RNR - Earnings call transcript Q3 2020 | RenaissanceRe Holdings Ltd.

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the RenaissanceRe Third Quarter 2020 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded [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, Mr. McCue.

Keith McCue

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

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

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

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

Kevin O'Donnell

valid do to Once solutions at typhoons active important after rebuilding you our promptly. everyone, protection, efforts sympathies by record-breaking of and multiple across we morning We extend those we is Keith. and landfall the saw our by expertise and strike, making today's in catastrophes. and in quarter, all Thanks, the support which providing disasters paying the sharing Coast ourselves part US, numerous wildfires Asia. Good claims for impacted which these joining our find end purpose to call. third An of recovery and West very thank again, a name storms

third they were in we when for California, has been helping landfall large making proud fully so as and by Hurricane need the quarter Hurricane Category activity. the an the during wind. loss as with events paid and and in role people QX discussed we our these clear risks This Gulf activity, our are severe. and results change The level and reflect Oregon far already belief and Sally to nearly third that play I understand is the of year, take, in I The an that fourth the frequent making So, climate Mexico while particular are XXXX events and in location Laura am active driven we call, also continued elevated of that it extreme and contributes same of Washington. both Delta it wildfire quarter for Last X active season a experiencing most. Hurricanes wildfires are quarter Laura more our especially year, wildfire to more

already wildfires atmosphere. million On the being double the than XXXX, than more more XX consumed tons is dioxide in over X and have California either released or resulted West in million which has carbon into acres Coast, of metric XXXX, XXXX

the entire powering For for in more state is is perspective, times year. dioxide X.X than a carbon this released

We continue risk is that strong there California to in change evidence two reasons. believe is climate that primary increasing for wildfire

more and vegetation, creating at drier is of the for depth intense seasons time XXX than and and First, longer dessication any Higher years. California's wildfires. the hotter climate past in accelerate temperatures fuel now larger, dry

drives in Category strong heat globally influencing of autumn, hurricane or rise, the a change the XXXX X have anticipated as tropical overlap cyclones the combination Category which to Ana surge. greater climate Due and Santa from season the storm warmed it also risk. we a dry we dramatic reach impacts 'XX. proportion where length spread X winds and damaging increases level late Climate world, a the high sea causing with and into status. also winds. of of of in results the Second, fires extends change Climate change This is to experienced future, Diablo

Unfortunately, While temperatures, believe change. primarily of and levels are will Atlantic prior natural Consequently, increases surface the in sea change, loss. heightened normal in models, may no surface we always complex long-term cat the the the of climate future. record problem this a last amplify of two human the not to hurricane. ways with of long-term product due there lower what be however, sea change Vendor recent we hurricane variability risk. for climate the record can longer a been behavior historical likely rather past to have risk are temperatures rely in experience periods, revert of expect levels to associated new guide of Making activity worse, for climate on estimate to cycles interact activity reliable can decades

fact and a to perils. change on the For building the [ph] face first in is of true trend or reflected cat example, we build used the models the the wildland-urban materials resilience in to long-term however. gain this only price fail of is To step with that be disasters competitive seen the risk. have provide risk accurately codes coast to that a interface, often natural climate advantage, Recognizing increasing natural insight lines in must

these a hazards the Risk RenaissanceRe of to understanding and believe engineers basis future to full but observations, and of natural impact proprietary scientists, how risk the has capture Sciences of for Our our distribution cat and models They best underwriters informed managers closely against. works model, change the at continue and on have impact best Risk by physics change. RenaissanceRe categorizing the climate our change, studying climate that the physical with for calibrated build that will a that be outcomes decades. of Sciences been should Applying written creates historical to climate new meteorologists insights,

expected impact can an capture beyond representation risk a other cat implications Our dollar single approach has climate in managers, obvious ILS of and true and us a climate. cat overestimation fails model proprietary benefits This returns. underwriters all risk ILS rely the in This of profit from of our who apart that But sets investments stakeholders. optimistic of on investors. or for models building often change informed many and changed vendor goes to result

ILS to risks Our their investment. model rely the accurately on inherent partners us to

the growing some Our that customer our portfolios as risk superior insight our can does influence the And risk benefit of provide well at of risk and peers, to our risk allowing selection, key clients we more shareholders profile, is leads component we the industry-leading increased often the our climate worst. can distribution understanding appreciate efficient their of climate us from on of construct Contrary an to us enhanced service full products. perspectives, of through risk a the sustainability. demand on as a shrinking to for our business deeper for portfolios, on accurately not put which pricing shape competitive into the best rather superior to but disadvantage

climate from opportunities. on change, deployment to discuss Moving take want I a to minute capital

believe we January renewal opportunities will to the the I period, As capital. of material best have we important in enter additional one X years profitably deploy many

capital, valuable risk interest large the events of prove material XXXX pressure put Our trapped additional the historically rates. rates, increasingly should combination reinsurance selection loss upward on QX focus low and on superior as

quarter. opportunities. to the renewal I'll to discuss best detailed programs, and call. our off-cycle the on support financial end existing have performance on profitable provide the it over and segments legacy update opportunistic the I'll new status But first for significant positions to growth business, on at of call to We first, more the capital the in capture turn and Bob

Bob Qutub

Thanks, good Kevin, and morning, everyone.

