Good morning. My name is Ashley, and I will be your conference operator today. At this time, I would like to welcome everyone to the RenaissanceRe Second Quarter 2024 Earnings Conference Call and Webcast. After the prepared remarks, we will open the call for questions. Instruction will be given at that time. Thank you. I will now turn the call over to Keith McCue, Senior Vice President of Finance and Investor Relations. Please go ahead.

Thank you, Ashley. 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 Qutub, Executive Vice President and Chief Financial Officer; and David Marra, Executive Vice President 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. 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.

Thanks, Keith. Good morning, everyone, and thank you for joining today's call. Before I begin my comments, I want to welcome our Chief Underwriting Officer, David Marra, to the call. Going forward, he will provide the more detailed commentary on segment performance that I previously covered, and I look forward to his increased participation. Welcome, David. Turning to the quarter. I am pleased to report that RenaissanceRe once again delivered excellent results. We reported an annualized operating return on average common equity of 28%. Notably, the operating return on equity this quarter is almost identical to Q2 last year, but average common equity has increased by two-thirds. We have changed the scale of the company over the last several years, most significantly by acquiring Validus Re, and are proud that this greater scale and diversification continues to reward our shareholders with superior returns. Looking forward, over the remainder of this year and into 2025, I believe these superior returns can persist. It is an exciting time to be a reinsurer and we are confident in our strategy and we trust our execution. As you will hear us discuss today, we are delivering results across each of our three drivers of profit, and believe that we can continue to do so for several reasons. First, property reinsurance rates remain attractive. We led the market pricing reset in 2023 and are confident that the rate strength we are currently experiencing will continue. The market is becoming increasingly stable. Primary companies are adjusting to the new reinsurance market by increasing property rates. This allows them to continue to add limits to their reinsurance protections. Over the preceding year, we estimate that demand for property catastrophe reinsurance limits in the US excluding cat bonds has increased by about $20 billion. This new demand was present at the beginning of the year and accelerated into the midyear renewals. Supply ultimately met this demand but did not exceed it. Second, interest rates have proven to be sticky. And even with anticipated rate cuts will likely remain higher than they have been over most of the past two decades. At the same time, our investment portfolio continues to grow. The combination of increased investment leverage, largely benefiting from our casualty and specialty portfolio and increased book yield are driving compelling returns and benefiting shareholders. Third, our fee-generating Capital Partners business is performing well. We have attractive structures and provide our third-party Capital Partners access to several offerings, all of which benefit from the exceptional talent of our underwriting franchise. This aligned strategy continues to attract capital and separates us from other managers. Our Capital Partners business improves our offerings to customers, enhances our ability to optimize our portfolio and generate attractive fees for doing so. One more reason we are so excited about the future is the performance of our Validus Re acquisition. We have renewed most of the Validus book at this point, and we believe we achieved our most important objectives in underwriting, people, and capital. From an underwriting perspective, I'm pleased to report that the Validus portfolio has outperformed initial expectations against every relevant metric. We successfully retained the combined book, deepened our partnerships with customers and met our underwriting objectives across both segments. As we have discussed in the past, we understood the Validus Re business very well and there were no surprises, underwriting or otherwise. From a people and operations perspective, we have retained key talent. Legacy Validus employees are fully integrated into our teams and have been making substantial contributions at every level of our organization. Operationally, underwriting systems have been fully integrated since the closing and we are on schedule for integrating our back-office systems. In addition, we have been able to leverage several of Validus' proprietary systems and tools to augment our deal analysis and modeling. From a capital management perspective, we have already merged one of the two main Validus balance sheets into the RenaissanceRe balance sheet. We remain on track to merge the remaining balance sheet by the end of the year. Together with renewing Validus portfolio onto RenaissanceRe balance sheets, these actions have freed substantial capital and liquidity at the holding company. This provides us with considerable dry powder to deploy into the business and return to shareholders. From my perspective, we still have a little work to do in order to fully integrate Validus, but successfully landing the underwriting portfolio was the most important milestone. Bob and Dave will provide additional insights into the success of Validus, but suffice it to say we couldn't be happier regarding our execution on this deal. Shifting now to the midyear renewals which David will discuss in greater detail. Overall, we were pleased with our results and the risk portfolio we constructed. This remains one of the most favorable property markets that I've seen in my career with attractive rates and terms and conditions relatively unchanged. All of which is to say, we are delighted with the state of the market which I believe remains appropriately positioned in the insurance value chain assumes the appropriate level of risk and is being paid attractively for it. Before turning to Bob, I would like to spend a minute discussing how we shaped our risk going into this wind season and how we have enhanced our resilience to loss. To help frame the discussion I want to highlight three main points. First, on an absolute dollar basis our risk is up. As we grew exposure to Southeast Hurricane largely due to the addition of the Validus portfolio. Second, on a percentage of equity basis, however, we reduced our exposure to loss. And third we shaped our portfolio to steepen the curve further reducing the relative risk we are taking to small events compared to larger events. The first two points are straightforward. We grew because rates were attractive and we can deliver strong returns by deploying capital into hurricane risk even when considering the elevated forecast. At the same time, we grew our equity base substantially which reduced our overall risk on a percentage of equity basis. The more complicated element and the one that added the most alpha to our portfolio relative to the market was our active shaping of the portfolio's distribution of outcomes to decrease exposure to smaller events compared to larger events. We did this using our risk expertise, proprietary tools, and flexible capital platform including Capital Partners. This substantially reduced the relative risk to our income statement. At the same time, we shifted the entire risk curve lower, reducing risk to our balance sheet albeit less so than the income statement. These actions benefit you as shareholders because we grew into a strong market reduced your exposure to hurricane loss and optimized portfolio returns over the full distribution of outcomes. I believe that we were uniquely positioned to execute on this strategy and have constructed one of the most resilient portfolios since I started here at RenRe in 1996. In short, if you have the right tools, it's a good time to be a reinsurer. This concludes my opening remarks. Bob will now discuss our financial performance for the quarter followed by David who will provide an update on our segment performance.

