Good morning. My name is Julie and I will be your conference operator today. At this time, I would like to welcome everyone to the RenaissanceRe Second Quarter 2017 Financial Results Conference Call. [Operator Instructions] I would now like to turn the call over to Peter Hill, you may begin your conference.

Good morning and thank you for joining the second quarter 2017 financial results conference call. Yesterday, after the market closed we issued our quarterly release. If you didn't receive a copy, please call me at 212-521-4800 and we will make sure to provide you with one. There will be an audio replay of the call available from about 1:00 p.m. Eastern Time today through midnight on August 26. The replay can be accessed by dialing 855-859-2056 or +1404-537-3406. The passcode you will need for both numbers is 18690168. Today's call is also available through the Investor Information section of www.renre.com and will be archived on RenaissanceRe's website through midnight on October 4. Before we begin, I am obliged to caution that today's discussion may contain forward-looking statements and actual results may differ materially from those discussed. Additional information regarding the factors shaping these outcomes can be found in RenaissanceRe's SEC filings to which we direct you. With us to discuss today's results are Kevin O'Donnell, President and Chief Executive Officer and Bob Qutub, Executive Vice President and Chief Financial Officer. I would now like to turn the call over to Kevin. Kevin?

Thanks Peter. Good morning and thank you for joining today's call. I'll open the call with an overview of our performance for the quarter and highlight what I think the big themes were. Bob will then discuss our financial results. Finally, I will give you a little more detail about what happened in each of our segments before taking your questions. Last night we released our second quarter earnings. We had a good quarter reporting growth in book value of 3.4% and growth in tangible book value per share plus accumulated dividend of 3.9%. We also reported an annualized ROE of 15.2% and an annualized operating ROE of 10%. These returns were the result of our overall strong performance, most notably in our property catastrophe portfolio as well as above average investment results, driven by tightening spreads and price depreciation in our public equities. I've spoken before of our competitive advantages or what we refer to as the three superiors. These are superior customer relationships, superior risk relation and superior capital management. And they have underpinned our success from the beginning. In order to maximize long-term shareholder value, we believe we need to execute in all three of these critical areas all of the time. This quarter is a good example about doing just that. To begin with superior customer relationships, the specific example of this is the recently held America's Cup Sailing competition in Bermuda. We were a proud supporter and it was a good opportunity to showcase the island which looked spectacular on the world stage. From our perspective, it was a great opportunity to spend time with our customers at a premier sporting event. During the Americas Cup, we hosted about 250 clients, brokers and guests representing roughly one third of our portfolio and eleven of our…

Thanks Kevin and good morning everyone. I'd like to first give you a few overall themes for the quarter and provide some detail of our consolidated and segment financial results and conclude with investments and capital activities. As Kevin noted in his opening remarks, we were pleased with our results for the quarter as we experienced a relatively low level of catastrophe losses. This combined with solid investment results and our continued focus on capital and expense management, resulted in annualized ROE of 15.2% and an annualized operating ROE of 10%. Overall we built an attractive portfolio of risk given prevailing market conditions. We stayed true to our strategic objectives during the quarter allowing us to grow our consolidated topline. Our casualty specialty segment saw 24% increase in gross premiums written during the quarter with the majority of the increase coming from certain casualty classes of business where our teams successfully executed new deals with select core clients. In our property segment, we saw some unique and attractive opportunities for new business as well as opportunities for greater placements on existing business. As a result gross premiums written in other property main class of business increased 42%, albeit from a relatively small base. This more than offset the continued soft pricing environment we experience in catastrophe. Overall, gross premiums written in our property segment were relatively flat during the second quarter of 2017 compared to the second quarter of 2016 as we maintained our underwriting discipline and exacted our gross to net strategy. Now moving onto our consolidated financial results. For the quarter ended June 30, 2017, we reported $263 million or $4.24 per diluted common share and operating income of $113 million or $2.79 per diluted common share. We generated an annualized ROE for the quarter of 15.2% and…

Thanks Bob. I'll start with my comments in the property segment and I'll move over to the casualty segment. Our property segment performed very well in a number of ways during the quarter. Certainly with regard to the results, which Bob has already described, but also with regard to our underwriting at a major renewal date. We maintained and strengthened key customer relationships in a market that presented limited new opportunities. It was not a surprise to us that the competitive nature of the property market continued at the mid-year renewals and we have positioned our portfolio accordingly in response. At the June 1 property cat renewal, we did a good job of managing growth and net property cat premium and we grew our books of property quota share, property per risk, and property binder business for what we refer to as other property during the quarter in line with expectations. These portfolios are written mostly in our US and London offices and I'll touch on them in more detail later. As we've mentioned previously, we retained about half of our premium in the property segment reflecting our desire to bring efficient capital to DaVinci, Upsilon, Fibonacci and all our other vehicles and to improve the capital efficiency and returns of our net portfolios through the use of seeded reinsurance. Looking more specifically at property tax, demand in the second quarter was essentially flat, which added to some of the competition. One factor behind this lack of increased demand for traditional reinsurance was the pricing witnessed within the cat bond market. There was 6 billion of cat bonds issued in the second quarter and have been over 9 billion of cat bonds issued for the first half of the year. To put this in perspective, there was less than 6…

[Operator Instructions] Your first question comes from the line of Elyse Greenspan with Wells Fargo. Your line is open.

