# RENAISSANCERE HOLDINGS LTD (RNR) FY 2023 MD&A

Verbatim Item 7 Management's Discussion and Analysis from RENAISSANCERE HOLDINGS LTD's 10-K for fiscal year 2023.

SEC filing source: https://www.sec.gov/Archives/edgar/data/913144/000091314424000019/rnr-20231231.htm
Accession: 0000913144-24-000019
Filing date: 2024-02-21
Report date: 2023-12-31
Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high

Company profile: /company/RNR/
All MD&A years: /company/RNR/mda/
Previous year: /company/RNR/mda/fy2022/ (FY 2022)
Next year: /company/RNR/mda/fy2024/ (FY 2024)

ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion and analysis of our results of operations for 2023 compared to 2022, as well as our liquidity and capital resources at December 31, 2023. This discussion and analysis should be read in conjunction with the audited consolidated financial statements and notes thereto included in this filing. This filing contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from the results described or implied by these forward-looking statements. See “Note on Forward-Looking Statements.” For a discussion and analysis of our results of operations for 2022 compared to 2021, please refer to the disclosures set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages 50-97 of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 8, 2023.

On November 1, 2023, we completed the Validus Acquisition, pursuant to which we acquired Validus Holdings and Validus Specialty. We accounted for the Validus Acquisition under the acquisition method of accounting in accordance with FASB Accounting Standards Codification (“ASC”) Topic Business Combinations.

Our results of operations and financial condition for 2023 include Validus for the period from November 1, 2023 through December 31, 2023. The following discussion and analysis of our results of operations for 2023, compared to 2022, as well as our liquidity and capital resources at December 31, 2023, should be read in that context. In addition, the results of operations for 2023 and financial condition at December 31, 2023 may not be reflective of the ultimate ongoing business of the combined entities.

In this Form 10-K, references to “RenaissanceRe” refer to RenaissanceRe Holdings Ltd. (the parent company) and references to “we,” “us,” “our” and the “Company” refer to RenaissanceRe Holdings Ltd. together with its subsidiaries, unless the context requires otherwise. Defined terms used throughout this Form 10-K are included in the “Glossary of Defined Terms” at the end of “Part I, Item 1. Business” of this Form 10-K.

All dollar amounts referred to in this Form 10-K are in U.S. dollars unless otherwise indicated.

Due to rounding, numbers presented in the tables included in this Form 10-K may not add up precisely to the totals provided.

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INDEX TO MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

[[GREPCENT_TABLE]]
[["","Page"],["OVERVIEW","53"],["SELECTED CONSOLIDATED FINANCIAL DATA","55"],["SUMMARY OF CRITICAL ACCOUNTING ESTIMATES","57"],["Claims and Claim Expense Reserves","57"],["Premiums and Related Expenses","64"],["Reinsurance Recoverable","64"],["Fair Value Measurements and Impairments","65"],["Income Taxes","67"],["SUMMARY RESULTS OF OPERATIONS","69"],["FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES","83"],["Financial Condition","83"],["Liquidity and Cash Flows","84"],["Capital Resources","90"],["Impact of Validus Acquisition on Liquidity and Capital Resources","91"],["Reserve for Claims and Claim Expenses","91"],["Investments","92"],["Ratings","96"],["SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION","98"],["CURRENT OUTLOOK","100"]]
[[/GREPCENT_TABLE]]

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OVERVIEW

RenaissanceRe is a global provider of reinsurance and insurance that specializes in matching desirable risk with efficient capital. We provide property, casualty and specialty reinsurance and certain insurance solutions to customers, principally through intermediaries. Established in 1993, we have offices in Bermuda, Australia, Canada, Ireland, Singapore, Switzerland, the U.K., and the U.S. We are one of the world’s leading providers of property, casualty and specialty reinsurance solutions.

Our mission is to match desirable risk with efficient capital to achieve our vision of being the best underwriter. We believe that this will allow us to produce superior returns for our shareholders over the long term, and to enable our purpose of protecting communities and enabling prosperity. We seek to accomplish these goals by (i) being a trusted, long-term partner to our customers for assessing and managing risk, (ii) delivering responsive and innovative solutions, (iii) leveraging our core capabilities of risk assessment and information management, (iv) investing in these core capabilities in order to serve our customers across market cycles, and (v) keeping our promises.

