Conduit Holdings (LSE:CRE) — Full Year Results

0:01 Good afternoon, and welcome to the CONDUIT HOLDINGS LIMITED full year results investor presentation. Throughout this quarter presentation, investors will be in listen only mode. Questions are encouraged, and they can be submitted anytime just by using the q and a tab that's situated in the right hand corner of your screen. Simply type in your questions and press send. The The company may not be in a position to answer every question it receives in the meeting itself, however, the company can review the questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to CEO, Trevor Carvey. Good afternoon to you, sir.

0:32 Thanks very much, Alessandro. Thanks very much, and welcome to everybody. We've got a short deck to walk you through around the business generally, but also, obviously, around year end results and development in the in the first quarter to some extent. Can go next slide up? Thanks. So first slide, summary slide, really, sort of at a glance, the split of the business between the property, casualty and specialty lines, which I'll go into in more detailed sentiment around those as I go through, and written premium, 1,160,000,000 written through 2024. A number of you will be aware that, you know, we're based in Bermuda, 65 employees currently, and a multiline reinsurer. By that, we mean we cover the the breadth of classes across first party property, third party casualty, and specialty, which sits as, if you like, as an interim class between the two. Again, more details on those later. Listed on the stock exchange in 2020 as a start of IPO.

1:40 2024 performance, I'll go into that in a moment, but 12.7% ROE, dividend per share that we've we've held through through year end. And then some notes around our capital situation and the AFS rating, A-, which we've been from the outset of the company, but just recently moved to positive outlook. So with that, we can get into the more detailed slides and work through the business. Yes. So first on premiums. In '24, we obviously continued to grow the portfolio, but that's very much across where the conditions supported it. Property, casualty and specialty are moving at different rates.

2:26 And we saw good growth of flagged up here in the property department and specialty in particular. But casualty was also playing its part. We grew 25% to just over 1,100,000,000. It's very much about selecting the risks from a wide submission flow that we get. As a business here in Bermuda, we see very large amount of global business. So we are able to build a portfolio that does embrace risk from a vast number of territories and countries. Currently, we are more predominant towards The US. It's just where that market has moved faster in the last last three years. It's reacted to the the net cat losses that have arisen.

3:17 So from a property standpoint, we are more skewed towards that. But we do see an awful lot of business from other parts of the world. It's just very often at the moment. The pricing of those doesn't get to or beyond minimum rating hurdle. On combined ratio, which is essentially performance, the discount to combined ratio is 86%. It's up from 72.1 last year. And that's primarily due to some increased cat activity through '24 where there was a significant, let's say, increase in frequency of natural and man made catastrophes that basically were impacting the industry, the year overall for 2024 was close to record breaking in $140,000,000,000 of natural perils losses that occurred through the twelve months of 2024.

4:18 And in that respect, we've come on to it with the an ROE with the financial summary page, delivering on that return of just under 13% in a year when there's a record number of cats, something which I think we can be proud of. Two major losses last year, Hurricanes Milton and Helling, were probably the two larger ones. And as I mentioned, they had an impact on the overall business. We had $68,000,000 of losses across those two events, which is about 9.4% contribution to the undiscounted loss ratio for 2024. So as a counterpoint to the higher loss activity is the investment portfolio, which performed well. Net investment return was 66 That was down slightly from the prior year, but that's largely down to lower unrealized gains, which is really reflecting changes in interest rates and spreads.

5:20 I suppose, importantly, a larger part of the investment return was from net investment income, and that's down to higher book yield on the growing investment portfolio. In terms of comprehensive income, we produced $125,000,000 overall through the year. That's ROE, as I said, at 12.7%. Net tangible assets per share, they ended the year at $6.70 and it's included

5:50 the growth in the net of assets per share was just under 13%, 12.9%. And as I said, I think that's a reasonable result in a year with more than $140,000,000,000 of natural perils losses out there. Next slide, please.

6:09 Yep. We've is that it? Yeah. Okay. Yeah. Yes, sir. The next slide. Yeah. Okay. K. So yeah. Come back. Sorry. The slide's just gone at this end.

