REG - Conduit Holdings Ltd - Preliminary results for the year ended 31/12/24
19/02/2025 07:15
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RNS Number : 6194X Conduit Holdings Limited 19 February 2025
Pembroke, Bermuda - 19 February 2025
Conduit Holdings Limited
("CHL"; LSE ticker: CRE)
Preliminary results for the year ended 31 December 2024
Strong premium growth across all segments
Resilient performance despite significant industry loss year
Robust outlook with strong balance sheet to capitalise on opportunities
CHL, the ultimate parent company of Conduit Re, a multi-line Bermuda-based
reinsurance business, today presents its preliminary results for the year
ended 31 December 2024.
Trevor Carvey, Chief Executive Officer, commented: "From a standing start four
years ago, we have delivered a business which produced $1.16 billion of gross
premiums written in 2024, an increase of 24.8% on 2023. In a high catastrophe
year, the business produced a 12.7% ROE, after having delivered a 22.0% ROE in
2023.
While the business is still exhibiting substantial growth, we now have a
demonstrated platform, generating profitable returns even in high industry
loss years. Our results also illustrate the continued and growing cost
efficiency of our business model and an increasing contribution to
profitability from investment returns as our asset base grows. The Company is
well capitalised and we expect to continue to build on these achievements as
the business grows and matures. We had a solid January 2025 renewal period
with extensive support from our existing clients across our multi-line
profile. Selective additions of attractive business led to double digit growth
over the 2024 renewal season on an ultimate basis.
The California wildfires are a tragic event for the families and communities
impacted, as well as a significant loss for the industry, from which Conduit
is not immune. From an industry perspective, we expect that the wildfires will
impact rates in areas of the property portfolio which will flow through to an
improved underwriting environment and provide continued opportunities for the
Company. While it is only February and we have experienced a very significant
event early in the year, our current forecast leads us to believe we can still
deliver an ROE in the low to mid teens for the year, assuming reasonable loss
activity and investment performance."
Year ended 31 December
Key financials ($m) 2024 2023 Change
Gross premiums written 1,162.4 931.4 24.8%
Reinsurance revenue 813.7 633.0 28.5%
Net reinsurance revenue 720.0 556.3 29.4%
Reinsurance service result 131.6 183.6 (28.3)%
Net investment result 66.1 70.6 (6.4)%
Comprehensive income 125.6 190.8 (34.2)%
Financial ratios (%) 2024 2023 Change (pps)
Return on equity 12.7 22.0 (9.3)
Net loss ratio 73.3 58.2 15.1
Reinsurance operating expense ratio 8.4 8.8 (0.4)
Other operating expense ratio 4.3 5.1 (0.8)
Combined ratio (discounted) 86.0 72.1 13.9
Combined ratio (undiscounted) 97.1 81.9 15.2
Total net investment return 4.0 5.8 (1.8)
Per share data ($) 2024 2023 Change
Tangible net assets per share 6.70 6.25 0.45
Dividends per common share for financial year 0.36 0.36 -
Diluted earnings per share 0.79 1.19 (0.40)
Key highlights:
Results for the year ended 31 December 2024
• 24.8% increase in gross premiums written to $1.16 billion (2023: $0.93
billion)
• Deliberate and targeted growth achieved across all three segments as
the business continued to see attractive underwriting opportunities in its
target classes
• In an already attractive market, the business saw continued rate
increases: overall risk-adjusted rate change of +1% (net of claims inflation)
• 2024 discounted combined ratio of 86.0% (2023: 72.1%) in a high
catastrophe year - includes the impact of Hurricanes Helene and Milton as well
as a series of elevated risk losses
• Enhanced operating leverage: total reinsurance and other operating
expense ratio reduced to 12.7% (2023: 13.9%)
• Continuing to see the benefits of asset accumulation on the balance
sheet: net investment income of $65.0 million (+57.4% on 2023)
• Comprehensive income of $125.6 million, resulting in a 12.7% return on
equity in a high catastrophe year
• Final dividend of $0.18 (approximately 14 pence) per common share,
taking the full 2024 dividend to $0.36 (approximately 28 pence) per common
