By Edward Carron

May 12 - (The Insurer) - Conduit Re passed $1 billion in gross written premiums and posted positive results last year but has seen its share price dive along with a wave of senior exits in early 2025 following higher-than-anticipated California wildfire losses.

Shares in the reinsurer’s London-listed parent company closed at 348.5 pence on Monday, down 30.3% from their December 2020 IPO value and 26.2% since the start of 2025.

Bermuda-based Conduit’s share price had been on a downward trajectory since November 2024, but the stock suffered sharp and continuous drops once the extent of the company’s exposure to the California wildfires became public.

Alongside its 2024 full-year results, published in February, Conduit disclosed estimated losses from the January 2025 Los Angeles wildfires of between $100 million and $140 million, net of reinsurance recoveries and reinstatement premiums.

The range was considerably higher than the estimate of $50 million to $90 million issued a week earlier by analysts at Berenberg.

STOCK DIVES ON WILDFIRE HIT AND EXECUTIVE EXITS

Analysis by The Insurer showed that Conduit had the fourth-largest impact from the wildfires, behind only State Farm, Mercury General and Heritage, with estimated losses of between 10% and 13% of shareholder equity.

Following the wildfire loss disclosure on February 19, parent company Conduit Holdings’ stock started to tumble, falling 7.7% on the first day. It has continued downwards since.

On March 31 it was announced that CEO Trevor Carvey would be stepping down, with the company citing a “change in personal circumstances requiring his return to the UK”. Chairman Neil Eckert has stepped into the role in an interim capacity while the search for a new chief executive is under way.

The news of Carvey’s exit prompted an immediate drop in the share price that was recouped in the following weeks, ahead of another downturn on April 21 after The Insurer revealed that CUO Gregory Roberts was also exiting the company.

COMBINED RATIO

The reinsurer had a combined ratio over 100% in its first two years of operation.

In 2021 it had a high expense ratio of 46.2%, with operating costs of $90 million, which is expected for a company’s first year of operation.

While expenses came down in 2022, Conduit’s combined ratio was still over 100%, due to “higher-than-average natural-catastrophe losses for the industry” and the war in Ukraine, the company said in its annual report for the year.

However, Bermudian peers, Everest, RenaissanceRe and Arch all maintained combined ratios below 100% that year.

GWP GROWTH

The pure-play reinsurer grew its gross written premiums to more than $1.2 billion dollars in 2024, its fourth full year of operation.

While growing its reinsurance revenue at roughly $200 million dollars each year since 2021, Conduit has seen more growth in its property and specialty segments, while casualty has made up a smaller share of business, going from 35% in 2021 to 26% in 2024.