RenaissanceRe
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Sven Wehmeyer, Jodie Arkell, Hugh Brennan and Ed Cruttenden have new roles.
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Strong reinsurance results have absorbed long-tail reserve charges.
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The initial plan was to renew $2.7bn of the acquired book.
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This was RenRe’s first set of quarterly results after its takeover of Validus.
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The segment has bounced back from its mid-2022 nadir, but its current zenith is not that much to shout home about.
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Additional disclosure following the RenRe acquisition reveals results for both carriers for the nine months to 30 September last year.
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Ratings could be lowered by one notch depending on regulatory restrictions on cash flow from Bermuda operating entities to non-operating holding companies, the ratings agency said.
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Other senior executives, including CFO Robert Qutub and general counsel Shannon Bender, received stock awards of $750,000 for their involvement in the Validus Re acquisition.
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The number of staff retained contrasted with more dramatic cuts made after the acquisition of Tokio Millennium and Platinum.
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After moving into the rank of fifth-largest reinsurer, following its acquisition of Validus, RenRe said it would continue to take a leading role in the regional cat space and expected to be more able to trade through market cycles.
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The Bermudian firm said it expects the acquisition could drive more growth than the prior forecast of $2.7bn incremental premium.
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The Bermudian also disclosed that it raised $16.3mn of third-party capital in Medici during the quarter.
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The deal was announced in late May, with RenRe taking over AIG’s treaty business, including AlphaCat Managers, and all renewal rights to Talbot’s reinsurance treaty unit.
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The Bermudian’s global property CUO and European chief says it is ready to expand if conditions remain favourable.
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The reinsurer said it was monitoring conditions in the property E&S markets, where it has been reducing capacity to grow in property treaty, as rate gains could provide fertile ground for future growth.
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Large loss events resulted in a net negative impact of $68.5mn on the property segment’s Q2 underwriting results.
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The reaction to capital raising this year signals that investor belief in risk-takers is reinvigorated.
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RenaissanceRe has said it hopes to retain as much as 90% of the Validus Re portfolio, but where are the highest areas of overlap by cedant?
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Morgan Stanley and Golman Sachs exercised in full their right to buy 945,000 shares in the company.
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The carrier intends to use the cash raised as part of its consideration for Validus.
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The deal is the third scale-up buyout for the firm, highlighting the ongoing value of scale in the reinsurance segment.
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The deal is not predicted to have a long-term impact on RenRe’s financial leverage, AM Best said.
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The takeover will push it up two places to rank as the fifth-largest writer of P&C reinsurance by gross premium.
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The Bermudian reinsurer launched a public offering of 6,300,000 common shares and anticipates raising around $1.15bn to finance the transaction.
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The deal represents RenRe’s third Bermuda consolidation deal following Platinum and TMR.
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The CEO said the reinsurer has already written some private deals ahead of the June 1 deadline and expects to continue a pivot away from E&S in favour of property cat reinsurance.
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The segment reported a 13.5-point improvement in its CoR to 56.5%, while maintaining a 14.6% growth in net written premiums.
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The executive will stand for election at RenRe’s AGM in May.
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The January 1 renewal for 2023 was “one of the most profound” the company has ever had, the CEO said.
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The Bermudian also raised third-party capital of $402.9mn effective January 1, 2023, including $377.2mn in DaVinci and the remaining in Medici.
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The world’s largest investment company has assets under management of more than $10tn.
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The firm elevated Justin O'Keefe, Cathal Carr, Fiona Walden and Bryan Dalton to US and Bermuda, Europe, casualty & specialty, and property CUOs, respectively.
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The executive will continue to lead climate and sustainability underwriting initiatives in addition to his new role.
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The RenRe vehicle, formerly a major retro writer, has been a reduced force this year.
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The reinsurer is ready to “walk away from business” where it feels pricing and terms and conditions are not good enough.
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The Bermudian reinsurer said both appointments are effective January 1, 2023.
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A 3.9-point decline in the casualty and specialty segment offset a 2.5-point deterioration in the company’s property business.
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The estimate is driven by $540mn of losses attributable to Hurricane Ian.
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This publication’s review of H1 disclosures shows how listed (re)insurers’ nat cat losses have tallied with aggregate projections.
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Ratings agencies suggest that carriers must do better on controlling volatility – but diverging risk appetites give the lie to the idea that the industry is walking away from risk.
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The carrier said increased demand should maintain upward rate pressure at January 1.
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The company’s property segment booked a combined ratio of 57.6%, 13.8 points higher compared to Q2 2021 due to a higher attritional loss ratio.
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RenaissanceRe has always been a business with strong convictions and an assured management team, willing to carve out a path distinct from competitors.
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Sudhir Modhvadia will be based in London and report to head of facultative Alex Shepherd.
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RenaissanceRe CEO Kevin O’Donnell explained on an earnings call his take on the mid-year renewals and a relatively low impact of the Ukraine war.