share, in line with our stated dividend policy
• Tangible net assets per share of $6.70 (£5.35) as at 31 December 2024
increased 12.9% including dividends paid during the year (31 December 2023 -
$6.25 or £4.91)
Outlook
• Continued strong growth at January renewals
• Growth experienced in each business segment
• Client partnerships creating strong levels of renewing business
• Multi-line profile allows selective participation in new
opportunities aligning business with target risk appetite
• Risk-adjusted rate change, net of claims inflation, was down
modestly at -3% but pricing and, importantly, underwriting terms and
conditions remain at very attractive levels
• Retrocession programme renewed in January 2025 at improved terms
• 2024 experienced over $140 billion of insured natural catastrophe
losses and the January 2025 California wildfires are likely one of the
costliest insured catastrophes in history. We expect the recent events to
support favourable underwriting conditions during upcoming renewal periods and
we expect to see opportunities to grow our book and deploy capacity at
favourable rates
• Balance sheet remains very strong with capacity for further growth
California Wildfires
The January 2025 California wildfires have caused widespread damage across the
Los Angeles area. While there is still considerable uncertainty due to the
complicated nature of the losses and recency of the event, our preliminary
undiscounted ultimate loss estimate across all divisions is between $100 and
$140 million, net of reinsurance recoveries and reinstatement premiums.
Our current preliminary estimate is based on an analysis of in-force contracts
with exposure within the Los Angeles area, evaluating all the initial
information we have received from brokers, cedants and other industry sources,
along with a review of the latest modelled losses for our portfolio at various
return periods. As additional information emerges our ultimate loss may vary
from this preliminary estimate. The financial impact on Conduit of this event
will be reflected in the interim results for the six months ended 30 June
2025.
Neil Eckert, Executive Chairman, commented: "On our IPO four years ago we set
out with a target of delivering mid-teens ROEs and gross premiums written of
$0.9 billion in year four. Our premium in 2024 was $1.16 billion which is 30%
above our IPO target, in addition we achieved a 12.7% ROE in a high industry
loss year following on from a 22.0% ROE in 2023. We can be proud of what this
business has achieved and, with a strong capital base and a robust, efficient
platform that is still in its growth phase, I am very excited for the future."
Underwriting update
Premiums
Gross premiums written for the year ended 31 December 2024:
2024 2023 Change Change
Segment $m $m $m %
Property 606.3 468.3 138.0 29.5%
Casualty 297.6 276.7 20.9 7.6%
Specialty 258.5 186.4 72.1 38.7%
Total 1,162.4 931.4 231.0 24.8%
During 2024, all our three segments delivered growth in gross premiums written
and Conduit Re experienced an increasing number of opportunities to deploy its
capital into the segments and products that it targets. The non-catastrophe
elements of both Property and Specialty in particular provided good
opportunities for selective growth throughout the year.
Pricing
Pricing levels and terms and conditions continued to be very attractive in
2024 with a moderate increase (+1%) in overall risk-adjusted rate change, net
of claims inflation, against a backdrop of historically high rates.
2024 risk-adjusted rate change by segment, net of claims inflation:
Property Casualty Specialty
3% (1)% 1%
Net reinsurance revenue
For the year ended 31 December 2024:
Property Casualty Specialty Total
$m $m $m $m
Reinsurance revenue 437.8 201.8 174.1 813.7
Ceded reinsurance expenses (81.7) (1.4) (10.6) (93.7)
Net reinsurance revenue 356.1 200.4 163.5 720.0
For the year ended 31 December 2023:
Property Casualty Specialty Total
$m $m $m $m
Reinsurance revenue 345.2 171.8 116.0 633.0
Ceded reinsurance expenses (66.9) (1.3) (8.5) (76.7)
Net reinsurance revenue 278.3 170.5 107.5 556.3
Reinsurance revenue for the year ended 31 December 2024 was $813.7 million
compared to $633.0 million for 2023. The increase in reinsurance revenue
relative to the prior year was due to continued growth in the business plus
the earn-out of premiums from prior underwriting years.
