RNR - Earnings call transcript Q4 2017 | RenaissanceRe Holdings Ltd.

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Operator

Good morning. My name is Amy and I will be your conference operator today. At this time, I would like to welcome everyone to the RenaissanceRe fourth quarter 2017 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Instructions]. [Operator you. Thank may you conference. Peter begin Hill, your

Peter Hill

morning quarter XXXX thank market we release. all Yesterday, you fourth our closed, quarterly our joining for issued financial the Good after and results call. conference

a you be through X:XX (XXX)-XXX-XXXX be p.m. from will provide an copy, If replay to on get please me March the and sure There at one. with today about of Eastern midnight call X. you or audio Time we (XXX)-XXX-XXXX will available didn't Today's replay call The be through can on by dialing through on both www.renre.com XXXXXXXX. The will RenaissanceRe's you is the of midnight for archived April call +X-(XXX)-XXX-XXXX. need will sector accessed passcode available be XX. and website Investor numbers Information is

to those discussed. begin, today's and am that statements forward-looking we discussion from results contain I may materially actual obliged caution differ may Before

to to Kevin and Officer SEC information Qutub, President direct Chief you. factors Kevin. in to Additional the Executive now turn I to and regarding Financial us like RenaissanceRe's today's Kevin? these outcomes call found Chief the would which Vice Executive we President be and over discuss can results filings Bob shaping Officer. With O'Donnell, are

Kevin O'Donnell

for Thanks catastrophes. of RenaissanceRe franchise Peter. against impacted significant natural morning a was by joining and the difficult and strengthened today's you Good call. XXXX, backdrop well In thank executed our market that

this losses operating book is value Also plus return our our negative book our not if X.X%. year, was on year, negative question catastrophic share value per our it share In per was of the equity return but X.X% tangible a X% in For decreased the when X.X%. by accumulated decreased occur. change on business, for by dividends and equity and

as the I Overall, strategy has January to X value. terms. portfolios X saw both But We opportunities terms. reversal specialty loss I forward the the allowed for in were tools, of first other and the we facing being when control believe last such property of of for say how execute events the to Bob proud the second and to and strong property call at increases that material access the with detail have at over the we gross January new our January will elevated suffice board catastrophe the XXXX, business. emergence. paying grow half and Due property and capital our rapidly better underwriting executed the successfully XXXX execute all to am with improving in rather reinsurance deliver we our our renewals positive our can also I address declining and and to capital rates pricing well the a In right casualty with across While that particularly us was market a grow few terms to claims headwinds our in reinsurance the In customers' improved will than of the our to renewals could knowing at strategy, show first years, better year, and of and look the benefits these speaks. years cat with on our portfolios. it long losses control conditions, in into The shareholder the relationships things time our XXXX, team several X breeze time. programs already net for the renewals after and greater force we improved the we them. plan in happen, prior structure cannot and segment market to that backs I on

the expectation to rate been the to the has performance Moving been tailwind a going investment continue The raised XXXX these in this end portfolio curve rates of in forward that Fed of detail. three us positive provide should is XXXX. and our rates rate our interest Most renewals, beyond traditionally discuss reinsurance shorter into times has rising will interest greater the XXXX. which of impact the is as concentrated. will have where been beneficial Bob investments in

from have tax intercompany alter also certainty these to now of We most current sections. taxation. more In December, U.S. Most changes cross-border reforms including U.S. corporate reinsurance implemented the around the regulation. taxation significant perspective, significantly, transactions, our

with of outside Bermuda U.S. statement but somewhat to we ours, relative but jurisdiction deferred believe the have transactions will financial diminished do innovator as tax adjustment, important on flexible economic of At For impact given reform the not XXXX, that substantial a that our remains end structure. a advantage will the we of still write-down reinsurance a this company like the reputation two assets our an the significant Bob preferred affirmed U.S. advanced in explain us, business. our tax

life a with be Langhorne space Europe closed RGA excited are about a reinsurance which within First, are called We million will investor. joint joint we there a the in good anticipate and closed pipeline fundraising. of particularly $XXX we with business, Re ventures, entered minority the into a Consistent opportunity. our venture block

serve to Re are delighted a We that believe partner our as customers RGA combined will and Langhorne have strengths well.

This our property us rather over is time to and investment, further Holdings, to invest casualty solutions may a industry-leading than helps runoff customers. but bring in more strategy our just runoff an agree we company. allows Second, and Catalina allow

protection to with solutions. live runoff either Additionally, Catalina we providing our transactions partner or hope side-by-side alongside Catalina's new

capabilities. and We be us expand these market to help will are excited partnerships, in which explore our new sectors

contributions from continue also steady portfolio. to our investments strategic and We public equities see

in years. we to made we new have XXXX, or mature where our investments the investments we portfolio trading rebalanced public made gains addition in through significant over the selective In

announce a to our for pleased bias a to has We which successful, allowed Essent newest early continue including to reinsurance. to major investments office area think opened be Zurich, hub name stage which and in I of and act with in Switzerland, many we long-term few. our this very a Trupanion am recently

before increasing transact to have the I of spoken with have footprint and platform customers flexible value where and desire. ability having now a we our about in how they a small We Switzerland will look on Bob provide seeing later the opportunities the turn I over first at to a will details for on more our financials. call call but we are a in few the XXXX

