Conduit Holdings (LSE:CRE) — Q1 2024 Trading Update

0:01 Good afternoon, and welcome to the CONDUIT HOLDINGS LIMITED investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time via the q and a tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. And I'd now like to hand you over to Neil Ackert, executive chairman. Good afternoon, sir.

0:32 Good afternoon. And I'm joined here with Trevor Carvey, group chief executive, and we also have Elaine Whelan, group chief financial officer, in case there's any questions on finance at at the end of the session. So, Antonio, let's go on to the first slide. So this is our investment proposition. CONDUIT is a pure play Vermutin reinsurer. It does not write direct business. Its value proposition is based on targeted underwriting. We underwrite property, casualty, and specialty. Specialty is classes of business such as marine, aviation, energy, political violence, etcetera.

1:20 Me and Trevor started the company in 2020. We believe we've assembled or particularly Trevor's assembled a team of really strong underwriters. We have a highly efficient operation, a very open collaborative culture. Just behind this boardroom, there is the underwriting floor. It's all open plan. There is a high level of communication. We have a management team, as I said before, with proven track record. And more and more, the use of data is coming into the reinsurance market, the ability to analyze underlying portfolios of risk. And as a reinsurer, we have access to a lot of underlying portfolios, so data plays a very big part of our business.

2:10 One of the aspects that I think makes CONDUIT particularly, attractive is that we raised the money in 2020. Our first underwriting year was 2021. So we do not have exposure to back year legacy issues. It's a clean, strong balance sheet, and investments also. The mantra is keep things simple. It's a double a rated portfolio, short duration. Average duration I think is about two and a half years. Around there, yeah. So we will we can talk more about that in the q and a, but with that, I will pass over to Trevor.

2:59 Thanks, Neil. Morning, everybody, or afternoon if it's in The UK, no doubt. Yeah. So some summary points here to kick us off, which really encapsulates the trading update that we've announced in the RNS today. Gross premiums written $356,800,000. That's up 28% year over year versus the first quarter twenty twenty three. That's good growth in the range of space that we're in. It's still an awful lot of the market that we see before us that is worthy of us deploying capacity into. The growth for us as we called it out previously, property and specialty particularly are offering more attractive areas for us. So 37% growth in property and 31% in specialty are obviously driving that. And as I say, we're targeting the classes and the sectors where we see the best returns at the moment.

3:58 But generally, the market is still very attractive for us. On risk change or risk adjusted rate change, I should say, 3% overall net of inflation. And that's across the blended portfolio of renewals, plus five in property, down two in casualty and up two in specialty. In terms of those, that's the rate change, net of inflation, that we've got on our renewing portfolio. We obviously have new business as well. We're adding to the portfolio in the quarter. Doesn't form part of that computation. But but overall, we're still seeing a positive environment. Cash is interesting because it's around the edges there where we established a core book of business going back to 2021 when we started the the business.

4:48 We've built on that year over year as we've grown that capacity portfolio. Some of those renewals were showing a bit of rate weakness, and so so you've seen that minus 2%. But we've traded through that. We've done some optimization of the portfolio and there's new that's been added. The key for us year over year on casualty is to ensure that in the overall casualty division, we don't see combined ratio deterioration. So essentially, we're looking to trade that casualty book through, and we are still growing it, but maintaining that margin on the overall portfolio, and that's what we're being able to achieve to date. Trading environment, yeah, I've touched on this already, you know, we refer to it as an underwriter's market, and that's very much how we see it.

5:34 Within the divisions of property, casualty, and specialty, we have a whole host of subsets, And that's the important point with a multiline reinsurer. We have three big divisions, but within those, there are lower subsectors. And the underwriters are finding still a number of those classes are very attractive, and the general rating level across all of them in a very good position. During the quarter, active quarter for industry events, number of nat cat losses as well out there. For us, they're well within planning expectations. And there's certainly, you know, there's pockets of positive impact on the rate that we're seeing within those. Mature business now in the fourth trading year.

