RenaissanceRe Profit Rebounds on Book Value Surge, Premiums Shrink
RenaissanceRe's net income jumped to $654.2 million from $284.5 million a quarter earlier, even as gross premiums written fell 12.5% and its casualty book turned unprofitable.
RenaissanceRe Holdings (RNR), the Bermuda-based reinsurer, reported second-quarter net income available to common shareholders of $654.2 million, more than double the $284.5 million it earned in the first quarter but 20.8% below the $826.5 million posted a year earlier.
The rebound from the first quarter had more to do with investment volatility than underwriting momentum. Return on average common equity swung to 24.0% annualized in the second quarter from just 10.5% in the first, when $421.9 million of mark-to-market losses depressed results; even so, the latest figure trailed the 33.7% RenaissanceRe generated in the second quarter of 2024. Operating ROE, which strips out those investment swings, told a steadier story of erosion, falling to 20.1% from 24.2% a year earlier and down from 21.8% in the first quarter.
Gross premiums written fell 12.5% year over year to $2.99 billion, with declines across both major segments. Property premiums dropped 10.4% to $1.55 billion as catastrophe-class rates softened, a decline of 13.9% in that line only partly offset by a $35.0 million increase in other-property business. Casualty and Specialty premiums fell 14.6% to $1.44 billion, and net premiums written in that segment dropped a steeper 25.7%, reflecting exposure reductions, cyber rate pressure and heavier retrocessional buying.
The two segments moved in opposite directions on underwriting profitability. Property's combined ratio improved slightly to 27.1% from 27.4% a year earlier, helped by $257.5 million of net favorable prior-year development split between catastrophe-class and other-property lines. Casualty and Specialty deteriorated to a 103.3% combined ratio from 101.8%, as the segment swung to net adverse prior-year development of 4.4% from 0.2% favorable a year earlier. That shift included a newly disclosed $54.0 million reclassification of Baltimore Bridge Collapse losses out of Property and into Casualty and Specialty, plus $5.5 million of purchase accounting adjustments, neither of which appeared in the first-quarter release. The company's overall combined ratio nonetheless improved to 72.8% from 75.1%, with Property's scale outweighing Casualty and Specialty's slippage.
Fee income declined 12.6% to $83.0 million from $95.0 million a year earlier and fell sequentially from $94.1 million, as DaVinci management fees stepped down from a prior-year deferred-fee recapture and performance fees from Upsilon softened. Net investment income kept climbing, up 4.7% to $432.5 million and ahead of the first quarter's $420.5 million, extending a run of steady growth in that line. But total investment return fell to 6.6% annualized from 9.6%, as net realized and unrealized investment gains dropped 65% to $121.6 million from $349.7 million, with losses on fixed-maturity investments and commodities offsetting equity gains of $217.3 million.
Income tax expense fell to $139.4 million from $176.9 million, as Bermuda tax credits reduced both the tax line and operating and corporate expenses in the quarter. Book value per common share grew 5.7% sequentially to $264.77, a sharp reacceleration from 1.4% growth in the first quarter, and was up 24.8% from a year earlier.
RenaissanceRe repurchased $350.0 million of stock in the quarter, 1.2 million shares at an average price of $300.82, roughly matching the $352.5 million bought back in the first quarter, and followed with a further $82.9 million between July 1 and July 20. Chief Financial Officer Robert Qutub and Chief Portfolio Officer Ross Curtis will retire at the end of 2026, with Matthew Neuber set to succeed Qutub as CFO in 2027.