RNR - Earnings call transcript Q2 2019 | RenaissanceRe Holdings Ltd.

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Operator

Good morning. My name is Jason, and I will be your conference operator today. At this time, I would like to welcome everyone to the RenaissanceRe Second 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. Instructions] [Operator

McCue, your Finance conference. Keith you Investor Vice begin may Senior you. and President, Relations, Thank

Keith McCue

Good second results quarter Thank XXXX morning. you financial conference for call. joining our

issued Yesterday, quarterly after closed, we the release. market our

X-XXX-XXX-XXXX today XXX-XXX-XXXX we'll an get numbers replay X:XX a from with call time Eastern XXX-XXX-XXXX, provide If or you of The make will the can U.S. copy, through dialing to accessed be didn't sure There by about replay me is please at August and audio you one. The available p.m. code midnight you XX. be both toll-free will internationally. pass for on need XXXXXXX. call

is and XX, on call section August available archived Information through Investor of will midnight Today's XXXX. www.renre.com, through on also the be RenaissanceRe's website

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

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

now Kevin? to to turn Kevin. I'd the over like call

Kevin O'Donnell

questions. to today's Good about Bob our an thank and Keith. for I'll speak and And finally, quarter you results. your with onto financial Thanks, the call open our will back call overview joining the second morning our cover of call. performance. then come take I'll segments

annualized. operating value tangible represent dividends plus earnings These average last accumulated equity to by common return changes a equity common second return not per and on quarter had annualized of annualized value share strong report common XX.X%. value share XX% released our We We reported by per we and quarter-to-quarter are on of book pleased X.X% increases we and our X.X%. night I'm and absolute to quarter that grew average book book

growth across premiums net inclusion segments, low a the all underwriting I results strategy net level of of we a and driven business activity, by our of second differentiated as quarter TMR overall income. as result were The both grow higher achieved catastrophe lines, the this market. earned year, strong from income selectively allowed a the an to the this us investment improving quarter growth increased profitability has pleased and am both that into and in with portfolio,

the forward, market sustainability and the rate I'm of about optimistic increases. about Looking

attractive of I benefit we to an renewals. In term. better profit pricing discuss our that the capacity lines and saw positive able and constructed We terms. across preferential I'm midyear casualty rates in and at strong with momentum when confident brokers. and shareholders business, detail experienced strategically the business, strong but underlying were us positioned that continued deploy business, sustainability will we I were and property we our our rates address engagement rising renewals and clients to and rates segments, multiple In our more the will over more portfolio long from

progressing closed our major the extremely my the but and combined entity. with as details, of gone well. integration TMR, people this first renewal is full a to will first was our more our acquisition portfolio having since Moving you through Bob provide quarter perspective, and from

our operating now and in a executing one system single speaking locations new strategy. Zurich by and We one new consistent and in balance Re, sheet one [indiscernible]. with are a flexibility view risk voice, Sydney company increased of unified with adding Swiss underwriting We've

our risk. represents All in captured rents TMR of of view is the and business

at you efficient of contribution to is it we about recent XXXX. that the integration be In the the happier that its in retain on progressing, midyear our on seeing We were couldn't able renewals more the to most balance leveraging find which system, are And call or we attractive, well we expect continue. short, opportunities how by business I'll confident we're sheets. to doing as I update shareholder as end about the TMR value. the long-term integrated

to Bob? turn look But at for it Bob financials. our over a first I'll

Bob Qutub

and strong finally, second to would on few TMR results. everyone. a quarter financial morning update to our it to But I like We turn back integration. Kevin and Thanks, had Kevin. I first, like good would key of a today over the highlight And you I'll

important vendor entities continue smoothly renewal as We with consolidation, the executed to recent our on on track TMR, on on to TMR base. June consolidated integration. of TMR make rebranding TMR's the other expense we anticipated a consolidated completed entity, the good synergies and the process starting So, progress offices. of remain successes, the Among X we realize advanced London

the reduce down portfolios to its highly portfolio especially collateral with the transitioning wind party capital of we management. regard continue complexity forward, will help operational During several to of third counterparties. business, reinsurance to quarter, transfers rated going risk These

business will negligible. this from income that assume to be continue We

related million time of quarter the breaks costs. quarter full of a This $XX.X costs, down reflecting reported this that of compensation $X.X integration of we've of the to TMR which and book. million recorded costs acquisition, is expenses $X.X We million into corporate consolidated transaction million results the TMR $X.X first

reporting financial now reflects earnings. Our fully TMR

foreign majority the was by the from quarter income investments mark-to-market we Contributing exchange to our TMR, gains of $XX gains non-dollar reposition and results ongoing of TMR tax these on which Taking for to approximately and our remain other operating after on of as driven with million in the factors track projected into million, portfolio. was was which contribution achieve. the from rate consistent income we consideration, to run net $XXX quarter contribution the

aspect is development to adverse ADC. or address the I cover One briefly like the transaction underlying would the mechanics of TMR

unearned protecting the losses premium. ADC of we acquired from point is enterprise protects The paid including attachment As TMR, recall, reserves the you above the on the cover ADC. ADC an us

report incurred be basis. reporting. segment some an there our our quarterly Consequently, performance and However, we in by underwriting on can noise

the impact This ADC. to quarter, there was no

and likely the and favorable received return This over the time results TMR originally ADC the three If outcomes. of is the in maneuvers TMR results our results not shareholders anticipated, this targeted TMR as our perspective, acquisition. this on is benefit economic impacted to an favorable, not shareholders. are From impacted development are the ADC

is loss. we no the ADC anticipated. finally, means it experienced holding on company keep favorable shareholders And declare or and the suffered as to contract TMR's results overall which To on economic results were recover at our positive up shareholders of reserves level, limit the our because not TMR are unfavorable, is the the recovering ADC on we development

our Now, on results, XX%. annualized moving return consolidate average equity was to common on

