RenaissanceRe Q2 2025 Earnings Report

RenaissanceRe EPS Results

• Actual EPS: $12.29
• Consensus EPS: $10.28
• Beat/Miss: Beat by +$2.01
• One Year Ago EPS: $12.41

RenaissanceRe Revenue Results

• Actual Revenue: $2.77 billion
• Expected Revenue: $2.96 billion
• Beat/Miss: Missed by -$192.99 million
• YoY Revenue Growth: -2.40%

RenaissanceRe Announcement Details

• Quarter: Q2 2025
• Date: 7/23/2025
• Time: After Market Closes
• Conference Call Date: Thursday, July 24, 2025
• Conference Call Time: 10:00AM ET

RenaissanceRe (NYSE:RNR), together with its subsidiaries, provides reinsurance and insurance products in the United States and internationally. The company operates through Property, and Casualty and Specialty segments. The Property segment writes property catastrophe excess of loss reinsurance and excess of loss reinsurance to insure insurance and reinsurance companies against natural and man-made catastrophes, including hurricanes, earthquakes, typhoons, and tsunamis, as well as winter storms, freezes, floods, fires, windstorms, tornadoes, explosions, and acts of terrorism; and other property class of products, such as proportional reinsurance, property per risk, property reinsurance, binding facilities, and regional U.S. multi-line reinsurance. The Casualty and Specialty segment writes various classes of products, such as directors and officers, medical malpractice, and professional indemnity; automobile and employer's liability, casualty clash, umbrella or excess casualty, workers' compensation, and general liability; financial and mortgage guaranty, political risk, surety, and trade credit; and accident and health, agriculture, aviation, cyber, energy, marine, satellite, and terrorism. It distributes products and services primarily through intermediaries. The company invests in and manages funds. RenaissanceRe Holdings Ltd. was founded in 1993 and is headquartered in Pembroke, Bermuda.

RenaissanceRe Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: RenaissanceRe grew tangible book value per share by 10% year-to-date and achieved a 24% operating return on equity in Q2, demonstrating strong long-term value creation.
• Positive Sentiment: At the June 1 renewal, 80% of U.S. property catastrophe premiums were written at private terms above market rates, and overall U.S. cat exposure grew 13% while still securing low-single-digit rate changes.
• Positive Sentiment: The investment portfolio, leveraging $19 billion of reserves against $10 billion of equity, delivered a 5% yield and generated $286 million in retained net investment income in Q2.
• Positive Sentiment: Capital Partners fee income rebounded to $95 million in Q2—fully recapturing deferred management fees—and has totaled nearly $700 million since early 2023, adding stable earnings without shareholder capital.
• Negative Sentiment: Management continues to reduce U.S. general liability exposure by about 30%, maintaining high reserve ratios and a cautious underwriting stance amid elevated trend and injury cost inflation.

Presentation

[Operator]

Good morning. My name is Angela, and I will be your conference operator today. At this time, I would like to welcome everyone to the RenaissanceRe Second Quarter twenty twenty five Earnings Conference Call and Webcast. After the prepared remarks, we will open the call for your questions. Instructions will be given at that time.

[Operator]

Thank you. I will now turn the call over to Keith McHugh, Senior Vice President of Finance and Investor Relations. Please go ahead.

[Keith McCue, SVP - Finance & IR at RenaissanceRe]

Thank you, Angela. Good morning, and welcome to RenaissanceRe's second quarter earnings conference call. Joining me today to discuss our results are Kevin O'Donnell, President and Chief Executive Officer Bob Cutub, Executive Vice President and Chief Financial Officer and David Marr, Executive Vice President and Group Chief Underwriting Officer. First, some housekeeping matters. Our discussion today will include forward looking statements, including new and updated expectations for our business and results of operations.

[Keith McCue, SVP - Finance & IR at RenaissanceRe]

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. Reconciliations to GAAP metrics and other information concerning non GAAP measures may be found in our earnings release and financial supplement, which are available on our website at renre.com. And now, I'd like to turn the call over to Kevin. Kevin?

[Kevin O’Donnell, President & CEO at RenaissanceRe]

Thanks, Keith. Good morning, everyone, and thank you for joining today's call. As you'd expect, I review numerous reports detailing our risk, return, liquidity, capital utilization and innumerable other metrics. I've been doing this at RenRe for almost thirty years. In all these years, have never been more pleased as I am today when I look at these reports and evaluate the state of our business.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

At the most fundamental level, our objective is to grow tangible book value per share over the long term. This quarter is an excellent example of our ability to do just that. Even with the impact of the California wildfires last quarter and substantial share repurchases, we have grown tangible book value per share by 10% year to date and over 20% over the past twelve months. We also delivered a 24% operating return on equity this quarter. These financial results demonstrate the strength of our income diversification and ability to absorb volatility.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

They also demonstrate that we are well compensated for the risk we choose to take. This manifests through a combination of underwriting income, investment income and fee income. Each of these drivers of our profit are performing well and are positioned for long term success. Starting with underwriting. Over the last several years, we have grown and diversified our underwriting portfolio substantially.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

This has benefited our business in numerous ways. As one of the largest P and C reinsurers in the world, we have built a company designed to solve any risk problem in any class of business for any client. We augment this powerful platform with people and technology that are industry leading and client focused. This incentivizes customers to come to us first because we can design better solutions for their biggest problems and back it with significant capacity. This ability to do these things enables us to secure better than market terms.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

A good example of this is the recent Florida renewal. 80% of the premium we wrote was at private terms above market rates. While we have been doing this for years in property catastrophe, our increased scale allows us to do so more broadly across classes. Obviously, this makes a substantial difference in the quality of our underwriting portfolios and it bolsters our ability to continue to produce strong returns. The second driver of profit we focus on is investments.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

Given the nature of cat business as well as continuing macroeconomic uncertainty, investment approach remains relatively cautious. That said, over the last year, we have structured our investment portfolio to be strongly accretive in the current environment. As you can see from our investment results year to date, this approach has been successful. Ultimately, our investment portfolio is designed to support our underwriting book. At the same time, the growth and diversification in our underwriting book provides benefits to our investments.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

Because we are writing a larger portfolio of long tail casualty and specialty lines, our overall net reserve position has grown to $19,000,000,000 This results in significant investment leverage against a common equity position of $10,000,000,000 At today's yields, this leverage is highly valuable and generates consistent and significant net investment income, we expect to persist. Equally, if not more important, the growth in reserves has lengthened the duration of our liabilities. This gives us greater flexibility in the allocation and duration of assets. All of these factors benefit our shareholders in a higher for longer interest rate environment. Of course, this investment approach in and of itself does not differentiate us from other diversified reinsurers, but it is different for us and it should benefit you in a much bigger way than at any previous time in our history.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

