Q4 2024 Conduit Holdings Ltd Earnings Call Transcript
Key Points
- Conduit Holdings Ltd (STU:CHO) reported a 25% increase in gross premiums written, reaching $1.16 billion in 2024.
- The company achieved a return on equity of 12.7% for 2024, despite a challenging year with significant catastrophe losses.
- Net investment return was $66.1 million or 4% for 2024, supported by a higher book yield on a growing investment portfolio.
- The company's balance sheet remains strong with over $1 billion in total capital and no debt, providing headroom for further growth.
- Conduit Holdings Ltd (STU:CHO) maintained a conservative investment strategy, resulting in a high-quality, highly liquid portfolio with an average credit quality of AA.
- The discounted combined ratio increased to 86% from 72.1% in 2023, primarily due to increased catastrophe activity.
- The company faced significant losses from natural and man-made catastrophes, including $68 million from Hurricanes Milton and Helene.
- The California wildfires have created considerable uncertainty, with preliminary loss estimates between $100 million and $140 million net of reinsurance recoveries.
- Net investment return decreased from 5.8% in the prior year to 4% in 2024, due to lower unrealized gains reflecting changes in interest rates and spreads.
- The company experienced pressure on legacy casualty reserves and a higher impact from discounting on the 2024 loss ratio compared to 2023.
Good morning, everyone. Welcome to the '24 Conduit results presentation. The team will present our results, but also an update on the tragic events that have occurred in Los Angeles.
With that, I will hand over to Trevor, and we will take questions afterwards, and the Q&A will be moderated by Brett Shirreffs, our Head of IR.
I'm pleased to be with you today to share our 2024 results, as well as provide updates on our January renewal performance.
And our exposure to the California wildfires.
First, on premiums, during 2024, we continue to grow our portfolio where market conditions supported. With the gross of premiums written increasing nearly 25% to 1.16 billion.
Our approach to building the portfolio has been consistent by selectively deploying capacity to business lines.
That offer the best risk adjusted returns.
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