RenRe suffers huge Q3 loss from Ian
Bermuda reinsurer RenaissanceRe Holdings Ltd. has posted a third-quarter net loss of $825.3 million.
The company said Hurricane Ian and certain other catastrophe events contributed to a $648.4 million net negative impact on the net loss attributable to common shareholders, and added 57.2 percentage points to the combined ratio, pushing it to 138.7 per cent.
The staggering numbers follow poor results for the corresponding period last year (three months to the end of September) when there was a net loss of more than $450 million and a combined ratio of 145.1 per cent.
While gross premiums written have risen from nearly $1.8 billion to more than $2.2 billion, underwriting loss grew from nearly $679 million for last year’s third quarter to more than $683 million for the period this year.
Book value per common share fell from $128.91 to $94.55.
Kevin J. O’Donnell, president and chief executive officer, said: “Hurricane Ian’s arrival in the final days of the quarter was both a stark reminder of our value proposition to our customers and a catalyst for change in the reinsurance marketplace.
“RenaissanceRe’s strategic focus on reinsurance, strong capital and industry leadership uniquely situate us to drive transformative change during the upcoming renewal period.
“As a result, we are positioned to deliver an attractive return to our investors through materially increased underwriting profit, robust fee income and significantly higher investment income.”
The company reported 101.6 per cent growth in net investment income compared to Q3 2021.
The impact of increasing interest rates on the fixed maturity portfolio was the primary driver of $641.5 million of net realised and unrealised losses on investments.
In reviewing the net negative impact on the consolidated financial statements, the company said total Q3 2022 weather-related large losses amounted to net claims and claims expenses incurred of more than $1.15 billion, including more than $990 million from Hurricane Ian alone.
But the company noted: “Meaningful uncertainty remains regarding the estimates and the nature and extent of the losses from these catastrophe events, driven by the magnitude and recent nature of each event, the geographic areas impacted by the events, relatively limited claims data received to date, the contingent nature of business interruption and other exposures, potential uncertainties relating to reinsurance recoveries and other factors inherent in loss estimation, among other things.”
Other Q3 2022 catastrophe events include the severe weather in France in May and June of 2022, typhoons in Asia and Hurricane Fiona during the third quarter of 2022.