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The consolidated financial statements were approved by the Board of Directors on 25 February 2026
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CHL was incorporated under the laws of Bermuda on 6 October 2020 and, on 7 December 2020,
all of its common shares of par value $0.01 per share were admitted to the standard listing segment
of the Official List of the UK Financial Conduct Authority and admitted to trading on the LSE\u2019s main
market for listed securities. CHL\u2019s registered office is Clarendon House, 2 Church Street, Hamilton HM
11, Bermuda. CHL\u2019s consolidated financial statements as at, and for the year ended 31 December 2025
include the Company\u2019s subsidiaries. The principal activity of Conduit is to provide reinsurance
products and services to its clients worldwide.
A full listing of Conduit\u2019s related parties can be found in note 22.
2. Summary of material accounting policies
The basis of preparation, use of judgements and estimates, consolidation principles and material
accounting policies adopted in the preparation of these consolidated financial statements are set
out below. Excluding percentages, share and per share data or where otherwise stated, all amounts
in tables and narrative disclosures are in millions of US dollars.
Basis of preparation
These consolidated financial statements are prepared on a going concern basis in accordance with
IFRS as issued by the IASB, and the DTR issued by the Financial Conduct Authority, and are prepared
on a historical cost basis, except for items measured at fair value as disclosed in the relevant
accounting policies. In accordance with the requirements of IAS 1, the financial statements\u2019 assets and
liabilities have been presented in order of liquidity, which provides information that is more reliable
and relevant for a financial institution.
In the course of preparing these consolidated financial statements, no judgements have been made in
the process of applying Conduit\u2019s accounting policies, other than those involving estimations as noted
in the \u2018Use of judgements and estimates\u2019 section, that have had a significant effect on amounts
recognised in these consolidated financial statements.
Going concern
The consolidated financial statements of Conduit have been prepared on a going concern basis. In
assessing Conduit\u2019s going concern position as at 31 December 2025, the Board have considered a
number of factors, including the current balance sheet position and Conduit\u2019s strategic and financial
plan, taking account of possible changes in trading performance and funding retention, stress testing
and scenario analysis. Conduit\u2019s capital ratios and its capital resources are comfortably in excess of
regulatory solvency requirements, and internal stress testing indicates Conduit can withstand severe
economic and competitive stresses.
As a result of the assessment, the Board has a reasonable expectation that Conduit has adequate
resources to continue in operational existence for the foreseeable future and therefore believe that
Conduit is well placed to manage its business risks successfully. Accordingly, Conduit continues
to adopt the going concern basis in preparing the consolidated financial statements.
Changes in accounting policies and new standards
There were no new standards that became effective in the year ended 31 December 2025 that have
had a material impact on Conduit.
Future accounting changes
No standards or interpretations have been issued that are expected to have a material effect on
Conduit\u2019s financial position, presentation or disclosure.
IFRS 18, Presentation and Disclosure in Financial Statements, will replace IAS 1, Presentation of
Financial Statements, and applies to reporting periods beginning on or after 1 January 2027.
IFRS 18 will require entities to classify all income and expenses on the consolidated statement of
comprehensive income into operating, investing and financing activities, disclose in a single note
management-defined performance measures, and provide enhanced guidance on how to group
information in the financial statements.
Conduit is in the process of assessing the impact that the new standard will have on its consolidated
financial statements, including presentation and disclosure requirements. There is no impact
anticipated on the financial results of Conduit. Only minimal changes are expected to the presentation
and disclosure in the consolidated financial statements, with minor subtotal changes in the
consolidated statement of comprehensive income, a minor change to the starting position in the
consolidated statement of cash flows, and minimal additional disclosure related to management-
defined performance measures.
Use of judgements and estimates
The preparation of financial statements in conformity with IFRS requires Conduit to make judgements
and estimates that affect the reported and disclosed amounts at the balance sheet date, revenues and
expenses during the reporting period and the associated financial statement disclosures. All estimates
are based on management\u2019s knowledge of current facts and circumstances, assumptions based on
that knowledge and their prediction of future events. Actual results may differ significantly from the
estimates made.
The most significant estimates made by management are in relation to the liability for incurred
claims and associated ceded reinsurance recoveries, as discussed in note 3 and note 15.
Less significant estimates are made in determining the estimated fair value of certain financial
instruments, as discussed in note 3 and note 13.
In addition, some management judgement is exercised in determining the total premium cash flows
expected to be received from reinsurance contracts that are used to determine the amount of
reinsurance revenue recognised in the period.
While not significant, estimates are also used in the estimated fair value of the MIP as discussed
in note 7.
Consolidation principles
These consolidated financial statements comprise the financial statements of CHL and its subsidiaries
as at and for the year ended 31 December 2025. Subsidiaries are those entities that are controlled by
Conduit and are fully consolidated from the date on which Conduit obtains control and continue to
be consolidated until the date when such control ceases. Control is achieved when Conduit is exposed,
or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect
those returns through its power over the subsidiary.
Intragroup balances and transactions are eliminated in preparing the consolidated financial
statements. Subsidiaries\u2019 accounting policies are consistent with Conduit\u2019s accounting policies.
Foreign currency
The functional currency, which is the currency of the primary economic environment in which Conduit
operates, is US dollars. Items included in the financial statements of each entity are measured using
the functional currency. These consolidated financial statements are presented in US dollars.
Foreign currency transactions are recorded in the functional currency for each entity using the
exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated
in foreign currencies are revalued at period end exchange rates. The resulting foreign exchange
differences on revaluation are recorded in the consolidated statement of comprehensive income
within net foreign exchange gains (losses). Non-monetary assets and liabilities denominated in a
foreign currency are carried at historic rates. Non-monetary assets and liabilities carried at estimated
fair value and denominated in a foreign currency are translated at the exchange rate at the date the
fair value was determined.
Reinsurance contracts
IFRS 17 sets out the classification, measurement and presentation and disclosure requirements for
reinsurance contracts. It requires reinsurance contracts to be measured using current estimates and
assumptions that reflect the timing of cash flows and recognition of profits as insurance services are
delivered. The standard provides two main measurement models which are the General Measurement
Model (GMM) and the Premium Allocation Approach (PAA).
The PAA simplifies the measurement of reinsurance contracts for remaining coverage, or pre-claims,
in comparison to the GMM. The GMM is used for the measurement of the liability for incurred claims.
PAA eligibility
Under IFRS 17, Conduit\u2019s reinsurance contracts issued and ceded reinsurance contracts held are all
eligible to be measured by applying the PAA, due to meeting the following criteria:
\u2022
Loss-occurring reinsurance contracts with coverage period of one year or less are automatically
eligible; and
\u2022
Modelling of risk-attaching contracts or contracts with a coverage period greater than one year
produces a measurement for the group of reinsurance contracts that does not differ materially from
that which would be produced applying the GMM.
Classification
Contracts that transfer significant reinsurance risk at the inception of the contract are accounted for
as reinsurance contracts. Contracts purchased and held by Conduit under which it transfers significant
reinsurance risk to a counterparty are accounted for as ceded reinsurance contracts. Contracts that
do not transfer significant reinsurance risk are accounted for as investment contracts. Reinsurance risk
is transferred when a reinsurer agrees to compensate a policyholder if a specified uncertain future
event adversely affects the policyholder.
Conduit\u2019s accounting policies apply to both reinsurance contracts issued and ceded reinsurance
contracts held unless explicitly referenced as applying to contracts issued or ceded only. Conduit
writes both excess of loss and proportional (also known as quota share or pro-rata) reinsurance
contracts. The type of contract impacts the recognition of reinsurance revenue. Contract types are
discussed on page 120.
Separating components from reinsurance contracts
IFRS 17 distinguishes three components that, if embedded in a reinsurance contract, should be
bifurcated, and accounted for separately. These are:
\u2022
Cash flows relating to embedded derivatives that are required to be separated;
\u2022
Cash flows relating to distinct investment components; and
\u2022
Promises to transfer distinct goods or distinct non-insurance services.
IFRS 17 then applies to all remaining components of the contract. Conduit does not have any contracts
containing non-insurance components that require separation. Where contracts contain multiple
reinsurance components that meet the requirements for separation, these are separated and
accounted for as standalone contracts.
Some reinsurance contracts issued contain profit-sharing arrangements, such as profit commissions
and no claims bonuses. Under these arrangements, there is a minimum guaranteed amount that the
policyholder will always receive either in the form of profit commission, or as reimbursement for
claims, or another contractual payment, irrespective of the insured event happening. These are
typically considered non-distinct investment components. Non-distinct investment components are
not separated from the reinsurance contract as they are closely interrelated to the measurement of
the reinsurance contract. However, the impact of the non-distinct investment components are
excluded from the consolidated statement of comprehensive income by adjusting reinsurance
revenue and reinsurance service expenses by the minimum amount due. There is no impact to the
reinsurance service result as there is an equal reduction to both revenue and expenses.
Level of aggregation
Conduit manages reinsurance contracts issued by class of business within an operating segment.
Classes of business are aggregated into portfolios of contracts that are subject to similar risks.
Contracts within each portfolio are grouped into groups of contracts that are issued within a calendar
year, the annual cohort, and are (i) contracts that are onerous at initial recognition; (ii) contracts that
at initial recognition have no significant possibility of subsequently becoming onerous; or (iii) a group
of remaining contracts. These groups represent the level of aggregation at which reinsurance
contracts are initially recognised and measured. Such groups are not subsequently reconsidered.
Onerous contracts
Under the PAA, it is assumed there are no contracts in the portfolio that are onerous at initial
recognition, unless there are facts and circumstances that may indicate otherwise. Management
primarily considers the following to determine whether there are facts and circumstances that mean
a group of contracts are onerous:
\u2022
Pricing information;
\u2022
Results of similar contracts it has recognised; and
\u2022
External factors, such as a change in market experience or regulations.
If a group of contracts becomes onerous, Conduit increases the carrying amount of the liability for
remaining coverage to the amount of the fulfilment cash flows with the amount of such an increase
recognised immediately in reinsurance service expenses. Subsequently, Conduit amortises the amount
of the loss component by decreasing reinsurance service expenses. The loss component amortisation
is based on the passage of time over the remaining coverage period of contracts within an onerous
group. If facts and circumstances indicate that the expected profitability of the onerous group during
the remaining coverage has changed, then Conduit remeasures the loss component by reassessing
the fulfilment cash flows as required until the loss component is reduced to zero.
Where a loss component is expected to be partially or fully recovered by ceded reinsurance contracts,
the amount of recovery is recognised in ceded reinsurance recoveries.
Recognition
Conduit recognises groups of reinsurance contracts it issues from the earliest of:
\u2022
The beginning of the coverage period of the group of contracts;
\u2022
The date when the first payment from the cedant is due or when the first payment is received
if there is no due date; or
\u2022
For a group of onerous contracts, the date when facts and circumstances indicate that the group
is onerous.
For ceded reinsurance contracts Conduit recognises the group of contracts:
\u2022
If the reinsurance contracts provide proportionate coverage, at the later of the beginning of the
coverage period of the group, or the initial recognition of the underlying covered reinsurance
contracts issued; or
\u2022
For non-proportionate coverage, the beginning of the coverage period of the group of contracts,
unless an onerous group of underlying reinsurance contracts have been recognised and the ceded
reinsurance contract has been signed before that date.
Modification and derecognition
Conduit derecognises reinsurance contracts when:
\u2022
The rights and obligations relating to the contract are extinguished (meaning discharged, cancelled
or expired); or
\u2022
The contract is modified such that the modification results in a change in the measurement model
or the applicable standard for measuring a component of the contract substantially changes the
contract boundary, or requires the modified contract to be included in a different group. In such
cases, Conduit derecognises the initial contract and recognises the modified contract as a new
contract. When a modification is not treated as a derecognition, Conduit recognises amounts paid
or received for the modification with the contract as an adjustment to the relevant liability for
remaining coverage.
Contract boundaries
The measurement of a group of reinsurance contracts includes all future cash flows expected to arise
within the boundary of each contract in the group. Cash flows are within the boundary of a
reinsurance contract if they arise from substantive rights and obligations that exist during the
reporting period in which Conduit can compel the cedant to pay the premiums, or in which Conduit
has a substantive obligation to provide the cedant with services. A substantive obligation to provide
services ends when Conduit has the practical ability to reassess the risks of the cedant and, as a result,
can set a price of level of benefits that fully reflects those risks. Where Conduit issues multi-year
contracts and does not have the ability to re-price on each policy anniversary the contract is
considered one contract and therefore future cash flows from each of the annual periods are
considered on initial recognition.
For ceded reinsurance contracts the cash flows are within the boundary of the contract if Conduit
has a substantive right to receive services or if Conduit is compelled to pay premiums to the reinsurer.
The substantive right to receive services from the reinsurer ends when:
\u2022
The reinsurer has the practical ability to reassess the risks transferred to it and can set a price
of level of benefits that fully reflects those risks; or
\u2022
The reinsurer has a substantive right to terminate the coverage.
\u2022
Conduit assesses the contract boundary at initial recognition and at each subsequent reporting date
to include the effects of changes in circumstances on Conduit\u2019s substantive rights and obligations.
The assessment of the contract boundary, which defines the future cash flows that are included in
the measurement of the contract, requires judgement and consideration of Conduit's substantive
rights and obligations. Conduit issues risk-attaching reinsurance contracts which provide
reinsurance coverage to underlying contracts issued within the terms of the contract. While the
contracts can have an annual term the contract boundary is assessed with consideration of the
coverage period of the underlying contracts. Contracts that cover claims from underlying contracts
within the contract period, loss-occurring contracts, are typically annual term. Where contracts
contain multi-year terms, Conduit exercises judgement on whether provisions within the contract
allow cancellation or re-pricing at each anniversary of the contract.
Measurement \u2013 Liability for remaining coverage
On initial recognition of each group of contracts, the carrying amount of the liability for remaining
coverage is measured as the premiums received on initial recognition, if any, minus any reinsurance
acquisition expense cash flows allocated to the group of contracts and any amounts arising from the
derecognition of the prepaid reinsurance acquisition expense cash flows asset. Conduit has chosen
not to expense reinsurance acquisition expense cash flows on contracts with coverage of one year
or less when they are incurred in order to apply a consistent treatment of reinsurance acquisition
expense cash flows for all contracts, regardless of the length of coverage.
Subsequently, at the end of each reporting period, the liability for remaining coverage is:
\u2022
Increased by any premiums received in the period;
\u2022
Decreased for reinsurance acquisition expense cash flows paid in the period;
\u2022
Decreased for the amounts of expected premium cash flows recognised as reinsurance revenue
for the services provided in the period;
\u2022
Increased for the amortisation of reinsurance acquisition expense cash flows in the period
recognised as reinsurance service expenses; and
\u2022
Decreased for any non-distinct investment component paid or transferred to the liability
for incurred claims.
Conduit has elected not to adjust the liability for remaining coverage for the time value of money
as its reinsurance contracts do not contain a significant financing component.
Conduit measures the reinsurance asset for remaining coverage for its ceded reinsurance contracts
that it holds on the same basis as reinsurance contracts issued, adapted to reflect the features that
differ between contracts issued versus contracts held.
Reinsurance revenue recognised in the period is based on the total premium cash flows expected
to be received over the lifetime of the contract, net of any deductions that are paid to the cedant.
The amount of total expected revenue from a contract recognised in the period is dependent on
the type of reinsurance contract, as discussed below.
Excess of loss contracts
For the majority of excess of loss contracts, expected premium cash flows are assessed based on
the minimum and deposit or flat premium, as defined in the contract. Subsequent adjustments to the
minimum and deposit premium are assessed in the period in which they are determined. For excess
of loss contracts where no deposit is specified in the contract, premium cash flows are assessed based
on estimates of premiums provided by the ceding company. Subsequent adjustments, based on
reports of actual premium by ceding companies, or revisions in estimates, are assessed in the period
in which they are determined. For multi-year policies that are payable in annual instalments, where
the reinsured has the sole ability to cancel, the total expected premium cash flows for all annual
periods are assessed at the inception of the contract. Where unilateral cancellation by the reinsurer
exists at each anniversary of the contract the annual periods are assessed as separate contracts.
Reinsurance revenue for excess of loss contracts is generally recognised evenly over the term of the
underlying risk period of the reinsurance contract, except where the period of risk differs significantly
from the contract period. In these circumstances, reinsurance revenue is recognised over the period of
risk in proportion to the amount of reinsurance protection provided. Where contract terms require the
reinstatement of coverage after a ceding company\u2019s loss, as the reinstatement is contingent on the
loss, the estimated mandatory reinstatement premiums are recorded within reinsurance service
expenses.
Proportional contracts
Premium cash flows for proportional contracts are assessed based on estimates of ultimate premiums
provided by the ceding company, supplemented by management\u2019s estimates of premiums based
on its experience with the ceding company, familiarity with each market, the timing of the reported
information and its understanding of the characteristics of each class of business. Initial estimates of
premium cash flows are assessed in the period in which the contract incepts, or the period in which
the contract is bound, if later. Contracts written on a \u2018risks-attaching\u2019 basis cover claims which attach
to the underlying reinsurance policy written during the term of the respective policy. Reinsurance
revenue on such policies generally extend beyond the original term of the contract. Subsequent
adjustments, based on reports of actual premium by the ceding company, or revisions in estimates,
are assessed in the period in which they are determined.
Reinsurance acquisition expense cash flows
Reinsurance acquisition expense cash flows represent the cash flows that arise from the cost of selling
and underwriting a group of reinsurance contracts and include:
\u2022
Contract specific costs, such as brokerage;
\u2022
Operating expenses that are incurred in relation to the fulfilment of reinsurance contracts; and
\u2022
An allocation of fixed and variable overheads.
Reinsurance acquisition expenses are deferred over the period in which the related premiums are
earned to the extent they are recoverable out of expected future revenue margins and recognised
within reinsurance service expenses.
Commissions that are paid to cedants, such as ceding commissions, are not treated as reinsurance
acquisition expense cash flows as they do not relate to a service. Such commissions are treated as
a reduction in the expected premium recognised as reinsurance revenue
Ceded reinsurance expenses
Ceded reinsurance is purchased in the normal course of business to increase capital capacity or
to limit the impact of individual risk losses and loss events impacting multiple cedants, such as
natural-catastrophes, or both. Conduit may purchase ceded reinsurance on both an excess of loss
and a proportional basis, and may supplement this with the use of ceded reinsurance cover linked
to the issuance of catastrophe bonds or other capital market products. Ceded reinsurance premiums
are recognised as ceded reinsurance expenses in the same manner as reinsurance contracts issued,
depending on the terms of the contract. Ceding commissions received are deducted from the
premium paid that is recognised in ceded reinsurance expenses. Other expenses incurred in the
placing of ceded reinsurance contracts that are in relation to a service by a third party, such as
brokerage, are recognised in ceded reinsurance expenses.
Measurement \u2013 Liability for incurred claims
The liability for incurred claims represents the estimated ultimate cost of settling all reinsurance claims
arising from events that have occurred up to the end of the reporting period, including the operating
costs that are expected to be incurred in the course of settling such claims, reinstatement premiums
on specific loss events, profit commissions and similar expenses that are contingent on claims plus a
provision for IBNR. The liability for incurred claims is derived from the estimated fulfilment cash flows
relating to expected claims. The fulfilment cash flows incorporate, in an unbiased way, all reasonable
and supportable information available, without undue cost or effort, about the amount, timing and
uncertainty of those future cash flows. They also include an explicit adjustment for non-financial risk,
the risk adjustment. Estimates of future cash flows for incurred claims are discounted on initial
recognition and then re-measured to current rates as at the reporting date.
Cash flows for outstanding losses are estimated initially on the basis of reported losses received from
cedants. Cash flows for ACRs are determined where management\u2019s expectation of the ultimate cost
of the reported loss is greater than that reported. Estimated cash flows for IBNR may also consist of
a provision for additional development in excess of losses reported by cedants, as well as a provision
for losses which have occurred but have not yet been reported by cedants.
Cash flows for IBNR are estimated initially using expected loss and loss adjustment expense ratios
which are selected based on information derived by underwriters and actuaries during the initial
pricing of the business. These estimates are reviewed regularly and, as experience develops and
new information is received, the cash flows are adjusted as necessary. As actual loss information is
reported, and Conduit develops its own loss experience, management will use various actuarial
methods as well as a combination of management\u2019s judgement and experience, historical reinsurance
industry loss experience and estimates of pricing adequacy trends to estimate cash flows for IBNR.
The estimation of the liability for incurred claims is a complex process which incorporates a significant
amount of judgement. It is reasonably possible that uncertainties in the reserving process, delays in
cedants reporting losses to Conduit, together with the potential for unforeseen adverse developments,
could lead to a material change in the liability for incurred claims.
Any amounts recoverable from reinsurers are estimated using the same methodology as for the
underlying losses except for the requirement under IFRS 17 to assess the ceded reinsurance recovery
cash flows for the effect of any risk of non-performance, including expected credit losses.
Management monitors the creditworthiness of its reinsurers on an ongoing basis and assesses any
reinsurance assets for the risk of non-performance, with a provision for non-performance risk being
recognised as an expense in the period in which it is determined.
Presentation of reinsurance contracts
Reinsurance assets and liabilities
The asset or liability for a portfolio of reinsurance contracts is the net position of both the liability for
remaining coverage and the liability for incurred claims. Whether a portfolio is in a liability or asset
position is typically impacted by the timing of cash flows received versus cash flows paid. Conduit
presents separately in the consolidated balance sheet portfolios of reinsurance contracts issued and
held that are in an asset position and those that are in a liability position.
All reinsurance contract assets and liabilities are deemed monetary assets and liabilities and are
revalued at period end exchange rates.
Reinsurance revenue
Reinsurance revenue in the consolidated statement of comprehensive income is the amount
of expected premium cash flows, net of any deductions paid to the cedant and excluding any
non-distinct investment component. Conduit allocates the expected premium receipts to each
period of coverage on the basis of passage of time or the expected risk pattern if it differs
significantly from the passage of time.
Reinsurance service expenses
Reinsurance service expenses in the consolidated statement of comprehensive income includes
changes in the liability for incurred claims that do not arise from the application of discount rates,
being recognition and amortisation of any loss components, amortisation of reinsurance acquisition
expense cash flows and other attributable operating expenses.
Ceded reinsurance income and expenses
Conduit has elected to present the income and expenses from ceded reinsurance contracts separately
in the consolidated statement of comprehensive income. Ceded reinsurance expenses represent the
total expected ceded premiums and other amounts, that are not contingent on recoveries, payable
to Conduit\u2019s reinsurers. Conduit recognises ceded reinsurance expenses based on the passage of
time over the coverage period of a group of contracts or expected risk pattern. Income from ceded
reinsurance contracts includes expected recoveries on incurred claims, changes in expected
recoveries related to past service, the provision for the effects of changes in risk of reinsurer non-
performance plus other amounts that are contingent on recoveries, such as ceded profit commissions
payable to the reinsured.
Net reinsurance finance income (expense)
Reinsurance finance income (expense) includes the changes in the carrying amounts of reinsurance
and ceded reinsurance assets and liabilities arising from the unwind of discount recognised in prior
periods and the effects of remeasuring to current discount rates plus other financial assumptions.
Conduit has elected to disaggregate the changes in the risk adjustment for the time value of money
and present it within net reinsurance finance income (expense).
Conduit has chosen not to disaggregate finance income (expense) between other comprehensive
income (OCI) and comprehensive income.
Financial instruments
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held on call with banks, money market funds,
and other short-term highly liquid investments with a maturity of three months or less at the date of
purchase. Carrying amounts approximate fair value due to the short-term nature and high liquidity of
the instruments.
Investments
Conduit\u2019s fixed maturity securities portfolio meets the requirements for mandatory classification as
FVTPL and is carried at estimated fair value in the consolidated balance sheet. The classification of
financial assets is determined at the time of initial purchase. A financial asset is classified at FVTPL
if it is held within a business model that is managed and evaluated on a fair value basis or if acquired
principally for the purpose of selling in the short term, or if it forms part of a portfolio of financial
assets in which there is evidence of short-term profit taking. Presentation of these securities in the
FVTPL category is consistent with how management monitors and evaluates the performance of
these securities on a fair value basis.
Regular way purchases and sales of investments are recognised at estimated fair value on the trade
date, and are subsequently carried at estimated fair value. Balances pending settlement are reflected
in the consolidated balance sheet in other assets or other payables. The estimated fair value of
Conduit\u2019s fixed maturity securities portfolio is determined based on bid prices from recognised
exchanges, broker-dealers, recognised indices or pricing vendors. Changes in estimated fair value
of investments classified as FVTPL are recognised in the consolidated statement of comprehensive
income within net unrealised gains (losses) on investments.
Investments are derecognised when Conduit has transferred substantially all the risks and rewards of
ownership. On derecognition of an investment held at FVTPL, previously recorded unrealised gains
and losses are recycled from net unrealised gains (losses) on investments to net realised gains (losses)
on investments.
Interest income, amortisation and accretion of premiums and discounts on fixed maturity securities
are calculated using the effective interest rate method and recognised in net investment income.
The carrying value of accrued interest income approximates estimated fair value due to its short-term
nature and high liquidity.
Leases
Conduit recognises a right-of-use asset and a lease liability at the lease commencement date.
The right-of-use asset is initially measured at cost, which comprises the initial measurement of the
corresponding lease liability adjusted for any lease payments made at or before the commencement
date, plus any initial direct costs incurred and an estimate of any costs to be incurred at the expiration
of the lease agreement.
Right-of-use assets are subsequently measured at cost less accumulated depreciation and
any impairment losses. Straight-line depreciation is calculated from the commencement date of the
lease to the earlier of either the end date of the lease term or the useful life of the underlying asset.
The lease liability is initially measured at the present value of the future lease payments at the lease
commencement date. Lease payments are discounted using the interest rate implicit in the lease or,
if that rate cannot be readily determined, Conduit\u2019s incremental borrowing rate. Lease payments
included in the measurement of the lease liability include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, variable lease payments that depend on an index
or a rate, and amounts expected to be paid under residual value guarantees.
The lease liability is subsequently measured by increasing the lease carrying amount to reflect the
interest due on the lease liability using the effective interest rate method and reducing the carrying
amount to reflect the lease payments made. Conduit re-measures the lease liability and the related
right-of-use asset whenever there is a change in future lease payments arising from a change in
index or rate, if Conduit changes its assessment of whether it will exercise a purchase, extension
or termination option or if there is a revised in-substance fixed lease payment.
Right-of-use assets and lease liabilities are presented as separate financial statement line items
in the consolidated balance sheet.
Conduit also operates DSBP and LTIP awards. Under the DSBP, a percentage of each employee's
bonus is automatically deferred into shares as nil cost options. These nil cost awards vest annually
in separate equal tranches over a three-year period from the date of grant and do not have associated
performance criteria attached to the awards. These awards accrue dividend equivalents for all
dividends declared where the record date falls between the grant date and date of exercise, and
are paid at the time of exercise.
The LTIP awards are awarded with or without performance criteria attached to the awards. These nil
cost awards granted to staff vest over a three-year period from the date of grant. These awards
accrue dividend equivalents for all dividends declared where the record date falls between the grant
date and date of exercise, and are paid at the time of exercise. Refer to note 7 for details of
performance criteria attached to certain LTIP awards.
At each balance sheet date, Conduit revises its estimate of the number of instruments that are
expected to become exercisable. It recognises the impact of the revision of original estimates, if any,
as equity-based incentive expense in the consolidated statement of comprehensive income, and a
corresponding adjustment is made to other reserves in shareholders\u2019 equity over the remaining
vesting period. On exercise, the differences between the expense charged to the consolidated
statement of comprehensive income and the actual cost to Conduit, if any, is transferred to other
reserves in shareholders\u2019 equity.
Pensions
Conduit\u2019s pension plans are based on defined contributions or equivalent cash in lieu, subject to
applicable law and local market standards. On payment of contributions to the plans or cash in lieu
there is no further obligation to Conduit. Contributions or payments of cash in lieu are recognised
as employee benefits within other expenses in the consolidated statement of comprehensive income
in the period when the services are rendered.
Employee benefits
Equity-based incentives
Conduit currently operates a MIP under which shares are subscribed for or nil cost options are
granted. The fair value of the instruments granted is estimated on the date of grant. The estimated
fair value is recognised as an expense pro-rata over the vesting period of the instrument, adjusted
for the impact of any non-market vesting conditions. No adjustment to vesting assumptions is made
in respect of market vesting conditions.
Government assistance
Conduit recognises government assistance when there is reasonable assurance that Conduit has
complied with, and will continue to comply with, the conditions attached to the assistance, and
that the amount of the credit will be received. Government assistance that relates to operating
expenditures is recognised in the consolidated statement of comprehensive income in the same
line item as the relevant operating expense.
Unutilised credits that Conduit expects to recover in future periods, including amounts refundable
in cash, are recorded as a receivable. Conduit reassesses at each reporting date whether there is
reasonable assurance that the conditions for receipt of the remaining credit continue to be met.
Tax
Income tax on the profit or loss for the period comprises current and deferred tax. Current tax is the
expected tax payable on the taxable income for the year using tax rates enacted or substantively
enacted at the year-end reporting date and any adjustments to tax payable in respect of prior periods.
Deferred tax is provided, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. The amount of
deferred tax provided is based on the expected manner of realisation or settlement of the carrying
amount of the assets and liabilities, using tax rates enacted or substantively enacted at the reporting
date. Deferred tax assets are recognised in the consolidated balance sheet to the extent that it is
probable that future taxable profit will be available against which the temporary differences can
be utilised.
Own shares
Own shares include shares repurchased under share repurchase authorisations and held in treasury,
plus shares purchased and held in trust, for the purposes of employee equity-based incentive
schemes. Own shares are deducted from shareholders\u2019 equity. No gain or loss is recognised on
the purchase, sale, cancellation or issue of own shares and any consideration paid or received is
recognised directly in equity.
Share capital and issuance costs
Shares are classified as shareholders\u2019 equity if there is no obligation to transfer cash or other financial
assets. Transaction costs that are attributable to the issuance of new shares are treated as a deduction
from equity.
", "dimensions": { "concept": "ifrs-full:DisclosureOfMaterialAccountingPolicyInformationExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f190": { "value": "General information
CHL was incorporated under the laws of Bermuda on 6 October 2020 and, on 7 December 2020,
all of its common shares of par value $0.01 per share were admitted to the standard listing segment
of the Official List of the UK Financial Conduct Authority and admitted to trading on the LSE\u2019s main
market for listed securities. CHL\u2019s registered office is Clarendon House, 2 Church Street, Hamilton HM
11, Bermuda. CHL\u2019s consolidated financial statements as at, and for the year ended 31 December 2025
include the Company\u2019s subsidiaries. The principal activity of Conduit is to provide reinsurance
products and services to its clients worldwide.
A full listing of Conduit\u2019s related parties can be found in note 22.
2. Summary of material accounting policies
The basis of preparation, use of judgements and estimates, consolidation principles and material
accounting policies adopted in the preparation of these consolidated financial statements are set
out below. Excluding percentages, share and per share data or where otherwise stated, all amounts
in tables and narrative disclosures are in millions of US dollars.
Basis of preparation
These consolidated financial statements are prepared on a going concern basis in accordance with
IFRS as issued by the IASB, and the DTR issued by the Financial Conduct Authority, and are prepared
on a historical cost basis, except for items measured at fair value as disclosed in the relevant
accounting policies. In accordance with the requirements of IAS 1, the financial statements\u2019 assets and
liabilities have been presented in order of liquidity, which provides information that is more reliable
and relevant for a financial institution.
In the course of preparing these consolidated financial statements, no judgements have been made in
the process of applying Conduit\u2019s accounting policies, other than those involving estimations as noted
in the \u2018Use of judgements and estimates\u2019 section, that have had a significant effect on amounts
recognised in these consolidated financial statements.
Going concern
The consolidated financial statements of Conduit have been prepared on a going concern basis. In
assessing Conduit\u2019s going concern position as at 31 December 2025, the Board have considered a
number of factors, including the current balance sheet position and Conduit\u2019s strategic and financial
plan, taking account of possible changes in trading performance and funding retention, stress testing
and scenario analysis. Conduit\u2019s capital ratios and its capital resources are comfortably in excess of
regulatory solvency requirements, and internal stress testing indicates Conduit can withstand severe
economic and competitive stresses.
As a result of the assessment, the Board has a reasonable expectation that Conduit has adequate
resources to continue in operational existence for the foreseeable future and therefore believe that
Conduit is well placed to manage its business risks successfully. Accordingly, Conduit continues
to adopt the going concern basis in preparing the consolidated financial statements.
Changes in accounting policies and new standards
There were no new standards that became effective in the year ended 31 December 2025 that have
had a material impact on Conduit.
Future accounting changes
No standards or interpretations have been issued that are expected to have a material effect on
Conduit\u2019s financial position, presentation or disclosure.
IFRS 18, Presentation and Disclosure in Financial Statements, will replace IAS 1, Presentation of
Financial Statements, and applies to reporting periods beginning on or after 1 January 2027.
IFRS 18 will require entities to classify all income and expenses on the consolidated statement of
comprehensive income into operating, investing and financing activities, disclose in a single note
management-defined performance measures, and provide enhanced guidance on how to group
information in the financial statements.
Conduit is in the process of assessing the impact that the new standard will have on its consolidated
financial statements, including presentation and disclosure requirements. There is no impact
anticipated on the financial results of Conduit. Only minimal changes are expected to the presentation
and disclosure in the consolidated financial statements, with minor subtotal changes in the
consolidated statement of comprehensive income, a minor change to the starting position in the
consolidated statement of cash flows, and minimal additional disclosure related to management-
defined performance measures.
Use of judgements and estimates
The preparation of financial statements in conformity with IFRS requires Conduit to make judgements
and estimates that affect the reported and disclosed amounts at the balance sheet date, revenues and
expenses during the reporting period and the associated financial statement disclosures. All estimates
are based on management\u2019s knowledge of current facts and circumstances, assumptions based on
that knowledge and their prediction of future events. Actual results may differ significantly from the
estimates made.
The most significant estimates made by management are in relation to the liability for incurred
claims and associated ceded reinsurance recoveries, as discussed in note 3 and note 15.
Less significant estimates are made in determining the estimated fair value of certain financial
instruments, as discussed in note 3 and note 13.
In addition, some management judgement is exercised in determining the total premium cash flows
expected to be received from reinsurance contracts that are used to determine the amount of
reinsurance revenue recognised in the period.
While not significant, estimates are also used in the estimated fair value of the MIP as discussed
in note 7.
Consolidation principles
These consolidated financial statements comprise the financial statements of CHL and its subsidiaries
as at and for the year ended 31 December 2025. Subsidiaries are those entities that are controlled by
Conduit and are fully consolidated from the date on which Conduit obtains control and continue to
be consolidated until the date when such control ceases. Control is achieved when Conduit is exposed,
or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect
those returns through its power over the subsidiary.
Intragroup balances and transactions are eliminated in preparing the consolidated financial
statements. Subsidiaries\u2019 accounting policies are consistent with Conduit\u2019s accounting policies.
Foreign currency
The functional currency, which is the currency of the primary economic environment in which Conduit
operates, is US dollars. Items included in the financial statements of each entity are measured using
the functional currency. These consolidated financial statements are presented in US dollars.
Foreign currency transactions are recorded in the functional currency for each entity using the
exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated
in foreign currencies are revalued at period end exchange rates. The resulting foreign exchange
differences on revaluation are recorded in the consolidated statement of comprehensive income
within net foreign exchange gains (losses). Non-monetary assets and liabilities denominated in a
foreign currency are carried at historic rates. Non-monetary assets and liabilities carried at estimated
fair value and denominated in a foreign currency are translated at the exchange rate at the date the
fair value was determined.
Reinsurance contracts
IFRS 17 sets out the classification, measurement and presentation and disclosure requirements for
reinsurance contracts. It requires reinsurance contracts to be measured using current estimates and
assumptions that reflect the timing of cash flows and recognition of profits as insurance services are
delivered. The standard provides two main measurement models which are the General Measurement
Model (GMM) and the Premium Allocation Approach (PAA).
The PAA simplifies the measurement of reinsurance contracts for remaining coverage, or pre-claims,
in comparison to the GMM. The GMM is used for the measurement of the liability for incurred claims.
PAA eligibility
Under IFRS 17, Conduit\u2019s reinsurance contracts issued and ceded reinsurance contracts held are all
eligible to be measured by applying the PAA, due to meeting the following criteria:
\u2022
Loss-occurring reinsurance contracts with coverage period of one year or less are automatically
eligible; and
\u2022
Modelling of risk-attaching contracts or contracts with a coverage period greater than one year
produces a measurement for the group of reinsurance contracts that does not differ materially from
that which would be produced applying the GMM.
Classification
Contracts that transfer significant reinsurance risk at the inception of the contract are accounted for
as reinsurance contracts. Contracts purchased and held by Conduit under which it transfers significant
reinsurance risk to a counterparty are accounted for as ceded reinsurance contracts. Contracts that
do not transfer significant reinsurance risk are accounted for as investment contracts. Reinsurance risk
is transferred when a reinsurer agrees to compensate a policyholder if a specified uncertain future
event adversely affects the policyholder.
Conduit\u2019s accounting policies apply to both reinsurance contracts issued and ceded reinsurance
contracts held unless explicitly referenced as applying to contracts issued or ceded only. Conduit
writes both excess of loss and proportional (also known as quota share or pro-rata) reinsurance
contracts. The type of contract impacts the recognition of reinsurance revenue. Contract types are
discussed on page 120.
Separating components from reinsurance contracts
IFRS 17 distinguishes three components that, if embedded in a reinsurance contract, should be
bifurcated, and accounted for separately. These are:
\u2022
Cash flows relating to embedded derivatives that are required to be separated;
\u2022
Cash flows relating to distinct investment components; and
\u2022
Promises to transfer distinct goods or distinct non-insurance services.
IFRS 17 then applies to all remaining components of the contract. Conduit does not have any contracts
containing non-insurance components that require separation. Where contracts contain multiple
reinsurance components that meet the requirements for separation, these are separated and
accounted for as standalone contracts.
Some reinsurance contracts issued contain profit-sharing arrangements, such as profit commissions
and no claims bonuses. Under these arrangements, there is a minimum guaranteed amount that the
policyholder will always receive either in the form of profit commission, or as reimbursement for
claims, or another contractual payment, irrespective of the insured event happening. These are
typically considered non-distinct investment components. Non-distinct investment components are
not separated from the reinsurance contract as they are closely interrelated to the measurement of
the reinsurance contract. However, the impact of the non-distinct investment components are
excluded from the consolidated statement of comprehensive income by adjusting reinsurance
revenue and reinsurance service expenses by the minimum amount due. There is no impact to the
reinsurance service result as there is an equal reduction to both revenue and expenses.
