May 3, 2023 - 10-Q: Quarterly report pursuant to Section 13 or 15(d)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-14428

RENAISSANCERE HOLDINGS LTD.

(Exact Name Of Registrant As Specified In Its Charter)


Bermuda			98-0141974
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification Number)

Renaissance House, 12 Crow Lane, Pembroke, Bermuda HM 19

(Address of Principal Executive Offices) (Zip Code)

(441) 295-4513

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol	Name of each exchange on which registered
Common Shares, Par Value $1.00 per share	RNR	New York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a Series F 5.750% Preference Share, Par Value $1.00 per share	RNR PRF	New York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a Series G 4.20% Preference Share, Par Value $1.00 per share	RNR PRG	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒, Accelerated filer ☐, Non-accelerated filer ☐, Smaller reporting company ☐, Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of Common Shares, par value U.S. $1.00 per share, outstanding at May 1, 2023 was 43,931,577.

RENAISSANCERE HOLDINGS LTD.

TABLE OF CONTENTS


		Page
	GLOSSARY OF DEFINED TERMS	3
	NOTE ON FORWARD-LOOKING STATEMENTS	4

PART I
ITEM 1.	FINANCIAL STATEMENTS	6






ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	53
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	86
ITEM 4.	CONTROLS AND PROCEDURES	86

PART II
ITEM 1.	LEGAL PROCEEDINGS	87
ITEM 1A.	RISK FACTORS	87
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	87
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	87
ITEM 4.	MINE SAFETY DISCLOSURES	87
ITEM 5.	OTHER INFORMATION	87
ITEM 6.	EXHIBITS	88

SIGNATURES		89

GLOSSARY OF DEFINED TERMS

In this Form 10-Q, references to “RenaissanceRe” refer to RenaissanceRe Holdings Ltd. (the parent company) and references to “we,” “us,” “our” and the “Company” refer to RenaissanceRe Holdings Ltd. together with its subsidiaries, unless the context requires otherwise.


“ASC”			Accounting Standards Codification
“A.M. Best”			A.M. Best Company, Inc.
“DaVinci Reinsurance”			DaVinci Reinsurance Ltd.
“DaVinci”			DaVinciRe Holdings Ltd. and its subsidiaries
“ERM”			enterprise risk management
“Exchange Act”			the Securities Exchange Act of 1934, as amended
“FAL”			a deposit that must be submitted to support the underwriting capacity of a member of Lloyd’s
“FASB”			Financial Accounting Standards Board
“FCR”			financial condition report
“Fitch”			Fitch Ratings Ltd.
“Fontana”			Fontana Holdings L.P. and its subsidiaries
“Form 10-K”			Annual Report on Form 10-K
“Form 10-Q”			this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023
“IRS”			United States Internal Revenue Service
“Medici”			RenaissanceRe Medici Fund Ltd.
“Moody’s”			Moody’s Investors Service
“Renaissance Reinsurance”			Renaissance Reinsurance Ltd.
“Renaissance Reinsurance of Europe”			Renaissance Reinsurance of Europe Unlimited Company
“Renaissance Reinsurance U.S.”			Renaissance Reinsurance U.S. Inc.
“RenaissanceRe”			RenaissanceRe Holdings Ltd.
“RenaissanceRe Finance”			RenaissanceRe Finance Inc.
“RenaissanceRe Specialty U.S.”			RenaissanceRe Specialty U.S. Ltd.
“RREAG”			RenaissanceRe Europe AG
“S&P”			Standard and Poor’s Rating Services
“SEC”			U.S. Securities and Exchange Commission
“Securities Act”			Securities Act of 1933, as amended
“Syndicate 1458”			RenaissanceRe Syndicate 1458
“Top Layer”			Top Layer Reinsurance Ltd.
“Tower Hill Companies”			collectively, our investments in a group of Tower Hill affiliated companies including Bluegrass Insurance Management, LLC, Tower Hill Claims Service, LLC, Tower Hill Holdings, Inc., Tower Hill Insurance Group, LLC, Tower Hill Insurance Managers, LLC, Tower Hill Re Holdings, Inc., Tower Hill Signature Insurance Holdings, Inc., Tower Hill Risk Management LLC and Tomoka Re Holdings, Inc.
“U.K.”			United Kingdom
“U.S.”			United States of America
“Upsilon Fund”			RenaissanceRe Upsilon Fund Ltd.
“Upsilon RFO”			Upsilon RFO Re Ltd.
“Vermeer”			Vermeer Reinsurance Ltd.

