Bermuda headquartered reinsurance specialist RenaissanceRe has reported an overall deterioration in its net loss for the first quarter of 2022, compared with the same period last year, despite seeing a return to positive underwriting results.
RenRe’s net loss fell further from $290.9 million in Q1 of last year to a loss of $394.4 million this year.
But this seems to be almost entirely attributable to the company’s investment result, which dropped by $323.6 million from $265.8 million last year to $589.3 million in the first quarter of 2022.
RenRe primarily attributed its negative investment performance to higher net realized and unrealized losses on investments, principally within its fixed maturity investments portfolio.
In contrast, the reinsurer’s operating income improved from $4.4 million to $151.9 million, with underwriting income similarly surging from a loss of $35.7 million last year to a positive result of $200.3 million in Q1 this year.
This resulted in 16.6 percentage points of improvement to RenRe’s combined ratio, which finished the quarter at 86.5%.
The net negative impact of large weather losses on the underwriting result was $102.3 million.
RenRe also reported $27.1 million of underwriting losses within its Casualty and Specialty segment due to claims relating to the Russia-Ukraine conflict, although it did not disclose precisely which lines had been impacted.
Within the Property segment, gross premiums written decreased by $273.3 million, or 16.9%, driven by a $175.5 million reduction in Upsilon RFO Re, a $79.1 million reduction in assumed reinstatement premiums due to lower impact from the Q1 weather losses, and a $28.3 million decrease in the other property class of business, principally due to the planned non-renewal of certain deals.
Within Casualty and Specialty, gross premiums written increased 54.4%, principally in the professional liability and general casualty lines of business. This growth was primarily driven by increases in new and existing business written in the current and prior periods, combined with rate improvements.
“For our shareholders, we delivered a solid double digit operating return while generating profits in both underwriting segments,” said RenRe President and Chief Executive Officer Kevin J. O’Donnell.
“Our balance sheet is strong and all three of our drivers of profit should benefit from improving market conditions: our underwriting from material rate increases across most lines as well as continuing growth in our Casualty and Specialty segment; our fee income business from the launch of our groundbreaking Casualty and Specialty joint venture Fontana; and our investment income from rising interest rates,” he continued.
“We believe that all of these factors will make our financial results increasingly resilient to natural catastrophe volatility and produce superior returns for our shareholders.”
