RenaissanceRe Reports $1.8 billion of Annual Net Income Available to Common Shareholders and $2.2 billion of Operating Income Available to Common Shareholders in 2024.

RenaissanceRe Reports $198.5 million of Quarterly Net Loss Attributable to Common Shareholders and $406.9 million of Operating Income Available to Common Shareholders in Q4 2024.

Full Year 2024 Highlights

• Return on average common equity of 19.3% and operating return on average common equity of 23.5%.
• 18.5% growth in book value per share and 26.0% growth in tangible book value per share plus change in accumulated dividends.
• Strong performance across Three Drivers of Profit: underwriting income of $1.6 billion, net investment income of $1.7 billion, and fee income of $326.8 million.
• Combined ratio of 83.9% and adjusted combined ratio of 81.5%.
• Repurchased $677.6 million of common shares in 2024, including $462.3 million in the fourth quarter.
• Raised $857.4 million of third-party capital in the Capital Partners unit, with a further $237.8 million raised from third-party investors effective January 1, 2025.

Fourth Quarter 2024 Highlights

• Annualized return on average common equity of (7.8)% and annualized operating return on average common equity of 16.0%.
• Combined ratio of 91.7% and adjusted combined ratio of 89.4%.
• Fee income of $77.1 million; up 8.9% from Q4 2023.
• Net investment income of $428.8 million; up 13.8% from Q4 2023.
• Mark-to-market losses of $630.3 million, primarily driven by $565.9 million of losses related to the fixed maturity portfolio.
• Hurricane Milton had a net negative impact of $270.5 million on net income (loss) available (attributable) to common shareholders and added 13.9 percentage points to the combined ratio.

PEMBROKE, Bermuda--(BUSINESS WIRE)-- RenaissanceRe Holdings Ltd. (NYSE: RNR) (“RenaissanceRe” or the “Company”) today announced its financial results for the fourth quarter and full year 2024.

Fourth Quarter 2024

Acquisition of Validus

On November 1, 2023, the Company completed its acquisition (the “Validus Acquisition”) of Validus Holdings, Ltd. (“Validus Holdings”), Validus Specialty, LLC (“Validus Specialty”) and the renewal rights, records and customer relationships of the assumed treaty reinsurance business of Talbot Underwriting Limited from subsidiaries of American International Group, Inc., Validus Holdings, Validus Specialty, and their respective subsidiaries collectively are referred to herein as “Validus.”

The results of operations and financial condition include Validus since November 1, 2023. The results of operations for the three months and year ended December 31, 2024, compared to the three months and year ended December 31, 2023, should be viewed in that context.

• Gross premiums written increased by $45.4 million, or 13.2%, primarily due to a $53.4 million increase in the other property class of business, in both catastrophe and non-catastrophe exposed business, reflecting the renewal of business acquired in the Validus Acquisition and organic growth.

• Net premiums written increased by $18.2 million, or 5.1%, driven by the increase in gross premiums written discussed above, partially offset by an increase in ceded premiums written.

• Net claims and claim expense ratio - current accident year increased by 46.8 percentage points, due to a higher impact from large loss events compared to the fourth quarter of 2023. Hurricane Milton added 45.9 percentage points to the catastrophe class of business and 32.7 percentage points to the other property class of business.

• Net claims and claim expense ratio - prior accident years reflected net favorable development of 37.1%, primarily driven by:

– net favorable development of $321.4 million from large catastrophe events across the 2017 to 2023 accident years, including $256.2 million from the weather-related large losses in 2021 and 2022; and

– net favorable development on attritional losses across the other property class of business.

• Underwriting expense ratio increased 1.6 percentage points, primarily due to:

– a 1.1 percentage point increase in the acquisition expense ratio, driven by the increase in acquisition expenses from purchase accounting adjustments primarily related to the Validus Acquisition, which added 2.0 percentage points to the acquisition expense ratio in the fourth quarter of 2024. This was partially offset by changes in the mix of business as a result of the continued relative growth in the catastrophe class of business, which has a lower acquisition expense ratio than the other property class of business; and

– a 0.5 percentage point increase in the operating expense ratio primarily due to an increase in operating expenses following the Validus Acquisition.

