RNR - Earnings call transcript Q3 2018 | RenaissanceRe Holdings Ltd.

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Operator

Good morning. My name is Emily, and I will be your conference operator today. At this time, I would like to welcome everyone to the RenaissanceRe Third Quarter 2018 Financial Results. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator may conference. you begin Hill, your Peter

Peter Hill

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

copy, the sure on Eastern +X-XXX-XXX-XXXX. audio Time X:XX make you replay receive didn’t the provide X. you please me The available and we be at There’ll one. midnight PM call today December call replay with The of through we’ll XXX-XXX-XXXX, an about If is be from you by the accessed RenaissanceRe’s XXX-XXX-XXXX or midnight January is and call can for website need Today’s Investor www.renre.com, on numbers on X, also passcode both be of dialing will through archived XXXX. will through Information XXXXXXXX. section available

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

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

Kevin O'Donnell

It Good that Last thanks joining Peter. in was shares. agreed million many our Farm for Thanks to on an have night today's and quarter State call. active announced morning fronts. we invest $XXX

with which results. advances then refer definitive global accelerates from the catastrophes. financial Tokio will transaction was TMR of to open discuss our platform. Marine the Re, highlight quarter our reinsurance above it our then leadership. of Millennium acquire discussion of strategy and transaction, discuss quarterly average of will of a how some with Farm's the announced agreement the reinsurance and TMR also impact natural as I an TMR. course, Bob investment it I’ll our and We Tokio perspective to And their State

taking and performed Aditya members the Curtis, questions. Treasure out Counsel. point and our of our the Steve Bob, Ventures of our that the deal and I I'll our to including how Officer; Group Unit; in few for before also today, address loss a activity Underwriting addition Dutt, Ross segments Chief team quarter Weinstein, Finally, should General included Head Group our I’ve

First, State we announced last investment has shareholder. night of million with yesterday's to the a RenRe $XXX a intent closing remaining Farm agreed at of that $XXX.XX make in price long-term

investor Re. Our the to insurance PC and provider State humbling founding largest us stretches way. deepen want in in back the relationship Re they have with association U.S., in Top It decades its DaVinci a Farm Layer and are is both to significant such with

Next, to TMR moving the transaction. on

aspects X.XX be many reinsurance multiple very ways Marines' it billion. about excited acquiring will in tangible enhance about values deal, book which that be not the for a this times relationship We least of Marine. Tokio us I'm with transaction Tokio will business $X.X at will value of our the

adverse an premiums As purchases. with relating part entering cover provide agreement Marine non-Japanese will business a reinsurance Marine us cooperation their which we including with Tokio over existing protection. Tokyo will development provide be this to will significant business unearned Further, of downside transaction, their us

and regulatory by TMR’s as reinsurer Tokio in They acquire the Switzerland. multi-line the in strong and established half in was is the billion property culture as U.S., shareholders’ London platforms a sometime Australia. have casualty XXXX to We in well TMR platform $X.X Switzerland and a with and to Bermuda, approval. in robust risk background, a is the to underwriting It subject close based of first transaction of expect way all Marine TMR XXXX By equity.

some I this transaction our benefits casualty time we desirable an risks out scarce. when discussed large, providing the that TMR the value deck. our as benefits will I in frequent, beneficial and of the starting of To to page us leadership the well for provides reinsure accelerate solutions a quarter laying of report details our important standalone detail as greater a and growing TMR opportunities my greater market recognition the in X transaction begin posted with, we important at the I comprehensive or remain a morning believe transaction. of transaction, into as address Last reinsurance and provide strategy we’ll to outcomes sides. kind more leadership specialty optimism the that both see this of on which one present the of now strategy website including our will does investor as customers. the You presentation our proposition lines like -- would on for penetration that

approach to independent It to being a gross offer how while changing we The well that our also well-protected solutions increase will to will lines. number with this a on the Tokio enhance should $XXX and benefits Later the The our great and Bob greater will and our that detail us, call, clients. strategy client our problems. attractive multiple client’s core will most immediately us of business of completion, in to premiums broader to risk shares our transaction financial Upon of apply in accelerate will also broker RenRe were to us of accretive a $X financial market to strengths allows transaction example increase allow deal our their toughest solve For as growth transaction we access attractive to augments strategy written is our makes greater receive able strategy explain flexibility. through base. the shareholders financial us our TMR how $X should fact capital to able Marine familiar book of our million to continually more re-insurance strength on exclusively to leading pro is as comprehensive of scale reinsurer, our forma results. and are pool access we billion, intimately to permits which and reinforces a this an and our billion. adapt reserves This of business a over TMR portfolio. an

their have worked formed grown premiums that business. at capital gross and initially third-party selection We on XXXX. time in most reinsurance our and to written By areas. Bermuda footprint now re-underwrite in portfolio TMR refocus reinsurance profitable $X.X they've applying since billion Since have excluding opportunity portfolio in management stands will it their expanded its the superior which was we their the business risk their capabilities with

we both ratios. result a efforts improving hope As to loss our and TMR’s its expense ratio by of combined improve

hurdles. of million assume about and In that substantial Investor likelihood TMR’s we probably risk $XXX could makes closer to on leadership our market all falls conservative meet being and written positioned billion of underwriting there $X reinsurance case base our In of pages the from portfolio. reinsurance appetite. premium Our is us gross benefit and Deck premium within that XX, XX to a uniquely present