Thanks, Kevin, and good morning, everyone. This quarter we delivered excellent results across all aspects of our business. Operating income was $651 million and our annualized operating return on average common equity was 28%. All three drivers of profit are producing strong sustainable sources of income. Underwriting income was $479 million up 37% from the second quarter of 2023. Net investment income was $84 million up 48% and retained net investment income was $283 million up 50%. These increasing earnings across all three drivers of profit are reflected in our operating EPS which was $12.41 per share this quarter, up 40% from a year ago. As Kevin explained, we believe that the momentum behind our three drivers of profit will persist and we will continue to generate superior returns for our shareholders. I will discuss our earnings in more detail in a moment. But first, I want to touch on capital management. Over the last several quarters, we have been consistently generating profits in excess of what we require to grow the business. We are now at a point in the balances integration where we are starting to free up more of this excess capital. We find our shares very attractive to current multiples. Since the end of the first quarter, we repurchased $170 million of our common shares. As we look forward, we are keeping an eye on hurricane season. However, as Kevin mentioned, we believe that we will deliver consistent strong returns over the long term. This combined with our leading ability to match desirable risk with efficient capital means that we can capture attractive underwriting opportunities while continuing to repurchase shares at attractive valuations. Turning now to our second quarter results and starting with our first driver of profit underwriting where gross premiums written were up 29% or 36% year-to-date. We have seen attractive risk adjusted returns in property catastrophe and specialty and have grown these classes of businesses by 35% and 82%, respectively year-to-date. Net premiums written were up 29% for the quarter and 35% for the year. Underwriting income for the quarter was $479 million and our adjusted combined ratio was 79%. Year-to-date, we have generated over $1 billion of underwriting income with an adjusted combined ratio of 77%. Moving now to our property segment and starting with property catastrophe where catastrophe gross premiums written were up by 26% and net premiums written were up by 16%. This difference relates to the purchase of additional retro and the increased use of our Upsilon vehicle. Year-to-date property catastrophe gross premiums written were up $675 million or 35%. Year-to-date net premiums written grew by 24%, however, on a gross to net basis, which gives effect to our joint ventures, our net retained grew by about the same as our gross. The overall property catastrophe adjusted combined ratio was 25% and included 14 percentage points of favorable development predominantly from the 2021 through 2023 accident years. The current accident year loss ratio was 19%. Events in the quarter including US severe convective storm activity and the Taiwan earthquake had a 10 percentage point impact on this ratio. The acquisition expense ratio was up by about two percentage points driven by the impact of purchase accounting adjustments and reinstatement premiums. Moving now to other property where gross premiums written were up by 22% and net premiums written were up by 24% due to the addition of the Validus portfolio. Other property net earned premiums were similar to the first quarter at $400 million. Next quarter we expect other property net premiums earned to be about $360 million as the reductions we made in 2023 to our other property book continue to earn through. The other property adjusted combined ratio was 90% and the current accident year loss ratio was 62%. The current accident year loss ratio contained a six percentage point total impact from US severe convective storms and the Taiwan earthquake. Overall the other property book has been performing consistently well and we continue to see an attritional loss ratio in the low 50s. Moving now to our Casualty and Specialty portfolio where gross and net premiums written were up 34% and 41%, respectively. This growth is largely driven by the renewal of the Validus portfolio in addition to some incremental specialty opportunities offset by reductions in professional liability. Casualty and specialty net earned premiums were $1.6 billion, up 52%. In the third quarter, we are expecting net earned premiums to be about $1.6 billion. The casualty and specialty adjusted combined ratio was 95.6%. This included 1.5 percentage points of favorable development, which stemmed from our cyber, credit, and professional liability books. The current accident year loss ratio was 67.9%. This included a 3.4 percentage point impact from two specific losses within our credit and transactional liability books. Note that the casualty and specialty reported underwriting income of $28 million, which reflects a $41 million reduction due to purchase accounting adjustments. We continue to expect a mid-90s casualty and specialty adjusted combined ratio on average. Moving now to fee income in our Capital Partners business where fee income was $84 million, up 48% from the comparable quarter. Management fees were $55 million, up 27% largely due to growth in DaVinci and Fontana. Performance fees were $29 million with a favorable development in the quarter driving better than expected results. These continue to be a stable source of income for us. And in the third quarter, we expect management fees to remain around $55 million and performance fees should be in the range of $20 million absent any large loss event. Moving now to investments. For retained net investment income was $283 million, up 6% from the first quarter and up 50% from a year ago. This upside from last quarter was driven by a larger asset base, which is benefiting from higher interest rates. We had $82 million of retained mark-to-market losses in the quarter largely driven by increased treasury rates. Overall, retained unrealized losses in our fixed maturity investments are $214 million or $4.08 per share. Our retained yield to maturity increased to 5.7% from 5.5% last quarter and we have kept retained duration stable at 3.3 years. The net retained investment income return was 5.3%. Since the end of the quarter, treasury rates have moderated a bit and we expect to retain net investment income for the third quarter to be about flat. Rates on our fixed maturity portfolio remain very attractive. Even if future rate cuts are as expected, our portfolio should continue to generate consistent net investment income in the quarters ahead. And finally, turning to expenses, where the operating expense ratio was 4.3%, which is flat compared to the first quarter but down from a year ago. As I've discussed in the past, we expect the operating expense ratio to stay relatively flat through 2024. Corporate expenses were $35 million. This contains $17 million from the Validus acquisition which will continue to taper off through the year. As a reminder, these transaction-related expenses are excluded from operating income. And in conclusion, this was a strong quarter with significant contributions from each of our three drivers of profit. Underwriting income surpassed $1 billion for the first half, management and performance fees were $84 million for the second quarter in a row and net investment income rose again and continues to be a stable significant source of income. And as we look forward, we believe that these superior returns can persist for the remainder of this year and into 2025, and we are in an excellent position to continue delivering superior shareholder value. And with that, I'll now turn the call over to David.

