TIDMCRE
RNS Number : 1797H
Conduit Holdings Limited
26 July 2023
Pembroke, Bermuda - 26 July 2023
Pembroke, Bermuda - 26 July 2023
Conduit Holdings Limited
("CHL" LSE ticker: CRE)
Interim Results for the six months ended 30 June 2023
Comprehensive income of $78.6 million; RoE of 9.1%
Strong year-on-year growth in gross premiums written of 52.9%;
Combined ratio of 72.5%
Efficient business model, strong capital base, positioned for
continued growth into favourable market conditions
CHL, the parent company of Conduit Re, a pure-play reinsurance
business based in Bermuda, today presents its interim results for
the six months ended 30 June 2023, on an IFRS 17 basis.
Trevor Carvey, Chief Executive Officer, commented: "This has
been a very successful half year for Conduit, and we are delivering
on the goals we set out when we founded the business in 2020. In a
half year which has seen high industry losses, our focused
underwriting strategy has delivered strong underwriting results
which, coupled with our low expense base, have delivered a very
attractive combined ratio of 72.5% (83.1% on undiscounted basis).
With no back years prior to 2021, we continue to look forward to
deploying capital effectively, taking maximum advantage of current
market conditions, which we see continuing for some time."
Neil Eckert, Executive Chairman, commented: "We are delighted to
announce our maiden interim profit. The low combined ratio and
highly attractive return on equity are testament to the
effectiveness of our strategy. This is one of the hardest insurance
markets in a generation and we are very well placed to capitalise
on that with our efficient business model."
Key financials ($m) Six months ended 30 June 2023 Six months ended 30 June 2022 Change
(re-stated)(1)
Estimated ultimate premiums written
(2) 762.2 492.2 54.9%
Gross premiums written (3) 542.2 354.5 52.9%
Reinsurance revenue 278.7 169.3 64.6%
Net reinsurance revenue 242.8 148.9 63.1%
Reinsurance service result 80.7 10.4 676.0%
Net investment result 22.6 (50.0) 145.2%
Comprehensive income (loss) 78.6 (39.4) 299.5%
Financial ratios (%) Six months ended 30 June 2023 Six months ended 30 June 2022 Change (pps)
(re-stated) (4)
Return on equity 9.1 (4.0) 13.1
Net loss ratio 57.5 85.0 (27.5)
Reinsurance operating expense ratio 9.3 8.0 1.3
Other operating expense ratio 5.7 6.9 (1.2)
Combined ratio (discounted) 72.5 99.9 (27.4)
Combined ratio (undiscounted) 83.1 105.8 (22.7)
Total net investment return 2.1 (4.7) 6.8
1 With the transition to IFRS 17, certain comparative amounts
have been re-stated as if the standard had always been in
effect.
2 Estimated ultimate premiums written now exclude reinstatement
premiums to ensure consistency with the IFRS 17 view of
revenue.
3 Gross premiums written now exclude reinstatement premiums to
ensure consistency with the IFRS 17 view of revenue
4 With the transition to IFRS 17, certain comparative amounts
have been re-stated as if the standard had always been in
effect.
