RENAISSANCERE HOLDINGS LTD – 10-Q – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion and analysis of our results of operations for the
three and nine months ended September 30, 2021 and 2020, respectively, as well
as our liquidity and capital resources at September 30, 2021. This discussion
and analysis should be read in conjunction with the unaudited consolidated
financial statements and notes thereto included in this filing and the audited
consolidated financial statements and notes thereto contained in our Form 10-K
for the fiscal year ended December 31, 2020. This filing contains
forward-looking statements that involve risks and uncertainties. Actual results
may differ materially from the results described or implied by these
forward-looking statements. See "Note on Forward-Looking Statements."
In this Form 10-Q, references to "RenaissanceRe" refer to RenaissanceRe Holdings
Ltd. (the parent company) and references to "we," "us," "our" and the "Company"
refer to RenaissanceRe Holdings Ltd. together with its subsidiaries, unless the
context requires otherwise.
All dollar amounts referred to in this Form 10-Q are in U.S. dollars unless
otherwise indicated.
Due to rounding, numbers presented in the tables included in this Form 10-Q may
not add up precisely to the totals provided.
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INDEX TO MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

                                                                  Page
  OVERVIEW                                                         55
  SUMMARY OF CRITICAL ACCOUNTING ESTIMATES                         57
  SUMMARY RESULTS OF OPERATIONS                                    70
  FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES             81
  Financial Condition                                              81
  Liquidity and Cash Flows                                         82
  Capital Resources                                                86
  Reserve for Claims and Claim Expenses                            88
  Investments                                                      88
  Ratings                                                          90
  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION                     90
  EFFECTS OF INFLATION                                             92
  OFF-BALANCE SHEET AND SPECIAL PURPOSE ENTITY ARRANGEMENTS        92
  CONTRACTUAL OBLIGATIONS                                          92
  CURRENT OUTLOOK                                                  92


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OVERVIEW

RenaissanceRe is a global provider of reinsurance and insurance. We provide
property, casualty and specialty reinsurance and certain insurance solutions to
customers, principally through intermediaries. Established in 1993, we have
offices in Bermuda, Australia, Ireland, Singapore, Switzerland, the U.K., and
the U.S. Our operating subsidiaries include Renaissance Reinsurance, Renaissance
Reinsurance U.S. Inc., RenaissanceRe Specialty U.S. Ltd. ("RenaissanceRe
Specialty U.S."), RenaissanceRe Europe AG ("RREAG"), Renaissance Reinsurance of
Europe Unlimited Company and our Lloyd's syndicate, RenaissanceRe Syndicate 1458
("Syndicate 1458"). We also underwrite reinsurance on behalf of joint ventures,
including DaVinci Reinsurance Ltd. ("DaVinci"), Top Layer Reinsurance Ltd. ("Top
Layer Re"), Upsilon RFO Re Ltd. ("Upsilon RFO") and Vermeer Reinsurance Ltd.
("Vermeer"). In addition, through RenaissanceRe Medici Fund Ltd. ("Medici"), we
invest in various insurance-based investment instruments that have returns
primarily tied to property catastrophe risk.
Our mission is to match desirable, well-structured risks with efficient sources
of capital to achieve our vision of being the best underwriter. We believe that
this will allow us to produce superior returns for our shareholders over the
long term, and to protect communities and enable prosperity. We seek to
accomplish these goals by being a trusted, long-term partner to our customers
for assessing and managing risk, delivering responsive and innovative solutions,
leveraging our core capabilities of risk assessment and information management,
investing in these core capabilities in order to serve our customers across
market cycles, and keeping our promises. Our strategy focuses on superior risk
selection, superior customer relationships and superior capital management. We
provide value to our customers and joint venture and managed fund partners in
the form of financial security, innovative products, and responsive service. We
are known as a leader in paying valid claims promptly. We principally measure
our financial success through long-term growth in tangible book value per common
share plus the change in accumulated dividends. We believe this metric is the
most appropriate measure of our financial performance, and in respect of which
we believe we have delivered superior performance over time. The principal
drivers of our profit are underwriting income, investment income, and fee income
generated by our third-party capital management business.
Our core products include property, casualty and specialty reinsurance, and
certain insurance products principally distributed through intermediaries, with
whom we have cultivated strong long-term relationships. We believe we have been
one of the world's leading providers of catastrophe reinsurance since our
founding. In recent years, through the strategic execution of several
initiatives, including organic growth and acquisitions, we have expanded and
diversified our casualty and specialty platform and products, and believe we are
a leader in certain casualty and specialty lines of business. We also pursue a
number of other opportunities, such as creating and managing our joint ventures
and managed funds, executing customized reinsurance transactions to assume or
cede risk, and managing certain strategic investments directed at classes of
risk other than catastrophe reinsurance. From time to time we consider
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.
We have determined our business consists of the following reportable segments:
(1) Property, which is comprised of catastrophe and other property reinsurance
and insurance written on behalf of our operating subsidiaries and certain joint
ventures and managed funds, and (2) Casualty and Specialty, which is comprised
of casualty and specialty reinsurance and insurance written on behalf of our
operating subsidiaries and certain joint ventures and managed funds.
To best serve our clients in the places they do business, we have operating
subsidiaries, branches, joint ventures, managed funds and underwriting platforms
around the world. We write property and casualty and specialty reinsurance
through our wholly-owned operating subsidiaries, joint ventures, managed funds
and Syndicate 1458 and certain insurance products primarily through Syndicate
1458 and RenaissanceRe Specialty U.S. Syndicate 1458 provides us with access to
Lloyd's extensive distribution network and worldwide licenses, and also writes
business through delegated authority arrangements. The underwriting results of
our operating subsidiaries and underwriting platforms are included in our
Property and Casualty and Specialty segment results as appropriate.