Our core products include property, casualty and specialty reinsurance, and certain insurance products, principally distributed through intermediaries with whom we have cultivated strong long-term relationships. Our business consists of the following reportable segments: (1) Property, which is comprised of catastrophe and other property (re)insurance, and (2) Casualty and Specialty, which is comprised of general casualty, professional liability, credit and other specialty (re)insurance. The underwriting results of our consolidated operating subsidiaries and underwriting platforms are included in our Property and Casualty and Specialty segment results as appropriate.

Our strategy focuses on operating as an integrated system of three competitive advantages: superior risk selection, superior customer relationships and superior capital management. We provide value to our customers and partners in the form of financial security, innovative products, and responsive service. We are known as a leader in paying valid claims promptly.

We have three principal drivers of profit that generate diversified earnings streams for our business - underwriting income, fee income, and investment income. Underwriting income is the income that we earn from our core underwriting business. By accepting the volatility that this business brings, we believe that we can generate superior long-term returns and achieve our vision. Fee income is the income that we earn primarily from managing third-party capital in our Capital Partners unit and is composed of management fee income and performance fee income. Investment income is income derived from the investment portfolio that we maintain to support our business. We take a disciplined approach in building a relatively conservative, well-structured investment portfolio with a focus on fixed income investments. Compared to underwriting income, we view fee income, in particular management fee income, and investment income, as relatively stable, less volatile, and capital efficient sources of income.

We principally measure our financial success through long-term growth in tangible book value per common share plus the change in accumulated dividends. We believe this metric is the most appropriate measure of our financial performance, and in respect of which we believe we have delivered superior performance over time.

Our current business strategy focuses predominantly on writing reinsurance. We also write excess and surplus lines insurance through delegated authority arrangements, and typically underwrite insurance risks in portfolio form. Additionally, we pursue a number of other opportunities, such as creating and managing our joint ventures and managed funds, executing customized reinsurance transactions to assume or cede risk, and managing certain strategic investments. We continually explore appropriate and efficient ways to address the risk management needs of our clients and the impact of various regulatory and legislative changes on our operations. From time to time we consider diversification into new ventures, either through organic growth, the formation of new joint ventures or managed funds, or the acquisition of, or the investment in, other companies or books of business of other companies.

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VALIDUS ACQUISITION

On November 1, 2023, we completed the Validus Acquisition in accordance with the Stock Purchase Agreement dated May 22, 2023 between RenaissanceRe Holdings Ltd. and American International Group, Inc., a Delaware corporation and NYSE-listed company, pursuant to which, upon the terms and subject to the conditions thereof, we, or one of our subsidiaries, purchased, acquired and accepted from certain subsidiaries of AIG, all of their right, title and interest in the shares of Validus Holdings, Ltd. and Validus Specialty, LLC. Substantially all of the assets of Validus Holdings are comprised of its equity interest in its wholly-owned subsidiary, Validus Reinsurance, Ltd. Pursuant to the Stock Purchase Agreement, we also acquired the renewal rights, records and customer relationships of the assumed treaty reinsurance business of Talbot Underwriting Limited, an affiliate of AIG, a specialty (re)insurance group operating within the Lloyd’s market.

In connection with the Validus Acquisition, on November 1, 2023, we paid to AIG aggregate consideration of $2.985 billion, consisting of the following: (i) cash consideration of $2.735 billion; and (ii) 1,322,541 common shares, which were valued at approximately $250.0 million based on a value of $189.03 per share at signing, pursuant to the Stock Purchase Agreement. The value of the acquisition consideration was $3.020 billion as of the closing date. We also entered into a registration rights agreement with AIG in respect of the shares issued to AIG. AIG also received an option to make a substantial investment into our Capital Partners vehicles, which was exercised effective January 1, 2024.

We believe that the Validus Acquisition has several significant strategic benefits for us. We believe that it advances our strategy as a global property and casualty reinsurer, providing additional scale and increasing our importance with customers and brokers. Through the Validus Acquisition, we gained access to a large, attractive book of reinsurance business that was closely aligned with our existing business mix, accelerating our growth in a favorable market. We believe our increased scale following the Validus Acquisition positions us among the five largest global property and casualty reinsurers. The Validus Acquisition was immediately accretive to our shareholders upon completion. At the same time, we have deepened, and intend to continue to deepen, our relationship with a core trading partner, AIG, who is one of our five largest clients by premium volume, as the Validus Acquisition provides options for increased future strategic engagement.

