RenaissanceRe trims Q4 combined ratio by 20 points in cat-free quarter
Reinsurance group RenaissanceRe saw its fourth-quarter combined ratio fall by 20 points, benefiting from a cat-free quarter, though ongoing underwriting losses in casualty and specialty lines weighed on earnings, with fee income and investment gains helping to offset the shortfall, according to its latest results.
The property segment took an eye-opening 49.8 point cut in its Q4 combined ratio to a mere 21.8%, enough to render a 2.7x increase in the quarter’s underwriting profit to $719 million.
Management spoke blithely of a “comparatively lower impact from large losses” in the quarter from the 47.3 large loss ratio points suffered in Q4 2024. Q4 2025 does include 10.6 points from Hurricane Melissa, a figure then offset by a very quick 13.6 points favourable development on LA wildfires from the first quarter. Favourable prior year development dating to 2024 and 2022 offered less of a boost than in the prior period.
Premium in the property segment was wildly skewed by the drop off in reinstatement premiums for the cat-free period. GPW were down 11.3% YoY for Q4 to trim the full-year gain to 2.5%.
Casualty and specialty continues to suffer underwriting losses with no particular improvement against prior periods. The segment’s Q4 combined ratio of 103.5% was only fractionally better than the prior year period.
Current accident year loss ratios were up by 1.2 percentage points on 4.6 points combined impact from UPS Airlines flight 2976 and the Grasberg mine landslide. PYD turned negative but management blurred the view to drivers by mixing it with comments on underwriting expenses.
GPW in casualty and specialty was down 2.3% year on year in the fourth quarter “driven by decreases in the general casualty and specialty classes and partially offset by an increase in the credit class.”
For the full 2025, casualty and specialty underwriting was ten times the money loser it had been in 2024 on a four-point rise in the segment combined ratio to 104.4%. GPW was down 1.6% and increased retrocession further dampened the net revenue metric.
As is so often the case, fee income from the stable of ILS vehicles padded earnings handsomely. Q4 total fee income for the group is up 31.8% to $101 million, exclusively on the more than doubling of performance fee income versus light erosion in management fees on wobbly AuM tallies.
Add in a rebound in total investment result to $654.0 million in Q4, including net investment income of $446.7 million and mark-to-market gains of $186.7 million, adjusted for tax and other, and RenaissanceRe swung to a Q4 attributable net profit of $751.6 million, good for an annualised ROE of 27.8%.
For the full-year, attributable net profits rose 44% to $2.6 billion despite the 21% slide in underwriting profits seen chiefly in casualty, but also visible in property. A $1.28 billion increase in total investment earnings made the difference, with a light gain in fee income heaping on.
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