RenaissanceRe Holdings Ltd. (RenaissanceRe) operates as a global provider of reinsurance and insurance.
The company provides property, casualty, and specialty reinsurance and certain insurance solutions to customers, principally through intermediaries.
The company’s business strategy focuses predominantly on writing reinsurance. The company applies its reinsurance lens of approaching risks as a portfolio to the insurance business that it writes, primarily though delegated authority arrangement...
RenaissanceRe Holdings Ltd. (RenaissanceRe) operates as a global provider of reinsurance and insurance.
The company provides property, casualty, and specialty reinsurance and certain insurance solutions to customers, principally through intermediaries.
The company’s business strategy focuses predominantly on writing reinsurance. The company applies its reinsurance lens of approaching risks as a portfolio to the insurance business that it writes, primarily though delegated authority arrangements. Through its Capital Partners unit, it creates and manages joint ventures and managed funds, which provide access to the portfolios it underwriters build. Additionally, it pursues several other opportunities, such as executing customized reinsurance transactions to assume or cede risk and managing certain strategic investments. It continually explores appropriate and efficient ways to address the risk management needs of its clients and the impact of various regulatory and legislative changes on its operations. From time to time, it considers diversification into new ventures, either through organic growth, the formation of new joint ventures or managed funds, or the acquisition of, or investment in, other companies, or books of business of other companies.
The company’s business consists of the following reportable segments: Property, which is consisted of catastrophe and other property (re)insurance; and Casualty and Specialty, which is consisted of general casualty, professional liability, credit, and other specialty (re)insurance.
The company has three principal drivers of profit that generate diversified earnings streams for its business: underwriting income, fee income, and investment income. Underwriting income is the income that it earns from its core underwriting business. By matching desirable risk with efficient capital and accepting the volatility that this business brings, it believes that it generates superior returns over the long-term. Fee income is the income that it earns primarily from managing third-party capital in its Capital Partners unit and is composed of management fee income and performance fee income. Investment income is income derived from the investment portfolio that it maintains to support its business.
Strategy
The company’s strategy is to operate an integrated system of three competitive advantages: superior customer relationships, superior risk selection, and superior capital management.
Segments
Property Segment
The company’s Property segment includes its catastrophe class of business, principally consisted of excess of loss reinsurance and excess of loss retrocessional reinsurance, which insures insurance and reinsurance companies against natural and man-made catastrophes. It also includes other property class of business, primarily consisted of proportional reinsurance, property per risk, property (re)insurance, binding facilities, and regional U.S. multi-line reinsurance, which have exposure to natural and man-made catastrophes.
The company writes catastrophe reinsurance and insurance coverage protecting against natural and man-made catastrophes, such as earthquakes, hurricanes, typhoons and tsunamis, winter storms, freezes, floods, fires, windstorms, tornadoes, explosions, and acts of terrorism. It also offers this coverage to insurance companies and other reinsurers primarily on an excess of loss basis. This means it begin paying when its customers’ claims from a catastrophe exceed a certain retained amount. It also offers proportional coverages and other structures on a catastrophe-exposed basis.
The company’s excess of loss property contracts generally covers natural perils, and its predominant exposure under such coverage is to property damage. However, other risks, including business interruption and other non-property losses, may also be covered under its property reinsurance contracts when arising from a covered peril.
The company offers coverages on a worldwide basis. Because of the wide range of possible catastrophic events to which it is exposed, including the size of such events and the potential for multiple events to occur in the same time period, its property business is volatile, and its financial condition and results of operations reflect this volatility. To moderate the volatility of its risk portfolio, company may increase or decrease its presence in the property business based on market conditions and its assessment of risk-adjusted pricing adequacy. It frequently purchases reinsurance or other protection for its own account for a number of reasons, including to optimize the expected outcome of its underwriting portfolio, to manage capital requirements for regulated entities, and to reduce the financial impact that a large catastrophe or a series of catastrophes could have on its results.
Casualty and Specialty Segment
The company writes casualty and specialty reinsurance and insurance across a broad range of classes of business, including general casualty, professional liability, credit and other specialty lines. This business is predominantly reinsurance, although it also writes insurance business, primarily through delegated authority arrangements. As a result of its financial strength and stable, long-term relationships with leading underwriters of casualty and specialty insurance globally, it offers significant capacity in this segment.
