Chairman of property and casualty reinsurer, Conduit Re, Neil Eckert, has said that because of the propitious timing of the company’s launch, and the exceptional hard work of the team in building out ability to deliver on plans, Conduit Re is “perfectly placed” to take advantage of the current conditions arising from the 2021/22 hard market.
Describing the current hard market as a “very different beast”, Eckert said to shareholders in his annual report statement that it has been a market in which the drivers of much needed improvements within pricing and terms and conditions, were in the primary direct markets, adding that there are now “signs of real capacity constraint” in some areas of the market, as well as continuing pricing momentum.
“Conduit Re was conceived and launched into the best insurance underwriting conditions to have existed for over a decade, possibly even two,” Eckert said.
Eckert described how the last two or three market corrections that he had personally experienced within his career were triggered by large catastrophe events – Hurricane Andrew in 1992, the World Trade Centre Attacks in 2001, and the combined losses from Hurricanes Katrina, Rita and Wilma in 2005.
Furthermore, Conduit Re’s overall results for its first full year of operations saw the company take a comprehensive loss of $42 million.
Eckert explained to shareholders that whilst it is disappointing to be reporting a loss, it is in line with what can be expected from a year that was “particularly costly for the industry.”
In addition, the company’s initial strategy, with a bias towards quota share business, also resulted in a delayed recognition of earnings compared to its IPO plan.
“This bias towards writing more quota share business was a direct response to market conditions and has allowed us to build a high-quality diversified and balanced portfolio which stood us in good stead with relatively low catastrophe losses during 2021, a “cat heavy” year,” Eckert told shareholders.
However, despite these shortcomings, Eckert stated that the business remains exceptionally well capitalised, as well as being on track to fulfil the growth strategy set out at the time of the IPO.
He explained to shareholders that he is excited about the future for Conduit, and that the company’s first year has been about laying resilient foundations, building the team, the operational capability, constructing the underwriting portfolio, and forming a strong and healthy culture.
“I am proud of what has been achieved so far, but also acutely aware of the opportunity given to us by our shareholders and the responsibility that entails. We will continue building on our excellent first year’s work in 2022.”
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