RNR - Earnings call transcript Q2 2020 | RenaissanceRe Holdings Ltd.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the RenaissanceRe Second Quarter 2020 Financial Results Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] I would now like to hand the conference over to your speaker today, Keith McCue, Senior Vice President, Finance and Investor Relations. Please go ahead sir.

Keith McCue

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

If you you XXXX-XXX-XXXX can XXXXXXX. internationally. for The didn’t by call The the Website Time code archived XX, at will accessed toll-free XXX-XXX-XXXX, today receive an August be dialing call a copy, through need we’ll be on X:XX sure please available make is through U.S. from to on XXXX. on you section and available PM both also replay Midnight or numbers Information replay provide of audio Today’s XXX-XXX-XXXX is with about will RenaissanceRe’s There Investor will Midnight and one. pass the through of call www.renre.com Eastern me XX. August be

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

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

Kevin O’ Donnell

morning thank both Good we had second for financially the call. joining strong and today’s glad Keith. Thanks, and quarter. performance to you I’m report that operationally in

standout; raised fortress $X over particular we billion common First, future accomplishments in sheet balance a in anticipation equity, new For building me of three opportunities. of significant

in groups with approach three reported categories exposure claims our developing with to lines sound, managing COVID-XX our expectations. Second,

rate constructively I brokers renewals generally. casualty, terms focused and and and more each adequacy, and quarter executed achieve these the will of in address and customers our conditions. accomplishments greater improved discuss working Finally, we and to with property detail disciplined across

confident demand underwriting lines next all casualty inflation believe capital. demand will equity. trapped will experiencing bar of our we to Post already the This IPO, Beginning in supply beset over rate Why opportunities for we Bob we common loss significant now? an and as by by our losses Capital were for with markets verdicts markets. material in accelerated resulted buyers create consecutive one by pre-existing in drives experienced and by execute performance to the at upward develop has mirrored need in will a factors First, to we supply historically ILS improved also least elevated was the Numerous now? a have and acquisition. three been have markets trend other catastrophe constrained follows. caused have reinsurance common will placed the equity? resulting reduction market, Why substantial high the resulting At believe of equity, increases years. rates. the race. billion? increasing large our losses three will severity. among rate ability deep financial frequency loss years largest jury capital Why large years. reduce the retro To not increase by on demand insured slowly history, COVID-XX shares caused markets add the COVID-XX, supply confluence uncertainty, on of were pressure activity, in We persist occasion demand, update opportunity answer with imbalance. for only which raising and and usual, for will you for same Throughout recession period, This an look to factors that time, volatility. increased history. in expect economic extended issued are a concurrent emergence I As quarter. and that And led be flack to and The XX-year on impact an raising COVID-XX Property in has CMC and our almost why which several into Prior discipline to of several us this elevated dislocated will questions.

all reasons time concluded equity. new was the to this the ideal that raise we For

debt, flexing credit Second, and form why is it depending is market capital with to to preferred, choose its our dedicated maximize did of efficient LLCs. strategy innovators capital. risks capital, we Each deployed well as between cars, bonds, retro our to equity? third we side of efficient use is accessing revolvers the the relative cat desirable have most been against. conditions, common, match selected forms Our party as on risk and system efficiency to integrated Throughout preferentially history, capital, and senior

had to permanent. is that improving Opportunity multiple Given a scale the this capital billion? man On risk. we our of excess it necessary our available is It current fully can to determine we finally, as is the We deploy we is so in are we we to equity term maximize us into And It the growing maximize this for deploy market retaining opportunities main option. chose to deploy capital the flexible raised shareholder market two But We we we opportunity increased earnings long opportunity two prudent size more why an gives pro-formas maintaining the you already the and capital was raised. underwriting, expecting. we order a envisioned we while one, and opportunity ran capital. best value. buffer. told conditions, believe feel confident call, can common previous

best grow to first Our opportunity and an improving into market. is

a current provide January our our execution. Many opportunities, business ahead private and and a preferential our deploying renews We and their sheet, results conditions are next in This term new certainty grow more business of support long productive equity. with first really Providing business of by at reluctance concerned execution we to makes large can market purchase and their are reinsurance even have renewal. afforded fortress in year. call customers with already take considerable renew about a we gives of us of for growth, both and at balance to With us X, deals. demonstrated or certainty that record half of Approximately us sufficient a insurers retro ability customers track having profitable rates. to options to new our access risks, existing attractive conversations believe

second construct grow deployment underwriting with risk Our order more share the amount earnings opportunity portfolio. is of to our shrink of retain most gross A strategy flexibility the in we efficient key others to the component to risk. is and

sheet, conditions to capacity offer balance to With our we provide. able which are the sheet our flexibility As were more seeking a the evolved, of rated capacity are additional we increasingly enhances that able market to our rated customers. flexible, can equity on have balance term customers long provide stable, solutions common

and that COVID-XX. be do market managing manner and in share line. faces rise, Shifting have exposures. our rates to and able expected sell As increasingly so so category its retro, capital COVID-XX explained developed approach ILS reported challenges, contributes largely our will To a I Last as losses to retro less to bottom quarter, our we date, within to framework. our more should three more the this risk of