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

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

in a plus Year-to-date, we book tangible grown cumulative per XX%. by value dividends have share change

$XX.X was investments, unrealized operating realized as Our as million acquisition. well integration or gains expenses income of which $XXX TMR and $X.XX diluted per and common $XXX the associated compensation on share, transaction, of net million million excludes with

of the of We from year. transaction. $XXX underwriting Net this an TMR the reported of income XXX% quarter had and up combination organic last considerable ratio $XXX million comparable XX%. overall of million growth or a impact premiums for the $XXX million the combined quarter quarter and for quarter the The growth was is earned

about net XXXX. $X.X billion of had premiums in earned TMR

re-underwrite TMR year. will take While the about business, this we a process expect as this reduce we number to

it largely seated this net is it the since into premium program. by addition, is our In is retained as ADC, protected retro not

business we'll As a TMR impact earned. diminished runs the premiums off have on

now generate portfolio. capital these incurred We investment in be related businesses mostly income, of have invested multiple taxable income they in including as located profit, subject to taxes $X.X our under gains jurisdictions. We and million tax. assets, investment this invested balance sheets income quarter, will to And

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

which quarter, $XX totaled million sum and are last of our expenses, in million direct million. of quarter same corporate from operational year $XX which or Our the increase the is the for an $XX expenses, up

of or $XX or costs the acquisition associated million the quarter. million TMR I have primarily from of expenses in the direct comparable during increase $XX million million an for been increase $XX.X the impact corporate was earlier. with transactional expenses this XX% expenses to by in of incurred driven referred would $XX TMR Adjusting that the was quarter and

driven expenses acquisition of support global TMR, expanded ongoing will by business. our the our as that well is as platform of increase following the This continuing growth

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

afforded However, us. significantly the ratio reflects of has this premiums that earned improved direct net expenses and quarter to business increased TMR leverage X% to the

net premiums ratio off may somewhat. tick TMR's this earned run up As

from $XXX our Now, million $XXX segments million in million. moving the the grew was our comparative and $XXX segment million about property first other was quarter cat XX% over property. or gross Property about to growth, starting to from by quarter written and on with the Of XXX premiums where

we and about in $XX quarter, about retained a $XXX or with last printing growth property in ratio. million. printing other combined our reported combined total, XX% the the property segment ratio our catastrophe a written million In property of to of underwriting gross income and in XX% second of XX% quarter, premiums Similar cat property XX% ratio combined

$XX as premium is XX% the acquisition were majority business where $XXX of quarter. on new the the over force from million quarter. was ratio for in moving to We written or a the reflective with date million and business this Casualty in segment of TMR that second Casualty our comparative The of and XXXX which increase Now, the segment, the not is the quarter. gross for combined ratio The accident quarter is prior was of was flat quarter. the XX% income year reported current underwriting year loss of this XX%,

quarter. is performance where our an Now, comparable XX%. million to Relative to of fees income $XX XXX manage. earned and party $XX the we grew third fee was income that $XX and third due fee million We capital June, growth in management income, quarter amount million We our to participation XX% in the about in moving raised in total was party which fee million fees. the which of capital the additional for

million. investments, $XXX million, was and for Net joint income higher Of million. of investment our from $XXX net return up the million comparable income short-term the private quarter, million the $XX on and various overall our income Now, our we and to investments. and quarter due turning maturity was million equity on investment increased $XXX $XX attributable was to was to retained investment assets and investments net fixed returns ventures $XXX invested

million quarter by our mark-to-market total of maturity million, retained investment for of results million between our portfolio. posted driven XXX fixed We results our investment We managed XXX distinguish of portfolio and $XXX the investment investment our which was from gains investments.

investment of Our only portfolio contribute a that portfolio and to our net retained assets income. subset investment those our is managed includes

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

quarter, $XX to the a investment managed X.X% of X.X reported our billion. In and assets second years portfolio duration yield maturity of on of

reported X.X While yield of portfolio to on assets retained maturity of years billion. duration and of almost X.X% $XX investment

For new total investment third the of investment we the billion. results. our million portfolio, mainly driven $XXX party This our net redeployed capital, growth was TMR managed and million of cash $XXX quarter, participation, by grow almost of is from of by$XXX portfolio $X.X which million

to first portfolio our these reminder, US a TMR we to integrated as converted has the results. was of into and asset our assets portfolio the investment quarter non new that assets impact investment As the net our investment successfully dollar we managers transition total TMR incorporated investment income on been dollars. overall this The

so TMR municipal And exempt tax holdings.

with our our second capital shares I'll repurchase did during the of on quarter. not any the close We management. Now, comments

capital priority organically. provide Our has also grow renewals with midyear deploy been business. the into us always ample to opportunities to The

to I consistent our of and business, repurchasing capital opportunities of strong stewards shares it anticipate record preference. being we and sense the table. always will of is keep That options previously proud we deploy our all into makes forward, with on Moving said additional when which are track good stated capital the

on more And with segments. that, I'll details now Kevin for to back our turn over the call

