Good day and thank you for standing by. Welcome to the RenaissanceRe's Q1 Earnings Results Conference Call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question-and-answer session [Operator Instructions]. I would now like to hand the conference over to Keith McCue, SVP Finance Investor Relations. Thank you. Please go ahead.

Good morning. Thank you for joining our first-quarter 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 4441-239-4830 and we will make sure to provide you with one. There will be an audio replay of the call available from about 2:00 PM Eastern time today through midnight on June 4th. The replay can be accessed by dialing 855-859-2056 U.S. toll free or 1-404-537-3406 internationally. The passcode you will need for both numbers is 7549718. 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 June 4th, 2022. 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 Robert Qutub, Executive Vice President and Chief Financial Officer. I'd now like to turn the call over to Kevin. Kevin? Kevin O’Donnell: Thanks, Keith. Good morning, everyone. And thank you for joining today's call. Last night, we reported solid top-line growth at an annualized operating return on average common equity of 11%. This is a good start to the year and the second-quarter in a row, of reporting double-digit operating ROE during active CAT quarters. As I've discussed with you, over the last ten years, we have made key strategic decisions to build the capabilities and scale that we think are needed to generate superior returns in an evolving marketplace. This has included: carefully growing our casualty and specialty business, developing leadership and other property underwriting, maintaining…

Thanks, Kevin, and good morning, everyone. This quarter we continued to demonstrate the power of our platform reporting operating income of a $152 million and an annualized operating return on average, common equity of 10.8%. We had underwriting income of $200 million generating profits across both segments and a very attractive quarter. Looking forward to the end of 2022, we expect improvements in each of our three drivers of profit, which should increasingly benefit our financial results as the year progresses, making them more resilient to natural catastrophe volatility. First, we expect our net investment income to benefit from rising interest rates and increased investment leverage. Our retained investment leverage, defined as the ratio of our retained fixed maturity and short-term investments portfolio to common equity is about 2.3 times. This means that 100 basis point increase in our retained yield will generate about 230 basis points of incremental operating return on equity over time. As long as rates continue to rise, we anticipate that investment earnings will be a greater contributor to operating ROE. Second, the Casualty and Specialty business continues to improve and we believe that it can produce a mid-90s combined ratio on a growing premium base. Finally, we expect the income to improve over the course of the year and anticipate we should be earning in the range of $45 million per quarter by year-end, absent any large losses. This improvement reflects capital -- and normalization of performance fees in DaVinci and the launch of our new vehicle, Fontana. With these tailwinds, you can understand why I'm so confident about the strategic decisions that we have made and the earnings power of our business. Today, I'll cover these points in more detail in addition to our capital management activities and expenses. I will also provide an…

[Operator Instructions]. Please standby will be compile the Q&A roster. Your first question comes from the line of Elyse Greenspan with Wells Fargo.

Hi. Thanks. Good morning. My first question was just on the level of buyback on. So last quarter you guys had said that buyback will be driven by net income. So did the negative mark-to-market from the higher interest rates impact you know the slowdown in the quarter and then tying is it that I guess I was also a little surprised with the slowdown given that you said excess capital, right. Remains at the top end of your range. So, I would think that would have supported perhaps more buyback activity in the quarter.

Thanks, Elyse. Good question. First, I'll start with we still are at the high end of our excess capital. We did reflect the mark-to-market that came through on the portfolio. We look at that as more timing as opposed to absolute. And the future what I was talking about, the rising interest rates are models on a pro forma basis. And so that's going to have the ability to look forward and actually look at the increasing rates that we'll get on the portfolio and bring that back into our capital. So that's the support of our capital. Look, there was a lot of activity this quarter between inflation, between a war and rising interest rates. We did start off the quarter and bought about $93 million back, and we just took a pause. We look at this on a quarterly basis. So, as we look forward into the second quarter, we're looking at a number of things where we can deploy capital. And actually, we already have in Fontana. We've got the ability to put 150 million to work there. We also have the ability to do both and we have the intent to look at both options that we have to deploy, both into the business and also return.