Revenues and Expenses

Our revenues are principally derived from three sources: (1) net premiums earned from the reinsurance and insurance policies we sell; (2) net investment income and net realized and unrealized gains from the investment of our capital funds and the investment of the cash we receive on the policies which we sell; and (3) fees received from our joint ventures, managed funds and structured reinsurance products, which are primarily reflected in redeemable noncontrolling interest or as an offset to acquisition or operating expenses.

Our expenses primarily consist of: (1) net claims and claim expenses incurred on the policies of reinsurance and insurance we sell; (2) acquisition costs, which typically represent a percentage of the premiums we write; (3) operating expenses, which primarily consist of personnel expenses, rent and other expenses; (4) corporate expenses, which include certain executive, legal and consulting expenses, costs for research and development, transaction and integration-related expenses, and other miscellaneous costs, including those associated with operating as a publicly traded company; and (5) interest and dividends related to our debt and preference shares. We are also subject to taxes in certain jurisdictions in which we operate. Historically, the majority of our income has been earned in Bermuda, which did not have a corporate income tax, so the tax impact to our operations has been minimal. However, on December 27, 2023, the Government of Bermuda announced the implementation of a 15% corporate income tax effective January 1, 2025. We expect that this development, along with the implementation of the OECD’s Pillar Two regime in the jurisdictions in which we operate, will increase our income taxes in the future. We believe that the flexible global operating model that we have utilized will continue to prove resilient.

The underwriting results of an insurance or reinsurance company are discussed frequently by reference to its net claims and claim expense ratio, underwriting expense ratio, and combined ratio. The net claims and claim expense ratio is calculated by dividing net claims and claim expenses incurred by net premiums earned. The underwriting expense ratio is calculated by dividing underwriting expenses (acquisition expenses and operational expenses) by net premiums earned. The combined ratio is the sum of the net claims and claim expense ratio and the underwriting expense ratio. A combined ratio below 100% indicates profitable underwriting prior to the consideration of investment income. A combined ratio over 100%

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indicates unprofitable underwriting prior to the consideration of investment income. We also discuss our net claims and claim expense ratio on a current accident year basis and a prior accident years basis. The current accident year net claims and claim expense ratio is calculated by taking current accident year net claims and claim expenses incurred, divided by net premiums earned. The prior accident years net claims and claim expense ratio is calculated by taking prior accident years net claims and claim expenses incurred, divided by net premiums earned.

We manage DaVinci, Fontana, Medici, and Vermeer, and own all, or a majority, of the voting interests, but own no, or a minority, economic interest of each. As a result of our controlling voting interests, we fully consolidate these entities in our financial statements, even though we do not retain the full value of the economic outcomes generated by these entities. The portions of the economic outcomes that are not retained by us are ultimately allocated to the third-party investors who hold the noncontrolling interests in these entities. The economic outcomes may include underwriting results, investments results, and foreign exchange impacts, among other items. For example, if one of these entities were to generate underwriting losses due to a natural catastrophe, the full amount would be reflected in net income (loss) on our consolidated statements of operations, but ultimately we would only retain a portion of that amount in our net income (loss) attributable to RenaissanceRe. In the Company’s consolidated balance sheets and consolidated statements of operations, the portion of these items attributable to third parties is reflected in “Net (income) loss attributable to redeemable noncontrolling interests” line item. Refer to “Note 10. Noncontrolling Interests” in our “Notes to the Consolidated Financial Statements” for additional information regarding our redeemable noncontrolling interests and how this accounting treatment impacts the Company’s financial results.

