Bermuda-based reinsurer RenaissanceRe (RenRe) has reported positive income and an underwriting gain for the fourth-quarter of 2021, but the heavy catastrophe load experienced saw the company’s full-year combined ratio deteriorate slightly to 102.1%.
For Q4 2021, RenRe has posted net income of $210.9 million and operating income of $213.7 million, compared with $189.8 million and a loss of $77.1 million in Q4 2020, respectively.
Gross written premiums (GWP) swelled to more than $1.3 billion in the quarter as property GWP increased, year-on-year, by almost 25% and casualty GWP spiked by 48%.
Across the business, underwriting income amounted to $276.7 million in Q4 2021, compared with an underwriting loss of $151.7 million in the prior year period. During the period, weather-related large losses contributed a $53.4 million net negative impact on net income.
All in all, RenRe has posted an improved combined ratio of 79.4% for Q4 2021 against 114.7% a year earlier. The improved underwriting performance reflects a better result in both property and casualty for the period.
In its property segment, RenRe has announced a Q4 combined ratio of 64.4%, compared with 125.6% last year. And in the casualty business, the firm has produced a Q4 combined ratio of 92.5%, compared with 104.1% in Q4 2020.
On the asset side of the balance sheet, RenRe has reported investment income of $80.5 million for the fourth-quarter of 2021.
Commenting on the firm’s fourth-quarter result, President and Chief Executive Officer (CEO), Kevin O’Donnell, said: “The fourth quarter was a solid finish to a difficult year. We reported a return on average common equity of over 14% for the quarter driven by record profitability in our Casualty and Specialty segment and strong results in our Property segment. For the full year, we earned a modest operating profit despite catastrophe losses of nearly $1 billion. At the same time, we exercised leadership in the market, growing net premiums written by 45% while simultaneously returning over $1 billion in capital to shareholders.
“At the January 2022 renewal, our Capital Partners team once again led the industry, raising $500 million in DaVinci to grow in an improving environment and further optimize our Property segment. In addition, we continued to expand our Casualty and Specialty business in an attractive market, and as a result have built a stronger, more diversified and efficient underwriting portfolio that I am confident will produce superior returns for our shareholders in 2022.”
For the full-year, catastrophe events had a bigger impact on the reinsurer’s performance, contributing a $962.1 million net negative impact on an annual net loss of $73.4 million. The net loss for 2021 compares with net income of $731.4 million in 2020.
A look at the data shows that Hurricane Ida was the costliest event for RenRe last year, with the storm having a net negative impact of $411.9 million on the annual net loss.
This is followed by the European floods in July, which had a net negative impact of $194.5 million, and Winter Storm Uri in early 2021, which had a net negative impact of $180.6 million. Additionally, RenRe reports that other 2021 catastrophe events had a net negative impact of $57.3 million on its 2021 result, while aggregate losses had an impact of $117.8 million.
Other catastrophe events includes the hail storm in Europe in late June 2021; the wildfires in California during the third-quarter; the tornadoes in the Central and Midwest U.S. in December 2021; and the Midwest Derecho in December 2021.
Overall, Bermuda-based RenRe has announced an underwriting loss of $108.9 million for 2021 compared with a loss of $76.5 million a year earlier. The combined ratio deteriorated slightly, year-on-year, from 101.9% to 102.1%.
However, GWP did increase to $7.8 billion in 2021 from $5.8 billion in 2020, driven by 32% growth in property and 38% growth in casualty.
During the year, the company also raised $1.1 billion of additional capital in its Capital Partners business, including $258 million from RenRe, with a further $662.7 million raised effective January 1st, 2022, including $209.7 million from RenRe.
For the full-year, RenRe has recorded fee income of $128.5 million ($30 million in Q4), although this was impacted by large weather-related losses. Year-on-year, fee income actually fell by $16.7 million due to lower performance and management fee income.
The total investment result for 2021 decreased by $1.1 billion, year-on-year, which RenRe attributes to the difference in net realized and unrealized gains (losses) on investments, principally within the fixed maturity and equity investments portfolios.