We believe remainder business. integrated have will post-closing our that that we many system can application in continue we consider options evaluate to the strategy the this engrossed and through of for

bringing its the we to the sources In portfolio capital efficient will on enhance addition capital. to net generally risk equity. needed ability bring our risk TMR’s efficiently return required our Conversely of incremental to will with more the re-underwriting will this desirable support strategy to gross further new its to lower optimize it which applying TMR business business and capital portfolio by to joint risk and match increasing venture

will While that which will importantly, $XXX importantly on with to I with structures balance development Tokio for going Most fronting business price attractive are risk obtaining business the we downside. several From risk reserves substantially our adverse be we renew adding this the cover most third we and believe ventures business of The our transaction only an to than forward. specific Marine Tokio business, includes which perspective, is designed a we reduce will business. includes from choose different in us Marine limit. very party our is provide our this million very transaction the removes the to TMR’s are – an sheet,

to scenes. Marine the until their to continuity Group transaction, to fronting part continue us As agreement an allowing with provide we the to capacity have businesses Tokio provide of XXXX,

TMR business, further its to the we a sheet gives from to needs our their since Marine of Marine with a on excited more exciting risk our relationship. where is capabilities will us environment have XXXX aspects agreement They risk summary, us. an in no for capital related To take Tokio transaction invaluable ability purchases enhance of enter is and to abundant. the This very recognized customer accelerate of unique our it cooperation While agreed a the access how scarce one which of will reinsurance been this respective to footprint, through to determining the is affiliates. business and I'm strategy. this Tokio the cooperation of a our longstanding has In global work a its solutions seedant with transaction on bespoke non-Japanese and balance facilitates attractive process is provide have our and clear, this future be and activities. these about risk agreement of preferential portion we

team that financial call We the I have call, Bob the best of transaction aspects over in later realize with TMR eager financial once to turn and losses on feel segments, the our in the to the the on future business I’ll and have and closes. update work but opportunities comfortable discuss recent our business greater discuss depth engage I'll the to do are we performance. TMR first, overall to we these transaction to order benefits, but in

Bob Qutub

both challenges. us I We everyone. with probably morning, good a questions presented and Kevin, many and quarter know opportunities today. us that Thanks, you had for have

and TMR on financial enhanced comments turn highlighting few will I I be to to my fee income some will limit Then it the Kevin. disclosure, back introducing we over will transaction a results. discussing providing So

share, to on be purchase It book we share, to opportunities share starting be business. Now of gross it the excited through solid of on material, our multiple $X.X foundation to at The will to operating associated have ability earnings per TMR return demonstrates X.XX quarter. value billion forms is financial acquire with value per per will transaction very the I’m XX simultaneously meeting it immediately integrated deal. book tangible and to goodwill price TMR customers approximately book closing of commitments active efficient capital based in and tangible RenRe’s June or operating our and will little strategy application be our this with The equity. while large times about evaluations. to and very accretive able net book bring a transaction, attractive system, will

in pre-closing slightly dividend $X.X at $XXX estimated dividend the closing available rent billion $XXX and an priced cash million about agreed We which to and $XXX The of be component adjustment cash available more will purchase component and million constant. pay Tokio the cash a of Marine above price re-shares also have and at RenRe shares. the yesterday’s at of result year. pre-closing Any component million price cash the keep of one with $XXX below $XXX.XX this than would or they variance will cash. of million consists in hold least per share, to receive will

Given and between us between that books, our expect synergies will the we reinsurance significant there TMR. overlap be substantial

As these you course must and the synergies will however next occur done couple be the of of realizing responsibly years. over know,

we we our rest towards the value. our do maximizing business, manage do shareholder will We expenses rest eye with intelligently and with an of as business of the will

transaction on basis. will We issue the pro a debt not with forma any conjunction in

total our our $XXX one will This that XX.X% than its debt-to-capital should anticipate to we increase point current However, slightly reduce from more percentage ratio XX.X%. capital million. approximately

a investment addition, our our expect forma at pro increase basis, a transaction upward to slope, proximately TMR assets billion. In leverage we in investment should by increase closing an the on $X

underwriting We higher acumen anticipate in expect of a result existing bring which risks. TMR’s smaller book to significant will portfolio we to quality

growth-to-net our seeded third this strategies capital. were risk use optimize party also to will We in

inception business net aggressively changed. capital GAAP we to our and take As view not we note underwriting We in look and XX% form to as of Since any book, in dividends access will and opportunities capital have management optimize, will returned of the term first. our deploy capital $X.X allocate or TMR’s to a long we repurchases. responsibly. a our company, its share that billion investors income manage approach we has should and I

the consolidated moving on to Now results.