Level of aggregation
Conduit manages reinsurance contracts issued by class of business within an operating segment.
Classes of business are aggregated into portfolios of contracts that are subject to similar risks.
Contracts within each portfolio are grouped into groups of contracts that are issued within a calendar
year, the annual cohort, and are (i) contracts that are onerous at initial recognition; (ii) contracts that
at initial recognition have no significant possibility of subsequently becoming onerous; or (iii) a group
of remaining contracts. These groups represent the level of aggregation at which reinsurance
contracts are initially recognised and measured. Such groups are not subsequently reconsidered.
Onerous contracts
Under the PAA, it is assumed there are no contracts in the portfolio that are onerous at initial
recognition, unless there are facts and circumstances that may indicate otherwise. Management
primarily considers the following to determine whether there are facts and circumstances that mean
a group of contracts are onerous:
\u2022
Pricing information;
\u2022
Results of similar contracts it has recognised; and
\u2022
External factors, such as a change in market experience or regulations.
If a group of contracts becomes onerous, Conduit increases the carrying amount of the liability for
remaining coverage to the amount of the fulfilment cash flows with the amount of such an increase
recognised immediately in reinsurance service expenses. Subsequently, Conduit amortises the amount
of the loss component by decreasing reinsurance service expenses. The loss component amortisation
is based on the passage of time over the remaining coverage period of contracts within an onerous
group. If facts and circumstances indicate that the expected profitability of the onerous group during
the remaining coverage has changed, then Conduit remeasures the loss component by reassessing
the fulfilment cash flows as required until the loss component is reduced to zero.
Where a loss component is expected to be partially or fully recovered by ceded reinsurance contracts,
the amount of recovery is recognised in ceded reinsurance recoveries.
Recognition
Conduit recognises groups of reinsurance contracts it issues from the earliest of:
\u2022
The beginning of the coverage period of the group of contracts;
\u2022
The date when the first payment from the cedant is due or when the first payment is received
if there is no due date; or
\u2022
For a group of onerous contracts, the date when facts and circumstances indicate that the group
is onerous.
For ceded reinsurance contracts Conduit recognises the group of contracts:
\u2022
If the reinsurance contracts provide proportionate coverage, at the later of the beginning of the
coverage period of the group, or the initial recognition of the underlying covered reinsurance
contracts issued; or
\u2022
For non-proportionate coverage, the beginning of the coverage period of the group of contracts,
unless an onerous group of underlying reinsurance contracts have been recognised and the ceded
reinsurance contract has been signed before that date.
Modification and derecognition
Conduit derecognises reinsurance contracts when:
\u2022
The rights and obligations relating to the contract are extinguished (meaning discharged, cancelled
or expired); or
\u2022
The contract is modified such that the modification results in a change in the measurement model
or the applicable standard for measuring a component of the contract substantially changes the
contract boundary, or requires the modified contract to be included in a different group. In such
cases, Conduit derecognises the initial contract and recognises the modified contract as a new
contract. When a modification is not treated as a derecognition, Conduit recognises amounts paid
or received for the modification with the contract as an adjustment to the relevant liability for
remaining coverage.
Contract boundaries
The measurement of a group of reinsurance contracts includes all future cash flows expected to arise
within the boundary of each contract in the group. Cash flows are within the boundary of a
reinsurance contract if they arise from substantive rights and obligations that exist during the
reporting period in which Conduit can compel the cedant to pay the premiums, or in which Conduit
has a substantive obligation to provide the cedant with services. A substantive obligation to provide
services ends when Conduit has the practical ability to reassess the risks of the cedant and, as a result,
can set a price of level of benefits that fully reflects those risks. Where Conduit issues multi-year
contracts and does not have the ability to re-price on each policy anniversary the contract is
considered one contract and therefore future cash flows from each of the annual periods are
considered on initial recognition.
For ceded reinsurance contracts the cash flows are within the boundary of the contract if Conduit
has a substantive right to receive services or if Conduit is compelled to pay premiums to the reinsurer.
The substantive right to receive services from the reinsurer ends when:
\u2022
The reinsurer has the practical ability to reassess the risks transferred to it and can set a price
of level of benefits that fully reflects those risks; or
\u2022
The reinsurer has a substantive right to terminate the coverage.
\u2022
Conduit assesses the contract boundary at initial recognition and at each subsequent reporting date
to include the effects of changes in circumstances on Conduit\u2019s substantive rights and obligations.
The assessment of the contract boundary, which defines the future cash flows that are included in
the measurement of the contract, requires judgement and consideration of Conduit's substantive
rights and obligations. Conduit issues risk-attaching reinsurance contracts which provide
reinsurance coverage to underlying contracts issued within the terms of the contract. While the
contracts can have an annual term the contract boundary is assessed with consideration of the
coverage period of the underlying contracts. Contracts that cover claims from underlying contracts
within the contract period, loss-occurring contracts, are typically annual term. Where contracts
contain multi-year terms, Conduit exercises judgement on whether provisions within the contract
allow cancellation or re-pricing at each anniversary of the contract.
Measurement \u2013 Liability for remaining coverage
On initial recognition of each group of contracts, the carrying amount of the liability for remaining
coverage is measured as the premiums received on initial recognition, if any, minus any reinsurance
acquisition expense cash flows allocated to the group of contracts and any amounts arising from the
derecognition of the prepaid reinsurance acquisition expense cash flows asset. Conduit has chosen
not to expense reinsurance acquisition expense cash flows on contracts with coverage of one year
or less when they are incurred in order to apply a consistent treatment of reinsurance acquisition
expense cash flows for all contracts, regardless of the length of coverage.
Subsequently, at the end of each reporting period, the liability for remaining coverage is:
\u2022
Increased by any premiums received in the period;
\u2022
Decreased for reinsurance acquisition expense cash flows paid in the period;
\u2022
Decreased for the amounts of expected premium cash flows recognised as reinsurance revenue
for the services provided in the period;
\u2022
Increased for the amortisation of reinsurance acquisition expense cash flows in the period
recognised as reinsurance service expenses; and
\u2022
Decreased for any non-distinct investment component paid or transferred to the liability
for incurred claims.
Conduit has elected not to adjust the liability for remaining coverage for the time value of money
as its reinsurance contracts do not contain a significant financing component.
Conduit measures the reinsurance asset for remaining coverage for its ceded reinsurance contracts
that it holds on the same basis as reinsurance contracts issued, adapted to reflect the features that
differ between contracts issued versus contracts held.
Reinsurance revenue recognised in the period is based on the total premium cash flows expected
to be received over the lifetime of the contract, net of any deductions that are paid to the cedant.
The amount of total expected revenue from a contract recognised in the period is dependent on
the type of reinsurance contract, as discussed below.
Excess of loss contracts
For the majority of excess of loss contracts, expected premium cash flows are assessed based on
the minimum and deposit or flat premium, as defined in the contract. Subsequent adjustments to the
minimum and deposit premium are assessed in the period in which they are determined. For excess
of loss contracts where no deposit is specified in the contract, premium cash flows are assessed based
on estimates of premiums provided by the ceding company. Subsequent adjustments, based on
reports of actual premium by ceding companies, or revisions in estimates, are assessed in the period
in which they are determined. For multi-year policies that are payable in annual instalments, where
the reinsured has the sole ability to cancel, the total expected premium cash flows for all annual
periods are assessed at the inception of the contract. Where unilateral cancellation by the reinsurer
exists at each anniversary of the contract the annual periods are assessed as separate contracts.
Reinsurance revenue for excess of loss contracts is generally recognised evenly over the term of the
underlying risk period of the reinsurance contract, except where the period of risk differs significantly
from the contract period. In these circumstances, reinsurance revenue is recognised over the period of
risk in proportion to the amount of reinsurance protection provided. Where contract terms require the
reinstatement of coverage after a ceding company\u2019s loss, as the reinstatement is contingent on the
loss, the estimated mandatory reinstatement premiums are recorded within reinsurance service
expenses.
Proportional contracts
Premium cash flows for proportional contracts are assessed based on estimates of ultimate premiums
provided by the ceding company, supplemented by management\u2019s estimates of premiums based
on its experience with the ceding company, familiarity with each market, the timing of the reported
information and its understanding of the characteristics of each class of business. Initial estimates of
premium cash flows are assessed in the period in which the contract incepts, or the period in which
the contract is bound, if later. Contracts written on a \u2018risks-attaching\u2019 basis cover claims which attach
to the underlying reinsurance policy written during the term of the respective policy. Reinsurance
revenue on such policies generally extend beyond the original term of the contract. Subsequent
adjustments, based on reports of actual premium by the ceding company, or revisions in estimates,
are assessed in the period in which they are determined.
Reinsurance acquisition expense cash flows
Reinsurance acquisition expense cash flows represent the cash flows that arise from the cost of selling
and underwriting a group of reinsurance contracts and include:
\u2022
Contract specific costs, such as brokerage;
\u2022
Operating expenses that are incurred in relation to the fulfilment of reinsurance contracts; and
\u2022
An allocation of fixed and variable overheads.
Reinsurance acquisition expenses are deferred over the period in which the related premiums are
earned to the extent they are recoverable out of expected future revenue margins and recognised
within reinsurance service expenses.
Commissions that are paid to cedants, such as ceding commissions, are not treated as reinsurance
acquisition expense cash flows as they do not relate to a service. Such commissions are treated as
a reduction in the expected premium recognised as reinsurance revenue
Ceded reinsurance expenses
Ceded reinsurance is purchased in the normal course of business to increase capital capacity or
to limit the impact of individual risk losses and loss events impacting multiple cedants, such as
natural-catastrophes, or both. Conduit may purchase ceded reinsurance on both an excess of loss
and a proportional basis, and may supplement this with the use of ceded reinsurance cover linked
to the issuance of catastrophe bonds or other capital market products. Ceded reinsurance premiums
are recognised as ceded reinsurance expenses in the same manner as reinsurance contracts issued,
depending on the terms of the contract. Ceding commissions received are deducted from the
premium paid that is recognised in ceded reinsurance expenses. Other expenses incurred in the
placing of ceded reinsurance contracts that are in relation to a service by a third party, such as
brokerage, are recognised in ceded reinsurance expenses.
Measurement \u2013 Liability for incurred claims
The liability for incurred claims represents the estimated ultimate cost of settling all reinsurance claims
arising from events that have occurred up to the end of the reporting period, including the operating
costs that are expected to be incurred in the course of settling such claims, reinstatement premiums
on specific loss events, profit commissions and similar expenses that are contingent on claims plus a
provision for IBNR. The liability for incurred claims is derived from the estimated fulfilment cash flows
relating to expected claims. The fulfilment cash flows incorporate, in an unbiased way, all reasonable
and supportable information available, without undue cost or effort, about the amount, timing and
uncertainty of those future cash flows. They also include an explicit adjustment for non-financial risk,
the risk adjustment. Estimates of future cash flows for incurred claims are discounted on initial
recognition and then re-measured to current rates as at the reporting date.
Cash flows for outstanding losses are estimated initially on the basis of reported losses received from
cedants. Cash flows for ACRs are determined where management\u2019s expectation of the ultimate cost
of the reported loss is greater than that reported. Estimated cash flows for IBNR may also consist of
a provision for additional development in excess of losses reported by cedants, as well as a provision
for losses which have occurred but have not yet been reported by cedants.
Cash flows for IBNR are estimated initially using expected loss and loss adjustment expense ratios
which are selected based on information derived by underwriters and actuaries during the initial
pricing of the business. These estimates are reviewed regularly and, as experience develops and
new information is received, the cash flows are adjusted as necessary. As actual loss information is
reported, and Conduit develops its own loss experience, management will use various actuarial
methods as well as a combination of management\u2019s judgement and experience, historical reinsurance
industry loss experience and estimates of pricing adequacy trends to estimate cash flows for IBNR.
The estimation of the liability for incurred claims is a complex process which incorporates a significant
amount of judgement. It is reasonably possible that uncertainties in the reserving process, delays in
cedants reporting losses to Conduit, together with the potential for unforeseen adverse developments,
could lead to a material change in the liability for incurred claims.
Any amounts recoverable from reinsurers are estimated using the same methodology as for the
underlying losses except for the requirement under IFRS 17 to assess the ceded reinsurance recovery
cash flows for the effect of any risk of non-performance, including expected credit losses.
Management monitors the creditworthiness of its reinsurers on an ongoing basis and assesses any
reinsurance assets for the risk of non-performance, with a provision for non-performance risk being
recognised as an expense in the period in which it is determined.
Presentation of reinsurance contracts
Reinsurance assets and liabilities
The asset or liability for a portfolio of reinsurance contracts is the net position of both the liability for
remaining coverage and the liability for incurred claims. Whether a portfolio is in a liability or asset
position is typically impacted by the timing of cash flows received versus cash flows paid. Conduit
presents separately in the consolidated balance sheet portfolios of reinsurance contracts issued and
held that are in an asset position and those that are in a liability position.
All reinsurance contract assets and liabilities are deemed monetary assets and liabilities and are
revalued at period end exchange rates.
Reinsurance revenue
Reinsurance revenue in the consolidated statement of comprehensive income is the amount
of expected premium cash flows, net of any deductions paid to the cedant and excluding any
non-distinct investment component. Conduit allocates the expected premium receipts to each
period of coverage on the basis of passage of time or the expected risk pattern if it differs
significantly from the passage of time.
Reinsurance service expenses
Reinsurance service expenses in the consolidated statement of comprehensive income includes
changes in the liability for incurred claims that do not arise from the application of discount rates,
being recognition and amortisation of any loss components, amortisation of reinsurance acquisition
expense cash flows and other attributable operating expenses.
Ceded reinsurance income and expenses
Conduit has elected to present the income and expenses from ceded reinsurance contracts separately
in the consolidated statement of comprehensive income. Ceded reinsurance expenses represent the
total expected ceded premiums and other amounts, that are not contingent on recoveries, payable
to Conduit\u2019s reinsurers. Conduit recognises ceded reinsurance expenses based on the passage of
time over the coverage period of a group of contracts or expected risk pattern. Income from ceded
reinsurance contracts includes expected recoveries on incurred claims, changes in expected
recoveries related to past service, the provision for the effects of changes in risk of reinsurer non-
performance plus other amounts that are contingent on recoveries, such as ceded profit commissions
payable to the reinsured.
Net reinsurance finance income (expense)
Reinsurance finance income (expense) includes the changes in the carrying amounts of reinsurance
and ceded reinsurance assets and liabilities arising from the unwind of discount recognised in prior
periods and the effects of remeasuring to current discount rates plus other financial assumptions.
Conduit has elected to disaggregate the changes in the risk adjustment for the time value of money
and present it within net reinsurance finance income (expense).
Conduit has chosen not to disaggregate finance income (expense) between other comprehensive
income (OCI) and comprehensive income.
Financial instruments
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held on call with banks, money market funds,
and other short-term highly liquid investments with a maturity of three months or less at the date of
purchase. Carrying amounts approximate fair value due to the short-term nature and high liquidity of
the instruments.
Investments
Conduit\u2019s fixed maturity securities portfolio meets the requirements for mandatory classification as
FVTPL and is carried at estimated fair value in the consolidated balance sheet. The classification of
financial assets is determined at the time of initial purchase. A financial asset is classified at FVTPL
if it is held within a business model that is managed and evaluated on a fair value basis or if acquired
principally for the purpose of selling in the short term, or if it forms part of a portfolio of financial
assets in which there is evidence of short-term profit taking. Presentation of these securities in the
FVTPL category is consistent with how management monitors and evaluates the performance of
these securities on a fair value basis.
Regular way purchases and sales of investments are recognised at estimated fair value on the trade
date, and are subsequently carried at estimated fair value. Balances pending settlement are reflected
in the consolidated balance sheet in other assets or other payables. The estimated fair value of
Conduit\u2019s fixed maturity securities portfolio is determined based on bid prices from recognised
exchanges, broker-dealers, recognised indices or pricing vendors. Changes in estimated fair value
of investments classified as FVTPL are recognised in the consolidated statement of comprehensive
income within net unrealised gains (losses) on investments.
Investments are derecognised when Conduit has transferred substantially all the risks and rewards of
ownership. On derecognition of an investment held at FVTPL, previously recorded unrealised gains
and losses are recycled from net unrealised gains (losses) on investments to net realised gains (losses)
on investments.
Interest income, amortisation and accretion of premiums and discounts on fixed maturity securities
are calculated using the effective interest rate method and recognised in net investment income.
The carrying value of accrued interest income approximates estimated fair value due to its short-term
nature and high liquidity.
Leases
Conduit recognises a right-of-use asset and a lease liability at the lease commencement date.
The right-of-use asset is initially measured at cost, which comprises the initial measurement of the
corresponding lease liability adjusted for any lease payments made at or before the commencement
date, plus any initial direct costs incurred and an estimate of any costs to be incurred at the expiration
of the lease agreement.
Right-of-use assets are subsequently measured at cost less accumulated depreciation and
any impairment losses. Straight-line depreciation is calculated from the commencement date of the
lease to the earlier of either the end date of the lease term or the useful life of the underlying asset.
The lease liability is initially measured at the present value of the future lease payments at the lease
commencement date. Lease payments are discounted using the interest rate implicit in the lease or,
if that rate cannot be readily determined, Conduit\u2019s incremental borrowing rate. Lease payments
included in the measurement of the lease liability include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, variable lease payments that depend on an index
or a rate, and amounts expected to be paid under residual value guarantees.
The lease liability is subsequently measured by increasing the lease carrying amount to reflect the
interest due on the lease liability using the effective interest rate method and reducing the carrying
amount to reflect the lease payments made. Conduit re-measures the lease liability and the related
right-of-use asset whenever there is a change in future lease payments arising from a change in
index or rate, if Conduit changes its assessment of whether it will exercise a purchase, extension
or termination option or if there is a revised in-substance fixed lease payment.
Right-of-use assets and lease liabilities are presented as separate financial statement line items
in the consolidated balance sheet.
Conduit also operates DSBP and LTIP awards. Under the DSBP, a percentage of each employee's
bonus is automatically deferred into shares as nil cost options. These nil cost awards vest annually
in separate equal tranches over a three-year period from the date of grant and do not have associated
performance criteria attached to the awards. These awards accrue dividend equivalents for all
dividends declared where the record date falls between the grant date and date of exercise, and
are paid at the time of exercise.
The LTIP awards are awarded with or without performance criteria attached to the awards. These nil
cost awards granted to staff vest over a three-year period from the date of grant. These awards
accrue dividend equivalents for all dividends declared where the record date falls between the grant
date and date of exercise, and are paid at the time of exercise. Refer to note 7 for details of
performance criteria attached to certain LTIP awards.
At each balance sheet date, Conduit revises its estimate of the number of instruments that are
expected to become exercisable. It recognises the impact of the revision of original estimates, if any,
as equity-based incentive expense in the consolidated statement of comprehensive income, and a
corresponding adjustment is made to other reserves in shareholders\u2019 equity over the remaining
vesting period. On exercise, the differences between the expense charged to the consolidated
statement of comprehensive income and the actual cost to Conduit, if any, is transferred to other
reserves in shareholders\u2019 equity.
Pensions
Conduit\u2019s pension plans are based on defined contributions or equivalent cash in lieu, subject to
applicable law and local market standards. On payment of contributions to the plans or cash in lieu
there is no further obligation to Conduit. Contributions or payments of cash in lieu are recognised
as employee benefits within other expenses in the consolidated statement of comprehensive income
in the period when the services are rendered.
Employee benefits
Equity-based incentives
Conduit currently operates a MIP under which shares are subscribed for or nil cost options are
granted. The fair value of the instruments granted is estimated on the date of grant. The estimated
fair value is recognised as an expense pro-rata over the vesting period of the instrument, adjusted
for the impact of any non-market vesting conditions. No adjustment to vesting assumptions is made
in respect of market vesting conditions.
Government assistance
Conduit recognises government assistance when there is reasonable assurance that Conduit has
complied with, and will continue to comply with, the conditions attached to the assistance, and
that the amount of the credit will be received. Government assistance that relates to operating
expenditures is recognised in the consolidated statement of comprehensive income in the same
line item as the relevant operating expense.
Unutilised credits that Conduit expects to recover in future periods, including amounts refundable
in cash, are recorded as a receivable. Conduit reassesses at each reporting date whether there is
reasonable assurance that the conditions for receipt of the remaining credit continue to be met.
Tax
Income tax on the profit or loss for the period comprises current and deferred tax. Current tax is the
expected tax payable on the taxable income for the year using tax rates enacted or substantively
enacted at the year-end reporting date and any adjustments to tax payable in respect of prior periods.
Deferred tax is provided, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. The amount of
deferred tax provided is based on the expected manner of realisation or settlement of the carrying
amount of the assets and liabilities, using tax rates enacted or substantively enacted at the reporting
date. Deferred tax assets are recognised in the consolidated balance sheet to the extent that it is
probable that future taxable profit will be available against which the temporary differences can
be utilised.
Own shares
Own shares include shares repurchased under share repurchase authorisations and held in treasury,
plus shares purchased and held in trust, for the purposes of employee equity-based incentive
schemes. Own shares are deducted from shareholders\u2019 equity. No gain or loss is recognised on
the purchase, sale, cancellation or issue of own shares and any consideration paid or received is
recognised directly in equity.
Share capital and issuance costs
Shares are classified as shareholders\u2019 equity if there is no obligation to transfer cash or other financial
assets. Transaction costs that are attributable to the issuance of new shares are treated as a deduction
from equity.
Risk disclosures
Introduction
Conduit is exposed to risks from several sources, classified into six primary risk categories. The
primary risk categories are: (a) reinsurance risk; (b) market risk; (c) liquidity risk; (d) credit risk; (e)
operational risk; and (f) strategic risk. These are discussed in detail on the following pages. The
primary risk to Conduit is reinsurance risk.
The Board is responsible for determining the nature and extent of the principal risks Conduit is willing
to take in achieving its strategic objectives and should maintain sound risk management and internal
control systems. To this end, the Board has established various committees to support the execution
of its responsibilities and has reviewed the committee structures at CRL. The Board, and committees
thereof, define the risk preferences and appetites within which management is authorised to operate.
The risk function is responsible for supporting the Board, and the CRL Board, with the day-to-day
oversight of the risks that Conduit seeks or is exposed to in pursuit of its strategic objectives, and
the satisfaction of certain regulatory risk management expectations relevant to CRL. The framework
under which risks are managed contemplates risk appetite and tolerance constraints. Risk appetite
is prescribed by the Board and is reviewed at least annually, with consideration of the financial
and operational capacity of Conduit. The use of financial capacity in this context relates to
calculated or modelled capital requirements, based on residual unmitigated risk exposures.
Current capital requirements are determined by reference to rating agency, regulatory, and our
internal capital model requirements.
Day-to-day management of risk is the responsibility of management, operating within the defined
appetite and tolerances. The risk framework prescribes a standardised approach to the management
of risk, oversight and challenge by the risk function and independent assurance provided by the
internal audit function. The risk framework also addresses the reporting of risks, emerging risks, risk
events and compliance with risk appetite and tolerance statements to executive management and the
Board, and relevant board committees, of CHL and CRL. To ensure transparency and accountability of
the business for all independent Non-Executive Directors, four Independent Non-Executive Directors
from the Board have been appointed to the Board of CRL. Furthermore, the Board is invited to attend
operating entity board level meetings and see all minutes and records of such operating entity board
and committee meetings.
Climate change
\u2022
An underwriting roundtable meeting, typically held at least weekly (and more frequently during key
Conduit is exposed to risks associated with climate change but also potential opportunities arising
renewal periods), where deal flow, pricing and opportunities are discussed;
from that risk. Risks from climate change can include physical risk and transition risk. Physical risks are
\u2022
Pricing models are used in all areas of the underwriting process and are stored centrally in our
those relating to the physical impacts of climate change, which can be from increased frequency and/
pricing platform;
or severity of climate-related events, or structural, due to longer-term shifts in climate patterns.
\u2022
Risk appetite and tolerance statements have been established and the CRO reports quarterly
Transition risks are those relating to the transition to a lower carbon economy and include risks such
on adherence;
as policy and legal risk, technology risk, market risk and reputational risk. Our approach to managing
\u2022
A number of modelling tools are used to model catastrophes and calculate the associated expected
climate-related risks is documented in Conduit\u2019s Risk Management Policy.
losses; and
\u2022
Outwards reinsurance is purchased to mitigate both frequency and severity of losses, and to
a. Reinsurance risk
protect Conduit\u2019s capital base.
Conduit underwrites both short-tail and long-tail reinsurance contracts on a worldwide basis. These
reinsurance contracts transfer insurance risk, including risks exposed to both natural and man-made
catastrophes, and risk and liability losses. The risk in connection with underwriting reinsurance
contracts is, in the event of a covered loss, whether the premiums will be sufficient to meet the
associated loss payments and expenses. The underwriters evaluate and estimate the level of
premiums sufficient to cover expected losses, expenses and profitability through a combination of
sophisticated risk modelling tools, past experience and knowledge of loss events, current industry
trends and broader economic indicators. In order to ensure appropriate reinsurance risk selection and
limits on the concentration and diversification of the aggregate portfolio, Conduit has established risk
management and internal control systems to evaluate and assess the expected losses of each
individual contract, class of business, geographic region and the aggregate portfolio.
These controls, include, but are not limited to:
\u2022
A five-year strategic plan is produced that defines the overriding business goals that management
and the Board aim to achieve;
\u2022
A detailed business plan is produced annually and considers current market conditions and the
risk-adjusted profitability of the underwriting portfolio;
\u2022
Conduit\u2019s internal capital requirements consider the probability and magnitude of reinsurance losses
varying adversely from the expected losses considered during the underwriting and subsequent
reserving processes;
\u2022
Forecasts are produced periodically to assess the progress toward the business plan and the
strategic plan;
\u2022
Each underwriter has a clearly defined limit of underwriting authority;
\u2022
Each contract underwritten is subject to a pre-bind peer review;
Catastrophe management
Certain classes of Conduit\u2019s business provide coverage for natural catastrophes and are subject to
seasonal variation and the impacts of climate change. Conduit has exposure to large catastrophe
losses globally, in particular in North America, Europe and Japan and these are most likely to be driven
by windstorm events. The level of windstorm activity, and any landfall thereof, during the North
Atlantic, European and Asia Pacific wind seasons may materially impact loss experience. The North
Atlantic and Asia Pacific wind seasons are typically June to November and the European wind season
November to March. Conduit has exposure to other natural catastrophes that can occur throughout
the year, such as earthquakes, tsunamis, droughts, floods, hail, tornadoes, and wildfires. In addition,
Conduit is exposed to risk losses throughout the year from perils such as fire, explosion, war, terrorism,
political risk, cyber and other events, including loss arising from legal liabilities rather than physical
damage.
Exposure management is an evolving discipline. Industry understanding of natural catastrophe events
continues to develop, informed by advances in science, improved hazard data, enhanced modelling
methodologies and emerging insights from actual loss events. Conduit reviews and refines its
approaches to exposure monitoring, model utilisation and risk aggregation as exposures and loss
models are updated to ensure they remain appropriate and proportionate to the risk profile of the
portfolio. This includes assessing changes in vendor models, cedant data quality, evolving peril
definitions and observed trends in climate and loss behaviour.
During 2025, Conduit refined its approach to natural catastrophe monitoring, redefining its peril
region zones. Comparative figures for the prior period have been re-presented to ensure consistency
with the current presentation. For US windstorm, this includes incorporating all North Atlantic
Windstorm exposure into one zone which takes into account windstorms impacting more than
one zone and/or that make multiple landfalls.
Conduit has defined its appetite and tolerance levels to manage underwriting exposure accumulation
across its portfolio, based on the output from models that estimate the expected frequency and
severity of potential loss events. The tolerances are designed to monitor net exposure across different
peril and region combinations.
The table below shows Conduit\u2019s estimated net exposures to certain peak zone perils as a percentage
of tangible capital. These net positions are modelled stochastically and net of outwards reinsurance on
a first occurrence basis at the 100-year and 250-year return periods.
The modelled estimated net PML as at 31 December 2024 reflects reduced attachment points to
aggregate reinsurance protections following the occurrence of catastrophe events during the year.
This has a notable impact on the North American Windstorm net exposures. The 31 December 2025
exposures do not benefit from similar reductions in the attachment points of aggregate reinsurance
protections, given the benign wind loss experience during the year. While modelling is an important
tool for assessing exposure and aggregating risks, its reliability varies by peril and region. Models rely
on assumptions, judgements and input data provided by cedants, which can vary in precision and
accuracy. As such actual exposures are likely to vary from those modelled. There could also be
unmodelled losses to consider in addition to the modelled figures presented below. The models also
include loss scenarios at higher return periods which could result in losses to capital greater than the
modelled expectations shown.
As at 31 December
2025
2024
Net PML
% of tangible
Net PML
% of tangible
100-year return period estimated net loss
$m
capital
$m
capital
Peril
North Atlantic Windstorm
282.6
25.6%
174.7
16.6%
US and Canada Earthquake
116.5
10.6%
80.7
7.7%
European Windstorm
61.8
5.6%
49.4
4.7%
Asia Pacific Windstorm
37.3
3.4%
45.8
4.4%
Asia Pacific Earthquake
45.6
4.1%
50.9
4.8%
As at 31 December
2025
2024
Net PML
% of tangible
Net PML
% of tangible
250-year return period estimated net loss
$m
capital
$m
capital
Peril
North Atlantic Windstorm
352.4
32.0%
246.2
23.4%
US and Canada Earthquake
214.7
19.5%
125.8
12.0%
European Windstorm
76.6
6.9%
52.0
4.9%
Asia Pacific Windstorm
39.8
3.6%
55.7
5.3%
Asia Pacific Earthquake
59.6
5.4%
58.4
5.6%
Operating segments
The underwriting business is comprised of three principal divisions: Property, Casualty and Specialty. These divisions are also considered to be Conduit\u2019s operating segments. Details of each operating
segment and reinsurance revenue by geographic region and operating segment are as follows:
2025
20241
Property
Casualty
Specialty
Total
Total
Property
Casualty
Specialty
Total
Total
Year ended 31 December
$m
$m
$m
$m
%
$m
$m
$m
$m
%
US
268.4
131.3
13.7
413.4
46.1
239.1
111.3
10.9
361.3
44.4
Worldwide
140.0
74.4
110.0
324.4
36.2
157.0
63.9
100.5
321.4
39.5
Europe
49.5
49.4
20.8
119.7
13.3
34.8
39.4
22.9
97.1
11.9
Other
36.6
1.5
1.5
39.6
4.4
30.2
2.8
0.9
33.9
4.2
Reinsurance revenue
494.5
256.6
146.0
897.1
100.0
461.1
217.4
135.2
813.7
100.0
1
Certain reinsurance contracts previously reported within the Specialty segment are now reported within the Property and Casualty segments to better align with Conduit\u2019s internal view of these contracts. Comparative periods have been re-presented in order to be consistent with the
current period presentation.
Property reinsurance
Conduit is exposed to large natural-catastrophe losses, such as windstorm and earthquake losses,
primarily from assuming risks associated with property treaties. Exposure to natural-catastrophe
events is controlled and measured by managing to predefined limits within stochastic modelling and
deterministic accumulations across classes per geographic zone and peril. The accuracy of these
analyses is limited by the quality of data and the effectiveness of the modelling. It is possible that
a catastrophic event significantly exceeds the expected modelled event loss.
Natural-catastrophe risk is written across both the US and internationally on an excess of loss
and quota share basis. Reinsurance structures are offered typically in respect of peril, geography and
probability of activation or exhaustion.
Property per risk treaties are offered with the strategy to minimise natural-catastrophe exposure,
focusing on fire risk. This is considered by both natural-catastrophe specific metrics, treaty conditions
and excess of loss structure.
Ceded reinsurance is purchased to mitigate exposures to large natural-catastrophe losses. Ceded
reinsurance is typically purchased on an ultimate net loss excess of loss basis, however industry loss
warranties, catastrophe bonds issuances, or proportional treaty arrangements may also be utilised.
Casualty reinsurance
Conduit underwrites a balanced portfolio of casualty classes of business, comprised of both excess
of loss and proportional contracts, on a worldwide basis.
Casualty claims tend to take longer to be reported and ultimately settled than physical damage risks.
Conduit typically maintains a liability for incurred claims for casualty classes of business over a longer
period of time than for the property and specialty classes of business where the costs of claims are
generally known and settled within a shorter time frame.
Conduit purchases ceded reinsurance to protect against any clash between losses arising in its
casualty portfolio.
The sub-classes of casualty business include directors and officers liability, financial institutions liability,
general liability for multiple sub-classes and, on an excess and umbrella basis, medical malpractice,
professional liability and transactional liability. Conduit has limited appetite for, and generally avoids,
workers compensation, standalone auto and cyber treaties.
Directors and officers liability
Directors and officers liability policies offer protection for company managers and directors and
officers against claims that may arise in the normal course of operations. Coverage includes legal
expenses and liability to shareholders, bondholders, creditors or others owing to actions or omissions
by a director or officer of a private or public corporation, or not-for-profit organisation.
Financial institutions liability
Financial institutions coverage may cover risks such as computer and commercial crime, professional
indemnity and civil liability.
General liability
General liability commonly provides cover for losses arising from the legal liability of an original
insured and statutory liability in the case of employers\u2019 liability which result in bodily injury or disease
to third parties or physical damage to third-party property. Conduit offers a wide range of general
liability reinsurance products including contractors general liability, excess general liability, umbrella,
energy and environmental.
Medical malpractice
Medical malpractice reinsurance generally covers professional liability and errors and omissions
specifically in the healthcare industry, protecting physicians and other healthcare professionals against
claims of negligent acts or injury of patients under their care. Medical malpractice reinsurance does
not cover intentional or criminal acts.
Professional liability
Professional liability generally provides coverage for third-party losses resulting from legal liability
or civil liability or negligence, errors or omissions or wrongful acts arising from the provision of, or
failure to provide, professional services by an original insured. Sub-classes of this business would
include lawyers, accountants, architects and engineers, errors and omissions, plus miscellaneous
professional liability.
Transactional liability
Transactional liability reinsurance is used by parties to various business transactions, such as mergers,
acquisitions and divestitures, to transfer certain transaction-related risks to the reinsurance market.
There can be a broad range of risks covered, including warranty, litigation, pension and tax
uncertainties and employment matters.
Specialty reinsurance
Conduit\u2019s specialty classes of business are written on both an excess of loss and proportional basis
and can provide reinsurance coverage against physical damage (short-tail) or against legal liability
(long-tail) losses. Although specialty classes of business are exposed to natural-catastrophe risk, it is
generally to a lesser extent than property classes of business. They are more likely to be affected by
specific large loss events such as accidents, collisions, fires and similar man-made catastrophe events.
Specialty classes of business are highly diverse in nature and require specific market expertise
and experience. The specialty classes of business include, but are not limited to, aviation, energy,
engineering and construction, environmental, marine, renewables, political violence and terrorism and
are offered on both a specific and a whole account basis.
Conduit purchases ceded reinsurance protection to reduce exposure to both large risk losses and an
accumulation of smaller claims arising from any one event. Ceded reinsurance is typically purchased
on an excess of loss basis, but, from time to time, proportional arrangements may be entered into.
Aviation
The aviation class of business provides cover to the insurers of airlines, aircraft, airports, aircraft
manufacturers and aviation related products, and includes cover for the aircraft themselves as well
as losses arising from passenger and third-party liability claims against airlines and/or operators
and/or manufacturers.
Energy
The energy class of business provides reinsurance cover for a global spread of accounts that includes
risks such as downstream energy, midstream energy, upstream energy, energy liability, construction
and natural perils related coverages such as Gulf of Mexico wind and hurricane programmes. Policies
typically cover legal liability of an insured and property for physical damage (including natural
catastrophe), machinery breakdown perils and consequential business interruption exposure. Loss
limits are set at a level commensurate with the modelled estimated maximum loss scenario.
Engineering and construction
The class covers a wide range of products falling under related property and business income
protection on a worldwide basis. These products include, but are not limited to, contractors\u2019 all risks,
erection all risks, plant and equipment, machinery breakdown and loss of profits. Projects range from
small bespoke to large civil engineering constructions. The main hazards are fire and explosion, theft,
collapse and natural perils such as earthquake, windstorm and flood.
Environmental
Environmental products generally provide cover relating to the environmental and energy casualty
classes with regard to pollution. The related sectors typically include energy, construction and
industrial, which includes both commercial and residential risks.
Marine
Marine cargo is an international account and covers the reinsurance of commodities or goods in
transit. Typically, transit cover is provided on an all-risks basis for marine perils for the full value of
the goods concerned. Static cover is also provided for losses to cargo, from both elemental and non-
elemental causes. In addition, the cargo account can include for example, fine art, vault risks, artwork
on exhibition and marine war and terrorism business relating to cargo in the ordinary course of transit.
Marine liability commonly provides cover for legal liability for losses arising from the operation
of marine and offshore related assets including but not limited to the reinsurance of the International
Group of Protection and Indemnity Clubs, the operation and management of ships and vessels,
cargo, and marine builders\u2019 risks covering the building of ocean-going vessels and offshore assets.
The marine hull class generally consists of worldwide coverage spanning physical damage, hull
and machinery breakdown, loss of hire and mortgagees\u2019 interests for a range of maritime vessels
from cargo and passenger ships to private pleasure craft. Products typically cover both risk and
catastrophe exposures.
Renewables
The class covers a wide range of tailored solutions globally. The class includes offshore and onshore
wind power, ground and rooftop solar power plus bioenergy fuels and associated operations. The risks
exposed are quite unique, from difficult construction operations to installing complex equipment that
is routinely exposed to natural hazards. Policies typically include cover for physical damage, legal
liability, machinery breakdown and business interruption for both construction and operational phases.
Political violence and terrorism
Political violence and terrorism coverage is provided for US and worldwide property risks, but typically
excluding nuclear, chemical, biological and cyber coverage in most territories.
Whole account
Coverage is generally provided on a worldwide basis and covers a broad spectrum of the cedants
risks under a single policy. The classes of business covered under a whole account reinsurance policy
can include property, specialty and casualty classes of business including commercial and personal
automobile, general liability, workers compensation, employers liability, excess casualty and umbrella,
as well as selected professional liability coverage.
