RenaissanceRe Holdings Ltd.

Good day and thank you for standing by. Welcome to the Renaissance Re'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. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to Keith McHugh, 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 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 2 p.m. 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 754-9718. Today's call is also available through the Investor Information section of www.investor.com. and will be archived on Renaissance Re's website through midnight on June 4, 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. Last night, we reported solid top-line growth and 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 10 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 our leadership in PropertyCat, and continuing to be trusted partners for capital while growing our fee-generating businesses. As a result, we have built one of the world's largest reinsurance businesses to where we now manage about $8 billion in gross written premium with about 650 employees. This has allowed us to build considerable asset, premium, and operational leverage, and we continue to invest in internal initiatives to make us more effective and efficient as we scale. We are now seeing the benefit of these strategic decisions across each of our three drivers of profit and believe our financial results should continue to improve over the course of the year. I would like to begin my comments by explaining why our prospects are increasingly bright. Across the PMC industry, we are seeing reinsurers increasingly step back from risk. We, on the other hand, have never been more confident in positioning as a lead reinsurer, both in casualty and specialty, as well as in property. We believe that the pullback by competitors in the reinsurance market, particularly in property cat risk, will inure to our benefit. Starting with our casualty and specialty business, which constitutes about 60% of our net premiums written for the quarter, we intentionally but carefully began building this segment during a more challenging phase of the market. constructing a portfolio with embedded options for growth. For the last three years, we have accelerated this growth into an improving market. In the first quarter of 2022, net premiums were up nearly three and a half times from the same quarter in 2019. As a consequence, we believe our casualty business will be a significant tailwind to our earnings. Profitability on this book continues to improve, and the leverage it provides our investment portfolio will be increasingly valuable in a rising interest rate environment. This quarter, we also introduced a new strategic dimension to the casualty business, our most recent joint venture, Fontana Re. Fontana is the first fund that is 100 percent dedicated to writing casualty and specialty risks, including long tail lines. It continues our track record of innovation and reflects robust external validation of both the market leadership we have built in casualty specialty, as well as our recognition as a leading manager of partner capital across multiple risk classes. We are unique among our peers, as we are the only reinsurer that is both owned and managed, rated and fronted at scale vehicles for every class of risk that we write. In our casualty business, we are now employing the same strategy that for 20 years we successfully deployed in our property business. Fontana delivers significant benefits to our stakeholders. For customers, it helps us to be broader and a deeper partner by providing long-term capital that allows us further flexibility to grow our casualty and specialty business and bring additional capacity to dislocated markets. For our capital partners, it gives investors direct access to market-leading underwriting and claims management through a whole-account quota share of our casualty and specialty businesses. And for our shareholders, it reduces volatility and furthers our strategic aim of monetizing our competitive advantage in underwriting by trading underwriting risk for fee income. I believe the strategic choices we have made in the last decade make us uniquely capable of bringing a solution such as Fontana to market. For example, We built the underwriting infrastructure necessary to source attractive casualty and specialty risk and underwrite it profitably. We have 40 underwriters in this segment, many with decades of experience, as well as strong relationships with the largest and most prominent insurance companies. Equally important, we have built a robust casualty specialty claims infrastructure, which is vital to managing the life cycle of the casualty business. Our underwriting focus also distinguishes Fontana from other investment-centered vehicles, as its return primarily derives from underwriting profit, not investment return. None of the competitive advantages we bring to Fontana can be quickly or cheaply replicated by third-party capital, providing investors the confidence they need to invest in long-tail lines and the liquidity they will ultimately desire to efficiently exit. which creates a deep and sustainable mode around this business. Moving now to property. While we have evolved as a broadly diversified writer of property and casualty business, we have remained steadfast in our commitment to underwriting catastrophe risk. Our deep institutional knowledge in this area is a critical component of who we are as Renry and the value that we bring our shareholders. both directly through underwriting income and through the fees that we earn managing risk in our capital partners' business. In contrast, the overall trend in the PNC reinsurance market has been an increasing reticence to accept catastrophe volatility at any price. For example, third-party capital in this space continues to contract. Previously independent