$X.XX third or quarter, net share. of per we the For common million diluted reported $XX.X income

$XX of to million Now, third results moving on million income share. we diluted the per for quarter, consolidated common net or $XX.X – reported $X.XX

strategic The common overall maturity equity of the partially on Our investments had from losses investments. or per net of income $XX.X loss gains interest of reported in an operating $XX.X underwriting was as We gains unrealized million ratio million result rates. by excludes million $X.XX realized and share, primarily diluted investments and our $XX quarter for offset and were our of fixed which a increased XXX%. were combined

In of reinstatement our premiums largely disclosure due that versus the quarter be $XXX providing we to in million gross reinstatement Our premiums current ongoing $XXX is an about the forward. do, to the business will to wanted This million year going the you effort our that were $XX million million discuss booked consistent we down of I in decrease the last quarter. premiums comparable we in in quarter written with from third income enhanced to help way around quarter. fee think $XXX

of we supplement, make and where and providing transparent. Well, component our fee catastrophe break will income information this that to our You income several more added have been products. it structure reinsurance joint years funds the SEC the detailed focused includes we business, now management our manage wanted income and new for in a income business. filings, the property of have fee performance to we fee Fee we out XX note page venture

have capital give trade fees bring we and to risk through the income income, third-party to fee we increased ability into for us. our also where transparency structures other wanted to generated we While deals you

expenses. have fee addition better operational have some income More account to four In will performance. income the add catastrophe years transparency our changed a so also providing you in in in the surge our management for and fee to not of performance serving not ratios variance give accumulating XXXX, to our the we I’d historic prior There with customers need, idea years included reduces the your our XXXX income this catastrophe the expenses remain reduce income both business. which the fee reduces far due both XXXX even that like fee size events fee specifically, five and fees. you to way underwriting performance acquisition our that the of income, we catastrophe over of reduce last our our now increased expense focus to remind has the and strategy income in should our property assets. events been I on

capital. Our system to risk needs our This is choice our by customers’ capital. is the driven consistent with matching source to efficient approach of balance sheet strategy with attractive our with efficient applying integrated most of match

wanted Now before highlight to the I moving to in this our for our quarter again improvements you segments, continued operational efficiency.

in to we You in we should increase business the as TMR. the expect process invest coming operational expenses the especially as integrating undertake and quarters of

However, in expected relatively over earned stable expense due the should time ratio growth premiums. remain net to operational

the other continue the to our be to improve benefits of and of One transaction TMR investment leverage. underwriting will

of will comparative the million and third premium of large non-recurring. class This quarter and by will be with where by segment, nature this segments of quarter by versus premiums large growth our its in gross the the catastrophe Property over written end. XXXX from by earned property customers million our earned X.X% effect existing to premiums on solutions. million. premium of we They’re unique over moving $XXX year down business premium this was was premiums gross opportunities current out those capital $XX which quarter that starting property Now million solutions seeking supported our this re-instatement business. booked consistent provided The quarter the fully transactions funds in majority where written XX.X%. $XXX The with in by grew was the We for in be with property premiums catastrophe in of premiums quarter, catastrophe were quarter written $XXX backing business re-instatement third these decreased the gross

Michael we third quarter. $XX from over unpredictable X% quarter. combined and of some impact should results. While $XX benefited mention onetime business, Typhoon in estimate of basis QX by in have the also by million events. over in impact our are almost down catastrophe I result from ratio very loss on in a briefly million that the to $XX reported figures We In the class property our increasingly This have on comparative $XXX XXXX other we JV, million written cautioned catastrophic our net property underwriting segment of variability currently could million from total, dollars financial from event. incurred opportunities XXX% of million we forward. net hurricane past million grew premiums negative it gross Florence Hurricane the to broke their $XXX negative premium will preliminary in that that of an a $XX these nature we the going other few deals years, In which these

our of Now casualty in moving XX%. in premiums underwriting combined casualty segment quarter $XX segment on the XXXX generated The the up X% gross million to over ratio quarter. third comparative our written of were income a of

to ratio This our continues book performance development accident experienced with with recent year favorable casualty casualty a quarter. and is of in Our consistent the the expectations segment of mid-XXs in the We both for at putting XX% prior around X%. run forward. from loss current modest years accident going line

stemming investments. Now, in net of the We million in investment results in million total maturity total resulting reported of and short-term an return X.X%. portfolios. annualized results $XX third was from of quarter Included investment turning our investment investment $XX income, total fixed largely to

invested impact assets have benefited the of from We periods. during recent rates interest average and higher the

previous $XXX X.X short-term investment overall are and was million maturity at maturity of The quarter. X.X% The we quarter, up at September XXXX prior short-term by investment fixed the from our quarter. the down almost XX, and portfolios which grew investment was maturity the slightly For portfolios our fixed years. our portfolio to from yield duration was

to portion somewhat of And by around shareholders reported duration the more call X.X short decreasing recently duration our The assets last with up years. been of of portfolio the at due that, longer principally segments. impact back our As that quarter, investment balance sheets, the on. our has now duration detail the collateralized our I to explained Kevin turn held on is I’ll for so