Thanks, Bob, and good morning, everyone. As Kevin discussed, our underwriting team has been focused on retaining the combined RenaissanceRe and Validus business at the persistently attractive rates in terms and conditions we have seen over the last two years. With the majority of renewals now complete, we have achieved this goal delivering over $3 billion of well-diversified incremental in-force premium from the Validus portfolio while deepening our partnerships with brokers and clients. This larger diversified portfolio puts us in an excellent position to help our clients manage their biggest risks, while continuing to produce superior returns on the underwriting side. Importantly, portfolio construction is a constant process. Even at our larger size, we remain nimble with a focus on capturing attractive opportunities as they arise and exercising discipline as needed to preserve superior returns for our shareholders. This morning, I will provide more context on market conditions and quarterly performance within our Property and Casualty segments. Starting with Property, where we had a successful midyear renewal. As Kevin discussed, there was significant new demand supply match demand but did not exceed it. We retained the combined RenaissanceRe and Validus portfolio and have grown Property Catastrophe gross premiums written by 35% year-to-date. This reflects high success renewing the Validus portfolio, which is the largest contributor to our growth and is the most efficient way for us to grow into this market. We also achieved some incremental growth from new business in our US cat book. Our success in retaining the Validus portfolio is consistent between Q1 and Q2. Reported gross premium written growth in Q2 is lower than Q1 because the Validus portfolio was more heavily skewed to 1/1 inception than the RenaissanceRe book. The year-to-date figure is indicative of the overall growth we achieved. We maintained the strong level of rate adequacy that we have been driving since January 1, 2023, and we believe that the market for property catastrophe reinsurance remains highly attractive. Terms and conditions have been stable and retentions have held. In aggregate, we estimate that overall rate was down by about 5% with rates about flat at the bottom of programs and down 5% to 10% at the top. Looking forward to 2025, we expect demand will continue to grow as cedents adjust their reinsurance budgets to prevailing market conditions and respond to inflation of underlying insured values. While most of this demand will be at the top end of programs, it will also filter down through towers. We are in a superior position to underwrite this additional demand for several reasons. First, our flexible platform with owned and managed balance sheets. This enables us to deploy capital at the top, middle, and low end of towers providing a single source of large capacity that clients value while allowing us to optimize our net retained portfolio. Second, our risk expertise and the strength and durability of our partnerships, which makes us the first-call market for clients and brokers. Now moving to Other Property. As Bob mentioned, there are several events this quarter that drove a higher loss ratio, including severe convective storms in the US and a magnitude 7.4 earthquake in Taiwan. Losses from US PCS events in the first half approached $40 billion, the second highest since 2011. While these non-peak weather events impacted the primary market, the effect on our portfolio is muted due to the higher rates and attachment points we achieved in 2023 in the Property Catastrophe space. As we have discussed, we believe that the right level of risk now resides with the right part of the capital chain. By and large, insurance companies are working to construct their portfolios to fund these earnings event losses, while reinsurers provide cover for more severe capital-intensive events. The Other Property business was profitable for the quarter and has been performing very well for the last several quarters due to elevated rates and conservative portfolio positioning. While rate increases for cat-driven Other Property risks have moderated a bit, we continue to find the business attractive. Now moving to Casualty and Specialty. The combined RenaissanceRe-Validus portfolio provides us with a larger book of business while maintaining a high degree of diversification within the segment. We enjoy a stronger lead market position and deeper partnerships with clients which will ensure first-call status and access to the best risks in the market. The portfolio provides diversifying returns with meaningful contributions to each of our three drivers of profit; underwriting profit with low correlation to natural catastrophes, fee income from Fontana, and net investment income from reserves generated by the portfolio. An important part of fulfilling our vision of being the best underwriter is knowing when to grow and when to reduce. Each business within Casualty and Specialty is at a different point in the cycle and we continually manage our participations to achieve the best portfolio mix and balance of risk and reward. We see the entire market and gather data on loss development and claims trends as well as forward-looking exposure. We use this information to select between risks in any one year and also to scale our participations at different points in the cycle. Specifically, we grew our Casualty book in 2020 and 2021 when the return on risk was most attractive. Even though rates were increasing by 50% or more in some cases, we did not lower our reserving loss ratio significantly. This is due to our prudent reserving process, which is structured to recognize bad news quickly and defer good news until the business seasons. In particular, we believe that claims emergence patterns would be volatile following court closures during COVID and that social inflation was likely to continue. Our loss picks are independent from what our clients book and are built up from individual claims data, aggregate market data, and actuarial judgment. It is still early for these recent years and the business needs more time to season but so far they are developing within expectations. In addition to cycle management and our prudent reserving process, we have made adept use of adverse development covers. This has resulted in our net reserve pool being overweighted towards the more favorable years with about 5% of our total reserves exposed to the casualty soft market years of 2014 to 2018. More recently, we responded to a deteriorating rate environment in DNO by decreasing this portion of our professional liability business by a meaningful amount. We continue to see rate increases in general liability. In recent years, rates have been keeping up with trend. Currently on some programs, loss inflation is accelerating. We are incorporating this into our pricing in order to ensure we are differentiating between risks and constructing the best portfolio to maintain profitability in the future. Looking forward, the focus of our book is increasingly towards Specialty and Credit where we are seeing the best risk-adjusted returns. Within Specialty, the second quarter is relatively quiet renewal period although positive trends from 1/1 continue with terms and conditions holding and significant growth emanating from the Validus portfolio. In Credit, we continue to see healthy underlying performance. Demand for mortgage reinsurance has declined in line with lower origination volumes, but deals remain attractive and we have been successful at protecting our lead position. And with that, I'll turn it back to Kevin.