Ceded reinsurance expenses for the year ended 31 December 2024 were $93.7
million compared to $76.7 million for 2023. The increase in cost relative to
the prior year reflected additional limits purchased due to the growth of the
inwards portfolio exposures plus price increases on renewals.
Net reinsurance service expenses
For the year ended 31 December 2024:
Property Casualty Specialty Total
$m $m $m $m
Reinsurance losses and loss related amounts (256.3) (146.2) (128.4) (530.9)
Reinsurance operating expenses (38.1) (13.1) (9.3) (60.5)
Ceded reinsurance recoveries (0.4) - 3.4 3.0
Net reinsurance service expenses (294.8) (159.3) (134.3) (588.4)
For the year ended 31 December 2023:
Property Casualty Specialty Total
$m $m $m $m
Reinsurance losses and loss related amounts (136.5) (120.7) (70.8) (328.0)
Reinsurance operating expenses (30.4) (11.9) (6.7) (49.0)
Ceded reinsurance recoveries 4.6 0.2 (0.5) 4.3
Net reinsurance service expenses (162.3) (132.4) (78.0) (372.7)
Net reinsurance losses and loss related amounts
2024 was another above average year of loss activity for the industry.
Hurricanes Helene and Milton made landfall in the United States, and there was
also elevated activity across smaller and mid-size natural catastrophe and
large risk events such as the Baltimore Bridge.
We recorded an undiscounted net loss, after reinsurance and reinstatement
premiums, of $68.0 million related to Hurricanes Helene and Milton. These two
events contributed 9.4% to our undiscounted loss ratio for 2024.
Our loss and reserve estimates have been derived from a combination of reports
and statements from brokers and cedants, modelled loss projections, pricing
loss ratio expectations and reporting patterns, all supplemented with market
data and assumptions. We continue to review these estimates as more
information becomes available.
Our discounted net loss ratio for the year ended 31 December 2024 was 73.3%
compared with 58.2% for the 2023 year, while our undiscounted net loss ratio
was 84.4% and 68.0% respectively. The increase for the year ended 31 December
2024 was primarily related to an increase in net losses related to natural
catastrophes and large risk events. Although 2023 was an active year for
natural catastrophes, no major loss event, individually or in aggregate, had
an outsized or material impact on Conduit.
Our undiscounted ultimate loss estimates, net of ceded reinsurance and
reinstatement premiums, for previously reported loss events remained stable.
The inherent uncertainty in estimating the net liability for incurred claims
gives rise to favourable or adverse development. During the year ended 31
December 2024 the favourable development in the discounted net liability for
incurred claims for prior accident years was $4.3 million (31 December 2023:
$3.9 million).
Reinsurance operating expenses and other operating expenses
For the year ended 31 December 2024:
2024 2023 Change Change
$m $m $m %
Reinsurance operating expenses 60.5 49.0 11.5 23.5%
Other operating expenses 30.8 28.3 2.5 8.8%
Total reinsurance and other operating expenses 91.3 77.3 14.0 18.1%
2024 2023 Change
% % (pps)
Reinsurance operating expense ratio 8.4 8.8 (0.4)
Other operating expense ratio 4.3 5.1 (0.8)
Total reinsurance and other operating expense ratio 12.7 13.9 (1.2)
Reinsurance operating expenses includes brokerage and operating expenses
deemed attributable to reinsurance contracts.
Total reinsurance and other operating expenses were $91.3 million for the year
ended 31 December 2024 compared with $77.3 million for the prior year. The
increase is due to the continued growth of the business and increased
headcount. The decrease in the reinsurance operating expense ratio and other
operating expense ratio was due to the growth in net reinsurance revenue
during the year.
