RENAISSANCERE HOLDINGS LTD

Previous wording

The following is a discussion and analysis of our results of operations for the three and six months ended June 30, 2024 and 2023, as well as our liquidity and capital resources at June 30, 2024. This discussion and analysis should be read in conjunction with the unaudited consolidated financial statements and notes thereto included in this filing and the audited consolidated financial statements and notes thereto contained in our Form 10-K for the fiscal year ended December 31, 2023. This filing contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from the results described or implied by these forward-looking statements. See “Note on Forward-Looking Statements.”

Current wording

The following is a discussion and analysis of our results of operations for the three and nine months ended September 30, 2024 and 2023, as well as our liquidity and capital resources at September 30, 2024. This discussion and analysis should be read in conjunction with the unaudited consolidated financial statements and notes thereto included in this filing and the audited consolidated financial statements and notes thereto contained in our Form 10-K for the fiscal year ended December 31, 2023. This filing contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from the results described or implied by these forward-looking statements. See “Note on Forward-Looking Statements.”

Previous wording

Our results of operations and financial condition include Validus since November 1, 2023. The following discussion and analysis of our results of operations for the three and six months ended June 30, 2024, compared to the three and six months ended June 30, 2023, as well as our financial condition, liquidity and capital resources at June 30, 2024, should be read in that context.

Current wording

Our results of operations and financial condition include Validus since November 1, 2023. The following discussion and analysis of our results of operations for the three and nine months ended September 30, 2024, compared to the three and nine months ended September 30, 2023, as well as our financial condition, liquidity and capital resources at September 30, 2024, should be read in that context.

Previous wording

Our expenses primarily consist of: (1) net claims and claim expenses incurred on the policies of reinsurance and insurance we sell; (2) acquisition costs, which typically represent a percentage of the premiums we write; (3) operational expenses, which primarily consist of personnel expenses, rent and other expenses; (4) corporate expenses, which include certain executive, legal and consulting expenses, costs for research and development, transaction and integration-related expenses, and other miscellaneous costs, including those associated with operating as a publicly traded company; and (5) interest and dividends related to our debt and preference shares. We are also subject to taxes in certain jurisdictions in which we operate. Historically, the majority of our income has been earned in Bermuda, which did not have a corporate income tax, so the tax impact to our operations has been minimal. However, on December 27, 2023, the Government of Bermuda announced the implementation of a 15% corporate income tax effective January 1, 2025. We expect that this development, along with the implementation of the OECD’s Pillar Two regime in the jurisdictions in which we operate, will increase our income taxes in the future. We believe that the flexible global operating model that we have utilized will continue to prove resilient.

Current wording

Our expenses primarily consist of: (1) net claims and claim expenses incurred on the policies of reinsurance and insurance we sell; (2) acquisition costs, which typically represent a percentage of the premiums we write; (3) operational expenses, which primarily consist of personnel expenses, rent and other expenses; (4) corporate expenses, which include certain executive, legal and consulting expenses, costs for research and development, transaction and integration-related expenses, and other miscellaneous costs, including those associated with operating as a publicly traded company; and (5) interest and dividends related to our debt and preference shares. We are also subject to taxes in certain jurisdictions in which we operate. Historically, the majority of our income has been earned in Bermuda, which did not have a corporate income tax, so the tax impact to our operations has been minimal. However, on December 27, 2023, the Government of Bermuda announced the implementation of a 15% corporate income tax effective January 1, 2025. We expect that this development, along with the implementation of the OECD’s Pillar Two global minimum tax regime in the jurisdictions in which we operate, will increase our income taxes in the future. We believe that the flexible global operating model that we have utilized will continue to prove resilient.

Previous wording

General economic inflation has increased over the past few years compared to recent historical norms, and there is a risk of inflation remaining elevated for an extended period, which could cause claims and claims related expenses to increase, impact the performance of our investment portfolio, or have other adverse effects. This risk may be exacerbated by geopolitical factors and global supply chain issues, among other factors, from time to time. Many central banks have raised interest rates, which could act as a countervailing force against some of these inflationary pressures, but this could be partially offset if some central banks begin to cut rates too soon. The actual effects of the current and potential future increase in inflation on our results cannot be accurately known until, among other items, claims are ultimately settled. The duration and severity of an inflationary period cannot be estimated with precision. We consider the anticipated effects of inflation on us in our catastrophe loss models and on our investment portfolio. Our estimates of the potential effects of inflation are also considered in pricing and in estimating reserves for unpaid claims and claim expenses. The potential exists, after a catastrophe loss, for the development of inflationary pressures in a local economy.

