RenRe’s property cat book still rate adequate, tactics evolve with the market: CEO O’Donnell

RenaissanceRe’s property catastrophe reinsurance portfolio remains rate adequate at today’s pricing, CEO Kevin O’Donnell said today, laying out the shift in tactics the reinsurer employed in response to market conditions at the mid-year renewals.

As we reported this morning, RenaissanceRe’s second-quarter 2026 results revealed the company has been exhibiting disciplined cycle management by underwriting fewer premiums and buying more retrocession.

With the reduction in premiums written likely on the mind of shareholders and analysts today, it’s no surprise the CEO began his remarks with this topic the focus.

Speaking during the RenaissanceRe earnings call today, CEO Kevin O’Donnell provided some clarity on the way his company has positioned itself and its portfolios to continue extracting the best possible returns from the property catastrophe reinsurance business it underwrites.

O’Donnell stated, “Each of our three drivers of profit-underwriting fee and net investment income contributed meaningfully to these strong results. This reflects the long-term, disciplined execution of our strategy that enables us to continue to grow tangible book value per share.

“Our strategy does not change from quarter to quarter. We manage the business to build efficient portfolios of risk that maximise profitability. What does change, however, are the tactics we employ to achieve that strategy as markets shift. You can see this in action at the mid-year renewals.”

He went on to explain how RenRe approached the property cat renewals at the mid-year, saying that, “property catastrophe rates were down high-teens, which was consistent with our expectations.”

Continuing, “Our leadership position allowed us to grow property cat limit with high-quality clients. The result is a portfolio that remains rate adequate at today’s pricing.

“We continue to like the property cat market. Recent rate decreases have come off the step change in pricing and terms that reset this market in 2023. As a result, property cat rates remain broadly adequate, and that is what dictates our underwriting behaviour.

“Thinking about our business in terms of rate adequacy provides us a more nuanced strategy than having one playbook for a hard market and another for a soft market. What sets us apart is that we know how to navigate the transition between the two, as well as having more tools to do so. We’ve been navigating the property cat market for decades and know when to grow and when to exercise discipline.”

O’Donnell went on to say that the growth RenaissanceRe has experienced through the hard market, as well as through its acquisition of the Validus business, has positioned the company well for the current market environment.

Closing his opening remarks by further explaining that, “Ultimately, this is a margin business, not a growth business. In a declining rate environment, discipline is not about how much you write; it’s about how much you keep.

“We start by seeing the entire market on both the inwards and the outward side. This gives us an informed view of where the best risk actually sits. We exercise risk selection to concentrate on the specific accounts and layers where the economics are strongest, and manage line size aggressively.

“We then deploy the rest of our toolkit, including retrocessional buying and Capital Partners vehicles, to shape what we have retained.

“That combination lets us grow the gross portfolio where we see opportunity, while managing the net portfolio to achieve the optimal risk, the optimal mix between risk and return that maximises long-term growth and tangible book value.”

Chief Underwriting Officer David Marra explained later in the call that RenRe’s approach to property cat is one of growing where it deems the opportunity attractive and rate adequate, while giving up any business it does not feel meets its return hurdles any more.

CEO O’Donnell, when asked whether he felt property cat rates might plateau in future, said he feels the market will remain competitive for now.

“The market moves in cycles. I would expect that, from a macro perspective, there’s a lot of supply in the market. We’re still seeing an increase in demand, but at a reducing level compared to what we’ve seen over the last couple of years.

“That dynamic, I think, will set up for continued pricing pressure moving forward,” O’Donnell said.

The CEO further stated, “From our perspective, we have a long track record of executing into changing markets. This is not a soft market, it is a changing market, which I think you’ve highlighted well. We like where the rates are. We are building a portfolio that uses more of the tools that are available to us, which we’ve done historically over time, so I would expect that there’ll be more rate pressure.

“But as the market continues to become more competitive, we will increase our output to the market, which is historically what happens in a declining rate environment. So when I look forward into ’27, I would expect competition to remain robust, but I don’t anticipate that it will create major obstacles for us to continue to build a great portfolio and to continue to compound tangible book value per share.”

Finally, towards the end of the call O’Donnell looked further ahead into 2027 renewals, “There’s two assessments that need to be done when thinking about property cat because of the capital consumption and the correlations. One is, what is the standalone economics and what’s the marginal economics. Marginally, I expect that even with the same level of rate reduction and the the associated increase in the loss ratio for the individual deals we will like the portfolio.

“We will further enhance the capital efficiency of that portfolio, so increasing the marginal returns through risk-sharing mechanisms that we have. So, when looking into ’27, I do anticipate that there’ll be more competition. I also anticipate we’re going to build a property cat portfolio that we really like.”

Also read: RenRe gets $83m third-party capital fees, writes fewer premiums, buys more retro in Q2 2026.