include one, from a of full in in categorized for has been events these includes one health. and risks. or reserves our virus, event into we COVID-XX against casualty we began reflect or certain renewals. contingency, claim been by receive the limit If paid Category Category to three however, you based the falling second categories. and XXXX. cancelled are such the losses distinct well excluded be of class, clear, which cancelled recall end covers as COVID-XX ratios risk to to In in closely and recession cancelled exposure line events These event we as understood losses have linked casualty risks specialty event not postponed, as like two, expectations. certain and book through To caused Last quarter, notifications booked losses loss elevated with the related economic to have types year take. future quarter, of accident events COVID-XX. and increased are to We we the potential

our mortgage continue to including COVID-XX losses. portfolio, monitor We for credit

are current is great risen, crisis. is loss underbuilt. fundamentally has than of regulations market likelihood different are and housing the Loans the quality, tighter, While financial of higher situation the the

forbearance has the addition, in In U.S. extended comprehensive the history. measures largest federal most and government

three, For believe mortgage is reserved. category book And unknowns adequately our known the primarily these is that reasons, we interruption. business

follows risk provided, As of interruption pandemic has where it under that has been losses paid of covered. policies and not pandemic been generally benefit should the policyholders communicable business been controversial, except property not have for reported widely coverage coverage protection extensions be have disease

minimal to attempts seasons by intend us to and Our impose that to fight liability. plaintiffs’ bar the interruption exposure advise they all any and continue have to losses business

in Europe the connected these closely We exposures are on and monitoring actions our with continue students court stay U.S. to and

address. Bob, before to it I'd one turn more item Finally, I there’s to over like

we ventures business. our I several excited close work has our departed have I interim ago, our to for weeks to the -- am announced with to opportunity As have were Aditya and responsibility ventures assumed service Aditya success. of capital. to continued partner XX and We closely thank his we deploy work him profitably talented seeing many at a team with time are years opportunities for wish

managers our Upsilon, gross is which of the over dislocated, going Vermeer grown and Medici oldest role will markets business. unit third million most balance renewals. a in system, becoming of one we in respected so forward. for increasingly Despite capital, has and our ILS It to continue support do strategy raised ventures party the to and in of participation, to including play Our the capital we critical mid-year integrated net aligned successfully sheets $XXX

and of trust in in that the I our capital result can do to has portfolios management, earn continue We to partner is to risk, high of deliver us the enterprise excellent ability a value future. confidence so placed aligned investor and our confident quality we am superior Our that risk approach. underwriting, in that trust greatly

for the of financial I'll first turn at performance. it our an to Bob but renewals about let talk our on So the with call, segments over the me that, provide update end

Bob Qutub

more capital investment main underwriting and raise results, of its drivers then financials. several Kevin. of my had three then prepared overview comments I’ll discuss our profit, in with two providing in working and with on COVID-XX. a then our our our financial back transition Zurich. results good from Thanks, income. began than opened After quarter mixed update three offices accomplishments. to this optional our COVID-XX. response and model. will remotely And we And our offices provide transitioned of income and has to been impact an on months and to limited detail financial our and everyone. to operating to strong home, and these fee continue strategic operational our more operational I smooth. employees, with with update a solid Bermuda returns, an income, on consolidated well response Most morning, work June, however, basis all we’ll on an Beginning begin and in on We an the back we’re We starting from

to expanding quarter, recruiting. to and several of remotely second business. in the new active invest we throughout Importantly, the on to continue We boarded support needs the business employees hired our

Kevin raised of $XXX one largest Now in earnings public We at we pressure raise, renewal. our $X.X to opportunities offering a on price through moving have to January million In that concurrent the per some discussed this will shares per equity private interim, the will and Farm a subsequent this with X.X to deploy billion of and capital capital a the State capital share. common anticipate share. be common at placement

note was impact our raise, and as that increased will of the or capital XX%, our operating gains that $XX This minimal. strong significant on a value And share, book our during investment finally, you portfolio, income. per result quarter, quarter, mark-to-market

reported return our annualized results, on per or fee moving for income. influenced primarily return we of gains Reported income Annualized $XX.XX XX.X% common mark-to-market on in favorable Now average equity equity net portfolio. was underwriting driven of common by consolidated operating to diluted the quarter common average by share. million, our results, $XXX XX.X%, and investment

Gross premiums net This Our TMR on operating and unrealized income was excludes exchange investment, foreign expenses diluted gains and share. related up net written segment of growth XX% million last from common transition $X.XX quarter realized $XXX losses. $XXX and quarter per $X.X were million year. the comparable the or for billion, from our XX% XX% came casualty. from came this property or

As we XXXX. Tokyo Millennium on XX, Re acquired a March reminder,

are since where comparable So first acquisition results quarter full year-over-year. this is the the

indicated the before, did of portion significant not a we renew As TMR portfolio. we

line despite top our quarter during was the of achieved pressure. growth So XX% downwards

was renewed of this our normal impact XX% the the in ADC, to our property to Legacy a covered in ceded ratio as quarter. see ceded You the our flat will premium our our acquired Well, casualty ceded also this program. business less from incorporated TMR XX%, not reflecting ceded stayed from that cede to by acquisition to seeded business increased premiums. of so gross TMR segment to the we by program. ratio XX% at This of XX% from year-over-year subject ratio gross was the is has XX% in into the decline business offset decision to