Current wording

General economic inflation has increased over the past few years compared to recent historical norms, and there is a risk of inflation remaining elevated for an extended period, which could cause claims and claims related expenses to increase, impact the performance of our investment portfolio, or have other adverse effects. This risk may be exacerbated by geopolitical factors and global supply chain issues, among other factors, from time to time. Some central banks have begun to cut interest rates, which could act as a potential supporting force for some of these inflationary pressures, if they have cut rates too soon. The actual effects of the current and potential future increase in inflation on our results cannot be accurately known until, among other items, claims are ultimately settled. The duration and severity of an inflationary period cannot be estimated with precision. We consider the anticipated effects of inflation on us in our catastrophe loss models and on our investment portfolio. Our estimates of the potential effects of inflation are also considered in pricing and in estimating reserves for unpaid claims and claim expenses. The potential exists, after a catastrophe loss, for the development of inflationary pressures in a local economy.

Previous wording

Below is a discussion of the results of operations for the second quarter of 2024, compared to the second quarter of 2023.

Current wording

Below is a discussion of the results of operations for the third quarter of 2024, compared to the third quarter of 2023.

Previous wording

Net income available to RenaissanceRe common shareholders was $495.0 million in the second quarter of 2024, compared to $191.0 million in the second quarter of 2023, an increase of $304.0 million. As a result of our net income available to RenaissanceRe common shareholders in the second quarter of 2024, we generated an annualized return on average common equity of 21.4%, and our book value per common share increased from $165.20 at December 31, 2023 to $179.87 at June 30, 2024, a 5.5% increase, after considering the change in accumulated dividends paid to our common shareholders.

Current wording

Net income available to RenaissanceRe common shareholders was $1.2 billion in the third quarter of 2024, compared to $194.0 million in the third quarter of 2023, an increase of $979.7 million. As a result of our net income available to RenaissanceRe common shareholders in the third quarter of 2024, we generated an annualized return on average common equity of 47.1%, and our book value per common share increased from $179.87 at June 30, 2024 to $202.01 at September 30, 2024, a 12.5% increase, after considering the change in accumulated dividends paid to our common shareholders.

Previous wording

The most significant items affecting our financial performance during the second quarter of 2024, on a comparative basis to the second quarter of 2023, include:

Current wording

The most significant items affecting our financial performance during the third quarter of 2024, on a comparative basis to the third quarter of 2023, include:

Previous wording

•Underwriting Results - we generated underwriting income of $479.3 million and had a combined ratio of 81.1% in the second quarter of 2024, compared to underwriting income of $351.0 million and a combined ratio of 80.3% in the second quarter of 2023. Our underwriting income in the second quarter of 2024 was comprised of our Property segment, which generated underwriting income of $451.7 million and had a combined ratio of 53.9%, and our Casualty and Specialty segment, which generated underwriting income of $27.6 million and had a combined ratio of 98.2%. In comparison, our underwriting income in the second quarter of 2023 was comprised of our Property segment, which generated underwriting income of $281.0 million and had a combined ratio of 63.0%, and our Casualty and Specialty segment, which generated underwriting income of $70.0 million and had a combined ratio of 93.2%;

Current wording

•Underwriting Results - we generated underwriting income of $393.8 million and had a combined ratio of 84.8% in the third quarter of 2024, compared to underwriting income of $385.8 million and a combined ratio of 78.0% in the third quarter of 2023. Our underwriting income in the third quarter of 2024 was comprised of our Property segment, which generated underwriting income of $394.7 million and had a combined ratio of 60.3%, and our Casualty and Specialty segment, which incurred an underwriting loss of $0.9 million and had a combined ratio of 100.1%. In comparison, our underwriting income in the third quarter of 2023 was comprised of our Property segment, which generated underwriting income of $356.0 million and had a combined ratio of 53.2%, and our Casualty and Specialty segment, which generated underwriting income of $29.8 million and had a combined ratio of 97.0%;

