RenaissanceRe(US:RNR)2026-02-04 17:02Financial Data and Key Metrics Changes - Operating income for 2025 was reported at $1.9 billion, with an operating return on equity (ROE) of 18% and tangible book value per share plus accumulated dividends growing by 30% [4][5][16] - The company repurchased $650 million of its shares during the fourth quarter, representing 13% of its shares over the course of 2025 [5][6] - The cumulative return on shares since the Validus acquisition has been around 30% [6] Business Line Data and Key Metrics Changes - Underwriting income for the year was $1.3 billion, with a combined ratio of 85% [16][17] - Fee income reached $329 million for the year, with management fees at $207 million and performance fees at $121 million [21][22] - Retained net investment income for the year was $1.2 billion, up 4% from the previous year [23] Market Data and Key Metrics Changes - Property CAT rates were down in the low teens percentage, but the company found opportunities to grow, keeping top-line premium and property CAT down only in the mid-single digits [10][11] - The underwriting portfolio is roughly one-third larger compared to the previous year, with retained net investment income tripling and fee income more than doubling [11] Company Strategy and Development Direction - The company aims to maintain or grow its property business, focus on preserving underwriting margins, and continue to grow fees in its Capital Partners business [12] - The strategy for 2026 includes executing a gross-to-net strategy to arbitrage competitive CAT-bond markets and retro markets [12] - The company is upgrading its underwriting system to be more customer-centric and leveraging artificial intelligence [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver consistent, superior returns to shareholders, citing the diversified sources of income as a key strength [11][40] - The company anticipates that each of its three drivers of profit will remain robust sources of income in 2026 [40] Other Important Information - The company incurred a 15% corporate income tax in Bermuda for the first time in 2025, but still managed to produce excellent returns [24][25] - The Bermuda government introduced substance-based tax credits that will positively impact the company's results [25][26] Q&A Session Summary Question: Property CAT premiums expectation for 2026 - Management confirmed that they expect premiums to be down mid-single digits for the year, with continued rate reductions anticipated during mid-year renewals [42] Question: Expense ratio guidance - The expense ratio guidance for 2026 is expected to be between 5%-5.5%, including the benefit of Bermuda tax credits [43][44] Question: Gold investment and its impact - Management indicated that the gold position serves as a hedge against underwriting and interest rate risks, and they do not have a specific exit price target [48][49] Question: Capital deployment in property risk for 2026 - Management plans to hold risk relatively flat for the Southeast Hurricane, with potential adjustments based on market opportunities [51] Question: Expected returns and rate adequacy in property CAT - Management stated that rate adequacy remains strong despite recent rate declines, and they will focus on selecting the best opportunities for portfolio construction [55][56]