6:35 Okay. Just skip through, don't we? Okay. Alright. So, essentially, I'll talk to you a slide. Apologies. A slide had come in, though, but I wasn't expecting. But, essentially, this is largely what what I've just gone through. So without repeating the figures, the growth that we've seen, 25%, and then running through down to the comprehensive income for the year, 125,000,000. Spoke about the final dividend. Probably the last two points are the ones that we'd highlight on top of the numbers I've already spoken to. The balance sheet is still very strong. We've grown into that since we launched the business. The BSCR, which is the solvency ratio, is estimated at 269%, and that's after allowing for the impact of the wildfire losses that have occurred in the early in the first quarter this year. I'll speak about those typically in a moment.

7:37 But we often get a question around hedge room for growth. Can we still grow going forward with the capital we've got? And the answer fundamentally is yes. Our business plan going out over the next three to five years, where we still expect to grow appropriately when the market's there, we're able to do that without raising further equity or debt. You know, we stay alert to other mechanisms, other capital avenues that are out there in the market. But certainly, in terms of where the plan is set and where we see the business trending, subject to market conditions, we certainly have plenty of headroom to still grow into that. Next slide.

8:28 Yes. So on overall growth in written premiums, we certainly carried on that growth 25% through the entirety of 2024. And overall, we've written more than $3,000,000,000 since the company came into effect. And that's quite a good landmark. If you look at how we have grown over that period of time, we certainly delivered a relevance and a presence in the market. And I think that's become really valued across client base and the partners that we've established in the different lines of business. As I said, we're highly selective around the way that we construct the portfolio.

9:15 That balance of property, casualty, specialty over the years of 2020 through 2021, we've seen the inherent growth there. But we've maintained that balance through the piece. Property has grown at a faster rate, but that's more a recognition of the market improvements, the market moves that have been made there relative to, shall we say, to some of the cash departures. Cashity for us, just a word around that. We built that portfolio from scratch in 2021, those same clients and just growing with them and then added additional new partnerships as we got through more into 2023 and 2024. It's a really good space. The casualty business for us is an area where we're still dialing it, if you like, setting the reserves around it at a conservative level.

10:10 The portfolio generally takes five years four to five years before you really start to get an emerging picture that you can react to in terms of the way that you manage reserve releases. But a point that we often get asked about in the industry is what sort of trends are you seeing on that casualty loss ratio and claims experience. And we reiterated again on the call yesterday that the pricing picks that we made when we wrote the business in 2123, we haven't moved those. So we still are very comfortable with those loss picks that we made, the expectations around those. We carry a management load on top of those, which is reflected in the combined ratio that we posted for Kashy, which is essentially kind of the 98% to 99% combined ratio level. So we're not reflecting a profited margin by releasing reserves from that at this stage, but we're very comfortable with the way that we've currently dialed those ultimate loss bit.

11:18 Piece around rate change overall, you can see somewhat lumpy the index, but starting with 100% in 'twenty one and then arriving now in 'twenty four. We're still seeing positive net rate change, risk adjusted rate change in the current year, which is up. There's a degree to which, I'll talk about in the context of the wildfires, although I'll come up with the wildfires in a moment. That will undoubtedly drive rate change. It's a large loss, and we're already seeing signs in the market for the March and April renewals. There's some significant rate increases that are being quoted in the reinsurance market, INR market for property renewals, particularly in The States. I think it will have less impact on more far reaching territories.

12:17 Japan is a large renewal season, April 1. I love that Japanese business is renewed on the regional side. I think we're likely to see a material maybe some rate change there driven out of the impact of the California wildfires. But it's certainly reset the market in certain areas, particularly in The States. Next slide. Yes. So just around January renewals. As we said, the rates were down modestly overall, particularly around the property side. We saw some softening in the property market, particularly in the excessive loss, which is the catastrophe, the volatility, in bracing covers, they came off in terms of rate, in some cases, by 10% to 15% overall in the market.