Previous wording

•Gross Premiums Written - our gross premiums written increased by $773.9 million, or 29.2%, to $3.4 billion, in the second quarter of 2024, compared to the second quarter of 2023. This was comprised of an increase of $423.4 million in our Casualty and Specialty segment and $350.5 million in our Property segment, both primarily driven by the renewal of business acquired in the Validus Acquisition, in conjunction with the retention of legacy lines;

Current wording

•Gross Premiums Written - our gross premiums written increased by $781.7 million, or 48.3%, to $2.4 billion, in the third quarter of 2024, compared to the third quarter of 2023. This was comprised of an increase of $502.0 million in our Casualty and Specialty segment and $279.7 million in our Property segment, both primarily driven by the renewal of business acquired in the Validus Acquisition, in conjunction with the retention of legacy lines, as well as organic growth in the Property segment through increased demand and new opportunities during the third quarter renewals;

Previous wording

•Investment Results - our total investment result, which includes net investment income and net realized and unrealized gains (losses) on investments, was income of $283.3 million in the second quarter of 2024, compared to $69.9 million in the second quarter of 2023, an increase of $213.4 million. The primary drivers of the higher total investment result were an increase in net investment income of $118.2 million due to a combination of higher average invested assets, primarily resulting from the Validus Acquisition, and higher yielding assets, as well as lower net realized and unrealized losses on investments in the second quarter of 2024 compared to the second quarter of 2023. Net realized and unrealized losses on investments decreased $95.2 million as a result of lower net realized and unrealized losses on fixed maturity investments compared to the comparative quarter, primarily due to generally lower increases in interest rates in the second quarter of 2024 compared to the second quarter of 2023;

Current wording

•Investment Results - our total investment result, which includes net investment income and net realized and unrealized gains (losses) on investments, was income of $1.4 billion in the third quarter of 2024, compared to $101.0 million in the third quarter of 2023, an increase of $1.3 billion. The primary drivers of the higher total investment result were an increase of $1.2 billion in net realized and unrealized gains on investments and an increase in net investment income of $94.8 million. The increase in net realized and unrealized gains on investments was principally due to higher net realized and unrealized gains on fixed maturity investments of $891.7 million, which were driven by declining interest rates in the third quarter of 2024 compared to interest rate increases in the third quarter of 2023, and the increase in net investment income was due to a combination of higher average invested assets, primarily resulting from the Validus Acquisition, and higher yielding assets in the fixed maturity investments portfolio;

Previous wording

•Net Income Attributable to Redeemable Noncontrolling Interests- our net income attributable to redeemable noncontrolling interests was $224.7 million in the second quarter of 2024, compared to $174.9 million in the second quarter of 2023. The higher net income attributable to redeemable noncontrolling interests in the second quarter of 2024 was primarily driven by improved underwriting results generated by DaVinci and Vermeer, and higher net investment income resulting from higher average invested assets and higher yielding assets within the investment portfolios of our joint ventures and managed funds; and

Current wording

•Net Income Attributable to Redeemable Noncontrolling Interests- our net income attributable to redeemable noncontrolling interests was $450.2 million in the third quarter of 2024, compared to $213.7 million in the third quarter of 2023. The higher net income attributable to redeemable noncontrolling interests in the third quarter of 2024 was primarily driven by strong underwriting results generated by DaVinci and Vermeer, an increase in net realized and unrealized gains on investments resulting from declining interest rates in the third quarter of 2024 compared to interest rate increases in the third quarter of 2023, and higher net investment income resulting from higher average invested assets and higher yielding assets within the investment portfolios of our joint ventures and managed funds; and

Previous wording

•Impact of Large Loss Events - we had a net negative impact on net income available to RenaissanceRe common shareholders of $105.2 million resulting from the 2024 Large Loss Events. This compares to a net negative impact on net income available to RenaissanceRe common shareholders of $98.1 million resulting from the 2023 Large Loss Events.

