Conduit Stock

Good afternoon, ladies and gentlemen, and welcome to the Conduit Holdings Limited Investor Presentation. [Operator Instructions] Before we begin, we would like to submit the following poll.

I'd now like to hand you over to the team from Conduit Holdings. Good afternoon.

Good day, everyone, and welcome to Conduit's 2026 Interim Results Conference Call. Thank you for joining us. On the call are Neil Eckert, Chief Executive Officer; Elaine Whelan, Chief Financial Officer; and Stephen Postlewhite, Chief Underwriting Officer. Please note our disclaimer language on Slide 2.

I will now turn the call over to our CEO, Neil Eckert.

Thanks, Brett, and welcome, everyone. Today's presentation will cover our business performance for the first half of 2026, as well as an update on market conditions and the outlook. Steve will cover performance in each of our segments, and Elaine will provide some additional detail on our financial and investment highlights for the period before closing remarks and time for questions.

I'm pleased to report a solid first half performance for 2026. We generated comprehensive income of $80.3 million and a return on equity of 7.8%, while growing tangible net assets per share by 8.4% during the first half and 23.2% over the past year. These are strong levels of shareholder value creation and a meaningful improvement compared to our performance in the prior year. As market conditions have become more competitive, we have remained disciplined in our deployment of capital. We continue to grow in areas where we believe pricing remains attractive, particularly casualty, whilst reducing exposures in parts of property and specialty, where rates no longer meet our return hurdles. This included a reduction in certain quota share treaties as we continue to rebalance our portfolio.

Gross premiums written were $789 million, down 1.8% from the prior year, reflecting this deliberate portfolio management. Underwriting performance benefited from a much more benign catastrophe environment compared with the first half of 2025. Our undiscounted combined ratio improved to 92.6% compared with 122.1% in the prior year period. On investments, our managed portfolio grew approximately $375 million over the last 12 months to $2.3 billion. Our growing asset base continues to support higher net investment income, which increased more than 20% year-on-year. Investment income of $46.7 million during the first half contributed meaningfully to our earnings and is expected to continue to support our overall earnings going forward.

Our investment result in the first half was impacted by rising treasury yields, which resulted in unrealized mark-to-market losses and a lower overall investment return of 0.9%. We also remained active in returning capital to shareholders. During the first half of the year, we repurchased 6.8 million shares for $38.9 million, while also returning $28.7 million through dividends. These actions, combined with solid earnings generation, contributed to tangible net assets per share increasing to GBP 5.70 as of June 30. Lastly, we have continued to attract talent to the organization and strengthen our personnel with new hires across several key functions. We have recently hired an experienced Chief Operating Officer, who will be starting shortly and have several senior additions to our property team that will join the company later this year.

Turning to our underwriting performance. Our focus throughout the first half has been to protect margins, manage volatility and position the portfolio for the next phase of the cycle. Overall, gross premiums written were down 2% year-over-year. This reflects continued growth in casualty where rates have remained stable, offset by reductions in Property and Specialty as we responded to softer pricing conditions. Across the portfolio, risk-adjusted rates declined approximately 6% during the first half. While pricing remains broadly adequate, we have continued to see increasing competition as the year has progressed, particularly in property and certain specialty classes. Terms and conditions have also begun to ease modestly in selected areas.

Despite those pressures, underwriting performance improved significantly from the prior year. The undiscounted combined ratio was 92.6%, benefiting from a relatively benign catastrophe environment. Results were impacted by some modest exposure to events arising from the Middle East conflict and other risk losses, but those losses remain below our reporting threshold individually and in the aggregate. Importantly, we have also increased retrocessional protection during 2026. Whilst that has increased ceded costs, it supports our objective of stabilizing underwriting results and protecting our capital through the softening phase of the cycle.

With that, I will hand over to Steve, who will present on performance and market conditions in our 3 segments.

Thanks, Neil, and good morning, everyone. Through the midyear renewals, the team worked hard to secure our positions on renewals and select new business that aligns to our portfolio objectives as we seek to gradually shift towards excess of loss business in Property and Specialty segments, protect our margins as pricing soften and manage underwriting volatility. We are comfortable with the portfolio reducing modestly in this environment as some business will not meet our technical pricing requirements.

Turning to the Property segment. Gross premiums written declined 9% to $454.8 million. This reduction was anticipated and reflects our continued strategy of reducing quota share participations with more marginal profitability characteristics while selectively increasing excess of loss business where we believe the risk return profile is more attractive. We have also been successful in securing international opportunities, which add diversification to our portfolio. We remain committed to progressing the portfolio towards a greater proportion of excess of loss business, which should improve portfolio margin and provide a more balanced risk profile over time.

Property risk-adjusted pricing declined by approximately 10% during the first half with some acceleration observed during the year as we expected. Industry capital continues to grow, supported by strong returns over recent years and increased participations from both traditional and alternative capital providers. Property cat excess of loss rates were generally off 15% to 20% at midyear with some variation around that range. The quota share treaties saw continued upward pressure on ceding commissions. Despite the softer market backdrop, underwriting performance improved materially year-over-year. The property undiscounted combined ratio improved to 72.8% from 130.5% in the prior period, reflecting the absence of major catastrophe losses such as the California wildfires that affected results in 2025.

Turning to casualty. In our view, casualty continues to represent an attractive segment of the market, although some classes demonstrate firmer prices than others. We have continued to focus on areas of the casualty market with more sustainable pricing momentum. During the first half, gross premiums written increased 21% year-over-year to $217 million, consistent with the growth rate we achieved during 2025. Growth was driven through expanding our relationships with preferred clients that continue to demonstrate disciplined cycle management behavior in their underwriting approach. These broader client relationships have added diversification in classes and geographies to our casualty portfolio.

We have also selectively trimmed or non-renewed areas of the portfolio where loss experience or the underwriting approach didn't align with our objectives. Pricing remains relatively stable with risk-adjusted rates down approximately 1% during the first half, demonstrating the relative resilience of the casualty market. Market conditions vary across classes and territories, but overall remain broadly consistent with our expectations, and we continue to find attractive opportunities to deploy capital. The general third-party liability class continues to see the strongest original rate increases and has driven much of our growth in casualty.

Underwriting performance remains stable with an undiscounted combined ratio of 102.9%, broadly consistent with the prior year period. We remain aware of industry loss trends and carefully consider frequency and severity dynamics in our pricing approach. Our reserving philosophy remains consistent, and the portfolio continues to perform in line with expectations.

Turning to Specialty. Competition continues to increase, and we have scaled back the portfolio slightly during the first half with premiums reducing 5% compared to prior year to $117.2 million. We have reduced participations in classes where competitive pressures increased or pricing no longer met our expectations. While overall market conditions have softened, the Specialty segment remains highly diverse. We continue to find opportunities in selected areas where pricing is improving, including aviation, political violence and terrorism classes. In Aviation, we saw strong submission activity and have successfully written several new attractively priced excess of loss and quota share accounts at midyear. Risk-adjusted rates were down 7% during the first half.

Attractive diversification characteristics continue to draw capital from new and existing markets into many specialty classes. Recent loss activity has helped stabilize pricing in certain classes, but we expect the market will remain competitive. The undiscounted combined ratio during the first half was 104.8%. This result includes the impact of losses associated with the conflict in the Middle East. Overall, our approach remains highly selective. We will continue to prioritize margin over volume and focus our participation on opportunities where expected returns remain attractive. We also remain ready to capitalize on any class-specific shifts in pricing as we are actioning in aviation currently.

One of the most important strategic actions we have taken over the last year has been to strengthen our retrocession program. As market conditions become more competitive, reducing volatility and protecting capital become an increasingly important part of our underwriting strategy. And during 2026, we expanded our retrocession coverage across both peak and secondary peril exposures. This included increased limit and lower retention within our core program. We also maintain cover for second and third event scenarios. The benefit of these actions can clearly be seen in the reduction of our modeled net PMLs, both at the 1 in 100 and 1 in 250-year return periods. Net exposures are lower than they were at the beginning of 2025 and 2026 with further improvement achieved at the 1st of July 2026. While this enhanced program increases retrocession costs, we believe it provides valuable earnings stability and balance sheet protection as we move into the peak Atlantic wind season.

I will now hand over to Elaine to go through our financial and investment highlights.

Thanks, Steve. Gross premiums written of $789 million are down 1.8% on the prior year. We mentioned front-loading our book a little last quarter as we expected the market outlook to worsen, and that has certainly been the case, particularly in property. We non-renewed a few quota share deals this quarter that no longer hit our hurdle rates. We've also taken a more conservative view on our premium estimates given our market outlook, and that's also part of the reason for the small reduction year-on-year. While we are still seeing adequately priced business as the bulk of our book is written in the first 6 or 7 months of the year, we would now expect our gross premiums written for 2026 to be a little behind 2025 levels.

We have reinsurance revenue of $455.9 million versus $433.3 million at the prior half year, a 5.2% increase year-on-year. Our business mix has an impact on reinsurance revenue with excess of loss writing and earning faster than quota share, we continue to see some benefit of prior underwriting years earning into this year. Ceded reinsurance expenses, which are essentially our ceded premiums earned, excluding reinstatement premiums, were $73.3 million for the first 6 months of 2026 compared with $53.4 million for the prior year. Our average cover has increased year-on-year due to additional cover purchased with the aim of reducing volatility.

On losses, while the first 6 months of 2026 were relatively light from an event perspective, the Middle East conflict had an impact with the industry, along with various severe convective storms and other smaller natural catastrophes. We haven't recorded any particularly material losses, but did put some reserves up for the Middle East conflict in our Specialty division. 2025, of course, at the California wildfires and our undiscounted net loss net of reinsurance and reinstatement premiums at June 30 last year was $118.3 million with that number holding relatively steady through this half year. The California wildfires contributed 31.6% to our undiscounted net loss ratio last year.

I remind you that our reinsurance service expenses includes both loss and loss related amounts, but also reinsurance operating expenses and an allocation of some other operating expenses. In our interim financial statements segment disclosure, we provided a breakout of that number into the loss and the expense components so that you can see those separately and also to help with calculating our net loss ratio. Our undiscounted net loss ratio for the half year was 80.7% versus 109.6% for the prior period. Our discounted loss ratio was 68.5% for the half year this year and 95.8% for the half year last year.

Our combined ratio for the half year was 92.6% on an undiscounted basis and 80.4% on a discounted basis compared to 122.1% and 108.3%, respectively, for the prior year. Our comprehensive income for the half year was $80.3 million compared to a comprehensive loss of $13.5 million for the prior period. Lastly, on this page, on ROE, we have adopted an amended measure, which is the internal rate of return of the change in fully diluted book value per share. This measure of ROE versus the previous measure of return on opening equity is a more sophisticated holistic and comprehensive measure of return, which captures all aspects of performance and capital management actions. Under this method, our ROE for the half year is 7.8% versus a negative 1.4% for the prior period.

ROE has also been presented on a prior basis for comparison, and we also have some more detail on comparatives in the appendices. On the investment side, yields have increased this year, although spread narrowing has offset that to a degree. The portfolio is generating a good level of income, though, maintaining a current book yield around 4.2%. Overall, for the half year, we returned 0.9% versus 3.9% in the prior year, where we saw yields move the other way. We remain relatively short duration, and our focus is on maintaining a high-quality, highly liquid portfolio. Duration is currently 2.7 years, which is in line with our net reserves. Average credit quality is AA, and you can see the usual pie chart here with our asset allocation. And other than cash, cash equivalents and short-term investments reducing a bit, which is largely timing, no real changes from prior quarters in that or our strategy.

On this slide, you can see that as the business continues to grow and we remain highly cash generative, our invested assets also continue to grow. As our portfolio has become higher yielding over time, we produce more income and as our investment leverage increases over time, that contributes more to our ROE. I'll now hand back to Neil for closing comments.

Thanks, Elaine. Let me conclude with a few observations. We've delivered a strong first half result, producing $80.3 million of comprehensive income and a 7.8% return on equity, whilst continuing to grow our tangible book value per share. Our underwriting strategy is evolving as we carefully manage the pricing cycle. We are growing where returns remain attractive and scaling back where pricing no longer meets our standards. We have continued to strengthen the resilience of the business through an enhanced retrocession program with broad coverage for all perils. We continue to effectively manage our capital to increase shareholder value. During the first half, we returned approximately $68 million to shareholders through dividends and accretive share repurchases.

Looking ahead, we expect competition and price softening to persist across many lines of business. In this environment, our ability to be nimble and focus on capital discipline and margin rather than market share will become increasingly important. We believe Conduit is positioned to navigate these conditions. The last 12 months has been continuous enhancement in terms of people and process, reaffirmed ratings and results that have been at or in excess of market consensus. This is an ongoing process, and our focus remains on generating attractive risk-adjusted returns, preserving balance sheet strength and creating long-term shareholder value. Thank you, and we can now open the call for questions.

[Operator Instructions] Guys, we have received a number of questions. So perhaps if we dive straight into it. The first one that we have here asks, what do you consider to be your particular strength and why?

Okay. So when we IPO-ed the company, that was after a period of a soft market. There was significant unreserving on casualty. So we have a strong, clean balance sheet. We reserved our casualty to 100% ever since we started writing it. We now have gross assets under management of 2.3x net tangible. So we have $2.3 billion of gross assets, which means we start each year with a strong flow of investment income, probably somewhere between $90 million and $100 million, which gives us a strong start.

We are 0 tax being Bermuda based from a corporate tax point of view, and we get tax credits for employing staff on the island. Most of the multinational -- all of the multinational companies, international companies do pay global corporation tax. We're single location specialist pure play. At $1 billion, we, in our view, are big enough to matter and to have an A- rating, but we are small enough to be nimble. So managing the business is more easy. The business model is simple.

And then there's the sort of specialization. We basically write property casualty specialty. It's pricing, it's culture, it's service and alignment. But we do feel we can -- the combination of those factors give us an edge. And it's also cycle management and risk management, which hopefully this set of announcements demonstrate our approach.

And just turning to the next question. What internal metrics do you use to monitor most closely to ensure underwriting quality isn't compromised during periods of growth?

So I would say the primary metric on each and every contract that we underwrite, we have a pricing basis. So that allows us to understand the margin that we have in every contract and that's something we report on review regularly. Around that also, we have a very clear risk appetite and risk set right up from things like how much limit we'll give to any individual contract right through to what our P&Ls are, what our kind of man-made RDS scenarios need to look like. We have also the absolute level of rate change and monitor of business combined ratio at an aggregated level. So all metrics come into making sure that we steer and have clear guardrails around what we do when we're growing or shrinking, doesn't we do that on every contract.

We have someone here asking, given competitive pressures in specialty, are there particular classes where you've effectively stopped writing business because of returns no longer meet your hurdle rates?

So I would say on that, that pricing still varies by client. So you could have a class which is under pressure that some of those seeds will still be performing well for you. So I wouldn't say we necessarily move out of a class or an area entirely, but we may emphasize or deemphasize depending on what kind of pricing state the overall market for that particular product. So again, it comes down to individual clients, individuals teams and the contracts that we're underwriting.

Yes, I would endorse that. I mean there are certain classes where we're wary at the moment, sort of energy being one of them, but there will still be good seeds within that market that we wish to support. And also, there's a number of seeds where we have relationships across multiple lines. And those relationships, if they're preferred clients, we will look at the relationship in the round. There are some classes that we regarded throughout the life of the company as not being adequately priced. We have very little in the way of satellite exposure as an example. So yes, we do, but we haven't in the last 9, 12 months, decided to wholesale withdraw from any particular specialty.

Just turning to the next question. Are there opportunities to expand into adjacent specialty lines without materially increasing risk?

I think there are, yes. And we have a number of areas where we actually have quite low or even no exposure in some of the specialty classes I would highlight, the credit political risk area, cyber where we have very low exposure, aviation, which we have been growing and we'll continue to focus on growth on. So the short answer is yes. And we can build up some exposure in the areas there where the pricing remains really robust. We can do that because we're actually relatively small or we don't do any of that business at the moment. So that's something we actively and scan on a regular basis to kind of look at those areas what pricing they're in and what the opportunities might be for us. So we're very active, I would say, in that area.

It also gives us the opportunity to introduce an element of diversification classes that are capital efficient, don't add PML. So by PML, we mean probable maximum loss, which is a measure of your catastrophic exposure to significant natural perils. So some special classes give diversification away from that. So apart from the margin hunting and searching out lines that we think have sufficient margin to deploy capital, it is also about diversification and capital efficiency.

Perfect. Thank you. And that actually concludes all the questions that have come in this afternoon. So thank you very much indeed for addressing those. And of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended.

But Neil, perhaps before really now just looking to redirect those on the call to provide you their feedback, which I know is particularly important to yourself and the company. If I could just ask you for a few closing comments just to wrap up with, that would be great.

Right. Well, first closing comment is I've got Elaine Whelan, our Chief Financial Officer here, who is retiring in September. So this is her last. And I was hoping that someone would post a really featish question for her as a parting shot. But I want to thank Elaine for the fantastic service she's given this company, and it's been an absolute pleasure to work with her. I may say for, but it's been an absolute pleasure to work with us.

It's been a solid first half. The company -- last year, we had a fairly traumatic year and I stepped in as CEO. The job was to stabilize the company. We sorted out the reinsurance program for the year-end. We had a good first quarter. I think we're going from stabilization to strengthening and progress. The share price has recovered somewhat, but we still trade at a significant discount to book value. Our growth in NTA over 12 months has been 23%. So NTA today is GBP 5.70 a share, share price GBP 4.50. We pay a strong yield.

So I believe that it's a company that has gone through a process of recovery. Market outlook, rates are softening. We cannot get away from that. But I think we understand that, and we know how to manage ourselves without the pursuit of growth in an irresponsible fashion. So yes, in summary, satisfactory first half, and I feel the company is well positioned to continue to make good progress. That concludes my remarks.

Perfect. Neil, that's great. And thank you all once again for updating investors this afternoon. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order the management team can better understand your views and expectations. This will take a few moments to complete, but I'm sure it will be greatly valued by the company. On behalf of the management team of Conduit Holdings Limited, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.

Thank you for joining us. On the call are Neil Eckert, Chief Executive Officer; Elaine Whelan, Chief Financial Officer; and Stephen Posolite, Chief Underwriting Officer. Please note our disclaimer language on Slide 2. I will now turn the call over to our CEO, Neil Eckert.

Thanks, Brett, and welcome, everyone. Today's presentation will cover our business performance for the first half of 2026 as well as an update on market conditions and the outlook. Steve will cover performance in each of our segments, and Elaine will provide some additional detail on our financial and investment highlights for the period before closing remarks and time for questions.

I'm pleased to report a solid first half performance for 2026. We generated comprehensive income of $80.3 million and a return on equity of 7.8%, while growing tangible net assets per share by 8.4% during the first half and 23.2% over the past year. These are strong levels of shareholder value creation and a meaningful improvement compared to our performance in the prior year.

As market conditions have become more competitive, we have remained disciplined in our deployment of capital. We continue to grow in areas where we believe pricing remains attractive, particularly casualty, whilst reducing exposures in parts of property and specialty, where rates no longer meet our return hurdles. This included a reduction in certain quota share treaties as we continue to rebalance our portfolio.

Gross premiums written were $789 million, down 1.8% from the prior year, reflecting this deliberate portfolio management. Underwriting performance benefited from a much more benign catastrophe environment compared with the first half of 2025. Our undiscounted combined ratio improved to 92.6% compared with 122.1% in the prior year period.

On investments, our managed portfolio grew approximately $375 million over the last 12 months to $2.3 billion. Our growing asset base continues to support higher net investment income, which increased more than 20% year-on-year. Investment income of $46.7 million during the first half contributed meaningfully to our earnings and is expected to continue to support our overall earnings going forward. Our investment results in the first half was impacted by rising treasury yields, which resulted in unrealized mark-to-market losses and a lower overall investment return of 0.9%.

We also remained active in returning capital to shareholders. During the first half of the year, we repurchased 6.8 million shares for $38.9 million, while also returning $28.7 million through dividends. These actions, combined with solid earnings generation, contributed to tangible net assets per share increasing to GBP 5.70 as of June 30.

Lastly, we have continued to attract talent to the organization and strengthen our personnel with new hires across several key functions. We have recently hired an experienced Chief Operating Officer, who will be starting shortly and have several senior additions to our property team that will join the company later this year.

Turning to our underwriting performance. Our focus throughout the first half has been to protect margins, manage volatility and position the portfolio for the next phase of the cycle. Overall, gross premiums written were down 2% year-over-year. This reflects continued growth in casualty where rates have remained stable, offset by reductions in Property and Specialty as we responded to softer pricing conditions. Across the portfolio, risk-adjusted rates declined approximately 6% during the first half. While pricing remains broadly adequate, we have continued to see increasing competition as the year has progressed, particularly in property and certain specialty classes. Terms and conditions have also begun to ease modestly in selected areas.

Despite those pressures, underwriting performance improved significantly from the prior year. The undiscounted combined ratio was 92.6%, benefiting from a relatively benign catastrophe environment. Results were impacted by some modest exposure to events arising from the Middle East conflict and other risk losses, but those losses remain below our reporting threshold individually and in the aggregate.

Importantly, we have also increased retrocessional protection during 2026. Whilst that has increased ceded costs, it supports our objective of stabilizing underwriting results and protecting our capital through the softening phase of the cycle. With that, I will hand over to Steve, who will present on performance and market conditions in our three segments.

Thanks, Neil, and good morning, everyone. Through the midyear renewals, the team worked hard to secure our positions on renewals and select new business that aligns to our portfolio objectives as we seek to gradually shift towards excess of loss business in Property and Specialty segments, protect our margins as pricing soften and manage underwriting volatility. We are comfortable with the portfolio reducing modestly in this environment as some business will not meet our technical pricing requirements.

Turning to the Property segment. Gross premiums written declined 9% to $454.8 million. This reduction was anticipated and reflects our continued strategy of reducing quota share participations with more marginal profitability characteristics while selectively increasing excess of loss business where we believe the risk return profile is more attractive. We have also been successful in securing international opportunities, which add diversification to our portfolio.

We remain committed to progressing the portfolio towards a greater proportion of excess of loss business, which should improve portfolio margin and provide a more balanced risk profile over time.

Property risk-adjusted pricing declined by approximately 10% during the first half with some acceleration observed during the year as we expected. Industry capital continues to grow, supported by strong returns over recent years and increased participations from both traditional and alternative capital providers. Property cat excess of loss rates were generally off 15% to 20% at midyear with some variation around that range. The quota share treaties saw continued upward pressure on ceding commissions.

Despite the softer market backdrop, underwriting performance improved materially year-over-year. The property undiscounted combined ratio improved to 72.8% from 130.5% in the prior period, reflecting the absence of major catastrophe losses such as the California wildfires that affected results in 2025.

