RNR - Earnings call transcript Q4 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 Fourth 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 Vice Finance Senior Investor President McCue, and for Relations. Keith ahead. go Please

Keith McCue

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

can XXX-XXX-XXXX XXXXXXX. XXX-XXX-XXXX, XX. dialing If or through internationally. you copy, is XXXX. audio by RenaissanceRe's of one. make free accessed US Time a for be X:XX through on X-XXX-XXX-XXXX archived didn't section replay available with website through The XX, The of to Toll you on be need www.renre.com, midnight available today will and both from PM also me provide be about March and please sure There'll the information passcode Today's we'll you Investor numbers call will get replay at is call on March an the midnight call Eastern

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

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

Kevin O'Donnell

Thanks Keith. call. And good morning and thank today's you for joining

fair hold us shareholders answer questions. it's accountable that two Looking only back think year each the to I for

question; events catastrophe Japan landfall billion the response performance record with $XX and first beginning California and year we in losses. other hurricanes Including around achieved impact financial of two have significant a was XXXX most the the In satisfied forth the world. to our goals we at with set year than our strategy. further US, numerous wildfires; are ourselves of First; breaking that and decades, second; the typhoon in for we the insured greater natural

note per by of per change risk and market. losses within tangible grew value value large our Against and specialty losses and and we In this some dividends share significant were individual X% numerous plus accumulative book backdrop X.X%. by the addition share there book casualty our both

financial Preference X.XX% Re. by most operational time, flexibility these XXXX. our from leverage the raise capital Together we of $X raised the F and and considerable not but UpsilonRe of a continues efficient rate finally improve. and Vermeer multiple our capital lower also the and us through Series heading our existing year, in return on more for making to largest and believe I we We discuss performed XXXX. many in X.X% our the an the we Bob X.X% quarter shareholders. XXXX, fifth relative equity other well. issued reported million cost we every operating and common on our profit we them in was successes quarterly with, our activity our operating to quarter the Earlier But For was to same environment paying only million in detail return dividend the over actions issuance our billion Farm financial of joint State to had in equity of latest loss year, ability will our later. XXX and demonstrate begin sources fourth capital a raising shares of lowered interest results to $XXX vehicle in our Shares ventures business liquidity provide effective between into At

our more premiums equity gross the shareholders' while five expenses sum flat. and of we growing keeping XX% and years than Over operational corporate doubled written last have by the

new and also operating Vermeer by our increase existing efficiency to diligently such working of our on profitable and as business strongly by this execute ones business to Re. write achieved against forming strategy have We more platforms

leverage portfolio will our and moving platforms. as Tokio continue to forward improve leverage bringing Millennium to us operational in our the capital that continue Re expect to We will allow

and to So as with in we've XXXX for financial question the are we industry performance many with returns pleased believe our hurdles I first year answer the a so generated. that

We strong the with and On direction strategy. goals. rigorously clearly and review developed to second necessary goals for review according factors and year Every internal defined of strategy external a that question, have our the our and this further year and achieved we is our new forcing In advanced all The and launched long-term that believe joint significant of this will vehicle formation Re execution annual is focused. We venture in develop executed I several targets vehicle us and the strategy. well keep tactics our XXXX, Vermeer we with ways. partner.

for Best an a rare of new rating which it is First, carrier. A.M. A received

capital party therefore risk capital vehicle third and the and and rated focused of one market Second and intensive remote investor further commitment is capital. billion at risk powerful single is equity in commitments the ever third to a system the on the capability right largest from with $X sector unique RenRe of and integrated match the enhances for ILS end a ability our right

TMR. planning. for third main was TMR the the quarter an XXXX and the continued of will as which are in of Millennium highlights progress we've then refer transaction. We established devote announcement significant to Tokio office to of Since resources acquisition to our the I One making on integrated Re integration management significant

premium XXXX business to value and our we of to transaction demonstrate the and with we our paying of the yet our quarter scale a financially As clients access coming us and number lead rapidly major Equally continue their XX. based our this time valid platforms minimal and shareholders $X of business. claims. XXXX improvement breakdown classes growth execution our leverage. at The to provide to products opportunity discussed was strategy at and risk, but to will profitably ratio of grow both This important attractive. allows broad the Bob is both strategically to another gross in was with attractive business. continued of our was our fourth both minute, our of to give services by robust a dilution billion segments increases combined from a grow capital and on the In the all announcement, should the in in our you of operating

the over past we've to paid billion our in almost fact, gross $X.X claims In customers. years few

add value simply claims paying our Our goes to however. beyond customers

and deals new call we TMR years. We with we've continue also better partners assess on first projects. large In transaction, for source and able our risk. XXXX benefit to be strategic our capabilities the a clients and number the been past share in we're the This WeatherPredict, as business intellectual over understand many further clients likely exclusively and invest to subsidiaries our more in can and knowledge our addition bespoke insights like especially through to to several we tactical help the is other

underwriting our As we and we several always sharpened operational do, toolkit efficiency. initiatives to while improve advancing underwriting

