Conduit Re's 2025 Performance: A Look into Reinsurance Market Trends
Reinsurance Market Update: Conduit Re's Performance in 2025
Conduit Re, a Bermuda-based reinsurance company, reported a 6.9% increase in gross premiums written (GPW) for 2025, reaching $1.243 billion compared to $1.162 billion in 2024. This growth was largely driven by the casualty segment, with premiums rising 23% year-over-year to $392.3 million. Meanwhile, property premiums saw a modest 2.2% increase to $659.4 million, while specialty premiums decreased by 3.6% to $191.3 million.
The casualty segment's growth was supported by expanding business partnerships in third-party liability insurance. In contrast, the sluggish growth in property premiums was linked to a competitive market with softening prices. Conduit Re strategically reduced its presence in certain specialty lines due to pricing and term pressures imposed by regulatory compliance requirements.
Market Trends and Strategic Adjustments
Throughout 2025, the reinsurance market encountered widespread softening in pricing and terms across various business classes. Conduit Re experienced a risk-adjusted rate change of -3% net of claims inflation, with both property and specialty rates declining by 5%. These decreases were slightly offset by a 1% rise in casualty rates, driven partially by market corrections from reserve deterioration.
Reinsurance revenue increased by 10.2% to $897.1 million, while net reinsurance revenue rose by 8.1% to $778 million. The uptick in ceded reinsurance expenses to $119.1 million, up from $93.7 million, was attributed to expanded outwards protections and the growth of inwards portfolio exposures. These strategic moves are critical for Conduit Re to navigate current underwriting and risk management challenges.
Financial Highlights and Strategic Focus
Net reinsurance service expenses reached $668.1 million in 2025, up from $588.4 million in 2024, as reinsurance losses increased to $623.2 million. Conduit Re recorded substantial losses from natural catastrophes, such as severe convective storms and the California wildfires, accounting for a $119.1 million net loss.
Despite these challenges, Conduit Re's reinsurance service result was $109.9 million, compared to $131.6 million in the previous year, with the undiscounted combined ratio increasing to 101.5%. The company's net investment result was $119.5 million, an 80.8% increase over the prior year, indicative of effective risk management and strategic asset allocation.
Outlook and Strategic Initiatives
Overall, group-wide comprehensive income decreased by 7% to $116.8 million, resulting in an 11.1% return on equity. Neil Eckert, CEO, emphasized the importance of underwriting discipline, noting, "We have moderated our growth rate by exiting business that did not meet our pricing or performance standards."
Looking ahead, Conduit Re plans to carefully manage capital allocation, considering share repurchases as part of its strategic objectives. The company's robust balance sheet supports future business opportunities in a competitive market, ensuring regulatory compliance while pursuing sustainable growth.