Bermuda-based RenaissanceRe Holdings Ltd. (RenRe) has reported a rise in net income and underwriting income for the fourth quarter of 2022, although the impact of weather-related large losses pushed the reinsurer to report a net loss of $1.1 billion for the full year 2022.
Year-on-year, Q4 underwriting income increased from $276.7 million to $316.3 million, as the combined ratio weakened slightly but remained solid at 80.5%.
Gross premiums written (GPW) increased to $1.6 billion and net premiums written (NPW) to $1.4 billion in Q4 2022.
All in all, RenRe has reported net income of $448.1 million for the quarter, compared with $210.9 million a year earlier. At the same time, operating income increased from $213.7 million in Q4 2021 to $322.2 million in Q4 2022.
Within its property segment in Q4 2022, underwriting income improved to $257 million, as GPW declined by 3.3% as a result of a reduction of $11.8 million within the catastrophe class of business owing to lower reinstatement premiums.
The property unit also saw a 10 percentage point rise in the net claims and claim expense ratio primarily due to Hurricane Nicole and Winter Storm Elliot. The property combined ratio strengthened, year-on-year, to 62.6%.
In its casualty and specialty segment, RenRe has reported Q4 2022 underwriting income of $59.1 million, which is up slightly on the $53.6 million seen a year earlier.
GPW increased by an impressive 31% to $1.2 billion on the back of growth in new and existing business and rate improvement, mainly from business written in prior periods. NPW spiked by more than 31% to $972.6 million.
The casualty and specialty segment’s combined ratio hit 93.7% in Q4 2022, compared with 92.5% a year earlier.
Additionally, RenRe has announced that fee income was relatively stable as compared to Q4 2021 at $30.1 million, as management fee income rose, partially offset by a decline in performance fee income.
On the asset side of the balance sheet, the reinsurer has reported a total investment result of $379.4 million for Q4 2022 compared with $58.9 million a year earlier.
Turning to the company’s full year performance, and the underwriting result has achieved a turnaround from the loss of $108.9 million seen in 2021, to a gain of $149.9 million in 2022. This is reflected in the improvement in the combined ratio from 102.1% to 97.7%.
GPW increased to over $9.2 billion for the year, while NPW rose to $7.2 billion.
During the year, weather-related losses had a significant, net negative impact on net income of more than $807 million, of which over $532 million relates to Hurricane Ian, $218.3 million is from other catastrophe events, and more than $56 million relates to aggregate losses.
As a result, RenRe has reported a net loss of $1.1 billion for 2022, compared with a loss of $73.4 million in the prior year.
On its underwriting performance, which has improved year-on-year, 2022 weather-related large losses had a net negative impact of more than $1.2 billion, which was mostly felt in the property segment, which has fallen to an underwriting loss of $16.1 million for 2022.
In contrast, the casualty and specialty segment’s underwriting result improved year-on-year to $165.9 million in 2022.
Total fee income across the group fell from $128.5 million in 2021 to $118.7 million in 2022.
The total investment result declined by more than $1.3 billion, year-on-year, as a result of net realised and unrealised losses on investments of more than $1.8 billion.
Kevin J. O’Donnell, President and Chief Executive Officer, said: “We finished the year with an excellent quarter, reporting an annualized operating return on average common equity of 29.6% driven by strong underwriting results, significantly increased net investment income and stable management fees. For the full year, we delivered a 6.3% operating return despite a net negative impact of $807.6 million from catastrophe losses.
“At the January renewal we demonstrated leadership and discipline, achieving the step change in rate and terms investors required, while providing the reinsurance capacity customers needed. We enter 2023 with expectations of continuing strong demand for our products, ample capital to meet this demand, and anticipation of one of the most successful years in our history.”