NOTE ON FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q of RenaissanceRe Holdings Ltd. contains forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act. Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, us. In particular, statements using words such as “may,” “should,” “estimate,” “expect,” “anticipate,” “intend,” “believe,” “predict,” “potential,” or words of similar import generally involve forward-looking statements. For example, we may include certain forward-looking statements in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” with regard to trends in results, prices, volumes, operations, investment results, margins, combined ratios, fees, reserves, market conditions, risk management and exchange rates. This Form 10-Q also contains forward-looking statements with respect to our business and industry, such as those relating to our strategy and management objectives, plans and expectations regarding our response and ability to adapt to changing economic conditions, market standing and product volumes, competition and new entrants in our industry, industry capital, insured losses from loss events, government initiatives and regulatory matters affecting the reinsurance and insurance industries.

The inclusion of forward-looking statements in this report should not be considered as a representation by us or any other person that our current objectives or plans will be achieved. Numerous factors could cause our actual results to differ materially from those addressed by the forward-looking statements, including the following:

•our exposure to natural and non-natural catastrophic events and circumstances and the variance they may cause in our financial results;

•the effect of climate change on our business, including the trend towards increasingly frequent and severe climate events;

•the effectiveness of our claims and claim expense reserving process;

•the effect of emerging claims and coverage issues;

•the performance of our investment portfolio and financial market volatility;

•the effects of inflation;

•the ability of our ceding companies and delegated authority counterparties to accurately assess the risks they underwrite;

•our ability to maintain our financial strength ratings;

•the highly competitive nature of our industry;

•our reliance on a small number of brokers;

•collection on claimed retrocessional coverage, and new retrocessional reinsurance being available on acceptable terms or at all;

•the historically cyclical nature of the (re)insurance industries;

•our ability to attract and retain key executives and employees;

•our ability to successfully implement our business, strategies and initiatives;

•our exposure to credit loss from counterparties;

•our need to make many estimates and judgments in the preparation of our financial statements;

•our ability to effectively manage capital on behalf of investors in joint ventures or other entities we manage;

•changes to the accounting rules and regulatory systems applicable to our business, including changes in Bermuda and U.S. laws or regulations;

•other political, regulatory or industry initiatives adversely impacting us;

•our ability to comply with covenants in our debt agreements;

•the effect of adverse economic factors, including changes in the prevailing interest rates and recession or the perception that recession may occur;

•the effect of cybersecurity risks, including technology breaches or failure;

•a contention by the IRS that any of our Bermuda subsidiaries are subject to taxation in the U.S.;

•the effects of possible future tax reform legislation and regulations in the jurisdictions in which we operate;

•our ability to determine any impairments taken on our investments;

•our ability to raise capital on acceptable terms, including through debt instruments, the capital markets, and third party investments in our joint ventures and managed fund partners;

•our ability to comply with applicable sanctions and foreign corrupt practices laws; and

•our dependence on the ability of our operating subsidiaries to declare and pay dividends.

As a consequence, our future financial condition and results may differ from those expressed in any forward-looking statements made by or on behalf of us. The factors listed above, which are discussed in more detail in our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 8, 2023, and Item 1A of this Quarterly Report on Form 10-Q, should not be construed as exhaustive. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to revise or update forward-looking statements to reflect new information, events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


			Page
Consolidated Balance Sheets at March 31, 2023 (unaudited) and December 31, 2022			7
Consolidated Statements of Operations for the three months ended March 31 , 202 3 and 2022			8
Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2023 and 2022			9
Consolidated Statements of Changes in Shareholders’ Equity for the three months ended March 31, 2023 and 2022			10
Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022			11
Notes to the Consolidated Financial Statements			12
Note 1. Organization			12
Note 2. Significant Accounting Policies			13
Note 3. Investments			14
Note 4. Fair Value Measurements			17
Note 5. Reinsurance			27
Note 6. Reserve for Claims and Claim Expenses			29
Note 7. Debt and Credit Facilities			33
Note 8. Noncontrolling Interests			34
Note 9. Variable Interest Entities			37
Note 10. Shareholders’ Equity			41
Note 11. Earnings per Share			42
Note 12. Segment Reporting			43
Note 13. Derivative Instruments			45
Note 14. Commitments and Contingencies and Other Items			51
Note 15. Subsequent Events			52

