• Grew net premiums written by $341.1 million, or 18.7%; driven by growth in Casualty and Specialty net premiums written of $459.4 million, or 56.3%.
• Launched Fontana, an innovative casualty and specialty joint venture, in April 2022, expanding fee income business.
• Reported a combined ratio of 86.5%, which included an impact of 7.0 percentage points from the Q1 2022 Weather-Related Large Losses and 1.8 percentage points related to the Russia-Ukraine War.
• Repurchased $93.4 million of common shares.

RenaissanceRe Holdings Ltd. (NYSE: RNR) (“RenaissanceRe” or the “Company”) today announced its financial results for the first quarter of 2022.

Net Negative Impact

Net negative impact on underwriting result includes the sum of (1) net claims and claim expenses incurred, (2) assumed and ceded reinstatement premiums earned and (3) earned and lost profit commissions. Net negative impact on net income (loss) available (attributable) to RenaissanceRe common shareholders is the sum of (1) net negative impact on underwriting result and (2) redeemable noncontrolling interest, both before consideration of any related income tax benefit (expense).

Estimates of net negative impact are based on a review of potential exposures, preliminary discussions with certain counterparties and actuarial modeling techniques. Actual net negative impact, both individually and in the aggregate, may vary from these estimates, perhaps materially. Changes in these estimates will be recorded in the period in which they occur.

Meaningful uncertainty remains regarding the estimates and the nature and extent of losses from catastrophe events, driven by the magnitude and recent nature of each event, the geographic areas impacted by the events, relatively limited claims data received to date, the contingent nature of business interruption and other exposures, potential uncertainties relating to reinsurance recoveries, and other factors inherent in loss estimation, among other things.

In February 2022, Russia launched an invasion into Ukraine. There is uncertainty associated with the scale, duration and impact of this situation, which we continue to actively monitor. The Company’s loss estimates represent its best estimate of incurred losses based on currently available information, and actual losses may vary materially from these estimates.

Weather-Related Large Losses

Net negative impact on the consolidated financial statements

Net negative impact on the segment underwriting results and consolidated combined ratio

Russia-Ukraine War Losses

In the first quarter of 2022, losses related to Russia’s invasion of Ukraine resulted in a net negative impact on net income (loss) available (attributable) to RenaissanceRe common shareholders of $24.9 million. This reflects net claims and claims expenses incurred and net negative impact on underwriting result of $27.1 million, solely in the Casualty and Specialty segment, partially offset by redeemable noncontrolling interest of $2.2 million. The net negative impact on underwriting result had a 1.8 percentage point impact on the consolidated combined ratio.

Underwriting Results - Property Segment: Combined ratio of 70.1%; 17.3 percentage points from the Q1 2022 Weather-Related Large Losses

• Gross premiums written decreased by $273.3 million, or 16.9%, driven by:

– $175.5 million reduction in Upsilon RFO Re Ltd. (“Upsilon RFO”).

– $79.1 million reduction in assumed reinstatement premiums due to lower impact from the Q1 2022 Weather-Related Large Losses, as compared to Winter Storm Uri in the first quarter of 2021.

– $28.3 million decrease in the other property class of business, principally due to the planned non-renewal of certain deals, which is partially offset by growth and rate improvement across other areas of business.

• Net premiums written decreased by $118.3 million, or 11.7%, driven by a $69.0 million decrease in net reinstatement premiums, and the reduction in the other property class of business noted above.

• The net claims and claim expense ratio - current accident year decreased 38.6 percentage points, primarily as a result of a lower impact from the Q1 2022 Weather-Related Large Losses, as compared to Winter Storm Uri in the first quarter of 2021.

• The net claims and claim expense ratio - prior accident years reflected net favorable development primarily from weather-related large losses in the 2017 to 2020 accident years.

• Underwriting expense ratio increased 3.6 percentage points, primarily driven by a reduced benefit to the ratio from reinstatement premiums.

• Underwriting income of $184.8 million and a combined ratio of 70.1% included the Q1 2022 Weather-Related Large Losses which had a $102.3 million net negative impact on the Property segment underwriting result and added 17.3 percentage points to the combined ratio in the first quarter of 2022.

