RenaissanceRe (RNR) Q1 2025 Earnings Call April 24, 2025 05:43 PM ET Company Participants Keith McCue - Senior Vice President of Finance & Investor RelationsKevin O’Donnell - President & CEORobert Qutub - Executive VP & CFODavid Marra - Executive VP & Group Chief Underwriting OfficerElyse Greenspan - Managing DirectorJian (Bob) Huang - Executive DirectorMeyer Shields - Managing DirectorAndrew Andersen - Equity Research Vice President Conference Call Participants Josh Shanker - AnalystJimmy Bhullar - Equity ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-14428 RENAISSANCERE HOLDINGS LTD. (Exact Name Of Registrant As Specified In Its Charter) (State or Other Jurisdiction of Incorporation or ...

Core Viewpoint - RenaissanceRe Holdings Ltd. reported a modest operating loss in Q1 2025 due to significant catastrophe events, including California wildfires, but demonstrated resilience with a 7% annualized return on average common equity and strong investment performance [7][14][20]. Financial Performance - The company experienced a $771 million underwriting loss and a combined ratio of 128%, with a 52.6 percentage point impact from large losses [3][14]. - Fee income was suppressed at $30 million, down 64% from Q1 2024, with negative performance fees of $16 million [3][14]. - Retained net investment income was $279 million, supported by $328 million in retained mark-to-market gains [5][14]. Catastrophe Impact - The net negative impact from large losses was $703 million after-tax, primarily from California wildfires, which accounted for $633 million of the losses [3][14][17]. - The property catastrophe combined ratio was reported at 176%, reflecting a current accident year loss ratio of 170% [4][14]. Underwriting and Market Conditions - Management expects property catastrophe market conditions to remain attractive, with growing demand and strong pricing, particularly in Florida [7][20]. - The casualty market is showing signs of improvement, with rates continuing to increase and enhanced claims management strategies being implemented [8][20]. Capital Management - The company repurchased 1.5 million shares for $361 million at an average price of $242 per share during the quarter [5][14]. - An $800 million debt issuance was completed, including $500 million of RenaissanceRe senior notes and $300 million of Da Vinci senior notes [6][14]. Strategic Outlook - RenaissanceRe is positioned to benefit from increased risk aversion in a volatile macroeconomic environment, with a focus on margin preservation and growth opportunities in property catastrophe [12][20]. - The company updated its wildfire models to enhance quoting confidence for wildfire-exposed deals in Q2 2025 renewals [8][20].

Core Insights - RenaissanceRe reported $3.13 billion in revenue for Q1 2025, a 10.3% year-over-year increase, exceeding the Zacks Consensus Estimate by 7.79% [1] - The company experienced an EPS of -$1.49, a significant decline from $12.18 a year ago, with a surprise of -365.63% compared to the consensus estimate of -$0.32 [1] Financial Performance Metrics - The combined ratio was reported at 128.3%, higher than the estimated 113.5% by analysts [4] - The underwriting expense ratio was 27.5%, better than the average estimate of 30.2% [4] - The net claims and claim expense ratio for the calendar year was 100.8%, exceeding the estimated 83.4% [4] - Net investment income was $405.35 million, slightly below the average estimate of $428.77 million, but a 3.7% increase year-over-year [4] - Net premiums earned totaled $2.72 billion, surpassing the estimate of $2.47 billion, reflecting an 11.3% year-over-year increase [4] - Equity in earnings of other ventures was $17.83 million, exceeding the estimate of $9.43 million, marking a 26.2% year-over-year increase [4] - Net premiums earned in the property segment were $1.25 billion, significantly higher than the estimated $956.47 million, representing a 33.3% year-over-year increase [4] - Net premiums earned in the casualty and specialty segment were $1.47 billion, slightly below the estimate of $1.52 billion, showing a -2.3% year-over-year change [4] - Other income was reported at $0.91 million, significantly lower than the estimated $2 million, indicating a -1928% year-over-year change [4] Stock Performance - RenaissanceRe shares returned +1.8% over the past month, contrasting with the Zacks S&P 500 composite's -6.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

RenaissanceRe (RNR) came out with a quarterly loss of $1.49 per share versus the Zacks Consensus Estimate of a loss of $0.32. This compares to earnings of $12.18 per share a year ago. These figures are adjusted for non- recurring items. This quarterly report represents an earnings surprise of -365.63%. A quarter ago, it was expected that this insurance company would post earnings of $7.61 per share when it actually produced earnings of $8.06, delivering a surprise of 5.91%. Over the last four quarters, the ...