We event We've the our money said of to reserve also human deep spend stream. improve are our develop continue people greatest our also hesitate never that already assets capital. we to and

an objectives. So regarding XXXX high of now With strong in XXXX results our spend viewing as broader all conclusion, when a year against this was I'll comments our level market. couple on background extremely the strategic our performance minutes

for and around fair amount there its As renewals. to the market collateralized skepticism property a was December ability reload of progressed,

hoping it again to were some were last think not once when renewal materialized. I year did the a and for disappointed market in dislocated similar

XXXX. consistently We our adjusted and we have over the in cycles tactics seen last did accordingly many market XX have as years

determinant a said renewal. the before, price be I've should As of successful sole not

So while building focused we're individual attractive on remain of committed portfolios. we changes the price quantum to

to owned right in While and having the gross managed including assist It structured and more. price the is successful brought our seeded structuring to portfolios than capital both sheets net requires strategy much execution customers being important, more right balance the right of of market meaningful rated We on the takes our structure our to maximize reinsurance the time. component optimization return. our simply careful protections. capital charging of significant that the at was and A

our you materially from once benefits As again quarter, this approach. this saw results

As capital customers returns the degree will service very harness our of to as trading interest property ways a in to did to our it, XXXX find business sheets of we long large balance show as the in enhanced cat basis. we rated in the continues on a

updated capital. distributions and assuming effects and unique underwriting risk proprietary deep decision us as we tools each possess tail risk and allow returns daily. where allow provides Our in consequently the to These risk how to the us speed generate seeding and required us capital of better curbs tools in of focus more flexibility points understanding expertise of the sensitive. expected on is shape understand the usage This

many however, customers increased of the in effecting is the anticipate capital XXXX loss play years in This first protecting the our role smaller the I severity result business. the in contraction time a third and risk. frequency For party

should seeing of maturation I'll capital way. be investors hybrid that collateralized of see this migrating I financials. in But we're our an intermediated the at in we're the a is assess a first managers. capital Bob more strong to third the later integration and XXXX ultimately rated that market provide by the that model opportunities deliver our increasingly call. in a in believe market important system. capital underwriting scrutinized order seeing step we turn structures I call the by our business, for over with that this we is their integrated conducted of component fulsome more and expertise in a natural TMR details to believe and capacity next the This While I'll the and more the look of diligence to pioneered the underwriting to needs be being sophisticated

Bob Qutub

and performed been the first transaction and we'll I'd good significant I'd transaction volatile our to quarter morning, it preparation the Kevin. the believe highlight with we but the TMR a a financial financial on of focus backdrop you turn few finally the for for wide to losses progress key both the market. TMR the integration like Starting us. I'll update full Thanks be to catastrophe industry Against has well in and year. I Kevin today over in fourth everyone. the back like making results, for and spread

is work number streams management which As Kevin we administering of well. discussed is that each of an established a integration have office progressing

first also call our estimated target not confident the resulting premiums written billion timeline of $XXX closing, to remain our first we in gross regarding TMR operate subject and the we run of achieving we between on immediately and rate. target When regulatory to sometime we continues year We've acceptable TMR business companies But on progress, $X this of million those expect, in separate we what Until optimistic and half it. close. half are would dictate with for concentrates the combined close detailed streams work identified focused for will we to the that you the Which As uninterrupted, essential it business announced one. first along transaction, on primarily anticipated we plans closing? day of final ensuring preparing companies million the state this as approval. of $XXX after do continue

I and from first will to significant stood operating over synergies will realized last in allow be quarter, where years TMR. XX These should improve TMR leverage to prior once two projected continue with realize discussed the us months and first As acquisition. we synergies be it the to the our achieved auctioned

As we has facets increased discussed TMR forward. going which flexibility several acquisition the of the financial financing our

continue the First, $XXX pay least at to TMR anticipate million. of we will a dividend pre-closing

Second; RenRe $XXX will Tokio shares Marine worth at issued be of to closing. million

comparisons also to should Kevin the in And increased addition their flexibility after purchase its explicitly XXXX. and our I difficult. liquidity shares. become transaction linked investment TMR, close us recently as note, purchase we will mentioned closed of XXXX TMR our that Well financial of State results In Farm in not to our provides

not giving update be on you four next but call, this will we'll projections reason, quarter. this For further

the strategic our of well share X.X% million investments. $XX quarter an moving average From fourth diluted reported was million the realized underwriting of of our X.X%. of equity losses our portfolio unrealized positions onto results at per primarily as a investment investment beginning $X.X losses million $X.XX $X.XX annualized million we or per and operating $XX equity excludes comprises common operating combined losses $XX annualized negative operating our with had on of We which posted loss which return positive an consolidating and for overall on equity was were share. and equity as net XXX%. an on common ratio positive our portfolio. for reported basis X.X%. average common perspective the passive On We returns however, operating diluted of however, These from or common Now quarter income quarter

plus common share onto and equity We our moving equity Now share and grew per average common share. income of per per $X.XX income on the year diluted X.X% XXXX. and reported was our or perspective, or share operating average X.X% realized of per value $XXX of From diluted dividends tangible million full by a net our value on an return accumulated X.X%. operating book million return operating annual common grew X.X%. $X.XX book We $XXX common