Underwriting Results - Casualty and Specialty Segment: Grew net premiums written by 56.3% and reported a combined ratio of 98.2%

• Gross premiums written increased 54.4%, principally in the professional liability and general casualty lines of business. This growth was primarily driven by increases in new and existing business written in the current and prior periods, combined with rate improvements.

• Net premiums written increased 56.3%, primarily driven by growth in the casualty lines of business, consistent with the changes in gross premiums written.

• Net claims and claim expense ratio was unchanged from the first quarter of 2021, despite the impact of the Russia-Ukraine War, which added 3.1 percentage points of losses to the current accident year net claims and claim expenses.

• Underwriting expense ratio decreased 0.7 percentage points, principally due to a 1.2 percentage point improvement in the operating expense ratio driven by improved operating leverage, partly offset by a 0.5 percentage point increase in the net acquisition expense ratio due to slightly higher costs associated with the casualty book.

Fee Income: $28.3 million of fee income; performance fees impacted by deficit carried forward from weather-related losses in 2021

• Total fee income increased $4.4 million due to higher performance fee income, partially offset by lower management fee income.

– Performance fee income was higher in the first quarter of 2022, however, continued to be negatively impacted by the underwriting deficit carried forward from the weather-related losses in 2021; the performance fee income in the first quarter of 2021 was negatively impacted by the impact of Winter Storm Uri losses.

– Management fee income was lower in the first quarter of 2022, primarily due to the reduced size of the Company’s structured reinsurance products and lower capital managed at Upsilon, partially offset by increased capital managed at other joint ventures and managed funds.

Investment Results: Performance primarily driven by net realized and unrealized losses in the fixed maturity investments portfolio

• Total investment result decreased $323.6 million, primarily due to higher net realized and unrealized losses on investments, principally within the fixed maturity investments portfolio.

– In the first quarter of 2022, net realized and unrealized losses on fixed maturity investments of $618.3 million were primarily driven by unrealized mark-to-market losses resulting from the significant increase in interest rates. In addition, net realized and unrealized losses of $56.1 million on equity investments were in line with the wider equity markets.

– In the first quarter of 2021, net realized and unrealized losses on fixed maturity investments of $261.8 million were largely driven by increasing interest rates. In addition, net realized and unrealized losses of $67.9 million on equity investments were primarily driven by losses in the Company’s strategic investment portfolio.

• Managed fixed maturity and short-term investment weighted average yield to maturity was 2.3% and average duration was 2.8 years on total consolidated fixed maturity and short-term investments of $17.7 billion at March 31, 2022.

• Net loss attributable to redeemable noncontrolling interests was $11.9 million compared to net loss attributable to redeemable noncontrolling interests of $46.9 million in the first quarter of 2021, primarily due to:

– DaVinciRe Holdings Ltd. (“DaVinciRe”), which had a net loss in the first quarter of 2022 due to realized and unrealized losses on investments, driven by the increase in interest rates discussed previously, as compared to a larger net loss in the first quarter of 2021, which was driven by losses from Winter Storm Uri; and

– RenaissanceRe Medici Fund Ltd. (“Medici”), which, while generating positive returns for Medici’s investors, had a net loss attributable to redeemable noncontrolling interests in the first quarter of 2022 due to foreign exchange losses on hedges related to foreign currency share classes held by third-party investors. After taking into account the original currency carrying value of Medici’s foreign currency share classes, foreign currency hedges had no net impact to Medici’s investors. This was partially offset by

– Vermeer Reinsurance Ltd. (“Vermeer”), which had improved net income in the first quarter of 2022 as compared to the first quarter of 2021, which was impacted by losses from Winter Storm Uri.

• Income tax benefit of $36.7 million compared to $19.5 million in the first quarter of 2021. The increase in income tax benefit was primarily driven by higher unrealized investment losses in the Company’s U.S.-based operations compared to the first quarter of 2021.

• Net foreign exchange losses of $15.5 million compared to $22.8 million in the first quarter of 2021. The net foreign exchange losses in both periods were primarily driven by losses attributable to third-party investors in Medici which are allocated through noncontrolling interests, as discussed above, and miscellaneous foreign exchange losses generated by underwriting activities.

• Share repurchases of 576.7 thousand common shares at an aggregate cost of $93.4 million and an average price of $162.03 per common share in the first quarter of 2022. There were no shares repurchased subsequent to March 31, 2022.

