Conduit Holdings Ltd. · LSE:CRE
Conduit — FY2022 Earnings Presentation
25 slides from Conduit's earnings presentation, Feb 22, 2023
Slide 1: Conduit Holdings Limited Full Year 2022 results
Conduit Holdings Limited Full Year 2022 results 22 February 2023
Slide 2: The best market environment in decades
The best market environment in decades Unique combination of events converged in the (re)insurance industry for the 2023 January Renewals Industry specific $66bn (or 15%) Inflationary Increasing interest New Nat Cat events reinsurance capital pressures rates environment (i.e. Ukraine crisis) erosion
Slide 3: Perfectly positioned for exceptional market conditions
Perfectly positioned for exceptional market conditions Our scalable business model is greatly positioned to benefit from favourable market environment Targeted underwriting Balance sheet strength Operational excellence Reinsurance treaty focus Legacy-free balance sheet Single location, highly
Slide 4: Excellent premium growth in a challenging environment
Excellent premium growth in a challenging environment Gross premiums written of $637.5 million, +68.3% over 2021 Underwriting profit of $0.3 million in a year with extreme natural catastrophe and man-made losses 2022 combined ratio of 107.0%; diversified book of business accelerating towards a
Slide 5: Decisive underwriting approach to build resilience
Decisive underwriting approach to build resilience 2022 IPO Plan, Gross premiums written 2022, Actual gross premiums written $626.0m $637.5m 16% 24% 45% 47% 37% 31% Property Casualty Specialty Property Casualty Specialty Tactically adjusting to industry dynamics, maintained strategic approach to N
Slide 6: >$1 billion cumulative gross premiums written since inception
>$1 billion cumulative gross premiums written since inception Cumulative gross premiums written, $m 1,016 907 168 151 738 126 366 556 310 100 241 379 189 291 66 210 51 129 483 446 37 77 372 44 83 267 163 183 130 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2021 2022 Property Casualty Specialty 6
Slide 7: 2022 financial highlights
2022 financial highlights FY 2022 FY 2021 Change Estimated ultimate losses, net of reinsurance recoveries $millions Gross premiums written 637.5 378.8 258.7 and reinstatement premiums, from hurricane Ian ($40.9 Net premiums earned 482.3 194.2 288.1 million) and from the Ukraine crisis ($24.6 milli
Slide 8: Operational efficiency
Operational efficiency 30% 1,118 1,200 Other operating expenses / Net premiums earned 25% 1,000 Significant pipeline of unearned Cumulative ultimate premiums written, $m premiums of approximately 20% 800 $355 million which will flow through over subsequent years 15% 600 1,059 955 Scalable busine
Slide 9: High quality investment portfolio
High quality investment portfolio Asset allocation as at 31 December 2022 Credit quality as at 31 December 2022 Total investment U.S. Agency Total investment MBS/CMBS, 9% BBB portfolio & cash: U.S. Municipal Bonds portfolio & cash: and Non U.S. Govt 11% $1,134.6m $1,134.6m Bonds/Agencies, 2% Corpora
Slide 10: Strong growth in 2022 across all segments
Strong growth in 2022 across all segments Gross premiums written, $m 637.5 Property: Growth achieved without altering risk profile of the +68.3% 101 +52% underwriting portfolio Benefiting from new & existing clients passing on improved conditions through quota share relationships 378.8 237 +83%
Slide 11: Capitalising on the structural marketplace shift
Capitalising on the structural marketplace shift Risk-adjusted rate change, net of inflation1) 39% 19% 14% 8% 8% 7% 7% 5% 4% 4% 4% 3% 2% 2% 2% 2% 1% 1% 1% 1% 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2023 1/1 Property Casualty Specialty Weighted Opportunity for improved margins in 2023 and beyond We have
Slide 12: January 2023: leaning into a hard market
January 2023: leaning into a hard market Premium1) Premium1) Premium Price Reporting segments 1/1/2022, $m 1/1/2023, $m changes changes Property 109.3 197.3 81% +39% Casualty 85.5 112.2 31% +1% Specialty 67.8 111.9 65% +14% Total 1 January 262.6 421.4 60% +19% Another late renewal season for reins
