RenaissanceRe (RNR) Q1 2025 Earnings Call

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].