RENAISSANCERE HOLDINGS LTD

Over the last 10 years, we have made key strategic decisions to build the capabilities and scale that we believe will allow us to generate superior returns in an evolving marketplace. We have diversified our sources of capital through various owned and managed balance sheets as well as equity, debt and insurance-linked securities markets. We believe that the prior planning initiatives we implemented provide the flexibility to manage large loss events and efficiently distribute capital across balance sheets. We are unique among our peers in that we have both owned and managed, and rated and fronted, vehicles across the risks that we write. Our three drivers of profit put us in a differentiated position to absorb losses while still providing efficient capacity to our customers and producing strong returns for our shareholders. This has afforded us significant flexibility to react when the world changes.

For both RenaissanceRe and the industry, the first quarter of 2025 is likely to represent one of the largest quarters for catastrophic losses in history. Additionally, global socio-political and geopolitical events have increased macroeconomic volatility. As a reinsurer, we are paid to assume volatility, and are intentionally designed to withstand it. The largest risks that we protect against, such as hurricanes and earthquakes, do not correlate to financial cycles and need to be protected against in good or bad economic times. Due to these factors, we believe that our Company is generally “anti-correlated” to the current macroeconomic environment, including political and economic factors such as tariffs, that are weighing on other industries and companies more heavily.

We believe that we are in a strong capital position, even after recent catastrophe losses. Our capital position provides us with the flexibility and opportunity to deploy capital into the business while actively repurchasing shares when at attractive valuations. When possible, our preference is to deploy any excess capital into profitable business opportunities before returning excess capital to shareholders.

Reinsurance Market Trends and Developments

We believe we have created significant opportunities to source attractive risk in the lines of business that we write, and that such opportunities will result in superior returns for our shareholders. We are in a period of heightened macroeconomic volatility, and we believe that it is in times of uncertainty where RenaissanceRe’s expertise, partnership-approach and coordination across teams differentiates us as a reinsurance leader. Typically, insurance is a necessary or required purchase, and by extension we expect that demand for reinsurance will persist.

We are uniquely positioned to write a variety of risks, leveraging the enhancements we have made over the last several years to our risk and capital management technology and underwriting expertise to cover additional lines of business. In particular, we have invested heavily to understand the influence of climate change on the weather and its impact on the risks that we take. We believe that our RenaissanceRe Risk Sciences team gives us an advantage in properly reflecting the evolving phenomenon of climate change in our models as compared to commercially available models.

Our strategy focuses on delivering a value proposition composed of leadership, expertise and partnership, through our operation as an integrated system of three competitive advantages: superior risk selection, superior customer relationships and superior capital management. We leverage our strengths in risk selection and capital management to build portfolios designed to be resilient against a spectrum of tail-risk scenarios. This allows us to price our products accordingly and to maintain our position as a consistent incumbent for our customers.

We plan to continue to seek to take advantage of additional available opportunities and think that the strategic decisions we have made in prior periods have laid the foundation for these initiatives. Our clients value our ability to be a long-term partner who brings access to multiple forms of capital and innovative, large-scale solutions.

General Economic Conditions

We think that the stresses in the global economy will continue and that this may result in increased market volatility. Global events and geopolitical instability have contributed to widespread economic inflation over the past few years compared to recent historical norms. We consider the anticipated effects of inflation, including social, economic, and event-driven, in our loss models, on our investment portfolio, and generally in the running of our business, and actively monitor trends in these areas. To the extent that tariffs or inflation exacerbate demand surge, we believe we have the tools to appropriately price for the impact.

Central bank policy and changes to interest rates may also increase the risk of inflationary pressure. The effects of interest rate trends on our reinsurance and insurance business could be magnified for longer-tail business lines that are more inflation-sensitive, particularly in our Casualty and Specialty segment.

The risk of a global recession is a continuing concern. However, we think that our business model is well positioned to be less sensitive to an inflationary or recessionary environment. Several factors are driving recent volatility, including concerns regarding tariffs, trade, inflation and recession. Notwithstanding the many uncertainties and challenges that lie ahead, we believe that our track record of responding to industry events, differentiated risk management and client service capabilities, coupled with access to diverse sources of both capital and risk continue to position us favorably in the current environment.