Turning to casualty. In our view, casualty continues to represent an attractive segment of the market, although some classes demonstrate firmer prices than others. We have continued to focus on areas of the casualty market with more sustainable pricing momentum. During the first half, gross premiums written increased 21% year-over-year to $217 million, consistent with the growth rate we achieved during 2025. Growth was driven through expanding our relationships with preferred clients that continue to demonstrate disciplined cycle management behavior in their underwriting approach. These broader client relationships have added diversification in classes and geographies to our casualty portfolio.

We have also selectively trimmed or nonrenewed areas of the portfolio where loss experience or the underwriting approach didn't align with our objectives. Pricing remains relatively stable with risk-adjusted rates down approximately 1% during the first half, demonstrating the relative resilience of the casualty market. Market conditions vary across classes and territories, but overall remain broadly consistent with our expectations, and we continue to find attractive opportunities to deploy capital.

The general third-party liability class continues to see the strongest original rate increases and has driven much of our growth in casualty. Underwriting performance remains stable with an undiscounted combined ratio of 102.9%, broadly consistent with the prior year period. We remain aware of industry loss trends and carefully consider frequency and severity dynamics in our pricing approach. Our reserving philosophy remains consistent, and the portfolio continues to perform in line with expectations.

Turning to Specialty. Competition continues to increase, and we have scaled back the portfolio slightly during the first half with premiums reducing 5% compared to prior year to $117.2 million. We have reduced participations in classes where competitive pressures increased or pricing no longer met our expectations.

While overall market conditions have softened, the specialty segment remains highly diverse. We continue to find opportunities in selected areas where pricing is improving, including aviation, political violence and terrorism classes. In aviation, we saw strong submission activity and have successfully written several new attractively priced excess of loss and quota share accounts at midyear.

Risk-adjusted rates were down 7% during the first half. Attractive diversification characteristics continue to draw capital from new and existing markets into many specialty classes. Recent loss activity has helped stabilize pricing in certain classes, but we expect the market will remain competitive.

The undiscounted combined ratio during the first half was 104.8%. This result includes the impact of losses associated with the conflict in the Middle East. Overall, our approach remains highly selective. We will continue to prioritize margin over volume and focus our participation on opportunities where expected returns remain attractive. We also remain ready to capitalize on any class-specific shifts in pricing as we are actioning in aviation currently.

One of the most important strategic actions we have taken over the last year has been to strengthen our retrocession program. As market conditions become more competitive, reducing volatility and protecting capital become an increasingly important part of our underwriting strategy. And during 2026, we expanded our retrocession coverage across both peak and secondary peril exposures. This included increased limit and lower retention within our core program.

We also maintained cover for second and third event scenarios. The benefit of these actions can clearly be seen in the reduction of our modeled net PMLs, both at the 1 in 100 and 1 in 250-year return periods, net exposures are lower than they were at the beginning of 2025 and 2026 with further improvement achieved at the 1st of July 2026. While this enhanced program increases retrocession costs, we believe it provides valuable earnings stability and balance sheet protection as we move into the peak Atlantic wind season.

I will now hand over to Elaine to go through our financial and investment highlights.

Thanks, Steve. Gross premiums written of $789 million are down 1.8% on the prior year. We mentioned front-loading our book a little last quarter as we expected the market outlook to worsen, and that has certainly been the case, particularly in properties. We nonrenewed a few quota share deals this quarter that no longer hit our hurdle rates. We've also taken a more conservative view on our premium estimates given our market outlook, and that's also part of the reason for the small reduction year-on-year. While we are still seeing adequately priced business as the bulk of our book is written in the first six or seven months of the year, we would now expect our gross premiums written for 2026 to be a little behind 2025 levels.

We have reinsurance revenue of $455.9 million versus $433.3 million at the prior half year, a 5.2% increase year-on-year. While business mix has an impact on reinsurance revenue with excess of loss writing and earning faster than quota share, we continue to see some benefit of prior underwriting years earning into this year.

Ceded reinsurance expenses, which are essentially our ceded premiums earned, excluding reinstatement premiums, were $73.3 million for the first six months of 2026 compared with $53.4 million for the prior year. Our average cover has increased year-on-year due to additional cover purchased with the aim of reducing volatility.

On losses then, while the first six months of 2026 were relatively light from an event perspective, the Middle East conflict had an impact for the industry, along with phased severe convective storms and other smaller natural catastrophes. We haven't recorded any particularly material losses that did put some reserves up for the Middle East conflict in our Specialty division. 2025, of course, had the California wildfires and our undiscounted net loss net of reinsurance and reinstatement premiums at June 30 last year was $118.3 million with that number holding relatively steady through this half year. The California wildfires contributed 31.6% to our undiscounted net loss ratio last year.

I remind you that our reinsurance service expenses includes both loss and loss related amounts, but also reinsurance operating expenses and an allocation of some other operating expenses. In our interim financial statements segment disclosure, we provided a breakout of that number into the loss and the expense components so you can see those separately and also to help with calculating our net loss ratio.

Our undiscounted net loss ratio for the half year was 80.7% versus 109.6% for the prior period. Our discounted loss ratio was 68.5% for the half year this year and 95.8% for the half year last year. Our combined ratio for the half year was 92.6% on an undiscounted basis and 80.4% on a discounted basis compared to 122.1% and 108.3%, respectively, for the prior year. Our comprehensive income for the half year was $80.3 million compared to a comprehensive loss of $13.5 million for the prior period.

Lastly, on this page, on ROE, we have adopted an amended measure, which is the internal rate of return of the change in fully diluted book value per share. This measure of ROE versus the previous measure of return on opening equity is a more sophisticated holistic and comprehensive measure of return, which captures all aspects of performance and capital management actions. Under this method, our ROE for the half year is 7.8% versus a negative 1.4% for the prior period. ROE has also been presented on the prior basis for comparison, and we also have some more detail on comparatives in the appendices.

On the investment side, yields have increased this year, although spread narrowing has offset that to a degree. The portfolio is generating a good level of income though, maintaining a current book yield around 4.2%. Overall, for the half year, we returned 0.9% versus 3.9% in the prior year, where we saw yields move the other way. We remain relatively short duration, and our focus is on maintaining a high-quality, highly liquid portfolio.

Duration is currently 2.7 years, which is in line with our net reserves. Average credit quality is AA, and you can see the usual pie chart here with our asset allocation. And other than cash, cash equivalents and short-term investments reducing a bit, which is largely timing, no real changes from prior quarters in that on our strategy.

On this slide, you can see that as the business continues to grow and we remain highly cash generative, our invested assets also continue to grow. As our portfolio has become higher yielding over time, we produce more income and as our investment leverage increases over time, that contributes more to our ROE. I'll now hand back to Neil for closing comments.

Thanks, Elaine. Let me conclude with a few observations. We've delivered a strong first half result, producing $80.3 million of comprehensive income and a 7.8% return on equity, whilst continuing to grow our tangible book value per share. Our underwriting strategy is evolving as we carefully manage the pricing cycle. We are growing where returns remain attractive and scaling back where pricing no longer meets our standards. We have continued to strengthen the resilience of the business through an enhanced retrocession program with broad coverage for all perils. We continue to effectively manage our capital to increase shareholder value.

During the first half, we returned approximately $68 million to shareholders through dividends and accretive share repurchases. Looking ahead, we expect competition and price softening to persist across many lines of business. In this environment, our ability to be nimble and focus on capital discipline and margin rather than market share will become increasingly important. We believe Conduit is positioned to navigate these conditions. The last 12 months has been continuous enhancement in terms of people and process, reaffirmed ratings and results that have been at or in excess of market consensus. This is an ongoing process, and our focus remains on generating attractive risk-adjusted returns, preserving balance sheet strength and creating long-term shareholder value.

Thank you, and we can now open the call for questions.

[Operator Instructions] Our first question comes from the line of Ben Cohen with RBC Capital Markets.

My first question is really just in terms of how we should think about the combined ratio going forward. I mean, firstly, on the reported undiscounted combined ratio, I don't know if you could say anything what you see as maybe good luck is the wrong phrase, but sort of better weather than normal or low nat cat losses. And from that start of 92.6%, given the rate decline that we see in your book, is it reasonable to kind of take those rate declines and see those increasing the combined ratio as we look forward to the second half of the year and maybe typically into 2027?

Ben, we're not giving any specific combined ratio guidance on there. It's obviously been a relatively benign first half. We have had a few bits and pieces coming through in the first half though in terms of the Middle East losses that we have in there, nothing particularly material. We do have more casualty business, so that impacts the combined ratio. So a different business mix than we've had in the past, but we're not giving any specific guidance on that. On the rate decline, we are looking at that and factoring that into how we price, how we reserve. So we're hoping that we've captured all that as well.

Could I ask a follow-up question just in terms of the sort of the strong net income contribution that there was from sort of [indiscernible], I think, in the first half. I just wonder if you could make a comment as to how you see the growth in available capital on a sort of maybe on a BSCR basis in the first half and what that might mean for capital return in the second half of the year?

Yes. I think the guidance that we've given before is in the 200% to 300% range, and we're very comfortable in that. Sorry to tell you, we're not giving any solid guidance on that one either, but we have got a strong capital position going into wind season, and we'll wait and see what happens over the wind season, and then we'll make some decisions on that towards the end of this year. So that's really our November Board conversation.

Our next question comes from the line of Abid Hussain, Panmure Liberum.

I've got three questions. I think the first one was on the pivot to excess of loss line. Just wondering how much further is it going on that pivot towards excess of loss? I appreciate that there's been a material move in the first half [indiscernible] property lines in excess of loss.

And then the second question is on casualty book. Just wondering how much further growth can you achieve here if pricing remains steady -- if pricing does remain steady, would you look to continue to grow across the casualty books?

And then the final question is on growth versus capital distribution. Should we be expecting the balance between growth and distribution to shift from this year onwards, i.e., more of an emphasis on distributions from this year, perhaps next year onwards Just any sort of color or guidance around that, please?

On the first question around the shift towards excess of loss, what I would say is there is still room to move on that. We are targeting a kind of 50-50 split on property over time, but that will -- that is going to be something we move towards over the next 12 to 18 months. So I expect that to continue, most likely also in specialty to some extent, but to a lesser extent.

I think your second question was around growth within casualty. I mean, we very much target a specific set of preferred partners in casualty. And what we're looking to do with those preferred partners is we're looking to deepen our relationship, deepen our participation. So we could potentially see some continued growth with those preferred partners, and we're trying to shift away from things that are more opportunistic. So I can't tell you how that balance will play through, and we don't give guidance on growth, obviously.

But I would imagine, and we certainly have been successful during the course of the first half in shifting towards our preferred partners. Those preferred partners, by the way, are those that we believe are underwriting with the most discipline and in the way that we would want to see them underwriting through the softening market, although in some areas, casualty actually is keeping certainly pace with our view of inflation and possibly even improving in terms of rate, but we expect that trend probably to start reversing as we get into next year.

Yes. But just on the capital conversation, I think everything Steve just said about growth is all valid comments, but there are still areas where we would see opportunities. And where we may trim some of the renewing book, there are still other areas that we can go into and find business that meets our hurdles.

I'd point you to the slide that we've got in our deck on how we think about capital. So it's really an exercise in terms of what we want to underwrite and then we match the capital to that and then anything that's left over, and once you put headroom on top of that, is what we designate for capital returns. And again, my last comments were Ben, that's really a October, November kind of consideration once we get through wind season and see if there's been anything interesting that's happened this year and then what we want to do with our capital for next year.

Our next question comes from the line of Michael Huttner with Berenberg.

I had lots of little niggly questions. The one that you mentioned softening terms and conditions, and I just wondered whether you can give us a little bit more color on that. On solvency, I was not quite sure. Could you explain why there's no number? I think in the past you have provided numbers at the half year stage. I'm not 100% sure, but the fact that there's none it always raises questions. People kind of think, well, what -- is something wrong?

On -- you've increased your PML so my guess, exposures, I guess, I don't know to Asia. And with El Niño, so obviously, there's been a few more events than floods in China and stuff. Is there anything there worth mentioning already, which I guess would affect Q3?

The -- and then two last ones. I'm curious, you mentioned the enhanced retro quite a few times. I'm just wondering if you can give us a little bit more color on that. I'll leave it there.

Thank you, Michael. Yes. The first question, I think, was softening Ts and Cs. We are seeing an erosion in certain places on conditions, expansions of coverage. And we have seen sort of modest erosion in Ts and Cs. There's no point in calling it anything other than that. But overall, the book was price adequate, and we've delivered the results we have.

You mentioned PMLs in Asia. There's nothing material to report from a loss perspective there. We do, over time, want to diversify the property book and the increase in Asia is partially a function of our increase in international excess of loss. So I regard that as a positive really.

Michael, can you remind me the other question where you said there was no number?

It's the solvency one. I'm happy to take that. That's a year-end disclosure for us, Michael. So we don't typically put anything out at the half year. But I think we're comfortable with where we were at the half year, and we've been profitable through the first half. I mean there's a number of things that impact the calculation, but no significant changes in terms of where we were, but it is a year-end disclosure for us.

And on the enhanced...

Enhanced retro. We have reduced our PMLs as stated for peak risk. We have bought significantly more cover. We have coverage for both peak and secondary perils all the way through the whole program. On the secondaries, we attach much lower than we do on peak. And we don't disclose access points and limits actually purchased for sort of commercially sensitive regions. But we have significantly reduced our whole account retention for events. So I would say our capital is better protected, and we also have significantly reduced volatility in the account on a net basis.

[Operator Instructions] Our next question comes from the line of Joseph Theuns with Autonomous.

First question is on the expense ratio, which I noticed increased versus previous years, particularly in the property segment. Is this a one-off due to some sort of idiosyncratic reason in this period? Or should we expect this to continue?

And my second question is on the performance of the property book. I was a little surprised perhaps to see the loss ratio higher than in previous years despite the shift to more excess of loss. Is this the impact of softening coming through? Or was there sort of a high level of attritional losses that maybe we -- I wasn't factoring in.

I'll take the first one on the expense ratio. I think it's probably a bit more of a geography conversation in previous years, with a higher quota share book, you get more of the ceding commissions offsetting revenue, whereas with the move to excess of losses, there's more brokerage coming through, it comes through a different line item. So it's really driven by the business mix. Sorry, was there a follow-up?

Okay. On the loss ratio, there's not really anything specific driving that. I would say it's -- if anything, it's maybe just a little bit more of a cautious view on how we're reserving. So I wouldn't read too much into that.

And it seems that we have a follow-up Michael Huttner with Berenberg.

I've got quite a few more. So specialty, you mentioned growth in aviation. And I suspect, but I don't know if you said that also the lines where pricing is harder, so that's political risk and something else? Is it terror or something? Then I was curious about the inflation assumption you're baking into casualty. I suppose it's really to understand how much more cautious on reserving you are or whatever.

Then I think you mentioned at the full year that your confidence level interval level for reserving is towards the upper end of your target range, so which I think is 75% to 85%. I just wondered if you could provide an update.

And then the last question is, I've got one more, but this is last for now is you get this kind of tax benefit in Bermuda, which I think was EUR 8 million in H1. Is this kind of a linear thing? Do we get EUR 8 million every half year?

Yes, Steve, why don't you…

I'll take the first question, Michael. Yes, I mean, we are constantly on the hunt for margin. And aviation is one of the areas that we see as being stronger in terms of where it sits in its pricing cycle. Similarly, I guess, political risk and terror post events in the Middle East and other events actually over the last couple of years is in a slightly stronger place than many lines of business. And this is something that we are able to do because we are small and nimble and able to flex and pivot when we see these kind of opportunities. I would expect that to continue. We're constantly surveying the environment, I guess, to look for those opportunities.

Yes. On inflation, Michael, we have different inflation rates applied to different classes and property will be much closer to conventional inflation. On the casualty lines, we load in a factor to take into account social inflation. We don't disclose our inflation assumptions, but on casualty, it's considerably higher than on property. And I think I'll leave it at that.

On the reserve issue, we did disclose -- I'm looking at Brett here, we did disclose it at the finals. And the range we like to be in is between the 75th and the 85th percentile. And at the finals, we were at the 84 -- 83%, sorry. So we are at the conservative end of the range that we like to report. And obviously, there won't be -- we haven't disclosed the half year, but you can see from the results and the growth in reserves, there won't be much change.

Michael, just on the tax benefit, it's not linear. It's weighted heavily to the first half of the year. So we do expect to get a benefit in the second half, but it'll be very much smaller. And just a reminder that that came in late for the last year, and there's a phased implementation of that. So there's kind of 50% benefit that we got last year. It's a 75% benefit this year, then it lifts to 100% next year. So it will be different H1 to H2, but we will get an increasing benefit of that as that implementation gets phased in.

And it seems that we have another question from Andreas van Embden with Peel Hunt.

I just had a question around your premium growth outlook, particularly for that quota share book. I think you mentioned in your report that you're taking a more conservative view of the premium estimates on the quota share book you write due to rate softening. I just wondered whether you're just taking a view for 2026? Or does this also include a view for further rates softening in perhaps in '27 on multiyear treaties. So just trying to understand how much of an influence this adjustment to your quota share premium outlook influences your group revenue outlook?

Yes. I guess the comment was primarily focused on the current financial year, but it certainly will impact how we think about '27. If our view on current rate environment holds, then what we've done this year will hold into '27. But if that rate environment deteriorates further, then we'll take further action on those. And that might lead to us not renewing more contracts, but that's obviously a work in progress, and we can't give too much guidance on that at this stage. We just say that we expect to be a little bit behind 25 this year now. We do expect to see other opportunities in other lines of business as we move into '27. So hopefully, some of that will offset some of the rating decline.

And just to get a feel for how much of that quota share book you're writing in '26 spills over in '27 and perhaps '28, what percentage should I think of that book will spill over and perhaps need adjustment if the market continues to soften.

Yes. I think you're thinking about how the earnings come through on that. I guess, '26 underwriting year will mostly be -- it will be mostly written and earned through next year. So there won't be an awful lot that a little bit, but not too much that earns into 2028.

Okay. So it's mainly '27.

Yes.

Once again, we have a follow-up from Michael Huttner with Berenberg.

I promise last too. The first one is you're -- I feel I may be wrong, much stronger company than maybe 18 months ago or 12 months ago, whatever. How has that affected your relationship with the brokers? Do they now come and knock on your door, or more often? Just to get a feel for kind of your market weight, if you like.

And then the second is to say thanks to Elaine. I'm not sure, but I think this may be the last call you make. I'm not sure if it's true or not. But big thanks. The way I always think of you is the in French is a famous play where the actor protects the war chest, and that's how you've certainly kept that well in place.

Michael, thank you. And yes, you're right, it is Elaine's call, and it's been my pleasure to have worked with her particularly closely over the last 18 months. So Elaine, thank you very much.

Thanks, Michael, for the comments. Appreciate them. I'll miss your question.

Yes, certainly does guard the war chest and lock and chain, padlocks, and everything else you can imagine. So in terms of broking relationships, yes, we do -- I mean, we are a specialist pure-play reinsurer. So we obviously have extremely strong relationships with the key brokers, both as it relates to inwards and also outwards on our retrocession. So it's one of the things we major on and being sort of relatively small and single location, we work hard at it. And it's not only just preferred relationships with key customers, but really strong preferred relationships with key brokers, and we have continued to enjoy those relationships. I haven't really noticed a shift in emphasis on those relationships.

Yes, the company -- we've been working on strengthening the teams and with that come new relationships with both clients and brokers. But really, it's been about -- it was initially about stabilization. We've made some good hires in the last few months and done some more changes. And so that's how I would summarize that.

And another follow-up from Joseph Theunswith Autonomous.

The first is just on -- just asking for a bit of clarification, I guess, on something that you mentioned earlier, Elaine, which is that you now expect premiums to be lower than last year across the full year. Is that also going to be the case for revenues? That's my first question.

And the second is on how the increased retro that you purchased at the midyears will sort of flow through. Can we expect the property retention to decline again further in the second half after your announcement today?

Yes. I think the comment around being lower than last year was really focusing on gross premiums written. So the revenues will be less impacted by that. It is more of an earned view and is supported by the quota share that is still kind of coming through there from prior years. And so that's a slightly different relationship there. And I guess just on the retro, it's predominantly excess of loss, it's predominantly one place, so you can think about that when you're factoring through in your numbers.

Yes. There will be no more significant coverage purchase during the rest of this year. So the retention will stay as it is.

And that's all the questions we have for today. I will now turn the call back over to Neil for closing remarks.

Yes. So we've had what I would describe as a satisfactory first half. We've been really clear in the priorities we have, which is being disciplined, emphasis on margin, capital discipline. I think the company is in a good place. It really just remains for me to thank Elaine for the shift she's put in, and it's been a great pleasure working with you. And look forward to speaking to many of you individually over the next few months or at the Q3 call. Thank you, everyone.

Good afternoon, and welcome to the Conduit Holdings Limited Q1 Trading Update Investor Presentation. [Operator Instructions] Before we begin, I would like to submit the following poll. And I would now like to hand you over to Brett, Head of Investor Relations. Good afternoon to you.

Good day, everyone, and welcome to Conduit's Q1 2026 Trading Update. Thank you for joining us today. Joining me on the call are Neil Eckert, Chief Executive Officer; Elaine Whelan, Chief Financial Officer; and Stephen Postlewhite, Chief Underwriting Officer. Please note our disclaimer language on Slide 2. I will now turn the call over to our CEO, Neil Eckert.

Thanks, Brett, and welcome, everyone. As mentioned on our 2025 results call, Stephen joined in January, and I'm delighted to have him with us today. As usual, today's update focuses on our top line underwriting experience during the quarter and our view of the market with Steve providing more details of each of our segments. Elaine will then cover the financial and investment highlights, including a review of our capital management strategy.

In the first quarter of 2026, we continue to identify select areas for growth and increased gross premiums written by 4.9% over the prior year. Growth was again led by our Casualty segment, where risk-adjusted pricing has remained stable. The quarter saw heightened volatility in investment markets following the outbreak of the conflict in the Middle East. Against this backdrop, we were pleased with the performance of our investment portfolio, which generated a 0.3% return during the first quarter despite the volatility and higher fixed income yields and spreads. Importantly, our managed investments continued to grow by over $100 million since year-end and over $400 million during the last 12 months, reaching $2.3 billion. This added scale will continue to support our earnings going forward.

Capital management remains a focus for us as market conditions soften. During the first quarter, we repurchased $22.9 million worth of shares. And this month, we substantially completed our previous $50 million buyback authorization. We remain confident in the strength of our balance sheet, and the Board has authorized a new buyback program, demonstrating our focus on shareholder returns.

Turning to our top line underwriting performance for the first quarter. Our portfolio continues to grow into areas of the market where we have found attractive underwriting opportunities. We achieved 4.9% growth in gross written premiums, reaching $430 million in the first quarter. Our overall growth rate continues to moderate given increasing competition in the market, but we have identified select opportunities that align with our appetite, primarily in the Casualty segment.

As we discussed on our last call, our reception in the market was strong at 1/1. And this performance is a direct result of the hard work of the team leading up to the renewal period. Market capacity continues to increase, driven by the strong retained earnings of the industry over the last several years. Prices are softening, and we observed a risk-adjusted rate decline of 5% for the first quarter.