Effects of Inflation

General economic inflation has increased over the past few years compared to recent historical norms, and there is a risk of inflation remaining elevated for an extended period, which could cause claims and claims related expenses to increase, impact the performance of our investment portfolio, or have other adverse effects. This risk may have been exacerbated by the impact from the war in Ukraine and global supply chain issues, among other factors. Many central banks have been raising interest rates, which could act as a countervailing force against some of these inflationary pressures. The actual effects of the current and potential future increase in inflation on our results cannot be accurately known until, among other items, claims are ultimately settled. The duration and severity of an inflationary period cannot be estimated with precision. We consider the anticipated effects of inflation on us in our catastrophe loss models and on our investment portfolio. Our estimates of the potential effects of inflation are also considered in pricing and in estimating reserves for unpaid claims and claim expenses. The potential exists, after a catastrophe loss, for the development of inflationary pressures in a local economy.

SELECTED CONSOLIDATED FINANCIAL DATA

The following tables set forth our selected consolidated financial data and other financial information at the end of and for each of the years in the five-year period ended December 31, 2023. The results of Validus and TMR are included in our consolidated financial data from November 1, 2023 and March 22, 2019, respectively. The selected consolidated financial data should be read in conjunction with our consolidated financial statements and related notes thereto and the other information in this “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-K.

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[[GREPCENT_TABLE]]
[["","Year ended December 31,","2023","","2022","","2021","","2020","","2019"],["","(in thousands, except share and per share data and percentages)"],["","Statements of Operations Data:"],["","Gross premiums written","$","8,862,366","","","$","9,213,540","","","$","7,833,798","","","$","5,806,165","","","$","4,807,750"],["","Net premiums written","7,467,813","","","7,196,160","","","5,939,375","","","4,096,333","","","3,381,493"],["","Net premiums earned","7,471,133","","","6,333,989","","","5,194,181","","","3,952,462","","","3,338,403"],["","Net investment income","1,253,110","","","559,932","","","319,479","","","354,038","","","424,207"],["","Net realized and unrealized gains (losses) on investments","414,522","","","(1,800,485)","","","(218,134)","","","820,636","","","414,109"],["","Net claims and claim expenses incurred","3,573,509","","","4,338,840","","","3,876,087","","","2,924,609","","","2,097,021"],["","Acquisition expenses","1,875,034","","","1,568,606","","","1,214,858","","","897,677","","","762,232"],["","Operational expenses","375,182","","","276,691","","","212,184","","","206,687","","","222,733"],["","Underwriting income (loss)","1,647,408","","","149,852","","","(108,948)","","","(76,511)","","","256,417"],["","Net income (loss)","3,620,127","","","(1,159,816)","","","(103,440)","","","993,058","","","950,267"],["","Net income (loss) available (attributable) to RenaissanceRe common shareholders","2,525,757","","","(1,096,578)","","","(73,421)","","","731,482","","","712,042"],["","Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share \u2013 diluted","52.27","","","(25.50)","","","(1.57)","","","15.31","","","16.29"],["","Dividends per common share","1.52","","","1.48","","","1.44","","","1.40","","","1.36"],["","Weighted average common shares outstanding \u2013 diluted","47,607","","","43,040","","","47,171","","","47,178","","","43,175"],["","Return on average common equity","40.5","%","","(22.0)","%","","(1.1)","%","","11.7","%","","14.1","%"],["","Combined ratio","77.9","%","","97.7","%","","102.1","%","","101.9","%","","92.3","%"],["","At December 31,","2023","","2022","","2021","","2020","","2019"],["","Balance Sheet Data:"],["","Total investments","$","29,216,143","","","$","22,220,436","","","$","21,442,659","","","$","20,558,176","","","$","17,368,789"],["","Total assets","49,007,105","","","36,552,878","","","33,959,502","","","30,820,580","","","26,330,094"],["","Reserve for claims and claim expenses","20,486,869","","","15,892,573","","","13,294,630","","","10,381,138","","","9,384,349"],["","Unearned premiums","6,136,135","","","4,559,107","","","3,531,213","","","2,763,599","","","2,530,975"],["","Debt","1,958,655","","","1,170,442","","","1,168,353","","","1,136,265","","","1,384,105"],["","Capital leases","21,540","","","22,020","","","22,459","","","22,853","","","25,072"],["","Preference shares","750,000","","","750,000","","","750,000","","","525,000","","","650,000"],["","Total shareholders\u2019 equity attributable to RenaissanceRe","9,454,958","","","5,325,274","","","6,624,281","","","7,560,248","","","5,971,367"],["","Common shares outstanding","52,694","","","43,718","","","44,445","","","50,811","","","44,148"],["","Book value per common share","$","165.20","","","$","104.65","","","$","132.17","","","$","138.46","","","$","120.53"],["","Accumulated dividends","26.52","","","25.00","","","23.52","","","22.08","","","20.68"],["","Book value per common share plus accumulated dividends","$","191.72","","","$","129.65","","","$","155.69","","","$","160.54","","","$","141.21"],["","Change in book value per common share plus change in accumulated dividends","59.3","%","","(19.7)","%","","(3.5)","%","","16.0","%","","17.1","%"]]
[[/GREPCENT_TABLE]]