The company offers its casualty and specialty reinsurance products principally on a proportional basis, and it also provides excess of loss coverage. These products frequently include tailored features, such as limits or sub-limits, which it believes helps in managing its exposures. Any liability exceeding, or otherwise not subject to, such limits revert to the cedant. Certain casualty and specialty lines of business, such as marine, energy, and terrorism are also exposed to catastrophe risk, and it seeks to appropriately estimate and manage correlations between these lines and its property reinsurance portfolio.
The company’s Casualty and Specialty segment also offers certain insurance products, including excess and surplus, general liability and professional liability lines of business, primarily through delegated authority arrangements. It writes this business in a similar manner to its reinsurance business, and views it through a reinsurance lens, with a focus on approaching it as a portfolio of risks.
Other
In addition to its two reportable segments, the company has an other category. The company’s Other category primarily includes the results of: investment unit, which manages and invests the funds generated by its consolidated operations; and the company’s share of strategic investments in certain markets that offer attractive risk-adjusted returns or where its investment adds value, and where, rather than assuming exclusive management responsibilities itself, the company partners with other market participants.
Principal Wholly-Owned Operating Subsidiaries
The company’s principal wholly-owned operating subsidiaries are Renaissance Reinsurance, RREAG, Renaissance Reinsurance U.S., RenaissanceRe Specialty U.S., and Syndicate 1458. Through these subsidiaries, the company writes the property and casualty and specialty (re)insurance that drives its underwriting income.
Managed Joint Ventures and Managed Funds
The company manages a number of joint ventures and managed funds, which provides with an additional presence in the market, enhance its client relationships, and generates management fee income and performance fee income. Its principal joint ventures and managed funds include DaVinci (DaVinciRe Holdings Ltd. and its subsidiaries), Fontana (Fontana Holdings L.P. and its subsidiaries), Medici (RenaissanceRe Medici Fund Ltd.), Vermeer (Vermeer Reinsurance Ltd.), Top Layer (Top Layer Reinsurance Ltd.), and Upsilon (includes Upsilon RFO (Upsilon RFO Re Ltd.) and Upsilon Fund (RenaissanceRe Upsilon Fund Ltd.)).
DaVinci
The company formed DaVinci in 2001 to expand its capacity to provide property catastrophe reinsurance and certain lines of casualty and specialty reinsurance on a global basis. Third-party investors own a majority of the economic interest in DaVinci, which provides them with access to attractive risk while generating a management fee and a performance fee stream of income for the company. In addition, the company maintains a significant economic investment in DaVinci. The company controls a majority of the outstanding voting rights in DaVinci, DaVinci Reinsurance’s holding company, and as a result, consolidate DaVinci in the company’s financial results. RUM (Renaissance Underwriting Managers, Ltd.), a wholly owned subsidiary of RenaissanceRe, acts as the exclusive underwriting manager for DaVinci. Through the company’s operating subsidiaries, principally Renaissance Reinsurance, the company participates on every risk that DaVinci Reinsurance assumes, ensuring alignment. From time to time, Renaissance Reinsurance or certain other operating subsidiaries write business for both themselves and DaVinci Reinsurance, and then cede a portion to DaVinci Reinsurance.
Fontana
Fontana assumes casualty and specialty risks, including long-tail lines. Third-party investors own a majority of the economic interest in Fontana, which provides them with access to attractive casualty and specialty risk while generating a management fee and a performance fee stream of income for the company. Fontana also allows the company to increase casualty and specialty capacity for the company’s customers. The company controls a majority of the outstanding voting rights in Fontana, and as a result, consolidates it in the company’s financial results. Fontana assumed a whole account quota share of the company’s global casualty and specialty book of business, including the credit portfolio, ensuring alignment. Fontana comprises a group of reinsurance operating companies and their holding companies, in which the company maintains a significant economic investment.
Medici
Medici principally invests in property catastrophe bonds, although it may also invest in various other insurance-based investment instruments that have returns primarily correlated to property catastrophe risk. Third-party investors own a majority of the participating, non-voting common shares of Medici, pursuant to which they own a majority of Medici’s economic benefits, which provides them with access to attractive catastrophe bond risks while generating a management fee stream of income for the company. Medici allows the company to increase its participation in its customers’ catastrophe bond offerings and broaden its relationships with them. The company controls all of Medici’s outstanding voting rights, and as a result consolidate it in the company’s financial results. RenaissanceRe Fund Management Ltd. (RFM), a wholly owned subsidiary of RenaissanceRe, acts as the exclusive investment fund manager of Medici. The company maintains a significant investment in Medici.
