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RenRe posts $206mn underwriting loss for Q3 on large loss events

28th October 2020 - Author: Luke Gallin

Bermuda-based reinsurer ReniassanceRe (RenRe) has reported an underwriting loss of $206.1 million for the third-quarter of 2020 and a combined ratio of 120.6%, as large loss events resulted in a net negative impact of $422.4 million and added a significant 43.4 percentage points to the combined ratio.

RenaissanceRe buildingEarlier this month, RenRe pre-warned that elevated losses from catastrophe events in the quarter would drive an operating loss for the period.

The reinsurer has now announced an operating loss of $131.7 million for the quarter against operating income of $32.7 million a year earlier, while net income increased slightly to $47.8 million, compared with $36.7 million in Q3 2019.

The combined impacts of Hurricanes Laura and Sally, the wildfires occurring in California, Oregon and Washington, and other cat events including the August 2020 derecho which impacted the U.S. Midwest, Hurricane Isaias, and Typhoon Maysak, alongside estimates associated with aggregate loss contracts on these and other events in Q3, had a net negative impact on net income of $321.7 million.

On the underwriting result, Q3 large loss events resulted in a net negative impact of $422.4 million and contributed to a significant weakening of the combined ratio, which deteriorated to 120.6% compared with 100.4% in Q3 2019.

RenRe states that its property unit recorded an underwriting loss of $206.6 million and had a combined ratio of 140% in Q3 2019, which more than offset an underwriting gain of $0.6 million and a combined ratio of 99.9% in the firm’s casualty and specialty segment.

Gross premiums written jumped by almost 33% year-on-year to $282 million, driven by an increase of $168.6 million in the casualty and specialty segment and an increase of $113.4 million in the property division.

The Bermuda domiciled reinsurer’s investment result also improved in Q3 2020, reaching $307.8 million and generating an annualised total investment return of 6.2%, compared to $145.8 million and an annualised total investment return of 3.6% in the prior year quarter.

Kevin J. O’Donnell, President and Chief Executive Officer (CEO) of RenRe, commented: “Another active quarter further confirms the critical role RenaissanceRe plays in helping communities rebuild. Our results for the third quarter reflect the climate-change driven frequency of catastrophic events impacting the world, but these are risks that we understand well and are paid to take. As we approach the January renewal, I am confident we will successfully execute our strategy and profitably deploy significant capital by helping our customers solve their biggest problems.”

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