RenaissanceRe Holdings Stock

RenaissanceRe Holdings Ltd. (RenaissanceRe) operates as a global provider of reinsurance and insurance that specializes in matching desirable risk with efficient capital.

The company provides property, casualty and specialty reinsurance and certain insurance solutions to customers, principally through intermediaries. The company is one of the world’s leading providers of property, casualty and specialty reinsurance solutions.

The company’s core products include property, casualty and specialty reinsurance, and certain insurance products, principally distributed through intermediaries with whom the company has cultivated strong long-term relationships.

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 provides value to its customers and partners in the form of financial security, innovative products, and responsive service.

The company’s business strategy focuses predominantly on writing reinsurance. The company also writes excess and surplus lines insurance through delegated authority arrangements, and typically underwrite insurance risks in portfolio form. Additionally, the company pursues a number of other opportunities, such as creating and managing the company’s joint ventures and managed funds, executing customized reinsurance transactions to assume or cede risk, and managing certain strategic investments. The company continually explores appropriate and efficient ways to address the risk management needs of the company’s clients and the impact of various regulatory and legislative changes on the company’s operations. From time to time the company considers diversification into new ventures, either through organic growth, the formation of new joint ventures or managed funds, or the acquisition of, or the investment in, other companies or books of business of other companies.

Validus Acquisition

On November 1, 2023, the company completed the Validus Acquisition. Validus refers to Validus Holdings (Validus Holdings, Ltd.), Validus Specialty (Validus Specialty, LLC), and their respective subsidiaries that were acquired in the Validus Acquisition (including Validus Re and Validus Holdings (UK) Ltd), collectively. Substantially all of the assets of Validus Holdings are consisted of its equity interest in its wholly-owned subsidiary, Validus Reinsurance, Ltd. Pursuant to the Stock Purchase Agreement, the company also acquired the renewal rights, records and customer relationships of the assumed treaty reinsurance business of Talbot Underwriting Limited, an affiliate of AIG (American International Group, Inc.), a specialty (re)insurance group operating within the Lloyd’s market.

The company also entered into a registration rights agreement with AIG in respect of the shares issued to AIG. AIG also received an option to make a substantial investment into the company’s Capital Partners vehicles, which was exercised effective January 1, 2024.

Strategy

The company has adopted a focused and unique strategic position within the marketplace as a global reinsurer, and aspire to be a leading aggregator of volatility. The key elements of the company’s strategy include superior customer relationships and superior risk selection.

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 the company’s 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. The company offers this coverage to insurance companies and other reinsurers primarily on an excess of loss basis. This means the company begin paying when its customers’ claims from a catastrophe exceed a certain retained amount. The company also offers proportional coverages and other structures on a catastrophe-exposed basis.

The company’s excess of loss property contracts generally cover natural perils, and the company’s 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 the company’s property reinsurance contracts when arising from a covered peril.

The company offers its coverages on a worldwide basis. Because of the wide range of possible catastrophic events to which the company is exposed, including the size of such events and the potential for multiple events to occur in the same time period, the company’s property business is volatile and its financial condition and results of operations reflect this volatility.

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 the company also writes insurance business, primarily through delegated authority arrangements. As a result of the company’s financial strength and stable, long-term relationships with leading underwriters of casualty and specialty insurance globally, the company offers significant capacity in this segment.

The company offers its casualty and specialty reinsurance products principally on a proportional basis. The company also provides excess of loss coverage. These products frequently include tailored features, such as limits or sub-limits, which help the company manage its exposures. Any liability exceeding, or otherwise not subject to, such limits reverts to the cedant. Certain casualty and specialty lines of business, such as marine, energy and terrorism are also exposed to catastrophe risk, and the company seeks to appropriately estimate and manage correlations between these lines and the company’s property reinsurance portfolio.

The company’s Casualty and Specialty segment also offers certain casualty insurance products, including general liability and professional liability lines of business. Syndicate 1458 also writes business through delegated authority arrangements. The company writes this business in a similar manner to its reinsurance business, and view it through a reinsurance lens, with a focus on approaching it as a portfolio of risks.

Other

In addition to the company’s two reportable segments, the company has an Other category. The company’s Other category primarily includes the results of: the company’s investment unit, which manages and invests the funds generated by the company’s consolidated operations; and the company’s share of strategic investments in certain markets that offer attractive risk-adjusted returns or where the company’s 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 (Renaissance Reinsurance Ltd.), RREAG (RenaissanceRe Europe AG), Renaissance Reinsurance U.S. (Renaissance Reinsurance U.S. Inc.), RenaissanceRe Specialty U.S. (RenaissanceRe Specialty U.S. Ltd.), and Syndicate 1458 (RenaissanceRe Syndicate 1458). Through these subsidiaries, the company writes the property and casualty and specialty (re)insurance that drives the company’s underwriting income.