Ceded reinsurance
Ceded reinsurance is purchased in the normal course of business to increase capital capacity, limit
the impact of individual risk losses and loss events impacting multiple cedants (such as natural
catastrophes, notably earthquakes and named storms), or both. Ceded reinsurance may also be
purchased from time to time to optimise the risk-adjusted return of Conduit's aggregate underwriting
portfolio. Conduit may purchase ceded reinsurance on both an excess of loss and proportional basis,
and may also use reinsurance linked to catastrophe bonds or other capital market products. The mix
of ceded reinsurance coverage is dependent on specific loss mitigation requirements, market
conditions and available capacity. In certain market conditions, Conduit may deem it more economic
to hold capital than purchase ceded reinsurance. Ceded reinsurance does not relieve Conduit of its
obligations to policyholders. Conduit is exposed to reinsurance risk where ceded reinsurance
contracts put in place to reduce gross reinsurance risk do not perform as anticipated, result in
coverage disputes or prove inadequate in terms of the limits purchased. Failure of a ceded reinsurer to
pay a valid claim is considered a credit risk which is detailed in the credit risk section below. Ceded
reinsurance coverage is not intended to be available to meet all potential loss circumstances. Conduit
will retain certain losses, as the cover purchased is unlikely to transfer the totality of Conduit\u2019s
exposure. Any loss amount which exceeds the ceded reinsurance coverage purchased would
be retained by Conduit. Some ceded reinsurance policies have limited reinstatements, therefore the
number of claims which may be recovered on second, and subsequent loss circumstances is limited.
Under Conduit\u2019s ceded reinsurance security policy, ceded reinsurers are assessed and approved based
on their financial strength ratings, among other factors. These decisions are regularly reviewed as an
integral part of the business planning and performance monitoring process. The management
Counterparty Security Committee examines and approves all Conduit\u2019s ceded reinsurers to ensure
that they possess suitable security.
Fulfilment cash flows
Fulfilment cash flows consist of:
\u2022
The estimates of future cash flows required in the ultimate settlement of claims;
\u2022
An adjustment for the time value of money; and
\u2022
A risk adjustment for non-financial risk
Estimates of future cash flows
A significant and critical judgement and estimate made by management is the estimation of future
cash flows in relation to ultimate claims settlements. Management estimates, in an unbiased way,
future cash flows to cover its estimated liability for both reported and unreported claims on events
that have occurred up to the latest valuation date, incorporating all reasonable and supportable
information that is available without undue cost or effort. Management uses methodologies that
calculate a point estimate for the ultimate losses, representing management\u2019s best estimate of
ultimate future cash flows. Conduit estimates the future cash flows by taking outstanding losses,
adding an estimate for IBNR and, if deemed necessary, ACRs which represent Conduit\u2019s estimate for
losses related to specific contracts that management believes may not be adequately estimated by
the cedant as at that date.
Liabilities for incurred claims are not permitted until the occurrence of an event which may give rise to
a claim. As a result, only provisions applicable to losses that have occurred up to the reporting date
are established, with no allowance for the provision of a contingency liability to account for expected
future losses or for the emergence of new types of latent claims. Claims arising from future events can
be expected to require the establishment of substantial liabilities from time to time. The estimated
timing of the future cash flows is determined by applying cash flow payment assumptions to the best
estimate of ultimate future cash flows.
The reserving process is dependent on management\u2019s judgement and is subject to meaningful
uncertainty due to both qualitative and quantitative factors, including, but not limited to: the nature of
the business written, whether it is short-tail or long-tail, whether it is excess of loss or proportional, the
magnitude and timing of loss events, the geographic areas impacted by loss events, time lags in the
reporting process from the original claimant, limited claims data, policy coverage interpretations, case
law, regulatory directives, demand surge and inflation, potential uncertainties related to reinsurance
and ceding company reserving practices, and other factors inherent in the estimation process for the
net ultimate liability for incurred claims.
The judgements and estimates used in establishing future cash flow calculations may be revised as
additional experience or other data becomes available. Future cash flows are also reviewed as new or
improved methodologies are developed and as laws or regulations change. Furthermore, as a business
operating within a broker market, management must rely on loss information reported to brokers by
other insurers and their loss adjusters, who must estimate their own losses at the policy level, often
based on incomplete and changing information. The information management receives varies by
cedant and may include paid losses, estimated case reserves and an estimated provision for IBNR
reserves. Additionally, reserving practices and the quality of data reporting may vary among ceding
companies, which adds further uncertainty to management\u2019s estimates of the ultimate losses.
Conduit\u2019s internal actuaries review the assumptions and methodologies on a quarterly basis and
develop an actuarial best estimate of Conduit\u2019s future cash flows using the processes outlined above.
The management Reserving Committee reviews the estimate for the liability for incurred claims on a
quarterly basis. The reserves are subject to a semi-annual independent review by Conduit\u2019s external
actuaries. The results of the internal and independent reserve reviews are presented to the Audit
Committee.
Risk adjustment
The risk adjustment for non-financial risk is the compensation that Conduit requires for bearing the
uncertainty about the amount and timing of the cash flows arising from reinsurance contracts. Conduit
determines the risk adjustment at the entity level and allocates to the groups of reinsurance contracts.
Conduit has estimated the risk adjustment using a margin-based approach. The margins are calibrated
to a targeted confidence interval range using the BMA BSCR risk framework. Conduit expects that the
risk adjustment recognised within the fulfilment cash flow will fall within the range of the 75th and the
85th percentile, gross and net of ceded reinsurance. Conduit estimates that the risk adjustment net of
ceded reinsurance corresponds to the 83rd percentile as at 31 December 2025 (31 December 2024:
81st percentile).
Short-tail versus long-tail
Claims relating to short-tail risks are generally reported more promptly than those relating to long-tail
risks. The timeliness of reporting can be affected by such factors as the nature of the event causing
the loss, the location of the loss and whether the losses are from policies in force with primary insurers
or reinsurers.
Excess of loss versus proportional
For excess of loss contracts, management is aided by the fact that each policy has a defined limit of
liability arising from one event. Once that limit has been reached, there is no further exposure to
additional losses from that policy for the same event. For proportional business, an initial estimated
loss and loss expense ratio is generally used. This is based upon information provided by the ceding
company and/or their broker and management\u2019s historical experience of that treaty, if any, and the
estimate is adjusted as actual experience becomes known.
Market risk
Conduit is at risk of loss due to movements in market factors. The main market risks Conduit is
exposed to include:
\u2022
Reinsurance risk;
\u2022
Investment risk; and
\u2022
Currency risk.
Reinsurance risk
Conduit is exposed to reinsurance market risk from several sources, including the following:
\u2022
The advent or continuation of a soft market, which may result in a stabilisation or decline
in premium rates and/or terms and conditions for certain classes, or across all classes;
\u2022
The actions and reactions of key competitors, which may directly result in volatility in premium
volumes and rates, fee levels and other input costs;
\u2022
Market events, including unusual inflation in rates, may result in a limit in the availability of cover,
causing political intervention or national remedies;
\u2022
Failure to maintain broker and cedant relationships, leading to a limited or substandard choice of
risks inconsistent with Conduit\u2019s risk appetite;
\u2022
Changes in laws and regulation, including capital, governance or licensing requirements; and
\u2022
Changes in the geopolitical environment.
The most important method to mitigate reinsurance market risk is to maintain strict underwriting
standards. Conduit manages reinsurance market risk in numerous ways, including the following:
\u2022
Reviewing and amending underwriting plans and outlook as necessary;
\u2022
Reducing exposure to, or withdrawing from, market sectors where conditions have reached
unattractive levels;
\u2022
Purchasing appropriate, cost-effective reinsurance cover to mitigate exposures;
\u2022
Closely monitoring changes in rates, terms and conditions and inflation;
\u2022
Ensuring through rigorous underwriting criteria that surplus capital does not drive
short-term risk appetite;
\u2022
Holding an underwriting roundtable meeting, typically held at least weekly (and more frequently
during key renewal periods), where deal flow, pricing and opportunities are discussed;
\u2022
Holding quarterly management Underwriting Oversight Committee meetings that consider matters
that include underwriting performance for CRL;
\u2022
Holding management Risk Oversight Committee meetings that consider matters that include the
risk management framework, capital management, underwriting exposure accumulation and
outward reinsurance strategy;
\u2022
Holding an annual strategy review meeting;
\u2022
Holding a quarterly Underwriting Committee board meeting that considers matters including
underwriting performance for CRL;
\u2022
Holding a quarterly Risk, Capital and Compliance Committee meeting to review relevant risk and
capital considerations for CRL; and
\u2022
Holding regular meetings with regulators and rating agencies.
Reinsurance finance risk
Estimates of future cash flows for incurred claims are discounted on initial recognition and then re-
measured to current rates as at each reporting date. Reinsurance liabilities and ceded assets for
incurred claims are therefore sensitive to the level of market interest rates. Interest rate risk
on reinsurance contracts is the risk that the value of the future cash flows will fluctuate due to changes
in market interest rates. Movements in interest rates may lead to an adverse impact on the value of
Conduit\u2019s reinsurance contract assets and liabilities. Conduit manages this risk by monitoring the
duration of reinsurance contract cash flows and adopting policies regarding asset and liability
matching to reduce the volatility arising from interest rate movements on assets and liabilities in the
consolidated statement of comprehensive income.
The total reinsurance contract assets and liabilities exposed to interest rate risk are detailed below:
2025
2024
As at 31 December
Note
$m
$m
Ceded asset for incurred claims
15
50.1
41.2
Liability for incurred claims
15
(1,366.2)
(978.0)
Total
(1,316.1)
(936.8)
Discount rates
All future cash flows are discounted using yield curves that are adjusted to reflect the characteristics of the cash flows and the liquidity of the reinsurance contracts. Conduit determines its discount rates
using a bottom-up method of using a risk-free rate, plus an illiquidity premium where applicable. Risk-free rates are determined by reference to the yields published by EIOPA for the relevant, material
currencies. The illiquidity premium is estimated by reference to observable market corporate bond yields.
The annual spot rates, including illiquidity premium, used for the re-measurement of the net liability for incurred claims as at the balance sheet date are shown below for all portfolios:
2025
2024
As at 31 December
1 year
3 years
5 years
10 years
1 year
3 years
5 years
10 years
USD
3.93%
3.84%
3.97%
4.34%
4.68%
4.56%
4.52%
4.57%
EUR
2.58%
2.78%
2.98%
3.36%
2.74%
2.59%
2.64%
2.77%
GBP
4.04%
4.03%
4.17%
4.55%
4.96%
4.65%
4.54%
4.57%
The sensitivity of Conduit\u2019s net reinsurance liability for incurred claims to interest rate movements is
detailed below, assuming linear movements in interest rates:
2025
2024
As at 31 December
$m
%
$m
%
Immediate shift in yield (basis points)
100
33.6
2.6
25.1
2.7
75
25.3
1.9
18.9
2.0
50
17.0
1.3
12.7
1.4
25
8.5
0.6
6.4
0.7
0
\u2013
\u2013
\u2013
\u2013
-25
(8.6)
(0.7)
(6.4)
(0.7)
-50
(17.3)
(1.3)
(12.9)
(1.4)
-75
(26.0)
(2.0)
(19.5)
(2.1)
-100
(34.8)
(2.6)
(26.1)
(2.8)
nvestment risk
Movements in investments resulting from changes in interest and inflation rates, credit spreads, and
currency exchange rates, among other factors, may lead to an adverse impact on the value of
Conduit\u2019s investment portfolio.
The management Investment Committee is responsible for all investment-related decisions and
investment guidelines. The investment guidelines set the parameters within which Conduit\u2019s external
managers must operate. Important parameters of these guidelines include permissible asset classes,
duration ranges, credit quality, permitted currency, maturity, industry sectors, geographical, sovereign
and issuer exposures. Guideline compliance is monitored on a monthly basis. The portfolio of fixed
maturity securities is currently managed by four external managers. Their performance is monitored
on an ongoing basis. Conduit projects the level of funds required to meet near-term obligations and
cash flow needs following extreme events in order to ensure adequate liquidity is maintained. Conduit
also prioritises liquid asset classes with higher credit quality and shorter duration so that Conduit can
meet reinsurance and other near-term obligations. Conduit has split the portfolio into a short-tail
mandate, to better match the property and specialty classes of business, and a long-tail mandate, to
better match the casualty classes of business and some aspects of the specialty classes of business.
The short-tail mandate will be slightly shorter duration than the long-tail mandate.
Conduit reviews the composition, duration and asset allocation of its investment portfolio on a regular
basis to respond to changes in interest rates and other market conditions. If certain asset classes are
anticipated to produce a higher return within management\u2019s risk tolerance, an adjustment in asset
allocation may be made. Conversely, if the risk profile is expected to move outside of tolerance levels,
adjustments may be made to reduce the risks in the portfolio.
Conduit models various periods of significant stress in order to better understand the investment
portfolio\u2019s risks and exposures. The scenarios represent what could, and most likely will, occur \u2013 albeit
not in the exact form of the scenarios, which are based on historic periods of volatility. Conduit also
monitors the portfolio impact of more severe scenarios consisting of extreme shocks.
Conduit focuses on the most significant risks in its investment portfolio which are interest rate risk,
credit risk and liquidity risk, and has built stress testing and risk analytics around these risks to ensure
they are within tolerances and preferences. Conduit seeks to invest in issuers with more sustainable
business practices on balance, as it believes that this will also help reduce risk in the portfolio.
Strategic asset allocation reviews will be undertaken periodically to assess Conduit\u2019s overall
investment strategy and to consider alternative asset allocations to achieve the best risk-adjusted
return within Conduit\u2019s risk appetite. Any resulting recommendations would be approved by the
appropriate management committee(s) and reported to the Board. The Investment Committee meets
quarterly to ensure that the strategic and tactical investment actions were consistent with investment
risk preferences, appetite, risk and return objectives and tolerances. The investment risk tolerances
have been incorporated into the risk framework.
The investment mix by mandate and sector of Conduit\u2019s portfolio of fixed maturity securities
is as follows:
Estimated fair
Estimated fair
Estimated fair
value short-tail
value long-tail
value total
As at 31 December 2025
$m
$m
$m
Short-term investments
14.1
0.3
14.4
US treasuries
294.5
253.5
548.0
US agency debt
2.0
2.6
4.6
US municipals
11.3
7.9
19.2
Non-US government and agency
\u2013
3.4
3.4
Asset-backed
205.4
32.3
237.7
US government agency mortgage-backed
121.4
132.0
253.4
Non-agency mortgage-backed
38.2
24.6
62.8
Agency commercial mortgage-backed
5.6
\u2013
5.6
Non-agency commercial mortgage-backed
46.2
54.3
100.5
Corporate
354.7
303.1
657.8
Total
1,093.4
814.0
1,907.4
Estimated
Estimated
Estimated
Non-US
fair value
fair value
fair value
Other
government
short-tail
long-tail
total
Financials
industries
and agency
Total
As at 31 December 2024
$m
$m
$m
As at 31 December 2024
$m
$m
$m
$m
Short-term investments
29.4
6.0
35.4
US
210.9
205.8
\u2013
416.7
US treasuries
297.6
176.5
474.1
Canada
30.7
1.0
\u2013
31.7
US agency debt
1.9
2.5
4.4
UK
27.5
5.2
\u2013
32.7
US municipals
14.2
6.5
20.7
Other countries
41.6
6.4
\u2013
48.0
Non-US government and agency
\u2013
\u2013
\u2013
Total
310.7
218.4
\u2013
529.1
Asset-backed
171.6
39.4
211.0
The sector allocation of corporate bonds is as follows:
US government agency mortgage-backed
63.5
83.8
147.3
2025
2024
Non-agency mortgage-backed
22.0
8.6
30.6
As at 31 December
$m
%
$m
%
Agency commercial mortgage-backed
7.0
\u2013
7.0
Financials
336.8
51.2
310.7
58.7
Non-agency commercial mortgage-backed
30.6
36.1
66.7
Industrials
284.0
43.2
193.5
36.6
Corporate
311.5
217.6
529.1
Utilities
37.0
5.6
24.9
4.7
Total
657.8
100.0
529.1
100.0
Total
949.3
577.0
1,526.3
Corporate and non-US government and agency bonds by country are as follows:
Non-US
Other
government
Financials
industries
and agency
Total
As at 31 December 2025
$m
$m
$m
$m
US
241.7
300.9
\u2013
542.6
Canada
36.9
2.9
2.9
42.7
UK
25.1
4.5
\u2013
29.6
Other countries
33.1
12.7
0.5
46.3
Total
336.8
321.0
3.4
661.2
Conduit\u2019s investment portfolio is comprised of fixed maturity securities and cash and cash equivalents.
Fair values can be impacted by movements in interest rates, credit ratings, exchange rates, the current
economic environment and outlook. The estimated fair value of the portfolio of fixed maturity
securities is generally inversely correlated to movements in market interest rates. If market interest
rates fall, the estimated fair value of Conduit\u2019s portfolio of fixed maturity securities would tend to
rise and vice versa. The sensitivity of the price of fixed maturity securities to movements in interest
rates is indicated by their duration. The greater a security\u2019s duration, the greater its price volatility
to movements in interest rates. The sensitivity of Conduit\u2019s portfolio of fixed maturity securities to
interest rate movements is detailed in the following table, assuming linear movements in interest rates.
2025
2024
As at 31 December
$m
%
$m
%
Immediate shift in yield (basis points)
100
(58.9)
(3.1)
(41.0)
(2.7)
75
(43.9)
(2.3)
(30.8)
(2.0)
50
(29.0)
(1.5)
(20.5)
(1.3)
25
(14.4)
(0.8)
(10.3)
(0.7)
0
\u2013
\u2013
\u2013
\u2013
-25
14.2
0.7
11.6
0.8
-50
28.2
1.5
23.1
1.5
-75
42.0
2.2
34.7
2.3
-100
55.6
2.9
46.3
3.0
Conduit mitigates interest rate risk on the investment portfolio by establishing and monitoring
duration ranges in its investment guidelines. The duration of the portfolio is matched to the modelled
expected duration of the reinsurance reserves, within a permitted range. The permitted duration range
for the portfolio is between 1.5 and 5 years. The overall duration for the fixed maturity securities,
managed cash and cash equivalents is 2.8 years as at 31 December 2025 (as at 31 December 2024:
2.5 years).
In addition to duration management, Conduit monitors VaR to measure potential losses in the
estimated fair values of its cash and invested assets and to understand and monitor risk. The VaR
calculation is performed using variance/covariance risk modelling. Securities are valued individually
using standard market pricing models. These security valuations serve as the input to many risk
analytics. The principal VaR measure that is produced is an annual VaR at the 99th percentile
confidence level. Under normal conditions, the portfolio is not expected to lose more than the VaR
metric listed below, 99% of the time over a one-year time horizon. The appropriateness of this
measure is considered by the Investment Committee periodically.
Conduit\u2019s annual VaR calculation is as follows:
2025
2024
% of
% of
shareholders\u2019
shareholders\u2019
As at 31 December
$m
equity
$m
equity
99th percentile confidence level
97.0
8.8%
102.2
9.7%
Currency risk
Conduit is susceptible to fluctuations in rates of foreign exchange, principally between the US dollar and pounds sterling and the US dollar and the euro. Even though risks are assumed on a worldwide basis,
they are predominantly denominated in US dollars. Conduit is exposed to currency risk to the extent its assets are denominated in different currencies to its liabilities. Conduit is also exposed to translation risk
on non-monetary assets and liabilities. Foreign currency gains and losses are recorded in the period they occur in the consolidated statement of comprehensive income.
Conduit hedges monetary non-US dollar liabilities primarily with non-US dollar assets but may also use derivatives, such as currency forwards, to mitigate foreign currency exposures. The main foreign
currency exposure relates to its reinsurance and ceded reinsurance assets and liabilities, cash holdings and dividend payable, if applicable.
The following table summarises the carrying value of all monetary and non-monetary assets and liabilities categorised by Conduit\u2019s main currencies.
USD
GBP
EUR
Other
Total
As at 31 December 2025
$m
$m
$m
$m
$m
Total assets
2,175.3
31.7
72.4
46.0
2,325.4
Total liabilities
(1,064.4)
(34.1)
(80.8)
(43.7)
(1,223.0)
Net assets (liabilities)
1,110.9
(2.4)
(8.4)
2.3
1,102.4
USD
GBP
EUR
Other
Total
As at 31 December 2024
$m
$m
$m
$m
$m
Total assets
1,801.5
27.4
40.1
37.2
1,906.2
Total liabilities
(758.4)
(24.2)
(39.4)
(33.0)
(855.0)
Net assets (liabilities)
1,043.1
3.2
0.7
4.2
1,051.2
The impact on profit from a proportional foreign exchange movement of 10.0% against the US dollar at year end spot rates would be a decrease or increase of $0.5 million (31 December 2024: increase or
decrease of $1.3 million).
c. Liquidity risk
Liquidity risk is the risk that cash may not be available to pay obligations when they are due without
incurring unreasonable costs. Conduit\u2019s main exposure to liquidity risk is with respect to its reinsurance
and investment activities. Conduit is exposed if proceeds from the sale of financial assets are not
sufficient to fund obligations arising from reinsurance contracts and/or other liabilities. Conduit can be
exposed to fund daily calls on its available investment assets, principally to settle reinsurance claims
and/or to fund trust accounts following a large catastrophe loss, or other collateral requirements.
Liquidity risk exposures related to reinsurance activities are as follows:
\u2022
Large catastrophic events, or multiple medium-sized events in quick succession, requiring the
payment of high-value claims within a short time frame or to fund trust accounts established to
collateralise claims payment liabilities;
\u2022
Failure of cedants to meet their contractual obligations with respect to the timely payment
of premiums; and
\u2022
Failure of Conduit\u2019s ceded reinsurers to meet their contractual obligations to pay claims within a
timely manner.
Liquidity risk exposures related to investment activities are as follows:
\u2022
Adverse market movements and/or a duration mismatch to obligations, resulting in investments
needing to be disposed of at a significant realised loss; and
\u2022
An inability to liquidate investments due to market conditions.
Conduit\u2019s investment strategy is to hold high quality, liquid securities sufficient to meet reinsurance
liabilities and other near-term liquidity requirements. Portfolios are specifically designed to ensure
funds are readily available in an extreme event.
The maturity dates of Conduit\u2019s portfolio of fixed maturity securities are as follows:
Short-tail
Long-tail
Total
As at 31 December 2025
$m
$m
$m
Fixed maturity securities at FVTPL
Less than one year
145.3
56.9
202.2
Between one and two years
144.9
52.7
197.6
Between two and three years
167.3
94.4
261.7
Between three and four years
59.1
63.6
122.7
Between four and five years
78.0
62.9
140.9
Over five years
82.0
240.3
322.3
Asset-backed and mortgage-backed
416.8
243.2
660.0
Total
1,093.4
814.0
1,907.4
Short-tail
Long-tail
Total
As at 31 December 2024
$m
$m
$m
Fixed maturity securities at FVTPL
Less than one year
134.7
11.4
146.1
Between one and two years
169.2
64.7
233.9
Between two and three years
120.3
46.9
167.2
Between three and four years
61.1
95.5
156.6
Between four and five years
68.2
50.1
118.3
Over five years
101.1
140.5
241.6
Asset-backed and mortgage-backed
294.7
167.9
462.6
Total
949.3
577.0
1,526.3
The estimated maturity profile of the reinsurance liability for incurred claims and financial liabilities of Conduit is as follows:
Years until liability becomes due \u2013 discounted
2025
2024
Carrying
Less than
Carrying
Less than
value
one
One to three
Three to five
Over five
Total
value
one
One to three
Three to five
Over five
Total
As at 31 December
Note
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
Reinsurance liability for incurred claims
15
1,366.2
440.1
543.5
227.7
154.9
1,366.2
978.0
280.4
403.9
175.8
117.9
978.0
Other reinsurance payables
15
11.4
11.4
\u2013
\u2013
\u2013
11.4
6.3
6.3
\u2013
\u2013
\u2013
6.3
Other payables
11.7
11.7
\u2013
\u2013
\u2013
11.7
18.9
18.9
\u2013
\u2013
\u2013
18.9
Lease liabilities
16
0.8
0.8
\u2013
\u2013
\u2013
0.8
1.6
0.8
0.8
\u2013
\u2013
1.6
Total
1,390.1
464.0
543.5
227.7
154.9
1,390.1
1,004.8
306.4
404.7
175.8
117.9
1,004.8
Actual maturities of the above may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations with or without call or prepayment penalties. The estimation
of the ultimate liability for incurred claims is complex and incorporates a significant amount of judgement. The timing of payments is also uncertain and cannot be predicted as simply as for other financial
liabilities. Actuarial and statistical techniques, past experience and management\u2019s judgement have been used to determine a likely settlement pattern.
As at 31 December 2025, cash and cash equivalents were $339.2 million (31 December 2024: $313.2 million). Conduit manages its liquidity risks via its investment strategy to hold high quality, liquid securities,
sufficient to meet its reinsurance liabilities and other near-term liquidity requirements. In addition, Conduit has established asset allocation and maturity parameters within the investment guidelines such that
the majority of the investments are in high quality assets which could be converted into cash promptly and at minimal expense. Conduit monitors market changes and outlook and reallocates assets as it
deems necessary.
As at 31 December 2025, Conduit considers it has more than adequate liquidity to pay its obligations as they fall due even if difficult investment market conditions were to prevail for a period of time.
d. Credit risk
Credit risk is the risk that a counterparty may fail to pay, or repay, a debt or obligation. Conduit is
exposed to credit risk on its fixed maturity investment portfolio, its expected premium cash flows
due from cedants and on ceded reinsurance recoverables.
Credit risk on Conduit\u2019s portfolio of fixed maturity securities is mitigated through the investment
policy to invest in instruments of high credit quality issuers and to limit the amounts of credit exposure
with respect to particular ratings categories and any one issuer. Securities rated below an S&P or
equivalent rating of BBB may comprise no more than 15.0% of the portfolio. Conduit also limits
exposure to individual issuers, with declining limits for less highly rated issuers. Conduit therefore does
not expect any significant credit concentration risk on its investment portfolio, except for fixed
maturity securities issued by the US government and its agencies.
Conduit is potentially exposed to counterparty credit risk in relation to the total expected premium
cash flows due from reinsurance brokers and cedants and on ceded reinsurance recoverables due
from Conduit\u2019s reinsurers. Credit risk on total expected premium cash flows due from cedants is
managed by conducting business with reputable broking organisations, with whom Conduit has
established relationships, and by rigorous cash collection procedures. Conduit also has a broker
approval process in place. Credit risk from ceded reinsurance recoverables is primarily managed by
the review and approval of reinsurer security, with ongoing monitoring in place.
Ceded reinsurance recoverables are recorded within ceded reinsurance contract assets as the ceded
asset for incurred claims which is shown in note 15.
The table opposite presents an analysis of Conduit\u2019s major exposures to counterparty credit risk,
based on their rating. Expected premium cash flows are not rated, however there is limited default
risk associated with these amounts.
Cash and cash
equivalents and fixed
Ceded asset for
maturity securities
incurred claims
As at 31 December 2025
$m
$m
AAA
657.1
\u2013
AA+, AA, AA-
934.4
\u2013
A+, A, A-
526.1
35.8
BBB+, BBB, BBB-
124.9
\u2013
Other
4.1
14.3
Total
2,246.6
50.1
Cash and cash
equivalents and fixed
Ceded asset for
maturity securities
incurred claims
As at 31 December 2024
$m
$m
AAA
566.4
\u2013
AA+, AA, AA-
742.2
\u2013
A+, A, A-
441.5
24.6
BBB+, BBB, BBB-
89.4
\u2013
Other
\u2013
16.6
Total
1,839.5
41.2
The ceded reinsurance assets classified as other are fully collateralised.
As at 31 December 2025 the average credit quality of Conduit\u2019s cash and cash equivalents and
portfolio of fixed maturity securities was AA (31 December 2024: AA).
Total expected premium cash flows represents the premium, net of deductions, expected to be
received for past and future reinsurance coverage. The following table shows total expected premium
cash flows that are not yet due and those that are past due but not impaired, which represents the
exposure to credit risk on reinsurance contracts issued at the balance sheet date.
2025
2024
As at 31 December
$m
$m
Not yet due
462.0
440.1
Less than 90 days past due
17.3
21.4
Over 90 days past due
8.1
4.8
Total
487.4
466.3
For the years ended 31 December 2025 and 2024 no provisions have been made for impaired
or irrecoverable balances and no amount was charged to the consolidated statement of
comprehensive income in respect of bad debts.
Operational risk
Operational risk is the risk of loss resulting from inadequate or failed internal processes, personnel,
systems or external events. During the reporting period, various operational risks were identified,
and steps were taken to manage or mitigate those risks.
The risk framework addresses the identification, assessment and mitigation of operational risks. This
process involves the use of risk registers to identify inherent risk and residual risk after the application
of controls. The management of individual risks rests with functional managers who have direct
ownership of those risks within their respective business area or process. The risk function provides
independent challenge and oversight to ensure risks are effectively managed. This includes facilitating
a quarterly risk and control affirmations process and performing control testing, with the outcomes
informing the overall assessment of the control environment. The results of compliance reviews and
independent internal audits provide an additional level of review and verification. The Audit
Committee has selected a reputable provider to serve as outsourced internal auditors.
f. Strategic risk
Conduit has identified several strategic risks, including:
\u2022
The risks that either the poor execution of the business plan or an inappropriate business plan in
itself results in a strategy that fails to reflect adequately the trading environment, resulting in an
inability to optimise performance, including reputational risk;
\u2022
The risks of the failure to maintain adequate capital, accessing capital at an inflated cost or the
inability to access capital and unanticipated changes in vendor, regulatory and/or rating agency
models that could result in an increase in capital requirements or a change in the type of capital
required; and
\u2022
The risks of succession planning, staff retention and key personnel risks.
Business plan risk
Conduit\u2019s business plan forms the basis of operations and provides strategic direction to management.
Actual versus planned results are monitored regularly.
Capital management risk
Total tangible capital is as follows:
2025
2024
As at 31 December
$m
$m
Shareholders\u2019 equity
1,102.4
1,051.2
Risks associated with the effectiveness of Conduit\u2019s capital management are mitigated as follows:
\u2022
Regular monitoring of current and prospective regulatory and rating agency capital requirements;
\u2022
Oversight of capital requirements by the Board;
\u2022
Ability to purchase sufficient, cost-effective reinsurance;
\u2022
Maintaining contact with vendors, regulators and rating agencies in order to stay abreast
of upcoming developments; and
\u2022
Participation in industry groups such as the Association of Bermuda Insurers and Reinsurers,
Reinsurance Association of America and the International Underwriting Association.
Conduit reviews the level and composition of capital on an ongoing basis with a view of:
\u2022
Maintaining sufficient capital for underwriting opportunities and to meet obligations
to policyholders;
\u2022
Maximising the risk-adjusted return to shareholders within the context of the defined risk appetite;
\u2022
Maintaining an adequate financial strength rating; and
\u2022
Meeting all relevant capital requirements.
Capital is increased or returned as appropriate. The retention of earnings generated leads to an
increase in capital. Capital raising can include debt or equity and returns of capital may be made
through dividends, share repurchases, a redemption of debt or any combination thereof. Other capital
management tools and products available to Conduit may also be utilised. All capital actions require
approval by the Board.
The primary source of capital used by Conduit is equity shareholders\u2019 funds. As a holding company,
CHL relies on dividends from its operating entity to provide the cash flow required for dividends to
shareholders. The ability of the operating entity to pay dividends and make capital distributions is
subject to the legal and regulatory restrictions of the jurisdiction in which it operates.
CRL is regulated as a Class 4 (re)insurer by the BMA and is required to hold sufficient capital under
applicable regulations. The BMA\u2019s regulatory framework has been assessed as equivalent to the EU\u2019s
Solvency II regime. CRL had sufficient capital at all times throughout the year to meet the BMA\u2019s
requirements, inclusive of the BSCR standard formula and minimum margin of solvency.
Retention risk
Risks associated with succession planning, staff retention and key person risks are mitigated through
a combination of resource planning processes and controls, including:
\u2022
The identification of key personnel with appropriate succession plans at CHL;
\u2022
The identification of key team profit generators at CRL and function heads with targeted
retention packages;
\u2022
Documented recruitment procedures, position descriptions and employment contracts;
\u2022
Resource monitoring and the provision of appropriate compensation, including equity-based
incentives which vests over a defined time horizon, subject to achieving certain performance
criteria; and
\u2022
Training schemes.Segmental reporting
Management and the Board review Conduit\u2019s business and evaluates its performance primarily
by three segments: Property, Casualty and Specialty. These are considered to be the reportable
segments for the purposes of segmental reporting. Further classes of business are underwritten
within each reportable segment. The nature of these individual classes is discussed further in the
Risk disclosures section in note 3.
Reportable
Operations and classes of business
segments
Property
US and international property catastrophe and non-catastrophe risks on an excess
of loss and proportional contract basis.
Casualty
US and international casualty risks principally including directors and officers liability,
financial institutions liability, general liability, medical malpractice, professional liability
and transactional liability.
Specialty
Diverse portfolio of business, including aviation, energy, engineering and
construction, environmental, marine, renewables, political violence and terrorism
and whole account.
Reportable segment performance is measured by the reinsurance service and finance result and the
combined ratio. The chief operating decision maker does not manage Conduit\u2019s assets by reportable
segment, and, accordingly, investment income and other non-underwriting related items are not
allocated to each reportable segment. Refer to the risk disclosures for more information. All amounts
reported are transactions with external parties and associates.
There are no significant inter-segmental transactions.
Property
Casualty
Specialty
Total
Year ended 31 December 2025
$m
$m
$m
$m
Reinsurance revenue by geographic region
US
268.4
131.3
13.7
413.4
Worldwide
140.0
74.4
110.0
324.4
Europe
49.5
49.4
20.8
119.7
Other
36.6
1.5
1.5
39.6
Reinsurance revenue
494.5
256.6
146.0
897.1
Property
Casualty
Specialty
Total
Year ended 31 December 20241
$m
$m
$m
$m
Reinsurance revenue by geographic region
US
239.1
111.3
10.9
361.3
Worldwide
157.0
63.9
100.5
321.4
Europe
34.8
39.4
22.9
97.1
Other
30.2
2.8
0.9
33.9
Reinsurance revenue
461.1
217.4
135.2
813.7
For the year ended 31 December 2025 there was no premium within the worldwide geographic region
written with external parties in Bermuda (31 December 2024: $0.7 million).
2025
20241
Property
Casualty
Specialty
Total
Property
Casualty
Specialty
Total
Year ended 31 December
$m
$m
$m
$m
$m
$m
$m
$m
Reinsurance revenue
494.5
256.6
146.0
897.1
461.1
217.4
135.2
813.7
Ceded reinsurance expenses
(107.9)
(1.2)
(10.0)
(119.1)
(81.7)
(1.4)
(10.6)
(93.7)
Net reinsurance revenue
386.6
255.4
136.0
778.0
379.4
216.0
124.6
720.0
Reinsurance losses and loss related amounts, discounted
(305.9)
(187.3)
(130.0)
(623.2)
(274.0)
(156.7)
(100.2)
(530.9)
Reinsurance operating expenses
(41.3)
(15.5)
(8.4)
(65.2)
(39.3)
(14.0)
(7.2)
(60.5)
Reinsurance service expenses
(347.2)
(202.8)
(138.4)
(688.4)
(313.3)
(170.7)
(107.4)
(591.4)
Ceded reinsurance recoveries
2.3
-
18.0
20.3
(0.4)
-
3.4
3.0
Reinsurance service result
41.7
52.6
15.6
109.9
65.7
45.3
20.6
131.6
Net reinsurance finance income (expense)
(27.3)
(34.1)
(15.8)
(77.2)
(12.3)
(10.5)
(8.0)
(30.8)
Reinsurance service and finance result
14.4
18.5
(0.2)
32.7
53.4
34.8
12.6
100.8
Other operating expenses
(24.8)
(30.8)
Net unallocated revenue (expenses)
108.9
55.6
Total comprehensive income
116.8
125.6
Net loss ratio (discounted)
78.5%
73.3%
82.4%
77.5%
72.3%
72.5%
77.7%
73.3%
Reinsurance operating expense ratio
10.7%
6.1%
6.2%
8.4%
10.4%
6.5%
5.8%
8.4%
Other operating expense ratio
3.2%
4.3%
Combined ratio (discounted)
89.2%
79.4%
88.6%
89.1%
82.7%
79.0%
83.5%
86.0%
Net loss ratio (undiscounted)
86.4%
93.2%
94.1%
89.9%
79.8%
89.4%
90.0%
84.4%
Combined ratio (undiscounted)
97.1%
99.3%
100.3%
101.5%
90.2%
95.9%
95.8%
97.1%
5. Investment return
Net
Total
investment
Net realised
Net unrealised
investment
income
gains (losses)
gains (losses)
return
As at 31 December 2025
$m
$m
$m
$m
Fixed maturity securities
71.5
(0.4)
39.2
110.3
Cash and cash equivalents
9.2
\u2013
\u2013
9.2
Total
80.7
(0.4)
39.2
119.5
Net
Total
investment
Net realised
Net unrealised
investment
income
gains (losses)
gains (losses)
return
As at 31 December 2024
$m
$m
$m
$m
Fixed maturity securities
54.4
0.1
1.0
55.5
Cash and cash equivalents
10.6
\u2013
\u2013
10.6
Total
65.0
0.1
1.0
66.1
6. Reinsurance finance return
2025
2024
Year ended 31 December
$m
$m
Interest accretion from reinsurance contracts
(63.1)
(39.6)
Interest accretion from ceded reinsurance contracts held
2.0
2.0
Net interest accretion
(61.1)
(37.6)
Change in discount rates from reinsurance contracts
(16.9)
6.9
Change in discount rates from ceded reinsurance contracts held
0.8
(0.1)
Net change in discount rates
(16.1)
6.8
Net reinsurance finance income (expense)
(77.2)
(30.8)
Included in net investment income is $2.0 million of investment management and custody fees for the
year ended 31 December 2025 (31 December 2024: $1.6 million). Net foreign exchange gains (losses)
on cash and cash equivalents and fixed maturity securities for the year ended 31 December 2025 was
$9.3 million (31 December 2024: $(4.5) million). Foreign exchange impacts are not included in the
investment returns in the table above.
