Bermuda-based reinsurer RenaissanceRe has reported a net loss of $450.2 million for the third quarter of 2021, as catastrophe losses contributed to a $726.8 million net negative impact on its result during the period.
The Q3 2021 net loss compares with a gain of $47.8 million for the prior year period, while the firm’s underwriting performance deteriorated further to a loss of $678.8 million.
Weather-related losses had a significant impact on the reinsurer in Q3. Net claims and claims expenses incurred related to hurricane Ida totalled $784 million, for the European floods $388.7 million, and for other catastrophe events in the quarter $33.9 million, resulting in a total hit of $1.27 billion for the quarter.
But once you include assumed reinstatement premiums earned, ceded reinstatement premiums earned, and earned profit commission, these events had a net negative impact on the underwriting result of $1.05 billion, and a net negative impact on net loss attributable to RenRe common shareholders of $726.8 million.
The catastrophe events in the quarter had a 73.8 percentage point negative impact on RenRe’s consolidated combined ratio, which deteriorated from 120.6% in Q3 2020 to 145.1% in Q3 2021.
Across the business, gross premiums written (GPW) grew by more than 55% to roughly $1.8 billion, which included $254.9 million of reinstatement premiums associated with Q3 weather-related losses in the property segment, which the firm says accounted for around one-third of growth.
In the property segment, GPW increased by more than 80% to $773.7 million, but fell to an underwriting loss of $681.9 million, with a combined ratio of 183.5%.
The loss in the property unit is primarily a result of Q3 2021 weather-related losses, which had a $1 billion net negative impact on the segment’s underwriting performance, and added 140.5 percentage points to the combined ratio.
In RenRe’s casualty and specialty segment, GPW increased by almost 40% to more than $1 billion, as the underwriting result improved to $3.1 million. The segment has produced a slightly improved combined ratio of 99.6% for the third quarter.
Additionally, RenRe has reported that total fee income increased, year-on-year, by almost $10 million to $28.3 million in Q3 2021.
On the asset side of the balance sheet, RenRe has reported net investment income of $78.3 million for Q3 2021, compared with $83.5 million for the prior year period.
Kevin J. O’Donnell, President and Chief Executive Officer (CEO), commented: “This was another active season for natural catastrophes and while our results for the third quarter reflect this volatility, we have maintained a robust capital position and our business fundamentals remain strong. As we look forward to 2022, our fortress balance sheet provides us with great flexibility to create value for shareholders.
“We believe we will have ample capacity to renew existing risk and underwrite new opportunities if sufficiently profitable, but are equally motivated to return excess capital to shareholders at what we consider very attractive multiples.”