Property and specialty markets are experiencing more intense competition and rate softening, but pricing overall remains adequate in our view. Casualty rates are more stable, broadly keeping up with loss trend, and we have seen strong opportunities to grow that portfolio with existing and new cedents.

From a loss perspective, the first quarter of 2026 was more benign than the prior year, which included the California wildfires, but was in line with longer-term averages for insured catastrophe losses for the industry. The market is also dealing with the rise in geopolitical uncertainty and the conflict in the Middle East. The event is ongoing and could impact several areas of the market, depending on the extent and duration of the conflict. We do have exposure to the conflict in some of our specialty classes and have recorded an initial loss estimate based on the latest information, which is not material to Conduit.

With that, I will hand over to Steve for a deeper dive into our market experience across our segments.

Thanks, Neil, and good morning, everyone. It's great to be with you today. As Neil mentioned, I joined the team in January this year and have been working in the industry for nearly 3 decades. I'm very happy to bring this experience to the CUO role at Conduit. Over my career, I have served in senior positions within underwriting, risk management and actuarial functions.

I've spent the first few months getting to know the team and the portfolio and have been pleased with the strength of the people and the opportunities for Conduit going forward. In Q1, the team selectively renewed or secured deals that align well with our strategic objectives, primarily seeking to protect our margins and improve earnings stability.

Turning to the Property segment. Gross premiums written increased 1% over the prior year period to $248.8 million. This modest growth reflects our success of securing new business and increasing shares on well-priced accounts while reducing exposure or exiting treaties with poorer performance or terms that did not match our technical pricing standards. We continue to see a strong flow of business opportunities and submissions, and we are carefully picking our participations.

As we expected, rates continued to soften in the quarter and risk-adjusted rates were down 9% across our Property portfolio. The rate softening comes on the back of several years of strong rate increases and profitable results for the industry. Despite the recent rate softening, we believe the pricing generally remains adequate, and we continue to find select opportunities.

Softening was most notable within property catastrophe reinsurance lines, driven by robust returns over recent years, increased capacity and a relatively benign loss activity for the market. We expect these softening trends to continue through the midyear renewals, and we will remain nimble and proactive in the competitive environment to target well-priced business.

Turning to Casualty. In Q1, the team continued to focus on expanding in classes where rate dynamics remain robust and with cedents that have demonstrated track records of prudent cycle management behaviors. Our casualty team has found select new business opportunities on top of strong renewals. The increase in this segment complements our short-tail Property and Specialty business and enhances overall portfolio diversification.

For the first quarter, we reported $109.7 million of gross premiums written, representing a 23% increase over the prior year quarter. Expiring business was generally renewed at similar shares, while we made deliberate decisions to exit underperforming treaties where returns or terms were less attractive, supporting ongoing portfolio optimization. Growth for the quarter was largely attributable to U.S. general third-party liability, complemented by incremental gains in smaller subclasses that contributed to portfolio diversification. The rating environment remains attractive in our view, although some classes continue to demonstrate firmer prices than others. We continue to focus on areas of the casualty market with sustained pricing momentum.

During the first quarter, risk-adjusted rates were down 1% after adjusting for inflation expectations. Looking ahead, we remain mindful of industry loss trends, including some signs of increased loss frequency and the past legacy concerns in certain areas. Against this backdrop, our focus is on carefully selecting our partners, improving diversification and expansion with our preferred partners across complementary classes.

Turning to Specialty. Competition has increased, and we have scaled back the portfolio slightly to begin the year with premiums reducing 4% or $3 million compared to prior year to $71.8 million. Consistent with our plans, we have been able to leverage our strong trading relationships and quota share participations to successfully write some new higher-margin excess of loss business. This gradual repositioning will take time, but we expect it will help support our margins as the market softens.

Risk-adjusted rates were down 7% in the quarter. The specialty market has become competitive and the team stepped back from a number of deals that did not meet our expectations or requirements. Instead, the team has prioritized protecting margins and ensuring written deals are adequately priced with the required terms and conditions. Loss impacted contracts and selected classes where there has been loss activity have experienced firmer pricing such as marine and aviation, and we have written a few new treaties in these areas.

The first quarter has been quite active from a risk loss perspective in addition to the ongoing conflict in the Middle East. We don't expect the direction of the market to change, but there is potential for enhanced geopolitical risk awareness and the ongoing conflict to create further opportunities. We will stand ready to respond should the opportunities align with our appetite.

I will now hand over to Elaine to go through our financial and investment highlights.

As you've heard, our growth continues into our sixth year of operations, albeit now at a much slower pace, as you would expect, given the rapid growth we experienced in our earlier years and also market conditions at the 1/1 renewals. We wrote $430.3 million of gross premiums written in the first quarter of the year compared with $410.2 million in the first quarter of 2025, a 4.9% increase year-on-year. We typically write the majority of our book in the first half of the year, certainly by [ 1/7 ], and we have tried to front-load our book a little given our market outlook. So we would expect that first quarter growth rate to moderate a bit by the half year, although we still expect to see growth for the year.

Note that our gross premiums written exclude reinstatement premiums as they're not deemed to be revenue under IFRS 17, but are included within reinsurance service expenses as a loss-related amount. Our reinsurance revenue was $240.3 million compared with $213 million in the prior year, a 12.8% increase year-on-year. There hasn't been any significant loss activity in the quarter that has impacted the company. We do expect to pick up some losses related to the U.S. military campaign in Iran, but we don't expect these to be material to our results based on the current information available. Given that latest information, I would describe the loss level from the ongoing conflict is manageable and within our earnings expectations. Otherwise, not much to report on the loss front and prior year specific loss events are broadly stable.

On the investment side, the portfolio yield offset the negative impact of the increase in yields in the quarter, and we generated a return of 0.3%. Book yield is 4.2%, in line with year-end on March 31 last year. We remain relatively short duration and maintain our focus on a high-quality, highly liquid portfolio, particularly given the recent volatility in the markets. Duration is currently 2.8 years on both our investments and our net reserves. Average credit quality is AA, and you can see the usual pie chart here with our asset allocation. And the only change to note is a small bank loan portfolio that we have started this year to help to diversify the portfolio and maintain yield. Otherwise, no real changes from prior quarters in that or our strategy.

We started to include this slide on capital last year to explain how we think about capital. Our focus, first and foremost, is on maintaining sufficient capital to maintain our ratings and to support our underwriting portfolio. We then carry a buffer for opportunities and any other eventualities. Anything over and above that is where we consider capital returns or where else to deploy the excess. The option or blend of options depends on a number of factors, including market outlook and our share multiple. This month, we substantially completed the $50 million share repurchase authorization that our Board approved last year. This year, our Board have approved another program, and we intend to execute that as and when appropriate before our 2027 AGM.

I'll now hand back to Neil for closing comments.

Thanks, Elaine. In closing, we remain focused on delivering shareholder returns, and we'll continue to execute our strategy to support that objective. We continue to make meaningful progress to stabilize the business. The key driver has been the renewal of our outward retrocession program at 1/1 with broader coverage for peak and secondary perils, reducing our net exposure to tail events.

Board and leadership strength is an ongoing focus, and we are pleased that Steve Postlewhite has now settled in the CUO role and working well with his team. We have continued to make progress with our regular Board succession during the first quarter. Elizabeth Murphy has retired from the Board, and I would like to thank her for her dedicated service. Elizabeth was a founder director and has provided valuable guidance and insight as Audit Committee Chair during her tenure. Sadly, Stephen Redmond, a tremendous asset to the Board, passed away in March. His significant contributions and kindness will be missed by all those who had the privilege of working with Stephen.

During the quarter, Nicholas Shott was appointed Board Chair and was joined by 3 new independent nonexecutive directors, Richard Lightowler, Peter Mullen and Penny Shaw, each bringing strong insurance industry experience. The market is softening, but we view most areas as remaining rate adequate. We found select growth opportunities in the first quarter, primarily within our Casualty segment, and we'll continue to adjust in response to changing conditions. Our Underwriting business is supported by a relatively conservative and growing investment portfolio that is now $2.3 billion. This increased scale will support investment income and returns going forward.

Capital management remains a priority. We substantially completed the initial $50 million share buyback program and have continued to pay a consistent attractive dividend. The Board has authorized another share buyback program, reinforcing our focus on capital efficiency and shareholder value. Looking ahead, while we expect competitive market conditions to persist, we remain confident in our strategy, balance sheet and underwriting approach to generate value for shareholders. Thank you for your time and continued interest in Conduit. We would now be happy to take your questions.

[Operator Instructions]

I wanted to start off the Q&A session with the first one here, which reads as follows. Gross premiums written only grew 4.9% despite a still large reinsurance market opportunity. What is preventing faster growth? And how should shareholders think about your long-term growth rate?

Right. So that growth was posted in spite of the fact that there is underlying rate reductions, particularly on property and specialty. So that growth does represent the net after the reduction in overall premiums. So it's a pleasing performance. It puts us probably at the upper end of our peer group in terms of Q1 reporting. We do have to accept the fact that we face a softening market at the moment, and we must manage our business accordingly and really make sure that we have high underwriting standards and do not compromise those standards. So my hope is we've struck the right balance and that, that growth rate is good whilst maintaining our underwriting discipline. Steve, do you want to take Peter's other question on Casualty?

Yes, sure. Thanks, Neil. So on Casualty, I mean, we have underwritten Casualty since the formation of the company in 5 years of relatively strong rates. And so off the back of that relatively strong rate, we have set reserves, I think, on a reasonably prudent basis, and we monitor them really continuously. And so we gain comfort from the fact that we have been extremely consistent in our approach to Casualty reserving and have really seen no major sources of worry, i.e., deterioration within those reserves. However what I would say is it's still relatively early in that development process for Casualty. And so we will continue to do that as we build into the future.

Certainly, from a rating perspective, Casualty has also been the thing which has held up best in terms of rating. We build really quite stringent inflation assumptions into our pricing, recognizing that Casualty lines can be impacted by social inflation, particularly in the U.S. And what we're seeing after we build in those inflation assumptions is that pricing still remains broadly adequate and at the level that we've really seen over the past few years. We're not seeing significant rate deterioration. So that's what gives us comfort.

Thanks, Steve. That's a comprehensive answer. I would add one other thing to that. On reserving, there's 2 criteria. There's the independent actuarial best estimate, which is determined by Willis Towers Watson. And then the management have their own best estimate known as the MVE. Our management best estimate is some $125 million or more above the independent actuary and we call that the risk adjustment. So we are trying to layer conservatism on top of the independent third party.

Right. Let's move on then. Board and leadership changes, right? The next phase of Conduit for me, we are 5 years in as a company. We will be really challenging and testing the business plan. We have scaled and deployed capital during that first 5 years. We have not executed as well as I would have liked, but I think those things and those corrections are in process. We've made a number of senior personnel changes, all of which I would say are strengthening and adding to the business.

The next phase for me is about building and further strengthening, reviewing the classes of business we write. Bench strength within Underwriting is important. Operations, we're aware of the fast-changing world of technology. We want to stay abreast of that and improve our internal business processes. So it's really more of the same, and it is about improving the strength on the bench.

Elaine, would you like to comment on the share buybacks versus writing more business?

Sure. We've gone ahead and our Board has authorized a share buyback, but it gives us the flexibility to use that between now and the next AGM. So it doesn't mean that we will go and execute that right now. We do have time to do that and review all of our options. We have a fairly healthy dividend yield just now anyway. So there's a whole combination of factors that go into our decision-making around our capital in terms of whether we deploy or return capital. So it's a lot of moving parts and a lot of it is driven by the market opportunities that we see ahead of us as well.

And what about the bond market volatility?

We did disclose in our year-end financial statements in the risk section there, the potential impacts of movements in rates on our bond portfolio. So I refer you to that to get a view in terms of how sensitive it is.

That's great, guys. If I may just jump back in there as I can see you have addressed those questions from investors today. So thank you for doing so. Neil, before we direct investors to provide you with a feedback, which is particularly important to the company, can I just please ask you for a few closing comments?

Yes. So we're now well into Q2, which really has continued as Q1 left off. We've affected a lot of change in the recent period, and we are getting into the phase of further strengthening on key areas, particularly operations and underwriting. I'm personally pleased with the outcome of Q1. I look forward to presenting our interim results in July when we will no doubt be doing another session with you guys. So very many thanks for your interest, and we look forward to speaking in the near future.

Fantastic. Thank you for updating investors today. Could I please ask investors not to close this session as you now be automatically redirected to provide your feedback, which will help the company better understand your views and expectations. On behalf of the management team, we would like to thank you for attending today's presentation, and good afternoon to you all.

Good day, everyone, and welcome to Conduit's Q1 2026 Trading Update. Thank you for joining us today. Joining me on the call are Neil Eckert, Chief Executive Officer; Elaine Whelan, Chief Financial Officer; and Stephen Postlewhite, Chief Underwriting Officer. Please note our disclaimer language on Slide 2. I will now turn the call over to our CEO, Neil Eckert.

Thanks, Brett, and welcome, everyone. As mentioned on our 2025 results call, Stephen joined in January, and I'm delighted to have him with us today. As usual, today's update focuses on our top line underwriting experience during the quarter and our view of the market with Steve providing more details of each of our segments. Elaine will then cover the financial and investment highlights, including a review of our capital management strategy.

In the first quarter of 2026, we continue to identify select areas for growth and increased gross premiums written by 4.9% over the prior year. Growth was again led by our Casualty segment, where risk-adjusted pricing has remained stable. The quarter saw heightened volatility in investment markets following the outbreak of the conflict in the Middle East. Against this backdrop, we were pleased with the performance of our investment portfolio, which generated a 0.3% return during the first quarter despite the volatility and higher fixed income yields and spreads. Importantly, our managed investments continued to grow by over $100 million since year-end and over $400 million during the last 12 months, reaching $2.3 billion.

This added scale will continue to support our earnings going forward. Capital management remains a focus for us as market conditions soften. During the first quarter, we repurchased $22.9 million worth of shares. And this month, we substantially completed our previous $50 million buyback authorization. We remain confident in the strength of our balance sheet, and the Board has authorized a new buyback program, demonstrating our focus on shareholder returns.

Turning to our top line underwriting performance for the first quarter. Our portfolio continues to grow into areas of the market where we have found attractive underwriting opportunities. We achieved 4.9% growth in gross written premiums, reaching $430 million in the first quarter. Our overall growth rate continues to moderate given increasing competition in the market, but we have identified select opportunities that align with our appetite, primarily in the Casualty segment. As we discussed on our last call, our reception in the market was strong at 1/1, and this performance is a direct result of the hard work with the team leading up to the renewal period.

Market capacity continues to increase, driven by the strong retained earnings of the industry over the last several years. Prices are softening, and we observed a risk-adjusted rate decline of 5% for the first quarter. Property and Specialty markets are experiencing more intense competition and rate softening but pricing overall remains adequate in our view. Casualty rates are more stable, broadly keeping up with loss trend, and we have seen strong opportunities to grow that portfolio with existing and new seasons. From a loss perspective, the first quarter of 2026 was more benign than the prior year, which included the California wildfires, but was in line with longer-term averages for insured catastrophe losses for the industry.

The market is also dealing with the rise in geopolitical uncertainty and the conflict in the Middle East. The event is ongoing and could impact several areas of the market, depending on the extent and duration of the conflict. We do have exposure to the conflict in some of our specialty classes and have recorded an initial loss estimate based on the latest information, which is not material to Conduit. With that, I will hand over to Steve for a deeper dive into our market experience across our segments.

Thanks, Neil, and good morning, everyone. It's great to be with you today. As Neil mentioned, I joined the team in January this year and have been working in the industry for nearly 3 decades. I'm very happy to bring this experience to the CUO role at Conduit. Over my career, I have served in senior positions within underwriting, risk management and actuarial functions. I spent the first few months getting to know the team and the portfolio and have been pleased with the strength of the people and the opportunities for Conduit going forward. In Q1, the team selectively renewed or secured deals that align well with our strategic objectives, primarily seeking to protect our margins and improve earnings stability.

Turning to the Property segment. Gross premiums written increased 1% over the prior year period to $248.8 million. This modest growth reflects our success of securing new business and increasing shares on well-priced accounts while reducing exposure or exiting treaties with poorer performance or terms that did not match our technical pricing standards. We continue to see a strong flow of business opportunities and submissions, and we are carefully picking our participations. As we expected, rates continued to soften in the quarter and risk-adjusted rates were down 9% across our property portfolio.

The rate softening comes on the back of several years of strong rate increases and profitable results for the industry. Despite the recent rate softening, we believe the pricing generally remains adequate, and we continue to find select opportunities. Softening was most notable within property catastrophe reinsurance lines, driven by robust returns over recent years, increased capacity and a relatively benign loss activity for the market. We expect these softening trends to continue through the midyear renewals, and we will remain nimble and proactive in the competitive environment to target well-priced business.

Turning to Casualty. In Q1, the team continued to focus on expanding in classes where rate dynamics remain robust and with cedents that have demonstrated track records of prudent cycle management behaviors. Our Casualty team has found select new business opportunities on top of strong renewals. The increase in this segment complements our shorter-tail Property and Specialty business and enhances overall portfolio diversification. For the first quarter, we reported $109.7 million of gross premiums written, representing a 23% increase over the prior year quarter. Expiring business was generally renewed at similar shares while we made deliberate decisions to exit underperforming treaties, where returns or terms were less attractive, supporting ongoing portfolio optimization.

Growth for the quarter was largely attributable to U.S. general third-party liability, complemented by incremental gains in smaller subclasses that contributed to portfolio diversification. The rating environment remains attractive in our view, although some classes continue to demonstrate firmer prices than others. We continue to focus on areas of the casualty market with sustained pricing momentum. During the first quarter, risk-adjusted rates were down 1% after adjusting for inflation expectations. Looking ahead, we remain mindful of industry loss trends including some signs of increased loss frequency and past legacy concerns in certain areas.

Against this backdrop, our focus is on carefully selecting our partners, improving diversification and expansion with our preferred partners across complementary classes. Turning to Specialty. Competition has increased, and we have scaled back the portfolio slightly to begin the year, with premiums reducing 4% or $3 million compared to prior year to $71.8 million. Consistent with our plans, we have been able to leverage our strong trading relationships and quota share participations to successfully write some new, higher margin excess of loss business. This gradual repositioning will take time, but we expect it will help support our margins as the market softens.

Risk-adjusted rates were down 7% in the quarter. The Specialty market has become competitive, and the team stepped back from a number of deals, which did not meet our expectations or requirements. Instead, the team has prioritized protecting margins and ensuring written deals are adequately priced with the required terms and conditions. Loss-impacted contracts and selected classes where there has been loss activity have experienced firmer pricing, such as marine and aviation, and we have written a few new treaties in these areas. The first quarter has been quite active from a risk loss perspective in addition to the ongoing conflict in the Middle East. We don't expect the direction of the market to change, but there is potential for enhanced geopolitical risk awareness and the ongoing conflict to create further opportunities. We will stand ready to respond should the opportunities align with our appetite. I will now hand over to Elaine to go through our financial and investment highlights.

As you've heard, our growth continues into our sixth year of operations, albeit now at a much slower pace, as you would expect, given the rapid growth we experienced in our earlier years and also market conditions at the 1/1 renewals. We wrote $430.3 million of gross premiums written in the first quarter of the year, compared with $410.2 million in the first quarter of 2025, a 4.9% increase year-on-year. We typically write the majority of our book in the first half of the year, certainly by 1/7, and we have tried to front-load our book a little given our market outlook. So we would expect that first quarter growth rate to moderate a bit by the half year, although we still expect to see growth for the year. Note that our gross premiums written exclude reinstatement premiums as they are not deemed to be revenue under IFRS 17, but are included within reinsurance service expenses as a loss related amount.

Our reinsurance revenue was $240.3 million compared with $213 million in the prior year, a 12.8% increase year-on-year. There hasn't been any significant loss activity in the quarter that has impacted the company. We do expect to pick up some losses related to the U.S. military campaign in Iran, but we don't expect these to be material to results based on the current information available. Given that latest information, I would describe the loss level from the ongoing conflict is manageable and within our earnings expectations. Otherwise, not much to report on the loss front and prior year specific loss events are broadly stable. On the investment side, the portfolio yield offset the negative impact of the increase in yields in the quarter, and we generated a return of 0.3%.

Book yield is 4.2%, in line with year-end on March 31 last year. We remain relatively short duration and maintain our focus on a high-quality, highly liquid portfolio particularly given the recent volatility in the markets. Duration is currently 2.8 years on both our investments and our net reserves. Average credit quality is AA, and you can see the usual pie chart here with our asset allocation and the only change to note is a small bank loan portfolio that we have started this year to help to diversify the portfolio and maintain yield. Otherwise, no real changes from prior quarters in that or our strategy.

We started to include this slide on capital last year to explain how we think about capital. Our focus, first and foremost, is on maintaining sufficient capital to maintain our ratings and to support our underwriting portfolio. We then carry a buffer for opportunities and any other eventualities. Anything over and above that is where we consider capital returns or where else to deploy the excess. The option or blend of options depends on a number of factors, including market outlook and our share multiple. This month, we substantially completed the $50 million share repurchase authorization that our Board approved last year. This year, our Board has approved another program, and we intend to execute that as and when appropriate before our 2027 AGM. I'll now hand back to Neil for closing comments.

Thanks, Elaine. In closing, we remain focused on delivering shareholder returns, and we'll continue to execute our strategy to support that objective. We continue to make meaningful progress to stabilize the business. The key driver has been the renewal of our outward retrocession program at 1/1 with broader coverage for peak and secondary perils, reducing our net exposure to tail events. Board and leadership strength is an ongoing focus, and we are pleased that Stephen Postlewhite has now settled in the CUO role and working well with his team. We have continued to make progress with our regular Board succession during the first quarter. Elizabeth Murphy has retired from the Board, and I would like to thank her for her dedicated service. Elizabeth was a Founder Director and has provided valuable guidance and insight as Audit Committee Chair during her tenure.

Sadly, Stephen Redmond, a tremendous asset to the Board, passed away in March. His significant contributions and kindness will be missed by all those who had the privilege of working with Stephen. During the quarter, Nicholas Shott was appointed Board Chair and was joined by 3 new independent nonexecutive directors, Richard Lightowler, Peter Mullen and Penny Shaw, each bringing strong insurance industry experience. The market is softening, but we view most areas as remaining rate adequate. We found select growth opportunities in the first quarter, primarily within our Casualty segment, and we'll continue to adjust in response to changing conditions.

Our underwriting business is supported by a relatively conservative and growing investment portfolio that is now $2.3 billion. This increased scale will support investment income and returns going forward. Capital management remains a priority. We substantially completed the initial $50 million share buyback program and have continued to pay a consistent attractive dividend. The Board has authorized another share buyback program, reinforcing our focus on capital efficiency and shareholder value. Looking ahead, while we expect competitive market conditions to persist, we remain confident in our strategy, balance sheet and underwriting approach to generate value for shareholders. Thank you for your time and continued interest in Conduit. We would now be happy to take your questions.