This is one of the key reasons we're more profitable and less volatile than we were five years ago. Our third driver of profit is the fee income we earned in our capital partners business. Our integrated model allows us to deploy more than $10,000,000,000 of partner capital to benefit our customers in addition to our own capital. At the same time, our third party investors value the low beta returns generated from well underwritten and expertly sourced risk. For our shareholders, the fees we generate through this business are also highly accretive.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

Just one quarter after the California wildfires, fees have reset to normal levels and we have already recaptured management fees deferred from last quarter. The volatility in fee income generally averages out over several quarters making it a stable and very profitable business for us that we have grown steadily over time. In fact, since the beginning of 2023, these have totaled almost $700,000,000 This is more than double the amount we generated over the same period prior to 2023. I should note that we manage third party capital differently than others typically in rated balance sheets in which we co invest. By structuring our platform this way, we can optimize utility to customers and profitability to investors.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

While we recognize this structure creates certain modeling challenges for the investment community, we are continually working to enhance shareholder disclosures to provide a deeper understanding of the earnings power and competitive mode of our Capital Partners fee income business. Shifting now to a discussion of the midyear renewals and overall business environment. Looking forward, we are positioned to continue to deliver shareholder value. The underwriting market remains attractive with healthy returns across property catastrophe and specialty lines. David will discuss the midyear renewal in detail with you later on the call, but we successfully met all of our objectives growing property catastrophe in The U.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

S. While continuing to optimize our casualty and specialty portfolio. For property cat specifically, we constructed our largest net retained portfolio to date. It is also one of our most profitable on an expected basis both in terms of percentage return, but also in absolute dollars. With regard to casualty and specialty, we have a strong portfolio.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

Most lines in this segment are performing well. Overall, our casualty and specialty book continues to provide strong returns primarily from investment income on the considerable float it generates. As we have previously discussed, we are keeping a close eye on casualty lines including general liability where we are holding reserve ratios high as we monitor elevated trend. So far, we are encouraged by the rate and claims management improvements we are seeing, which we believe are keeping rates above this elevated trend. At this point in the year, our portfolio is largely set as very little business renews in the second half.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

Consequently, we are already planning for next year and approach 2026 from a position of continuing rate adequacy, which provides us confidence that our strong returns will persist. This concludes my opening comments. Bob will now discuss our financial performance for the quarter followed by David who will provide an update on our segment performance. Thanks. Bob?

[Robert Qutub, EVP & CFO at RenaissanceRe]

Thanks, Kevin, and good morning, everyone. We delivered outstanding results this quarter with annualized return on equity of 34% and operating return on equity of 24%. Operating income per share was $12.29 our second best result ever exceeded only by this quarter last year. Performance was strong across each of our three drivers of profit with underwriting income of $6.00 $2,000,000 up 26% from last year, fees of $95,000,000 which fully recovered from losses last quarter and retained net investment income of $286,000,000 which remains a consistent and significant contributor to our bottom line. We are proud of our leading returns and have strong conviction in our ability to continue delivering at this level going forward.

[Robert Qutub, EVP & CFO at RenaissanceRe]

There are four numbers that help illustrate this. First, 15 points, which is the aggregate contribution from net investment income and fees to our overall return on average common equity. We expect both of these drivers to remain stable over time and therefore we began each quarter with a consistently strong earnings base. Second, dollars 600,000,000, which was our underwriting profit this quarter. Underwriting leadership is the strategic core of our business and it typically brings significant upside to the 15 points of the stable base I just described Third, dollars 1,500,000,000.0.

[Robert Qutub, EVP & CFO at RenaissanceRe]

The value of shares we have repurchased since we began buying back in April. This equates to 6,000,000 shares or about 70% of what we issued in connection with the Validus acquisition. This demonstrates the robust efficiency of our platform, strength of our earnings and most importantly, our conviction in the value of our stock and earnings sustainability going forward. And finally, 20%. This is the amount we have grown our primary metric, tangible book value per share plus change in accumulated dividends over the last year.

[Robert Qutub, EVP & CFO at RenaissanceRe]

This is particularly notable given both the significant volume of shares we have repurchased along with the impact we have absorbed from multiple large loss events including Hurricanes Helene and Milton and the California wildfires. Year to date, we have grown this metric by 10.4%. Now I'd like to turn to a more detailed discussion of our results, starting with our first driver of profit underwriting, where we had an excellent quarter. We delivered an overall adjusted combined ratio of 73%. This reflected a low level of catastrophe losses and favorable development within both segments.

[Robert Qutub, EVP & CFO at RenaissanceRe]

Across our underwriting portfolio, overall gross premiums written were $3,400,000,000 flat to the comparable quarter and net premiums written were $2,700,000,000 also flat to last year. However, there was a greater movement at a class of business level as we continue to shape the portfolio. Specifically, in property catastrophe, we grew gross premiums written by 98,000,000 or 8%. This reflects our highly successful June 1 renewal where we grew premium in The U. S.

[Robert Qutub, EVP & CFO at RenaissanceRe]

By 13% across nationwide and Florida specific carriers. In credit, professional liability and specialty, gross premiums were also up at a class level compared to last year, although this primarily related to premium adjustments in Q2 of last year. In other property, gross premiums written were down by $119,000,000 or 24%. This reflects premium adjustments due to the rate decreases of around 10% to 15% in the E and S business, as well as an adjustment to a large contract. Similarly, General Casualty was down $118,000,000 or 19%.

[Robert Qutub, EVP & CFO at RenaissanceRe]

About half of this relates to actions we are taking to reduce general liability exposure. We're also seeing double digit rate increases in this class, which is partially offsetting the impact of this exposure reduction. As I mentioned previously, we reported more than $600,000,000 of underwriting income. Most of this came from the Property segment where we reported an adjusted combined ratio of 26%, current accident year loss ratio of 30% and favorable development of 31 percentage points. Other property in particular had its strongest quarter yet with an adjusted combined ratio of 43%.

[Robert Qutub, EVP & CFO at RenaissanceRe]

This was driven by solid current year results and a significant favorable development. Casualty and Specialty underwriting performance was within our expectations with an adjusted combined ratio of 99.5%. This included 1.6 points from large specialty events in the quarter, primarily from the Air India tragedy. For the third quarter of twenty twenty five, we expect the following metrics in our underwriting book. Within other property, net premiums earned of about $360,000,000 and an attritional loss ratio in the mid-50s.

