A large new reinsurer in Bermuda, Conduit Reinsurance Ltd, has been given an A- (excellent) financial strength rating by AM Best.

Conduit is headed by Neil Eckert, executive chairman, and Trevor Carvey, chief executive officer, and is launching in time to write business on January 1. Conduit Re will be a Class 4 reinsurer.

AM Best has assigned an “a-” long-term issuer credit rating to Conduit Re. The ratings outlook is stable.

The ratings reflect Conduit Re’s balance sheet strength, which AM Best categorises as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The rating agency expects Conduit Re will maintain the strongest level of risk-adjusted capitalisation, as measured by its capital adequacy ratio, over its five-year start-up phase.

Funding of $1.1 billion was raised through an initial public offering for Conduit Re’s holding company, Conduit Holdings Limited.

AM Best said it viewed Conduit Re’s business profile as limited, given its lack of competitive position and established distribution network in a competitive reinsurance marketplace, “however, the experience of senior management and underwriters in the targeted classes of business increases the likelihood of market acceptance and successful execution of the company’s business plans”.