Thanks. And then my follow-up on last quarter, you guys had said within property that gross premiums are going to be down and net was expected to be about flat after accounting for -- excluding reinstatement. It does seem like you guys found better growth within Casualty, but then perhaps not as much growth within Property as when you made those statements. How should we be thinking about the growth within both gross and net within your property book this year? Has anything changed relative to that guide?

There has been really no change. What I tried to point out was there's -- a lot of times we get focused on the gross and that's what I was trying to walk you down in my comments about Upsilon and RenaissanceRe and get into the net. And that's really when I look at the net premiums written off and property, I broke it down between catastrophe which actually showed modest growth that we had in their reflective of the rate and the positioning of the portfolio. Other property over the last couple of years, we've seen significant growth from what we saw and the decline in other property on a net basis which was down about 17 points, was really just refining the profitability that Kevin has been talking about. And so, we've not renewed on some proportional lines on the quota share. Kevin O’Donnell: That's accurate. Bob and one thing you mentioned is anything changed in our view of property. If anything, we are increasingly seeing green shoots in further dislocation in pricing. So, if I think about how to underwrite our property portfolio, firstly, from growth perspective, Bob explained where we are. Over a couple of years of the growth has been strong and we've had the pendulum kind of swung over to the risk’s accumulation. As an underwriter, you need to think about when you want to focus on margin expansion and risk accumulation. We are swinging the pendulum towards margin expansion. So, on a like-for-like basis, all of our property is now producing more expected profit for the premium that we're bringing in. We think that's the right focus coming into what is coming up for renewal is largely going to be wind exposed business. We liked the construct of the portfolio, but we're going to press rate. So, I still have optimism that we're going to see opportunities for growth from rate and largely within expectations of where pricing is likely to be will hold the risk curves relatively flat to where we were last year.

Okay. Thanks for the color. Kevin O’Donnell: Yes.

Your next question comes from the line of Yaron Kinar with Jefferies.

Thank you. Good morning, everybody. Maybe to follow-up on Elyse's question because I'm not sure I fully understand the response with regards to the buyback capacity for this year. So, if buybacks were going to be tied to net income and net income was actually a loss this quarter given the marks, do you still expect them to do buybacks over the course of the year? Do you expect this will lower buybacks as a result of that? Or is it that you are looking at the pro forma operating income benefits from higher interest rates that would still drive buyback? Kevin O’Donnell: It's one of the points I was trying to make. And thanks for the follow-up on that for clarification. The point I was trying to make on the mark-to-market. Yes, indeed, we had absolute net income loss, but the point I was trying to make on the mark-to-market as we view a lot of that is more timing as opposed to absolute will realize very small amounts of it. So, we're still looking at a positive base. We have the ability to buyback share, we have the ability to deploy capital, and we look at each quarter on a discrete basis.

So conceptually, wouldn't it make sense to tie the buybacks to operating income then?

I don't want to get to disconnected because it's a net income that increases the capital and we have to look at what available capital is. And that was the point I was making when I said we did take a hit on the capital to the mark-to-market, but we have to look forward to the investment earnings going forward. It's a balance in a situation like this. This was a lot of activities this quarter and we took a break, that doesn't mean we didn't stop. Kevin O’Donnell: We're not formulaic on our buybacks, we are looking at lots of different things. And one thing Bob had mentioned is buying back is a way for us to manage excess capital. Our first priority is to deploy capital into the business and we invested significantly in Fontana. We think Fontana provides long-term strategic advantages to us in managing our casualty business. Again, beyond this share buybacks, we did invest more in building out the platform.

Okay. Got it. And then my my second question of higher level. Kevin, in your comments sounds like you're so confident in being in the property CAT business, more so than many of your peers. That's because you are also scaling back a little bit in property, just not to the extent we're seeing in others. And I guess my question would be, does that essentially mean that you're comfortable with having higher volatility over the long run, even with higher ROE and even with recognition that maybe the investment community seems to be a bit more negative on such volatility in underwriting results. Even with a higher ROE? Kevin O’Donnell: Yeah. I think you're thinking about it to the right lands and then it's two degrees. I believe there's more rate coming in property. I also believe we have more skills, more access, and more vehicles to think about how to construct property portfolios and specifically property CAT portfolios to extract more [Indiscernible] from the market. I think it's rational for others to take a different view on how to think about property CAT. But I look at what we're building with -- in the portfolios that we're able to [Indiscernible] in each of our vehicles. And we're getting paid more for the risks that we're taking. And I think the volatility is a trade that investors make for the amount of return we're producing. But I see more return on the horizon for every dollar or premium were taking in property CAT, other property, and E&S exposed property CAT.