[Robert Qutub, EVP & CFO at RenaissanceRe]

And within casualty and specialty, net premiums earned of about $1,500,000,000 and an adjusted combined ratio in the high 90s. Moving now to fee income in our Capital Partners business where fees were $95,000,000 for the quarter, up 13% and remain a powerful driver of shareholder value. This consisted of management fees of $57,000,000 and performance fees of $39,000,000 Given our strong underwriting results and significant favorable development this quarter, we recaptured the majority of management fees that were deferred as a result of the California wildfires in the first quarter. This also resulted in earning performance fees earlier in the quarter than expected. In the third quarter, we expect fees should be about $80,000,000 which includes $50,000,000 in management fees and $30,000,000 in performance fees absent any large loss event.

[Robert Qutub, EVP & CFO at RenaissanceRe]

This is a unique business that leverages our existing infrastructure to generate persistent and substantial fees for our shareholders. Its operation requires no shareholder capital, few direct employees, increases our value proposition to customers and adds roughly three points to our ROE annually. We believe that this is an underappreciated aspect of our business given its high value generation and high marginal return. Moving now to our third driver investments, where retained net investment income was $286,000,000 up slightly from the first quarter driven by growth in invested assets. As we discussed on our last call, early in the quarter we acted on market volatility, increasing our allocation to equities as well as high yield and investment grade credit.

[Robert Qutub, EVP & CFO at RenaissanceRe]

We reported $343,000,000 of retained mark to market gains in the quarter, primarily driven by a rally in shorter term treasuries in addition to tightening credit spreads and rising equities, a substantial portion of which we access through investment related derivative strategies. Our retained yield to maturity stayed relatively flat at 5% and retained duration was also flat at three years. Looking forward, we expect retained net investment income to remain equally strong in the third quarter. Our investment portfolio is intended to complement our underwriting portfolio. As we have grown and diversified our business, we have greater flexibility and duration and asset mix, while also increasing investment leverage.

[Robert Qutub, EVP & CFO at RenaissanceRe]

These factors have allowed us to shape the investment portfolio and evolve the asset mix to increasingly include classes such as private credit, private and public equity and higher yielding assets. Over time, this should enable us to increase investment income. Our investment portfolio remains well positioned. So as the interest rate environment evolves over the cycle, we have the tools and flexibility to maintain our investment portfolio's strong contribution to our bottom line. Moving now to expenses.

[Robert Qutub, EVP & CFO at RenaissanceRe]

Our interest expense was somewhat elevated due to an overlap between some maturing debt in the quarter and the new issuances from Q1. Our operating expense ratio was 5.2%, up about a point from the second quarter of last year. This is in line with our expectations and reflects our continued investment in the business after a period of significant growth. Looking ahead, we expect our operating expense ratio to stay around 5% for the remainder of the year. Now I'd like to share an update on capital management.

[Robert Qutub, EVP & CFO at RenaissanceRe]

We continue to return capital to shareholders this quarter, repurchasing 1,600,000.0 shares for $376,000,000 at an average price of $242 per share. And so far this quarter, we have repurchased 294,000 shares for $70,000,000 at an average price of $239 per share. Year to date that brings total repurchases to 3,300,000.0 shares for $8.00 $8,000,000 We remain in a substantial excess capital and robust liquidity position and have demonstrated our ability to generate consistent strong returns for our shareholders. As we move through the hurricane season, we will continue to look for opportunities to deploy capital into the business while repurchasing shares at attractive valuations. And finishing now with tax and as a reminder, the new 15% Bermuda corporate income tax went into effect this year and our results this quarter include a tax expense of $177,000,000 The effective tax rate on our GAAP net income was 13% this quarter, although the effective tax rate on income attributable to RenaissanceRe shareholders is a few points higher.

[Robert Qutub, EVP & CFO at RenaissanceRe]

The difference relates to non controlling interest, which is subject to a minimal amount of income tax. Given the new tax environment, our results this quarter are not directly comparable to last year. On a like for like basis, our ability to generate an after tax 24% operating return on equity indicates that our earnings power is persistently strong. And finally, we delivered excellent results this quarter across each of our three drivers of profit. Deploying capital to grow our property cat class of business while continuing to return significant capital through accretive share repurchases.

[Robert Qutub, EVP & CFO at RenaissanceRe]

We have the conviction in our ability to continue to deliver superior returns throughout the year. And with that, I'll now turn it over to David.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

Thanks, Bob, and good morning, everyone. Our second quarter underwriting performance was excellent. We reported an adjusted combined ratio of 73% and significantly grew our U. Property catastrophe portfolio at the midyear renewal, outperforming the market with risk adjusted rates in our book down low single digits. Our strong results this quarter are directly connected to our unique competitive advantages, including our integrated operating model, deep risk expertise and customer centric approach.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

Our REMS underwriting system enables us to quickly deliver lead quotes and capacity in an integrated way across geographies and classes of business. This allows us to transact seamlessly with our clients across multiple lines. In fact, the majority of our premium comes from clients who buy products across property, casualty and specialty. Our approach is unique and differentiated, and clients reward us with strong signings and preferential terms. This benefits RenaissanceRe shareholders through an attractive combination of underwriting fee and investment income, as Kevin and Bob have just discussed.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

With respect to underwriting income, our margins across the portfolio remain very attractive. Since the reinsurance step change in rates and terms and conditions in 2023, we have generated $3,000,000,000 in underwriting profit and industry leading combined ratios. During this time period, we have reported consistent favorable development averaging seven points. This has contributed to our underwriting profitability and is due to the strength of our previous underwriting decisions and our robust reserving process, both of which are key strengths of our business. We managed risk from the time of binding a treaty to the time claims settle, ultimately supporting strong financial results across our underwriting portfolio.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

We believe that risk is appropriately distributed across the insurance value chain with reinsurers largely providing balance sheet protection and being paid adequately for doing so. This is why we find the current underwriting market attractive, and it is also why we expect its current terms and conditions to persist. Rate is likely to fluctuate around current levels depending on primarily on shifting supply and demand, which should remain attractive. In short, the dynamics that have driven our strong results this quarter and since 2023 are still in effect and will support us in generating sustainable superior returns in the future. Now moving to a discussion of our underwriting actions in quarter.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

This renewal highlighted RenaissanceRe's underwriting culture at its best as we shaped our portfolio at scale in property casualty and specialty markets. Across the midyear renewals, we chose to grow property catastrophe exposure in an attractive environment, deploying leading capacity at rates and terms that outperformed the broader market maintain our exposure in other property shape our specialty portfolio and continue to reduce exposure in select casualty lines where we believe caution is warranted. Our highest marginal return business is currently U. S. Property catastrophe where we grew premiums by 13% in the quarter, deploying capital at attractive expected returns.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