Vermeer
Vermeer expands the company’s ability to provide capacity focused on risk remote layers in the U.S. property catastrophe market. The company maintains majority voting control of Vermeer, and as a result consolidate it in the company’s financial results. Stichting Pensioenfonds Zorg en Welzijn, a pension fund represented by PGGM (PGGM Vermogensbeheer B.V.), retains 100% of Vermeer’s economic benefits. Vermeer is managed by RUM in return for a management fee.
Top Layer
The company established Top Layer in 1999 to expand its ability to write high excess non-U.S. property catastrophe reinsurance. Top Layer is owned 50% by State Farm (State Farm Mutual Automobile Insurance Company) and 50% by Renaissance Reinsurance. Top Layer is managed by RUM in return for a management fee. The company maintains a significant investment in Top Layer.
Upsilon
Upsilon is composed of Upsilon RFO and Upsilon Fund. Upsilon RFO is the risk bearing entity. As a segregated accounts company, Upsilon RFO holds identified pools of assets and liabilities in accounts that are each ring-fenced or segregated from any claims from the creditors of Upsilon RFO’s general account and from the creditors of other segregated accounts within Upsilon RFO. Upsilon RFO’s segregated accounts enter into collateralized reinsurance arrangements, and each account’s capital is sourced either directly from third-party investors, or from Upsilon Fund. The company consolidates the financial results of certain accounts of Upsilon RFO and account for the portion of its premium that the company does not own as a ceded retrocession. Upsilon gives the company the ability to provide additional capacity to the worldwide aggregate and per-occurrence primary and retrocessional markets on a collateralized basis, either directly, or through business written by Renaissance Reinsurance and then ceded to Upsilon RFO.
Upsilon Fund is also a segregated accounts company, and each account acts as either a pool of assets from multiple investors, such as Upsilon Diversified, or as a separately-managed account for an individual institutional investor, such as NOC1. Upsilon Fund’s segregated accounts invest in either Upsilon RFO, or in other reinsurance risks that are managed by the company. Upsilon Fund is managed by RFM in return for a management fee and a performance fee. The company does not consolidate Upsilon Fund. The company maintains a significant investment in Upsilon RFO.
AlphaCat
In connection with the Validus Acquisition, the company acquired AlphaCat Managers (AlphaCat Managers Ltd.), which manages third-party capital in various forms, including through closed-end and open-end Bermuda mutual funds and one managed account, collectively, the ‘AlphaCat Funds’, which generate fee income. Prior to the Validus Acquisition, substantially all of the AlphaCat Funds had received full redemption requests from their investors and capital was being released accordingly, subject to certain constraints. The company expects to run off this business over a period of time.
Noncontrolling Interest
The company manages DaVinci, Fontana, Medici, and Vermeer; and owns all or a majority of the voting interests, but owns no, or a minority, economic interest of each. As a result of its controlling voting interests, it fully consolidates these entities in its financial statements, even though it does not retain the full value of economic outcomes generated by these entities.
Other Transactions
From time to time, the company pursues other customized reinsurance and financing transactions. For example, it has participated in, and continuously analyzes, other attractive opportunities in the market for insurance-linked securities and derivatives.
Investments
Investment Income
The company’s investment portfolio generates its third driver of profit, investment income. The company structures its investment portfolio to emphasize the preservation of capital and the availability of liquidity to meet its claims obligations, to be well diversified across market sectors, and to generate relatively attractive returns on a risk-adjusted basis over time.
The company’s investment portfolio also serves as a stable capital base against which it can underwrite risk, and also allows the company to generate relatively attractive investment income and returns over time. The company’s investment portfolio includes both investments that it makes on behalf of the company and whose investment results are fully retained by the company, as well as investments that it manages on behalf of the company’s joint ventures and managed funds, in which it retains no, or only a partial, economic interest.
The majority of the company’s investments are highly-rated fixed income securities. The company also holds a significant amount of short term investments which have a maturity of one year or less when purchased. In addition, the company holds other investments, including catastrophe bonds, fund investments, term loans and direct private equity investments, which offer the potential for higher returns but with relatively higher levels of risk. The company’s investment portfolio takes into account the duration of its liabilities and the level of strategic asset risk the company wishes to assume over the medium- to long-term. The company may from time to time re-evaluate its investment guidelines and explore investment allocations to other asset classes that either increase or decrease its overall asset risk. To further the sustainability of the company’s investment portfolio, it considers certain environmental, social and governance factors within its investment strategy. The company’s investments are subject to market-wide risks and fluctuations, as well as to risks inherent in particular securities.