Current wording

•Impact of Large Loss Events- we had a net negative impact on net income available to RenaissanceRe common shareholders of $243.2 million resulting from the Q3 2024 Large Loss Events. This compares to a net negative impact on net income available to RenaissanceRe common shareholders of $77.5 million resulting from the 2023 Large Loss Events in the third quarter of 2023.

Previous wording

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.

Current wording

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 the events, 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.

Previous wording

The financial data below provides additional information detailing the net negative impact of the Q2 2024 Large Loss Events on our segment underwriting results and consolidated combined ratio in the second quarter of 2024.

Current wording

The financial data below provides additional information detailing the net negative impact of the Q3 2024 Large Loss Events on our segment underwriting results and consolidated combined ratio in the third quarter of 2024.

Previous wording

(1)“2023 Large Loss Events” includes the earthquakes which impacted southern and central Turkey in February 2023, Cyclone Gabrielle which impacted northern New Zealand, the flooding that impacted northern New Zealand in January and February 2023, and various wind and thunderstorm events which impacted states in both the Southern and Midwest U.S. during March 2023 (“Q1 2023 Large Loss Events”), and a series of large, severe weather events that impacted Texas and other southern and central U.S. states in June 2023. Net negative impact on net income (loss) available (attributable) to RenaissanceRe common shareholders for the three months ended June 30, 2023 includes an increase of approximately $20.0 million in the net negative impact of the Q1 2023 Large Loss Events during the second quarter.

Current wording

(1)“2023 Large Loss Events” includes: (1) the wildfires in Hawaii in August 2023 and Hurricane Idalia; (2) a series of large, severe weather events in Texas and other Southern and Central U.S. states in June 2023; (3) the earthquakes in Southern and Central Turkey in February 2023, Cyclone Gabrielle, the flooding in northern New Zealand in January and February 2023, and various wind and thunderstorm events in both the Southern and Midwest U.S. during March 2023 and (4) certain aggregate loss contracts triggered during 2023.

Previous wording

Gross premiums written in the catastrophe class of business were $1.3 billion in the second quarter of 2024, an increase of $262.8 million, or 26.2%, compared to the second quarter of 2023. This increase was principally driven by the renewal of business acquired in the Validus Acquisition, in conjunction with the retention of legacy lines, at the June 1, 2024 renewal.

Current wording

Gross premiums written in the catastrophe class of business were $344.0 million in the third quarter of 2024, an increase of $183.2 million, or 113.9%, compared to the third quarter of 2023. This increase was principally driven by an increase in reinstatement premiums of $74.3 million, as well as organic growth through new opportunities and increased client demand, and the renewal of business acquired in the Validus Acquisition, in conjunction with the retention of legacy lines, at the July 1, 2024 renewal.

Previous wording

Gross premiums written in the other property class of business were $488.5 million in the second quarter of 2024, an increase of $87.7 million, or 21.9%, compared to the second quarter of 2023. The increase in gross premiums written in the other property class of business was principally due to the renewal of business acquired in the Validus Acquisition and organic growth in both our catastrophe and non-catastrophe exposed business within other property.

Current wording

Gross premiums written in the other property class of business were $446.7 million in the third quarter of 2024, an increase of $96.5 million, or 27.6%, compared to the third quarter of 2023. The increase in gross premiums written in the other property class of business was principally due to the renewal of business acquired in the Validus Acquisition and organic growth in both our catastrophe and non-catastrophe exposed business within other property.

Previous wording

Net premiums written in our Property segment were $1.4 billion in the second quarter of 2024, an increase of $214.0 million, or 18.7%, compared to the second quarter of 2023, consistent with the changes in gross premiums written discussed above, partially offset by an increase in ceded premiums written as part of our gross-to-net strategy.

Current wording

Net premiums written in our Property segment were $701.2 million in the third quarter of 2024, an increase of $256.4 million, or 57.6%, compared to the third quarter of 2023, consistent with the changes in gross premiums written discussed above.

Previous wording

Impacting the underwriting result and combined ratio in the second quarter of 2024 were the Q2 2024 Large Loss Events, which resulted in a net negative impact on the Property segment underwriting result of $63.0 million and added 7.0 percentage points to the Property segment combined ratio, reflecting impacts in both the catastrophe and other property class of business. Impacting the underwriting result and combined ratio in the second quarter of 2023 were the 2023 Large Loss Events, which resulted in a net negative impact on the Property segment underwriting result of $68.5 million and added 10.8 percentage points to the Property segment combined ratio, reflecting impacts in both the catastrophe and other property classes of business.

