RNR - Earnings call transcript Q1 2019 | RenaissanceRe Holdings Ltd.

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Operator

Good morning. My name is Scott, and I will be your conference operator today. At this time, I would like to welcome everyone to the RenaissanceRe First Quarter 2019 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question-and-answer session. you. Thank Instructions] [Operator Vice call. and Senior may Relations, begin your President, McCue, Investor Finance you Keith

Keith McCue

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

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

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

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

Kevin O'Donnell

I'm plus absolute value a previous tangible that an these value from in X.X% share to clarify finally, night, our and and quarter. not but quarter of Thanks, more are growth should taking questions. back share growth Keith. report come I bit per of Bob had our book segments open strong we And with annualized, quarter growth that before accumulated X%. performance. book Good a financials. I'll released first overview morning talk and pleased again, an then And thanks go numbers represent once for our of I'll rather joining today's Last on earnings, with in per call. about little will dividends to we over the

XX.X% came this were our strategy preferentially risk we capital, and to profitably began trend. our we where efficiently above positioned our with benefit with rising We also as XX.X%. annualized on market. our profitable reported Property and by system culmination the applied were to customers. the an platforms of as operating Once well-planned return catastrophe most and desirable and strategy activity. programs. and cultivation significant of annualized January that both has our business of return I integrated the the growth In in owned aggressively segments The and of investment of capital a quickly the partner and common high in rate us this of across were basis. net of our our strategic markets methodical We the a in portfolio as following to and the on in established, on strong low patiently Part am customers, pioneered these Casualty positions them growth and to from This trends with an brokers and business our approach renewal, multiline a we positioning was positioned portfolio value gross-to-net part results offering success gains quarter. our match and X grow developed driven resulted common Overall, and an hybrid on our business, equity premiums earned and profitability successful executed level pleased average proposition rates history to largest thoughtfully strategy This of expected and the underwriting improved. building recognize positions to most uniquely positive was equity larger

purchase closing TMR risk the can include impact moved This although was provide comprehensive integrated planning not other the we and will TMR we our late modeled of Because of strategic announced, operating are details a the we the statement, single income construct already basis capital sheet and reflecting on the time. however, aspects, Among risk closed balance addition price of quarter, is we a From and an TMR's Swiss integration we expect transaction full you TMR. balance now in how on portfolios underwriting does have March perspective, to over is Bob our previously XX. with my risk in critical As From underwriting the TMR's the on and from closed progressing. system. of more prove results integrated, the to view management captured full reflected as have are the and our combined scale organization. of execution. the sheet the advantageous risk perspective, on and management transaction

various updates Bob that and portfolios we renewals, have on customers portfolios. to We though, contributions deals our they and and I meet now renewals have positioned anticipate identified after the at are most many and the where grow opportunity strong we the platforms, discuss efficient. make I'll our the experienced year's team, X. RenaissanceRe to additions it improve of benefit business depth years. are rates outlook to TMR about moving excited already the July also the to in you can numerous who TMR where employees across financials, June both our portfolio our our I'm coming which again, at Once January this and renewing continue, managing will new greater the strong year, momentum April our will will is over to on strong and had impressive on begin we X

seeing recent resulting costs. also increased in market reflected pricing, they're in are retro dynamics we better While

goal in times, implementing play many and As risk I've portfolios role can of retro our gross-to-net to build discussed is an strategy. our important efficient buying

dictates. retro anyone to the and seller contributing pricing a indifferent return a net our as portfolio, from we'll are to to of We component shift buyer of

we an absolute compared retro on both basis our risk-adjusted relative years. the increase more several last and and as will efficient, of prices be to So equity, becomes exposing less buying likely

increased will only the partner We to this, justify shareholder we characteristics exposure the our return if and do however, believe capital. risk

We have capital, of be continue going so to forward. been stewards always and good we'll

long with but to As grown to we look at and opportunities call which XX%. Bob corporate makes XXXX address success us XXXX, superior over first, we result increasingly grow, gross turn the should capital, the This the we're by I'll the underwriting over seeing and written efficient premiums later, shareholders' to returns in Since me in term. our XX% have in let the increasing beginning financials. our XXX%, our only of investment operating find equity and we continue operating increasing leverage. expenses by by while

Bob Qutub

of acquisition, $X.XX nearly compensation billion, of And $XXX $X Thanks, dividend key the in the strong million of which cost; on would of reported this Kevin, to and making. million financial million cost. I quarter And today, transaction the related into TMR which of have March worth and to But million paying $XXX to We and first, We we XX, million million. comprised first over everyone. you I of was results. to We and morning, of $XXX cost; and progress good $XX transaction been breaks down of like X.XX million turn $XX a update on consideration TMR back had it few would finally, shares corporate highlight cash like transaction expenses a the closed million I'll our integration common a quarter. closing Kevin. $X

identifiable We also intangible million booked $XX $XX of goodwill. and of million assets

went To Day execution. and Now X have to planning successful. that reduced integration smoothly, base by was and and integration TMR immediately the confident we quick year. optimistic, date, the to which, is closed, of that accretive, the TMR extensive the Thanks will will a value year. we transaction expense this contribution have have preparation. shifted will TMR we are approximately identified from action to and majority I XX% in The it make synergies, continued shareholder significant first we remain be

continue We From any over out, anticipate to Kevin income. TMR of contribute estimate results. $XXX TMR's we QX premiums reporting $XXX TMR's perspective, to have million and our net financial pointed in will a included million not the written earnings gross of retaining reported as

consistent financials re-underwriting However, forma with our Form XXXX. items, have be however, X-K as year-over-year year-end you, of a now results of with entities. and regulations, anticipated book, comparability sheet companies is TMR's a caution the And TMR's that without will combined both pro would SEC filed for onetime I balance XXXX we reflective synergies difficult.