Net reinsurance finance income (expense)
For the year ended 31 December 2024:
2024 2023 Change
$m $m $m
Net interest accretion (37.6) (26.0) (11.6)
Net change in discount rates 6.8 (6.8) 13.6
Net reinsurance finance income (expense) (30.8) (32.8) 2.0
The net reinsurance finance expense was $30.8 million for the year ended 31
December 2024 compared with $32.8 million for the prior year. The unwind of
discount made up most of the expense in both years, although there was some
income related to the increase in discount rates in the latter part of 2024 as
we re-measured at those higher rates. The opposite was true for 2023 where
discount rates decreased late in the year resulting in an additional expense.
Investments
In line with our stated strategy, we continue to maintain a conservative
approach to managing our invested assets with a strong emphasis on preserving
capital and liquidity. Our strategy remains maintaining a short duration,
highly-rated portfolio, with due consideration of the duration of our
liabilities. There are currently no risk assets held in the portfolio. Risk
assets will generally only be considered to diversify and protect the
portfolio, and where the risk-return profiles are appropriate.
The investment return for the year ended 31 December 2024 was 4.0% driven by
net investment income given a generally higher yielding portfolio. For 2023
the portfolio returned 5.8% driven by net investment income and net unrealised
gains on investments due to a significant reduction in treasury yields and
narrowing of credit spreads during the latter part of 2023.
Net investment income, excluding realised and unrealised gains and losses, was
$65.0 million for the year ended 31 December 2024 (31 December 2023 - $41.3
million), or an increase of 57.4%, driven by a higher yielding portfolio and
growth in cash and investment balances year on year. Total investment return,
including net investment income, net realised gains and losses, and net change
in unrealised gains and losses, was a gain of $66.1 million (31 December 2023
- $70.6 million).
The breakdown of the managed investment portfolio is as follows:
As at 31 December 2024 As at 31 December 2023
Fixed maturity securities 85.8% 87.7%
Cash and cash equivalents 14.2% 12.3%
Total 100.0% 100.0%
Key investment portfolio statistics for our fixed maturities and managed cash
were:
As at 31 December 2024 As at 31 December 2023
Duration 2.5 years 2.4 years
Credit Quality AA AA
Book yield 4.1% 3.7%
Market yield 4.8% 5.1%
Capital & dividends
Total capital and tangible capital available was $1.05 billion as at 31
December 2024 (31 December 2023 - $0.99 billion).
Tangible net assets per share as at 31 December 2024 was $6.70, or £5.35 (31
December 2023 - $6.25 or £4.91). Including dividends, tangible net assets per
share increased 12.9% during 2024.
Shares purchased by CHL's employee benefit trust during 2024 amounted to $9.4
million (2023 - $13.7 million) and will be held in trust to meet future
obligations under CHL's variable incentive schemes.
On 18 February 2025 CHL's Board of Directors declared a final dividend of
$0.18 (approximately 14 pence using the exchange rate on 18 February 2025) per
common share, resulting in an aggregate payment of $29.7 million. The dividend
will be paid in pounds sterling on 17 April 2025 to shareholders of record on
21 March 2025 (the "Record Date") using the pound sterling / US dollar spot
exchange rate at 12 noon BST on the Record Date.
CHL previously declared and paid an interim dividend during 2024 of $0.18
(approximately 14 pence) per common share. Consequently, the full 2024
dividend was $0.36 (approximately 28 pence) per common share in line with our
stated dividend policy.
Financial Information
The unaudited consolidated financial statements for the year ended 31 December
2024 are published on Conduit's website at www.conduitreinsurance.com.
Conduit's 2024 Annual Report and Accounts are expected to be made available on
Conduit's website by Friday 28 February 2025.
Presentation for Analysts and Investors at 12:00 noon UK time
Conduit Re's management will host a virtual meeting for analysts and investors
via a webcast and conference call on Wednesday 19 February 2025 at 12:00 noon
UK time.