for an of ratio Finally, had we the combined XX%. overall year

wanted moving you before our on update Now onto our to segments I efficiency. operational

cost sum and million last $XX which increase our including million a of expenses XXXX an a to for operational accrual fees million which related of continued bonus decrease and and million which from in And a accrual quarter driven versus up compensation cost related facility. compensation which the acquisition was driven a year. is increased cost, quarter year. for increase expenses Our transaction the quarter direct our in in the was by are bonus this $XX the TMR larger last from factors same was number is corporate $X in same expenses credit expenses to investment totaled the the the new business in in of the corporate of in operational increase by $XX

slight For compared the direct our to of expenses XXXX. totaled only earned a as uptick a million net ratio which $XXX premiums was year,

the increasing As I previously integrate invest expenses have do to so business we direct and will as continue in as discussed, we TMR. been

However, continue expense we we premiums earned direct to TMR backing net of should of to the as our as expect expense our premiums impact integration leverage overtime base out grow to improve the net earned. ratio the

for segment, by starting million written the $XXX reinstatement with over Now comparative property the where $XXX property million in onto offset in our shareholders loss QX, development negative impact change aggregate retrocessional by RenaissanceRe XXXX Hurricane of negative QX, XXXX grew negative driven $XX or in catastrophe to the our of $XXX We the number impact losses million. the moving million an was shareholders reduced million total, XXXX and XXX% the the $XX growth was In net QX, including event of catastrophe favorable in XXXX segments to underwriting which the the catastrophe quarter. had due million. events the loss $XXX total premiums. net This segment quarter million this to an million estimated $XX to of premiums by fourth of incurred Michael, on previously was to large million impact $XXX RenaissanceRe $XX quarter gross on and net events combined a to a quarter. common of we've fourth due impact ratio announced from XXXX common the events

by For million class premiums written class with property business. segment or XX% $XXX broke or our $XX $XXX XX% gross reinstatement the and grew in in of of $XX property to property of or growth million million of year, million our catastrophe down This other in our XX% premiums. business

combined property our of XX%. income year, reported and ratio million full the For segment underwriting a $XXX of

comfortable We There acquisition from XX% for prior is long-term million remain XXXX and Our or recoverable increased movement events. in the very were catastrophe quality of This either collateralized these for $XXX as reinsurance with to predominantly due the the year. with the partners. they're some or quarter expenses our mostly both recoverable the year. credit

As earned points a quarter. percentage down X.X were net expenses XX% for acquisition to of percentage premiums the

typically For however carry in increase cost. XX% the which increase offset quarter which was premiums recall in the The to XXXX as XX% movement in for third largely lower year the was of from decreased quarter in profit the expenses reinstatement acquisition acquisition XXXX. you increased however due brokerage. year to the commissions to Downward due

quarter $XX segment, the Now XX% up our or fourth comparative premiums million over quarter. written XXXX of casualty the for moving gross onto our were

existing or change up line best quantify $XXX At business worst. $XX time, deals the hurdles. amount top premium premiums developed not million over return did adequately the year, XXX on quarter, We're million several of the and we casualty to comparable and reduced were not gross book. XX%. deals Consequently that tools years. And underwriting same business gross access our written on our growth that the positioned last premium premiums did the have of growth new the increase on million in to preferential were were For on proprietary the non-renewed XX written wrote Due or while deals. we our to decrease or we uniquely over gross either million the meet up

ratio loss XXX% a and We to shifts. XXX% small are underwriting combined $XX loss always of and of shaping were results has a The we in mask portfolio million provide the and and maximize potential changes the casualty [indiscernible] segment the return to covers in casualty million sometimes third in combined underwriting on and quarter ratio and insight efficiency underlying been year. net of liability casualty for estimate The of book large the $XX losses will wrote by wildfire the the for of covered quarters. related but reserves. our second these our impacted California additional for deals, losses Kevin a our

wildfire recent liability XXs our segment of line the mid the deals, If is losses, casualty and the profitable book with if quarter out for our Similarly, with adjust loss in would ratio the have expectations. impact the you year. both run you California wildfire current around liability continues our the of of impact been casualty to accident performance for back which consistent and a

total net we the experienced investment Now turning market income investment million mark-to-market of results million. to investments $XXX to and year with for in million for was losses due full $XX the year $XXX volatility resulting

quarter. total million. bond mark-to-market million fund with impacted due million cap investment for of to quarter on of losses was and maturity negatively of $XX investments million on our We Medici $X posted losses $XX the losses $XX return of on investment losses $XX the million. private fixed investments income quarter however equity $XX and by was short-term the and For million Net for

overall For than the portfolio quarter, we more the billion prior $XXX grew year. million and quarter from from $X.X our by prior investment the

topics and our new financial to our discussed ventures ongoing efforts breakout into impact enhanced fee results previously moving included insight in we we've Now for with last supplement. you of onto a shareholders. quarter Whereas cover income how our our couple provide joint our

our this we're transparency further quarter of to part provide additional beginning providing into disclosures As effort, this company.