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SUMMARY OF CRITICAL ACCOUNTING ESTIMATES

Claims and Claim Expense Reserves

General Description

We believe the most significant accounting judgment made by management is our estimate of claims and claim expense reserves. Claims and claim expense reserves represent estimates, including actuarial and statistical projections at a given point in time, of the ultimate settlement and administration costs for unpaid claims and claim expenses arising from the insurance and reinsurance contracts we sell. Our claims and claim expense reserves are a combination of case reserves, additional case reserves, or ACR, and incurred but not reported losses and incurred but not enough reported losses, collectively referred to as IBNR. Case reserves are losses reported to us by insureds and ceding companies, but which have not yet been paid. If deemed necessary and in certain situations, we establish ACR, which represents our estimates for claims related to specific contracts that we believe may not be adequately estimated by the client as of that date or within the IBNR. We establish IBNR using actuarial techniques and expert judgement to represent the anticipated cost of claims which have not been reported to us yet or where we anticipate increased reporting. Our reserving committee, which includes members of our senior management, reviews, discusses, and assesses the reasonableness and adequacy of the reserving estimates included in our audited consolidated financial statements.

The following table summarizes our reserve for claims and claim expenses by segment, allocated between case reserves, additional case reserves and IBNR:

[[GREPCENT_TABLE]]
[["","At December 31, 2023","Case Reserves","","Additional Case Reserves","","IBNR","","Total"],["","(in thousands)"],["","Property","$","2,461,580","","","$","1,459,010","","","$","3,913,030","","","$","7,833,620"],["","Casualty and Specialty","2,801,016","","","203,560","","","9,648,673","","","12,653,249"],["","Total (1)","$","5,262,596","","","$","1,662,570","","","$","13,561,703","","","$","20,486,869"],["","At December 31, 2022"],["","(in thousands)"],["","Property","$","1,956,688","","","$","2,008,891","","","$","3,570,253","","","$","7,535,832"],["","Casualty and Specialty","1,864,365","","","167,993","","","6,324,383","","","8,356,741"],["","Total","$","3,821,053","","","$","2,176,884","","","$","9,894,636","","","$","15,892,573"]]
[[/GREPCENT_TABLE]]

(1)Included in the Company’s reserves for claims and claim expenses balance at December 31, 2023 is $4.5 billion of gross reserves for claims and claim expenses, at fair value, acquired as a result of the Validus Acquisition.

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Activity in the liability for unpaid claims and claim expenses is summarized as follows:

[[GREPCENT_TABLE]]
[["","Year ended December 31,","2023","","2022"],["","(in thousands)"],["","Reserve for claims and claim expenses, net of reinsurance recoverable, as of beginning of period","$","11,181,648","","","$","9,025,961"],["","Net incurred related to:"],["","Current year","4,024,116","","","4,586,422"],["","Prior years","(450,607)","","","(247,582)"],["","Total net incurred","3,573,509","","","4,338,840"],["","Net paid related to:"],["","Current year","364,793","","","105,885"],["","Prior years","2,630,885","","","1,924,271"],["","Total net paid","2,995,678","","","2,030,156"],["","Foreign exchange (1)","62,902","","","(152,997)"],["","Amounts acquired (2)","3,320,202","","","\u2014"],["","Reserve for claims and claim expenses, net of reinsurance recoverable, as of end of period","15,142,583","","","11,181,648"],["","Reinsurance recoverable as of end of period","5,344,286","","","4,710,925"],["","Reserve for claims and claim expenses as of end of period","$","20,486,869","","","$","15,892,573"]]
[[/GREPCENT_TABLE]]

(1)Reflects the impact of the foreign exchange revaluation of the reserve for claims and claim expenses, net of reinsurance recoverable, denominated in non-U.S. dollars as at the balance sheet date.