Financial Performance - Net income available to RenaissanceRe common shareholders for Q1 2025 was $161,147, a decrease of 56% from $364,798 in Q1 2024[13]. - Operating income available to RenaissanceRe common shareholders for Q1 2025 was $(69,754), compared to $636,379 in Q1 2024[13]. - Total revenues for Q1 2025 reached $3,470,488, an increase from $2,599,425 in Q1 2024[17]. - Net income attributable to RenaissanceRe common shareholders for the three months ended March 31, 2025, was $158,782, a decrease of 56% compared to $359,525 for the same period in 2024[88]. - Basic earnings per share for the three months ended March 31, 2025, was $3.29, down from $6.96 in the same period of the previous year[88]. - The company reported a net claims and claim expense ratio of 100.8% for the calendar year, indicating that claims exceeded premiums earned[21]. Premiums and Underwriting - Gross premiums written increased to $4,155,503 in Q1 2025, up 4.1% from $3,990,684 in Q1 2024[13]. - Net premiums written rose to $3,443,529, a 7.6% increase from $3,199,573 in the same period last year[13]. - The combined ratio for Q1 2025 was 128.3%, significantly higher than 77.9% in Q1 2024[13]. - The underwriting loss for the three months ended March 31, 2025, was $770.6 million, compared to an underwriting income of $540.7 million in the same period last year[21]. - The combined ratio for the first quarter of 2025 was 128.3%, significantly higher than 77.9% in the first quarter of 2024, indicating a deterioration in underwriting performance[21]. - Gross premiums written for the property segment increased by 12.7% to $2,130,833 compared to $1,889,881 in the same quarter last year[34]. Claims and Expenses - Net claims and claim expenses incurred surged to $2,743,758 in Q1 2025, compared to $1,166,123 in Q1 2024[17]. - The net claims and claim expenses incurred reached $1,623,257, a substantial increase from $154,249 in the previous year, resulting in a net claims and claim expense ratio of 130.1%[30]. - The company reported incurred claims and claim expenses of $3,104,842 for the current quarter, compared to $1,159,623 in the same quarter last year[48]. - Total reserves for claims and claim expenses increased to $22,857,131 from $21,303,491 at the end of the previous quarter[48]. Investment Performance - Total investment result for Q1 2025 was $738,293, compared to $177,121 in Q1 2024, reflecting a substantial increase[13]. - The annualized total investment return for managed investments was 9.3% in Q1 2025, up from 2.8% in Q1 2024[13]. - Net investment income for Q1 2025 was $405,353, compared to $390,775 in Q1 2024, showing a slight increase of 3.5%[70]. - The company reported net realized and unrealized losses on investments of $(373.4) million for Q1 2025, contrasting with gains of $232.6 million in Q1 2024[98]. - The company reported a net investment income return annualized of 4.8% for Q1 2025, down from 5.3% in Q1 2024, a decrease of 0.5%[112]. Assets and Equity - Total assets increased to $53.63 billion as of March 31, 2025, up from $50.71 billion at December 31, 2024, representing a growth of 5.7%[19]. - Shareholders' equity attributable to RenaissanceRe decreased to $10.35 billion as of March 31, 2025, down from $10.57 billion at the end of 2024[19]. - The tangible book value per common share increased to $178.31 as of March 31, 2025, from $177.18 at the end of 2024[106]. Segment Performance - The casualty and specialty segment gross premiums written decreased by 3.6% to $2,024,670 from $2,100,803 year-over-year[34]. - Total catastrophe net premiums written rose by 32.7% to $1,411,050 from $1,063,723 year-over-year[38]. - Casualty and Specialty segment net premiums written decreased by 2.7% to $1,752,535 from $1,801,955 in the prior year[38]. Future Outlook - The company is focusing on improving underwriting performance and managing claims expenses to enhance profitability in future quarters[30].

Core Viewpoint - RenaissanceRe Holdings Ltd. has launched a new property catastrophe bond fund, the RenaissanceRe Medici UCITS Fund, aimed at providing European and global investors access to its catastrophe bond investment strategy within a regulated UCITS structure in Ireland [1][2][3]. Group 1: Fund Details - The RenaissanceRe Medici UCITS Fund is an extension of the existing RenaissanceRe Medici Fund Ltd., maintaining similar investment principles [2]. - The fund commenced with $340 million in capital, which includes $140 million co-invested by RenaissanceRe [2]. - RenaissanceRe holds a 15.8% non-controlling economic ownership in the Medici entity as of the end of 2024 [2]. Group 2: Strategic Alignment - This initiative aligns with RenaissanceRe's strategy to expand globally, diversify capital sources, and enhance its investment platform [3]. - The new fund aims to attract more third-party capital and broaden the investor base beyond traditional markets [3]. Group 3: Management and Revenue Generation - The Capital Partners team of RenaissanceRe will manage the fund, leveraging 25 years of experience in managing third-party capital and building investor relationships [4]. - The fund is expected to strengthen RenaissanceRe's catastrophe bonds business, efficiently matching capital with risk and creating a stable revenue stream [4]. - RenaissanceRe is positioned to generate consistent returns by utilizing its risk expertise and experience in alternative capital management [4]. Group 4: Market Performance - RenaissanceRe's shares have increased by 7% over the past year, compared to a 15.7% rise in the industry [5].