with underwriting $X.XX $X.XX XX.X%. integration the loss $XX operating or of where book by the income, our X.X%, accumulated consolidated unrealized income. results, gains and common operating fee of return on large by As We of tangible TMR. X%. $X.XX net position our have large tangible very or Kevin return you events. in our going as of our value or investment for impact equity season. common or million of share. our our income change loss common loss quarter share profit, net into by negative grew capital Today, gains wind loss by activity, investment RenaissanceRe were X.X%, net will this an on income book and three was performance wildfire mark-to-market we primarily in a plus book on discussed Starting This from remain loss realized the renewals. an share. dividends Year-to-date, strategic negative diluted impacted Annualized the common in reported from and $XXX Limited, grown share gains per accumulated I per plus share and prerelease, annualized our quarter per we and portfolio. Net by Despite reported income million dividends excludes exchange reported equity XXXX per active on common detail results We $XXX value provide saw average with and diluted per in Included XXXX positive more value elevated foreign operating QX related investments, resulting is common then and the strong consolidated expenses discuss to sale was benefiting million driven average X.X%, common (UK) net and third events. this QX $X.XX we of drivers our in

adjustments commissions of taking impact of the Now after to us, net bottom best with our line ceded related net negative losses lost premiums, combined earned profit, drivers for for and underwriting reinstatement profit estimate with impact and starting underwriting is along of now incurred a to clarify, events redeemable income. $XXX we ratio account, into loss discuss consolidated XXX%. of reported On of non-controlling quarter our and million interest. I three the basis, will a

the with from premiums billion, growth Approximately COVID-XX by XX% XX% casualty quarter $X.X XX% driven and were of million quarter. quarter came results predominantly written last from for year. from or this Our $XXX from came losses of losses the impact in segment comparable property. the little were up catastrophe Gross our natural

are far pleased with growth our so this year. We

year, beyond. last opportunities we As deploy will to and we XXXX in anticipate capital I've mentioned have additional that many

XXX% segment quarter. up now XXXX and points combined $XXX by property XX development the related segment, exposed combined in negative with development, events, to in ratios expansion catastrophe reinstatement book. our the was an business the delegated segment was its premiums favorable increased a written XXX%, during loss The reported property adjustment premiums our XX%, or of ratio development respectively. reporting QX Lloyd's and increase year of large indicated X%, where X%. a to ratio the property was of was other gross and XXX%. for is we've class Moving property loss underwriting for large flat favorable comparable the with insurance driven our current events property adding And property loss overall and catastrophe million risks, other We expense property from QX accident Favorable continued experiencing The property to XX% ratio by segment percentage to authority is ratio. XXX%, property XXXX of the comparable other which catastrophe in This XXXX to property for quarter as of for the the the loss and quarter. with XX% past, experiencing premium

the of decline the unwinding percentage improved approximately within in expenses. profit offset However, ratio the operating leverage underwriting expense operating the point point given to was X due acquisition up lower X and expense ratio was to a the cat quarter. commissions ratio, previously events percentage This of slightly earned large the expense by due

was quarter. by X driven million increase our points existing ratio well is share current premium casualty which The to which growth This expansion to business XX%, on our casualty or as than gross moving grew accident contributed loss three X XX.X%. $XXX as where XX%. combination of ratio. This comparable Overall, higher the percentage opportunities. deal percentage factors, Now points our the of premiums and loss ratio each new a segment, is was year was combined of about

adverse and $XX IBNR not reserves Hurricane second, combined to ceded million our book, million book; cover. did First, development and impact Laura marine ratio; premium $XX third, for from Lloyd's insurer of increased new the which related our in our energy in mortgage private

we walk are payment, through Starting more or reserve and book, two us. mortgage report detail. delinquencies you are do insurers Now We term. even our as reported if without reflect we increased private notifications. with in otherwise delinquent reserves said, delinquency to XX insurance to payment notifications let all crystallize loans loans The days where forbearance the perform as our expected anticipate holiday the to required are will that long me items for of they to at these last mortgage in as losses. paid primary not That the

X decrease by to ratio these profit loss losses commissions casualty our a our cedents. of the Due increased points. in delinquencies to mortgage these While paid offset structure transaction, were the by

to there's combined As ratio. impact no the a result,

of adverse Lloyd's for to reserve example casualty time reinsure transaction to to syndicate, This are but from medium-term given underwrite cost through an see treatment, our over closed innovative We reinsurance to accounting the capital underwriting to relief year's cover is reserves our economically, continue additional protection August in This to the our gross-to-net strategy premium may reflected points. in short loss retroactive accounting capacity about for in protected an Lloyd's improving syndicate The the provides action. moving our into creating we transaction. an current the market. Now a means accident that this standpoint. volatility cover. the It you development transaction years. is is of contributing XXXX this X segment, casualty XXXX the This ratio for in

the X%, driven During a of development the favorable third experienced variety of also lines. quarter, casualty by specialty segment

and our moving at assets events under fee driver of the was management fees The more increases the income by $XX DaVinci for The capital, overall million and accordingly. to that quarter negative reducing attributable $XX and the to interest Premier This $XX million an second where Medici our by million, XX% total total due fees DaVinci, in up income in partner and to from catastrophe the is for in income, Now offset comparable quarter, Year-over-year, profit, to million. million. reflected was charge $XX $XX This are DaVinci, loss passed net Vermeer. Upsilon. were impact fees offset by of driven on earnings quarter operating X%. for on third performance was up was Upsilon. DaVinci than our Medici Vermeer non-controlling fee Management