• Combined ratio increased by 28.5 percentage points, and adjusted combined ratio, which removes the impact of acquisition related purchase accounting adjustments, increased by 27.5 percentage points, each primarily due to the impact of Hurricane Milton, partially offset by higher favorable development of prior accident years net claims and claim expenses.

Underwriting Results - Casualty and Specialty Segment: Combined ratio of 103.7% and adjusted combined ratio of 101.3%, with current accident year loss ratio of 69.5%

• Gross premiums written increased by $69.3 million, or 4.8%, primarily driven by increases in the other specialty and professional liability classes of business and partially offset by a decrease in the credit class of business.

• Net premiums written increased 11.9%, consistent with the drivers for gross premiums written discussed above, in addition to an overall reduction in retrocessional purchases.

• Combined ratio increased by 6.4 percentage points, and adjusted combined ratio, which removes the impact of acquisition related purchase accounting adjustments, increased by 7.0 percentage points, each primarily due to the increase in the net claims and claim expense ratio.

• Net claims and claim expense ratio - current accident year increased by 6.5 percentage points compared to the fourth quarter of 2023, driven by higher losses principally within the general casualty class of business.

• Net claims and claim expense ratio - prior accident years reflects net favorable development driven by reported losses generally coming in lower than expected on attritional net claims and claim expenses from the other specialty and credit classes of business.

Fee Income: $77.1 million of fee income, up 8.9% from Q4 2023

• Management fee income increased $5.8 million, reflecting growth in the Company’s joint ventures and managed funds, specifically DaVinci and Fontana.

• Performance fee income remained strong, driven by positive underwriting results and prior year favorable development.

Investment Results: Net investment income up $51.8 million from Q4 2023; total investment result driven by net realized and unrealized losses, primarily in the fixed maturity investments portfolio

• Net investment income increased $51.8 million, due to a combination of higher average invested assets, primarily resulting from the Validus Acquisition, and higher yielding assets in the fixed maturity investments portfolio.

• Net realized and unrealized losses on investments increased by $1.2 billion, principally driven by:

– higher net realized and unrealized losses on fixed maturity investments trading of $1.1 billion, primarily due to increases in market yields in Q4 2024, as compared to decreases in Q4 2023; and

– an increase in net realized and unrealized losses on investment-related derivatives of $61.4 million, primarily as a result of increased losses on long interest rate futures from the market yield movements noted above, offset by lower losses on credit default swaps.

• Total investments were $32.6 billion at December 31, 2024 (December 31, 2023 - $29.2 billion). The weighted average yield to maturity and duration on the Company’s investment portfolio (excluding investments that have no final maturity, yield to maturity or duration) was 5.4% and 2.9 years, respectively (December 31, 2023 - 5.8% and 2.6 years, respectively).

• Net income attributable to redeemable noncontrolling interests of $170.4 million was primarily driven by:

– strong underwriting results in DaVinci and Vermeer;

– net investment income driven by higher average invested assets and higher yielding assets within the investment portfolios of the Company’s joint ventures and managed funds; partially offset by

– net realized and unrealized losses in the investment portfolios of the Company’s joint ventures and managed funds.

• Income tax benefit of $63.9 million in Q4 2024, compared to $554.2 million in Q4 2023. The income tax benefit in Q4 2024 was primarily driven by losses in the Company’s U.S. operations, as compared to Q4 2023, which was primarily driven by a net deferred tax benefit of $593.8 million recorded in connection with the enactment of the 15% Bermuda corporate income tax act on December 27, 2023.

• Net foreign exchange losses of $48.4 million in Q4 2024, an increase of $60.8 million from Q4 2023. The net foreign exchange losses were driven by losses attributable to third-party investors in Medici which are allocated through net income (loss) attributable to redeemable noncontrolling interest, and the impact of certain foreign exchange exposures related to underwriting activities.

• Share Repurchases of 1.7 million common shares at an aggregate cost of $462.3 million and an average price of $264.43 per common share.

• Gross premiums written increased $1.3 billion, or 35.4%, driven by:

– an increase in catastrophe of $850.6 million, or 39.6%, driven by the renewal of business acquired in the Validus Acquisition, in conjunction with the retention of legacy lines.