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The firm reported that net claims and claims expenses incurred related to the invasion had a $27.1mn negative impact in the casualty and specialty segment.
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Fontana investors will face a short lock-up period in the sidecar’s ramp-up phase, but thereafter there will be some “embedded liquidity.”
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The new platform extends RenRe’s suite of ILS and reinsurance strategies.
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The carrier has introduced a number of ESG-focused roles, which sees Cathal Carr, SVP, underwriting, appointed as global head of climate and sustainability strategy.
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Executive pay at RenaissanceRe fell for the second year in a row in 2021 after a “disappointing” return for shareholders in a year of elevated natural catastrophes.
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Carr was previously SVP, global head of property catastrophe at the reinsurer.
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RenaissanceRe has nominated Shyam Gidumal to its board, while Jean Hamilton is set to retire from the board in May 2022.
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RenaissanceRe had raised $470mn for the high-risk fund platform a year earlier.
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The move has emerged after Axa XL and Hamilton took decisions to move reinsurance books out of Lloyd’s.
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Kevin O’Donnell also said 1.5-point rises in ceding commissions for long-tail line treaties were an “acceptable” increase in acquisition costs, given improved underlying profitability.
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Casualty premiums grew 48% and the company raised $663mn in new capital for its alternative capital vehicles.
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The executive said social inflation, fraud, and other loss drivers have driven up the cost of storms, and contributed to model miss.
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The reinsurer grew GWP by 55% – to $1.77bn – helped by a surge in reinstatement premiums, but the company was weighed down by $727mn in net cat claims.
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The figure – which included $440mn in losses from Hurricane Ida and $210mn from severe flooding in Europe – exceeds the $617mn in claims in the third quarter of 2017.
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From ESG to social inflation, systemic risk to cat risk, we highlight some of the top discussions from this year’s four-day virtual conference.
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The RenRe CEO attributed the company’s success with third-party capital to making sure new vehicles meet client demands.
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The reinsurer has been reducing its exposure to domestic companies since 2019.
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RenRe CEO Kevin O’Donnell said cyber reinsurance rates were two fifths higher in Q2 than during the same period last year.
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RenRe beats estimates with $329mn underwriting income driven by a surge of profits in its property segment.
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New and growing carriers helped to fill out treaties as Sompo stepped back from a market that came in flatter than expected for remote risk.
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The executive also indicated that the reinsurer would be willing to grow at the Florida, if pricing reached what it viewed as adequate levels.
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The reinsurer grew premiums by 31% in the quarter overall, led by a 33% pickup in property premiums and 29% growth in casualty and specialty.
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Last year, RenRe reported an operating profit of $33mn in Q1 due to Covid-19 losses.
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The division had been led by group CEO Kevin O’Donnell on an interim basis following Aditya Dutt’s departure.
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Competition has ramped up over the last two years and now represents a threat to returns.
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The move follows Fidelis’ decision to hand back $275mn it had raised for a retro vehicle.
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Further Covid losses, core loss ratio improvements, reserving and the duration of the cycle are key themes emerging from the reporting season.
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O’Donnell noted that the Bermudian has enjoyed the fruits of a “materially improving market” during January 1 renewals.
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RenRe said it had “ample dry powder” even after fully deploying its $1.1bn 2020 capital raise.
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The additional $730mn in capital for its Upsilon RFO, DaVinci and Medici funds include $130mn of the company’s own money.
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The reinsurer anticipates a $175mn hit from Covid-19 claims during the quarter.
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The move comes as environmental policies move up the list of investor priorities.
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He is replaced in the role by Shannon Lowry Bender, who starts work on 1 January next year.
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The syndicate has a £651mn stamp for 2021 as it looks to redeploy growth capital released from a recent adverse development cover.
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CEO Kevin O'Donnell said climate change was driving increases in cat loss frequency.
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Axis, RenRe, Arch and Everest Re trade roughly in line with the S&P 500.
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The Bermuda carrier will be an initial investor in Griffin Highline.
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The CEO says recent trends are affirming the assumptions made before the carrier’s $1bn equity raise.
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The reinsurer’s combined ratio improved to 78.5% from 81.3% in the prior year quarter.
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The former RenRe third-party capital chief joins the Bermudian ILS firm.
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The executive played a key management role in a group that has raised more than $1bn in the last year.
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This comes after Everest Re previously let a mid-year renewal lapse, with ILS capacity scarce.
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The shares change hands at a 0.6 percent premium to the undisturbed price, though more than 5 percent below Tuesday's close.
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Shares in the carrier rise more than 4 percent in the New York morning.
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Shares in the insurers rose higher than the broader market as states move toward cautiously reopening their economies.
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O’Donnell argued that market uncertainty about the breadth and depth of Covid-19 losses will reduce risk appetite and constrain the reinsurance supply.
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The reinsurer’s specialty book was hit with $104mn in coronavirus-related claims during the quarter.
