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RENAISSANCERE HOLDINGS LTD (RNR)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 performance was strong across underwriting, investments, and fee income: net income to common of $826.5M, GAAP diluted EPS $17.20, operating EPS $12.29, adjusted combined ratio 73.0%, and annualized operating ROE 24.2% .
  • Results beat S&P Global consensus: operating EPS beat by ~25% (actual $12.29 vs $9.78*), and revenue beat by ~$0.29B (actual $3.21B vs $2.92B*) as low cat losses and large prior-year favorable development lifted underwriting, while investment gains surged *.
  • Management guided Q3 to continued strength: fees ~$80M (management ~$50M, performance ~$30M), other property NPE ~$360M with mid-50s attritional LR, C&S NPE ~$1.5B with adjusted CR in high-90s, and operating expense ratio ~5% for remainder of year .
  • Mid-year renewals were a key catalyst: RNR grew its U.S. property cat book, wrote ~80% Florida premium at private terms above market, constructed its largest and one of its most profitable net retained cat portfolios, and recaptured deferred fees post California wildfires .

What Went Well and What Went Wrong

What Went Well

  • Record underwriting performance in Property: combined ratio 27.4% (adjusted 25.8%), driven by lower current-year cat losses and 30.7 points of favorable prior-year development; underwriting income rose to $630.2M .
  • Investment outperformance: total investment result $762.8M (net investment income $413.1M, mark-to-market gains $349.7M); annualized total investment return 9.4% .
  • Capital partners fee income recovered: fee income $95.0M (+12.9% YoY), with performance fees benefiting from strong underwriting and favorable development, primarily in DaVinci and Upsilon .
  • Management quote: “Underwriting and fee income reached record highs, and investment income remained near peak levels...position us to continue delivering substantial value” — Kevin O’Donnell .

What Went Wrong

  • Casualty & Specialty softness: combined ratio 101.8% (adjusted 99.5%) due to higher attritional losses and increased acquisition/operating expense ratios; underwriting loss of $(28.5)M .
  • Sequential revenue down from Q1 as reinstatement-premium-driven Q1 surge normalized: total revenues fell to $3.21B from $3.47B .
  • Tax drag: income tax expense of $176.9M in Q2 tied to newly effective Bermuda corporate income tax; GAAP effective tax rate ~13% on net income; tax rate for RNR shareholders slightly above 15% given jurisdictional mix .

Financial Results

Headline P&L vs Prior Periods and Estimates

MetricQ2 2024Q1 2025Q2 2025Consensus (Q2 2025)
Total Revenues ($USD Millions)$2,828.5 $3,470.5 $3,206.6 $2,916.0*
Net Premiums Earned ($USD Millions)$2,541.3 $2,720.8 $2,412.2 —
Underwriting Income ($USD Millions)$479.3 $(770.6) $601.7 —
Net Income to Common ($USD Millions)$495.0 $161.1 $826.5 —
EPS – GAAP Diluted ($)$9.41 $3.27 $17.20 —
EPS – Operating Diluted ($)$12.41 $(1.49) $12.29 $9.78*
Combined Ratio (%)81.1% 128.3% 75.1% —
Adjusted Combined Ratio (%)78.6% 126.4% 73.0% —

Note: Consensus values marked with *; Values retrieved from S&P Global.

Segment Breakdown

Segment MetricQ2 2024Q2 2025
Property – Net Premiums Earned ($USD Millions)$980.8 $868.0
Property – Underwriting Income ($USD Millions)$451.7 $630.2
Property – Combined Ratio (%)53.9% 27.4%
Casualty & Specialty – Net Premiums Earned ($USD Millions)$1,560.5 $1,544.1
Casualty & Specialty – Underwriting Income ($USD Millions)$27.6 $(28.5)
Casualty & Specialty – Combined Ratio (%)98.2% 101.8%