First question. Kevin, great disclosure on the catastrophe market. I'm just trying to tie a couple of things together. In your opening commentary, you pointed to growth being lower for the foreseeable future. You pointing to, I mean, although there was some growth to start the year, I'm just trying to get kind of what numbers you're pointing to within that book? And then as we think about cat, the majority of the renewals have already taken place for this year. I mean is there anything that you can think to that would cause you to think that the catastrophe market conditions would change when we start thinking about January 1 of next year, obviously with the caveat being we don't know how the hurricane season will turn out?

With regard to the cat market, I think if you go back in the first quarter call, we talked that we thought we would shrink a little in property cat and we would grow other property. We ended up holding a little bit more property cat premium than we expected, not because rates were wildly different than where we anticipated, just because of the relationships we have and the opportunities we saw. You're absolutely right, there's not a lot that renews in the cat market between now and year end. And absent the catalyst, I think it's difficult to think that finance - the trends we're seeing in the business will change. So I would go with an expectation that absent some reason to reconsider the market that our view of the market will likely be unchanged, if there's no catalyst for change.

Okay. And then in terms of the specialty casualty business, your underlying loss ratio in that was about 69 this quarter, which was in line with the first quarter and I know you called out some events, about five point impacting that number. There was, Bob, you pointed to some smaller events this quarter. If you can kind of put a number on that, I'm just trying to think like with the business mix that you've been shifting to there, is the 69 the right kind of underlying loss ratio ex-reserve development to think about in that business going forward.

We did try to give some additional disclosure on that and I think what was - one of the components of that disclosure was that the last year's number was, there was some movement in it, so the spread between last year and this year was a little larger than what we would have expected. But I think thinking about the current year loss ratios in the high-60s, it is about right going forward.

Okay. And then in terms of capital management views, in temporary, you guys have taken the stance of maybe being a little bit less active during Hurricane season, what are your thought process surrounding repurchasing stock this year during the wind season?

I think going back to my comments in the text of my speech here, we really look at a number of different factors. It's difficult for us to predict what our capital allocation will be for share buybacks in the third quarter. We have a wind season that is out there, but that doesn't mean we haven't lost shares in the third quarter before. We bought 2 million in this quarter already, but aside from that, I mean just a number of different factors Elyse.

Your next question comes from the line of Kai Pan with Morgan Stanley. Your line is open.

First question on the Florida, your gross to net strategy. Are you buying more protection for lower layers, how is that tied to your forecast for this hurricane season. Some forecasts say this year probably more active hurricane season.

Yes. So let me start with just the ceded construct of our portfolio. I think largely, the vast majority of our ceded construct this year versus last year is consistent. I think two things I'll highlight is we didn't renew our cat bond, which is the Mona Lisa cat bond, which was protecting the more remote end of the distribution, but we did buy a little bit more traditional ceded coverage, which is more in the meat of the distribution. So that's why one of the reasons we have a little bit more risk at the more remote return periods and a little bit less risk at the more frequent return periods. With regard to the sea surface temperatures and the forecast for above average activity, it's obviously something that we look at. It's a risk that we believe we must manage. It's not a risk that we look to pass on to those ceding risks to us. So it's something obviously we have a lot of resources put to understanding it and it does affect the way we shape our portfolio, but much more in a net basis than on a gross basis.

And then second question on the casualty specialty line of business been growing pretty fast the last few years. And if you look at underlying combined ratio for this book, it's running about 100%. So I just wondering just want to sort of reconcile the rapid top line growth versus the profitability of the business, when can this line becoming a meaningful driver in terms of underwriting income?

Sure. I think I would shift of focus from a quarterly growth and just look at the year-to-date growth for the overall segment, which I think is about 7%. So yes, we are growing in that line of business, but that growth is tempered compared to what we've seen over the last few years. This is a long tail line of business as you know and it will take some period for the book to mature. So I think it will take a few years for the real earnings power of this book to emerge, but I feel very comfortable about where our curves are and how our legacy book is developing against those curves.

So do you have any expectation with eventually that the current book will run out just in the high-90s commodity ratio, if you're taking consideration of future reserve leases?