realized our with portfolio to results of reasonably or yield driver portfolio. investment by attempt increased in and high unrealized reported $XXX maturity yield. investment allocation gains total of equity $XXX and income. in quarter equity equities prudent strategic portfolio to investment were our have Now predominantly to with stretch million. gains and the These our third investment investment profit, fixed third We for for gains to take of approach turning million our and driven a materially We not our mark-to-market conservative

in third loan As the credit increasing obligations we mortgage-backed corporate in made we second as on call, previous I more discussed our increased such quarter. In investment-grade the and allocations, quality our sectors allocation to collateralized securities. commercial quarter, credit marginal AAA-rated higher

overall Our $XX and we quarter the with was for fixed maturity income net and short-term quarter million investment retained income partner capital. investment remainder the the of which was $XX million, $XX million. And for shared

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

our and million which which I'd our sum is Millennium increased the the primarily underwriting totaled $XX driven our focus of items, our and and expense business. of sale expenses of period has simplify operational I'll was related been an like exchange core exchange third and RenaissanceRe sale discuss departures. predominantly from X which increase for million year. more decrease on was X direct associated TMR momentarily. as was quarter on to quarter, us Limited Included RenaissanceRe from expenses million including the Direct to always on Now expenses, of expense of earned by before expenses, It The entity. is foreign senior to expenses, the to net were one-off points on by in transaction This expenses allows intent UK which and the in or commercial increase RenRe This Kevin, was acquired placed ratio. for million and foreign million this XX% increase handing management (UK) over to $XX premiums corporate driven related wrote to and ratio to of the Tokio gains (UK) points corporate into strategy, auto comparable of long-tail by $XX XXXX. increase our $X the quarter. information the an of Limited are by provide of transaction-related more percentage last part than volatility. XXXX, expense corporate This $XX corporate operations run-up stated and percentage Re the loss Limited, divest

As a quarter. reminder, RenaissanceRe the excluded transaction Limited operating in loss from costs loss (UK) on sale the the and of associated are

leverage just the This the items And office operating also due by decrease of of model. earned period was travel declined the the year, and X% impact Limited I ratio expense reduction operational the the to demonstrating direct percentage comparable COVID-XX ratio from Excluding of one-off in a X%. business RenaissanceRe expense (UK) to net related expense point embedded last is restrictions. X to described, our premium the point in

gain has a $XX million The our And relates an through for bottom quarter Kevin. I'll to prior of adjustment of it's half interest. turn Re Tokio line that, non-controlling related integration. Approximately remaining the this Medici with impact now Finally, majority we it back to Millennium reported out gain and foreign over the accounting the on no gain. is backed as exchange to

Kevin O'Donnell

Bob. Thanks,

the imbalance will will be usual, Overall, casualty January with as renewal. driven and is accelerated for our I deploy my market our cat. property our regarding comments related continued by am brokers anticipate leadership long-term another capital very by RenRe of X across to and As to certain natural Beginning uncertainty capital-intensive and areas additional relationships further opportunities active given optimistic and and for We positioned between we grow, year risks COVID-XX a particularly property our customers. that segments. in I catastrophes. with business head divide supply/demand into there portfolio,

active very the in natural US. quarter third catastrophes was The for

low-to-medium the play. increasingly events These uncertainty. property the The [ph] and to third of and cat At BI as the COVID-XX and as events wildfires had quarter, will Because demand aggregate losses came contemplate should severity. were Gulf on to the cat investors capital also experienced Coast. events Hurricane environment Laura consecutive and additional and Hurricanes frequency Mexico, categorize same throughout would already by the reinsurance to West is draft property high-frequency of most largest into for from I in covers above-average So add of Sally pressure us the ILS and prior lead fatigued Northeast additional impactful time, [ph] US the claim rate XXXX. increased becoming year for hardening cat fourth collateral caused a elevated already in

result at that While multiple new to processes more encouraged likely for favorable in an stage. the received have favorable early industry. market, theories judgments by In to the plaintiffs' business remain COVID-XX-related availability pandemic news insurers. bar that we must industry. in in still result part, the I result recovery we across venues could these a the uncertainty to US, test believe insurance not will continued are processes for obtaining the we for of hopes of the remember concerned so in liabilities remain continue that these will generally regarding to to it's challenges protections the Such losses in important years. interruption in BI material irrational that And coverage that extend is far, will the shutdown. most that are insurance of court's It's recognize, we interpretations regarding however, to from the the

their claims As with protect those rights under insurance may reinsurers. policies. time their some be to coverage, of to there will submit Ultimately, with any insurers claims is presented uncertainty

and affirmative interruption claims, we during fluid submitted of from are the long process. is shared business as outside an was I I the that shutdowns. in is issue see a information virus more particularly expect way think more impact sold as the coverage will the a US. we renewal Internationally, the But understanding increase

provide clarity the interruption-related potential renewal claims. such of various with appropriately customer so and Additionally, In regarding expect react we greater for us assess we will business of losses, the claims issue jurisdictions fourth our as the validity coverage watching are are approaching differently, conversations space this that quarter, we we will carefully.