7. Employee benefits and other incentives
The following table lists the assumptions used in the stochastic model for the MIP awards:
Aggregate remuneration and other incentives of Conduit\u2019s employees is as follows:
Assumptions
2025
2024
Dividend yield
0%
Expected volatility1
range from 17.2% \u2013 19.0%
Year ended 31 December
$m
$m
Wages and salaries
17.1
14.9
Risk-free interest rate2
range from 0.3% \u2013 0.6%
Pension benefit
2.0
1.6
Expected life of instruments
range from 4 to 7 years
Bonus and other benefits
18.2
18.1
1 The expected volatility was calculated based on a comparator group of companies.
Total cash compensation
37.3
34.6
2 The risk-free interest rate is based on the yield of a US government bond on the date of grant.
Equity-based incentive expense
9.3
7.1
Total employee benefits and other incentives
46.6
41.7
Equity-based incentive schemes
MIP
Prior to the IPO, a MIP was created. The purpose of the MIP was to provide an incentive scheme for
the founders and initial employees for their services in establishing the foundations of Conduit. The
incentive is based around shares in CML, which will be automatically exchanged for ordinary shares of
CHL for an aggregate value equivalent to up to 15% of the excess of the market value of CHL over and
above the Invested Equity, subject to the satisfaction of the vesting conditions. All outstanding grants
have an exercise period of four to seven years from the grant date. The fair value is estimated using a
stochastic Monte Carlo model.
CML issued 100,000 A1 shares and 100,000 A2 shares during the period ended 31 December 2020
at a subscription price of \u00a31.72 and $2.26, respectively. Refer to note 18 for additional details.
The shares were granted prior to the IPO and therefore discounts for business viability and lack of
marketability were also applied. There are significant risks associated with an IPO and the instruments
are also illiquid until the tranche vesting dates. Management therefore selected their best estimates at
the time for these discounts. These assumptions were highly judgemental and input from advisers was
sought. Management also considered alternative assumptions and concluded there was not a material
impact on the estimated valuation selected. The calculation of the equity-based incentive expense
assumes no forfeitures due to employee turnover, with subsequent adjustments to reflect actual
experience. The assumptions and estimated valuation selected resulted in 20% being expensed
upfront for certain employees as this portion was not tied to service conditions and was fully
expensed in the period ended 31 December 2020.
Conditions of the MIP include:
\u2022
The incentives are to be equity settled and have therefore been accounted for in accordance with
IFRS 2;
\u2022
The value of the services received in exchange for the share-based incentives is measured by
reference to the estimated fair value of the incentives at their grant date, with the estimated fair
value recognised in the consolidated statement of comprehensive income, together with a
corresponding increase in other reserves within shareholders\u2019 equity, on a straight-line basis over
the vesting period, based on an estimate of the number of shares that will ultimately vest;
\u2022
Vesting conditions, other than market conditions linked to the share price of CHL, are not taken
into account when estimating the fair value; and
\u2022
At the end of each reporting period Conduit revises its estimates of the number of shares that are
expected to vest due to non-market conditions and recognises the impact of the revision to original
estimates, if any, in the consolidated statement of comprehensive income, with a corresponding
adjustment to shareholders\u2019 equity.
DSBP
Number of
A percentage of each employee\u2019s bonus is automatically deferred into shares as nil cost options.
LTIP
awards
The nil cost options vest annually in separate equal tranches over a three year period from the date
Outstanding as at 31 December 2023
365,984
of grant and do not have associated performance criteria attached to the awards. These awards
Granted
658,446
accrue dividend equivalents for all dividends declared where the record date falls between the grant
Exercised
\u2013
date and date of exercise, and are paid at the time of exercise.
Forfeited
(41,733)
Number of
Outstanding as at 31 December 2024
982,697
DSBP
awards
Outstanding as at 31 December 2023
782,692
Granted
1,145,537
Granted
1,102,968
Exercised
\u2013
Exercised
(339,282)
Forfeited
(56,353)
Forfeited
(24,363)
Outstanding as at 31 December 2025
2,071,881
Outstanding as at 31 December 2024
1,522,015
Granted
1,074,807
Exercised
(693,573)
Forfeited
(15,947)
Outstanding as at 31 December 2025
1,887,302
LTIP \u2013 time vesting criteria
The LTIP is a retention scheme with awards granted to staff members as nil cost options. The nil
cost options vest over a three year period from the date of grant and the time vesting criteria are
the only stipulations attached to the awards. These awards accrue dividend equivalents for all
dividends declared where the record date falls between the grant date and date of exercise, and
are paid at the time of exercise.
LTIP \u2013 performance criteria
The LTIP awards with performance criteria vest three years from the date of grant and are dependent
on certain performance criteria being met. A maximum of 75% of the awards will vest if the change in
NTAVS is in excess of a required threshold, while the remaining 25% is subject to the TSR return over
the vesting period being in excess of a required threshold. These awards accrue dividend equivalents
for all dividends declared where the record date falls between the grant date and date of exercise,
and are paid at the time of exercise.
Number of
LTIP
awards
Outstanding as at 31 December 2023
\u2013
Granted
417,780
Exercised
\u2013
Forfeited
\u2013
Outstanding as at 31 December 2024
417,780
Granted
609,972
Exercised
\u2013
Forfeited
\u2013
Outstanding as at 31 December 2025
1,027,752
8. Other operating expenses
2025
2024
As at 31 December
$m
$m
Other operating expenses include:
Audit fees
1.2
1.1
Other auditor services
0.1
0.1
Total
1.3
1.2
During the year ended 31 December 2025, KPMG Audit Limited provided non-audit services in relation
to Conduit\u2019s 2025 interim review and carbon emission disclosures. Fees for non-audit services in the
year ended 31 December 2025 totalled $0.1 million (31 December 2024: $0.1 million).
9. Financing costs
2025
2024
As at 31 December
$m
$m
LOC and trust fees
1.2
1.1
Interest expense on lease liabilities
\u2013
0.1
Total
1.2
1.2
Refer to note 17 for details of Conduit\u2019s financing arrangements.
10. Government assistance
Bermuda Tax Credits (Tax Credit Act 2025)
In December 2025, the Bermuda Government enacted the Tax Credit Act 2025, introducing
substance-based tax credits designed to support entities demonstrating substantive economic
presence in Bermuda. Conduit qualifies for these credits.
The credits are earned in full each annual period based on Conduit\u2019s eligible payroll costs,
Bermuda-based expenditure and other qualifying investments in people. Once earned, the credits
are utilised over a four-year period as an offset to payroll tax, subject to annual utilisation caps.
Any portion that cannot be utilised within the four-year period is payable in cash to Conduit by
the Bermuda Government.
For the year ended 31 December 2025, Conduit recognised tax credits of $6.9 million (2024: nil) in the
statement of comprehensive income. These credits have been recorded as a reduction in reinsurance
and other operating expenses, consistent with the nature of the underlying cost. The corresponding
receivable, included in other assets, represents the portion of the 2025 credit expected to be utilised in
future periods.
As at 31 December 2025, Conduit recognised a receivable of $8.0 million (2024: nil), representing the
unused portion of the 2025 credit. Recognition of the receivable reflects management\u2019s assessment
that Conduit satisfies the eligibility requirements of the Tax Credit Act and has reasonable assurance
of recovery.
The difference of $1.1 million (2024: nil) between the credit recognised in the statement of
comprehensive income and the receivable reflects the application of Conduit's IFRS 17 expense
allocation methodology, including the deferral of acquisition-related operating expenses in accordance
with Conduit\u2019s accounting policy in that regard.
Further information on the accounting policy is provided in note 2.
11.
Tax
Bermuda
CHL, CSL, CML and CRL have received an undertaking from the Bermuda government which exempts
them from all Bermuda local income, withholding and capital gains taxes until 31 March 2035. On 27
December 2023 the Bermuda government enacted legislation, the Bermuda CIT Act of 2023, into law.
CHL, CSL, CML and CRL are currently not in scope for this new legislation and as such, the exemptions
provided by the Bermuda government undertaking still apply.
12. Cash and cash equivalents
2025
2024
As at 31 December
$m
$m
Cash at bank and in hand
28.8
25.4
Cash equivalents
310.4
287.8
Total
339.2
313.2
Cash equivalents include money market funds and other short-term highly liquid investments with
three months or less remaining until maturity at the time of purchase. The carrying amount of these
assets approximates their fair value. Refer to note 17 for cash and cash equivalents provided as
collateral under Conduit\u2019s financing arrangements.
13. Investments
Cost or
amortised
Unrealised
Unrealised
Estimated
cost
gains
losses
fair value
As at 31 December 2025
$m
$m
$m
$m
Fixed maturity securities, at FVTPL
Short-term investments
14.4
\u2013
\u2013
14.4
US treasuries
547.2
4.6
(3.8)
548.0
US agency debt
4.6
\u2013
\u2013
4.6
US municipals
18.8
0.5
(0.1)
19.2
Non-US government and agency
3.3
0.1
\u2013
3.4
Asset-backed
237.3
0.9
(0.5)
237.7
US government agency mortgage-backed
263.4
2.0
(12.0)
253.4
Non-agency mortgage-backed
63.5
0.3
(1.0)
62.8
Agency commercial mortgage-backed
5.7
0.1
(0.2)
5.6
Non-agency commercial mortgage-backed
101.9
0.7
(2.1)
100.5
Corporate
651.9
9.7
(3.8)
657.8
Total
1,912.0
18.9
(23.5)
1,907.4
Cost or
amortised
Unrealised
Unrealised
Estimated
cost
gains
losses
fair value
As at 31 December 2024
$m
$m
$m
$m
Fixed maturity securities, at FVTPL
Short-term investments
35.4
\u2013
\u2013
35.4
US treasuries
485.0
0.6
(11.5)
474.1
US agency debt
4.5
\u2013
(0.1)
4.4
US municipals
20.9
0.2
(0.4)
20.7
Non-US government and agency
\u2013
\u2013
\u2013
\u2013
Asset-backed
211.7
0.5
(1.2)
211.0
US government agency mortgage-backed
164.8
0.2
(17.7)
147.3
Non-agency mortgage-backed
31.7
0.2
(1.3)
30.6
Agency commercial mortgage-backed
7.4
\u2013
(0.4)
7.0
Non-agency commercial mortgage-backed
70.6
0.1
(4.0)
66.7
Corporate
538.1
2.2
(11.2)
529.1
Total
1,570.1
4.0
(47.8)
1,526.3
As at 31 December 2025 other assets and other payables included nil and $0.5 million for investments
sold and purchased, respectively (31 December 2024: nil and $6.4 million, respectively).
Conduit determines the estimated fair value of each individual security utilising the highest-level
inputs available. Prices for the investment portfolio are provided via a third-party investment
accounting firm whose pricing processes and the controls thereon are subject to an annual audit
on both the operation and the effectiveness of those controls. Various recognised reputable pricing
sources are used including pricing vendors. The pricing sources use bid prices where available,
otherwise indicative prices are quoted based on observable market trade data. The prices provided
are compared to the investment managers\u2019 pricing.
Conduit has not made any adjustments to any pricing provided by independent pricing services or
its third-party investment managers for the years ended 31 December 2025 and 2024. The fair value
of securities in the investment portfolio is estimated using the following techniques:
LEVEL (I) \u2013 Level (I) investments are securities with quoted prices in active markets. A financial
instrument is regarded as quoted in an active market if quoted prices are readily and regularly
available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and
those prices represent actual and regularly occurring market transactions on an arm\u2019s length basis.
LEVEL (II) \u2013 Level (II) investments are securities with quoted prices in active markets for similar assets
or liabilities or securities valued using other valuation techniques for which all significant inputs are
based on observable market data. Instruments included in Level (II) are valued via independent
external sources using directly observable inputs to models or other valuation methods. The valuation
methods used are typically industry accepted standards and include broker-dealer quotes and pricing
models including present values and future cash flows with inputs such as yield curves, credit spreads,
interest rates, prepayment speeds and default rates.
LEVEL (III) \u2013 Level (III) investments are securities for which valuation techniques are not based
on observable market data and require significant management judgement.
Conduit determines whether transfers have occurred between levels of the fair value hierarchy by
re-assessing the categorisation at the end of each reporting period. Transfers from Level (I) to (II)
securities amounted to $56.1 million and transfers from Level (II) to (I) securities amounted to
$101.0 million during the year ended 31 December 2025 using end of current period positions and
estimated fair values. Transfers from Level (I) to (II) securities amounted to $19.1 million and transfers
from Level (II) to (I) securities amounted to $54.7 million during the year ended 31 December 2024
using end of current period positions and estimated fair values. There were no investments included
in Level (III) for either year end.
The fair value hierarchy of Conduit\u2019s investment portfolio is as follows:
Level I
Level II
Total
As at 31 December 2025
$m
$m
$m
Fixed maturity securities, at FVTPL
Short-term investments
12.3
2.1
14.4
US treasuries
548.0
\u2013
548.0
US agency debt
2.0
2.6
4.6
US municipals
\u2013
19.2
19.2
Non-US government and agency
\u2013
3.4
3.4
Asset-backed
\u2013
237.7
237.7
US government agency mortgage-backed
\u2013
253.4
253.4
Non-agency mortgage-backed
\u2013
62.8
62.8
Agency commercial mortgage-backed
\u2013
5.6
5.6
Non-agency commercial mortgage-backed
\u2013
100.5
100.5
Corporate
176.7
481.1
657.8
Total
739.0
1,168.4
1,907.4
Level I
Level II
Total
A summary of interests in unconsolidated structured entities is as follows:
As at 31 December 2024
$m
$m
$m
2025
2024
Fixed maturity securities, at FVTPL
As at 31 December
$m
$m
Short-term investments
30.9
4.5
35.4
Fixed maturity securities, at FVTPL
US treasuries
474.1
\u2013
474.1
Asset-backed
237.7
211.0
US agency debt
1.9
2.5
4.4
US government agency mortgage-backed
253.4
147.3
US municipals
0.5
20.2
20.7
Non-agency mortgage-backed
62.8
30.6
Non-US government and agency
\u2013
\u2013
\u2013
Agency commercial mortgage-backed
5.6
7.0
Asset-backed
\u2013
211.0
211.0
Non-agency commercial mortgage-backed
100.5
66.7
US government agency mortgage-backed
\u2013
147.3
147.3
Total
660.0
462.6
Non-agency mortgage-backed
\u2013
30.6
30.6
Agency commercial mortgage-backed
\u2013
7.0
7.0
The fixed maturity structured entities are used to meet specific investment needs of borrowers and
Non-agency commercial mortgage-backed
\u2013
66.7
66.7
investors which cannot be met from standardised financial instruments available in the capital markets,
providing liquidity and diversification. While individual securities may differ in structure, the principles
Corporate
130.7
398.4
529.1
of the instruments are similar and it is appropriate to aggregate the investments into the categories
Total
638.1
888.2
1,526.3
detailed above.
Refer to note 17 for investments provided as collateral under Conduit\u2019s financing arrangements.
14. Interests in structured entities
Unconsolidated structured entities in which Conduit has an interest
As part of Conduit\u2019s investment activities, it invests in unconsolidated structured entities. Conduit does
not sponsor any of the unconsolidated structured entities. The business relations of Conduit with the
structured entities set out below do not give rise to consolidation because the criteria for control
pursuant to IFRS 10, as contained in our consolidation principles, are not met.
The risk that Conduit faces in respect of the investments in structured entities is similar to the risk it
faces in respect of other financial investments held on the consolidated balance sheet. Fair value is
determined by market supply and demand, which is driven by investor evaluation of the credit risk
of the structure and changes in the term structure of interest rates which can change the expectation
of cash flows associated with the instrument and, therefore, its value in the market.
The maximum exposure to loss in respect of these structured entities would be the carrying value
of the instruments that Conduit holds. Generally, default rates would have to increase substantially
before Conduit would suffer a loss. This assessment is made prior to investing and regularly through
the holding period for the security. Refer to note 17 for investments provided as collateral under
Conduit\u2019s financing arrangements.
15. Reinsurance contracts
The breakdown of portfolios of reinsurance contracts issued and reinsurance contracts held, that are
in an asset position and those in a liability position and by type of reinsurance asset or liability, is set
out below.
2025
2024
As at 31 December
$m
$m
Reinsurance contract liabilities
(1,210.5)
(834.5)
Liability for remaining coverage
167.1
149.8
Liability for incurred claims
(1,366.2)
(978.0)
Other reinsurance receivables (payables)
(11.4)
(6.3)
Reinsurance net asset (liability)
(1,210.5)
(834.5)
Ceded reinsurance contract assets
51.4
48.9
Ceded asset (liability) for remaining coverage
(3.5)
1.4
Ceded asset for incurred claims
50.1
41.2
Ceded other receivables (payables)
4.8
6.3
Ceded reinsurance net asset (liability)
51.4
48.9
The reconciliation from the opening to the closing balances of the liability for remaining coverage and
the liability for incurred claims for reinsurance contracts issued and ceded reinsurance contracts held
is shown on the next page. The reconciliation shows the movement in the liability by the reinsurance
service result, total comprehensive income (loss) and cash flows separately for reinsurance contracts
issued and ceded reinsurance contracts held.
2025
2024
Remaining
Remaining
coverage
Incurred claims
coverage
Incurred claims
Present value
Present value
Excluding loss
of future cash
Risk
Excluding loss
of future cash
Risk
Year ended 31 December ($m)
component
flows
adjustment
Total
component
flows
adjustment
Total
Opening reinsurance asset (liability)
149.8
(899.1)
(78.9)
(828.2)
109.7
(542.3)
(49.9)
(482.5)
Reinsurance revenue
897.1
\u2013
\u2013
897.1
813.7
\u2013
\u2013
813.7
Reinsurance service expenses
Incurred claims and other expenses
\u2013
(586.9)
(49.0)
(635.9)
\u2013
(514.8)
(35.3)
(550.1)
Amortisation of reinsurance acquisition expense cash flows
(49.9)
\u2013
\u2013
(49.9)
(46.0)
\u2013
\u2013
(46.0)
Changes to liabilities for incurred claims for past service
\u2013
(14.9)
12.3
(2.6)
\u2013
(3.7)
8.4
4.7
Reinsurance service expenses
(49.9)
(601.8)
(36.7)
(688.4)
(46.0)
(518.5)
(26.9)
(591.4)
Reinsurance service result
847.2
(601.8)
(36.7)
208.7
767.7
(518.5)
(26.9)
222.3
Reinsurance finance income (expense)
\u2013
(73.0)
(7.0)
(80.0)
\u2013
(30.3)
(2.4)
(32.7)
Effect of exchange rates
(1.4)
(8.2)
(0.8)
(10.4)
1.3
2.5
0.3
4.1
Total changes in comprehensive income (loss)
845.8
(683.0)
(44.5)
118.3
769.0
(546.3)
(29.0)
193.7
Investment components
29.7
(29.7)
\u2013
\u2013
27.4
(27.4)
\u2013
\u2013
Cash flows
Premiums received1
(907.6)
\u2013
\u2013
(907.6)
(803.2)
\u2013
\u2013
(803.2)
Claims and other attributable expenses paid
\u2013
369.0
\u2013
369.0
\u2013
216.9
\u2013
216.9
Reinsurance acquisition expense cash flows1
49.4
\u2013
\u2013
49.4
46.9
\u2013
\u2013
46.9
Total cash flows
(858.2)
369.0
\u2013
(489.2)
(756.3)
216.9
\u2013
(539.4)
Closing reinsurance asset (liability)
167.1
(1,242.8)
(123.4)
(1,199.1)
149.8
(899.1)
(78.9)
(828.2)
1
Certain reinsurance acquisition expense cash flows that are typically net settled have been re-presented in comparative periods in order to be consistent with the current period presentation.
2025
2024
Remaining
Remaining
coverage
Incurred claims
coverage
Incurred claims
Excluding loss
Present value
Excluding loss
Present value
component
of future cash
Risk
component
of future cash
Risk
Year ended 31 December ($m)
recovery
flows
adjustment
Total
recovery
flows
adjustment
Total
Opening ceded reinsurance asset (liability)
1.4
41.2
\u2013
42.6
(1.2)
42.6
\u2013
41.4
Ceded reinsurance expenses
(119.1)
\u2013
\u2013
(119.1)
(93.7)
\u2013
\u2013
(93.7)
Ceded reinsurance recoveries
Amounts recoverable on incurred claims
\u2013
3.6
\u2013
3.6
\u2013
3.4
\u2013
3.4
Changes to amounts recoverable for incurred claims
\u2013
16.7
\u2013
16.7
\u2013
(0.4)
\u2013
(0.4)
Ceded reinsurance recoveries
\u2013
20.3
\u2013
20.3
\u2013
3.0
\u2013
3.0
Reinsurance service result
(119.1)
20.3
\u2013
(98.8)
(93.7)
3.0
\u2013
(90.7)
Ceded reinsurance finance income (expense)
\u2013
2.8
\u2013
2.8
\u2013
1.9
\u2013
1.9
Effect of exchange rates
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Total changes in comprehensive income (loss)
(119.1)
23.1
\u2013
(96.0)
(93.7)
4.9
\u2013
(88.8)
Investment components
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Cash flows
Premiums paid
114.2
\u2013
\u2013
114.2
96.3
\u2013
\u2013
96.3
Recoveries received
\u2013
(14.2)
\u2013
(14.2)
\u2013
(6.3)
\u2013
(6.3)
Total cash flows
114.2
(14.2)
\u2013
100.0
96.3
(6.3)
\u2013
90.0
Closing ceded reinsurance asset (liability)
(3.5)
50.1
\u2013
46.6
1.4
41.2
\u2013
42.6
2025
2024
Remaining
Remaining
coverage
Incurred claims
coverage
Incurred claims
Present value
Present value
Excluding loss
of future cash
Risk
Excluding loss
of future cash
Risk
Year ended 31 December ($m)
component
flows
adjustment
Total
component
flows
adjustment
Total
Opening net reinsurance asset (liability)
151.2
(857.9)
(78.9)
(785.6)
108.5
(499.7)
(49.9)
(441.1)
Net reinsurance revenue
778.0
\u2013
\u2013
778.0
720.0
\u2013
\u2013
720.0
Net reinsurance service expenses
Net incurred claims and other expenses
\u2013
(583.3)
(49.0)
(632.3)
\u2013
(511.4)
(35.3)
(546.7)
Amortisation of reinsurance acquisition expense cash flows
(49.9)
\u2013
\u2013
(49.9)
(46.0)
\u2013
\u2013
(46.0)
Changes to net liabilities for incurred claims for past service
\u2013
1.8
12.3
14.1
\u2013
(4.1)
8.4
4.3
Net reinsurance service expenses
(49.9)
(581.5)
(36.7)
(668.1)
(46.0)
(515.5)
(26.9)
(588.4)
Reinsurance service result
728.1
(581.5)
(36.7)
109.9
674.0
(515.5)
(26.9)
131.6
Net reinsurance finance income (expense)
\u2013
(70.2)
(7.0)
(77.2)
\u2013
(28.4)
(2.4)
(30.8)
Effect of exchange rates
(1.4)
(8.2)
(0.8)
(10.4)
1.3
2.5
0.3
4.1
Total changes in comprehensive income (loss)
726.7
(659.9)
(44.5)
22.3
675.3
(541.4)
(29.0)
104.9
Investment components
29.7
(29.7)
\u2013
\u2013
27.4
(27.4)
\u2013
\u2013
Cash flows
Net premiums received1
(793.4)
\u2013
\u2013
(793.4)
(706.9)
\u2013
\u2013
(706.9)
Net claims and other attributable expenses paid
\u2013
354.8
\u2013
354.8
\u2013
210.6
\u2013
210.6
Reinsurance acquisition expense cash flows1
49.4
\u2013
\u2013
49.4
46.9
\u2013
\u2013
46.9
Total cash flows
(744.0)
354.8
\u2013
(389.2)
(660.0)
210.6
\u2013
(449.4)
Closing net reinsurance asset (liability)
163.6
(1,192.7)
(123.4)
(1,152.5)
151.2
(857.9)
(78.9)
(785.6)
1
Certain reinsurance acquisition expense cash flows that are typically net settled have been re-presented in comparative periods in order to be consistent with the current period presentation.
The estimation of the liability for incurred claims is a complex process which incorporates a significant amount of judgement. It is reasonably possible that uncertainties in the reserving process, delays in
cedants reporting losses to Conduit, together with the potential for unforeseen adverse developments, could lead to a material change in the liability for incurred claims. The liability established by Conduit
is viewed as adequate, however a 20% increase in estimated undiscounted losses would have a $304.9 million adverse impact on comprehensive income (31 December 2024: $222.7 million).
Conduit did not book any additional case reserves for the years ended 31 December 2025 and 2024. The net liability for incurred claims as at 31 December 2025 had an estimated duration of 2.7 years
(31 December 2024: 2.8 years).
During 2025 Conduit was impacted by a number of natural catastrophe events and risk losses, including the California wildfires, severe convective storms in the United States, and several aviation
losses, among others. The most significant event was the California wildfires. Our undiscounted net loss attributed to the wildfires, net of reinsurance and reinstatement premiums, was $119.1 million
at 31 December 2025.
During 2024 Conduit was impacted by significant losses in relation to Hurricanes Helene and Milton, recording an undiscounted net loss, after reinsurance and reinstatement premiums, of $68.0 million.
While there were numerous other catastrophe and risk loss events that impacted Conduit in 2024, none of those were material individually to Conduit.
The inherent uncertainty in estimating the net liability for incurred claims gives rise to favourable or adverse development. During the year ended 31 December 2025 the change in the discounted net liability
for incurred claims for prior accident years was a reduction of $14.1 million (31 December 2024: $4.3 million). Despite some adverse development on the 2021 and 2022 accident years, overall favourable
development was due to IBNR releases due to a lack of reported claims.
Prior accident year claims development
2025
2024
Year ended 31 December
$m
$m
2021 accident year
(3.5)
0.7
2022 accident year
(6.8)
(7.3)
2023 accident year
0.5
10.9
2024 accident year
23.9
n/a
Total claims development \u2013 favourable (unfavourable)
14.1
4.3
Claims development table
The following tables show the estimates of cumulative undiscounted incurred claims, including the risk adjustment, for each successive accident year at each reporting date, together with the cumulative
payments to date:
Gross undiscounted claims, including risk adjustment
$m
$m
$m
$m
$m
$m
Accident year
2021
2022
2023
2024
2025
Total
At end of accident year
190.7
391.2
401.3
660.1
762.5
One year later
184.7
387.2
389.7
637.1
Two years later
187.5
394.9
389.6
Three years later
187.3
427.6
Four years later
190.0
Current estimate of undiscounted incurred claims
190.0
427.6
389.6
637.1
762.5
2,406.8
Cumulative payments to date
(153.4)
(258.4)
(202.6)
(164.4)
(103.5)
(882.3)
Current estimate of undiscounted liability for incurred claims
36.6
169.2
187.0
472.7
659.0
1,524.5
Effect of discounting
(144.3)
Current estimate of discounted liability for incurred claims
1,380.2
Ceded undiscounted recoveries, including risk adjustment
$m
$m
$m
$m
$m
$m
Accident year
2021
2022
2023
2024
2025
Total
At end of accident year
(48.9)
(39.0)
\u2013
(7.0)
(4.1)
One year later
(50.1)
(36.9)
\u2013
(3.2)
Two years later
(57.3)
(36.9)
\u2013
Three years later
(57.8)
(62.9)
Four years later
(56.6)
Current estimate of ceded undiscounted incurred recoveries
(56.6)
(62.9)
\u2013
(3.2)
(4.1)
(126.8)
Cumulative recoveries received to date
47.6
12.2
\u2013
\u2013
0.1
59.9
Current estimate of ceded undiscounted asset for incurred claims
(9.0)
(50.7)
\u2013
(3.2)
(4.0)
(66.9)
Effect of discounting
5.6
Current estimate of ceded asset for incurred claims
(61.3)
Net undiscounted claims, including risk adjustment
$m
$m
$m
$m
$m
$m
Accident year
2021
2022
2023
2024
2025
Total
At end of accident year
141.8
352.2
401.3
653.1
758.4
One year later
134.6
350.3
389.7
633.9
Two years later
130.2
358.0
389.6
Three years later
129.5
364.7
Four years later
133.4
Current estimate of net undiscounted incurred claims
133.4
364.7
389.6
633.9
758.4
2,280.0
Cumulative payments to date
(105.8)
(246.2)
(202.6)
(164.4)
(103.4)
(822.4)
Current estimate of net undiscounted liability for incurred claims
27.6
118.5
187.0
469.5
655.0
1,457.6
Effect of discounting
(138.7)
Current estimate of net liability for incurred claims
1,318.9
A reconciliation of the net liability for incurred claims per the claims development tables to the carrying amounts included in the balance sheet has been provided below. Loss related amounts represent
amounts due that are contingent on claims, such as reinstatement premiums and profit commissions.
Reconciliation to carrying amounts:
2025
2024
Gross
Ceded
Net
Gross
Ceded
Net
As at 31 December
$m
$m
$m
$m
$m
$m
Undiscounted liability for incurred claims per claims development tables
1,524.5
(66.9)
1,457.6
1,113.6
(56.5)
1,057.1
Discount
(144.3)
5.6
(138.7)
(123.4)
5.1
(118.3)
Liability for incurred claims per claims development tables
1,380.2
(61.3)
1,318.9
990.2
(51.4)
938.8
Other loss related amounts
(14.0)
11.2
(2.8)
(12.2)
10.2
(2.0)
Liability (asset) for incurred claims
1,366.2
(50.1)
1,316.1
978.0
(41.2)
936.8
16. Right-of-use lease assets
Right-of-use lease assets primarily relate to leased properties for Conduit\u2019s offices in Bermuda and
office equipment.
Right-of-use assets
$m
Balance and net book value as at 31 December 2023
2.1
Additions
\u2013
Depreciation
(0.7)
Balance and net book value as at 31 December 2024
1.4
Additions
\u2013
Depreciation
(0.7)
Balance and net book value as at 31 December 2025
0.7
Lease liabilities
2025
2024
As at 31 December
$m
$m
Less than one year
0.8
0.8
Between one and five years
\u2013
0.8
Total undiscounted lease liabilities
0.8
1.6
Amounts recognised in the consolidated financial statements
2025
2024
Year ended 31 December
$m
$m
Consolidated statement of comprehensive income
Interest expense on lease liabilities
\u2013
0.1
Depreciation of right-of-use assets
0.7
0.7
Total
0.7
0.8
Consolidated statement of cash flows
Lease payments
0.8
0.8
The discounted lease liability as at 31 December 2025 was $0.8 million (31 December
2024: $1.6 million). Conduit does not face significant liquidity risk with respect to its
lease liabilities.
17. Financing arrangements
Letters of credit and trust accounts
CRL is a non-admitted reinsurer in the US and Canada but does have approved reciprocal jurisdiction
reinsurer (\u2018RJR\u2019) status in certain states of the US which is renewed annually. Subject to certain
exceptions, RJR status reduces the need for CRL to post collateral to support cedants in states where
CRL has RJR status. However, terms and conditions of certain reinsurance contracts with US and
Canadian cedants require CRL to provide collateral for outstanding insurance contract liabilities,
including the liability for remaining coverage and liability for incurred claims. The collateral can be
provided by LOCs or by assets in trust accounts. Refer to note 9 for details of interest expense
associated with these LOCs included in financing costs. Additional information about Conduit\u2019s
exposure to interest rate and liquidity risk is included in the risk disclosures section in note 3.
Standby letter of credit facility
During July 2021, CRL, as the borrower, entered into a $125.0 million standby letter of credit facility led
by Lloyds Bank Corporate Markets plc. CHL will guarantee the obligations of CRL with respect to the
standby LOC facility. Terms of the standby LOC facility contain standard qualitative representations
and require certain standard financial covenants be adhered to, including: a maximum consolidated
debt-to-capital ratio of CHL of 35.0%; a minimum consolidated tangible net worth of CHL; and a
minimum A.M. Best rating of B++ for CRL. CRL increased the aggregate amount of the commitment
under the facility up to $175.0 million by the end of 2023, reducing it to $150.0 million during 2024.
The facility remains at $150.0 million as at 31 December 2025. As at 31 December 2025, $102.8 million
(31 December 2024: $121.2 million) was outstanding under the standby LOC facility and is secured by
cash and cash equivalents and investments of $122.5 million (31 December 2024: $141.4 million).
Uncommitted letter of credit facility
During September 2021, CRL entered into a $75.0 million uncommitted LOC facility with Citibank
Europe PLC which was increased to $125.0 million during 2023. The facility remained at $125.0 million
as at 31 December 2025 and 2024. Terms of the uncommitted LOC facility include standard qualitative
representations. As at 31 December 2025, $102.4 million (31 December 2024: $99.0 million) was
outstanding under the uncommitted LOC facility and is secured by cash and cash equivalents and
investments of $111.7 million (31 December 2024: $106.8 million).
Trust accounts
Several trust account arrangements have been established in favour of policyholders and ceding
companies to provide collateral or comply with the security requirements of certain contracts.
As at 31 December 2025, $303.0 million (31 December 2024: $239.1 million) of cash and cash
equivalents and investments were restricted in favour of third parties.
Additional letter of credit and trust funding requirements
For the year ended 31 December 2025 collateral requests and amendments received subsequent to
the year end date, but in relation to that financial year, were a net reduction of $11.9 million. For the
year ended 31 December 2024 there was a net reduction of $17.8 million. These collateral requests will
be processed in the normal course of business. Any funding requirements will be satisfied using cash
and cash equivalents and/or investments with any reductions being released from restricted funds.
18. Share capital
Authorised share capital
Number
$m
Authorised common shares of $0.01 each
10,000,000,000
100.0
Authorised A1 shares of \u00a30.01 each
100,000
\u2013
Authorised A2 shares of $0.01 each
100,000
\u2013
As at 31 December 2025 and 2024
10,000,200,000
100.0
Common shares
A1 shares
A2 shares
Total
Total
Allotted, called-up and fully paid
number
number
number
number
$m
Issued
165,239,997
100,000
100,000
165,439,997
1.7
As at 31 December 2025 and 2024
165,239,997
100,000
100,000
165,439,997
1.7
The number of common shares in issue less own shares held as at 31 December 2025 was 154,310,942 (31 December 2024: 156,977,997).
CHL holds 18,000 A1 and A2 shares at 31 December 2025 and 2024. The A1 and A2 shares issued by CML have no voting rights attached. Subject to vesting conditions, discussed in note 7, the A1 and A2
shares will be automatically exchanged for ordinary shares of CHL.
Own shares
Number held in
Number held in
Total number of
Total
Own shares
treasury
$m
trust
$m
own shares
$m
As at 31 December 2023
-
-
(7,183,860)
(32.9)
(7,183,860)
(32.9)
Purchased by EBT
-
-
(1,417,422)
(9.4)
(1,417,422)
(9.4)
Distributed by EBT
-
-
339,282
1.7
339,282
1.7
As at 31 December 2024
-
-
(8,262,000)
(40.6)
(8,262,000)
(40.6)
Repurchased
(2,667,154)
(12.5)
-
-
(2,667,154)
(12.5)
Purchased by EBT
-
-
(693,474)
(3.0)
(693,474)
(3.0)
Distributed by EBT
-
-
693,573
3.4
693,573
3.4
As at 31 December 2025
(2,667,154)
(12.5)
(8,261,901)
(40.2)
(10,929,055)
(52.7)
Shares repurchased by CHL and the EBT will be held as own shares to meet future obligations under CHL\u2019s variable incentive schemes. See note 22 for information on shares held by the EBT.
Dividends
Record date
Payment date
Per share $
$m
Final 2023
22 March 2024
24 April 2024
0.18
29.8
Interim 2024
16 August 2024
5 September 2024
0.18
29.7
Final 2024
21 March 2025
17 April 2025
0.18
29.7
Interim 2025
15 August 2025
11 September 2025
0.18
29.7
See note 23 for information with respect to dividends declared subsequent to 31 December 2025.
19. Other reserves
Other reserves consist of the following:
As at 31 December 2023
Equity-based incentive expense
Distributions by EBT
As at 31 December 2024
Equity-based incentive expense
Distributions by EBT
As at 31 December 2025
Other reserves include Conduit\u2019s equity-based incentive expense.
Other
reserves
$m
1,059.6
7.1
(1.7)
1,065.0
9.3
(3.4)
1,070.9
21. Earnings per share
The following reflects the earnings and share data used in the basic and diluted earnings per share
computations:
2025
2024
As at 31 December
$m
$m
Total comprehensive income
116.8
125.6
Number
Number
Basic weighted average number of shares
156,550,732
157,226,209
Dilutive effect of equity-based incentives
1,333,475
918,066
Diluted weighted average number of shares
157,884,207
158,144,275
Earnings per share
Per share $
Per share $
Basic
0.75
0.80
Diluted
0.74
0.79
20.Contingencies and commitments
Legal proceedings and regulations
Conduit operates in the reinsurance industry and is subject to legal proceedings in the normal course
of business. While it is not practicable to estimate or determine the final results of all pending or
threatened legal proceedings, management does not believe that any such proceedings (including
litigation) will have a material effect on its results and financial position.
Equity-based incentive awards are only treated as dilutive when their conversion to common shares
would decrease earnings per share or increase loss per share from continuing operations. Incremental
shares from ordinary restricted share options where relevant performance criteria have not been met
are not included in the calculation of dilutive shares.
22. Related party disclosures
These consolidated financial statements include CHL and the entities listed below:
Subsidiary undertakings
Domicile
Principal Business
CHL
Bermuda
Holding company, Ultimate parent
CRL
Bermuda
General insurance business
CRSL1
England and Wales
Support services
CML2
Bermuda
Support services
CSL
Bermuda
Support services
EBT
Jersey
Employee benefit trust
1
CRSL dissolved effective 14 January 2025
2
CML is part-owned by members of management. Management\u2019s share ownership in CML exists solely for the purposes of the Group\u2019s MIP
scheme for attracting and retaining talent. Management\u2019s shares in CML have no voting power or control in respect of CHL\u2019s ownership of
CRL via CML\u2019s ownership of CRL.
Unless otherwise stated, Conduit owns 100% of the share capital and voting rights in the
subsidiaries listed.
Conduit Reinsurance Services Limited (CRSL)
CRSL was established at the inception of Conduit with the expectation that certain support
services would be provided to group companies. These support services have not been required
and the voluntary liquidation of CRSL commenced during 2024. The process was completed on
14 January 2025.
Employee benefit trust
The EBT was established with the sole purpose of administering Conduit\u2019s equity-based incentive
schemes. The trustee operates the trust for the benefit of Conduit\u2019s employees, all in accordance
with an established trust deed. While Conduit does not have legal ownership of the EBT, the trust
is consolidated in Conduit\u2019s accounts due to the ability that Conduit has to influence the actions
of the trust.
