RenaissanceRe Holdings Ltd. — FY 2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This is an annual report, not a standalone fourth-quarter results filing. Amounts below are U.S. dollars; figures are rounded.
Business context
RenaissanceRe is a Bermuda-based global reinsurer and insurer, with Property and Casualty and Specialty reporting segments. It also manages joint ventures and funds, generating fee income, and invests assets supporting its underwriting business. Its results can be materially affected by catastrophe losses and financial-market movements.
Financial performance and position
| Metric | FY 2022 | FY 2021 |
|---|---|---|
| Gross premiums written | $9.214 billion | $7.834 billion |
| Net premiums earned | $6.334 billion | $5.194 billion |
| Net investment income | $559.9 million | $319.5 million |
| Realized and unrealized investment gains (losses) | $(1.800) billion | $(218.1) million |
| Total investment result | $(1.241) billion | $101.3 million |
| Underwriting income (loss) | $149.9 million | $(108.9) million |
| Combined ratio | 97.7% | 102.1% |
| Net loss attributable to common shareholders | $(1.097) billion | $(73.4) million |
| Diluted earnings per common share | $(25.50) | $(1.57) |
| Operating cash flow | $1.604 billion | $1.235 billion |
At year-end, total assets were $36.553 billion, investments $22.220 billion, cash and cash equivalents $1.194 billion, and claims reserves $15.893 billion. Debt was $1.170 billion; shareholders’ equity attributable to RenaissanceRe was $5.325 billion. Book value per common share was $104.65, down from $132.17; book value plus accumulated dividends declined 19.7% to $129.65.
The $500 million revolving credit facility had no borrowings outstanding at year-end. Separately, $1.378 billion was issued or drawn across listed revolving and letter-of-credit facilities. The company reported $7.9 billion of cash and investments on deposit or in trust for counterparties, including regulatory collateral; these assets should not be assumed to be freely available. Remaining investment commitments were $1.2 billion.
Material changes versus FY 2021
- Gross premiums written increased 17.6%, led by 41.4% growth in Casualty and Specialty to $5.479 billion; Property premiums fell 5.7% to $3.734 billion.
- Casualty and Specialty underwriting income rose to $166.0 million, with a 95.3% combined ratio. Property’s underwriting loss narrowed to $16.1 million, but its combined ratio remained above break-even at 100.6%.
- The consolidated combined ratio improved, but investment performance deteriorated sharply: higher interest rates and broad equity-market declines drove the $1.8 billion investment loss. Higher yields lifted net investment income.
- 2022 weather-related large losses reduced underwriting results by an estimated $1.219 billion and common-shareholder results by $807.6 million, with a 20.0 percentage-point impact on the consolidated combined ratio. The comparable 2021 underwriting impact was $1.403 billion. Russia-Ukraine war losses reduced common-shareholder results by a further $23.9 million.
- Prior-year claims development was favorable by $247.6 million, versus favorable development of $249.5 million in 2021. Claims reserves increased to $15.893 billion from $13.295 billion.
- Cash declined by $664.7 million. Shareholders’ equity attributable to RenaissanceRe fell by $1.299 billion, primarily reflecting the net loss, share repurchases and dividends.
Outlook, commentary and principal risks
Management provided no specific numerical earnings or premium guidance. It described the January 1, 2023 renewals as favorable, citing higher rates, tighter terms and conditions, and opportunities to deploy capital, particularly in property catastrophe. Management expects higher reinvestment yields to support investment income and believes performance fees could recover, while noting the ongoing volatility and uncertainty of the business.
Management also said retrocessional reinsurance was less available and more expensive after catastrophe losses and trapped collateral, although the company obtained more coverage than anticipated. It expects elevated catastrophe, climate-related and inflation risks to remain relevant. Other material risks include reserve uncertainty, social inflation and long-tail casualty exposures, reliance on three brokers for 82.2% of gross premiums written, counterparty and retrocession collection risk, market-value volatility, and regulatory, tax and capital requirements.
A powerful earthquake struck Turkey and the surrounding region on February 6, 2023; the filing states that loss estimates remain materially uncertain. The company reported effective disclosure controls and internal control over financial reporting. The auditor identified reserve valuation as a critical audit matter, reflecting substantial estimation judgment.
Important facts for investors to verify
- How Hurricane Ian and other 2022 catastrophe losses develop, and whether recoveries from reinsurers are collectible and timely.
- Whether reserve estimates remain adequate, particularly for long-tail casualty claims, inflation and emerging coverage or litigation trends.
- How much of the investment portfolio’s mark-to-market losses may reverse over time, and the resulting impact of interest rates, credit spreads and equities on earnings and capital.
- Whether 2023 renewal pricing, terms and retrocessional protection support profitable growth, especially at mid-year U.S. property renewals.
- Available liquidity after accounting for pledged collateral, regulatory restrictions, investment commitments and potential claims payments.
- How third-party capital subscriptions, redemptions and noncontrolling interests affect reported consolidated results and RenaissanceRe’s retained economics.