I’ll to income, primary into our better And our we Now and supplement drivers have of fee income begin financial financial dive profit, with to income. our three reorganized deeper results. underwriting align it investment with,

We $XX duplicative discussing of approximately we the billion, $XXX underwriting contributing with contributing have ratio information. combined while or quarter, Both disclosure income million quarter Park in [ph] around income premiums segments investments, performed were earned or income underwriting non-controlling XX%. enhanced reported $XXX a of and up Casualty removing Net $XX retained million where income. $X I’ll of by property interest and million begin well of million also the XX.X%. for

continue sum expenses, net direct expense and expenses, which decrease to of ratio second more a year, was than these our transition TMR associated related with three Transition $XX down of lower XXXX. earned percentage direct million wind Our are $XX in the will leverage, strong from and comparable premiums near the $XX XXXX expenses in second expenses. million driven of for the last well totaled of points quarter, million of quarter of anticipate We quarter over of which term. operating to operating period acquisition a expenses million have the X%, The decrease XXXX. the $X the from $XX million as the operational by corporate to declined from by is as

percentage two in partially about down were and expenses to from related operational reduced travel, $X points, million by expenses operating office driven Additionally, COVID-XX. marketing savings

from development across million points years. and was offset the a releases accident driven the from more the where comparable a four expansion prior were adverse in major by renewals last and Lloyd’s and and gross a acquisition $XXX of We favorable driven book. property delegated other in lower and additional the property the in premiums quarter our cash respectively. book, predominantly of to the of rate XX% in of We other favorable This at the XXX of up your cash, segment, expense XX% both events book. increases, in were growth Underwriting Japan, million than expenses did – by accident three property of million $XX reflecting were by Both book. leverage, Moving written ratio combined or reported of down favorable $X which cat property reserve current have ratio variety the lines by XX%, insurance percentage of small authority in in ratio development profitable, was improved other and property development property operating reporting property. Overall, combined property, reported segment. in loss X% ratios renewals property, XX% XX% a we were the

was And casualty in where reported development line casualty in premiums existing we to a related of XX%, million growth deals. prior million ratio to accident finally, of primarily on TMR renewals, of growth million, resulted ratio our year in grew $XX quarter. due increases impact with or loss underlying excluding and in $XXX growth gross second The XX% our of non segment premium the by rate an organic we in reported in current with was the that X% estimate results, increases Moving than $XX The our combined X%. is more favorable expectations. which we

second and performance our fee half income profit, quarter Year-to-date, and Total to $XX second XX% of capital to business $XX compared partner up up are to fee continues was our in management income. made million as first shift driver I’ll in million the $XX million, fees XXXX of perform. of for grow Now, fees the fees.

several made the business XX, greater prepared my insight into supplement, beginning non-controlling our I providing the in comments, the to our page improvements ventures As with of financials. from and interest mentioned impact we’ve joint financial how changes

of that non-controlling the billion of comparable This second quarter on the to quarter $X.X our is table and the in new we for interest on balance sheet and up Medici page a this capital capital added Vermeer. have that as billion, behalf from shows totaled We DaVinci, manage amount last year. partner reflected $X.X

XXXX, low results As a DaVinci, non-controlling million. accordingly. charge capital by by of this in quarter, Layer mark-to-market $XXX earnings gains. bolstered to interest include Upsilon, underwriting $XX partner mark-to-market catastrophes reminder, interest million, interest related non-controlling partner and charged of Vermeer quarter our attributable reduced second reported was does second not strong was solid these increased Top to the gains. capital vehicles driven growth Langhorne. to the performance, Compared which The This non-controlling and Medici and by or the

is Upsilon Upsilon, at supplement, end to the not our which the as quarter of was flow All through which with associated belongs total Regarding partners. our $X.X premiums billion premiums. financial second highlighted statements financial of billion, the written $X.X in managed gross capital

in treat we Upsilon closing serve now from earned Therefore, contrast the net offset seeded the in our only profit Financial second we share operating is as snapped of extreme quarter our included first quarter. XX% driver to income. and written our markets However, acquisition portion premiums. to And in with volatility back Upsilon Fees of investment the partners third we premium. expenses. in saw

of million realized results first gains maturity the fixed Our recovered investment quarter investments. and $XXX for second unrealized also investment from XXXX. equity and portfolio of quarter in with $XXX Reporting predominantly and mark-to-market the total losses million

corporate our tightened. results grade investment both and rates decreased allocation credit, we benefited During the as of which spreads quarter, investment increased the both and to duration of

million, for and income million, partner and capital. term net million. with investment for maturity investment with retained $XX Of remainder quarter $XX was being the the net in income, was overall fixed income $XX million short $XX the investment we Our quarter shared the

yield portfolio of X.X years on investment maturity of $XX.X assets duration reported managed to of billion. Our X.X% and