13:10 Ours is less at minus five by virtue of the fact that more of a grand up proportional quota share portfolio, where, for us, the biggest impact on ratio is much less. The specialty side, and we've spoken about that a lot so far, especially for us, is essentially the cost of business which it's predominantly by non cat business. The specialty, when you think about it, is in our portfolio, is very light in cat exposure. So specialist buildings, which, again, not particularly exposed to catastrophe.

14:00 And then in some cases, specialty is also for us, more, as you say, more esoteric classes around casualty, pieces like environmental liability, which we write some of that in our specialty portfolio. But we wouldn't really treat as full blown third party general liability, but some of the more specialist and cash to third party costs come in there. Additionally, classes in there, which we could write, but we're very low in, is aviation. Aviation and space is often quoted as a class that sits in companies, especially portfolios. Aviation market, to our extent, is largely ineffective and I won't say completely broken, but the rates that are achievable, premium rates that are achievable in aviation.

14:51 Certainly, in my career, over many decades, I've rarely seen the aviation market being an attractive place to deploy capacity. Last comment, really, just reaffirming the strong balance sheet. And providing we see the classes moving in the right direction, we will deploy. And to put that into context across property, casualty, and specialty, we probably have subclasses underneath that in the region of 24, 25 of them spread across property, casualty, and specialty. And we think of them as kind of elevators. You know, they move up and down at different rates. And over the last three years, particularly, generally, they've trended upwards, which is why you've seen that growth from our portfolio.

15:39 There are some classes now, within parts of property that have already flagged that have started to dip down. Some of the specialty classes like aviation that we call out, we monitor, we watch them. And those are classes where, you know, the rate adequacy elevators are on the way down, and the ones that we step off, that's basically designed around creating a portfolio, is there to manage the cycles as it evolves through. Next slide, please. Yes. Topic which will be in the press, major industry loss. There's no doubt about that. They've impacted many homeowners in the area, in the affected areas. And there were essentially two fires, Palisades and Eton, that have merged into what the insurance industry is describing as as one event. But it's another reminder of the scale of the loss, really, though, to some degree, service of the

16:43 insurance and the reinsurance community provides in you know, as the rebuilding takes place. Big point to flag up here is, and there's still considerable uncertainty around the event and the tail nature of it. It was I'll briefly touch on the catastrophe models and the models that are used to try and forecast the frequency of large events and how often they come around. They are inherently more reliable around the frequent events like wind, which, as every month or every quarter goes by year on year, there's a bigger data set around how strong wind and hurricane losses are, where they're occurring around the world and they become part of a quite a large data set, so the data's more reliable.

17:33 On wildfire,

17:37 it's been very much more sparse in terms of the data. And so the models for the California wildfire, if we work on the basis that the range is in that sort of 35,000,000,000 to $50,000,000,000 estimate. And that's often quoted at the moment by modeling agencies and other monitoring agencies. And that's an estimate around the range of how large the loss could be. We sort of recognize that. We can put it to print and wouldn't do in terms of what our actual view is because at the moment, it's still early in the losses evolution. But I think that $35,000,000,000 to $50,000,000,000 range is is certainly reasonable. And the return period of that, sort of, scale of it in the model was anywhere between two hundred and five hundred years. So to put in the sense of how how long the models were there, you know, we know the the accuracy of predicting the return periods of these models is is an imprecise science, and we spend our entire time here in the that modeling unit, essentially, of being pessimistic around those frequencies at the tail and loading them and I feel like bringing them into a more reasonable distribution rate.

18:59 But on this one, even with our loads, it still had it sitting out as a very much an unexpected tail event. We wanted to come up with an estimate up here for us. The net loss range, ultimate undiscounted net loss, is between $100,000,000 and $140,000,000 Net of that, we always put the end part of that and actually together where it's after net of the reinsurance that we have and then any additional sort of contingent premiums, which are sometimes paid on policies where the a loss has occurred. It's just a feature of some of the contract. So we're saying a 100 to $140,000,000. And, you know, we've come up with that by

19:48 contracts line by line, talking to clients and working through their own estimates. Essentially, they come to us with a range in number of cases themselves. And what we've done here is build that up to a public disclosure and a public announceable amount of between 100,000,000 and $140,000,000 Just in terms of what does that look like in the context of our overall portfolio, put it into some sort of context for losses of this type, we budget annually between 40,000,000 and $50,000,000 That's the best way to think about it. So the additional amount here you can see above that reflects the extent of the surprise and the shock that's that's there in the industry and is starting now being reported out through a number of the year end quarterly earnings calls.