Current wording

Impacting the underwriting result and combined ratio in the third quarter of 2024 were the Q3 2024 Large Loss Events, which resulted in a net negative impact on the Property segment underwriting result of $305.7 million and added 35.4 percentage points to the Property segment combined ratio, reflecting impacts in both the catastrophe and other property classes of business. Impacting the underwriting result and combined ratio in the third quarter of 2023 were the 2023 Large Loss Events, which resulted in a net negative impact on the Property segment underwriting result of $97.7 million and added 13.6 percentage points to the Property segment combined ratio, reflecting impacts in both the catastrophe and other property classes of business.

Previous wording

The net claims and claim expense ratio in the second quarter of 2024 of 27.9% was comprised of a current accident year net claims and claim expense ratio of 36.5% and 8.6 percentage points of net favorable development of prior accident years, primarily in the catastrophe class of business in the 2021 to 2023 accident years. In comparison, the second quarter of 2023 had a net claims and claim expense ratio of 37.2%, comprised of a current accident year net claims and claim expense ratio of 41.3% and 4.1 percentage points of net favorable development of prior accident years.

Current wording

The net claims and claim expense ratio in the third quarter of 2024 of 33.2% was comprised of a current accident year net claims and claim expense ratio of 62.5% and 29.3 percentage points of net favorable development of prior accident years, including 10.9 percentage points from the 2022 Weather-Related Large Losses. The other property class of business had 19.5 percentage points of net favorable development, primarily related to lines of business where the Company principally estimates net claims and claim expenses using traditional actuarial methods. In comparison, the third quarter of 2023 had a net claims and claim expense ratio of 27.1%, comprised of a current accident year net claims and claim expense ratio of 46.1% and 19.0 percentage points of net favorable development of prior accident years.

Previous wording

The current accident year net claims and claim expense ratio for the Property segment, which decreased by 4.8 percentage points, included a 7.7 percentage point impact from the Q2 2024 Large Loss Events in the second quarter of 2024 compared to 11.5 percentage points from the 2023 Large Loss Events in the second quarter of 2023. In the catastrophe class of business, a 14.3 percentage point improvement was primarily due to the lower impact from large loss events, with the Q2 2024 Large Loss Events adding 9.6 percentage points compared to the 2023 Large Loss Events which added 18.5 percentage points in the second quarter of 2023. In the other property class of business, the 10.2 percentage point increase was primarily driven by a series of individual risk losses which added 4.7 percentage points in the second quarter of 2024. In addition, the Q2 2024 Large Loss Events added 5.5 percentage points, compared to the 2023 Large Loss Events which added 3.8 percentage points in the second quarter of 2023.

Current wording

The current accident year net claims and claim expense ratio for the Property segment, which increased by 16.4 percentage points, included a 35.0 percentage point impact from the Q3 2024 Large Loss Events in the third quarter of 2024 compared to 14.5 percentage points from the 2023 Large Loss Events in the third quarter of 2023. In the catastrophe class of business, a 27.2 percentage point increase was primarily due to the greater impact from large loss events, with the Q3 2024 Large Loss Events adding 43.5 percentage points compared to the 2023 Large Loss Events which added 16.8 percentage points in the third quarter of 2023. In the other property class of business, the 6.1 percentage point increase was primarily driven by the Q3 2024 Large Loss Events, which added 24.8 percentage points, compared to the 2023 Large Loss Events which added 12.3 percentage points in the third quarter of 2023.

Previous wording

The underwriting expense ratio increased 0.2 percentage points, largely driven by a 0.6 percentage point increase in acquisition expenses from purchase accounting adjustments relating to the Validus Acquisition, which added 1.8 percentage points to the acquisition expense ratio in the second quarter of 2024, partially offset by changes in the mix of business as a result of the continued relative growth in the catastrophe class of business, which has a lower acquisition expense ratio than the other property class of business. This increase in the acquisition expense ratio was partially offset by a 0.4 percentage point decrease in the operating expense ratio, primarily due to an increase in net premiums earned.