from Now last years. revolving during TMR moving on events the to tenure credit upgraded million large $XXX X our financial $XXX quarter. to to few extending million, the of a facility fall, anticipation In we while transaction,

allowed however, on we we assets to sufficient against possible, the $XXX the quarter, transaction in TMR. also large to as us We drawing this drew to impact process We order tried minimize revolver, complete as the million to exercise had the of so consequently, liquidity and down results. close the down investment a the efficiently without During purchase against revolver. complete TMR doing our completed

Moving now to results. consolidated on

Our XX.X%. was common annualized equity return average on

Our investment results gains from quarter this mark-to-market benefited in portfolio. significant the

diluted common for an net share. $XXX annualized quarter per income XX.X%. We common on of a million operating solid posting $X.XX on return had basis, equity also operating or average of the Reported quarter

quarter or gains $XX million of was excludes $XXX million of had and with income overall Our of realized and expenses investments an as unrealized net for per $XXX TMR We associated share, as million million of income $X.XX operating combined the well common diluted underwriting XX%. transaction $XXX integration which on reported the acquisition. ratio and

briefly moving on our I'd segment operational to to results, update our like efficiency. Now on before you

XX% which this million quarter, corporate up in an million is primarily our non-recurring quarter for business. by TMR expenses of XX-XX of driven the the an that expenses the expenses, our have the are TMR split quarter, million from million. of $XX increase or This Adjusting of with charges $XX been in The $XX to direct support which quarter. totaled million, million of the growth comparable or of and the year operational unrelated $XX last direct to ongoing and was of earlier. would increase expenses associated same impact I $XX was continuing from corporate the acquisition increase $XX Our for increase the in between expenses and sum was expenses, $XX million TMR this referred to

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

TMR we the net to expense ratio backing our integration, we expect out earned should and of However, grow over impact earned. time of to the premiums quarter to premiums improve expense direct improved base continue net as the this leverage our after as

which XXXX gross Now income and or first moving where quarter comparative $X.X a the XX% XX%, written was not specific The XX.X% accident our up premiums up underwriting in event expectations. point the quarter. current million increased year starting and our segments, is any This to of in for with of were ratio is line the segment, the segment quarter. with loss of combined prior ratio the quarter. to Casualty over and loss for $XX the X our is million year percentage Reported Casualty ratio from related

with and or The from premiums which by Now in or grew a written Property the XX% $XX what retained, was moving $X XX% to we in the just gross about $XXX was our million XX% increase, cat This joint written million growth the $XXX increase. where shared $XX milestone. quarter business property. of quarter the segment, first million billion what first to that other growth, over or million Property from about the at quarter $X about gross $XXX significant between cat billion. was is Of gross we million premiums in about premium, venture was vehicles, Property of our which the Property divided comparative exceeded our over and was

for premium $XXX in after ceded Now Property well adjusting we our retained increased as the million. by vehicles cat as only these participation premium, about

ability XX% segment an total, which year is comparable on our January the followed integrated the and we demonstrates of we to also last a inceptive growth as was that as first midyear deal well from our quarter quarter transaction the growth year, timing. a when though act at apparent Overall, this efficiently income and million reporting wrote Additionally, large our system our of X however, quickly a combined first in flexibility of X.X underwriting percentage some XX%, represented Property ratio, was from ratio. combined a the other loss reporting quarter, basis, combined properties the reported $XXX XX% find catastrophe On down Property ratio and with ratio XX% quarter. accident points other opportunities. in In of Property that

risk result to adverse events. was During watching on of experienced X losses the the and in points other over of these of it years. quarter, from development. felt for and bolster book development predominantly IBNR losses non-proportional Property XX was our the prudent adverse per-risk We're development number This large a covers claims closely came prior these

quarter. Now moving where to was million fee income fee the $XX total for income,

quarter events. While fee year component performance up both prior compared has to of effects was fee the the year's ago, catastrophic experienced and still income the prior last the

will potential long-term business few on probably this run not So back rate more quarters depending a experienced. loss it's for be to and

to investments. Turning now

the and by $XX which, and total and investment income $XX our increased investments quarter $XXX yields. comparable was million, assets combination from invested quarter, on $XXX fixed was higher and million on our the gains a up results net posted $XXX income million was on for short-term was equity driven the return investments. million For million of We Net investment fixed our of million, investments of $XX to mark-to-market the maturity of overall million. investment $XX quarter due maturity