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A meaningful portion of the reinsurance and insurance we write provides
protection from damages relating to natural and man-made catastrophes. Our
results depend to a large extent on the frequency and severity of these
catastrophic events, and the coverages we offer to customers affected by these
events. We are exposed to significant losses from these catastrophic events and
other exposures we cover, which primarily impact our Property segment, in both
the property catastrophe and other property lines of business. Accordingly, we
expect a significant degree of volatility in our financial results and our
financial results may vary significantly from quarter-to-quarter and from
year-to-year, based on the level of insured catastrophic losses occurring around
the world. Our Casualty and Specialty business, which represents approximately
half of our gross premiums written annually, is an efficient use of capital that
is generally less correlated with our Property business. It allows us to bring
additional capacity to our clients, across a wider range of product offerings,
while continuing to be good stewards of our shareholders' capital.
We continually explore appropriate and efficient ways to address the risk needs
of our clients and the impact of various regulatory and legislative changes on
our operations. We have created and managed, and continue to manage, multiple
capital vehicles across several jurisdictions and may create additional risk
bearing vehicles or enter into additional jurisdictions in the future. In
addition, our differentiated strategy and capabilities position us to pursue
bespoke or large solutions for clients, which may be non-recurring. This, and
other factors including the timing of contract inception, could result in
significant volatility of premiums in both our Property and Casualty and
Specialty segments. As our product and geographical diversity increases, we may
be exposed to new risks, uncertainties and sources of volatility.
Our revenues are principally derived from three sources: (1) net premiums earned
from the reinsurance and insurance policies we sell; (2) net investment income
and net realized and unrealized gains from the investment of our capital funds
and the investment of the cash we receive on the policies which we sell; and (3)
fee income received from our joint ventures and managed funds, advisory services
and various other items.
Our expenses primarily consist of: (1) net claims and claim expenses incurred on
the policies of reinsurance and insurance we sell; (2) acquisition costs which
typically represent a percentage of the premiums we write; (3) operating
expenses which primarily consist of personnel expenses, rent and other operating
expenses; (4) corporate expenses which include certain executive, legal and
consulting expenses, costs for research and development, transaction and
integration-related expenses, and other miscellaneous costs, including those
associated with operating as a publicly traded company; (5) redeemable
noncontrolling interests, which represent the interests of third parties with
respect to the net income of DaVinciRe Holdings Ltd. ("DaVinciRe"), Medici and
Vermeer; and (6) interest and dividend costs related to our debt and preference
shares. We are also subject to taxes in certain jurisdictions in which we
operate. Since the majority of our income is currently earned in Bermuda, which
does not have a corporate income tax, the tax impact to our operations has
historically been minimal. In the future, our net tax exposure may increase as
our operations expand geographically, or as a result of adverse tax
developments.
The underwriting results of an insurance or reinsurance company are discussed
frequently by reference to its net claims and claim expense ratio, underwriting
expense ratio, and combined ratio. The net claims and claim expense ratio is
calculated by dividing net claims and claim expenses incurred by net premiums
earned. The underwriting expense ratio is calculated by dividing underwriting
expenses (acquisition expenses and operational expenses) by net premiums earned.
The combined ratio is the sum of the net claims and claim expense ratio and the
underwriting expense ratio. A combined ratio below 100% indicates profitable
underwriting prior to the consideration of investment income. A combined ratio
over 100% indicates unprofitable underwriting prior to the consideration of
investment income. We also discuss our net claims and claim expense ratio on a
current accident year basis and a prior accident years basis. The current
accident year net claims and claim expense ratio is calculated by taking current
accident year net claims and claim expenses incurred, divided by net premiums
earned. The prior accident years net claims and claim expense ratio is
calculated by taking prior accident years net claims and claim expenses
incurred, divided by net premiums earned.
Segments
Our reportable segments are defined as follows: (1) Property, which is comprised
of catastrophe and other property reinsurance and insurance written on behalf of
our operating subsidiaries and certain joint ventures and managed funds, and (2)
Casualty and Specialty, which is comprised of casualty and specialty
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reinsurance and insurance written on behalf of our operating subsidiaries and
certain joint ventures and managed funds. In addition to our two reportable
segments, we have an Other category, which primarily includes our strategic
investments, investments unit, corporate expenses, capital servicing costs,
noncontrolling interests and certain expenses related to acquisitions and
disposals.
COVID-19 Pandemic
Due to the ongoing and rapidly evolving nature of the COVID-19 pandemic, we are
continuing to evaluate the impact of the COVID-19 pandemic on our business,
operations and financial condition, including our potential loss exposures. It
is not yet possible to give an estimate of all of the Company's potential
reinsurance, insurance or investment exposures, or any other effects that the
COVID-19 pandemic may have on our results of operations or financial condition.
We continue to evaluate industry trends and information received from or
reported by clients, brokers, industry actuaries, regulators, courts, and
others, and expect historically significant industry losses to emerge over time
as the full impact of the pandemic and its effects on the global economy are
realized.
SUMMARY OF CRITICAL ACCOUNTING ESTIMATES
Our critical accounting estimates include "Claims and Claim Expense Reserves,"
"Premiums and Related Expenses," "Reinsurance Recoverables," "Fair Value
Measurements and Impairments" and "Income Taxes," and are discussed in
Management's Discussion and Analysis of Financial Condition and Results of
Operations in our Form 10-K for the year ended December 31, 2020. There have
been no material changes to our critical accounting estimates as disclosed in
our Form 10-K for the year ended December 31, 2020.
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