those bottom overall we're the break our exclude reflect maturity impacts the retained to is line of include with from we key our all entities, a supplement held cases felt of well You'll that some the short-term in of and maturity The Page to direct or performance breakout in short-term purpose in X of in that portfolio our that portion a a revised and managed fixed of consolidated portfolio defers held the assets it are the investment our other metrics. portfolio. out our held from The investments of retained there financial this see managed and investment investment the portfolio impact some ventures. joint from investments portion these these had in fixed

those on returns do not the assets impact bottom-line. As RenRe's

of we've joint entities. fully our ventures our because over consolidated several are As controlled of the discussed

However for RenRe $X by reflected as investments the the started would billion of yielding are not under is Many non-controlling these about which these investment portfolio impact Holding's guideline. yielding retained duration. these adjust requiring shorter to bottom-line. as assets distort separate difference the it duration effect highly yearend interest lower in investments that XXXX adjustment. at interest does optimal we The investment minority our rated only be consequently The of hold a than guidelines have entities

years was maturity retained duration fixed at For And maturity higher for the managed portfolio the yield our duration managed months. the to yield X.X%. expect of quarter, similarly whereas X.X% reported to investments X.X X.X that in our XX the lengthen to we portfolio next portfolio down on short-term was example, maturity our and the Whereas portfolio was of at the of over retained in years.

the of results realized addition unrealized be to these and methodology our to XXXX, Vermeer. In enhanced the gains the quarter for non-controlling refining and disclosures will operating remove DaVinci to beginning first losses in interest our calculating and related from we

with either capital the quarter into moving income, purchase money. not year. ending best quarter. with our any we and the Now deploying is shareholders' in it or we was the onto the first strategy This And of the million total for $X.X finally management, shares fee is capital use income fee believe consistent did of business

to XXXX down income fee Our compared was events. to the fees to comparable performance QX, driven loss the for quarter due by catastrophe the quarter

year, over fee which For $XX more total income for I'll XXXX. booked the our to of XX% over we is Kevin that details on With segments. back million up it turn

Kevin O'Donnell

Thanks Bob. then in the specialty XXXX comments our moving discussion results property my of questions. casualty I'll XXXX the our between Starting opportunities with renewal I'll the any and and segment. onto then and take segment X and January divide

XXXX, property in year full premiums written the gross by our For we grew in segment XX%.

from in terms Hurricane for loss experienced estimates wind time. Andrew since and as XXXX. $XX being billion XXX and came from both beach in the by increases the line in Hurricane We Fires premiums industry growth And very QX. once Woolsey the around intense winds events. quarter with a property as this Michael experienced as catastrophes Mexico both the the reinstatement landfall. other made explained at were central most and Bob number in natural in California most the on at in fire the and the as speed acres cat The the deadliest year's primarily Michael top of Camp are based premium landfall pressure the wildfires As California resulting at this since US structures as the with Camille well destructive XXXX hour strong Florida an large in strongest X property again in destroyed. Category most catastrophe Camp Hurricane US in in was well significant mile of storm Panhandle history

that combined ultimately these exceed fires $XX cost will expect insured from the We billion.

our in wildfire market the rode XXXX these this to the result write wildfires. casualty more discussed about coverage. decision loss to As to of net I liability added our for that spoke we deals underwriting materially in participation two They on calls. were pivot Bob deals the prior

cat favorable small, in by returns driven market these experienced traditional but deals risk deals XXXX. liability The market. adjusted California more property was versus is following California dislocation decision offered wildfire the the Our substantial

on participation expanded So programs. these our

As business, determine that you the if it segment how to will the losses it materialize we them. take quarter's but potential to recognize in reserved our many explain these would to We've substantial would about can minute will these we our nature results casualty the these be of decided to segment. programs. deals I losses to have spend prudent Absent Due from casualty see now. their the years thought wildfire been liability profitable, would wildfires a to like wrote when we liability

While I in participate money. decision a nonetheless one. market this convinced remain hindsight lost our we correct that to was in

on we First, California We we deals superior prioritize our we to the to net however. risk the capital the partners clients reducing on were that by net to property our against as that strategy to purchases. view our through deals exposure. risk our them of we this risk. our retrocessional that managing Consequently, was risk determined And and providing best casual consisting application exposure casualty gross placed capacity and optimized returns we subsequently took overall the wrote and side