6:22 For us, it's been a question of building the platform and that, if you like, in the first couple of years, getting to that stable state. And really, over the last two renewal seasons, I think, you know, the business and the underwriting trading teams have been in a position where, you know, we've got significant relevance in the market. All of our three divisions are trading very actively with the large clients and the large broking houses, and we're seeing which is really what we're expecting this our fourth year, still an increasing flow of business through our front door, which is a great position to be in because for us, the big mantra that we put out when we put the business together was that you need a widespread of business to be able to select from.

7:08 And as we published in previous announcements, we have a healthy review rate, should we call it, for every 10 risks. You know, there's there's a lot that we review that don't make our hurdle and a smaller percentage do. So for us, that's a good position to be in. As long as we've got that strong funnel of distribution, it means that we're in a very strong position to select as we go forward. The last point is an important one for us. Non admitted partnerships, that's basically a sector in The US, in America, where a class of carrier, which is referred to as non admitted, has been on a very steep rate in terms of conditions increase to improving market over the last three years.

8:00 And we called that out very early. We built some very key strong partnerships through 2021 and 2022. And a lot of the growth that we're seeing at the moment is coming out of that area where there is a very healthy margin. It's been referred to a lot in the industry press, but I think for us as CONDUIT, we called that out very early and have been active in that space for now getting into our fourth year. Antonio, next slide. Yes, slide here, which is I think informative over the history of the company over the four years shows what we've written on a cumulative basis since the company came into inception. So written just over $2,200,000,000 of premium.

8:45 And the value on this slide is you can see the property, the cash and the specialty are all playing their part. So the rate of increase in specialty has been larger in the last three quarters. But over the whole piece, there's always that focus on having a balanced portfolio, and that's really key for us. You're not going to see this portfolio suddenly taking a big skew out to write a predominant portion of, for instance, cat business within the property space, which imbalances the portfolio as an example. We're always going to keep the the relative parts of the pie, if you like, in some sort of proportion so they balance, and there's a diversifying factor there. It means the company and the performance of portfolio is more robust around absorbing shocks and losses that come through, and the portfolio is in a position where you're not overextended in any one country, region or class, and that's really important for us.

9:46 And also, probably just a last point here is that given that we the way that the reinsurance treaty business is accounted, particularly the quota share that we write, that has a development pattern and an earning pattern where the premium comes in over time. So that's the reference there to a significant pipeline of unemployment premiums is still there from our 'twenty two, 'twenty three portfolios in particular, that is still earning through and coming through in 'twenty four. Okay. Next slide, Antonio. So these next three slides are really around the specific divisions of property and casualty and specialty, and just showing a bit more color around how we see these sectors. So as we said on the first slide, 37% growth in property, premium to return going up to 217,000,000 q 01/2024.

10:40 And on the right hand side is that progression of the rate change using the base cases year end 2021, and then what we've seen risk adjusted coming through to where we arrived at in 2024. And you'll see this also on the cash deal and specialty slides. We started in 2021, but there was already in train a rate increase environment. So what we've been seeing in these rate increases that we've been reporting year on year is really on the back of the years that are compounding to this point. So you start to see some of the sectors now which even start to flatten out, things like casualty at the moment. And for us, it's still sitting on a relatively high part of the cycle.

11:30 So overall, across the three divisions, you'll see this in the other two. They're at, I wouldn't say, career highs, but they're certainly at relatively highs over the course of the last ten to fifteen years. So the industry at the moment that we're trading in, the reinsurance space, is a strong place to be active and deploying into. The just one comment at the bottom that CAT capacity increasing is a slightly dampening effect as we get into the midyear renewals, Catastrophe reinsurance, excessive loss reinsurance, there's a big renewal season that's due up in The US particularly, and that as we go into the hurricane season, a lot of those reinsurance contracts renew through May, June, and July.

