Bermuda-based reinsurer RenaissanceRe Holdings Ltd. has announced a net loss of more than $825 million for the third quarter of 2022 as the firm reports a large underwriting loss on the back of catastrophe losses of almost $649 million, mostly driven by Hurricane Ian.
The Q3 2022 net loss has widened from the $450 million net loss reported for the same period last year, as RenRe also reports an operating loss of roughly $400 million for the quarter, compared with a loss of $450 million a year earlier.
Weather-related large losses of $648.4 million included losses of more than $539 million related to Hurricane Ian, $99 million of losses from other catastrophe events in the quarter, and $9.7 million of aggregate losses, after reinstatement premiums.
All in all, RenRe has reported a Q3 2022 combined ratio of 138.7%, which is actually an improvement on the 145.1% seen a year earlier.
Across the group, gross premiums written (GPW) increased, year-on-year, from $1.8 billion to $2.2 billion for Q3 2022, while net premiums written (NPW) jumped from $1.5 billion to $1.8 billion.
A look at the reinsurer’s Q3 2022 results by segment reveals that RenRe’s property segment fell to an underwriting loss of $722 million in the period with a combined ratio of 186%, as Hurricane Ian had a net negative impact on the result of more than $820 million.
Within the property segment, GPW increased by 3.4% to $800 million, as NPW improved by 2.3% to $697 million.
Turing to the company’s casualty and specialty segment, and Hurricane Ian’s impact on the underwriting result was just $7 million in the quarter, with the unit producing underwriting income of almost $40 million, compared with just $3 million a year earlier. The segment’s combined ratio strengthened from 99.6% in Q3 2021 to 95.7% in Q3 2022.
At the same time, RenRe’s casualty and specialty division achieved GPW growth of 42%, year-on-year, to $1.42 billion, as NPW increased by nearly 40% to $1.1 billion.
In terms of fee income, the Bermudian reinsurer has reported that for Q3 2022 this totalled $25.7 million, reflecting a slight decline from the $28.3 million reported a year earlier.
On the asset side of the balance sheet, RenRe’s net investment income increased by $79.5 million to more than $157 million for Q3 2022. However, net realised and unrealised losses on investments swelled from $42 million in Q3 2021 to $641.5 million in Q3 2022, driven by losses on fixed maturity investments trading of $424.2 million as a result of the significant increase in interest rates on the fixed maturity portfolio.
At the same time, the reinsurer booked net realised and unrealised losses on catastrophe bonds of $127 million in the quarter, mostly as a result of Hurricane Ian.
While the catastrophe bond losses are primarily held in the firm’s Medici portfolio, RenRe notes that across this fund and its Vermeer venture, it raised capital of $122.1 million in the third quarter.
Kevin O’Donnell, President and Chief Executive Officer (CEO), RenRe, said: “Hurricane Ian’s arrival in the final days of the quarter was both a stark reminder of our value proposition to our customers and a catalyst for change in the reinsurance marketplace. RenaissanceRe’s strategic focus on reinsurance, strong capital and industry leadership uniquely situate us to drive transformative change during the upcoming renewal period. As a result, we are positioned to deliver an attractive return to our investors through materially increased underwriting profit, robust fee income and significantly higher investment income.”