recall, we our retained investment In managed X.X our quarter, quarter, between splitting duration began in of a reported on years of $XX.X managed you billion. out portfolio our to portfolio As of maturities last X.X% the assets will our first and portfolio. results yield

a a portfolio yield X.X% on of of $X.X assets X retained reported years our of billion. maturity duration While to in

our reminder, well and investments investments other exclude short-term but portfolios investments a equity other managed the as include As and retained as maturity fixed and our ventures. investments, in

this last from remainder almost the quarter, was with growth $X.X For the organic billion shares common and our preferred the and being of TMR, and investment grew prior $X we to year. due year. from portfolio quarter issuance About managed $X.X by of billion prior billion the the increase

a impact not on our was As investment net reminder, TMR the and investment this total of results income quarter. included

advance quarter February by liquidated portfolio this of acquisition in order were closing. as Our of generate during TMR liquidity to in the we impacted portions our returns the investment material investment

the we TMR portfolio the into and increase we the of will portfolio, equities portfolio credits. RenRe add As to integrate and the duration exposure

our municipal tax-exempt plan acquired to TMR. not also of from We divest management. during first We the shares And did the we now with the bonds quarter. any that capital repurchase

quarters. been Marine issued Tokio ample Our We over shares RenRe million State capital into to The always and an of priority organically. Farm also and us has deploy $XXX with opportunities business. the of April January to grow aggregate provided the renewals X last to

being the is stated deploy of financials. XX-year it to opportunities into said, paying capital sense. business, track not first in consistent it the We'll previously of we and with repurchasing close when In always we That table. yet million strong good our additional reflected keep after April, anticipate $XXX capital all debt quarter, our unsecured in I the a proud which our stewards options forward, Moving preference. X.X%. shares transaction senior of of on coupon this is raised are record makes Since

debt lowest million Now net our our lowest debt. points, I the $XXX outstanding a our mature. million the was will offering we the this to record, optimal, consistent the notes be recent for should although on revolver when the basis a date to coupons use of we quickly TMR notes, were borrowings spread we cost quarter anticipation replacing debt P&C senior our years, should and with debt we was our amount. of a first industry. of end other note, X the this basis to track close X draw an conditions senior in on at one second X.XX% with down believe $XXX lowest with coupon March XX-year this partly of executed another inflate XXXX X.X% pay tranche fixed to did senior at from In a of proceeds very effect to the the a of which rates XXXX, have in of increase the for XXX acquisition, $XXX debt pricing quarter. necessary X.XX% at Consequently, million TMR. combined of not have the the on And And complete

it in notes, that, the in all Kevin 'XX debt to for across was maturities back on senior X.X%, and maturing maturities now borrowing with average 'XX. our turn more XXXX, cost Excluding segments. I'll with And our details XXXX,

Kevin O'Donnell

comments Thanks, Bob. divide and our segment Property our I'll Casualty my between segment.

impact versus otherwise us my up Gross the unless or reminder, comparable came premiums do other comments quarter. This TMR million predominantly opportunities. written from our business. afforded the stated. a financial about U.S. of which our has and the Casualty Starting lines As segment. classes were In continued for specialty not leadership market of space, $XX with financial include XX% in lines, major we demonstrate to growth growth example, mortgage

team as of our casualty market-leading evolving the has our tools has leadership, does shown of however, much used our adequately to portfolio to have Top our book and quarter. grown began monitoring our growth, While trends as line ahead is specialty, book change casualty today. where not quantify stay the not strong it this we and amount in

trend, have an quarters each combined last quarter with the ratio average in been stable of fourth core we of deals the XX%. Overall, X the premiums gross on same of of growth new overall premiums Casualty visions. always satisfied longer and results return in up the it's million business. changes stability segment met our the do the written efficiency adjusting we deals. million on We're the After the financial fact, the lines always or return, wrote represent top and profit that, the $XXX $XX we portfolio time, of terms that tell $XX underlying portfolio full while net or in reduced the overall no for of remain or deals overall gross existing So to profitable of with deals either maximize XXXX, Wildfire line non-renewed story being million, of were of opportunistic premiums we At and not experiencing with hurdles. a shaping

Specialty rate are specifically withdrawals, in capacity Casualty certain had carriers lines, the large momentum. market Lloyd's from and For seeing we increases certain we've global moderate and through

of recent increasing loss appears that roughly While have rising offset been by rate winning rates the it out. now trend might finally costs, be

underlying have seeing commissions and ceding reinsurance a align necessary casualty to with retain significant portfolio the this to and TMR's we're portion on of expect also we it appetite. and work reductions improvements terms to addition rate accounts. to In including conditions, risk increases, At our many completed point,

and will we expect U.S. year. For this business example, our over criteria U.K. business Property in other upon while other not Overall, and underwriting does to XX%, renewal. segment auto comparable reunderwriting written by last be grew and grew gross premiums by that quarter exit XX%. the meet we non-standard our XX% Property grew cat property motor

in This I TMR of the earlier, growth new our and of organic. mentioned we have of result rate combination yet growth in increase operations reporting so are the a included is the As business. not statement we financials, was

