Investments drop RenRe to $325m Q2 loss

Created: Jul 26, 2022 10:27 AM

Net realised and unrealised losses of a staggering $654 million, primarily in the fixed maturity investments portfolio, crashed Bermuda reinsurer RenaissanceRe to a startling 2022 Q2 net loss of $324.9 Million.

The poor investment performance, driven by results in the equity markets and interest rate changes, was paired with positive top line results.

Gross premiums rose from nearly $2.1 billion in the comparative period last year to nearly $2.5 billion in the relevant quarter.

Technical underwriting remained superior with a combined ratio of 78.3 per cent.

The company reported a 32.5 per cent growth in net investment income; a 23.2 per cent growth in net premiums written, with a 37.6 per cent growth in casualty and specialty and 10.5 per cent in property.

Kevin J. O’Donnell, president and chief executive officer, commented: “We reported a strong quarter, with continuing top line growth and solid operating profitability demonstrating the power of our diversified platform.

“Our financial results were driven by strong performance across both underwriting segments, a significant increase in net investment income and an expanding Capital Partners business.

“We are pleased with our 18.4 per cent annualised operating return on average common equity during the quarter, and are confident that our consistent strategy, leadership in a strengthening market and robust capital position will enable us to continue maximising shareholder value.”

The net realised and unrealised losses on investments were principally driven by fixed maturity investment trading losses of $437 million, as a result of the significant interest rate increases. This compares to gains of $97.2 million in the second quarter of 2021, driven by decreasing interest rates.

Equity investments trading losses of $91.5 million were principally driven by broad equity market declines, as compared to gains of $65.6 million in the second quarter of 2021, driven by gains in the company’s strategic investment portfolio.

Total investments were $20.6 billion at June 30, 2022.

The company affected share repurchases of 298.2 thousand common shares at an aggregate cost of $44.1 million and an average price of $147.85 per common share in the second quarter of 2022. It repurchased an additional 175.7 thousand of common shares at an aggregate cost of $25.3 million from July 1, 2022 through July 22, 2022.

RenRe: poor investment performance paired with positive top line results (File photograph)

RenRe CEO Kevin O’Donnell: consistent strategy, leadership in a strengthening market and robust capital position will enable us to continue maximizing shareholder value (File photograph)

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