RenRe enjoys robust Q1 despite GWP shrinking

RenaissanceRe posted a strong set of results in the first quarter of the year as it swung to a robust profit despite its gross written premiums (GWP) shrinking. Its CEO also highlighted its three pillars of profit: underwriting results, Capital Partners fees, and net investment income.

The Bermuda reinsurer made a net profit of $564 million in the first quarter, a big improvement on the $394 million loss it posted in the same period last year. Its combined ratio dropped to an impressive 78% compared with 86.5% a year earlier.

Its GWP dropped slightly to $2.8 billion, a small decrease on the year before. It said this was driven by a $81.8 million decrease in the other property class of business, primarily due to the non-renewal of certain catastrophe exposed quota share programmes that it said did not meet its return hurdles. This was partially offset by an $42.5 million increase in its property catastrophe class of business, principally driven by rate improvements on deals written in the first quarter of 2023.

The GWP on the casualty side shrank even more – by 7.1% which it said reflected decreases in casualty classes of business, principally in professional liability, and partially offset by growth in the other specialty class of business.

Kevin O’Donnell, president and CEO, said: “We began the year with an excellent quarter, reporting an operating return on average common equity of 29.7% driven by strong underwriting results, growing Capital Partners fees, and increased net investment income. Looking forward, we expect these Three Drivers of Profit to continue to improve, driven by ongoing strong demand for our products, increased fees from our Capital Partners business and a favourable investment environment. We are confident that the attractive reinsurance market will persist, providing us with many opportunities to deploy additional capital as the year progresses.”