adversely, Florida will this cat we exposure we our perspective, XXXX impact our the losses we up As of have other it That continues retro From more Unfortunately, to reserves strategy like you from development in you of Japanese Typhoon the for was earthquake further with We're to Consequently, covers Jebi increasingly of more appears some Due book. potential reinsurance is Jebi Jebi the be that events increases through losses to develop XX% and know, much and with engagement. retro events. April renewal, Japanese I'd closely our monitoring for like to anticipated market, market as in region to business market consistent renewal the relatively Typhoon and on confident for significant wins flat. in retain remain impacting development XX% our impacted give experience overall primary events Non-loss our loss-affected between XX%, XXXX, continuing we busiest enjoyed we'll if to now original adverse said, on book and the X.X% and and to of date estimate. were continue relative further the our larger large is Jebi Japan substantial we with market color to period the our XXXX. X business. rate layers. the the in -- in

headwinds the ironically not the market. has are problems in As insurance past, frequently we market for faced losses biggest Florida many experiencing Hurricane significant discussed years. this the among have by been

estimated come losses As of impact One, substantially time. a losses, writer Florida companies of hurricane consecutive one in underestimated from cat The the and XXXX. from years exposed events to losses expect the have even catastrophe of Florida headwinds of macro both drivers have several in the their XXXX factors. time and should other contracts, poorly

seen the the Hurricane adverse adjustment many material to reimbursement levels For under the cause elevated even been largest XXXX for inflation. have of unprecedentedly development These recoverable as term expect Florida, has loss we high Three, in Irma. expenses But development we've which Two, have example, and Florida significantly politically the is adverse been fraud, event anticipated. correct expenses contracts. XXXX what loss adjustment been come reinsurance was for reinsurers higher on social than we've rates. for in

the rates are inflation Capital and includes have local inflation The that Social Irma's addressed which of the ongoing. ceded. that the difficulties insurance are are estimate were Florida ensured several reinsurers of increasingly providers believe that insurance an they the for market a the policies, Michael indicators but to for behavior and inflation. And in them. bad has for assignment recognize risk more impact levels. frustrated We at market elevated buyers' to social four, remain Hurricane XX%. rate and social of market by down litigation. for experienced pushed conventional from Hurricane includes and the many not loss need early finally There also want being that in least also by years, unsustainable recognize of impact to carriers We amplified the benefits up been waking account

sellers. power firm walk existing to order from allocate they supply to are Florida to of of away expect be market, we constrained. this: reasons run willingness willing were tune to buyers will at that reinsurers shifts capital are in seeing rates. traditional the There below who for X reduce least of result, we This instances balance the reinsurance a at terms As the reinsurance First, quoted

This to that deployed market, take Second, resulted managers otherwise exhibited seen capital diminished. the risk. similarly appetite substantial is result of attributable has very could but ILS previously the have ILS in a of in made not risk. been unique these to has estimate capital as Florida's for of the exuberance have did to been loss has to losses traditional it to accurately. managers market, on more that to Similar This elevated afflicted, has in deploy having ILS development, have less legislative Florida only Cap trapped not part problems X diminished we resulted Markets responses Much been and recently are worth losses. noting.

has FHCF of the First, increased reimbursement. percentage its LAE

the While of expected in address residents expenses, resulting loss Florida laudable, of X% elevated without the private loss and cato-excel LAE this it change shifts any programs. reduction noteworthy does adjustment from additional problem simply reinsurers rather, the the to not burden to

has assignment Florida finally Second, attempted to of address fraud. the benefits

am plaintiff's of While to find the we potential workaround latest but hurdle. on underestimate of believe support before ingenuity wait-and-see success predicated is to a hope the this approach I welcome, not providing warranted any discounts in practice, is the do this I reforms. wrong, these I reform a

with reflect inflation social in the So state. view elevated increased as background, to risk a have level of of our the that we

need prepared are clear, We return to of makes XX% to equitable -- in not quoting them We're our for we're reduce To our this to quarter. and in resulted risk, at wind the a our rates class the ratio with if be do development rate. season we view of met we our for currently, to increased have Property Bob prepare elevated clients adjusted rates. cost it X of grow which June other more consistent with with Currently, capital business, quoting change the view. risk in combined sense. noted adverse if match will

loss. commercial While comfortable price property, large the These and we we we dam understood and were higher risk remain for loss appropriately the losses the Colombian risk that losses such construction ratio the than driven as lines it. in energy was like, would by

that Unlike and has to that subject available losses to often The term risk other losses over are property significant volatility, will attractive business risk it after is which data from time. suffer long continue property is I'm difficult soon to occurs, time the outside catastrophe, That are reported. fully until our closely for other term. to we'll trends. remain long confident over to the value sound developing watch and will evaluate they this shareholder business said, accrue business