Thanks, David. We delivered another excellent quarter financially driven by strong underwriting fee and net investment income. We had solid midyear renewals and successfully retained the combined RenaissanceRe and Validus portfolio while deepening our partnerships with customers. We optimally shaped our underwriting portfolios balance of risk and return objectives. We repurchased our shares at attractive multiples. And lastly, we are confident the current favorable environment will persist into 2025, which will allow us to continue to grow shareholder value at an industry-leading pace. And with that, we'll open it up for questions. Thanks.

Thank you. We will take our first question from Elyse Greenspan with Wells Fargo. Please go ahead.

Hi thanks. Good morning. My first question is a question on premium growth. You guys emphasized that you're seeing good growth in the legacy Ren as well as in the Validus book of business. From outside the company, when you look at what you guys reported last year, some of the information that we have on Validus from disclosures that are out there I think some of us struggle a little bit to understand the growth in both businesses. Could you just provide some more color to help us understand like the growth that you are seeing in both businesses so far this year?

Yes, I'll start and then I'll ask Dave to give some commentary as well. We're proud of the growth that we've achieved. If you go back to 1/1, we increased the expectations for growth from $2.7 billion to $3 billion with upside we have written more than $3 billion. A lot of that, as Dave highlighted, comes from the Validus acquisition. I think the simplest way that we look at growth is from a year-to-date basis rather than a quarter. So, if you're looking at the year-to-date numbers, they're very strong growth percentages, which reflect that $3-plus billion of additional premium. I think the quarterly number is a little bit misleading just because the Validus portfolio was much more weighted to a 1/1 book compared to a second quarter book. And with that, Dave, if you want to touch a little bit more?

Yes, exactly. We got pretty much every line that we wanted to out of the Validus portfolio. And then as the demand grew we were able to add some incremental lines beyond that. So, we're very happy with the results. The market is very supportive of the larger RenaissanceRe partnership of their business. And that's showing up in fully incorporating the Validus portfolio and also some additional growth.

Thanks. My follow-up is on the Specialty Casualty segment. If I adjust for the 3.4 points that Bob mentioned, it seems like your accident year combined ratio excluding VOBA hasn't really changed much year-over-year in that Casualty Specialty segment. There is a lot of uncertainty with both economic and social inflation, and we are seeing numerous reserve charges coming from primary companies. I want to understand how this is being factored into your loss picks, especially since the numbers haven't changed significantly year-over-year aside from the noise you pointed out regarding VOBA.

Yes, Elyse, this is David. I'll start with that. The claims Bob mentioned that are increasing the current accident year loss ratio are related to our major classes and came in this quarter, causing some volatility. This is typical volatility that we might expect in the business and we do not see it as a trend. Overall, we are monitoring casualty trends. As discussed, our current year reports are developing as expected and we are confident in those numbers. We are noticing an increasing trend in certain areas of general liability, which are still localized and driven by auto losses, including some auto losses entering the umbrella layers. We are adjusting our pricing in future renewals to ensure we stay ahead of these trends.

