RenaissanceRe secured extra retrocessional protections on the 1/1 renewals this yr, ceding extra in the best way of its property disaster premiums than it had a yr earlier.
Curiously, this got here after a dialogue of the forecasts for a really energetic Atlantic hurricane season in 2024, which may very well be a driver of the elevated retro shopping for, though causes for extra retro being bought weren’t given through the name.
CFO of RenaissanceRe Bob Qutub commented, “We had a phenomenally profitable 1/1 renewal and retained the mixed RenaissanceRe and Validus portfolio based on plan. In consequence, gross premium written had been up 43% with sturdy development throughout each segments.”
However Qutub went on so as to add that, “Web premiums written had been up barely much less at 41%,” saying that “This displays our choice to buy some extra ceded safety in our property disaster e-book as a part of our gross to internet technique, in addition to some timing variations.”
Qutub went into extra element particularly on the property disaster reinsurance e-book at RenRe.
He defined that, “Gross premiums written had been up by 44% and internet premiums written had been up by 30%. We ceded about $277 million, or 21% of property disaster enterprise, in comparison with 12% in Q1 final yr.”
In order that appears a bigger quantity of retrocession getting used to handle the disaster publicity at RenaissanceRe this yr, which it’s cheap to assume might at the very least partly be a response to the forecasts for a really energetic Atlantic wind season.
Later within the name, RenaissanceRe’s CEO Kevin O’Donnell additionally mentioned retrocession purchases.
O’Donnell stated that, “At 1/1 we noticed continued self-discipline round retro constructions and pricing was comparatively flat. We primarily traded with our long-term companions and had been in a position to safe extra capability.”
The CEO went on to clarify that, “As we renew the Validus portfolio onto RenaissanceRe steadiness sheets it’s included into our varied retro programmes.”
He then added that, “The subsequent main renewal for our retro programme is in June and we count on that we can buy the restrict that we need.
“That stated our robust capital and liquidity place gives us vital flexibility, and we’ll solely buy extra limits if it improves our general portfolio.”
We’ve heard of various corporations positioning for the probabilities of a extra energetic hurricane season this yr, with retrocession purchases and devices resembling industry-loss warranties (ILW’s) being procured.
Whereas we will’t say for sure that it is a driver for RenRe’s elevated use of retrocession in 2024, the corporate has a naturally bigger disaster e-book because of the acquisition of Validus, it’s possible one of many elements which might be weighed when the corporate considers how greatest to guard itself, its shareholders and different investor stakeholders.
After all, the rising third-party capital sources of the Capital Companions unit at RenRe are additionally a consider how the corporate manages its disaster dangers.
