RenaissanceRe (NYSE:RNR) reported what executives described as another strong quarter, with operating income of $548 million and an annualized operating return on equity of about 20% for the second quarter of 2026.
President and Chief Executive Officer Kevin O’Donnell said tangible book value per share rose approximately 6% in the quarter and 27% year-over-year, reflecting contributions from the company’s three main profit drivers: underwriting, fee income and net investment income.
Underwriting Results Remain Strong Despite Premium Declines
Chief Financial Officer Bob Qutub said RenaissanceRe generated operating earnings per share of $12.92 and an annualized operating return on equity of 20.1%. Annualized return on common equity was 24%, aided by $154 million of retained mark-to-market gains, primarily from equities.
The company reported $600 million of underwriting income and an adjusted combined ratio of 72% for the quarter. Qutub said the result reflected strong accident-year performance, low catastrophe activity and 9 percentage points of favorable prior-year development.
- Property catastrophe: Current accident-year loss ratio was 12%, with an adjusted combined ratio of 9%. The segment benefited from 25 percentage points of favorable development.
- Other property: Current accident-year loss ratio was 53%, and the adjusted combined ratio was 52%, including 35 percentage points of favorable development.
- Casualty and Specialty: Current accident-year loss ratio was 68%, and the adjusted combined ratio was 102%.
Gross premiums written were $3 billion, down 12% from the prior-year period. Property catastrophe premiums declined 14%, excluding reinstatement premiums, while Casualty and Specialty premiums fell 15%. Qutub said lower rates at mid-year drove much of the property catastrophe decline, while Casualty and Specialty reflected both proactive reductions and timing-related factors.
Property Catastrophe Rates Fall, But Executives Say Market Remains Adequate
O’Donnell said property catastrophe rates were down in the “high teens” at mid-year, consistent with the company’s expectations. He said RenaissanceRe’s leadership position allowed it to grow property catastrophe limit with high-quality clients while maintaining a portfolio that remains rate adequate.
Group Chief Underwriting Officer David Marra said the company grew U.S. property catastrophe limit by $600 million at the mid-year renewals, including on nationwide accounts with key clients and California programs where RenaissanceRe sees strong rate adequacy. The company also maintained its share on Florida domestic programs after several years of growth and kept private pricing on 65% of that Florida premium.
Marra said U.S. property catastrophe rates in the company’s January 1 and June 1 books are down about 20% over the past two years, after increasing by around 50% in 2023. “Set against that increase and improved terms and conditions, we continue to believe U.S. property catastrophe business has a strong level of rate adequacy,” he said.
During the question-and-answer portion of the call, O’Donnell said he expects continued pricing pressure because supply remains significant, even as demand continues to grow at a slower pace. “This is not a soft market,” he said. “It is a changing market.”
Baltimore Bridge Loss Shifts Segment Results
RenaissanceRe’s Casualty and Specialty results were affected by the settlement of the Baltimore Bridge collapse, which caused losses to shift from property to specialty. O’Donnell said the net effect on the company’s bottom line was relatively small, but the movement between reporting segments created a noticeable impact on Casualty and Specialty results.
Qutub said the segment reported 4.4 percentage points of prior-year adverse development, including 4.1 points tied to the Baltimore Bridge collapse. The overall increase in net negative impact from the bridge loss was $12 million in the quarter.
Marra said that excluding the Baltimore Bridge and purchase accounting adjustments, Casualty and Specialty prior-year development would have been modestly favorable, with an adjusted combined ratio in the high 90% range, consistent with company guidance.
Executives said RenaissanceRe remains cautious in general liability because social inflation and elevated loss cost trends continue to affect casualty lines. Marra said the company is supporting clients that are managing rate and claims effectively while selectively reducing exposure to others.
Capital Management and Investment Income Support Returns
RenaissanceRe repurchased $350 million of its shares in the second quarter, a level consistent with the first quarter. Through July 20, the company repurchased an additional $83 million of shares in the third quarter.
Qutub said that since the beginning of the second quarter of 2024, RenaissanceRe has repurchased $3 billion of shares at an average price of $258 per share, while generating $4.6 billion of operating earnings over the same period. He said the combination helped tangible book value per share rise 66% over that period and benefited operating earnings per share by more than 20% because of the lower share count.
Net investment income also reached a record level. Qutub said retained net investment income was $314 million, up 3% from the first quarter and 10% from a year earlier. Fixed maturity investments, short-term investments and credit holdings contributed to the result. The company continued to extend duration, with retained portfolio duration increasing to 3.5 years from 3.4 years in the prior quarter.
Fee income totaled $83 million, including $48 million of management fees and $35 million of performance fees. Qutub said management fees remained strong, although they were lower than a year earlier because the prior-year quarter included recaptured DaVinci fees that had been deferred after California wildfires.
Outlook Includes Continued Buybacks and Stable Earnings Drivers
For the third quarter, RenaissanceRe expects other property net premiums earned of about $330 million and an attritional loss ratio in the mid-50% range. The company expects Casualty and Specialty net premiums earned of approximately $1.3 billion and an adjusted combined ratio in the high 90% range.
Qutub said management fees are expected to be around $50 million in the third quarter, while performance fees should average about $30 million per quarter, though they can vary with underwriting results, large losses or prior-year development. He also said retained net investment income should continue to trend modestly higher.
O’Donnell said the underwriting portfolio is largely in place heading into the peak of hurricane season and described it as “well-constructed and well-protected.” He said RenaissanceRe does not underwrite based on a benign season, but instead builds a portfolio intended to perform across a range of outcomes.
The company also discussed its use of artificial intelligence, with O’Donnell saying RenaissanceRe is integrating AI to “amplify the impact” of employees and support better decisions. He said the company is moving from broad use of generative AI tools toward more automation, including AI integration into its REMS underwriting system.
O’Donnell also noted the previously announced leadership transition. Qutub and Chief Portfolio Officer Ross Curtis will remain involved through year-end, and Matt Neuber is expected to become chief financial officer in 2027.
“In short, each of our three drivers of profit performed well,” O’Donnell said, adding that RenaissanceRe continued to return capital to shareholders and remains confident in the balance of 2026.
About RenaissanceRe (NYSE:RNR)
RenaissanceRe Holdings Ltd. is a global provider of reinsurance and insurance solutions, specializing in property catastrophe, casualty, and specialty lines. Established in 1993 and headquartered in Bermuda, the company trades on the New York Stock Exchange under the symbol RNR. With a focus on underwriting and risk assessment, RenaissanceRe offers tailored programs designed to help insurers and corporations manage exposure to natural disasters, liability claims, and other complex risks.
The company operates through two primary segments: Reinsurance and Insurance.