And then one really quick one, the $94 million of professional lines business you guys called out as a return of premium of some sort. Did that have any impact on the Casualty Specialty margin in the quarter?

No. It's not. It's negligible. I mean these are normal adjustments based off of estimates that we have. And what we think the client will actually underwrite for risk attaching. The adjustments tend to happen across all lines of businesses, except when you have large swings or large changes in trend which is what you saw in professional liabilities. It was a negative adjustment, but the impact on underwriting margin is nominal. It's very minimal. The risk one question Elyse, I'd like to go back on growth. Your comment on year-over-year comparability and the gross written premium with the under Validus' control last year and is under our control this year. There was a difference in how they recognize the quota share on a gross written basis. It was recognized all in the quarter that it was written, whereas we'll recognize it over the course of the year. The difference it doesn't change the risk and it doesn't change the underwriting margin. It just affects the top line optics and you'll see this year over last year until you get into the fourth quarter of this year.

Thank you.

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

I'd like to dig in a little bit to David's comments a little bit more and talk about the loss ratio or the current year loss ratio in the Casualty segment, obviously deteriorated in Q1 you had the George Lock, then the Baltimore Bridge Disaster, but we didn't have many items in that this quarter. What's going on in the margins there? And is there just conservatism given what we're hearing at other underwriters about loss trends getting worse for recent accident years?

Let me try and address that one, Josh. In my prepared comments you heard me talk about while we acknowledge it was $28 million in underwriting income and there was $6 million in the first quarter if you go back and you want to refer to the bridge, included in both of those numbers for casualty was amortization of purchase accounting of over $40 million. And that's why we show an adjusted combined ratio in the mid-90s. That's why it's $95.6 million versus $98 million that's really to show the cash on cash differential. So I would look through and you can probably go back and look at the adjusted combined ratio against the $1.5 billion of net earned premium. That's how you get to that number.

And so given that situation in that purchase accounting goes out one year from now it will have a step function difference?

It will continue to step down each quarter. But by the fourth quarter of next year, we'll come off significantly indeed probably less than half of that.

Okay. I'll try and do that math. And then what about the loss ratio, specifically the loss ratio feels elevated relative to expectations given that there were no casualty cats in the quarter and whatnot. Am I mistaken about that impression?

Josh, this is David. You're right, that there were a couple of points like Bob mentioned. It's a couple of one-off claims that are in fall in subsets of our major classes. So there's just inherently more volatility there. Two claims were reported. So we booked those in the current year. It is indicative of the volatility we would expect from time-to-time in the current year loss ratio. And I think one of the important things is there's event-like losses that can happen and then there's shifts in our curve and changes in trend. None of this has changed our curves. These are just single losses in relatively small books of business.

Okay. Thank you. Any more color on that would always be appreciated. And then, on the Property business side I was maybe a bit surprised there was any large event disclosure this quarter. And one of the things that was triggered was a number of aggregate covers I suppose, I thought the market was moving away from aggregate covers over the last couple of years. Can you talk about what your appetite is for writing that business and how well priced it is given where it was a couple of years ago?

Hey, Josh, I can comment on that. This is David. There's very little appetite in the market for aggregate covers. There are some that attach at proper catastrophic levels, but aggregate covers that will provide the earnings level protection that will respond to the smaller caps that we're seeing happen in the severe convective storms and the other things that happened in the quarter those are not really existent to the market these days.

But they existed and you have them in your losses in this quarter yes?

No. We mentioned the Taiwan earthquake, and although it was a significant quarter for PCS events, it isn't related to what was reported in the market in 2022. Those low aggregate deals do not make up a major part of the loss, which, as Dave pointed out, is not really a market-driven issue.

It seems like in the press release.

Some of the Midwest regionals are structured as aggregates, but they differ from traditional aggregates that were exposing reinsurers before 2020. They are smaller companies that include an aggregate component in their programs, but these are not the lower aggregates seen in the market from 2022. They feature more suitable retention levels and generally have a narrower geographic focus.

Great. Thanks for the answers.

Yes.

Thank you. We'll take our next question from Ryan Tunis with Anonymous Research. Please go ahead.

Hi. Good morning guys. Just a question I guess on Specialty. So if I look at the current accident year loss ratio over the past five quarters, we've had kind of two different types of quarters. There's three that have been 67 plus and there's two that have been 63. Is it fair to say that the 63 is more of the favorable scenario where you kind of overearn on the Specialty and the 67 is kind of more like the normal with the type of specialty losses over time that you'd expect?

I believe the range you mentioned is the typical volatility associated with portfolio diversification. There will inevitably be losses during both up and down quarters, whether in the current or prior year, and this range does not concern us.

Got it. And then I guess just for Kevin. Maybe just a little bit more texture on the competitive environment right now in terms of like the type of capital you're seeing coming into the market? I mean, there's a lot of cap bond issuance this quarter. I'm not sure what to read it out. But yes, I mean, how has that been evolving? Or is it still pretty much as disciplined as it's been? Or are you seeing some changes in the capital composition?