Slide 13: Measured approach to natural catastrophe exposures
Measured approach to natural catastrophe exposures 2021 2022 2023 Net PMLs1) $m % TNAV $m % TNAV $m % TNAV 1:100 Florida windstorm 44 4.2 54 5.5 65 8.0 1:250 California earthquake 62 5.9 75 7.7 99 12.2 Conduit Re actively manages its net exposure with a retrocession programme designed to absorb ca
Slide 14: Exciting prospects for 2023
Exciting prospects for 2023 2022 saw the first underwriting profit in year of elevated claim activity, with further substantial rate increases at January 2023 Conduit Re is protected from industry reserve strengthening caused by inflation Strong pipeline of premiums earning through as book mat
Slide 15: APPENDICES
APPENDICES We CONDUIT RE 15
Slide 16: Exceptional double-digit growth
Exceptional double-digit growth 2021 gross premiums written: $378.8m 2022 gross premiums written: $637.5m 18% 16% 47% +68.3% 48% 34% 37% Property Casualty Specialty Property Casualty Specialty In 2022 Conduit Re continued to show robust growth across all segments, reflecting excellent renewals, wi
Slide 17: Over $670 million of net premiums earned over 24 months
Over $670 million of net premiums earned over 24 months Cumulative net premiums earned, $m 677 404 194 48 Q2 Q4 Q2 Q4 2021 2022 17
Slide 18: Conduit Re 2022 large losses experience
Conduit Re 2022 large losses experience Hurricane Ian made landfall in the US state of Florida as a strong Category 4 hurricane on 28 September 2022. It continued its path north-east across Florida before making a second landfall in South Carolina. Based on current information, our ultimate loss
Slide 19: Commercial insurance pricing environment remains robust
Commercial insurance pricing environment remains robust Marsh global insurance pricing change (gross of claims inflation) 22.0% 20.0% 19.0% 18.0% 15.0% 14.6% 14.0% 13.0% 11.0% 11.0% 9.0% 8.0% 6.0% 6.0% 4.0% 3.0% 2.1% 1.2% 1.4% 0.8% 0.9% (2.2)% (1.6)% (2.3)% (3.1)% (3.2)% (3.6)% (3.8)% (5.0)% Q4 '15
Slide 20: Very strong capital position
Very strong capital position Single regulated balance sheet in Bermuda, with diversified portfolio of business lines Simple, legacy-free balance sheet, backed by ordinary shares Regulatory capital coverage ratio in excess of 300% based on 31 December 2022 balance sheet AM Best rating (A-, Ex
Slide 21: IFRS 17 – Key messages
IFRS 17 – Key messages IFRS 17 and 9 are accounting changes and do not impact our underwriting strategy or the underlying No impact to strategy economics and reserving approach Our reserving approach is unchanged but with more granular disclosures surrounding risk adjustment Net increase to Sh
Slide 22: IFRS 17 and IFRS 9 key accounting policies
IFRS 17 and IFRS 9 key accounting policies Premium allocation approach (PAA) used for all reinsurance contract. Measurement Model PAA is more closely aligned to current accounting and easier to understand. Presentation of commissions as reduction to revenue will be a significant change in pres
Slide 23: Investor relations calendar - 2023
Investor relations calendar - 2023 Conduit Re scheduled disclosures Conduit Re planned roadshow/conferences 17 May: Q1 2023 trading update 24, 28 February: London roadshow 17 May: Annual General Meeting 27 February: Edinburgh roadshow TBD: IFRS 17 Update 8 March: RBCC conference, New Yor
Slide 24: Forward looking statements
Forward looking statements Important note: This presentation and announcement include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates",
Slide 25: conduitreinsurance.com
Enquiries please contact: H/Advisors Maitland Vikki Kosmalska / Alistair de Kare-Silver +44 (0) 207 379 5151 conduitre@h-advisors.global Antonio Moretti Investor Relations +44 (0) 7935 708 723 Antonio.Moretti@conduitre.bm About Conduit Re Conduit Re is a pure-play reinsurance business based in Bermu