[Operator Instructions] We'll take our first question from Michael Christodoulou from Berenberg.

I have a couple. First one, I guess, it's on volume. Most insurers have reported so far have highlighted a reduction in volume, but Conduit actually managed to grow premiums 5%, led by Casualty up 23% year-on-year. If you can give us a bit more color around that behind the drivers, specifically maybe for Casualty and perhaps talk a bit about the risk profile, that would be great. And then the second one is on retro. Neil, you mentioned the renewal of the retro program, but that also should mean that there's going to be a benefit from lower pricing. If you can elaborate maybe about where that benefit will show up and also, I guess, for the new structure of the retro, where it stands and I guess, how it helps going forward, that also would be great.

Steve, if you take the first question on the inwards, and then I'll deal with the retro.

Sure. Thanks, Michael. Thanks for the questions. On Casualty, clearly, the main driver of the growth comes from Casualty. And really there, we're kind of benefiting a little from our scale and nimbleness. So we're able to be really selective in what we target for growth there. And what I would say is there's kind of 3 levels to that selectivity. The first is we're able to look underneath Casualty, which is a very broad church, and we identify there are a number of lines of business, which are continuing to be really quite price-adequate and are the hardest. In particular, I would highlight USGL, where that line of business is kind of in a later stage in the cycle than many.

So it's still in a harder state, and we've been able to focus and really kind of be very selective in terms of that line in particular. The second area of selectivity, I guess, is our preferred partner approach where we look at our business and our trading partners. We classify some of them as preferred. We do that because we believe they are the very strongest in the areas that we target, the very strongest in terms of how they do their underwriting and in particular, I guess, at this stage of the cycle, how they think about cycle management. So we can see and they can demonstrate that they are being good actors in terms of managing their portfolio and therefore, give us confidence that we can support them.

So there are 2 areas. And the third area of selectivity is really diversification. So we're able to target classes that generate the highest level of diversification and therefore, use the lowest capital and so get the best returns for us. And kind of that nimbleness has enabled us to grow. The other thing I would say is it takes time to get on some of these placements, and we have been very consistent with how we traded with a number of these partners and built up a very strong relationship and very focused relationship with them. And that's really standing us in good stead, enabling us to grow in Casualty.

Okay. Thanks, Steve. On the retro program, we have benefited from more competitive conditions, but the principal thing we did was set out to eradicate basis risk, which you will be aware was the cause of the California issue in 2025. So we buy a tower of full whole account, both for peak and secondary perils, which we don't publish the limits that we place or the actual retention because that's commercially sensitive. But what we do give is information on our PMLs and risk tolerances. The overall -- so we get better value, a more comprehensive and complete program. We are managing our exposures now, both from a capital and from an earnings volatility perspective. The cost will not be less than last year because the account has grown. And so although we, in my view, bought significantly more better value, we will have paid more than last year. But as I say, I stress -- I would emphasize the word value. And those premiums will come through when we financially report both at the interims and the year-end.

Our next question comes from the line of Abid Hussain with Panmure Liberum.

I've got 3 questions, if I can. The first one is on management changes. Just wondering with the new Chief Underwriting Officer and a new chairperson, have there been any changes to the risk appetite or indeed the underwriting processes? And then the second question is on the pricing trends at the first of April or after the end of the quarter. Just wondering if you've observed any meaningful loosening to the Ts and Cs, the terms and conditions within the contracts renewing after the quarter end? And then just finally, on your capital ratio and the target range. Thank you for sharing that. That's very helpful. So look, the BSCR ratio is bang in the middle of your target range. Are you comfortable at that sort of level in the current market conditions? Or would you let it drift lower from here?

Thanks, Abid. I'm going to let Steve do the one for rate. I'm going to let Elaine comment on capital. I will start with management changes. I mean the whole period since I took over has been one of change and in every regard, and by one instance, I'll come on to, it's been about positive change and strength and improvement. So it's been a fascinating 12 months from my perspective. And -- but we have strengthened from the top down, the main board, we strengthened, in my view, the underwriting processes. There is one thing I will comment on. There is -- as regards to Elaine, that is a genuine retirement. She is a friend of this company, will be fully engaged and working here until September. So that is different from a lot of the other change that we have put into place, but we are strengthening this company across the board. As it relates to risk appetite, the new arrivals have not -- we have published our risk appetite in terms of PMLs and catastrophe, and that is -- continues to be conservatively managed. And so really, my takeaway theme is it's gradual change with a view to positive and strengthening and that's where we are. Steve, over to you for 1/4.

Yes. So I think the question related to changes in Ts and Cs as opposed to pure rate change. I mean, if there is one kind of slight silver lining to a market which is softening relatively rapidly, I would say there is discipline in Ts and Cs. So we haven't really seen structures materially changing. We haven't seen yet, I guess, the advent of additions such as terrorism and NBCR and other things coming into property policies anymore than we had historically. That's not to say that couldn't change as we go forward. It's something that we're very alive to and we'll be very much on top of as we go through the underwriting process.

Just on the capital side of things, we are very comfortable where we're sitting just now. And I think I wouldn't expect to see that change too much from that position. If anything, hopefully, that would come up a little bit as we build retained earnings and manage our risk through risk selection and managing our PMLs and the extra reinsurance we've got there as well. We just point out though that, that is only one area of focus for us. is the one that gets published because that's the one that everyone else puts out there. But we also pay attention to the rating agency models and our own internal capital model as well. So there's quite a lot that goes into how we think about capital and our capital requirements.

Our next question comes from the line of Andreas van Embden from Peel Hunt.

I just had a question around the investment portfolio. If I look at the investment leverage or the investments against equity, it's around 2x. And I just wondered whether if you take a 3-year view, whether this is going to be sort of a constant ratio of investments to equity or as you build out your casualty portfolio as you grow that in Q1, whether that should increase over time.

Elaine, do you want to comment or do you want me to?

Just one question, Andreas. It's most unlike you. Or is it one question for now? I think in terms of where our leverage goes, a lot of it depends on what we're doing on the capital side of things as well. If we are making capital returns, then that's obviously going to impact how much that portfolio can grow. But we are cash generative and the reserves have been building. As the business mix changes at some point, that might kind of cap out. We haven't really kind of given any guidance on that. So it does depend on where the market goes, what business we're underwriting the business mix and how much we're returning capital to shareholders as well.

So Andreas, I'll just add to that. I think the clue is in the size of the account in the early years. And so once the account -- as Elaine has observed, once the account and the early years are fully developed, then the growth in gross assets will plateau. But so long as we're growing the casualty account and the current years are bigger than the prior -- than the old years, then you will see a growth in the amount of reserves that we carry because the book has a tail of up to 7 years in terms of reaching maturity. So I would expect to see our gross assets continue to grow.

Our next question comes from the line of Ben Cohen with RBC Capital Markets.

I wanted to ask 2 things. Firstly, just interested in terms of the margin that you think you're writing new business at. And maybe you could put that into the context of, I guess, I'm not sure if it's now a historic target to hit a sort of mid-teens ROE over the course of the cycle, just sort of where you are against that sort of target? And the second thing is if you could give any outlook as to how you see the market developing into the June, July renewals. Any particular aspects that you're looking out for there or areas you're choosing to focus on?

Right. Steve, if I pass over to you to comment on the midyear renewals and market outlook.

Sure. Yes. So on the market outlook, obviously, we're right in the throes of that right now, June and July. We don't really see a material difference to what we've seen in the first quarter of the year. Property is probably going to be off slightly more, and we kind of predicted that by, to some extent, front-loading our property exposure to first of Jan. So that we expected. Casualty and Specialty, I think, is really more of the same. So I think it will be very similar to what you see within this pack.

Okay. And we -- obviously, when we are writing new business, we have an internal target margin, which we don't really comment on in public sort of given the commercial sensitivity in terms of our new customers reading about what margin we expect out of their business. But what I will comment on, on the mid-teen ROE, that figure was something that emerged around the time that the company was launched. What we have seen is people getting in hard markets into the 20-plus ROEs, and we hit 20-plus in '23. And a lot of people have been achieving returns in excess of 15%. And the assumption being that, that's a cross-cycle return, not a forecast for any 1 year in isolation. I'm obviously aware of where analyst forecasts sit for our company this year, and I'm not going to comment on that. But I think a decently run reinsurance business can post cross-cycle ROEs of 15% and this hard cycle has reinforced my views on that. What we've got to do as a company is execute.

Our next question comes from the line of Joseph Theuns with Autonomous.

The first is in the property book. I just want to get sort of a flavor of how much of the growth kind of was split between the excess of loss versus quota share and kind of a broader update on how the recalibration towards a 50-50 mix in that book is going? And then the second question, I was hoping to kind of square off the chart that you have on Slide 11 on capital with your target range of 200% to 300%. I believe in the past, you've said that the required capital range -- required capital is [ 170 ]. And so if the target solvency range is 200% to 300%, can we sort of take away that the targeted headroom is 30% and then based off that, that anything in excess of 200% is can be considered excess capital?

I'll start on the Property QS versus XL, then I'll pass over to Elaine to comment on the capital. I don't think I'm really familiar with where the [ 170 ] figure ever came from. And -- but I'll let Elaine deal with that. So we always said that the transition to excess of loss would be a medium-term project and could take 2 to 3 renewal seasons. That process is underway, and we have written a significant amount of new excess of loss business. I'm very pleased with the showing that we've had. And what we will do is it is work in progress. I mean, effectively, what we've had is one significant part of the renewal book at 1/1 has come up. We are -- 1/4 was good.

We do not, at this stage, publish a split. But over time, we will give granular information. But what I said before was it would be a medium-term issue. We have come off quite a lot of the quota share book as it relates to excess of loss, and we are growing the open market. But I'd rather report on sort of facts and information once we have achieved that. And I reiterate what we said before, it is a 2 to 3 renewal season project to get to the split that you referenced. That split would be a target for Property and Specialty. Casualty will always be predominantly quota share. That is the way that market operates. Elaine, I'll pass over to you to discuss the capital.

Not too sure about the [ 170 ] either, maybe we can chat with that offline and see where that's coming from. But I think maybe just to put into context, what we're trying to say on that slide is how we think about capital, and it's not an exact science. So there are a few different models that we look at. The regulatory one is only one of the models that we look at, and we tend to focus more on the rating agency model and our own internal capital model. And so we've kind of -- when we've calibrated those models against each other and where we sit in our business model relative to peers, all that kind of stuff, the 200% to 300% range is where we've come up from the regulatory perspective. And I wouldn't read too much into the fact that we're bang in the middle of that range this year, but it will move around there.

And that is driven by market opportunity, we can be at the lower end of that, we can be at the higher end of that. And that may or may not trigger a conversation around whether we're doing capital returns or not. But it's very much about working out what our required capital is for the book that we want to underwrite and then putting that buffer on top of there, which I think is a fairly common approach in the market and carrying some headroom over that. And that gives us the flexibility to respond to anything that we need to respond to. And once we get over those levels, that's when we're starting to have conversations around what we do with that extra capital that's there that we're not using for the business. Are we seeing a new line of business that we want to go into? Are we looking to deploy it into another area, those kind of things or whether we want to return that. So it's quite an involved process. It's not just driven by hit a certain percentage and then anything over that gets returned.

Okay. Makes sense. And sorry, if I may just have one very quick follow-on. In terms of the buyback impact on solvency last year, can you give us a sort of rough range of how many points of solvency that had an impact on?

I don't have that number to hand, Joe.

I mean in terms -- I mean the one thing that I would say is that -- last year, we did come in at in excess of an 11-point ROE at the end of the day, whatever it looked like at the midyear, it was slightly better at year-end. And that would obviously have helped the balance sheet and the ratios a little bit. Okay. Let's move on.

Maybe just one thing to add to that. I think in terms of our overall capital base, $50 million isn't really that big a number. So it's not a big percentage, not a big impact.

There are no further questions on the conference line. I will now turn the call over back to Neil for closing remarks.

Thank you. So we're now well into Q2, which has continued as Q1 left off. We have affected a lot of change, and we're now getting through to the phase of strengthening the business in key areas, particularly operations and underwriting. I'm personally pleased with Q1. I look forward to presenting our interim results in late July, and thank you all for your interest. Cheers

Good afternoon, ladies and gentlemen, and welcome to the Conduit Holdings Limited Investor Presentation. [Operator Instructions] Before we begin, we'd like to submit the following poll, and I'm sure the company will be most grateful for your participation. I'd now like to hand over to the team from Conduit Holdings. Good afternoon to all.

Good day, everyone. Welcome to Conduit's Full Year 2025 Results Presentation. We appreciate your time today as we discuss our performance for the year. Joining me on the call are Neil Eckert, Chief Executive Officer; Elaine Whelan, Chief Financial Officer. Please note our disclaimer language on Slide 2. I will now turn the call over to our CEO, Neil Eckert.

Thanks, Brett. Welcome to our presentation. As Brett mentioned, I'm joined by Elaine Whelan, our CFO. Today's presentation will cover our business performance for 2025 and our view of the market and January renewals. I will also provide an update on some key actions we have taken during the year. Elaine will provide some additional detail on our financial and investment highlights for the year before closing remarks and time for questions.

We have had some significant changes within the executive team over the last 12 months that have brought additional depth and expertise to the organization. Although he is not with us on the call, I'm excited that Stephen Postlewhite officially joined Conduit as Chief Underwriting Officer in late January. Stephen brings a strong CUO background to Conduit and is quickly getting immersed into the business. I have no doubt that he will make an ongoing impact.

William Randolph joined as Chief Risk Officer last July. William has settled in well and has made some noticeable improvements to our risk functions already. We've also welcomed new talent in other key functions such as underwriting, modeling, actuarial and claims. We are now up to 68 employees here in Bermuda, and we will continue to hire and invest in the business as we see fit.

I would also like to mention some recent changes at Board level. The Board recently concluded its recruitment process to identify a new Chair, and I'm delighted that Nicholas Shott has agreed to take on the role. Nicholas joined the Board in November with a strong background in financial services and advisory roles and is well suited for the role of Chair.

I look forward to partnering with him as we continue to move Conduit forward in the execution of our strategy. I would also like to thank Elizabeth Murphy, who will retire from the Board ahead of the 2026 AGM as part of our normal Board succession planning. Elizabeth was a Founding Director and has provided valuable guidance and insight as Audit Committee Chair during her tenure.

2025 was a difficult and transitional year for Conduit that ended with a double-digit ROE after a challenging start to the year. Our portfolio continued to grow with gross premiums written increasing nearly 7% year-on-year to $1.24 billion. We found select opportunities to grow our business as markets softened over the course of the year.

Catastrophe activity and risk loss frequency remained elevated in 2025 with approximately $127 billion of insured catastrophe losses according to AM. Our undiscounted combined ratio in 2025 was 101.5%, reflecting our larger exposure to the California wildfires during the first half of the year and a benign second half with no U.S. landfalling hurricanes.

We enjoyed excellent investment performance, which delivered a 6.7% return for the year, contributing $119.5 million of income. Our managed investments continued to grow by approximately $380 million over the last 12 months and reached $2.2 billion as of the year-end with a 4.2% book yield, the portfolio is producing strong recurring income.

All in all, we produced $116.8 million of comprehensive income for an ROE of 11.1%. This result is below our mid-teens cross-cycle target and our initial expectations for the year, but is a reasonable return after generating a loss during the first half of 2025. Compared to the prior year, our net tangible assets per share increased 11.9%, including dividends, reaching $7.14 or GBP 5.30 per share.

We returned $59.4 million to shareholders through dividends and repurchased 2.7 million shares for $12.5 million through our authorized share buyback program, which has continued into the new year, for which authorization expires at the May AGM, where we will seek renewed authorization. Our balance sheet remains strong and our estimated BSCR of 252% at 31st December leaves us well capitalized.

Turning to our underwriting results for the year. We continue to grow our top line at a steady pace during 2025. Our growth was driven by a strong increase in Casualty of 23%. Throughout the year, Casualty rates remained firm, and we deployed our capacity where we saw the best opportunities. Property grew a modest 2% and Specialty was down 4% as market competition increased over the course of the year in both of these segments. Our balance between Property, Casualty and Specialty has shifted slightly, reflecting the strong Casualty growth during 2025, which is now almost 1/3 of the portfolio.

Overall, risk-adjusted rates reduced by 3% for the year, reflecting a 5% rate decline in both Property and Specialty segments, while Casualty pricing was more firm and increased by 1%. Industry capacity continues to build with both traditional and alternative capital generating strong retained profits over the last 3 years despite elevated loss activity. This additional capacity is being used to pursue growth strategies and driving more competition in the market. Our 2025 undiscounted combined ratio of 101.5% compares to 97.1% in the prior year. Our result was heavily impacted by the January California wildfires, which added 15.3% to the ratio. We have taken steps to remedy this in the future, which I will touch on in a few minutes.

Property gross premiums written increased by $14 million to $659.4 million for 2025, representing a 2% growth over the prior year. After several years of strong growth and rate increases, growth has slowed as price softening over the course of the year. Capacity continues to build driven largely by retained earnings for both traditional reinsurers and alternative capital looking to expand their business.

This led to a 5% reduction in risk-adjusted rates on our renewal portfolio. Pricing has come off peak levels but remains adequate in our view. We will approach the market with discipline as we look to gradually rebalance the portfolio. Our undiscounted combined ratio for the Property segment was 97.1%, an increase from 90.2% in the prior year. The higher combined ratio primarily reflects our net exposure to the California wildfires and to a lesser extent, U.S. convective storms.

The Atlantic hurricane season was notably active, producing 3 Category 5 storms. However, none made landfall in the United States, contributing to a strong underwriting performance in the second half of the year. During the year, Angus Hampton was promoted to Head of Casualty. He and the team had a strong year engaging with clients and finding growth opportunities.

Casualty gross premiums written increased $73.4 million to $392.3 million for 2025, representing a 23% growth over the prior year. Our growth has been focused on the areas of the casualty market that are experiencing stronger pricing, such as U.S. general third-party liability. We have deepened our support for partners that are taking a disciplined approach to managing the cycle. We also wrote some new business that complemented our existing portfolio.

Across this segment, rates have generally remained stable after inflation, and our risk-adjusted rate change was up 1% during 2025. Pricing varies broadly across different casualty classes, and we are carefully watching the areas of the market that could show signs of improvement. Capacity for Casualty business is generally stable. The industry continues to face challenges relating to prior year reserve development, which has helped maintain more stable pricing and terms and conditions.

Our undiscounted combined ratio for 2025 was 99.3%. In Casualty, we have maintained our consistent approach to reserving, which we regard as appropriate given its long-tail nature. The growth in our Casualty book has also contributed to our strong cash flow and growing investment portfolio as we hold reserves against this business. This has positively impacted our investment leverage and ROE contribution from the portfolio.

Specialty gross premiums written decreased $7.1 million to $191.3 million, representing a 4% decline over the prior year. Our contraction in gross premiums written in Specialty reflects our disciplined approach to more competitive conditions driven by overcapacity in the market.

The market has shown growing appetite for Specialty business over the last year due to the margin potential and the noncorrelating nature of the risks, and this has attracted new entrants. We have come off business where prices have softened or commissions have increased meaningfully.

Across our Specialty business, risk-adjusted rate change was minus 5% during 2025. Specialty is made up of many different classes with different price dynamics. However, softening has become more broad over the course of the year. There are a few classes where pricing has remained firm, such as aviation and some multiline accounts. And we will look to deploy our capacity in areas which demonstrate the best margin.

Our undiscounted combined ratio for 2025 was 100.3% and increased from 95.8% in the prior year. The Specialty segment was impacted by a greater frequency of risk losses in 2025, including aviation events. A small proportion of the California wildfire also sits within the specialty book. Our team had another successful January renewal season. We worked hard in the lead up to renewals, in essence, beginning at Monte Carlo in September, spending significant time with clients and brokers to clearly communicate our appetite and make sure we receive a strong flow of business.

Our reception in the market was stronger than it has been, and we saw a significant number of attractive new and renewal opportunities for our portfolio. As expected, pricing was more competitive at the January renewals with overall renewal pricing down 5% across our portfolio. Property and Specialty risk-adjusted rates were down 7%, while Casualty was down 1%.

We have seen increased capacity in the market from traditional and alternative capital, particularly for Property risks and Specialty risks reflected in these figures. We have previously communicated our appetite to grow the balance of excessive loss within the Property portfolio. We have started to write more excessive loss business and our treaty count has increased in this area.

We have also found select new quota share opportunities with attractive pricing that we added to the portfolio. Our overall balance of excess of loss and quota share has not changed meaningfully as this is an ongoing process that will take time. Casualty conditions remain more stable. Primary rate increases in U.S. general third-party liability are starting to decelerate but continue to benefit from price corrections.

In Casualty, our team is working to identify new partners and opportunities to diversify the portfolio. At the January renewals, we wrote several new treaties and also increased our line size with select clients. Terms and conditions have generally remained stable for the U.S. accounts, while international business has displayed more competition. Our casualty business is and will remain largely quota share, which is how cedants approach the Casualty market.

In Specialty, we saw an increase in new business, including excess of loss opportunities. We have remained highly selective if rates continue to soften at 1/1. Capacity remains strong, and we continue to see new entrants in the market, which has impacted signings. We participated on several new Specialty placements, including a couple of new aviation deals where pricing has been more stable.

As we said previously, we expect the rebalancing of our portfolio to take several renewal seasons, and we are pleased with the new excess loss opportunities that we've added to the portfolio. The market is dynamic, and we are deploying our capacity based on the strongest opportunities we see rather than strictly following preset targets. As the market develops, we will adjust our appetite to find areas producing the best margin.

Another critical piece of Conduit's transition has been our increased focus on reducing earnings volatility and better management of our net exposures. In 2025, we increased the size of our exposure management team. The team works hand-in-hand with underwriting and risk to monitor and manage our portfolio exposures against preset tolerances for a variety of perils and regions at different return periods.

With our results, we are disclosing new PML zones at the 100- and 250-year return periods. Our refined approach provides a more conservative and transparent view of exposures as they capture broader geographic zones. We believe this gives investors a more complete view of risk, particularly for extreme events. You will notice that we have experienced a year-over-year reduction in PMLs across almost all peak zone perils at both the 100- and the 250-year return periods.

This primarily reflects our expanded retrocession coverage and increased limit that we purchased in January 2026. Our retrocession program also provides improved protection from secondary perils, which includes cover for wildfire, convective storm, floods and freezes. The California wildfires in 2025 highlighted the need for us to have more comprehensive coverage for these types of events. In 2025, we purchased additional retrocession cover following the wildfires to specifically address coverage for secondary perils.

Our retro spend has increased for 2026 with this increased protection, but we believe that we have a program that will reduce earnings volatility and better protect our balance sheet from extreme events. As an example of this, if we apply our 2026 retro program to our gross loss for California wildfires, we believe our net loss will be reduced by at least 50%. I will now hand the call over to Elaine to go through our financial and investment performance.