of to in to of factors much by XXXX than losses, said, will Thankfully, the but number to trend and desirable that the capacity. recognize and persistence estimation was would efficient again a surprised of risk overall has had loss in flexibility decision. a thoughtful market once we it and therefore our significant insurance net performed benefits insurance continue protection of the development coverage companies perspective the from Vermeer market have of even a within be contributed loss the development been have California loss to estimate. decision January control have experience correct largest the XXXX. one By Which than to risk superior year, Florida XXXX it years of strategy itself the experience just through simply of events more, well not that of process underwriting finally aspects of additional XXXX Hurricane and time and industry companies. X a does Hurricane to is the events. X capital that well successful. in to relation the This retro I at providing strategy see After cover The with this value We the Irma. this various good nullify loss modelled generating hopefully years gross more think vehicles in to not expenses we're true markets augmented diminished especially retrocessional renewal is in The processes? none most the of and Our for favorable of a encompasses Florida Irma equally model the testament January adverse sheets requires all manage. events of The them this buyers said, catastrophe is renewal the notably portfolio construction the That my saw experience adjustment reinsurance we last year. A the recognize [indiscernible] around net was ongoing casualty occurred XXXX. especially on that appropriate. enter buying development catastrophe for gross that Re are our Gross balance we XXXX of adverse [indiscernible] the to worrying have on events adverse and market. our Florida. and That development a net future us three estimation health industry's

business X, the flat down, but lines were is increased primary The retrocessional demand too rates was not the US loss cat experience. the was reinsurance impacted particularly and currently generally impacted and with around with which Some business At a the picture of They're broad disconnect may hardening business and average impacted brushing renewal XXXX. few taking year experienced by approach that and that on line surface were in that up continue property progresses. disappointing. retrocessional trend the in on market past on paint Certain reports up appear our losses third the renewal third largest supplied down US broke January to property reinsurance With that the adjusted and for straw price recent loss European as in consistent this and is reinsurance [indiscernible] to cat at market our flat will which XX%. We be saw years. to retro increased years capital was primary to non-loss reinsurance XX% X between by few risk in has seem reinsurance wildfires party California capital. performed X% saw back well impacted general, which was for been predominantly anticipate January We expectations the increases In year-over-year. property the camel's party XX% for pricing. wasn't points. especially

expect to deals loss regions. see on increases rate impacted However currently throughout and larger the we year

X renewal the April these Florida renewed three deals before losses. impacted Japanese the that The by X, which Specifically Jebi consecutive losses wildfires and California years June were following of typhoon hurricane losses renewal post occurred.

also the our [indiscernible] be we what for these and underwriting class different our again Seeing with been one is priced. of in flat partners. portfolio. returns but The at in market access business private up do. long-term in XX% and our we pricing off from adequately is structuring expiring moving large but more I Generally The renewing of experience, me XXXX and property opportunities of portfolios believe once particular our couple to January early becoming to changes expertise have X. the experienced other XXXX, had gives lines accordingly a also retro game will adjusted plan is abilities risk confidence

our since maybe anticipate better wind be be the a return accept the on expected to last such I that loss anticipate portfolio being higher that similar shape that roughly our will will and into no return that skewed will little we're tails larger. paid is we Going year. But season,

assume pace an original however, risk. client component rates continue part, changes for have the underlying in which we access essentially Even of casualty clients accounts. on core some level. except to renewal, conditions been risk overall have broad their opportunities tools was specialty [ph] growth are [ph] major best sub saw our where premiums has several portfolio in written of the by loss business see improve our our flat least important the and this ability We holds January X casualty commissions relatively clients continue monitor and in that high forward. with segment gross renewal may for Underlying California increase This response at casualty was property. allowed across our exceeding and to to a within improvements our however disciplined Obviously with broad business. global the portfolio at business most now This classes we performance flat. and going we create on developed multi-line a troubled For property keeping found XX%. at to all in we there to That of year, for worst. desire in trend. in we've the the it and true relationships is common not significant casualty us robust classes on our grew and to did wildfires remain on rate global clients our of improvements The casualty are business with stable providing and the while strategy based market coverage greater and held came to was The confidence and the liability said, reinsurers grew casualty inforce including impact The terms trink portfolios.

hand Specialty classes, introduced business advantage and growth first financial the specialty of of on includes ability Our in instance strong new for products mover a sub our number number [ph] side areas. execute quickly. but on several the that both mortgage other we X/X lines in experienced highlighted to a

political market fairly placements. to execute net our to on strategy gross Similar We with continue continue to seeding and in segment, for risk, growing specialty also purchase casualty bigger quarter gain in property shares our and position year. to remaining the consistent order key to full leverage we the our and during

[ph] this We continue of in approximately one-third segment. to premiums seed

Another marked to by loss significant activity quarter industry. the

We're volatility markets. strong also had significant however preparing the the year. progress good both integration. experienced a also in believe and and debt I this equity for backdrop making TMR We quarter that Against in we

maximizing As XXXX. turn ahead shareholder with that it executing for are to the strategy focused questions. about our always over we remained value. resolutely I'll you optimistic And us and Thank on opportunities and in

Operator

of question Bank. our from comes and line Josh Deutsche the from Instructions] Shanker first [Operator

is Your line open.

