Reinsurance News

RenRe falls to $290.9m Q1 net loss as combined ratio deteriorates

29th April 2021 - Author: Luke Gallin

Bermuda domiciled reinsurer, RenaissanceRe Holdings Ltd. (RenRe), has announced a net loss of $290.9 million for the first quarter of 2021, as the impacts of winter storm Uri pushed the carrier to an underwriting loss for the period.

RenaissanceRe buildingMajor winter storms in the U.S. in February had a $179.8 million net negative impact on the company’s net loss, and a $291.5 million net negative impact on the underwriting result, primarily impacting the property business.

As a result, RenRe has reported an underwriting loss of $35.8 million for the first quarter of 2021 and a combined ratio of 103.1%, compared with an underwriting gain of $64.1 million and a combined ratio of 93% for the prior year first quarter.

The overall net loss of $290.9 million for Q1 2021 compares with a net loss of $81.9 million for the same period in the prior year.

Across the business, gross premiums written (GPW) increased from $2.03 billion in Q1 2020 to $2.65 billion in Q1 2021. During the period, the company says that it expanded participation on multiple casualty and specialty lines, benefiting from underlying rate increases and anticipated improvement in underwriting margins.

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Additionally, RenRe grew its catastrophe-exposed U.S. property excess and surplus lines in the other property class of business. Furthermore, at both the January 1st and April 1st, 2021 reinsurance renewals, the firm highlights a disciplined approach where it was able to expand participation predominantly with existing customers at better rates.

Within RenRe’s property business in Q1, GPW spiked by 32.5% to $1.62 billion. However, the unit did fall to a $41.8 million underwriting loss with a combined ratio of 106.9%, against an underwriting gain of $147 million and a combined ratio of 65.1% in Q1 2020.

In casualty and specialty, GPW jumped by 28.6% year-on-year to $1.04 billion. Here, RenRe has reported a turnaround in the underwriting performance as the segment recorded a gain of $6 million in Q1 2021 and a combined ratio of 98.9%, compared with an underwriting loss of $83 million and a combined ratio of 116.9% in Q1 2020.

Turning to investments, and the company’s total investment result declined by $254.4 million due to net realized and unrealized losses on investments of $345.6 million.

RenRe has also provided an update on its COVID-19 experience, noting that net claims and claims expenses incurred during the first quarter of 2021 were not significant.

Kevin O’Donnell, RenRe’s President and Chief Executive Officer (CEO), commented: “We materially grew our underwriting portfolio while returning significant capital to our shareholders during a quarter that was negatively impacted by Winter Storm Uri and volatile capital markets.

“Going forward, we anticipate additional opportunities to grow into a broadly improving market by matching desirable risk with efficient capital, both on our wholly owned balance sheets and in our industry-leading RenaissanceRe Capital Partners business. Together with improved yields in our investment portfolio, this diligent execution of our strategy will further contribute to shareholder value creation.”

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