Conduit Holdings Limited

Good day, everyone. Welcome to Conduit's Trading Update call for Q3 2025. We appreciate your time today. Joining me on the call are Neil Eckert, Chief Executive Officer, and Elaine Whelan, Chief Financial Officer. Please note our disclaimer language on slide two. I will now turn the call over to our CEO, Neil Eckert.

Thanks, Brett. Welcome to our presentation. I'm joined today by Elaine Whelan, our CFO. As usual with our trading updates, today's presentation will focus on our top line underwriting experience across each of our segments through the first nine months of the year. I will also provide our views on recent market conditions and some thoughts on the up and coming renewal seasons. Elaine will provide some additional detail on our financial investment highlights through the third quarter before closing remarks and time for questions. For the first nine months of 2025, we delivered growth in gross premiums written across all three of our segments. Our casualty segment has experienced the strongest growth during 2025, while property and specialty have increased at a more modest single digit rate. The relative growth rates across our segments reflect the opportunities we have seen throughout the year. Certain classes have presented more compelling opportunities to deploy our capital, and we have consciously grown in those areas, while we have also deliberately pulled back in other classes. Market conditions have become more competitive during 2025, following several years of price increases and strong returns to the industry. Overall, our risk-adjusted rate change net of claims inflation was down 3% for the nine months ended 30th September. In casualty, original rate change in certain classes is meeting or exceeding expected claims inflation, while conditions in property and specialty segments have been more competitive with some softening occurring after several years of increases. Despite the softening experience during the year, we believe pricing remains adequate. Our investment portfolio continued to perform well through Q3, with a net investment return of 5.4% for the first nine months. As our business matures, the investment portfolio has increased to £2 billion, providing increased leverage and income to support returns. Managed investments and cash increased approximately £350 million over the last 12 months. While the first half of 2025 was marked by elevated loss activity, with over 100 billion of insured catastrophe losses, the third quarter was a relatively benign period. Additionally, our loss estimates for previously reported events have remained stable. Whilst we recognise the loss environment was more benign during the third quarter, We are reaffirming our mid-single-digit ROE guidance for 2025, recognising that there is still potential for late-season hurricane activity and other lost events before year-end. We were reminded last week with Hurricane Melissa hitting several islands in the Caribbean with very intense winds and rain before coming to Bermuda. Our thoughts are with those who continue to experience the devastating impact of the storm as they begin to recover. While the full extent of the catastrophe will take time to assess and there remains uncertainty in industry loss estimates immediately following an event, our market share in the Caribbean is small and we do not expect this to be a material event. In line with our capital management strategy, we have followed a cautious approach to our share buyback program through the peak Atlantic hurricane season Now that we are through the most active part of the season, we will resume executing on our buyback programme, where we have board approval for up to 50 million until May 2026. 2025 continues to be a transitional year across multiple dimensions for Conduit, marked by deliberate steps to strengthen our leadership and position the company for improved underwriting resilience. Among these strategic initiatives, we are pleased to to announce the appointment of Stephen Possilwhite as our new Chief Underwriting Officer. Stephen brings nearly three decades of experience in the global specialty insurance and reinsurance market and has a proven track record of driving results across senior roles at several leading insurance and reinsurance organisations. His skills and experience are well aligned with Conduit's strategy and commitment to strengthen our underwriting capabilities. This appointment follows a rigorous search to identify a leader capable of advancing our underwriting strategy in this next phase of the company. The appointment complements the recent addition of William Randolph as Chief Risk Officer and the promotion of Angus Hampton to Head of Casualty amongst other appointments and promotions across the company. We are also pleased to welcome Nicholas Schott as an Independent Non-Executive Director on the Conduit Board, Nicholas joins us with an exceptional track record in financial services, honed over decades as a trusted leader in the investment banking and in advisory roles for FTSE 100 institutions. Collectively, these appointments underscore our commitment to bring the resources and talent to the organisation in order to execute on our strategy. Now turning to our top-line underwriting performance in the first nine months of the year. We achieved 8.5% growth in gross premiums written, reaching 1.04 billion. This growth reflects both targeted new business and increased participations on accounts where we saw strong alignment with our underwriting approach. Growth in our property and specialty books have continued to moderate as we proactively respond to evolving market dynamics and have reduced certain accounts where pricing has softened more aggressively. Our casualty segment continued to grow in Q3 and we increased participation with demonstrating positive rate momentum in targeted classes. As we work through our planning process and approach January renewals, we expect our growth rate will continue to moderate next year as pricing will likely continue to soften. And we begin to reposition our property portfolio towards a greater share of excess of lost business. We are also focused on improving the alignment of our inwards and outward portfolio with more effective retro coverage. As discussed earlier in the year, following the California wildfires, we purchased retrocession protection against large secondary perils. Our aim is to reduce volatility going forwards from these types of events, and we are focused on the net performance of our portfolio in our 2026 business planning. I will now turn to premium growth for our individual business segments, along with their respective market conditions and outlook. In property, we have grown gross premiums written by 32 million to 568 million for the first nine months of 2025, representing a 6% increase over the same period in 2024. After several years of positive rate compounding, the property market has experienced softening prices during 2025, driven by increased capacity from traditional reinsurers as well as alternative capital sources. This resulted in a risk-adjusted rate change net of inflation through 30 September of minus 5% for property, which was consistent with the experience we have seen during the year and within our expectations. Although pricing is moderating, our property book remains adequately priced with sufficient margin. Market behavior generally remains disciplined around terms and conditions with attachment points holding. And we have seen pricing for loss impacted accounts remain firm. As mentioned earlier this year, we are targeting a greater balance of quota share and excess of loss business within the property portfolio. Our strong relationships with customers and brokers will help provide access to the business we are targeting as we seek to expand shares on well-performing business and participate on new programs. We will also reduce shares on underperforming accounts or where the pricing or structure is no longer aligned with our appetite. As we execute on these plans for 2026, we expect to move towards a more even balance between quota share and excessive loss within the property segment during the upcoming year. with further progress over the next two to three renewal seasons. Casualty continues to be our second largest segment, providing attractive diversification to our underwriting risk profile and supporting the growth of our investment portfolio. We increased casualty gross premiums written by $45 million during the first nine months of 2025, reaching $269 million. This represents a 20% increase over the same period of 2024. The casualty market continues to be relatively disciplined, although pricing conditions vary by class. Across our casualty portfolio, risk-adjusted rate change net of inflation for the first nine months was plus one. This reflects our preferred classes keeping pace with claims inflation. while other classes within casualty, such as DNO and financial lines, have experienced more competitive pricing, and we have reduced our exposures in these areas. The growth we have experienced in casualty has been focused in targeted classes demonstrating improving conditions and positive rate momentum. This includes U.S. general third-party liability and U.S. excess and surplus lines. Our casualty portfolio is built on a foundation of solid long-term quota share partnerships, and it will be difficult to materially increase the excess and loss proportion of the accounts in this class. Overall growth was driven by increasing our support to partners that have demonstrated underwriting discipline and societal changes, including expertise in managing claims in this environment. We expect the casualty market will continue to be dynamic as we enter 2026 and we will maintain our careful approach to selecting our partners. Turning lastly to specialty, gross premiums written increased by a modest four million for the first nine months of 2025 to 202 million. This represents of stable 2% growth in the portfolio over the same period in 2024, consistent with growth presented at our 2025 interim results. Specialty is a broad market and conditions vary widely across classes. Capacity continues to be attracted to the margin potential and non-correlating characteristics of specialty risks. And we have seen new entrants looking to gain share. Rates are beginning to come off peak levels we experienced in 2024. And as a result, the portfolio has experienced a minus 3% risk adjusted rate change net of inflation for the nine month period. Our temper growth reflects the increased competition in the market and the team reducing exposure to accounts showing signs of margin compression. While these dynamics have introduced some pressure on rates, the broader environment remains disciplined, with terms and conditions largely remaining consistent. That said, we are beginning to experience a modest upward trend in seeding commissions, as seedings seek to benefit from abundant reinsurance capacity. In Q3, we have strengthened our specialty underwriting team with the appointment of David Frawley. David is a seasoned underwriter with deep market experience, particularly in marine and aviation classes, which will allow us to take advantage of any meaningful firming of aviation rates in 2026 following a number of significant loss events this year. I will now hand back to Elaine to go through our financial and investment highlights.