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Ed Cruttenden will take on the role as Bryan Dalton becomes CUO for the Bermuda carrier’s European operations.
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The new funds raised at 1 January are dedicated to its retro-focused Upsilon fund and its Medici cat bond strategy.
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The carrier reported an underwriting loss of $65.2mn for the quarter, slightly better than in the prior-year period.
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Gross reserves related to the former Tokio Millennium Re book were £160mn in September.
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The reinsurance partnership would support the expansion of Beazley’s fast-growing affirmative cyber book.
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A lower catastrophe burden buoys group profit but anticipated reserved strengthening prompts it to trim its full-year forecast.
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The sector will see a slight dip in capital at the upcoming renewals, but growth prospects are strong, panellists at an S&P conference predict.
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O'Donnell said the market is “missing the point” about the dangers of climate change.
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The Bermudian company wrote 70 percent more casualty and specialty premium year on year.
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The reinsurer expects to take a $100mn charge from Faxai and assume $55mn of Dorian liabilities.
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The RenRe CEO raised the concern in light of the way catastrophe losses have risen from initial estimates in recent years.
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Tatsuhiko ‘Tats’ Hoshina led Tokio Millennium Re for 14 years and becomes the 11th member of the advisory board.
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Kinesis deployed 50 percent more limit year on year while RenaissanceRe grew its DaVinci sidecar.
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Half of the $700mn capital raise was allocated to DaVinci “based on opportunities arising from organic growth”, he said.
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The reinsurer beat estimates of $3.71 per share and reported raising $700mn in capital through third-party vehicles.
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Alex Shepherd joins from the role of property head at Syndicate 1458.
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The ILS market faces a test to recover position as it loses market share to traditional players.
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The underwriter moves following the completion of RenRe’s takeover of the Tokio Marine unit.
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The Japanese carrier says loss derives mainly from an appreciation in the value of the yen since TMR’s launch in 2000.
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About 46 percent of shareholders disapproved of O’Donnell’s compensation in a non-binding advisory vote.
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First-quarter combined ratios deteriorated at most Bermuda-based (re)insurers.
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The reinsurer, now owned by RenaissanceRe, had reported a loss of $158.8mn in 2017.
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Reinsurers recognize the need for more rate for the risk being ceded, O’Donnell said on the firm’s Q1 call.
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The Bermudian (re)insurer posted a combined ratio of 72 percent in Q1 2019, a 1.4 percentage point increase year on year.
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Cunningham is the latest TMR underwriter to resurface in the industry.
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Nine broking houses made it to the ranking this year versus 54 underwriting firms.
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The second edition of the survey generated a ranking of 227 reinsurance professionals
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David Martin will report to deputy global reinsurance head Matthew Wilken.
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After Hurricane Katrina, a slew of big composite insurers including Axa and Chubb spun off their reinsurance arms, citing their excessive volatility.
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The firm’s moves to add new pools of risk will not extend to a major shift into primary lines.
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The blockbuster $1.5bn deal grows RenRe to a $3.9bn-premium reinsurer.
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Much of the executive team is leaving as the firm’s $1.5bn sale to RenRe nears close.
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Nephila, RenRe and Validus go on the record with this publication on the forthcoming 1 June renewals.
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Aside from the noise around elevated catastrophes and lacklustre renewals, Q4 underlying loss ratios continued to rise.
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As activist investor Voce Capital Management becomes the carrier’s fourth-largest shareholder, this publication explores what incentive the investor has to push for a sale.
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At the midpoint of disclosures, this publication summarises the key trends identified by industry leaders so far.
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Few of the Bermuda and London staff at Tokio Millennium Re will be retained after the takeover.
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There will be a reduction in the amount of third party capital in the industry this year, O’Donnell told analysts.
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RenaissanceRe beat analyst consensus by turning an operating profit despite posting an underwriting loss of for the final quarter of 2018.
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The Willis Re executive said 2019 could be a challenging year for some ILS managers, as some products have performed poorly.
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The vehicle will target the upper layers of US property catastrophe cover.
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About four-fifths of stocks in the index decline and none manages gains of more than 1 percent.
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Casualty reinsurers looking to continue positive pricing movements seen in 2018 renewals.
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The California State Compensation Insurance Fund returned to the cat bond market as USAA’s ResRe multi-peril deal raised $200mn.
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Above-average cat losses dominate discussions during the P&C earnings season.
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The credit agreement went into effect on 9 November.
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Analyst predicts Chubb and Travelers could also pick up $400mn if industry insured losses hit $10bn.
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Reputation can still be an underrated commodity in insurance.
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Carriers disclose heavy cat losses as well as mixed underlying performances, as business mix shift continues.
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Casualty pricing and demand overshadow property catastrophe, while RenRe arrives just too late to steal the show.
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Deal adds scale and operating leverage for the Bermudian at an attractive price.
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The deal also accelerates a strategy of pursuing increased scale and leverage.
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