Kevin O'Donnell

a Thanks, around U.S. the Bob. in quarter the the Starting with world. both Property, and natural of number there were in catastrophes

additional from the Bob very there were like burned number wildfires burned Mendocino would none particularly latter events, in While the estimated the details of impact the with imply in financial perspective. the $X and a primarily an loss related California, of loss I they however, the was modern of provide frequency to number acres destructive severity perspective was high in events. would these from summer outlier of the touched of some briefly on Carr around a industry losses. This largest personal the From not lines. acres impactful with California as being as perspective history. were billion to

Japan, quarter. Increasing experienced of least as while successive aggregate Tokyo. late Moving Typhoon impact be after it speeds powerful extraordinary insured the of in not widespread September to populated on XXXX. in In made in record damage Jebi billion a heavy Typhoon Florence struck there. reinsurance has to to of billion. Typhoon $X resulting the flooding Multiple United in third one through XX. of large intensity high an a as quarter Japan widespread region on purchased in there strike about on with Japan, in experienced was downpours during the Hurricane will Carolina Typhoon $XX its Typhoon Japan devastating At the together the North Then level locations end floods September still as Trami the landfall and deals losses Jebi loss strongest quarter probably industry XXXX the In strong to June loss overall Jebi impacting Yancy caused storm. in amount the struck flooding. comparable mudslides second industry as category storm X, sector most extensive and the at was been it Jebi States, since mid-July up wind and Japan Mireille with in

think loss rainfall from losses due to wind $X was of are including will in smaller buying to of billion also will the wind regional from be substantial habits storm there While reinsurance deals. a the factors region increasing and the market extensive Florence state pools, several flooding record several the largely around this breaking mid-Atlantic be aggregate loss We impact there buyers damage. the and the of

Hurricane we XXXX. was mangkhut call. event touch had impact industry an Moving reached in as We estimated during next Michael. think the to the briefly it peak a extensively in more Hong it a billion Bob will intensity about X quarter net our Category fourth a mentioned this storm, on September, to ongoing on since is This that Kong is I which negative Asia, strike strongest and of typhoon Ellen $XX event.

closely issues. the assignment Florida Of is situation development call. we'll you course, expense next will adjustment and this and we on update monitoring be of loss And on for benefit its quarter's

to The continue And from catastrophe That comfortable being persist. adjustment combined events. the we XXXX Irma Florida the events. XXXX track with remain the for last We environment as challenging legal reserves our loss by Hurricane expenses. Cat in trends industry the adverse high driven with persistence call, discussed said we is

to as premiums London this in to our other Cat came gross written our increased many Property growth our over we property add by Moving on experienced to The portfolio, million the in transaction long platform. solid $XXX that premiums property quarter, X%. term. with is its other likely along other from the written In about other benefits, business. add to I growth wanted TMR about property our gross primarily

written to will transaction. Moving business. premiums our other and continue business estimate other property We of portfolio, the to forward, our $XXX TMR up optimized TMR that million may growth property in we add the to from gross both organically see

segment there growth the of Underneath third we in this bit a however by year-on-year rate written X% casualty premium casualty, our quite at a muted apparent grow quarter. on change. gross was Looking basis

similar large with for a we This liability quarter, quarter. you to call to market last deal discussed we California had another bespoke wildfire deal write opportunity the the first

a is market, strategy able bringing we’re to instance Upsilon net gross dislocated to amount a to casualty risk what see the collateralized risk to first two-thirds This substantial to our partners. and our capital apply system and to this us of for seeding of a to vehicle. addition integrated includes In

tended instance innovative vehicles collateralized know the another leadership. property Upsilon you pricing on our represents have focus we and tail casualty more to of quarter on have As improving to continued discussed herein have with market liability accounts. risk troubled cat The the succeeding short trends into third conditions terms risk all

to loss While trends underlying rates continue increase are also up.

lay such Farm Going future forward, have the outstanding to transaction. premium gratifying have tangible shareholder most a could executing were able TMR we we questions. it most maximizing impact our we over for it segment. become value optimized, substantial in to gross turn Tokio plus remain with for effective multiple over TMR conclusion, $XXX to grew it committed transaction despite foundation and was State a is active that, profound strategy large two and the quarter, Once accumulated share to to and With In agreeing organizations We success result book events, likely as additional value of casualty I'll of the means had our to the dividends very on Marine as shareholders. written million.

Operator

comes Pan the line Stanley. our Instructions] from of [Operator And first from question Morgan Kai

is open. line Your

Kai Pan

you it discuss deals, could Capital if forward. just around little get like a any is question Times strategy independent such you going attractive the you bidding continue with wonder Square good with a it provide and happened be morning. will in color process, you why first before process is your the My can it? bit you like And about deal sounds price if competitive give a recent range us background that a Is TMR. Thank can and that you

Kevin O'Donnell

Thanks, Kai.

believe mentioned With Times beneficial comment, to we've Square influence exactly Square them formal on letter I be regard long-term to to but our worked point with I letter With publication discussions be your specific shareholders. really consistent transaction. it the a for discussions this to and known would more to Tokio regard early summer. in was risk process, thinking this would is when the had started question many Times certainly is pinpoint for say the easy beginning solutions that in years it over have difficult and and with As about better transaction We time. of Tokio. strategy our no a that's to different

straightforward thinking about we think the partner needs Tokio So hope retrieve to in the be And structure how transaction. that this I transaction found a to collaborative and reflects they to which comprehensive business from was was long-term the was a that to we was a exit meet our shareholders. and to able reinsurance we accretive bringing the which have thought that deal needs