Key highlights:
2023 H1 Results
-- Gross premiums written for the six months ended 30 June 2023
of $542.2 million, a 52.9% increase over the first six months of
2022
-- Overall portfolio risk-adjusted rate change for the first six
months of 2023, net of claims inflation, of 15%
-- Compounding impact of strong renewal book, with high quality
partners, in third year of trading
-- In an active natural catastrophe period for the industry, no
major event loss, individually or in aggregate, had an outsized or
material impact on our results for the period
-- Combined ratio of 72.5% for the first six months of 2023
compared with 99.9% for the same period in 2022
-- Sponsored the issuance of first $100 million three-year
catastrophe bond; resulting collateralised reinsurance cover
complements traditional retrocession programme
-- Total reinsurance and other operating expense ratio of 15.0%
for the first six months of 2023 compared with 14.9% for the same
period in 2022
-- High quality investment portfolio with average credit quality
of AA; book yield of 3.2%, and market yield of 5.5% (respectively
AA, 1.4% and 3.5% for the same period in 2022)
-- Total net investment return of $22.6 million for the six
months ended 30 June 2023 which includes a net unrealised gain of
$5.7 million, compared to a net investment loss of $50.0 million
which included $54.3 million of net unrealised loss in the same
period in 2022
-- Comprehensive income of $78.6 million, representing a 9.1% return on equity for the half year
-- Interim dividend of $0.18 (approximately 14 pence) per common share declared
Outlook
-- $1.9 billion of estimated ultimate premiums written from
launch in December 2020 up to 30 June 2023, with significant
pipeline of unearned premium of approximately $755 million which
will flow through in subsequent years
-- Market conditions remain very favourable with property and specialty leading the way
-- Capacity for continued growth into a hard market and benefiting from:
-- Our experienced team, which has rapidly developed a
reputation for being a responsive, reliable and relevant
counterparty - evidenced by the substantial growth we have been
able to achieve since launch
-- Established, efficient and scalable underwriting business model
-- Legacy-free balance sheet with ample capacity to support the
planned growth and beyond; AM Best A- (Excellent) rating, with
"very strong" balance sheet strength
Underwriting update
During the first six months of 2023, Conduit Re continued to
show growth across all segments, benefiting from new business, high
retention and underlying growth of renewal business, coupled with
improving rates. Client count and submission flow have increased in
line with Conduit Re's strategy, with the embedded renewing
portfolio providing the key profitable foundations.
Premiums
Estimated ultimate premiums written for the six months ended 30
June 2023:
2023 2022 re-stated Change Change 2022 published
Segment $m $m $m % $m
Property 371.9 228.8 143.1 62.5% 230.5
Casualty 237.7 171.0 66.7 39.0% 171.0
Specialty 152.6 92.4 60.2 65.2% 95.2
Total 762.2 492.2 270.0 54.9% 496.7
----------- ------ --------------- ------- ------- ---------------
Gross premiums written for the six months ended 30 June
2023:
2023 2022 re-stated Change Change 2022 published
Segment $m $m $m % $m
Property 308.4 186.6 121.8 65.3% 188.3
Casualty 140.6 111.6 29.0 26.0% 111.6
Specialty 93.2 56.3 36.9 65.5% 59.1
Total 542.2 354.5 187.7 52.9% 359.0
----------- ------ --------------- ------- ------- ---------------
Pricing
Pricing levels and terms and conditions continued to improve in
the first half of 2023 and we were presented with an increasing
number of opportunities to deploy our capital into the areas and
products that we target. The non-catastrophe elements of both
property and specialty in particular are providing ongoing
opportunities for selective growth.
Conduit Re's overall risk-adjusted rate change for the six
months ended 30 June 2023, net of claims inflation, was 15%, and by
segment was:
Property Casualty Specialty
30% 0% 12%
Net reinsurance revenue
For the six months ended 30 June 2023:
Property Casualty Specialty Total
$m $m $m $m
Reinsurance revenue 152.3 77.7 48.7 278.7
Ceded reinsurance expenses (31.2) (0.6) (4.1) (35.9)
Net reinsurance revenue 121.1 77.1 44.6 242.8
---------------------------- --------- --------- ---------- -------
For the six months ended 30 June 2022:
Property Casualty Specialty Total
$m $m $m $m
Reinsurance revenue 85.0 55.7 28.6 169.3
Ceded reinsurance expenses (16.6) (0.6) (3.2) (20.4)
Net reinsurance revenue 68.4 55.1 25.4 148.9
---------------------------- --------- --------- ---------- -------
Reinsurance revenue for the six months ended 30 June 2023 was
$278.7 million compared to $169.3 million for the same period in
2022. The increase in reinsurance revenue relative to the prior
period is due to continued growth in the business plus the earn-out
of premiums from prior underwriting years.
Ceded reinsurance expenses for the six months ended 30 June 2023
were $35.9 million compared to $20.4 million for the same period in
2022. The increase in cost relative to the prior period reflects
additional limits purchased due to the growth of the inwards
portfolio exposures plus price increases at the 1 January renewals.