Kevin O'Donnell

property premiums comparable increases growth property while segment, in both other first lines then grew last of the growth up comments quarter the Casualty. tax XXX%. year, provide grew Starting Property our by rate by gross property with I Bob. over addition XX% grew the was written we will our XX%, with TMR and a segment on by combination Thanks and The organic follow portfolio. of

cat around with there renewal the flat with June average Florida between increases rate a XX% little of and Florida although movement spread to programs the X demand the on change industry in was XX% to At in Overall fund participations. some experienced due limits quite this. shifts purchased was

recent loss through to reduced in supply. resulted was as and So, ultimately rate experience charges coming well any costs improvement due in as capital which

was well years these trapped in reinsurance last specific supply party markets aggregate risk, capital The global hurricanes on especially dynamics. capital. less part losses third It due losses record experiencing Michael retro Florida to two influenced from as Florida factors take to an and materially have seen elevated Several as Irma. levels of available basis, to

In concerns ongoing to addition, inflation added and anxiety social this creep market. existing loss over capacity providing about to

From risk On reducing basis insurers the market up necessary, in over a not Consequently, once our needs but sufficient. exposure, were light southeast be perspective, hurricane right. years. the several we the enjoyed have domestic these rate be proportion way last Florida single were to reductions we the which Florida rates only domestic increases of again, evaluated high change take the digits, substantial rate adjusted of

we Southeast the time, such same capture better economics we same where the risk, could to exposure pools our as more exposure, hurricane diversified for of increased relatively retro. At

exposure while the our rates exposure grew southeast more us take terms did basis equity about against peril equity percentage increased the not enough So, absolute remains our on we hurricane for and southeast risk, flat. an of base, to to improve

taking of history equity a even are So, writing is are of rates exposure base stronger absolute summary, flat. returns, as a domestic our percentage Florida about market, which our our better. our portfolio, we that book remains with in the when peril smaller and risks higher is a The percentage is in southeast producing result consistent of this more though hurricane

access best positioned us the tools, what shape capital, uniquely efficient I and we to best did which using to the the underwriting risk form capture portfolio experienced in most this believe our quarter. Our is

on year, for to pleased newest various we In Jebi, Similar events able market Déjà event Florida the largest on largest Vermeer constructed Irma Jebi, was development the deploy and that event vehicle. in the in in far, for were to to investor that losses was were typhoon Michael. adverse XXXXs vu, XXXXs on sheet like we XXXX particularly development the portfolio with hurricane in biggest the come our as the including last development, Irma. so midyear, we balance the Additionally, XXXX market adverse continue case avenues from adverse of and just

industry end now The market. conservative our have initially estimates, typhoon we're of materially the XXXX. which And increased for above the since high more the estimate Jebi third of quarter were than

Our impact the we to as quarter well, negative first books reported is has unchanged property net growth although increased loss essentially our Jebi's third from when of XXXX it.

from superior this successfully and have volatility integrated our net strategy. to tools, We the gross event, due underwriting managed system to robust

XXXX net was in our overall, events negative contracts, XX quarter, other from of and some loss adverse million was charge years. in approximately impact development we favorable The large aggregate did primarily the For this offset development the by including retro. experience

closely. to typhoon As Jebi impact attention I monitor and to continue paying market it we'll quarter, discussed particular and retro the on growing last we're its

using is last of programs. An nature retro risk partners, over This our our surprising the help retro distributions. from we've is able important of recoveries almost that from programs to several shape or To substantial not of made our renew retro at retro the that evident we expired losses us the our midyear. either component portfolio were us all fact to as the construction our to years, is

adjusted our more retro our with of because I is profile program purchases. increased and believe pleased have the result While we rate, efficient of is paid an and portfolio risk different these the am that

one are was not sources. renewal retro preferentially on among successful, but capital shift available a retro, any of rather type though including reliant we Even

to is we performance of when Our and several had in to broader attracted. and retro Vermeer, we the strong portfolio within were consistent returns an Medici forms opportunity to support more of June potentially raised in market. especially year, other in preferential to our Upsilon capital, our XXX efficient sellers This access and supply order X both give constrained. that DaVinciRe, including customers, partners Consequently, us long-term with underwriting areas deploy additional saw retro capital million

to partners their our with general, In us capital. trust choose

often and track by market market to aligned are changes. Property support increases rate rates the and In speaking being insurance capabilities either sizes. I record underwriting changes, simultaneously as modeling classified carriers leverage long-term rates position superior An Rate line reinsurance driven that concern the conditions. of approach is and strong sustainability the will have their Primary Given improving belief the both. best increases. recent reduce of increase or believe from are be market RenaissanceRe to important our

which risk to and that some existed discipline be a has the willing have over factors, capacity business. quite similar increased a to importantly funds of years changing less and is the that reduce risk ILS a resulting to two seeking replace for long-term inability managers newfound from to are rate, Due are time. write ILS reinsurers below limits, This reduction been the due willingness can to those credited view of dynamic not raise have most In vein, capital willing returns realization and and losses levels. losses, acceptable to to less last few to their reduce

pressures ILS putting to lawyers I to maintain them carriers, rates. upward strengths. pressure trends facto with the that also will of in managers the market, pressure expect agencies now results. sustained on believe to I moving play the the encouraging be improve traditional current regulators are forward. this, So, will These rate on rating such as Because aligned de further our continue

managing and market recognized partner leader and a underwriting, modeling are We capital.

