By Isha Marathe

April 11 - (The Insurer) - S&P Global Ratings has revised its outlook on RenaissanceRe Holdings and its subsidiaries from stable to positive, citing stronger and more diverse operating earnings over the past two years, accelerated by the Validus acquisition.

S&P on March 28 affirmed its A-minus issuer credit ratings on RenRe, its intermediate holding company, DaVinciRe Holdings, and its A-plus issuer credit and financial strength ratings on all core operating subsidiaries.

"The revised outlook reflects our assessment that RenRe has successfully integrated the Validus acquisition, finalized in November 2023, positioning the company to continue to post sound and diversified earnings," S&P said.

RenRe's combined ratio was 84.7% in 2024 and 78.6% in 2023, including corporate expenses. The higher combined ratio in 2024 was attributed to elevated global natural catastrophe losses, which contributed 8.6 percentage points compared with 4.4 percentage points in 2023, as well as an increase in attritional losses within casualty lines.

S&P said RenRe outperformed its peers in this period.

The rating agency said the Validus acquisition fueled gross premiums written (GPW) growth by over 32%, or $2.9 billion, compared with 2023, reaching $11.7 billion in 2024, bolstering RenRe's competitive position and advancing its pure-play strategy as a global property/casualty reinsurer.

Despite the scale of the acquisition, it did not significantly alter the overall business profile of the consolidated company since Validus' portfolio was of good quality and aligned well with RenRe's business mix, S&P Global said.

RenRe's underwriting results have been bolstered by reserve releases, which totaled $851 million in 2024 (8.4 ppts favorable impact on the combined ratio), compared with $451 million in 2023 (6 ppts). These higher reserve releases were primarily in the property segment, related to accident years 2017 to 2023.

"Since early 2023, RenRe has benefited from structural changes within the reinsurance sector, including higher attachment points, improved terms and conditions, and a hard market in property catastrophe reinsurance," S&P said.

"In addition, RenRe strategically chose not to renew certain business lines that failed to meet its hurdle rates."

As a result, including the estimated $750 million loss related to the 2025 California wildfires, S&P expects RenRe to produce strong combined ratios in the low 90s through 2025 to 2027, including a natural catastrophe load in the mid-teens.