RenRe sees Q3 net income climb to $194m as combined ratio drops to 78%

RenaissanceRe has reported Q3 net income available to common shareholders of $194 million, driven by significant growth in its underwriting, fee and investment incomes, while its combined ratio dropped 60.7 points from the same period last year to 78%.

This quarter’s income figure compares to a net loss of $825,344 million in Q3 of last year, marking a drastic improvement.

RenRe’s underwriting income in Q3 stood at $385,804, up from a loss of $683,114 last year. Meanwhile, fee income climbed 150.9% from Q3 2022 to $64.6 million this year, and net investment income was up 108.6% from Q3 2022 to $329.1 million.

Annualized return on average common equity was thus 11.5% with an annualised operating return on average common equity of 25%.

Meanwhile, RenRe’s total gross premiums written in Q3 2023 were down slightly to $1,618,443 million from $2,220,661 million last year.

In the firm’s property segment, gross premiums written decreased by $289.3 million, or 36.1%, driven by a $230.5 million decrease in the catastrophe class of business, and a $236.5 million reduction in gross reinstatement premiums from lower weather-related large losses in the third quarter of 2023.

In addition, there was also a $58.8 million decrease in the other property class of business, primarily due to the non-renewal of certain catastrophe-exposed quota share programs that did not meet RenRe’s return hurdles.

The property segment’s combined ratio thus improved by 132.8 percentage points, primarily due to a lower level of current accident year net losses combined with higher prior accident year net favourable development.

Gross premiums written in RenRe’s casualty and specialty segment decreased by $312.9 million, or 22.0%, chiefly driven by a $226.7 million decrease in the credit class of business, principally due to significant premium growth in Q3 of 2022 associated with “opportunistic deals written in the mortgage book of business, which do not renew annually and earn over several years,” according to the firm.

Kevin J. O’Donnell, President and Chief Executive Officer, commented, “In 2023, we continued to confidently execute our strategy and are pleased with the results we are achieving and excited about the future of our company.

“On November 1, 2023, we closed the acquisition of Validus Re, adding risk expertise and scale in a favourable market and building a solid foundation for the continued execution of our strategy.

“In addition, we reported strong results for the third quarter, delivering a 25.0% operating return on average common equity driven by significant contributions from each of our “Three Drivers of Profit – underwriting, fee and investment income.

“As we approach the January 1 renewals, we remain resolutely focused on executing our strategy as a unified company, retaining the Validus portfolio and capturing additional attractive growth opportunities that support our customers and deliver value for our shareholders.”

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