Capital continues to flow into the industry, and we're pleased to deploy a significant amount of it into the market. As I mentioned earlier, we also observed $20 billion in new limits purchased. Overall, we're witnessing a balanced market where the capital available for deployment aligns well with market demand. It's important to note that the reset in pricing that has occurred remains evident, and while we're operating at this new price level, we're not seeing a downward trend towards 2022 pricing. We continuously monitor supply and demand dynamics, particularly in the property cat market, which currently seems to maintain a favorable equilibrium.

I noticed you mentioned in your prepared remarks that the terms and conditions have remained largely the same. Could you clarify what you meant by any changes in the margin? Was there anything that was additional?

Yes, definitely. I mean, the most important thing is that the retention is held. I mean the retentions are the piece that allows us to continue to construct the portfolio and be removed from attritional losses. And that's the most important thing that we're focused on.

Thank you.

Thank you. We'll take our next question from Bob Huang with Morgan Stanley. please go ahead.

Hi. Good morning. I want to discuss repurchase a bit more. Thank you for your comments on repurchase. I’m interested in understanding more about this decision. Many people are anticipating a busy hurricane season, so it seems a bit unusual to repurchase such a large number of shares right before the peak of that season. Can you explain your strategy here? Why not wait until after the hurricane season? Given the consistent repurchase so far, should we interpret this as a sign of your confidence in your balance sheet? I would appreciate any additional context regarding your strategy and tactics around the repurchase.

I want to refer you back to my prepared comments. I mentioned a couple of key factors: we have achieved seven consecutive quarters of profitable results, which has significantly increased our capital base, allowing us to deploy that capital effectively. Additionally, we are generating a 28% return on equity, which I am very pleased with. We have also enhanced our liquidity through the integration of Validus, which includes raising capital. This has led us to attractive opportunities to reinvest in capital. As I mentioned in my closing remarks, we have the advantage of expanding into promising markets that Kevin and David discussed, alongside the opportunity to repurchase shares at favorable prices.

Okay. So there's really no...

And nothing's changed in our capital allocation process.

Okay. No, I really appreciate that. Thank you. That's actually all for me.

Thank you. We'll take our next question from Yaron Kinar with Jefferies. Please go ahead.

Thank you. Good morning. I wanted to go back to growth for a second. And I realize it may be difficult for us as outsiders to figure out what organic growth was like given the maybe different seasonality in the Validus book. But, obviously, I think we are seeing a considerable slowdown in organic and I'm wondering does that tie to your comments about moving maybe to higher tail risk? And if so, can you offer us maybe a way to think about more of an apples-to-apples comparison of growth and the opportunity that you're going after in Property?

Yes. Thanks for the question, Yaron. The way we think about building our portfolio is we look at it on a pro forma basis and then try to design a portfolio that has kind of the best set of returns across the full distribution of outcomes. Growth certainly played a big part in that this year. Capital management the way we structured the risk on our partner balance sheets and the way we used our seated. So I would say there's not a lot that's changed in our appetite for how we've built the portfolio. Your question between organic and inorganic, I think we've been disappointed to say the size of the portfolio that we would likely create. There's a very heavy overlap between what Validus wrote and what RenRe wrote prior to the acquisition. That's one of the reasons we like the portfolio so much. So I would say that our ability to land $3-plus billion of premium, we could categorize that as more organic growth, because there's always changes across what Validus legacy wrote and what RenRe legacy wrote. But we think it's a cleaner way to talk about it is largely attributing it to the Validus portfolio.

Okay. Shifting to Casualty and Specialty, I'm curious about the reserve weighting for the more recent accident years that you mentioned. We are witnessing some industry pressure for accident years 2021 through 2023, especially related to auto and general liability. Can you discuss how you see those accident years developing?

Yes. Hi. This is David. Like I said in my prepared comments, those accident years are developing within our expectations; they are still green and we need to continue to lift in the season but that's the good sign so far. When we construct our overall portfolio and want to ensure that it's resilient to things like inflation, there are several things that we think about. One we have to construct the portfolio to avoid the risks like commercial auto that are really most in the crosshairs of the plaintiff bar. We also then use cycle management like we talked about in order to have the highest weighted portion of our risk when return on risk is the best. We've used adverse development covers in order to manage risk in some areas and depends also the reserving process. We recognize bad news early, and we didn't take down our loss picks significantly even though rates were going up and would have pointed to a potentially lower expected loss ratio. That just leads to an overall stronger pool of reserves, which is more resilient in an inflationary environment.

Okay. Just to clarify, when you say that the accident years 2021 through 2023 have not developed much and are still very early, does that also apply to general liability and any auto-related reserves?

We don't really write commercial auto. So, it's more liability. Commercial auto would be a subset of general liability but we don't write.

Right. Yes, I was just thinking through excess liability. Okay. Thank you.

Thank you. We will take our next question from Brian Meredith with UBS. Please go ahead.