Tax Updates

On December 27, 2023, the Government of Bermuda announced the implementation of a 15% corporate income tax, which became effective on January 1, 2025. Therefore, our profits generated on or after January 1, 2025 in Bermuda (except for profits earned by our joint ventures and managed funds) are subject to a 15% CIT. We generally expect that the profits generated in Bermuda on or after January 1, 2025 by our joint ventures and managed funds, except to the extent those profits are attributable to redeemable noncontrolling interests, will also be taxed at 15% as a result of the enactment or expected enactment of provisions similar to the GloBE Rules by many of the jurisdictions in which we operate. These changes have impacted our results for the first quarter of 2025, and we expect our income taxes will increase in the future. On January 15, 2025, the OECD issued administrative guidance, which, if incorporated into the laws of the jurisdictions in which we operate, could cause additional top-up taxes to the extent the net deferred tax asset that we established upon enactment of the CIT in 2023 pursuant to the economic transition adjustment is utilized after 2026. We believe that the flexible global operating model that we have utilized will continue to prove resilient.

Three Drivers of Profit

Despite significant capital market disruptions and elevated first quarter catastrophes, we believe that our three drivers of profit demonstrated the resilience of our earnings. Having three distinct sources of income makes us more resilient to catastrophe activity, and we believe this resilience will reward our shareholders with superior returns over the long term. The benefit of this approach is evident in our results this quarter, as we were able to absorb one of the largest catastrophe losses in history in our quarterly earnings. As we have developed increased income diversification over time, it has reduced the impact of large loss activity on our results. Losses that used to impact annual results to a significant extent now only impact quarterly results to a more limited extent due to our increased scale and diversified and sustainable earnings streams.

Underwriting Income

Through disciplined underwriting, we aim to manage the cycle and allocate our capital to the business that will generate the best returns. Portfolio construction is a continuous process, and we believe that we have constructed a large and profitable underwriting portfolio that has been bolstered by our ability to participate broadly across our clients’ portfolios. We aim to be a provider of first choice and a trusted partner to our customers to help them manage their risk across portfolios and market cycles.

We believe that each of our reportable segments have different risk and volatility profiles that contribute in distinct and important ways to our three drivers of profit, and in particular our underwriting income. The Property segment is inherently more volatile, but also provides meaningful underwriting income in lower catastrophe quarters as well as strong fee income from third-party capital. The Casualty and Specialty segment generally provides a more stable underwriting result over-time, along with significant investment income stemming from capital invested on longer tail risk in certain lines of business. These segments also provide us with diversification across our loss reserves and the tail of our risks, which allows us to better manage changes in loss trends, whether favorable or adverse, across our underwriting portfolio.

We have created a large, well-diversified combined portfolio with deep partnerships with brokers and clients. Even at our increased scale, we continue to remain focused on staying nimble to enable us to capture attractive opportunities as they arise, while exercising discipline to effectively manage our portfolio.

Looking forward to the remainder of 2025, we believe that demand in the market will continue to grow due to several factors, including the impact of recent catastrophe events, the inflation of insured values and cedants adjusting their reinsurance budgets. The fact that the California Wildfires occurred in the first quarter does not change our overall strategy for the year. Our focus on continuing to grow business where it makes sense remains, and we believe there is ample latent demand in markets and are prepared to grow where we see opportunities. We believe that we are well positioned to meet this expected demand due to our flexible underwriting platform, our risk expertise, and the strength and durability of our partnerships with clients and brokers.

Property

With the global impact of climate change, we expect the frequency and severity of perils such as drought, flood, rain, hail and wildfire to continue at the elevated levels we have seen in recent years. We believe that the increase in severe weather, coupled with currently projected demographic trends in catastrophe-exposed regions, contributes to factors that will increase the average economic value of expected losses, increase the number of people exposed per year to natural disasters and, in general, exacerbate disaster risk. The impact from these factors was apparent in the California Wildfires. However, we think that the underwriting changes that we have made, including requiring higher rates and attachment points, has optimized the portfolio and positioned us so that this catastrophe activity will have a smaller impact on our financial results than it otherwise may have.

At the January 1, 2025 renewals, demand increased at the top end of programs, as did competition for attractive placements. Overall, we deployed property catastrophe capacity with key clients and had a favorable renewal with terms and conditions remaining attractive. Growth was greatest in the property catastrophe class where risk-adjusted returns have been strongest and where we were able to capture incremental opportunities. Given the ongoing attractive market, we have appetite to grow in the property catastrophe class and plan to deploy additional limit through the mid-year. Our primary focus, however, is on margin. Competition has been increasing in the other property class, and we intend to deploy the tools at our disposal to construct a book of business complementary to our property catastrophe book and accretive to our overall underwriting portfolio.

In our Property segment, we have focused on constructing a portfolio that has appropriate attachment points for each of our customers, and we expect this dynamic to persist through 2025, supporting a healthy reinsurance market and the consistent protection our customers need. Looking forward, we expect that the property catastrophe reinsurance market will be impacted by the past several quarters of elevated catastrophe events. These have affected, and we expect will continue to affect, the supply-demand balance, placing upward pressure on rates, and providing us with new opportunities to deploy capacity to support our customers. Our strong capital position provides us with the flexibility so that we can move quickly to offer capacity to our partners at attractive rates.