Strategic Investments
The company also pursues strategic investments where, rather than assuming exclusive management responsibilities itself, the company partners with other market participants. For example, it has strategic investments in the Tower Hill Companies, which grants access to participants in the Florida homeowners insurance market. Additionally, it has a strategic investment in TWFG, which distributes personal and commercial insurance across the United States.
Competition
The company competes with certain Lloyd’s syndicates active in the London market.
Marketing
The company markets its products primarily through reinsurance brokers. The company focuses its marketing efforts on targeted brokers and partners. By maintaining close relationships with brokers, it is able to obtain access to a broad range of potential reinsureds.
Regulation
Bermuda Regulation
The company’s entities registered under the Insurance Act include:
Class 4 general business insurers: Renaissance Reinsurance, and DaVinci Reinsurance:
Class 3B general business insurers: RenaissanceRe Specialty U.S., Vermeer and RREAG, Bermuda Branch;
Class 3A general business insurers: Top Layer, Fontana Reinsurance Ltd., and Fontana Reinsurance U.S. Ltd.;
Class 3 general business insurer: AlphaCat Re, Mont Fort Re Ltd., and Shima Reinsurance Ltd.;
Collateralized insurer: Upsilon RFO; and
Insurance managers: RUM and RenaissanceRe Underwriting Management Ltd.
The Bermuda Monetary Authority (BMA) is the group supervisor of the RenaissanceRe Group and it has designated Renaissance Reinsurance to be the ‘designated insurer’ in respect of the RenaissanceRe Group. The designated insurer is required to ensure that the RenaissanceRe Group complies with the provisions of the Insurance Act pertaining to groups and all related group solvency and group supervision rules.
The International Association of Insurance Supervisors, or IAIS, has adopted a Common Framework for the supervision of Internationally Active Insurance Groups, or IAIGs, which is focused on the group-wide supervision of IAIGs. The BMA has issued a consultation paper about proposed enhancements to its insurance group supervision framework. The development and adoption of these capital standards could increase the company’s prescribed capital requirement, the level at which regulatory scrutiny intensifies, limit intercompany capital transactions, suspend debt repayments, and significantly increase its cost of regulatory compliance.
Certain of the company’s Bermuda-registered entities are subject to additional regulatory requirements, including the following:
Insurance Code of Conduct: All Bermuda registered insurers are required to comply with the BMA’s Insurance Code of Conduct, which establishes duties, requirements and standards regarding sound corporate governance, risk management and internal controls.
Special Purpose Insurer and Collateralized Insurer Reporting Requirements: Unlike other (re)insurers, SPIs and collateralized insurers are fully funded to meet their (re)insurance obligations; therefore the application and supervision processes are less burdensome than traditional registered general business insurers. However, these entities remain subject to annual financial statements and solvency reporting and disclosure requirements.
Insurance Manager Reporting Requirements: Insurance managers are required to report to the BMA information regarding their management and operations, as well as certain events, for example, a failure to comply with a condition imposed upon it by the BMA.
Economic Substance Act: Every Bermuda registered entity, other than an entity which is resident for tax purposes in certain jurisdictions outside Bermuda, engaged in a relevant activity (which includes, but is not limited to insurance, fund management, financing and leasing, and holding entity activities) and from which it earns gross revenue in a relevant financial period must satisfy economic substance requirements by maintaining a substantial economic presence in Bermuda, and certain of the company’s entities incorporated in Bermuda are subject to annual reporting obligations regarding this requirement.
Policyholder Priority: The Insurance Amendment (No. 2) Act 2018 provides that, subject to the prior payment of preferential debts under the Employment Act 2000 and the Bermuda Companies Act 1981, the insurance debts of an insurer must be paid in priority to all other unsecured debts of the insurer.
Investment Fund Regulation: The Bermuda Investment Funds Act 2006 sets standards and criteria applicable to the establishment and operation of investment funds in Bermuda with a view to protecting investors. The BMA is responsible for supervising and regulating investment funds. Each of the company’s managed funds, including Medici and Upsilon Fund is registered or authorized under the Investment Funds Act and therefore regulated by the BMA. Under the Investment Funds Act, registered funds and authorized funds are subject to offering disclosure requirements and obligations with respect to service providers, depositary functions, safekeeping obligations, valuations, and reporting to investors and the public, among other requirements.