Bob Qutub

Kevin and Thanks good everyone. morning

the challenging XXXX, on As right the disciplined matching we events are and hard We written our split roughly proud growth reflect XXXX, specialty most in manner displayed and conditions between loss billion of we premiums on committed achieved while management across platforms we a executing to our and consolidated with navigating a in market in strong strategy measured growing during dedication remain effort a our organization. this the underwriting year. efficient work our risk to ventures the $X.X joint We capital maintaining the available. the concerted and through XX-XX casualty property grew We expense focus while gross segment.

results, underlying will performance are activities. As our financial our time, then investment segment full to excited in would the we discuss believe business about of and XXXX. take and capital portfolio noted, of lie the Kevin At market opportunity improvement ahead this and an the I through conditions for we that year. our are quarter overview showing I you like

diluted operating a we share or loss December income ended $X.XX of $XX per share. or XX, per common million diluted million $X net of $X.XX reported XXXX, quarter the and For common

annualized and negative the Our annualized was positive ROE was for ROE X.X% quarter our X.X%. operating

million or million we per the combined ratio per of quarter, and per share reported On XXX%. our loss and and per the of quarter $X.XX million diluted common value full-year an loss loss basis, $XXX decreased operating or by accumulated we $XX $X.XX a book a value of tangible our reported increased share common share. dividends $XXX diluted net was X.X% for During including book Underwriting share a X.X%.

Our was negative year X.X%. full our was X.X% and operating ROE ROE negative

including Our value our book was and dividends ratio loss by X% book of we Underwriting a year decreased X.X%. share for and tangible the million decreased combined accumulated $XXX value XXX%. by reported per

one has of insured loss experienced. the company Now our largest XXXX years was

losses in $XXX in The with fourth of and third wildfires million. hurricanes combined quarter quarter resulted total earthquakes California underwriting the

also hurricanes, piece $XXX risk the and aggregate by execution underwriting contracts largely events. integrated loss our our These of consolidated to losses losses ratio loss points in XX added our in aggregate resulted consolidated All-in, million $XXX of of We the to aforementioned design contracts results of wildfires important the an and combined aggregate additional million earthquakes, impact financial and associated a portfolio. incurred from XXXX. net driven form negative

claim negative the redeemable recall, of expenses incurred, impact net Now that earned lost and premiums commissions and and and claims reinstatement seeded, earned noncontrolling assumed net estimates interest. profit of sum includes

to this event. as in retro we individual is Adding integrated the our the our and purchase combined protection significant full portfolio complexity across disclosures. we rather Given we have basis, the view QX think protection, an way an which than year book which events business, our QX on catastrophe of is about

the reasons, as we similar California integrated useful presentation together on For view presented believe how portfolio. based well. We have we risk information provides this more wildfires our QX

Kevin's of corporate Now of deferred bill, we a the down of This did result regarding tax reduction further operating on the write-down our as $XX rate. expand about results. remarks affect tax and moving U.S. asset, on portion wrote tax million, not our a

us we of operating future in discussing given bill will bill, the our impact release the press tax noted expect flexible for economic minimal tax As platform. the currently be our

earnings our and and year-to-date our would I supplement, release issued quarterly night which our of details website. last financial be additional and you to results, we refer found on can For

results shift casualty now specialty. beginning with followed our segment property segment me by Let to the

million of renewals gross XXXX, premiums but up are property in catastrophe our QX Certain and of the written to these catastrophe the period. were of The class drove increase following fourth in written quarter exposure reinstatement after This for million million quarter $XX to During able written of segment the this for fourth were In generally compared written of up most of quarter gross of premiums is backup the enter $XX an our $XX business, both periods of business, for quarters. light fourth current the catastrophe million were net quarter. the reinstatement is events. partial premiums premiums number of removing of we premiums original covers gross comparative property line the of a into impact the in written contracts $XX periods. in XXXX

losses, the estimated segment and losses underwriting of combined XX% resulted property added losses a comparative impact quarter, of fourth the quarter. offset the a from partially results Our and $XXX ratio additional combined quarter. ratio in loss property underwriting our in these million of aggregate QX property $XX of quarter segment points Combined, by our XX dominated catastrophe an the compared The the the in a net ratio during million XXX% underwriting wildfires by items and income segment incurred in of underwriting events. of and decrease million California in in $XXX combined the to were

Now be that California early from Northern would December million. negative estimated we $XX about net recall, in impact the wildfires

our Given split updated and the of wildfires fires. Southern we net between QX for received, information estimate negative is have the two-thirds, the Northern all one-third $XXX million, roughly California impact

during we from approaches. these to a $XX modestly were In we addition, With we in million respect dive plan our our as impact of deep by additional estimate negative contracts. these contracts an and up catastrophe these events, put receive net during reduced our and information from to of of perform $XX anniversary million. QX aggregate QX a mid-XXXX also continue impacted to negative events impact We analyze and initial net QX the events