Kai Pan

my then is after and million. good question earnings $XXX It’s – Okay. second the about on of run your rate expected tax

three us leased component You of that.

investing income, million. And One if X.X% already of $X that’s them you like is less time yield billion. $XX

as how have cost the gross premium return So I well $XXX much factors just wonder ratio on synergy would these million. how much of the other as $XXX contributed two including a to income improving million

Kevin O'Donnell

business, about map their existing I is our and appetite portfolio apply Long-term is So, to thanks. into metrics buy we that way that – our The risk for management the our investment objective is businesses pretty it think straightforward. have risk of think our same and I businesses the systems. line

line business, the clearly our In to rationalize on be up could need would say [Technical of the with on to we that, $XXX I difficulty] and Tokyo that the converge is we’ve appetite as to are that realized. million would risk with millennium platform. long at regard believe gain our billion. $X to business will look that I expectation transparency So a look the be to more term With that is as we our after synergies reinsured assessed we that order the by would synergies, we we close underwriting do a reinsure that and I loss margins think ratios there are achieve within

Operator

on the line? you Are still

Kai Pan

Yes. I hear am. them. I couldn't

Operator

line believe disconnected has just their My just apologies. one moment. I

Kevin O'Donnell

Kai, me you now? can hear Hey,

Kai Pan

Yeah. I can hear you.

It’s Sorry that. about somehow is disconnected. getting

Kevin O'Donnell

Yeah.

Sorry. answer. I’m are cut out. there. can where repeat tell me But I'll what you happened I what you not my – sure

Kai Pan

great. Yeah. That be would

expense side. rationalized You on were the cut off right about

Kevin O'Donnell

Okay.

what combined our will to on for target just rationalize in – book risk renewals have as we Long and tolerance how pretty portfolio ratio same annuity, a way that metrics been term, has a to the we on what is existing So the to investment transparent and will basis, that their I at said consistent look hopefully the I'll over. is I books. repeat on roll be

is expect portfolio, we as And much rate $XXX risk should as will synergies once believe asked we on that say then view would that. returns. the the ratio runway our do we like we to $X the have be some time we to acquisition. prior that's get the would basis a could our cost I to million So at more billion the a our expense have you but that with be we average and have and plan a to that It'll that appetite maintain there you we able clearly the on believe about again run take long-term clarity be organization to

Kai Pan

will buybacks I XXXX? Okay. one Last may is you pass if throughout

Kevin O'Donnell

capital comments, my changed. in prepared Kai, our said allocation not has I approach As

in shareholders. our with buybacks our that strategy in a returning we've demonstrated this got long and of capital business the our are transaction, and As to invest part continue and of a first we are allocation always capital plan will history further consideration to

Kai Pan

Okay. Well, probably buybacks I billion $X think that with even could dollars cash outlay. you some that about do like

Kevin O'Donnell

is area in really we this capital It's now, up and right strategy, deployed. best what our transaction right this is think our Kai. Right all about the is deploying to alleyway further the

Kai Pan

still other that you the is to deal Also, you have ask after way excess Okay. capital? think the

Kevin O'Donnell

come that into Yeah, we season. excess deploy as to we have look we renewal capital the

deploy. look we renewal seasons, has we come Again, to Kai. where nothing where that's know, look changed, that’s deploy as we to You into

Kai Pan

Great. Thank you.

Kevin O'Donnell

mentioned I I re-underwriting the our amplification make is I my a would point bit risk comments, to One about as in Bob’s appetite. talked little

components One of the less will on larger require of the the that will TMI’s capital. platform, business transaction diversified be

over equity can closer the price. So long I the purchase than think issued rather to we the get term,

Kai Pan

good much you luck. I see. so and all for Well, thank the answers

Kevin O'Donnell

Thank Appreciate it. you.

Operator

comes of Kinar question from next Sachs. Yaron Our the line Goldman from

open. is line Your

Yaron Kinar

a everybody. – morning, I’ve deal. couple the good questions Hi, had on on of

millennium Tokyo the involved on that of side. would to some did most the risk come portfolio? what’s How or take sizing and So right the the would and of right specialty of that it that seems it portfolio with come casualty like size long tail from

Kevin O'Donnell

is are observation deals them. and The bigger for your is casualty think I specialty So Most correct. annual. portfolio a

XX close, a deals months. which take on longer. will There will it multiyear depending few are take So

risk, Your TMR balance exposed that renew will second be our about until question the risk sheet it. any associated we balance on with sheet business to

would hit being that in balance that development the balance premium mix purchased that sheet, being those is two. with new – reason will the only – beyond renewed Assuming adverse we and covers the cover transaction meaning reserve the business conjunction the we

Yaron Kinar

retro on market into and elements you Okay. own do the And third don’t what as through sheet. necessarily your you with consider take allocation for want you the balance own there your simply take to process that balance the want or options do you other elements you the options the serve that sheet to renewing? to the your what to party are to necessarily for on go Can don’t with talk procedures is not consider of partner maybe as