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

turn We’re and that, comfortable with developments investment And over and we’ll to our our asset monitor and portfolio. back to on economic I’ll the with impact allocation duration, Kevin. continue it

Kevin O’ Donnell

that an and lines had almost I’ll segments renewal prudently in quarter comments to mid-year, to property the property net Across on the disciplined both for better preferred of higher plan conditions manage business. Thanks, move perspective underwriting achieved on our our was with start all our Casualty. on rates denominator in from Florida terms our Starting Bob. segment, and and renew board however, in with common tax, a then the core we a executing proactive accounts. risk we

of the renewal push and XX% as rate a call into first terms number to going and Rates on conditions. the up to were for strategy Our XX% We well purchases was as were private obtain able average. were to deals. smaller a meaningful we reducing firm support excess of relationships terms our third. clients well by in rates more number number market about in the participation consolidated preponderance order to a on Florida, of of We a of our

will has reflect basis. Florida made do adjusters. both on and COVID-XX percentage be on challenge those our reasons on difficult the been relying reduced at Florida impact equity believe and restrictions of our Effective reduced subsequent expected June companies, claims models more CAD on of repair this Florida therefore For the We independent absolute There and Southeast costly places limit and not and we shift. by this PMLs flat profit. especially premiums movement. a claims that in some Overall, claims we increasing adjusting reduced the renewal. handling for one our book, were in several an holding we

COVID-XX. unchanged. storm with we of rates. successfully back In adjusting. in on our fraud of increases. allowed believe, property remains for those us addition, relationships to accelerated across Florida, that to meaningfully has claims Ultimately, The rates aggressively maintain Florida, to our these claims cut environment Consequently, Outside post increasing higher our willingness chose it partners best Florida effectively who we most exposure push segment prior crisis were and will the to pervasive handle was

fully For zone with up XX% carry increased one and to this to tight exposure, XX% momentum expect the increases for rate of were to we peak was exposure rates we saw XX. Even X renewal. rates January non-fees through capacity

have the fortress largest positive [Indiscernible] The we new recognition most strong programs. and to raise widespread raised, in which balance that capital reaction the the and position instilling as into to even reputation certainty we With of our renewals can complicated excellent further enhanced of our are first a bring market. reinsurance an our grow to sheet capital has market, a dislocated

cap Upsilon, Syndicate the solutions reduce bespoke to during fact, limited, Vermeer, able quarter, suite utilizing their to sheets. seeking Layer RenaissanceRe by to a large reinsurance we’re of full of XXXX. our very In Da provide number balance volatility Top students Vinci, focused and

on we’ve closely As I where being we property the our has last quarter, appropriately. paid monitoring discussed risks other and of performance book cat-exposed are increasing been been we believe

other global portfolio, continue chose with to back did our meet quarter, second focus with and specifically hurdles. our and that not unproportional was where increased not In large contracts, cut pro we renewal risk the inadequate. several to the our book, programs we on deals rate renew good quarter for risk In We return property clients. optimize being this

opportunity retro. the market, to especially June Shifting risk largest tightens. now the improved ample adjusted where XX% insurance we in on that We to and Conditions Terms see one XX% also protection for the ceded materially as down ceding challenging U.S. date emissions second primary E&S are to programs. continue is with purchased. capacity the up renewal retrocessional rates most

conditions. said, that Prices bond dislocated. at early a position. Lisa due and the but Mona purchased have in retro were XX% last price to $XXX these issued a strong strong as we higher over in We challenging mid-year with up markets expected, we were remain in That I portfolio As we increased were for we at position engaged, we went renewal and market as retro the points. brokers million already competitive a fully expected, limit cat On with despite about less are average, believe successful XXXXs market had and mid-year to our year pay happy attachment And January. than program. mentioned,

now rate precise were to the execute including increasing trend to increases, casualty significant almost double many and above lines continues to way. is prior pre-existing XX second our increase and umbrella inflation not what in Like we for most rate years, accelerating has for lines, liability, market by well casualty the in uncertainty Moving coordinated beginning to digit professional our D&O, surpass casualty; in trends. across renewals in at COVID-XX and general driven experienced rate year. this period the liability loss were anticipated business and rates in Increased was magnitude able from COVID-XX The quarter and cyber. renewal a of property, the many part with cost is these corrections of classes, a territory

In many addition, ceding of commissions impact are programs, increases. reducing on rate the amplifying

quality high In recession, uncertainty The others our focused appetite Over COVID-XX given programs. best the We without to programs our pandemics benefit from us COVID-XX walk where on Overall, excellent will the from appropriately exclude business. suppress was positions cover exposure to is and this respect and speculation second largely believe one In our resurface in priced a articulated to building leading puts renewing been well the the cost on on in as dynamics was to improved improves, With loss problem has exercised this market product The COVID-XX inflation approach challenges comfortable quarter. to increases a were from to will and to was believe market minimal. property muted, policy of in extent strong continue the operationally we that as the both economic as and to and grow portfolio or it clearly rate on have the the an exclusion to COVID-XX casualty we several position Well, and we as win. instances chose is one underlying back. We build many we We losses year, some cut closing, we’re loss elevated at risk to exclusions. where an with subside. we underlying contains able renewed business the able only attain exclusion. possible. underlying deals, to to intended not We overcame market There June led were inflation renewal that XXXX. this exist outperform intact, to and continued COVID-XX, we disciplined currently away however, book. that financially casualty the margin. in number the casualty as

manageable, Our our and experienced investment gains strong COVID-XX in risk remains portfolio. we

begun begin will but And we’ve that, office which questions. to of slowly, our process the you. deliberately. reopening Finally, turn Thank execute with for over I'll it