• Raised capital of $786.3 million in the first quarter of 2022, through DaVinciRe, Medici, Upsilon RFO, and Vermeer, including $209.7 million from the Company. Subsequent to March 31, 2022:

– Launched Fontana Holdings L.P. and its subsidiaries (“Fontana”) with capital commitments of $475.0 million. In April 2022, $400.0 million of this amount had been funded, comprised of $273.7 million from third-party investors and $126.3 million from the Company; and

– Raised an additional $147.0 million through Medici, including $10.0 million from the Company.

Non-GAAP Financial Measures and Additional Financial Information

This Press Release includes certain financial measures that are not calculated in accordance with generally accepted accounting principles in the U.S. (“GAAP”) including “operating Income (loss) available (attributable) to RenaissanceRe common shareholders,” “operating Income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted,” “operating return on average common equity - annualized,” “tangible book value per common share” and “tangible book value per common share plus accumulated dividends.” A reconciliation of such measures to the most comparable GAAP figures in accordance with Regulation G is presented in the attached supplemental financial data.

Please refer to the “Investors - Financial Reports - Financial Supplements” section of the Company’s website at www.renre.com for a copy of the Financial Supplement which includes additional information on the Company’s financial performance.

Conference Call Information

RenaissanceRe will host a conference call on Wednesday, May 4, 2022 at 11:00 a.m. ET to discuss this release. Live broadcast of the conference call will be available through the “Investors - Webcasts & Presentations” section of the Company’s website at www.renre.com.

About RenaissanceRe

RenaissanceRe is a global provider of reinsurance and insurance that specializes in matching well-structured risks with efficient sources of capital. The Company provides property, casualty and specialty reinsurance and certain insurance solutions to customers, principally through intermediaries. Established in 1993, RenaissanceRe has offices in Bermuda, Australia, Ireland, Singapore, Switzerland, the United Kingdom and the United States.

Cautionary Statement Regarding Forward-Looking Statements

Any forward-looking statements made in this Press Release reflect RenaissanceRe’s current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are subject to numerous factors that could cause actual results to differ materially from those set forth in or implied by such forward-looking statements, including the following: the Company’s exposure to natural and non-natural catastrophic events and circumstances and the variance it may cause in the Company’s financial results; the effect of climate change on the Company’s business, including the trend towards increasingly frequent and severe climate events; the effectiveness of the Company’s claims and claim expense reserving process; the effect of emerging claims and coverage issues; the highly competitive nature of the Company’s industry, resulting in consolidation of competitors, customers and (re)insurance brokers, and the Company’s reliance on a small and decreasing number of brokers; the historically cyclical nature of the (re)insurance industries; collection on claimed retrocessional coverage, and new retrocessional reinsurance being available on acceptable terms; the ability of the Company’s ceding companies and delegated authority counterparties to accurately assess the risks they underwrite; the Company’s ability to maintain its financial strength ratings; the impact of large non-recurring contracts and reinstatement premiums on the Company’s financial results; the Company’s ability to attract and retain key executives and employees; the effect of cybersecurity risks, including technology breaches or failure; the performance of the Company’s investment portfolio and financial market volatility; the effects of inflation; the Company’s ability to successfully implement its business strategies and initiatives, and the success of any of the Company’s strategic investments or acquisitions, including its ability to manage its operations as its product and geographical diversity increases; the Company’s exposure to credit loss from counterparties; the Company’s need to make many estimates and judgments in the preparation of its financial statements; the Company’s ability to effectively manage capital on behalf of investors in joint ventures or other entities it manages; changes to the accounting rules and regulatory systems applicable to the Company’s business, including changes in Bermuda laws or regulations or as a result of increased global regulation of the insurance and reinsurance industries; other political, regulatory or industry initiatives adversely impacting the Company; the Company’s ability to comply with covenants in its debt agreements; a contention by the U.S. Internal Revenue Service that any of the Company’s Bermuda subsidiaries are subject to taxation in the U.S.; the effects of possible future tax reform legislation and regulations, including changes to the tax treatment of the Company’s shareholders or investors in its joint ventures or other entities it manages; the Company’s ability to determine any impairments taken on its investments; the uncertainty of the continuing and future impact of the COVID-19 pandemic, including measures taken in response thereto and the effect of legislative, regulatory and judicial influences on the Company’s potential reinsurance, insurance and investment exposures, or other effects that it may have; foreign currency exchange rate fluctuations; the Company’s ability to raise capital if necessary; the Company’s ability to comply with applicable sanctions and foreign corrupt practices laws; the Company’s dependence on the ability of its operating subsidiaries to declare and pay dividends; aspects of the Company’s corporate structure that may discourage third-party takeovers and other transactions; difficulties investors may have in serving process or enforcing judgments against the Company in the U.S.; and other factors affecting future results disclosed in RenaissanceRe’s filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.