Kevin O'Donnell

Yeah.

business of of I are a what perspective challenged. some they more most – think lines they're in, we're from with, that class that the familiar have I businesses

be in re-underwriting. the will probably those So which our focus we'll area

to I which risk apply maximizes return. on balance think portfolio our systems the our appropriate the capital balance balance specific the measure be equity, determine and on on partner own sheets, return sheet, our our which on where we we'll and and will ultimately then the it's our the sheets to optimizes risk is normal and once have applied

So how our XXXX, ratios simple of I look would book an for my succeeding be anticipation do I to business in target, they I easy reasonably that’s structured. will it's or y. that at but way say wouldn't think will the this it's if x a will say answer is will book for that not be it flat a XXXX. about be

Yaron Kinar

not to helpful. necessarily quick Millennium. from portfolio correct? Tokio investment looking reallocate the earlier that that you're like That's one Is It from Fair. And final sounds from coming comments one. your

Kevin O'Donnell

seamlessly. But was duration. will casualty portfolio that this few about optimize we longer that itself things $X ours pretty we lend the well, investment in to bit we’ll should liabilities, assets. is of given duration think bring the their little total look a outlined specialty pretty I I There into that in as billion a to integrate think there

Yaron Kinar

very much. Got you Thank it.

Operator

question line America of from [Operator Instructions] our Jay And next Bank from the Lynch. of comes Cohen Merrill

is open. line Your

Jay Cohen

actually. questions Two Thanks.

the looks explain first can in happened there? it The wondering like is pay don't were negative what if which I'm third quarter losses your you say you typically

Kevin O'Donnell

your question? ask We’ll up. to look that second Wanted

Jay Cohen

Sure.

business more the fairly that we in have market to market already one development. side risk, that's mentioned does Casualty guess the alternative ability see on might you're interested gets call in some to pricing that are which capital an had bringing competitive? concern it beginning Upsilon, we if interesting assuming general that into more Casualty limit the I is is You casualty it that

Kevin O'Donnell

a has So, were pretty Casualty, to to to risk – circumstances. my specific to has structured – to in experience interested capital way, there a in set our capital be third-party be if third-party for in a it the be of be

to So we I it. uniquely positioned have construct are risk to access kind think of that and

Secondly, the say we business with market investment lot bring interest is of diversification associated would traditional And the the is that one to in a primary catastrophes portfolios. know, extreme or events that to the of as related for income tail. drivers Casualty reinsurance I the float is more

is able unique that So, that of I risk be think, spot capital. bring it something to to we're that an to kind

a property casualty and cat meet appetite, which business. they of it's an interest primary objective from it the business expressed have and having like investor think in I but primary they one doesn’t the one reasons

had with comments to that – got if on see he I’ve there. turn any mentioned, I As

Bob Qutub

put Sure. together to Hi, on is focus add, and our Jay. solutions I’ll trying for just actually innovating clients. our

matching that, trying us, Kevin we pricing issues. and as our to be sufficient As get as on their solve rather capital We'd long for we to effect it's do help the have what and necessarily. can front on interest too mentioned, about clients might foot that capital on much risk focus don't

the for was that motivation So really doing what we did.

Jay Cohen

Thank Got you. it. That’s helpful guys.

Kevin O'Donnell

Bob, think, first one. I got you've the

Bob Qutub

years. that's see recoveries starting to come Jay, from the you're Yeah. in basically prior

you back, thing come starting to is recoveries billion to those down. mean good the a we're assets recoveries had $X.X a a bring ago If see I QX in about we XXXX, which from look year side

Jay Cohen

for Great. that. Definitely. Thanks

Kevin O'Donnell

Jay. Thanks,

Operator

Kumar question Buckingham from next Our from comes of Research. the Amit line

line open. Your is

Amit Kumar

follow had up question Thanks Kai. to and I good morning. a

You large you know you a deal your the from obviously other for asking this phenomenal financial I looks shareholders one options. perspective. you at have to That equation, if look said flip of

could exit Northover and decent where means provide fetched you not the multiple still seen have of market new to deal other one-five appropriate shareholders? a have value have go now deals yet three benefit out You on two from right to which the you why multiples in we chose direction, climate

Kevin O'Donnell

The is So, per and and way is it strategy the tangible thanks questions, that transaction metric this accumulated execution term we’ve primary strategy the of we that. grow share book advancement Amit. at long our that for value the dividends our believe the of plus to through look over achieves

So deployed deal is capital I talked the activities in we've of financial about done always use This quarter when is accretive. the think on we've metric business. preferred this about that every our

But seems not there us other overlap the how as is stock there have looking you of with thought best – the So risk measure. story is to see what term. total sure everything introduced direction. a understand and between for for. what is the quarters it the But premium and long value on internal with was to is known multiple just there growth it or you ever the I are trading understand we're stick our you the from we've again, just perspective investors our having have the book. given chosen there about if this totally achieve execution return I what is metrics for the out is and metric focused primary for looking way at It for strategy that so executing to modest and is did long. clearly to to now I'm talked that about, over market trying clear let's choose consistent think a creation? It to any to think your it absolutely just I'm

