RenaissanceRe(RNR) - 2025 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company achieved a 10% growth in tangible book value per share year to date and over 20% in the past twelve months [5] - Operating return on equity was reported at 24% for the quarter, with annualized return on equity at 34% [16] - Underwriting income reached $600 million, up 26% from the previous year, while retained net investment income was $286 million [17][26] - The adjusted combined ratio was 73%, reflecting low catastrophe losses and favorable development [20] Business Line Data and Key Metrics Changes - Gross premiums written were $3.4 billion, flat compared to the previous year, while net premiums written were $2.7 billion, also flat [21] - Property catastrophe gross premiums written increased by $98 million or 8%, with a 13% growth in the U.S. [21] - Other property gross premiums written decreased by $119 million or 24%, primarily due to rate decreases [22] - Casualty and specialty underwriting performance was within expectations, with an adjusted combined ratio of 99.5% [24] Market Data and Key Metrics Changes - The underwriting market remains attractive with healthy returns across property catastrophe and specialty lines [13] - The company successfully grew its property catastrophe portfolio while optimizing its casualty and specialty portfolio [14] - The Florida market showed stability due to pricing environment and tort reform, allowing the company to write 80% of its Florida premium at private terms above market rates [40] Company Strategy and Development Direction - The company aims to grow tangible book value per share over the long term, focusing on income diversification and risk absorption [5] - The integrated operating model and deep risk expertise are highlighted as competitive advantages [33] - The company plans to continue deploying capital into the business while repurchasing shares at attractive valuations [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to continue delivering superior returns, with a strong capital and liquidity position [50] - The current underwriting market is expected to persist, with rates likely to fluctuate around levels reset in 2023 [37] - The company is optimistic about maintaining margins and finding opportunities to deploy capital [58] Other Important Information - The company repurchased 1.6 million shares for $376 million at an average price of $242 per share [30] - The effective tax rate on GAAP net income was 13% for the quarter, influenced by the new 15% Bermuda corporate income tax [31] Q&A Session Summary Question: Reserve releases in the quarter - The reserve releases of around $132 million came from across all accident periods dating back to 2017, with half of that sticking to the company [54] Question: Future outlook for 2026 - The company believes it can continue to execute its strategy and preserve margins, regardless of the wind season outcomes [56] Question: Management fees recovery - Management fees bounced back due to favorable developments and quicker recovery of deferred fees, with guidance for the next quarter set at $80 million [65] Question: Pricing confidence in the reinsurance market - The company does not foresee a downward trend in rate inadequacy and expects rates to trade at adequate levels [73] Question: Buybacks and capital deployment - The company plans to continue capital deployment and share repurchases at attractive prices, especially as it approaches the wind season [75] Question: Florida renewals and market dynamics - The company experienced growth in Florida due to improved market conditions and demand, with a focus on high-risk return layers [109]