In addition to the GAAP financial measures set forth in this Press Release, the Company has included certain non-GAAP financial measures within the meaning of Regulation G. The Company has provided these financial measures in previous investor communications and the Company’s management believes that these measures are important to investors and other interested persons, and that investors and such other persons benefit from having a consistent basis for comparison between quarters and for comparison with other companies within the industry. These measures may not, however, be comparable to similarly titled measures used by companies outside of the insurance industry. Investors are cautioned not to place undue reliance on these non-GAAP measures in assessing the Company’s overall financial performance.

Operating Income (Loss) Available (Attributable) to RenaissanceRe Common Shareholders and Operating Return on Average Common Equity - Annualized

The Company uses “operating Income (loss) available (attributable) to RenaissanceRe common shareholders” as a measure to evaluate the underlying fundamentals of its operations and believes it to be a useful measure of its corporate performance. “Operating Income (loss) available (attributable) to RenaissanceRe common shareholders” as used herein differs from “net income (loss) attributable to RenaissanceRe common shareholders,” which the Company believes is the most directly comparable GAAP measure, by the exclusion of net realized and unrealized gains and losses on investments, excluding other investments - catastrophe bonds, net foreign exchange gains and losses, corporate expenses associated with the acquisition of TMR and the subsequent sale of RenaissanceRe (UK) Limited (“RenaissanceRe UK”), the income tax expense or benefit associated with these adjustments and the portion of these adjustments attributable to the Company’s redeemable noncontrolling interests. The Company’s management believes that “operating Income (loss) available (attributable) to RenaissanceRe common shareholders” is useful to investors because it more accurately measures and predicts the Company’s results of operations by removing the variability arising from: fluctuations in the fair value of the Company’s fixed maturity investment portfolio, equity investments trading, other investments (excluding catastrophe bonds) and investments-related derivatives; fluctuations in foreign exchange rates; corporate expenses associated with the acquisition of TMR and the subsequent sale of RenaissanceRe UK; the associated income tax expense or benefit of these adjustments; and the portion of these adjustments attributable to the Company’s redeemable noncontrolling interests. The Company also uses “operating Income (loss) available (attributable) to RenaissanceRe common shareholders” to calculate “operating Income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted” and “operating return on average common equity - annualized.” The following table is a reconciliation of: (1) net income (loss) attributable to RenaissanceRe common shareholders to “operating Income (loss) available (attributable) to RenaissanceRe common shareholders”; (2) net income (loss) attributable to RenaissanceRe common shareholders per common share - diluted to “operating Income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted”; and (3) return on average common equity - annualized to “operating return on average common equity - annualized.” Comparative information for all prior periods has been updated to conform to the current methodology and presentation.

Tangible Book Value Per Common Share and Tangible Book Value Per Common Share Plus Accumulated Dividends

The Company has included in this Press Release “tangible book value per common share” and “tangible book value per common share plus accumulated dividends.” “Tangible book value per common share” is defined as book value per common share excluding goodwill and intangible assets per share. “Tangible book value per common share plus accumulated dividends” is defined as book value per common share excluding goodwill and intangible assets per share, plus accumulated dividends. The Company’s management believes “tangible book value per common share” and “tangible book value per common share plus accumulated dividends” are useful to investors because they provide a more accurate measure of the realizable value of shareholder returns, excluding the impact of goodwill and intangible assets. The following table is a reconciliation of book value per common share to “tangible book value per common share” and “tangible book value per common share plus accumulated dividends.”

View source version on businesswire.com: https://www.businesswire.com/news/home/20220503006025/en/