Funding for the trust is provided by CHL through a non-interest bearing loan facility. The facility may
only be used by the trustee for the purpose of achieving the objectives of the EBT. During the year
ended 31 December 2025, advances of $3.0 million (31 December 2024: $9.4 million) were made to
the trust.
CHL common shares purchased by the EBT will be held for the benefit of employees under CHL\u2019s
variable incentive schemes. During the year ended 31 December 2025 the trust purchased common
shares of 693,474 (31 December 2024: 1,417,422).
During the year ended 31 December 2025 the EBT distributed 693,573 shares with a value of $3.4
million to employees. For the year ended 31 December 2024 the EBT distributed 339,282 shares at a
value of $1.7 million.
Stabilitas Re
Stabilitas Re Limited a special purpose vehicle (Stabilitas Re), was launched in June 2023. Conduit
sponsored the launch of a catastrophe bond issued by Stabilitas Re and CRL entered into a
collateralised reinsurance agreement with Stabilitas Re as part of the transaction. The catastrophe
bond was issued to third-party investors by Stabilitas Re. Conduit has no ownership interest in, nor
any control, over Stabilitas Re and therefore does not consolidate that entity.
Key management compensation
Remuneration for key management of Conduit\u2019s Executive Group, and Non-Executive Directors, was
as follows:
2025
20241
Year ended 31 December
$m
$m
Cash compensation
7.3
7.2
Equity-based incentive expense
5.9
4.7
Directors\u2019 fees and expenses
1.0
0.8
Total
14.2
12.7
1
Cash compensation for the prior period has been re-presented to align with the current period view of benefits.
Note: 2025 costs include compensation paid to Conduit\u2019s former CEO and CUO on their respective
retirements.
Loans to employees to assist with environmental and other projects, have been made by CSL. These
loans are short term and interest free. Any financial benefit to the employee is generally not material.
Non-Executive Directors do not receive any benefits in addition to their agreed fees and expenses and
do not participate in any of Conduit\u2019s incentive, performance or pension plans.
IncubEx, Inc.
Effective 9 April 2021, CHL executed a stock purchase agreement with IncubEx, a product and
business development firm with a focus on designing and developing new financial products in global
environmental, reinsurance and related commodity markets. CHL purchased 624 shares of IncubEx\u2019s
Series A-3 preferred stock, with a par value of $0.0001 per share, for an aggregate purchase price of
$50,000, or $80.08 per share.
CHL\u2019s CEO is also a founder and current chairman of IncubEx. The terms and conditions of the
stock purchase agreement are equivalent to those that would prevail in an arm\u2019s length transaction.
The investment in IncubEx is included in other assets in the consolidated balance sheet and is
recorded at cost, which approximates fair value.
NCX Consultants Limited
CSL has entered into a service agreement with NCX Consultants Limited to provide administrative
support services. The contract has an annual value of approximately $0.1 million. NCX is a company
in which CHL\u2019s CEO holds significant control.
Subsequent events
Dividends
On 17 February 2026, Conduit\u2019s Board of Directors declared a final dividend for 2025 of $0.18
(approximately \u00a30.13) per common share, which will result in an aggregate payment of $29.2 million.
The dividend will be paid in pounds sterling on 16 April 2026 to shareholders of record on 20 March
2026 (the Record Date) using the GBP/USD spot exchange rate at 12 pm UK time on the Record Date.
Additional performance measures (the \u201cAPMs\u201d)
Conduit presents certain APMs to evaluate, monitor and manage the business and to aid readers\u2019 understanding of Conduit\u2019s financial statements and methodologies used. These are common measures used
across the (re)insurance industry and allow the reader of Conduit\u2019s financial reports to compare those with other companies in the (re)insurance industry. The APMs should be viewed as complementary to,
rather than a substitute for, the figures prepared in accordance with IFRS. Conduit\u2019s Audit Committee has evaluated the use of these APMs and reviewed their overall presentation to ensure that they were
not given undue prominence. This information has not been audited.
Management believes the APMs included in the consolidated financial statements are important for understanding Conduit\u2019s overall results of operations and may be helpful to investors and other interested
parties who may benefit from having a consistent basis for comparison with other companies within the (re)insurance industry. However, these measures may not be comparable to similarly labelled measures
used by companies inside or outside the (re)insurance industry. In addition, the information contained herein should not be viewed as superior to, or a substitute for, the measures determined in accordance
with the accounting principles used by Conduit for its audited consolidated financial statements or in accordance with IFRS.
Below are explanations, and associated calculations, of the APMs presented by Conduit:
APM
Explanation
Calculation
Gross premiums written
For the majority of excess of loss contracts, premiums written are recorded based on the minimum
Amounts payable by the cedant before any deductions, which
(KPI)
and deposit or flat premium, as defined in the contract. Premiums written for proportional contracts
may include taxes, brokerage and commission. Reinstatement
on a risks attaching basis are written over the term of the contract in line with the underlying
premiums are excluded.
exposures. Subsequent adjustments, based on reports of actual premium by the ceding company,
or revisions in estimates, are recorded in the period in which they are determined. Reinstatement
premiums are excluded.
Net loss ratio
Ratio of net losses and loss related amounts expressed as a percentage of net reinsurance
Net losses and loss related amounts / Net reinsurance revenue
(discounted and
revenue in a period. This can be calculated using discounted or undiscounted net losses
undiscounted)
and loss related amounts.
Undiscounted net losses and loss related amounts / Net
reinsurance revenue (note 4)
Reinsurance operating
Ratio of reinsurance operating expenses, which includes acquisition expenses charged by insurance
Reinsurance operating expenses / Net reinsurance revenue
expense ratio
brokers and other insurance intermediaries to Conduit, and operating expenses paid that are
(note 4)
attributable to the fulfilment of reinsurance contracts, expressed as a percentage of net reinsurance
revenue in a period.
Other operating
Ratio of other operating expenses expressed as a percentage of net reinsurance revenue in a period.
Other operating expenses / Net reinsurance revenue
expense ratio
(note 4)
Combined ratio
The sum of the net loss ratio, reinsurance operating expense ratio and other operating expense ratio.
Net loss ratio + Net reinsurance operating expense ratio + Other
(discounted) (KPI)
Other operating expenses are not allocated to the segment combined ratio.
operating expense ratio
(note 4)
Additional performance measures (the \u201cAPMs\u201d) continued
APM
Explanation
Calculation
Combined ratio
The sum of the net loss ratio (undiscounted), reinsurance operating expense ratio and other
Net loss ratio (undiscounted) + Net reinsurance operating expense
(undiscounted)
operating expense ratio. Other operating expenses are not allocated to the segment combined ratio.
ratio + Other operating expense ratio
(note 4)
Accident year loss ratio
Ratio of the net losses and loss related amounts of an accident year (or calendar year) revalued at
Accident year net losses and loss related amounts / Net
the current balance sheet date expressed as a percentage of net reinsurance revenue in a period.
reinsurance revenue
Total net investment
return (KPI)
Conduit\u2019s principal investment objective is to preserve capital and provide adequate liquidity to
Net investment income + Net unrealised gains (losses) on
support the payment of losses and other liabilities. In light of this, Conduit looks to generate an
investments + Net realised gains (losses) on investments /
appropriate total net investment return. Conduit bases its total net investment return on the sum
Non-operating cash and cash equivalents + Fixed maturity
of non-operating cash and cash equivalents and fixed maturity securities. Total net investment return
securities, at beginning of period
is calculated daily and expressed as a percentage.
Return on equity (KPI)
RoE enables Conduit to compare itself against other peer companies in the immediate industry.
Profit (loss) after tax for the period / Total shareholders\u2019 equity,
It is also a key measure internally and is integral in the performance-related pay determinations.
at beginning of period
RoE is calculated as the profit for the period divided by the opening total shareholders\u2019 equity.
Total shareholder
Total shareholder return allows Conduit to compare itself against other public peer companies.
Closing Common Share price, at end of period \u2013 Opening Common
return (KPI)
Total shareholder return is calculated as the percentage change in Common Share price over a
Share price, at beginning of period + Common Share dividends
period, after adjustment for Common Share dividends.
during the period / Opening Common Share price, at beginning of
period
Dividend yield
Calculated by dividing the annual dividends per Common Share by the Common Share price on the
Annual dividends per Common Share / Closing Common Share
last day of the given year and expressed as a percentage.
price
Net tangible assets
This provides a measure of book value per share for all shares in issue less own shares held in treasury
Total shareholders\u2019 equity less intangible assets, at the end of the
per share (KPI)
or the EBT trust.
period / Total common shares in issue less own shares held
The GBP equivalent of NTAVS is calculated using the end of period
exchange rate between USD and GBP.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f191": { "value": "Clarendon House, 2 Church Street, Hamilton HM11, Bermuda", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f192": { "value": "Bermuda", "dimensions": { "concept": "ifrs-full:PrincipalPlaceOfBusiness", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f193": { "value": "Bermuda", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f194": { "value": "Bermuda", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f195": { "value": "The principal activity of Conduit is to provide reinsuranceproducts and services to its clients worldwide.", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f196": { "value": "millions of US dollars", "dimensions": { "concept": "ifrs-full:DescriptionOfPresentationCurrency", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f197": { "value": "
Basis of preparation
These consolidated financial statements are prepared on a going concern basis in accordance with
IFRS as issued by the IASB, and the DTR issued by the Financial Conduct Authority, and are prepared
on a historical cost basis, except for items measured at fair value as disclosed in the relevant
accounting policies. In accordance with the requirements of IAS 1, the financial statements\u2019 assets and
liabilities have been presented in order of liquidity, which provides information that is more reliable
and relevant for a financial institution.
In the course of preparing these consolidated financial statements, no judgements have been made in
the process of applying Conduit\u2019s accounting policies, other than those involving estimations as noted
in the \u2018Use of judgements and estimates\u2019 section, that have had a significant effect on amounts
recognised in these consolidated financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f198": { "value": "
Going concern
The consolidated financial statements of Conduit have been prepared on a going concern basis. In
assessing Conduit\u2019s going concern position as at 31 December 2025, the Board have considered a
number of factors, including the current balance sheet position and Conduit\u2019s strategic and financial
plan, taking account of possible changes in trading performance and funding retention, stress testing
and scenario analysis. Conduit\u2019s capital ratios and its capital resources are comfortably in excess of
regulatory solvency requirements, and internal stress testing indicates Conduit can withstand severe
economic and competitive stresses.
As a result of the assessment, the Board has a reasonable expectation that Conduit has adequate
resources to continue in operational existence for the foreseeable future and therefore believe that
Conduit is well placed to manage its business risks successfully. Accordingly, Conduit continues
to adopt the going concern basis in preparing the consolidated financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f199": { "value": "
Changes in accounting policies and new standards
There were no new standards that became effective in the year ended 31 December 2025 that have
had a material impact on Conduit.
Future accounting changes
No standards or interpretations have been issued that are expected to have a material effect on
Conduit\u2019s financial position, presentation or disclosure.
IFRS 18, Presentation and Disclosure in Financial Statements, will replace IAS 1, Presentation of
Financial Statements, and applies to reporting periods beginning on or after 1 January 2027.
IFRS 18 will require entities to classify all income and expenses on the consolidated statement of
comprehensive income into operating, investing and financing activities, disclose in a single note
management-defined performance measures, and provide enhanced guidance on how to group
information in the financial statements.
Conduit is in the process of assessing the impact that the new standard will have on its consolidated
financial statements, including presentation and disclosure requirements. There is no impact
anticipated on the financial results of Conduit. Only minimal changes are expected to the presentation
and disclosure in the consolidated financial statements, with minor subtotal changes in the
consolidated statement of comprehensive income, a minor change to the starting position in the
consolidated statement of cash flows, and minimal additional disclosure related to management-
defined performance measures.", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f200": { "value": "
Use of judgements and estimates
The preparation of financial statements in conformity with IFRS requires Conduit to make judgements
and estimates that affect the reported and disclosed amounts at the balance sheet date, revenues and
expenses during the reporting period and the associated financial statement disclosures. All estimates
are based on management\u2019s knowledge of current facts and circumstances, assumptions based on
that knowledge and their prediction of future events. Actual results may differ significantly from the
estimates made.
The most significant estimates made by management are in relation to the liability for incurred
claims and associated ceded reinsurance recoveries, as discussed in note 3 and note 15.
Less significant estimates are made in determining the estimated fair value of certain financial
instruments, as discussed in note 3 and note 13.
In addition, some management judgement is exercised in determining the total premium cash flows
expected to be received from reinsurance contracts that are used to determine the amount of
reinsurance revenue recognised in the period.
While not significant, estimates are also used in the estimated fair value of the MIP as discussed
in note 7.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f201": { "value": "
Consolidation principles
These consolidated financial statements comprise the financial statements of CHL and its subsidiaries
as at and for the year ended 31 December 2025. Subsidiaries are those entities that are controlled by
Conduit and are fully consolidated from the date on which Conduit obtains control and continue to
be consolidated until the date when such control ceases. Control is achieved when Conduit is exposed,
or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect
those returns through its power over the subsidiary.
Intragroup balances and transactions are eliminated in preparing the consolidated financial
statements. Subsidiaries\u2019 accounting policies are consistent with Conduit\u2019s accounting policies.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f202": { "value": "
Foreign currency
The functional currency, which is the currency of the primary economic environment in which Conduit
operates, is US dollars. Items included in the financial statements of each entity are measured using
the functional currency. These consolidated financial statements are presented in US dollars.
Foreign currency transactions are recorded in the functional currency for each entity using the
exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated
in foreign currencies are revalued at period end exchange rates. The resulting foreign exchange
differences on revaluation are recorded in the consolidated statement of comprehensive income
within net foreign exchange gains (losses). Non-monetary assets and liabilities denominated in a
foreign currency are carried at historic rates. Non-monetary assets and liabilities carried at estimated
fair value and denominated in a foreign currency are translated at the exchange rate at the date the
fair value was determined.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f203": { "value": "
Reinsurance contracts
IFRS 17 sets out the classification, measurement and presentation and disclosure requirements for
reinsurance contracts. It requires reinsurance contracts to be measured using current estimates and
assumptions that reflect the timing of cash flows and recognition of profits as insurance services are
delivered. The standard provides two main measurement models which are the General Measurement
Model (GMM) and the Premium Allocation Approach (PAA).
The PAA simplifies the measurement of reinsurance contracts for remaining coverage, or pre-claims,
in comparison to the GMM. The GMM is used for the measurement of the liability for incurred claims.
PAA eligibility
Under IFRS 17, Conduit\u2019s reinsurance contracts issued and ceded reinsurance contracts held are all
eligible to be measured by applying the PAA, due to meeting the following criteria:
\u2022
Loss-occurring reinsurance contracts with coverage period of one year or less are automatically
eligible; and
\u2022
Modelling of risk-attaching contracts or contracts with a coverage period greater than one year
produces a measurement for the group of reinsurance contracts that does not differ materially from
that which would be produced applying the GMM.
Classification
Contracts that transfer significant reinsurance risk at the inception of the contract are accounted for
as reinsurance contracts. Contracts purchased and held by Conduit under which it transfers significant
reinsurance risk to a counterparty are accounted for as ceded reinsurance contracts. Contracts that
do not transfer significant reinsurance risk are accounted for as investment contracts. Reinsurance risk
is transferred when a reinsurer agrees to compensate a policyholder if a specified uncertain future
event adversely affects the policyholder.
Conduit\u2019s accounting policies apply to both reinsurance contracts issued and ceded reinsurance
contracts held unless explicitly referenced as applying to contracts issued or ceded only. Conduit
writes both excess of loss and proportional (also known as quota share or pro-rata) reinsurance
contracts. The type of contract impacts the recognition of reinsurance revenue. Contract types are
discussed on page 120.
Separating components from reinsurance contracts
IFRS 17 distinguishes three components that, if embedded in a reinsurance contract, should be
bifurcated, and accounted for separately. These are:
\u2022
Cash flows relating to embedded derivatives that are required to be separated;
\u2022
Cash flows relating to distinct investment components; and
\u2022
Promises to transfer distinct goods or distinct non-insurance services.
IFRS 17 then applies to all remaining components of the contract. Conduit does not have any contracts
containing non-insurance components that require separation. Where contracts contain multiple
reinsurance components that meet the requirements for separation, these are separated and
accounted for as standalone contracts.
Some reinsurance contracts issued contain profit-sharing arrangements, such as profit commissions
and no claims bonuses. Under these arrangements, there is a minimum guaranteed amount that the
policyholder will always receive either in the form of profit commission, or as reimbursement for
claims, or another contractual payment, irrespective of the insured event happening. These are
typically considered non-distinct investment components. Non-distinct investment components are
not separated from the reinsurance contract as they are closely interrelated to the measurement of
the reinsurance contract. However, the impact of the non-distinct investment components are
excluded from the consolidated statement of comprehensive income by adjusting reinsurance
revenue and reinsurance service expenses by the minimum amount due. There is no impact to the
reinsurance service result as there is an equal reduction to both revenue and expenses.
Level of aggregation
Conduit manages reinsurance contracts issued by class of business within an operating segment.
Classes of business are aggregated into portfolios of contracts that are subject to similar risks.
Contracts within each portfolio are grouped into groups of contracts that are issued within a calendar
year, the annual cohort, and are (i) contracts that are onerous at initial recognition; (ii) contracts that
at initial recognition have no significant possibility of subsequently becoming onerous; or (iii) a group
of remaining contracts. These groups represent the level of aggregation at which reinsurance
contracts are initially recognised and measured. Such groups are not subsequently reconsidered.
Onerous contracts
Under the PAA, it is assumed there are no contracts in the portfolio that are onerous at initial
recognition, unless there are facts and circumstances that may indicate otherwise. Management
primarily considers the following to determine whether there are facts and circumstances that mean
a group of contracts are onerous:
\u2022
Pricing information;
\u2022
Results of similar contracts it has recognised; and
\u2022
External factors, such as a change in market experience or regulations.
If a group of contracts becomes onerous, Conduit increases the carrying amount of the liability for
remaining coverage to the amount of the fulfilment cash flows with the amount of such an increase
recognised immediately in reinsurance service expenses. Subsequently, Conduit amortises the amount
of the loss component by decreasing reinsurance service expenses. The loss component amortisation
is based on the passage of time over the remaining coverage period of contracts within an onerous
group. If facts and circumstances indicate that the expected profitability of the onerous group during
the remaining coverage has changed, then Conduit remeasures the loss component by reassessing
the fulfilment cash flows as required until the loss component is reduced to zero.
Where a loss component is expected to be partially or fully recovered by ceded reinsurance contracts,
the amount of recovery is recognised in ceded reinsurance recoveries.
Recognition
Conduit recognises groups of reinsurance contracts it issues from the earliest of:
\u2022
The beginning of the coverage period of the group of contracts;
\u2022
The date when the first payment from the cedant is due or when the first payment is received
if there is no due date; or
\u2022
For a group of onerous contracts, the date when facts and circumstances indicate that the group
is onerous.
For ceded reinsurance contracts Conduit recognises the group of contracts:
\u2022
If the reinsurance contracts provide proportionate coverage, at the later of the beginning of the
coverage period of the group, or the initial recognition of the underlying covered reinsurance
contracts issued; or
\u2022
For non-proportionate coverage, the beginning of the coverage period of the group of contracts,
unless an onerous group of underlying reinsurance contracts have been recognised and the ceded
reinsurance contract has been signed before that date.
Modification and derecognition
Conduit derecognises reinsurance contracts when:
\u2022
The rights and obligations relating to the contract are extinguished (meaning discharged, cancelled
or expired); or
\u2022
The contract is modified such that the modification results in a change in the measurement model
or the applicable standard for measuring a component of the contract substantially changes the
contract boundary, or requires the modified contract to be included in a different group. In such
cases, Conduit derecognises the initial contract and recognises the modified contract as a new
contract. When a modification is not treated as a derecognition, Conduit recognises amounts paid
or received for the modification with the contract as an adjustment to the relevant liability for
remaining coverage.
Contract boundaries
The measurement of a group of reinsurance contracts includes all future cash flows expected to arise
within the boundary of each contract in the group. Cash flows are within the boundary of a
reinsurance contract if they arise from substantive rights and obligations that exist during the
reporting period in which Conduit can compel the cedant to pay the premiums, or in which Conduit
has a substantive obligation to provide the cedant with services. A substantive obligation to provide
services ends when Conduit has the practical ability to reassess the risks of the cedant and, as a result,
can set a price of level of benefits that fully reflects those risks. Where Conduit issues multi-year
contracts and does not have the ability to re-price on each policy anniversary the contract is
considered one contract and therefore future cash flows from each of the annual periods are
considered on initial recognition.
For ceded reinsurance contracts the cash flows are within the boundary of the contract if Conduit
has a substantive right to receive services or if Conduit is compelled to pay premiums to the reinsurer.
The substantive right to receive services from the reinsurer ends when:
\u2022
The reinsurer has the practical ability to reassess the risks transferred to it and can set a price
of level of benefits that fully reflects those risks; or
\u2022
The reinsurer has a substantive right to terminate the coverage.
\u2022
Conduit assesses the contract boundary at initial recognition and at each subsequent reporting date
to include the effects of changes in circumstances on Conduit\u2019s substantive rights and obligations.
The assessment of the contract boundary, which defines the future cash flows that are included in
the measurement of the contract, requires judgement and consideration of Conduit's substantive
rights and obligations. Conduit issues risk-attaching reinsurance contracts which provide
reinsurance coverage to underlying contracts issued within the terms of the contract. While the
contracts can have an annual term the contract boundary is assessed with consideration of the
coverage period of the underlying contracts. Contracts that cover claims from underlying contracts
within the contract period, loss-occurring contracts, are typically annual term. Where contracts
contain multi-year terms, Conduit exercises judgement on whether provisions within the contract
allow cancellation or re-pricing at each anniversary of the contract.
Measurement \u2013 Liability for remaining coverage
On initial recognition of each group of contracts, the carrying amount of the liability for remaining
coverage is measured as the premiums received on initial recognition, if any, minus any reinsurance
acquisition expense cash flows allocated to the group of contracts and any amounts arising from the
derecognition of the prepaid reinsurance acquisition expense cash flows asset. Conduit has chosen
not to expense reinsurance acquisition expense cash flows on contracts with coverage of one year
or less when they are incurred in order to apply a consistent treatment of reinsurance acquisition
expense cash flows for all contracts, regardless of the length of coverage.
Subsequently, at the end of each reporting period, the liability for remaining coverage is:
\u2022
Increased by any premiums received in the period;
\u2022
Decreased for reinsurance acquisition expense cash flows paid in the period;
\u2022
Decreased for the amounts of expected premium cash flows recognised as reinsurance revenue
for the services provided in the period;
\u2022
Increased for the amortisation of reinsurance acquisition expense cash flows in the period
recognised as reinsurance service expenses; and
\u2022
Decreased for any non-distinct investment component paid or transferred to the liability
for incurred claims.
Conduit has elected not to adjust the liability for remaining coverage for the time value of money
as its reinsurance contracts do not contain a significant financing component.
Conduit measures the reinsurance asset for remaining coverage for its ceded reinsurance contracts
that it holds on the same basis as reinsurance contracts issued, adapted to reflect the features that
differ between contracts issued versus contracts held.
Reinsurance revenue recognised in the period is based on the total premium cash flows expected
to be received over the lifetime of the contract, net of any deductions that are paid to the cedant.
The amount of total expected revenue from a contract recognised in the period is dependent on
the type of reinsurance contract, as discussed below.
Excess of loss contracts
For the majority of excess of loss contracts, expected premium cash flows are assessed based on
the minimum and deposit or flat premium, as defined in the contract. Subsequent adjustments to the
minimum and deposit premium are assessed in the period in which they are determined. For excess
of loss contracts where no deposit is specified in the contract, premium cash flows are assessed based
on estimates of premiums provided by the ceding company. Subsequent adjustments, based on
reports of actual premium by ceding companies, or revisions in estimates, are assessed in the period
in which they are determined. For multi-year policies that are payable in annual instalments, where
the reinsured has the sole ability to cancel, the total expected premium cash flows for all annual
periods are assessed at the inception of the contract. Where unilateral cancellation by the reinsurer
exists at each anniversary of the contract the annual periods are assessed as separate contracts.
Reinsurance revenue for excess of loss contracts is generally recognised evenly over the term of the
underlying risk period of the reinsurance contract, except where the period of risk differs significantly
from the contract period. In these circumstances, reinsurance revenue is recognised over the period of
risk in proportion to the amount of reinsurance protection provided. Where contract terms require the
reinstatement of coverage after a ceding company\u2019s loss, as the reinstatement is contingent on the
loss, the estimated mandatory reinstatement premiums are recorded within reinsurance service
expenses.
Proportional contracts
Premium cash flows for proportional contracts are assessed based on estimates of ultimate premiums
provided by the ceding company, supplemented by management\u2019s estimates of premiums based
on its experience with the ceding company, familiarity with each market, the timing of the reported
information and its understanding of the characteristics of each class of business. Initial estimates of
premium cash flows are assessed in the period in which the contract incepts, or the period in which
the contract is bound, if later. Contracts written on a \u2018risks-attaching\u2019 basis cover claims which attach
to the underlying reinsurance policy written during the term of the respective policy. Reinsurance
revenue on such policies generally extend beyond the original term of the contract. Subsequent
adjustments, based on reports of actual premium by the ceding company, or revisions in estimates,
are assessed in the period in which they are determined.
Reinsurance acquisition expense cash flows
Reinsurance acquisition expense cash flows represent the cash flows that arise from the cost of selling
and underwriting a group of reinsurance contracts and include:
\u2022
Contract specific costs, such as brokerage;
\u2022
Operating expenses that are incurred in relation to the fulfilment of reinsurance contracts; and
\u2022
An allocation of fixed and variable overheads.
Reinsurance acquisition expenses are deferred over the period in which the related premiums are
earned to the extent they are recoverable out of expected future revenue margins and recognised
within reinsurance service expenses.
Commissions that are paid to cedants, such as ceding commissions, are not treated as reinsurance
acquisition expense cash flows as they do not relate to a service. Such commissions are treated as
a reduction in the expected premium recognised as reinsurance revenue
Ceded reinsurance expenses
Ceded reinsurance is purchased in the normal course of business to increase capital capacity or
to limit the impact of individual risk losses and loss events impacting multiple cedants, such as
natural-catastrophes, or both. Conduit may purchase ceded reinsurance on both an excess of loss
and a proportional basis, and may supplement this with the use of ceded reinsurance cover linked
to the issuance of catastrophe bonds or other capital market products. Ceded reinsurance premiums
are recognised as ceded reinsurance expenses in the same manner as reinsurance contracts issued,
depending on the terms of the contract. Ceding commissions received are deducted from the
premium paid that is recognised in ceded reinsurance expenses. Other expenses incurred in the
placing of ceded reinsurance contracts that are in relation to a service by a third party, such as
brokerage, are recognised in ceded reinsurance expenses.
Measurement \u2013 Liability for incurred claims
The liability for incurred claims represents the estimated ultimate cost of settling all reinsurance claims
arising from events that have occurred up to the end of the reporting period, including the operating
costs that are expected to be incurred in the course of settling such claims, reinstatement premiums
on specific loss events, profit commissions and similar expenses that are contingent on claims plus a
provision for IBNR. The liability for incurred claims is derived from the estimated fulfilment cash flows
relating to expected claims. The fulfilment cash flows incorporate, in an unbiased way, all reasonable
and supportable information available, without undue cost or effort, about the amount, timing and
uncertainty of those future cash flows. They also include an explicit adjustment for non-financial risk,
the risk adjustment. Estimates of future cash flows for incurred claims are discounted on initial
recognition and then re-measured to current rates as at the reporting date.
Cash flows for outstanding losses are estimated initially on the basis of reported losses received from
cedants. Cash flows for ACRs are determined where management\u2019s expectation of the ultimate cost
of the reported loss is greater than that reported. Estimated cash flows for IBNR may also consist of
a provision for additional development in excess of losses reported by cedants, as well as a provision
for losses which have occurred but have not yet been reported by cedants.
Cash flows for IBNR are estimated initially using expected loss and loss adjustment expense ratios
which are selected based on information derived by underwriters and actuaries during the initial
pricing of the business. These estimates are reviewed regularly and, as experience develops and
new information is received, the cash flows are adjusted as necessary. As actual loss information is
reported, and Conduit develops its own loss experience, management will use various actuarial
methods as well as a combination of management\u2019s judgement and experience, historical reinsurance
industry loss experience and estimates of pricing adequacy trends to estimate cash flows for IBNR.
The estimation of the liability for incurred claims is a complex process which incorporates a significant
amount of judgement. It is reasonably possible that uncertainties in the reserving process, delays in
cedants reporting losses to Conduit, together with the potential for unforeseen adverse developments,
could lead to a material change in the liability for incurred claims.
Any amounts recoverable from reinsurers are estimated using the same methodology as for the
underlying losses except for the requirement under IFRS 17 to assess the ceded reinsurance recovery
cash flows for the effect of any risk of non-performance, including expected credit losses.
Management monitors the creditworthiness of its reinsurers on an ongoing basis and assesses any
reinsurance assets for the risk of non-performance, with a provision for non-performance risk being
recognised as an expense in the period in which it is determined.
Presentation of reinsurance contracts
Reinsurance assets and liabilities
The asset or liability for a portfolio of reinsurance contracts is the net position of both the liability for
remaining coverage and the liability for incurred claims. Whether a portfolio is in a liability or asset
position is typically impacted by the timing of cash flows received versus cash flows paid. Conduit
presents separately in the consolidated balance sheet portfolios of reinsurance contracts issued and
held that are in an asset position and those that are in a liability position.
All reinsurance contract assets and liabilities are deemed monetary assets and liabilities and are
revalued at period end exchange rates.
Reinsurance revenue
Reinsurance revenue in the consolidated statement of comprehensive income is the amount
of expected premium cash flows, net of any deductions paid to the cedant and excluding any
non-distinct investment component. Conduit allocates the expected premium receipts to each
period of coverage on the basis of passage of time or the expected risk pattern if it differs
significantly from the passage of time.
Reinsurance service expenses
Reinsurance service expenses in the consolidated statement of comprehensive income includes
changes in the liability for incurred claims that do not arise from the application of discount rates,
being recognition and amortisation of any loss components, amortisation of reinsurance acquisition
expense cash flows and other attributable operating expenses.
Ceded reinsurance income and expenses
Conduit has elected to present the income and expenses from ceded reinsurance contracts separately
in the consolidated statement of comprehensive income. Ceded reinsurance expenses represent the
total expected ceded premiums and other amounts, that are not contingent on recoveries, payable
to Conduit\u2019s reinsurers. Conduit recognises ceded reinsurance expenses based on the passage of
time over the coverage period of a group of contracts or expected risk pattern. Income from ceded
reinsurance contracts includes expected recoveries on incurred claims, changes in expected
recoveries related to past service, the provision for the effects of changes in risk of reinsurer non-
performance plus other amounts that are contingent on recoveries, such as ceded profit commissions
payable to the reinsured.
Net reinsurance finance income (expense)
Reinsurance finance income (expense) includes the changes in the carrying amounts of reinsurance
and ceded reinsurance assets and liabilities arising from the unwind of discount recognised in prior
periods and the effects of remeasuring to current discount rates plus other financial assumptions.
Conduit has elected to disaggregate the changes in the risk adjustment for the time value of money
and present it within net reinsurance finance income (expense).
Conduit has chosen not to disaggregate finance income (expense) between other comprehensive
income (OCI) and comprehensive income.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForReinsuranceExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f204": { "value": "
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held on call with banks, money market funds,
and other short-term highly liquid investments with a maturity of three months or less at the date of
purchase. Carrying amounts approximate fair value due to the short-term nature and high liquidity of
the instruments.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f205": { "value": "
Investments
Conduit\u2019s fixed maturity securities portfolio meets the requirements for mandatory classification as
FVTPL and is carried at estimated fair value in the consolidated balance sheet. The classification of
financial assets is determined at the time of initial purchase. A financial asset is classified at FVTPL
if it is held within a business model that is managed and evaluated on a fair value basis or if acquired
principally for the purpose of selling in the short term, or if it forms part of a portfolio of financial
assets in which there is evidence of short-term profit taking. Presentation of these securities in the
FVTPL category is consistent with how management monitors and evaluates the performance of
these securities on a fair value basis.
Regular way purchases and sales of investments are recognised at estimated fair value on the trade
date, and are subsequently carried at estimated fair value. Balances pending settlement are reflected
in the consolidated balance sheet in other assets or other payables. The estimated fair value of
Conduit\u2019s fixed maturity securities portfolio is determined based on bid prices from recognised
exchanges, broker-dealers, recognised indices or pricing vendors. Changes in estimated fair value
of investments classified as FVTPL are recognised in the consolidated statement of comprehensive
income within net unrealised gains (losses) on investments.
Investments are derecognised when Conduit has transferred substantially all the risks and rewards of
ownership. On derecognition of an investment held at FVTPL, previously recorded unrealised gains
and losses are recycled from net unrealised gains (losses) on investments to net realised gains (losses)
on investments.
Interest income, amortisation and accretion of premiums and discounts on fixed maturity securities
are calculated using the effective interest rate method and recognised in net investment income.
The carrying value of accrued interest income approximates estimated fair value due to its short-term
nature and high liquidity.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForHeldtomaturityInvestmentsExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f206": { "value": "
Leases
Conduit recognises a right-of-use asset and a lease liability at the lease commencement date.
The right-of-use asset is initially measured at cost, which comprises the initial measurement of the
corresponding lease liability adjusted for any lease payments made at or before the commencement
date, plus any initial direct costs incurred and an estimate of any costs to be incurred at the expiration
of the lease agreement.
Right-of-use assets are subsequently measured at cost less accumulated depreciation and
any impairment losses. Straight-line depreciation is calculated from the commencement date of the
lease to the earlier of either the end date of the lease term or the useful life of the underlying asset.
The lease liability is initially measured at the present value of the future lease payments at the lease
commencement date. Lease payments are discounted using the interest rate implicit in the lease or,
if that rate cannot be readily determined, Conduit\u2019s incremental borrowing rate. Lease payments
included in the measurement of the lease liability include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, variable lease payments that depend on an index
or a rate, and amounts expected to be paid under residual value guarantees.
The lease liability is subsequently measured by increasing the lease carrying amount to reflect the
interest due on the lease liability using the effective interest rate method and reducing the carrying
amount to reflect the lease payments made. Conduit re-measures the lease liability and the related
right-of-use asset whenever there is a change in future lease payments arising from a change in
index or rate, if Conduit changes its assessment of whether it will exercise a purchase, extension
or termination option or if there is a revised in-substance fixed lease payment.
Right-of-use assets and lease liabilities are presented as separate financial statement line items
in the consolidated balance sheet.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f207": { "value": "
Conduit also operates DSBP and LTIP awards. Under the DSBP, a percentage of each employee's
bonus is automatically deferred into shares as nil cost options. These nil cost awards vest annually
in separate equal tranches over a three-year period from the date of grant and do not have associated
performance criteria attached to the awards. These awards accrue dividend equivalents for all
dividends declared where the record date falls between the grant date and date of exercise, and
are paid at the time of exercise.
The LTIP awards are awarded with or without performance criteria attached to the awards. These nil
cost awards granted to staff vest over a three-year period from the date of grant. These awards
accrue dividend equivalents for all dividends declared where the record date falls between the grant
date and date of exercise, and are paid at the time of exercise. Refer to note 7 for details of
performance criteria attached to certain LTIP awards.
At each balance sheet date, Conduit revises its estimate of the number of instruments that are
expected to become exercisable. It recognises the impact of the revision of original estimates, if any,
as equity-based incentive expense in the consolidated statement of comprehensive income, and a
corresponding adjustment is made to other reserves in shareholders\u2019 equity over the remaining
vesting period. On exercise, the differences between the expense charged to the consolidated
statement of comprehensive income and the actual cost to Conduit, if any, is transferred to other
reserves in shareholders\u2019 equity.
Pensions
Conduit\u2019s pension plans are based on defined contributions or equivalent cash in lieu, subject to
applicable law and local market standards. On payment of contributions to the plans or cash in lieu
there is no further obligation to Conduit. Contributions or payments of cash in lieu are recognised
as employee benefits within other expenses in the consolidated statement of comprehensive income
in the period when the services are rendered.
Employee benefits
Equity-based incentives
Conduit currently operates a MIP under which shares are subscribed for or nil cost options are
granted. The fair value of the instruments granted is estimated on the date of grant. The estimated
fair value is recognised as an expense pro-rata over the vesting period of the instrument, adjusted
for the impact of any non-market vesting conditions. No adjustment to vesting assumptions is made
in respect of market vesting conditions.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f208": { "value": "
Government assistance
Conduit recognises government assistance when there is reasonable assurance that Conduit has
complied with, and will continue to comply with, the conditions attached to the assistance, and
that the amount of the credit will be received. Government assistance that relates to operating
expenditures is recognised in the consolidated statement of comprehensive income in the same
line item as the relevant operating expense.
Unutilised credits that Conduit expects to recover in future periods, including amounts refundable
in cash, are recorded as a receivable. Conduit reassesses at each reporting date whether there is
reasonable assurance that the conditions for receipt of the remaining credit continue to be met.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGovernmentGrants", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f209": { "value": "
Tax
Income tax on the profit or loss for the period comprises current and deferred tax. Current tax is the
expected tax payable on the taxable income for the year using tax rates enacted or substantively
enacted at the year-end reporting date and any adjustments to tax payable in respect of prior periods.
Deferred tax is provided, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. The amount of
deferred tax provided is based on the expected manner of realisation or settlement of the carrying
amount of the assets and liabilities, using tax rates enacted or substantively enacted at the reporting
date. Deferred tax assets are recognised in the consolidated balance sheet to the extent that it is
probable that future taxable profit will be available against which the temporary differences can
be utilised.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f210": { "value": "
Own shares
Own shares include shares repurchased under share repurchase authorisations and held in treasury,
plus shares purchased and held in trust, for the purposes of employee equity-based incentive
schemes. Own shares are deducted from shareholders\u2019 equity. No gain or loss is recognised on
the purchase, sale, cancellation or issue of own shares and any consideration paid or received is
recognised directly in equity.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTreasurySharesExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f211": { "value": "
Share capital and issuance costs
Shares are classified as shareholders\u2019 equity if there is no obligation to transfer cash or other financial
assets. Transaction costs that are attributable to the issuance of new shares are treated as a deduction
from equity.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f212": { "value": "
Risk disclosures
Introduction
Conduit is exposed to risks from several sources, classified into six primary risk categories. The
primary risk categories are: (a) reinsurance risk; (b) market risk; (c) liquidity risk; (d) credit risk; (e)
operational risk; and (f) strategic risk. These are discussed in detail on the following pages. The
primary risk to Conduit is reinsurance risk.
