Bermuda-based reinsurer RenaissanceRe Holdings Ltd. (RenRe) has reported underwriting income of $479.3 million and a combined ratio of 81.1% in its second quarter 2024 results, as both fee income and investment income also contributed to another successful quarter for the firm.
Year-on-year, RenRe’s Q2 underwriting result increased more than 36% although the combined ratio did weaken by 0.8 percentage points, as the property segment combined ratio strengthened but the casualty and specialty combined ratio deteriorated.
Group-wide, the reinsurer has reported gross premiums written (GPW) growth of $773.9 million, or 29.2% from Q2 2023 to $3.42 billion in Q2 2024. Net premiums written (NPW) also grew by more than 29% to $2.84 billion, while net premiums earned rose by a significant 42% to $2.54 billion from $1.8 billion in Q2 2023.
Growth was strong across the business in the second quarter, with property GPW rising 25% to $1.75 billion on the back of a $262.8 million increase in catastrophe, driven by the renewal of business acquired in the Validus acquisition, in conjunction with the retention of legacy lines, primarily at the June 1st, 2024 renewal.
There was also an $87.7 million increase in other property, again reflecting the renewal of business acquired in the Validus takeover and organic growth, in both catastrophe and non-catastrophe-exposed business.
Property NPW increased by $214 million, or 18.7% to $1.35 billion as a result of the growth in GPW, although this was partially offset by an increase in ceded premiums written as part of the firm’s gross-to-net strategy.
The property segment’s underwriting income improved to $451.7 million from $281 million, as the combined ratio improved by 9.1 percentage points to 53.9%, driven by growth in net premiums earned, a lower level of current accident year net losses, and higher prior year favorable development. In the quarter, large loss events added 9.6 percentage points to the catastrophe class of business and 5.5 percentage points to the other property class of business, while the firm also benefited from some net favorable development.
As for RenRe’s casualty and specialty segment, the Q2 2024 combined ratio deteriorated by 5 percentage points to 98.2%, as underwriting income fell from $70 million to $27.6 million on the back of a rise in net claims from higher losses in the quarter.
The segment’s GPW increased by 33.9% to $1.67 billion, primarily driven by the renewal of business acquired in the Validus acquisition, principally in the general casualty and other specialty classes of business. Organic growth in legacy lines of business was partially offset by a decrease in the professional liability class of business.
Casualty and specialty NPW grew by almost 41% year-on-year to $1.48 billion, reflecting the drivers of growth in GPW and also an overall reduction in retrocessional purchases in the quarter. Net premiums earned jumped by 52% to $1.56 billion.
In terms of total fee income, RenRe has reported a year-on-year rise of more than 48%, or $27 million to $84.1 million, with $11.9 million growth in management fee income, which reflects growth in the its joint ventures and managed funds, specifically DaVinciRe Holdings Ltd., and Fontana Holdings L.P., as well as the addition of fees earned by AlphaCat Managers Ltd., which was acquired as part of the Validus deal.
Performance fee income also increased year-on-year, from $13.2 million to $28.8 million, driven by improved underwriting results and prior year favorable development.
On the asset side of the balance sheet, RenRe has reported net investment income of $410.8 million, an increase of 40.4% from Q2 2023’s $292.7 million. The annualized return on average common equity hit 21.4% and the annualized operating return on average common equity hit 28.2%. The total investment results increased to $283.3 million for the quarter compared to $69.9 million last year.
All in all, RenRe has reported second quarter 2024 net income of $495.1 million, up 159% from the $191 million reported in Q2 2023. Operating income increased from $411.5 million to $650.9 million.
Kevin J. O’Donnell, President and Chief Executive Officer, commented on the results, “We delivered another excellent quarter driven by strong underlying performance from each of our Three Drivers of Profit – underwriting, investment and fee income.
“The Validus transaction continues to accrete significant value to our shareholders by delivering substantial growth in both premium and invested assets in one of the most favorable business environments in our history. Going forward, our consistent strategy and strong execution will enable our excellent performance to persist and allow us to grow shareholder value at an industry-leading pace.”