California has the the of and this several actions improving. been on addition This to Florida, Jebi, capacity of including adverse factors, number due is impact and Wildfires, to In a of record generally X more markets. We're Typhoon of third-party Florida, in Property remedial development market E&S retro capital in limited the in places including Lloyd's markets. trend at cat outside improving seeing bond years

proportional we're So of many in profitable allowing impact sectors before growth our segment, transaction. Property for opportunity ample even anticipating the All the benefit underlying business. TMR our for and things equal, primary increases rate

our and the E&S through and to fecal customers book have options improvement. directly direct access is showing which significant business, data space, this Lloyd's by We both supporting in also price

to ventures. Moving

XX quarter, was more writing transactions. Premiere a Re off start than This strong to

limitations our goal the of toward with timing serve available to the us billion pleased allow are while the $X to us. capacity current We on and of should customers, working Premiere deploying market

we've new capital. of has years, all it to seasonal Based become preferred cat markets, relationships to and continue X increasingly prior an grown view such to the capital X, materially, our Over of the and believe certain retro you partner forms reinsurance our risk provider important primarily also with retro but that as Upsilon June believe could of given capacity we transactions. that the on Wildfire our Florida by at continue grow to results. risks deals, contributor be We and we reinsurance

solid cat investment our TMR regarding with growth opportunities in Coming and X premiums, whole. for implementing continued on the Thanks remain questions. into Thanks, integrating quarter progress and our conclusion, cohesive strategy companies on So and maximizing and made turn renewals, shareholder in activity. significant value. a over up we're first optimistic transaction and the midyear have I'll focused that, it We was to strong. the closed low returns

Operator

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

line Your is open.

Josh Shanker

a the the Thank the your XX a Yes. returns spent said is date cumulative built you say expected existence? public compound company, built prepared years that expected that your profitable around on you there first Kevin, existence most you as its of think reason higher the to remarks a in first you've X decades portfolio the is of RenRe basis. ever delivering than you. portfolio portfolio to XX%. ROE of of the today Is an

Kevin O'Donnell

would That's were So company, that capital today's returns reinsurer different in think, of the to we and that platform very diversified then, type built a back more market. a shifted don't reason be structurally company third-party we have we I producing had. a and types of become those

So your pure comments return. comments about about are my are scale,

we our and the portfolio are profit The of expected is between the diversity we've today's that market. that brought, I we've that dollar overall think So greater. returns in the early value in achievable the achieved scale don't the bought years,

Josh Shanker

All right. start more is you digging the you And buffer close aggressively? loss into then on how a your is That the a that industry to before coverage think What today? do retro comments. want sessional to there And I give just makes is -- sense. clarification little Jebi your they of

Kevin O'Donnell

to back So I think, look. have I and go

that. north said range. were of I we in or is the billion. Trami alone me that think $XX $XX surprise previously north think billion that Wouldn't of I like billion something north $XX it's and billion, $XX if of would Jebi Jebi

in probably We it, -- got on Japan. higher than lighter a for little some but side skip we just me So let market, our positioning context well. the as were we significantly

writer. particularly So some do Japan, not but within be we're known a wind wind large to covers, we domestic write

on secondly, One we're in protection So that; and big a my -- as more reasons: X we have that reinsurance comments participant that for market. not is

further think we're development. to insulated better I

the trickier. far that's retro, through accrete as As additional little a

We loss have have, that against probably substantial retro where thought but IBNR the limit as that the to book approaching contracts upper are was. we reinsurers many I we feel this

was. for bigger to accrete than But which we much a because but specific expected, loss So bigger think it are as exposed we value where -- on I me for don't it's would already was I it, put there than number market been because some hard much a have you. dollar to be the of

Josh Shanker

for... Then Okay.

Kevin O'Donnell

comment within beyond the correct gets is the as of or we're just sometimes it's not. one already protecting. -- whether that -- reserve the to retros. of voluntary It's into I retros think It's retros a it we a whether make, it's level matter the This I'd already into

Operator

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

is line Your open.

Amit Kumar

Well, acquisition. thanks TMR and good starting the Got questions. Maybe, with morning. few

better upside at to today and the announced? the mentioned? look there when would've remarks, $XXX the when TMR on Specialty. wouldn't of was exist deal I'm in addressable and was you based you comments earnings GPW why environment reiteration in Casualty announced. pricing in the guidance curious, just initial an probably the the opening upside -- is there million portfolio, XX% be made the was million I $XXX pricing versus that imagined factoring deal some the you this Is versus If

Bob Qutub

the income. it premium part the And there, is the out this rate question. comes with mentioned, have million. $XXX that the you and Bob. from net contribution addressable We Thanks remain comfortable for the Amit, we run the to million $XXX

We have portfolio. disciplined. to upside it. there's $X variables on that's a an is the investment it. pricing. Yes, ratios to of Kevin $XXX obviously, synergies we're on focused technical at we looking of but through ahead of And hope be the going we to is there the not and million want focused number and what different There's is billion, getting We're how range

Amit Kumar

that Okay, helps.

is discussion. switching rents The to, second I question, guess, portfolio again, the this

changed, Did things about how in the was et of about talked it? spit of a better legislation, and the seasons. I returns the you out the you in after What think some vary the changes, risks change? talked plug the expected active when I went was the the cetera, AOB marketplace. after you in your remarks, you curious, model tweaked changes How hurricane initial opening have of understanding look? X it did versus

Kevin O'Donnell

learnings question, it learnings, lower the to from the see, loss imply after to our wrote 'XX and took book rephrase it me let those have asked adjusted and we and you I if way them answer XXXX the prior would business we So if of curve the returns? we is,

Amit Kumar

Yes, sir.

