London-listed, made in Bermuda

Trevor Carvey, chief executive and chief underwriting officer of Conduit Re, explains the importance of technology and why freedom from legacy exposures is such an advantage for a new reinsurer.

“Our executive chairman is passionate about all things environmental.”
Trevor Carvey, Conduit Re

When was the company formed and with how much capital?

Conduit Re was capitalised on December 7, 2020 when its holding company, Conduit Holdings, completed an initial public offering (IPO) on the London Stock Exchange. Our IPO raised approximately $1.1 billion and we invested $1.05 billion into Conduit Re to support our underwriting plans.

Who are the main investors?

Our investor base currently consists of around 60 institutional investors, most of whom are well known and established global investment institutions. Our largest investors include Aviva, Fidelity, CI Signature, Kames Capital (Aegon) and Odey Investments.

What was the inspiration for the name?

Conduit is a connection and the reinsurance business is about connections—connections between people, partners and data. It’s a name that provokes ideas of communication, partnership and the facilitation and protection of underlying business.

“The hardening market offers good rate rises and attractive market conditions.”

Who are the key figures/senior management at this stage?

Conduit is led by Neil Eckert as executive chairman and me as group chief executive and current chief underwriting officer.

Neil became a reinsurance broker in 1980 and has an excellent track record of starting, building and developing in the Listed Company environment for Institutional investors, including Brit, Climate Exchange and Aggregated Micropower, all of which were public companies that he founded, built and successfully exited.

I have spent many years as a reinsurance underwriter and manager and have previous startup experience with Arch Re Bermuda, Harbor Point and Markel.

Our senior team also consists of a group of insurance experts, with years of experience in our target classes of underwriting:

Greg Roberts and Chris Board run our property underwriting, both of whom learned their trade at Amlin and are well-known in their fields.

Marc Bearman runs our Specialty business and is also a very well-known figure in the marine and energy market. He joins us from AXA XL.

Erik Soria and Angus Hampton run our casualty underwriting; Erik joining from Sirius and Angus from Liberty.

What is your initial business plan in terms of target lines of business?

We are looking to achieve steady, sustainable growth with a well-diversified excess of loss and quota share book of treaty reinsurance business across multiple underwriting classes and in multiple territories. Our book will be fairly evenly split between property, casualty and specialty.

Why did you feel now was a good time to launch a new reinsurer?

The business has been formed to capitalise on what we believe is an exceptional market opportunity. Years of high insured catastrophe losses, diminished casualty reserves and the more recent losses and industry strain caused by COVID-19 and capacity reductions in certain classes of insurance and reinsurance have led to significant corrections in insurance and reinsurance pricing and tightening of policy terms and conditions.

The hardening market offers good rate rises and attractive market conditions and Conduit benefits from having no legacy exposure and a strong, unencumbered balance sheet available to write new business.

Additionally, our focus on technology, especially data management and analysis, allows us to benefit from investment in new technology without any legacy issues.

“We will take a balanced approach to our catastrophe risk exposures.”

Why did you choose Bermuda?

Bermuda is a natural home for a startup reinsurer, being a major hub for global reinsurance, and a base of operations for all the top reinsurance broking firms. There’s also an exceptional pool of local industry talent available, a strong and effective regulator and the Island offers a tried and tested path for new businesses in the industry.

What has been your experience of Bermuda so far?

Many of the Conduit team have been involved with Bermuda startups before and were already known to the Bermuda Monetary Authority and this was helpful. Luckily, we knew what was required and were well prepared.

This previous experience also helped us to hit the ground running with brokers and clients.

What are your predictions for reinsurance market conditions in 2021?

Despite the hardening market conditions, the industry has remained disciplined and professional. We expect this market discipline to continue through the April renewals and into the mid-year renewals.

There is a lot of talk about rate increases and improvements in terms and conditions, and it is undoubtedly the case that current market conditions are favourable in our key target classes of business and we expect them to continue to improve across the board. The signs are that this is a sustained industry correction recognising the many factors that affect the price of risk.

COVID-19 continues to be a significant drag on the market and will continue to create uncertainty as many cases are litigated.

What are your medium-term objectives as a business?

Our overall business objective is to underwrite a diversified portfolio $472 million of gross written premium in 2021 which we will grow steadily year on year, with a view to building our portfolio to c.$1 billion by year five.

We will take a balanced approach to our catastrophe risk exposures, and aim to build book value and franchise value through the quality of our underwriting, our levels of service and our use of technology.

Environmental, social and corporate governance (ESG) considerations will also be a key focus for Conduit. We are embedding ESG principles into our business activities, our investment philosophy and our broader company culture. Our executive chairman is passionate about all things environmental and has been at the forefront of delivering environmental change through market initiatives.

We aim to promote better risk management, innovation, sustainable outperformance and positive community engagement with our ESG agenda.

Image courtesy of Shutterstock / Darryl Brooks / Martin Lisner

In association with:

A Bermuda:Re+ILS Special Report