Thanks, Neil. The California wildfires in January of 2025 gave the industry a bumpy start to the year and Conduit in particular, felt the effects of that event and experienced a larger loss than we would have liked for that type of event. The rest of the year was, however, relatively quiet for us from a loss perspective. Our investment portfolio performed well, and we also had a benefit from tax credits from recent legislation passed in Bermuda, our sole location of operations.

All in, we produced a reasonable ROE of 11.1% in a challenging year. We recorded $1.24 billion of gross premiums written for the year compared to $1.16 billion for the prior year, almost a 7% year-on-year increase. Our reinsurance revenue, which broadly speaking, is IFRS 4 gross premiums earned less ceding commissions was $897.1 million for the year compared to $813.7 million for the prior year, a 10.2% increase year-on-year, reflecting our continued but moderating growth strategy.

As you will see in our segment note of financial statements, we reclass some business this year between our 3 divisions. After those reclasses, all 3 divisions still show growth in reinsurance revenue with Property and Casualty showing growth in gross premiums written and Specialty slightly down on the prior year. Overall, the growth year-on-year reflects our view on the markets.

Heading into 2026, we do expect growth to moderate further as the market softens, although pricing remains broadly adequate, and there are plenty of opportunities to pick our way through. Ceded reinsurance expenses, which you can see in our RNS and essentially our ceded premiums earned, excluding reinstatement premiums, were $119.1 million compared with $93.7 million for the prior year. Our average cover has increased year-on-year as the average book has grown in addition to price increases at the January 1, 2025 renewals, plus additional cover purchased during the year to address secondary peril exposures.

That ceded reinsurance expense brings our net reinsurance revenue to $778 million for 2025 versus $720 million for the prior year, 8.1% year-on-year growth. On the loss side, 2025 was another active year in terms of industry losses, but with a different makeup of those losses than in 2024. Where 2024 losses resulted from a broad mix of events, 2025 was very much characterized by the January California wildfires.

Our undiscounted net loss after reinsurance and reinstatement premiums for that event was $119.1 million, a 15.3% impact on our undiscounted loss and combined ratios. For the prior year across Hurricane Helene and Milton, we had a net impact after reinstatement premiums of $68 million, which had a 9.4% impact on our undiscounted loss and combined ratios.

Our net undiscounted loss ratio for the year was 89.9% versus 84.4% for the prior year, the difference being driven by the larger impact of the California wildfires this year versus the numerous smaller events in 2024. Our net discounted loss ratio was 77.5% versus 73.3% for the prior year. You can see a higher impact from discounting on the 2025 ratio as compared to the 2024 ratio, driven primarily by the higher loss ratio.

Just a reminder here that we made a policy decision to use opening rates to discount our nonspecific incurred losses with date of loss for material specific events. Our combined reinsurance operating expense and other operating expense ratios were 11.6% versus 12.7% in the prior year. In the fourth quarter of 2025, the Bermuda government passed legislation introducing tax credits for companies that have a substantial presence and investment in Bermuda.

Conduit benefited from this new legislation, and we recorded credits of $6.9 million in our income statement, offsetting reinsurance and other operating expenses. Adjusting for the tax credits recorded this year, the ratio would be 12.5%, broadly in line with the prior year. Our combined ratio on a discounted basis was 89.1% versus 86% for the prior year and on an undiscounted basis was 101.5% versus 97.1%.

Our net reinsurance finance expense for the year was $77.2 million versus $30.8 million in the prior year. Our interest accretion was $61.1 million compared to $37.6 million in the prior year, and the impact of changes in discount rates was an expense of $16.1 million, which is a benefit of $6.8 million in the prior year. You can see these numbers in our RNS and our financial statements.

The accretion has increased in line with expectations as a relatively new company with growing reserve balances. We also had higher incurred losses in 2025, so more discount from those to unwind during the year also. The remeasurement to current discount rates reflects the changes in yields. Our net investment return was 6.7% for the year versus 4% in the prior year. I'll come on to investments in a bit more detail in a moment on the next slide. But just to wrap up on this one, our comprehensive income for the year was $116.8 million or an ROE of 11.1% versus the prior year of $125.6 million and 12.7%.

So here's the investment bit. Book yield is now at 4.2% compared to 4.1% at the end of 2024, so reasonably consistent. As our asset base and investment leverage grows, the portfolio earns more income. Investment income is $80.7 million compared to $65 million in the prior year. With the reduction in yields in the year, we booked a net unrealized gain of $39.2 million versus $1 million in the prior year. As noted on the previous slide, our investment return for the year was 6.7%.

Otherwise around the portfolio, we continue to notch duration up a little but remain relatively short, and our focus continues to be on maintaining a high-quality, highly liquid portfolio. Duration is currently 2.8 years versus 2.7 years on our net reserves. Average credit quality is AA, and you can see the usual pie chart here with our asset allocation. This slide demonstrates what I just mentioned. You can see that as the business continues to grow and we remain highly cash generative, our invested assets also continue to grow.

As our portfolio has become higher yielding over time, we produce more income. And as our investment leverage increases over time, that contributes more to our ROE. I'll now hand back to Neil for additional comments.

Thanks, Elaine. To close out, I wanted to quickly reflect on some of the key achievements over Conduit's first 5 years. From a standing start, Conduit is now writing more than $1.2 billion of premium annually with a diverse portfolio of Property, Casualty and Specialty risks. We focus on classes that we know well and where we understand the risks. We have established strong client and broker relationships and have become a trusted market.

Our portfolio is supported by a large renewing book and a strong flow of new business that we carefully select from. As market conditions change in any given line, we can shift capacity to areas where we see stronger pricing conditions. As we have deployed capacity, our growth has resulted in increased operating leverage for the business. Our gross premium leverage is 1.1x our shareholders' equity and our managed investments are up to 2x our shareholders' equity.

We have paid a steady dividend since inception, providing an attractive yield on our shares. Dividend payments through 31st December '25 have totaled over $267 million or nearly $300 million with the final dividend declared today. That will be paid in April. In addition, we initiated a buyback program during 2025. We expect to continue to provide attractive capital returns to our shareholders through dividends and buybacks going forward as market conditions and capital requirements warrant.

Lastly, we have strengthened the team as we move beyond that start-up phase. Our business has grown and now requires different skills and expertise. Our team has increased to 68 staff here in Bermuda, and we will continue to grow and invest as needed to move our business forward. We have generated profits in each of the last 3 years, not at the level we think we can achieve. But all in, we believe that our business is now well positioned to deliver attractive returns for shareholders through dividends, repurchases and growth in net tangible assets per share.

In closing, we are pleased with the progress we have made post the California wildfires. We have maintained our presence on select lines that we regard as price adequate, whilst we have also exited some treaties that no longer meet our pricing requirements. Our return on equity of 11.1% was slightly better than it could have been given the size of our exposure to the California wildfires at the beginning of the year.

The benign hurricane season led to solid underwriting results in the second half of the year, which was supported by strong investment returns. During the year, we have taken steps to improve the execution of our strategy, and we believe this leaves us well positioned for 2026 and beyond. We have strengthened our leadership and underwriting teams by attracting new talent to the organization.

These individuals bring additional expertise and fresh perspectives that will improve the resilience of our business. As the market softens, we remain committed to finding profitable opportunities. We are happy to walk away from business that does not meet our requirements and have demonstrated this during the January renewals. Having said that, conditions are dynamic, and we have also found select opportunities for growth in new business.

We are committed to reducing volatility as we gradually rebalance our portfolio and maintain a more comprehensive retrocession program. We believe that we are well protected from severe peak and secondary perils based on our modeling. Our balance sheet remains strong, and we are returning excess capital to shareholders through dividends and share repurchases, which will continue to be a focus as we prioritize capital efficiency and prudence.

Thank you, and we are now ready to take your questions.

That's great. Neil, Elaine, thank you very much indeed for updating investors. [Operator Instructions] I'd just like to remind you a recording of this presentation, along with a copy of the slides will be available to you shortly after the meeting has ended. Neil, Elaine, thank you once again. There's been a number of questions from investors. Thank you to everybody for your engagement this afternoon. Perhaps I can start off with the first one here. Are softer conditions actually creating opportunities for disciplined players like Conduit?

The principal area that we would benefit from slightly softer conditions will be in the purchase of our own reinsurance. And that enables us to manage our net position in these types of markets. So that does create some opportunity. We'd obviously prefer markets to be hard, it's [indiscernible] expanding capacity in that market. I think I'll leave that answer there.

That's great. Let me just turn to the question. How should we think about capital allocation priorities over the next, say, 12 to 18 months?

So where we see profitable business, we would allocate capital towards that and we have seen at year-end. But the other issue with capital allocation is to use capital where it's responsible for share repurchase and share buyback and specific [indiscernible] we have continued appetite and we are ready in the market buying our stock. So there was a slide at the half year on capital strategy, I'd refer people to the presentation on the website. But either allocation for the most profitable business or using the capital where the surplus capital is to buy in our own shares.

Great. let me just take another question, if I may. Use of AI in bifurcation trials, bad faith claims, liability and damages separation. I don't know if you can take that question there, Neil.

Well, we sort of -- yes, I understand the question. It's where a trial is bifurcated into 2 to try and keep things simpler. I mean AI litigation is fairly new. But the first stage of the trial [indiscernible] then they have a separate trial to establish the potential liability. We have been looking carefully at AI as it relates to Casualty.

I don't want to break down here, but we are not technology specialists. We don't specifically need [indiscernible]. The other thing we've seen with technology moving is some very big data center coverages from a physical damage perspective, there's huge limits being required in the market that could create business opportunity.

The risks themselves are complex, and we will look at them very carefully before we participate. So there's a mixture of potential risks we need to be aware of, such as AI litigation and also opportunities such as the insurance of the new physical infrastructure that's required.

Great. Thank you very much indeed. Question from Richard. Richard asks, what area of the portfolios are you most excited about?

Well, it's more excitement as it relates to balancing the portfolio, increasing exposures in some territories where we regard ourselves as underweight. We still see more than adequate pricing. [indiscernible] The account that is from a rate perspective probably nevertheless is Casualty.

In terms of using the word exciting, it's more a cautious approach to taking risk. So excitement is [indiscernible]. But there's still good opportunity. We like certain parts of the Specialty account. We obviously like our Property portfolio. We only write business that we consider to be rate adequate. So those are the areas, Casualty is where we posted the strongest growth. That also is a big driver of the investment income.

One of the areas that once again if excitement in the right way, but I do think our investment performance in 2025 was outstanding. And our gross assets under management are growing all the time. We started after the IPO of $1 billion. We're now well past $2 billion of AUM. So that starts to create a bedrock of recurring revenue for each year that we're in [indiscernible].

Thank you very much indeed, Neil. A question here from Andrew. Andrew asks, the company trades at a discount to its NAV. This contrasts with the situation elsewhere, Beazley, for example, has commanded a substantial premium to NAV. Could you let us have your thoughts as to this discount valuation?

Yes. So the Beazley scenario is -- I mean, Beazley is one of the leading specialty markets in London. It was subject to a takeover bid by Zurich. I've seen takeover bids in the previous cycle that got up to 2.4x valuation such as [indiscernible] when it got taken out. We -- our share is traded at a heavy discount after the Los Angeles fire, and we've had a year of substantial change.

The share price was actually about GBP 2.75 earlier in the year. This year has been about stabilizing, sorting out the reinsurance to move forward. Discount has [ flaws ]. I think we just need to establish and get the stabilization and start printing results. The result today, ironically, probably ahead of analyst forecast. So there is evidence of stabilization. We're obviously aware of the discount and that's one of the [indiscernible] being in the market buying our own shares.

Question here from Bruno. As rates softened with fewer opportunities to achieve adequate RoTE, are you more likely to increase shareholder distribution via dividends and share buybacks?

So we do -- I think that that's the same theme as previous questions. We are in the market. Every time we trade, every day, we have the RNS. So investors see the shares that we're purchasing. And so long as the capital models allow us, and we did publish our capital strategy, we will use that capital to purchase stock. And that's the answer, yes. And we are clear -- I was clear in my quote and in the presentation that we are buying our shares and are doing so on a daily basis right now.

Could you let us have your thoughts on where we are in the insurance cycle? Do you think rates are now stable? Or will they decline over the next year or 2? And how much do you expect?

So part of that is what's going on right now and the other half of the question is crystal ball gazing. I mean the rating environment is a function of available market capital. And since 2022, the market has -- market balance sheet overall has increased substantially. That is creating appetite for risk. Returns were above the normal rate of returns in the insurance space across '23, '24 and rates have been declining since the end of '24.

We saw a 7% decline in Property and Specialty, Casualty is holding up. We would expect that trend to continue. I can't predict how far that goes. But there is discipline in [indiscernible]. At the moment, we see the market rate adequate pricing is at about 22 levels. It's above where it was when we IPO-ed. So that's where we see things. But at the moment, the trend is more softening.

A question from Graham. Thank you very much, Graham, for your question. Your results today are above market expectations and the overall market is strongly up today. Why do you think your share price has fallen by 5%?

Yes. I mean it's frustrating. We did post ahead of expectation. Other companies in the sector have also declined. So the insurance sector, not just in London, also in the U.S., Bermuda is off today. Maybe that reflects outlook. But I mean, I keep a close eye on the trading activity in our market's been elevated volumes today. Yes, I agree with the observation that we came in above forecast. It's not just us, it's across the sector. We have fallen more than other companies in the sector. But that's where we are. That's the stock market.

Thank you, Neil. I know we've touched on the discount, but just a follow-up question. As the shares are trading at a 30-ish percent discount to NAV, which management actions are you implementing to narrow the discount?

So that is a variation on the theme of the previous question. And the one thing we will do, as a management team, one is how you manage risk, we would have an appetite to buy in our shares in preference to writing business. So those are the management actions. It's capital discipline.

And then I guess a final question from Robert. How would you differentiate your businesses from the competitors?

So Conduit is a pure-play single location reinsurance company. And most of the purposes in the reinsurance market are in some cases, global. We took Swiss [indiscernible] in some cases, multinational, [indiscernible] in Bermuda. London is a truly global market. So our pitch was to set up a very focused pure-play just writing property, casualty, specialty reinsurance, that is the differentiating factor.

One of the differentiators is our tax rate. The multinationals will be paying corporate tax rate. Some of them are on a temporary exemption at the moment because we are single location, we have 0 tax we've actually got sort of small benefit from a -- Elaine, maybe you can comment on the payroll situation.

Sure. In December of 2025, the Bermuda government passed some new legislation around tax credit, which is really to encourage further investment in Bermuda, so to the extent that we have employees based in the [indiscernible] and that's being implemented in stages, so it's 50% this year, 75% next year and then 100% the following year. We disclosed a $6.9 million benefit in our expenses and from implementing that this year and then we expect to get a benefit from those increasing percentages [indiscernible] benefits offsets both reinsurance operating expenses and other operating expenses.

I think the other differentiating factor is the age of the company. It was a new balance sheet in 2021 we did not have exposure [indiscernible].

That's great. I think that concludes -- there are -- sorry to and check, there are no further questions, I think. So thank you once again to everybody for your engagement this afternoon. Neil and Elaine, I know investor feedback is particularly important to you both, and I'll shortly redirect investors on the call to give you their thoughts and expectations. But perhaps before doing so, Neil, I could just ask you for a couple of closing comments.

Yes. So '25 was a transition year. And I stepped in the CEO during the first half. We've significantly strengthened the management team. The first half of the year was really defined by the events in California. We subsequently purchased reinsurance to address that issue. That's true on an ongoing basis. One of the numbers that we do allude to on Slide 11 of our presentation is applying the '26 retro program, our California plan will be less than half what it actually was in '25.

So there's the emphasis on risk management reinsurance purchase, which market conditions remain rate adequate. The market is softening. We acknowledge that. And we posted a decent result. We are in the middle of a share buyback program. I think that sort of defines the current activities. By the way, thank you all for your interest and for attending the presentation.

That's great, Neil, Elaine, thank you once again for updating investors. Ladies and gentlemen, please can I ask you not to close the session as we'll now redirect you so that you can provide your feedback in order that the company can better understand your views and expectations.

On behalf of the management team of Conduit Holdings Limited, we'd like to thank you for attending today's presentation, and wish you all a good rest of your day. Thank you.

Good day, everyone. Welcome to Conduit's Full Year 2025 Results Presentation. We appreciate your time today as we discuss our performance for the year. Joining me on the call are Neil Eckert, Chief Executive Officer; Elaine Whelan, Chief Financial Officer. Please note our disclaimer language on Slide 2.

I will now turn the call over to our CEO, Neil Eckert.

Thanks, Brett. Welcome to our presentation. As Brett mentioned, I'm joined by Elaine Whelan, our CFO. Today's presentation will cover our business performance for 2025 and our view of the market and January renewals. I will also provide an update on some key actions we have taken during the year. Elaine will provide some additional detail on our financial and investment highlights for the year before closing remarks and time for questions.

We have had some significant changes within the executive team over the last 12 months that have brought additional depth and expertise to the organization. Although he is not with us on the call, I'm excited that Stephen Postlewhite officially joined Conduit as Chief Underwriting Officer in late January. Stephen brings a strong CEO background to Conduit and is quickly getting immersed into the business. I have no doubt that he will make an ongoing impact. William Randolph joined us as Chief Risk Officer last July. William has settled in well and has made some noticeable improvements to our risk functions already. We also welcomed new talent in other key functions such as underwriting, modeling, actuarial and claims. We are now up to 68 employees here in Bermuda, and we will continue to hire and invest in the business as we see fit.

I would also like to mention some recent changes at Board level. The Board recently concluded its recruitment process to identify a new Chair, and I'm delighted that Nicholas Shott has agreed to take on the role. Nicholas joined the Board in November with a strong background in financial services and advisory roles and is well suited for the role of Chair. I look forward to partnering with him as we continue to move Conduit forward in the execution of our strategy. I would also like to thank Elizabeth Murphy, who will retire from the Board ahead of the 2026 AGM as part of our normal Board succession planning. Elizabeth was a Founding Director and has provided valuable guidance and insight as Audit Committee Chair during her tenure. 2025 was a difficult and transitional year for Conduit that ended with a double-digit ROE after a challenging start to the year.

Our portfolio continued to grow with gross premiums written increasing nearly 7% year-on-year to $1.24 billion. We found select opportunities to grow our business as markets softened over the course of the year. Catastrophe activity and risk loss frequency remained elevated in 2025 with approximately $127 billion of insured catastrophe losses according to Aon. Our undiscounted combined ratio in 2025 was 101.5%, reflecting our larger exposure to the California wildfires during the first half of the year and a benign second half with no U.S. landfalling hurricanes. We enjoyed excellent investment performance, which delivered a 6.7% return for the year, contributing $119.5 million of income. Our managed investments continued to grow by approximately $380 million over the last 12 months and reached $2.2 billion as of the year-end with a 4.2% book yield, the portfolio is producing strong recurring income.

All in all, we produced $116.8 million of comprehensive income for an ROE of 11.1%. This result is below our mid-teens cross-cycle target and our initial expectations for the year, but is a reasonable return after generating a loss during the first half of 2025. Compared to the prior year, our net tangible assets per share increased 11.9%, including dividends, reaching $7.14 or $5.30 per share. We returned $59.4 million to shareholders through dividends and repurchased 2.7 million shares for $12.5 million through our authorized share buyback program, which has continued into the new year, for which authorization expires at the May AGM, where we will seek renewed authorization.

Our balance sheet remains strong and our estimated BSCR of 252% at 31st December leaves us well capitalized. Turning to our underwriting results for the year. We continue to grow our top line at a steady pace during 2025. Our growth was driven by a strong increase in casualty of 23%. Throughout the year, casualty rates remained firm, and we deployed our capacity where we saw the best opportunities. Property grew a modest 2% and Specialty was down 4% as market competition increased over the course of the year in both of these segments. Our balance between Property, Casualty and Specialty has shifted slightly, reflecting the strong Casualty growth during 2025, which is now almost 1/3 of the portfolio.

Overall, risk-adjusted rates reduced by 3% for the year, reflecting a 5% rate decline in both Property and Specialty segments, while Casualty pricing was more firm and increased by 1%. Industry capacity continues to build with both traditional and alternative capital generating strong retained profits over the last 3 years despite elevated loss activity. This additional capacity is being used to pursue growth strategies and driving more competition in the market. Our 2025 undiscounted combined ratio of 101.5% compares to 97.1% in the prior year. Our result was heavily impacted by the January California wildfires, which added 15.3% to the ratio. We have taken steps to remedy this in the future, which I will touch on in a few minutes.

Property gross premiums written increased by $14 million to $659.4 million for 2025, representing a 2% growth over the prior year. After several years of strong growth and rate increases, growth has slowed as price softening over the course of the year. Capacity continues to build, driven largely by retained earnings for both traditional reinsurers and alternative capital looking to expand their business. This led to a 5% reduction in risk-adjusted rates on our renewal portfolio. Pricing has come off peak levels but remains adequate in our view. We will approach the market with discipline as we look to gradually rebalance the portfolio.

Our undiscounted combined ratio for the Property segment was 97.1%, an increase from 90.2% in the prior year. The higher combined ratio primarily reflects our net exposure to the California wildfires and to a lesser extent, U.S. convective storms. The Atlantic hurricane season was notably active, producing 3 Category 5 storms. However, none made landfall in the United States, contributing to a strong underwriting performance in the second half of the year.

During the year, Angus Hampton was promoted to Head of Casualty. He and the team had a strong year engaging with clients and finding growth opportunities. Casualty gross premiums written increased $73.4 million to $392.3 million for 2025, representing a 23% growth over the prior year. Our growth has been focused on the areas of the casualty market that are experiencing stronger pricing, such as U.S. general third-party liability. We have deepened our support for partners that are taking a disciplined approach to managing the cycle. We also wrote some new business that complemented our existing portfolio.

Across this segment, rates have generally remained stable after inflation, and our risk-adjusted rate change was up 1% during 2025. Pricing varies broadly across different casualty classes, and we are carefully watching the areas of the market that could show signs of improvement. Capacity for casualty business is generally stable. The industry continues to face challenges relating to prior year reserve development, which has helped maintain more stable pricing and terms and conditions. Our undiscounted combined ratio for 2025 was 99.3%. In Casualty, we have maintained our consistent approach to reserving, which we regard as appropriate given its long-tail nature. The growth in our Casualty book has also contributed to our strong cash flow and growing investment portfolio as we hold reserves against this business. This has positively impacted our investment leverage and ROE contribution from the portfolio.

Specialty gross premiums written decreased $7.1 million to $191.3 million, representing a 4% decline over the prior year. Our contraction in gross premiums written in Specialty reflects our disciplined approach to more competitive conditions driven by overcapacity in the market. The market has shown growing appetite for Specialty business over the last year due to the margin potential and the noncorrelating nature of the risks, and this has attracted new entrants. We have come off business where prices have softened or commissions have increased meaningfully. Across our Specialty business, risk-adjusted rate change was minus 5% during 2025.