During the second quarter of 2023, Conduit Re sponsored the first
issuance of a $100 million catastrophe bond by Stabilitas Re Ltd.,
which was placed successfully with strong investor demand. The
resulting three-year collateralised reinsurance cover complements
Conduits Re's traditional retrocession programme.
Net reinsurance service expenses
For the six months ended 30 June 2023:
Property Casualty Specialty Total
$m $m $m $m
Reinsurance losses and loss related amounts (63.2) (56.5) (27.6) (147.3)
Reinsurance operating expenses (13.6) (5.7) (3.2) (22.5)
Ceded reinsurance recoveries 7.6 - 0.1 7.7
Net reinsurance service expenses (69.2) (62.2) (30.7) (162.1)
--------------------------------------------- --------- --------- ---------- --------
For the six months ended 30 June 2022:
Property Casualty Specialty Total
$m $m $m $m
Reinsurance losses and loss related amounts (40.6) (48.2) (49.1) (137.9)
Reinsurance operating expenses (6.7) (3.2) (2.0) (11.9)
Ceded reinsurance recoveries 3.0 - 8.3 11.3
Net reinsurance service expenses (44.3) (51.4) (42.8) (138.5)
--------------------------------------------- --------- --------- ---------- --------
Net reinsurance losses and loss related amounts (5)
In an active natural catastrophe period for the industry, no
major event loss, individually or in aggregate, had an outsized or
material impact on Conduit during the first six months of 2023.
Our discounted net loss ratio for the six months ended 30 June
2023 was 57.5% compared with 85.0% for the same period in 2022,
while our undiscounted net loss ratio was 68.1% and 90.9%
respectively. The prior period loss ratio was impacted by our
estimated ultimate net impact, on an undiscounted basis, from the
Ukraine conflict of $24.6 million.
Our undiscounted ultimate loss estimates, net of ceded
reinsurance and reinstatement premiums, for previously reported
loss events remain stable.
Our loss and reserve estimates have been derived from a
combination of reports and statements from brokers and cedants,
modelled loss projections, pricing loss ratio expectations and
reporting patterns, all supplemented with market data and
assumptions. We will continue to review these estimates as more
information becomes available.
5 Reinsurance losses and loss related amounts less ceded
reinsurance recoveries
Reinsurance operating expenses and other operating expenses
For the six months ended 30 June 2023:
2023 2022 re-stated Change Change
$m $m $m %
Reinsurance operating expenses 22.5 11.9 10.6 89.1%
Other operating expenses 13.9 10.2 3.7 36.3%
Total reinsurance and other operating expenses 36.4 22.1 14.3 64.7%
------------------------------------------------ ----- --------------- ------- -------
2023 2022 Change
% % (pps)
Reinsurance operating expense ratio 9.3 8.0 1.3
Other operating expense ratio 5.7 6.9 (1.2)
Total reinsurance and other operating expense ratio 15.0 14.9 0.1
----------------------------------------------------- ----- ----- -------
Reinsurance operating expenses includes brokerage and operating
expenses deemed attributable to reinsurance contracts.
Total reinsurance and other operating expenses were $36.4
million for the six months ended 30 June 2023 compared with $22.1
million for the prior year. The increase is due to the continued
growth of the business and increased headcount.
The increase in the reinsurance operating expense ratio and
respective decrease in the other operating expense ratio were due
to a larger proportion of Conduit's operating expenses being deemed
attributable to reinsurance operating expense as the business
matures.
Net reinsurance finance income (expense)
The net reinsurance finance expense was $10.1 million for the
six months ended 30 June 2023 compared with income of $10.1 million
for the same period in the prior year. With the increase in yields
in the first quarter of this year broadly reversing in the second
quarter, the impact of re-measuring net losses to current discount
rates was minimal. The unwind of discount made up most of the
expense in the first six months of 2023, given the increasing net
reserve balances and rates in 2022. The opposite was true for the
income in the prior year as rates increased significantly but there
was little discount to unwind from the prior year.