Kevin O'Donnell

a there's One in downside So, nothing simple comments. is risk reinsurance, transaction. you or believe the mentioned structure, we it is I significant several is execution in that all in and transaction don’t embedded a construct productions. understand, things the limited they do It's your this that of there reasonably

for that from clear build perspective, tangible long-term So, by this to pretty far that book choice way a transaction I think beneficial us the executing it's is most value.

presented in is have one we and to question we consider. perspective transaction fide second would governance transaction any is is Your that bona which, us from a great carefully

Amit Kumar

think stock the do question, valued appropriately Last here? is

Kevin O'Donnell

at strategy discuss calls earnings. explain these our look and I for me as good opportunity to a to

for the what think call. the decides, valuations our I market I are is scope stock of beyond think appropriate what the

Amit Kumar

the for answers. Thanks

Kevin O'Donnell

Sure.

Operator

Greenspan comes from Fargo. Our next line question from Elyse the of Wells

Your line open. is

Elyse Greenspan

Hi. Thank you.

question on Kevin. So, my

that interesting there outlook turn will done been hurricane us know think from kind floor you and You like with you other seems should some of year next you combined months you this counter prices. has players, this run Can it a XXXX you you XX-XX know on about for a of cat deal I needing timing think capital know, couple guys market kind losses season we've maybe virtually know at better the year? cat with deal entering you know put this on. how and your But January more provide into losses the guys I think year. away is are seen to X announcing opportunities of next potentially the where you also

Kevin O'Donnell

I in two think heard I there. questions

matter timing closing really take time long to when the cease in things when we of where to of when a with a These are is against the is think construct coincidental rather calendar negotiations renewal together trying a year. bring I this than began. deal that and

I on of for the think dependence regard way do them a secular When hurricane demand think secular a lot ample constrained be believe we've that of about There are the we will who retro retro third depending to willingness I frankly party the capital. There A – many the that in is for retro few be pricing by this for supported to lot Their recognize second in But at think important yearend the this about overly is Your or cycles retro I our cyclical shift. comes biggest around from a support with an purchasing I willingness this in will of traditional markets of the retro look impact be participate times pricing. driver peers retro will question a meaningful being but many customers will that will demand. is the availability there is that have an market macro stable. shift I supply say market. I on market. be level renewal, constructive on support talked reasonably the think the believe and persist. on shift anticipate there will to to also behavior continue in lot I season. would available. whether be is we would a are I that a think where I we shift, of the on could more but And past don't

Elyse Greenspan

Okay.

up flat January based And to X? be we reinsurance what to get you down retro and traditional will or down think when so on you see also marginally then or just rates do for

Kevin O'Donnell

that have that us our the long platform benefit compete we which any as environment from positive as the in not planning. I transaction. were per portfolio to built in environment we’ll the pricing. there’s So If there there’s optimize rate don’t the enhancement. enhancement next rate we’ll enhancement report is in rate margin we’ve If allows rate against XX-XX year, as

Elyse Greenspan

you other question to Okay. outlook know TMR margin And then know there. back my the relates you and

combined they I So XXXX. XX% part ratio had think of pointed to in –

we guys my to material and on to business brought know you And platinum you with million is get when that from much say running show as So is margin that to improvement of way second you addressable you that us to currently business that well? guys stems business. transaction part how you But you the come what is at? renewing billion I probably off of took guess question million define margins the some you kind margin $XXX you to there of the of that when – part way there of a this that to of is $XXX see that hit as some business tell that deal a the can $X for your to delta not

Kevin O'Donnell

the take But way time will same us existing we for is risk The we The at think onto of business and a we that that will by same the it the our as will be margins bring have. and business looking are perspective about we and that – do book capital business so at the platform. it be is, that that have as we from we like I it at will to underwritten to margins TMR our be of think done I line a book business.

support Additionally, with we amount the will capital strategy apply that our the will which of ROE. enhance optimize net business, to of will associated the which gross

amount is of second adverse which as mentioned the a to ADC. question, caliber is what be protects of development with – addressed the protected is earlier, think And we're the is taking solid risk re-underwritten. I until. I we Your believe by an reserves It pool

that pool and be reserve until reserve by will reserve, protected will renew it the business, So, be the we in the ADC. will it

Operator

from [Operator of comes the Brian UBS. Your question next Instructions] line Meredith from

open. is line Your

Brian Meredith

Yes. Thanks. A here. couple questions quick of

you're what needed more First, doesn't clarity saying you little why transaction capital balance give get State excess assets upon Kevin, you and to on sound I'm liquid It sheet could plenty curious, to Bob capital. transaction? the a your just Farm of this do that like that

the So equity Farm why raised? State do

Kevin O'Donnell

$XXX what contemplated think is to on I we issuing comment So, in at we frequent intervals company and is tried on And what the I that comment a equity. to tried not million Bob equity. of deal, structuring always are

State being natural a Farm that of It our which contemplated issuance had So was transaction stock. equity. we for the the enter time to

Brian Meredith

Got you.

the unrelated. second Then Okay. one

it to transaction like in the going we fourth this Just bottom on expected, quarter, the the and still looks much pretty two generated quarter the to is earn quarter profitability curious looks to going in false it's is on line, transactions one-off how much quarter? it’s the like had should in on that fourth those all those you week underwriting transactions on all just expect that pretty much

Kevin O'Donnell

but just we figure that saw there, it's of is near amount Brian, a small nowhere in there the Yeah. a it's piece, small throw this we quarter. but would we what size it

I would So there to is… just nearly But I would zero. round that - down

Brian Meredith

Nearly zero. Got you.