(2)Represents the fair value of Validus’ reserves for claims and claim expenses, net of reinsurance recoverables, acquired on November 1, 2023.

The following table details our prior year development by segment of our liability for unpaid claims and claim expenses:

[[GREPCENT_TABLE]]
[["","Year ended December 31,","2023","","2022"],["","(in thousands)","(Favorable) adverse development","","(Favorable) adverse development"],["","Property","$","(408,905)","","","$","(205,741)"],["","Casualty and Specialty","(41,702)","","","(41,841)"],["","Total favorable development of prior accident years net claims and claim expenses","$","(450,607)","","","$","(247,582)"]]
[[/GREPCENT_TABLE]]

Our reserving methodology for each line of business uses a loss reserving process that calculates a point estimate for our ultimate settlement and administration costs for claims and claim expenses. We do not calculate a range of estimates and do not discount any of our reserves for claims and claim expenses. We use this point estimate, along with paid claims and case reserves, to record our best estimate of additional case reserves and IBNR in our consolidated financial statements. Under GAAP, we are not permitted to establish estimates for catastrophe claims and claim expense reserves until an event occurs that gives rise to a loss.

Reserving for our claims involves other uncertainties, such as the dependence on information from ceding companies, the time lag inherent in reporting information from the primary insurer to us or to our ceding companies, and different reserving practices among ceding companies. The information received from ceding companies is typically in the form of bordereaux, broker notifications of loss and/or discussions with ceding companies or their brokers. This information may be received on a monthly, quarterly or transactional basis and normally includes paid claims and estimates of case reserves. We may also receive an estimate or provision for IBNR from certain ceding companies. This information is often updated and adjusted from time to time during the loss settlement period as new data or facts in respect of initial claims, client accounts, industry or event trends may be reported or emerge in addition to changes in applicable statutory and case laws.

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Our estimates of large losses are based on factors including currently available information derived from claims information from certain customers and brokers, industry assessments of losses, proprietary models, historical reinsurance and insurance loss experience and statistics, management’s experience and judgment to assist the establishment of appropriate claims and claim expense reserves, and the terms and conditions of our contracts. The uncertainty of our estimates for large losses is also impacted by the preliminary nature of the information available, the magnitude and relative infrequency of the loss, the expected duration of the respective claims development period, inadequacies in the data provided to the relevant date by industry participants, the potential for further reporting lags or insufficiencies and, in certain cases, the form of the claims and legal issues under the relevant terms of insurance and reinsurance contracts. In addition, a significant portion of the net claims and claim expenses associated with certain large losses can be concentrated with a few large clients and therefore the loss estimates for these losses may vary significantly based on the claims experience of those clients. The contingent nature of business interruption and other exposures will also impact losses in a meaningful way, which we believe may give rise to significant complexity in respect of claims handling, claims adjustment and other coverage issues, over time. Given the magnitude of certain losses, there can be meaningful uncertainty regarding total covered losses for the insurance industry and, accordingly, several of the key assumptions underlying our loss estimates. Loss reserve estimation in respect of our retrocessional contracts poses further challenges compared to directly assumed reinsurance. In addition, our actual net losses may increase if our reinsurers or other obligors fail to meet their obligations.

Because of the inherent uncertainties discussed above, we have developed a reserving philosophy which attempts to incorporate prudent assumptions and estimates, and we have generally experienced favorable development on prior accident years net claims and claim expenses in the last several years. However, there is no assurance that this favorable development on prior accident years net claims and claim expenses will occur in future periods.

Our reserving techniques, assumptions and processes differ among our Property and Casualty and Specialty segments. Refer to “Note 8. Reserve for Claims and Claim Expenses” in our “Notes to the Consolidated Financial Statements” for more information on the risks we insure and reinsure, the reserving techniques, assumptions and processes we follow to estimate our claims and claim expense reserves, prior year development of the reserve for claims and claim expenses, analysis of our incurred and paid claims development and claims duration information for each of our Property and Casualty and Specialty segments.