Investments
In line with our stated strategy, we continue to maintain our
conservative approach to managing our invested assets with a strong
emphasis on preserving capital and liquidity. Our strategy remains
maintaining a short duration, highly-rated portfolio, with due
consideration of the duration of our liabilities. Our investment
portfolio does not hold any derivatives, equities, alternatives or
emerging market debt.
The investment return for the first six months of 2023 was 2.1%
driven primarily by investment income given a generally higher
yielding portfolio. Narrowing credit spreads also supported the
portfolio during a period of yield volatility. In the first six
months of 2022 the portfolio returned (4.7)% due to the significant
increase in treasury yields.
Net investment income, excluding realised and unrealised gains
and losses, was $17.2 million for the six months ended 30 June 2023
(30 June 2022 - $6.4 million). Total investment return, including
net investment income, net realised gains and losses, and net
change in unrealised gains and losses, was a gain of $22.6 million
(30 June 2022 - $50.0 million loss).
While we expect market volatility to remain elevated in the near
term, Conduit expects to be able to reinvest at higher rates as the
existing portfolio rolls over.
The breakdown of the managed investment portfolio is as
follows:
As at 30 June 2023 As at 30 June 2022 As at 31 December 2022
--------------------------- ------------------- ------------------- -----------------------
Fixed maturity securities 91.8% 91.7% 91.3%
Cash and cash equivalents 8.2% 8.3% 8.7%
Total 100.0% 100.0% 100.0%
--------------------------- ------------------- ------------------- -----------------------
Key investment portfolio statistics for our fixed maturities and
managed cash were:
As at 30 June 2023 As at 30 June 2022 As at 31 December 2022
---------------- ------------------- ------------------- -----------------------
Duration 2.4 years 2.4 years 2.2 years
Credit Quality AA AA AA
Book yield 3.2% 1.4% 2.4%
Market yield 5.5% 3.5% 5.2%
---------------- ------------------- ------------------- -----------------------
Capital & dividends
Total capital and tangible capital available was $0.92 billion
as at 30 June 2023 (30 June 2022 - $0.92 billion; 31 December 2022
- $0.87 billion).
Tangible net assets per share as at 30 June 2023 were $5.72 (30
June 2022 - $5.56; 31 December 2022 - $5.41).
On 25 July 2023, Conduit's Board of Directors declared an
interim dividend of $0.18 (approximately 14 pence) per common
share, resulting in an aggregate payment of $29.7 million. The
dividend will be paid in pounds sterling on 8 September 2023 to
shareholders of record on 18 August 2023 (the "Record Date") using
the pound sterling / US dollar spot exchange rate at 12 noon BST on
the Record Date.
Webcast
Conduit's management will host a virtual meeting for analysts
and investors via a webcast and conference call on Wednesday 26
July 2023 at 12.00 noon UK time / 8.00 am Bermuda time.
To access the webcast, please register in advance here:
https://www.lsegissuerservices.com/spark/ConduitHoldingsLtd/events/e1d7a6f0-afc8-4c85-9005-2b8c6e0683c1
To access the conference call, please register to receive unique
dial-in details here:
https://services.choruscall.za.com/DiamondPassRegistration/register?confirmationNumber=8220743&linkSecurityString=15183aa09b
A recording of the conference call will be made available later
in the day on the Investors section of Conduit Re's website at
www.conduitreinsurance.com.
Media contacts
H/Advisors Maitland - Vikki Kosmalska / Alistair de
Kare-Silver
+44 (0) 207 379 5151
conduitre@h-advisors.global
Investor relations and other enquiries:
info@conduitreinsurance.com
Panmure Gordon (UK) Limited (Joint Corporate Broker)
+44 (0) 207 886 2500
Berenberg (Joint Corporate Broker)
+44 (0) 203 207 7800
Peel Hunt (Joint Corporate Broker)
+44 (0) 207 418 8900
This announcement contains information, which may be of a price
sensitive nature, that Conduit is making public in a manner
consistent with the Market Abuse Regulation (EU) No. 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018, as amended, and other regulatory
obligations. The information was submitted for publication, through
the agency of the contact persons set out above, at 07:00 BST on 26
July 2026.
