RenaissanceRe(US:RNR)2021-07-23 18:30Financial Data and Key Metrics Changes - The company reported net income of $457 million and operating income of $278 million for the quarter, resulting in an annualized return on average common equity of 27.6% and an annualized operating return of 16.8% [19][21]. - Gross premiums written increased by $392 million, or 23%, with a year-to-date growth in net premiums written of $886 million, or 36% [22]. Business Line Data and Key Metrics Changes - The property segment saw gross premiums written grow by $141 million, or 14%, with a combined ratio of 44% due to a lack of catastrophe losses [23]. - The casualty segment reported gross premiums written of $911 million, growing $251 million or 38%, with a combined ratio of 97.8% [25]. Market Data and Key Metrics Changes - The company noted that the Florida market remains highly challenged due to social inflation, with its exposure to Florida domestic companies reduced to less than 3% of gross written premiums [44]. - The company is experiencing an active hurricane season, having already faced three U.S. land-falling storms, and is closely monitoring meteorological conditions [49]. Company Strategy and Development Direction - The company aims to be the best underwriter by focusing on reinsurance and diversifying geographically and into traditional casualty lines, while avoiding an insurance strategy [10]. - The strategic decision to grow the casualty business during a challenging market phase is expected to yield benefits as pricing improves [12]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the execution of their strategy, particularly in the casualty book, and noted that they are monitoring the impact of social inflation and other trends [14]. - The company believes it is in a strong financial position with ample flexibility to pursue new opportunities while continuing share repurchases [63]. Other Important Information - The company raised $1.1 billion in equity capital since Q2 2020 and has returned over $700 million to shareholders through share repurchases and dividends [16][17]. - The company has shifted its investment portfolio towards U.S. Treasuries due to low credit spreads and is focused on maintaining liquidity [29][72]. Q&A Session Summary Question: Thoughts on buybacks during wind season - Management indicated a strong capital position allows for continued buybacks during wind season, unlike previous years [63]. Question: Deployment of raised capital - Management confirmed that all raised capital has been deployed and expressed optimism about future growth opportunities [65]. Question: Investment portfolio yield concerns - Management reassured that they are comfortable with their investment portfolio and prioritize liquidity over yield [71][72]. Question: Favorable reserve development drivers - Management noted that favorable reserve development was primarily across various years and perils, with a significant portion attributed to their DaVinci partnership [118].