Property Segment

Actual Results vs. Initial Estimates

As discussed above, the key assumption in estimating reserves for our Property segment is our estimate of incurred claims and claim expenses. The table below shows our initial estimates of incurred claims and claim expenses for each accident year and how these initial estimates have developed over time. The initial estimate of accident year incurred claims and claim expenses represents our estimate of the ultimate settlement and administration costs for claims incurred in our Property segment occurring during a particular accident year, and as reported as of December 31 of that year. The re-estimated incurred claims and claim expenses as of December 31 of subsequent years, represent our revised estimates as reported as of those dates. Our most recent estimates as reported at December 31, 2023 differ from our initial accident year estimates and demonstrate that our most recent estimate of incurred claims and claim expenses are reasonably likely to vary from our initial estimate, perhaps significantly. Changes in this estimate will be recorded in the period in which they occur. In accident years where our current estimates are lower than our initial estimates, we have experienced favorable development, in comparison, for accident years where our current estimates are higher than our original estimates we have experienced adverse development. The table is presented on a net basis and, therefore, includes the benefit of reinsurance recoveries. In addition, we have included historical incurred claims and claim expenses development information related to Platinum, TMR and Validus in the table below. For incurred accident year claims and claim expenses denominated in currencies other than USD, we have used the current year-end balance sheet foreign exchange rate for all periods provided, thereby eliminating the effects of changes in foreign currency translation rates from the incurred accident year claims development information included in the table below.

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The following table details our Property segment incurred claims and claim expenses, net of reinsurance, as of December 31, 2023.

[[GREPCENT_TABLE]]
[["","","","Incurred Claims and Claim Expenses, Net of Reinsurance"],["","(in thousands)","","For the year ended December 31,"],["","Accident Year","","2014","","2015","","2016","","2017","","2018","","2019","","2020","","2021","","2022","","2023"],["","2014","","$","380,622","","","$","352,583","","","$","331,455","","","$","326,513","","","$","331,610","","","$","331,347","","","$","325,325","","","$","319,529","","","$","317,076","","","$","315,158"],["","2015","","\u2014","","","511,360","","","459,762","","","416,585","","","399,498","","","389,650","","","384,744","","","375,769","","","377,861","","","376,792"],["","2016","","\u2014","","","\u2014","","","588,366","","","607,340","","","576,902","","","554,287","","","526,318","","","522,330","","","541,396","","","530,843"],["","2017","","\u2014","","","\u2014","","","\u2014","","","2,018,855","","","1,824,613","","","1,698,844","","","1,681,670","","","1,624,156","","","1,559,925","","","1,532,082"],["","2018","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","1,374,423","","","1,465,633","","","1,408,253","","","1,280,066","","","1,267,732","","","1,216,792"],["","2019","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","1,203,828","","","1,191,214","","","1,103,449","","","1,017,085","","","953,986"],["","2020","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","1,989,861","","","2,098,289","","","2,092,021","","","2,036,200"],["","2021","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","2,744,649","","","2,713,942","","","2,628,136"],["","2022","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","2,584,543","","","2,463,435"],["","2023","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","1,473,736"],["","Total","","","","","","","","","","","","","","","","","","","","$","13,527,160"]]
[[/GREPCENT_TABLE]]

Our initial and subsequent estimates of incurred claims and claim expenses, net of reinsurance, are impacted by available information derived from claims information from customers and brokers, industry assessments of losses, proprietary models, historical reinsurance and insurance loss experience and statistics, management’s experience and judgment to assist the establishment of appropriate claims and claim expense reserves, and the terms and conditions of our contracts. As described above, given the complexity in reserving for claims and claims expenses associated with property losses, and catastrophe excess of loss reinsurance contracts in particular, which make up a significant proportion of our Property segment, we have experienced development, both favorable and unfavorable, in any given accident year. For example, net claims and claim expenses associated with the 2019 accident year have experienced favorable development. This is largely driven by reductions in estimated net ultimate claims and claim expenses associated with the 2019 Large Loss Events. In comparison, net claims and claim expenses associated with the 2020 accident year have experienced adverse development. The adverse development was driven by an increase in expected net claims and claim expenses as new and additional claims information was received associated with the 2020 Weather-Related Large Loss Events.

