By David Bull

April 23 - (The Insurer) - RenaissanceRe missed analysts’ consensus for a $1.17 a share operating loss for the first quarter as it reported a $1.49 a share deficit, with the California wildfires and large losses in its casualty and specialty division sending the reinsurer to a $771 million underwriting loss.

The operating loss of $69.8 million compared to an operating profit of $636.4 million, with the underwriting loss for the period more than reversing the $540.7 million underwriting profit reported in Q1 2024.

The underwriting results translated to a combined ratio of 128.3%, up from 77.9%, with an adjusted combined ratio of 126.4%, up from 75.4% in the prior-year period.

Commenting on the quarterly results, RenRe president and CEO Kevin O’Donnell highlighted the growth in the company’s “primary metric” of tangible book value per share plus accumulated dividends from $175.9 to $206.8, as well as an annualized return on average common equity of 6.6% while returning $380 million of capital to shareholders through buybacks and dividends.

As expected, California wildfires were the biggest component of losses in the quarter, although the net negative impact on net income attributable to RenRe shareholders of $632.7 million was below the $750 million initial Q1 earnings loss pick reported along with the Bermudian’s Q4 2024 results release in January.

In its Q1 earnings release Wednesday after markets closed, the company said that the net negative impact on underwriting result was $1.26 billion, but that was reduced by $114.7 million of income tax benefit and $507.6 million for redeemable non-controlling interest.

WILDFIRES, AMERICAN AIRLINES CRASH AND REFINERY FIRES

RenRe reported that $37.2 million of the California wildfires impact was in its casualty and specialty segment, which was also hit by $98.3 million of losses from other 2025 large loss events that included the American Airlines flight 5342 crash and certain refinery fires.

At the group level, gross premiums written (GPW) climbed from $3.99 billion to $4.16 billion, with net premiums written $(NPW.SI)$ up from $3.20 billion to $3.44 billion, and net premiums earned (NPE) up from $2.44 billion to $2.72 billion.

By division, GPW was up 12.7% in property to $2.13 billion – including 24.3% in cat driven by reinstatement premiums – with NPW up 21.0% to $1.69 billion and NPE up 33.3% to $1.25 billion.

The combined ratio jumped by 105.8 points to 148.7%, or by 106.6 points to 147.1% on an adjusted basis. The California wildfires added 159.4 points to the cat class and 29.6 points to the other property class.

Prior-year net favorable development of 15.0 points helped offset the wildfire impact.

In casualty and specialty, GPW was down 3.6% to $2.02 billion, with NPW down 2.7% to $1.75 billion, and NPE down 2.3% to $1.47 billion, as the division fell to a $163.4 million underwriting loss, compared to a $6.3 million underwriting profit in the prior-year period.

The combined ratio deteriorated by 11.5 points to 111.1%, with the adjusted combined ratio up 11.7 points to 108.8%.

Large loss events in the first quarter including the airlines and refinery losses contributed to the current accident year net claims and claim expense ratio increasing by 9.4 points.

Fee income on RenRe’s managed capital platform was down 63.5% to $30.5 million for the quarter, including the effect of lower management and performance fees from DaVinci as a result of 2025 large loss events.

NET INVESTMENT INCOME UP

The third contributor to results at the Bermudian is its investment portfolio, and the company reported that net investment income increased by $14.6 million to $405.4 million, with net realized and unrealized gains on investments of $332.9 million, compared to losses of $213.7 million in Q1 2024.

The total investment results increased by $561.2 million to $738.3 million, representing an annualized net investment income return of 5.1%, or 9.3% on a total investment return basis.

RenRe also highlighted the launch of cat bond fund Medici UCITS with $341.5 million of capital in March, aimed at providing European and other global investors access to the company’s cat bond investment strategy. The capital raised included a $140.0 million contribution from RenRe.

The Bermudian said it raised a total of $461.8 million of third-party capital including $129.2 million through Fontana; $69.7 million through DaVinci; $61.5 million through its established Medici cat bond fund; and $201.5 million through Medici UCITS, including $176.5 million transferred from Medici.

It returned $406.2 million of third-party capital, including $72.0 million to Fontana, and $254.1 million in Medici, which included $176.5 million transferred in kind to Medici UCITS.