Specialty is made up of many different classes with differing price dynamics. However, softening has become more broad over the course of the year. There are a few classes where pricing has remained firm, such as aviation and some multiline accounts. And we will look to deploy our capacity in areas which demonstrate the best margin. Our undiscounted combined ratio for 2025 was 100.3% and increased from 95.8% in the prior year. The Specialty segment was impacted by a greater frequency of risk losses in 2025, including aviation events. A small proportion of the California wildfire also sits within the specialty book.

Our team had another successful January renewal season. We worked hard in the lead up to renewals, in essence, beginning at Monte Carlo in September, spending significant time with clients and brokers to clearly communicate our appetite and make sure we receive a strong flow of business. Our reception in the market was stronger than it has been, and we saw a significant number of attractive new and renewal opportunities for our portfolio. As expected, pricing was more competitive at the January renewals with overall renewal pricing down 5% across our portfolio. Property and Specialty risk-adjusted rates were down 7%, while Casualty was down 1%. We have seen increased capacity in the market from traditional and alternative capital, particularly for property risks and specialty risks reflected in these figures.

We have previously communicated our appetite to grow the balance of excessive loss within the Property portfolio. We have started to write more excessive loss business and our treaty count has increased in this area. We have also found select new quota share opportunities with attractive pricing that we added to the portfolio. Our overall balance of excessive loss and quota share has not changed meaningfully as this is an ongoing process that will take time. Casualty conditions remain more stable. Primary rate increases in U.S. general third-party liability are starting to decelerate but continue to benefit from price corrections.

In Casualty, our team is working to identify new partners and opportunities to diversify the portfolio. At the January renewals, we wrote several new treaties and also increased our line size with select clients. Terms and conditions have generally remained stable for the U.S. accounts, while international business has displayed more competition. Our Casualty business is and will remain largely quota share, which is how cedents approach the casualty market. In Specialty, we saw an increase in new business, including excess of loss opportunities. We have remained highly selective if rates continue to soften at 1/1. Capacity remains strong, and we continue to see new entrants in the market, which has impacted signings. We participated on several new specialty placements, including a couple of new aviation deals where pricing has been more stable.

As we said previously, we expect the rebalancing of our portfolio to take several renewal seasons, and we are pleased with the new excess loss opportunities that we've added to the portfolio. The market is dynamic, and we are deploying our capacity based on the strongest opportunities we see rather than strictly following preset targets. As the market develops, we will adjust our appetite to find areas producing the best margin. Another critical piece of Conduit's transition has been our increased focus on reducing earnings volatility and better management of our net exposures. In 2025, we increased the size of our exposure management team. The team works hand-in-hand with underwriting and risk to monitor and manage our portfolio exposures against preset tolerances for a variety of perils and regions at different return periods.

With our results, we are disclosing new PML zones at the 100- and 250-year return periods. Our refined approach provides a more conservative and transparent view of exposures as they capture broader geographic zones. We believe this gives investors a more complete view of risk, particularly for extreme events. You will notice that we have experienced a year-over-year reduction in PMLs across almost all peak zone perils at both the 100- and the 250-year return periods. This primarily reflects our expanded retrocession coverage and increased limit that we purchased in January 2026. Our retrocession program also provides improved protection from secondary perils, which includes cover for wildfire, convective storm, floods and freezes. The California wildfires in 2025 highlighted the need for us to have more comprehensive coverage for these types of events.

In 2025, we purchased additional retrocession cover following the wildfires to specifically address coverage for secondary perils. Our retro spend has increased for 2026 with this increased protection, but we believe that we have a program that will reduce earnings volatility and better protect our balance sheet from extreme events. As an example of this, if we apply our 2026 retro program to our gross loss for California wildfires, we believe our net loss will be reduced by at least 50%.

I will now hand the call over to Elaine to go through our financial and investment performance.

Thanks, Neil. The California wildfires in January of 2025 gave the industry a bumpy start to the year and Conduit in particular, felt the effects of that event and experienced a larger loss than we would have liked for that type of event. The rest of the year was, however, relatively quiet for us from a loss perspective. Our investment portfolio performed well, and we also had a benefit from tax credits from recent legislation passed in Bermuda, our sole location of operations. All in, we produced a reasonable ROE of 11.1% in a challenging year. We recorded $1.24 billion of gross premiums written for the year compared to $1.16 billion for the prior year, almost a 7% year-on-year increase. Our reinsurance revenue, which broadly speaking, is IFRS 4 gross premiums earned less ceding commissions, was $897.1 million for the year compared to $813.7 million for the prior year, a 10.2% increase year-on-year, reflecting our continued but moderating growth strategy.

As you will see in our segment note or financial statements, we reclass some business this year between our 3 divisions. After those reclasses, all 3 divisions still show growth in reinsurance revenue with Property and Casualty showing growth in gross premiums written and Specialty slightly down on the prior year. Overall, the growth year-on-year reflects our view on the markets. Heading into 2026, we do expect growth to moderate further as the market softens, although pricing remains broadly adequate, and there are plenty of opportunities to pick our way through. Ceded reinsurance expenses, which you can see in our RNS and are essentially our ceded premiums earned, excluding reinstatement premiums, were $119.1 million compared with $93.7 million for the prior year.

Our outwards cover has increased year-on-year as the Emirates book has grown in addition to price increases at the January 1, 2025, renewals, plus additional cover purchased during the year to address secondary peril exposures. That ceded reinsurance expense brings our net reinsurance revenue to $778 million for 2025 versus $720 million for the prior year, 8.1% year-on-year growth. On the loss side, 2025 was another active year in terms of industry losses, but with a different makeup of those losses than in 2024. Where 2024 losses resulted from a broad mix of events, 2025 was very much characterized by the January California wildfires.

Our undiscounted net loss after reinsurance and reinstatement premiums for that event was $119.1 million, a 15.3% impact on our undiscounted loss and combined ratios. For the prior year across Hurricane Helene and Milton, we had a net impact after reinstatement premiums of $68 million, which had a 9.4% impact on our undiscounted loss and combined ratios. Our net undiscounted loss ratio for the year was 89.9% versus 84.4% for the prior year, the difference being driven by the larger impact of the California wildfires this year versus the numerous smaller events in 2024.

Our net discounted loss ratio was 77.5% versus 73.3% for the prior year. You can see a higher impact from discounting on the 2025 ratio as compared to the 2024 ratio, driven primarily by the higher loss ratio. Just a reminder here that we made a policy decision to use opening rates to discount our nonspecific incurred losses with date of loss for material specific events. Our combined reinsurance operating expense and other operating expense ratios were 11.6% versus 12.7% in the prior year.

In the fourth quarter of 2025, the Bermuda government passed legislation introducing tax credits for companies that have a substantial presence and investment in Bermuda. Conduit benefited from this new legislation, and we recorded credits of $6.9 million in our income statement, offsetting reinsurance and other operating expenses. Adjusting for the tax credits recorded this year, the ratio would be 12.5%, broadly in line with the prior year. Our combined ratio on a discounted basis was 89.1% versus 86% for the prior year and on an undiscounted basis was 101.5% versus 97.1%.

Our net reinsurance finance expense for the year was $77.2 million versus $30.8 million in the prior year. Our interest accretion was $61.1 million compared to $37.6 million in the prior year and the impact of changes in discount rates was an expense of $16.1 million versus a benefit of $6.8 million in the prior year. You can see these numbers in our RNS and our financial statements. The accretion has increased in line with expectations as a relatively new company with growing reserve balances. We also had higher incurred losses in 2025, so more discount from those to unwind during the year also. The remeasurement to current discount rates reflects the changes in yields.

Our net investment return was 6.7% for the year versus 4% in the prior year. I'll come on to investments in a bit more detail in a moment on the next slide. But just to wrap up on this one, our comprehensive income for the year was $116.8 million or an ROE of 11.1% versus the prior year of $125.6 million and 12.7%. So here's the investment bit. Book yield is now at 4.2% compared to 4.1% at the end of 2024, so reasonably consistent. As our asset base and investment leverage grows, the portfolio earns more income. Investment income is $80.7 million compared to $65 million in the prior year. With the reduction in yields in the year, we booked a net unrealized gain of $39.2 million versus $1 million in the prior year.

As noted on the previous slide, our investment return for the year was 6.7%. Otherwise around the portfolio, we continue to notch duration up a little but remain relatively short, and our focus continues to be on maintaining a high-quality, highly liquid portfolio. Duration is currently 2.8 years versus 2.7 years on our net reserves. Average credit quality is AA, and you can see the usual pie chart here with our asset allocation. This slide demonstrates what I just mentioned. You can see that as the business continues to grow and we remain highly cash generative, our invested assets also continue to grow. As our portfolio has become higher yielding over time, we produce more income. And as our investment leverage increases over time, that contributes more to our ROE.

I'll now hand back to Neil for additional comments.

Thanks, Elaine. To close out, I wanted to quickly reflect on some of the key achievements over conduit's first 5 years. From a standing start, Conduit is now writing more than $1.2 billion of premium annually with a diverse portfolio of Property, Casualty and Specialty risks. We focus on classes that we know well and where we understand the risks. We have established strong client and broker relationships and have become a trusted market. Our portfolio is supported by a large renewing book and a strong flow of new business that we carefully select from.

As market conditions change in any given line, we can shift capacity to areas where we see stronger pricing conditions. As we have deployed capacity, our growth has resulted in increased operating leverage for the business. Our gross premium leverage is 1.1x our shareholders' equity and our managed investments are up to 2x our shareholders' equity. We have paid a steady dividend since inception, providing an attractive yield on our shares. Dividend payments through 31st December '25 have totaled over $267 million or nearly $300 million with the final dividend declared today that will be paid in April.

In addition, we initiated a buyback program during 2025. We expect to continue to provide attractive capital returns to our shareholders through dividends and buybacks going forward as market conditions and capital requirements warrant. Lastly, we have strengthened the team as we move beyond that start-up phase. Our business has grown and now requires different skills and expertise. Our team has increased to 68 staff here in Bermuda, and we will continue to grow and invest as needed to move our business forward. We have generated profits in each of the last 3 years, not at the level we think we can achieve. But all in, we believe that our business is now well positioned to deliver attractive returns for shareholders through dividends, repurchases and growth in net tangible assets per share.

In closing, we are pleased with the progress we have made post the California wildfires. We have maintained our presence on select lines that we regard as price adequate, whilst we have also exited some treaties that no longer meet our pricing requirements. Our return on equity of 11.1% was slightly better than it could have been, given the size of our exposure to the California wildfires at the beginning of the year. The benign hurricane season led to solid underwriting results in the second half of the year, which was supported by strong investment returns.

During the year, we have taken steps to improve the execution of our strategy, and we believe this leaves us well positioned for 2026 and beyond. We have strengthened our leadership and underwriting teams by attracting new talent to the organization. These individuals bring additional expertise and fresh perspectives that will improve the resilience of our business. As the market softens, we remain committed to finding profitable opportunities. We are happy to walk away from business that does not meet our requirements and have demonstrated this during the January renewals. Having said that, conditions are dynamic, and we have also found select opportunities for growth in new business. We are committed to reducing volatility as we gradually rebalance our portfolio and maintain a more comprehensive retrocession program. We believe that we are well protected from severe peak and secondary perils based on our modeling. Our balance sheet remains strong, and we are returning excess capital to shareholders through dividends and share repurchases, which will continue to be a focus as we prioritize capital efficiency and prudence.

Thank you, and we are now ready to take your questions.

[Operator Instructions] We will take our first question from Abid Hussain from Panmure Liberum.

I've got 3 questions, if I can, please. The first one is on pricing. I know you've given quite a lot of color there, but I just wanted to ask you to step back and just give us a sense of how you would characterize the overall pricing environment for 2026? And do you feel there are indeed enough lines adequately priced? And then just how quickly does it usually tip over to that sort of inadequate territory based on your past experience? Is it sort of like a cliff edge? Or does it actually take quite a bit of time? So sorry for that, that's a long first question. And then the second one is just on Casualty. Just wondering what's your thinking on growing in that line? And then finally, on the share buybacks. Could you just talk to under what conditions you may increase the share buyback?

Right. Thanks, Abid. So in terms of pricing, there are plenty of areas which we regard as rate adequate. The market is still priced well above levels that it was priced at when we did the IPO. And yes, the market has made a lot of retained profits. There is pressure -- downward pressure on rating. But there is not this cliff edge that you've alluded to, at least I would not expect to see that. There are disciplines, there are guardrails. There is a stage where pricing has a technical level, at which people will start coming off business if it hits that technical level. So my view is there is not a cliff edge coming. There is overcapacity. That's as a result of the capital derived from retained profits. But by and large, we see terms and conditions holding. We see deductibles holding, and we see a market that's priced well above where it was when we IPO-ed. So we see plenty of rate adequate business.

Casualty, you mentioned, that's been one of the strongest of the 3 segments, rating up over last year, plus one after inflation and adjustment for terms and conditions. It was off 1 at 1/1. We continue to see a good showing of business. We have taken -- we've come off some accounts if there's any concern over rate adequacy on those accounts. And casualty is a broad spectrum of business. It's the general liability where we see rates strongest. Rates have come off on financial lines, D&O, but we have been able to selectively increase the portfolio. We believe that our reserve strategy on Casualty has been consistent and the casualty account is one of the reasons leverage and can achieve the good results in the good results we've had on investment returns.

Share buybacks. We did publish a strategy on share buybacks back at the interim stage. And we have been buying our shares and the RNS has been extremely active every time we buy shares, that will be announced. We announced the $50 million authorization, and we are working our way to buying stock, which that authorization is in force until May. we will seek to renew that authorization. We did temporarily suspend the share buyback program as we went into the hurricane season. We regarded that as prudent at the time. And then as we got through the hurricane season, we resumed that repurchase. In line with the strategy that we published, where we have surplus capital after we paid dividends, we will buy our shares, and we've been doing that. And we said in this announcement, we continue to have appetite. So within the bounds of prudent management, we have appetite to buy our shares.

Our next question comes from the line of Michael Huttner with Berenberg.

Fantastic these lovely results. I had 3 -- 4. So on Retro, maybe I'm wrong, but I heard that the total cost of retro is actually up '26 versus '25. And I just wondered whether -- because I thought that the buying the secondary peril kind of retro within the whole account would be a little bit of a saving. I just wondered -- I'm clearly wrong, but maybe you can provide some color. On the buyback, when you say renewed, does it mean just the same old $50 million, whatever hasn't been used? Or would it be an extra $50 million? And also maybe you can tell us the figure today. I know if I added up the ones, but it takes a long time, so I'm sorry.

On the investment income, I wonder what the best ways of calculating kind of a number for 2026. Should I just use the 4.2%, which seems to be the market yield and multiply by whatever guess I have of investment assets, which are growing nicely. And then the final one, I'm really sorry, I'm hogging the line a bit, but casualty, the profit release kind of profile, it feels like in 2025, on the underwriting side, you had a combined ratio of close to 100%, so nothing released. But I just wondered when that might change.

Okay. So Michael, I'll deal with the retro question, then I'll pass back to Elaine for the investment side, and then we'll deal with the Casualty question. The cost of -- it's a much more comprehensive program, and that's reflected in the PMLs that we publish. And we have got secondary peril coverage throughout the entire program. The cost of the reinsurance program is a function of the overall premium income and our income is up. So in percentage terms it will not be 1 million miles different, but it is a much more comprehensive program. And I would suspect that on an ongoing basis, it's reached an equilibrium level. We flagged growth, obviously, will moderate. We flagged where pricing is. But I'm pleased with the retro program. We don't disclose exact costs. There are commercial reasons for that, but we try and disclose net exposures. And that's really as far as I can answer. On investments, Elaine?

Yes. On investments, Michael, yes, due to market yields, we do expect to see some rate cuts this year, but I think that's a reasonable starting point. Might go down a little bit as a result. Just going to go back to the question on the share repurchase as well. We tend to ask for kind of standard authorization at the AGM, have done over the last number of years. So that's the bit that we'll repeat. In terms of what size we want to determine going forward, we won't be announcing that until May. So you'll get that from us then.

And then on the Casualty side of things, our reserves are still fairly young on the Casualty side. It is still fairly early stages in the development of the first few years of the company. And in that kind of 5- to 7-year stage is when we start taking a closer look at those. '21 and into '22 were still fairly small years in terms of the Casualty portfolio as well. We were writing and earning out premium fairly slowly at that point. So it's not such a sizable impact in terms of the book at that point as well. But it is still fairly early stages. And just a reminder that in our reserving approach, we do put a risk adjustment on top of our reserves as well, and that tends to be -- a larger chunk of that tends to go towards the Casualty book than other books.

Go on, Michael.

No, no. I was just asking Elaine, would you have the buyback as of today?

Yes. So as at today, it's -- at year-end, it was $12.5 million. As of today, it's $17.8 million part of the overall, and we continue to be active, which you will be able to see on a daily basis on the RNS.

Our next question comes from the line of Andreas Van Embden from Peel Hunt.

I just want to ask a question around sort of the pricing environment. You say that terms and conditions seem to be coming under some pressure across the industry. Could you maybe highlight where you're seeing this across your own portfolio? And if there is some slippage in terms and conditions, how you're trying to address this as you renew your book? And the same actually for ceding commissions. You're sort of mentioning increasing ceding commissions, which sort of push up your acquisition costs. Is this something you can mitigate within your underwriting program?

And then finally, just going back to the California wildfire losses. Mercury General yesterday published results, and they showed that they are planning to recover significant losses from the Eaton exposure. You're talking about a recovery of 55% to 70% of their incurred losses. I'm not sure whether Mercury is part of your reinsurance program or not. But would you -- if some of your insurers or cedents would be able to recover from the Eaton section of the wildfire, would that be a positive for Conduit Re?

Right. Yes. On the pricing environment, you specifically referenced terms and conditions. I think we basically feel the same. The U.S. reporting season has happened and people were basically saying, while rate is off, terms and conditions have largely held up. What is most important is underlying attachment points. The market attachment points elevated as the market hardened and were driven away from the action. We see that still largely holding up. There have been a few instances of expansions of cover in sort of areas such as Specialty. I don't want to go into class specific within Specialty because that's quite sensitive.

Ceding commissions, very often, it's reflected in the performance of the treaty where you have a very good performing treaty, the client will be asking for more cede. Ceding commissions rising are a function of a softening market. There are plenty of accounts where ceding commissions actually held stable. So it's some and some, but the way we price business is on a net basis after taking into account all ceding and acquisition costs. California wildfire. We are aware of the subrogation, particularly as it relates to Eaton. Our number, we have held stable at this juncture. We have not taken into account substantial subrogation. What I would say is that the market is more exposed to Palisades than Eaton, where the expectation is there will be less subrogation. So at the moment, we are taking a watching brief. We've held our number at around the [ 118 ] and that's our position for now.

Our next question comes from the line of Joseph Theuns with Autonomous.

I was hoping to get some clarification, I guess, on the retro program within the property book. When you say that, that increase in 2026, is that relative to the 1/1 time frame in 2025? Or is that another increase following the increase you took post the wildfires? So it's just a case of understanding whether it's sort of we're seeing an additional, I suppose, increase in the retro cover that you've purchased. And then the next question I've got is just in terms of the property book, can you give some kind of flavor in terms of how much new business you've written relative to cancellations? Did you cancel more business than you wrote? And how much of the -- how much of that you canceled was in the quota share relative to the XOL business?

Okay. So overall, there has been -- the retro program is much more comprehensive. It includes secondaries all the way through up to a very high level. We do publish on a more comprehensive basis, our PMLs and have changed the basis we report to a North Atlantic windstorm as opposed to Florida. The North Atlantic will cover all territories on a multiple basis. The return periods or the losses at the 100-year and the 250-year return period have come down year-on-year. We did purchase more coverage after the wildfire, but that -- some of that was specific to protecting ourselves against wildfire exposure. At 1/1, we now have a more comprehensive program. I shall leave it at that because we don't disclose specific limits and cost because of the fact that, that is commercially sensitive.

But I would refer you to Slide 11 on the PMLs. In terms of property, we have voiced a desire over time to limit or to rebalance the portfolio. That will not occur on Casualty. Casualty, the clients purchase quota share by and large, so the Casualty book. But then again, in casualty, you don't get the natural peril accumulation. On Property, we have come off some quota share, and we have written a reasonable new amount of excess of loss. It's work in progress. It will take time, but we are coming off quota shares and writing. And in the announcement, we haven't published details of what we've come off and the amount of new excess of loss we've written. We want to get through the year, but it is work in progress.

Okay. If I can just ask -- it's a bit cheeky, but if I can ask a quick follow-up question about the PMLs. If I look at the financial statements, the reported PML for the North American windstorm was 16.6%. And in Slide 11, it's 10% -- is that reduction completely due to the increased retro cover? Or is it some of it also to do with sort of the Nat Cat risk that you've taken on that, that has reduced relative to sort of last year? Just trying to get an understanding of the shift there.

Joe, it's [indiscernible] versus 1/1. And yes, most of that change is driven by our program.

Our next question comes from the line of Ivan Bokhmat with Barclays.

I've got 2 questions. The first one is regarding the ROE outlook. You're suggesting that clearly, you haven't kind of maximized the potential in 2025. So I'm just wondering if you could maybe outline the medium-term trajectory within the context of what we're now seeing as a softening reinsurance market. Do you think getting back to that 15% is a possibility up until the market has reached the bottom and turned?

And then the second question is going back to the 1/1 renewals. I was just hoping that you could talk a little bit more about whether if you compare the volumes at renewals, have you actually grown the book? And as you think into 2026, do you anticipate growing the book at further renewals? You've referred to some growth slowdown. Maybe you can try to help us understand what degree of slowdown are we talking about?

So in terms of ROE, what we have discussed in the past is that through the cycle, mid-teens, there will be -- there's two things. There will be -- even in a hard cycle, there will be different loss patterns we're in the fortuity business. At soft parts of the cycle, one would expect the ROE over time to be below that figure. And there will be years when the market will publish rates above that. We are in a softening part of the cycle. We made 12 in '24. We've made 11 last year, although it was impacted by that one particular event, California. So I mean, I don't want to get into outlook. We are aware of analyst consensus. And that's where I'll leave it. There will -- in summary, parts of the cycle will be less than 15 and there will be years will be more. To an extent, it's fortuity and market loss driven.

In terms of growth, we flagged the fact that the emphasis is not on growth. The emphasis is on capital management quality. We will be very mindful of price adequacy when we are looking at business. We've had a good year-end. And we are coming off business where it doesn't mean rate. We're writing new excess of loss business. We did say the year-end has been good. We are aware of what analysts are saying in the market. And I mean, it sounds like I'm being evasive. I just do not want to give a forecast for the year on premium. It's early days other than to say we have had a good year-end.

Maybe I could just also follow up on the subsequent renewals during the year. Do you expect the dynamics to change in any way in terms of price or in terms of terms and conditions or some classes of digital business that could shift?

