Best’s News & Research Service - December 09, 2021 12:29 PM (EST)
AM Best Affirms Credit Ratings of Conduit Reinsurance Limited
- December 09, 2021 12:29 PM (EST)
London //BestWire// - AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Conduit Reinsurance Limited (Conduit Re) (Bermuda). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Conduit Re’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
Conduit Re’s balance sheet strength is supported by its strongest level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), which the company is expected to maintain over its five-year start-up phase. Levels of risk-adjusted capitalisation take into account AM Best’s additional capital requirements for new company formations. Conduit Re holds a high level of excess capital relative to the scale of its underwriting operations, following a USD 1.1 billion initial public offering of its holding company, Conduit Holdings Limited, in December 2020.
In the first three quarters of 2021, Conduit Re’s profitability has been impacted by catastrophe losses and elevated expenses as the company achieves scale. Gross premiums written during this period reached USD 291.2 million. The adequate operating performance assessment reflects AM Best’s expectations that over the five-year start-up period, Conduit Re will be able to achieve internal capital generation assisted by the company’s well-defined business plans, and a favourable pricing environment.
Conduit Re has established relationships with brokers effectively and is on track to achieve its target premium volumes, albeit with a greater share of proportional treaty business than expected as a result of market conditions. The company’s reinsurance portfolio already benefits from good diversification of business by line of business and geography. In AM Best’s view, Conduit Re’s will require time to demonstrate and secure its competitive position in the international reinsurance market.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.