Loss experience and rate changes varied widely across clients and layers. Loss impacted layers were flat to up 15%, although in California, rate increases were much higher. Conversely, loss free layers were down 5% to 15%. Our ability to understand each program, quote early and select the most profitable layers gave us a competitive advantage. As a result, we constructed a portfolio with rate down low single digits, which is a strong outcome given that we estimate the market was down around 10%.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

Our key areas of growth were flat to up rates were flat to up were Florida, California and loss impacted nationwide carriers. In Florida, we believe the pricing environment, terms and conditions and tort reform have helped stabilize the market. In addition, growth in demand created an opportunity for us to deploy significant capital at private terms as buyers look to secure increased capacity. As Kevin mentioned, we wrote 80% of our Florida premium at private terms above the market. We have been underweight in Florida, but our position as a market leader enabled us to grow with rates roughly flat.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

We also grew in California, where most business had been impacted by the catastrophic LA wildfires last quarter. RenaissanceRe Risk Sciences provided us with a competitive advantage by rapidly updating our California wildfire models to reflect an updated view of risk. At April, we provided lead market quotes and grew into an increasing rate environment, achieving premium rate increases of more than 50% on some loss impacted programs. And finally, we also grew selectively with loss impacted nationwide carriers using our risk selection capabilities to target growth and our customer relationships to secure bigger lines at rates up in the high single digits. Year to date, we have deployed $1,700,000,000 of new limit into property cat with $1,000,000,000 of this in the second quarter.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

Our property catastrophe book is the largest we have ever written and among the most profitable on an expected absolute dollar basis. Before moving on to other classes of business, there are three points I would like to highlight about how we have shaped our risk going into this wind season. First, due to our growth in property catastrophe at the midyear renewals, risk is up on an absolute basis for U. S. Perils, although more heavily weighted toward the tail.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

Second, on a percentage of equity basis, risk is also up, but generally in line or below the levels prior to the Validus acquisition. And finally, we purchased additional ceded protection, including products which provide increased resilience against multiple large events such as second event covers and the issuance of a cat bond providing aggregate protection. I will now briefly touch on themes we have observed across other classes of business, which broadly aligned to what we have seen earlier in the year. Starting with other property. We have been optimizing the mix of this book and are now seeing profit materialize following consecutive years of rate increases beginning in late twenty seventeen through mid-twenty twenty four.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

We are pleased with the strong returns we have generated both on a current and prior year basis. Going forward, we are seeing increased competition and lower rates for E and S property business. We are monitoring this closely and will adjust our portfolio with respect to business that does not meet our hurdles. In casualty, rates in U. S. General liability continue to increase at approximately 15%. This is ahead of our plan, but we remain cautious and will continue to take a conservative approach. Casualty business is mostly quota share and due to the long tail, we manage it over a ten year cycle. During the last year, we have worked closely with our clients with a partnership lens, enhancing our underwriting and claims information flow and structuring our lines to create the optimal portfolio for the next cycle. This data driven underwriting approach will result in additional improvements in the business over and above the rate and claims improvements made by our clients. Over the last year, we have scaled back where exposure was greatest and reduced our general liability exposure in The U.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

S. By approximately 30, although significant rate increases have helped moderate the top line impact. Moving to Specialty. Our diversified book remains highly attractive and profitable. Some lines, like Aviation, have seen increased loss activity and are responding with additional rate.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

Others, like energy and cyber, have remained profitable despite recent loss events. We have expert teams in each class and constantly evaluate our positions to optimize the portfolio based on risk and reward in the business. Finally, in credit, performance continues to be strong, and we remain prudently positioned to navigate uncertainty in the current geopolitical environment with a diversified risk profile and conservatively managed portfolios across the spectrum of mortgage, credit, political risk, surety and structured credit. In closing, just as each program's pricing reflects its unique risk profile, each reinsurer's experience at the midyear renewal reflected the expertise and leadership they brought to the market. For companies like RenaissanceRe with preferential access and deep client trust, we were able to build a portfolio with highly accretive economics that positions us for continued strong performance. And with that, I'll turn it back to Kevin.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

Thanks, David. Our business is exceptionally healthy. All three drivers of profit outperformed expectations and the current environment remains favorable. We had a strong renewal and constructed our largest and one of our most profitable net retained property cat portfolios. Our capital partners business has recovered to its full fee generating potential and continues to contribute substantial low volatility earnings to our bottom line.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

Finally, the interest rate environment remains attractive and we took advantage of market weakness to increase our allocation to equities and high yield, which should help increase returns. And with that, I'll open it up for questions.

[Operator]

We'll take our first question from Elyse Greenspan with Wells Fargo. Your line is open. Please go ahead.

[Elyse Greenspan, Managing Director at Wells Fargo]

Hi, thanks. Good morning. My first question is on the reserve releases in the quarter. I think it was around $132,000,000 I'm focusing on the property cat piece. And I know you guys called out from 2021, 2022 and 2023.

[Elyse Greenspan, Managing Director at Wells Fargo]

I'm just curious was one of those years like the bigger driver of the releases? And I guess the second part of that question is, I'm just curious if the releases just stem from Milton or Florida events that would just be reflective of just the reforms working in the state?

[Robert Qutub, EVP & CFO at RenaissanceRe]

Hey Elyse, thanks. This is Bob. It comes from across all the accident periods going all the way back to 2017. And we share some of those losses with our joint venture about half of that sticks to us.

[Elyse Greenspan, Managing Director at Wells Fargo]

Okay. Thanks. And then, I guess just it seems like the renewals at the mid year on the property cat side played out well relative to your expectations. I guess, Kevin, as you think forward, I guess, obviously, a lot depends what happens with this hurricane season. But how are you thinking about things going into 2026, both January 1 and then even the Florida renewals heading into the mid years next year?

[Kevin O’Donnell, President & CEO at RenaissanceRe]

Yes, great. Thanks. Yes, you're right. This year has gone exceptionally well. And I think it's important to kind of remind ourselves as to where we are as we're thinking about planning for 2026.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

We've grown our portfolios where we've chosen to grow them. We've had good opportunities and we continue to execute our strategy well. So as I look at where we are heading into 2026, really at this point as I mentioned in my comments not much business comes up between now and year end. So one of the bigger variables will be what happens in wind season. But if you break wind season down, all wind season does is if it's an inactive year it gives buyers pricing power and if it's an active year it gives reinsurers pricing power.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

What we've talked about before since 2023 we think the market is reset and will trade around this new level. And that is really what we've seen and we have proven that we can execute to produce better than market returns in that environment. So regardless of what happens between now and year end really the way we're looking at it is we'll continue to execute our strategy. We believe we can continue to preserve our margin. We have no change in our ability to find opportunity to deploy capital.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

We have a strong capital and liquidity position. So we believe we can continue to manage capital through share repurchases. So as we're really beginning to shift our focus from writing our book for 2025 to planning for 2026, nothing has changed with our strategy. Between now and year end we'll have great conversations, have price discovery, we'll sharpen our tools and tactics. But I think at the end of the day 26% is going to look a lot like 25% for us.