Thanks, Neil. Gross premiums written of $1,039.1 million are up 8.5% on the prior year. As we mentioned at the half year, we expected the growth we discussed then to moderate slightly over the rest of the year, and that's still the case, but we still expect to have a healthy level of growth for the full year. We have reinsurance revenue of $662.4 million versus $588.2 million in the prior year, a 12.6% increase year on year. A reminder once again, our reinsurance revenue is essentially gross premiums earned less seeding commission and a smaller adjustment for non-distinct investment components. It therefore tracks the same pattern as our gross premiums earned would have, just a lower number after the seeding commission deduction. Generally, seeding commissions have ticked up a bit, so we're seeing a higher deduction for those, which of course impacts our reinsurance revenue. On losses then, the first six months of 2025 was clearly another highly active period of natural catastrophe events and risk losses for the industry, including the California wildfires, but the third quarter has been relatively quiet. Our California wildfire loss hasn't really moved since the half year, and we are maintaining our previously reported reserve on that. Other previously reported loss events also remain stable. On the investment side, with the reduction in yields and spread tightening in the quarter, plus the portfolio generally producing strong investment income, we generated a return of 1.5%, bringing us to 5.4% for the year to date. Book yield is 4.2% and market yield is 4.3%. We remain relatively short duration and our focus is on maintaining a high quality, highly liquid portfolio. Duration is currently 2.8 years versus 2.7 years on our net reserves. Average credit quality is AA, and you can see the usual pie chart here with our asset allocation and no significant changes from prior quarters in that or our strategy. I'll now hand back to Neil for closing comments.