No. What we've seen is we've seen overall pricing, and that's a function of the capital supply into the market. Different parts of the market have held up better than others and casualty being the market that has softened the least. I don't expect radical shift. In individual underlying classes, there could be impacts. There are losses that may settle out that are in the market, which could impact individual contracts. Overall, I would expect a continuance of conditions, a holding up by and large of discipline as it relates to attachment points in terms of conditions and a continuing softening in pricing, not dissimilar to the levels we saw at 1/1.

Our next question comes from the line of Ben Cohen with RBC Capital Markets.

I just had 2 questions. Firstly, I just wanted to follow up on Ivan's question about the ROE outlook because I think you had said earlier that the market pricing is still better than you had assumed at the time of the IPO. So I just wonder why you couldn't be confident that you're going to hit a mid-teens ROE this year obviously, allowing for sort of weather volatility. And the second question was, I think, going back to my notes, you had previously been giving an outlook of a sort of low 80s combined ratio. Thinking about rolling that forward, are we really looking at kind of price and then the additional cost of retro in terms of where we would come out for 2026? Or are there other material things that you would want to flag there?

So if I take the ROE outlook, I can really only reiterate what I said. Yes, at the time of the IPO, we expressed a desire to hit mid-teens ROEs. What we did know at the time of the IPO was that we were in a rapidly hardening market, and that did come to pass, fueled both by investment losses and Hurricane Ian in 2022. The market conditions are at or above '22 levels. We are just being, I think, prudent. The retro cost is not a factor that would drive different approach on ROEs at this time. What we have got is market conditions and loss experience and analyst forecasts are assuming a combined ratio that is well above low to mid-80s on the old basis. So there's a lot of change. I mean, Elaine, would you like to comment on in terms of combined ratio prospects?

Yes, sure. Ben, I think previously, when we were talking about those levels, we were talking about that as being emerging was in the underlying book and always remind people then about how we reserve, which is to add a risk adjustment on top of that. So bear in mind our reserving approach in there as well. I think also we have seen some changes in the mix in our book. We have stayed a little bit longer with quota share than we perhaps anticipated. And we are writing more casualty, which tends to be higher ratio anyway and tends to be where more of our risk adjustment sits. So that will have an impact as well, plus a little bit extra in terms of outward spend.

Our last question comes from the line of Michael Huttner with Berenberg.

They're really short, I think. One is I just wondered, you talked about risk adjustment a few times. Can you -- is there a figure we can see or a feel for how it's increased year-on-year? The second is you mentioned in alternative capital, there's a bit more of that. I know some of your peers or competitors actually kind of use that, they almost like a fee basis. So they kind of use that as kind of add-on extra capacity and they take a fee and I just wondered how you looked at that. And then the last point, the feeling I have is that the incredibly strong, I mean much stronger than in our models. I keep having to raise them in terms of investment income, investment assets and kind of you start the year basically making a lot of money before anything you have to do much.

Is that something which -- I don't know how to phrase the question because it's a bit forward-looking, but is it something that people are kind of underestimating? I don't think people on our side because we kind of -- I'm a bit kind of -- but your counterparts, the brokers, are they kind of -- when you speak to them and you deal with them, are they incorporating the fact that you're making a lot of money in investment income and so saying, you don't need that much? Or is that the investment income something you get to keep?

Elaine, do you want to deal with the risk adjustment?

Yes. Sure. Michael, you will find that in our financial statements that we have a loss on financial statements Note 15. It was $78.9 million last year. It's $123.4 million this year. It tends to be a fairly consistent percentage of our overall reserves.

Thank you, Elaine. So increased year-on-year by about $50 million. In terms of alternative capital, there are alternative capital manifests itself in the form of ILS funds, insurance-linked securities. And we do ourselves buy some retrocessional coverage of some of those funds. There has been a growth in the amount of capital in that area of the market. So that has created the plentiful supply. It has contributed. It hasn't created. It's contributed to the supply of retrocession. There are some companies in the market that actually manage ILS funds, one particular London-based here and there are several traditional P&C carriers in Bermuda that also manage third-party funds. We do not do that. We write conventional property casualty specialty through our licensed carrier. We buy retrocession protecting that account. And we do buy from some alternative capital markets. So that's my response on that.

Yes, the investment portfolio, I mean, we can't be more plain and clear as to the amount of gross assets we have under management. That is partially a function of the reserves we carry against our Casualty, and we comment on the basis on which we reserve, which we regard as consistent. I think on previous questions, we've covered the duration of the tail. And what I would say is that as the book matures, if you look back to the early years, it was much smaller. So initially, the releases will flow more cautiously. And I mean -- but over time, that aspect will develop. But for now, yes, you're right. The gross assets are there. We have investment leverage.

There are no further questions on the conference line. I will now hand over to Neil for closing remarks.

So thank you for attending, and thank you for the questions. We look forward to a further update of Q1, and then we have our AGM around that time in May. I'd like to thank the Board of the company, the management team. We have worked hard through 2025. It was an interesting and difficult start to the year, but it's turned out H2 was satisfactory. So thank you all. We will see many of our shareholders face-to-face over the next few weeks and quite a few of the brokers. And that's it for now. Okay. Cheers.

Good afternoon, and welcome to the Conduit Holdings Limited Investor presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll. And I'd now like to hand you over to the management team of Conduit Holdings Limited. Good afternoon.

Good day, everyone. Welcome to Conduit's Trading Update Call for Q3 2025. We appreciate your time today. Joining me on the call are Neil Eckert, Chief Executive Officer; and Elaine Whelan, Chief Financial Officer. Please note our disclaimer language on Slide 2. I will now turn the call over to our CEO, Neil Eckert.

Thanks, Brett. Welcome to our presentation. I'm joined today by Elaine Whelan, our CFO. As usual, with our trading updates, today's presentation will focus on our top line underwriting experience across each of our segments through the first 9 months of the year. I will also provide our views on recent market conditions and some thoughts on the upcoming renewal season. Elaine will provide some additional detail on our financial and investment highlights through the third quarter before closing remarks and time for questions.

For the first 9 months of 2025, we delivered growth in gross premiums written across all 3 of our segments. Our Casualty segment has experienced the strongest growth during 2025, while Property and Specialty have increased at a more modest single-digit rate. The relative growth rates across our segments reflect the opportunities we have seen throughout the year. Certain classes have presented more compelling opportunities to deploy our capital, and we have consciously grown in those areas, while we have also deliberately pulled back in other classes. Market conditions have become more competitive during 2025, following several years of price increases and strong returns to the industry.

Overall, our risk-adjusted rate change net of claims inflation was down 3% for the 9 months ended 30th September. In Casualty, original rate change in certain classes is meeting or exceeding expected claims inflation, while conditions in Property and Specialty segments have been more competitive with some softening occurring after several years of increases. Despite the softening experienced during the year, we believe pricing remains adequate. Our investment portfolio continued to perform well through Q3 with a net investment return of 5.4% for the first 9 months.

As our business matures, the investment portfolio has increased to $2 billion, providing increased leverage and income to support returns. Managed investments and cash increased approximately $350 million over the last 12 months. While the first half of 2025 was marked by elevated loss activity with over $100 billion of insured catastrophe losses, the third quarter was a relatively benign period. Additionally, our loss estimates for previously reported events have remained stable. Whilst we recognize the loss environment was more benign during the third quarter, we are reaffirming our mid-single-digit ROE guidance for 2025, recognizing that there is still potential for late season hurricane activity and other loss events before year-end.

We were reminded last week with Hurricane Melissa hitting several islands in the Caribbean with very intense winds and rain before coming to Bermuda. Our thoughts are with those who continue to experience the devastating impact of the storm as they begin to recover. While the full extent of the catastrophe will take time to assess and there remains uncertainty in industry loss estimates immediately following an event, our market share in the Caribbean is small, and we do not expect this to be a material event for Conduit.

In line with our capital management strategy, we have followed a cautious approach to our share buyback program through the peak Atlantic hurricane season. Now that we are through the most active part of the season, we will resume executing on our buyback program, where we have Board approval for up to $50 million until May 2026. 2025 continues to be a transitional year across multiple dimensions for Conduit, marked by deliberate steps to strengthen our leadership and position the company for improved underwriting resilience.

Among these strategic initiatives, we are pleased to have announced the appointment of Stephen Postlewhite as our new Chief Underwriting Officer. Stephen brings nearly 3 decades of experience in the global specialty insurance and reinsurance market and has a proven track record of driving results across senior roles at several leading insurance and reinsurance organizations. His skills and experience are well aligned with Conduit's strategy and commitment to strengthen our underwriting capabilities. This appointment follows a rigorous search to identify a leader capable of advancing our underwriting strategy in this next phase of the company.

The appointment complements the recent addition of William Randolph as Chief Risk Officer and the promotion of Angus Hampton to Head of Casualty, amongst other promotions across the company. We are also pleased to welcome Nicholas Shott as an Independent Non-Executive Director on the Conduit Board. Nicholas joins us with an exceptional track record in financial services, honed over decades as a trusted leader in the investment banking and in advisory roles for FTSE 100 institutions. Collectively, these appointments underscore our commitment to bring the resources and talent to the organization in order to execute on our strategy.

Now turning to our top line underwriting performance in the first 9 months of the year. We achieved 8.5% growth in gross premiums written, reaching $1.04 billion. This growth reflects both targeted new business and increased participations on accounts where we saw strong alignment with our underwriting approach. Growth in our Property and Specialty books have continued to moderate as we proactively respond to evolving market dynamics and have reduced certain accounts where pricing has softened more aggressively.

Our Casualty segment continued to grow in Q3, and we increased participation - we're demonstrating positive rate momentum in targeted classes. As we work through our planning process and approach January renewals, we expect our growth rate will continue to moderate next year as pricing will likely continue to soften, and we begin to reposition our property portfolio towards a greater share of excess of loss business. We are also focused on improving the alignment of our inwards and outward portfolio with more effective retro coverage. As discussed earlier in the year, following the California wildfires, we purchased retrocession protection against large secondary perils. Our aim is to reduce volatility going forward from these types of events, and we are focused on the net performance of our portfolio in our 2026 business planning.

I will now turn to premium growth for our Individual Business segments, along with their respective market conditions and outlook. In property, we have grown gross premiums written by $32 million to $568 million for the first 9 months of 2025, representing a 6% increase over the same period in 2024. After several years of positive rate compounding, the property market has experienced softening prices during 2025, driven by increased capacity from traditional reinsurers as well as alternative capital sources. This resulted in a risk-adjusted rate change net of inflation through 30th September of minus 5% for property, which was consistent with the experience we have seen during the year and within our expectations.

Although pricing is moderating, our property book remains adequately priced with sufficient margin. Market behavior generally remains disciplined around terms and conditions with attachment points holding. And we have seen pricing for loss-impacted accounts remain firm. As mentioned earlier this year, we are targeting a greater balance of quota share and excess of lost business within the property portfolio. Our strong relationships with customers and brokers will help provide access to the business we are targeting as we seek to expand shares on well-performing business and participate on new programs.

We will also reduce shares on underperforming accounts or where the pricing or structure is no longer aligned with our appetite. As we execute on these plans for 2026, we expect to move towards a more even balance between quota share and excess of loss within the Property segment during the upcoming year with further progress over the next 2 to 3 renewal seasons. Casualty continues to be our second largest segment, providing attractive diversification to our underwriting risk profile and supporting the growth of our investment portfolio.

We increased casualty gross premiums written by $45 million during the first 9 months of 2025, reaching $269 million. This represents a 20% increase over the same period of 2024. The casualty market continues to be relatively disciplined, although pricing conditions vary by class. Across our casualty portfolio, risk-adjusted rate change net of inflation for the first 9 months was plus 1. This reflects our preferred classes keeping pace with claims inflation, while other classes within casualty such as D&O and financial lines have experienced more competitive pricing, and we have reduced our exposures in these areas.

The growth we have experienced in casualty has been focused in targeted classes demonstrating improving conditions and positive rate momentum. This includes U.S. general third-party liability and U.S. excess and surplus lines. Our casualty portfolio is built on a foundation of solid long-term quota share partnerships, and it will be difficult to materially increase the excess of loss proportion of the account in this class.

Overall growth was driven by increasing our support to partners that have demonstrated underwriting discipline and the cycle changes, including expertise in managing claims in this environment. We expect the casualty market will continue to be dynamic as we enter 2026, and we will maintain our careful approach to selecting our partners.

Turning lastly to Specialty. Gross premiums written increased by a modest $4 million for the first 9 months of 2025 to $202 million. This represents a stable 2% growth in the portfolio over the same period in 2024, consistent with growth presented at our 2025 interim results. Specialty is a broad market and conditions vary widely across classes. Capacity continues to be attracted to the margin potential and non-correlating characteristics of specialty risks. And we have seen new entrants looking to gain share. Rates are beginning to come off peak levels we experienced in 2024. And as a result, the portfolio has experienced a minus 3% risk-adjusted rate change net of inflation for the 9-month period.

Our [ tempered ] growth reflects the increased competition in the market and the team reducing exposure to accounts showing signs of margin compression. While these dynamics have introduced some pressure on rates, the broader environment remains disciplined with terms and conditions largely remaining consistent. That said, we are beginning to experience a modest upward trend in ceding commissions as cedent seek to benefit from abundant reinsurance capacity.

In Q3, we have strengthened our specialty underwriting team with the appointment of David Frawley. David is a seasoned underwriter with deep market experience, particularly in marine and aviation classes, which will allow us to take advantage of any meaningful firming of aviation rates in 2026 following a number of significant loss events this year. I will now hand back to Elaine to go through our financial and investment highlights.

Thanks, Neil. Gross premiums written of $1,039.1 million are up 8.5% on the prior year. As we mentioned at the half year, we expected the growth we discussed then to moderate slightly over the rest of the year, and that's still the case, but we still expect to have a healthy level of growth for the full year. We have reinsurance revenue of $662.4 million versus $588.2 million in the prior year, a 12.6% increase year-on-year. A reminder once again, our reinsurance revenue is essentially gross premiums earned less ceding commission and a smaller adjustment for non-distinct investment components. It therefore, tracks the same pattern as our gross premiums earned would have just a lower number after the ceding commission deduction.

Generally, ceding commissions have ticked up a bit, so we're seeing a higher deduction for those, which, of course, impacts our reinsurance revenue. On losses then the first 6 months of 2025 was clearly another highly active period of natural catastrophe events and risk losses for the industry, including the California wildfires, but the third quarter has been relatively quiet. Our California wildfire loss hasn't really moved since the half year, and we are maintaining our previously reported reserve on that. Other previously reported loss events also remained stable.

On the investment side, with the reduction in yields and spread tightening in the quarter, plus the portfolio generally producing strong investment income, we generated a return of 1.5%, bringing us to 5.4% for the year-to-date. Book yield is 4.2% and market yield is 4.3%. We remain relatively short duration and our focus is on maintaining a high-quality, highly liquid portfolio. Duration is currently 2.8 years versus 2.7 years on our net reserves. Average credit quality is AA, and you can see the usual pie chart here with our asset allocation and no significant changes from prior quarters in that or our strategy. I'll now hand back to Neil for closing comments.

Thank you, Elaine. In closing, as we look forward to January renewals in 2026, we believe pricing will continue to soften and our growth will moderate as we reposition certain parts of the portfolio towards a greater share of excess of loss business, notably in our property segment. We will be focused on better alignment of our inwards, outward portfolio and improving our net position. Our balance sheet remains strong, and we are resuming the previously announced share buyback program after pausing during the peak Atlantic hurricane season. We are committed to transitioning Conduit to being a stronger, more resilient underwriting company and the recent employee appointments and promotions signal our investment in the business. We believe the actions we are taking will support more stable and resilient returns for shareholders. That concludes today's presentation. Thank you for your time. We will now turn over to Q&A.

That's great. Thank you very much for your presentation. [Operator Instructions] I'd like to remind you that recording of this presentation along with a copy of the slides and the published Q&A can be accessed via your dashboard. As you can see, we have received a number of questions throughout today's presentation. And if I may just start off with the first question here, which reads as follows. Does the trend towards lower market yields and moderating rates increase your risk concerns about 2026 earnings?

I mean we've written a plan to -- for this year to take into account our views on pricing. Our views, we don't give a forward-looking view on pricing per se. We publish each quarter what our view is on rates, but we have said that we expect the softening trend to continue. So that would be taken into account through our business planning process. So we're always concerned about future earnings and meeting targets, but we've done everything we can to take that into account and operate accordingly.

That's great. The next question we have here reads, we have some softening in pricing, particularly in property. How are you maintaining underwriting discipline in this environment? And do you still see overall rate adequacy heading into the 2026 renewals?

So we have ways that we review business. We have a serious input from pricing actuaries across all 3 lines of business, Property, Specialty and Casualty. And we are critically aware of margin, especially as it relates to quota share. And the different components are underlying softening in portfolios, acquisition costs, which manifest themselves in brokerage or seed. And to that end, there are guardrails. And when a contract is reviewed, it is done so with all of that information to hand. If a contract looks like it's becoming marginal, it is then elevated. And it is a collective situation, and we have parameters where underwriting authority is only granted within certain pricing parameters. And if things are outside those parameters, once again, it gets elevated and a commercial judgment is employed. So I think it's the process that is disciplined, and I have confidence in our underwriters.

Do you believe the current market conditions justify your continued focus on underwriting discipline rather than aggressive premium expansion?

Totally agree with that. I mean current market conditions, if anything, should increase our focus on underwriting discipline. We did expand after we launched the company. We launched the company in 2021. We had $1 billion of capital. The first thing to do is to deploy. And we did call the cycle right at that time. We were able to deploy into a hardening market. And we are reaching sort of maturity from a deployment of capital perspective. So now it's about quality as opposed to growth. And in the current market where rates are actually coming off, which we've been quite open about, then it is, the mantra is about underwriting discipline and net bottom line.

That's great. And I think the last question we have here is, how are you thinking about balancing capital returns such as the buyback program with funding future growth opportunities?

I think that always is a balance that we're looking at. As Neil just mentioned, in the early stages of the company, we were deploying capital. A quarter or 2 back, we put up a slide on our website that we showed how we think about capital, which is basically matching the capital to the portfolio that we want to write and that portfolio has to meet our return hurdles. And increasingly, at this point in the cycle, return on capital there. And then we put some buffers around that and anything that's excess to that is what we consider for capital returns, and that's either through the buyback program or through dividends and some of that is driven by our ordinary dividend policy, which is unchanged and this is driven by who we are from a multiple perspective and what we think our shareholders are looking for.

That's great. Thank you all for answering those questions you can from investors. And of course, the company can review all questions submitted today, and we'll publish those responses on the Investor Meet Company platform. Just before redirecting investors to provide their feedback, which is particularly important to the company, Neil, could I please just ask you for a few closing comments?

Yes. So this quarter has been one about stabilization, strengthening the business, our team. We are delighted to have been able to secure the services of Stephen Postlewhite as Chief Underwriting Officer. We have strengthened the main Board with the appointment of Nicholas Shott, who has an extensive track record is extremely experienced. It was a benign quarter, although we've elected to reaffirm our current guidance in the light of the fact that we're still in the life season. Even last week, there was a Cat 5 hurricane that hit the Caribbean, and our sympathy goes out to those people. So it's work in progress. It's stabilization. It's looking forward to the year-end. We have a lot of work to do. And I think that basically summarizes the sentiment, and we look forward to speaking to you at the finals.

That's great. Thank you all for updating investors today. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This may take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of Conduit Holdings Limited, we'd like to thank you for attending today's presentation, and good afternoon to you all.

Good day, everyone. Welcome to Conduit's Trading Update Call for Q3 2025. We appreciate your time today. Joining me on the call are Neil Eckert, Chief Executive Officer; and Elaine Whelan, Chief Financial Officer. Please note our disclaimer language on Slide 2.

I will now turn the call over to our CEO, Neil Eckert.

Thanks, Brett. Welcome to our presentation. I'm joined today by Elaine Whelan, our CFO. As usual with our trading updates, today's presentation will focus on our top line underwriting experience across each of our segments through the first 9 months of the year. I will also provide our views on recent market conditions and some thoughts on the up-and-coming renewal season. Elaine will provide some additional detail on our financial investment highlights through the third quarter before closing remarks and time for questions.

For the first 9 months of 2025, we delivered growth in gross premiums written across all 3 of our segments. Our Casualty segment has experienced the strongest growth during 2025, while Property and Specialty have increased at a more modest single-digit rate. The relative growth rates across our segments reflect the opportunities we have seen throughout the year. Certain classes have presented more compelling opportunities to deploy our capital, and we have consciously grown in those areas, while we have also deliberately pulled back in other classes. Market conditions have become more competitive during 2025, following several years of price increases and strong returns to the industry.

Overall, our risk-adjusted rate change net of claims inflation was down 3% for the 9 months ended 30th September. In casualty, original rate change in certain classes is meeting or exceeding expected claims inflation, while conditions in Property and Specialty segments have been more competitive with some softening occurring after several years of increases. Despite the softening experienced during the year, we believe pricing remains adequate. Our investment portfolio continued to perform well through Q3 with a net investment return of 5.4% for the first 9 months.

As our business matures, the investment portfolio has increased to GBP 2 billion, providing increased leverage and income to support returns. Managed investments and cash increased approximately GBP 350 million over the last 12 months. While the first half of 2025 was marked by elevated loss activity with over GBP 100 billion of insured catastrophe losses, the third quarter was a relatively benign period. Additionally, our loss estimates for previously reported events have remained stable. Whilst we recognize the loss environment was more benign during the third quarter, we are reaffirming our mid-single-digit ROE guidance for 2025, recognizing that there is still potential for late season hurricane activity and other loss events before year-end.

We were reminded last week with Hurricane Melissa hitting several islands in the Caribbean with very intense winds and rain before coming to Bermuda. Our thoughts are with those who continue to experience the devastating impact of the storm as they begin to recover. While the full extent of the catastrophe will take time to assess and there remains uncertainty in industry loss estimates immediately following an event, our market share in the Caribbean is small, and we do not expect this to be a material event for Conduit. In line with our capital management strategy, we have followed a cautious approach to our share buyback program through the peak Atlantic hurricane season.

Now that we are through the most active part of the season, we will resume executing on our buyback program, where we have Board approval for up to GBP 50 million until May 2026. 2025 continues to be a transitional year across multiple dimensions for Conduit, marked by deliberate steps to strengthen our leadership and position the company for improved underwriting resilience. Among these strategic initiatives, we are pleased to have announced the appointment of Stephen Postlewhite as our new Chief Underwriting Officer. Stephen brings nearly 3 decades of experience in the global specialty insurance and reinsurance market and has a proven track record of driving results across senior roles at several leading insurance and reinsurance organizations. His skills and experience are well aligned with Conduit's strategy and commitment to strengthen our underwriting capabilities.

