Conduit Re (CRE · LSE)
Protecting a Riskier World
Natural catastrophes now cost the world over $300 billion a year in economic losses and over $100 billion a year in insured losses, and the gap between what's insured and what isn't keeps widening. Conduit Holdings Limited (LSE: CRE) is a lean Bermuda-based reinsurer built to profit from that growing need for reinsurance cover.
Bull case for Conduit Re
A Growing Long-Term Need for Cover
Climate change, growth in exposures, emerging risks and a vast protection gap create a rising demand over time.
Two Engines of Profit
Underwriting plus growing investment income fund dividends and repeated buybacks.
Risk Spread Across Three Lines
A diverse portfolio across property, casualty and specialty aims to reduce volatility and impact from a single event.
Bear case for Conduit Re
Softening Markets Can Squeeze Prices
Reinsurance is cyclical: periods of plentiful capital push rates down and squeeze margins.
Catastrophe Exposure
A single large disaster can still have a meaningful impact on profits.
Balancing Capital Returns Against Financial Strength
Heavy payouts could strain the credit rating if a big loss hits.