The Board is responsible for determining the nature and extent of the principal risks Conduit is willing
to take in achieving its strategic objectives and should maintain sound risk management and internal
control systems. To this end, the Board has established various committees to support the execution
of its responsibilities and has reviewed the committee structures at CRL. The Board, and committees
thereof, define the risk preferences and appetites within which management is authorised to operate.
The risk function is responsible for supporting the Board, and the CRL Board, with the day-to-day
oversight of the risks that Conduit seeks or is exposed to in pursuit of its strategic objectives, and
the satisfaction of certain regulatory risk management expectations relevant to CRL. The framework
under which risks are managed contemplates risk appetite and tolerance constraints. Risk appetite
is prescribed by the Board and is reviewed at least annually, with consideration of the financial
and operational capacity of Conduit. The use of financial capacity in this context relates to
calculated or modelled capital requirements, based on residual unmitigated risk exposures.
Current capital requirements are determined by reference to rating agency, regulatory, and our
internal capital model requirements.
Day-to-day management of risk is the responsibility of management, operating within the defined
appetite and tolerances. The risk framework prescribes a standardised approach to the management
of risk, oversight and challenge by the risk function and independent assurance provided by the
internal audit function. The risk framework also addresses the reporting of risks, emerging risks, risk
events and compliance with risk appetite and tolerance statements to executive management and the
Board, and relevant board committees, of CHL and CRL. To ensure transparency and accountability of
the business for all independent Non-Executive Directors, four Independent Non-Executive Directors
from the Board have been appointed to the Board of CRL. Furthermore, the Board is invited to attend
operating entity board level meetings and see all minutes and records of such operating entity board
and committee meetings.
Climate change
\u2022
An underwriting roundtable meeting, typically held at least weekly (and more frequently during key
Conduit is exposed to risks associated with climate change but also potential opportunities arising
renewal periods), where deal flow, pricing and opportunities are discussed;
from that risk. Risks from climate change can include physical risk and transition risk. Physical risks are
\u2022
Pricing models are used in all areas of the underwriting process and are stored centrally in our
those relating to the physical impacts of climate change, which can be from increased frequency and/
pricing platform;
or severity of climate-related events, or structural, due to longer-term shifts in climate patterns.
\u2022
Risk appetite and tolerance statements have been established and the CRO reports quarterly
Transition risks are those relating to the transition to a lower carbon economy and include risks such
on adherence;
as policy and legal risk, technology risk, market risk and reputational risk. Our approach to managing
\u2022
A number of modelling tools are used to model catastrophes and calculate the associated expected
climate-related risks is documented in Conduit\u2019s Risk Management Policy.
losses; and
\u2022
Outwards reinsurance is purchased to mitigate both frequency and severity of losses, and to
a. Reinsurance risk
protect Conduit\u2019s capital base.
Conduit underwrites both short-tail and long-tail reinsurance contracts on a worldwide basis. These
reinsurance contracts transfer insurance risk, including risks exposed to both natural and man-made
catastrophes, and risk and liability losses. The risk in connection with underwriting reinsurance
contracts is, in the event of a covered loss, whether the premiums will be sufficient to meet the
associated loss payments and expenses. The underwriters evaluate and estimate the level of
premiums sufficient to cover expected losses, expenses and profitability through a combination of
sophisticated risk modelling tools, past experience and knowledge of loss events, current industry
trends and broader economic indicators. In order to ensure appropriate reinsurance risk selection and
limits on the concentration and diversification of the aggregate portfolio, Conduit has established risk
management and internal control systems to evaluate and assess the expected losses of each
individual contract, class of business, geographic region and the aggregate portfolio.
These controls, include, but are not limited to:
\u2022
A five-year strategic plan is produced that defines the overriding business goals that management
and the Board aim to achieve;
\u2022
A detailed business plan is produced annually and considers current market conditions and the
risk-adjusted profitability of the underwriting portfolio;
\u2022
Conduit\u2019s internal capital requirements consider the probability and magnitude of reinsurance losses
varying adversely from the expected losses considered during the underwriting and subsequent
reserving processes;
\u2022
Forecasts are produced periodically to assess the progress toward the business plan and the
strategic plan;
\u2022
Each underwriter has a clearly defined limit of underwriting authority;
\u2022
Each contract underwritten is subject to a pre-bind peer review;
Catastrophe management
Certain classes of Conduit\u2019s business provide coverage for natural catastrophes and are subject to
seasonal variation and the impacts of climate change. Conduit has exposure to large catastrophe
losses globally, in particular in North America, Europe and Japan and these are most likely to be driven
by windstorm events. The level of windstorm activity, and any landfall thereof, during the North
Atlantic, European and Asia Pacific wind seasons may materially impact loss experience. The North
Atlantic and Asia Pacific wind seasons are typically June to November and the European wind season
November to March. Conduit has exposure to other natural catastrophes that can occur throughout
the year, such as earthquakes, tsunamis, droughts, floods, hail, tornadoes, and wildfires. In addition,
Conduit is exposed to risk losses throughout the year from perils such as fire, explosion, war, terrorism,
political risk, cyber and other events, including loss arising from legal liabilities rather than physical
damage.
Exposure management is an evolving discipline. Industry understanding of natural catastrophe events
continues to develop, informed by advances in science, improved hazard data, enhanced modelling
methodologies and emerging insights from actual loss events. Conduit reviews and refines its
approaches to exposure monitoring, model utilisation and risk aggregation as exposures and loss
models are updated to ensure they remain appropriate and proportionate to the risk profile of the
portfolio. This includes assessing changes in vendor models, cedant data quality, evolving peril
definitions and observed trends in climate and loss behaviour.
During 2025, Conduit refined its approach to natural catastrophe monitoring, redefining its peril
region zones. Comparative figures for the prior period have been re-presented to ensure consistency
with the current presentation. For US windstorm, this includes incorporating all North Atlantic
Windstorm exposure into one zone which takes into account windstorms impacting more than
one zone and/or that make multiple landfalls.
Conduit has defined its appetite and tolerance levels to manage underwriting exposure accumulation
across its portfolio, based on the output from models that estimate the expected frequency and
severity of potential loss events. The tolerances are designed to monitor net exposure across different
peril and region combinations.
The table below shows Conduit\u2019s estimated net exposures to certain peak zone perils as a percentage
of tangible capital. These net positions are modelled stochastically and net of outwards reinsurance on
a first occurrence basis at the 100-year and 250-year return periods.
The modelled estimated net PML as at 31 December 2024 reflects reduced attachment points to
aggregate reinsurance protections following the occurrence of catastrophe events during the year.
This has a notable impact on the North American Windstorm net exposures. The 31 December 2025
exposures do not benefit from similar reductions in the attachment points of aggregate reinsurance
protections, given the benign wind loss experience during the year. While modelling is an important
tool for assessing exposure and aggregating risks, its reliability varies by peril and region. Models rely
on assumptions, judgements and input data provided by cedants, which can vary in precision and
accuracy. As such actual exposures are likely to vary from those modelled. There could also be
unmodelled losses to consider in addition to the modelled figures presented below. The models also
include loss scenarios at higher return periods which could result in losses to capital greater than the
modelled expectations shown.
As at 31 December
2025
2024
Net PML
% of tangible
Net PML
% of tangible
100-year return period estimated net loss
$m
capital
$m
capital
Peril
North Atlantic Windstorm
282.6
25.6%
174.7
16.6%
US and Canada Earthquake
116.5
10.6%
80.7
7.7%
European Windstorm
61.8
5.6%
49.4
4.7%
Asia Pacific Windstorm
37.3
3.4%
45.8
4.4%
Asia Pacific Earthquake
45.6
4.1%
50.9
4.8%
As at 31 December
2025
2024
Net PML
% of tangible
Net PML
% of tangible
250-year return period estimated net loss
$m
capital
$m
capital
Peril
North Atlantic Windstorm
352.4
32.0%
246.2
23.4%
US and Canada Earthquake
214.7
19.5%
125.8
12.0%
European Windstorm
76.6
6.9%
52.0
4.9%
Asia Pacific Windstorm
39.8
3.6%
55.7
5.3%
Asia Pacific Earthquake
59.6
5.4%
58.4
5.6%
Operating segments
The underwriting business is comprised of three principal divisions: Property, Casualty and Specialty. These divisions are also considered to be Conduit\u2019s operating segments. Details of each operating
segment and reinsurance revenue by geographic region and operating segment are as follows:
2025
20241
Property
Casualty
Specialty
Total
Total
Property
Casualty
Specialty
Total
Total
Year ended 31 December
$m
$m
$m
$m
%
$m
$m
$m
$m
%
US
268.4
131.3
13.7
413.4
46.1
239.1
111.3
10.9
361.3
44.4
Worldwide
140.0
74.4
110.0
324.4
36.2
157.0
63.9
100.5
321.4
39.5
Europe
49.5
49.4
20.8
119.7
13.3
34.8
39.4
22.9
97.1
11.9
Other
36.6
1.5
1.5
39.6
4.4
30.2
2.8
0.9
33.9
4.2
Reinsurance revenue
494.5
256.6
146.0
897.1
100.0
461.1
217.4
135.2
813.7
100.0
1
Certain reinsurance contracts previously reported within the Specialty segment are now reported within the Property and Casualty segments to better align with Conduit\u2019s internal view of these contracts. Comparative periods have been re-presented in order to be consistent with the
current period presentation.
Property reinsurance
Conduit is exposed to large natural-catastrophe losses, such as windstorm and earthquake losses,
primarily from assuming risks associated with property treaties. Exposure to natural-catastrophe
events is controlled and measured by managing to predefined limits within stochastic modelling and
deterministic accumulations across classes per geographic zone and peril. The accuracy of these
analyses is limited by the quality of data and the effectiveness of the modelling. It is possible that
a catastrophic event significantly exceeds the expected modelled event loss.
Natural-catastrophe risk is written across both the US and internationally on an excess of loss
and quota share basis. Reinsurance structures are offered typically in respect of peril, geography and
probability of activation or exhaustion.
Property per risk treaties are offered with the strategy to minimise natural-catastrophe exposure,
focusing on fire risk. This is considered by both natural-catastrophe specific metrics, treaty conditions
and excess of loss structure.
Ceded reinsurance is purchased to mitigate exposures to large natural-catastrophe losses. Ceded
reinsurance is typically purchased on an ultimate net loss excess of loss basis, however industry loss
warranties, catastrophe bonds issuances, or proportional treaty arrangements may also be utilised.
Casualty reinsurance
Conduit underwrites a balanced portfolio of casualty classes of business, comprised of both excess
of loss and proportional contracts, on a worldwide basis.
Casualty claims tend to take longer to be reported and ultimately settled than physical damage risks.
Conduit typically maintains a liability for incurred claims for casualty classes of business over a longer
period of time than for the property and specialty classes of business where the costs of claims are
generally known and settled within a shorter time frame.
Conduit purchases ceded reinsurance to protect against any clash between losses arising in its
casualty portfolio.
The sub-classes of casualty business include directors and officers liability, financial institutions liability,
general liability for multiple sub-classes and, on an excess and umbrella basis, medical malpractice,
professional liability and transactional liability. Conduit has limited appetite for, and generally avoids,
workers compensation, standalone auto and cyber treaties.
Directors and officers liability
Directors and officers liability policies offer protection for company managers and directors and
officers against claims that may arise in the normal course of operations. Coverage includes legal
expenses and liability to shareholders, bondholders, creditors or others owing to actions or omissions
by a director or officer of a private or public corporation, or not-for-profit organisation.
Financial institutions liability
Financial institutions coverage may cover risks such as computer and commercial crime, professional
indemnity and civil liability.
General liability
General liability commonly provides cover for losses arising from the legal liability of an original
insured and statutory liability in the case of employers\u2019 liability which result in bodily injury or disease
to third parties or physical damage to third-party property. Conduit offers a wide range of general
liability reinsurance products including contractors general liability, excess general liability, umbrella,
energy and environmental.
Medical malpractice
Medical malpractice reinsurance generally covers professional liability and errors and omissions
specifically in the healthcare industry, protecting physicians and other healthcare professionals against
claims of negligent acts or injury of patients under their care. Medical malpractice reinsurance does
not cover intentional or criminal acts.
Professional liability
Professional liability generally provides coverage for third-party losses resulting from legal liability
or civil liability or negligence, errors or omissions or wrongful acts arising from the provision of, or
failure to provide, professional services by an original insured. Sub-classes of this business would
include lawyers, accountants, architects and engineers, errors and omissions, plus miscellaneous
professional liability.
Transactional liability
Transactional liability reinsurance is used by parties to various business transactions, such as mergers,
acquisitions and divestitures, to transfer certain transaction-related risks to the reinsurance market.
There can be a broad range of risks covered, including warranty, litigation, pension and tax
uncertainties and employment matters.
Specialty reinsurance
Conduit\u2019s specialty classes of business are written on both an excess of loss and proportional basis
and can provide reinsurance coverage against physical damage (short-tail) or against legal liability
(long-tail) losses. Although specialty classes of business are exposed to natural-catastrophe risk, it is
generally to a lesser extent than property classes of business. They are more likely to be affected by
specific large loss events such as accidents, collisions, fires and similar man-made catastrophe events.
Specialty classes of business are highly diverse in nature and require specific market expertise
and experience. The specialty classes of business include, but are not limited to, aviation, energy,
engineering and construction, environmental, marine, renewables, political violence and terrorism and
are offered on both a specific and a whole account basis.
Conduit purchases ceded reinsurance protection to reduce exposure to both large risk losses and an
accumulation of smaller claims arising from any one event. Ceded reinsurance is typically purchased
on an excess of loss basis, but, from time to time, proportional arrangements may be entered into.
Aviation
The aviation class of business provides cover to the insurers of airlines, aircraft, airports, aircraft
manufacturers and aviation related products, and includes cover for the aircraft themselves as well
as losses arising from passenger and third-party liability claims against airlines and/or operators
and/or manufacturers.
Energy
The energy class of business provides reinsurance cover for a global spread of accounts that includes
risks such as downstream energy, midstream energy, upstream energy, energy liability, construction
and natural perils related coverages such as Gulf of Mexico wind and hurricane programmes. Policies
typically cover legal liability of an insured and property for physical damage (including natural
catastrophe), machinery breakdown perils and consequential business interruption exposure. Loss
limits are set at a level commensurate with the modelled estimated maximum loss scenario.
Engineering and construction
The class covers a wide range of products falling under related property and business income
protection on a worldwide basis. These products include, but are not limited to, contractors\u2019 all risks,
erection all risks, plant and equipment, machinery breakdown and loss of profits. Projects range from
small bespoke to large civil engineering constructions. The main hazards are fire and explosion, theft,
collapse and natural perils such as earthquake, windstorm and flood.
Environmental
Environmental products generally provide cover relating to the environmental and energy casualty
classes with regard to pollution. The related sectors typically include energy, construction and
industrial, which includes both commercial and residential risks.
Marine
Marine cargo is an international account and covers the reinsurance of commodities or goods in
transit. Typically, transit cover is provided on an all-risks basis for marine perils for the full value of
the goods concerned. Static cover is also provided for losses to cargo, from both elemental and non-
elemental causes. In addition, the cargo account can include for example, fine art, vault risks, artwork
on exhibition and marine war and terrorism business relating to cargo in the ordinary course of transit.
Marine liability commonly provides cover for legal liability for losses arising from the operation
of marine and offshore related assets including but not limited to the reinsurance of the International
Group of Protection and Indemnity Clubs, the operation and management of ships and vessels,
cargo, and marine builders\u2019 risks covering the building of ocean-going vessels and offshore assets.
The marine hull class generally consists of worldwide coverage spanning physical damage, hull
and machinery breakdown, loss of hire and mortgagees\u2019 interests for a range of maritime vessels
from cargo and passenger ships to private pleasure craft. Products typically cover both risk and
catastrophe exposures.
Renewables
The class covers a wide range of tailored solutions globally. The class includes offshore and onshore
wind power, ground and rooftop solar power plus bioenergy fuels and associated operations. The risks
exposed are quite unique, from difficult construction operations to installing complex equipment that
is routinely exposed to natural hazards. Policies typically include cover for physical damage, legal
liability, machinery breakdown and business interruption for both construction and operational phases.
Political violence and terrorism
Political violence and terrorism coverage is provided for US and worldwide property risks, but typically
excluding nuclear, chemical, biological and cyber coverage in most territories.
Whole account
Coverage is generally provided on a worldwide basis and covers a broad spectrum of the cedants
risks under a single policy. The classes of business covered under a whole account reinsurance policy
can include property, specialty and casualty classes of business including commercial and personal
automobile, general liability, workers compensation, employers liability, excess casualty and umbrella,
as well as selected professional liability coverage.
Ceded reinsurance
Ceded reinsurance is purchased in the normal course of business to increase capital capacity, limit
the impact of individual risk losses and loss events impacting multiple cedants (such as natural
catastrophes, notably earthquakes and named storms), or both. Ceded reinsurance may also be
purchased from time to time to optimise the risk-adjusted return of Conduit's aggregate underwriting
portfolio. Conduit may purchase ceded reinsurance on both an excess of loss and proportional basis,
and may also use reinsurance linked to catastrophe bonds or other capital market products. The mix
of ceded reinsurance coverage is dependent on specific loss mitigation requirements, market
conditions and available capacity. In certain market conditions, Conduit may deem it more economic
to hold capital than purchase ceded reinsurance. Ceded reinsurance does not relieve Conduit of its
obligations to policyholders. Conduit is exposed to reinsurance risk where ceded reinsurance
contracts put in place to reduce gross reinsurance risk do not perform as anticipated, result in
coverage disputes or prove inadequate in terms of the limits purchased. Failure of a ceded reinsurer to
pay a valid claim is considered a credit risk which is detailed in the credit risk section below. Ceded
reinsurance coverage is not intended to be available to meet all potential loss circumstances. Conduit
will retain certain losses, as the cover purchased is unlikely to transfer the totality of Conduit\u2019s
exposure. Any loss amount which exceeds the ceded reinsurance coverage purchased would
be retained by Conduit. Some ceded reinsurance policies have limited reinstatements, therefore the
number of claims which may be recovered on second, and subsequent loss circumstances is limited.
Under Conduit\u2019s ceded reinsurance security policy, ceded reinsurers are assessed and approved based
on their financial strength ratings, among other factors. These decisions are regularly reviewed as an
integral part of the business planning and performance monitoring process. The management
Counterparty Security Committee examines and approves all Conduit\u2019s ceded reinsurers to ensure
that they possess suitable security.
Fulfilment cash flows
Fulfilment cash flows consist of:
\u2022
The estimates of future cash flows required in the ultimate settlement of claims;
\u2022
An adjustment for the time value of money; and
\u2022
A risk adjustment for non-financial risk
Estimates of future cash flows
A significant and critical judgement and estimate made by management is the estimation of future
cash flows in relation to ultimate claims settlements. Management estimates, in an unbiased way,
future cash flows to cover its estimated liability for both reported and unreported claims on events
that have occurred up to the latest valuation date, incorporating all reasonable and supportable
information that is available without undue cost or effort. Management uses methodologies that
calculate a point estimate for the ultimate losses, representing management\u2019s best estimate of
ultimate future cash flows. Conduit estimates the future cash flows by taking outstanding losses,
adding an estimate for IBNR and, if deemed necessary, ACRs which represent Conduit\u2019s estimate for
losses related to specific contracts that management believes may not be adequately estimated by
the cedant as at that date.
Liabilities for incurred claims are not permitted until the occurrence of an event which may give rise to
a claim. As a result, only provisions applicable to losses that have occurred up to the reporting date
are established, with no allowance for the provision of a contingency liability to account for expected
future losses or for the emergence of new types of latent claims. Claims arising from future events can
be expected to require the establishment of substantial liabilities from time to time. The estimated
timing of the future cash flows is determined by applying cash flow payment assumptions to the best
estimate of ultimate future cash flows.
The reserving process is dependent on management\u2019s judgement and is subject to meaningful
uncertainty due to both qualitative and quantitative factors, including, but not limited to: the nature of
the business written, whether it is short-tail or long-tail, whether it is excess of loss or proportional, the
magnitude and timing of loss events, the geographic areas impacted by loss events, time lags in the
reporting process from the original claimant, limited claims data, policy coverage interpretations, case
law, regulatory directives, demand surge and inflation, potential uncertainties related to reinsurance
and ceding company reserving practices, and other factors inherent in the estimation process for the
net ultimate liability for incurred claims.
The judgements and estimates used in establishing future cash flow calculations may be revised as
additional experience or other data becomes available. Future cash flows are also reviewed as new or
improved methodologies are developed and as laws or regulations change. Furthermore, as a business
operating within a broker market, management must rely on loss information reported to brokers by
other insurers and their loss adjusters, who must estimate their own losses at the policy level, often
based on incomplete and changing information. The information management receives varies by
cedant and may include paid losses, estimated case reserves and an estimated provision for IBNR
reserves. Additionally, reserving practices and the quality of data reporting may vary among ceding
companies, which adds further uncertainty to management\u2019s estimates of the ultimate losses.
Conduit\u2019s internal actuaries review the assumptions and methodologies on a quarterly basis and
develop an actuarial best estimate of Conduit\u2019s future cash flows using the processes outlined above.
The management Reserving Committee reviews the estimate for the liability for incurred claims on a
quarterly basis. The reserves are subject to a semi-annual independent review by Conduit\u2019s external
actuaries. The results of the internal and independent reserve reviews are presented to the Audit
Committee.
Risk adjustment
The risk adjustment for non-financial risk is the compensation that Conduit requires for bearing the
uncertainty about the amount and timing of the cash flows arising from reinsurance contracts. Conduit
determines the risk adjustment at the entity level and allocates to the groups of reinsurance contracts.
Conduit has estimated the risk adjustment using a margin-based approach. The margins are calibrated
to a targeted confidence interval range using the BMA BSCR risk framework. Conduit expects that the
risk adjustment recognised within the fulfilment cash flow will fall within the range of the 75th and the
85th percentile, gross and net of ceded reinsurance. Conduit estimates that the risk adjustment net of
ceded reinsurance corresponds to the 83rd percentile as at 31 December 2025 (31 December 2024:
81st percentile).
Short-tail versus long-tail
Claims relating to short-tail risks are generally reported more promptly than those relating to long-tail
risks. The timeliness of reporting can be affected by such factors as the nature of the event causing
the loss, the location of the loss and whether the losses are from policies in force with primary insurers
or reinsurers.
Excess of loss versus proportional
For excess of loss contracts, management is aided by the fact that each policy has a defined limit of
liability arising from one event. Once that limit has been reached, there is no further exposure to
additional losses from that policy for the same event. For proportional business, an initial estimated
loss and loss expense ratio is generally used. This is based upon information provided by the ceding
company and/or their broker and management\u2019s historical experience of that treaty, if any, and the
estimate is adjusted as actual experience becomes known.
Market risk
Conduit is at risk of loss due to movements in market factors. The main market risks Conduit is
exposed to include:
\u2022
Reinsurance risk;
\u2022
Investment risk; and
\u2022
Currency risk.
Reinsurance risk
Conduit is exposed to reinsurance market risk from several sources, including the following:
\u2022
The advent or continuation of a soft market, which may result in a stabilisation or decline
in premium rates and/or terms and conditions for certain classes, or across all classes;
\u2022
The actions and reactions of key competitors, which may directly result in volatility in premium
volumes and rates, fee levels and other input costs;
\u2022
Market events, including unusual inflation in rates, may result in a limit in the availability of cover,
causing political intervention or national remedies;
\u2022
Failure to maintain broker and cedant relationships, leading to a limited or substandard choice of
risks inconsistent with Conduit\u2019s risk appetite;
\u2022
Changes in laws and regulation, including capital, governance or licensing requirements; and
\u2022
Changes in the geopolitical environment.
The most important method to mitigate reinsurance market risk is to maintain strict underwriting
standards. Conduit manages reinsurance market risk in numerous ways, including the following:
\u2022
Reviewing and amending underwriting plans and outlook as necessary;
\u2022
Reducing exposure to, or withdrawing from, market sectors where conditions have reached
unattractive levels;
\u2022
Purchasing appropriate, cost-effective reinsurance cover to mitigate exposures;
\u2022
Closely monitoring changes in rates, terms and conditions and inflation;
\u2022
Ensuring through rigorous underwriting criteria that surplus capital does not drive
short-term risk appetite;
\u2022
Holding an underwriting roundtable meeting, typically held at least weekly (and more frequently
during key renewal periods), where deal flow, pricing and opportunities are discussed;
\u2022
Holding quarterly management Underwriting Oversight Committee meetings that consider matters
that include underwriting performance for CRL;
\u2022
Holding management Risk Oversight Committee meetings that consider matters that include the
risk management framework, capital management, underwriting exposure accumulation and
outward reinsurance strategy;
\u2022
Holding an annual strategy review meeting;
\u2022
Holding a quarterly Underwriting Committee board meeting that considers matters including
underwriting performance for CRL;
\u2022
Holding a quarterly Risk, Capital and Compliance Committee meeting to review relevant risk and
capital considerations for CRL; and
\u2022
Holding regular meetings with regulators and rating agencies.
Reinsurance finance risk
Estimates of future cash flows for incurred claims are discounted on initial recognition and then re-
measured to current rates as at each reporting date. Reinsurance liabilities and ceded assets for
incurred claims are therefore sensitive to the level of market interest rates. Interest rate risk
on reinsurance contracts is the risk that the value of the future cash flows will fluctuate due to changes
in market interest rates. Movements in interest rates may lead to an adverse impact on the value of
Conduit\u2019s reinsurance contract assets and liabilities. Conduit manages this risk by monitoring the
duration of reinsurance contract cash flows and adopting policies regarding asset and liability
matching to reduce the volatility arising from interest rate movements on assets and liabilities in the
consolidated statement of comprehensive income.
The total reinsurance contract assets and liabilities exposed to interest rate risk are detailed below:
2025
2024
As at 31 December
Note
$m
$m
Ceded asset for incurred claims
15
50.1
41.2
Liability for incurred claims
15
(1,366.2)
(978.0)
Total
(1,316.1)
(936.8)
The sensitivity of Conduit\u2019s net reinsurance liability for incurred claims to interest rate movements is
detailed below, assuming linear movements in interest rates:
2025
2024
As at 31 December
$m
%
$m
%
Immediate shift in yield (basis points)
100
33.6
2.6
25.1
2.7
75
25.3
1.9
18.9
2.0
50
17.0
1.3
12.7
1.4
25
8.5
0.6
6.4
0.7
0
\u2013
\u2013
\u2013
\u2013
-25
(8.6)
(0.7)
(6.4)
(0.7)
-50
(17.3)
(1.3)
(12.9)
(1.4)
-75
(26.0)
(2.0)
(19.5)
(2.1)
-100
(34.8)
(2.6)
(26.1)
(2.8)
nvestment risk
Movements in investments resulting from changes in interest and inflation rates, credit spreads, and
currency exchange rates, among other factors, may lead to an adverse impact on the value of
Conduit\u2019s investment portfolio.
The management Investment Committee is responsible for all investment-related decisions and
investment guidelines. The investment guidelines set the parameters within which Conduit\u2019s external
managers must operate. Important parameters of these guidelines include permissible asset classes,
duration ranges, credit quality, permitted currency, maturity, industry sectors, geographical, sovereign
and issuer exposures. Guideline compliance is monitored on a monthly basis. The portfolio of fixed
maturity securities is currently managed by four external managers. Their performance is monitored
on an ongoing basis. Conduit projects the level of funds required to meet near-term obligations and
cash flow needs following extreme events in order to ensure adequate liquidity is maintained. Conduit
also prioritises liquid asset classes with higher credit quality and shorter duration so that Conduit can
meet reinsurance and other near-term obligations. Conduit has split the portfolio into a short-tail
mandate, to better match the property and specialty classes of business, and a long-tail mandate, to
better match the casualty classes of business and some aspects of the specialty classes of business.
The short-tail mandate will be slightly shorter duration than the long-tail mandate.
Conduit reviews the composition, duration and asset allocation of its investment portfolio on a regular
basis to respond to changes in interest rates and other market conditions. If certain asset classes are
anticipated to produce a higher return within management\u2019s risk tolerance, an adjustment in asset
allocation may be made. Conversely, if the risk profile is expected to move outside of tolerance levels,
adjustments may be made to reduce the risks in the portfolio.
Conduit models various periods of significant stress in order to better understand the investment
portfolio\u2019s risks and exposures. The scenarios represent what could, and most likely will, occur \u2013 albeit
not in the exact form of the scenarios, which are based on historic periods of volatility. Conduit also
monitors the portfolio impact of more severe scenarios consisting of extreme shocks.
Conduit focuses on the most significant risks in its investment portfolio which are interest rate risk,
credit risk and liquidity risk, and has built stress testing and risk analytics around these risks to ensure
they are within tolerances and preferences. Conduit seeks to invest in issuers with more sustainable
business practices on balance, as it believes that this will also help reduce risk in the portfolio.
Strategic asset allocation reviews will be undertaken periodically to assess Conduit\u2019s overall
investment strategy and to consider alternative asset allocations to achieve the best risk-adjusted
return within Conduit\u2019s risk appetite. Any resulting recommendations would be approved by the
appropriate management committee(s) and reported to the Board. The Investment Committee meets
quarterly to ensure that the strategic and tactical investment actions were consistent with investment
risk preferences, appetite, risk and return objectives and tolerances. The investment risk tolerances
have been incorporated into the risk framework.
The investment mix by mandate and sector of Conduit\u2019s portfolio of fixed maturity securities
is as follows:
Estimated fair
Estimated fair
Estimated fair
value short-tail
value long-tail
value total
As at 31 December 2025
$m
$m
$m
Short-term investments
14.1
0.3
14.4
US treasuries
294.5
253.5
548.0
US agency debt
2.0
2.6
4.6
US municipals
11.3
7.9
19.2
Non-US government and agency
\u2013
3.4
3.4
Asset-backed
205.4
32.3
237.7
US government agency mortgage-backed
121.4
132.0
253.4
Non-agency mortgage-backed
38.2
24.6
62.8
Agency commercial mortgage-backed
5.6
\u2013
5.6
Non-agency commercial mortgage-backed
46.2
54.3
100.5
Corporate
354.7
303.1
657.8
Total
1,093.4
814.0
1,907.4
Estimated
Estimated
Estimated
Non-US
fair value
fair value
fair value
Other
government
short-tail
long-tail
total
Financials
industries
and agency
Total
As at 31 December 2024
$m
$m
$m
As at 31 December 2024
$m
$m
$m
$m
Short-term investments
29.4
6.0
35.4
US
210.9
205.8
\u2013
416.7
US treasuries
297.6
176.5
474.1
Canada
30.7
1.0
\u2013
31.7
US agency debt
1.9
2.5
4.4
UK
27.5
5.2
\u2013
32.7
US municipals
14.2
6.5
20.7
Other countries
41.6
6.4
\u2013
48.0
Non-US government and agency
\u2013
\u2013
\u2013
Total
310.7
218.4
\u2013
529.1
Asset-backed
171.6
39.4
211.0
The sector allocation of corporate bonds is as follows:
US government agency mortgage-backed
63.5
83.8
147.3
2025
2024
Non-agency mortgage-backed
22.0
8.6
30.6
As at 31 December
$m
%
$m
%
Agency commercial mortgage-backed
7.0
\u2013
7.0
Financials
336.8
51.2
310.7
58.7
Non-agency commercial mortgage-backed
30.6
36.1
66.7
Industrials
284.0
43.2
193.5
36.6
Corporate
311.5
217.6
529.1
Utilities
37.0
5.6
24.9
4.7
Total
657.8
100.0
529.1
100.0
Total
949.3
577.0
1,526.3
Corporate and non-US government and agency bonds by country are as follows:
Non-US
Other
government
Financials
industries
and agency
Total
As at 31 December 2025
$m
$m
$m
$m
US
241.7
300.9
\u2013
542.6
Canada
36.9
2.9
2.9
42.7
UK
25.1
4.5
\u2013
29.6
Other countries
33.1
12.7
0.5
46.3
Total
336.8
321.0
3.4
661.2
Conduit\u2019s investment portfolio is comprised of fixed maturity securities and cash and cash equivalents.
Fair values can be impacted by movements in interest rates, credit ratings, exchange rates, the current
economic environment and outlook. The estimated fair value of the portfolio of fixed maturity
securities is generally inversely correlated to movements in market interest rates. If market interest
rates fall, the estimated fair value of Conduit\u2019s portfolio of fixed maturity securities would tend to
rise and vice versa. The sensitivity of the price of fixed maturity securities to movements in interest
rates is indicated by their duration. The greater a security\u2019s duration, the greater its price volatility
to movements in interest rates. The sensitivity of Conduit\u2019s portfolio of fixed maturity securities to
interest rate movements is detailed in the following table, assuming linear movements in interest rates.
2025
2024
As at 31 December
$m
%
$m
%
Immediate shift in yield (basis points)
100
(58.9)
(3.1)
(41.0)
(2.7)
75
(43.9)
(2.3)
(30.8)
(2.0)
50
(29.0)
(1.5)
(20.5)
(1.3)
25
(14.4)
(0.8)
(10.3)
(0.7)
0
\u2013
\u2013
\u2013
\u2013
-25
14.2
0.7
11.6
0.8
-50
28.2
1.5
23.1
1.5
-75
42.0
2.2
34.7
2.3
-100
55.6
2.9
46.3
3.0
Conduit mitigates interest rate risk on the investment portfolio by establishing and monitoring
duration ranges in its investment guidelines. The duration of the portfolio is matched to the modelled
expected duration of the reinsurance reserves, within a permitted range. The permitted duration range
for the portfolio is between 1.5 and 5 years. The overall duration for the fixed maturity securities,
managed cash and cash equivalents is 2.8 years as at 31 December 2025 (as at 31 December 2024:
2.5 years).
In addition to duration management, Conduit monitors VaR to measure potential losses in the
estimated fair values of its cash and invested assets and to understand and monitor risk. The VaR
calculation is performed using variance/covariance risk modelling. Securities are valued individually
using standard market pricing models. These security valuations serve as the input to many risk
analytics. The principal VaR measure that is produced is an annual VaR at the 99th percentile
confidence level. Under normal conditions, the portfolio is not expected to lose more than the VaR
metric listed below, 99% of the time over a one-year time horizon. The appropriateness of this
measure is considered by the Investment Committee periodically.
Conduit\u2019s annual VaR calculation is as follows:
2025
2024
% of
% of
shareholders\u2019
shareholders\u2019
As at 31 December
$m
equity
$m
equity
99th percentile confidence level
97.0
8.8%
102.2
9.7%
Currency risk
Conduit is susceptible to fluctuations in rates of foreign exchange, principally between the US dollar and pounds sterling and the US dollar and the euro. Even though risks are assumed on a worldwide basis,
they are predominantly denominated in US dollars. Conduit is exposed to currency risk to the extent its assets are denominated in different currencies to its liabilities. Conduit is also exposed to translation risk
on non-monetary assets and liabilities. Foreign currency gains and losses are recorded in the period they occur in the consolidated statement of comprehensive income.
Conduit hedges monetary non-US dollar liabilities primarily with non-US dollar assets but may also use derivatives, such as currency forwards, to mitigate foreign currency exposures. The main foreign
currency exposure relates to its reinsurance and ceded reinsurance assets and liabilities, cash holdings and dividend payable, if applicable.
The following table summarises the carrying value of all monetary and non-monetary assets and liabilities categorised by Conduit\u2019s main currencies.
USD
GBP
EUR
Other
Total
As at 31 December 2025
$m
$m
$m
$m
$m
Total assets
2,175.3
31.7
72.4
46.0
2,325.4
Total liabilities
(1,064.4)
(34.1)
(80.8)
(43.7)
(1,223.0)
Net assets (liabilities)
1,110.9
(2.4)
(8.4)
2.3
1,102.4
USD
GBP
EUR
Other
Total
As at 31 December 2024
$m
$m
$m
$m
$m
Total assets
1,801.5
27.4
40.1
37.2
1,906.2
Total liabilities
(758.4)
(24.2)
(39.4)
(33.0)
(855.0)
Net assets (liabilities)
1,043.1
3.2
0.7
4.2
1,051.2
The impact on profit from a proportional foreign exchange movement of 10.0% against the US dollar at year end spot rates would be a decrease or increase of $0.5 million (31 December 2024: increase or
decrease of $1.3 million).
c. Liquidity risk
Liquidity risk is the risk that cash may not be available to pay obligations when they are due without
incurring unreasonable costs. Conduit\u2019s main exposure to liquidity risk is with respect to its reinsurance
and investment activities. Conduit is exposed if proceeds from the sale of financial assets are not
sufficient to fund obligations arising from reinsurance contracts and/or other liabilities. Conduit can be
exposed to fund daily calls on its available investment assets, principally to settle reinsurance claims
and/or to fund trust accounts following a large catastrophe loss, or other collateral requirements.
Liquidity risk exposures related to reinsurance activities are as follows:
\u2022
Large catastrophic events, or multiple medium-sized events in quick succession, requiring the
payment of high-value claims within a short time frame or to fund trust accounts established to
collateralise claims payment liabilities;
\u2022
Failure of cedants to meet their contractual obligations with respect to the timely payment
of premiums; and
\u2022
Failure of Conduit\u2019s ceded reinsurers to meet their contractual obligations to pay claims within a
timely manner.
Liquidity risk exposures related to investment activities are as follows:
\u2022
Adverse market movements and/or a duration mismatch to obligations, resulting in investments
needing to be disposed of at a significant realised loss; and
\u2022
An inability to liquidate investments due to market conditions.
Conduit\u2019s investment strategy is to hold high quality, liquid securities sufficient to meet reinsurance
liabilities and other near-term liquidity requirements. Portfolios are specifically designed to ensure
funds are readily available in an extreme event.