RenaissanceRe Holdings Ltd. and Subsidiaries

Consolidated Balance Sheets

(in thousands of United States Dollars, except share and per share amounts)


	March 31, 2023		December 31, 2022
Assets	(Unaudited)		(Audited)
Fixed maturity investments trading, at fair value – amortized cost $15,067,873 at March 31, 2023 (December 31, 2022 – $15,038,551)	$	14,695,585	$	14,351,402

Short term investments, at fair value - amortized cost $5,177,881 at March 31, 2023 (December 31, 2022 - $4,671,581)	5,177,095		4,669,272
Equity investments, at fair value	551,394		625,058
Other investments, at fair value	2,700,655		2,494,954
Investments in other ventures, under equity method	84,731		79,750
Total investments	23,209,460		22,220,436
Cash and cash equivalents	1,063,707		1,194,339
Premiums receivable	5,933,701		5,139,471
Prepaid reinsurance premiums	1,130,831		1,021,412
Reinsurance recoverable	4,706,671		4,710,925
Accrued investment income	121,681		121,501
Deferred acquisition costs	1,242,395		1,171,738
Receivable for investments sold	267,161		350,526
Other assets	358,203		384,702
Goodwill and other intangible assets	236,517		237,828

Total assets	$	38,270,327	$	36,552,878
Liabilities, Noncontrolling Interests and Shareholders’ Equity
Liabilities
Reserve for claims and claim expenses	$	15,996,826	$	15,892,573
Unearned premiums	5,250,642		4,559,107
Debt	1,140,960		1,170,442
Reinsurance balances payable	3,989,660		3,928,281
Payable for investments purchased	389,440		493,776
Other liabilities	279,878		648,036

Total liabilities	27,047,406		26,692,215
Commitments and contingencies
Redeemable noncontrolling interests	5,357,386		4,535,389
Shareholders’ Equity
Preference shares: $1.00 par value – 30,000 shares issued and outstanding at March 31, 2023 (December 31, 2022 – 30,000)	750,000		750,000
Common shares: $1.00 par value – 43,931,597 shares issued and outstanding at March 31, 2023 (December 31, 2022 – 43,717,836)	43,932		43,718
Additional paid-in capital	467,623		475,647
Accumulated other comprehensive income (loss)	(14,838)		(15,462)
Retained earnings	4,618,818		4,071,371
Total shareholders’ equity attributable to RenaissanceRe	5,865,535		5,325,274


Total liabilities, noncontrolling interests and shareholders’ equity	$	38,270,327	$	36,552,878

See accompanying notes to the consolidated financial statements

RenaissanceRe Holdings Ltd. and Subsidiaries

Consolidated Statements of Operations

For the three months ended March 31, 2023 and 2022

(in thousands of United States Dollars, except per share amounts) (Unaudited)


	Three months ended
	March 31, 2023		March 31, 2022
Revenues
Gross premiums written	$	2,790,261	$	2,942,964
Net premiums written	$	2,263,703	$	2,165,217
Decrease (increase) in unearned premiums	(583,153)		(678,792)
Net premiums earned	1,680,550		1,486,425
Net investment income	254,378		83,691
Net foreign exchange gains (losses)	(14,503)		(15,486)
Equity in earnings (losses) of other ventures	9,530		(6,390)
Other income (loss)	(4,306)		1,193
Net realized and unrealized gains (losses) on investments	279,451		(673,017)



Total revenues	2,205,100		876,416
Expenses
Net claims and claim expenses incurred	801,200		841,733
Acquisition expenses	432,257		376,507
Operational expenses	77,474		67,907
Corporate expenses	12,843		12,502
Interest expense	12,134		11,955
Total expenses	1,335,908		1,310,604
Income (loss) before taxes	869,192		(434,188)
Income tax benefit (expense)	(28,902)		36,707


