Bermuda-based RenaissanceRe’s President and Chief Executive Officer (CEO), Kevin O’Donnell, recently discussed the company’s experience at the January 1st, 2024, reinsurance renewals during the firm’s Q4 and full year 2023 earnings call.
“At the recent January 1 renewal, we improved this already strong underwriting portfolio. Due to our overwhelming success in renewing the Validus business, we grew substantially into a market that remains highly favourable,” said O’Donnell.
He explained that roughly half of the reinsurer’s combined premiums were renewed at the January renewals, and that its retention rate exceeded already high expectations. At the same time, the company overwhelmingly kept its combined catastrophe lines.
Commenting on the property catastrophe market specifically, the CEO said that rates remain strong and the market remains disciplined.
“Market rates were flat to up a few percentage points. Programmes that needed rate, got rate, improving the overall portfolio. Terms and Conditions were largely consistent, and retentions held steady,” he said.
In the other property line of business, O’Donnell described the market as one that continues to experience rate increases, particularly in the US and parts of Europe.
“We held our exposures relatively flat while achieving higher rates. In 2024, we will continue to monitor other property. If risk-adjusted returns approach similar levels to what we are obtaining in property cat, I expect there will be opportunities to grow exposure to this business,” said O’Donnell.
For RenRe, the January 1 renewal was also successful for its casualty book.
“Our ability to participate broadly across our customers portfolios, once again served us well, helping us renew the business we targeted at terms and conditions that made sense. This includes the Validus is portfolio.
“Looking forward to 2024, we expect strong performance from a considerably larger book, benefiting from the Validus lines. This is because we are observing increased discipline in the market. General Liability is benefiting from a combination of improving underlying rates, reductions in ceding commissions, and improvements in terms and conditions,” said the CEO.
The market also continues to be attractive in specialty lines, with the reinsurer growing its net premiums written almost 50% in 2023.
“Validus brings us a significant amount of specialty business and provides us an even more influential position in this market. We were successful in renewing this book at January 1, and are excited about future potential here,” said O’Donnell.
“Overall, across our segments our January 1, 2024, underwriting portfolio is larger and more efficient than 2023. And we believe we will continue to benefit over the year.
“Based on our success at January 1, we are likely to have significant upside against the $2.7 billion of the Validus portfolio we initially expected to retain. We are expecting to renew at least $3 billion of Validus premium, and probably more, including most of the property and specialty lines.
“We achieved this favourable outcome at January 1 by consistently communicating our risk appetite to brokers and customers after we announced the Validus deal. We are now the leading participant on many placements,” said the CEO.
RenRe reported a stronger combined ratio of 76% and 77.9% for the fourth quarter and full year 2023, respectively, as the firm’s underwriting and investment income improved for both periods.