[Elyse Greenspan, Managing Director at Wells Fargo]

Thank you.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

Sure.

[Operator]

We'll take our next question from Josh Shanker with Bank of America. Please go ahead.

[Josh Shanker, Managing Director at Bank of America]

Yes, thank you. Just wanted to talk about management fees a little bit. I think at the last quarter call, were pretty sure that management fees would be a little weaker and then they bounced back real fast. What's changed in the past few months? And also how does the AlphaCatOmegaCat book and that winding down play into the numbers here?

[Kevin O’Donnell, President & CEO at RenaissanceRe]

Yes. I'll just make a couple of comments and I'll turn it over to Bob. No, you're absolutely right. I think we had a strong second quarter. It tends to be a light cat quarter that is not necessarily what's budgeted.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

So we had greater earnings or greater catch up on our fees because of that and then obviously favorable development benefited our third party capital vehicles as well. So that pushed us to recover some of the deferred fees more quickly. AlphaCatOmegaCat we're not a big contributor, but I'll turn it over to Bob for more specifics.

[Robert Qutub, EVP & CFO at RenaissanceRe]

That's it. I mean as my prepared comments Josh, the management fee we expected the deferral to be a little bit longer. We got it all back which is why the $56,000,000 but we're guiding you back to $50,000,000 for the third quarter in my prepared comments for the management fee. And as Kevin pointed out, the favorable development in the property cat side accelerated the ability to earn the performance fees, but we're still guiding it to $30,000,000 for the next quarter. So 80,000,000 all in for Q3 and that's kind of what I refer to as the more stable area kind of sort of neutral.

[Josh Shanker, Managing Director at Bank of America]

So when I'm looking at the da Vinci income statement, it looks like premium growth was pretty healthy at da Vinci. I guess where I'm going, have you been able to convince Alphacat investors to redeploy into your proprietary vehicles? Or why is there a difference between what we see at the firm wide level in property and what we see at da Vinci?

[Kevin O’Donnell, President & CEO at RenaissanceRe]

Yes. So, AlphaCad is not something is a vehicle that we purchased with Validus and we're managing down. We have broad and strong investor interest in da Vinci of investors is not part of the story. It's really the ability for us to execute into the market and continue to grow both RenRe and da Vinci.

[Josh Shanker, Managing Director at Bank of America]

And just bear with me. The fact that da Vinci was there more opportunities to deploy capital into da Vinci or is there more capital in da Vinci so the risk adjusted returns are the same? I'm looking at the strong growth there and it says to me that you leaned into da Vinci in the quarter or maybe just had more capital?

[Robert Qutub, EVP & CFO at RenaissanceRe]

This is Bob, Josh. The way I look at it is that all of our property cat is going through our own account and Da Vinci. We're not cultivating in the AfliCap space. That's kind of a multi risk strategy that doesn't fit our purpose built balance sheet.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

Yes. Just to remind everyone, da Vinci is not exactly this, but it behaves a bit like a quota share of RenRe Limited. There's no risk in da Vinci that's not in RenRe Limited. One of the benefits was some of the favorable development there was a little bit less ceded in da Vinci than in RenRe Limited. But if I would think of no shift in earnings and no shift in strategy between RenRe and da Vinci going forward.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

But in any given quarter there'll be a little bit of noise.

[Josh Shanker, Managing Director at Bank of America]

Okay. Thank you.

[Operator]

We'll take our next question from Jimmy Bhullar with JPMorgan. Please go ahead.

[Jimmy Bhullar, Equity Research Analyst at JP Morgan]

Hey, good morning. I had a couple of questions. First, just on pricing. Obviously, prices have been coming down the last couple of years, but returns are still very attractive and for you guys and for your peers as well. So what gives you the confidence that rates won't continue to decline and we're not facing a soft reinsurance market?

[Kevin O’Donnell, President & CEO at RenaissanceRe]

Yes. Kind of back to comments we've made on previous calls and a little bit earlier is, you're absolutely right. There are price changes, but I think the real focus should be rate adequacy. Rates went up 50% in 2023 and then over the last two quarters we're talking about rate changes in the 10 ish percentage change obviously less for us because of our portfolio construction and access to business. So we believe that the market will continue to trade both on terms and conditions and rates at the levels that were reset in 2023.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

As with any financial market there'll be times where buyers have a bit more to push on price and there's times where sellers have a bit more to push on price. But we don't see a downward trend to rate inadequacy in the near term. We continue to believe that rates will trade at highly adequate levels whether they're up or down a little bit is something the market will decide as we move forward.

[Jimmy Bhullar, Equity Research Analyst at JP Morgan]

And then on buybacks, it seems like you've been more active the last few quarters than you had in the past. I think the last three quarters combined you've taken out almost 10% of your shares. So assuming a similar level of profitability, should we assume that buybacks continue at this pace or is the current level inflated either to minimize the Validus dilution or like some other factors?

[Robert Qutub, EVP & CFO at RenaissanceRe]

I think thanks for the question. You're taking us back to fourth quarter. We consolidated some of the balance sheets and we freed up an enormous amount of trapped capital. That would be account for a lot of the accelerated share repurchases that we did in Q4, Q1. We saw great opportunities this quarter here, this past quarter in Q2 that carry over into three.

[Robert Qutub, EVP & CFO at RenaissanceRe]

So we've got an $800,000,000 I mean mindful of the fact we're going into the wind season, which may prevent which may provide opportunities in of itself. We are looking to deploy capital and return capital at attractive prices if it presents itself.

[Jimmy Bhullar, Equity Research Analyst at JP Morgan]

Thanks.

[Operator]

We'll take our next question from Alex Scott with Barclays. Please go ahead.

[Alex Scott, Equity Research Analyst at Barclays]

Hey, good morning. One I is on following up on some of the prepared remarks around added outward reinsurance that you purchased and I think there was a cap on aggregate that was mentioned as well. And just wanted to see if you'd provide a little more detail around that and help us just think through some of those things in accounting for what may or may not come from hurricane season?

