Bermuda-based reinsurer RenaissanceRe Holdings Ltd. (RenRe) has reported underwriting income of $394 million for the third quarter of 2024 and a significant rise in net income to $1.2 billion, as the strong performance of its property segment more than offset a loss in casualty and specialty.
Across the business, underwriting income increased by 2% year-on-year, although the combined ratio rose from 78% to 84.8%, as large loss events had a net negative impact of $243 million on net income, and added 12.7 percentage points to the Q3 2024 combined ratio.
During the quarter, gross premiums written (GPW) increased to $2.4 billion from $1.6 billion, net premiums written (NPW) increased to $2.2 billion from $1.4 billion, and net premiums earned (NPE) hit $2.6 billion compared with $1.8 billion in Q3 2023.
In its property segment, GPW increased 54.7% year-on-year to $791 million, NPW rose 57.6% to $701 million, and NPE was up 30.8% to $995 million. RenRe attributes the growth in GPW to a $183 million increase in the catastrophe class of business, driven by an increase of $74 million in reinstatement premiums as well as a combination of organic growth, new opportunities, and the renewal of business acquired in the Validus acquisition, in conjunction with the retention of legacy lines, primarily at the July 1st, 2024 renewal.
Additionally, RenRe highlights a $97 million increase in the other property class of business, again reflecting the renewal of business acquired in the Validus acquisition and organic growth, in both catastrophe and non-catastrophe exposed business.
The property segment’s Q3 2024 underwriting income increased to $395 million from $356 million, as the combined ratio moved from 53.2% to 60.3%, so remains very robust, on the back of a higher net claims and claim expense ratio.
The Q3 2024 large loss events added 43.5 percentage points to the catastrophe class of business and 24.8 percentage points to the other property class of business, notes RenRe. In total, net claims and claims expenses incurred from large loss events in the quarter totalled $370 million, of which $181 million relates to Hurricane Helene, and $189 million to other large loss events.
Helene had a net negative impact on the property underwriting result of $148 million, and net negative impact on Group net income of $125 million. All in all, Q3 2024 large losses had a negative impact of $311 million on underwriting, and a negative impact of $243 million on net income.
RenRe has also revealed that hurricane Milton is estimated to have a $275 million net negative impact on net income in the fourth quarter of 2024.
In the reinsurer’s casualty and specialty segment, GPW was up 45.3% to $1.6 billion in Q3 2024, as NPW rose 49.7% to $1.5 billion and NPE increased 59.5% to $1.6 billion. RenRe attributes the GPW expansion to the renewal of business acquired in the Validus acquisition, principally in the general casualty and other specialty classes of business, which grew by $169 million and $208 million, respectively, compared to the third quarter of 2023, and also organic growth of legacy lines.
But while premiums grew, the unit’s underwriting result fell from a gain of $30 million in Q3 2023 to a loss of $927,000, with a combined ratio of 100.1% compared to 97% last year. The company attributes the deterioration to the increase in the underwriting expense ratio, which moved up from 31.2% to 34.4%.
In terms of fee income, the Bermudian has reported a rise of 27% or $18 million to $82 million in Q3 2024, with $11 million growth in management fee income and a $7 million uplift in performance fee income.
On the asset side of the balance sheet, net investment income increased $95 million year-on-year to $424 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.
Kevin J. O’Donnell, President and Chief Executive Officer, commented: “We reported strong results this quarter. Our business continues to perform well, and we are in an excellent capital and liquidity position. We believe that these strong returns will persist, providing us with opportunities to grow while continuing to return capital to our shareholders through share repurchases. These actions position us to deliver consistent, superior returns for our shareholders through the course of 2025 and into the future.
“RenaissanceRe’s purpose is to protect communities and enable prosperity. It is important to recognize that the catastrophes of the quarter caused significant human suffering, in addition to substantial property damage. We extend our sympathies to all those impacted and are proud of the role that we have in supporting communities as they recover and rebuild.”
