Full Transcript: RenaissanceRe Holdings Q2 2026 Earnings Call

RenaissanceRe Holdings (NYSE: RNR ) reported second-quarter financial results on Thursday. The transcript from the company's second-quarter earnings call has been provided below. This content is powered APIs. For comprehensive financial data and transcripts, visit Access the full call at Summary RenaissanceRe Holdings reported strong financial performance in Q2 2026 with an operating income of $548 million and an annualized operating return on equity of 20%.

Tangible book value per share grew 6% in the quarter and 27% year-over-year. The company strategically navigated the property catastrophe market, maintaining rate adequacy despite midyear rate decreases in the high teens, and grew property catastrophe limit by $600 million with high-quality clients. RenaissanceRe repurchased $350 million of shares, emphasizing capital management as a key strategy alongside underwriting to enhance shareholder value. In casualty and specialty lines, the company reported a combined ratio above 100% due to a shift of losses from the Baltimore Bridge collapse, but maintained confidence in underwriting performance with proactive reserving.

Management highlighted the integration of AI into operations for enhanced decision making and announced leadership transitions with Matt Neuber set to become CFO in 2027. The outlook for the rest of 2026 remains positive, with a well-constructed portfolio prepared for the hurricane season and ongoing investments in AI and capital management expected to drive long-term growth. Full Transcript Tasha, Operator Good morning, my name is Tasha and I will be your conference operator today. At this time I would like to welcome everyone to the RenaissanceRe Holdings' second quarter 2026 earnings conference call and webcast.

After the remarks, we will open the call for your questions. Instructions will be given at that time. Lastly, if you should need operator assistance, please press STAR zero. Thank you.

I will now turn the call over to Keith McHugh, Senior Vice President of Finance and Investor Relations. Please go ahead. Keith McHugh, SVP Finance and Investor Relations Thank you, Tasha. Good morning and welcome to RenaissanceRe Holdings' second quarter earnings conference call.

Joining me today to discuss our results are Kevin O'Donnell, President and Chief Executive Officer, Bob Qutub, Executive Vice President and Chief Financial Officer, and David Mara, Executive Vice President and Group Chief Underwriting Officer. To begin, some housekeeping matters: our discussion today will include forward-looking statements, including new and updated expectations for our business and results of operations. It's important to note that actual results may differ materially from the expectations shared today. Additional information regarding the factors shaping these outcomes can be found in our SEC filings and in our earnings release.

During today's call, we will also present non-GAAP financial measures. com. And now I'd like to turn the call over to Kevin. Kevin O'Donnell, President and Chief Executive Officer Thanks, Keith.

Good morning, everyone, and thank you for joining us today. For the second quarter, we reported operating income of $548 million and an annualized operating return on equity of 20%. Tangible book value per share grew approximately 6% in the quarter and 27% year over year. Each of our three drivers of profit—underwriting, fee, and net investment income—contributed meaningfully to these strong results.

This reflects the long-term disciplined execution of our strategy that enables us to continue to grow tangible book value per share. Our strategy does not change from quarter to quarter. We manage the business to build efficient portfolios of risk that maximize profitability. What does change, however, are the tactics we employ to achieve that strategy as markets shift.

You can see this in action at the midyear renewals. David will discuss these in more detail, but property catastrophe rates were down high teens, which was consistent with our expectations. Our leadership position allowed us to grow property cat limit with high-quality clients. The result is a portfolio that remains rate adequate at today's pricing.

We continue to like the property cat market. Recent rate decreases have come off the step change in pricing and terms that reset this market in 2023. As a result, property cat rates remain broadly adequate, and that is what dictates our underwriting behavior. Thinking about our business in terms of rate adequacy provides us more nuanced strategy than having one playbook for a hard market and another for a soft market.

What sets us apart is that we know how to navigate the transition between the two as well as having more tools to do so. We've been navigating the property cat market for decades and know when to grow and when to exercise discipline. Rate changes tend to be asymmetric. Periods of gradual decreases are punctuated by rapid large increases, which is what occurred in 2023.

We recognized the opportunity at the time and aggressively grew both organically as well as through the Validus acquisition. This positions us well for the current market. Ultimately, this is a margin business, not a growth business. In a declining rate environment, discipline is not about how much you write; it's about how much you keep.