Now each for large of XXXX. billion, XXXX XX% events. Included $XX the compared associated premiums compared year, are this in up segment to million growth $X.X XXXX, written our million to premiums full $XXX $XXX in with or million in property gross reinstatement were

million Our In premiums new other gross million up certain written in a business XXXX, into of property were our line was or entering premiums. select reinstatement catastrophe for of of well participation Driving the XX% written business, impact as excluding deals this growth as $XX increase X% XXXX. increased of $XXX line on transactions. premiums saw or gross number

following covers on in my also earlier events. catastrophe QX into some entered mentioned quarter, comments we As backup the

incurred underwriting ratio a to $XXX in combined an XXXX. Our XXX% a income of in ratio of and million combined and compared property of underwriting $XXX loss segment million of XXXX XX%

underwriting combined for property the to in XXX property events loss year. were segment dominated full by quarter, the segment the points of adding As our ratio our results the large

to specialty segment were to of XXXX. fourth the XX% gross XXXX, casualty relative premiums on our quarter quarter where of written Moving fourth in up the

the We disciplined selectively segment with professional continue the in this a growth to business. of liability able new primarily our within be we execute and quarter, pleased to deals on during number are

decrease specialty the casualty income combined to in ratio quarter. the impacting and quarter underwriting XX% in of in generated XX% in million combined a the of expenses, the compensation fourth the in specialty of million ratio and $X part expense casualty earned. segment the a During decrease a continued of by growth reflecting $XX segment underwriting net Positively with and underwriting was during expenses quarter XXXX, operating lower ratio, a driven combined income compared combined of comparative ratio premiums

Our expenses. similar in decrease operating property segment also a experienced

impact muted the was the losses segment. However, in cat given large that

not did a in our in-force financial premiums in multiyear For written gross the specialty large current existing we of selectively in as year in casualty result the offsetting were lines. XXXX, full decrease reinsurance our to premiums the contract business year. written was that lines of certain a written XXXX X% within mortgage reoccur gross primarily this casualty and Partially grow increase continue business, new up

we continue having our to With on gross topline, strategy, the seeded the of in our growth we premiums. to-date net out casualty XX% specialty have execute to experienced

XXXX. ratio combined increase income Ogden and year $XX For a ratio QX combined an primarily of generating compared change driven combined was Rate. the full the ratio the of million underwriting million to the in of XXX% impact casualty the a XX% from by the $XX underwriting The specialty and loss XXXX, in in the net and of segment underwriting catastrophe of losses events incurred

the a specialty over book growth have within to view you of existing its our expense have expectations. continues we recent and to disciplined base as well fundamentals casualty long-term and remain we periods before, Our our communicated leverage

average return investments. for was of generating strong the we returns public reported maturity of rising return our and driven result to result of invested from of markets million year throughout the the by trying total a our equity total in investments, million X.X%. $XXX equity in generating full turning higher fourth total XXXX. X.X%. in and our rate Now portfolio In annualized interest quarter assets XXXX, We benefited the investment investment XXXX, portfolio a environment $XX and investment fixed total we experienced as returns positive private And global of an

our and the to X.X maturity XX% XXXX. exposure. investments rate, modest degree portfolio at credit investments was portfolio with with The duration duration investment was remains and interest conservative fixed fixed Our a to respect of high short-term with income December short-term credit and allocated risk on maturity and and of to investment and X.X% liquidity years yield XX,

largely was assets invested capital Our Upsilon, was duration down slightly during the the driven of from shorter duration given nature quarter, raise vehicle. in which the in that

satisfied portfolio the ventures by to produced of for again us own. continue unit fundamentals we the we strategic Our companies investment returns positive and our be with managed overall long-term

Now moving our management to activities. on capital

the strategy remain enter ventures to as we capital joint efficient and XXXX. sheet balance to testament well Our following capital XXXX, our management capitalized a events access and of

of X/X not have we our During to on during capital common XXXX, the the deploying thus have renewals our into unit. and ventures and any focused purchased fourth quarter XXXX far we of Rather, shares.

continues long-term our team to franchise. new with investments actively well ventures as can for strategic relationships transactions looking high-quality Our as enhance underwriting that build

As we form have third-party to Re, with in are pleased experience capital with Langhorne where RGA RGA's matched we life to will worked market. be management well a

approval. a shareholding also minority definitive regulatory We Catalina to in excited subject have are agreement to signed acquire to

additional decisions was with team trusted $XXX of capital a the making ventures partners. Upsilon deploying Our portion from reloading million also that are In January significant in instrumental capital we raise for XXXX. summary, renewals in management long-term an of

of has participants. changed. approach not by of mindful other market actions to and recent But and management availability underwriting our business be will capital capital We taken the opportunities, the

and always risk business to we look we and deploy underwriting first As capital hurdles. foremost opportunities that into meet have our said, return

in Before supplement. portfolio with part just as turning that and separately in to the accordingly. up will like conforming communicated roll I Kevin. third be to continue of are overall will results the results want be turn and you quarter this I business that, appropriate. results call our property financial will And our remind back to our our on Lloyds a quarter our to back would and to financial strategy we our we as view it's reporting call of last call, a with risk Kevin, disclose specialty Lloyds We you casualty our as the key

Kevin O'Donnell

Thanks it questions. Bob. up talk I segments minutes will take to a of open and renewals few to we will about then our move each finally X/X and for the

written XX% gross we property in relatively events. cat These by year reinstatement base. a from full XXXX, XX%. the by about specifically, our catastrophe the property For other small grew numbers More XX%, segment we from exclude and grew premiums albeit premiums by

continue the estimates QX to for assess We catastrophic our loss events.