capital the allocators expertise Our to us them. we Stevens manage capital us business in our growth partnerships want with in because risk have portfolios. to recognize their do strong long-term Similarly, cat developed demonstrates and with that demonstrates want partner premiums growth our

are look as and excited the over qualified advantage take preferentially years. I of many I'm opportunities the poised about next continue we forward, very to should that when future, uniquely few the So,

segment, the million organic. to This quarter. the book of written business our from and Of or remainder Moving came top Casualty is growth, comes TMR specialty XXX versus the portfolios. other and premiums growth predominantly million and comparable our to up XXX extent thirds the somewhat XX% traditional legacy lesser about credit casualty a gross were from line two

We and within overall terms Casualty business. results core the of continue satisfactory profitability, the to segment the of stability in experience

trends for And rate increasingly addition, risk as appear are In enhanced on The across the market lost Casualty in positive we're benefit and carriers, increased These focus business likely further multiple which to are outpacing to general. these Lloyds as Property to efforts increases, from is positively an impacted business underlying rates we by believe well environment underlying our increases an premium forward. larger lines from seeing momentum clients. rates persist rate Generally, favorable of similar rate selection. encouraged our being we to on falling interest further due at reform going discipline by that trends discipline. be

market we rates line capacity rate, size. in seeing rising current to in the due primary is and are on withdrawals the Similar of Casualty dependent Property sustainability to decreases Most underlying market, trends. insurance

market and adequacy. placed not to the that as committed improve side, they in insurers being but and by yet. much of our Om proportional of improving is that I believe needed, reinsurers. a are rate conditions, As terms rate this directly can we rate better reinsurance basis through benefit as the sought is economics insurers improvements occurring

of optimistic degree remain a market as we So, that I this rate for well. sustainability have in

specialty in casualty organic access in lines. risk. Both position through great franchise market a and initiatives leading business our built with acquisition, to with we've the and pleased I'm

we improving platforms new have balance that access to more us the recent environment. capabilities, the in portfolio, increased risk addition an of sheets position With added and and strongly scale, TMR

markets of well forward, developing and as are Moving forms new on new products efficient as capital. focused sourcing we

both diligent to midyear and smoothly, back bank executed the well increased of are markets. Both equity progress raising investment this increases run and and and considerable I needed our to significant In far realizing capacity strong am integration amounts income in with remain believe realized segments and of renewals, differentiated conclusion, on positions. to rate strategy constraint execution our income We so fixed we provide rate sustainable. at Property back resulted our to gains profits, continues target our pleased quarter The TMR the underwriting our targets. in year. that for Casualty capital partner we synergy net

optimistic on and remain focused we maximizing forward, in our shareholder strategy Going regarding confident value. opportunities, our

it with questions. turn over that, I'll to And

Operator

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

Your line open. is

Josh Shanker

Yeah, thank you.

it expenses maybe a numbers to to incurred are TMR expenses XQ, that think First we you to quick recur not the in integration your or in what there will about question immediately, is. any they that follow? that's I guess quarters added the that the P&L related If not

Bob Qutub

recorded in of platform. different I our as Josh, ongoing out talked basically is of half we we about rate, just the had Bob, this categories, is the XX Hey, that which a the million, helping growth couple on run have under increase

The see cost of decline. cost. forward, to mixture other nonrecurring expect and ongoing the there's they're We'll onetime XX.X, and nonlinear, it'll but cost but those compensation a going

Josh Shanker

want away, talk co some a of playing? but newer vehicles, little in the to you market about can Vermeer, the the and of to be us of just you Okay Medici some idea and give the you us bit targeting, area And how give they're what you I relates give market some may that and of holes where that much the and can know left details cat you're too a an situation there? can little

Kevin O'Donnell

Sure.

of lots in is very appetite, in RenRe's similar allocated XXX DVs DV. there's That seeing was that's DV. to about growth, cat opportunities half on DV business that remember, where business Performa was portfolio. not on RenRe, the organic no but the of to And not TMR the you So, in of is based also if in RenRe of we're it appetite role million, there's from

just seeing high also we Vermeer writing you is were vehicles the remind of strategies, good other to And opportunity. level US The risk. exposed

writes which US high risk. level, top we layer So, rating, non have exposed

retro is on a we Upsilon that one where the we vehicle. sheet, that's don't which find have on has when worldwide also cat put most Medici opportunities is our is balance the which focused the But appetite. parallel bonds, to and Upsilon and probably vehicle, co it cat the then fit that more We that

We writing us using cat to products But more to has the co cat the provide drawing customers capacity some forms are market traditional were the of other retro not that asessional from session was product. allowed co retro previously.

that is So, helpful?

Josh Shanker

helpful and you the one other on Yes, TMR that property one more we the third segment in and in was in that Can get premium, the growth party vehicles growth significant. the divide the between area. broaden that appetite RenRe's in just

Bob Qutub

half that have Hey, growth this would the be from was and what been Bob, organic about in is have date. would the in acquisition the in the be remainder TMR, Josh year-over-year. purchase they force the at generally property, rest The growth other brought would the would come of in

Kevin O'Donnell

in property. that's on And There it's helpful cat and within to world property, is well. property. there's other come in the as I traditional can property, also within as type dad think risk property property, that the far the perils about more remind appetizer as But losses assumed always in think property other that we other everybody other

cat So we're seeing just hasn't in particularly underlying space. opportunities, other increasing, changed. our particularly are as as rates risk a reminder, the union in And there is appetite property

Josh Shanker

you Thank and congratulations.