– an increase in other property of $410.8 million, or 29.0%, in both catastrophe and non-catastrophe exposed business, reflecting the renewal of business acquired in the Validus Acquisition and organic growth.

• Net premiums written increased $866.3 million, or 29.2%, consistent with the changes in gross premiums written, partially offset by an increase in ceded premiums written as part of the Company’s gross-to-net strategy.

• Net claims and claim expense ratio - current accident year increased by 11.8 percentage points, primarily as a result of a higher impact from the 2024 Large Loss Events in 2024 compared to the impact from the 2023 Large Loss Events in 2023.

– 2024 Large Loss Events contributed 23.1 percentage points to the current accident year net claims and claim expense ratio in 2024, while the 2023 Large Loss Events contributed 11.0 percentage points in 2023.

• Net claims and claim expense ratio - prior accident years reflected net favorable development in 2024 of 21.2%, primarily driven by:

– net favorable development of $622.2 million from the large loss events across the 2017 to 2023 accident years, including $464.4 million from the weather-related large losses in 2021 and 2022, driven by better than expected loss emergence; and

– net favorable development on net attritional losses within the other property class of business.

• Combined Ratio increased by 3.8 percentage points, and adjusted combined ratio, which removes the impact of acquisition related purchase accounting adjustments, increased by 2.0 percentage points, driven by higher current accident year losses and partially offset by higher prior year favorable development.

Underwriting Results - Casualty and Specialty Segment: Net premiums written increased by 36.0%; Combined ratio of 100.4% and Adjusted combined ratio of 98.0%

• Gross premiums written increased $1.6 billion, or 30.4%, driven by:

– the renewal of business acquired in the Validus Acquisition, principally in the other specialty and general casualty classes of business, which grew by $926.5 million and $550.7 million, respectively, compared to 2023; and

– organic growth of legacy lines, particularly within the other specialty class of business.

• Net premiums written increased 36.0%, consistent with the drivers discussed for gross premiums written above, in addition to an overall reduction in retrocessional purchases.

• Net claims and claim expense ratio - current accident year increased by 3.3 percentage points, primarily driven by higher attritional losses within certain casualty lines of business, and the impact of event losses on catastrophe exposed lines within the other specialty class of business.

• Net claims and claim expense ratio - prior accident years reflects net favorable development driven by reported losses generally coming in lower than expected on attritional net claims and claim expenses from the other specialty and credit classes of business.

• Underwriting expense ratio increased 1.4 percentage points due to the impact of purchase accounting adjustments related to the Validus Acquisition.

• Combined ratio increased by 5.2 percentage points, and adjusted combined ratio, which removes the impact of acquisition related purchase accounting adjustments, increased by 3.8 percentage points, each primarily due to the increase in net claims and claim expense ratio.

Fee Income: $326.8 million of fee income; up 38.0% from 2023; increase in both management and performance fees

• Management fee income increased by $43.3 million, reflecting growth in the Company’s joint ventures and managed funds, specifically DaVinci and Fontana, as well as the recording of management fees in DaVinci in 2024 that were deferred in 2022 and 2021 as a result of the weather-related large losses experienced in prior years. The increase was partially offset by a decrease in fees associated with the reduction in capital managed at Upsilon.

• Performance fee income increased $46.7 million, driven by improved current year underwriting results, primarily in DaVinci, Upsilon and the Company’s structured reinsurance products.

Investment Results: Total investment result of $1.6 billion, driven by net investment income of $1.7 billion and partially offset by net realized and unrealized losses on investments of $27.8 million

• Net investment income increased $401.2 million, due to a combination of higher average invested assets, primarily resulting from the Validus Acquisition, and higher yielding assets in the fixed maturity investments portfolio.

• Net realized and unrealized losses on investments increased $442.4 million, principally driven by:

– net realized and unrealized losses on fixed maturity investments trading of $246.4 million in 2024, compared to net realized and unrealized gains of $292.1 million in 2023, primarily due to increases in yields on longer duration assets during 2024, compared to decreases in 2023; and

– an increase in net realized and unrealized gains on other investments of $159.4 million, driven by an increase in the value of the Company’s investment in TWFG as a result of TWFG, Inc.’s initial public offering in the third quarter of 2024.

