RenRe rides hard market to $459m Q2 profit
RenaissanceRe continued to gain from its acquisition of the Validus group and from "one of the most favourable business environments in our history" as it more than doubled its second quarter profit.
The Bermuda-based re/insurer said net income rose 159% to $459 million from $191 million while gross written premiums surged 29% or $774 million to $3.4 billion and the company's combined ratio edged up to 81.1% from 80.3%.
“We delivered another excellent quarter driven by strong underlying performance from each of our Three Drivers of Profit – underwriting, investment and fee income," said Kevin J. O’Donnell, chief executive officer. "The Validus transaction continues to accrete significant value to our shareholders by delivering substantial growth in both premium and invested assets in one of the most favorable business environments in our history.
"Going forward, our consistent strategy and strong execution will enable our excellent performance to persist and allow us to grow shareholder value at an industry-leading pace.”
Underwriting income for the company rose to $479 million from $351 million, driven by the property segment, which recorded a $451 million profit compared to a $261 million profit in the same period in 2023.
The casualty and specialty segment lagged, with underwriting profit dropping from $70 million to $27 million as increased net claims offset strong gross written premium growth.
Net investment income increased 40% from $292 million to $410 million.
Overall claims rose from $931 million to $1.3 billion while total expenses rose to $1.1 billion from $1.85 billion.
By segment, property shone, with GWP rising 25% to $1.7 billion and the company recording a 9 percentage point improvement in combined ratio to 53.9%. RenaissanceRe said it had a $263 million increase in catastrophe underwriting and an $88 million increase in other property. The catastrophe result was driven by a strong June 1 renewal for both the Validus acquisition and legacy lines.
The segment also benefited from a 4.8 percentage point drop in its net claims ratio in the current accident year and favourable developments in the 2017 to 2023 accident years.
The casualty and specialty segment increased GWP by 34% from $1.25 billion to $167 billion but underwriting income slumped to $27 million from $70 million as the segment's combined ratio deteriorated to 98.2% from 93.2%.
RenaissanceRe said its net claims ratio increase from 63.3% to 67.9% and was offset by a 1.5% improvement in prior year developments while the underwriting expense ratio rose to 31.8% from 30%.
Fee income in RenRe's third party and insurance-linked securities ventures rose $27 million or 48% to $84 million as management fee income rose to $55 million. Performance fee income more than doubled to $28.7 million, driven by improved underwriting results and favourable prior year developments, particularly in DaVinciRe Holdings.
The company recorded $225 million of net income attributable to con=controlling interests due to the strong performance of DaVinci and Vermeer Reinsurance higher investment returns.
It said it raised $84 million in partner capital, primarily in investment vehicle Upsilon RFO and returned partner capital of $340.8 million including $182 million in Medici funds due to investors rebalancing their positions following strong performance in recent quarters and $75 million from Upsilon Diversified Fund due to the release of collateral related to prior years' contracts.
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