20:45 For us, again, into context for the year, clearly, it's only February, and there's there's a long way to go. There's only ten months to go. But from from the way that that we believe that this will impact the portfolio, we made a public statement that, you know, based on the current forecasts and looking at our plan ahead and the expectation we have around rates and opportunities in the market, we believe that we can still deliver an ROE in the low to mid teens for 2024. I mean, that's clearly dependent on loss activity for the rest of the year, as I've said, and also how the investment markets react to a degree or how they play out.

21:33 But it provided there's a reasonable loss activity through the rest of the year, we think that target or that future guidance, if you like, around the ROE of low to mid teens is certainly achievable.

21:51 Financial highlights, I'll just pass it over to Brett. We'll run through a couple of it. Yep. Thanks, Trevor. Just to hit on a a few of the financial highlights from from 2024. Some of these will be a bit of a repeat, but we recorded 1,160,000,000 of gross premiums written for full year 2024. This compares to 931,400,000 in 2023, so almost a 25% year on year increase. As you may know, our business mix does favor quota share over excess of loss. So we have a bit of the 2024 underwriting year that will still continue to write into 2025, but subject to any ongoing adjustments to estimates, all other prior underwriting years are fully written now.

22:39 Just over half of our 2024 underwriting year is earned, so a substantial amount remains to earn into 2025. Moving down the table, our reinsurance revenue, which broadly speaking is IFRS four gross premiums earned less ceding commissions, was $813,700,000 for the year compared to $633,000,000 for the prior year, which was a 28.5% increase year on year, reflecting the growth strategy. I would note that, as Trevor mentioned, each of our three divisions experienced fairly robust growth during 2024. And you see that coming through in both the gross premiums written and the reinsurance revenue lines.

23:29 Turning to the net reinsurance revenue, dollars $720,000,000 in 2024 compared to 5 and $56,300,000 in the prior year, totaling 29.4% year on year growth. Now that does expense in the year of 93,700,000 compared to seventy six point seven million in the prior year. Our outwards cover has increased a bit year on year again as the inwards book has grown.

24:04 And we also sponsored our first cat bonds in June 2023, which provides cover on a three year term. On the loss side of the business, 2024 was another active year in terms of industry losses. A number that's been cited by a number of sources is, you know, 140 plus billion of industry insured catastrophe losses during the year. 2024 did have a different makeup of the losses than than 2023. We saw this resulted from a broad mix of events, both risk losses such as events like the Baltimore Bridge collapse, as well as several smaller and midsize natural catastrophe events across the globe, as well as, you know, several more significant events such as hurricane Milton and hurricane Helene.

25:03 As a predominantly quota share underwriter, CONDUIT did pick up, its fair share of of those losses. Across hurricanes Helane and Milton, we had a net impact after reinsurance and reinstatement premiums of 68,000,000. This had a 9.4 impact on our undiscounted loss and combined ratio and an 8.5% impact on our discounted loss and combined ratio. Now looking at the components of our combined ratios a little bit more closely, our undiscounted loss ratio for the year was 84.4 versus 68% in the prior year.

25:46 The difference there primarily being driven by the some of those events that that I just discussed in 2024. Our net discounted loss ratio was 73.3% versus 58.2% for the prior year. You can see a slightly higher impact from discounting on the 2024 ratio compared to the prior year, and this was primarily driven by the higher loss ratio, which was somewhat offset by the relative impact of movement in interest rates year on year, as well as a slight reduction in the duration of our reserves. Our combined reinsurance operating expense and other operating expense ratios were 12.7% versus 13.9% in the prior year, trending down in line with expectations as we've previously discussed as the business continues to gain scale.