As a in during on quarter. impact the recognized have million fourth our Bob discussed, net reduction events $XX we these of negative

the we proprietary other the receive on-location hand dive on loss including our a us subsidiary, we customer that QX will renewal cat As year first events estimate. progresses, will to and our have events, Once midyear. additional perform we in reports information data, assist research fine-tuning related the around deep assessments to which sufficient WeatherPredict occur from should plan engineering

conditions in preannounced, losses we California we Similar led to in affecting drought in the December. wildfires Northern wildfires separate Southern California suffered As from October.

wildfires. wildfires my the XXXX includes difficult wildfire approach, we customers with to negative the should to increase cat the prior The discussions quarter contracts As I the it XXXX are aggregate that the respect when losses consistent California out impact in attributable million. in in similar, fourth loss. with events. split with are of the Consistent to point I aggregate net California out, also the the is from events, from can negative impact mentioned, perils particular combined be reporting that QX

characteristics applies and last that noted even QX And call, As on they are unique though developing the finding California more they to differently. the events, has develops this I occurred after each wildfires our we cat loss quickly. are

quarter, benefits half capital, ability purchase our retro the to gross the particularly of less of do so we tail protection recognize in discussed of side is initially to I last on than The meaningful to As for we abundant the wildfires. positive second risk XXXX our and for net strategy continue short forecasted.

evaluate will and XXXX, similar to property our retro to cat market XXXX. continue we the of in anticipate risk retain XX% about that We

pricing time experienced first X segment Moving January the years. for to renewal. the has property The increases in

Going market we on entered than a did. We capital have Rates partner to and renewal acceptable changes of appears the renewal and the as capital. into higher were market more we in to an of our own performed both executed quickly, in and seem expectations better more rate the well. market, prepared execute deploying we our range

up rates to flat cat flat XX%. to quarter, XX%. to said I is market did. other rates rates X% to equilibrium they long-term XX%. were It business, was neither affected Loss programs last nor hope cat up international move our loss X%, were well. suitable XX% the On up U.S. programs most, the up the continues too were Rates U.S. between with other to and up property go between were XX% to market affected to As high flat X% non-loss and up needed with a on Rates up averaging retro rates in to affected as in while low. closer that to XX%

change are profitably renewal. and ways this property with the Given January a the pricing to pleased X rate find execution at grow overall our at to continue greater pace we segment than the environment,

access were generally the we on business had wanted. the programs to For call example, many and we first

multiple of role to us in to the able that This the amount retro. in lines our customers we books both most advisor our over flat the strategic the portfolio premium to significant to ties and is distributed resulted market. critical strengthening is was growth property transactional over our business the having in internationally a rate market on new reduces million focus were lines with of access $XXX portion access our and grow relatively to important demand. new catastrophe as in increase. and of trusted The also preferential was That other business. property U.S. nature, in a across our reaffirming and across subject noteworthy and the the said, of It multiyear which in limit Our assumed

it of strategic, exposure. evolved consistent in retrocessional example, year-on-year more moving X. January from year transactional exclusively the million Upsilon assumed formed since from the million the aggregate we to our at For grew with vehicle has $XXX Upsilon vehicle limit to than of we of almost when approach $XXX first our limit XXXX,

vehicles coming underwriting there The is This Overall, we As portfolio those heavy of and of period reinsurance more half loss forward of XXXX. with retro our together me. increases be only retrocessional with remainder our to it see Upsilon manner a the sourcing at great to although for risk recent a to continues ventures example would X XX% is programs portfolio to be efficient incepting continues teams which expect enterprise or as primary carry impress about today, placements, from in covers. renews move January the of the capital. attractive property will matching on through work and and We a programs renewal midyear. X/X affected price these

we strategy written of was premium several deals was and business, the written in a in during fairly out and having will as continued result our grew over execute casualty of to our to consistent year. lines gross several the casualty down casualty X%. we line whereas of purchases year, the expected, by This gross-to-net full book the growth number years. earn for in the our driven ceded premium in specialty large which segment by written Similar our segment, XXXX, financial with property quarter remaining For

stable. premium of generally conditions one-third terms rates remained were and up about in At in segment. we the the As renewal, Bob lines mentioned, casualty January this currently cede and

been casualty elevated emergence renewals. underlying the was market to on in more deterioration. particularly it had their exercised reinsurers observable rate discipline approach conditions, loss Regarding relatively most or challenged This whether accounts,

