Conduit H2 Earnings Call Highlights

Conduit (LON:CRE) used its full-year 2025 results presentation to describe what management called a “difficult and transitional year,” marked by elevated catastrophe activity across the industry and a sizeable loss from the January California wildfires. Despite that start, the company reported a double-digit return on equity for the year, supported by strong investment performance, and outlined actions taken to reduce earnings volatility going forward.

Executive and board changes

Chief Executive Officer Neil Eckert said the company made “significant changes within the executive team” over the past 12 months. Stephen Postlewhite joined as Chief Underwriting Officer in late January, and William Randolph joined as Chief Risk Officer last July. The company also added staff across underwriting, modeling, actuarial, and claims, bringing headcount to 68 employees in Bermuda.

At the board level, Conduit appointed Nicholas Shott as chair following a recruitment process. Eckert also noted that founding director Elizabeth Murphy will retire from the board ahead of the 2026 AGM as part of succession planning.

Full-year 2025 results: growth, catastrophe losses, and investment income

Management reported gross premiums written of $1.24 billion in 2025, up nearly 7% year-over-year, as the company found select opportunities to grow while markets softened. Eckert cited Aon data indicating approximately $127 billion of insured catastrophe losses during 2025, noting that catastrophe activity and risk loss frequency remained elevated.

Conduit’s undiscounted combined ratio was 101.5% for 2025, which the company attributed largely to exposure to the California wildfires in the first half of the year, offset by a “benign” second half with no U.S. landfalling hurricanes. Comprehensive income totaled $116.8 million, translating to an ROE of 11.1%, which management said was below its “mid-teens cross cycle target” and initial expectations, but reflected a rebound after a first-half loss.

Investment performance was a major driver of earnings. The company posted a 6.7% investment return, generating $119.5 million of income. Managed investments increased by about $380 million over the last 12 months to $2.2 billion at year-end, and CFO Elaine Whelan said the portfolio’s book yield was 4.2%. Whelan added that investment income rose to $80.7 million from $65 million in the prior year, and the company recorded net unrealized gains of $39.2 million, aided by yield declines during the year.

Net tangible assets per share increased 11.9% including dividends, to $7.14 (GBP 5.30) per share, according to Eckert.

Segment performance: casualty growth offsets more competitive property and specialty markets

The company highlighted a shift in mix, driven by strong casualty growth. Eckert said overall risk-adjusted rates fell 3% for the year, reflecting declines of 5% in both property and specialty, while casualty pricing increased 1%.

• Property: Gross premiums written rose 2% to $659.4 million. Risk-adjusted rates on the renewal portfolio declined 5% as capacity increased and pricing softened, though management said pricing “remains adequate.” The property undiscounted combined ratio increased to 97.1% from 90.2%, reflecting net exposure to the California wildfires and, to a lesser extent, U.S. convective storms. Eckert noted the Atlantic hurricane season produced three Category Five storms, but none made U.S. landfall.
• Casualty: Gross premiums written increased 23% to $392.3 million, with the company emphasizing areas with stronger pricing such as U.S. general third-party liability. The casualty undiscounted combined ratio was 99.3%. Management said pricing varied by class, but capacity was “generally stable,” while prior-year reserve development issues across the industry helped keep pricing and terms more stable.
• Specialty: Gross premiums written declined 4% to $191.3 million as Conduit reduced writings in more competitive areas where pricing softened or commissions rose. Risk-adjusted rates fell 5%, and the specialty undiscounted combined ratio increased to 100.3% from 95.8%, driven by higher frequency of risk losses, including aviation events. Management added that a small portion of the California wildfire loss also sat within specialty.

January renewals and market conditions

Eckert said Conduit had a “successful January renewal season,” supported by extensive engagement with clients and brokers. As expected, pricing was more competitive: overall renewal pricing was down 5% across the portfolio. Property and specialty risk-adjusted rates were down 7%, while casualty was down 1%.

Management reiterated an appetite to increase the share of excess-of-loss within property and said it has begun writing more of this business, increasing treaty count, while also adding select new quota share opportunities. In casualty, the company wrote several new treaties and increased line size with select clients, with terms and conditions described as generally stable for U.S. accounts and more competitive internationally. In specialty, Conduit reported increased new business, including excess-of-loss opportunities, while remaining “highly selective” amid ongoing rate softening and new market entrants. The company also cited participation in new aviation deals where pricing has been more stable.

Capital returns, volatility reduction, and Bermuda tax credits

Conduit returned $59.4 million to shareholders through dividends and repurchased 2.7 million shares for $12.5 million under its buyback program, which has continued into the new year. Eckert said authorization expires at the May AGM and the company will seek renewed authorization. He also said the company remains well capitalized, citing an estimated BSCR of 252% at December 31.

In response to investor questions, management repeatedly emphasized capital allocation toward “the most profitable business” while using surplus capital to repurchase shares, particularly given the stock’s discount to NAV. Eckert also said softer market conditions can create opportunity in purchasing Conduit’s own reinsurance, helping manage net exposures.

On volatility reduction, the company described expanding its exposure management team and disclosing new PML zones at 100- and 250-year return periods. Eckert said PMLs declined year-over-year across almost all peak zones at both return periods, primarily due to expanded retrocession coverage and increased limits purchased in January 2026. Conduit also increased retrocession protection for secondary perils such as wildfire, convective storm, floods, and freezes, citing lessons from the California wildfires. Eckert said that applying the 2026 retro program to the California wildfire loss would reduce Conduit’s net loss by “at least 50%.”

Whelan also highlighted Bermuda legislation passed in the fourth quarter introducing tax credits for companies with substantial presence and investment in Bermuda. Conduit recorded $6.9 million of credits in 2025, which offset expenses; Whelan said the credit is being implemented in stages—50% this year, 75% next year, and 100% the following year—subject to payroll costs.

Looking ahead, management said it expects growth to moderate further as the market softens, while maintaining discipline on pricing and continuing to adjust appetite based on where it sees the best margins.

About Conduit (LON:CRE)

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 Re and is listed on the London Stock Exchange