About Conduit Re
Conduit Re is a pure-play Bermuda-based 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). References to "Conduit" include Conduit Holdings
Limited and all of its subsidiary companies.
Learn more about Conduit Re:
Website: https://conduitreinsurance.com/
LinkedIn: https://www.linkedin.com/company/conduit-re
Important information (disclaimers)
This announcement includes statements that are, or may be deemed
to be, "forward-looking statements". These forward-looking
statements may be identified by the use of forward-looking
terminology, including the terms "believes", "estimates", "plans",
"goals", "objective", "rewards", "expectations", "projects",
"anticipates", "expects", "achieve", "intends", "tends", "on
track", "well placed", "estimated", "projected", "may", "will",
"aims", "could" or "should" or, in each case, their negative or
other variations or comparable terminology, or by discussions of
strategy, plans, objectives, goals, targets, future events or
intentions. Forward-looking statements include statements relating
to the following: (i) future capital expenditures, expenses,
revenues, unearned premiums pricing rate changes, terms and
conditions, earnings, synergies, economic performance,
indebtedness, financial condition, dividend policy, claims
development, losses and loss estimates and future business
prospects; and (ii) business and management strategies and the
expansion and growth of Conduit's operations.
Forward-looking statements may and often do differ materially
from actual results. Forward-looking statements reflect Conduit's
current view with respect to future events and are subject to risks
relating to future events and other risks, uncertainties and
assumptions relating to Conduit's business, results of operations,
financial position, liquidity, prospects, growth and strategies.
These risks, uncertainties and assumptions include, but are not
limited to: the possibility of greater frequency or severity of
claims and loss activity than Conduit's underwriting, reserving or
investment practices have anticipated; the reliability of
catastrophe pricing, accumulation and estimated loss models; the
actual development of losses and expenses impacting estimates for
claims which arose as a result of recent loss activity such as the
Ukraine crisis, Hurricanes Ian and Ida, the European storms and
floods in 2021 and 2022, the earthquake in Turkey and wildfires in
Canada and Europe; the impact of complex causation and coverage
issues associated with attribution of losses to wind or flood
damage; unusual loss frequency or losses that are not modelled; the
effectiveness of Conduit's risk management and loss limitation
methods, including to manage volatility; the recovery of losses and
reinstatement premiums from our own reinsurance providers; the
development of Conduit's technology platforms; a decline in
Conduit's ratings with A.M. Best or other rating agencies; the
impact that Conduit's future operating results, capital position
and ratings may have on the execution of Conduit's business plan,
capital management initiatives or dividends; Conduit's ability to
implement successfully its business plan and strategy during 'soft'
as well as 'hard' markets; the premium rates which are available at
the time of renewals within Conduit's targeted business lines;
increased competition on the basis of pricing, capacity or coverage
terms and the related demand and supply dynamics as contracts come
up for renewal; the successful recruitment, retention and
motivation of Conduit's key management and the potential loss of
key personnel; the credit environment for issuers of fixed maturity
investments in Conduit's portfolio; the impact of swings in market
interest rates, currency exchange rates and securities prices;
changes by central banks regarding the level of interest rates and
the timing and extent of any such changes; the impact of inflation
or deflation in relevant economies in which Conduit operates;
Conduit becoming subject to income taxes in the United States or in
the United Kingdom; and changes in insurance or tax laws or
regulations in jurisdictions where Conduit conducts business.
Forward-looking statements contained in this interim update may be
impacted by the escalation or expansion of the Ukraine conflict on
Conduit's clients, the volatility in global financial markets and
governmental, regulatory and judicial actions, including coverage
issues.
Forward-looking statements speak only as of the date they are
made. No representation or warranty is made that any
forward-looking statement will come to pass. Conduit disclaims any
obligation or undertaking to update or revise any forward-looking
statements contained herein to reflect actual results or any change
in the assumptions, conditions or circumstances on which any such
statements are based unless required to do so by law or regulation.