Thank you.

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

Thanks. I guess Kevin, I'm trying to reconcile your, I think optimistic tone about market opportunities now, with comments you've made on previous calls about re-thinking your overall risk expectations. But I'm sure I'm getting the phrasing wrong. Are you seeing current opportunities now or is it that you think that the pullback of competitors means that at some point in time, even with the higher level of anticipated risks, that you can nod ahead? Kevin O’Donnell: I'm not exactly sure what commentary you're adjusting to. So let me just talk about what we're actually doing it in property and see if that answers your question. So, from the property perspective, other property we're seeing excess return in [Indiscernible] other properties. That has been the focus. What you've seen this quarter is a shift one to our normal process of updating our view of risk required some changes to the portfolio, but also the opportunity for us to press for margin. So, you're seeing some change just to the construct of the other property portfolio, but no shift in strategy. From a property CAT perspective, a lot of focus right now is on Florida. Were not that interested in Florida market, but we do have a lot of Southeast Atlantic hurricane risks which comes in through different ways. We think we're going to hold that relatively flat, but harvest more margin for the risks that we're taking there. When I think about the overall construct to portfolio, I'm delighted with the size, I'm delighted with the pricing prospects that we see on the construct of the portfolio and the efficiency that we're continuing to enhance in the overall returns in each of our vehicles. So, I am very optimistic about where we are in the opportunities. I think they'll be in addition to that from a demand side, we said that after the January 1st renewal, we had an expectation that companies would sit back and realize that they were retaining perhaps more risk than they might be comfortable with. We're seeing that effect the supply to reinsurers, reassessing their desire to write property CAT and we're seeing new -- substantial new demand come to the market for increased purchasing. So, all of those dynamics setup for what I think is a really accretive market for us to be bullish on. And we're working into that market right now by enhancing margin.

Okay. No, that's helpful. Second question, nothing terribly cute, but according to a lot of media reports, there are some RenaissanceRe businesses for sales, and I'm wondering how you think about that. Additional acquisitions and reenter. Kevin O’Donnell: I think that probably should read fewer tabloids for the insurance industry, but I think from our perspective, I feel strategically complete. We have a great portfolio. We fully absorbed the last acquisitions, which flatten them in TMR. I think the lens we have hasn't changed, which would be it advances our strategy and is financially accretive, we take a look. But right now, I think the opportunity costs from distracting our underwriters from the pursuit of organic opportunities in the market is significant, and I think that's the lands in which any opportunity needs to be viewed from. So, I think the barrier for us to enter into an engagement for acquisition is higher than perhaps it was with TMR. But if the right opportunities there, it's impossible to say you'd never look at anything.

Okay. Perfect. Thank you very much. Kevin O’Donnell: Sure.

[Operator Instructions]. Your next question comes from the line of Joshua Shanker with Bank of America.

Yes. Thank you for taking my question. You're pulling back and remixing for the best opportunities available. Does that mean last year that the property CAT business you wrote was probably underpriced given what your model's saying right now? Are you not the only ones who are pulling back or maybe there's better opportunities everywhere? But if you could do over 2021 again, is the model different enough that it's giving a different output for the risks that you took a year ago. Kevin O’Donnell: That's a great question. And one, we obviously spent a lot of time on. So first, we're not pulling back. What we're doing is, we're looking at ways to expand the profit in the portfolio. I think our risk levels will be ballpark, same as last year. With regard to under pricing last year and over -- and adequately pricing this year, I think that's -- let me break it down to some of the things that we looked at in the change. Firstly, our models are always updated. And what we try to do is get ahead of the moment and build into where the markets are headed. From an inflation perspective, inflation is higher this year than last year. We want more money for the same risk just because its loss costs are going to be higher. Social inflation trends are continuing. We'll learn more about that. So, there's more precision in our social inflation application in the model. I wouldn't say that's making a judgment as to price is higher or lower. And then climate to mix. Climate is going to change and the benefit we have with building our own model is, we've long reflected climate change. A component of reflecting climate change is incrementally changing your model as the environment…

