Mike Zurimski

Mike Zurimski questioned whether RenaissanceRe's property IBNR and additional case reserves, currently hovering above historical levels, indicate added conservatism. He also asked for a characterization of the year-to-date (nine months) combined ratios as below average, better than average, or normal, considering the impact of large losses.

Answer

President and CEO Kevin O'Donnell stated there is no added conservatism or shift in reserve building. He noted that property reserves are event-driven, and movements in large events can significantly impact development. O'Donnell found it difficult to characterize the year-to-date combined ratio as wildly dissimilar from the modeled portfolio, given the mix of a large wildfire loss, light wind season, favorable development, and strong pricing.

Mike Zurimski questioned whether RenaissanceRe's property IBNR and additional case reserves, currently hovering above historical levels, indicate added conservatism. He also asked for a characterization of the year-to-date (nine months) combined ratios as below average, better than average, or normal, considering the impact of large losses.

Answer

President and CEO Kevin O'Donnell stated there is no added conservatism or shift in reserve building. He noted that property reserves are event-driven, and movements in large events can significantly impact development. O'Donnell found it difficult to characterize the year-to-date combined ratio as wildly dissimilar from the modeled portfolio, given the mix of a large wildfire loss, light wind season, favorable development, and strong pricing.

Mike Zurimski asked about the long-term relationship between organic growth and EBITDA margins, especially considering potential lower organic growth, and the potential impact of a government shutdown on the specialty segment for Q4.

Answer

CEO Powell Brown and CFO Andrew Watts clarified that organic growth is one component, with contingent commissions being a material portion of value. They advised against a direct correlation between organic growth and margins, reiterating a 30-35% target range. Regarding the government shutdown, Powell Brown noted potential impacts on Medicare Social Security set-aside and flood businesses in Q4 or Q1, with revenue generally getting caught up and flood renewals front-run.