This appointment follows a rigorous search to identify a leader capable of advancing our underwriting strategy in this next phase of the company. The appointment complements the recent addition of William Randolph as Chief Risk Officer and the promotion of Angus Hampton to Head of Casualty, amongst other impointments and promotions across the company. We are also pleased to welcome Nicolas Schott as an Independent Non-Executive Director on the Conduit Board. Nicholas joins us with an exceptional track record in financial services, honed over decades as a trusted leader in the investment banking and in advisory roles for the FTSE 100 institutions.

Collectively, these appointments underscore our commitment to bring the resources and talent to the organization in order to execute on our strategy. Now turning to our top line underwriting performance in the first 9 months of the year. We achieved 8.5% growth in gross premiums written, reaching GBP 1.04 billion. This growth reflects both targeted new business and increased participations on accounts where we saw strong alignment with our underwriting approach. Growth in our Property and Specialty books have continued to moderate as we proactively respond to evolving market dynamics and have reduced certain accounts where pricing has softened more aggressively.

Our casualty segment continued to grow in Q3, and we increased participation with who are demonstrating positive rate momentum in targeted classes. As we work through our planning process and approach January renewals, we expect our growth rate will continue to moderate next year as pricing will likely continue to soften, and we begin to reposition our property portfolio towards a greater share of excess of loss business. We are also focused on improving the alignment of our inwards and outward portfolio with more effective retro coverage. As discussed earlier in the year, following the California wildfires, we purchased retrocession protection against large secondary perils.

Our aim is to reduce volatility going forward from these types of events, and we are focused on the net performance of our portfolio in our 2026 business planning. I will now turn to premium growth for our individual business segments, along with their respective market conditions and outlook. In property, we have grown gross premiums written by GBP 32 million to GBP 568 million for the first 9 months of 2025, representing a 6% increase over the same period in 2024. After several years of positive rate compounding, the property market has experienced softening prices during 2025, driven by increased capacity from traditional reinsurers as well as alternative capital sources.

This resulted in a risk-adjusted rate change net of inflation through 30th September of minus 5% for property, which was consistent with the experience we have seen during the year and within our expectations. Although pricing is moderating, our property book remains adequately priced with sufficient margin. Market behavior generally remains disciplined around terms and conditions with attachment points holding. And we have seen pricing for loss-impacted accounts remain firm. As mentioned earlier this year, we are targeting a greater balance of quota share in excess of lost business within the property portfolio.

Our strong relationships with customers and brokers will help provide access to the business we are targeting as we seek to expand shares on well-performing business and participate on new programs. We will also reduce shares on underperforming accounts or where the pricing or structure is no longer aligned with our appetite. As we execute on these plans for 2026, we expect to move towards a more even balance between quota share and excess of loss within the property segment during the upcoming year with further progress over the next 2 to 3 renewal seasons. Casualty continues to be our second largest segment, providing attractive diversification to our underwriting risk profile and supporting the growth of our investment portfolio.

We increased casualty gross premiums written by $45 million during the first 9 months of 2025, reaching $269 million. This represents a 20% increase over the same period of 2024. The casualty market continues to be relatively disciplined, although pricing conditions vary by class. Across our casualty portfolio, risk-adjusted rate change net of inflation for the first 9 months was plus 1%. This reflects our preferred classes keeping pace with claims inflation, while other classes within casualty such as D&O and financial lines have experienced more competitive pricing, and we have reduced our exposures in these areas.

The growth we have experienced in casualty has been focused in targeted classes demonstrating improving conditions and positive rate momentum. This includes U.S. general third-party liability and U.S. excess and surplus lines. Our casualty portfolio is built on a foundation of solid long-term quota share partnerships, and it will be difficult to materially increase the excess of loss proportion of the account in this class. Overall growth was driven by increasing our support to partners that have demonstrated underwriting discipline as the cycle changes, including expertise in managing claims in this environment. We expect the casualty market will continue to be dynamic as we enter 2026, and we will maintain our careful approach to selecting our partners.

Turning lastly to Specialty. Gross premiums written increased by a modest GBP 4 million for the first 9 months of 2025 to GBP 202 million. This represents a stable 2% growth in the portfolio over the same period in 2024, consistent with growth presented at our 2025 interim results. Specialty is a broad market and conditions vary widely across classes. Capacity continues to be attracted to the margin potential and noncorrelating characteristics of specialty risks. And we have seen new entrants looking to gain share. Rates are beginning to come off peak levels we experienced in 2024. And as a result, the portfolio has experienced a minus 3% risk-adjusted rate change net of inflation for the 9-month period. Our tempered growth reflects the increased competition in the market and the team reducing exposure to accounts showing signs of margin compression.

While these dynamics have introduced some pressure on rates, the broader environment remains disciplined with terms and conditions largely remaining consistent. That said, we are beginning to experience a modest upward trend in ceding commissions as cedents seek to benefit from abundant reinsurance capacity. In Q3, we have strengthened our specialty underwriting team with the appointment of David Fraley. David is a seasoned underwriter with deep market experience, particularly in marine and aviation classes, which will allow us to take advantage of any meaningful firming of aviation rates in 2026 following a number of significant loss events this year. I will now hand back to Elaine to go through our financial and investment highlights.

Thanks, Neil. Gross premiums written of $1,039.1 million are up 8.5% on the prior year. As we mentioned at the half year, we expected the growth we discussed then to moderate slightly over the rest of the year, and that's still the case, but we still expect to have a healthy level of growth for the full year. We have reinsurance revenue of $662.4 million versus $588.2 million in the prior year, a 12.6% increase year-on-year. A reminder once again, our reinsurance revenue is essentially gross premiums earned less ceding commission and a smaller adjustment for non-distinct investment components. It therefore, tracks the same pattern as our gross premiums earned would have just a lower number after the ceding commission deduction.

Generally, ceding commissions have ticked up a bit, so we're seeing a higher reduction for those, which, of course, impacts our reinsurance revenue. On losses then the first 6 months of 2025 was clearly another highly active period of natural catastrophe events and risk losses for the industry, including the California wildfires, but the third quarter has been relatively quiet. Our California wildfire loss hasn't really moved since the half year, and we are maintaining our previously reported reserve on that. Other previously reported loss events also remained stable. On the investment side, with the reduction in yields and spread tightening in the quarter, plus the portfolio generally producing strong investment income, we generated a return of 1.5%, bringing us to 5.4% for the year-to-date. Book yield is 4.2% and market yield is 4.3%.

We remain relatively short duration, and our focus is on maintaining a high-quality, highly liquid portfolio. Duration is currently 2.8 years versus 2.7 years on our net reserves. Average credit quality is AA, and you can see the usual pie chart here with our asset allocation and no significant changes from prior quarters in that or our strategy. I'll now hand back to Neil for closing comments.

Thank you, Elaine. In closing, as we look forward to January renewals in 2026, we believe pricing will continue to soften and our growth will moderate as we reposition certain parts of the portfolio towards a greater share of excess of loss business, notably in our property segment. We will be focused on better alignment of our inwards and outwards portfolio and improving our net position. Our balance sheet remains strong, and we are resuming the previously announced share buyback program after pausing during the peak Atlantic hurricane season.

We are committed to transitioning Conduit to being a stronger, more resilient underwriting company and the recent employee appointments and promotions signal our investment in the business. We believe the actions we are taking will support more stable and resilient returns for shareholders. That concludes today's presentation. Thank you for your time. We will now turn over to Q&A.

That concludes today's presentation. Thank you for your time. We will now turn over to Q&A.

[Operator Instructions] And we'll take our first question from Michael Huttner.

Congratulations on what looks like a strong quarter. I had 3 questions, please. The first one is on the growth. I think you said moderate next year. Can you give us a feel for your thinking here? I think I had previously 5% growth. I think consensus is 2%. But any kind of indication of how -- what it would look like next year would be really, really helpful. The second is, I know you haven't -- even though the quarter is clearly benign and the fact that you -- and Melissa is not material and you didn't mention anything else sounds like in the first 4 months of the second half were looking good. I just wondered if you can kind of talk a little bit about -- you didn't upgrade anything. So is this -- are we going to see the benefits of these improvements? Or will they be kind of used in some way to improve resiliency or something? And then the final question is not actually a question. It's a kind of suggestion. Maybe -- I know you spoke about XL and quota share and by line of business. Maybe you could publish these numbers.

Michael, it's Neil here. Thank you. We don't give forward guidance on revenue. What we have said is growth will moderate. And as we deployed -- we were growing strongly during the deployment phase of the business. It's starting to get towards maturity. And that brings into focus the quality of the portfolio, capital management and those issues. I'm aware of analyst consensus forecast for next year. But we did say growth will moderate. We didn't say shrink. So I mean, I don't really want to be more explicit than that. On the update on earnings, there was a Cat 5 on the water this time last week. So we are in a hurricane season. It just seemed inappropriate to revise earnings at this point. What we have said is we are reaffirming the guidance and that there were no material events in the aggregate or individually as far as Conduit is concerned. Could you just repeat your observation just so that I...

It's just that you talked -- you're changing your business model. You talked about more quota -- more excessive losses quota share. And I just wondered if you could actually publish the numbers just using hints and suggestions as an analyst is challenging.

Yes. I do understand that. We are -- we have now approved the '26 business plan in what we have is a plan and an aspiration. We haven't communicated that in this quarterly update. But your comments are noted, and we will see if we could be helpful in that regard.

Our next question comes from the line of Abid Hussain.

Just 2 questions from me. The first one is on stabilization. So as you stabilize the ship with people changes, product mix shift and then margins, how should we think about the outlook for the business in terms of growth, capital distributions or growth versus capital distributions and more broadly, the ROE going forward sort of beyond this year, really? And then the second question is on the casualty book. You've accelerated the growth across the casualty book over the third quarter. What is it that you like about that business versus the other lines of business? Does it bring capital diversification benefits from the cat exposed lines? Any more color as to sort of why you're looking to grow in that particular line of business?

Okay. In terms of stabilization, I mean, I said to Mike in the previous answer that as we hit this part of the cycle and as we have now reached virtually full deployment, then growth will moderate. It's about exposure management. It's about bottom line and it's about capital strategy. We did announce today that we're resuming our share buyback. So that, I think, would be the future emphasis. And in terms of returns, I mean, we have voiced what our aspiration is through a cycle. And there will be parts of the cycle where returns will be lower because of rating and parts of the cycle when rates will be higher. But our future aspirations remain unchanged. I'm obviously aware of analyst consensus for next year, which I think is around sort of 13 and a bit percent ROE.

So I don't really want to go further than that. In terms of casualty, it's where the market is the strongest at the moment. We are very specific in terms of our appetite for certain segments and parts of the casualty account. It has the benefit of diversification, as you alluded to in your question, and doesn't give us additional P&L probable maximum loss exposure as it relates to the property account. So it does help when we are writing more excessive loss on the property side to continue to grow the casualty account, which we will look to do both in America and internationally.

Yes. it's Elaine, If you could just add a bit on the capital point. We did put a slide in one of our decks a quarter or 2 back in terms of how we think about capital. And I'd point you towards that again. I think that way of thinking hasn't changed in terms of how we think about the capital for what we want to write and building various buffers over that for whatever opportunities come up and whatnot. Our consideration about dividends versus share buybacks is obviously somewhat influenced by our trading multiple as well. So you're going to take another look at that slide.

Our next question comes from the line of Ben Cohen.

I had 2 questions, please. Firstly, could you just say a bit more about how you see your retro buying strategy ahead of next year? And maybe any sort of preliminary feedback that you've had from brokers in terms of price and your ability to sort of make any changes that you're looking for? And on a similar vein, in terms of the business that you're writing and the mix shift that you're looking to get from shifting from proportional to XL, can you just say a bit more about client acceptance desire to sort of expand shares with you on the XL side. Do I detect in the [indiscernible] or in the discussion at Q3 versus Q2 that maybe you're seeing that shift to XL just being a little bit more difficult, whether it's related to environment or customer demand. Maybe you could give a bit of color there.

Okay. On the retro buying strategy, we have been discussing and had initial pre-market discussions with our flag broker and other brokers. We had previously bought a lot of named peril as in wind and quake coverage. We know that the market has availability for all perils, including secondary perils to be included program, which obviously is more economic than buying secondaries on a separate basis. So we have a comprehensive program structure. We have yet to go into market, that is common across the entire market and that process will start in the next 2, 3 weeks that there will be a small handful of programs out there.

I mean I noted the Lancasher comments on their retrocession as well. So yes, we will be going for a very comprehensive program that will reflect the necessity to protect our capital given that we will write more XL reinsurance. In terms of business written, most clients buy both quota share and excess of loss protection. And by being on and having an established quota share account, we will therefore see most of the XL business and getting on to it will be the driver. So it is hard, and Michael asked a question earlier for me to give a sort of percentage split. At the half year, we said it's evolution, not revolution, and it's not in a bad phase. Where there are quota shares and there is satisfactory margin, and we like the quality of the business, we will write those.

The shift will probably be more predominantly in the property and the specialty. Casualty is very much a quota share type business because there is not the need to buy catastrophe volatility as it relates to natural perils, obviously. So casualty will be probably very much weighted towards quota share, and that's common across the market. The drive will be on property and specialty. And I look forward to the renewal season. We will know more about the outcome by the time that we report on the finals.

Our next question comes from the line of [indiscernible].

My first question will be about specialty. I mean you mentioned signs of increased competition. And you've also highlighted that aviation might be an opportunity. Maybe you can be a little bit more granular at what subsegments of specialty do you see conditions worsen more, which ones you still like and whether there's any geographic distribution there?

My second question will be on capital generation. Now that we've been through most of the year, we're in November, maybe you could give some form of estimates of where do you expect your DSCR and DCR ratios to land by year-end? That would be very helpful.

And maybe question number three, I think we spoke about that in prior calls, but with new kind of pricing assumptions for the year. Maybe you can comment about your appetite to nat cat, where do you expect your PMLs to develop given the mix shift, et cetera?

Elaine, do you want to comment first on the issue of BSCR and those things, and then I'll come back to specialty and nat cat.

Yes, sure, Ivan, unfortunately, we can't give any real guidance on that at this stage. We will be reporting on that at year-end, but we're not going to give an expectation of where we're going to end up at this point. But we have previously set out a range that we expect to operate in and we expect to be comfortable in that range.

And then if I pick up on the specialty. I mean specialty is, in effect, a very broad score. It is everything that property and casualty isn't. We do see opportunities to sort of -- there's a lot going on in engineering builders risks. Some of the marine classes are softening. We've seen strong competition for offshore energy recently, but it's a broad school. And we do continue on a risk-by-risk account-by-account basis to see good opportunity. We are also seeing international business, and that will allow geographic diversification.

And once again, we will have a push with the major brokers to write more nonproportional as in excess of lost business. Nat cat, can you repeat the question on nat cat? Yes, it's about PMLs. And we haven't revised our PMLs, but given the nature of the way that we can protect our account, I would not expect to see a material shift in those at all. And we will give detailed guidance on our PMLs at our finals in February. And certainly, that's well ahead of next year's hurricane season, which is sort of peak exposure outside of obviously quake.

Our next question comes back from the line of Michael Huttner.

I've got 3. First one is you were obviously at Monte Carlo and now we're 2 months later about. Just wondered if how the environment has changed relative to what was discussed at Monte Carlo, which seemed kind of softening, but nothing dramatic. The second is on the -- what you said, that's really good. But could you possibly say or maybe you could send out to all the slide you mentioned on the capital priorities? And then the last one is investment income. So you've got tons of investment assets, so EUR 2 billion. You've got a really nice 5.4% investment return.

What can you -- and I'm really sorry, you might say, well, I can't answer the question or this is so simple. I'm not going to answer it. But what is the -- in terms of the bottom line, the figure which goes into the ROE, so call it, if it's 5%, it's about EUR 50 million or something. How much would the investment income portion be? I'm having trouble because I seem to remember in the past, you explained really hopefully that part of the unrealized gains from investment sense, which I think are in the 5.4% figure would then come out again as part of the -- if you gotta call it, the unwind anyway.

Do you want to -- so the capital priorities, I can confirm that Brett can actually -- it is on our Conduit website under Investor Relations, but I will ask Brett to send it to the analysts on this call.

Elaine?

Yes. I mean we don't disclose the split at Q3, but we did disclose it at the half year. So you can go back and reference that. And we did get a small benefit this quarter from the reduction in yields as well. So we are seeing fairly strong investment income of the portfolio now it's a good point for that. But I'll point to the half year [indiscernible].

What was the book yield at the half year?

Half year would have been about 4.2 which i think is really consistent.

Yes. So the book yield is 4.2%, and the actual return was 5.4%, so you can work out the difference. And the capital we have -- our assets are expanding on an annualized basis of about -- basically I'm talking historic about $250 million. Good. So that deal [indiscernible].

On the investment return, I seem to remember the 5.4%, which includes the unrealized gains, that gets offset within the P&L by something else. It actually doesn't hit the bottom line. Am I right in this? Or am I completely missing the point?

It's somewhat offset by the reinsurance finance income and expense. So that's unwinding the accretion on our investment -- on our insurance liabilities and basically marking them to market for the movement in yield. It's not a perfect match and the investment income and investment return tends to be a little bit higher than that, but there is an offset.

Our next question comes from the line of Joseph Theuns.

The first is just on your growth in casualty. I just wanted to double check my understanding is correct that this is driven by kind of increased market share with your current partners? And sort of the follow-up question to that is just how -- was that because some of the other partners that you have they sort of withdraw? Or is it just -- how are you able to sort of increase your market share essentially? Or is it through higher demand? My second sort of question is just about the transformation plan. Neil, you mentioned that the business strategy or plan for 2026 has now been agreed. Can you sort of give an indication of when we might hear it? Is it going to be the full year earnings? Or could it be earlier?

Right. I mean, let's deal with the business plan first. I doubt that many companies would communicate the sort of inner workings of their own business plan to the market. So I don't -- certainly not before the earnings. And at that time, we will disclose all of the disclosures that we previously have, which would include things like PMLs. We for commercial reasons and sensitivity, we don't disclose individual detail of our outward reinsurance program, but we will, as I say, disclose PMLs, which give our net exposure.

And I mean we will be as helpful as we can, but there are limits as to what a company can disclose in terms of commercially sensitive information, but we will look to update in February. On the casualty, it will be a mixture of growth on current partners. I mean all of our clients each year has different patterns and some of them will reduce the amount of coverage they buy and retain more. Others will look to buy more. So there's no hard and fast rule. We are still seeing new business opportunities as we grow and mature, and it sometimes takes time to get on to people's reinsuring panels for casualty, especially if you're a new company.

We are also looking to diversify on a geographic basis, and we are seeing new opportunities in Europe. So Michael mentioned Monte Carlo, we have been traveling extensively. We have been working hard with our major inward broking partners. We have been having a number of meetings with our client base and working very hard on that. So it's partly an increase in existing core relationships. But on most of the really top clients, we've probably got the positioning we want. So future development and growth will come out of new customers and a slight geographic diversification. But obviously, that falls within the confines of us being selective. And casualty is a lot of subclasses, and we have views on the bits that we find attractive.

[Operator Instructions] Our next question comes from the line of Andreas van Embden.

Yes, I just have a high-level question around cycle management and capital. Obviously, you'll be managing your gross versus net or your retentions next year. And one of the ways you can do that is through your reinsurance program, you're going to be optimizing this ahead of 1/1. I just wondered whether you also considered using third-party capital either against your property cat book or casualty as a capital management tool into 2026 or maybe even 2027 in order to sort of optimize your capital structure and maybe release some capital.

Yes. The answer to your question is yes. We have deeply considered it. We've run 2 individual projects looking at side cars, quota shares, and they come with pros and cons. And in each case, we have modeled it. You can cede away casualty premium and you lose the investment income, which is one of the features we have. We like the business that we're writing in that area. So to cede it to a third party. Yes, you get the cede commission, but as I say, you lose the investment income. So it's a straight forward exercise modeling that. I mean at the moment, our principal goals for this year-end is expand the coverage in the program to take into account secondaries, protect our capital. And we are very, very conscious of this in the light that we will be writing more excess of loss and keep it simple and focus on capital management.

Yes. Andreas, we have already sponsored the cat bond and then we do some funds as well. So I mean third-party capital space that we're already using [indiscernible].

Yes. We have $100 million cat bond in force.

Yes. I was thinking more in terms of partnerships coming alongside you, either funds or sidecars to sort of take some of the load of moving towards cat XL?

Yes. And as I said, we run 2 projects on that basis, looking at that, and we are aware of the ILS appetite in the market. At the moment, we haven't closed a transaction of that nature, but it's under constant review. And I do get the point.

Our next question comes back from the line of Michael Huttner.

And that probably is my last question, but you've been so helpful. I was very tempted. It's just really to understand better what's happening in the market. So I think you spoke about the terms and conditions in specialty remaining consistent, I think. And then -- but maybe in property attachment points may be kind of maybe not unchanged. I don't know the words you used, but clearly, it's good but maybe not as good. And then I think you also said something about the -- let me just check my notes. Yes. No, it was actually just on this. The pricing, the pricing and loss affected. You mentioned that it remains firm. I think it's not -- it was just a comparison. I think at Hanover at the Investor Day, which is 3 weeks ago, so it's a while back, they were kind of hopeful that loss adjusted -- sorry, loss affected would see rising prices. I just wondered if -- where you've seen the market shift there.

So what we have seen some, and I would describe it as moderate price rises on business that was loss affected in the California wildfires. There are 1 or 2 big claims hit in the specialty market. And we would expect to see payback emerging on some of those programs that were affected by the major events that have happened in the specialty market. So yes, there is a hope. Some aviation policies that there have been recoveries under aviation, war programs in respect to Ukraine. And actually, I was asked a question earlier about aviation by, I think, Ivan. And I admitted to allude to it.

David Crawley, who has joined us and works for Mark Berman on the specialty side, does have expertise in this area. And if there is a rerating in that space. It may present opportunities. We will be cautious for now because there is -- we think the markets will develop over time. So yes, we do expect or have seen some pricing adjustment on loss effective business. Michael, what was your question again on property?

It was just -- I was curious, curiosity on the attachment points where they're kind of holding firm or maybe tumbling a little bit at the edges?

And that -- the answer to that is market by market, it will vary. People will try and expand their coverage, especially on retro, where we are a net beneficiary as opposed to a writer. The one thing I would say is that property is very model driven. So it is if people do start dropping attachment points. It drives through into the model and the way the proxy is priced. So there are some in-built defense mechanisms, but we do recognize the pricing we have published, the pricing that we're experiencing. So I'm not denying, but there are reductions in the property market. But so far, we have seen discipline as it relates to terms and conditions. And that includes under conditions, you would include deductibles and excess points.

There are no further questions on the conference line. I will now hand over to Neil for closing remarks.

Right. Thank you, everybody. So that concludes today in terms of Q&A. It's been a good quarter for us. I think there's some solid progress being made. We're obviously very, very pleased with the hiring of Stephen Postlewhite, which we announced today, who joined in late January. We look forward to a renewal season and the buildup to year-end, and we'll report further at the finals. So I think that concludes it for me. But thank you for joining the call, and I will probably look forward to speaking to each of you individually in the next few days.