Current wording

The underwriting expense ratio increased by 1.0 percentage point, largely driven by a 0.4 percentage point increase in acquisition expenses due to purchase accounting adjustments relating to the Validus Acquisition, which added 1.8 percentage points to the acquisition expense ratio in the third quarter of 2024, partially offset by changes in the mix of business as a result of the continued relative growth in the catastrophe class of business, which has a lower acquisition expense ratio than the other property class of business. In addition to the increase in the acquisition expense ratio, the operating expense ratio also increased 0.6 percentage points, primarily due to an increase in operating expenses following the Validus Acquisition.

Previous wording

In the second quarter of 2024, Property segment underwriting income was reduced by total purchase accounting adjustments of $21.9 million, which added 2.2 percentage points to the Property segment combined ratio.

Current wording

In the third quarter of 2024, our Property segment underwriting income was reduced by total purchase accounting adjustments of $22.4 million, which added 2.2 percentage points to the Property segment combined ratio.

Previous wording

In the second quarter of 2024, our Casualty and Specialty segment gross premiums written increased by $423.4 million, or 33.9%, to $1.7 billion, compared to the second quarter of 2023. This increase was primarily driven by the renewal of business acquired in the Validus Acquisition, and is principally reflected in the general casualty and other specialty classes of business, which grew by $255.4 million and $247.8 million, respectively, compared to the second quarter of 2023. This increase also reflects organic growth of legacy lines, particularly within the other specialty class of business. Partly offsetting this growth were reductions to premium estimates on business underwritten in prior years. These changes in premium estimates occurred across all classes of business, but principally in the professional liability class of business which decreased $94.2 million in the second quarter of 2024 compared to the second quarter of 2023 and is largely driven by reported premiums and revised ceding company estimates.

Current wording

In the third quarter of 2024, our Casualty and Specialty segment gross premiums written increased by $502.0 million, or 45.3%, to $1.6 billion, compared to the third quarter of 2023. This increase was primarily driven by the renewal of business acquired in the Validus Acquisition, and is principally reflected in the general casualty and other specialty classes of business, which grew by $168.6 million and $208.4 million, respectively, compared to the third quarter of 2023. This increase also reflects organic growth of legacy lines, particularly within the other specialty class of business.

Previous wording

We purchase reinsurance to reduce our exposure to large losses and to help manage our risk portfolio. To the extent that appropriately priced coverage is available, we anticipate continued use of retrocessional reinsurance to reduce the impact of large losses on our financial results and to manage our portfolio of risk. As in our Property segment, the buying of ceded reinsurance in our Casualty and Specialty segment is based on market opportunities and is not based on placing a specific reinsurance program each year.

Current wording

We purchase reinsurance to reduce our exposure to large losses and to help manage our risk portfolio. To the extent that appropriately priced coverage is available, we anticipate continued use of retrocessional reinsurance to reduce the impact of large losses on our financial results and to manage our portfolio of risk.

Previous wording

Net premiums written in our Casualty and Specialty segment increased by $428.7 million, or 40.8%, to $1.5 billion, in the second quarter of 2024, compared to $1.1 billion in the second quarter of 2023, consistent with the changes in gross premiums written and quota share retrocessional coverage purchased as discussed above.

Current wording

Net premiums written in our Casualty and Specialty segment increased by $484.9 million, or 49.7%, to $1.5 billion, in the third quarter of 2024, compared to $1.0 billion in the third quarter of 2023, consistent with the changes in gross premiums written and quota share retrocessional coverage purchased as discussed above.

Previous wording

The increase in the Casualty and Specialty segment combined ratio in the second quarter of 2024 by 5.0 percentage points to 98.2% was primarily driven by the current accident year net claims and claim expense ratio which increased 4.6 percentage points, principally as a result of two specific losses within the structured credit and transactional liability lines of business which added 3.4 percentage points. During the second quarter of 2024, our Casualty and Specialty segment also experienced net favorable development on prior accident years net claims and claim expenses of $23.9 million or 1.5 percentage points, compared to $0.5 million or 0.1 percentage points during the second quarter of 2023. The increase in net favorable development was principally driven by reported losses generally coming in lower than expected on attritional net claims and claim expenses from the other specialty, credit and professional liability classes of business, partially offset by the impact of purchase accounting adjustments relating to the Validus Acquisition.