12:18 There's more capacity that's come into the market and sitting around, particularly at the very remote end. It's not really where we play. We're not big writers at that part of the of the spectrum, but there's more capacity that's that's evident and has come into the market. And the the top end or high remote end of catastrophe reinsurance will certainly see some rate fall off, some rate drop off this coming midyear.

12:46 I think we referred to that in our call earlier today. It's an area which we'll observe, we'll watch it. We're not massively skewed or heavy in that space, but it's something which we're very comfortable trading through this midyear. Next one, casualty. Yes. So casualty, single digit growth, 6%, which even though we saw a negative 2% on our renewals, which is the point, we're still very comfortable growing that marginally over the quarter. And as I referred to earlier, we see a lot of new business, an awful lot of new business, which we pick and sift our way through. And when we rank that business up, some of those have been very attractive for us to write in the quarter. So we've added some new, which is contribution to that 6% growth in

13:39 casualty. But actually, particularly with the January renewals from part of the first quarter, we did let some casualty business go at the margins, relatively small amounts, but we, if you like, re optimized the portfolio, added some newer, better blended margins, and cycled out some of the business that we thought was showing signs of weakening earlier than other classes of casualty. And that's a perfectly natural course of action that you'll see us actively participate in, looking at the portfolio month to month and quarter to quarter. And we're very comfortable with new business that we see that is a, you know, like a better replacement for current portfolios, we're happy to optimize the portfolio within that.

14:28 And it's a healthy activity which a lot of reinsurers talk to in my experience, but often don't carry out. But we're very comfortable making sure we maintain those margins in the portfolio. Next slide, specialty. Yeah. So good growth here. Specialty classes cover a very wide spectrum. There's certain things that we don't do, particularly motor, mortgage, plutocracy. We don't trade in those spaces.

15:01 They are very acute classes where you need some very specialized expertise and very specific capital allocation tools. In our experience, those are areas where we can't punch above our weight, so we avoid them. And I think that's it's a healthy discipline knowing what you where your strengths are as opposed to where they're not. So the team is happy growing within our specialty arena, 31% growth in specialty, still showing good risk adjusted rate change. And if you see from 2021 across our blended renewal classes, it's up 13% over that time, which is a really good place to be. There are various losses over that period of time in the industry. Ukraine came through, obviously, over the course of the last eighteen months. There's been a lot of talk about in the market. That caused price increases through in the aviation space, which we're relatively small in, but it's an example of where the market does react.

16:05 And then there's the Baltimore Bridge loss, which is still very much being ascertained to the scope of that of the industry. So there's still a lot of work to do in terms of where that loss will ultimately go to in the market. But that again will probably cause uptick in rate within the marine specialty classes as that loss comes to, if you like, fruition in the market over the course of the next few quarters and indeed over the course of the next year or so.

16:35 So the specialty market does react. We're active in it, but it's about being disciplined, knowing your strengths, knowing where to play and where to keep your powder dry. I think the team has done a very good job through the course of the quarter in growing that specialty. And to a large extent, that's probably just a final word, especially for us, is essentially lower in the Nat Cat contributions. There are some specialty classes that in the industry can be written, but do bring large natural perils accumulations for us. We try and focus on those classes that essentially are complementing our property cat portfolio and doesn't add to our overall corporate catastrophe maximum loss accumulations.

17:25 Next slide.

17:29 Financial highlights. So this is summarizing really within each of the divisions where we are property, casualty and specialty, 78,000,000 gross written premiums. And you can see a lot of that's being done through that property space, the 36% change we referred to before. A lot of rate coming through there, a lot of new business in the specialty space, as I say, which helps to diversify. And casualty, you can see, as I referred to before, we're still growing that marginally, but recycling some of the thinner margin business and putting in some of the newer attractive business.