however, in loss trends were some ceding reinsurance and books saw commissions exhibited favorable with of and demand. and terms in direction. markets broader a against rate average, remained movement our supply capacity be was business. trend of there upwards the and reduced cedents would conditions flat there the contraction from good accounts On healthy ample even basically Overall, and even adjusting optimistic capacity profits contraction, supply in some that However, underlying well-rated

conditions the While rates the improve write should deals in to in of due material to profitability number in significant sustained be continue market needed will is proportional our we of before underlying a portfolio. change a increase casualty, there

adjustments underwriters in terms were and their While Being recognized the improving leader in most improved market. to in often small, to gain us casualty actively on on will an an has underperforming the the share and movement business to continue specialty benefit in reduce this our attractive manage and portfolio. allowed a accounts and positions resulted

clear with as breadth into provide and to meaningful and support of proposition and and clients for Our certain value preferential brokers. our products is as market well our programs trends the insight of ability on evidence on platforms signings clients performance translates

ample was customers with our This supply. Our and term. where the capital. broad again, robust remains we value is Once the customers reinsurers attractive we such and with providing healthy consistency. monetize business by spot relationships to stable financial mortgage returns grow lines. our maximize risk are There selectively to provide who in expertise best over bright long Ultimately, with to year. for be approach we the shareholder on demand, deep provides as capacity be relationships our although this, there want wanted of areas we that a able take and overweight, continues partners can and Because

relative business and previously, our mentioned both DaVinci, joint fourth DaVinci view the following hurricanes, activity, I raised structures. us by written into of in capital We driven in of excess and This quarter. capital from financial events billion respect in managed trade the lost some in us with the new late investors. vehicles, raise a had busy allowed our we venture contracts including reduction XXXX last various other quarter bond cat the of equity to gave $X to capital premiums $XXX Upsilon million As replenish not began fund major was gross its confidence to lines Medici, of of one-off our QX into raising forward when existing and in This fourth and September market the and all the cat in Atlantic the attractiveness.

Catalina. XXXX call environment capable with gross-to-net one value. coupled At significantly XXXX. a we I in both execute earlier, This, our constructed a in Thanks. we and the able up is growing portfolio segments a made am rising of and performance proud are strategy. substantial discussed rate questions. in investments our in interest better XXXX the same investments, portfolio that and Rates were of optimistic maximizing and I for strategic we in trending has that, open halted in resulted than shareholder decline regarding With mostly and strategic of to direction. key across positive time, have Langhorne opportunities the As their both a their I will

Operator

Instructions]. [Operator

Your first Kai Pan open. line question comes Morgan from the is with of Stanley. Kai, line your

Kai Pan

good and morning. you Thank

I What the versus midyear renew that am percentage in is change loss-impact just at question first of on renewal. The the account? upcoming would Jan loss-free if Jan account proportion X wondering is your X renewals? account

Kevin O'Donnell

but me talk Japan, more Florida. I let renewals, of loss don't qualitatively. later the really impacted. this but that obviously up have to actually year it is What's Florida renewal importantly, split, two coming Most is big

very I participation June, had then X/X, which percentage losses. some retro for saw the be renewals at than the nationwide in we greater July book, international book, had losses. mixed. will the small X/X. book, which At we think We the in have was And that So the had the what which had we midyear large participation

program the low-end program the had the didn't. at in of further Some losses, up

loss I X/X. at than So expectation will without had accounts specific affected going X/X, X/X, into be greater say we a we percentage with that would of split, the there a an are what

Kai Pan

your Kevin, less than will Great. how mentioned increasing to gross that believe carry And also, that is buying retro change coverage? you the faster will momentum reinsurance you midyear that rate the rate rate, Okay. at you you that strategy? Are retro as forward What confidence? net gives renewals.

Kevin O'Donnell

Sure.

first. start think part will retro your of with question I I the

I retro. as a are product reason better-than-expected are in to but retro, purchasing we than conflicted could buying. The through think grew we is message it very seem Upsilon for selling access saying a we what that different are what we is, had we that

sell worldwide what program, mostly and affected we Upsilon loss some a So through is heavily aggregate.

retro we pricing some capital. because enterprise mix the larger that's for retro actually coverage as addition partner needed of what wasn't nationwides. some In to Upsilon, in I we to as the commit us That our also mentioned, in some as have high is

purchasing is different basis. Our on done a

So previous have significant as capital whether participate our retro I long-term would talked largely of CPP calls, or those our we renewed in we coverage, the will we on be us. that alongside programs partners, they through third-party and that better a facility, of which the participating with partners consider amount have market in partners

have different coverage movement trading within are account Upsilon book than saw the of Upsilon, rates. a than rate is that what getting movement selling which the for rate was retro, better basis We a and specific on we more often Upsilon we within

for that's been renewals, affected year? lot persist question increases business I significant is, One rate of a X/X portion book there's was, what yet, through that a there's our not second renewed previously, of Your both think Florida and why multiyear. will of has for the mentioned the loss also do I rest X/X but the

suffered there's has touched. long which other many rate a losses, has has but we decline, of that for parts have not years. had have part So And of period that persisted renewed, been finally, but