Josh Shanker

but not little I bet be the answer California going bit. there's those. you're going question, rather of liability TMR talk to about transaction at wildfire lot to I'd

And months what that is to capital your to is conversations and be three about your in pull conversation of had do your much time over, with there businesses to agencies. two able the last that terms since out regulators the excess that, internal the that you come What's how confidence us talked by and is you generated you what a be it. You on second, about assessment with timeframe? how going of to combination might capital your rating

Bob Qutub

Good this if can morning, let kick up. Josh. I me see

with TMR for we're the can right the get and more In I on then Switzerland capital, dependent consider or on pointed it's help and of out of that's it's we also able a factors. will some so the us the very, getting factor different renew much FINMA capital book, what dividend dialog going One; a again $XXX that we're excess on of approval to we than of so more, cover we $XXX also billion with and be how now but is that's now. on business. is terms which they'll going be to get what the in performance on be confident been working to capital, going hopefully hopefully north adverse on the the amount couple in $X million out forward, development of the has there ongoing them really and somewhere regulators that's XXX and are of very to million working The the existing question good is that

lot would very the different good. there's a regulators number well feel factors, the the the as but up positive. been FINMA we So dialog world, a more as the and the We've in gotten rest has as sum it of us and around with others very I insight process into

Josh Shanker

more or you timeline, year are the guess. next discussion or progress have And you two, before be a know over a close I well in do you the will going to

Bob Qutub

the prior our have to about talking anticipate closing. coming we dividend that been out, we've to No

Josh Shanker

thank very much. Okay, you

Operator

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

line Your is open.

Elyse Greenspan

remarks getting better. pricing Kevin first referenced your My you throughout question,

much mid-year to and [ph] we renewals. at then won't Florida see guess capital come year. X two know What you back the pointed throughout in also those April of capital necessarily I being X/X is hear better as chatter just gives conviction some for in being about of prices we and You that this up you alternative as the seeing collateralized tied capacity not advance

Kevin O'Donnell

Thanks.

we're highest quality say think formations is based market in much what down we most into the to consolidate tied is I party ILS with much my managers a management. one my fourth also to in. how would and think been of to the business - believe of I market in believe I from the allocated going to I of in that that reinsurance which comes market points with it capital is that going how compared that capital the manage capital of regardless price fact, the on certainly perspective from going party Part continue quarter preferred though to we're the Re as in position the be lost. to expectations, Is the the success XXXX I will What to happens is and up mentioned in renewals access third Vermeer and is? to forward third XXXX.

see where increased whether is the - and take advantage the lot to we frankly really, participation in be renewal by diminished will retro [ph] So market interest a there largely capacity this is Florida is X/X and that I position or not targeted, is did and ILS a from market think ILS we in a capacity which preferred of that. we of

Elyse Greenspan

within diminished just capacity you so subsequent, then said ILS retro. and Okay

and like much as more seems like purchasing it purchased you're guys So also it year. you as retro sounds last then wrote

that So able when both up same. sorry. or more is you to higher rates also were and meaning wrote that purchase then choose rates just more did the I'm correct that in to at

Bob Qutub

Sure.

our balance it we regard to some write With purchasing, our for our have on outwards. between So I'll sheets then divide our party third are of those owned With are both and at more place and relationships X/X retro significant with and [ph] did long-term the already our that XXXX. we our partners. inwards inwards in book,

mid-year when Secondly that mid-year. comes have to based we overall price we're to those and are the or and it make portfolios structures portfolios our whether on frankly use going impact structuring determinations we'll on purchases the at other

that retro can that seeded have. put we or we form So retain can we're have either have, other it we into not structures tied put or or we mid-year to it vehicles either the it onto renewing the

Elyse Greenspan

very much. you thank the Okay, appreciate color. I

Operator

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

open. is line Your

Amit Kumar

questions, if Two I may.

over these transcripts is is question just of guess sort QX it I the trying we've call the from month that I renewal very down at or six levels. seen the pricing compared was the want clear to it month go or one are at the question we last goes be to on to Elyse's based a first on expecting similar what pricing. look outlook does here, losses XXX, The bit i.e. I back better to call. the and mid-teens past to three the the years back for then just

Kevin O'Donnell

of is is I kind just standpoint there a Florida. From explain cycles and profitability Let then cycle a Florida a two good the has think and happening and of what Florida profitability of think over There's couple the market think behaviour is I me sense in there Florida. frustration a been a with activity the loss years last growing because is in not I bet behavioral of cycle.

levels, reinsurers to IOB being what need at significantly there's structures placed is through and not we've be. I historically elevated more adjustment been are The they elevated loss as [ph] other issues think that than precise as are to seen expense the flowing issues. the and

both reinsurers of are supply, pricing protecting I the in which with it's an So a from will side return if frustration and required behavioral in who with not reduction and think there's sense a materialized. increase that market in that, drive

than renewal more year. So optimistic about I'm I last the was Florida

Amit Kumar

Okay that's the second The have I going question a to back fair on point. is, only TMR. discussion

had PowerPoint $XXX million number. with you the back at know that go you time, If started to we

$X curious, in that of at [ph] me I upside Is to billion. number that range am think going more aspirational I the something million definitive was to more there changed $X earnings of on to to XXX million or but $XXX there on? But number. else $XXX billion now we've that $XXX based seems a the number it time, think I thinking? was that million over is rate I'm are