This to was expected. property, other was active it also Turning quarter. an

Laura year, the property catastrophe QX attritional events, are velocity to I US quarter. only exposure experienced from large year property QX Consequently, Midwest for explained it. the opportunities seeing accelerate E&S And said, cat, have events overall, favorable the other primarily within deploy performance earlier business loss increased we up, property to development That our the and XXXX Rates property we the losses book. As from prior rate we other believe of material satisfied the losses paid the I book's this the are and Sally to to persistence as of you particularly Hurricanes were was this are and other expectations, being and capital Rachel these am property. sufficiently XXXX with other in in will increases. profitably loss we Similar large increased [ph].

course, aggravating [ph] Of losses successive already is retro dislocated an and uncertainty increasing market.

We of are a experienced seller and level and in of comfortable this buyer managing as both market, retrocessional uncertainty the coverage.

amounts of selling on deploy to XXXX significant Focusing profitably another is yet in capital. opportunity more

Moving business. casualty now and to our specialty

strategic performed clients that As acquisition largely and at commission markets. ratio the both our economics position casualty key experienced increases all along a several this We continuing during with segment great exemplify executed our third transactions major core expectations with Bob on improvements, across explained, of quarter. classes, and hardening profit and risk within

oversubscribed, on that trading to partners. ability with build Our deals to substantiates our lines options strategy targeted increase core were

on the have our been mortgage economic monitoring shutdowns closely We book. COVID-XX-related measures of and development impact forbearance of

portfolio ability While economic years. have of has we challenging housing the a we on market of homeowners' in be tight avoided from repay pandemic-driven, the will pandemic, the back although that appreciation unemployment outstanding mortgages. high into this and price homeowner have challenging comes quality economic their an remain significant fundamentals risk And anticipation actively underwriting several equity. underwriting resilient. The borrowers US on regulations, picture portfolio homeowners believe it that put to the and the to have growth could market constructed it standards and months, strong seen for of credit were backdrop, the been by we and recent in lower constructing Despite loan downturn of pressure heading did banking expect we supported not

trends Forbearance reduced consistently showing GCE in at peaking improvement and well. since X.X% time. that having are May, forbearance as With around

in renewal, Looking of strong opportunities forward to we our with the exhibiting expect we momentum Many our deploy And across or both platforms. are capital markets and January across improving segments stable lines and rate conditions. to terms ample additional supply/demand significant overall, seeing imbalances. all are

strong We have on years for focused many positions building high-quality programs.

As the our market hardens, to programs, we operate And believe overall, new continues we our are preferentially well. the joint on economics. call to team sheets I'm for share first venture poised both being perform balance ventures improved report to opportunities, existing at to expand effectively. pleased continue while the

affecting in With to to market and maintain year the year-to-date for expect prefer of XXXX, long the their of impact collateralized currently also process collateral would the Re, The is as The simplicity The losses to of roll benefit an will reinsurance. enjoys in Business in history, of And traditional claims of the as catastrophe collateral difference a Layer performances into Consequently, amounts ILS due Medici, and to its deals in its and an experienced capital over will Top cedent that cedents from catastrophe on experiencing. our suffer draft one Vermeer, to new cap protection already-active fourth potential intensify COVID-XX again remains it available. interruption-related date flight loss against factors coverage all losses, and yet while highlights significant is likely of industry collateralized In COVID-XX, and premium. the myriad trapped like for of remains deal, losses will losses, years. had profitable. to early to want quarter, inherent providers stages quarter. protection only we best important XXXX capital the bond BI events the positive but the industry continue uncertainty tension. quarters. in fund, assessing out new of potential level Upsilon play heightened DaVinci had between cat a this a

renewal XXXX, the us will deploying sheets Upsilon. increasingly enviable likely In certainty Given customers the continued have X preferred the cycle. transact to flexibility we vehicles. to Market means through quarter as balance collateralized of of our is restricts we natural very we This this find risk the conclusion, If this, paper into cedents going in the result more rated that to over heading of expect provide ourselves rated shrinking and occurs, their catastrophe improve transfer. position prefer a supply already-unbalanced an conditions into January further activity market. in in with

turn our Thank And from As amounts of questions. grapples with provides that, I'll change uncertainties independent confident value the that it an I beyond. climate the deploy and environment with this over you. we competitive for industry in advantage. of view and continue and COVID-XX, am creating risk with us enduring profitably capital can material shareholder long-term XXXX in

Operator

you. Fargo. [Operator from Wells Your from Instructions] Elyse Please morning comes this Greenspan go question Thank first ahead.