So for is there rate enhancement. need

approach as more reinsurance overall rate backbone for I the for So the going renewals. midyear we in be is discipline discipline a the market protections that to think recognizing needed is

Kai Pan

That's returns the wondering, was investment income I value potential I may, One two one, ventures? these of both recent financial addition in the investment in very investment, or the of business. from last runoff strategic is this significant joint investment if helpful. two on impact in are to and terms fee how

Bob Qutub

it's XX%. have than are Catalina we standpoint, Kai, minority less the the but strategic withstand doesn't it, the First, but is value to financial just that from trying out get we that interest in of small,

Kevin O'Donnell

consistent what with done very we as on And vehicles. have I think of other these

we on XX-XX about as consistent way the that other partner If with you the the kind partners and Langhorne little a take pool, in of are Langhorne, to DaVinci ultimately raised joint Catalina the as vehicles we with Langhorne. to are small delighted in by investment the million third-party have there. RGA fund management but leader think reinsurance by different. capital the transactions a space life underwritten RGA we and we that was venture is the have $XXX vehicle, recognized That's a are

in a Catalina. it's mentioned, Bob investment have that we As small

viable to I customers is strategically runoff seeing that management tool. think benefit solutions increasingly, as capital our the a are us

both reinsurance So business with if coverage through it's for our of win-win customers reputation provide our a with we can Catalina solutions to books customers, or runoff and great Catalina vehicles like sit everybody. trusted and I life a a coverage those with down partner ongoing think through for

Kai Pan

very you much with Good Thank for answers. XXXX the luck

Bob Qutub

much. Thank you very

Kevin O'Donnell

Kai. Thanks

Operator

your Elyse, Fargo. Greenspan of Elyse Your next Wells comes from line with open. line is question the

Elyse Greenspan

in Trupanion, away vehicles, successful is about just focused thought you gave the probably making what you other investments Thank guys investments. have on Catalina, and in When I moving Langhorne first question you area? I cat these in cat mean, mentioned know Essent guess. you think, last your from In that which question. have I comfort picking on the really core you. these two past, been and expertise, off investments I guys My

was guys You had successful. also in investment not which as ChannelRe,

was and thought longer thought you than more to capital the time the tail historically done? idea which So in capital and that what going tail, have vehicles process as is guess, you shorter putting I the now about here, put

Kevin O'Donnell

Thanks. Sure.

me start Langhorne. with Let

think contributing. that each are RGA are of So lot contributing I right is expertise. underwriting you when we a Langhorne, think of I

of are expertise of business. We collaboration, third-party to and a In platform powerful sets capital two skills runoff to lot contributing tremendously I those be successful think for in us be structure management a will vehicle. the block

level potentially some of I that market. pipeline for coming to an requirements increased some think are European there's benefits that seeing we with solvency

underwriting that So bring in structure for expertise thinking regard to and vehicle. recognized from the capital we looked an what management leading was what third-party leader industry we think expertise capital for and I an it, to table about with industry is

investment minority a we confident is how we being So I for little future that have Catalina are them. and further success. in equity where set investment, afield, a about very feel up bit with it

We the They reputation and got record great have within team a got for a known track long time. have have the strong a they market.

about So risk I more the legacy we will than be from and is different see some in what tail long us, in about we transaction live to again they to think think business I them in us participate risk of The way which perspective how think But they help ways that's can a the perspective as we going a are with. business. issues ultimately familiar to give P&C. do. It's

of everyone. is and think everybody something I effort combined contributing ventures each of for partnerships the produce will to great the think joint returns I these So

Elyse Greenspan

some loss and Okay. the renews. Jan being July business you. to than Kevin, pointed Thank impacted as market you to going potentially And better of June more commentary. then back X

obviously have We the reload seen market. in capital alternative a of lot

in we that do As could into view comments the together, what see July, closer the premium cat a your get as Ren all dynamic? and June in how that thinking of potential on And type have growth put to continues, pricing when XXXX? you you your does on factor

Kevin O'Donnell

Sure.

of can coming, the It's into with see forward a there's flat I renewals, reasonably forward expect we of it's a what But a coming lot think out between June, there's look to Looking lot Florida. demand February to I when that cover and then. and July reasonable air now happen.

priority about sure. to the the But reinsurers incumbency on third-party thing capital, am Florida, comments I there's on focus think Your more I is not whether given risk for placements. looking in to

difficult to to markets. without So be I dislocate think well-behaving growth, traditional going it's

sure I regard So wind have, think back anyone X/X will for to X/X. our positive having persist as think I coming that momentum to in at what role rates, given persist. reinsurers the renewals. better think as rate, from saw that a more the I be a than capital can go think, third-party opportunities to to to or am rating growth, indicate Florida will growth positioned indicate and rate will will into possibly for I market. at environment, the tried those about I but I that With achieve I well as not are we I X/X we the think be But mean what economics that I don't we think

Elyse Greenspan

a losses forward? seems you. Okay. high due to expense lower we to the level like as XXXX. bonuses level a in it saw just we Bob, going for quarter. benefit think going saw maybe the the the And then you modeling benefit quantify It is Maybe Can question potentially guys like in expenses of you on seems expenses this that about your