18:09 We refer there to no event loss individual in the aggregate within the quarters had a material impact, and that's a reference both both to the Baltimore Bridge and also a series of natural perils losses, which are still quite prevalent. A lot of them don't make the big industry press, but a lot of losses through parts of America, tornado, hailstorms, and must they not the front page hurricanes. There's a lot of insured loss out there in the in the underlying, particularly property market space, where natural payrolls losses are up more frequent and certainly it's something which we track. But we plan and budget for those expectations largely. So for us,

18:56 you you incur those losses within the portfolio, but there's nothing outsized for us. And that goes for losses also in Europe, you know, the Italian hailstorms, which, again, you'll see that being reported quite significantly through the European reporting season. But again, for us, you know, they're well within expectations. Okay. Next slide. Neil touched on this at the start, quality investment portfolio. For us, it's about capital preservation and making sure that we got the liquidity to support the underwriting side of our activities. Low risk strategic portfolio allocation, you've got the split of that there and the asset allocation at the end of March. Total investment return in the quarter, 0.5%.

19:44 Yes, highly yielding portfolio coming through, but that's offset by the increase in the market impacts from interest rate changes on the market mark to market valuations. You'll see that through, as we've seen today, pretty much in all of the quarterly reporting that's coming through. That's a trend that's just been there through through the interest rate changes in the quarter. Portfolio duration, Neil touched on this earlier, then the split of that within. We do have a consideration of the ESG factors in the management of the investments. So that's still a key part of how we review and how we manage the allocation of the portfolio through the ESG sector. And it's something which we're very active in with our managers.

20:36 Okay. So final slide for me. I think then we move to q and a now. We do. Yeah. Yeah. Yeah. So we've spoken about the growth in the quarter, but it's just a kind of a a comment here to what happened in April and then actually through beyond that. You know, it was a good April for us. That momentum continued, and we're certainly still continuing to see in the midyear renewals a very healthy trading environment. And rating levels, as I say, it's a following win largely. We refer to it as an underwriter's market and the point there is where we see clients doing a really good job and the market's still in our favor, we're really comfortable growing the shares and developing those positions appropriately.

21:21 And the appropriately really does refer to keeping the balance in the portfolio, and the underwriters are certainly always have that within their key drivers where they allocate capacity.

21:33 All three divisions playing their part, property, casualty and specialty. They all had a good role in twelve months, certainly a good quarter. And even the areas of casualty, which is showing signs of softening, we've got a really good hold on the performance year over year and what our underlying core partners are doing in deploying in that space. Strong balance sheet, as we've said, you know, we've become increasingly relevant with clients. We continue to expand the business with those clients that we are comfortable in the way that they deploy their own line sizes and their own portfolios. And the low 8% discount to combined ratio certainly continues to emerge within our overall portfolio.

22:22 Final word, as I think I've said, you know, it goes without saying high quality new business is what we look to focus on. It's not an easy task, you know. Anybody that tells you you can sit in the reinsurance market, open the doors, and all the business that flows through is top notch is not being entirely truthful with you, I would say. So they continue to do really good exercises of sifting through a very broad portfolio. What's distilled out of that is probably the word is a a core book of business, which we're really happy supporting through. So I think that's probably Yeah. It for me, Neil. Yeah. I I think we we can now move on to q and a. Thank you, Trevor. Hopefully, that gives you a feel. One would stress that we don't report results on a quarterly basis.

23:13 This is a trading update. Our next results will come out at the end of July for the first half. But with that, Antonio, let's pass into Q and A. Neil, Trevor, thank you very much for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab situated on the top right hand corner of your screen. Just while the company take a few moments to review review those questions submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via investor dashboard. As you can see, we've received a number of questions throughout today's presentation, and thank you to all investors for submitting their questions. Perhaps if we drive straight into the q and a, the first question that we have here reads as follows. Can you give us your view on the overall profitability of the market today, and where do you think it's heading, and the growth you envisage for a conduit rate in this market environment?