Bob Qutub

Yes.

Kevin O'Donnell

loss that learning, we've on learn That at we the did Yes. -- of new customers. events, We've with we our It's a and outcome. learning after and lower is different into an that is end. through that can and The upper incorporate our social we parallel model. is which, end on the do. the The of learning do well, shift, a the walked is change the each one process that is the reason Florida. a increased exactly And did what we What one it's we yes. answer for curves is inflation impact to that is within that not

dollar the The capital is have second element which It's for or be we on the in strategy that to need is we not numerator. the some deployment for it write of prior that but denominator, the loss was we more because the each than premium, to is of cost Florida more and that and employed our business. these higher events outcome, pricing anticipate was the cost gross-to-net that will of recoup expense of on -- is expensive, an

of an outcome. kind that's So

the the feel about overall observations framework. those based part when for periods of picked things risk loss. return normal about our down we think storms portfolio, So up I adjust the we that on And against I good process it's our in or any where

for doing We are same the Jebi. work

Amit Kumar

Got it.

The answer third I'll question, and you when final this. requeue

the movement? refresh going examples losses, -- that to resulted of adverse risk Could which some on back Just of in discussion those risk the losses. would what you be us, those

Kevin O'Donnell

a Lennox there in large not like I like Yes, are known let losses There me community, -- it. is to the -- were think the made of of investor are the -- things community. for back, would risk it that just -- there not dam. drivers in mere within fires warehouses one but the may reinsurance over these was a be that, Columbia have primary fire factories fire, things At which couple mentioned

estimate some about to one, this quarter happened; know reported that's of X cluster grown. they has by things secondly, work were comment my engineers ways: of and a that large have hard is losses been risk in the the in -- these very first kind us has again, have of as been of so to One, have size hit that, sometimes damage So of more the done prior the event, these year

Operator

Shields with KBW. question Your the next comes from of line Meyer

Your open. line is

Meyer Shields

Thanks. Two quick questions.

would other look segment, First, underlying any, at the what losses? the large property was call, individual I we reserve when there developments that offset

Kevin O'Donnell

me X, was what, is attritional answer attritional is, and -- see the break running of then So very way pretty development call, kind -- from right was that's there The to large seems there your if let from it. One I'll there piece well. into question and to events? be

of per Bob's one pretty excess XOL, of attritional So side promotional risk the seems doing from be stuff comments really the loss book. well. the was to was The this from

but that arising. and known is things a prior losses, reporting secondly, from unfortunate risk development clustering uniquely clustering events this is of we because reported mentioned The affects then that for the quarter. were quarter, it in first fourth So which, happened protect. really that very large The late quarter; as really look X the again, intend us of I of were in quarters. is more that It's adverse events at in engineers to X the

But the be elements that's X adverse. piece the underlying seems attritional to behaving. So of

Meyer Shields

Okay, yes, perfect. that's

of is? significant actual industry seen, sense we've any what takes we in examples RE long loss with a cat question, have Second until few developments. it you how know the obviously, of Do terms reserve actually

Kevin O'Donnell

general? Michael speaking and you Are Jebi? and Irma just about Or in

Unidentified Analyst

about extending? Andrew. or that I'm but whether is asking wondering pricing I'm I'm shrinking Jebi,

Kevin O'Donnell

where to of part a and reasons, and difficult seems is extending begin some from be they be question. the That's it of are which honest, know a to social to Florida end. good inflation

where a caused we Jebi -- damage expected. is bit learn we is honestly, Jebi because think have the of to I more on greater than

well the were industry. think we already I above

previous to does inconsistent performed. of the be some Japan how have storms with And seem in growth

So for answer I information, currently one it's I Jebi, but good more good on. a will you that have have working get don't are we we think answer a on which once we

Meyer Shields

thank perfect much. you that's Okay so

Operator

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

Your line is open.

Elyse Greenspan

the My understanding Hi. Kevin, could not like market relative happen seems I during question you're upcoming what all renewals. of yet of your put it optimistic -- Good start on together, and to remarks also could if morning. first

conversations was relative more it you Or all for the of you were even about when relative some in pushing that you've dialogue that having How past feel rate, conversations seasons going? really insurers Given you to pushing for year having to headwinds how's last been price? market the with did this outlined, and mention your Florida does the year?