Operator

Instructions] line first our question Thank you. Elyse [Operator from And Fargo. Greenspan from the Wells comes of

open. is line Your

Elyse Greenspan

market that last of morning. you to first being of improving I you on, could Good introductory remarks pointed Thanks. a couple what said. I to this My question, kind guess an what years goes believe back Kevin is some of your

that are raised? billion you think thinking, just equity XXXX, and that to, be work? is So over the Would I’m you know capital trying to together you of to you you Sorry, XXXX? put period that can guys, Over timeframe time this do X that beyond? what tie that XXXX that

Kevin O’ Donnell

a that’s question. Elyse, great Thanks

of We will opportunities in in deploy year. business look the come some find half We but most to the first the placed know, XXXX. reinsurance of is might that in as up, you

So targeting raises XXXX. a on very our that. in being really January capital important for date Obviously, deploying

in portfolios the other is as As going going to opportunity. I have we’re we’re something into our one XXX% and control. levers, we’re our is restructure grow two to kind that pull of we The to going the mentioned, restructuring is

have the markets we this about feel can deploy as an deploy based that that the absolutely where book based on XXXX observations we that can from, seeing as from on think what confident we’re So rates we and are perspective, like, XXXX. we our performance performer in And organic looks of target we in the well. our

Elyse Greenspan

obviously, Okay, an could there, flipside be the And season, right. like right in season. my of could now, the up but season follow winter and be active seems obviously, inactive middle it an it we’re is, storm then storm

based if, to you losses, your just high a is if initial there’s of of to there an on level off not view pricing now, not thoughts your can is there Hurricane just the enough use So that you give right there think momentum, storm? do if put of active one capital one us

Kevin O’ Donnell

we’re So confident into no landfalling strong if enough XXXX. where there’s or momentum headed, that number there’s moving still in I that of and uncertainty feel landfalling think relatively the market, even I have are I rates hurricanes, light think, going about hurricanes to

there could large if there’s losses from be XXXX. think substantial in I dislocation additional hurricanes further

Elyse Greenspan

Okay, I the thank color. appreciate you.

Kevin O’ Donnell

Thanks.

Operator

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

line open. Your is

Yaron Kinar

good following last morning, question. I up on Hi, everybody. guess Elyse’s

we kind I think that think we’re also chance I that raise How, to does capital starting time markets. how raises that the in from longer I opportunity? term a see and are into XXXX, of the the slowed E&S impact looking think, capital of that much kind incumbents to think there Is down get even some this rate saw story. I too? happens

Kevin O’ Donnell

other build that and change executing on watching our existing we’re closely the which in were our our way affect environment both customers. obviously, performance we build engage we into than the formations. what’s saying, doesn’t The companies our, look we new we’re with as trying and exactly to we at you’re it, strategy. as going strategy, our conducting we’re may do raises with So it anything capital That we

capital our that that capital necessarily, strategy. We’re not not is with competing informing

growth. trying our capital both that look of it the remain that’s confident being formations, what by do, plans I by regardless to raised by for we we’re new as existing dislocate shouldn’t and companies, So at

Yaron Kinar

in of and they one, environment. could more compete Okay, the market beyond that, little longer I maybe necessarily how see be a ready too. to term competitive you feel can a but wouldn’t

Kevin O’ Donnell

a that’s good think I point.

deploy incompetency Our goal of is we is XXXX. to high. The the raised in this capital quite benefit in business

look want So they as as see to their this we reinsurance, it to grow recalibrate that. also, take, into risk we’ll look books And demand the to with against others look we’ll more to for meet capital.

sure to we’re this in not strategy other our on and stronger just just we’re up I comes make by it’ll located as capital So it. to a us think be to execute line, position,

Yaron Kinar

was the portfolio. reading it. I have I Got if considering I of of question quarter? My duration this Bob, realized a short for large the your wouldn’t game number comments, what large this the source miss second relatively expected and the just but, apologize

Bob Qutub

probably There’s We a first you’ll from repositioning supplemental our our the spread. income. quarter opportunities see And grade late was credit. fixed the two of came in the that saw investment some of some three in that and quarters generally We started sources into positioning. result

of quarter significant gave gave some continued other the a as of We benefit we in on fixed That’s it the coupled a in back resurgence it, came significant it. that made April. with back that first stronger of in saw million. that When did. rebounds income And that over us quarter actually rebound, it than XXX aspect the equities

we how get that’s see You’ll there.

Yaron Kinar

Got it. Thank you.

Bob Qutub

Thank you.