Bob Qutub

Yes. That's right, Elyse.

but efficiencies year-over-year of can't which corporate which and down year. As profitability that costs benefit we reasons the the it costs out really the only was as down, seeing number, But But Corporate exits we of the comments, a don't a of costs. is million, operating have I you you out. prepared but operational in take performance. did the our more year, compensation normalized quarter this some some around result are fourth casualty that's executive one, in the for a probably a we property typically can see give you last comparatively the $XX lower pointed expenses, bit year. corporate both is, not run are of in rate reflective there figure We But saw it obvious quite take. the also, expenses, by show as in expenses our my for segments or leveraging gained the

Elyse Greenspan

Thank Great. I color. much. the you very appreciate Okay.

Bob Qutub

Thank you.

Operator

Research Your is comes the Kumar Amit next question from line Buckingham with your Amit, open. of line Group.

Amit Kumar

Kumar. I will quick then Hi. Two It's requeue. Amit questions,

could back XXXX KRW, XX%. index to if online the to by, rate the is online needed? to the I figure versus look equilibrium in or and index Do tie could we back XXXX Or to X/X, your fast is out so. rate pricing discussion a to, you where was past be? the some rate in on by perception? am versus XXXX, you regarding let's trying we forward say, momentum. the we on And still I guess, it to there the what Going said JLT let's equilibrium point then XX% get your jumped gap comments based you go if is, hoping I if you where at XXXX, fell get to if you say,

Kevin O'Donnell

was I question expected at look rate try just is be me answer to renewal? you what successful to adequacy What with think after are this your X/X. needed regard, Let is, at, I asking one Knowing there be X/X. the that needed to otherwise X/X to adequate, have at might successful would the rates be that all shortfalls. completed placements should model been were lead believe rationally take what's for were

there it. about what's capital the think I in success when required you finding think that is have access I and So desirable risk, this then that is market that, making to most efficient for sure where

scale for we is risk that as present that opportunity writing to the efficient So Upsilon able to in sheets to to And we we and have our our own secondly, on we able that capital balance it. structured our we had and the what have because at were customers efficiently, a basis. were on both we are net did risk access type year XXXX of X/X, meet done looking gross every at we since balance grow and to sheet on

very a on Upsilon and it's balance on efficient rated very a So capital sheet structure. consumptive the

adequate using whether capital match order in to. are So what in context not be risk rates because you to has that to or are successful in not that put market, that it's be to of

As I success. are think set of lines I the the look for set at tools of X/X, same means same up, variables which required

customers' and are we vehicle to both much look needs. we will our capital to to new I of that ability at expose, a execute going to look or as going our X/X, of think some the in we and past gross I had we on whether as initiate meets basis X/X have a into at net and So vehicles very are best how the carefully our

Amit Kumar

it. point. Got Fair

to goes other discussion The Langhorne. back Catalina question and on the

your number I it, I step there in mind? opportunistic should businesses? a Is If capital there to ask, that is I more you is core to back, a XXXX? Or dedicate call would to for you guess can noncore level non-P&C or of these, this were like like if

Kevin O'Donnell

It's somewhere between.

working on year. a I think think we when to going, we these about so are deals we for what close been have

took them. up as we and a up with the parameters long quarter it's if come time on and in overall partnership. of So not to structure they the popped It closed the the

team way value and we because think the about the are very we think I overall long team transactions, it, of for I We of that we underwriting when very and the they these the can think the as the up be enterprise easily about can ventures in then nature. knowing value with liquidity between about partnership partnership. structured, So mentioned, in collaborate, come an to tail

a joint long it emerged partnership and opportunistic economics that another made venture dollars in as in engage So do. this which what able would also one it's to perspective strategically for both sense we as actively economics. get we relationships. But because we it's and us capital allocated from to tomorrow, it are relationship not there is If was types we not these strategically, have finite of

Amit Kumar

and for stop it. Got for will the and I requeue. answers Thanks here good luck future. the

Kevin O'Donnell

Thanks Amit.

Bob Qutub

Thanks Amit.

Operator

with line your Brian Brian, comes next is Meredith UBS. line question from open. of Your the

Brian Meredith

questions for here you. quick of couple A Thanks. Yes.

just noticed cash big I balance and your a jump also in liabilities. The curious, on a sheet at Bob, other going big one, there unusual December Was increase first in something on?

Bob Qutub

just will there in premium my durations that comment for liability flip at short the Upsilon goes liability into comes the on about side X/X. the that's cash. That's into the and prefunding Recall that

Brian Meredith

you. Got

book from Great. And should income right the we your what thinking year turns. kind about rates new it benefit relative are that's a with kind where just seeing? expect on interest yield that's look current are we of So And yields Thanks. then the now, of portfolio? secondly, this higher your money to investment like

Bob Qutub

money yield at will give yield, the new a would end year I was Brian. you The say, our I perspectives, the of of couple X.X%.