Kevin O'Donnell

So thank's for the question.

on it expectation we a I probably last more think, set back year Florida. this for on, was Looking call, muted

we're recognition to a all good a market their we the I seller's And price a that of Florida each bit to look variables it's the have in market with the but pretty as market a in them tense, to think but a each -- in collaborative, buyer's success rate a quote that. important forward, or will of kind that which this view think of toward in for believe my Most have portfolio, it's been clearing hurdle losses. And those that the comments performed is kind to discovery that Yes, prepared adequacy, partners, I of the things of against from specific we've side of out of I we seller to overall conversations a capital that of to is our have at that going expense as long-term as a a some different think quotes and probably risk think for this do I to great I and I that we of And in and that be opposite there's performance that to not portfolio yet. don't a changing year job our building transparent Florida for performed story change they in will development. point week, best deserve from a in but wouldn't lot up of stack cost price we working I be we going said as them -- and done better changing say rate worst. loss And think the been it to our fact of be. conversations, that momentum need outlined I our We the the we construction used how and sharing about shape. very market, we've with customers loss Florida. those a think regard the those again, adjustment our doesn't Florida

Elyse Greenspan

that's be in you if guys then year would coverage this your that year? California And as you Are there to planning you last do write -- similar flip continuing of side that had utilities. then year? the Okay, business the losses write to fire helpful. And this retro terms on on for business,

Kevin O'Donnell

is that wildfire and So there's of is one question, one pieces utility. I X think

wildfire So let I'll then We risk. like start talk with about utility. me wildfires,

will to it. write We continue

think, traditional property Your choose be for retro available, will retain and of question to believe, retro, about more we more I but it. wildfire, may I expensive,

we retain utilities, I to are to think more we is perspective, going we adding what in write to appropriately. be the retros property XXXX specifically our will compared in into the difficult if that From more it of will utility write priced wildfire, business XXXX. prepared it's and was risk

perspective, we've I push into the So how we from to utilities but is diminished. structure as flexibility opportunity think property it, of a a got to retro lot

Elyse Greenspan

items. helpful. profitable then level guys above on Specialty a lastly any And this just segment the full out like at the for onetime margin the year? Casualty, Would that a bit XX% you run segment, little really quarter. Doesn't that's to sound expect Okay, you called

Kevin O'Donnell

Specialty The Casualty business as for a to Specialty changed when in these we're we our positive Hopefully, than portfolio and positive nothing's of ratio than make has comment TMR and think platform, within have drivers try there's in line trend. We're I the I'll going the to renews but between to loss [Technical identified and draw rate our the a and is weight not we're business, in to often on is we one-off bring amplifying segment. Casualty that the seeing is, book, higher that Yes, more one where do greater on Difficulty] -- and to calls Specialty. seeing kind Casualty run that business a trend. what

is that's organic rise simply we're mix a are So rate of generally just but you're may see quarterly trends in run seeing Overall and there, you some noise. what positive, outcome. seeing our business

Elyse Greenspan

color. Thanks helpful. that's Okay the for

Kevin O'Donnell

Thanks. Sure.

Operator

next the of question Meredith with The from UBS. comes Brian line

is open. line Your

Brian Meredith

line Yes. there's questions line. new What One just miscellaneous is noticed quick a this Bob, I investment numbers here as you. that? couple for Thanks, a question.

Bob Qutub

In the portfolio? investment

Brian Meredith

Yes, $XX million of miscellaneous other investments.

Bob Qutub

of this assets are that reflects -- are came there. smaller portfolio. the through had the These integration out that they Those some TMR of the

it not So bobs out are really much bits there. to that and say about other than

Brian Meredith

with the one that is more of Okay, And Will offering versus actually debt be If The of more than my chunk is great. cost write-off -- acquisition this -- above year going then numbers they're also you purchase the quite i.e. different amortization actually the accounting formas $XXX actually substantial purchase is that million. your The the pro to chunk the second it? accretion transactions from on at on provided of another Re. big I accounting. a was question big here. look Tim favorable, or part that last

Bob Qutub

have levels improve to the that cluttered Having we forma purchase within is these. things there did things reunderwriting. results, with centered achieve, which do make the that pieces accounting and we outline purchase rise with X the of -- up. purchase may said And of on the had I accounting. have tried It very what accretive. favorable will to that that over have versus we all not variables these the the comparable that we development there, expect impact the rather things accounting technical a they few some kind that, gap, comfortable mildly also very We're pro significant So what really in There's book the will would very ratios. what help be in brought comments to the The Those in XXXX the place. our comparability across. reserve comfortable and to we're with will XXXX. intend

within there, the earned but premiums may that forward. on it be effects the are would roll tapper of first the year see so out would you And that that some

Operator

question Autonomous Research. Tunis next Your comes from line with Ryan of

open. is line Your

Ryan Tunis

market. about wanted I Thanks. the just I potential Kevin, come development question in retro the Jebi the to to for back guess,

in for sense Just if and we that to feel magnitude, to $X or just are $X of understand we thinking of Jebi XXs? Or urgency trying $XXX losses how order potential another size strengthen could shareholders? do be billion, the you about. be I'm RenRe billion stalking of potential mean, I million additional could

Kevin O'Donnell

we have, the that Well, is kind an in unanswerable that I'd we in of adequately have be the we're now loss reserved. represented means -- would information numbers development -- my it's but substantial which because there,

if of I end very your that -- I not we're think -- There's grow that. with renewal. of was pace, high it expectations. in It's that at has XX% by we're fast only the a it's raised is the the of growing if through because been only degree in and Jebi uncertainty lower lot reported anywhere -- it -- to a a at

in the So if leader loss occur. to I scenario was think development we would loss not be the forward the put that you for gross