Operator

question And from from KBW. Shields our next comes Meyer

Your line is open.

Meyer Shields

wrong I market multiple got basis. than year in I more last think that months or about is other? optimistic this XX is Can that being and hurricanes, the to a dislocation clarify this, the but ILS in take you’ve this one that the Am yourself the shouldn’t that to way on subject one that train point, location about opportunities thinking will to

Kevin O’ Donnell

So what I’m what trapped of that. But a and there how was say has I instances And not answer couple being sure years development of in to capital. think trapped the suffered is I particularly market to Michael the Irma. in many from ILS lost, a – because in would row

there’s So some in market. bruises I think that

a, capital will BI that trapped as risk and about ILS understanding uncertainty types be of a the taking. the better providers capital many they’re think losses for to I awakening

being finally, suddenly has seen low that and think then as you’re on And elsewhere beta asset a for this portfolios. the market, seeing heavily appetites in been weigh capital. retro it’s their correlating ILS they’ve again will losses impacted, I with taken

they’ve ILS realized space, several So a on years. think over when there’s I allocated against based obstacles this internal portfolio that compete capital is classes lot for the the at ILS I asset to look uncertainty manager into how of other

more develop, of or everything or, I built. I think about XXXX. on and have over headwinds some But when where persist. markets XXXX continue other the interest ILS will So go, how a certainly could wouldn’t through interest there depending be there capital, last will are in there, think are believer lack that capital, otherwise built we we that And to ILS we losses

Meyer Shields

much. dollars can the reduce party Okay. or how useful much in through lot be the additional Is would assuming a retro there additional That’s of written any equity thumb I’m purchases lens retro you rule either that of terms writings? premium billion we support? very adopt it at Thank helpful. would that third in net of that common of looking

Kevin O’ Donnell

question. Yes, your I it’s understand

is we I look to way deploy. think it the we’re at going

the the the on leverage different money return downstream the we of company, we based how have sheets we will of it can to capital. into construct the One best those balance on is issues holding

by business portfolios. within different be each the mix it’ll of and amount the So

So and maximizing it’s the the and opportunity on then efficiently. a most a that that clear, I something this It’s saying think I’d difficult X answer. return not and to more balance XXX ratio simple or just But capital. to it’s to going be down ratio a screaming sorry, us what the capitalists we’re appropriate [Ph] capital optimizes focus give say, sheet but is. the I to the think new you about one well to to half is like for can’t

Meyer Shields

Nope, so completely understand. Thanks much.

Kevin O’ Donnell

Yes.

Operator

Bank comes next from Our the of from America. line Josh of question Shanker

line is Your open.

Josh Shanker

I increase mean, still the PML, It here get moment I Yes. the this everybody. at I you’re been a really opportunity exposure trying in right cut answer? expect that guess portfolio. you was do to figure look, I’m and would Good well -- maybe it raise an bit, thought the little Can talking walk there given just of went whatnot. more as issue as there X/X. was sort capital, I’m a better? into a bit go you and now, rate there? And what timing, just about, into exposed been have you when to the satisfied I through not have to you but like decision you're Difficulty] that out, there for morning, optimizing [Technical would you seems little But to I Can

Kevin O’ Donnell

Sure.

a bit. little for up broke You

been I raise have capital why because portfolio? the changes? Why think have more you would grow is, in didn’t good with gone your Florida? we now the for question would What rate we did

Josh Shanker

it portfolio. great I mean, a just seems you maybe know. opportunity didn’t maybe X, the maybe taken seems because PML here that have I to that there already opportunity we was of. I on cat maybe it’s don’t XX%, went just non efficient Or mean, quarter ROE. cut deploy June was XX% you to more passed there’s it’s you PML It and capital. an like have a was it advantage like there thought wasn’t But with I that cutting here a yes,

Kevin O’ Donnell

Okay.

our part we when at Florida, portfolio. So firstly, looked of much a Florida is smaller

With Just a of let X% is currently Florida outline that. less for premium. our me significantly than overall premium

in less years it a means company for cutting and XX lot growing a like than did So Florida now ago.

grow the was Secondly, decision not ours. to

put we we XXX to us uncertainty didn’t at the that capital. opportunity company on ample exposure And more in the risk. warrant commented We raising. So decided to we of that million to capital ILS the some had bring did the more capital the through market more more market significant

at deploy this money. coming not to in, is capital, conversations in having So term think that our our going grow for clients it Whether have the we we understood Florida, that make positioned X/X. we not, about were of to this opportunity when long and or to because early opportunity sure with over we for raised positively matter they this year raised needed early I the the to it success

we success passes time whether deployed raising this keep and Our XXXX it in sure and in it’s make can as acretive. deploy it is money

So we make looking in was. were investors, capital that to we best didn’t the doing were clear grow XXXX, we this the is emphasis of And future In opportunity in we not take we the sure to to construct the to conversations on of is that trying that with the had put what portfolio. target advantage an Florida. what

So And nothing be used different Florida the is kind were part Florida than to would of our were. what of summarize than it. our portfolio about actions expectations in a it smaller our I way significantly is

Josh Shanker

much unrelated much whatnot that you and how that’s number approximate quarter by being helped you in saved able question. for how and EPS? expenses an Do to travel have Okay, any dollar not the

Bob Qutub

it’s million. here, $X expect office Bob. Josh, to about don't Yes, kind And comments. It’s some travel, much expect and that hold, through of open marketing that up. we that’s in travel, lower talked covered there We I was lower about quarter mostly to and expenses. that prepared grown reduced the this

till back. offices slightly. travel up, But business opening come to see up time. You will markets know, we’ll of open the traveling The the of probably as see how be start for we’ll its down bulk some -- that going that that till develops that over stay

Josh Shanker

you. Thank

Bob Qutub

Thank you.