So, I think the way I think about it is, our reserving loss ratios are setting our current year reserving targets and a lot of that and I think about it is really about what the premium adequacy for the book and then our prior year is really a measure as to how we're developing along the path to those loss ratios. So I actually don't separate the loss ratios as much as just going to look at the combined performance of the book. I think thinking about it from quarter-to-quarter is a little too short. We'll have some ups and downs, but ultimately, I believe that this book will be accretive on an underwriting basis and overall including investment income.

And my last question is, you probably saw this morning Markel acquired State National and they also own CATCo as well. I just wonder do you see any change in the sort of competitive marketplace in terms of alternative capital management and how do you view RenaissanceRe's market position.

So I did see that Markel bought State National and I obviously know that they own CATCo. I'm not sure that's a strategic tie there where they're looking to bring CATCo more to the primary market through the fronting of State National. From our standpoint, I feel great about our access to capital and our access to risk. I think we can structure anything that we've seen structured in the market or we have the capability to structure. What we do put forth is really more customer driven and not seeking to bring funds under management. When we think there's a customer need and we can bring efficient capital to that customer need, we'll either bring that from a big capacity that we have or structure a vehicle to meet the needs of the customer.

Your next question comes from the line of Jay Cohen with Bank of America. Your line is open.

I just wanted to focus on the G&A expenses, kind of that absolute number. You've done a really good job of bringing that down, the 2Q clearly came down even from the first quarter I think in every segment. I'm wondering should we be looking at that number in the 2Q as really the run rate or should we look at maybe the first half or the last four quarters, give us a sense of kind of where you are in that regard?

Sure, Jay. This is Bob. We've been focusing on the platform process ever since the acquisition, had a lot of volatility. There's been a lot of quote I guess other items and when you look at the first two quarters this year, it's been fairly clean. And we continue to focus on that, allowing us to leverage growth on the platform as Kevin talked about elsewhere.

So that 2Q number is a pretty good number to consider going forward?

That was pretty clean this quarter. There was a few small things, but not, so it's a low quarter. There wasn't anything significant like severance or other one-time items, but look at it in the context of the first half of the year. Relatively, I would say that's a good course that we're setting.

Your next question comes from the line of Meyer Shields with KBW. Your line is open.

I guess the question for Kevin. When you - what's the positive opportunity for RenaissanceRe when the third party catastrophe models update their modeling expectations.

I guess the most recent one that's out is really RMS 17. I think our process frankly is that when a model is released, it's a little bit like Christmas around RenaissanceRe with all our scientists waiting eagerly to open up the present and see what they can pull out of the model. So we're pulling apart, look for what has changed and figure out if there's elements of that, then we can incorporate into our independent view of risk and there has been 25 years honing that and a lot of that honing has come from the work that either RMS or any others have done to challenge the way in which we look at risk. So from the most constructive way to think about it is, I would say that one of the things that we do is we bring that learning to our customers. So as RMS 17 has made changes, we bring that understanding to our customers and give them a clean view of risk through that new lens, so that they can understand whether they want to accept the changes that are made and how it can impact either the way they construct their portfolio or think about beating that risk.

And then probably you talked a little bit about the evolution of the investment portfolio. Theoretically, if premium level off, but longer tail lines reserves accumulate, does that imply continued sort of changing in the portfolio?

Hey, Meyer. This is Bob. Let me take that one. We've talked about the portfolio being very short duration, 2.6 years. It's a reflection of how the portfolio has been constructed in the past, as kind of mentioned in his comment, the longer tail business will develop over time. That will give us some opportunities to look at the profile of the balance sheet and as we see future quarters, there may be things we can look at expanding the risk profile to some degree, but everything will be sort of evolutionary and gradual as we look at those opportunities as they come out of.

Your next question comes from the line of Brian Meredith with UBS. Your line is open.

Yeah. Thanks. A couple of quick questions here for you. First one, just curious we're seeing the decline a little bit here in the financial lines. Is that related to just the mortgage guarantee business starting to come down a little bit? Is that market getting more competitive?

I think one thing is, last year, we saw some opportunities to pick up some legacy books. So we knew that we were going to leg into those a little bit more than what we knew was going to be sustainable. So there's a little bit of coming off a high base. I think looking at financial lines now there, I believe the market is still profitable and there are still good opportunities there. It has become more competitive. So I think the reduction you're seeing is a little bit reflective of our continued discipline in underwriting that, but also the fact that we had a bigger book last year because of those legacy portfolios that we otherwise would have.

And then just curious Kevin, what's your kind of thoughts right now as far as the competitive dynamics at the Lloyd's market. Are you seeing any change, getting worse, better, which way?

The Lloyd's market is very competitive right now. I think I'm pleased with, looking at our syndicate last year, I think we had a 52 loss ratio, which again recognizes good results. What's tough is the expense load within the Lloyd's framework. I know Lloyd's as an entity is looking at ways in which you can begin to tackle that, both thinking about what the acquisition costs are to enter Lloyd's and also what are the administration costs for participating in the Lloyd's market. So I think there are some challenges within Lloyd's. I think they're probably going to be with us for some period of time, but I feel as if we're navigating it better than most, but we have to fully recognize, it's a tough market there.

