AM Best Revises Conduit Re Outlook To Stable
AM Best has revised the outlooks to stable from positive and 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 ratings agency said, “The Credit Ratings [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.
“The stable outlooks reflect AM Best’s expectation that Conduit Re’s rating fundamentals will remain supportive of the current assessment over the near to medium term, with the company expected to consolidate its business position under its refreshed senior management team.
“Conduit Re’s balance sheet strength is underpinned by risk-adjusted capitalisation that is projected to remain at the strongest level, as measured by Best’s Capital Adequacy Ratio [BCAR]. The balance sheet strength assessment is further supported by high quality capital without any financial leverage, a conservative investment strategy focused on fixed maturity securities and a reinsurance programme of excellent credit quality.
“The adequate operating performance assessment reflects Conduit Re’s expected robust underwriting profitability over the coming years, supported by adequate pricing levels and low expense ratios. Although 2025 results are expected to be profitable, outsized net exposure to the California wildfires has tempered underwriting profitability. A revised retrocession strategy during the year has reinforced the company’s ability to withstand losses from future secondary peril events. Conduit Holdings Limited, the ultimate parent of Conduit Re, reported a small loss of USD 13.5 million for the first six months of 2025, compared to USD 98.1 million of profit for the first six months of 2024.
“Conduit Re has been well received by the market, quickly establishing itself with key distributors since it began writing business in 2021. The company has a well-diversified book by line of business and geography, and AM Best expects it to write reinsurance revenue of approximately USD 900 million in 2025. Although there have been a number of changes within senior management during the year, incoming replacements have been well considered and are of strong caliber.”