Operator

the line JPMorgan. from Our Bhullar a from comes next question Jimmy

Your is open. line

Jimmy Bhullar

Hi, thanks.

view most and think had something So first clarity sort whether do them on of COVID going of got losses. else? question I just a interruption it’s on claims, To on business you or lines, extent booked some and your you’ve uncertainty in just have what already ultimate versus

Kevin O’ Donnell

be is think I we quarters for talking COVID-XX, we’ll about many forward. go as something

is applied has discipline best large think framework losses belief is our with will that in pandemic to And the the losses still Firstly, that ongoing, day. have an an it’s the very related not we this with handle framework. changed. way and we that every ongoing, as We all news see in to result the COVID

is framework, to trying about as to think as to we very the slow transparent to So recognizing and be that be possible, going develop estimate. loss we’re this difficult

pretty impact time you depth reception, of the length to to the I and many if loss in the how for category and a categories It’s primary probably the one is with policies. recession, bit to unknown. an of we regard to category So of will into which is three is about unknown from, direct the because the the recession virus that go of things related and covered the third direct the primary unknown, two, not the continue, challenges which tie losses and period two. think, BI more And driver virus the have most for think probably the significant transparent less of are a

So framework. our be in what provide a is to that trying disciplined we’re do to that’s approach and framework transparent

on what with recession. number come believe it’s at of is largely a COVID possible because up time that, be shape final loss ongoing, the not to the we to and it the is, dependent So event this related with

Jimmy Bhullar

you’ve you that even there’s losses it could raised think balance as as about uncertainty? exposure with as not you comfortable your you’ll that capital long is visibility are And some Or into your the that keep of what for likely great sheet, deploying it be?

Kevin O’ Donnell

That’s a great question.

testing think exposure extensive way done what that exposure can as scenarios. we analysis number think I be. produce, likely is, as it have under And more on more scenarios, a although then well is to the and we understanding about difficult extreme our very

sheets to feel predict, temporarily about our have. So to risk, exposure of loss, said and exposure it realization for difficult deploy none capital. our none we I comfortable very is very, changes willingness but balance of appetite our done, The affects that the and of maybe all and that this to it it

from potentially of when raise the uncertainty capital think future, I it’s opportunistic about looking for reflect So potential is that the with we have, not in related XXX% it losses COVID-XX.

Jimmy Bhullar

on then just expenses. And lastly Okay.

sort you the of marketing was number that year fairly Do more to of now half do activities How see pick will a assuming ramping as you go at the the rate gave that was through You or are well? up will that depressed you But on low. more of we it the people out at up queue? And office? think in look one mentioned, related I’m overall, ratio, travel your expense back second back expenses. expense your ratio as stay the that

Kevin O’ Donnell

more well I But -- things or extremely over back look one. One, base the expect net everything I don’t business operational gross to that. stay and the we expect leverage you talked on about driver importantly, office, relative our written we’re for we history, Jay, the if that to because working the talked premium about in will while, Yes, as the back two usual. reductions because not we that just to get around as a related COVID

for if our So one over infrastructure. you’ll time, have there, to we increase, out record over spend we’ve leveraging investments, we’ll demonstrated you do we that look expect we track volumes operating But as time see back a capital strong step more deploy platform.

Jimmy Bhullar

Thank you.

Operator

line next comes from from Bank. of Deutsche Phil Stefano Our question

line Your open. is

Phil Stefano

where earlier messaging uncertainty, it you might the kind have Yes, just was purchases that the around manage least the like new is thanks steer It demand the helping of COVID the some expectation reinsurance of to which renewals it’s might this like equity had to came a feel be be or beginning into help mid-year through put or potential year through conversations been to does and the with there that have event the to race volatility may felt feel of good in capacity, in come at into XXXX play? withhold that, can more morning. like be

Kevin O’ Donnell

the are want in I as supplement of We last the opportunity call don’t in leave is and we’ve that a in that good those XXXX. we in to impression there additional we’re to capital believe in purchasing, slowly. for And with this having this in at the All Yes, think the lens -- to we said is XXXX. XXXX, with will we’re I this is the that if contact our we’re book, kind think losses been market. But that, customers, deploy in to looking be with to they us discussions. their purchases which emphasize the pandemic trying and going false Should deploy we ongoing. looking the is that -- emerge COVID

in is to goal Our XXXX. deploy

Phil Stefano

the out additional conversations the changed just curious do heels trying So in they there maybe ventures the in partners raise. to being but have I up view from to of you unfair equity any correlation ability be I’m the capital the And business equity I draw, understood. an Partners in them an to my on wonders response part don’t and Capital crowded the a we’re pricing as of to the increase I that’s yourself was extent guess know, maybe the if way? whether reaction raise. me question would guess follow with