All subsequent written and oral forward-looking statements
attributable to Conduit and/or the group or to persons acting on
its behalf are expressly qualified in their entirety by the
cautionary statements referred to above.
"Estimated ultimate premiums written" is the estimated total
gross premiums written (excluding reinstatement premiums) that is
expected to be earned assuming all bound contracts run to the end
of the period of cover, after management discount for prudence.
The Conduit renewal year on year indicative pricing change
measure is an internal methodology that management intends to use
to track trends in premium rates of a portfolio of reinsurance
contracts. The change measure reflects management's assessment of
relative changes in price, exposure and terms and conditions. It is
also net of the estimated impact of claims inflation. The
calculation involves a degree of judgement in relation to
comparability of contracts and the assessment noted above,
particularly in Conduit's initial years of underwriting. To enhance
the methodology, management may revise the methodology and
assumptions underlying the change measure, so the trends in premium
rates reflected in the change measure may not be comparable over
time. Consideration is only given to renewals of a comparable
nature so it does not reflect every contract in the portfolio of
Conduit contracts. The future profitability of the portfolio of
contracts within the change measure is dependent upon many factors
besides the trends in premium rates.
Additional Performance Measures (APMs)
Conduit presents certain APMs to evaluate, monitor and manage
the business and to aid readers' understanding of Conduit's
financial statements and methodologies used. These are common
measures used across the (re) insurance industry and allow the
reader of Conduit's financial reports to compare those with other
companies in the (re)insurance industry. The APMs should be viewed
as complementary to, rather than a substitute for, the figures
prepared in accordance with IFRS. Conduit's Audit Committee has
evaluated the use of these APMs and reviewed their overall
presentation to ensure that they were not given undue prominence.
This information has not been audited.
Management believes the APMs included in the condensed interim
consolidated financial statements are important for understanding
Conduit's overall results of operations and may be helpful to
investors and other interested parties who may benefit from having
a consistent basis for comparison with other companies within the
(re)insurance industry. However, these measures may not be
comparable to similarly labelled measures used by companies inside
or outside the (re)insurance industry. In addition, the information
contained herein should not be viewed as superior to, or a
substitute for, the measures determined in accordance with the
accounting principles used by Conduit for its condensed interim
consolidated financial statements or in accordance with IAS 34.
Below are explanations, and associated calculations, of the APMs
presented by Conduit:
APM Explanation Calculation
Gross premiums written For the majority of excess of loss Amounts payable by the cedant before
contracts, premiums written are any deductions, which may include
recorded based on the minimum taxes, brokerage and
and deposit or flat premium, as commission.
defined in the contract. Premiums
written for proportional
contracts on a risks attaching basis
are written over the term of the
contract in line with
the underlying exposures. Subsequent
adjustments, based on reports of
actual premium by the
ceding company, or revisions in
estimates, are recorded in the period
in which they are determined.
Reinstatement premiums are excluded.
--------------------------------------- ---------------------------------------
Net loss ratio Ratio of net losses and loss related Net losses and loss related
amounts expressed as a percentage of amounts/Net reinsurance revenue
net reinsurance
revenue in a period
--------------------------------------- ---------------------------------------
Reinsurance operating expense ratio Ratio of reinsurance operating Reinsurance operating expenses/Net
expenses, which includes acquisition reinsurance revenue
expenses charged by insurance
brokers and other insurance
intermediaries to Conduit, and
operating expenses paid that are
attributable to the fulfilment of
reinsurance contracts, expressed as a
percentage of net
reinsurance revenue in a period.
--------------------------------------- ---------------------------------------
Other operating expense ratio Ratio of other operating expenses Other operating expenses/Net
expressed as a percentage of net reinsurance revenue
reinsurance revenue in
a period.
--------------------------------------- ---------------------------------------
Combined ratio (KPI) The sum of the net loss ratio, Net loss ratio + Net reinsurance
reinsurance operating expense ratio operating expense ratio + Other
and other operating expense operating expense ratio
ratio. A combined ratio below 100%
generally indicates profitable
underwriting, whereas a
combined ratio over 100% generally
indicates unprofitable underwriting,
each prior to the
consideration of total net investment
return.