Bob Qutub

Thanks for clarification. and the question

to key there's The We be upside of kept a would we be range portfolio I we to different of will of the you timing at to million is a were factors. our will investment the you which It $XXX timeframe as have target. not The contributor than [ph] $XXX and have then optionality $X gave million that it. $X help book. to the billion definitely on a Sure correct. performance a the the it. was on $XXX of improving also profitability the The update definitive profitability on what number the billion the synergies depends The last million best. that more and thought

be well it very upside and to there's could then. So

Amit Kumar

Got stop it. luck. answers I'll there. for and Thanks good

Operator

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

is open. Your line

Yaron Kinar

Florida most to opportunities? will attractive like be the the a you in earlier that shrink expect market so comments not greater would call. your market. It to XXXX? [indiscernible] you'd where And in the listening if geographical that Is So see sounds

Kevin O'Donnell

little I Florida the say bit, a up broke did market? think You you

Yaron Kinar

I if that geographies in year this one other asking a are so, you coming better to if shrink that just expect geography have and is opportunity. was there Florida Yes. would surface

Kevin O'Donnell

is premium. historically fact if back Florida our that the our return a X% been premium excess represents periods profitability representation available think our longer significant time a the have Florida where which believe you go that about write was and of of I currently history in So portion no was gross we there available. is of of

that I will upside reduce. rate improve have not we changing expect and rates think if X% not I in improve, do do would So terms Florida

Yaron Kinar

And Okay. other terms in of geographies.

Kevin O'Donnell

market. think what is So kind I of unique so we've, Florida

I think to market. geography. and is we thinking about and would particularly for casualty The to some protect way risk new in deals access broadly know holistically all getting the fact reasons I that across restructuring that we're the of is property Florida a the where we're unique that. for - we're which say the looking of significant which the bespoke provides taking us

it's we're feel make clients really and looking building then covers their to different how currently. how our the to way we structuring to sure florae switching I a capital portfolios most replacing not So core with have is it. desirable about at It's the positioning we're that's we're that our geography access that thinking

Yaron Kinar

on into being on it. got is aggregate follow-up Okay, be My as to ag to deeper go thoughts appetite covers. will there covers oppose prevent, more

Kevin O'Donnell

for we buyers. we're valuable relationships. have covers in enormously to companies which broadest deepest more With are covers Aggregate the aggregate that, much and sell likely to

ability cat good contribute continue relationships. I capital loss in think but have generally more our, we so can those assessment elements our those, I to from So we'll to sale our a like pressure strong spot pricing think to target non-critical think. have pretty feel understand particularly biggest very sell in and aggregates fulsome of to to from particularly on we've I we're strongest that has aggregate put a There to that. and ILS some been have I

Yaron Kinar

very quarter. great you much thank And it. Got and

Operator

comes the Our from question of Research. Autonomous Ryan next from Tunis line

Your line is open.

Ryan Tunis

have question which is I first My on, questions thanks. regard But disclosure to Bob, in I three on the guess is thoughtful fee it.

how guess one management question up, the performance [indiscernible] there sure growth, is could The I'm first I really Jan last on pretty from$XX didn't fees based a - grow was that's we management then year. other number performance. not but earnings million see was area significant on my because X year. like if it to fee and $XX million growing seems of the income visibility any fee next

lastly, a Thanks. to margins trying last about losses year. income? what look just number So that get think then have for on you if didn't we how like like would feel that and fee do

Bob Qutub

in bit in QX stable. pronounced it really thanks ventures one to our Similar back decline I There volatility timing joint quarter more reduced then to you last Those well. of and on a it with result what see did can you're fee overtime. tend in those a doing down we it, questions, while that's management as in is but effect, timing million more are of was little unique the $X it, that's be events. recaptured hope good Ryan. but QX that to we about the of year

you we in year. volatile don't should you in have having that look margin. On now. business saw a on if year to property to normalized look quarter see you start stress that's event what your we kind And saw and these but the you at to our QX, out volatility at similar on be QX QX you the more kind and the at non-cap last in is QX performance, income reflection reflected of it. on look don't question this going overall, of where it, It's have carve fee book right results are we a of all of to

Kevin O'Donnell

integrated I thing capital. One and so our are the margin on into on RenRe the on way we write allocate same risk add would underwriters for business think limited vehicles. the The is behalf we're party this that third about because underwriters tightly that

a So then line larger supporting balance in just and to allocating writing that capital. different we're sheets have it different instances many

a way in integrated a party to capital leverage many infrastructure in are less our their that's we're So difficult others way. for able managing who third

Ryan Tunis

and helpful follow-up. that's then my Okay

it equity think a quite by you on business, mentioned you return to, events. I mean put, and overall and the benefited negatively but trying I your XXXX a [indiscernible] about wildfires on be also had I Japanese volatile Just to earlier really the development was bit typhoon, from of mean you year that of this you on call. impacted those either didn't had obviously seemed favorable X%

feels [indiscernible] thinking get to good business. for in just year at actually results, go could returns what normal this we looking about [indiscernible] are a you you that experience So loss and pretty next how where trying how think are like feel

Bob Qutub

anticipate the our XXXX, basis. need in we on did that an So said be strategy XXXX my our than construct in expected what well I comments, is way different for that we portfolios but we to

as into With to we XXXX. we're think the in that as going were profitable least be will portfolios build because structural changes at they our that of portfolio. Our

our mid-year. think as will so to basis opportunities but bit see year think guidance give to what heavy I for was think a so expected return portfolio will seeded out more loss no build question be I outcomes. but panned risk, what not cat year, of will year XXXX probably bring, going this we that as we'll an back next be, tail what perform on we take loss knows who higher, would think all think, against Elyse's now potential to we'll a a we will little that I we're don't depending

Ryan Tunis

so Thanks much.