• Net income attributable to redeemable noncontrolling interests of $1.1 billion was primarily driven by:

– strong underwriting results in DaVinci and Vermeer;

– net investment income driven by higher interest rates and higher yielding assets within the investment portfolios of the Company’s joint ventures and managed funds;

– net realized and unrealized gains on catastrophe bonds recorded during the year in Medici; partially offset by

– net realized and unrealized losses in the investment portfolios of the Company’s joint ventures and managed funds.

• Income tax expense of $32.6 million in 2024 compared to an income tax benefit of $510.1 million in 2023. The income tax expense in 2024 was primarily driven by operating income in the Company’s taxable jurisdictions; partially offset by a $33.7 million deferred tax benefit resulting from the merger of RenaissanceRe Europe AG and Validus Switzerland completed in the second quarter. The income tax benefit in 2023 was primarily driven by a net deferred tax benefit of $593.8 million recorded in connection with the enactment of the 15% Bermuda corporate income tax on December 27, 2023.

• Net foreign exchange losses of $76.1 million in 2024 compared to a loss of $41.5 million in 2023. The net foreign exchange losses for 2024 and 2023 were driven by losses attributable to third-party investors in Medici which are allocated through net income (loss) attributable to redeemable noncontrolling interest, and the impact of certain foreign exchange exposures related to underwriting activities.

• Raised third party capital in 2024 of $857.4 million, primarily through DaVinci ($300.0 million), Medici ($199.6 million), Fontana ($100.0 million) and Vermeer ($175.0 million).

• Return of third-party capital in 2024 of $1.4 billion, including:

– $396.9 million of distributions from DaVinci, Vermeer, Medici and Top Layer, following strong earnings across these vehicles;

– $332.9 million from Upsilon Diversified as a result of the release of collateral associated with prior years’ contracts; and

– the remainder from redemptions from third-party investors rebalancing their portfolios, primarily because of the strong results noted above.

• Effective January 1, 2025, raised third party capital of $237.8 million in DaVinci, Medici and Fontana and returned third party capital of $99.0 million in DaVinci and Fontana. Following these transactions, the Company’s ownership in DaVinci, Medici and Fontana was 24.3%, 16.5% and 28.7%, respectively.

• Share repurchases of 2.7 million common shares at an aggregate cost of $677.6 million and an average price of $249.93 per common share in 2024. Repurchased an additional 546.9 thousand common shares at an aggregate cost of $137.7 million from January 1, 2025 through January 24, 2025.
  
  
• The California wildfires, commencing in January 2025, have led to a range of publicly available industry insured loss estimates. The Company expects its pre-tax net negative impact to be approximately 1.5% of the California wildfires’ aggregate industry insured loss. Based on a $50 billion aggregate industry insured loss, the Company estimates a pre-tax net negative impact on net income (loss) available (attributable) to common shareholders of approximately $750 million in the first quarter of 2025. The Company’s assessment of the impact from the California wildfires is preliminary, and is based on, among other things, initial industry insured loss estimates, market share analysis, the application of modeling techniques, a review of in-force contracts and potential uncertainties relating to reinsurance recoveries. It is difficult at this time to provide an accurate estimate of the financial impact of the California wildfires, including as a result of the preliminary nature of the information provided thus far by industry participants, the magnitude and recency of the California wildfires, and other factors.

Net negative impact on underwriting result includes the sum of (1) net claims and claim expenses incurred, (2) assumed and ceded reinstatement premiums earned and (3) earned and lost profit commissions. Net negative impact on net income (loss) available (attributable) to RenaissanceRe common shareholders is the sum of (1) net negative impact on underwriting result and (2) redeemable noncontrolling interest, both before consideration of any related income tax benefit (expense).

The Company’s estimates of net negative impact are based on a review of the Company’s potential exposures, preliminary discussions with certain counterparties and actuarial modeling techniques. The Company’s actual net negative impact, both individually and in the aggregate, may vary from these estimates, perhaps materially. Changes in these estimates will be recorded in the period in which they occur.

Meaningful uncertainty remains regarding the estimates and the nature and extent of the losses from these catastrophe events, driven by the magnitude and recent nature of the events, the geographic areas impacted by the events, relatively limited claims data received to date, the contingent nature of business interruption and other exposures, potential uncertainties relating to reinsurance recoveries and other factors inherent in loss estimation, among other things.