To access the webcast, please register in advance here:
https://sparklive.lseg.com/ConduitHoldingsLtd/events/3ce9fab6-452c-4161-9065-c6bdf5d57c39/conduit-holdings-ltd-full-year-results-2024
To access the conference call, please register to receive unique dial-in
details here:
https://registrations.events/direct/LON895647444
A recording of the presentation will be made available later in the day on the
Investors section of Conduit's website at www.conduitreinsurance.com.
Results and Investor Presentation via Investor Meet Company at 3:00 pm UK time
Conduit's management will provide a separate presentation aimed at retail
investors, relating to the full year 2024 financial results via the Investor
Meet Company platform for retail investors on Thursday 20 February 2025 at
3:00pm UK time.
The presentation is open to all existing and potential shareholders. No new
material information, including trading or financial information, will be
disclosed during the presentation.
There will be an opportunity for Questions & Answers at the end of the
meeting. Questions can be submitted pre-event via the Investor Meet Company
dashboard up until 9:00 am UK time the day before the meeting or at any time
during the live presentation.
Investors can register to join the presentation via the below link:
https://www.investormeetcompany.com/conduit-holdings-limited/register-investor
Media contacts
H/Advisors Maitland - Vikki Kosmalska / Genevieve Ryan
+44 (0) 207 379 5151
conduitre@h-advisors.global
Investor relations and other enquiries:
brett.shirreffs@conduitre.bm
Panmure Liberum (Joint Corporate Broker)
+44 (0) 207 886 2500
Berenberg (Joint Corporate Broker)
+44 (0) 203 207 7800
Peel Hunt (Joint Corporate Broker)
+44 (0) 207 418 8900
This announcement contains information, which may be of a price sensitive
nature, that Conduit is making public in a manner consistent with the Market
Abuse Regulation (EU) No. 596/2014 as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018, as amended, and other
regulatory obligations. The information was submitted for publication, through
the agency of the contact persons set out above, at 7:00 am UK time on 19
February 2025.
About Conduit Re
Conduit Re is a Bermuda-based multi-line reinsurance business with global
reach. Conduit Reinsurance Limited is licensed by the Bermuda Monetary
Authority as a Class 4 insurer. A.M. Best has assigned a Financial Strength
Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of a-
(Excellent) to Conduit Reinsurance Limited. The outlook assigned to these
ratings is positive.
Conduit Holdings Limited is the ultimate parent of Conduit Reinsurance Limited
and is listed on the London Stock Exchange (ticker: CRE). References to
"Conduit" include Conduit Holdings Limited and all of its subsidiary
companies.
Learn more about Conduit Re:
Website: https://conduitreinsurance.com/
LinkedIn: https://www.linkedin.com/company/conduit-re
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 includes 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", "plans", "goals", "objective", "rewards",
"expectations", "signals", "projects", "anticipates", "expects", "achieve",
"intends", "tends", "on track", "well placed", "continued", "estimated",
"projected", "preliminary", "upcoming", "may", "will", "aims", "could" or
"should" or, in each case, their negative or other variations or comparable
terminology, or by discussions of strategy, plans, objectives, goals, targets,
future events or intentions or loss estimates. Forward-looking statements
include statements relating to the following: (i) future capital requirements,
capital expenditures, expenses, revenues, unearned premiums pricing rate
changes, terms and conditions, earnings, synergies, economic performance,
indebtedness, financial condition, dividend policy, claims development, losses
and loss estimates and future business prospects; and (ii) business and
management strategies and the expansion and growth of Conduit's operations.
