RenaissanceRe’s chief executive says the company expects to capitalise on what he describes as the best fixed-income investment environment of the past 20 years.

Kevin O’Donnell’s comments came in a earnings call with analysts after RenRe announced a third-quarter loss of $161 million.

With the reinsurer making an underwriting profit of $426 million for the quarter, the net loss was largely driven by $879.8 million of net realised and unrealised investment losses, as rising yields resulted in falling valuations for fixed-income securities.

This year the key US Treasury ten-year yield reached its highest level since 2007 and was yesterday afternoon at about 5 per cent.

With persistent inflation maintaining pressure on central bankers around the world to raise interest rates, RenRe intends to take the opportunity to generate more income from its investment portfolio.

“The benchmark ten-year rate was up 80 basis points, and as a result, we now find ourselves in the best fixed-income investment environment in two decades,” Mr O’Donnell said on the call. “This is a significant opportunity for us.”

He explained that RenRe has shifted towards longer-duration investments. In September the firm extended its retained investment portfolio duration to 4.2 years, from 3.5 years at the start of the third quarter and from three years at the start of the year.

“This locks in higher yields for longer, which you will see reflected in growing quarterly net investment income moving forward,” Mr O’Donnell said.

Bob Qutub, RenRe’s chief financial officer, participating in his last earnings call before retiring to be succeeded by Matt Neuber, said RenRe’s weighted average yield to maturity had gone up by 120 basis points this year and was now at 6 per cent.

RenRe expects net investment income of about $325 million in the fourth quarter and $1.25 billion for 2026, growing higher next year.