Kevin O’ Donnell

investors couple our our and largest few great a I’ve that’s investors all to the Yes, weeks. spoken we’ve and, over spoken all to weeks question. last last over the

it. you raised million deployed XXX think the and if firstly, quarter in So we

bring to party continuing are third capital. we So risk to

I they’re our about the just they do. capital renewal, into incumbency, the deals way on right have of Going is the partner on a that X/X we think that as

area The to capital So risk underwritten them which structure we’re and optimize the with the where in going portfolio likely not risk the portfolios we, in at one to aggregate we in build The risk the deploy what going be that how way Upsilon. and the to going de environment new us is takes market for have, is and a when is I our against we vehicle will to portfolios the market. that the look retro their material mostly then will we’re opportunity rate do equity.

mandate for have. So anticipate be that think from that, will other sheets. more appealing buyers if our to Layer the Top I that come we DaVinci, there way targets some to of I it’s is consistent be a Vermeer, of risk that will risk, And it other than the Upsilon the shift with with less balance vehicles it likely than from and Upsilon is certainly structured,

take. have. we raises, look we not how to investors constantly to will and We the and are give partners objective at with risk but match right -- our the the not that capital can alongside we and we right we’ll two risk, So capital look and to it’s that efficient them they cherry us desirable pick best participate

Phil Stefano

And it. you’ll Got hope Thanks. do well. to continue

Kevin O’ Donnell

you. Thank it. Appreciate

Operator

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

open. is line Your

Elyse Greenspan

first thanks answered. Kevin you’ve goes back question, I the guess for follow taking Hi, just My something that to up.

the depending said, of the downstream or capital, is get So sheet would also it you to but desire it where the on use you the balance upon is and you can company equity that to said most it best own your holding in response capital, depending on opportunities. on returns rating the

use capital of that some in partnership your of You with some could venture capital?

Kevin O’ Donnell

Yes. a good question. is It

I think.

of a it can think I everything. be little

DaVinci’s into you said, the it’s size you percentage increase, along owned deployed of are it market deploy or opportunities be alongside if on look balance most our the our our our at we’ll participation to raised, of there others, at partners look That So fully look sheets. the -- in vehicles. I to those if anticipate, vehicles and will capital on

we the So most is when That risks to we vehicle want it, said, Upsilon DaVinci would about look to which is mostly sheets. balance certainly should probably about also continue more that to I think be for vehicle, that think should likely we bring as in more can where I of And home the our own and in defined ways will some that size -- it right will we limited on appetite likely can broadest these natural the can the one we it with not not the written appetite we a what’s may which vehicle. issue on likely when is vehicle it. has be is for for shift it, the in of structure as risk fit may invest

Elyse Greenspan

my then you And annualise on helpful. question that’s on Okay, This the deal. guys is right. we second first quarter, TMR called on side, the so, are out the

on within impact the I specialty growth to on an business when then we’ve you but that of some might the of figures out retain So some laid incrementally what for the you had of the that deal, some the expected thought business positive you got know announced not you had casualty. business, more conversations book is had non-renewal you of of you sense as my renew. guys had

that how specialty within business? that business I the quarters we just can of of give So next you over not to renew as needs modeling a guess us think the about three much sense

Kevin O’ Donnell

an able we what two renew. premium getting last did thought down in about at, said, Yes, I’ll year, walked back from billion We we we is to down -- start we answer. you we looked to be about would, a XXX,

of getting the more understanding much and getting relationships view unsure the a books books, at of of Going favorable gave the us to through to time. the know some know the are the terms, who

not didn’t it we to general we of down renew, expectations a implied there’s was we auto, about with. And more see liability, we’ve and did That TMR talked our XXX. strong did like things Things generally probably -- that I books it. So having know what more in drove of outperform which we felt felt a renewal we strong XX. the versus and coming Elyse $XXX we XXX, book. the then and and with over down it was element well But our feel like that that, said we underwritten. growth renew very of did of on we that million, lot the the it you’ll comfortable better, did pieces got on renewed We was

Bob Qutub

we [Ph] about I engage than only and think news was to The that XXX the is good deal we originally And then added to getting good that our that for confirmation a was target found us XXX hoped. in. that more good to business

Elyse Greenspan

that’s the Yes, additional helpful. you Thank for color.

Kevin O’ Donnell

Sure.

Operator

now turn our would like over to I back call to remarks. closing presenters the for

Kevin O’ Donnell

dialing forward engaged billion move to dollars next in Thank about And you for confident the quarters So look that you. to quarter. highly deploy have. we the we as to the about just call. we highly our and appreciate quarter great We X/X your renewal this towards ability and speaking feel feel

Operator

for today’s concludes gentlemen, and Ladies participating. Thank this call. you conference

now may disconnect You

RenaissanceRe (RNR) 29 Jul 202020 Q2 Earnings call transcript