24:04 Okay. Yeah. So kind of a general quest high level question. Profitability in the marketplace, think it's sector and class specific. If you look at class property, instance, you know, on a global basis, you know, trying to boil the ocean here to a degree, I suppose, but there are very specific areas where our view is, and I think if the industry is honest, there are better returns than others. If you look through Europe on the property space, some of those margins we see a lot of business. A lot of those margins leave a bit to be desired, to put it mildly. You know, we see it, we put it to our model, and it's really not worth deploying materially into that space. If you look at property that's presented to us through The US, generally, the ground up business, I. The non cat business, is showing some really good margins. That's a function of the way that, to a large extent, the regulation and the insurance carriers are licensed in The States. They're much more regionally focused.

25:13 And within that kind of spectrum, you're able to focus in on some really good opportunities. Casualty is interesting. Casualty is class specific. So if you look at casualty, areas such as public DNO, directors and officers, and professional liability have started to certainly over the last twelve months, we've seen rate softening appearing more and more in that space. We follow it. We track it. We know what our clients are doing to manage that. But that's class specific. There are other classes within the cashless space, which are still holding up and presenting very well to us. Specialty, I would say, again, class specific. Specialty has a very wide spectrum of short and long tail business within it.

26:03 There are a whole host of two marginal returns that sit along that scale. There's probably too much in this this session now to go into that into great depth. But the value in the specialty portfolio that we see and the way that it refers into overall blended margin and profitability, providing that's not contribution, as I said, to large natural perils accumulation, which has a capital cost for us, but providing it's bringing the reverse of that, which is individual risk diversification with a margin, that's a really good space to be. And I think probably the wrap up for me here on this one is, you know, I think you'll see us as we've referred to in some of our messaging from the last two or three quarters, pushing on in that specialty risk space and that brings good diversification, it brings good new margin, which sits within our overall portfolio very nicely.

27:05 Thank you. And just turning on to the next question here, which has two parts. The first part read as follows. Can you, in layman's terms, run me through what the difference is between gross premiums written and reinsurance revenue? Is the terminology as much as anything? Sure. Happy to take that one. We were an IFRS four report, and IFRS 17 came in last year, and we implemented and adopted that standard, and reinsurance revenue is an IFRS 17 term. Gross premiums written doesn't really exist under IFRS 17 anymore, but we've chosen to keep that as a KPI in our financial reporting so that you can see how things are going in kind of old school money, if you like, still able to see the growth there.

27:52 Reinsurance revenue is akin to gross premiums earned, but that is netted down further by ceding commissions, and then there's a smaller adjustment for nondistinct investment components, which is essentially profit commissions or a component of profit commissions. So it is a derivative of gross premiums written. But if you go back to kind of old world accounting, it's gross premiums earned net of ceding commissions, essentially. Thank you. And the next part of that question reads, is your build out of staffing and admin costs now sufficient from further revenue growth? Yeah. That's an interesting question. Certainly, when we put the original plan together, we saw that trend line in terms of operating expense to broadly the percentage where we are now.

28:42 In the round, we are very scalable from here. So we've got a good robust systems and operations divisions that are supporting the underwriting underwriting teams. Have been largely, I would say, kind of fully staffed certainly for the last eighteen months. You know, we're adding ancillary support underwriting personnel lower down in those teams. So it's really about processing the administration of of the policy counts as it grows. But the business as it stands at the moment is is in a very scalable state. You'll see us still adding personnel to it, the headcount will go up. You know, we'll still continue to invest in systems. But as a as a pure metric and, you know, the percentage cost of it relative to the premium, you know, we're at that level where I think we said we would be trending to when we put the original plan together. Yeah. So 5%.

29:39 I think also very importantly, we have the balance sheet to sustain that future growth without needing to issue new shares or or debt. And now that we've matured, we actually have on top of the existing balance sheet the potential of retained future earnings. Thank you. The next question here reads, given the focus on profitability and underwriting discipline, how are managing the balance between growth and risk, especially in high growth segments like property and specialty reinsurance? Yeah. That's the, you know, conundrum that all reinsurance leaders, managers run every day. That's exactly the point.