Kevin O'Donnell

Thanks.

Operator

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

is Your line open.

Amit Kumar

morning. good and Thanks,

actually is have I question first the casualty book. on The

time good based what's guess your about, book. way that comments higher rate the I about we talk ratio. talked was how on curious start should loss last improving it underlying and being run at was a blended book I call, On a there in the to running about the if profitability about you than is regarding, more TMRs for to improvement, rate think specialty a conference had book casualty and thinking

Kevin O'Donnell

then at take TMR, and more that, general has casualty heavily higher force specialty the it's form that the are book, portfolio it specialty of segment. a weighted and segment to of part and The credit in lines that other is casualty of casualty a that general legacy bit RenRe loss than me answering ratio some stab a casualty our there. in quite and in Let will

believe, be loss ratio. So, there will I that uptick, an in is

that However, that's the kept will retained casualty one book a that premium talked substantial And reduction of at will being of that of loss book about rate ratio component we the reasons the segment book run casualty order section highest materially not the been this that the re casualty Limited. be to renew. the within it's TMR basis the the TMR component we the general seeing book in has and is for of running we're RenRe before the underwritten. We've intend within legacy book large of on a be a

will hopefully time, say that it casualty I where So, to would we grow look market. to the better the we enjoy rationalize have to the we'll makes book rates and that against that will enforced, that book begin sense over beginning we're in observe

Amit Kumar

in talking about about lot is, comment. as not and remarks, question is, you I re-queue talked optimism, wondering your Do you're feature what I opening a losses, adverse if the and XXXX active development, other have that point, fair we have the And you improvement at will even the a cetera. hurricane still The an don't that's season actually it, was only still moot head Got renewals? points et that confidence doesn't active of in an hurricane become will we marketplace. having predicate into season, these sustainability

Kevin O'Donnell

season. primary will in on persist. being coming pushing a the wind side insurance change feel them of in wind it I But rate, everything happens So, from trends season, think are what lot that that the I normal optimistic can depending a

needs been sorry it realization of much on the renewed time, was coming through. And small there's losses sustainability lost basis, – but occurred improving, at it's in a quarter, think been the think like in a general late I rates years, business shift before Florida, buyers' particularly to market the business third for the idly of and there's that or fourth still effective either after in multiyear the prior occurred, that much losses I a a markets reinsurance that within long it's market go one rates further. to been the one, a so

Amit Kumar

and Got stop Thanks it, future. luck that's with for answers, very helpful. the the here. will I good

Kevin O'Donnell

Thanks.

Operator

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

Your is line open.

Meyer Shields

you're capital. talking I a forms Kevin, when segment, of other comment Thanks. about you pursuing about casually think especially the made

think non-cat party non-property I where for capital, investor hoping on the could third means appetite lines that update I you was or is is? us

Kevin O'Donnell

capital whether good whether capital of tail, is constrained The third perspective. bringing lines. I market, of lines in these is are to That cheaper. quarter And get year ultimately capital tail based casualty for with I customer and more business to cyber lines the lower substantial party put that seen the structures more and tail be part traction. access through business third last in support the I And a to to the into There issues find to area party not vertical are is vehicles I'll beginning are third trying like reinsurance in appetite of in stack think it. is we some from that which further do believe work either the available, capital. the get and needs that some probably with I about risk. is think to an optimistic many runoff. integration others one of And we've party appetite way there event we is and specialty last how is what non-cat of to some there the may future continuing so the than rolling talked it party third say there to insurance a can have third along remain thing year. closer capital the or more gain it And to think it the support to

Meyer Shields

guess you talked maybe higher ratio relative gears, in book likely very to to hold renewals? that's of that then shifting the net still quarter growth I paraphrasing Is helpful. a And last following Okay, about, major XXXX.

Kevin O'Donnell

a So, reduced is session rate, you're what asking? that

Meyer Shields

particularly for Yeah, losses. tail

Kevin O'Donnell

Yeah, about a structuring it. our I think component specific have when don't And targets. portfolio, – we we of retro is think

element a is of retro for something portfolio. renewed this because was So, of component to But I the is visibility we there us only required not that comment year. program, wanted lot we do and that our it it of what single a purchasing a

what same good The I highlight this portfolio together from the are So, of think amount like in that the thing the one I The And did 'XX. if from and risk the recover the we would we series year year in feel 'XX. last we a under And is shock perspective. that mean about loss, more would the on an we in about we and than retro limit 'XX I and 'XX, catastrophes would single built to in should 'XX a limit. less portfolio sized that less a we same think But we is medium bigger. ballpark as put 'XX. which XXXX that actually, we're we would said it's limits. have All purchases in which is is that it structure I with of have of occurrence change is construction purchased such recover aggregate the purchased we 'XX,

It’s together time. a elements up is changing at that portfolios net element we the portfolio So not it of come any again, can point beneficial most construct. that in we the with orchestrate it's think the how all to of our we is one

Meyer Shields

Okay, thank much. you very

Operator

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

Your open. line is

Elyse Greenspan

you. sense, first said the said all give on cat And that shows you losses retro and Good million was today? for sits going for then the Jebi. guys quarter, thank in question where you all think it and up that the the conversation in a added the Jebi; to you assuming is you know, right. morning. I some industry us that's Kevin, aggregate Hi, I'm you could covers guys insured back My XX

also then development. you adverse the if could give all what property you other color on some So

Kevin O'Donnell

Okay.

