Conduit Holdings, the ultimate parent company of Conduit Re, a multi-line Bermuda-based reinsurance business, today presents its interim results for the six months ended 30 June 2025.
Neil Eckert, Chief Executive Officer, commented: “We are in a period of transition as we begin positioning the business to be more resilient. We have started initiatives to manage net exposures better, including enhancing our outwards reinsurance programme and refining our portfolio. The process of rationalising our quota share exposure is underway and will lead to less premium in this area, while we have an increased appetite for excess of loss business. These adjustments are intended to reduce attritional loss exposure and improve diversification, which we believe will help drive more consistent returns in the future. The actions are further supported by targeted senior hires across key functions bringing valuable expertise and fresh perspectives to the team.
We have delivered 8.9% growth in gross premiums written and continue to see adequate pricing across many of our target classes, though market dynamics are shifting due to increased capacity. Our high quality and growing investment portfolio continued to deliver strong results, with 29.8% growth in net investment income and a 3.9% return through 30 June.
The first half was marked by elevated loss activity above our normal plan, including wildfires, severe convective storms and aviation events. Further, the recent UK High Court judgement regarding the 2022 Ukraine loss has significantly increased the industry’s insured loss from the event. The actions to rebalance our portfolio, together with increased losses during the second quarter and an increase in our reserves related to Ukraine, have resulted in a further reduction to our RoE expectations to the mid single digits for 2025. However, we believe Conduit has a strong foundation from which to build upon, and we are taking steps to advance the business and drive resilience to support long-term value creation across market cycles.”
* Refer to the Alternative Performance Measures (APMs) section for an explanation and description of the calculation
Key highlights:
- Gross premiums written for the six months ended 30 June 2025 of $803.3 million, an 8.9% increase over the six months ended 30 June 2024, reflecting targeted growth opportunities
- Rates remain at historically attractive levels despite some softening, with an overall risk-adjusted rate change of (3)% (net of claims inflation) for premium written in the first six months of 2025
- The six months ended 30 June 2025 were marked by particularly severe natural catastrophes and significant risk losses for the industry; our undiscounted combined ratio of 122.1% for this period reflects this activity, with the California wildfires accounting for 31.6% of this figure
- Net investment result of $63.8 million for the six months ended 30 June 2025 for a return of 3.9%, including strong growth in net investment income due to a growing investment portfolio
- Comprehensive loss of $13.5 million, representing a (1.3)% return on equity for the first six months of the year
- Tangible net assets per share of $6.43, approximately £4.68** (30 June 2024: $6.69 or £5.28; 31
- December 2024: $6.70 or £5.35)
** The GBP:USD exchange rate as at 30 June 2025 was 1.373 (30 June 2024: 1.266; 31 December 2024: 1.251)
Outlook
- The process of realigning our portfolio towards a greater share of excess of loss business is underway; as we work through our 2026 planning process, the team is actively identifying opportunities that align with our risk appetite and strategic objectives to improve diversification and margins
- We are making necessary changes to enhance our portfolio’s resilience and better manage net exposure going forward, including broader outwards protections, particularly related to secondary perils
- We will continue to strengthen our functional teams with targeted hires in underwriting, risk and claims, supporting our capabilities over the long term
- The previously mentioned portfolio adjustments, including purchasing additional reinsurance and reducing certain quota share business, will result in lower premium growth and net reinsurance revenue; this, along with loss activity above normal expectations and development on reserves related to Ukraine, will drive a lower RoE outlook for 2025 in the mid single digits
- Despite a loss for the half year, the Board remains confident in Conduit’s outlook, and has declared an interim dividend of $0.18 (approximately 13 pence) per common share, in line with our dividend policy which remains unchanged
- The strategic changes we are actioning are focused on generating more stable and resilient returns for shareholders, and we continue to target a mid-teens RoE across the cycle.