Conduit (CRE) H2 2023 earnings summary

Executive summary

• FY2023 gross premiums written (GPW) rose 49.6% to $931.4m; comprehensive income was $190.8m and return on equity (RoE) was 22.0%.

• Discounted combined ratio improved to 72.1% from 103.0% in FY2022; year-end tangible net assets per share rose to $6.25 from $5.41.

• Growth plans continue into 2024, with selective capacity deployment and increased focus on property and specialty.

Financial highlights

• Reinsurance revenue was $633.0m versus $392.4m; reinsurance service result was $183.6m versus $10.4m in FY2022.

• Net investment result was $70.6m versus a $52.8m loss; FY2023 included $30.6m net unrealised gains.

• Results of operating activities were $192.0m versus a $43.1m loss; diluted EPS was $1.19 versus a $0.27 loss per share in FY2022.

• FY2022 comparatives were restated for IFRS 17 adoption; GPW excludes reinstatement premiums.

Outlook and guidance

• At 1 January 2024, estimated ultimate premiums written were $582.4m, up 38% year on year; portfolio risk-adjusted rate change, net of claims inflation, was positive 3%.

• ~ $500m of unearned premiums is expected to flow through in subsequent years; attractive submissions and selective underwriting support continued organic growth.

• Renewing business remained strong, with high-quality new business; casualty selection remains disciplined while growth tilts toward property and specialty.

• No material increase in net PMLs was reported at the 1 January 2024 renewal.