Yes. Thank you. I'd just clarify quickly. So you didn't have any adverse development on 2020 through 2023 this quarter in Casualty and Specialty?

We're going to have puts and takes across the portfolio but nothing significant that was really anything to read into Brian. I mean there's always going to be puts and takes.

Thanks. I just want to clarify that. And then I'm just curious, on the Casualty and Specialty I appreciate you calling out the couple of the losses that happened. I'm just curious, when I think of those types of losses would they typically be kind of in your loss expectations? It's the kind of business that you guys write? Or is the casualty and specialty business you've got something that will have these bud force fairly regularly. I'm just trying to understand that a little bit more as to why these are unusual in the business that you write?

Yeah. It's a good question. I think there's always an actuarial judgment as to whether when a loss comes in whether it's contemplated in the curve or not. These are kind of weird losses and they're in relatively small portfolios. So when thinking about how we initially built the curves for those the development growth these really were something extraordinary and outside of it. So we decided to book them above the attritional. I don't consider that unusual. And I would say if these were a bigger portfolio and more traditional losses they would have been just absorbed within the attritional.

That makes sense. And one just quick follow-up. David, I think you mentioned that the way the Validus kind of renewals happened impact the second quarter. What's going to happen in the third quarter? Is Validus more heavily weighted toward third quarter less? Will that have an impact on growth in the third quarter?

Yes, especially with reference to property cat the book is pretty much 100% renewed. So the written premium that we see in that percentage growth is the closest proxy for annual.

Great. Thank you.

Thanks, Brian.

Thank you. We'll take our next question from Meyer Shields with KBW. Go ahead.

Thank you. Just a follow-up on that. Is there any way of quantifying the difference in gross written premium based on the accounting differences that you have with legacy Validus?

No, we haven't talked about that. The biggest correction that was made on that adjustment was in the purchase accounting when we started that in the fourth quarter and then into the first quarter. But it would reflect in first quarter for example we have shown a lot higher on the Validus side than we would have shown.

Okay. Fair enough. I guess, Kevin you made some comments about moving...

This is the part about the premium?

Yeah. So as you move away from those risks presumably the change in approach I mean some premiums that we had last year are not going to manifest this year?

Yeah. So there's they'll start kind of at the industry level and then to our execution. As Dave commented on 2023 retentions increased pretty substantially and prices increase. Both of those provide a buffer to the income statement because risk is more remote and we have more premium to cover for when losses emerge. Our portfolio shaping then, which really came in with regard to using different vehicles, so we deployed Upsilon to a greater degree this year. That comes through ceded premium. We upsized our ceded from where we originally had targeted in our first pro forma. And then the balance of risk between us and our partner balance sheets more broadly was optimized to again steepen the risk curve so that if there's smaller events as I highlighted we will have a lower market share compared to larger events. And that's what we mean by steepening. So the income statement will have a lower percentage market share exposure than the balance sheet, but both are down from a percent of equity basis.

Okay. Understood. Thank you so much.

Thank you. We will take our next question from Charlie Lederer with Citigroup. Please go ahead.

Thank you. So one large broker recently noted in the insurance media that reinsurers might be willing to write lower down layer at 1/1 in property and in specialty effectively starting to provide some earnings protection there. Can you talk on whether you're seeing that in the market being discussed and maybe whether your appetite may change as well given the more diversified book of business and third-party capital?

I believe buyers would prefer lower retention levels, which presents an opportunity for brokerages to sell. If lower layers are offered, the market will likely maintain discipline. I'm not particularly worried about a significant shift back to the retention levels seen in 2022. We're open to exploring buydown programs and other options that might be better suited than our own balance sheets. While we're not actively seeing this at the moment, discussions about retention are ongoing, and brokers see this as a potential area for growth. Dave, do you have anything to add?

No. I agree. I think most of the demand will come as new top layers and we continue to expect that to happen. We're able to play across the spectrum. So we have capital for the top layers and then we're able to optimize our net position throughout the tower as that suits us.

Got it. Thanks. And I guess different question. Just if we look at the operating noncontrolling interest that you disclosed in the sub kind of as a percentage of operating income, it seems like that was at the lowest level I think it's been since you began disclosing this. Can you talk about what's driving that or if there's anything underlying that that's notable?

That's a comp. NCI is always a little tricky. I think this has to do a little bit with our sessions or the risk sharing we're doing with some of our third-party capital partners particularly DaVinci. But why don't we come back to you on that. That's kind of a technical question for us to kind of wrestle through.

We will take our next question from Mike Zaremski with BMO. Please go ahead.

Thank you. Good morning. Referring to your comments on demand in the US for limit, considering the current inflationary situation in personal lines, we are seeing significant increases in labor costs. It makes sense that you're suggesting demand remains strong into '25. You mentioned that demand in the US rose by $20 billion; could you clarify what the base figure was? Also, do you anticipate that the speed of demand might increase in '25, considering these factors? I would appreciate some insights on the actual growth in demand compared to historical trends. Thank you.

