RenaissanceRe Holdings Ltd.

Good morning. My name is Chelsea, and I will be your conference operator today. At this time, I would like to welcome everyone to the Renaissance Re second quarter 2022 earnings conference call and webcast. After the prepared remark, we will open the call for your questions. Instruction will be given at that time. Lastly, if you should need operator assistance, please press star zero. Thank you, and I will now turn the call over to Keith McHugh, Senior Vice President of Finance and Investor Relations. Please go ahead.

Thank you. Good morning. Thank you for joining our second 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 1 p.m. Eastern time today through midnight on August 2nd. The replay can be accessed by dialing 800-938-2806 in the U.S. or 1-402-220-9034 internationally. Today's call is also available through the investor information section of www.renry.com. 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 Kutub, 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. We are pleased to report that RENRE generated strong second quarter results that combined consistent bottom line profitability with continued top line growth. For the quarter, we delivered an annualized operating return on average common equity of 18%, our third sequential quarter of double digit ROEs. Importantly, we also increased our net premiums by 23%. On a year-to-date basis, we have a reported operating ROE of 14.4% and growth in net written premium of 21%. Overall, our strong financial performance this quarter reflects the resilience of our business model across macroeconomic environments. It demonstrates that our strategy can consistently deliver profitable growth with improved performance across all three of Renre's drivers of profits. Underwriting, fees, and investments. From an underwriting perspective, we are especially pleased by the growing contribution of our casualty and specialty segment to our operating results. Increasing fee and investment income also serve as a stable platform to support our more volatile property CAD portfolio. Turning now to the operating environment. We are confident in our ability to continue creating near and long-term value for shareholders, notwithstanding challenges in the global macro economy. As we all are well aware, most broad economic indicators continue to decay during the quarter, driving concerns over inflation and increasing fears of recession. I would like to take a minute to discuss economic conditions and how they might impact our strategic approach and business results. Inflation, in its various forms, social, economic, and event-driven, is a factor we have always taken into consideration in running our business. Given the resurgence of economic inflation, we have implemented a robust framework across our underwriting portfolio to estimate and price for its impact. As a result, we are requiring materially increased rate to compensate for the lost cost impact of inflation. As such, even given our increased view of risk, we are still receiving rates ahead of trend. We have applied a similar framework to our reserving process, which we continue to assess and review based on our increased inflation assumptions. That said, we remain comfortable with our reserves even after stress testing for inflation. On the asset side of the balance sheet, inflation-driven interest rate increases are materially improving our investment returns. This should significantly offset the impact of inflation on our business as the increase in interest rates is likely to persist longer than elevated inflation. In summary, we have adopted a proactive approach to inflation and expect that once we have balanced the tradeoff between inflation and increased yield, the net impact on our operating results will be positive. The risk of recession is a more recent but growing concern. Our business model has historically proven to be less sensitive to this risk. There are several reasons for this. First, across the insurance value chain, there is limited discretion in purchasing decisions. Most policyholders must purchase coverage. is the case with homeowners insurance and many commercial coverages. By extension, most insurance carriers require reinsurance to maintain their portfolios. Second, inflationary pressures and recessions can raise demand for reinsurance. Inflation increases the cost of goods and services, consequently raising total insured values and, by extension, demand for additional reinsurance limits. Recession also decreases tolerance for risk, so demand for volatility protection goes up. Third, recession and inflation reduced the supply of capital while increasing its costs. Consequently, reinsurance rates typically rise while simultaneously becoming more competitive versus other forms of risk capital. As a result of these supply-demand dynamics, over the course of the next year, we expect increasing demand for our products across both property and casualty and specialty. Rates should continue to face upward pressure, in some cases materially. We saw this at the mid-year renewals, with property CAT demand increasing by about $5 billion against constrained supply, leading to substantially higher rates. The constrained supply of reinsurance is being driven by investor concerns over reinsurance generally as a class, and property CAT specifically. As you know, we have deep roots as a writer of property catastrophe reinsurance and remain committed to this risk as a core component of our underwriting strategy. This is due to our competitive advantage in understanding property cat risk and our conviction that we will be paid for the volatility over time. Renry's strategic commitment to reinsurance enhances our value proposition to customers along three critical dimensions. First, our participation is consistent. We manage risk on behalf of the biggest and best seedings and provide consistent exposure-driven pricing regardless of short-term weather predictions or deteriorating macroeconomic conditions. Second, our participation is broad. Our customers value the scale and breadth of our offerings and our ability to meet all their reinsurance needs. And third, we do not compete with our customers. Our strategic focus on reinsurance minimizes potential channel conflict. This strategy is clear, consistent, and increasingly differentiating. We believe that it provides us outsized participations on the best reinsurance programs and ensures we are a first curl market for new or increased reinsurance demand. Before I hand over to Bob, I wanted to address one of the major factors behind the market's perception of property cat risk, and that is the poor historic performance of cat models. In no small part, this is due to an over-reliance on vendor models that inadequately capture the growing influence of climate change. Our scientists and engineers at Renry Risk Sciences believe that the commercially available models do not properly reflect climate change as an evolving phenomenon. For some perils, while vendors may have adjusted their views to reflect recent experience, we believe that they have not robustly captured the physics of climate change. From a risk management perspective, this means that the vendor model outputs are likely to underestimate the risk that it insurers and reinsurers are managing. This could cause companies to expose more capital than intended, and their returns for managing cat risk will be lower than expected. Consequently, investors may question whether the entire insurance industry truly understands the potential impact of climate risk, whether it being correctly incorporated in the industry's evaluation of risk, and most critically, whether it is appropriately reflected in rates. Now let me explain why we are confident in our management, pricing, and portfolio construction of this risk. We have invested considerable resources in modeling and understanding climate change. Our team at Renry Risk Sciences ensures our models always reflect the most up-to-date, data-informed science. This enables us to steadily increase our current view of risk to reflect the present-day impact of climate change. As a result, we believe our models are better predictors of the impact of climate change on lost costs. In addition, our REMS underwriting system provides us an additional competitive advantage in underwriting property catastrophe risk. All our risks must be underwritten and modeled through REMS, which is continuously updated to fully reflect the best understanding of the physical parameters of shifting weather patterns. This ensures that our underwriting decisions are based on an elevated view of risk that fully reflects climate change. It gives us confidence that we are being paid appropriately for the risk we are assuming. That concludes my opening comments. I'll provide more detailed update on our segment performance at the end of the call, but first I'll turn it over to Bob to discuss our financial performance for the quarter.