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RENAISSANCERE HOLDINGS LTD (RNR)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was dominated by California wildfires and other large events, producing a consolidated combined ratio of 128.3% and adjusted combined ratio of 126.4% as operating EPS came in at $(1.49) while GAAP diluted EPS was $3.27, supported by strong mark-to-market investment gains .
  • Revenue outperformed consensus while operating EPS missed: total revenues were $3.47B vs. S&P Global consensus of $3.28B*, and Primary (operating) EPS of $(1.49) vs. $(0.85)*; reinstatement premiums boosted Property top-line materially .
  • Management emphasized margin preservation amid attractive reinsurance trading conditions; midyear renewals (Florida and nationwide) expected to be more reinsurer‑friendly, with demand growing and rate adequacy holding post‑2023 step change .
  • Catalysts include: potential subrogation and FAIR Plan recoupment (timing uncertain), continued share repurchases ($361M in Q1, plus $65M through April 21), and fee income recovery as large-loss impacts abate .

What Went Well and What Went Wrong

What Went Well

  • Investment performance: Total investment result was $738.3M (net investment income $405.4M; net realized/unrealized gains $332.9M) as lower yields and hedges (e.g., gold futures) drove mark-to-market gains; total investment return annualized 9.3% .
  • Capital return: Repurchased ~1.5M shares for $361.1M at $242.08 average in Q1, plus 278K shares for $65.3M through April 21; tangible BVPS plus accumulated dividends rose 0.9% QoQ to $206.79 .
  • Segment resilience: Other Property remained profitable despite wildfire impacts (combined ratio 83.6%; adjusted 82.1%); favorable PYD in Property attritional losses and catastrophe prior years aided ratios .

Quote: “Our ability to deliver enduring shareholder value in times of instability demonstrates the strength of RenaissanceRe’s platform, the benefit of our Three Drivers of Profit…” — Kevin O’Donnell .

What Went Wrong

  • Cat loss severity: 2025 Large Loss Events resulted in net negative impact of $(702.8)M on net income available to common shareholders after taxes, adding 52.6 points to the consolidated combined ratio; Property combined ratio surged to 148.7% .
  • Fee income pressure: Fee income fell to $30.5M (down 63.5% YoY) as performance fees reversed, particularly at DaVinci and structured reinsurance .
  • Casualty & Specialty headwinds: Combined ratio rose to 111.1% (adjusted 108.8%) with a 9.2‑point impact from large events and acquisition ratio uptick; management raised segment combined ratio target to the “high 90s” near term .

Financial Results

Revenue and EPS vs prior year, prior quarter, and consensus

MetricQ1 2024Q4 2024Q1 2025
Total Revenues ($USD Billions)$2.60 $2.34*$3.47
Diluted EPS (GAAP) ($)$6.94 n/a$3.27
Primary EPS (Operating) ($)$12.18 $8.06*$(1.49)

Values marked with * retrieved from S&P Global.

Estimate comparison (S&P Global):

MetricQ1 2025 ConsensusQ1 2025 Actual
Revenue ($USD Billions)$3.28*$3.47
Primary EPS ($)$(0.85)*$(1.49)

Values marked with * retrieved from S&P Global.

Margins vs prior periods

MetricQ1 2024Q4 2024Q1 2025
Combined Ratio (%)77.9 91.7 128.3
Adjusted Combined Ratio (%)75.4 89.4 126.4

Segment Breakdown (Q1 2025 vs Q1 2024)

MetricProperty Q1 2024Property Q1 2025C&S Q1 2024C&S Q1 2025
Gross Premiums Written ($MM)$1,889.9 $2,130.8 $2,100.8 $2,024.7
Net Premiums Written ($MM)$1,397.6 $1,691.0 $1,802.0 $1,752.5
Net Premiums Earned ($MM)$936.1 $1,248.0 $1,507.8 $1,472.8
Combined Ratio (%)42.9 148.7 99.6 111.1
Adjusted Combined Ratio (%)40.5 147.1 97.1 108.8

KPIs and Other Key Metrics

KPIQ1 2024Q1 2025
Net Investment Income ($MM)$390.8 $405.4
Net Realized & Unrealized Gains/Losses ($MM)$(213.7) $332.9
Total Investment Result ($MM)$177.1 $738.3
Fee Income ($MM)$83.6 $30.5
Book Value per Common Share ($)$170.92 $196.18
Tangible BVPS + Accumulated Dividends ($)$175.92 $206.79
ROAE (annualized, %)16.4 6.6
Operating ROAE (annualized, %)28.7 (2.9)
Share Repurchases (QTD)n/a1.5M shares; $361.1M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
C&S Combined Ratio TargetOngoingMid- to high-90s High-90s Raised
Management FeesQ2 2025~$50M run-rate ~$45M in Q2; back to ~$50M in Q3 Lower near-term, then normalize
Other Property NPEQ2 2025n/a~$380M New disclosure
C&S NPEQ2 2025n/a~$1.5B New disclosure
Retained Net Investment IncomeQ2 2025Flat to Q4 2024 About flat from Q1 Maintained
Quarterly DividendQ1 2025$0.39/share$0.40/share (30th consecutive increase) Raised
Share Repurchase AuthorizationQ4 2024$750M authorization Renewed; $750M current authorization Maintained/renewed