Ryan Tunis

everything Got those impact it, you about an the pricing on some Had just legislative in then competitive at on Or of actions. place? X of had? the Or dynamics have you the kind talked keeps just are conversation thinking all? helpful. going that's And about as seen they the it actions legislative took background, Florida, in those

Kevin O'Donnell

pieces an ahead that are there's sides of implementation activity both It's on are pricing changes. legislative advocated dynamic the in of of we increase I Florida the think in is right now. seeing But One discussion. thing AOB the being

different is course, the loss when And take only making of would that see it's price. needs where going we're and difference, we assessment better approach. dialogue point part to it you it a that's market. should we clear a the and material development. for I've brokers change know, actually clients may on Others of are and to change makes hope I wait-and-see at Of been the the but I we're think a course, view. this recognized say, in as in be saying, credit be. what this time, have off But judgment a we makes in the are

Operator

BoA with from of Merrill Cohen [Operator Lynch. next line comes Instructions] Jay question the Your

open. is line Your

Jay Cohen

Yes thanks.

questions. numbers Just

the just is to like this all quarterly us look could the interest changes? you of what Bob, balance going year for tell First, the given expense

Bob Qutub

effectively are quarterly It's see on about give roughly, -- take or you going a to basis. million $XX.X

see to uptick the $XXX the that going X.X% basically on You're million.

The be down. worried about extends that. so You small That's not the That can I'm math what cost, on revolver was quick will really that's a number. low do out. that,

this carried $XXX of is So when through year retires. will next then, March year and the that again, million

Jay Cohen

Exactly.

premiums that bigger this of second The to occurs base little calling assume a year? next should the TMR will be bit down to the get level north we I to of that year, down the in question, year? think, the million $XXX premium X Or

Bob Qutub

You'll year. a There be and the new renewals. capture see carryover will calendar in some obviously We'll make carryover.

We will will those capture so in. the come X/X and the X/Xs,

of of that over So XX-month, you'll it. most see the course the rolling

Jay Cohen

the then that premium, And of it similar to RenaissanceRe's? seasonality is

Kevin O'Donnell

little They're different. to it's and probably bit bit Property But to confident. Not similar a We're perfectly. to more book but book. features by RenaissanceRe ours, similar correlation, than It's similar X/X Property are, book a but Casualty little high ours I their -- perfect. not the are wouldn't we is

Jay Cohen

That's quick great. Then one one. last

incepted did this quarter business, talked amount year. you other deal property the you occur And wrote can you quarter us last about of that? On that What that midyear a tell in? the that had

Bob Qutub

was. large and think solve bespoke think QX. I out it this significant transaction was reflected clients our amount amount did to earned say We don't the help actually The challenges really what a that and it yes, that we Yes, said -- year. we ability

a year. of beginning had then the come to back we at chance so And it through the

timing So that's about on meant I what rates.

Jay Cohen

So -- got it.

a in headwind that a standpoint, is business bit of from XQ? of it written So the in line

Bob Qutub

help and to book don't cat know opportunistic headwind. It allowed long they transaction doing. solve I something us looking were the that with it, a demonstrated disclose We I that was the It was track was we've work -- record that if to but it of through. a challenges call them client didn't the

Jay Cohen

you're renewing Now quarter modeling from this a written it's comp XQ because the a already year, standpoint, It's standpoint. guess that contract. first same just I tough of a in the from

Bob Qutub

I quarter. the we we put -- trying were say first into we think it renewed the now is what into to it

Kevin O'Donnell

is way is the you're -- timing but quarter. second be a That the of will You highlighting right. end to reconciled There's the in timing all difference absolutely it by year, going difference.

Operator

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

Your open. is line

Amit Kumar

deep different we've change the follow-up going quick I the XXXX struggling Two this I'm to for on, could a to the in And is from to forward of develop. companies, for the and sense some is the and out guess, closing the Jebi. versus Or something understand usual cautiousness? of reasons here? your Jebi understand, the question to is other called what I'm loss development there get Just on still I just Hey, on that continue is Ryan's Olympics. 'XX trying cedence going March here it

Kevin O'Donnell

it nothing I've otherwise There's told is. on, cautiousness. you going It's what

the -- hasn't it's is so contracts. the there we behaving concern the thought larger, been my time long do It increase to than larger -- other was losses, big the retro to of think in work size we have it The one thought, I Japan. than to differently is that. quite understand appears -- we a the this wind than it be growth, albeit is in larger

or which don't of exchange Re just development. further We there's closes, I do reserves just retro have flag And what lead protection happening that we Jebi. the there Cole comment think information, in wanted we've is -- what got being is to but often if happens less your know so I year than after great then on fiscal -- Japan to that. happened, cautious, is has an in on can is reinsurance, that

risk could as We surprise, have been. a think, potentially we IBNR highlighting Jebi, continues I and to where be but has kind thing have of at this just it

Operator

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

Kevin O'Donnell

for quarter. Bye. Thanks speaking to you tuning next call, we Thanks, look today's forward again. into and to

Operator

concludes conference. today's This

now You disconnect. may

RenaissanceRe (RNR) 8 May 192019 Q1 Earnings call transcript