Forward-looking statements may and often do differ materially from actual
results. Forward-looking statements reflect Conduit's current view with
respect to future events and are subject to risks relating to future events
and other risks, uncertainties and assumptions relating to Conduit's business,
results of operations, financial position, liquidity, prospects, growth and
strategies. These risks, uncertainties and assumptions include, but are not
limited to: the possibility of greater frequency or severity of claims and
loss activity than Conduit's underwriting, reserving or investment practices
have anticipated; the reliability of catastrophe pricing, accumulation and
estimated loss models; the actual development of losses and expenses impacting
estimates for claims which arose as a result of recent loss activity such as
hurricanes, storms, floods and wildfires; the impact of complex causation and
coverage issues associated with attribution of losses to wildfires, wind or
flood damage; the impact of increased costs and inflation to settle claims in
high density areas and emerging information as losses develop; unusual loss
frequency or losses that are not modelled; the effectiveness of Conduit's risk
management and loss limitation methods, including to manage volatility; the
recovery of losses and reinstatement premiums from our own reinsurance
providers; the development of Conduit's technology platforms; a decline in
Conduit's ratings with A.M. Best or other rating agencies; the impact that
Conduit's future operating results, capital position and ratings may have on
the execution of Conduit's business plan, capital management initiatives or
dividends; Conduit's ability to implement successfully its business plan and
strategy during 'soft' as well as 'hard' markets; the premium rates which are
available at the time of renewals within Conduit's targeted business lines and
at policy inception; the pattern and development of premiums as they are
earned; increased competition on the basis of pricing, capacity or coverage
terms and the related demand and supply dynamics as contracts come up for
renewal; the successful recruitment, retention and motivation of Conduit's key
management and the potential loss of key personnel; the credit environment for
issuers of fixed maturity investments in Conduit's portfolio; the impact of
the ongoing conflicts in Ukraine and the Middle East, the impact of swings in
market interest rates, currency exchange rates and securities prices; changes
by central banks regarding the level of interest rates and the timing and
extent of any such changes; the impact of inflation or deflation in relevant
economies in which Conduit operates; Conduit becoming subject to income taxes
in Bermuda, the United States or in the United Kingdom; and changes in
insurance or tax laws or regulations in jurisdictions where Conduit conducts
business. Forward-looking statements contained in this trading update may be
impacted by emerging information regarding losses from the California
wildfires, the escalation or expansion of the Ukraine conflict or Middle East
conflict, the volatility in global financial markets and governmental,
regulatory and judicial actions, including coverage issues.
Forward-looking statements speak only as of the date they are made. No
representation or warranty is made that any forward-looking statement will
come to pass. Conduit disclaims any obligation or undertaking to update or
revise any forward-looking statements contained herein to reflect actual
results or any change in the assumptions, conditions or circumstances on which
any such statements are based unless required to do so by law or regulation.
All subsequent written and oral forward-looking statements attributable to
Conduit and/or the group or to persons acting on its behalf are expressly
qualified in their entirety by the cautionary statements referred to above.
The Conduit renewal year on year indicative risk-adjusted rate change measure
is an internal methodology that management uses to track trends in premium
rates of a portfolio of reinsurance contracts. The change measure is specific
for our portfolio and reflects management's assessment of relative changes in
price, exposure and terms and conditions. It is also net of the estimated
impact of claims inflation. It is not intended to be commentary on wider
market conditions. The calculation involves a degree of judgement in relation
to comparability of contracts and the assessment noted above, particularly in
Conduit's initial years of underwriting. To enhance the methodology,
management may revise the methodology and assumptions underlying the change
measure, so the trends in premium rates reflected in the change measure may
not be comparable over time. Consideration is only given to renewals of a
comparable nature so it does not reflect every contract in the portfolio of
Conduit contracts. The future profitability of the portfolio of contracts
within the change measure is dependent upon many factors besides the trends in
premium rates.
Additional Performance Measures (APMs)
Conduit presents certain APMs to evaluate, monitor and manage the business and
to aid readers' understanding of Conduit's financial statements and
methodologies used. These are common measures used across the (re)insurance
industry and allow the reader of Conduit's financial reports to compare those
with other companies in the (re)insurance industry. The APMs should be viewed
as complementary to, rather than a substitute for, the figures prepared in
accordance with IFRS. Conduit's Audit Committee has evaluated the use of these
APMs and reviewed their overall presentation to ensure that they were not
given undue prominence. This information has not been audited.