Okay. Thank you. And the other question which probably I could figure this out if I were a forensic accountant. But it's really a question for Bob, I think. The new money yields you guys are earning right now are far higher than where yield your portfolio is. But also, you have a lot of ventures and whatnot where the investments are in short-term rates, cash and stuff that doesn't really have any duration or credit risk to it at all. When I think about the portfolio, how much of the portfolio is subject to those new money yields, and how long should we expect for that portfolio to turnover -- I guess, what percentage of that portion turns over in a 12-month period?

That's a good question for clarity and we're not going to rack your brain. I'm going to give you the answer. Page 14 in the supplemental [Indiscernible] is the exactly what we consider the retained fixed maturity in short-term investment portfolio that 12 planes $1 billion. That's all our fixed maturity becomes out the investment portfolio and some of the short-term investments. The lion's share of the shorter-term investments you're talking about is really we're managing on behalf of the third-party capital. The new money yields and that's what the new money yield of 2.7% represents. And that's up from 1.6. We expect that to accrete into earnings rather quick. We'll expect to see some of that benefit coming in the second-quarter and increasingly in the third and fourth quarter.

Okay. Thank you.

Your next question comes from the line of Ryan Tunis with Autonomous Research.

Hey, thanks. Good afternoon. First question, apologize if this has been covered, if it has just ignored but on the other Property segment with the non-renewals of any indication of how much more that's on the common subsequent quarters this year? Kevin O’Donnell: A lot of that looks renewed already. And I think what we're doing -- and a fair amount of it is quota share, so it's going to depend on what the underlying companies are doing. I still believe that that portfolio is going to be relatively flat to -- sorry, relatively up on a net earned basis. But there's a lot of variables moving around. If I were to guess, flat is a conservative assumption.

Got you. And Kevin, you seem obviously more confident in the profitability that portfolio and some of the actions you've taken. Just wondering if maybe you could kind of share observations about, I don't know the math behind that. Like last year, it looks like you did like a 44% Attritional and other property excluding large losses. Have you thought about or looked at the math on if we didn't write this, it would've been X points lower? Just anything you could share on those lines about the type of tailwind that these non renewals could offer you. Thanks.

I'll kick it off a little bit, Ryan. We've seen the profitability in that book really come on pretty strong. I'm not sure about the 44%, maybe wouldn't go offline and talk about that. But we've been around upper 40s within focused on keeping that below 50 and 60 on this quarter, but it was four points coming in from the weather-related large losses. But we see that the business that we've grown significantly over the last three and a half years, 50%, 20, 21 over 20, we're going to see the magnitude of that accreting in income over the course of the year pretty significant.

I'll just ask one more too. It's been -- this has been something we've discussed over time that you guys have struggled in other property with the non-CAT stuff. What is it about that business that's -- obviously the history of the company goes back to property CAT? What is it, Kevin, what's your assessment of why you weren't quite as successful at writing some of the non-CAT stuff for other property? Kevin O’Donnell: I think non-CAT is -- there are two scales, you're absolutely right. There's understanding the attritional LMA getting that right, and then understanding the CAT. Leveraging into more CAT exposed, we think is an area that a lot of insurance companies have attritional expertise, but either less expertise or less desire for the CAT. We're getting a lot of excess margins there. That we're leveraging into the strength that historically we've demonstrated. The other property, frankly, the issues that we had were the bottom decile of the portfolio and being too patient from an earning perspective. We're not making that mistake again. And what you're seeing in some of the changes in other property is us working aggressively on leveraging very, very narrowly into our strategic objectives on that. And having less of our historic tolerance for those that are getting there.

Thank you. Kevin O’Donnell: Ryan. Thanks.

