In 2024, Bermuda-based Conduit Re reported gross premiums written (GPW) of $1.16 billion, reflecting a nearly 25% increase compared to the previous year. Despite facing higher catastrophe-related challenges, the company achieved a return on equity (ROE) of 12.7%. Conduit Re attributes its growth to strategic and focused expansion across its three main business areas, capitalizing on favorable underwriting conditions in targeted markets.
The property segment saw a significant rise in GPW, growing by 29.5% to reach $606.3 million. The specialty portfolio also experienced substantial growth, increasing by 38.7% to $258.5 million. Meanwhile, the casualty segment posted a more modest but still positive increase of 7.6%, reaching $297.6 million in GPW.
In 2024, Conduit Re reported that pricing levels and terms remained appealing, with an overall risk-adjusted rate increase of 1%, adjusted for claims inflation. By segment, property experienced a 3% risk-adjusted rate change, specialty saw a 1% increase, and casualty faced a 1% decrease.
Reinsurance revenue climbed by 28.5% to $813.7 million in 2024, while net reinsurance revenue surged by 29.4% to $720 million. However, the reinsurance service result declined by 28.3% to $131.6 million due to a rise in net reinsurance service expenses, which increased to $588.4 million from $372.7 million in 2023. This was primarily driven by higher losses and loss-related costs, totaling $530.9 million in 2024 compared to $328 million the previous year, affecting all three business segments.
Conduit Re noted that 2024 marked another year of above-average loss activity for the re/insurance industry. The company recorded an undiscounted net loss of $68 million, after accounting for reinsurance and reinstatement premiums, related to Hurricanes Helene and Milton. These events contributed 9.4% to the undiscounted loss ratio of 84.4% for the year, up from 68% in 2023. The discounted net loss ratio also rose to 73.3% in 2024 from 58.2%, largely due to increased net losses from natural catastrophes and large risk events.
Due to the higher loss ratio, partly mitigated by a lower reinsurance operating expense ratio of 8.4% and an other operating expense ratio of 4.3%, Conduit Re’s discounted combined ratio rose to 86% in 2024 from 72.1% in 2023. Similarly, the undiscounted combined ratio increased to 97.1% from 81.9%.
On the asset side, the reinsurer reported a total net investment return of 4% in 2024, down from 5.8% in 2023, driven by net investment income due to a higher-yielding portfolio. Net investment income, excluding realized and unrealized gains and losses, amounted to $65 million in 2024, marking a 57.4% year-on-year increase, fueled by a higher-yielding portfolio and growth in cash and investment balances. The total investment return, which includes net investment income, net realized gains and losses, and the net change in unrealized gains and losses, resulted in a gain of $66.1 million for 2024.
Looking forward, Conduit Re emphasized robust growth at the January 1, 2025, reinsurance renewals, with expansion across all business segments and an enhanced retrocession program on improved terms. As of January 1, 2025, the reinsurer experienced a risk-adjusted rate change, net of claims inflation, of -3%. However, the company noted that pricing and, crucially, underwriting terms and conditions continue to be very attractive.
Conduit Re has reported a preliminary estimate of its undiscounted ultimate loss from the California wildfires, ranging between $100 million and $140 million, after accounting for reinsurance recoveries and reinstatement premiums. The company anticipates that the wildfires will create favorable underwriting conditions in upcoming renewals, providing opportunities to expand capacity at attractive rates.
Trevor Carvey, CEO, stated: “Starting from scratch four years ago, we have built a business that generated $1.16 billion in gross premiums written in 2024, representing a 24.8% increase from 2023. Despite a year marked by significant catastrophes, the company achieved a 12.7% return on equity (ROE), following a strong 22.0% ROE in 2023. Our business continues to grow while demonstrating its ability to deliver profitable returns even during periods of high industry losses. Our results reflect the ongoing cost efficiency of our model and the growing contribution of investment returns as our asset base expands. With strong capitalization, we are well-positioned to build on these achievements as the company matures. In January 2025, we had a successful renewal season, supported by existing clients across our diversified portfolio. Strategic additions of attractive business contributed to double-digit growth compared to the 2024 renewal period.
“The California wildfires represent a tragic event for affected families and communities, as well as a substantial loss for the industry, including Conduit Re. From an industry perspective, we expect these events to drive rate increases in certain property segments, improving the underwriting environment and creating further opportunities for the company. Although it is early in the year and we have already faced a major event, our current projections indicate that we can still achieve an ROE in the low to mid-teens for 2025, assuming moderate loss activity and stable investment performance.”
Neil Eckert, Executive Chairman, added: “At the time of our IPO four years ago, we set goals of achieving mid-teens ROEs and $0.9 billion in gross premiums by year four. In 2024, we exceeded these targets, with premiums reaching $1.16 billion—30% above our IPO goal—and delivering a 12.7% ROE in a challenging catastrophe year, following a 22.0% ROE in 2023. We are proud of what we’ve accomplished and remain optimistic about the future, backed by a solid capital base and a robust, efficient platform that is still expanding.”
