Strong finish for RenRe, but cat losses hit hard in 2022


Strong finish for RenRe, but cat losses hit hard in 2022

shutterstock/Monster Ztudio

Renaissance Re has reported a net loss of $1.1 billion for 2022, despite a strong fourth quarter. Its losses in 2021 were $73.4 million.

The Bermuda headquartered re/insurer posted a profit of $448.1 million for the fourth quarter, up from $210.9 million in the same period last year, but it was dwarfed by losses earlier in the year. Net claims and claims expenses from Hurricane Ian cost it $982.2 million, while other cat events accounted for $331 million. The net negative impact from weather-related losses was $807.6 million.

Its combined ratio for 2022, however, was 97.7%%, compared to 102.1% in 2021, on gross written premiums of $9.2 billion – up strongly from $7.8 billion the previous year.

“We finished the year with an excellent quarter, reporting an annualized operating return on average common equity of 29.6% driven by strong underwriting results, significantly increased net investment income and stable management fees,” said Kevin O’Donnell, RenRe president and chief executive officer.

“For the full year, we delivered a 6.3% operating return despite a net negative impact of $807.6 million from catastrophe losses. At the January renewal we demonstrated leadership and discipline, achieving the step change in rate and terms investors required, while providing the reinsurance capacity customers needed. We enter 2023 with expectations of continuing strong demand for our products, ample capital to meet this demand, and anticipation of one of the most successful years in our history.”

Despite the losses in 2022, RenRe has increased property cat allocations in the 1.1 renewals, and will seek to add more at mid-year deadlines and in private deals as cedents look to cover shortfalls from January treaties. Property cat was becoming “increasingly profitable relative to other property,” O’Donnell said on the company’s Q4 earnings call.

In casualty & liability, RenRe will extend into more dislocated lines, especially where the war in Ukraine and geopolitical uncertainties have made lines appear dislocated, O’Donnell also said.

“We continue to see opportunities across casualty and specialty classes,” he told the call, with classes such as marine and energy, terror, and aviation “particularly attractive”.

“Overall, we are confident this casualty renewal will drive sustained profitability growth,” he said.


Renaissance Re, Cat Loss, Insurance, Reinsurance, Bermuda

Bermuda Re