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Macro/tariffs/recessionStrong investment gains; rate adequacy; cat events Post‑2023 rate step change; wildfire preliminary market loss framing Business “anticorrelated” with macro; tariffs not material; recession‑resistant; hedges (gold) in place Reinforced anticorrelation narrative
Property cat pricingAttractive; some competition at top layers Rates down high single digits but adequate; expect increase post wildfires Midyear renewals more reinsurer‑friendly; demand growing; margin preservation Favorable trading for reinsurers
Wildfire modeling & tail riskn/aTail event; need to steepen tail in models Updated wildfire model; quoting big lines; confidence in view of risk Model refinement continues
C&S trends (GL social inflation)C&S adjusted CR ~98%; monitoring trend Elevated GL trend; selective reductions; favorable development elsewhere GL trend stable at 10–12%; rates ≥15%; guidance to high-90s; cautious loss picks Conservative stance; gradual improvement
Capital & buybacks$106.8M repurchases Q3 $600M repurchases since last call $361M Q1 plus $65M post-Q1; ability to “do it all” (grow and buy back) Ongoing capital return
Fee income & third-party capitalFee income up in Q3; strong performance fees Run-rate ~$50M; performance fees to dip Fee income $30M; expect mgmt fees ~$45M Q2; performance fees to resume later Q2/Q3 Near-term pressure; recovery expected
Regulatory/taxn/aBermuda 15% corporate tax in 2025; DTA context Q1 tax benefit $45.5M; book Bermuda corporate income tax; model >15% blended tax Implemented; manageable impact

Management Commentary

  • “We grew our primary metric, tangible book value per share plus accumulated dividends, against a backdrop of elevated natural catastrophe losses and significant macroeconomic volatility.” — Kevin O’Donnell .
  • “Altogether, large losses in the quarter led to an after-tax net negative impact of $703 million… The California wildfires also led to significant reinstatement premiums…” — Robert Qutub .
  • “We have updated our wildfire model, learned from the last event and can be quoting big lines, growing on some deals exposed to wildfire.” — David Marra .
  • “If the wildfires happened in December of ’24 rather than January of ’25, our ROE for ’24 still would have been above 15%.” — Kevin O’Donnell .

Q&A Highlights

  • Midyear renewals: Expect stronger pricing and growing demand in Florida and nationwide programs; loss‑impacted accounts and Citizens depopulation dynamics are supportive .
  • C&S guidance: Segment target increased to high‑90s due to specialty losses and acquisition ratio noise; GL trend stable with rates ≥15%, but prudence dictates conservative current-year picks .
  • Capital partners and ILS: Third‑party vehicles (DaVinci, Vermeer) well‑capitalized; footprint stable to up; ILS competition not seen as material headwind .
  • Taxes: Model blended tax rate modestly above 15% due to U.S. exposure .
  • Subrogation and FAIR Plan: Potential offsets exist for Eaton fire and FAIR Plan assessments recoupment, but timing remains uncertain; not booked until receipt is confident .

Estimates Context

  • Q1 2025 revenue beat consensus ($3.47B vs. $3.28B*), driven by reinstatement premiums and strong investment gains; Primary EPS missed ($(1.49) vs. $(0.85)*), reflecting 52.6 points of large-loss impact on combined ratio .
  • Prior quarter (Q4 2024) Primary EPS was $8.06*, consistent with normalized/operating results, despite GAAP net loss driven by mark‑to‑market .
  • Expect sell‑side to raise Property cat rate assumptions into midyear and modestly increase top‑layer demand assumptions; C&S estimates likely reflect a high‑90s combined ratio near term and management fee normalization in H2 2025 .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • The quarter’s underwriting loss was severe but largely contained within Q1; investment gains and reinstatement premiums cushioned book value and revenue — watch for midyear pricing tailwinds to support margin recovery .
  • Property cat demand is rising; management will prioritize margin preservation over indiscriminate growth — expect disciplined deployment and private deals with differentiated terms .
  • Casualty & Specialty guidance to high‑90s underscores near‑term caution; select GL exposure reductions and conservative loss picks should limit downside while rates/claims handling improvements accrue over time .
  • Fee income should recover as large-event impacts fade; management fees guided ~$45M in Q2 and ~$50M by Q3 — supportive to earnings diversification .
  • Continued buybacks ($361M Q1 + $65M post-Q1) and dividend increase to $0.40 provide capital return visibility; authorization renewed at $750M .
  • Potential upside from subrogation and FAIR Plan recoupments exists but is unmodeled pending clarity — any realization would benefit loss development and earnings volatility .
  • Bermuda tax regime now effective; blended tax modestly >15% — manageable headwind given strong investment income and diversified drivers .

Citations: All numerical and qualitative claims are sourced from the company’s Q1 2025 8‑K press release and financial supplement and Q1 2025 earnings call transcript –, plus related Q1 2025 press releases (dividend increase, Medici UCITS, senior notes) , and prior-quarter materials (Q3 2024 press release, Q4 2024 call) – –.

Values marked with * retrieved from S&P Global.