Renaissance Reinsurance is the company’s primary flagship balance sheet, through which the company has broad exposure to a range of risks. The company’s other balance sheets allow the company to optimize where and how the company writes specific risks, considering geographic location, regulatory flexibility, and the ability to access different markets of risk. For example, RenaissanceRe Specialty U.S. writes excess and surplus U.S. risk, which can be supported on a quota share reinsurance or delegated authority basis through managing general agents, and RREAG focuses on writing specialty risks across the European market and in other jurisdictions utilizing its branches and the company’s reinsurance intermediaries. The company utilizes its integrated and flexible underwriting platform to ensure that risks are matched with the optimal principal wholly-owned operating subsidiary balance sheet. The company expects to merge certain Validus entities, including Validus Re (Validus Reinsurance, Ltd.) and Validus Switzerland (Validus Reinsurance (Switzerland) Ltd), into the company’s existing operating structure.

Managed Joint Ventures and Managed Funds

The company manages a number of joint ventures and managed funds, which provide the company with an additional presence in the market, enhance its client relationships and generate fee income and profit commissions. The company’s principal joint ventures and managed funds include DaVinci (DaVinciRe Holdings Ltd. and its subsidiaries), Top Layer (Top Layer Reinsurance Ltd.), Fontana (Fontana Holdings L.P. and its subsidiaries), Medici (RenaissanceRe Medici Fund Ltd.), Upsilon (includes Upsilon RFO (Upsilon RFO Re Ltd.) and Upsilon Fund (RenaissanceRe Upsilon Fund Ltd.)), and Vermeer (Vermeer Reinsurance Ltd.).

DaVinci

The company formed DaVinci in 2001 to expand the company’s 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 the company’s 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. The company separately participates in the risks written by Vermeer through the company’s wholly-owned balance sheets.

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. 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. The AlphaCat Funds are primarily funded by third-party capital investors and controlled by external boards unaffiliated with the company. The AlphaCat Funds are invested in various risk-linked instruments through variable funding notes issued by AlphaCat Re (AlphaCat Reinsurance Ltd.), AlphaCat Master Fund (AlphaCat Master Fund Ltd., a Bermuda mutual fund), and OmegaCat Re (OmegaCat Reinsurance Ltd.), which give investors access to a range of property catastrophe risks. 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.

Other Transactions

From time to time, the company pursues other customized reinsurance and financing transactions. For example, the company has participated in, and continuously analyzes, other attractive opportunities in the market for insurance-linked securities and derivatives. The company’s products contain a number of customized features designed to fit the needs of the company’s capital partners, as well as the company’s risk management objectives.

Strategic Investments

The company has strategic investments in the Tower Hill Companies, which grant the company access to participants in the Florida homeowners insurance market. Tower Hill Companies refers to “collectively, the company’s investments in a group of Tower Hill affiliated companies, including Bluegrass Insurance Management, LLC, Tower Hill Claims Service, LLC, Tower Hill Holdings, Inc., Tower Hill Insurance Group, LLC, Tower Hill Insurance Managers, LLC, Tower Hill Re Holdings, Inc., Tower Hill Risk Management LLC, and Tomoka Re Holdings, Inc.”.

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.

Regulation

The company’s entities registered under the Insurance Act include:

Class 4 general business insurers: Renaissance Reinsurance; Validus Re; Validus Switzerland, Bermuda Branch (Validus Reinsurance (Switzerland) Ltd, Bermuda Branch, an overseas company that has been granted a permit from the Minister of Finance to engage in or carry on any trade or business pursuant to the Companies Act and which is also registered to carry on insurance business as a Class 4 insurer pursuant to the Insurance Act in Bermuda); and DaVinci Reinsurance (DaVinci Reinsurance Ltd.);

Class 3B general business insurers: RenaissanceRe Specialty U.S., Vermeer and RREAG, Bermuda Branch (RenaissanceRe Europe AG, Bermuda Branch, an overseas company that has been granted a permit from the Minister of Finance to engage in or carry on any trade or business pursuant to the Companies Act and which is also registered to carry on insurance business as a Class 4 insurer pursuant to the Insurance Act in Bermuda);

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 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.

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. As a result of legislative amendments that came into force in July 2022, persons who did not previously require a license under the Investment Business Act 2003 and persons who relied on an exemption from the requirement to be licensed pursuant to the Investment Business (Exemptions) Order 2004 were required to apply to be licensed or registered under the IBA by the end of July 2023. As a result, RenaissanceRe Fund Management Ltd. and AlphaCat Managers Ltd., which were both previously exempt from requiring a license from the BMA to carry on investment business activities in or from Bermuda, applied for a Standard License and Class B Registration, respectively, under the IBA. Upon receipt of the BMA’s approval, RFM and AlphaCat will be subject to additional supervision by the BMA, including disclosure and reporting requirements and, in the case of RFM, minimum net asset and liquidity requirements.

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 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.

By entering into a membership agreement with Lloyd’s, RenaissanceRe CCL has undertaken to comply with all Lloyd’s bye-laws and regulations, as well as the provisions of the Lloyd’s Acts and the Financial Services and Markets Act 2000, as amended by the Financial Services Act 2012.

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 have substantial powers of intervention in relation to regulated firms. Lloyd’s is required to implement certain rules prescribed by the PRA and the FCA.

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.

Canada: Validus Re, Canada Branch is federally regulated by the Office of the Superintendent of Financial Institutions.

History

RenaissanceRe Holdings Ltd. was founded in 1993.