Elyse Greenspan

would specific in little My you we're do more have Hi, recognizing, to on at retro months sense as well Europe a a off to obviously, get in X/X? pricing still expect as January the the out. markets, you come question, X thanks, your color terms pricing having couple both of good first But -- today, Kevin, US, for of with how bit dialog cedents based hoping I in a in you're morning. what was for outlook of on

Kevin O'Donnell

about their discussions markets. the So of And clients giving guidance, needs with are question I Without right. casualty your specific being think is start our it what lots about coverage with let of with we me are. your early having comment outside actually

faster been rates rates increasingly at casualty accounts We on that are increasing forecast we're seeing cedents. what by the reviewing, our that has than

head I'll start With a positive we a with been the XXXX. seeing into are digits. There's E&S expectations up of other extremely which regard and had within double of we're property, as see lot been gratifying we there, to to US property. movement has So, that that rates lot discussion

feel cat we discovery reinsurance opportunities that, support, in like We not much But is momentum reinsurance in in variables but continue market the of to in extremely to that which to into Part dislocated, to retro continuing pricing the that all the market we Property optimistic are US reason better Europe, XXXX. on the sell. are supporting for and see much US and levered there's is that in to observing how early see reinsurers traditional there a reinsurance, And yet we lesser deploy effect portfolios. that capacity being process. we're probably degree. for going price has the renewal capital will support we're that, better a that because XXXX E&S pricing the for look to

market So, we contracts further, property to we retro as add anticipate to that the price market. more cat the gains momentum that in expect the

Elyse Greenspan

guys and ongoing in exposed? should how my fourth we And helpful. that I about more that's limits have hurricanes, the wildfires guys see with we the in third And quarter? losses you second potentially question. think could the you multiple quarter. that the the saw quarter But losses aggregate the on you the think much as appreciate Okay, how disclosure aggregate then about fourth

Kevin O'Donnell

Yeah.

with are year, few to the more a move particularly tend at the significant So going question. Those part difficult into That often of ongoing, insureds. that's the we're later concentrate And the in play said, kind good of looking a they're to year, when that. active a aggregate role. I contracts think when you it's wildfires, assess to

than to also continue fires from is Hurricane aggregate anticipate that if we seeing So then at from at at -- expect what we quarter, the there's there and the events But impact now. because participation that expect earlier that smaller which will Delta, what to simply Laura, that seeing these is. still about the this would but in counting point been talking we're rate have customers aggregate fourth be I be more increased we're And to losses be I exposure the will we're year. in

Elyse Greenspan

I color. appreciate the thanks. Okay,

Kevin O'Donnell

Some of the actually exhausted are ags well. as

point aggregate but there of on think out basis. I there, a out. continued it It's not exposed all to is So is exposure important

Elyse Greenspan

Thanks, helpful. that's Kevin. Okay,

Operator

question next ahead. from of Shanker Your go from comes America. Bank Please Josh

Josh Shanker

taking for you thank question. Yeah, my

around little a about If share Can now. talk of capture and bit you of about being at on role to the take cedent business collar there's lines what of advantage extent to the write talked of You business? how profitability? with casualty around dictate a a it, and there's RenRe terms quota pricing you your better in have pricing you what that commission that point ceding ahead does write? this ability those expectations it you does right how And RenRe's

Kevin O'Donnell

Yeah.

from seeing relatively So perspective, of reinsurance which accounts, terms, underlying is, there, from the best perspective, benefit stable we're seeing terms a on means I and think conditions are we're we're the beneficial seeing the a more our insurance commission rate on restrictive more terms benefit. or reinsurance enduring the enhancement through is more cover improved And challenged, that reinsurer. ceding either accounts to to what

exposed cedent. market, negotiation to the I So in the reinsurers think the always with a yeah,

And most We is our important most rate then the And have strong have we existing our existing will come relationships likely and of amplifying cedents we than relationships increase. from with of growth I early lines with. benefit what the of that believe in better XXXX. underlying the core that that at had our part to in in relationships the equal terms XXXX

Josh Shanker

reinsurance be what in Or sense might -- at you extent the cedents casualty I what the reserve you sending the various the market that right of And in aware reflected is the the I who in when now their interested in more primary adequacy. is might your reserves problems, be to guess, markets, business, in of quality markets extent look of general? to guess, it

Kevin O'Donnell

is. to we then the And business can the current our an philosophy, ratio. we be think of over kind one have on underwriting clients' where in that's year I think, So asking, between But sure and think interest may they'll probably where our we less the risk. make not reserving assess loss ratio underwriting we profitability often own is much on for do There a that expected time, is we're we and very participating, about representation a legacy our deep ground-up there's we -- a difference I more piece have there's way of a reconcile understanding. have a the business. aligned a account The problem closely not the think you're into we loss reserving and And question reserving of what understanding.

less do at we're basis, current business. I look legacy interested from older year portfolios, So, underwriting we're reserves a and not for think it we because in that

Josh Shanker

obviously cover, are the not have adverse suppose. you're through although it, concerned Well, you TMR, so I as I mean, about you

Kevin O'Donnell

And estimate all the those, is we're right, of on portfolios. business And Yeah. legacy our on best you're developing becoming much that of more them age, protected. they're as they stable. absolutely But

Josh Shanker

Thank you.

Kevin O'Donnell

Yeah.

Operator

from Please go Shields Your next ahead. comes question Meyer KBW. from

Meyer Shields

Thanks, good morning.