We start by seeing the entire market on both the inwards and the outwards side. This gives us an informed view of where the best risk actually sits. We exercise risk selection to concentrate on the specific accounts and layers where the economics are strongest and manage line size aggressively. We then deploy the rest of our toolkit, including retrocessional buying and Capital Partners vehicles, to shape what we have retained.

That combination lets us grow the gross portfolio where we see opportunity while managing the net portfolio to achieve the optimal mix between risk and return that maximizes long-term growth in tangible book value. Shifting to capital management, this quarter we repurchased $350 million of our shares at valuations rapidly accretive to tangible book value per share. We buy our own stock the way we underwrite—when the risk-adjusted return warrants it. In this market, managing the denominator in the ROE calculation through proactive capital management is as important as managing the numerator by protecting margin.

It is the combination of the two that allows us to continue compounding tangible book value per share independent of changes to our top line. Let me now shift to a few comments on reserves. Once again we reported significant favorable development. We recognize this benefit as the business seasons and if the data supports it; this was the case for most lines this quarter.

Where uncertainty remains—and in casualty it does—we remain cautious. Social inflation continues to impact casualty, and we have been proactive in recognizing trend over the last several years. You can see this in our reserving actions, where we've been strengthening, and you can see it in our pricing decisions, which reflected the higher initial loss picks for casualty. Focusing now on casualty and specialty results, we reported a combined ratio that was above 100% this quarter.

Our results were impacted by the settlement of the Baltimore Bridge collapse, which resulted in a shift of losses from property to specialty. The net effect on our bottom line was relatively small. The reason you see this as a shift between the two—whereas we view it as largely unchanged—is because we divide our reinsurance business into two reporting segments. This can sometimes lead to confusion, as we manage our accounts holistically across both Property and Casualty and Specialty, but report them separately.

Underlying casualty and specialty performance was in line with our guidance, and Dave will walk you through the mechanics. On the balance of the year, our view is positive. At this point, our underwriting portfolio is largely in place. The portfolio is well constructed and well protected as we approach the peak of the hurricane season.

There has been much discussion regarding to what extent potentially historic El Niño may influence the hurricane season. This is not how we think about underwriting risk, however. We have built a portfolio to perform across a range of outcomes rather than one that depends on a benign season. Another topic of much discussion recently has been AI.

As an organization, we are highly focused on continuing to integrate AI into our operations. Our vision for AI is to elevate the impact of our people and enable better decisions. I think about this as a combination of augmentation and automation. Regarding augmentation, we have made a variety of generative AI tools broadly available to our employees.

They are actively and creatively producing innovative use cases that should provide greater insight into the risk we assume. It has been satisfying to see the number of ways AI is being incorporated into our business, and it's probably fair to say that it is being used in one way or another across everything that we do. We are now moving towards automation. That said, one thing we have learned is that AI is not a silver bullet.

It does not automatically make everything better. Rather—especially in the case of automation—it needs to be employed carefully and thoughtfully to maximize the benefit of AI. It is not sufficient to simply overlay it on top of existing processes. Rather, many processes need to be reimagined from the ground up.

This is progressing from humans in the loop to humans on the loop, and we are devoting significant resources to this endeavor, and I expect it to impact increasing portions of our business over time. As I've discussed in the past, we are rebuilding our REMS underwriting system, and one of the upgrades is to include the integration of AI into underwriting. This is more augmentation, as the goal is to enhance judgment and expand what is possible—new risks, new clients, and new models. Before I conclude my remarks, a word on our leadership transition.

We have previously announced Bob will retire at year end, and Ross Curtis, our Chief Portfolio Officer, will both remain actively involved in our operations until that time and are focused on ensuring a smooth transition in 2027. Matt Neuber will become our Chief Financial Officer, bringing a proven record of financial leadership and deep expertise in corporate finance and capital management. He played a central role in building our Capital Partners business and scaled our treasury function in step with the growth of our company.

Matt has been with us for over a decade and has been deeply involved in every acquisition, capital decision, and significant change over this time. This gives him a deep appreciation for our history, culture, and business, and I look forward to him meeting more of you in the coming months. To conclude my opening remarks, the goal that guides every decision we make has been consistent: to maximize long-term growth in tangible book value per share. We pursue it through underwriting choices that optimize each of our three drivers of profit, combined with capital management that optimizes our efficiency.