The maturity dates of Conduit\u2019s portfolio of fixed maturity securities are as follows:
Short-tail
Long-tail
Total
As at 31 December 2025
$m
$m
$m
Fixed maturity securities at FVTPL
Less than one year
145.3
56.9
202.2
Between one and two years
144.9
52.7
197.6
Between two and three years
167.3
94.4
261.7
Between three and four years
59.1
63.6
122.7
Between four and five years
78.0
62.9
140.9
Over five years
82.0
240.3
322.3
Asset-backed and mortgage-backed
416.8
243.2
660.0
Total
1,093.4
814.0
1,907.4
Short-tail
Long-tail
Total
As at 31 December 2024
$m
$m
$m
Fixed maturity securities at FVTPL
Less than one year
134.7
11.4
146.1
Between one and two years
169.2
64.7
233.9
Between two and three years
120.3
46.9
167.2
Between three and four years
61.1
95.5
156.6
Between four and five years
68.2
50.1
118.3
Over five years
101.1
140.5
241.6
Asset-backed and mortgage-backed
294.7
167.9
462.6
Total
949.3
577.0
1,526.3
The estimated maturity profile of the reinsurance liability for incurred claims and financial liabilities of Conduit is as follows:
Years until liability becomes due \u2013 discounted
2025
2024
Carrying
Less than
Carrying
Less than
value
one
One to three
Three to five
Over five
Total
value
one
One to three
Three to five
Over five
Total
As at 31 December
Note
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
Reinsurance liability for incurred claims
15
1,366.2
440.1
543.5
227.7
154.9
1,366.2
978.0
280.4
403.9
175.8
117.9
978.0
Other reinsurance payables
15
11.4
11.4
\u2013
\u2013
\u2013
11.4
6.3
6.3
\u2013
\u2013
\u2013
6.3
Other payables
11.7
11.7
\u2013
\u2013
\u2013
11.7
18.9
18.9
\u2013
\u2013
\u2013
18.9
Lease liabilities
16
0.8
0.8
\u2013
\u2013
\u2013
0.8
1.6
0.8
0.8
\u2013
\u2013
1.6
Total
1,390.1
464.0
543.5
227.7
154.9
1,390.1
1,004.8
306.4
404.7
175.8
117.9
1,004.8
Actual maturities of the above may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations with or without call or prepayment penalties. The estimation
of the ultimate liability for incurred claims is complex and incorporates a significant amount of judgement. The timing of payments is also uncertain and cannot be predicted as simply as for other financial
liabilities. Actuarial and statistical techniques, past experience and management\u2019s judgement have been used to determine a likely settlement pattern.
As at 31 December 2025, cash and cash equivalents were $339.2 million (31 December 2024: $313.2 million). Conduit manages its liquidity risks via its investment strategy to hold high quality, liquid securities,
sufficient to meet its reinsurance liabilities and other near-term liquidity requirements. In addition, Conduit has established asset allocation and maturity parameters within the investment guidelines such that
the majority of the investments are in high quality assets which could be converted into cash promptly and at minimal expense. Conduit monitors market changes and outlook and reallocates assets as it
deems necessary.
As at 31 December 2025, Conduit considers it has more than adequate liquidity to pay its obligations as they fall due even if difficult investment market conditions were to prevail for a period of time.
d. Credit risk
Credit risk is the risk that a counterparty may fail to pay, or repay, a debt or obligation. Conduit is
exposed to credit risk on its fixed maturity investment portfolio, its expected premium cash flows
due from cedants and on ceded reinsurance recoverables.
Credit risk on Conduit\u2019s portfolio of fixed maturity securities is mitigated through the investment
policy to invest in instruments of high credit quality issuers and to limit the amounts of credit exposure
with respect to particular ratings categories and any one issuer. Securities rated below an S&P or
equivalent rating of BBB may comprise no more than 15.0% of the portfolio. Conduit also limits
exposure to individual issuers, with declining limits for less highly rated issuers. Conduit therefore does
not expect any significant credit concentration risk on its investment portfolio, except for fixed
maturity securities issued by the US government and its agencies.
Conduit is potentially exposed to counterparty credit risk in relation to the total expected premium
cash flows due from reinsurance brokers and cedants and on ceded reinsurance recoverables due
from Conduit\u2019s reinsurers. Credit risk on total expected premium cash flows due from cedants is
managed by conducting business with reputable broking organisations, with whom Conduit has
established relationships, and by rigorous cash collection procedures. Conduit also has a broker
approval process in place. Credit risk from ceded reinsurance recoverables is primarily managed by
the review and approval of reinsurer security, with ongoing monitoring in place.
Ceded reinsurance recoverables are recorded within ceded reinsurance contract assets as the ceded
asset for incurred claims which is shown in note 15.
The table opposite presents an analysis of Conduit\u2019s major exposures to counterparty credit risk,
based on their rating. Expected premium cash flows are not rated, however there is limited default
risk associated with these amounts.
Cash and cash
equivalents and fixed
Ceded asset for
maturity securities
incurred claims
As at 31 December 2025
$m
$m
AAA
657.1
\u2013
AA+, AA, AA-
934.4
\u2013
A+, A, A-
526.1
35.8
BBB+, BBB, BBB-
124.9
\u2013
Other
4.1
14.3
Total
2,246.6
50.1
Cash and cash
equivalents and fixed
Ceded asset for
maturity securities
incurred claims
As at 31 December 2024
$m
$m
AAA
566.4
\u2013
AA+, AA, AA-
742.2
\u2013
A+, A, A-
441.5
24.6
BBB+, BBB, BBB-
89.4
\u2013
Other
\u2013
16.6
Total
1,839.5
41.2
The ceded reinsurance assets classified as other are fully collateralised.
As at 31 December 2025 the average credit quality of Conduit\u2019s cash and cash equivalents and
portfolio of fixed maturity securities was AA (31 December 2024: AA).
Total expected premium cash flows represents the premium, net of deductions, expected to be
received for past and future reinsurance coverage. The following table shows total expected premium
cash flows that are not yet due and those that are past due but not impaired, which represents the
exposure to credit risk on reinsurance contracts issued at the balance sheet date.
2025
2024
As at 31 December
$m
$m
Not yet due
462.0
440.1
Less than 90 days past due
17.3
21.4
Over 90 days past due
8.1
4.8
Total
487.4
466.3
For the years ended 31 December 2025 and 2024 no provisions have been made for impaired
or irrecoverable balances and no amount was charged to the consolidated statement of
comprehensive income in respect of bad debts.
Operational risk
Operational risk is the risk of loss resulting from inadequate or failed internal processes, personnel,
systems or external events. During the reporting period, various operational risks were identified,
and steps were taken to manage or mitigate those risks.
The risk framework addresses the identification, assessment and mitigation of operational risks. This
process involves the use of risk registers to identify inherent risk and residual risk after the application
of controls. The management of individual risks rests with functional managers who have direct
ownership of those risks within their respective business area or process. The risk function provides
independent challenge and oversight to ensure risks are effectively managed. This includes facilitating
a quarterly risk and control affirmations process and performing control testing, with the outcomes
informing the overall assessment of the control environment. The results of compliance reviews and
independent internal audits provide an additional level of review and verification. The Audit
Committee has selected a reputable provider to serve as outsourced internal auditors.
f. Strategic risk
Conduit has identified several strategic risks, including:
\u2022
The risks that either the poor execution of the business plan or an inappropriate business plan in
itself results in a strategy that fails to reflect adequately the trading environment, resulting in an
inability to optimise performance, including reputational risk;
\u2022
The risks of the failure to maintain adequate capital, accessing capital at an inflated cost or the
inability to access capital and unanticipated changes in vendor, regulatory and/or rating agency
models that could result in an increase in capital requirements or a change in the type of capital
required; and
\u2022
The risks of succession planning, staff retention and key personnel risks.
Business plan risk
Conduit\u2019s business plan forms the basis of operations and provides strategic direction to management.
Actual versus planned results are monitored regularly.
Capital management risk
Total tangible capital is as follows:
2025
2024
As at 31 December
$m
$m
Shareholders\u2019 equity
1,102.4
1,051.2
Risks associated with the effectiveness of Conduit\u2019s capital management are mitigated as follows:
\u2022
Regular monitoring of current and prospective regulatory and rating agency capital requirements;
\u2022
Oversight of capital requirements by the Board;
\u2022
Ability to purchase sufficient, cost-effective reinsurance;
\u2022
Maintaining contact with vendors, regulators and rating agencies in order to stay abreast
of upcoming developments; and
\u2022
Participation in industry groups such as the Association of Bermuda Insurers and Reinsurers,
Reinsurance Association of America and the International Underwriting Association.
Conduit reviews the level and composition of capital on an ongoing basis with a view of:
\u2022
Maintaining sufficient capital for underwriting opportunities and to meet obligations
to policyholders;
\u2022
Maximising the risk-adjusted return to shareholders within the context of the defined risk appetite;
\u2022
Maintaining an adequate financial strength rating; and
\u2022
Meeting all relevant capital requirements.
Capital is increased or returned as appropriate. The retention of earnings generated leads to an
increase in capital. Capital raising can include debt or equity and returns of capital may be made
through dividends, share repurchases, a redemption of debt or any combination thereof. Other capital
management tools and products available to Conduit may also be utilised. All capital actions require
approval by the Board.
The primary source of capital used by Conduit is equity shareholders\u2019 funds. As a holding company,
CHL relies on dividends from its operating entity to provide the cash flow required for dividends to
shareholders. The ability of the operating entity to pay dividends and make capital distributions is
subject to the legal and regulatory restrictions of the jurisdiction in which it operates.
CRL is regulated as a Class 4 (re)insurer by the BMA and is required to hold sufficient capital under
applicable regulations. The BMA\u2019s regulatory framework has been assessed as equivalent to the EU\u2019s
Solvency II regime. CRL had sufficient capital at all times throughout the year to meet the BMA\u2019s
requirements, inclusive of the BSCR standard formula and minimum margin of solvency.
Retention risk
Risks associated with succession planning, staff retention and key person risks are mitigated through
a combination of resource planning processes and controls, including:
\u2022
The identification of key personnel with appropriate succession plans at CHL;
\u2022
The identification of key team profit generators at CRL and function heads with targeted
retention packages;
\u2022
Documented recruitment procedures, position descriptions and employment contracts;
\u2022
Resource monitoring and the provision of appropriate compensation, including equity-based
incentives which vests over a defined time horizon, subject to achieving certain performance
criteria; and
\u2022
Training schemes.", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f213": { "value": "
Market risk
Conduit is at risk of loss due to movements in market factors. The main market risks Conduit is
exposed to include:
\u2022
Reinsurance risk;
\u2022
Investment risk; and
\u2022
Currency risk.
Reinsurance risk
Conduit is exposed to reinsurance market risk from several sources, including the following:
\u2022
The advent or continuation of a soft market, which may result in a stabilisation or decline
in premium rates and/or terms and conditions for certain classes, or across all classes;
\u2022
The actions and reactions of key competitors, which may directly result in volatility in premium
volumes and rates, fee levels and other input costs;
\u2022
Market events, including unusual inflation in rates, may result in a limit in the availability of cover,
causing political intervention or national remedies;
\u2022
Failure to maintain broker and cedant relationships, leading to a limited or substandard choice of
risks inconsistent with Conduit\u2019s risk appetite;
\u2022
Changes in laws and regulation, including capital, governance or licensing requirements; and
\u2022
Changes in the geopolitical environment.
The most important method to mitigate reinsurance market risk is to maintain strict underwriting
standards. Conduit manages reinsurance market risk in numerous ways, including the following:
\u2022
Reviewing and amending underwriting plans and outlook as necessary;
\u2022
Reducing exposure to, or withdrawing from, market sectors where conditions have reached
unattractive levels;
\u2022
Purchasing appropriate, cost-effective reinsurance cover to mitigate exposures;
\u2022
Closely monitoring changes in rates, terms and conditions and inflation;
\u2022
Ensuring through rigorous underwriting criteria that surplus capital does not drive
short-term risk appetite;
\u2022
Holding an underwriting roundtable meeting, typically held at least weekly (and more frequently
during key renewal periods), where deal flow, pricing and opportunities are discussed;
\u2022
Holding quarterly management Underwriting Oversight Committee meetings that consider matters
that include underwriting performance for CRL;
\u2022
Holding management Risk Oversight Committee meetings that consider matters that include the
risk management framework, capital management, underwriting exposure accumulation and
outward reinsurance strategy;
\u2022
Holding an annual strategy review meeting;
\u2022
Holding a quarterly Underwriting Committee board meeting that considers matters including
underwriting performance for CRL;
\u2022
Holding a quarterly Risk, Capital and Compliance Committee meeting to review relevant risk and
capital considerations for CRL; and
\u2022
Holding regular meetings with regulators and rating agencies.
Reinsurance finance risk
Estimates of future cash flows for incurred claims are discounted on initial recognition and then re-
measured to current rates as at each reporting date. Reinsurance liabilities and ceded assets for
incurred claims are therefore sensitive to the level of market interest rates. Interest rate risk
on reinsurance contracts is the risk that the value of the future cash flows will fluctuate due to changes
in market interest rates. Movements in interest rates may lead to an adverse impact on the value of
Conduit\u2019s reinsurance contract assets and liabilities. Conduit manages this risk by monitoring the
duration of reinsurance contract cash flows and adopting policies regarding asset and liability
matching to reduce the volatility arising from interest rate movements on assets and liabilities in the
consolidated statement of comprehensive income.
The total reinsurance contract assets and liabilities exposed to interest rate risk are detailed below:
2025
2024
As at 31 December
Note
$m
$m
Ceded asset for incurred claims
15
50.1
41.2
Liability for incurred claims
15
(1,366.2)
(978.0)
Total
(1,316.1)
(936.8)
Discount rates
All future cash flows are discounted using yield curves that are adjusted to reflect the characteristics of the cash flows and the liquidity of the reinsurance contracts. Conduit determines its discount rates
using a bottom-up method of using a risk-free rate, plus an illiquidity premium where applicable. Risk-free rates are determined by reference to the yields published by EIOPA for the relevant, material
currencies. The illiquidity premium is estimated by reference to observable market corporate bond yields.
The annual spot rates, including illiquidity premium, used for the re-measurement of the net liability for incurred claims as at the balance sheet date are shown below for all portfolios:
2025
2024
As at 31 December
1 year
3 years
5 years
10 years
1 year
3 years
5 years
10 years
USD
3.93%
3.84%
3.97%
4.34%
4.68%
4.56%
4.52%
4.57%
EUR
2.58%
2.78%
2.98%
3.36%
2.74%
2.59%
2.64%
2.77%
GBP
4.04%
4.03%
4.17%
4.55%
4.96%
4.65%
4.54%
4.57%
The sensitivity of Conduit\u2019s net reinsurance liability for incurred claims to interest rate movements is
detailed below, assuming linear movements in interest rates:
2025
2024
As at 31 December
$m
%
$m
%
Immediate shift in yield (basis points)
100
33.6
2.6
25.1
2.7
75
25.3
1.9
18.9
2.0
50
17.0
1.3
12.7
1.4
25
8.5
0.6
6.4
0.7
0
\u2013
\u2013
\u2013
\u2013
-25
(8.6)
(0.7)
(6.4)
(0.7)
-50
(17.3)
(1.3)
(12.9)
(1.4)
-75
(26.0)
(2.0)
(19.5)
(2.1)
-100
(34.8)
(2.6)
(26.1)
(2.8)
nvestment risk
Movements in investments resulting from changes in interest and inflation rates, credit spreads, and
currency exchange rates, among other factors, may lead to an adverse impact on the value of
Conduit\u2019s investment portfolio.
The management Investment Committee is responsible for all investment-related decisions and
investment guidelines. The investment guidelines set the parameters within which Conduit\u2019s external
managers must operate. Important parameters of these guidelines include permissible asset classes,
duration ranges, credit quality, permitted currency, maturity, industry sectors, geographical, sovereign
and issuer exposures. Guideline compliance is monitored on a monthly basis. The portfolio of fixed
maturity securities is currently managed by four external managers. Their performance is monitored
on an ongoing basis. Conduit projects the level of funds required to meet near-term obligations and
cash flow needs following extreme events in order to ensure adequate liquidity is maintained. Conduit
also prioritises liquid asset classes with higher credit quality and shorter duration so that Conduit can
meet reinsurance and other near-term obligations. Conduit has split the portfolio into a short-tail
mandate, to better match the property and specialty classes of business, and a long-tail mandate, to
better match the casualty classes of business and some aspects of the specialty classes of business.
The short-tail mandate will be slightly shorter duration than the long-tail mandate.
Conduit reviews the composition, duration and asset allocation of its investment portfolio on a regular
basis to respond to changes in interest rates and other market conditions. If certain asset classes are
anticipated to produce a higher return within management\u2019s risk tolerance, an adjustment in asset
allocation may be made. Conversely, if the risk profile is expected to move outside of tolerance levels,
adjustments may be made to reduce the risks in the portfolio.
Conduit models various periods of significant stress in order to better understand the investment
portfolio\u2019s risks and exposures. The scenarios represent what could, and most likely will, occur \u2013 albeit
not in the exact form of the scenarios, which are based on historic periods of volatility. Conduit also
monitors the portfolio impact of more severe scenarios consisting of extreme shocks.
Conduit focuses on the most significant risks in its investment portfolio which are interest rate risk,
credit risk and liquidity risk, and has built stress testing and risk analytics around these risks to ensure
they are within tolerances and preferences. Conduit seeks to invest in issuers with more sustainable
business practices on balance, as it believes that this will also help reduce risk in the portfolio.
Strategic asset allocation reviews will be undertaken periodically to assess Conduit\u2019s overall
investment strategy and to consider alternative asset allocations to achieve the best risk-adjusted
return within Conduit\u2019s risk appetite. Any resulting recommendations would be approved by the
appropriate management committee(s) and reported to the Board. The Investment Committee meets
quarterly to ensure that the strategic and tactical investment actions were consistent with investment
risk preferences, appetite, risk and return objectives and tolerances. The investment risk tolerances
have been incorporated into the risk framework.
The investment mix by mandate and sector of Conduit\u2019s portfolio of fixed maturity securities
is as follows:
Estimated fair
Estimated fair
Estimated fair
value short-tail
value long-tail
value total
As at 31 December 2025
$m
$m
$m
Short-term investments
14.1
0.3
14.4
US treasuries
294.5
253.5
548.0
US agency debt
2.0
2.6
4.6
US municipals
11.3
7.9
19.2
Non-US government and agency
\u2013
3.4
3.4
Asset-backed
205.4
32.3
237.7
US government agency mortgage-backed
121.4
132.0
253.4
Non-agency mortgage-backed
38.2
24.6
62.8
Agency commercial mortgage-backed
5.6
\u2013
5.6
Non-agency commercial mortgage-backed
46.2
54.3
100.5
Corporate
354.7
303.1
657.8
Total
1,093.4
814.0
1,907.4
Estimated
Estimated
Estimated
Non-US
fair value
fair value
fair value
Other
government
short-tail
long-tail
total
Financials
industries
and agency
Total
As at 31 December 2024
$m
$m
$m
As at 31 December 2024
$m
$m
$m
$m
Short-term investments
29.4
6.0
35.4
US
210.9
205.8
\u2013
416.7
US treasuries
297.6
176.5
474.1
Canada
30.7
1.0
\u2013
31.7
US agency debt
1.9
2.5
4.4
UK
27.5
5.2
\u2013
32.7
US municipals
14.2
6.5
20.7
Other countries
41.6
6.4
\u2013
48.0
Non-US government and agency
\u2013
\u2013
\u2013
Total
310.7
218.4
\u2013
529.1
Asset-backed
171.6
39.4
211.0
The sector allocation of corporate bonds is as follows:
US government agency mortgage-backed
63.5
83.8
147.3
2025
2024
Non-agency mortgage-backed
22.0
8.6
30.6
As at 31 December
$m
%
$m
%
Agency commercial mortgage-backed
7.0
\u2013
7.0
Financials
336.8
51.2
310.7
58.7
Non-agency commercial mortgage-backed
30.6
36.1
66.7
Industrials
284.0
43.2
193.5
36.6
Corporate
311.5
217.6
529.1
Utilities
37.0
5.6
24.9
4.7
Total
657.8
100.0
529.1
100.0
Total
949.3
577.0
1,526.3
Corporate and non-US government and agency bonds by country are as follows:
Non-US
Other
government
Financials
industries
and agency
Total
As at 31 December 2025
$m
$m
$m
$m
US
241.7
300.9
\u2013
542.6
Canada
36.9
2.9
2.9
42.7
UK
25.1
4.5
\u2013
29.6
Other countries
33.1
12.7
0.5
46.3
Total
336.8
321.0
3.4
661.2
Conduit\u2019s investment portfolio is comprised of fixed maturity securities and cash and cash equivalents.
Fair values can be impacted by movements in interest rates, credit ratings, exchange rates, the current
economic environment and outlook. The estimated fair value of the portfolio of fixed maturity
securities is generally inversely correlated to movements in market interest rates. If market interest
rates fall, the estimated fair value of Conduit\u2019s portfolio of fixed maturity securities would tend to
rise and vice versa. The sensitivity of the price of fixed maturity securities to movements in interest
rates is indicated by their duration. The greater a security\u2019s duration, the greater its price volatility
to movements in interest rates. The sensitivity of Conduit\u2019s portfolio of fixed maturity securities to
interest rate movements is detailed in the following table, assuming linear movements in interest rates.
2025
2024
As at 31 December
$m
%
$m
%
Immediate shift in yield (basis points)
100
(58.9)
(3.1)
(41.0)
(2.7)
75
(43.9)
(2.3)
(30.8)
(2.0)
50
(29.0)
(1.5)
(20.5)
(1.3)
25
(14.4)
(0.8)
(10.3)
(0.7)
0
\u2013
\u2013
\u2013
\u2013
-25
14.2
0.7
11.6
0.8
-50
28.2
1.5
23.1
1.5
-75
42.0
2.2
34.7
2.3
-100
55.6
2.9
46.3
3.0
Conduit mitigates interest rate risk on the investment portfolio by establishing and monitoring
duration ranges in its investment guidelines. The duration of the portfolio is matched to the modelled
expected duration of the reinsurance reserves, within a permitted range. The permitted duration range
for the portfolio is between 1.5 and 5 years. The overall duration for the fixed maturity securities,
managed cash and cash equivalents is 2.8 years as at 31 December 2025 (as at 31 December 2024:
2.5 years).
In addition to duration management, Conduit monitors VaR to measure potential losses in the
estimated fair values of its cash and invested assets and to understand and monitor risk. The VaR
calculation is performed using variance/covariance risk modelling. Securities are valued individually
using standard market pricing models. These security valuations serve as the input to many risk
analytics. The principal VaR measure that is produced is an annual VaR at the 99th percentile
confidence level. Under normal conditions, the portfolio is not expected to lose more than the VaR
metric listed below, 99% of the time over a one-year time horizon. The appropriateness of this
measure is considered by the Investment Committee periodically.
Conduit\u2019s annual VaR calculation is as follows:
2025
2024
% of
% of
shareholders\u2019
shareholders\u2019
As at 31 December
$m
equity
$m
equity
99th percentile confidence level
97.0
8.8%
102.2
9.7%
Currency risk
Conduit is susceptible to fluctuations in rates of foreign exchange, principally between the US dollar and pounds sterling and the US dollar and the euro. Even though risks are assumed on a worldwide basis,
they are predominantly denominated in US dollars. Conduit is exposed to currency risk to the extent its assets are denominated in different currencies to its liabilities. Conduit is also exposed to translation risk
on non-monetary assets and liabilities. Foreign currency gains and losses are recorded in the period they occur in the consolidated statement of comprehensive income.
Conduit hedges monetary non-US dollar liabilities primarily with non-US dollar assets but may also use derivatives, such as currency forwards, to mitigate foreign currency exposures. The main foreign
currency exposure relates to its reinsurance and ceded reinsurance assets and liabilities, cash holdings and dividend payable, if applicable.
The following table summarises the carrying value of all monetary and non-monetary assets and liabilities categorised by Conduit\u2019s main currencies.
USD
GBP
EUR
Other
Total
As at 31 December 2025
$m
$m
$m
$m
$m
Total assets
2,175.3
31.7
72.4
46.0
2,325.4
Total liabilities
(1,064.4)
(34.1)
(80.8)
(43.7)
(1,223.0)
Net assets (liabilities)
1,110.9
(2.4)
(8.4)
2.3
1,102.4
USD
GBP
EUR
Other
Total
As at 31 December 2024
$m
$m
$m
$m
$m
Total assets
1,801.5
27.4
40.1
37.2
1,906.2
Total liabilities
(758.4)
(24.2)
(39.4)
(33.0)
(855.0)
Net assets (liabilities)
1,043.1
3.2
0.7
4.2
1,051.2
The impact on profit from a proportional foreign exchange movement of 10.0% against the US dollar at year end spot rates would be a decrease or increase of $0.5 million (31 December 2024: increase or
decrease of $1.3 million).", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f214": { "value": "
c. Liquidity risk
Liquidity risk is the risk that cash may not be available to pay obligations when they are due without
incurring unreasonable costs. Conduit\u2019s main exposure to liquidity risk is with respect to its reinsurance
and investment activities. Conduit is exposed if proceeds from the sale of financial assets are not
sufficient to fund obligations arising from reinsurance contracts and/or other liabilities. Conduit can be
exposed to fund daily calls on its available investment assets, principally to settle reinsurance claims
and/or to fund trust accounts following a large catastrophe loss, or other collateral requirements.
Liquidity risk exposures related to reinsurance activities are as follows:
\u2022
Large catastrophic events, or multiple medium-sized events in quick succession, requiring the
payment of high-value claims within a short time frame or to fund trust accounts established to
collateralise claims payment liabilities;
\u2022
Failure of cedants to meet their contractual obligations with respect to the timely payment
of premiums; and
\u2022
Failure of Conduit\u2019s ceded reinsurers to meet their contractual obligations to pay claims within a
timely manner.
Liquidity risk exposures related to investment activities are as follows:
\u2022
Adverse market movements and/or a duration mismatch to obligations, resulting in investments
needing to be disposed of at a significant realised loss; and
\u2022
An inability to liquidate investments due to market conditions.
Conduit\u2019s investment strategy is to hold high quality, liquid securities sufficient to meet reinsurance
liabilities and other near-term liquidity requirements. Portfolios are specifically designed to ensure
funds are readily available in an extreme event.
The maturity dates of Conduit\u2019s portfolio of fixed maturity securities are as follows:
Short-tail
Long-tail
Total
As at 31 December 2025
$m
$m
$m
Fixed maturity securities at FVTPL
Less than one year
145.3
56.9
202.2
Between one and two years
144.9
52.7
197.6
Between two and three years
167.3
94.4
261.7
Between three and four years
59.1
63.6
122.7
Between four and five years
78.0
62.9
140.9
Over five years
82.0
240.3
322.3
Asset-backed and mortgage-backed
416.8
243.2
660.0
Total
1,093.4
814.0
1,907.4
Short-tail
Long-tail
Total
As at 31 December 2024
$m
$m
$m
Fixed maturity securities at FVTPL
Less than one year
134.7
11.4
146.1
Between one and two years
169.2
64.7
233.9
Between two and three years
120.3
46.9
167.2
Between three and four years
61.1
95.5
156.6
Between four and five years
68.2
50.1
118.3
Over five years
101.1
140.5
241.6
Asset-backed and mortgage-backed
294.7
167.9
462.6
Total
949.3
577.0
1,526.3
The estimated maturity profile of the reinsurance liability for incurred claims and financial liabilities of Conduit is as follows:
Years until liability becomes due \u2013 discounted
2025
2024
Carrying
Less than
Carrying
Less than
value
one
One to three
Three to five
Over five
Total
value
one
One to three
Three to five
Over five
Total
As at 31 December
Note
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
Reinsurance liability for incurred claims
15
1,366.2
440.1
543.5
227.7
154.9
1,366.2
978.0
280.4
403.9
175.8
117.9
978.0
Other reinsurance payables
15
11.4
11.4
\u2013
\u2013
\u2013
11.4
6.3
6.3
\u2013
\u2013
\u2013
6.3
Other payables
11.7
11.7
\u2013
\u2013
\u2013
11.7
18.9
18.9
\u2013
\u2013
\u2013
18.9
Lease liabilities
16
0.8
0.8
\u2013
\u2013
\u2013
0.8
1.6
0.8
0.8
\u2013
\u2013
1.6
Total
1,390.1
464.0
543.5
227.7
154.9
1,390.1
1,004.8
306.4
404.7
175.8
117.9
1,004.8
Actual maturities of the above may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations with or without call or prepayment penalties. The estimation
of the ultimate liability for incurred claims is complex and incorporates a significant amount of judgement. The timing of payments is also uncertain and cannot be predicted as simply as for other financial
liabilities. Actuarial and statistical techniques, past experience and management\u2019s judgement have been used to determine a likely settlement pattern.
As at 31 December 2025, cash and cash equivalents were $339.2 million (31 December 2024: $313.2 million). Conduit manages its liquidity risks via its investment strategy to hold high quality, liquid securities,
sufficient to meet its reinsurance liabilities and other near-term liquidity requirements. In addition, Conduit has established asset allocation and maturity parameters within the investment guidelines such that
the majority of the investments are in high quality assets which could be converted into cash promptly and at minimal expense. Conduit monitors market changes and outlook and reallocates assets as it
deems necessary.
As at 31 December 2025, Conduit considers it has more than adequate liquidity to pay its obligations as they fall due even if difficult investment market conditions were to prevail for a period of time.", "dimensions": { "concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f215": { "value": "
d. Credit risk
Credit risk is the risk that a counterparty may fail to pay, or repay, a debt or obligation. Conduit is
exposed to credit risk on its fixed maturity investment portfolio, its expected premium cash flows
due from cedants and on ceded reinsurance recoverables.
Credit risk on Conduit\u2019s portfolio of fixed maturity securities is mitigated through the investment
policy to invest in instruments of high credit quality issuers and to limit the amounts of credit exposure
with respect to particular ratings categories and any one issuer. Securities rated below an S&P or
equivalent rating of BBB may comprise no more than 15.0% of the portfolio. Conduit also limits
exposure to individual issuers, with declining limits for less highly rated issuers. Conduit therefore does
not expect any significant credit concentration risk on its investment portfolio, except for fixed
maturity securities issued by the US government and its agencies.
Conduit is potentially exposed to counterparty credit risk in relation to the total expected premium
cash flows due from reinsurance brokers and cedants and on ceded reinsurance recoverables due
from Conduit\u2019s reinsurers. Credit risk on total expected premium cash flows due from cedants is
managed by conducting business with reputable broking organisations, with whom Conduit has
established relationships, and by rigorous cash collection procedures. Conduit also has a broker
approval process in place. Credit risk from ceded reinsurance recoverables is primarily managed by
the review and approval of reinsurer security, with ongoing monitoring in place.
Ceded reinsurance recoverables are recorded within ceded reinsurance contract assets as the ceded
asset for incurred claims which is shown in note 15.
The table opposite presents an analysis of Conduit\u2019s major exposures to counterparty credit risk,
based on their rating. Expected premium cash flows are not rated, however there is limited default
risk associated with these amounts.
Cash and cash
equivalents and fixed
Ceded asset for
maturity securities
incurred claims
As at 31 December 2025
$m
$m
AAA
657.1
\u2013
AA+, AA, AA-
934.4
\u2013
A+, A, A-
526.1
35.8
BBB+, BBB, BBB-
124.9
\u2013
Other
4.1
14.3
Total
2,246.6
50.1
Cash and cash
equivalents and fixed
Ceded asset for
maturity securities
incurred claims
As at 31 December 2024
$m
$m
AAA
566.4
\u2013
AA+, AA, AA-
742.2
\u2013
A+, A, A-
441.5
24.6
BBB+, BBB, BBB-
89.4
\u2013
Other
\u2013
16.6
Total
1,839.5
41.2
The ceded reinsurance assets classified as other are fully collateralised.
As at 31 December 2025 the average credit quality of Conduit\u2019s cash and cash equivalents and
portfolio of fixed maturity securities was AA (31 December 2024: AA).
Total expected premium cash flows represents the premium, net of deductions, expected to be
received for past and future reinsurance coverage. The following table shows total expected premium
cash flows that are not yet due and those that are past due but not impaired, which represents the
exposure to credit risk on reinsurance contracts issued at the balance sheet date.
2025
2024
As at 31 December
$m
$m
Not yet due
462.0
440.1
Less than 90 days past due
17.3
21.4
Over 90 days past due
8.1
4.8
Total
487.4
466.3
For the years ended 31 December 2025 and 2024 no provisions have been made for impaired
or irrecoverable balances and no amount was charged to the consolidated statement of
comprehensive income in respect of bad debts.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f216": { "value": "Segmental reporting
Management and the Board review Conduit\u2019s business and evaluates its performance primarily
by three segments: Property, Casualty and Specialty. These are considered to be the reportable
segments for the purposes of segmental reporting. Further classes of business are underwritten
within each reportable segment. The nature of these individual classes is discussed further in the
Risk disclosures section in note 3.
Reportable
Operations and classes of business
segments
Property
US and international property catastrophe and non-catastrophe risks on an excess
of loss and proportional contract basis.
Casualty
US and international casualty risks principally including directors and officers liability,
financial institutions liability, general liability, medical malpractice, professional liability
and transactional liability.
Specialty
Diverse portfolio of business, including aviation, energy, engineering and
construction, environmental, marine, renewables, political violence and terrorism
and whole account.
Reportable segment performance is measured by the reinsurance service and finance result and the
combined ratio. The chief operating decision maker does not manage Conduit\u2019s assets by reportable
segment, and, accordingly, investment income and other non-underwriting related items are not
allocated to each reportable segment. Refer to the risk disclosures for more information. All amounts
reported are transactions with external parties and associates.
There are no significant inter-segmental transactions.
Property
Casualty
Specialty
Total
Year ended 31 December 2025
$m
$m
$m
$m
Reinsurance revenue by geographic region
US
268.4
131.3
13.7
413.4
Worldwide
140.0
74.4
110.0
324.4
Europe
49.5
49.4
20.8
119.7
Other
36.6
1.5
1.5
39.6
Reinsurance revenue
494.5
256.6
146.0
897.1
Property
Casualty
Specialty
Total
Year ended 31 December 20241
$m
$m
$m
$m
Reinsurance revenue by geographic region
US
239.1
111.3
10.9
361.3
Worldwide
157.0
63.9
100.5
321.4
Europe
34.8
39.4
22.9
97.1
Other
30.2
2.8
0.9
33.9
Reinsurance revenue
461.1
217.4
135.2
813.7
For the year ended 31 December 2025 there was no premium within the worldwide geographic region
written with external parties in Bermuda (31 December 2024: $0.7 million).
2025
20241
Property
Casualty
Specialty
Total
Property
Casualty
Specialty
Total
Year ended 31 December
$m
$m
$m
$m
$m
$m
$m
$m
Reinsurance revenue
494.5
256.6
146.0
897.1
461.1
217.4
135.2
813.7
Ceded reinsurance expenses
(107.9)
(1.2)
(10.0)
(119.1)
(81.7)
(1.4)
(10.6)
(93.7)
Net reinsurance revenue
386.6
255.4
136.0
778.0
379.4
216.0
124.6
720.0
Reinsurance losses and loss related amounts, discounted
(305.9)
(187.3)
(130.0)
(623.2)
(274.0)
(156.7)
(100.2)
(530.9)
Reinsurance operating expenses
(41.3)
(15.5)
(8.4)
(65.2)
(39.3)
(14.0)
(7.2)
(60.5)
Reinsurance service expenses
(347.2)
(202.8)
(138.4)
(688.4)
(313.3)
(170.7)
(107.4)
(591.4)
Ceded reinsurance recoveries
2.3
-
18.0
20.3
(0.4)
-
3.4
3.0
Reinsurance service result
41.7
52.6
15.6
109.9
65.7
45.3
20.6
131.6
Net reinsurance finance income (expense)
(27.3)
(34.1)
(15.8)
(77.2)
(12.3)
(10.5)
(8.0)
(30.8)
Reinsurance service and finance result
14.4
18.5
(0.2)
32.7
53.4
34.8
12.6
100.8
Other operating expenses
(24.8)
(30.8)
Net unallocated revenue (expenses)
108.9
55.6
Total comprehensive income
116.8
125.6
Net loss ratio (discounted)
78.5%
73.3%
82.4%
77.5%
72.3%
72.5%
77.7%
73.3%
Reinsurance operating expense ratio
10.7%
6.1%
6.2%
8.4%
10.4%
6.5%
5.8%
8.4%
Other operating expense ratio
3.2%
4.3%
Combined ratio (discounted)
89.2%
79.4%
88.6%
89.1%
82.7%
79.0%
83.5%
86.0%
Net loss ratio (undiscounted)
86.4%
93.2%
94.1%
89.9%
79.8%
89.4%
90.0%
84.4%
Combined ratio (undiscounted)
97.1%
99.3%
100.3%
101.5%
90.2%
95.9%
95.8%
", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f217": { "value": "
5. Investment return
Net
Total
investment
Net realised
Net unrealised
investment
income
gains (losses)
gains (losses)
return
As at 31 December 2025
$m
$m
$m
$m
Fixed maturity securities
71.5
(0.4)
39.2
110.3
Cash and cash equivalents
9.2
\u2013
\u2013
9.2
Total
80.7
(0.4)
39.2
119.5
Net
Total
investment
Net realised
Net unrealised
investment
income
gains (losses)
gains (losses)
return
As at 31 December 2024
$m
$m
$m
$m
Fixed maturity securities
54.4
0.1
1.0
55.5
Cash and cash equivalents
10.6
\u2013
\u2013
10.6
Total
65.0
0.1
1.0
66.1
Included in net investment income is $2.0 million of investment management and custody fees for the
year ended 31 December 2025 (31 December 2024: $1.6 million). Net foreign exchange gains (losses)
on cash and cash equivalents and fixed maturity securities for the year ended 31 December 2025 was
$9.3 million (31 December 2024: $(4.5) million). Foreign exchange impacts are not included in the
investment returns in the table above.