Kevin O'Donnell

morning. Good

Meyer Shields

I terms you models the and that phrasing models, gap proprietary or shrinking? between about vendor catastrophes? as talked may be poorly. accurate models pricing that assessing of Is see more gap you increasing in Kevin. Do

Kevin O'Donnell

it's how risk. think depending about we underwriter I what -- is think the peril is -- also when it the I employing is the is important think the the and of location it's it also the and that gap representation on

integrated So, our rely we risk. highly on very in heavily being

understand way speaking we there our we pricing the understand that to the Our scientists than might be make that a different looking where in differences how to are we're are model can underwriters sure risk at so it. the market

people So, I a answer. I recognized where entry that think say, hurricanes. warmer analysis to what subtle a is then at California clarity of deeply the the with what in and for break of the severe think functions really the But that is means down, thinking about years, would or understanding attenuation is simple point of contract to if is There's understanding. more I how it And in deeper I really lot the gives a it's a rainfall hurricane. go will that have wildfire. there would difference point oceans place a more large lead you not

it's more complicated So, a conversation.

within then quite I we're it be be on believe peril, even depending think writing, but the meaningful. the I it that layers can to large,

Meyer Shields

Okay. That's very helpful.

supply particularly is ILS the X, as the you've are that January current because Does will over that or market? thinking thinking about this you time? got Or we this about that in question, temporary this early of pricing equilibrium retro dislocation mean the point? I'm demand resolved and think Second be will XXXX. should with dislocation But because be excessive maybe the normal new

Kevin O'Donnell

So if we our different we're platform have the didn't. we We a of in frameworks wouldn't built forms the that believer the have firstly, ILS. resilience of in and capital all

like it to me crop difficult that crop of is a think the challenged what investors interested this have for investors and that become of I that now. because don't is existing mentioned. though, return there a be who to rate issues right looks change new XXXX a I have the could It'd be know the phase. When to don't begin about has. I markets enhancements then XXXX, think do think rate in persistence think X/X I that I softening we legacy

about of more thinking that And I see term XXXX. of through we had. of much harvest about mentioning, when some think we're think to the to capital we've that I'm deploy, XXXX I'm rates long going the deployment to strong XXXX deployment it

our long problems. optimistic means retro grows like returns a term the we're or to it I'm market. us, customers' solve simply And and use So to the market company buyer enhance solely about shrinks for we're or to a a Whether seller. going

Meyer Shields

this above-average squeeze hopefully, the average pandemics I XXXX, one then and are year loss this you exclude because for rare. these an or in. COVID look Is an loss industry? more at question, year final can And Okay. if When let's

Kevin O'Donnell

question. It's a good

way, at end and think wildfires. think hitting, still ACE more if look the the I out was to of about that then The of Index we've ACE XXXX. and the the that storms will created and you a answer compare better that this storms point moderate lot storms of there the from the XXXX. Index probably energy indicate frequency to the I would it year with experienced that at you

frequency we as -- year. high this year more the So, understand of important potentially and that that to change being had important I think then to an climate medium severity

it an loss think insured at I look a formation. from can we So, from

but creation, all from it's high, from energy an certainly normal. storm probably activity, is the more Formation

Meyer Shields

Thank perfect. you very Okay, much.

Kevin O'Donnell

Sure.

Operator

question Kinar next Please from comes from Goldman Your go ahead. Yaron Sachs.

Yaron Kinar

my My is question line morning. good first Hi, Thanks questions. for growth. related taking top to

about, written. year-to-date, think at you're percent what, I XX-ish premiums gross growing

I an more think talked you had that earlier year, opportunity next about year. into in of really the seeing

more true forward? the sense is year year So, acceleration Or opportunities I expected? you comments my expect are than still just is, your guess this in question you you have the in seen from earlier that initially going further

Kevin O'Donnell

more think. sure question seeing other opportunities, a than were how not are exactly call I We first answer to you [ph] market. I'm that

growth growing targeted, are of is in that have benefiting benefiting from that rate are and we we change. -- lines We previously an business of lot awful

portfolio put haven't quality than greater accretive. I see But and I growth I because long-term continue I the is as the year's judgment this it I to So think to coming actually can we a that in growth XXXX. see whether in, it's pleased I'm of think expected. think

Yaron Kinar

question, my the Okay. then exposures. second And wildfire California

years back attractive? 'XX. change, I a You that as well the that to about currently that impact look with couple Is it's came risk question priced it's the is a of up shrink saw talked Or is that risk climate and as and that think wildfires you'd here? of a a in 'XX ago we still

Kevin O'Donnell

insurable. published the the is that thought have the and did we models that think to models could a of through be on needs believe And amending our someone. impacts and we lot after -- risk of for it's believe a a changed exists by play work. pretty represented be helping represent about risk way common view regard owned to to I role events in particularly a we time. So with mitigate I fires. we over paper models how And to think which the on updated has better that discussing XXXX I it's the insurance our homeowners the risk,

we capacity And be has for for insurers a reinsurance to appropriate protection from available. play. that provide insurance a that to want are retentions believe that perspective, to role believe allow I to there I participate risk. to in So,

Yaron Kinar

Okay. I answers. appreciate the

Kevin O'Donnell

Sure.

