Conduit Re continues to evolve reinsurance strategy amid desire to reduce volatility: CEO

Conduit Re, a Bermuda-based reinsurer specialising in property, casualty, and specialty lines, has made some notable changes to its outward reinsurance strategy, aiming to better shield its portfolio from increasingly volatile secondary perils such as wildfires, floods, and convective storms.

The new CEO Neil Eckert said recent events like the California wildfires underscored the importance of addressing not just traditional peak perils like hurricanes and earthquakes but also the growing threat of smaller yet frequent natural events.

“Our outwards reinsurance strategy has evolved,” he said, adding that aligning with return objectives and minimising early-year volatility were key drivers behind the shift.

To that end, Conduit Re has purchased additional reinsurance limits across both US and global secondary perils. According to Eckert, this includes enhanced aggregate protection designed to substantially reduce net exposure.

“We’ve taken decisive steps to address these risks. We have secured additional limits, both for US and global secondary perils, alongside increased aggregate cover substantially reducing our net exposure,” he said. These adjustments, he noted, are meant to strengthen the firm’s resilience against both large-scale catastrophes and more routine weather-related events.

While specifics of the reinsurance contracts remain confidential, Eckert explained that the coverage purchased is “meaningful” and calibrated to attach within Conduit’s individually disclosable loss thresholds. He emphasised the dual-layered structure of the protection, which includes both per-event and aggregate layers.

Eckert noted the per-event cover helps manage risk from significant single occurrences, while the aggregate protection guards against the accumulation of multiple, smaller claims over time. The aim is to smooth earnings volatility and maintain a consistent risk profile, especially during high-activity seasons like the Atlantic hurricane period.

“This refined approach is designed to stabilise returns for the remainder of ’25,” he said. Eckert added that these strategic purchases underscore a broader shift toward building more predictable financial outcomes. “We expect this will support more consistent performance across varying risk scenarios.”

Looking ahead, he indicated that Conduit plans to build on this framework in 2026 and beyond, using insights from its inward portfolio and broader market dynamics to continue optimising its reinsurance strategy.

Explaining the mechanics, Eckert noted: “The attachment point, or the place at which the per-event cover provides a hedge, is within our individually disclosable amounts per-loss, so they would sit within our cat budget. Then the aggregate cover sits further sideways behind the buffer.” He said the placements were tailored specifically to reduce volatility, a known concern for investors and stakeholders.

Despite the expanded coverage, Conduit’s peak peril probable maximum losses (PMLs) remain largely unchanged. “Our PMLs are largely unchanged, and the PMLs that we tell the market are based on peak peril, so quake and catastrophic wind. The additional coverage we purchased is for secondary perils both on an each and every basis and an aggregate basis, so they do not have a net impact on our PMLs, which are roughly running sort of as planned, and through previous disclosures,” he confirmed.

While PMLs may increase over the course of the year due to new business and renewals, they are currently tracking in line with earlier disclosures. “They will go up during the year, but for now, they’re stable,” Eckert said.

Eckert’s comments reflect a broader trend among reinsurers seeking to better balance severity and frequency in catastrophe risk, especially in a market where so-called secondary perils are proving to be increasingly disruptive.

The post Conduit Re continues to evolve reinsurance strategy amid desire to reduce volatility: CEO appeared first on ReinsuranceNe.ws.

Conduit Re, a Bermuda-based reinsurer specialising in property, casualty, and specialty lines, has made some notable changes to its outward reinsurance strategy, aiming to better shield its portfolio from increasingly volatile secondary perils such as wildfires, floods, and convective storms. The new CEO Neil Eckert said recent events like the California wildfires underscored the importance…