Conduit Re backs Commonwealth Mutual reinsurance pool

Conduit Re has backed Commonwealth Mutual, a proposed sovereign-owned reinsurance pool that would combine Commonwealth countries' hurricane, flood, drought and earthquake exposure, the Royal Gazette Bermuda Re reported. The Sustainable Markets Initiative, which ran the feasibility work, said it had completed a study of the vehicle.

The study examined whether enough insurance-market capacity and technical expertise exist to support the pool, and the SMI is now working with key Commonwealth countries on a full proposal.

For ILS allocators, Commonwealth Mutual would add another sovereign parametric cedent to the market, alongside CCRIF, African Risk Capacity and Pacific Catastrophe Risk Insurance Company, the three regional pools the mutual is designed to complement. The study set out to test insurance-market capacity and technical expertise.

CCRIF, the regional pool Bermuda belongs to, paid more than $122 million in the 2024-25 policy year, its most impactful year since inception, the report said. Bermuda is a member of CCRIF, which sells parametric cover to governments and other entities in the region, releasing funds when an agreed trigger such as wind speed or rainfall is reached rather than after a claims assessment. The initiative was presented at the Commonwealth Heads of Government Meeting in Antigua and Barbuda.

Neil Eckert, Conduit Re's chief executive, said the study showed the private sector, including brokers, insurers, regulators and capacity providers, is 'ready and willing to play its part' in closing the protection gap across the Commonwealth. He said the Commonwealth's scale and diversity could let the mutual offer 'significant limits at pricing that would be unachievable by any nation on its own'.

The SMI has been assembling private-sector partners: on Nov. 3, the SMI and BofA said they would back a $40 million nature strategy, as Private Wealth Daily previously reported. The next step for Commonwealth Mutual is the full proposal the SMI says it is developing with key Commonwealth countries.