RenRe posts strong full year 2024 performance despite Q4 net loss

RenaissanceRe Holdings Ltd. (RenRe), a Bermuda-based reinsurer, has reported net income of $1.8 billion for full year 2024 driven by a strong performance across underwriting, investments, and fee income, although the firm’s fourth quarter result was dented by mark-to-market losses and the impact of Hurricane Milton.

Group-wide, RenRe has announced a net loss for the fourth quarter 2024 of $198.5 million compared with a gain of $1.6 billion in the same period in 2023, as operating income fell from $623 million to $407 million.

A driver of the year-on-year decline in quarterly net income is a $1.2 billion rise in net realized and unrealized losses on investments to a loss of $630 million, compared with gains of $586 million last year. Overall, RenRe has reported a negative investment result of $201 million, down from Q4 2023’s gain of $962 million.

Additionally, hurricane Milton had a net negative impact of $270.5 million on the net result and added 13.9 percentage points to the quarterly combined ratio, which rose from 76% in Q4’23 to 91.7% in Q4’24.

Underwriting income declined to $208.6 million from $540.9 million, driven by a decrease in the property business to $266.8 million from $503.6 million, and an underwriting loss in the casualty and specialty segment of $58.3 million, compared with underwriting profit of $37.3 million in Q4’23.

Across the business, Q4’24 gross premiums written (GPW) rose to $1.9 billion from $1.8 billion, as net premiums written (NPW) increased to $1.8 billion from $1.6 billion, and net premiums earned (NPE) moved from $2.3 billion to $2.5 billion. RenRe grew property GPW 13.2% to $390 million in Q4’24 as NPW rose 5.1% to $376 million. Growth in casualty and specialty was less at 4.8% to GPW of $1.5 billion and NPW of $1.4 billion, reflecting growth of 11.9%.

RenRe’s third driver of profit, fee income, increased to $77.1 million for Q4’24 from $70.1 million in the prior year, driven by growth in both management fee income and performance fee income.

Although a Q1 2025 event, RenRe has commented on the impact of the California wildfires, stating that it expects its pre-tax net negative impact to be around 1.5% of the wildfires’ aggregate industry insured loss. Based on a $50 billion insured loss, RenRe estimates a pre-tax net negative impact on net income (loss) of approximately $750 million in the first quarter of 2025, although warns that this estimate is preliminary.

Turning to the full year 2024 performance, and RenRe has posted net income of $1.8 billion, which is strong albeit down on the $2.5 billion seen in 2023. Operating income, however, increased from $1.8 billion to $2.2 billion in 2024.

Group-wide, GPW increased significantly year-on-year to $11.7 billion from $8.7 billion in 2023, with strong growth in both property and the casualty and specialty segments, driven by the renewal of business acquired in the Validus acquisition. Full year 2024 NPW rose to $9.9 billion from $7.5 billion and 2024 NPE hit $10.1 billion, up from $7.5 billion in 2023.

The group’s underwriting result for the full year 2024 fell slightly to $1.62 billion from $1.64 billion, as the combined ratio moved from 77.9% in 2023 to 83.9% in 2024.

In 2024, large loss events had a net negative impact of $847.4 million on the underwriting result and a net negative impact on net income of $660.5 million. This reflects net claims and claims expenses incurred of $406.8 million from Hurricane Milton, $217.8 million from Hurricane Helene, and $381.3 million from other large loss events in the year.

Within the property segment, GPW rose 35.4% to over $4.8 billion, driven by an increase in catastrophe of $850.6 million, and an increase in other property of $410.8 million, driven by the renewal of business acquired in the Validus acquisition and organic growth.

The property segment combined ratio did deteriorate by 3.8 percentage points year-on-year but remains very healthy at 57.2%, despite a rise in the net claims and claim expense ratio – current accident year as a result of higher impact from the aforementioned 2024 large loss events, which contributed 23.1 percentage points to the current accident year net claims and claim expense ratio.

In the casualty and specialty segment, full year 2024 GPW amounts to $6.9 billion, up 30.4% year-on-year. While NPW rose 36% to $6.1 billion, again driven by the renewal of business acquired in the Validus acquisition.

However, for full year 2024, this segment fell to an underwriting loss of $25 million compared with a gain of $208 million in 2023, driven by an increase net claims and claim expense ratio.

In terms of fee income, RenRe has reported a rise of 38% from 2023 to $326.8 million, driven by growth in management fee income to $219.8 million and higher performance fee income of $106.9 million.

During 2024, the reinsurer raised third-party capital of $857.4 million, primarily through DaVinci ($300 million), Medici ($199.6 million), Fontana ($100 million), and Vermeer ($175 million). The company also returned third-party capital in 2024 of $1.4 billion. And, effective January 1st, 2025, RenRe raised third-party capital of $237.8 million in DaVinci, Medici, and Fontana and returned third-party capital of $99 million in DaVinci and Fontana.

On the asset side of the balance sheet, RenRe’s total investment result for 2024 fell slightly year-on-year to $1.6 billion, as higher net investment income more than offset net realized and unrealized losses on investments in the year of $27.8 million.

“We delivered another strong year. Our primary metric — growth in tangible book value per share plus change in accumulated dividends – was 26%. At the same time, we fulfilled our purpose while demonstrating our relevance to our customers, rapidly paying claims against a backdrop of elevated catastrophic events punctuated by two large hurricanes,” said Kevin J. O’Donnell, President and Chief Executive Officer.

“At the January 1 renewal, our long-term partnership approach was rewarded with preferential signings across our business, and we retained our attractive underwriting book. Looking forward, we believe our strong capital and liquidity positions will allow us to capture additional opportunities, bolstering our leadership position and generating superior shareholder value,” he added.

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