Investment Business Regulation: In 2024, RFM and AlphaCat Managers, which were both previously exempt from requiring a license from the BMA to carry on investment business activities in or from Bermuda, received a Standard License and Class B Registration, respectively, under the Bermuda Investment Business Act 2003. As a result, RFM and AlphaCat Managers are now subject to supervision by the BMA, including disclosure and reporting requirements, and in the case of RFM, minimum net asset and liquidity requirements.
The U.S. Regulation
Renaissance Reinsurance U.S. is a Maryland-domiciled insurer licensed or accredited as a reinsurer in all 50 states and the District of Columbia. It is also a certified reinsurer with the U.S. Treasury. Renaissance Reinsurance U.S. is subject to considerable regulation and supervision by state insurance regulators. The MIA, as Renaissance Reinsurance U.S.’s domestic regulator, is the primary financial regulator of Renaissance Reinsurance U.S. RREAG, the U.S. Branch is in runoff, but is still subject to supervision by the NYDFS.
The NYDFS is RREAG, the U.S. Branch’s insurance regulator in the U.S. RREAG, the U.S. Branch is subject to New York’s holding company laws, as well as laws and regulations pertaining to solvency, capital and surplus, authorized investments, deposits of securities for the benefit of policyholders, cybersecurity, corporate governance, and the financial risks related to climate change.
The U.K. Regulation
The PRA and the FCA regulate all financial services firms in the U.K., including the Lloyd’s market, RSML and RREAG, the U.K. Branch; and has substantial powers of intervention in relation to regulated firms. Lloyd’s is required to implement certain rules prescribed by the PRA and the FCA.
The operations of RSML are subject to oversight by Lloyd’s, substantially effected through the Council of Lloyd’s. RSML’s business plan for Syndicate 1458, including maximum underwriting capacity, requires annual approval by Lloyd’s. The company has deposited certain assets with Lloyd’s to support the underwriting business at Lloyd’s of RenaissanceRe CCL, the sole corporate member of Syndicate 1458.
Lloyd’s is subject to an annual PRA solvency test, which measures whether Lloyd’s has sufficient assets in the aggregate to meet all outstanding liabilities of its members, both current and run-off. If Lloyd’s fails this test, the PRA may require the entire Lloyd’s market to cease underwriting or individual Lloyd’s members may be required to cease or reduce their underwriting.
Swiss Regulation
RREAG and Validus Switzerland are reinsurance companies licensed and supervised by the Swiss Financial Supervisory Authority, or FINMA. As such, RREAG and Validus Switzerland must comply with Swiss insurance supervisory law and regulations applicable to reinsurers. RREAG maintains branch operations in Australia, Bermuda, the U.K. and the U.S., and Validus Switzerland maintains branch operations in Bermuda, each in accordance with applicable local regulations. In addition, the group affiliate RenaissanceRe Services of Switzerland AG must comply with applicable provisions of the Swiss Financial Services Act to continue its distribution activities for insurance-linked securities.
Certain of the company’s other branches and affiliated entities are subject to regulation in other jurisdictions, including those described below.
Singapore: Branches of Renaissance Reinsurance, Validus Re and DaVinci Reinsurance based in the Republic of Singapore have each received a license to carry on insurance business as a general reinsurer and are regulated by the Accounting and Corporate Regulatory Authority as a foreign company pursuant to Singapore’s Companies Act. Renaissance Services of Asia Pte. Ltd., the company’s Singapore-based service company, is registered with the Accounting and Corporate Regulatory Authority and subject to Singapore’s Companies Act.
Ireland: Renaissance Reinsurance of Europe is regulated and supervised by the Central Bank of Ireland and is subject to the requirements of Solvency II. Renaissance Reinsurance of Europe and Renaissance Services of Europe Ltd., the company’s Dublin-based Irish service company, are both registered with the Companies Registration Office in Ireland and subject to the Companies Act 2014.
Australia: RREAG, Australia Branch (RenaissanceRe Europe AG, Australia Branch), based in Sydney, Australia, provides coverage to insurers and reinsurers from Australia and New Zealand. The activities of RREAG, Australia Branch are licensed and regulated by APRA and the Australian Securities and Investments Commission. Pursuant to these regulations, RREAG, Australia Branch is subject to certain reporting and capital requirements in Australia.
History
RenaissanceRe Holdings Ltd. was founded in 1993. The company was incorporated in 1993 under the laws of Bermuda.