Current wording

The Casualty and Specialty segment current accident year net claims and claim expense ratio decreased by 1.4 percentage points to 65.8% compared to the third quarter of 2023, as the comparable period was impacted by event losses on catastrophe exposed lines within the other specialty class of business. During the third quarter of 2024, our Casualty and Specialty segment also experienced net favorable development on prior accident years net claims and claim expenses of $0.8 million or 0.1 percentage points, compared to $14.1 million or 1.4 percentage points during the third quarter of 2023. The net favorable development was principally driven by reported losses generally coming in lower than expected on attritional net claims and claim expenses from the other specialty and credit classes of business.

Previous wording

In the second quarter of 2024, Casualty and Specialty segment underwriting income was reduced by total purchase accounting adjustments of $41.0 million, which added 2.6 percentage points to the Casualty and Specialty segment combined ratio.

Current wording

In the third quarter of 2024, Casualty and Specialty segment underwriting income was reduced by total purchase accounting adjustments of $37.5 million, which added 2.4 percentage points to the Casualty and Specialty segment combined ratio.

Previous wording

In the second quarter of 2024, total fee income earned through third-party capital management activities increased $27.4 million, to $84.1 million, compared to $56.7 million in the second quarter of 2023, due to higher management and performance fee income.

Current wording

In the third quarter of 2024, total fee income earned through third-party capital management activities increased $17.5 million, to $82.1 million, compared to $64.6 million in the third quarter of 2023, due to higher management and performance fee income.

Previous wording

Management fee income increased $11.9 million compared to the second quarter of 2023, driven by increased capital managed at DaVinci and Fontana, as well as the addition of fees earned by AlphaCat Managers.

Current wording

Management fee income increased $10.5 million compared to the third quarter of 2023, driven by increased capital managed at DaVinci and Fontana, as well as the addition of fees earned by AlphaCat Managers.

Previous wording

Performance fee income increased $15.5 million compared to the second quarter of 2023, driven by improved underwriting results and favorable development on prior year events, primarily in DaVinci and in certain structured reinsurance products.

Current wording

Performance fee income increased $7.0 million compared to the third quarter of 2023, driven by improved underwriting results and favorable development on prior year events, primarily in Upsilon RFO.

Previous wording

The fees earned through third-party capital management activities are principally recorded through redeemable noncontrolling interest, or as an increase to underwriting income through a decrease in operational expenses or acquisition expenses. Below is a summary of the impact of fee income on the applicable financial statement line items.

Current wording

The fees earned through third-party capital management activities are principally recorded through redeemable noncontrolling interest, or as an increase to underwriting income through a decrease in operational expenses or acquisition expenses. Below is a summary of the impact of fee income on our consolidated results of operations.

Previous wording

(1)Reflects total fee income earned through third-party capital management activities recorded through underwriting income (loss) as a decrease (increase) to operational expenses or acquisition expenses. The $13.0 million includes $12.9 million of management fee income, recorded as a reduction to operational expenses and $0.1 million of performance fee income recorded as a reduction to acquisition expenses (2023 - $8.2 million, $11.2 million and an increase of $3.0 million, respectively).

Current wording

(1)Reflects total fee income earned through third-party capital management activities recorded through underwriting income (loss) as a decrease (increase) to operational expenses or acquisition expenses. The $12.3 million includes $11.6 million of management fee income, recorded as a reduction to operational expenses and $0.7 million of performance fee income recorded as a reduction to acquisition expenses (2023 - $6.9 million, $10.9 million and an increase of $4.0 million, respectively).

Previous wording

In addition to the $13.0 million of fee income earned through our third-party capital management activities that was recorded through underwriting income (loss), as detailed above, we also earn additional fee income on certain other underwriting-related activities. These fees, in the aggregate, are recorded as a reduction to operational expenses or acquisition expenses, as applicable. The total fees recorded through underwriting income (loss) are detailed in the table below.