KPIs

KPIQ2 2024Q2 2025
Fee Income ($USD Millions)$84.1 $95.0
Net Investment Income ($USD Millions)$410.8 $413.1
Total Investment Result ($USD Millions)$283.3 $762.8
Book Value per Common Share ($)$179.87 $212.15
Share Repurchases (Q2 and through Jul 21)—1.6M shares/$376.4M; plus 293.8k/$70.2M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Management Fees ($M)Q3 2025~$50 (run-rate indicated for Q3 from Q1 call trajectory) ~$50 Maintained
Performance Fees ($M)Q3 2025Begin recognizing toward end of Q2; no Q3 figure ~$30 Initiated Q3 level
Total Fees ($M)Q3 2025N/A~$80 Set
Other Property NPE ($M)Q3 2025~$380 for Q2 (prior quarter guide) ~$360 Lower vs Q2 realized guide
Other Property Attritional LRQ3 2025Mid-50s (indicated outlook) Mid-50s Maintained
C&S NPE ($B)Q3 2025~$1.5 for Q2 (prior guide) ~$1.5 Maintained
C&S Adjusted CRQ3 2025High-90s (forward look) High-90s Maintained
Operating Expense RatioFY 2025 (rest of year)Just above 5% (Q1 view) ~5% Slightly lower
Retained Net Investment IncomeQ3 2025About flat Q2 vs Q1 “Remain equally strong” Maintained
Dividend per Share ($)Q3 2025$0.40 (prior quarterly) $0.40 declared for Sept 30 Maintained
Share Repurchase Authorization ($M)OngoingPrior authorizationsRenewed to $750.0M Increased visibility

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Property Cat Pricing & AccessPost-’23 reset adequate; grew select lines at 1/1; targeted margin preservation 80% Florida premium at private terms above market; rates down low-single digits risk-adjusted; largest net retained cat book Favorable, scale-driven advantages expanding
Florida Tort Reform & DemandEarly signs of benefit; cautious incorporation Stability and depopulation increase demand; wrote private deals and grew at roughly flat rates Positive, aiding growth opportunities
California WildfiresQ1 net negative impact after tax ~$703M; no subrogation or recoupment booked yet Favorable development in property; model updates enabled post-loss pricing/growth Recovery underway; models improved
Casualty GL Trend & Claims MgmtElevated trend 10–12%; rate increases ≥15%; reduced exposure ~30% YoY; conservative reserving Continues cautious stance; attritional losses higher; adjusted CR high-90s outlook Stable cautious; portfolio reshaping persists
Capital Partners FeesSuppressed in Q1 ($30.5M), recovery expected Recovered to $95.0M; recaptured deferred fees; Q3 guide ~$80M Improving to stable run-rate
Investment Strategy & ReturnsConservative posture; added equities/high yield; inflation/geopolitical hedges (gold) Retained MTM gains $343M; total investment return 9.4% Strong; supportive of earnings base
Tax Environment (Bermuda)New 15% corporate tax; model slightly above 15%Q2 tax expense $176.9M; GAAP ETR ~13% overall; shareholder tax slightly above 15% New baseline established

Management Commentary

  • Kevin O’Donnell (CEO): “We delivered outstanding results this quarter... Underwriting and fee income reached record highs, and investment income remained near peak levels... position us to continue delivering substantial value for our shareholders.”
  • David Marra (CUO): “We significantly grew our U.S. property catastrophe portfolio at the mid-year renewal, outperforming the market... Our REMS underwriting system enables us to quickly deliver lead quotes and capacity... clients reward us with strong signings and preferential terms.”
  • Bob Qutub (CFO): “Operating income per share was $12.29... underwriting income of $602 million, fees of $95 million... retained net investment income of $286 million... We expect to continue delivering at this level going forward.”

Q&A Highlights

  • Reserve releases: Favorable development across numerous accident years back to 2017; roughly half retained after JV sharing .
  • Fee income trajectory: Faster-than-expected recovery of deferred management fees; Q3 guidance ~$80M total .
  • Florida exposure & private terms: Grew lines at above-market private terms; market share in Southeast Wind back to pre-Validus levels on % of equity basis .
  • Bermuda tax credits: “Economic tax adjustment” would offset cash payments (not G&A); shareholder tax slightly above 15% .
  • Outward protection: Added second-event covers and aggregate catastrophe bond to bolster resilience .