The mentioned I my is so X.X, duration relatively see it's will comments. the in prepared in You that supplemental. short.

started maturity fixed up have month. the in take the are We interest really and the securities course of last rates to over

I we given have at participants we kind expect of looking think and duration potentially as are where I rates would uptick. we a right as Kevin a of as we do general XXXX, at having yields say, and said, lot the other are higher we are. So think short in now,

Brian Meredith

line Got Are we income that perspective just you. and income got going you Langhorne And to Top quickly where are quick Layer you your just have to through book Is where see to other fee Re. Tower accounting from Hill? going another, the it?

Bob Qutub

a to joint Langhorne are XX-XX. venture is see, going the You

in are that So of nature where you limited our be investment side there. piece. [indiscernible] see it, to it's coming our That's in you noncontrolling pickup will see JV going given of it through interest. partnership the there. it will a But through But minority come

Brian Meredith

Great. Thank you.

Kevin O'Donnell

you. Thank

Operator

Meyer line open. with Shields Next from of the question line KBW. Meyer, comes your is

Meyer Shields

talk the other risk? the Great. return expected in one Kevin, return? Thanks. about question. break you between improvement attractive basic constructing When a overall expected that in more at down versus improvement portfolio words, In you can X/X,

Kevin O'Donnell

our say And would a has we from What try. uniform. me reasonably I net been increased Let sheets. shift that risk owned is, on risk our balance have perspective,

uniform hotter So high. reasonably a up not one shift. or the XXX, low if a curve. it's as down it's in in almost we It's hotter the like are It's up a below jump

we expected risk per we of getting two are using and really an are capital that return we our getting bumps. are efficiently little from we more dollar are a So rate perspective, more Then bit taking.

segment. major by changes the I highlighted seeing we So of kind rate are

what nominal then a I our you think that are more sheets. that returns are seeing could adding amount risk be in in a expected on taking change and owned proxy balance we the for

Meyer Shields

That's helpful. very Okay.

confuse me that to but estimates a loss you industry, the don't practice. Can than little Second question, of for which drift down bit? catastrophe to rather seem that talk odd broader been it guess. does kind seeing quarter up, are has we third your that normal with little experience I I want the to a

Kevin O'Donnell

about can us. talk I

movements have and in, these of There's When lot of losses. moving a I I our it, lot proximity came to have program. in shared think retro close a are a pieces. we events about think perspective, that from we there's going on

events we from at of wildfires all think had was are the not zero each optimal look the the allocate time gross sure and making events an just retro back is across and against the to we recovery the the to wildfires, there that So as happened, then again, retro back made we what had incurring. and about go protecting go losses of to begin assumptions set

we on I going to them. movement So think are see some

large. specifically weren't a that importantly, there. at overall If over little it particularly to trend movement wouldn't of bit of movements And a point more one the little I the any you overall the bit we There's of to net relative events. loss movement the look loss, here, in a gross had

to which the from from move As customers to and top macro the industrial process, our what's losses we is precision loss believe shares our time be. understanding more from they down, having increasingly passes the approach, kind very what with market and of starting dual their

I the loss to that mean think So customers moving will bit. also definitive migration numbers more the information a from will be around

Meyer Shields

Perfect. Thanks so much.

Kevin O'Donnell

Sure.

Operator

from comes of Jay, the of Cohen line open. Bank question line final America. your with your And Jay is

Jay Cohen

Kevin a we are from have capital than your there standpoint, moving at seemingly you. or probably Bob, had Thank in Yes. years. more company pieces

give buybacks no on pieces, Looking for expect buybacks? should potentially all those the going given everything just any can potential for we year, I this moving on? insight given you mean, us forward,

Bob Qutub

feel changed, That's which very comfortable. we X/X renewals we We are the very we went asking about, sheets capital balance looking a capitalized. as deploy on capital our focus our for of capital, into good first was look on deployment out question, at there. our how Nothing's talked to and Jay like it. management and And thanks we our well All did.

about on successful the were we As there. X/X Kevin renewals, talked

deployed We ventures also it through through means unit. our other

as told very good to And we XXXX. our money you My are about. put and comments to what into something are our we we work. of is the deploy felt see opportunities we kind capital, still looking priority again, are, So that's about go that to

few if over those buybacks, rather very covers deployment. been of capital time. Jay, we one to with that considerations looking come or that as will have good that share but And are overall are we not part capital one last it. to think Regarding as is the over us and balancing beholden Kevin, things seen get metric, have I as going about well you of offer it you returning period else? at anything our a quarter want to years, Or that, single

Kevin O'Donnell

absolutely right. That's Yes.

will We alternative into in deploy and can't then look ways manage deploy first it to it. we capital market if the

Jay Cohen

Thanks That guys. sense. makes

Kevin O'Donnell

Jay. you Thank

Bob Qutub

Jay. Thanks

Operator

This turn back Kevin I concludes call to the session. now CEO remarks. over our question-and-answer O'Donnell for closing will

Kevin O'Donnell

today's forward for everybody look to call. We on time. in speaking Thanks participating a you Thank Bye. months to you again. couple

Operator

This concludes today's conference call.

You may disconnect. now

RenaissanceRe (RNR) 3 Feb 182017 Q4 Earnings call transcript