Current wording

In addition to the $12.3 million of fee income earned through our third-party capital management activities that was recorded through underwriting income (loss), as detailed above, we also earn additional fee income on certain other underwriting-related activities. These fees, in the aggregate, are recorded as a reduction to operational expenses or acquisition expenses, as applicable. The total fees recorded through underwriting income (loss) are detailed in the table below.

Previous wording

Net realized and unrealized losses on investments were $127.6 million in the second quarter of 2024, compared to net realized and unrealized losses of $222.8 million in the second quarter of 2023. Principally impacting our net realized and unrealized losses on investments in the second quarter of 2024 were:

Current wording

Net realized and unrealized gains on investments were $943.7 million in the third quarter of 2024, compared to net realized and unrealized losses of $228.1 million in the third quarter of 2023. Principally impacting our net realized and unrealized gains on investments in the third quarter of 2024 were:

Previous wording

•net realized and unrealized losses on our fixed maturity investments trading portfolio of $90.7 million in the second quarter of 2024, compared to net realized and unrealized losses of $214.0 million in the second quarter of 2023, driven by generally lower increases in interest rates in the second quarter of 2024 compared to the second quarter of 2023;

Current wording

•net realized and unrealized gains on our fixed maturity investments trading portfolio of $612.4 million in the third quarter of 2024, compared to net realized and unrealized losses of $279.3 million in the third quarter of 2023, primarily due to decreases in interest rates in the third quarter of 2024 compared to interest rate increases in the third quarter of 2023;

Previous wording

•net realized and unrealized losses on catastrophe bonds of $34.1 million in the second quarter of 2024 compared to net realized and unrealized gains of $38.2 million in the second quarter of 2023, which is reflective of changes in risk spreads in the wider catastrophe bond market.

Current wording

•net realized and unrealized gains on catastrophe bonds of $66.3 million in the third quarter of 2024 compared to net realized and unrealized gains of $32.5 million in the third quarter of 2023, which was reflective of changes in risk spreads in the wider catastrophe bond market in both periods. The net realized and unrealized gains are primarily reflected in the Medici portfolio, and are predominantly attributable to third-party investors and allocated through net income (loss) attributable to redeemable noncontrolling interest.

Previous wording

In the second quarter of 2024, net foreign exchange losses were $8.8 million compared to $13.5 million in the second quarter of 2023. The net foreign exchange losses in the second quarter of 2024 and 2023 were primarily driven by losses attributable to third-party investors in Medici which are allocated through net income (loss) attributable to redeemable noncontrolling interest, in addition to the impact of certain foreign exchange exposures related to our underwriting activities.

Current wording

In the third quarter of 2024, net foreign exchange gains were $16.8 million compared to net foreign exchange losses of $25.9 million in the third quarter of 2023. The increase in net foreign exchange gains in the third quarter of 2024 is primarily driven by higher gains attributable to third-party investors in Medici in the current period, which are allocated through net income (loss) attributable to redeemable noncontrolling interest, in addition to the impact of certain foreign exchange exposures related to our underwriting activities.

Previous wording

Corporate expenses were $35.2 million in the second quarter of 2024, compared to $23.4 million in the second quarter of 2023, an increase of $11.8 million, which was primarily driven by $17.3 million of expenses associated with the Validus Acquisition, compared to $11.3 million in the comparative quarter. We expect to incur additional costs and expenses associated with the Validus Acquisition. These additional non-recurring costs may be significant, and it is possible that our ultimate costs will exceed our current estimates.

Current wording

Corporate expenses were $26.1 million in the third quarter of 2024, compared to $17.1 million in the third quarter of 2023, an increase of $8.9 million, which was primarily driven by $8.3 million of expenses associated with the Validus Acquisition, compared to $3.4 million in the comparative quarter. We expect to incur additional costs and expenses associated with the Validus Acquisition. These additional non-recurring costs may be significant, and it is possible that our ultimate costs will exceed our current estimates.

Previous wording

•DaVinci, which had an increase in net income in the second quarter of 2024 compared to the second quarter of 2023, primarily resulting from strong underwriting results and an increase in total investment result;

Current wording

•DaVinci, which had an increase in net income in the third quarter of 2024 compared to the third quarter of 2023, primarily resulting from strong underwriting results and an increase in total investment result;