Investment gains drive RenRe to $1.2bn profit

RenaissanceRe’s net income jumped to $1.2 billion as strong underwriting and investment returns overcame $243 million of large loss events in the third quarter of 2024. 

The Bermuda-based re/insurer also benefited from the purchase of Validus Re as gross written premiums jumped to $2.4 billion from $1.6 billion. 

Its underwriting profit edged up to $393.7 million from $385.8 million while its combined ratio worsened to 84.8% from 78 percent. The company said the large loss events added 12.7 points to its loss ratio. 

Hurricane Milton, which made landfall in Florida in October after the end of the third quarter, will have a $275 million negative impact on the company’s fourth quarter report. 

“We reported strong results this quarter,” said Kevin J O’Donnell, president and chief executive officer. “Our business continues to perform well, and we are in an excellent capital and liquidity position. We believe that these strong returns will persist, providing us with opportunities to grow while continuing to return capital to our shareholders through share repurchases. 

“These actions position us to deliver consistent, superior returns for our shareholders through the course of 2025 and into the future.”

He added in reference to the damage from the catastrophes in the third quarter: “RenaissanceRe’s purpose is to protect communities and enable prosperity. It is important to recognise that the catastrophes of the quarter caused significant human suffering, in addition to substantial property damage. 

“We extend our sympathies to all those impacted and are proud of the role that we have in supporting communities as they recover and rebuild.”   

The company enjoyed a massive improvement in net realised and unrealised gains, which soared to $1.3 billion compared to a loss of $228 million in the same period in 2023. Investment income improved from $329 million to $424 million. 

Fee income from the company’s third party managed funds rose to $82 million from $64 million.  

By insurance segment, property gross written premiums rose 54% to $790.7 million from $511 million and the underwriting income increased to $394.6 million from $356 million. The combined ratio rose to 60.3% from 53.2%. 

Much of the increase in GPW was driven by the Validus acquisition and the segment also benefitted from a net favourable development of $184.4 million from large catastrophe events between 2017 and 2022, including $108 million from 2022 when Hurricane Ian struck Florida. 

The casualty and specialty segment recorded a $927,000 loss compared to a $29.7 million profit in 2023 although gross written premiums rose to $1.6 billion compared to $1.1 billion in the period. The combined ratio rose from 97% to 100%. 

The loss appeared to be driven by an increase in the underwriting expense ratio, which rose 3.2 percentage points, largely due to the impact of Validus integration related activities.

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