Conduit Holdings Limited

Welcome, ladies and gentlemen, to the Conduitry Q3 update. I'm pleased to report that market conditions remain favourable, and we say the headline of this slide, among the best in decades. This is caused by a number of factors which we expect to continue. There's still the inflationary pressures causing more demand. The insurance carriers are are exhibiting the demand for new reinsurance business. We have observed a structural shift in US primary markets with the continued growth of E&S. Industry legacy. We're still seeing back year strengthening of reserves, which from our perspective at Conduit with our clean balance sheet is a competitive advantage. So, I mean, my takeaway here is Conduit Re is ideally positioned to capitalise. We've had a great quarter. And with that, I will hand over to Trevor Carvey.

Thanks, Neil. So as regards our broader trading update numbers for Q3, we've had another decent quarter. Ultimate premiums written year-to-date are now $909 million, which is up 56.4% over the nine months last year. On a gross premium written basis, the year-to-date figure is $764 million, up 50.3%, compared to the nine months ending 30 September 2022. We are really pleased with these numbers as we continue to grow and running ahead of the original IPO five-year plan. And essentially, we maintain our focus on diversification and growing various business classes in proportion as we scale. Greg can talk to this scaling later in the deck. On rate change, this stays positive for us across the book overall, at 15% risk adjusted, with property and specialty doing the heavy lifting currently in the weighted calculations across the overall portfolio. Our casualty book remains very healthy, with it skewed to what we view as a very disciplined client base and demonstrates that pricing is keeping pace with underlying loss trends, which is a must. We like the business bound in our portfolio, and it's worth mentioning that we continue to receive new offers to write casualty deals, where in our view, some insurers are not as disciplined or as focused as they need to be in our view. And it's always interesting to hold those up alongside our own book to compare and contrast. Benchmarking our book alongside others is always a very valuable exercise. On loss activity in the industry, whilst the quarter did not deliver a major landfalling hurricane event, there was certainly a continued higher frequency of wind events with severe convective storms hitting worldwide and in the USA in particular. At the end of the day, this has been an emerging pattern, and we continue to load the base model pricing assumptions for these circumstances, and thereby achieve an uplift across the broader property portfolio. This is in the knowledge that individual client performance is never a given, and some of them will surprise on the downside in circumstances like these, whilst others are an offset, surprising on the upside. That's the nature of a diversified book, and given the shape of our overall premium balance, where in general we carry a broad 70-30 premium split in favour of non-cap business, we can report that no caps event loss individually or in the aggregate has had a material impact during the nine months here today. Capital is a question that comes up from time to time, given that we've been able to grow faster than initially anticipated and given market conditions. Our current plans and stress tests do not contemplate any expected need to raise additional capital in our three to five year planning horizon. And by utilising current capital plus the earnings retention, we are in a position to fund the business ahead and maintain a healthy solvency position. My statement here takes into account stress tests, which are applied to a mean plan, but of course, extreme events, multiple large or catastrophe losses or a significant investment shock could of course provide uncertainty we carry headroom to buffer against such events and of course when we raised capital for the original plan there was headroom for other opportunities as they arose from the outset we have managed exposure and aggregations carefully whilst achieving valuable diversification writing the non-cap business is key for conduit we know that having a less pml hungry shape to the portfolio enables the business to grow volume significantly whilst also managing our capital needs. Scaling profitably, as we are experiencing this marketplace, strengthens our balance sheet and provides additional capacity for growth. As a final piece on this slide, we've stated several times over in the last few quarters, the man-made risk exposure part of our business, i.e. the non-natural catastrophe side of the industry, continues to look very attractive. Margins here are showing really well, and broadly speaking, we still report out on the base metric that around 70% of the premium we write is non-CAT exposed in nature, and will continue to generate a higher interest for some time yet. On the topic of CAT, this of course too has shown a significant uptick in pricing, and in the broader regions now, not just in the USA. Improving terms and conditions and wordings there are also moving margins, and Greg Roberts will speak to this and provide more colour in his part of the presentation. A slide we have shown before, and it demonstrates over time the evolution of the business and how we have continued to scale, is worth pointing out that the general trend and annual increases were broadly planned for, but true to say that volumes have grown faster than the original plan as market conditions have been in our favour. On a gross premium written basis, we've banged cumulatively over $1.7 billion since inception of the company, and that as a growth rate represents roughly 36% quarter on quarter over that timeframe. This is gross premium written with a significant unearned or yet to be earned piece and still due to flow through. Interestingly, over the last four quarters, the highest growth rate has been in specialty, with property close behind and followed by casualty. And that is broadly in line with our overall view of where the best opportunities and deal margins lie currently out there in the market. Greg will go into this in more detail in his slides next, and I'll pass over to him now. Thanks, Trevor.

Looking year on year, we've grown portfolio by around 56%. We really like the spread of business across our three major classes of property, specialty and casualty. And this can still be seen in our premium mix of 48% property, 30% casualty and 21% specialty. Now in proportional terms, we've increased specialty by 17% year on year and decreased casualty by 12% year on year when considering the mixed share of our portfolio with property remaining flat. This really demonstrates our prioritisation of growth and opportunities in property, specialty and then casualty in that order. We have eight core subclasses of business, but we monitor and trade in around 30. About 63% of our premium year to date is renewal premium, with the balance in 37% from new business. And this has expected contrast to our second year of about 69% of our premium coming from renewal contracts. Market trading environment remains highly attractive to us and is a great opportunity to grow in property and specialty. From the outset, we've managed very carefully tail risk within our portfolio, always willing to trade out the tail with caps and collars. Sometimes this can enable specialist capital to take this risk and sometimes it's simply retained by the seeders. I see this trend continuing and allowing us to grow further whilst maintaining the texture of our portfolio. As Trevor has mentioned, our total premium has sat at around 30% cap related and 70% non-cap related. This is an effective mix and remains suitable to our capital makeup and supports continued growth. Specialty is an exciting market with opportunities across multiple lines of interest to us. The bundled contracts of the past continue to provide new opportunity as unbundled options are now routinely considered upon renewal. This in turn has increased reinsurer focus on terms and conditions, particularly to coverage afforded in the contracts. This attention to wording creates an attractive market for us, and our underwriting team continues to pick their way through these. As I've outlined in the slide, the casualty market is one of varied seed and strategies. For us, our closest partners are actively managing the subclass cycles effectively and repositioning their portfolios accordingly. The management of public D&O risk varies considerably across the seed and base, and exposure to these classes have been visibly managed down at this point of the pricing cycle. Clearly, this is what we expect as a reinsurer. In the same fashion, we support the disciplined growth into the subclasses, delivering improving risk reward metrics. Our transparent and technical approach to the pricing of reinsurance contracts enables an effective dialogue with our seeders and is designed to assist both parties to be clear on the strategic alignment. As a reminder here, we continue to report our risk-adjusted portfolio metrics on a year-to-date basis after the application of our view of inflation. The underlying rates, or in other words, the quantum of premium exchange for risk cover, is growing in all classes. I think this is a really important message, as it tells us that the propensity for buyers of primary insurance contracts remains healthy and is in fact growing. This is not surprising when we think of the growing exposure as a result of both organic growth and the inflationary pressures. Our portfolio year-to-date overall rate change remains at 15%. The current texture of our casualty portfolio has resulted in flat risk-adjusted rate change net of inflation. whilst property and specialty show very strong risk-adjusted rate increases on a year-on-year basis. We expect to see demand increasing for reinsurance support from seedings as they tackle this exposure growth, both from an inflationary perspective and organic perspective, as population, commercial activity and investment continue to increase. On that note, I'll hand over to Elaine for her comments.