Jebi an actually been has interesting event. – Jebi So

think it of to back loss $XX originally thinking it's modeling in was was the little we that to reported, portfolio do is I of We previous it billion a the reasons that which a have when slow protections to mentioned range With continue portfolios. the XX the that retro go to the color reporting it's But I so for the range. $XX it one the to attuned about for that to billion of our over geography, a reporting call, into initially others not I I billion to is Bob bit billion this regard talk reasons retro and we something growth, are monitor. million I to than flowing reinsurance firms $X for the in portfolio, the as we came turn we billion provide how closely claims. the in is on currently. been range. the you And including And believe If $X out $X lot did we I more any can.

Bob Qutub

is on up [ph] it's can negative question. million break Elyse good That XX the with disclose. net which impact, Yeah, we consistent how a XX into

a through And You'll in Q that that events a whatever file in came it's that we see tonight. came from, but mostly number XXXX. that was of mixture Jebi the of that

Elyse Greenspan

what in adverse of about then that was to then cat other development? virtue – right And property the

Kevin O'Donnell

about and There's these care. then nothing are 'XX 'XX significant, events and talking we're property most on driven in losses that

Elyse Greenspan

first is Okay, that to is Am moving thank would million with relative it track income as seasonality to that got you $XX of million just say, And I you quarter $XXX that? of my obviously of that And did It I other given then both your you of you of you ongoing. seems will kind think couple than already kind I like you you. that book. a guys net at say the the million target. that viewed be missing and gave this question, the this And earnings feel would on know $XXX contribution you figures, guys the core guys It like remain TMR does seems like something? there a guys parts quarter, I target? on more

Bob Qutub

in mark-to-market my did a well. But for going was commentary out was gains our see big of ongoing there. runway that that the later investment of in Elyse. on I comments, in is the today ongoing point gains that TMR you'll exchange have a portfolio. we on run it that And Thanks about the positioning time and prepared would as we again, gets pointed the question my prepared in company; comments the $XX Q I came out TMR. very is from integration filed Look, that did million lot foreign out acquired an $XXX million from have portfolio In that one excluded we and giving sort that the comments had of rate, and the onetime items received the about on

we've hoping so, now, more. any going And we're still feel and right integration we and the not million comfortable with through very for the XXX seen surprises

keep we'll you posted. So,

Elyse Greenspan

Okay, thank much. you very

Kevin O'Donnell

Elyse. Thanks,

Operator

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

Your open. line is

Yaron Kinar

reallocate morning, assuming, Good a that's but another on follow-up attributable you. the so to somewhat those, the yields wind I with probably how at than think we on. bit, on that bit, I everybody. yields went portfolio, Thank should about And as now coming duration? TMR, Maybe more assets call the have investment you down and in saw acquisition. And another guess the the TMR [indiscernible] coming duration came was of interest up what expected time a we rates I'm

Bob Qutub

talk the a like see in just and the of billion different prepared reposition down non-dollar assets did supplemental, there. municipals agencies were changes brought my that moving out I can We and number in the out of comments in you just I about of $X selling and over the prepared

came the was came well a reported slightly as that a but often mark-to-market. loose the lot money So, parts, new of was changes risk. see moving reflected a substantial as we down and yield yes, the in No managed there on probably rate

to it and through book market duration we're our remains value. this its quarter eye was it. on So, around. The X.X keeping last we moving didn't is unchanged, an hear shareholders X.X tangible that quarter, relatively benefit The

an XXX about amount will XXX coming managed I million, or portfolio. did XX we which income from of the So, in point very out on of additional of is disclosure million my our I prepared that about million feel make comfortable. comments the investment portfolio

the was of fixed managed short-term the that's And So, around the some that's that, by as core but from our onto coming maturity, XXX. largely driven vehicles. its

Yaron Kinar

And reallocate improve the on as to core much do you you going from the interest think that we're is improvement? not here really pressure see rate such will portfolio that yield the or

Bob Qutub

not a position We portfolios right you. feel the with stretching comfortable we're positioned with for now

Yaron Kinar

do fund utilities, impacting And California that Okay. demand the second is just around wildfire see then pricing? you my or question supply

Kevin O'Donnell

California, So selling. way we've our way to impact that's positioned that the the materially going it's we're don't it at an reasonably portfolio, product we think demand recent, it's introduction the as in for and looked

Yaron Kinar

you. Thank Okay.

Kevin O'Donnell

Yeah, thanks.

