RenaissanceRe Holdings Ltd.

Ladies and gentlemen, thank you for standing by, and welcome to the Renaissance Re's fourth quarter and year end results conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to Keith McHugh, Senior Vice President, Finance and Investor Relations. Thank you. Please go ahead, sir.

Good morning. Thank you for joining our fourth quarter and year-end 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 441-239-4830, and we'll make sure to provide you with one. There will be an audio replay of the call available from about 1 p.m. Eastern time today through midnight on February 26th. 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 225-6505. Today's call is also available through the investor information section of www.renry.com and will be archived on Renaissance Re's website through midnight on February 26, 2022. Before we begin, I'm 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 Renaissance Re'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'd now like to turn the call over to Kevin. Kevin?

Thanks, Keith. Good morning, everyone, and thank you for joining today's call. For our investors and many of our capital partners, 2021 was a difficult year. The insurance industry experienced its fifth consecutive year of elevated catastrophe losses, which by several estimates exceeded $100 billion in insured loss and a continuation of the themes of climate change, rising inflation, and the increasing occurrence of secondary perils. We saw these themes repeated in the fourth quarter with severe convective storms causing widespread damage across the Midwest and wildfires impacting Colorado. In contrast to the year's catastrophe losses, and in part due to them, we had a strong January 1 renewal. We expected a divergence between the property and casualty and specialty renewals, anticipating that the property renewal would be challenging and entail difficult conversations. We communicated our risk appetite and expectations early to clients and brokers and worked closely with them to avoid surprises. We had several goals we wanted to achieve in property at the renewal, the most important of which were seeking rate, improving terms and conditions, adjusting for our increased view of risk, decreasing exposure to aggregate deals, and keeping our PMLs relatively flat. We achieved these goals at the renewal. which proceeded well despite being rather late. By January 1, most programs were filled. In property catastrophe lines, however, lower layers and retrocovers struggled more to be placed than higher layers, as reinsurers increasingly shifted away from frequency-exposed layers. As always, we were a consistent partner, offering capacity across the risk spectrum, which resulted in many opportunities for us. That said, in our property business, rate increases were sufficient to maintain our current book, but not enough to warrant significant growth. The renewal in our casualty business proceeded smoothly, which I'll discuss in greater detail in part two of my comments. Overall, I believe we optimized the portfolio, significantly increasing both the model's profitability and the efficiency of our underwriting portfolio. We reduced our growth rate at this renewal as we have increased our net premiums written by 75% over the last few years. In 2022, we will be paid more for the book we have already built and will focus on capital management and profit maximization. As usual, at the end of the year, I like to review our performance by responding to two questions. The first is, how did we do financially? And the second is, Have we executed our strategy effectively? Starting with the first question, how did we do financially? As previously mentioned, it was a difficult year where three out of four quarters were impacted by weather-related catastrophic losses, and interest rates remained near record lows. As a result, our operating return on average common equity was 1.3 percent. As I made clear last quarter, this performance was disappointing. I am confident, however, that we have the right strategy to deliver superior returns over the long term. This quarter, we demonstrated the benefit of our growing diversification as we achieved an operating return on average common equity of 14.4 percent, despite over 50 million of net negative impact from large catastrophic events. In 2022, we think we have, I think we can improve on this performance as we will be paid more for the risk that we take earn more on the investments we make, and continue to grow our fee-generating capital partners business. Which leads to my second question. Have we executed our strategy effectively? It is essential for a company to have a consistent vision, clear purpose, and coherent long-term strategy. Thanks to the diligent efforts of our employees, we executed well on our strategy in 2021 and distinguished ourselves ourselves in the consistent application of our three superiors, superior customer relationships, superior risk selection, and superior capital management. Beginning with superior customer relationships, we built a global multi-line specialist company in order to write more business with more customers in more locations around the world. The trusted relationships we have developed have provided us an incumbency position, allowing us to grow significantly in 2021. At the January renewal, this incumbency position continued to provide us a competitive advantage and the opportunity to acquire attractive business across many lines. As I already discussed, it was a difficult year for property, but we communicated early and often in the lead up to the renewals, managing expectations and ensuring that our customers were not surprised. Moving to superior risk selection, we continue to be recognized as the best underwriter of property catastrophe risk. The market trend in 2021 was to move away from property cat risk due to fears of climate change, social and monetary inflation, as well as a lack of confidence in cat modeling. However, our expertise and experience gave us the confidence to know when we were being paid adequately to assume this risk, which we are uniquely positioned to understand in price due to a strong underwriting bench, with many of our underwriters having experience over multiple market cycles, our scientists, engineers, and risk modelers at Renaissance Risk Sciences and our integrated system. We're also a leader in casualty and specialty underwriting. Our superior risk and capital management technology, along with deep underwriting expertise, has provided us a competitive advantage, enabling us to grow on the best deals and access new business as rates and profit margins have improved. Finally, there is superior capital management, Bob will have more to say about our achievements here, but the highlights include deploying $1 billion in new capital to grow into a strong market, returning over a billion to shareholders, and maintaining a robust excess capital position. Superior capital management was also distinguished by the continued growth of our capital partners business. It is difficult to overstate the competitive advantage that capital partners provides us, which is most obvious in the fee stream it generates. Equally important is the ability to use our capital partners' business to provide flexibility and optimize our gross-to-net strategy across all our balance sheets and thereby complement superior risk selection. This was evident in January 1 where we grew DaVinci by $500 million and increased the percentage of property CAT business we allocated to it. This is a win for our customers as we continue to support their programs during a period of market dislocations. a win for third-party capital investors who continue to have opportunities to grow by investing in DaVinci, and a win for shareholders who will benefit from increased fee income and optimized portfolio construction across all vehicles. Our MediciCat bond fund continues to execute extremely well and had strong returns in 2021. This portfolio has grown to $1.1 billion, and we anticipate continued robust investor demand in 2022. And finally, with respect to capital partners, Upsilon was significantly smaller at January 1 due to losses in trapped capital offering less than half the limit it did in 2021. Before turning the call over to Bob, I want to update you on our progress on our ESG strategy. As a reminder, we formalized our ESG efforts around three priorities where we believe we can make the most meaningful impact on society. promoting climate resilience and adaptation, including society's transition towards net zero. Second, closing the protection gap, and third, inducing positive societal change. You can read more about our accomplishments on our website, but there are a few endeavors I'd like to highlight. We furthered the transition to a net zero world through our participation at the United Nations 26th Climate Change Conference in Glasgow. We were active in several risk-focused initiatives, including the Building Resilience in a Riskier World event sponsored by the Insurance Development Forum, as well as the launch of the Global Risk Modeling Alliance, which is supported by the UN, IDF, the German government, and the V20. In 2021, we also continued our focus on diversity, equity, and inclusion through our global sponsorship of the Dive-In Festival. We reduced the carbon intensity of our corporate credit and public equity portfolios by 70%, as measured by MSCI, with negligible expected impact on the portfolio's yield. And finally, we participated in BlackRock's U.S. Carbon Transition Readiness Fund with a $100 million seed investment, which actively supports the transition to a low-carbon world. I am proud of the progress we are making as a company on ESG. This is important to all of our stakeholders, including our employees, who I would like to thank for their meaningful contributions towards achieving these goals. That concludes my initial comments. I'll provide more detailed update on the renewal and our segments at the end of the call, but first, Bob will discuss our financial performance for the quarter.