Great. And then last question, I'm just curious going back to the casualty and specialty business and you're definitely ceding away a fair amount of that premium. My question I guess is, are you benefiting at all in your underlying combined rations from the sessions or is that actually hurting for the time being? Clearly, looking at your acquisition expense ratios, which are on the higher side.

So let me answer this the way an underwriter would look at it and then the way we're representing it. The underwriters' view of it is it's helping our net economic portfolios. So we are ceding terms and conditions that are accretive to the overall book of business from - within the underwriters, we want an in force basis. The GAAP representations, we buy a fair amount of excess of loss reinsurance. That's definitely hurting us from the GAAP representation, because we're spending premium and not getting the recoveries because, as I mentioned, a lot of this stuff particularly in the first half of this year was high frequency, low severity stuff. So I think it's a bit of a mixed bag. We think it's the right thing to do and it's the way we've always looked about constructing our portfolios, but it does hurt us from a GAAP representation.

[Operator Instructions] Your next question comes from the line of Ian Gutterman with Balyasny. Your line is open.

Kevin, I guess the first I wanted to touch on is that, as I was looking through the numbers, one thing that stood out to me was, your acquisition cost, back when you were mostly a cat company, that was close to 10%. After the deal, it was maybe mid to high teens. In the past few quarters, it's been more like a 22%, 23%. And I understand why obviously the mix is changing. Are we sort of at a stable point where like 22%, 23% is the way to think about acquisition expense, does it continue to go up as you continue growing faster in the non-cat areas or was there anything abnormal in the first half that I would expect it to be lower, just can you give us a sense of how to think about that?

Sure. So the property, the other property stuff will continue to push up the overall property segment one, but I think you're probably more focused on casualty. Is that right?

I was looking companywide, so why don't you give those numbers?

So the other property component is, it's more a proportional business where we will be paying cedes. So we should expect to see our overall acquisition cost within the property segment rise as other property becomes a bigger component of that portfolio, but that's not reasonably stable. So from - I think if we're just a cat company, I don't think you'd see any material change in our acquisition costs. Moving over to casualty, ceding commissions elevated over the last several years, but are pretty stable. Any changes and yeah, so any changes you would see within our acquisition cost within casualty will be about portfolio shift on long lines of business, but within each of the businesses that we're in, the overall acquisition costs are reasonably stable.

Then on the investment income, you have been sort of - on the fixed side, sort of a high-30s run rate for a while and the past two quarters has been more like a 44, anything unusual in there or is it just, you've redeployed somewhat higher rates and this is a better base?

Regarding the investment portfolio, Ian, I think as I said, we haven't really made much of a change, duration has gone out a little bit from low 2s to mid-2.6 years. The yields have been kind of reflective of the market and what that position would be, we're at 2.3. We've seen it bounce around. We have modestly increased a little bit of our credit risk over the last year, but the reality is we're about the same, but going back to your earlier question, we're looking at the changes in our portfolio of risk on the liabilities side, possibly extend that out. Now having said that, our equity portfolio again continues on a total return basis perform adequately very well actually and if you look at the mark-to-market, you'd see that half of it was driven by equity and the other half was driven by the fixed income portfolio.

And then just the last one I had was, looking just at the other property segment disclosure, it looks like in the past few quarters, on an accident year basis, call it a low to mid-90s combined and there hasn't really been much cat activity if any in there. So if I can guess in your cat, just from other companies who have that sort of business, which seems to suggest that it's over 100 and maybe that's being conservative on the pics, but can you give me a sense of what normalizing, I guess I would have thought that should be a mid-80s, maybe in today's market, a high-80s type of book. What am I missing? Is it just that the expense ratio needs to come down as you grow or is there something else?

What I think one of the drivers on that, which is hard to give transparency on is the construct of a ceded portfolio supporting that book of business. So we have a lot of excess protections on the other property book. Most of those have not been triggered with more the attritional stuff coming in. So I think absent that, I think lower loss ratio is absolutely achievable, but again we're doing what we think is the right thing for constructing the portfolio and part of that is an unfavorable GAAP representation.

That makes sense. Is there an aggregate element to that as these attritionals continue or is it really more traditional XOL?

It's more traditional XOL and I think it's - and from what we're seeing on the attritional side, I wouldn't point to particular problems in the book either. It's just the way it's being represented on a GAAP basis.

There are no further questions at this time. I would now turn the call back over to Mr. O'Donnell for closing remarks.

Well, we appreciate you all joining us for this quarter's call. Thank you for your attention and your questions and we look forward to speaking to you next quarter.

This concludes today's conference call. You may now disconnect.