Management believes the APMs included in the consolidated financial statements
are important for understanding Conduit's overall results of operations and
may be helpful to investors and other interested parties who may benefit from
having a consistent basis for comparison with other companies within the
(re)insurance industry. However, these measures may not be comparable to
similarly labelled measures used by companies inside or outside the
(re)insurance industry. In addition, the information contained herein should
not be viewed as superior to, or a substitute for, the measures determined in
accordance with the accounting principles used by Conduit for its consolidated
financial statements or in accordance with IFRS.
Below are explanations, and associated calculations, of the APMs presented by
Conduit:
APM Explanation Calculation
Gross premiums written (KPI) For the majority of excess of loss contracts, premiums written are recorded Amounts payable by the cedant before any deductions, which may include taxes,
based on the minimum and deposit or flat premium, as defined in the contract. brokerage and commission. Reinstatement premiums are excluded.
Premiums written for proportional contracts on a risks attaching basis are
written over the term of the contract in line with the underlying exposures.
Subsequent adjustments, based on reports of actual premium by the ceding
company, or revisions in estimates, are recorded in the period in which they
are determined. Reinstatement premiums are excluded.
Net loss ratio (discounted and undiscounted) Ratio of net losses and loss related amounts expressed as a percentage of net Net losses and loss related amounts / Net reinsurance revenue
reinsurance revenue in a period. This can be calculated using discounted or
undiscounted net losses and loss related amounts.
Undiscounted net losses and loss related amounts / Net reinsurance revenue
Reinsurance operating expense ratio Ratio of reinsurance operating expenses, which includes acquisition expenses Reinsurance operating expenses/ Net reinsurance revenue
charged by insurance brokers and other insurance intermediaries to Conduit,
and operating expenses paid that are attributable to the fulfilment of
reinsurance contracts, expressed as a percentage of net reinsurance revenue in
a period.
Other operating expense ratio Ratio of other operating expenses expressed as a percentage of net reinsurance Other operating expenses/ Net reinsurance revenue
revenue in a period.
Combined ratio (discounted) (KPI) The sum of the net loss ratio, reinsurance operating expense ratio and other Net loss ratio + Net reinsurance operating expense ratio + Other operating
operating expense ratio. Other operating expenses are not allocated to the expense ratio
segment combined ratio.
Combined ratio (undiscounted) The sum of the net loss ratio (undiscounted), reinsurance operating expense Net loss ratio (undiscounted) + Net reinsurance operating expense ratio +
ratio and other operating expense ratio. Other operating expenses are not Other operating expense ratio
allocated to the segment combined ratio.
Accident year loss ratio Ratio of the net losses and loss related amounts of an accident year (or Accident year net losses and loss related amounts/ Net reinsurance revenue
calendar year) revalued at the current balance sheet date expressed as a
percentage of net reinsurance revenue in a period.
Total net investment return (KPI) Conduit's principal investment objective is to preserve capital and provide Net investment income + Net unrealised gains (losses) on investments + Net
adequate liquidity to support the payment of losses and other liabilities. In realised gains (losses) on investments/ Non-operating cash and cash
light of this, Conduit looks to generate an appropriate total net investment equivalents + Fixed maturity securities, at beginning of period
return. Conduit bases its total net investment return on the sum of
non-operating cash and cash equivalents and fixed maturity securities. Total
net investment return is calculated daily and expressed as a percentage.
Return on equity (KPI) RoE enables Conduit to compare itself against other peer companies in the Profit (loss) after tax for the period/ Total shareholders' equity, at
immediate industry. It is also a key measure internally and is integral in the beginning of period
performance-related pay determinations. RoE is calculated as the profit for
the period divided by the opening total shareholders' equity.
Total shareholder return (KPI) Total shareholder return allows Conduit to compare itself against other public Closing Common Share price, at end of period - Opening Common Share price, at
peer companies. Total shareholder return is calculated as the percentage beginning of period + Common Share dividends during the period / Opening
change in Common Share price over a period, after adjustment for Common Share Common Share price, at beginning of period
dividends.
