Conduit Holdings Ltd. · LSE:CRE
Conduit — FY2023 Earnings Presentation
28 slides from Conduit's earnings presentation, Feb 21, 2024
Slide 1: Conduit Holdings Limited 2023 Preliminary Results
Conduit Holdings Limited 2023 Preliminary Results 21 February 2024
Slide 2: 2023 results - Comprehensive income of $190.8 million
2023 results - Comprehensive income of $190.8 million Gross premiums written of $931.4 million, +49.6% over the same period in 20221 Total Shareholder Return of 16.4% in 2023 Discounted combined ratio of 72.1% compared with Book Value Per Share (BVPS) of $6.25 at year-end 103.0% for the twelve month
Slide 3: Balanced portfolio of actively managed risks
Balanced portfolio of actively managed risks Gross premiums written1 ($m) Highly diversified book of business, with ~2/3 931.4 not exposed to natural catastrophe 15.8% Low PMLs maintained with capacity to lean into 186.4 more attractive opportunities Strong origination platform supports continued 62
Slide 4: Strategic cost benefit from operating structure
Strategic cost benefit from operating structure Gross premiums written per full time employee1, $m Conduit Peers FY232 $15.8m $11.5m $9.7m $9.2m $6.8m $6.8m $5.8m $4.1m $3.4m $3.3m $2.2m $1.8m $1.6m $0.7m 2021 2022 2023 Co. 1 Co. 2 Co. 3 Co. 4 Co. 5 Co. 6 Co. 7 Co. 8 Co. 9 Co. 10 Co. 11 1. Conduit R
Slide 5: 63% growth in property
63% growth in property Gross premiums written1, $m Undiscounted combined ratio2 468.3 104.5% 94.0% +62.5% 288.1 62.4% 183.4 2021 2022 2023 2021 2022 2023 Growth achieved in line with Ground-up risk evaluation of 30% risk-adjusted rate Reinsurance service result current risk profile of the our quota
Slide 6: 17% growth in casualty
17% growth in casualty Gross premiums written1, $m Undiscounted combined ratio2 +16.9% 100.2% 100.1% 276.7 236.7 96.4% 129.0 2021 2022 2023 2021 2022 2023 Further development and Managed growth of 0% risk-adjusted rate Reinsurance service broadening of existing client segment reflecting market chang
Slide 7: 91% growth in specialty
91% growth in specialty Gross premiums written1, $m Undiscounted combined ratio2 186.4 136.7% 106.9% +90.8% 83.3% 97.7 66.4 2021 2022 2023 2021 2022 2023 Improved underlying New opportunities derived 9% risk-adjusted rate Reinsurance service pricing metrics driving from broadening trading change, ne
Slide 8: Natural catastrophe exposure remains in balance
Natural catastrophe exposure remains in balance 2021 2022 2023 2024 plan Net PMLs1 $m TNAV $m TNAV $m TNAV $m TNAV Conduit Re actively manages its net exposure with a retrocession programme designed to absorb capital- events shocks and minimise volatility 1:100 44 4.2% 54 5.5% 85 9.8% 83 8.4% Succes
Slide 9: 2023 financial highlights
2023 financial highlights FY 2023 FY 2022 Change % (restated1) 61.3% growth in reinsurance revenue Key financials ($m) driven by year-on-year increases across Gross premiums written 931.4 622.5 49.6% property, casualty and specialty Reinsurance revenue 633.0 392.4 61.3% RoE of 22.0% driven by strong
Slide 10: High quality investment portfolio
High quality investment portfolio Asset type as at Asset ratings as at 31 December 2023 31 December 2023 Capital preservation and liquidity remain of paramount importance 16% 9% 8% We maintain a short duration, highly-rated portfolio, with due 1% 30% consideration of our liabilities’ duration: book
Slide 11: Increasing contribution from investment portfolio
Increasing contribution from investment portfolio 1,500 6.0% $1,438.2m 5.2% 5.1% 1,400 5.0% 1,300 4.0% 1,200 3.7% $1,134.6m 3.0% 1,100 $1,075.9m 2.4% 2.0% 1,000 1.2% 1.0% 900 0.9% 800 0.0% 2021 2022 2023 Investment leverage1 1.1 1.3 1.5 Investments & cash Book yield Market yield 1. Investment levera
Slide 12: Profitable growth platform in favourable market conditions
Profitable growth platform in favourable market conditions 01 02 03 04 Exciting prospects No legacy issues Market environment Robust capital base ahead supports strong The pre-2020 year We maintain a growth trajectory 2023 represents an Strong origination industry casualty positive view on the excel
Slide 13: Any questions?