Bob will now discuss our financial performance for the quarter, followed by David, who will provide an update on the underwriting performance. Bob Qutub, Director Thanks, Kevin, and good morning everyone. 1%. Annualized return on common equity was 24%, with $154 million of retained mark-to-market gains primarily from equity.

We continue to steadily grow tangible book value per share, high fixed per share in the quarter and 27% over the last 12 months. These strong results reflect the consistency and strength of our earnings with diversified income across three drivers of profit. There are a few numbers in the second quarter that help demonstrate this. First, 15 points, which is the continued contribution from fee and investment income to our ROE, which forms a stable base of earnings quarter over quarter.

Second, $600 million, which was our underwriting income. Underwriting builds upon the stable base of income from fees and investments. And finally, $350 million, which was the amount of capital we returned to shareholders through share repurchases, a consistent level to the first quarter. So far in the third quarter through July 20, we repurchased an additional $83 million of our shares.

I'd like to spend some more time on capital management because it has been an important lever that we have been employing to grow shareholder value over the last two years. Kevin spoke about our focus on managing both the numerator and the denominator in the ROE equation. On the denominator side, since the beginning of Q2 2024 through Q2 2026, we have bought back $3 billion of our shares at an average price of $258 per share. 6 billion of operating earnings since the beginning of Q2 2024.

Our diligent capital management, coupled with consistently strong income from our three drivers of profit, has enabled us to grow tangible book value per share by 66% and benefit operating earnings per share by more than 20%. As a result of the lower going forward, we remain focused on growing tangible book value for shareholders by optimizing our income and managing our capital. Our underwriting book remains attractive. We continue to expect a similar level of management fee income and continue to have a positive outlook for investments.

We will continue to take a disciplined approach to capital management and anticipate continued share repurchases in the third quarter. Now I'd like to turn to a more detailed view of our three drivers of profit in the quarter, starting with underwriting, where our portfolio continues to perform well with an adjusted combined ratio of 72%, reported strong accident year results with a low level of catastrophe activity and 9 percentage points of favorable development. In property catastrophe, the current accident year loss ratio is 12% and the adjusted combined ratio was 9%. This included 25 percentage points of favorable development from a variety of accident years.

Other property had another excellent quarter with a current accident year loss ratio of 53% and adjusted combined ratio of 52%. We have 35 percentage points of favorable development, primarily related to the attritional book. In casualty and specialty, the current accident year loss ratio is 67%, excuse me, 68%, and the adjusted combined ratio was 102%. 1 points related to the Baltimore Bridge collapse.

This was a result of a shift in reserves from other property to specialty, and David will talk more about this in his prepared comments. But the overall impact to the company was an increase in net negative impact related to the bridge of only $12 million in the quarter. 4 percentage points from purchase accounting adjustments impacting the prior year. Overall gross premiums written were $3 billion, down 12%.

The largest movements were in property catastrophe, where the top line was down 14% excluding the impact of reinstatement premiums, and casualty and specialty, where it was down 15%. For property catastrophe specifically, lower rates at midyear drove most of the decline. As David will detail, we continue to find this business to be rate adequate and successfully held our lines while finding select opportunities to grow, helping to offset some of the rate decline. We chose not to deploy our collateralized vehicle Upsilon at the midyear renewal, instead renewing the business on wholly owned balance sheets.

This should serve to limit the impact on the top-line decrease on the bottom-line profitability. 5% this quarter. Last year there were a few one-off downward adjustments and without these top line was roughly 5 in casualty and specialty. We continue to shape the book.

A portion of the decline in the top-line growth was driven by proactive reductions and a portion was driven by timing of deals or premium adjustments. Specifically, General Casualty was down 17% as we continued to reduce our general liability portfolio. Specialty was down 16% due to a combination of exposure reduction in classes like cyber, rate reductions, and premium adjustments, and Credit was down 19% driven by timing of a few large deals that were not up for renewal this period. This quarter we purchased additional ceded protection across our portfolio.

In our property catastrophe book, our purchases were at more attractive rates than last year. This resulted in ceded spend being about flat. The decline in our ceded in our finance, which I previously just referenced. In casualty and specialty, we have increased our cession rates across the portfolio, particularly in casualty lines, which you can see reflected in the growth in ceded spend and a decline in net premiums written this quarter.

Between our ceded program and Capital Partners, we shared about 35% of casualty and specialty gross premiums written compared to 25% a year ago. 3 billion and adjusted combined ratio in the high 90s.