Premiums and Revenue Growth - Total gross premiums written for 2024 reached $11,733,066, a 32.1% increase from $8,862,366 in 2023[28] - The Property segment generated gross premiums of $4,823,731, accounting for 41.1% of total premiums written in 2024, compared to 40.2% in 2023[28] - The Casualty and Specialty segment contributed $6,909,335 in gross premiums, representing 58.9% of total premiums written in 2024, up from 59.8% in 2023[28] - In 2024, gross premiums written in the Property segment totaled $4,823,731, a 35.3% increase from $3,562,414 in 2023[31] - The Casualty and Specialty segment reported gross premiums written of $6,909,335 in 2024, a 30.4% increase from $5,299,952 in 2023[36] - The total gross premiums written across both segments reached $11,733,066 in 2024, a 32.3% increase from $8,862,366 in 2023[42] Underwriting and Risk Management - The company aims to enhance its underwriting income through disciplined risk selection and superior customer relationships[19] - The management team emphasizes the importance of superior capital management to optimize returns for shareholders[25] - The company utilizes risk management tools to monitor capital and liquidity positions on a consolidated basis and for each major operating subsidiary[84] - The company has integrated climate change considerations into its ERM process, continuously adjusting risk management models to reflect higher risk levels[88] - The company believes that changes in climate conditions have increased the severity and frequency of natural disasters, impacting its economic exposures[86] Strategic Initiatives and Acquisitions - The company is exploring diversification into new ventures through organic growth and potential acquisitions[17] - A recent acquisition of Validus Holdings is expected to contribute an additional $300 million in gross premiums written annually, enhancing the company's competitive position[152] - The company actively pursues strategic investments to enhance risk access and market information, including investments in Tower Hill Companies and TWFG[67] Financial Performance and Ratios - The combined ratio improved to 95%, indicating profitable underwriting prior to investment income considerations, compared to 98% in the previous year[154] - The net claims and claim expense ratio was reported at 60%, reflecting effective claims management and lower loss ratios[154] - The company reported a significant increase in gross premiums written, totaling $1.5 billion for the year ended December 31, 2024, representing a 15% increase year-over-year[155] Capital Management and Liquidity - The company focuses on maintaining financial strength ratings and managing capital effectively to support underwriting opportunities[10] - The capital management business generates management and performance fee income, contributing to a less volatile income source compared to underwriting[45] - RenaissanceRe's liquidity needs for the next 12 months are expected to be met by cash receipts from operations, although future cash flows may fluctuate significantly[407] - The company maintains various credit facilities and trusts to access liquidity and satisfy collateral requirements, which may impact liquidity[409] Regulatory Environment - RenaissanceRe's U.S. subsidiary, Renaissance Reinsurance U.S., is licensed in all 50 states and is subject to significant regulatory oversight[123] - The Bermuda Monetary Authority (BMA) has established a target capital level of 120% of the applicable Enhanced Capital Requirement (ECR) for certain registration categories[120] - The Corporate Income Tax Act 2023 will impose a 15% corporate income tax on profits generated in Bermuda starting January 1, 2025[122] Investment Portfolio - The investment portfolio emphasizes capital preservation and liquidity, with a focus on highly-rated fixed income securities and short-term investments[66] - Total investments increased by $3,423,313, reaching $32,639,456 in 2024, up from $29,216,143 in 2023[434] - U.S. treasuries accounted for 33.7% of total investments, increasing from 34.4% in the previous year, with a total value of $11,001,893[434] Employee and Operational Growth - The company employs 945 people worldwide as of February 7, 2025, an increase from 925 in February 2024 and 731 in February 2023[104] - Corporate expenses rose by $7.1 million to $134.8 million in 2024, primarily due to costs associated with the Validus Acquisition[390] Future Outlook - Future guidance indicates an expected growth in net premiums written by 10% for the upcoming fiscal year, driven by market expansion strategies[155] - The company plans to expand its market presence in Asia, targeting a 20% increase in market share within the next two years[153]

