RenaissanceRe Q1 Earnings Miss on High Expenses & California Wildfires

Core Viewpoint - RenaissanceRe Holdings Ltd. reported a challenging first quarter for 2025, with significant losses attributed to elevated expenses from the California Wildfires, despite strong premium growth in the property segment and an increase in net investment income [1][5]. Financial Performance - The company reported an operating loss of $1.49 per share, missing the Zacks Consensus Estimate by 365.6%, and a decline from the previous year's figure of $12.18 [2]. - Total operating revenues reached $3.13 billion, reflecting a 10.3% year-over-year increase and surpassing the consensus mark by 7.8% [2]. - Gross premiums written amounted to $4.16 billion, up 4.1% year over year, exceeding estimates [3]. Segment Analysis - Property Segment: - Gross premiums written increased by 12.7% year over year to $2.1 billion, benefiting from reinstatement premiums related to California Wildfires [7]. - Net premiums earned rose 33.3% year over year to $1.2 billion, beating estimates [7]. - The segment reported an underwriting loss of $607.2 million, a significant drop from an income of $534.4 million a year ago, with a combined ratio of 148.7% [8]. - Casualty & Specialty Segment: - Gross premiums written decreased by 3.6% year over year to $2 billion, falling short of estimates [9]. - Net premiums earned were $1.5 billion, down 2.3% year over year, missing the consensus estimate [9]. - The segment incurred an underwriting loss of $163.4 million, contrasting with an underwriting income of $6.3 million in the prior year, with a combined ratio of 111.1% [9]. Investment Income and Expenses - Net investment income was reported at $405.4 million, a 3.7% year-over-year increase, but below the consensus estimate of $428.8 million [4]. - Total expenses surged by 80.2% year over year to $3.5 billion, driven by increased net claims and acquisition costs, exceeding estimates [5]. Financial Position - As of March 31, 2025, cash and cash equivalents stood at $1.6 billion, down from $1.7 billion at the end of 2024 [10]. - Total assets increased by 5.8% to $53.6 billion, while total shareholders' equity declined to $10.3 billion from $10.6 billion at the end of 2024 [10]. Capital Deployment - The company repurchased common shares worth $361.1 million in the first quarter, with additional repurchases of $65.3 million from April 1 to April 21, 2025 [11].