Net negative impact on the segment underwriting results and consolidated combined ratio

Net negative impact on the consolidated financial statements

Non-GAAP Financial Measures and Additional Financial Information

This Press Release includes certain financial measures that are not calculated in accordance with generally accepted accounting principles in the U.S. (“GAAP”) including “operating income (loss) available (attributable) to RenaissanceRe common shareholders,” “operating income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted,” “operating return on average common equity - annualized,” “tangible book value per common share,” “tangible book value per common share plus accumulated dividends,” and “adjusted combined ratio.” A reconciliation of such measures to the most comparable GAAP figures in accordance with Regulation G is presented in the attached supplemental financial data.

Please refer to the “Investors - Reports & Filings” section of the Company’s website at www.renre.com for a copy of the Financial Supplement which includes additional information on the Company’s financial performance.

Conference Call Information

RenaissanceRe will host a conference call on Wednesday, January 29, 2025 at 10:00 a.m. ET to discuss this release. Live broadcast of the conference call will be available through the “Investors - News & Events - Investor Calendar” section of the Company’s website at www.renre.com. An archive of the call will be available from approximately 1:00 p.m. ET on January 29, 2025, through midnight ET on February 5, 2025.

About RenaissanceRe

RenaissanceRe is a global provider of reinsurance and insurance that specializes in matching desirable risk with efficient capital. The Company provides property, casualty and specialty reinsurance and certain insurance solutions to customers, principally through intermediaries. Established in 1993, RenaissanceRe has offices in Bermuda, Australia, Canada, Ireland, Singapore, Switzerland, the United Kingdom and the United States.

Cautionary Statement Regarding Forward-Looking Statements

Any forward-looking statements made in this Press Release reflect RenaissanceRe’s current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company may also make forward-looking statements with respect to its business and industry, such as those relating to its strategy and management objectives, plans and expectations regarding its response and ability to adapt to changing economic conditions, market standing and product volumes, competition in the industry, estimates of net negative impact and insured losses from loss events, and government initiatives and regulatory matters affecting the (re)insurance industries, among other things. These statements are subject to numerous factors that could cause actual results to differ materially from those addressed by such forward-looking statements, including the following: the Company’s exposure to natural and non-natural catastrophic events and circumstances and the variance they may cause in the Company’s financial results; the effect of climate change on the Company’s business, including the trend towards increasingly frequent and severe climate events; the effectiveness of the Company’s claims and claim expense reserving process; the effect of emerging claims and coverage issues; the performance of the Company’s investment portfolio and financial market volatility; the effects of inflation; the Company’s exposure to ceding companies and delegated authority counterparties and the risks they underwrite; the Company’s ability to maintain its financial strength ratings; the Company’s reliance on a small number of brokers; the highly competitive nature of the Company’s industry; the historically cyclical nature of the (re)insurance industries; collection on claimed retrocessional coverage and new retrocessional reinsurance being available; the Company’s ability to attract and retain key executives and employees; the Company’s ability to successfully implement its business strategies and initiatives; the Company’s exposure to credit loss from counterparties; the Company’s need to make many estimates and judgments in the preparation of its financial statements; the Company’s exposure to risks associated with its management of capital on behalf of investors; changes to the accounting rules and regulatory systems applicable to the Company’s business, including changes in Bermuda and U.S. laws or regulations; the effect of current or future macroeconomic or geopolitical events or trends, including the ongoing conflicts between Russia and Ukraine, and in the Middle East; other political, regulatory or industry initiatives adversely impacting the Company; the impact of cybersecurity risks, including technology breaches or failure; the Company’s ability to comply with covenants in its debt agreements; the effect of adverse economic factors, including changes in the prevailing interest rates; the effects of new or possible future tax actions or reform legislation and regulations in the jurisdictions in which the Company operates; the Company’s ability to determine any impairments taken on its investments; the Company’s ability to raise capital on acceptable terms; the Company’s ability to comply with applicable sanctions and foreign corrupt practices laws; the Company’s dependence on capital distributions from its subsidiaries; and other factors affecting future results disclosed in RenaissanceRe’s filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.