26:42 Our combined ratio on a discounted basis was 86% versus 72.1% for the prior year. On an undiscounted basis, the combined ratio was 97.1% compared to 81.9%. Turning to the investment side for a moment. Our net investment return was 4% for the year versus 5.8% in the prior year. We'll go into a bit more detail on this when we turn to the next slide. Just to close out here, our return on equity for 2024 was 12.7 percent compared to 22.0% in the prior year. Moving on to the next slide.

27:30 Just a quick overview of the investment portfolio. It's a highly conservative portfolio focused on liquidity, very high credit ratings, and a modest duration. Our book yields at the end of twenty twenty four was 4.1% compared to 3.7% at the end of twenty twenty three. This results in the portfolio earning more income than in the prior year as we saw a substantial increase in net investment income. The business is also generating more cash now, and our invested assets have increased meaningfully year on year. So that, along with the higher book yield, produces more income as well. Overall for the year, we had a small net unrealized gain.

28:20 As noted in the previous slide, our investment return for the year was 4%. This compares to the 5.8% generated in the prior year, which was driven by a sizable reduction in yields in the fourth quarter of that year. Some of the specifics of the portfolio duration just continues to nudge up very slightly, up to 2.5 from two point four years as of the end of the prior year. The average credit quality remains AA, and you can see the pie chart of the asset allocation breakdown. Just to close out on investments here, the slide shows both the cash investments in the portfolio as well as the net investment income.

29:21 As you can see, as we've grown the business, the portfolio has increased pretty substantial substantially in size. Our investment leverage is now up to 1.7. We generated $65,000,000 of net investment income in 2024. That was a 57.4% increase over the prior year and making a significant contribution. I'll now hand it back to Trevor for some closing comments. Okay. Yeah. Thanks, Brett. I think a lot of these are summary points from the slides that we've already talked through. But just basically in summary, '24 was a good year for us in terms of the progress that we've made.

30:09 Still growing strongly. The market's still there in front of us. So we saw that good growth through the year. And so the ROE, 12.7, was pretty good in the context of the scale of the market loss. And we did produce a 22% ROE in '23, but that was largely driven by lower loss activity and also something unwind on the gain the realized gain on the investment portfolio. We still we'll always remain focused, highly focused approach to building the portfolio and how we go about building that. Clients are always reviewed very much ground up as to how they continue to write their business, how we then reinsure them, the basis of what that reinsurance structure is.

31:00 And as I said before, in casualty, that's really important to understand exactly how clients are underwriting and changing policy forms, if they are, year on year as to how that could increase or decrease our own claims experience. So it's very much a ground up approach as a reinsurer, not typical of all reinsurers. We sometimes take a more top down approach, but for us, it's very important to understand what's going on at that grassroots level. I've mentioned already, you know, where pricing is, it's very attractive generally, but some classes we've already called out where there's been some softening. And we've actually, through the course of 'twenty four, I can think of a couple of classes where we have actually started to cut back our involvement because we see the signs of the market softening.

31:54 And that was actually a point around some of the property catastrophe business at January 1, where rates came off 15 or even 20% in some cases. In the main, we weren't on those, but we were offered them new and largely, we declined. So we are underweight in terms of pure property catastrophe having gone through January 1 renewal season. And there's none of them there of keeping the powder dry for the renewal seasons, which come through particularly April, May, and June. Yes. So probably just in closing, then we can move to Q and A. The balance sheet is really strong, as I said already. We've got over $1,000,000,000 in capital. Year end, no debt. And conservative investment portfolio will continue.

32:42 IInvest, as we said, recently revised the financial strength rating outlook, positive. It's been stable. And we've got the headroom for growth. So we're focused on driving long term returns for shareholders. I think we've built a business that's got a strong underwriting culture. We follow it from the ground up level. We understand what goes on in the underlying markets. We've a very good distribution network, as I said, accessing business globally here on the island, it's a very efficient way to access business. Probably, last of all, around our own costs and structure, we do, as we said we would do, we do run the business on a very competitive operating expense, which is sort of down in that sort of sub-five level.