Casualty and Specialty

Part of fulfilling our vision of being the best underwriter is knowing when to grow our portfolio and when to exercise discipline. Each line of business in the Casualty and Specialty segment is at a different point in the cycle and we continually manage our participation to achieve the best portfolio mix and balance of risk and reward. Our prior work building strong relationships with key customers has allowed us to gain superior access to desirable business. We have focused our growth in attractive areas while reducing on deals that do not meet our return hurdles. We continue to grow organically in certain credit and specialty lines of business where we are seeing the most attractive risk-adjusted returns.

We have seen favorable underlying conditions in the specialty class where we achieved desirable results, even with increasing competition and some downward pressure on rates, and maintained our strong leadership in specialty and credit lines at the January 1, 2025 renewals. Trends from these renewals generally continued at the April 1, 2025 renewals. In the professional liability market, capacity is starting to withdraw from the market after several quarters of rate decreases. In the casualty class, we retained the majority of our portfolio and had discussions with clients on casualty trends, while continuing to reduce lines on some treaties where exposure to loss inflation or loss trends was greatest. Within classes, we saw greater movement driven by prior year premium adjustments across lines. We typically make these types of premium adjustments on quota share deals based on annual reporting by cedents on actual premiums written.

Our portfolio management and robust reserving process has provided us with overall stability in the Casualty and Specialty segment, allowing the segment to remain a substantial contributor to our financial results. This diversification has also been beneficial when certain classes of business or underwriting years have experienced increasing loss trends and required more reserves.

We believe that we have a prudent reserving process for our Casualty and Specialty segment and remain confident in our reserves. We have been closely monitoring casualty loss trends, and our longstanding approach is to recognize increasing trends early. We are reflecting our insights into our reserving process to proactively stay ahead of trend and inform portfolio shaping decisions.

Across our Casualty and Specialty segment, we have experienced, and expect to continue to experience, movements up or down across different lines of business over time. This is the nature of the business and part of managing a diversified underwriting book. In our casualty class specifically, we have been closely monitoring trends in general liability where inflation and claims severity have been increasing. We typically manage our casualty business over a 10-year cycle and continue to manage our exposure given the loss trend in this business. As a reinsurer, we believe that we are better placed to identify current trends and best practices because we have a broad overview of the market and can see the differentiated approaches of our customers. Over the last two and a half years, we have added approximately $400 million to our general liability prior year reserves, with 40% of this in underwriting years between 2020 and 2023. We have been encouraged to see progress across the industry and believe that many insurance companies are improving their underwriting and claims management as well as accelerating rate increases.

During the quarter, our Casualty and Specialty segment was impacted by several large losses, including the California Wildfires, the crash of American Airlines flight 5342, and certain refinery fires. We do not believe that these losses are indicative of any longer-term trend.

Fee Income

We take a differentiated approach to our Capital Partners unit, with a focus on first sourcing the risks that we intend to write, and then matching them with the appropriate third-party capital. This business improves our offerings to customers, enhances our ability to optimize our portfolios, and generates attractive fees for doing so. We earn fee income in exchange for sharing risk with our third-party capital partners, and while we share underwriting income during profitable periods, we also share underwriting losses.

Our Capital Partners unit continues to grow into an attractive market and benefits from increased access to desirable risk. This was evident in the successful launch of Medici UCITS, a new Irish domiciled property catastrophe bond fund purpose-built to provide European and other global investors with access to RenaissanceRe’s successful catastrophe bond investment strategy through a dedicated European-regulated UCITS structure. We view fee income as a growing and sustainable driver of profit that we expect will continue to generate low-volatility management fee income. However, fees may be impacted by large losses, such as those experienced during the quarter, which can potentially result in reduced management fees, no performance fees or the reversal of previously accrued performance fees.

Investment Income

In 2024 and into 2025, we benefited from high interest rates and growth in this driver of profit as a result of our proactive rotation of the portfolio into higher yielding securities when we saw increases in interest rates. This was enhanced by the increased size of our investment portfolio.

We continue to maintain a relatively conservative position for our investment portfolio. In anticipation of increasing economic uncertainty, we increased our investment portfolio’s resilience to inflation by managing the shape of our yield curve, among other proactive actions. This relatively conservative posture enabled us to lean into opportunities presented in the market, including moderately increasing our allocations to riskier assets such as equities and high yield.

See the “Risk Factors” section in our Form 10-K for additional information on factors that could cause our actual results to differ materially from those in the forward-looking statements contained in this Form 10-K and other documents we file with the SEC.