Net income (loss)	840,290		(397,481)
Net (income) loss attributable to redeemable noncontrolling interests	(267,384)		11,912
Net income (loss) attributable to RenaissanceRe	572,906		(385,569)
Dividends on preference shares	(8,844)		(8,844)
Net income (loss) available (attributable) to RenaissanceRe common shareholders	$	564,062	$	(394,413)


Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – basic	$	12.95	$	(9.10)


Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – diluted	$	12.91	$	(9.10)
Dividends per common share	$	0.38	$	0.37

See accompanying notes to the consolidated financial statements

RenaissanceRe Holdings Ltd. and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

For the three months ended March 31, 2023 and 2022

(in thousands of United States Dollars) (Unaudited)


	Three months ended
	March 31, 2023		March 31, 2022
Comprehensive income (loss)
Net income (loss)	$	840,290	$	(397,481)
Change in net unrealized gains (losses) on investments, net of tax	918		834
Foreign currency translation adjustments, net of tax	(294)		(2,759)

Comprehensive income (loss)	840,914		(399,406)
Net (income) loss attributable to redeemable noncontrolling interests	(267,384)		11,912

Comprehensive income (loss) attributable to redeemable noncontrolling interests	(267,384)		11,912
Comprehensive income (loss) attributable to RenaissanceRe	$	573,530	$	(387,494)

See accompanying notes to the consolidated financial statements

RenaissanceRe Holdings Ltd. and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity

For the three months ended March 31, 2023 and 2022

(in thousands of United States Dollars) (Unaudited)


	Three months ended
	March 31, 2023		March 31, 2022
Preference shares
Beginning balance	$	750,000	$	750,000
Issuance of shares	—		—
Repurchase of shares	—		—
Ending balance	750,000		750,000
Common shares
Beginning balance	43,718		44,445

Repurchase of shares	—		(577)
Issuance of restricted stock awards	214		325
Ending balance	43,932		44,193
Additional paid-in capital
Beginning balance	475,647		608,121

Repurchase of shares	—		(92,857)
Offering expenses	—		—
Change in redeemable noncontrolling interests	(1,106)		(863)
Issuance of restricted stock awards	(6,918)		(770)
Ending balance	467,623		513,631
Accumulated other comprehensive income (loss)
Beginning balance	(15,462)		(10,909)
Change in net unrealized gains (loss) on investments, net of tax	918		834
Foreign currency translation adjustments, net of tax	(294)		(2,759)

Ending balance	(14,838)		(12,834)
Retained earnings
Beginning balance	4,071,371		5,232,624

Net income (loss)	840,290		(397,481)
Net (income) loss attributable to redeemable noncontrolling interests	(267,384)		11,912

Dividends on common shares	(16,615)		(16,241)
Dividends on preference shares	(8,844)		(8,844)
Ending balance	4,618,818		4,821,970

Total shareholders’ equity	$	5,865,535	$	6,116,960

See accompanying notes to the consolidated financial statements

RenaissanceRe Holdings Ltd. and Subsidiaries

Consolidated Statements of Cash Flows

For the three months ended March 31, 2023 and 2022

(in thousands of United States Dollars) (Unaudited)


	Three months ended
	March 31, 2023		March 31, 2022
Cash flows provided by (used in) operating activities
Net income (loss)	$	840,290	$	(397,481)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Amortization, accretion and depreciation	(32,948)		(9,337)
Equity in undistributed (earnings) losses of other ventures	5,568		16,069
Net realized and unrealized (gains) losses on investments	(267,289)		632,729




Change in:
Premiums receivable	(794,230)		(1,069,971)
Prepaid reinsurance premiums	(109,419)		(331,260)
Reinsurance recoverable	4,254		(50,821)
Deferred acquisition costs	(70,657)		(150,552)
Reserve for claims and claim expenses	104,253		215,674
Unearned premiums	691,535		1,015,092
Reinsurance balances payable	61,379		458,694
Other	2,972		(160,607)
Net cash provided by (used in) operating activities	435,708		168,229
Cash flows provided by (used in) investing activities
Proceeds from sales and maturities of fixed maturity investments trading	5,019,879		3,958,948
Purchases of fixed maturity investments trading	(5,159,348)		(4,405,789)