Core Viewpoint - RenaissanceRe Holdings Ltd. reported a decline in operating income for the fourth quarter of 2024, despite a year-over-year increase in total operating revenues, indicating mixed performance driven by premium growth and elevated expenses [1][2][3]. Financial Performance - Operating income for Q4 2024 was $8.06 per share, exceeding the Zacks Consensus Estimate by 5.9%, but down 31.5% year over year [1]. - Total operating revenues reached $3 billion, a 12.6% increase year over year, but fell short of the consensus mark by 1.2% [2]. - Gross premiums written amounted to $1.9 billion, up 6.4% year over year, but missed the estimate of $2.1 billion [4]. - Net premiums earned increased 12.4% year over year to $2.53 billion, although it lagged behind the consensus estimate of $2.56 billion [4]. - Net investment income was $428.8 million, a 13.8% year-over-year improvement, but missed the consensus estimate of $430.3 million [5]. - Total expenses rose 31.6% year over year to $2.38 billion, primarily due to higher net claims and operational expenses [6]. Underwriting Results - Underwriting income was reported at $208.6 million, a significant decline of nearly three-fold year over year [6]. - The combined ratio deteriorated by 1,570 basis points year over year to 91.7% [6]. Segment Performance - In the Property Segment, gross premiums written were $390 million, a 13.2% increase year over year, but below the estimate of $410 million [8]. - The Casualty & Specialty Segment saw gross premiums written rise 4.8% year over year to $1.5 billion, but also fell short of the estimate of $1.7 billion [10]. - The Property Segment's underwriting income dropped 47% year over year to $266.9 million, with a combined ratio of 71.6% [9]. - The Casualty & Specialty Segment incurred an underwriting loss of $58.3 million, contrasting with a prior-year underwriting income of $37.4 million, leading to a combined ratio of 103.7% [11]. Financial Position - As of December 31, 2024, cash and cash equivalents were $1.7 billion, down 10.7% from the previous year [12]. - Total assets increased by 3.5% year over year to $50.7 billion, while total shareholders' equity rose 11.8% to $10.6 billion [12]. Capital Deployment - The company repurchased common shares worth $462.3 million in Q4 2024, with additional repurchases of $137.7 million from January 1 to January 24, 2025 [13]. - A quarterly dividend of 39 cents per share was declared [13]. Full-Year Update - For the full year, gross premiums written reached $11.7 billion, a 32.4% increase year over year, while net premiums earned advanced 35.1% to $10.1 billion [14]. - Operating income for the year improved 14.5% to $42.99 per share [14].

Financial Data and Key Metrics Changes - The company's tangible book value plus accumulated dividends grew by 26% [6] - Operating income exceeded $220 million, with operating income per share just shy of $43 [6][23] - The adjusted combined ratio for the year was 81.5%, while the combined ratio for the Casualty and Specialty segment was 98%, up from 94% the previous year [10][31] Business Line Data and Key Metrics Changes - Underwriting income was $1.6 billion with an adjusted combined ratio of 81.5% [6][30] - The Property segment reported an adjusted combined ratio of 55%, while the Casualty segment reported an adjusted combined ratio of 98% [32][34] - Gross premiums written increased by 32% to $1.17 billion, with significant growth in property catastrophe and specialty lines [31] Market Data and Key Metrics Changes - The company expects an increase in demand for reinsurance in 2025 due to recent catastrophic events [30][43] - Property catastrophe rates were down in the high single digits, but the company found opportunities to grow, keeping top-line premiums flat [14][51] Company Strategy and Development Direction - The integration of Validus has been successful, retaining substantially all of its underwriting portfolio and generating capital efficiencies [9][30] - The company aims to be a first-call market for clients, focusing on strong partnerships and consistent pricing [48][50] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the improving market for property catastrophe reinsurance, anticipating upward pressure on rates [43][44] - The company is prepared to deploy additional capacity to support customers in light of recent catastrophic events [42][43] Other Important Information - The California wildfires are expected to have a pretax net negative impact of approximately $7.5 million based on a market loss estimate of $50 billion [17][18] - The Bermuda government will implement a 15% corporate income tax starting in 2025, which will affect the company's tax expenses [39][40] Q&A Session Summary Question: Concerns about Casualty Specialty combined ratio trends - Management noted that despite the higher combined ratio, they had a profitable year in Casualty Specialty and are comfortable with their reserves [63][65] Question: Impact of California wildfires on renewals - Management indicated that the California wildfires would impact pricing during renewals, with expectations for better opportunities in the upcoming renewals [68][70] Question: Clarification on reserve management and charges - Management confirmed that they have added to reserves in the Casualty segment but emphasized that the overall reserve pool remains in a comfortable position [82][84]