reinsurers have been absorbed into larger, more risk-averse organizations. carriers are cutting back on their reinsurance business, and few recent startups are focusing on writing reinsurance. Our willingness to accept volatility is increasingly valuable as the level of catastrophe risk in the world continues to grow. Climate change and its amplification of the frequency and severity of natural disasters is a well-known phenomenon. European windstorms, Australian floods, and Midwest tornadoes once again reminded our customers of the threat of climate change and the value of the protection we offer to them and to society more broadly. So while volatility is increasing, there are a smaller number of reinsurers willing to help students manage it. We distinguish ourselves in continuing to support our customers, maintaining a strong appetite for property cat risk and the ability to profitably underwrite business that clears our hurdle rates. Our decades of experience and industry-leading understanding of volatility places us in a preferred position to price the risk of loss from climate change and remain comfortable accepting cat risk. This is due to our strength in modeling, which has been a core component of our strategy since we formed almost 30 years ago. We frequently update our models as part of a regular, incremental process to which we have committed considerable resources. This provides several competitive advantages. First, we are not dependent on vendor models, where changes tend to be less frequent and more acute. Second, we are better able to anticipate and understand trends, giving us greater comfort in rapidly changing environment and making us less inclined to pull back from this risk class. Climate change has long been part of our view of risk. This quarter, with the expertise of Renrui risk sciences, we further updated our North Atlantic hurricane model to reflect our view of increased risk from the impacts of climate change, as well as rising social and economic inflation. Closely related to our long-term strategic decision to be a leader in catastrophe reinsurance is our commitment to addressing climate change as part of this strategy. As I wrote in my most recent letter to shareholders, Anthropogenic climate change is both an existential threat to the planet and an imminent risk to our industry, and we believe that Renry bears the responsibility of being part of this solution. As part of this, we need to recognize the potential threats of climate change to our underwriting results and our investment performance, as well as the opportunities we have to provide protection in an increasingly risky world. In furtherance of these objectives, this quarter we took several steps to advance our response to climate change. First, I was delighted to accept the role of chair of ClimateWise. This is an organization that brings together insurers, reinsurers, brokers, and industry service providers to promote a systematic response to climate change across the financial sector in cooperation with the University of Cambridge Institute for Sustainability Leadership. In this role, I will be working closely leaders across our industry to further our response to climate change. In addition, we appointed one of our most experienced property underwriters as global head of climate and sustainability strategy. We believe that while climate change is a risk that needs to be managed, it also brings opportunities across our business. This role will be focused on designing, executing, and coordinating our climate and sustainability underwriting strategy across both property and casualty. which includes new product development to respond to emerging underwriting opportunities. I would now like to take a minute to address inflation specifically, which has become more significant as of late. For us, inflation is both a headwind and a tailwind and cannot be viewed exclusively as good or bad. Rather, it needs to be anticipated and adjusted for. The obvious downside to inflation is the impact it has on our loss costs, more accurately in property where the confluence of social inflation, commodity inflation, and economic inflation can intersect to materially amplify industry loss. Frankly, this is not new as there is always inflation after a large event, which means we have deep experience modeling inflation of all types and are regularly updating our models to reflect anticipated conditions. Inflation can also impact casualty and specialty, which has been experienced lost cost inflation for several years due to elevated court verdicts. As a result, we are familiar with inflation's impacts and have the ability to capture and price for it. On the opportunity side, inflation is often correlated with both higher interest rates and insurance rates. We are enjoying significant amounts of both, which will benefit our results this year despite experiencing some mark-to-market losses this quarter. So, inflationary environments are both an opportunity and a threat, but we have deep expertise in managing the threat and anticipate material benefits from the opportunity. In summary, due to growing volatility, I believe that the reinsurance market has greater relevance now than at any time in our recent history. Climate change and other large recent losses have increased awareness of systemic risk. At the same time, many reinsurers have reduced their appetites for volatility. Consequently, we are in an excellent position to execute our strategy into a strong market. I anticipate that we will continue to grow our top line, albeit at a slower pace than the last several years, and more importantly, improving underwriting profitability. That concludes my opening comments. I'll provide a more detailed update on our segment performance at the end of the call. But first, Bob will discuss our financial performance for the quarter.