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

Hi, Alex. This is David. I'll provide some additional comments. So as we construct our inwards portfolio, we have a lot of options with how we shape that portfolio with ceded reinsurance. We buy reinsurance.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

We purchase cat bonds. We also have the joint venture vehicles that share some other risk with us. One thing that we did specifically from wind season last year and wind season this year was we continue to buy. We bought additional ceded. The ceded is getting more efficient.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

And specifically, there were some ceded that was besides from our normal per occurrence ceded, we bought purchased a cap bond, which was an aggregate in nature. We also have a cap bond, which is occurrence in nature. We have also some ceded reinsurance, which is specifically second event, to protect against accumulation of large events. It's all to in order to keep our net portfolio optimized and the highest ROE we can and protecting against scenarios where earnings could be impacted.

[Alex Scott, Equity Research Analyst at Barclays]

Got it. Okay. That's helpful. And I just wanted to ask about the casualty business. You guys pulled back a little more than I would have guessed in some of the general liability.

[Alex Scott, Equity Research Analyst at Barclays]

And is that something that changes your view at all in terms of reserve adequacy? Is that something you've already done a deeper review on and this is sort of the action on the other side of it? Or is there new information that you're still sort of implementing and the balance sheet?

[Kevin O’Donnell, President & CEO at RenaissanceRe]

Yes, I'll start and then I'll turn it over to Dave. Nothing's changed about reserves or anything about this. This is more about how we want to structure the portfolio. As David mentioned, '25 from a casualty perspective by every measure is a better year than 2024. But we want to see more persistence in that improvement before we begin to reflect that in our results just to make sure that we are fully benefiting from the better claims management and the elevated rate compared to the trend.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

So when I think about it, is much more about the written portfolio and how it fits into the and marginally benefits the overall portfolio that we're writing than a reflection on the health of the legacy portfolio that was written. I don't if you'd add something.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

Yes. I can address some of the portfolio movements that we've made. With the Casualty and Specialty segment, we're always looking to how to optimize the portfolio. If you go back several years, we were overweight credit, and we grew general liability and professional liability into 2021 when rates were increasing. And now we have a more emphasis in the specialty book following the Validus acquisition.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

The reductions in GL was really just part of that normal process. And we've been talking about that for about the last year, and that's enough for all of the renewals to be touched once. There's not one common renewal date. So that's what you're seeing there.

[Operator]

We'll take our next question from Wes Carmichael with Autonomous Research. Please go ahead.

[Wes Carmichael, Senior Analyst at Autonomous Research]

Hey, thank you. Good morning. Kevin, in your prepared remarks, I think you talked about Florida renewals and getting rates in terms above the market. I know you don't typically disclose P and Ls, but is there any color qualitatively you can share with us on how your Florida cat exposure has changed since renewals?

[Kevin O’Donnell, President & CEO at RenaissanceRe]

Yes. I think it's a combination of both something that I said and Dave said is we did grow into the Florida renewal this year. We did it significantly above market terms. So we feel really good about the economics. If you break it down, I think it puts us from a market share perspective for a Southeast Wind about where we were on a percentage of equity before to the levels we were prior to the acquisition of Validus.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

So last year a lot of our growth into Florida came not from expanding lines that we were on, but making sure we executed the Validus lines. This year we were able to bring an underweight market share for Southeast wind back up to our market share on a relative basis at the same percent of equity that we had prior to Validus.

[Wes Carmichael, Senior Analyst at Autonomous Research]

Got you. Thanks. That's helpful. And maybe as a follow-up, it's probably a little bit of a tough one to quantify, but a question we get often from investors. And you mentioned the prop cat book is the largest it's been, but is there any level of industry loss this year in wind season do you think might recatalyze pricing in the prop cat market for January?

[Kevin O’Donnell, President & CEO at RenaissanceRe]

I think it well, let's trace to where we are. So this year is already setting up from an aggregate basis to be a very substantial cat year. I think a lot of it happens lot of the impact from an event really is specific to where the event hit. It will have a very different effect on nationwide accounts if it hits in Florida than if it hits in the Northeast. So I think larger events are going to have bigger impacts.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

In general, the reinsurance market is attaching higher. So I would say it also has to be probably a larger event than what we would have had prior to 2023, but it's pretty hard to put a fine point on it. If you look back at Helene or Milton, had relatively the impact wasn't as profound as it would have been prior to 2023, so something above that level perhaps.

[Wes Carmichael, Senior Analyst at Autonomous Research]

Thank you. Very helpful.

[Operator]

We'll take our next question from Mike Zaremski with BMO.

[Michael Zaremski, MD & Senior Equity Research Analyst at BMO Capital Markets]

Hey, morning.

[Michael Zaremski, MD & Senior Equity Research Analyst at BMO Capital Markets]

Question on the I think you did a good job of kind of giving us data points on why your midyear portfolio is constructed better than the market average. Do you feel and you said it was due to scale and you kind of talked about 80% of the premium you wrote at private market terms above market rates. So I'm just kind of curious, do you think is that durable? I don't know if there's any like is this is there any historical presence for this wide of a delta? I'd have to go back and just kind of check all your midyear renewals versus the market.

[Michael Zaremski, MD & Senior Equity Research Analyst at BMO Capital Markets]

I haven't done that off the fly. But kind of curious if this new scale you think has some duration in terms of your pricing versus the marketplace?

[Kevin O’Donnell, President & CEO at RenaissanceRe]

Yes. I would say I'm enormously proud of the team's execution. 80% is a great number to achieve with private terms. We always have a high percentage of private terms within our portfolio. I think there's two things that we tried to highlight.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

One is this was exceptionally good and great execution. And secondly, because we're so broadly integrated with the largest buyers. Our conversations begin earlier and more broadly and with the size of our capacity and the expertise we bring allows us to have an increasing percentage of private terms in different areas of our business. So I would say it's not something that's new. I would say 80% is on the high end of our execution.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

I'm very proud of that, but hard to quantify more specifically. Dave?

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

Yes. I would say it was a great renewal for us and a couple of reasons in my mind on that is really just our risk selection capabilities and our access to business. And those two things, I believe, are sustainable. The market was not uniform. It was an underwriters' market.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

You had to pick and choose risks. Our underwriters know that business better than anyone, and we think we have the best access there. So that was a differentiator, not just in Florida, which allowed us to get to the 80% of the book on private terms and deliver flat rates, but also in understanding and being able to execute on the other key areas there. We talked about California. The key there was understanding the wildfire peril and being able to figure out how to execute into a post loss market quicker than anyone else.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

And then the loss impacted nationwide, was really about risk selection and then our ability to get those lines. So that the team really did that. That's what they do best. They showed leadership and delivered a great portfolio.