30:26 I think a lot of it goes to our approach, And and, like, one of our underwriters referred to this, certainly a good way of thinking about it is, you know, we manage the exposures through the front door on the way in. There are reinsurance models out there where companies and balance sheets are more comfortable taking very large positions on the inputs business and then seeking to solve that problem, if I call it that, through retrocession and as it's passed out and laid off. That's not what we do. So the point portfolio, growing the premium, growing the scale of the business, but keeping always in mind the need to balance the portfolio through the front door, which is kind of the way I'm thinking about it as we write it, is really important to us.

31:15 There is no quick answer. There is no golden golden arrow that you can point at it and say that's the the way to solve it. It's just hard work and it's continual evaluation of the portfolio as it evolves. And I think we do a good job of that. And so my comments around specialty and risk being not cat related goes to a big part of that. We're very conscious of of if we're selling a product, we want to get paid for the component parts, and that's really important to what we do. And if we're selling a especially poly that's policy that's got some natural pearls in it, we want to make sure we get paid for that. The industry isn't always good at doing that.

32:00 The products who get sold whereby their coverages, I wouldn't say hidden in there, but are included that are perhaps not priced. And that's a big part of what we do. Every policy we write, we strip out and break it down into its component parts. And I think it goes a long way towards sort of answering that question. Think, you know, that's how we measure that we're getting paid for the exposures that are building up in the portfolio and making sure they're balanced. I think also where we've seen the opportunity in the portfolio from the very beginning of the company, we've chosen to write more quota share than excess of loss, which also helps us to manage the volatility around our combined ratio as well. Thank you. The next question reads here, regarding casualty lines in general, it seems as pricing is not keeping up with underlying legacy reserve inflation, What are the odds of casualty prices picking up in the future?

32:53 I'm not sure I'd like to put odds on it. I think the general comment I would make is that the industry is really alert and alive to it. If you look back in that soft block year of years coming up to twenty nineteen, probably, you know, sort of 2013, 'fourteen, up to 'nineteen, they are really starting to hurt the industry. We obviously came into being 2021 and onwards. So I'm not sure what will I put odds on it, but certainly, when every client presents to us now, which is interesting, you know, I've been in the round doing this in some shape or form for forty years as is Neil. And the big change and shift that I've seen over the last four to five years is every single presentation and submission we get from clients now has in their right upfront a reference to how they are coping with managing and tracking underlying claims information.

33:53 Some do it better than others. Some charge, we think, more appropriately than others. Everybody talks about it, but some do a better job. And one of the things which we're really keen to do, and we refer to it, you know, in optimizing and changing some of the shares on our casualty portfolios, making sure that those that say they're charging for it can demonstrate they are. And if they are, we're happy to support them. The certainly, everybody is aware of it. And it's certainly firm front and center, particularly in the casualty lines. Thank you. The next question here reads, is an underwriter's market somehow different to a hard market? Shall I take that one? Yep. Go on.

34:39 Essentially, it's the same. A hard market is one that probably at a higher level is typified by pure price, short term price increases which are dropped in and are suffered by the market almost kind of ubiquitously. And and the hard market is then referred to as, wherever you go, you know, everything's up. It's hard market. Underwriters market, I think, is more nuanced. And what we're trying to convey there is that there are really good pockets where that hard component exists. But it's a blend also of understanding what you can do with terms and conditions. So we've got a lot of tools at our disposal where if we like the rate, we can also do things where we can still negotiate and put limiting factors on terms and conditions, move some deductibles, we can put some exclusions in contracts.

35:38 And it all has the effect of, from an underwriter standpoint, enabling that underwriter to influence and improve the margin. They are essentially, they go hand in hand. But underwriter's market, I think we're trying to convey that at the moment, generally prices are up and are good, but you're able to still impose and negotiate in improvements to contracts through the the software areas. So that's I think that's what we were trying to convey. Thank you. The next question here reads, are you adopting any new technologies or innovative practices to enhance underwriting processes? Yeah. Very much. It's from mean, the feature since we started that we were obviously legacy free. We wanted to make sure that we were digitized broad concept, but digitized as much as possible, that we weren't in for instance, just standard spreadsheets forever. And the the structure and the infrastructure we built built enables us to get at that data and to do things with it down the line and to to be more accessible, malleable, and add more value to the business. So what we've done in our short time is is really focused on making sure that the systems that we've got are able to talk to each other, communicate with each other, and be very much in the digital world.