Estimates Context

  • Q2 2025 operating EPS beat consensus meaningfully: actual $12.29 vs $9.78*, reflecting low cat losses, substantial prior-year favorable development, and strong investment gains *.
  • Q2 2025 revenue beat: actual $3.2066B vs $2.9160B*, driven by higher investment results and fee income recovery despite lower net premiums earned *.
  • Forward estimates imply sustained earnings power: FY2025 EPS consensus ~$34.66*, FY2026 ~$35.51*, consistent with management’s commentary on strong ROE drivers *.

Note: Values marked with * retrieved from S&P Global.

Actual vs Consensus Table (Q2 2025)

MetricActualConsensus
EPS – Operating Diluted ($)$12.29 $9.78*
Total Revenues ($USD Billions)$3.2066 $2.9160*

Key Takeaways for Investors

  • Underwriting momentum and scale advantages are widening in property cat; private terms and lead positions should sustain above-market economics into 2026 planning .
  • The fee-income engine has reset to normal with Q3 visibility; expect persistent low-volatility contribution (~3 ROE points annually per CFO) subject to large loss cadence .
  • Investment portfolio is accretive in higher-for-longer rates; derivative strategies and selective risk assets (equities, high-yield, private credit) support returns while duration stays moderate .
  • Casualty remains a watch item: exposure trimmed ~30% in GL; rates and claims management improving, but management remains conservative on reserving and mix .
  • Tax regime headwind is the new baseline; modeling slightly >15% shareholder tax rate is prudent near-term .
  • Capital return continues: $0.40 dividend declared and repurchase authorization refreshed to $750M; opportunistic buybacks remain likely given excess capital and liquidity .
  • Trading implications: Strong beat vs consensus and Q3 guide could support near-term sentiment; hurricane season risk remains, but outward protections (second-event covers, aggregate cat bond) temper earnings volatility .
Sources: Q2 2025 8-K Press Release and Financial Supplement **[913144_0000913144-25-000079_rnrearningsrelease2025q2.htm:0]** **[913144_0000913144-25-000079_rnrearningsrelease2025q2.htm:1]** **[913144_0000913144-25-000079_rnrearningsrelease2025q2.htm:2]** **[913144_0000913144-25-000079_rnrearningsrelease2025q2.htm:3]** **[913144_0000913144-25-000079_rnrearningsrelease2025q2.htm:4]** **[913144_0000913144-25-000079_rnrearningsrelease2025q2.htm:5]** **[913144_0000913144-25-000079_rnrearningsrelease2025q2.htm:7]** **[913144_0000913144-25-000079_rnrearningsrelease2025q2.htm:8]** **[913144_0000913144-25-000079_rnrearningsrelease2025q2.htm:9]** **[913144_0000913144-25-000079_rnrearningsrelease2025q2.htm:10]** **[913144_0000913144-25-000079_rnrearningsrelease2025q2.htm:15]** **[913144_0000913144-25-000079_rnrearningsrelease2025q2.htm:19]** **[913144_0000913144-25-000079_rnrfinancialsupplement2025.htm:6]** **[913144_0000913144-25-000079_rnrfinancialsupplement2025.htm:8]**; Q2 2025 Earnings Call Transcript **[0000913144_2234850_1]** **[0000913144_2234850_3]** **[0000913144_2234850_4]** **[0000913144_2234850_5]** **[0000913144_2234850_6]** **[0000913144_2234850_9]** **[0000913144_2234850_10]** **[0000913144_2234850_11]** **[0000913144_2234850_13]**; Q1 2025 Press Release/Transcript **[913144_22238dc7b2d24e1d92fd555dbdc8f1ff_0]** **[913144_22238dc7b2d24e1d92fd555dbdc8f1ff_1]** **[913144_22238dc7b2d24e1d92fd555dbdc8f1ff_11]** **[913144_RNR_3423119_5]** **[913144_RNR_3423119_6]** **[913144_RNR_3423119_10]**; Dividend/Buyback Authorization **[913144_bcb9b223d3b74a888dcd929d6c81a6a2_0]**.