Operator

Your next question comes go Autonomous ahead. Research. from Tunis Please Ryan from

Ryan Tunis

morning. good thanks, Hey,

are that lower than January. this the today ways XXXX with And book of more from And there's Company. a you an think stock extremely per company do standpoint, did year. just for consensus the and either report back were that standpoint, of prospects about can of a difficulty think clearly, has from observation, than better grow is of point just I it's probably everything. earnings for value share, to actually for way I an feel said, you the you the at an when be the the lot And two not beginning as then the might about and estimates -- had volatile. they Ren, in you But modeling stock stock I I kind X/X but is, can a of value, like Kevin you there it's analyst there that -- I I would observation, out guess So make volatile which more I the some a get kind question, think

the tough. elevated we an could really a is better what -- that how of actually have be Or normal year, core a forward. year is You understanding have moving earnings next on of could cat basis this Company power

that metrics in and to? would would I that's with me hour, you materials look what just view we you showing, So our question, we supplement yeah, that actually what you into us, power financial point main to the would increasing. me in would are get for be I observation. the an really that if guess point is be like give the your XXXX, as sat the that, your mean mind, that half your my Kevin, Like here is earnings things down

Kevin O'Donnell

think to. I historically what we've pointed

tangible the most What in is provides So, -- and for as growth forecast, is book we don't provide What I we've growth we think asking we appreciate to your provide for creating is guidance. what for observations, thank a you're value. being appropriate what per you. share historically measure value earnings pointed do that

the don't we return? regard then to we're tangible what build that on provide providing is complicated adequate thinking which primary that value would per for we're set asking the would metric very that we a we value is we construct volatility. I financial that look I the to raising, when provide the the transparency at volatility supplement. think we that the you're return the Are So share with success. make portfolios, for book that And portfolios, assuming. things about book the What's of say you're all decisions the guidance to try I but say about or is we how our But

Ryan Tunis

have context, of ways, you. not I but some clearly understood. it's or in whether elevated mean ways, just just in the saying thank in best I not a or is one hear you. elevated this an XXXX, year stories dependent lot we of P&C, in on but cat that I in I'm

Kevin O'Donnell

Yeah.

Operator

Your next Meredith question ahead. UBS. comes Brian from from Please go

Brian Meredith

Kevin. Thanks Yeah.

little question. kind add-on bit to an a Just to of that

is given take rate So now. know kind interest current or mid-single take past, digits. has look maybe your over single been think equity just environment -- for you do a of last return even your on, think you tangible right lower -- It's of a been at market I look if be? I this appropriate some and digits call achieve five years, business the the given equity I in should a your on can about curious, business the an updates. I'm talked If and at you've profile, kind it, that? were what business, you your return do And granted what

Kevin O'Donnell

what we're increasingly getting a that, that capital? how achievable to although challenging. that constantly it impact underwriting. the our the observing within is the much results the on we portfolio certainly on is way for about how periods years really expected re, measuring take above And has return Yeah basis profitability feel on of us an been we had a with I we of providing. that of capital think which of the is much cat seeing on to to and we I book think assess -- I compared that we're are we've capital comfortable have where using? our when about an basis, the longer-term And begin think what an So had casualty to us. on capital portfolios, has With trend feel and we're think I'm form that the you several And elevated cost increased last we're property to portfolio-by-portfolio the need comfortable achieved that, cat about types using, risks about what that activity, regard as for from we return think to we're

Brian Meredith

quick retain buyer's are hand, What frequency And I that we've as a demand? primary think that, and going thoughts to curious, you little Or buyers achieving cause of thanks. on one back from events, are on lot scale other increases increases that themselves, side them perspective? into price on we the some XXXX maybe Okay kind bit the demand a one your one, more reinsurance do head other had a is business themselves? good if pretty of then thinking question. of mean, to

Kevin O'Donnell

Yeah, I think small cat the of by But in within area, -- a it can are different I business. demand. I increase think line our that property be think we anticipating

provider we're We the preferred of also believe that supply.

improving. in the increase mixed So relatively to by ability an call, much our of to we should feel line I a we're experience increase earlier lot the for we're bag insurance demand -- in advantaged and as because that is to enhancement in how to mentioned see of have even business. we demand. flat in classes. in And of benefit of against the because grow like at us the benefit rate as will going Casualty of flat to more order we are an I that a relationships terms relatively casualty that But some -- position the position believe

Brian Meredith

makes you. That sense. Thank

Kevin O'Donnell

thanks. Yeah,

Operator

ahead. go from comes Please question Your Stefano Bank. next from Deutsche Phil

Phil Stefano

thanks. Yeah,

Just improving little improvement an home are you I a the in that in about price me, default not have for these augured talked mortgage dig wanted deterioration. To had a metrics to more. on bit and ratio, -- the would environment, rebook appreciation. the Kevin, guess loss

you this thought is reaction could color Or hoping there? I unemployment So, of how a what about was you little whether you just book and in that up a wave on losses maybe coming? us to second taking a give saw

Bob Qutub

that commissions other that the because that on in forbearance friendly by this terms, to delayed And we -- come gone Bob. I come -- has XX an or these take offset in, not will reported reasons. having delinquencies did the that casualty I'll the increase what that, days, they've But comments of said We're the it. all year But reported believe seeing up. Well we're ratio really in elevate it. neutralizes loss and be the us, cedents. an the seen But they're have is the accident been profit we have be they tried works could it. What increase in have prepared which just is our through not is we question seeing It the here. on But current contract dramatically outline in from coming way crystallized. side. that with

Phil Stefano

Thanks. Okay, got it. it That's from me.

Kevin O'Donnell

Yeah.