[Michael Zaremski, MD & Senior Equity Research Analyst at BMO Capital Markets]

Got it. And my follow-up is on Florida tort reform. I think, Kevin, you brought it up in your prepared remarks that it's beneficial. Just curious, you don't have to if you have a proprietary quantification of how beneficial is, maybe that's not something you want to share. But curious, are the reforms meaningful in terms of the impact RenRe feels they'll have on the loss ratio ultimately? And if so, are those positive impacts already being competed away? Are they fully understood by the marketplace? Or is that something that still needs more time to play out?

[Kevin O’Donnell, President & CEO at RenaissanceRe]

Yes. So it's a more meaningful impact for the domestic carriers or for any carrier in Florida because it affects all their claims. For us we're excess of loss on the cat side predominantly. We're still an owner of Tower Hill and we've seen the benefit there. Your question about is it some of it being competed away.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

We have seen some rate reductions in Florida which I think are appropriate. And we're still seeing strong profitability and strong health in the primary market there. So from our standpoint, it's something that we reflect in our underwriting, but it's a significantly lower effect than the benefit that the insurers are receiving within the market. But again, there is price competition being introduced to manage that and put some of the benefit back to policyholders. Dave?

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

Yes. I would just add to that, that the dynamic where there's the public markets are depopulating and private markets are more confident taking on risk, that definitely has something to do with the tort reform and the ability for the insurers to navigate that. And that benefits us as well because when the private markets grow their exposure, they have more reinsurance to buy and the growing demand was a factor that helped us in the opportunities in Q2.

[Michael Zaremski, MD & Senior Equity Research Analyst at BMO Capital Markets]

Thank you.

[Operator]

We'll take our next question from Meyer Shields with KBW.

[Meyer Shields, Managing Director at Keefe, Bruyette & Woods (KBW)]

Great. Thanks so much. And you're going to Florida. I'm trying to understand you talked about growth at flat rates, I was wondering if there's a way of breaking that down into increasing confidence in the reforms on the one hand or increasing demand from clients on the other hand in terms of which of those different components impacted your willingness to grow?

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

Hi, Meyer. This is David. I think so with the tort reform, one of the takeaways that helps the market and helps execute into the market is really just the stability it provides. So we have been a player in Florida for decades, right? But for many years, were underweight partly because of the negative effects of the legal system.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

Now it's in a much better spot and the profitability is in a much better spot. So this year, we had opportunities because business was loss impacted, and we also had growing demand, like I mentioned, with private markets taking on more. We also had the benefit of the Florida Hurricane Cat Fund moving up in its attachment. So the new demand was below that in those lower layers are layers that we target because of the high risk return. So that as a whole enabled us to act quickly.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

When buyers are looking to secure new capacity, they often will be more interested in securing a private deal with a company like us. So our ability to quote big capacity and bind that at our terms rather than wait for the market to come up with the clearing price really was an advantage in how we executed into those private deals in Q2.

[Meyer Shields, Managing Director at Keefe, Bruyette & Woods (KBW)]

That's really positive. Kevin, don't know if I'm over interpreting things, but you mentioned having will it underwrite any class of business. And I know in the past, you've talked about a lot of caution with regard to commercial auto. Should we interpret this as a change or am I trying too hard?

[Kevin O’Donnell, President & CEO at RenaissanceRe]

Had a bit of poetic license there. Our appetite with regard to commercial auto hasn't changed. We're also not a large writer workers' comp neither of those two things have changed.

[Meyer Shields, Managing Director at Keefe, Bruyette & Woods (KBW)]

Okay. I appreciate the clarification. And then this is I guess a question for Bob and I'm happy to take this offline if that's helpful. But you kind of mentioned increased transparency. Is it a ton of work for us to get an income statement on a retained basis rather than consolidated and then working?

[Robert Qutub, EVP & CFO at RenaissanceRe]

That's a good question Meyer. I mean the challenge we have is the GAAP accounting rules and the amount of breaking it out. We try and give you the breakout. We give you the breakout of the retained investment income which is about 70% of the overall managed and that's pretty consistent. We've given you some indications on the retained piece like on the favorable development.

[Robert Qutub, EVP & CFO at RenaissanceRe]

I talked about that in property cat. I think about half of it stays with us. We don't really have a good disclosure. We were looking we look at it internally and to get it externally would be an enormous amount of reconciliations that our legal department would probably put us through the grinder. Happy to talk to you offline about it.

[Robert Qutub, EVP & CFO at RenaissanceRe]

I know you talked to Keith a lot about it, and how we think about it. We've given you indications about half the property cat gets allocated over to da Vinci on the top line. We've got the 15% seat sessions on Fontana. We talk about that. But putting it all together is onerous exercise just given the nature of how we're structured.

[Meyer Shields, Managing Director at Keefe, Bruyette & Woods (KBW)]

I'm sorry, go ahead.

[Robert Qutub, EVP & CFO at RenaissanceRe]

So we're like I said, I was closing up and saying, we're always trying to seek to give you more insight into it and more information how you can cut down to the core and get to down to the managed number the retained numbers.

[Meyer Shields, Managing Director at Keefe, Bruyette & Woods (KBW)]

Yes. No, I completely got it. I appreciate the color.

[Robert Qutub, EVP & CFO at RenaissanceRe]

Yes.

[Operator]

We'll take our next question from Brian Meredith with UBS.

[Brian Meredith, Managing Director at UBS Group]

Thanks. Bob, first one for you. I know there's continued to be some discussion about Bermuda tax credits potentially coming through. Can you give us an update on kind of where that stands and what the potential benefit for you all may be?

[Robert Qutub, EVP & CFO at RenaissanceRe]

Thanks Brian. I touched upon it in my prepared comments that nothing's changed, okay. They haven't come out what they have is a Tax Reform Commission is working with the Ministry of Finance to give them some recommendations. They're still working on that. And the Premier is committed to give us an ability to give our perspective on it before it gets legislated.

[Robert Qutub, EVP & CFO at RenaissanceRe]

But what this does is the ETA as we call the economic tax adjustment gives us the ability to offset cash payments on our taxes as opposed to effective rate relief. It doesn't change the effective tax. I talked about that being 13% in my prepared comments, but the non controlling interest pay a very nominal amount of tax. So that reduces it, but the tax to RenRe shareholders is 15% just slightly above 15%.

[Brian Meredith, Managing Director at UBS Group]

And then I guess just follow-up and I was under the impression that maybe it could be an offset to G and A expenses.

[Robert Qutub, EVP & CFO at RenaissanceRe]

No.

[Brian Meredith, Managing Director at UBS Group]

No? Okay.