13. Investments
Cost or
amortised
Unrealised
Unrealised
Estimated
cost
gains
losses
fair value
As at 31 December 2025
$m
$m
$m
$m
Fixed maturity securities, at FVTPL
Short-term investments
14.4
\u2013
\u2013
14.4
US treasuries
547.2
4.6
(3.8)
548.0
US agency debt
4.6
\u2013
\u2013
4.6
US municipals
18.8
0.5
(0.1)
19.2
Non-US government and agency
3.3
0.1
\u2013
3.4
Asset-backed
237.3
0.9
(0.5)
237.7
US government agency mortgage-backed
263.4
2.0
(12.0)
253.4
Non-agency mortgage-backed
63.5
0.3
(1.0)
62.8
Agency commercial mortgage-backed
5.7
0.1
(0.2)
5.6
Non-agency commercial mortgage-backed
101.9
0.7
(2.1)
100.5
Corporate
651.9
9.7
(3.8)
657.8
Total
1,912.0
18.9
(23.5)
1,907.4
Cost or
amortised
Unrealised
Unrealised
Estimated
cost
gains
losses
fair value
As at 31 December 2024
$m
$m
$m
$m
Fixed maturity securities, at FVTPL
Short-term investments
35.4
\u2013
\u2013
35.4
US treasuries
485.0
0.6
(11.5)
474.1
US agency debt
4.5
\u2013
(0.1)
4.4
US municipals
20.9
0.2
(0.4)
20.7
Non-US government and agency
\u2013
\u2013
\u2013
\u2013
Asset-backed
211.7
0.5
(1.2)
211.0
US government agency mortgage-backed
164.8
0.2
(17.7)
147.3
Non-agency mortgage-backed
31.7
0.2
(1.3)
30.6
Agency commercial mortgage-backed
7.4
\u2013
(0.4)
7.0
Non-agency commercial mortgage-backed
70.6
0.1
(4.0)
66.7
Corporate
538.1
2.2
(11.2)
529.1
Total
1,570.1
4.0
(47.8)
1,526.3
As at 31 December 2025 other assets and other payables included nil and $0.5 million for investments
sold and purchased, respectively (31 December 2024: nil and $6.4 million, respectively).
Conduit determines the estimated fair value of each individual security utilising the highest-level
inputs available. Prices for the investment portfolio are provided via a third-party investment
accounting firm whose pricing processes and the controls thereon are subject to an annual audit
on both the operation and the effectiveness of those controls. Various recognised reputable pricing
sources are used including pricing vendors. The pricing sources use bid prices where available,
otherwise indicative prices are quoted based on observable market trade data. The prices provided
are compared to the investment managers\u2019 pricing.
Conduit has not made any adjustments to any pricing provided by independent pricing services or
its third-party investment managers for the years ended 31 December 2025 and 2024. The fair value
of securities in the investment portfolio is estimated using the following techniques:
LEVEL (I) \u2013 Level (I) investments are securities with quoted prices in active markets. A financial
instrument is regarded as quoted in an active market if quoted prices are readily and regularly
available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and
those prices represent actual and regularly occurring market transactions on an arm\u2019s length basis.
LEVEL (II) \u2013 Level (II) investments are securities with quoted prices in active markets for similar assets
or liabilities or securities valued using other valuation techniques for which all significant inputs are
based on observable market data. Instruments included in Level (II) are valued via independent
external sources using directly observable inputs to models or other valuation methods. The valuation
methods used are typically industry accepted standards and include broker-dealer quotes and pricing
models including present values and future cash flows with inputs such as yield curves, credit spreads,
interest rates, prepayment speeds and default rates.
LEVEL (III) \u2013 Level (III) investments are securities for which valuation techniques are not based
on observable market data and require significant management judgement.
Conduit determines whether transfers have occurred between levels of the fair value hierarchy by
re-assessing the categorisation at the end of each reporting period. Transfers from Level (I) to (II)
securities amounted to $56.1 million and transfers from Level (II) to (I) securities amounted to
$101.0 million during the year ended 31 December 2025 using end of current period positions and
estimated fair values. Transfers from Level (I) to (II) securities amounted to $19.1 million and transfers
from Level (II) to (I) securities amounted to $54.7 million during the year ended 31 December 2024
using end of current period positions and estimated fair values. There were no investments included
in Level (III) for either year end.
The fair value hierarchy of Conduit\u2019s investment portfolio is as follows:
Level I
Level II
Total
As at 31 December 2025
$m
$m
$m
Fixed maturity securities, at FVTPL
Short-term investments
12.3
2.1
14.4
US treasuries
548.0
\u2013
548.0
US agency debt
2.0
2.6
4.6
US municipals
\u2013
19.2
19.2
Non-US government and agency
\u2013
3.4
3.4
Asset-backed
\u2013
237.7
237.7
US government agency mortgage-backed
\u2013
253.4
253.4
Non-agency mortgage-backed
\u2013
62.8
62.8
Agency commercial mortgage-backed
\u2013
5.6
5.6
Non-agency commercial mortgage-backed
\u2013
100.5
100.5
Corporate
176.7
481.1
657.8
Total
739.0
1,168.4
1,907.4
", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f218": { "value": "
7. Employee benefits and other incentives
The following table lists the assumptions used in the stochastic model for the MIP awards:
Aggregate remuneration and other incentives of Conduit\u2019s employees is as follows:
Assumptions
2025
2024
Dividend yield
0%
Expected volatility1
range from 17.2% \u2013 19.0%
Year ended 31 December
$m
$m
Wages and salaries
17.1
14.9
Risk-free interest rate2
range from 0.3% \u2013 0.6%
Pension benefit
2.0
1.6
Expected life of instruments
range from 4 to 7 years
Bonus and other benefits
18.2
18.1
1 The expected volatility was calculated based on a comparator group of companies.
Total cash compensation
37.3
34.6
2 The risk-free interest rate is based on the yield of a US government bond on the date of grant.
Equity-based incentive expense
9.3
7.1
Total employee benefits and other incentives
46.6
41.7
Equity-based incentive schemes
MIP
Prior to the IPO, a MIP was created. The purpose of the MIP was to provide an incentive scheme for
the founders and initial employees for their services in establishing the foundations of Conduit. The
incentive is based around shares in CML, which will be automatically exchanged for ordinary shares of
CHL for an aggregate value equivalent to up to 15% of the excess of the market value of CHL over and
above the Invested Equity, subject to the satisfaction of the vesting conditions. All outstanding grants
have an exercise period of four to seven years from the grant date. The fair value is estimated using a
stochastic Monte Carlo model.
CML issued 100,000 A1 shares and 100,000 A2 shares during the period ended 31 December 2020
at a subscription price of \u00a31.72 and $2.26, respectively. Refer to note 18 for additional details.
The shares were granted prior to the IPO and therefore discounts for business viability and lack of
marketability were also applied. There are significant risks associated with an IPO and the instruments
are also illiquid until the tranche vesting dates. Management therefore selected their best estimates at
the time for these discounts. These assumptions were highly judgemental and input from advisers was
sought. Management also considered alternative assumptions and concluded there was not a material
impact on the estimated valuation selected. The calculation of the equity-based incentive expense
assumes no forfeitures due to employee turnover, with subsequent adjustments to reflect actual
experience. The assumptions and estimated valuation selected resulted in 20% being expensed
upfront for certain employees as this portion was not tied to service conditions and was fully
expensed in the period ended 31 December 2020.
Conditions of the MIP include:
\u2022
The incentives are to be equity settled and have therefore been accounted for in accordance with
IFRS 2;
\u2022
The value of the services received in exchange for the share-based incentives is measured by
reference to the estimated fair value of the incentives at their grant date, with the estimated fair
value recognised in the consolidated statement of comprehensive income, together with a
corresponding increase in other reserves within shareholders\u2019 equity, on a straight-line basis over
the vesting period, based on an estimate of the number of shares that will ultimately vest;
\u2022
Vesting conditions, other than market conditions linked to the share price of CHL, are not taken
into account when estimating the fair value; and
\u2022
At the end of each reporting period Conduit revises its estimates of the number of shares that are
expected to vest due to non-market conditions and recognises the impact of the revision to original
estimates, if any, in the consolidated statement of comprehensive income, with a corresponding
adjustment to shareholders\u2019 equity.
DSBP
Number of
A percentage of each employee\u2019s bonus is automatically deferred into shares as nil cost options.
LTIP
awards
The nil cost options vest annually in separate equal tranches over a three year period from the date
Outstanding as at 31 December 2023
365,984
of grant and do not have associated performance criteria attached to the awards. These awards
Granted
658,446
accrue dividend equivalents for all dividends declared where the record date falls between the grant
Exercised
\u2013
date and date of exercise, and are paid at the time of exercise.
Forfeited
(41,733)
Number of
Outstanding as at 31 December 2024
982,697
DSBP
awards
Outstanding as at 31 December 2023
782,692
Granted
1,145,537
Granted
1,102,968
Exercised
\u2013
Exercised
(339,282)
Forfeited
(56,353)
Forfeited
(24,363)
Outstanding as at 31 December 2025
2,071,881
Outstanding as at 31 December 2024
1,522,015
Granted
1,074,807
Exercised
(693,573)
Forfeited
(15,947)
Outstanding as at 31 December 2025
1,887,302
LTIP \u2013 time vesting criteria
The LTIP is a retention scheme with awards granted to staff members as nil cost options. The nil
cost options vest over a three year period from the date of grant and the time vesting criteria are
the only stipulations attached to the awards. These awards accrue dividend equivalents for all
dividends declared where the record date falls between the grant date and date of exercise, and
are paid at the time of exercise.
LTIP \u2013 performance criteria
The LTIP awards with performance criteria vest three years from the date of grant and are dependent
on certain performance criteria being met. A maximum of 75% of the awards will vest if the change in
NTAVS is in excess of a required threshold, while the remaining 25% is subject to the TSR return over
the vesting period being in excess of a required threshold. These awards accrue dividend equivalents
for all dividends declared where the record date falls between the grant date and date of exercise,
and are paid at the time of exercise.
Number of
LTIP
awards
Outstanding as at 31 December 2023
\u2013
Granted
417,780
Exercised
\u2013
Forfeited
\u2013
Outstanding as at 31 December 2024
417,780
Granted
609,972
Exercised
\u2013
Forfeited
\u2013
Outstanding as at 31 December 2025
1,027,752
", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f219": { "value": "
8. Other operating expenses
2025
2024
As at 31 December
$m
$m
Other operating expenses include:
Audit fees
1.2
1.1
Other auditor services
0.1
0.1
Total
1.3
1.2
During the year ended 31 December 2025, KPMG Audit Limited provided non-audit services in relation
to Conduit\u2019s 2025 interim review and carbon emission disclosures. Fees for non-audit services in the
year ended 31 December 2025 totalled $0.1 million (31 December 2024: $0.1 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f220": { "value": "
9. Financing costs
2025
2024
As at 31 December
$m
$m
LOC and trust fees
1.2
1.1
Interest expense on lease liabilities
\u2013
0.1
Total
1.2
1.2
Refer to note 17 for details of Conduit\u2019s financing arrangements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceCostExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f221": { "value": "
10. Government assistance
Bermuda Tax Credits (Tax Credit Act 2025)
In December 2025, the Bermuda Government enacted the Tax Credit Act 2025, introducing
substance-based tax credits designed to support entities demonstrating substantive economic
presence in Bermuda. Conduit qualifies for these credits.
The credits are earned in full each annual period based on Conduit\u2019s eligible payroll costs,
Bermuda-based expenditure and other qualifying investments in people. Once earned, the credits
are utilised over a four-year period as an offset to payroll tax, subject to annual utilisation caps.
Any portion that cannot be utilised within the four-year period is payable in cash to Conduit by
the Bermuda Government.
For the year ended 31 December 2025, Conduit recognised tax credits of $6.9 million (2024: nil) in the
statement of comprehensive income. These credits have been recorded as a reduction in reinsurance
and other operating expenses, consistent with the nature of the underlying cost. The corresponding
receivable, included in other assets, represents the portion of the 2025 credit expected to be utilised in
future periods.
As at 31 December 2025, Conduit recognised a receivable of $8.0 million (2024: nil), representing the
unused portion of the 2025 credit. Recognition of the receivable reflects management\u2019s assessment
that Conduit satisfies the eligibility requirements of the Tax Credit Act and has reasonable assurance
of recovery.
The difference of $1.1 million (2024: nil) between the credit recognised in the statement of
comprehensive income and the receivable reflects the application of Conduit's IFRS 17 expense
allocation methodology, including the deferral of acquisition-related operating expenses in accordance
with Conduit\u2019s accounting policy in that regard.
Further information on the accounting policy is provided in note 2.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGovernmentGrantsExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f222": { "value": "
Tax
Bermuda
CHL, CSL, CML and CRL have received an undertaking from the Bermuda government which exempts
them from all Bermuda local income, withholding and capital gains taxes until 31 March 2035. On 27
December 2023 the Bermuda government enacted legislation, the Bermuda CIT Act of 2023, into law.
CHL, CSL, CML and CRL are currently not in scope for this new legislation and as such, the exemptions
provided by the Bermuda government undertaking still apply.", "dimensions": { "concept": "ifrs-full:DisclosureOfTaxReceivablesAndPayablesExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f223": { "value": "
12. Cash and cash equivalents
2025
2024
As at 31 December
$m
$m
Cash at bank and in hand
28.8
25.4
Cash equivalents
310.4
287.8
Total
339.2
313.2
Cash equivalents include money market funds and other short-term highly liquid investments with
three months or less remaining until maturity at the time of purchase. The carrying amount of these
assets approximates their fair value. Refer to note 17 for cash and cash equivalents provided as
collateral under Conduit\u2019s financing arrangements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f224": { "value": "
A summary of interests in unconsolidated structured entities is as follows:
As at 31 December 2024
$m
$m
$m
2025
2024
Fixed maturity securities, at FVTPL
As at 31 December
$m
$m
Short-term investments
30.9
4.5
35.4
Fixed maturity securities, at FVTPL
US treasuries
474.1
\u2013
474.1
Asset-backed
237.7
211.0
US agency debt
1.9
2.5
4.4
US government agency mortgage-backed
253.4
147.3
US municipals
0.5
20.2
20.7
Non-agency mortgage-backed
62.8
30.6
Non-US government and agency
\u2013
\u2013
\u2013
Agency commercial mortgage-backed
5.6
7.0
Asset-backed
\u2013
211.0
211.0
Non-agency commercial mortgage-backed
100.5
66.7
US government agency mortgage-backed
\u2013
147.3
147.3
Total
660.0
462.6
Non-agency mortgage-backed
\u2013
30.6
30.6
Agency commercial mortgage-backed
\u2013
7.0
7.0
The fixed maturity structured entities are used to meet specific investment needs of borrowers and
Non-agency commercial mortgage-backed
\u2013
66.7
66.7
investors which cannot be met from standardised financial instruments available in the capital markets,
providing liquidity and diversification. While individual securities may differ in structure, the principles
Corporate
130.7
398.4
529.1
of the instruments are similar and it is appropriate to aggregate the investments into the categories
Total
638.1
888.2
1,526.3
detailed above.
14. Interests in structured entities
Unconsolidated structured entities in which Conduit has an interest
As part of Conduit\u2019s investment activities, it invests in unconsolidated structured entities. Conduit does
not sponsor any of the unconsolidated structured entities. The business relations of Conduit with the
structured entities set out below do not give rise to consolidation because the criteria for control
pursuant to IFRS 10, as contained in our consolidation principles, are not met.
The risk that Conduit faces in respect of the investments in structured entities is similar to the risk it
faces in respect of other financial investments held on the consolidated balance sheet. Fair value is
determined by market supply and demand, which is driven by investor evaluation of the credit risk
of the structure and changes in the term structure of interest rates which can change the expectation
of cash flows associated with the instrument and, therefore, its value in the market.
The maximum exposure to loss in respect of these structured entities would be the carrying value
of the instruments that Conduit holds. Generally, default rates would have to increase substantially
before Conduit would suffer a loss. This assessment is made prior to investing and regularly through
the holding period for the security. Refer to note 17 for investments provided as collateral under
Conduit\u2019s financing arrangements.", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestsInOtherEntitiesExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f225": { "value": "
15. Reinsurance contracts
The breakdown of portfolios of reinsurance contracts issued and reinsurance contracts held, that are
in an asset position and those in a liability position and by type of reinsurance asset or liability, is set
out below.
2025
2024
As at 31 December
$m
$m
Reinsurance contract liabilities
(1,210.5)
(834.5)
Liability for remaining coverage
167.1
149.8
Liability for incurred claims
(1,366.2)
(978.0)
Other reinsurance receivables (payables)
(11.4)
(6.3)
Reinsurance net asset (liability)
(1,210.5)
(834.5)
Ceded reinsurance contract assets
51.4
48.9
Ceded asset (liability) for remaining coverage
(3.5)
1.4
Ceded asset for incurred claims
50.1
41.2
Ceded other receivables (payables)
4.8
6.3
Ceded reinsurance net asset (liability)
51.4
48.9
The reconciliation from the opening to the closing balances of the liability for remaining coverage and
the liability for incurred claims for reinsurance contracts issued and ceded reinsurance contracts held
is shown on the next page. The reconciliation shows the movement in the liability by the reinsurance
service result, total comprehensive income (loss) and cash flows separately for reinsurance contracts
issued and ceded reinsurance contracts held.
2025
2024
Remaining
Remaining
coverage
Incurred claims
coverage
Incurred claims
Present value
Present value
Excluding loss
of future cash
Risk
Excluding loss
of future cash
Risk
Year ended 31 December ($m)
component
flows
adjustment
Total
component
flows
adjustment
Total
Opening reinsurance asset (liability)
149.8
(899.1)
(78.9)
(828.2)
109.7
(542.3)
(49.9)
(482.5)
Reinsurance revenue
897.1
\u2013
\u2013
897.1
813.7
\u2013
\u2013
813.7
Reinsurance service expenses
Incurred claims and other expenses
\u2013
(586.9)
(49.0)
(635.9)
\u2013
(514.8)
(35.3)
(550.1)
Amortisation of reinsurance acquisition expense cash flows
(49.9)
\u2013
\u2013
(49.9)
(46.0)
\u2013
\u2013
(46.0)
Changes to liabilities for incurred claims for past service
\u2013
(14.9)
12.3
(2.6)
\u2013
(3.7)
8.4
4.7
Reinsurance service expenses
(49.9)
(601.8)
(36.7)
(688.4)
(46.0)
(518.5)
(26.9)
(591.4)
Reinsurance service result
847.2
(601.8)
(36.7)
208.7
767.7
(518.5)
(26.9)
222.3
Reinsurance finance income (expense)
\u2013
(73.0)
(7.0)
(80.0)
\u2013
(30.3)
(2.4)
(32.7)
Effect of exchange rates
(1.4)
(8.2)
(0.8)
(10.4)
1.3
2.5
0.3
4.1
Total changes in comprehensive income (loss)
845.8
(683.0)
(44.5)
118.3
769.0
(546.3)
(29.0)
193.7
Investment components
29.7
(29.7)
\u2013
\u2013
27.4
(27.4)
\u2013
\u2013
Cash flows
Premiums received1
(907.6)
\u2013
\u2013
(907.6)
(803.2)
\u2013
\u2013
(803.2)
Claims and other attributable expenses paid
\u2013
369.0
\u2013
369.0
\u2013
216.9
\u2013
216.9
Reinsurance acquisition expense cash flows1
49.4
\u2013
\u2013
49.4
46.9
\u2013
\u2013
46.9
Total cash flows
(858.2)
369.0
\u2013
(489.2)
(756.3)
216.9
\u2013
(539.4)
Closing reinsurance asset (liability)
167.1
(1,242.8)
(123.4)
(1,199.1)
149.8
(899.1)
(78.9)
(828.2)
1
Certain reinsurance acquisition expense cash flows that are typically net settled have been re-presented in comparative periods in order to be consistent with the current period presentation.
2025
2024
Remaining
Remaining
coverage
Incurred claims
coverage
Incurred claims
Excluding loss
Present value
Excluding loss
Present value
component
of future cash
Risk
component
of future cash
Risk
Year ended 31 December ($m)
recovery
flows
adjustment
Total
recovery
flows
adjustment
Total
Opening ceded reinsurance asset (liability)
1.4
41.2
\u2013
42.6
(1.2)
42.6
\u2013
41.4
Ceded reinsurance expenses
(119.1)
\u2013
\u2013
(119.1)
(93.7)
\u2013
\u2013
(93.7)
Ceded reinsurance recoveries
Amounts recoverable on incurred claims
\u2013
3.6
\u2013
3.6
\u2013
3.4
\u2013
3.4
Changes to amounts recoverable for incurred claims
\u2013
16.7
\u2013
16.7
\u2013
(0.4)
\u2013
(0.4)
Ceded reinsurance recoveries
\u2013
20.3
\u2013
20.3
\u2013
3.0
\u2013
3.0
Reinsurance service result
(119.1)
20.3
\u2013
(98.8)
(93.7)
3.0
\u2013
(90.7)
Ceded reinsurance finance income (expense)
\u2013
2.8
\u2013
2.8
\u2013
1.9
\u2013
1.9
Effect of exchange rates
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Total changes in comprehensive income (loss)
(119.1)
23.1
\u2013
(96.0)
(93.7)
4.9
\u2013
(88.8)
Investment components
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Cash flows
Premiums paid
114.2
\u2013
\u2013
114.2
96.3
\u2013
\u2013
96.3
Recoveries received
\u2013
(14.2)
\u2013
(14.2)
\u2013
(6.3)
\u2013
(6.3)
Total cash flows
114.2
(14.2)
\u2013
100.0
96.3
(6.3)
\u2013
90.0
Closing ceded reinsurance asset (liability)
(3.5)
50.1
\u2013
46.6
1.4
41.2
\u2013
42.6
2025
2024
Remaining
Remaining
coverage
Incurred claims
coverage
Incurred claims
Present value
Present value
Excluding loss
of future cash
Risk
Excluding loss
of future cash
Risk
Year ended 31 December ($m)
component
flows
adjustment
Total
component
flows
adjustment
Total
Opening net reinsurance asset (liability)
151.2
(857.9)
(78.9)
(785.6)
108.5
(499.7)
(49.9)
(441.1)
Net reinsurance revenue
778.0
\u2013
\u2013
778.0
720.0
\u2013
\u2013
720.0
Net reinsurance service expenses
Net incurred claims and other expenses
\u2013
(583.3)
(49.0)
(632.3)
\u2013
(511.4)
(35.3)
(546.7)
Amortisation of reinsurance acquisition expense cash flows
(49.9)
\u2013
\u2013
(49.9)
(46.0)
\u2013
\u2013
(46.0)
Changes to net liabilities for incurred claims for past service
\u2013
1.8
12.3
14.1
\u2013
(4.1)
8.4
4.3
Net reinsurance service expenses
(49.9)
(581.5)
(36.7)
(668.1)
(46.0)
(515.5)
(26.9)
(588.4)
Reinsurance service result
728.1
(581.5)
(36.7)
109.9
674.0
(515.5)
(26.9)
131.6
Net reinsurance finance income (expense)
\u2013
(70.2)
(7.0)
(77.2)
\u2013
(28.4)
(2.4)
(30.8)
Effect of exchange rates
(1.4)
(8.2)
(0.8)
(10.4)
1.3
2.5
0.3
4.1
Total changes in comprehensive income (loss)
726.7
(659.9)
(44.5)
22.3
675.3
(541.4)
(29.0)
104.9
Investment components
29.7
(29.7)
\u2013
\u2013
27.4
(27.4)
\u2013
\u2013
Cash flows
Net premiums received1
(793.4)
\u2013
\u2013
(793.4)
(706.9)
\u2013
\u2013
(706.9)
Net claims and other attributable expenses paid
\u2013
354.8
\u2013
354.8
\u2013
210.6
\u2013
210.6
Reinsurance acquisition expense cash flows1
49.4
\u2013
\u2013
49.4
46.9
\u2013
\u2013
46.9
Total cash flows
(744.0)
354.8
\u2013
(389.2)
(660.0)
210.6
\u2013
(449.4)
Closing net reinsurance asset (liability)
163.6
(1,192.7)
(123.4)
(1,152.5)
151.2
(857.9)
(78.9)
(785.6)
1
Certain reinsurance acquisition expense cash flows that are typically net settled have been re-presented in comparative periods in order to be consistent with the current period presentation.
The estimation of the liability for incurred claims is a complex process which incorporates a significant amount of judgement. It is reasonably possible that uncertainties in the reserving process, delays in
cedants reporting losses to Conduit, together with the potential for unforeseen adverse developments, could lead to a material change in the liability for incurred claims. The liability established by Conduit
is viewed as adequate, however a 20% increase in estimated undiscounted losses would have a $304.9 million adverse impact on comprehensive income (31 December 2024: $222.7 million).
Conduit did not book any additional case reserves for the years ended 31 December 2025 and 2024. The net liability for incurred claims as at 31 December 2025 had an estimated duration of 2.7 years
(31 December 2024: 2.8 years).
During 2025 Conduit was impacted by a number of natural catastrophe events and risk losses, including the California wildfires, severe convective storms in the United States, and several aviation
losses, among others. The most significant event was the California wildfires. Our undiscounted net loss attributed to the wildfires, net of reinsurance and reinstatement premiums, was $119.1 million
at 31 December 2025.
During 2024 Conduit was impacted by significant losses in relation to Hurricanes Helene and Milton, recording an undiscounted net loss, after reinsurance and reinstatement premiums, of $68.0 million.
While there were numerous other catastrophe and risk loss events that impacted Conduit in 2024, none of those were material individually to Conduit.
The inherent uncertainty in estimating the net liability for incurred claims gives rise to favourable or adverse development. During the year ended 31 December 2025 the change in the discounted net liability
for incurred claims for prior accident years was a reduction of $14.1 million (31 December 2024: $4.3 million). Despite some adverse development on the 2021 and 2022 accident years, overall favourable
development was due to IBNR releases due to a lack of reported claims.
Prior accident year claims development
2025
2024
Year ended 31 December
$m
$m
2021 accident year
(3.5)
0.7
2022 accident year
(6.8)
(7.3)
2023 accident year
0.5
10.9
2024 accident year
23.9
n/a
Total claims development \u2013 favourable (unfavourable)
14.1
4.3
Claims development table
The following tables show the estimates of cumulative undiscounted incurred claims, including the risk adjustment, for each successive accident year at each reporting date, together with the cumulative
payments to date:
Gross undiscounted claims, including risk adjustment
$m
$m
$m
$m
$m
$m
Accident year
2021
2022
2023
2024
2025
Total
At end of accident year
190.7
391.2
401.3
660.1
762.5
One year later
184.7
387.2
389.7
637.1
Two years later
187.5
394.9
389.6
Three years later
187.3
427.6
Four years later
190.0
Current estimate of undiscounted incurred claims
190.0
427.6
389.6
637.1
762.5
2,406.8
Cumulative payments to date
(153.4)
(258.4)
(202.6)
(164.4)
(103.5)
(882.3)
Current estimate of undiscounted liability for incurred claims
36.6
169.2
187.0
472.7
659.0
1,524.5
Effect of discounting
(144.3)
Current estimate of discounted liability for incurred claims
1,380.2
Ceded undiscounted recoveries, including risk adjustment
$m
$m
$m
$m
$m
$m
Accident year
2021
2022
2023
2024
2025
Total
At end of accident year
(48.9)
(39.0)
\u2013
(7.0)
(4.1)
One year later
(50.1)
(36.9)
\u2013
(3.2)
Two years later
(57.3)
(36.9)
\u2013
Three years later
(57.8)
(62.9)
Four years later
(56.6)
Current estimate of ceded undiscounted incurred recoveries
(56.6)
(62.9)
\u2013
(3.2)
(4.1)
(126.8)
Cumulative recoveries received to date
47.6
12.2
\u2013
\u2013
0.1
59.9
Current estimate of ceded undiscounted asset for incurred claims
(9.0)
(50.7)
\u2013
(3.2)
(4.0)
(66.9)
Effect of discounting
5.6
Current estimate of ceded asset for incurred claims
(61.3)
Net undiscounted claims, including risk adjustment
$m
$m
$m
$m
$m
$m
Accident year
2021
2022
2023
2024
2025
Total
At end of accident year
141.8
352.2
401.3
653.1
758.4
One year later
134.6
350.3
389.7
633.9
Two years later
130.2
358.0
389.6
Three years later
129.5
364.7
Four years later
133.4
Current estimate of net undiscounted incurred claims
133.4
364.7
389.6
633.9
758.4
2,280.0
Cumulative payments to date
(105.8)
(246.2)
(202.6)
(164.4)
(103.4)
(822.4)
Current estimate of net undiscounted liability for incurred claims
27.6
118.5
187.0
469.5
655.0
1,457.6
Effect of discounting
(138.7)
Current estimate of net liability for incurred claims
1,318.9
A reconciliation of the net liability for incurred claims per the claims development tables to the carrying amounts included in the balance sheet has been provided below. Loss related amounts represent
amounts due that are contingent on claims, such as reinstatement premiums and profit commissions.
Reconciliation to carrying amounts:
2025
2024
Gross
Ceded
Net
Gross
Ceded
Net
As at 31 December
$m
$m
$m
$m
$m
$m
Undiscounted liability for incurred claims per claims development tables
1,524.5
(66.9)
1,457.6
1,113.6
(56.5)
1,057.1
Discount
(144.3)
5.6
(138.7)
(123.4)
5.1
(118.3)
Liability for incurred claims per claims development tables
1,380.2
(61.3)
1,318.9
990.2
(51.4)
938.8
Other loss related amounts
(14.0)
11.2
(2.8)
(12.2)
10.2
(2.0)
Liability (asset) for incurred claims
1,366.2
(50.1)
1,316.1
978.0
(41.2)
936.8
", "dimensions": { "concept": "ifrs-full:DisclosureOfReinsuranceExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f226": { "value": "
18. Share capital
Authorised share capital
Number
$m
Authorised common shares of $0.01 each
10,000,000,000
100.0
Authorised A1 shares of \u00a30.01 each
100,000
\u2013
Authorised A2 shares of $0.01 each
100,000
\u2013
As at 31 December 2025 and 2024
10,000,200,000
100.0
Common shares
A1 shares
A2 shares
Total
Total
Allotted, called-up and fully paid
number
number
number
number
$m
Issued
165,239,997
100,000
100,000
165,439,997
1.7
As at 31 December 2025 and 2024
165,239,997
100,000
100,000
165,439,997
1.7
The number of common shares in issue less own shares held as at 31 December 2025 was 154,310,942 (31 December 2024: 156,977,997).
CHL holds 18,000 A1 and A2 shares at 31 December 2025 and 2024. The A1 and A2 shares issued by CML have no voting rights attached. Subject to vesting conditions, discussed in note 7, the A1 and A2
shares will be automatically exchanged for ordinary shares of CHL.", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f227": { "value": "
Own shares
Number held in
Number held in
Total number of
Total
Own shares
treasury
$m
trust
$m
own shares
$m
As at 31 December 2023
-
-
(7,183,860)
(32.9)
(7,183,860)
(32.9)
Purchased by EBT
-
-
(1,417,422)
(9.4)
(1,417,422)
(9.4)
Distributed by EBT
-
-
339,282
1.7
339,282
1.7
As at 31 December 2024
-
-
(8,262,000)
(40.6)
(8,262,000)
(40.6)
Repurchased
(2,667,154)
(12.5)
-
-
(2,667,154)
(12.5)
Purchased by EBT
-
-
(693,474)
(3.0)
(693,474)
(3.0)
Distributed by EBT
-
-
693,573
3.4
693,573
3.4
As at 31 December 2025
(2,667,154)
(12.5)
(8,261,901)
(40.2)
(10,929,055)
(52.7)
Shares repurchased by CHL and the EBT will be held as own shares to meet future obligations under CHL\u2019s variable incentive schemes. See note 22 for information on shares held by the EBT.
Dividends
Record date
Payment date
Per share $
$m
Final 2023
22 March 2024
24 April 2024
0.18
29.8
Interim 2024
16 August 2024
5 September 2024
0.18
29.7
Final 2024
21 March 2025
17 April 2025
0.18
29.7
Interim 2025
15 August 2025
11 September 2025
0.18
29.7
See note 23 for information with respect to dividends declared subsequent to 31 December 2025.", "dimensions": { "concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f228": { "value": "
19. Other reserves
Other reserves consist of the following:
As at 31 December 2023
Equity-based incentive expense
Distributions by EBT
As at 31 December 2024
Equity-based incentive expense
Distributions by EBT
As at 31 December 2025
Other reserves include Conduit\u2019s equity-based incentive expense.
", "dimensions": { "concept": "ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f229": { "value": "
21. Earnings per share
The following reflects the earnings and share data used in the basic and diluted earnings per share
computations:
2025
2024
As at 31 December
$m
$m
Total comprehensive income
116.8
125.6
Number
Number
Basic weighted average number of shares
156,550,732
157,226,209
Dilutive effect of equity-based incentives
1,333,475
918,066
Diluted weighted average number of shares
157,884,207
158,144,275
Earnings per share
Per share $
Per share $
Basic
0.75
0.80
Diluted
0.74
0.79
Equity-based incentive awards are only treated as dilutive when their conversion to common shares
would decrease earnings per share or increase loss per share from continuing operations. Incremental
shares from ordinary restricted share options where relevant performance criteria have not been met
are not included in the calculation of dilutive shares.", "dimensions": { "concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f230": { "value": "
20.Contingencies and commitments
Legal proceedings and regulations
Conduit operates in the reinsurance industry and is subject to legal proceedings in the normal course
of business. While it is not practicable to estimate or determine the final results of all pending or
threatened legal proceedings, management does not believe that any such proceedings (including
litigation) will have a material effect on its results and financial position.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f231": { "value": "
22. Related party disclosures
These consolidated financial statements include CHL and the entities listed below:
Subsidiary undertakings
Domicile
Principal Business
CHL
Bermuda
Holding company, Ultimate parent
CRL
Bermuda
General insurance business
CRSL1
England and Wales
Support services
CML2
Bermuda
Support services
CSL
Bermuda
Support services
EBT
Jersey
Employee benefit trust
1
CRSL dissolved effective 14 January 2025
2
CML is part-owned by members of management. Management\u2019s share ownership in CML exists solely for the purposes of the Group\u2019s MIP
scheme for attracting and retaining talent. Management\u2019s shares in CML have no voting power or control in respect of CHL\u2019s ownership of
CRL via CML\u2019s ownership of CRL.
Unless otherwise stated, Conduit owns 100% of the share capital and voting rights in the
subsidiaries listed.
Conduit Reinsurance Services Limited (CRSL)
CRSL was established at the inception of Conduit with the expectation that certain support
services would be provided to group companies. These support services have not been required
and the voluntary liquidation of CRSL commenced during 2024. The process was completed on
14 January 2025.
Employee benefit trust
The EBT was established with the sole purpose of administering Conduit\u2019s equity-based incentive
schemes. The trustee operates the trust for the benefit of Conduit\u2019s employees, all in accordance
with an established trust deed. While Conduit does not have legal ownership of the EBT, the trust
is consolidated in Conduit\u2019s accounts due to the ability that Conduit has to influence the actions
of the trust.
Funding for the trust is provided by CHL through a non-interest bearing loan facility. The facility may
only be used by the trustee for the purpose of achieving the objectives of the EBT. During the year
ended 31 December 2025, advances of $3.0 million (31 December 2024: $9.4 million) were made to
the trust.
CHL common shares purchased by the EBT will be held for the benefit of employees under CHL\u2019s
variable incentive schemes. During the year ended 31 December 2025 the trust purchased common
shares of 693,474 (31 December 2024: 1,417,422).
During the year ended 31 December 2025 the EBT distributed 693,573 shares with a value of $3.4
million to employees. For the year ended 31 December 2024 the EBT distributed 339,282 shares at a
value of $1.7 million.
Stabilitas Re
Stabilitas Re Limited a special purpose vehicle (Stabilitas Re), was launched in June 2023. Conduit
sponsored the launch of a catastrophe bond issued by Stabilitas Re and CRL entered into a
collateralised reinsurance agreement with Stabilitas Re as part of the transaction. The catastrophe
bond was issued to third-party investors by Stabilitas Re. Conduit has no ownership interest in, nor
any control, over Stabilitas Re and therefore does not consolidate that entity.
Key management compensation
Remuneration for key management of Conduit\u2019s Executive Group, and Non-Executive Directors, was
as follows:
2025
20241
Year ended 31 December
$m
$m
Cash compensation
7.3
7.2
Equity-based incentive expense
5.9
4.7
Directors\u2019 fees and expenses
1.0
0.8
Total
14.2
12.7
1
Cash compensation for the prior period has been re-presented to align with the current period view of benefits.
Note: 2025 costs include compensation paid to Conduit\u2019s former CEO and CUO on their respective
retirements.
Loans to employees to assist with environmental and other projects, have been made by CSL. These
loans are short term and interest free. Any financial benefit to the employee is generally not material.
Non-Executive Directors do not receive any benefits in addition to their agreed fees and expenses and
do not participate in any of Conduit\u2019s incentive, performance or pension plans.
IncubEx, Inc.
Effective 9 April 2021, CHL executed a stock purchase agreement with IncubEx, a product and
business development firm with a focus on designing and developing new financial products in global
environmental, reinsurance and related commodity markets. CHL purchased 624 shares of IncubEx\u2019s
Series A-3 preferred stock, with a par value of $0.0001 per share, for an aggregate purchase price of
$50,000, or $80.08 per share.
CHL\u2019s CEO is also a founder and current chairman of IncubEx. The terms and conditions of the
stock purchase agreement are equivalent to those that would prevail in an arm\u2019s length transaction.
The investment in IncubEx is included in other assets in the consolidated balance sheet and is
recorded at cost, which approximates fair value.
NCX Consultants Limited
CSL has entered into a service agreement with NCX Consultants Limited to provide administrative
support services. The contract has an annual value of approximately $0.1 million. NCX is a company
in which CHL\u2019s CEO holds significant control.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f232": { "value": "
Subsequent events
Dividends
On 17 February 2026, Conduit\u2019s Board of Directors declared a final dividend for 2025 of $0.18
(approximately \u00a30.13) per common share, which will result in an aggregate payment of $29.2 million.
The dividend will be paid in pounds sterling on 16 April 2026 to shareholders of record on 20 March
2026 (the Record Date) using the GBP/USD spot exchange rate at 12 pm UK time on the Record Date.", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f233": { "value": "Conduit Holdings Limited", "dimensions": { "concept": "ifrs-full:NameOfUltimateParentOfGroup", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f234": { "value": "Conduit Holdings Limited", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "f235": { "value": "Conduit Holdings Limited", "dimensions": { "concept": "ifrs-full:NameOfParentEntity", "language": "en", "entity": "scheme:21380085AE62D1BXSF19", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } } } }