RenRe underwriting income rises 14% y/y in Q4, dented by large loss

Renaissance Re squeezed a 14% increase in fourth quarter underwriting income despite a surge in fourth quarter large loss in property line.

The 14.3% year on year increase in group underwriting income to $316.3 million followed a 20.7% increase in gross written premium to $1.59 billion.

Top line growth came exclusively from casualty and specialty where gross premiums written rose 30.7% and management could claim growth "across all lines of business" bolstered by new and existing business plus rate improvement, mainly on business written in prior periods.

The segment suffered a 1.2 percentage point rise in its combined ratio, chiefly on underwriting expenses while a drop off in unfavourable prior period adjustment helped offset a 1.0 point rise in the current accident year loss and loss expense ratio.

Property suffered in comparison to the prior year period. Gross premiums in property fell by 3.3% for Q4 2021 and Renaissance Re suffered a 10.0 percentage point hike in its current year claims ratio to 53.8%.

Winter Storm Elliott and Hurricane Nicole took the blame as weather-related large losses contributed 19.2 percentage points to the current accident year net claims and claim expense ratio versus 11.0 points in Q4 2021 and reduced Q4 underwriting income in the segment by $131.9 million..

Fee income from the group’s management of ILS-tied investment vehicles was largely flat from the prior year period. Increased AuM at DaVinci, Vermeer, Medici and Fontana Re offset the impact of a decline in AuM at the structured reinsurance vehicle Upsilon and reduced performance fees after nat cat hits.

The group’s total investment result improved $320.4 million; driven by 162.5% growth in net investment income and $168.1 million of net realized and unrealized gains in the fixed maturity
investments portfolio.

While the underwriting and investment gains propelled the group to roughly double Q4 net income, the full-year accounting still pointed to a $1.1 billion net loss following major nat cat losses throughout the year.

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