Net sales (purchases) of equity investments	104,077		(374,292)
Net sales (purchases) of short term investments	(480,425)		626,639
Net sales (purchases) of other investments	(159,523)		(210,840)
Net sales (purchases) of investments in other ventures	(11,250)		(779)
Return of investment from investment in other ventures	1,893		2,213




Net cash provided by (used in) investing activities	(684,697)		(403,900)
Cash flows provided by (used in) financing activities
Dividends paid – RenaissanceRe common shares	(16,615)		(16,241)
Dividends paid – preference shares	(8,950)		(8,940)

RenaissanceRe common share repurchases	—		(97,259)

Repayment of debt	(30,000)		—




Net third-party redeemable noncontrolling interest share transactions	190,585		66,729
Taxes paid on withholding shares	(18,729)		(10,782)

Net cash provided by (used in) financing activities	116,291		(66,493)
Effect of exchange rate changes on foreign currency cash	2,066		6,201
Net increase (decrease) in cash and cash equivalents	(130,632)		(295,963)

Cash and cash equivalents, beginning of period	1,194,339		1,859,019
Cash and cash equivalents, end of period	$	1,063,707	$	1,563,056

See accompanying notes to the consolidated financial statements

RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

(unless otherwise noted, amounts in tables expressed in thousands of United States (“U.S.”) dollars,

except shares, per share amounts and percentages) (Unaudited)

NOTE 1. ORGANIZATION

This report on Form 10-Q should be read in conjunction with RenaissanceRe’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (“Form 10-K”). RenaissanceRe was formed under the laws of Bermuda on June 7, 1993. Together with its wholly owned and majority-owned subsidiaries, joint ventures and managed funds, the Company provides property, casualty and specialty reinsurance and certain insurance solutions to its customers.

•Renaissance Reinsurance Ltd. (“Renaissance Reinsurance”), a Bermuda-domiciled reinsurance company, is the Company’s principal reinsurance subsidiary and provides property, casualty and specialty reinsurance coverages to insurers and reinsurers on a worldwide basis.

•Renaissance Reinsurance U.S. Inc. (“Renaissance Reinsurance U.S.”) is a reinsurance company domiciled in the state of Maryland that provides property, casualty and specialty reinsurance coverages to insurers and reinsurers, primarily in the Americas.

•RenaissanceRe Syndicate 1458 (“Syndicate 1458”) is the Company’s Lloyd’s syndicate. RenaissanceRe Corporate Capital (UK) Limited (“RenaissanceRe CCL”), a wholly owned subsidiary of RenaissanceRe, is Syndicate 1458’s sole corporate member. RenaissanceRe Syndicate Management Ltd. (“RSML”), a wholly owned subsidiary of RenaissanceRe, is the managing agent for Syndicate 1458.

•RenaissanceRe Europe AG (“RREAG”), a Swiss-domiciled reinsurance company, which has branches in Australia, Bermuda, the U.K. and the U.S., provides property, casualty and specialty reinsurance coverages to insurers and reinsurers on a worldwide basis.

•RenaissanceRe Specialty U.S. Ltd. (“RenaissanceRe Specialty U.S.”), a Bermuda-domiciled insurer, which operates subject to U.S. federal income tax.

•DaVinci Reinsurance Ltd. (“DaVinci Reinsurance”), a wholly-owned subsidiary of DaVinciRe Holdings Ltd. (“DaVinci”), is a managed joint venture formed by the Company to principally write property catastrophe reinsurance and certain casualty and specialty reinsurance lines of business on a global basis.

•Vermeer Reinsurance Ltd. (“Vermeer”) is a managed joint venture formed by the Company to provide capacity focused on risk remote layers in the U.S. property catastrophe market. The Company maintains a majority voting control of Vermeer, while Stichting Pensioenfonds Zorg en Welzijn (“PFZW”), a pension fund represented by PGGM Vermogensbeheer B.V., a Dutch pension fund manager, retains economic benefits.

•Fontana Holdings L.P. and its subsidiaries (collectively, “Fontana”) are a managed joint venture formed by the Company to assume casualty and specialty risks in line with the Company’s book of business. Fontana launched effective April 1, 2022.