Just paying that. Great, thanks.

Kevin O'Donnell

you. Thank

Operator

from comes Autonomous Our Tunis next Research. Ryan from question a line from

Your line is open.

Ryan Tunis

thanks. Hey,

deal. Just couple the on a

tax The average after been $XX first profits there focusing one, TMR of has five in last fact the years. on million

a is your number First also different Elyse’s going originally look gone when the $XXX of question, to synergy would a don’t among of book million, that to up all, trim In And ratio? from part would have billion XXX% million, that tax other than down? think combined or And structure? you your higher with book like, back words, all I $X.X this? that is is $XX that you the tax

Kevin O'Donnell

look Bermuda There’s a on would couple better the of things Yes, tax on it a platform. that. platform than existing

some uplift there. that So helps give us

of the Plus, we going be ratio be ratios select. we'd or keeping Kevin synergies Regarding the be book into of ratios, business combined what our in said, will business there a optimizing have expenses that would technical and deal. we're book better the the on we to

the driving you investment well supported So levers we that that. up $XXX that of million the that portfolio are out number put different got see we plus a as to there,

Ryan Tunis

how of magnitude on much order helps? benefit and Any tax were tax

Kevin O'Donnell

think website but about, could talked see is we what they on and you a amount haven't I their an it It's tax factor their disclose.

Ryan Tunis

those specialty. issue but or as conservative comparable just if thinking you Is quota was with specialty how possible in – it more changes one this on picks we'll their as more like be something I casualty flat may there combined casualty, maybe primarily the layer in some other perhaps ratios my businesses I’m your in about this selections? type like share mix that here guys it where recall is may see not stuff. then And are your are Okay. last And seem make

Kevin O'Donnell

bring much is at this the to our book. our objective I on is loss well. it that to in-force and quota their within So probably same issues focus or with wouldn't have of bias more too a casualty we as book – bias share on more that

and within the that's our concentrating million the profitable think it profitable to think the lines underwriting to deals. frankly the stretch billion. I is clearly of most is and the I $XXX So point basically the on most both concentrating portfolio easily on could enhance Again risk the appetite then by

Operator

question Meyer of KBW. line next Shields our And from from comes the

open. Your line is

Meyer Shields

Two to TMR required capital One, the very amount Thanks. it quick is fair be of keeping? at to questions. Great. scale of the premium written sort you'd gross that

Kevin O'Donnell

I'm One deploying we we're thing out flexibility target the that’s to is though point much and much I we're deploying how probably But as I how at looking crazy think a the what the number is on is profitability said closer having I then of back it with and diversified our number. the brings the platform equity probably envelope earlier portfolio to would on it enhanced call the the that risk platform capital have. beginning our point capital of to control fee a not due

Meyer Shields

that. missed I sorry helpful, That’s Okay.

Second when difficult is business is to about going the to past most to that, question, to writing available. look I premium to but a How of the know at extent commentary this based that? you it. the sound that’s in have be capacity naïve was it was that retain TMR on little the made going

Kevin O'Donnell

Can you I to understood make it. I want restate sure question? your

Meyer Shields

Right.

someone if I So for there is catastrophe it. assume other RenRe than if would that to overly a reason risks, for – there [indiscernible] simplistically, are

more the I that be premium wondering it will risk difficult am written by a retain is So, whether for cap to there TMR?

Kevin O'Donnell

Okay.

with a that's So I think transaction. any risk

the at what that what outcome is then overlap. look you As of is the and overlap likely

platinum I to our when business, customers targeted and – will the think sufficient in relationships book for within business of extremely did well of we protecting our did be I that feel the that maintain us we the book with transaction business.

equipped property casualty think feel simply as but the it's suited it broader question within but I well certainly to well a I and that the it's and to one it's manage. specialty a cap pretty business any well I pretty think transaction the risk than applies book,

Operator

further are questions. there Apologies. no And

Kevin O'Donnell

other is on that's believe as that both of No. $XXX the going is the that I more within say comment you would to billion when risk up a within moving we that and to I was the just thing achievable is target scope, million, risk the we made. appetite say, think

Operator

back turn are Kevin this will no the over to O'Donnell questions call for closing there further And at time. I remarks.

Kevin O'Donnell

your follow-up happy lot and if to your actually again I appreciate your them. we’re through is Thanks there for we're this attention quarter. the attention on know time. a call questions We always for and as take

Operator

This call. concludes today's conference

You may now disconnect.

RenaissanceRe (RNR) 31 Oct 182018 Q3 Earnings call transcript