33:31 We knew we would get there over time, but it does give us a significant edge or advantage, particularly as the market softens. We've got an edge there, we think, over the competition in terms of a head start when it comes to producing a margin, the combined ratio over the year. So thanks for your time. Should we move to q and a? Perfect. Thank you very much for the presentation. Ladies and gentlemen, please do continue to submit your questions, and you can do so just by using the q and a tab that's situated on the top right hand corner of your screen. We'll get straight into the questions with the first one here which reads as follows. How did the company view its future growth prospects following the recent industry losses?

34:17 Okay. The growth prospects that we thought we had when we got the plan together basically got a bit better, particularly in the property arena. So we have said on the broader open market call that having gone to January 1, we saw good double digit increase in premiums written at January 1. Softened in some areas, and we held back. So I think if anything, as I've said it before, parts of the property market, particularly in The States, are really going to uptick now.

35:07 So overall, the recent industry losses through '24 and the big new WiFi has really served to increase demand for what we sell. The companies want to buy more cover. So in that respect, I think it's move to the next one, Joey. Yeah. How did CONDUIT manage to reduce its total reinsurance, other operating expense ratio? That's essentially by virtue of continuing yeah. We're growing our business faster than we're growing our adjective costs. Good example, rising 11% more premium at one. So double digit growth at January 1 is achieved without adding really any additional resource or staff over the course of the period to achieve that. So the systems and the costs that we put into that are some cost to being continued to invest.

36:16 But it's it's really around ability to continue to write business. And in the region as well, this is probably the key to it. When we write a contract here, typically, we are alongside a number of other reinsurers. And for example, we could have 5% of a contract, and maybe we write that 5% in the first year. As we get to year two and we start to really appreciate and like what our client's doing and we think it's marginally accretive to the portfolio, we can move that from a 5% to a 7.5%. And that's where growth comes from, I'm sure. So I think often, when you're world of insurance, growth is associated with you've got to sell more policies, you've got to sell another 1,000 homeowners or another 10,000 motor policies.

37:07 That's very difficult to do, and that's where expense comes with it. But in our world, we're essentially writing the same contract, just changing our share of it. And that's really where the efficiency gains sit within the reinsurance world. Thanks. The next question here, how has CONDUIT performed compared to its initial IPO targets? And what factors contributed to this outcome? Yes. So overall, when we set the business up, we set out to grow the business over five years to just shy of $1,000,000,000 So on that measure, we are considerably ahead, 1,100,000,000 written through our fourth year. And that's really the tailwinds that's been there from the marketplace.

37:59 Rate adequacy was stronger than we thought. The demand has really increased for areas where clients want to buy more cover. The casualty inflation environment, social inflation, jury awards, if you like, have been larger in the back years going back to 'fourteen, 'fifteen, 'sixteen, 'seventeen, 'eighteen and up to 2019. And what that's done is create a somewhat bit of a fear factor around the casualty market, and it's underpinned it. So larger emerging losses from the back years is sort of underpinning the pricing. There's a casualty. There's inflation driven pricing, and property has been more loss experience and the need to buy more cover.

38:48 So in that respect, that's why that's growing. In terms of net income or comprehensive income, we basically have had a delay in that because we basically decided in the market to switch the approach to write more quota share ground up business rather than volatile excess of loss. That nature of that contract, per share basically earns a premium over two years. It doesn't earn it over one year. So whilst we've written as a headline item, a larger number at the top than plan 1,100,000,000 versus plan, the way that flows through into your financials has got a twelve month lag. So in that respect, we've been slow reporting net comprehensive income and the ROE. And so '23 was a '22 ROE, and we're sort of in that low to mid teens for '24.

39:45 So that's really been the impact there. In terms of delivering on people and the expense ratio, we're actually ahead of it. We've got where we are with slightly less headcount, and our operating expense is slightly ahead of where we thought it would be. That's great. Thank you very much. The next question here, is your strategy purely based on organic growth, or do you see m and a opportunities as well? Yeah. So, you know, depending on the cycle at the moment, certainly, look at my career over forty years, you can plot the M and A activity relative of where the premium cycles are. There's the upside of the trend line and the downside and when M and A activity takes place. For us, it's all about organic as far as we can see at the moment.