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

Thanks. A couple of them for your free, first Kevin, I'm just curious. The growth that you're seeing in your casting Casualty segment. How do you think about social inflation there? Are you thinking about when your pricing reserving that business kind of the current social inflation environment or you are you building in something significantly higher because it's the core to reopen and there's a lot of uncertainty there? Kevin O’Donnell: But absolutely agree with your last comment. There's a ton of uncertainty. And some of the observations we have about the out-performance, particularly in '20 when things were shutdown. We are being very, very slow to recognize because the historic lens for recognition of that may not be accurate because of the courts being slower. From -- and I think commentary broadly over the earnings season and our absolute observations on our portfolio is measuring trend and rate is kind of the art of casualty and specialty reserving and pricing and we're still seeing rate above trend. That is discounted because we're uncertain or confidence in trend because of the slowdown is lower, and social inflation is a component of that. I would say, everything we see under a normal environment would be even more bullish than I feel. We're tempering that bullishness because of the uncertainty of how COVID has affected the emergence of claims.

Great, that's helpful. And then the second question, I'm just curious. Looking at the breakdown and the growth across your casualty and specialty segments, growth, obviously throughout all of them. But financial lines jumped out at me is the big growth there. What areas within the financial lines right now are attractive? Kevin O’Donnell: We're seeing lots of it, attractive opportunities. One area that we spoke about and we continue to see lots of opportunity is in the mortgage. We're a very large, protector of the GSEs as well as the PMI market. So, we still see opportunity there. I know inflation is a known risk to the market, we're obviously watching that closely, but the portfolio continues develop really well. We're seeing stronger demand and good opportunity.

Great. And if I could speak one more and just quickly. With respect to your Russia, Ukraine exposures, have you had any claims notifications yet? And as we look forward, where arel the other areas that potentially you think you might see some development if at all? Kevin O’Donnell: We don't have any. Everything we've done is a shift in our -- we just think risk is elevated, so we've upped our IBNR. The areas that are getting the most press short-term is the aviation market and aviation leasing specifically. We are underweight in that market. There's some war on land coverage, so a lot of it's in the marine market and the aviation market. I think there are elevated chances for the global impacts from the war for credit businesses. This can become pretty broad in its impact. We're monitoring it all. Internally, we have a very sophisticated reserving approach to this, where every deal, every class of business that we write is categorized as to how exposed it is to potential risks emerging from the war. And when I look at that and I add up what I think our exposure is, we are significantly underweight relative to where our peers are in the market. This is not --

Thank you. Kevin O’Donnell: -- at this point, this is not a risk that is changing anything strategically or fundamental to who we are and what we're doing.

Makes sense. Thank you.

Your next question comes from the line of Yaron Kinar with Jefferies.

Thanks for taking the follow-up. Just one quick one. I know you said that you still have very limited appetite for growth in Florida. But with the special legislative session scheduled for [Indiscernible] May, how do you see that impacting [Indiscernible] renewals for the industry more broadly? Kevin O’Donnell: I don't think I've ever successfully forecast what's going to happen to the Florida legislature. I know it's being discussed, in particular, the drop on the FHCF by the drop down in attachment. That doesn't change. Actually, from RenRe's perspective, that has no change in what we do or how we're our looking at the market. I think there's a lot of problems in Florida. Solving it by a drop in the FHCF, I think is potentially releasing some short-term pain for the domestic areas. I think the structural issues are my bigger concern. And I think it's hard to want to perform in that theater when your -- at the end of the day, the theater is on fire because of all the issues within the market.

Appreciate it. Thank you. Kevin O’Donnell: Yes.

And there are no further questions in queue at this time. I would like to turn the call back over to you Kevin for closing remarks. Kevin O’Donnell: Thanks everybody for joining the call. All things equal, we believe our results should improve steadily over the course of the year and will be paid more for the risks that we take. We'll benefit from an expanded capital partner's business and anticipate that rising interest rates will translate materially higher investment income. Frankly, today's volatility should translate into tomorrow's improved financial performance and reward our shareholders with superior returns. I am optimistic about where we are, I like our portfolio and look forward to speaking to you on our next call. Thanks.

This concludes today's conference call. Thank you for participating. You may now disconnect.