This is not a company or a sector - non life insurance - that has much coverage and interest on stocko. Conduit Holdings (LON:CRE) is a pure play reinsurance company on a forecast PE of 5.5 but with good quality metrics. And yes, I know the industry is cyclical in nature, hence the low rating
I watched the presentation by CREon Wednesdays courtesy of IMC
Three things struck me
Firstly - that when asked if there was a hard market at the moment the answer given was that it was more nuanced in that it was more an underwriter's market where risk and rates can be balanced for example by changes in T&Cs. Emphasis here on margin.
Secondly - that they were only going to write business where they have sufficient data to assess risk and that in a majority of cases emerging market companies cannot provide the level of data required. So no rush to revenue at all costs.
Thirdly - although headcount may rise marginally, there is a level of scalability in the business for it to grow, probably dependent on the level of capital available.
The FY23 results where full year reinsurance revenues rose LFL 61% ($392m to $633m) and a further 35% LFL in Q1 2024 make me think that forecast eps for FY24 at $1.15 down from FY23 $1.19 may be too conservative!!
Time will tell - disclosure I hold - so my own views
DYOR as always
BTW the same undervaluation happened to Beazley (LON:BEZ) maybe 4 years ago
