Bermuda-based reinsurer RenaissanceRe (RenRe) incurred net claims and claims expenses from large loss events of more than $1.7 billion in the first quarter of 2025, driven by almost $1.6 billion of net claims from the January California wildfires, leading the firm to record an underwriting loss in the period.
The California wildfires had a net negative impact of $1.3 billion on RenRe’s Q1 2025 underwriting result, which decreased to a loss of $771 million from profit of $541 million in Q1 2024.
Most of the impact from the costly wildfires is in RenRe’s property segment, where the fires had a net negative impact on the underwriting result of $1.2 billion, as the segment fell to an underwriting loss of $607 million, compared with a gain of $534 million in Q1 2024.
The California wildfires had a 48.4 percentage point impact on the consolidated combined ratio, which deteriorated to 128.3% from 77.9%. In total, 2025 large loss events, which as well as the fires includes the crash of American Airlines flight 5342, and certain refinery fires in the quarter, had a 52.6% impact on the combined ratio.
While the underwriting performance suffered in the quarter, RenRe has reported top-line growth as gross premiums written (GPW) increased to $4.2 billion from $4 billion, net premiums written (NPW) rose to $3.4 billion from $3.2 billion, and net premiums earned increased to $2.7 billion from $2.4 billion.
The growth in the quarter was driven by the property segment which more than offset a decrease in premiums in the casualty and specialty arm.
Within property, GPW increased by 12.7% to $2.1 billion, with growth of more than 24% in the catastrophe class, driven by a $361.9 million increase in reinstatement premiums, primarily related to the California wildfires. Absent these reinstatement premiums, RenRe notes that GPW in the cat class remained relatively flat, with rate reductions at the 1.1 2025 renewals largely offset by other opportunities for growth.
The property segment’s underwriting loss totalled $607 million in Q1 2025 compared with profit of $534 million a year earlier, as the combined ratio deteriorated to 148.7% from 42.9% as a result of losses from the wildfires.
In the casualty and specialty segment, GPW fell 3.6% year on year to just over $2 billion in Q1 2025, driven by changes in premium estimates on business written in prior underwriting years, partially offset by growth on the existing mortgage book.
The segment has also recorded an underwriting loss in the quarter, of $163 million compared with a gain of $6 million in Q1 2024, as 2025 large loss events pushed the combined ratio to 111.1% compared with 99.6% a year earlier.
Fee income is another driver of profit for RenRe, and the $30.5 million recorded in Q1 2025 is down more than 63% on the prior year’s $83.6 million, which reflects a reduction in management fees from DaVinci as a result of the 2025 large loss events, and the recapture of previously deferred management fees in Q1 2024, which did not repeat in Q1 2025.
On the asset side of the balance sheet, RenRe’s net investment income increased by almost $15 million to $405 million in Q1 2025, with net realised and unrealised gains of $333 million and a total investment result of $738 million.
Group-wide, RenRe has reported net income of $161 million for Q1 2025, down on the prior year’s $365 million, and an operating loss of $70 million, compared with a gain $636 million.
Kevin J. O’Donnell, President and Chief Executive Officer, commented: “This quarter, we grew our primary metric, tangible book value per share plus accumulated dividends, against a backdrop of elevated natural catastrophe losses and significant macroeconomic volatility.
“We also recorded an annualized return on average common equity of 6.6% and a modest operating loss while returning $380 million of capital to our shareholders through buybacks and dividends. Our ability to deliver enduring shareholder value in times of instability demonstrates the strength of RenaissanceRe’s platform, the benefit of our Three Drivers of Profit and the value we bring as a risk provider.”