Operator

Our next Stanley. of Pan from Morgan comes Kai from question the line

is line Your open.

Kai Pan

nobody side, lessen on yet so year. yet much, that. in California so, has is property the loss $XX you more more so asked said Since question billion obliged about last wildfire less to than I'm to last loss your Josh's interested that, industry much than year's versus

your and also going general just [indiscernible] the in seeing year Is California. California this like going from in insurable [indiscernible] of liability years as property as forward? forward two sense that wondered elevated just So both well last losses perspective

Kevin O'Donnell

profit our face market to in perspective. similar from face California XXXX a the to market was the our risk to So for

in to the better level our yes take overall order we reason part to So to is to we manage risk wanted hedge at risk differently think we room and did casualty needed do that created returning the property so and did the in we because that holding that, the of we our down risk. differently

things elements. do did wouldn't I get we into differently yes So all of the

the year power are but deployed think that the given expected particular going a net one will the in I in to to insurable regard raise and is to and control risk measures is carefully sarcastic assume with seeded strategy within that quite what the the lower think is that to Is about California yes, needs to significant loss, to, in utilities drought? of just different think regard we leave is they a should You XXXX or that only very there's fulsome beyond on way power the there whether seedings public off forward? the gross going answer in probability With I of change shut elements California. retro. using like but or losses. Is behaviour there not

and how structure think want want the picking to capital specific place climate, against it to you spots, understanding regime want you see. I being your the that's So then about overall in capital retain and you the to

it's to going it's fulsome think that insurable, a but beyond absolutely model. I one at looking it's a analysis cap just take

Kai Pan

public be side, utilities. to sure you just think, participate you any on changes So the even still legislative the without liability would in

Kevin O'Donnell

Yes we'll utility [indiscernible] participate at public the the market. right price in

Kai Pan

my buybacks or because do just great. second you lots elevate is share Okay, capital on in to have wonder going on of lot take Last of of feel that plate buybacks. continue share follow-up management. opportunity catastrophes. you will you question down on year term pause the I take year, still going pause and this you forward things your deals

Kevin O'Donnell

obviously can capital of back our we've you're the a acquisition or Well with I record the where the fair and be XXXX made and this being [indiscernible]. year through of returning of b steward that's will business. between we've in the good shown significant we where capital the then constantly it, long-term so it year is but overall business good to of the balanced course done we've of now, and deploy looking TMR, a investment in we Culminating a the have we're way right, end past all investment think track and investing a job

Kai Pan

Okay, great. good so you thank and luck. much

Operator

Our Bank. Josh from Shanker question comes last of Deutsche from line

line open. Your is

Josh Shanker

not it or going net the wildfire at wildfire disclosure should more in that's question, press ones. So loss California negative impact ask of to California included be quick included your release. is your I'm top The

Kevin O'Donnell

are California the The losses casualty negative. no, not in net the

Josh Shanker

about some or been to so profitable precise been get. around you us as - you just that. profitable told that you've you're going specific would that you giving give have like as good numbers information given And we're can us

Kevin O'Donnell

The if it in that's between $XX we you to I incremental of direct our too showed reserves was back Josh. is, covered. you to million on everybody number steer I go what million the we I that to the trying amount down number have think mid-XXs and we rebalance. the to construct think some trying $XX overall our to had was we call

Josh Shanker

be XXXX. liability within of cleared in fire resolved Camp could Okay and take in this of the the situation Tubbs Tubbs the PG&E to terms you that situation the then said the single I might of situation years timeline resolved a is Fire investigators year. know resolve. and liability [Indiscernible] of

Bob Qutub

Potentially but complex. and single a can I determination you'll utility in instances take Cal the that liabilities which could these of the public way makes process of these guess it's it be whether a culpable within is of resolved long in ignition Fires time and the very fire. go cost is happens the through a typically year, happen the Once and

So guess potentially but wouldn't will is I a achievable particularly expect be in I these anytime that settled timely fashion.

Josh Shanker

day. Okay, thank a great you very much and have

Operator

O'Donnell it is Kevin closing time back I turn remarks. the that to for will for have questions. all And we

Kevin O'Donnell

you forward next quarter. to time and for to today Thank we your speaking look you

Operator

And disconnect. this now may concludes you today's call. conference

RenaissanceRe (RNR) 30 Jan 192018 Q4 Earnings call transcript