Eckert & Carvey to raise $1.1bn for listed reinsurer Conduit Re

Neil Eckert of Brit and IFEX fame and Trevor Carvey formerly of Markel have teamed up to launch a $1.1 billion London Stock Exchange listed IPO fund raising for Conduit Holdings, a new reinsurance entity likely to go by the name of Conduit Re.

Conduit Holdings has published its intention to float on the London Stock Exchange today, detailing a plan to underwrite global excess-of-loss and quota share treaty reinsurance, across property, casualty and specialty lines.

The founders, Eckert and Carvey cite what they “believe to be an exceptional market opportunity” in the reason for returning to the reinsurance market right now.

Explaining that it has no legacy exposure, Conduit says its “strong and unencumbered balance sheet will be fully available to write new business in what the Founders believe to be an attractive market environment.”

Conduit Re will aim to build a strong underwriting franchise, targeting “strong cross-cycle returns on equity in the mid-teens.”

“The business plan has a balanced approach to catastrophe risk exposures, generating profit and franchise value through the quality of its underwriting and its select portfolio of high-quality business,” the float information explains.

Legacy free and solely focused on reinsurance, Conduit Holdings believes it offers a stellar opportunity to investors to access a listed company targeting this marketplace.

Neil Eckert commented, “Trevor and I have traded in hard markets before, but we believe these are exceptional times by any standards and a really opportunistic time to launch a new reinsurance company bringing fresh capital and a very focused business plan to the market. We are enthused by the industry support we have had whilst developing our ideas for Conduit and look forward to opening for business.”

Trevor Carvey further explained, “We will be targeting an Excess of Loss and Quota Share book of treaty reinsurance business across Property, Specialty and Casualty lines. We are excited by a market where there is so much price improvement across so many classes. For the first time in a long while we think a well-capitalised new entrant can come into the market and successfully target quality business in scale and at historically attractive rates.”

The company targets issuance of $1.1 billion of shares, in a process run by Jefferies and Panmure Gordon as Joint Global Co-ordinators and Joint Bookrunners, and Kinmont Limited and GC Securities acting as Joint Financial Advisers to the Company.

Conduit intends to operate out of Bermuda as a Class IV licensed reinsurance company and expects to operate with a technology led approach, focused on data driven pricing, analytics and exposure management.

Eckert, the former reinsurance broker who went on to found Brit Insurance in the mid-90’s and launched IFEX tradable catastrophe instruments, will be Executive Chairman of Conduit Holdings.

Carvey, a founding underwriter and leader at Arch Re in Bermuda and then via Alterra a co-leader of global reinsurance at Markel, will be Chief Executive Officer of Conduit.

Mark Heintzman, most recently CFO at Ironshore, is proposed as the Chief Financial Officer of Conduit.

As the latest start-up to come to market, Conduit Re has a relatively standard business plan of pure reinsurance and intends to be nimble in the way it moves between business lines.

There’s no information regarding whether Conduit will look to leverage, or work with, third-party capital providers. But, as with any Bermuda reinsurance strategy, the company is likely to look to the capital markets in all its forms, for its own portfolio hedging, retrocession and potentially third-party capital partners in years to come.

It will be interesting to see how this IPO proceeds for Conduit, as right now there remains significant interest in reinsurance among the private equity community and the prospects of backing two experienced veterans of launching similar companies should prove attractive.

Also read: Conduit Re plans to underwrite retrocession and ILW’s, with collateralised reinsurance also potentially in scope.