37:08 And for us, as AI, as a case in point, you know, it's a it's a big topic, starts to become more and more possibly relevant and and certainly more visible in our space. The infrastructure that we've built is something with them like AI could look at and can look at. There are tools around which we're in the process of considering at the moment that can do a lot of good work around your existing datasets, interrogate that, look at it, and produce some outcomes. And I think for us, the reinsurance treaty world, we acknowledge that each transaction is very different. There's a lot of non uniformity in data, non non standardization of data.

37:57 In the way that we set up our infrastructure, I think we've got a better chance of getting that into formats that we can then do things within, like, in the world of AI. And the value that we certainly we see as a leadership team is that those tools can add significant speed and clarity and transparency to the underwriting decisions and other areas of our business when we're managing costs, for instance. So exciting times. We're set up to do it and, you know, it's it'll take some time, I think, for the industry to really get to grips with it. But for us, yeah, we want to push on and have the teams do work on that as we speak. I I think this question touches on one of the most fundamental changes that I've seen during my career. If I go back to my breaking days, you were reinsuring someone of quota share, you take a share of the underlying account of your client, but it was a blind follow because the data was not accessible and could not be analyzed. And now there is access to data analysis, data ingestion. All of these things are really coming. It's it's a very fundamental change.

39:08 Thank you. The next question here reads, on a GWP slash surplus basis, it looks like the company is roughly writing on a one to to one basis. What's management's appetite on increasing this ratio? Yeah. I think that that's not necessarily how we would think about our our business and our potential. A lot of it comes down to business mix. And as Trevor's talked about, there's a lot where we limit volatility and our exposures to natural catastrophe and the heavier excess of loss not cap programs tend to be a a heavier cap capital requirement. So it really is something that's driven by our business mix. Thank you. The next question here reads, are you looking towards expanding into emerging market regions?

39:56 What opportunities do you see in this area for CONDUIT, and do you have any plans down the line for this? Without being too broad, I'd say that we have very limited ambitions in in the emerging markets. Provide if the information and and transparency is limited. So it's a rather clunky way of saying, we see a lot of risks from emerging markets. We are open to considering business from those more on the the short tail space of property and specialty. But we have pretty high levels of data requirements we require to evaluate risks and a lot of the emerging market submissions we see and portfolio presentations just don't have that level of data and clarity of data. I think they're getting there.

40:55 There are some of the territories are better than others, but it's generally quite a long way from what we require as as kind of a a base set of data in a certain format to what is presented in a number of cases. So it's a shame because it obviously is largely diversifying, but as a as a reinsurer, you really need to be understand to be clear on the risks and exposures you're bringing on board. So so, yes, we are we are interested, but it's really a function of the data being brought up to a level that that fits our our own organization. And also our margin requirements. Yeah. Yeah. Because some of those territories do not support our target margin. Yep. Neil, Trevor, Elaine, thank you for answering all those questions that you carry 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 with their feedback, which I know is particularly important to yourself and the company, Trevor, could I please just ask you for a few closing comments?

41:59 Okay. Thank you all for for attending today. It's been it's been a good chance for us to share more in terms of where we are in the journey that we've been on. I think probably any words I would kind of leave the room with or the call with is, yeah, momentum's good. The market is in a really good place. You do have to pick your way through the the a broad range of classes, but there are lot of opportunities. And for us, I think we see the year ahead as being a really good space for us to continue to deploy into. Thanks. Thank you, everyone. Neil, Trevor, Elaine, thanks 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?

42:49 This will only 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.