RenaissanceRe Holdings has reported its financial results for the first quarter of 2024, highlighting significant developments in its operations.
The company's property segment saw a combined ratio of 42.9% and a 44.9% increase in gross premiums written, amounting to an additional $585.7 million. This rise was largely attributed to a $412.5 million increase in catastrophe premiums, spurred by the renewal of business from the Validus acquisition and the retention of legacy lines at the start of the year.
Furthermore, a $173.1 million increase in other property premiums reflected both the acquisition's impact and organic growth in catastrophe and non-catastrophe exposed business.
Net premiums written for the period grew by $377.8 million, or 37.0%, primarily driven by the uptick in gross premiums, though partially offset by higher ceded premiums as part of the company's strategic gross-to-net approach.
The combined ratio improved by 13.7 percentage points, with an adjusted combined ratio better by 15.8 percentage points, mainly due to an increase in net premiums earned and reduced current accident year net losses.
The net claims and claim expense ratio for the current accident year improved significantly, down 12.6 percentage points, owing to fewer large loss events compared to the first quarter of 2023. There was also net favorable development from prior accident years, particularly from weather-related large losses between 2017 and 2022, which emerged better than expected.
The underwriting expense ratio decreased by 2.9 percentage points, helped by a 1.6 percentage point reduction in operating expenses and a 1.3 percentage point decline in acquisition expenses, reflecting a shift in business mix and higher catastrophe focus which typically incurs lower acquisition costs.
In the casualty and specialty segment, the combined ratio was 99.6% with an adjusted combined ratio of 97.1%, and gross premiums written increased by 41.4%.
Management fee income rose by $15.1 million, reflecting growth in joint ventures and managed funds such as DaVinciRe Holdings, Fontana Holdings LP, and RenaissanceRe Medici Fund, alongside contributions from AlphaCat Managers.
Performance fee income saw a $23.6 million increase, primarily from improved underwriting results and favorable prior year developments.
Total investment results reached $177.1 million, with net investment income growing by 53.6% to $136.4 million, boosted by higher average invested assets and more profitable assets in the fixed maturity and short-term portfolios.
However, net realized and unrealized gains on investments fell by $493.1 million due to losses in fixed maturity investments and derivatives, affected by rising interest rates.
The company’s total investments stood at $29.6 billion by the end of March 2024. Net income attributable to redeemable noncontrolling interests was $244.8 million, largely from robust underwriting and investment results in joint ventures.
During the first quarter, RenaissanceRe raised $565.7 million in partner capital, primarily in DaVinci, Medici, and Fontana, and returned $701.2 million to partners, following strong performance across these entities in 2023.
Corporate expenses climbed by $26.4 million, mainly due to costs related to the Validus Acquisition. The income tax expense was $15.4 million, down from the previous year due to investment losses offset by an increase in operating income.
“We are pleased to deliver another exceptional quarter, characterized by strong profitability, substantial growth and persistent tailwinds behind our Three Drivers of Profit,” president and CEO Kevin J. O’Donnell said. “The successful renewal of the RenaissanceRe and Validus portfolio is deepening our partnerships with our customers while broadening our access to attractive risk. This combined underwriting portfolio, along with growing fee and net investment income, should continue to drive significant value for our shareholders.”
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