•Top Layer Reinsurance Ltd. (“Top Layer”) is a managed joint venture formed by the Company to write high excess non-U.S. property catastrophe reinsurance.

•RenaissanceRe Underwriting Managers U.S. LLC, is licensed as a reinsurance intermediary broker in the State of Connecticut and underwrites specialty treaty reinsurance solutions on both a quota share and excess of loss basis on behalf of affiliates.

•Renaissance Underwriting Managers, Ltd. (“RUM”), a wholly-owned subsidiary of RenaissanceRe, is the exclusive underwriting manager for certain of our joint ventures or managed funds in return for a management fee, performance fee, or both.

•RenaissanceRe Fund Management Ltd. (“RFM”) is a wholly-owned Bermuda exempted company and is the exclusive investment fund manager for several of the Company’s joint ventures or managed

funds, in return for a management fee, a performance based incentive fee, or both. RFM is an Exempt Reporting Adviser with the Securities and Exchange Commission and serves as the investment adviser to third-party investors in the various private investment partnerships and insurance-related investment products offered by the Company.

•RenaissanceRe Medici Fund Ltd. (“Medici”) is an exempted company, incorporated in Bermuda and registered as an institutional fund. Medici invests, primarily on behalf of third-party investors, in various instruments that have returns primarily tied to property catastrophe risk.

•Upsilon RFO Re Ltd. (“Upsilon RFO”), an exempted company incorporated in Bermuda and registered as a segregated accounts company and as a collateralized insurer, is a managed fund formed by the Company principally to provide additional capacity to the worldwide aggregate and per-occurrence primary and retrocessional property catastrophe excess of loss market.

•RenaissanceRe Upsilon Fund Ltd., an exempted company incorporated in Bermuda and registered as a segregated accounts company and a Class A Professional Fund, provides a fund structure through which third-party investors can invest in reinsurance risk managed by the Company.

•Mona Lisa Re Ltd. (“Mona Lisa Re”), a Bermuda domiciled special purpose insurer (“SPI”), provides reinsurance capacity to subsidiaries of RenaissanceRe through reinsurance agreements which are collateralized and funded by Mona Lisa Re through the issuance of one or more series of principal-at-risk variable rate notes.

•Fibonacci Reinsurance Ltd. (“Fibonacci Re”), an exempted company incorporated in Bermuda and registered as an SPI, was formed to provide collateralized capacity to Renaissance Reinsurance and its affiliates. Fibonacci Re raises capital from third-party investors and the Company, via private placements of participating notes which are listed on the Bermuda Stock Exchange.

•The Company and Reinsurance Group of America, Incorporated formed an initiative (“Langhorne”) to source third-party capital to support reinsurers targeting large in-force life and annuity blocks. Langhorne Holdings LLC (“Langhorne Holdings”) was incorporated to own and manage certain reinsurance entities, and Langhorne Partners LLC (“Langhorne Partners”) is the general partner for Langhorne. Langhorne’s capital commitment period expired at the end of December 2022 and the Langhorne entities are in the process of winding down.

•Following the acquisition of Tokio Millennium Re AG and certain associated entities and subsidiaries (collectively, “TMR”) on March 22, 2019, the Company managed Shima Reinsurance Ltd. (“Shima Re”), Norwood Re Ltd. (“Norwood Re”) and Blizzard Re Ltd. (“Blizzard,” together with Shima Re and Norwood Re, the “TMR managed third-party capital vehicles”), which provided third-party investors with access to reinsurance risk. The TMR managed third-party capital vehicles no longer write new business. The Company ceased providing management services to Blizzard effective November 1, 2020, and to Shima Re and Norwood Re effective December 1, 2020.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

There have been no material changes to the Company’s significant accounting policies as described in its Form 10-K for the year ended December 31, 2022, except as described below.

BASIS OF PRESENTATION

These consolidated financial statements have been prepared on the basis of accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and in conformity with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, these unaudited consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of the Company’s financial position and results of operations as at the end of and for the periods presented. All significant intercompany accounts and transactions have been eliminated from these statements.

Certain comparative information has been reclassified to conform to the current presentation. Because of the seasonality of the Company’s business, the results of operations and cash flows for any interim period

will not necessarily be indicative of the results of operations and cash flows for the full fiscal year or subsequent quarters.