Operator

from next comes Meredith from Your the question line UBS. Brian of

open. is line Your

Brian Meredith

the environment, environment have more of to I keep a pricing likely rating more what's than originally I'm couple you curious, think TM-RE business questions here. just given Hi, do with anticipated? Kevin, the you'd on going you're

Kevin O'Donnell

on is perspective XXX from that our million their order partners that orderly of there. ballpark book. change then that a And premium the the for exit which it'll front think don't I set of would provide beginning, we there we business remember business, very an the was

underwrite So, the we'll each there individually. rest of rose if we an it, will. it, And keep yeah, I account think, to opportunity

bit better we'll I this that a So, than I do can to least little And I XXX. get do that at hope we – that. we improve, feel as hope rates can comfortable,

Brian Meredith

Got any through? you if and where's and premiums fee through, that income coming fronting business just the coming

Bob Qutub

through comes seg. It property the

Brian Meredith

big and part forward? assume that so coming that TM-RE other property and we won't we continue of from increase necessarily property, other saw quarter the going that's So this should

Bob Qutub

cat, basis. and property off it's to comes run a it on No,

is, seeing all back forth. you're are in ratios, loss but what the So, those some and movements passed

So that's us. neutral to

Kevin O'Donnell

part others we to to not book, of about the the that transition Well, provide money willing associated the to one thing. which our run brought thing XXX the something from rate. but it's off, in intend it's run of are – included fees million, never the an our with that business We week earning comes that business, last front we is in thinking because to fees, for original us we this

Brian Meredith

– that's an And okay. offset it the you, is that to ratios? saying Got loss you're

Bob Qutub

comes rate and out. The through neutral because loss in pass it ratio its been has

the right So, in supplemental. there's cash see you no flows, impact. And that can

can Keith follow and with You up – can we

Brian Meredith

business up kind your of then helpful. of organic, And on and I'll versus in be was the that I through about, great. Yeah, would just TM-RE that go just the That'd asked question have think you and quickly, increase growth? a Josh that similar cat what be percentage follow

Bob Qutub

your understand to – question, was – the the trying of terms what In

Brian Meredith

business, - cat increase the much The TM-RE? of was the property your cat over cat

Bob Qutub

Very, not significant. piece of small very it,

Brian Meredith

thank Great, you.

Operator

line the Michael Your Phillips Stanley. Morgan next question from of from comes

open. is line Your

Michael Phillips

said gains. morning. as ratio when on impact A most it the couple I was loss from the sounds was on more consulting if Good mark-to-market any apologize Thanks. you this, there impact like missed TMR? TMR, TMR I

Bob Qutub

The my here a be ratio, of nothing I out did there, I into was the there loss in getting ADC. but bit little that prepared going of to of no or would worthy noise out there's no sold comments was there mean, point activation be significant and there movement.

So, the be but noise words that through go no. but respect, will time, as we're in with segments a across we other there position in favorable

Michael Phillips

you can cats kind to us And just thanks. TMRs of of I global relative guess Okay, historical remind to of book. kind exposure your

Kevin O'Donnell

One there's of which retained had we their elements fronting the is Bob cat. So, zero the business; is on business. talked about fronting two risk they

probably we is that had So it's a business US that any more focused, but risk on. not retained

with as portfolio they the want there. of diversified diversified to portfolio risks Fire a the and add because is a Japan, of wrote piece subsidiary The to second a didn't exclusion cat Marina Tokyo,

traditional of book Japan. for the exclusion diversified portfolio with not a uncommon reasonably cat with a So, it's spread

Michael Phillips

thank Okay, no, very you much.

Operator

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

line open. Your is

Ryan Tunis

from TMR I thanks. quarter beat in said dead on but this, horse XX tried Bob, this million operating the Hey, to you in earnings? that came

Bob Qutub

pointed in It wouldn't the a to the through GAAP mark-to-market GAAP lot of which earnings be I the outside of FX and earnings. that and came

upside remain the there. out ahead. we rate hoping that feel confident we [indiscernible] surprises that would run so, go Ryan. And seen We're change don't we've with $XXX now. And for million we that that have any

Ryan Tunis

within operating No, obscured mark-to-market the the of I'm at TMR? been that might much have FX some trying how or understand looking by line, to just income

Bob Qutub

Again, the it one time FX. and some I which yeah, of we're all operating through are income FX come core. pulling how did we the clarify with Actually, of going consistent our those that in the really was to towards is record

is these which entities $XX fact, reinsurance. we balance different re-underwrite sheets, choose we are reinsurance it's becoming In it consolidate will million – they difficult we And makes as as track. through and time to more go because the still on more to on difficult

see this but continuing about. as wouldn't disclosure, I we'll to a continue So, talk

Ryan Tunis

earnings just how for much – million an understand Understood, I'm mil, XQ? if the XXX was than XX more than quarter, operating how much you're you this more XX thought XX pace on more annualized just trying to

Bob Qutub

to running easy because It's business. an are question already not integrating started the that answer, we've people

got we've in So, lot a movements of it.

it's have But So, about. FX into cost operating we did increase a earnings. the some talked of I in come did million the very difficult. The of $XX

was that we result AG a unit. of that the outside looked of move as of Some was a – increase increase of chunk that half of TMR, good people and into it our services

Ryan Tunis

new with premium was thinking XX% of and my more then cat? was no we terms should that And rate like the there is that follow than the just up to growth renewals year, about property magnitude XX% cat top in significant midyear it or Okay. increases be just similar a of would make of kind about it it of of and do profitability – thinking the on that business, lot it up being

Kevin O'Donnell

you question. I'm fully your repeat for it Can not I me? sure understood

Ryan Tunis

year last not you'd and year of if be expect all how an the of then Yeah, to that I confused this comment do there's but I profitability taking – was you the trying equity obviously, on the you how just expect a comment mean, active as together bit the – to had I'm book just to have season. the wind rate, little about understand TMR percentage your relative the about, you

Kevin O'Donnell

Okay.

this. happened Let seems your a risk, to question, clarify to which which the wind what be is part of me component of kind try our southeast to first of

So, perspective, in the not grow limit Florida we did from domestic a year-over-year. portfolio market