--------------------------------------- ---------------------------------------
Accident year loss ratio Ratio of the net losses & loss related Accident year net losses and loss
amounts of an accident year (or related amounts/Net reinsurance
calendar year) revalued revenue
at the current balance sheet date
expressed as a percentage of net
reinsurance revenue in
a period.
--------------------------------------- ---------------------------------------
Underwriting year loss ratio Ratio of net losses and loss related Underwriting year net losses and loss
amounts of an underwriting year adjustment expenses / Net reinsurance
expressed as a percentage revenue
of net reinsurance revenue in a
period.
--------------------------------------- ---------------------------------------
Total net investment return (KPI) Conduit's principal investment Net investment income + Net unrealised
objective is to preserve capital and gains (losses) on investments + Net
provide adequate liquidity realised gains
to support the payment of losses and (losses) on investments /
other liabilities. In light of this, Non-operating cash and cash
Conduit looks to equivalents + Fixed maturity
generate an appropriate total net securities,
investment return. Conduit bases its at beginning of period
total net investment
return on the sum of non-operating
cash and cash equivalents and fixed
maturity securities.
Total net investment return is
calculated daily and expressed as a
percentage.
--------------------------------------- ---------------------------------------
Return on equity (KPI) RoE enables Conduit to compare itself Profit (loss) after tax for the
against other peer companies in the period/Total shareholders' equity, at
immediate industry. beginning of period
It is also a key measure internally
and is integral in the
performance-related pay
determinations.
RoE is calculated as the profit for
the period divided by the opening
total shareholders'
equity.
--------------------------------------- ---------------------------------------
Total shareholder return (KPI) Total shareholder return allows Closing Common Share price - Opening
Conduit to compare itself against Common Share price + Common Share
other public peer companies. dividends during the
Total shareholder return is calculated period / Opening Common Share price
as the percentage change in Common
Share price over
a period, after adjustment for Common
Share dividends.
--------------------------------------- ---------------------------------------
Dividend yield Calculated by dividing the annual Annual dividends per Common Share /
dividends per Common Share by the Closing Common Share price
Common Share price on
the last day of the given year and
expressed as a percentage.
--------------------------------------- ---------------------------------------
Condensed interim consolidated statement of comprehensive loss
(unaudited)
Six months Six months Twelve months
ended ended ended
30 June 2023 30 June 2022 31 Dec 2022
(re-stated) (re-stated)
$m $m $m
-------------------------------------------------- -------------- -------------- --------------
Reinsurance revenue 278.7 169.3 392.4
Reinsurance service expenses (169.8) (149.8) (362.1)
Ceded reinsurance expenses (35.9) (20.4) (48.6)
Ceded reinsurance recoveries 7.7 11.3 28.7
Reinsurance service result 80.7 10.4 10.4
-------------------------------------------------- -------------- -------------- --------------
Net investment income 17.2 6.4 17.8
Net realised losses on investments (0.3) (2.1) (2.8)
Net unrealised gains (losses) on investments 5.7 (54.3) (67.8)
Net investment result 22.6 (50.0) (52.8)
Net reinsurance finance (expense) income (10.1) 10.1 20.8
Net foreign exchange gains 0.9 1.4 1.3
Net financial result 94.1 (28.1) (20.3)
-------------------------------------------------- -------------- -------------- --------------
Equity-based incentives (1.0) (0.7) (2.1)
Other operating expenses (13.9) (10.2) (20.7)
Results of operating activities 79.2 (39.0) (43.1)
-------------------------------------------------- -------------- -------------- --------------
Financing costs (0.6) (0.4) (0.8)
Total comprehensive income (loss) for the period 78.6 (39.4) (43.9)
