RenaissanceRe eyes $650m Q3 cat hit, all-in for renewals despite loss

RenaissanceRe will likely suffer $650 million negative impact from cat losses in the third quarter, including a roughly $450 million hit from Hurricane Ian, sufficient to push the group to an attributable net and operating losses for the period.

The Q3 operating loss will be sufficient to push the YTD tally into a “modest” loss for nine months, management admitted. Admission of a “modest” 9M operating loss could point to a Q3 operating loss in the area of $400 to 435 million, analysts at Wells Fargo claimed in an early note to markets.

The reinsurer retains the capacity to participate fully in renewals, CEO Kevin O’Donnell said in a statement.

“Looking forward, we have the capital, scale, and flexibility to provide our customers with much needed reinsurance in 2023 while creating value for our shareholders,” O’Donnell said.

The O’Donnell comment may signal that RenaissanceRe won’t seek to raise capital ahead of the 1.1 renewals, “a topic that has been debated by investors in the weeks since Hurricane Ian made landfall,” analysts at Wells Fargo commented.

“Meaningful uncertainty” still hangs over the preliminary estimate which RenaissanceRe built on a review of its potential exposures, early talks with counterparties and actuarial models. Final tallies may vary, “perhaps materially.”

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