Renaissance Re loses out due to warmer than average winter

Share

Bermuda domiciled reinsurer Renaissance Re’s weather and energy risk management arm, RenRe Energy Advisors Ltd., have seen a large seasonal loss over the winter due to warmer than normal conditions across the U.S. and Europe according to their recent quarterly earnings call (transcript available here). It’s their second quarterly loss in succession as both Q4 2011 and Q1 2012 have generally been warmer than long-term average temperatures.

Much of RenRe Energy Advisors business involves weather derivative type products for utilities and weather insurance products to protect against temperature and precipitation weather events. In winter months RenRe are generally protecting customers against unusually warm weather, which impacts energy producers income. Hence the unusually warm weather, particularly that experienced in the UK and U.S. has resulted in a loss.

Kevin O’Donnell, RenRe’s EVP and Global Chief Underwriting Officer, said that the record warm weather of recent months was the ‘temperature equivalent of a catastrophe’ with over 15,000 warm temperature records set. He said that the recent quarter and winter season as a whole were well modelled and their results were within expectations. The division posted a loss of $32.7m after tax for the first quarter adding to the $31m after tax loss of the last quarter of 2011.

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.

Read previous post:
Best of Artemis, week ending 13th May 2012

The past week saw another new catastrophe bond come to market as Travelers launched their latest deal, Long Point Re III...

Close