Dividend yield Calculated by dividing the annual dividends per Common Share by the Common Annual dividends per Common Share / Closing Common Share price
Share price on the last day of the given year and expressed as a percentage.
Net tangible assets per share (KPI) This provides a measure of book value per share for all shares in issue less Total shareholders' equity less intangible assets, at the end of the period /
own shares held in treasury or the EBT trust. Total common shares in issue less own shares held
The GBP equivalent of NTAVS is calculated using the end of period exchange
rate between USD and GBP.
Consolidated statement of comprehensive income - unaudited
For the year ended 31 December 2024
2024 2023
$m $m
Reinsurance revenue 813.7 633.0
Reinsurance service expenses (591.4) (377.0)
Ceded reinsurance expenses (93.7) (76.7)
Ceded reinsurance recoveries 3.0 4.3
Reinsurance service result 131.6 183.6
Net investment income 65.0 41.3
Net realised gains (losses) on investments 0.1 (1.3)
Net unrealised gains (losses) on investments 1.0 30.6
Net investment result 66.1 70.6
Net reinsurance finance income (expense) (30.8) (32.8)
Net foreign exchange gains (losses) (2.2) 1.4
Net reinsurance and financial result 164.7 222.8
Equity-based incentive expense (7.1) (2.5)
Other operating expenses (30.8) (28.3)
Results of operating activities 126.8 192.0
Financing costs (1.2) (1.2)
Total comprehensive income for the year 125.6 190.8
Earnings per share
Basic $0.80 $1.19
Diluted $0.79 $1.19
Consolidated balance sheet - unaudited
As at 31 December 2024
2024 2023
$m $m
Assets
Cash and cash equivalents 313.2 199.8
Accrued interest receivable 12.4 8.5
Investments 1,526.3 1,238.4
Ceded reinsurance contract assets 48.9 42.7
Other assets 4.0 4.7
Right-of-use lease assets 1.4 2.1
Total assets 1,906.2 1,496.2
Liabilities
Reinsurance contract liabilities 834.5 494.5
Other payables 18.9 12.0
Lease liabilities 1.6 2.3
Total liabilities 855.0 508.8
Shareholders' equity
Share capital 1.7 1.7
Own shares (40.6) (32.9)
Other reserves 1,065.0 1,059.6
Retained earnings (loss) 25.1 (41.0)
Total shareholders' equity 1,051.2 987.4
Total liabilities and shareholders' equity 1,906.2 1,496.2
Statement of consolidated cash flows - unaudited
For the year ended 31 December 2024
2024 2023
$m $m
Cash flows from operating activities
Comprehensive income 125.6 190.8
Depreciation 1.1 0.7
Write-off of intangible asset - 1.4
Interest expense on lease liabilities 0.1 0.1
Net investment income (65.3) (42.4)
Net realised (gains) losses on investments (0.1) 1.3
Net unrealised (gains) losses on investments (1.0) (30.6)
Net unrealised foreign exchange (gains) losses 1.5 (1.2)
Equity-based incentive expense 7.1 2.5
Change in operational assets and liabilities
- Reinsurance assets and liabilities 337.1 184.0
- Other assets and liabilities 1.2 2.8
Net cash flows from operating activities 407.3 309.4
Cash flows used in investing activities
Purchase of investments (736.3) (541.5)
Proceeds on sale and maturity of investments 462.2 356.5
Interest received 55.1 37.0
Purchase of property, plant and equipment (0.7) (0.7)
Net cash flows used in investing activities (219.7) (148.7)
Cash flows used in financing activities
Lease liabilities paid (0.8) (0.7)
Dividends paid (59.5) (59.3)
Purchase of own shares (9.4) (13.7)
Distributions from EBT - (0.1)
Net cash flows used in financing activities (69.7) (73.8)
Net increase in cash and cash equivalents 117.9 86.9
Cash and cash equivalents at the beginning of the year 199.8 112.9
Effect of exchange rate fluctuations on cash and cash equivalents (4.5) -
Cash and cash equivalents at end of year 313.2 199.8
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