[Robert Qutub, EVP & CFO at RenaissanceRe]

Doesn't go to the a cash credit.

[Brian Meredith, Managing Director at UBS Group]

Got you. All right. Helpful. Thanks. And then second question, I'm just curious, big picture, we've definitely seen capital coming back into the reinsurance industry and property cat.

[Brian Meredith, Managing Director at UBS Group]

I know a lot of it's been cat bond. But maybe you can kind of talk a little bit about how disciplined that capital is that you're seeing? Is it any different than maybe prior soft cycles we've seen?

[Kevin O’Donnell, President & CEO at RenaissanceRe]

Yes. I would say it's been disciplined. Capital is always interested and always comes into it. Think formations of new companies continues to be limited. Cat bonds is an attractive area to people, probably a little less attractive than it was a year ago, but that market remains disciplined.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

And then our discussions with investors coming in are very return focused. They have a good understanding of the market. So I don't see some of the issues that we've seen before with influx of capital kind of wanting to be in the class regardless of return really being part of the dialogue at this point.

[Brian Meredith, Managing Director at UBS Group]

Great. Very helpful. Thank you.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

Sure.

[Operator]

And we'll take our next question from Andrew Anderson with Jefferies.

[Andrew Andersen, VP - Equity Research at Jefferies Financial Group]

Hey, thanks. Recognizing you gave an NPE guide for other property, but if we look at it on a gross basis and just thinking about the second half of the year, should we be thinking about this segment kind of following primary E and S rates?

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

Andrew, this is David. So I'll talk a little more about how we're thinking about the overall segment and what's in there. And I guess, first of all, starting with the overall property segment, we have a lot of ways we can deploy cat capacity. In the last few years, we've been had a preference to deploy that cat capacity in the property cat excess of lost product. But we also deploy cat capacity in the E and space, and that goes into the other property segment.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

We also have per risk and quota share business in that segment, which is less cat exposed and isn't under as much rate pressure as what we're seeing in cat E and S. And overall, the whole subsegment on other property is performing well, which kind of leads to where we get the pressure. Looking forward, we're monitoring that really closely. We have a lot of tools to manage that. First of all, when we look at the business on a specific location basis, rated on a location basis and have real time info on how it's trading.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

So we're able to make adjustments as needed. We're already shifting more of our business towards middle market versus large account. We also have options on how we shape the book with Seated. So we have a lot of ways to navigate what's coming. So it's too soon to tell exactly where the market will be, but we feel well placed to navigate it.

[Andrew Andersen, VP - Equity Research at Jefferies Financial Group]

And then just back on fee income. If I look at kind of the acquisition ratio and CAD, it was kind of up year over year, but it was quite a bit stronger in 1Q. I would have thought we would be seeing some benefit from total fee income in that acquisition line. Is there maybe a lag there or perhaps profit commissions?

[Robert Qutub, EVP & CFO at RenaissanceRe]

No, they should be they're coming through in a real time. As we a lot of our fees that we get off of the joint ventures will come through the non controlling interest. Actually a very small amount come through when you think about the performance fees and the management fees. So you'll see that that comes through non controlling interest, which is what we try and show in some of the supplemental information in our attachments.

[Operator]

And we'll take our last question from David Motemaden with Evercore.

[David Motemaden, MD & Senior Equity Research Analyst - Insurance & Business Services at Evercore ISI]

Hey, thanks. Good morning. Thanks for squeezing me in. Just on the private transactions you guys were able to do in cat, it sounded like 80% was on the high end. I'm wondering maybe if you could talk about how pricing was on that 80% of private deals versus the other 20%?

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

David, this is David. So we're comfortable with that the pricing was above market. It wasn't a one size fits all market, so we don't have specific details on that. But we were able to execute into Florida and find a business early. This is a large portion of our book to be on private terms.

[David Marra, EVP & Group Chief Underwriting Officer at RenaissanceRe]

And it really was the differentiator, we believe, in letting us grow into the market and land Florida at about flat versus down. There was rate pressure overall in the market on the loss non loss impacted layers and the top layers like we talked about. So for our overall Florida book to be flat was a great result.

[David Motemaden, MD & Senior Equity Research Analyst - Insurance & Business Services at Evercore ISI]

Got it. Okay. And then maybe just following up quickly, I think Alex had tried and I'll take another shot at it. But just on the general liability book or general casualty book where you mentioned you're cutting exposure by 30% or you have cut exposure by 30% over the last year. Have you guys taken any reserve actions or how much in terms of reserve actions have you guys taken on that part of the book, the back book now where you may have gotten off that risk?

[Kevin O’Donnell, President & CEO at RenaissanceRe]

Yes. When we think about reserving, obviously we start at the top of the house and then we break it into the segments. Within the Casualty and Specialty segment, we talked about this last year. We have added some reserves from redundancy within certain specialty and certain casualty classes to the GL portfolio. But there's nothing that is unusual with in any book of business there's certain classes that are above producing results above trend others that are below trend.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

But on balance the portfolio the casualty specialty book is in a very healthy state. So there's nothing really to report with regard to any changes within over the quarter.

[David Motemaden, MD & Senior Equity Research Analyst - Insurance & Business Services at Evercore ISI]

Great. Thank you.

[Operator]

This does conclude today's question and answer session. I will now turn the program back over to Kevin O'Donnell for any additional or closing remarks.

[Kevin O’Donnell, President & CEO at RenaissanceRe]

Thank you everybody for joining today's call. We're proud of where the company is going into the second half of the year and we remain optimistic about 2026. So look forward to speaking to you in a couple of months. Thank you.

[Operator]

This concludes the Renaissance III second quarter twenty twenty five earnings call and webcast. Please disconnect your line at this time, and have a wonderful day.

Participants

Executives

• Keith McCue, SVP - Finance & IR
• Kevin O’Donnell, President & CEO
• Robert Qutub, EVP & CFO
• David Marra, EVP & Group Chief Underwriting Officer

Analysts

• Elyse Greenspan, Managing Director at Wells Fargo
• Josh Shanker, Managing Director at Bank of America
• Jimmy Bhullar, Equity Research Analyst at JP Morgan
• Alex Scott, Equity Research Analyst at Barclays
• Wes Carmichael, Senior Analyst at Autonomous Research
• Michael Zaremski, MD & Senior Equity Research Analyst at BMO Capital Markets
• Meyer Shields, Managing Director at Keefe, Bruyette & Woods (KBW)
• Brian Meredith, Managing Director at UBS Group
• Andrew Andersen, VP - Equity Research at Jefferies Financial Group
• David Motemaden, MD & Senior Equity Research Analyst - Insurance & Business Services at Evercore ISI