Operator

Fargo. Wells comes Greenspan Elyse next ahead. Please Your question go at from from

Elyse Greenspan

All right, just in. had for I me follow ups. thanks two fitting back

use strong that Kevin, we your a little months capital environment. statement? in bit feel June? all The you today earlier positive this, of, think obviously, about XXXX. question pretty incrementally in five first raised sit you where all almost combine incorrect that to in to pricing capital there's if your comments I to it about more the you would right response that do together, equity after ability But with guys on anything my assume just a kind you together, return that Is put that putting -- X/X

Kevin O'Donnell

No.

the had areas knew primary we deploy. of to back gave capital go in to you if think kind which two June, I in we raise we ability

The first our we risks. can our platform, is restructure across just

regard Everything something news. unchanged of better to market is, control. of where our affirming that our assessment to because it's So, with is in each assessment, the point seeing we're we frankly else that already portfolio

in we deploy becomes to have the we to in -- we confidence our although money as even confidence good XXXX go into ability stronger So, closer. deploy demonstrated in June, our ability as

Elyse Greenspan

second Great. my And Okay. then question.

You pretty positive the guys market. retro sound on

also in balance more this you XXXX. that might weighted you Upsilon us see wrote just opportunity Upsilon? ILS capacity you retro and your could the in I potentially way less the own incremental how we could think much guess, give of retro was right could on versus the think that and year write books and XXXX you a that sense Or that your less that Can about, point on for sheet. a rated for I of made see like you

Kevin O'Donnell

I me renew understood make within sure retro we across Upsilon, you platform? much can the how question. Let or Are saying our of your --

Elyse Greenspan

away refills. Yeah, balance as a kept Upsilon how on in well, to sense that in sheet you assume I much for get on Ren's I as XXXX wrote of trying you Upsilon was some of well terms from some [ph]

the in sense, So I I guess, think of a And the what's for there XXXX? RenRe? and like how trying both Upsilon growth about was opportunity could to then get in growth right we

Kevin O'Donnell

deals, Yeah, Upsilon some was I when portfolio simply wrote some retro. wrote Upsilon I broader -- structure The is think than that a sheet Upsilon and because the structure. retro on about retro. we balance put retro a It capital aggregates rated into consumptive that of some

within retro structure. to So, it collateralized fits is going of well restructured. I that a that anticipate much be

And flexibility for XXXX. It for Upsilon. to that in it will market. which is in. within stuff that that it bring there's price way Upsilon on put people in across platforms which the hope we choose of for in the depends fit capital price sheet begins a retro, we in put sometimes renewed be is will it likely solutions in to be to we And suitable more into vehicle provide on the our for think and choose a Upsilon portfolio to that the balance deal or restructured. not balance can have rated be the focus I restructured just then tolerance we sheet. every retro much My for with certain But Upsilon

Elyse Greenspan

Thanks, helpful. that's Kevin. Okay,

Kevin O'Donnell

Yeah. Thank you.

Operator

comes Your Please Bhullar next question from JPMorgan. go from Jimmy ahead.

Jimmy Bhullar

morning. Hi, good

because been along -- and just earlier years, have elevated your of of I that a response had just the because poor questions of the recent in returns of some lines cats. question So the

to the on opposed is generate levels at lower Given you as more if Do your an last returns the few are last pricing even adequate? of the over where your think feel Or trend the still been are to you that levels years about years? sort pricing, a close cats they've do to cat optimism you how few of few aberration. current return if the potential next years expect do

Kevin O'Donnell

I'll between me property talk let more and then generally. comments So divide casualty, first, your and

Jimmy Bhullar

Sure.

Kevin O'Donnell

is what sure right to and So built capital. work we put property, portfolios market. the find do hard result net right that to to the is risk that better within make we are than that the it The we

think cash, as see think side much objectives we a property certainly met the talked about the we portfolios we our over before frame. built I'll So, Within that about an we that time what return had longer on expected on casualty, basis.

XX-year rolling trends. we a on that business margin level are rate on the needed are We rolling we that are of that seeing observations we're a period. making So we basis, But casualty at writing? over return believe the didn't XX-year our above were that

right the much about confidence So have a XX-year ways are adequate a portfolio. bit that the casualty moving for go, belief is which feel continue. my very, that return we my over level little I of it that period, thinking And still very to more we'll overall, we in-force produce rates more to adds positive way portfolio. will to But we're the

would a obviously, achieve them both bring So, when we we together, efficiency. capital

the the enhances combined adequacy portfolio portfolios. then So, both of

Jimmy Bhullar

far? -- Like from your And otherwise? a is Or on of Obviously, little information a sort what's have outcomes while the ultimate Okay. there or contemplating gotten to level from your on are of adverse take thus reserves of in COVID. sort of based court But confidence you've sort for your cushion losses. then to the going it's of your just you determine whatever clients? reserves bit a

Kevin O'Donnell

if we that to reserves ongoing think going put as is need But estimate we, It's on to It's and on something estimate currently always, an event. an the monitor. we're continue a situation. to it's COVID feel as event, we're reserves. got our I ongoing pandemic best best our holding. our we've dynamic

Jimmy Bhullar

Thanks.

Kevin O'Donnell

you. Thank

Operator

portion And I it Q&A call. now back O'Donnell to like to This the our for would concludes turn Kevin final of comments.

Kevin O'Donnell

Thank today's Thanks, to forward and talking you X/X renewals. look on participating you to again. everybody for we call, Bye. the after

Operator

conference Ladies conclude and again gentlemen, once for this does participating. today's you Thank call.

disconnect. You now may

RenaissanceRe (RNR) 28 Oct 202020 Q3 Earnings call transcript