Any questions?
Slide 14: Appendices
Appendices
Slide 15: How we create value
HOW WE Our investment proposition CREATE VALUE Our key business objectives Targeted Operational Strong balance underwriting excellence sheet Building a sustainable business for the - Pure-play reinsurance - Single location, highly - Legacy-free balance sheet. long-term benefit of our stakeholders tr
Slide 16: ESG is an important part of Conduit's culture
ESG is an important part of Conduit’s culture Environmental Social Governance - Carbon neutral in our operations - Societal considerations in underwriting and - Independent ESG Committee - Environmental considerations in underwriting and investment guidelines. - Diverse Board and employee base inves
Slide 17: Underwriting performance
Underwriting performance Gross premiums written1, $m Combined ratio2 In our third year, compound effect flowing through of renewals on 931.4 renewals and results of 119.4% prior underwriting producing strong 103.0% returns Diversification and 622.5 active portfolio management is a key 72.1% strength
Slide 18: Close to $2bn gross premiums written since inception
Close to $2bn gross premiums written since inception Cumulative gross premiums written1 ($m) 1,926.4 350.6 +33.2% 306.1 Significant pipeline Average quarterly increase of unearned 257.4 premiums of 642.7 218.3 585.2 approximately 506.6 $500 million which 164.1 will flow through over 430.9 148.2 subs
Slide 19: 1 January: premium growth with positive risk-adjusted change
1 January: premium growth with positive risk-adjusted change Reporting Premium1 Premium1 Premium Price segments 1/1/2024, $m 1/1/2023, $m changes changes Strong, focused growth, with continued portfolio Property 311.0 197.3 58% 5% optimisation Very strong levels of renewing business with our key par
Slide 20: Capital to support continued growth
Capital to support continued growth The following slide shows our BSCR coverage ratio based on year-end 2021, 2022 and 2023. It demonstrates we continue to have capital to support organic growth. The estimated coverage ratio for year- end 2023 is 381%. The coverage ratio is based on required capital
Slide 21: Capital to support continued growth
Capital to support continued growth Conduit year-end Peer year-end 2022 BSCR BSCR coverage ratio1 coverage ratio2 574% 404% 381% 300% 200% 2021 2022 2023 Co. 1 Co. 2 Co. 3 Co. 4 Co. 5 Co. 6 Co. 7 Co. 8 Co. 9 Co. 10 Co. 11 Co. 12 Eligible capital <$2.5 billion Eligible capital >$2.5 billion 1. Condui
Slide 22: Bermuda corporate income tax consultation
Bermuda corporate income tax consultation Bermuda Corporate Income Tax Act 2023 (Bermuda CIT) passed into law in December and will apply from January 2025 to those multi-national entities that qualify Conduit has a limited footprint, underwriting from a single location Conduit does not meet the crit
Slide 23: Discounting on losses
Discounting on losses Reminder of our discounting calculation methodology Calculation methodology Variability Discount on − New incurred claims discounted using opening − Opening discount rates are fixed for the period but discount on material events are new incurred discount rate or date of loss ra
Slide 24: The discount on our balance sheet will be unwound over future years
The discount on our balance sheet will be unwound over future years Discount roll-forward for the year ended 31 December 2023 © 24 24
Slide 25: Reinsurance finance result reduces volatility from investment return
Reinsurance finance result reduces volatility from investment return Investment return and reinsurance finance return for half year and full year results 70.6 20.8 22.6 10.1 (10.1) (32.8) (50.0) (52.8) HY 2022 FY 2022 HY 2023 FY 2023 Investment Return Reinsurance Finance Result © 25 25
Slide 26: Investor relations calendar - 2024
Investor relations calendar - 2024 Although we endeavour to adhere to the dates below, all future planned events are provisional and subject to change Conduit Re scheduled events Conduit Re planned attendance at conferences 15 May 2024: 5 March 2024: – Q1 2024 trading update - RBCC (New York) – AGM
Slide 27: Forward looking statements
Forward looking statements Important information (disclaimers) This announcement contains inside information for the purpose of the Market Abuse Regulation (EU) No 596/2014 (which forms part of UK domestic law pursuant to the European Union (Withdrawal) Act 2018, as amended). This announcement inclu
Slide 28: Enquiries please contact
Enquiries please contact: Vikki Kosmalska / Genevieve Ryan Antonio Moretti H/Advisors Maitland Investor Relations +44 (0) 207 379 5151 +1 (441) 276 4054 conduitre@h-advisors.global Antonio.Moretti@conduitre.bm About Conduit Re Conduit Re is a a pure-play Bermuda-based reinsurer, with a global reach.