USE OF ESTIMATES IN FINANCIAL STATEMENTS

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported and disclosed amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. The major estimates reflected in the Company’s consolidated financial statements include, but are not limited to, the reserve for claims and claim expenses; reinsurance recoverable and premiums receivable, including provisions for reinsurance recoverable and premiums receivable to reflect expected credit losses; estimates of written and earned premiums; fair value, including the fair value of investments, financial instruments and derivatives; impairment charges; and the Company’s deferred tax valuation allowance.

NOTE 3. INVESTMENTS

Fixed Maturity Investments Trading

The following table summarizes the fair value of fixed maturity investments trading:



	March 31, 2023		December 31, 2022
U.S. treasuries	$	7,331,398	$	7,180,129
Corporate (1)	4,474,372		4,390,568
Agencies	481,850		395,149

Non-U.S. government	364,048		383,838



Residential mortgage-backed	786,680		710,429
Commercial mortgage-backed	215,655		213,987
Asset-backed	1,041,582		1,077,302
Total fixed maturity investments trading	$	14,695,585	$	14,351,402

(1)Corporate fixed maturity investments include non-U.S. government-backed corporate fixed maturity investments.

Contractual maturities of fixed maturity investments trading are described in the following table. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.




	March 31, 2023				December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in less than one year	$	569,267	$	562,042	$	364,501	$	356,770
Due after one through five years	8,180,866		8,055,551		8,117,971		7,875,771
Due after five through ten years	3,882,836		3,770,478		4,072,142		3,805,287
Due after ten years	289,700		263,597		356,268		311,856
Mortgage-backed	1,073,453		1,002,335		1,009,205		924,416
Asset-backed	1,071,751		1,041,582		1,118,464		1,077,302
Total	$	15,067,873	$	14,695,585	$	15,038,551	$	14,351,402

Equity Investments

The following table summarizes the fair value of equity investments:



	March 31, 2023		December 31, 2022
Fixed income exchange traded funds	$	296,049	$	295,481
Financials	107,455		103,250
Equity exchange traded funds	—		90,510
Communications and technology	58,434		48,687
Consumer	36,532		33,447
Industrial, utilities and energy	25,012		25,326
Healthcare	24,001		24,617
Basic materials	3,911		3,740
Total	$	551,394	$	625,058

Pledged Investments

At March 31, 2023, $7.9 billion (December 31, 2022 - $7.9 billion) of cash and investments at fair value were on deposit with, or in trust accounts for the benefit of, various counterparties, including with respect to the Company’s letter of credit facilities. Of this amount, $1.3 billion (December 31, 2022 - $1.2 billion) is on deposit with, or in trust accounts for the benefit of, U.S. state regulatory authorities.

Reverse Repurchase Agreements

At March 31, 2023, the Company held $156.7 million (December 31, 2022 - $38.5 million) of reverse repurchase agreements. These loans are fully collateralized, are generally outstanding for a short period of time and are presented on a gross basis as part of short term investments on the Company’s consolidated balance sheets. The required collateral for these loans typically includes high-quality, readily marketable instruments at a minimum amount of 102% of the loan principal. Upon maturity, the Company receives principal and interest income.

Net Investment Income

The components of net investment income are as follows:



	Three months ended
	March 31, 2023		March 31, 2022
Fixed maturity investments trading	$	155,500	$	62,417
Short term investments	32,950		1,136
Equity investments	3,399		2,754
Other investments
Catastrophe bonds	38,831		17,360
Other	24,571		5,552
Cash and cash equivalents	4,264		(41)
	259,515		89,178
Investment expenses	(5,137)		(5,487)
Net investment income	$	254,378	$	83,691

Net Realized and Unrealized Gains (Losses) on Investments

Net realized and unrealized gains (losses) on investments are as follows:



	Three months ended
	March 31, 2023		March 31, 2022


Net realized gains (losses) on fixed maturity investments trading	$	(104,765)	$	(121,152)
Net unrealized gains (losses) on fixed maturity investments trading	312,026		(464,177)
Net realized and unrealized gains (losses) on fixed maturity investments trading	207,261		(585,329)
Net realized and unrealized gains (losses) on investments-related derivatives(1)	12,162		(40,288)
Net realized gains (losses) on equity investments	(8,738)		(20)
Net unrealized gains (losses) on equity investments	39,151		(48,669)
Net realized and unrealized gains (losses) on equity investments	30,413		(48,689)
Net realized and unrealized gains (losses) on other investments - catastrophe bonds	24,126		(8,261)
Net realized and unrealized gains (losses) on other investments - other	5,489		9,550
Net realized and unrealized gains (losses) on investments	$	279,451	$	(673,017)

(1)Net realized and unrealized gains (losses) on investment-related derivatives includes fixed maturity investments related derivatives (interest rate futures, interest rate swaps, credit default swaps and total return swaps), and equity investments related derivatives (equity futures). See “Note 13. Derivative Instruments” for additional information.

Net Sales (Purchases) of Investments

The tables below show the Company’s cash flows in respect of gross and net purchases and sales of equity investments, short term investments, other investments and investments in other ventures for the three months ended March 31, 2023 and 2022.



Three months ended March 31, 2023	Gross Purchases		Gross Sales	Net
Equity investments	$	(1,599)	105,676	$	104,077
Short term investments	$	(7,246,835)	6,766,410	$	(480,425)
Other investments	$	(212,336)	52,814	$	(159,523)
Investments in other ventures	$	(11,250)	—	$	(11,250)



Three months ended March 31, 2022	Gross Purchases		Gross Sales	Net
Equity investments	$	(396,298)	22,006	$	(374,292)
Short term investments	$	(7,138,020)	7,764,659	$	626,639
Other investments	$	(276,668)	65,828	$	(210,840)
Investments in other ventures	$	(905)	126	$	(779)

NOTE 4. FAIR VALUE MEASUREMENTS

The use of fair value to measure certain assets and liabilities with resulting unrealized gains or losses is pervasive within the Company’s consolidated financial statements. Fair value is defined under accounting guidance currently applicable to the Company as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between open market participants at the measurement date. The Company recognizes the change in unrealized gains or losses arising from changes in fair value in its consolidated statements of operations.

FASB ASC Topic Fair Value Measurements and Disclosures prescribes a fair value hierarchy that prioritizes the inputs to the respective valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to valuation techniques that use at least one significant input that is unobservable (Level 3). The three levels of the fair value hierarchy are described below:

•Fair values determined by Level 1 inputs utilize unadjusted quoted prices obtained from active markets for identical assets or liabilities for which the Company has access at the measurement date. The fair value is determined by multiplying the quoted price by the quantity held by the Company;

•Fair values determined by Level 2 inputs utilize inputs (other than quoted prices included in Level 1) that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals, broker quotes and certain pricing indices; and

•Level 3 inputs are based all or in part on significant unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In these cases, significant management assumptions can be used to establish management’s best estimate of the assumptions used by other market participants in determining the fair value of the asset or liability.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement of the asset or liability. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and the Company considers factors specific to the asset or liability.

In order to determine if a market is active or inactive for a security, the Company considers a number of factors, including, but not limited to, the spread between what a seller is asking for a security and what a buyer is bidding for the same security, the volume of trading activity for the security in question, the price of the security compared to its par value (for fixed maturity investments), and other factors that may be indicative of market activity.

There have been no material changes in the Company’s valuation techniques, nor have there been any transfers between Level 1 and Level 2, or Level 2 and Level 3 during the period represented by these consolidated financial statements.

Below is a summary of the assets and liabilities that are measured at fair value on a recurring basis and also represents the carrying amount on the Company’s consolidated balance sheets:



At March 31, 2023	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Fixed maturity investments trading
U.S. treasuries	$	7,331,398	$	7,331,398	$	—	$	—
Corporate (1)	4,474,372		—		4,474,372		—
Agencies	481,850		—		481,850		—

Non-U.S. government	364,048		—		364,048		—



Residential mortgage-backed	786,680		—		786,680		—
Commercial mortgage-backed	215,655		—		215,655		—
Asset-backed	1,041,582		—		1,041,582		—
Total fixed maturity investments trading	14,695,585		7,331,398		7,364,187		—
Short term investments	5,177,095		54,095		5,123,000		—
Equity investments trading	551,394		551,394		—		—
Other investments

Form: 10-Q

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