However, southeast Florida. we are risk which hurricane includes more taking

to which portfolios, outside saw component of southeast the the component, then peril opportunities risk market. a how when smaller building think So, the because the that's domestic it's take the is about we about portfolio, but peril we're that constructed think that taking. domestic we risk our of better And the of Florida we was and hurricane a Florida

of distribution, capacity on did equity much increase exposing. the did points equity And at draw piece as our So, a of are the as as not our we percent such retro. percentage domestic Florida market not we risk final as different is, other the lines

absolute the our Florida. we're Is season wind XXXX up equity than is which XXXX more in more However, risk again, that for for supports higher wind was that it season, clear? taking the

Ryan Tunis

helpful. The Yeah, you're is What type regional no, in that's if guess broadly XX. you up would I rate increases the I of you're the one to the if southeast? my said follow-up – domestic think guess I be more on XX stuff, business. think I writing are

Kevin O'Donnell

high risk the domestic we single they in So, were adjusted, Florida. said digits

from social is learned the steepness that the view the what netting change in we of about risk curve. out So of inflation the

lines getting are for exposure in other as that. more retro adjusted such rate We better than

But that producing. than disclose we're in we percentage Florida the in market. didn't So, what market, higher book. the the If markets grown it's as Florida what getting domestic it was are domestic a have other we higher would of our

Ryan Tunis

Understood, thank you.

Kevin O'Donnell

Yeah, thanks.

Operator

comes Matthew JMP Your Coletti from from next of question the line [ph].

line is open. Your

Unidentified Analyst

on Hi, to your to think you of in thanks. have want than better guys that I morning. comments. most. I work this probably Kevin, circle Jebi a would view and Good position a lot back your do

of late one give kind You the And and mark of hoping us tough why turned of on I so could on a to dive little mentioned out some thoughts a industry deeper to reporting. was for But much. least at little hands this around. missed that a be one your bit the it's just get you kind

Kevin O'Donnell

Yeah.

think So, the specific that of that comments, issues been industry bigger it's a and event what – than component probably there's within much of there's which a on with was couple models, certainly what has a initially before do touched of forecast. I were fact representation wind Japanese And I I to my to is early in optimistic think the it. is an

in without without under tendency frequency I estimate over think have even they're or severity taking. time, to the that risk they regions underwriters a

market. there's there think there been think of slow I exasperated And optimism a I that by degree underwriting all was So, reporting. in the of being

burned which than to what something for has would this being to this in added longer reporting, usual, expect have probably that was So, expected. Japan, been slower one slow tends than

risk XXXX. reporting in we So, the my with when slow has I reported is, When our underwriters think not net negative and from QX optimism in zero, the know, first mischaracterization time representing I from all said impact you comments of about our event contributed. changed book, what

is growth up. our However,

eight now in growth So, least as I gross also That think at our to mentioned, at we is XX, started it's some had loss. we XX.

the which of structured have portfolio, to ultimate impact our managed the is impact. maintain our way negative because same we the So, shareholders, we to net

book. So or IDNR, to feel this through half retro in is than have it in reserves, on when concern protections affect that reinsurance about particularly but we and with can that a do I adversely look do either fewer that we ACR at develop us, our Hopefully, our we if I good continues loss where loss about retro I are helpful. purchase

Unidentified Analyst

the expectation seen of construction, Cup for And in Yeah, along the social then World in Florida of kind we but been ups, a being a demand mean, of of through one maybe of, tears a year, of next specifically. of a the extremes, see of revisions lot kind of for construction. let's some little market of, talk Do at the follow surge I just not lot also call be some terms all? couple been contributing of Japan. evidence that the we've area, kind typical to There's that? a in had? as there's would Olympic lastly, talk Have you lines from inflation approach any Osaka you what the follow your

Kevin O'Donnell

not Yeah, honest, stuff. some being inflation somebody's contractors There residential building to perfectly of the as I'm stuff to more stadium probably doing an door. the But same I've jobs all marquee fixing that element area. within and is guy guy read pulled probably social well. garage To the on be Olympic Osaka sure

to how mentioned about transparency be think substantial tried But this as we loss what's call; I event. I represent to full few I driving as have learning a on the improve don't are things we that as to think is. it one I this occurred. to that it's previous still

at grown even in from Japan great one, an in think certainly as I we four substantially, rate increases expectation has perspective. after loss traditionally But increases helpful partners go renewal, XXXX. the with were the in one of that hope the has a reinsurance would I four rate been

Unidentified Analyst

Great, the thanks much color. for very

Operator

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

Bob Qutub

yield than underwriting XX in One we to to clarify operating was million and less be is we the the income Bob, full normally that. would thing book, just was of back off this XX consistent Ryan's the question on the investment get million, with get that go the portfolio I'd that that goes like on with half enforce income the that

So, I just wanted turn it to thank clarify I'll for you, you. over But back Kevin. question to that

Kevin O'Donnell

Bob. Thanks achieved Thanks this joining call. for great the so far where feel everybody and we've what about we I are year.

integration to doing right got in well very thing. optimism people we've opportunities degree the going is and the right I going think as a right high our of TMR the have I place The forward.

quarter. to that, I with next and you say to like you to speaking thank would forward So, I look

Operator

That conference call. concludes today's

You now may disconnect.

RenaissanceRe (RNR) 24 Jul 192019 Q2 Earnings call transcript