Conduit (LON:CRE) reported higher first-quarter gross written premiums and said it continues to find selective growth opportunities, even as reinsurance market competition increases and pricing softens across parts of its portfolio.
During the company’s Q1 2026 trading update, Chief Executive Officer Neil Eckert said gross premiums written rose 4.9% year over year to $430 million, with growth led by casualty. Eckert said the company’s overall growth rate “continues to moderate” as market capacity increases and competition intensifies.
“Prices are softening,” Eckert said, noting that Conduit observed an overall risk-adjusted rate decline of 5% in the first quarter. He said property and specialty markets are seeing more intense competition, while casualty rates are more stable and broadly keeping pace with loss trends.
Casualty Growth Leads the Quarter
Chief Underwriting Officer Steve Postlethwaite said Conduit’s casualty segment generated $109.7 million of gross premiums written in the quarter, up 23% from the prior-year period. Growth was largely attributable to U.S. general third-party liability, with additional gains from smaller subclasses that improved portfolio diversification.
Postlethwaite said Conduit renewed expiring casualty business at generally similar shares while exiting treaties where returns or terms were less attractive. He said the company is focusing on cedents with strong underwriting and prudent cycle management.
In response to an analyst question about the casualty increase, Postlethwaite said the company benefited from its “scale and nimbleness” and highlighted three areas of selectivity: targeting lines that remain rate adequate, working with preferred partners, and adding classes that improve diversification and capital efficiency.
Risk-adjusted casualty rates were down 1% after adjusting for inflation expectations, Postlethwaite said. He added that Conduit remains mindful of industry loss trends, including signs of increased loss frequency and legacy concerns in some areas.
Property and Specialty Face Softer Pricing
In property, gross premiums written rose 1% year over year to $248.8 million. Postlethwaite said the modest increase reflected new business and higher shares on well-priced accounts, offset by reductions or exits from treaties that did not meet the company’s technical pricing standards.
Risk-adjusted rates in the property portfolio fell 9% during the quarter. Postlethwaite said softening was most notable in property catastrophe reinsurance, driven by strong industry returns, increased capacity and relatively benign market loss activity. He said Conduit expects the softening trend to continue through mid-year renewals.
Specialty premiums declined 4%, or $3 million, to $71.8 million. Postlethwaite said competition increased in the segment and the company stepped back from deals that did not meet its pricing or terms requirements. Risk-adjusted specialty rates were down 7% in the quarter.
Postlethwaite said some loss-impacted contracts and selected classes, including marine and aviation, have seen firmer pricing, and Conduit has written a few new treaties in those areas.
Loss Activity and Geopolitical Risk
Eckert said the first quarter was more benign from a loss perspective than the prior-year period, which included the California wildfires, though industry catastrophe losses were in line with longer-term averages. He also said the ongoing conflict in the Middle East could affect several market areas depending on its duration and severity.
Conduit has exposure to the conflict in some specialty classes and recorded an initial loss estimate based on current information, but Eckert said the estimate is not material to the company. Chief Financial Officer Elaine Whelan separately said Conduit expects to pick up some losses related to the U.S. military campaign in Iran, but does not expect them to be material to results based on available information.
“I would describe the loss level from the ongoing conflict as manageable and within our earnings expectations,” Whelan said.
Investment Portfolio Grows to $2.3 Billion
Whelan said reinsurance revenue increased 12.8% year over year to $240.3 million. She noted that gross premiums written exclude reinstatement premiums under IFRS 17.
Conduit’s investment portfolio generated a 0.3% return in the quarter despite volatility, higher fixed income yields and wider spreads following the outbreak of conflict in the Middle East. Eckert said managed investments grew by more than $100 million since year-end and by more than $400 million over the last 12 months, reaching $2.3 billion.
Whelan said the portfolio book yield was 4.2%, in line with year-end and March 31 of the prior year. Duration was 2.8 years on both investments and net reserves, and average credit quality was double-A. She said Conduit remains focused on a high-quality, highly liquid portfolio and has added a small bank loan portfolio to help diversify and maintain yield.
Capital Management and Outlook
Conduit repurchased $22.9 million of shares in the first quarter and has substantially completed a previous $50 million buyback authorization, management said. Whelan said the board approved another buyback program, which the company intends to execute as appropriate before its 2027 annual general meeting.
Asked about capital levels, Whelan said Conduit is comfortable with its current position. She said the company considers regulatory measures, rating agency models and its internal capital model when assessing capital needs, rather than relying on a single threshold.
Eckert also addressed Conduit’s outward retrocession program, saying the company renewed the program at Jan. 1 with broader coverage for peak and secondary perils. In response to an analyst question, he said the company sought to reduce basis risk following the California wildfire issue in 2025. While Conduit benefited from more competitive retrocession conditions, Eckert said the cost would not be lower than last year because the account has grown, though he emphasized that the company received better value.
On mid-year renewals, Postlethwaite said Conduit does not see a material difference from first-quarter trends. Property is likely to be “off slightly more,” he said, while casualty and specialty should be broadly similar to the trends shown in the quarter.
Eckert said the market is softening but that Conduit still views most areas as rate adequate. He said the company remains focused on underwriting discipline, capital efficiency and shareholder returns as competitive conditions persist.
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 stable. Conduit Holdings Limited is the ultimate parent of Conduit Reinsurance Limited and is listed on the London Stock Exchange (ticker: CRE).
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Where Should You Invest $1,000 Right Now?
Before you make your next trade, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.
Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.
They believe these five stocks are the five best companies for investors to buy now...
The article "Conduit Q1 Earnings Call Highlights" first appeared on MarketBeat.
