RenaissanceRe posts standout property result with 15.5% combined ratio

Bermuda-based reinsurance and ILS specialist RenaissanceRe delivered a strong property performance in the quarter, with its property combined ratio improving to 15.5% amid a benign catastrophe environment. The favourable quarter helped drive a 16.4-point improvement in the group combined ratio year on year.

The flies in the ointment: a fractional underwriting loss in casualty, a major decline in investment gains and, for better or worse, a top line that suffered for lack of reinstatement premiums. All enough to shrink the Q3 bottom line versus the year prior period.

A cat-free property segment is a margin machine. The current accident year loss ratio fell 356.8 points and reserve releases kicked the total ratio point improvement to 457.4 points to get to a 15.5% combined ratio.

Management gave rather understated credit to “the relatively low level of catastrophe losses in the quarter.” Reserve releases were put to softened views on 2022 events.

The property top line, down 7.3% YOY in GWP and 5.8% in net earned premium (NEP) in accounting terms, reflected more the lack of reinstatement premiums amid the lack of cats in 2025. An adjusted GWP measure is up 21.9% year on year, management said.

In casualty, margins are much more of a struggle. The attritional loss ratio is problematic and prior year development turned fractionally negative. The segment’s combined ratio ultimately gains 1.3 points from the prior year period to 101.4%, showing an underwriting loss.

Revenues are down, including a 1.2% decline in gross written premium as RenaissanceRe continues to turn away from casualty lines, but it does buffer that decline with gains in credit and specialty classes, management said.

Beyond the big underwriting divisions, RenaissanceRe increased fee income from its ILS operations by 24% on the back of the improvement in underwriting results.

That increase included a minor 3.5% decline in the management fee income portion of the total, a possible hint of outflows, but management refrained from offering its prior statements on third party flows.

By the bottom line, the spike in aggregate underwriting income, the increase in fee income, combined with a major decline in realised investment gains and a rise in tax, has left the group with a $1.3 billion net profit for the quarter, down 18% year on year.

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