-------------------------------------------------- -------------- -------------- --------------
Earnings (loss) per share
Basic and diluted $0.49 $(0.24) $(0.27)
Condensed interim consolidated balance sheet (unaudited)
As at 30 June 2023 As at 30 June 2022 As at 31 Dec 2022 As at 1 Jan 2022
(re-stated) (re-stated) (re-stated)
$m $m $m $m
------------------------------------- ------------------- ------------------- ------------------ -----------------
Assets
Cash and cash equivalents 118.1 92.0 112.9 67.5
Accrued interest receivable 6.7 4.0 5.5 3.7
Investments 1,118.7 952.7 1,021.7 1,008.4
Ceded reinsurance contract assets 72.6 48.2 67.3 41.0
Other assets 3.0 2.6 3.6 1.6
Right-of-use assets 1.9 2.4 2.2 2.9
Intangible assets - 1.2 1.4 1.1
Total assets 1,321.0 1,103.1 1,214.6 1,126.2
------------------------------------- ------------------- ------------------- ------------------ -----------------
Liabilities
Reinsurance contract liabilities 394.8 177.5 336.3 116.1
Other payables 7.0 6.2 8.7 19.0
Lease liabilities 2.1 2.6 2.4 2.9
Total liabilities 403.9 186.3 347.4 138.0
------------------------------------- ------------------- ------------------- ------------------ -----------------
Shareholders' equity
Share capital 1.7 1.7 1.7 1.7
Own shares (19.2) (3.2) (20.1) (0.2)
Other reserves 1,058.1 1,056.7 1,058.1 1,056.0
Retained loss (123.5) (138.4) (172.5) (69.3)
Total shareholders' equity 917.1 916.8 867.2 988.2
------------------------------------- ------------------- ------------------- ------------------ -----------------
Total liabilities and shareholders'
equity 1,321.0 1,103.1 1,214.6 1,126.2
------------------------------------- ------------------- ------------------- ------------------ -----------------
Condensed interim statement of consolidated cash flows
(unaudited)
Six months Six months Twelve months
ended ended ended
30 June 2023 30 June 2022 31 Dec 2022
(re-stated) (re-stated)
$m $m $m
------------------------------------------------------------------- -------------- -------------- --------------
Cash flows from operating activities
Comprehensive income (loss) 78.6 (39.4) (43.9)
Depreciation 0.3 0.7 0.9
Write-off of intangible asset 1.4 - -
Interest expense on lease liabilities - 0.1 0.1
Net investment income (17.8) (7.0) (18.7)
Net realised losses on investments 0.3 2.1 2.8
Net unrealised (gains) losses on investments (5.7) 54.3 67.8
Net unrealised foreign exchange gains (0.9) (1.5) (1.0)
Equity-based incentives 1.0 0.7 2.1
Change in operational assets and liabilities
- Reinsurance assets and liabilities 53.7 56.3 195.1
- Other assets and liabilities (1.1) (5.5) (2.0)
Net cash flows from operating activities 109.8 60.8 203.2
------------------------------------------------------------------- -------------- -------------- --------------
Cash flows used in investing activities
Purchase of investments (279.2) (155.6) (304.9)
Proceeds on sale and maturity of investments 187.8 143.5 206.2
Interest received 16.4 9.5 21.1
Purchase of intangible assets - (0.1) (0.3)
Net cash flows used in investing activities (75.0) (2.7) (77.9)
------------------------------------------------------------------- -------------- -------------- --------------
Cash flows used in financing activities
Lease liabilities paid (0.3) (0.3) (0.6)
Dividends paid (29.6) (29.7) (59.3)
Purchase of own shares - (3.0) (19.9)
Distributions from EBT (0.1) - -
Net cash flows used in financing activities (30.0) (33.0) (79.8)
------------------------------------------------------------------- -------------- -------------- --------------
Net increase in cash and cash equivalents 4.8 25.1 45.5
Cash and cash equivalents at the beginning of the year 112.9 67.5 67.5
Effect of exchange rate fluctuations on cash and cash equivalents 0.4 (0.6) (0.1)
Cash and cash equivalents at end of period 118.1 92.0 112.9
------------------------------------------------------------------- -------------- -------------- --------------
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END
IR EAFXSALNDEAA
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July 26, 2023 02:00 ET (06:00 GMT)
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