40:39 It's such a broad universe that we're in. And we've made a, I think, a material impact in terms of relevance with clients that we're on. But when you consider we have $1,000,000,000 of written out of the industry of several 100,000,000,000, then plainly, we have an enormous universe that we continue to grow in. Just a word around M and A is just a more general observation in the businesses I've been involved in the past. Any M and A that's taken place in the industry, which is wholesale bought into a business, including all of the the back years and all the management of those, has very often been a challenge to integrate and to manage and to profitably.

41:30 The m and a that we've seen, and I've seen work in the past, is really more around acquiring teams of people. So and their renewal rights to business. So the the ones that have worked better when companies sold the renewal rights to a portfolio. So you get the right to write and renew all their policies without the headache of trying to get to grips with, in sometimes, several decades of back year reserving, which has been a challenge. So, yep, that's pretty much what we see at the moment. The next question. When are you likely to see the wildfires reflected in higher rates? Does your mid teens ROE for this year assume this happens? We believe and we understand from our clients that the reaction to that will be fairly immediate.

42:26 So wildfire, either in terms of a rate increase for that peril in the state or an exclusion in broader contract, which is quite important. There are a number of contracts out in the industry where, one, ostensibly, they're for all the property in The U. S, and it contains wildfire. And I think there'll be elements of where that will be squeezed out by virtue of exclusion, which essentially is adding value to the contract with that out. Where it's been written specifically, there definitely will be rate increase coming through. On portfolio, obviously, where we're sharing in those policies ground up with clients, They are written every month, every day. Policies are attaching to the companies, and we're sharing in those.

43:17 So in those treaties that we have, as we speak now, this week, there will be renewals of homeowners policies being written and quoted with rate increases that are in that portfolio of a company that we reinsure. So we are getting the benefit of now that now almost virtually, if you like. So that's happening now. In terms of our sort of forecast for the year and the low to mid teens ROE, there is an element in that. We really dialed up the the rate increase meter to to to use a number in ROE. We just simply looked at US property and where we thought there may be some reductions in some of the passes.

44:05 We've basically leveled off some of those. We think, you know, in the in the model, putting those in as flat would be a reasonable place to go. So let's put some sort of context in there that it's not purely built on us crossing our fingers and hope all of US property doubles the price, which it's not. Thank you very much. The final question we have here is you're trading well below IPO share price. Have you considered share buybacks? Yeah. Thanks for the question. We have discussed capital management routinely in these presentations and going back even to the IPO presentation and materials.

44:50 So we've had a level dividend, you know, essentially since our our first year of operations, 18¢ at each half year and and and full year. So capital management is is obviously something that that the management team and the board discuss regularly. And, you know, we do keep a close eye on on where the shares trade and the relative the relative value. So buyback is is one of the tools that is a capital management opportunity. And I think, you know, we've said since the outset, you know, our our primary focus for capital management is is to deploy into attractive conditions, and and we certainly still view the market as attractive.

45:45 And if there is excess capital on top of what we need to fulfill our plans, we will consider share buybacks or, you know, adjustments to the dividend or special dividends. Thank you, Brett. That's great. And thank you for answering all these questions from investors. Of course, company can review all the questions submitted today, and we will publish out the responses on the Investor Meet company platform. Just before redirecting investors to provide you their feedback, which is particularly important to the company, Trevor, could I just ask you for a few closing comments? Thanks very much. Well, first of all, thanks very much for your time and listening. At times, the reinsurance industry can be somewhat murky.

46:32 I think people understand an insurance policy. We all buy them on our homeowners, our house and our cars. We understand the nature of how insurance companies can react in terms of rate increases and coverage. When explaining the reinsurance industry, sometimes it's a bit of a challenge, but essentially, it's the same principle that we insure the insurance company. And that's kind of the way to think about it. So thanks for your time and for your patience. Interesting market at the moment, obviously, not just with the wildfires but with other market events. Thanks for your time. Look forward to seeing you online at the next visit. Thank you once again for updating investors today. Could I could I please ask investors not to close this session? As you know, we automatically redirected to provide your feedback in order the management team can better understand your views and expectations.

47:25 This then take a few moments to complete, which 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.