Sure. I think the demand has been fluctuating as the market hasn't quite aligned with the desire to purchase coverage. As rates are coming through in the primary market, we are seeing people following through on their intention to buy more limits. This has been especially positive for us with top layer and premier. We've also observed higher issuance of cat bonds. I would estimate that the market in the US for property cat limits is just above $160 billion, representing roughly a 15% growth rate.

Got it. Okay. That's helpful. Switching gears to investment income, I hope this is a fair question. If I look at the guidance you provided on the call last quarter, you mentioned that retained investment income would be relatively flat. However, it wasn't flat; it actually increased, even though I believe yields have decreased a bit since then. Maybe you can describe what caused the increase this quarter, especially since you're guiding for flat performance again for next quarter.

Thanks. I covered that in my prepared comments. Asset levels have increased, and with the higher rates, we achieved about $15 million more on the retained investment portfolio, along with some changes in mix, though the duration remained relatively unchanged.

Got it. So it's the asset side that you didn't guide you that we. Okay. Thank you.

Thank you. We'll take our next question from Andrew Kligerman with TD Securities. Please go ahead.

Hey thanks for getting me in. Quick follow-up on Brian's question earlier on Casualty. It was an interesting response. You said there were weird losses in relatively small portfolios. Any chance you could give a little texture on the types of claims and the limits that you paid out on those claims?

Yes, I think that’s more detail than probably makes sense. What we're trying to provide is an understanding of how the business is performing. If you examine our casualty portfolio, there are general liability lines along with larger, more homogeneous lines and then there are transactions from companies trying to create innovative products and develop portfolios. One of these transactions fell into that category. It was an emerging business where we collaborated with them to find a way to offer some capacity and see if the market could expand more broadly. This involved a very small portfolio with a unique and unfortunate loss in an area where we hoped to enlarge the reinsurance market and sell additional types of coverage.

Thanks for that. Could you provide an overview of the average limits you are writing and the range of limits, considering your extensive casualty portfolio?

Hi. This is David. I'll take that one. So we write a broad spread of casualty across general liability and professional liability. A lot of that business is quota share. So if an insurer puts out a $10 million limit, and we have 10% of that, then we have $1 million on each of their risks. It's a portfolio that had a lot of that in it and then gets aggregated up, like Kevin said, into homogenous groups that all that then can be tracked all as one. When we look at this, when we make those risk decisions, we're seeing the entire market, and then we're building up our view of risk both on the top down and bottom up and then placing our bets or constructing our portfolio in order to have the highest return on risk. So it's less about any one limit, and it's more about how we structure the portfolio within a class and over time.

Okay. Thanks a lot.

We'll take our next question from David Motemaden with Evercore. Please go ahead.

Hi. Thanks. Good morning. Thanks for squeezing me in. I just was hoping you could elaborate a little bit on the Casualty book and how closely you guys have been working with the cedents just to stay up on loss activity and actual to expected within those portfolios? Any changes you've made just given the distortions in the environment would be interesting to learn.

Certainly. It's an important aspect of our daily underwriting process to monitor actual versus expected outcomes. We can benchmark our clients' data against the overall market, which gives us an edge compared to insurance companies that have access only to their own data. By analyzing the entire market, we can form an independent perspective. This approach is crucial for scaling our participations over time and selecting between risks. For example, we've made portfolio shifts, such as steering clear of commercial auto as rates have declined, which reflects our continuous evaluation in the underwriting process.

Got it. Thank you. And then maybe just lastly, you spoke about having a higher dollar value of Southeast wind risk but lower on a percentage of equity basis. Could you just talk about why you're not willing to take that up on a percentage of equity basis, if returns are so solid? Is that just more active management ahead of a potentially active wind season? Or some color around that would be helpful.

We are focused on achieving the best returns across a wide range of possible outcomes. We had more success with retroactive purchases than we expected, which allowed us to take advantage of a steeper curve. Part of this can be attributed to our expectations of an active wind season, but it also helps to protect our income statement as we enter that season. Our ability to transparently assess the book we are writing, along with our hedging strategies, has allowed us to influence the curve and evaluate returns across various scenarios. We are responding to the expected higher frequency of events and strategically shaping our portfolio to increase returns. Actually, I think we can come back to Charlie's question from earlier regarding the NCI.

Yes, Charlie, I think regarding the NCI, our relationship with our vehicles remains unchanged. We continue to adhere to the same principles of aligning risk with the capital subscribed to by the joint venture. For instance, DaVinci has benefited from profitability in a low catastrophe environment. The NCI allocated to our joint venture partners has actually increased, with DaVinci's rising from $225 million to $300 million. Additionally, in the supplemental information, it showed an increase from $59 million year-over-year to $150 million year-over-year for the quarter. Therefore, the value proposition for our joint ventures is evident in our results.

And there are no further questions at this time. I'll turn the floor back over to Kevin O'Donnell for any additional or closing remarks.

Thank you for joining today's call. Hopefully, what came across is our excitement and enthusiasm for the portfolio that we create and the opportunities for continued strong performance. So thank you for joining the call, and we look forward to speaking to you next quarter.

Thank you and this concludes the RenaissanceRe Second Quarter 2024 Earnings Call and Webcast. Please disconnect your lines at this time, and have a wonderful day.