In accident years with a low level of insured catastrophe losses, our other property lines of business contribute a greater proportion of our overall incurred claims and claim expenses within our Property segment, compared to years with a high level of insured catastrophe losses. We expect that certain of our other property lines of business will tend to generate less volatility in future calendar years and, as such, we would expect to see a slower more stable increase or decrease in estimated incurred net claims and claim expenses over time in such business. Certain of our other property contracts are also exposed to catastrophe events, resulting in increased volatility of incurred claims and claim expenses driven by the occurrence of catastrophe events. In addition, volatility in the initial estimate associated with large catastrophe losses and the speed at which we settle claims can vary significantly based on the type of event. Losses from the COVID-19 pandemic are uncertain and highly complex, given the unprecedented situation, and will take longer to develop given the nature of the losses, thus potentially adding volatility to our incurred net claims and claim expenses.

Sensitivity Analysis

The table below shows the impact on our reserve for claims and claim expenses, net income (loss) and shareholders’ equity as of and for the year ended December 31, 2023 of a reasonable range of possible outcomes associated with our estimates of gross ultimate losses for claims and claim expenses incurred within our Property segment. The reasonable range of possible outcomes is based on a distribution of outcomes of our ultimate incurred claims and claim expenses from large losses. In addition, we adjust the loss ratios and development curves in our other property lines of business in a similar fashion to the sensitivity analysis performed for our Casualty and Specialty segment, discussed in greater detail below. In general, our reserve for claims and claim expenses for more recent losses are subject to greater uncertainty

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and, therefore, greater variability and are likely to experience material changes from one period to the next. This is due to uncertainty with respect to the size of the industry losses, which contracts have been exposed to the loss and the magnitude of claims incurred by our clients. As our claims age, more information becomes available and we believe our estimates become more certain, although there is no assurance this trend will continue in the future. As a result, the sensitivity analysis below is based on the age of each accident year, our current estimated incurred claims and claim expenses for the losses occurring in each accident year, and a reasonable range of possible outcomes of our current estimates of claims and claim expenses by accident year. The impact on net income (loss) and shareholders’ equity assumes no increase or decrease in reinsurance recoveries, loss related premium or profit commission, or redeemable noncontrolling interest.

Property Claims and Claim Expense Reserve Sensitivity Analysis

[[GREPCENT_TABLE]]
[["","(in thousands, except percentages)","Reserve for Claims and Claim Expenses atDecember 31,2023","","$ Impact of Change Reserve for Claimsand Claim Expensesat December 31,2023","","% Impact of Changeon Gross Reserve for Claimsand Claim Expensesat December 31,2023","","% Impact of Change on Net Income (Loss) forthe Year EndedDecember 31, 2023","","% Impact of Change on Shareholders\u2019Equity atDecember 31, 2023"],["","Higher","$","8,448,069","","","$","614,449","","","3.0","%","","(17.0)","%","","(6.5)","%"],["","Recorded","$","7,833,620","","","$","\u2014","","","\u2014","%","","\u2014","%","","\u2014","%"],["","Lower","$","7,410,133","","","$","(423,487)","","","(2.1)","%","","11.7","%","","4.5","%"]]
[[/GREPCENT_TABLE]]

We believe the changes we made to our estimated incurred claims and claim expenses represent a reasonable range of possible outcomes based on our experience to date and our future expectations. While we believe these are a reasonable range of possible outcomes, we do not believe the above sensitivity analysis should be considered an actuarial reserve range. In addition, the sensitivity analysis only reflects a reasonable range of possible outcomes in our underlying assumptions. It is possible that our estimated incurred claims and claim expenses could be significantly higher or lower than the sensitivity analysis described above. For example, we could be liable for exposures we do not currently believe are covered under our policies. These changes could result in significantly larger changes to our estimated incurred claims and claim expenses, net income and shareholders’ equity than those noted above, and could be recorded across multiple periods. The inflationary outlook is also highly uncertain and could result in larger changes than those depicted above. We continue to monitor the inflationary environment and reflect our view within our best estimate reserves. We also caution that the above sensitivity analysis is not used by management in developing our reserve estimates and is also not used by management in managing the business.

Casualty and Specialty Segment

Actual Results vs. Initial Estimates

As discussed above, the key assumption in estimating reserves for our Casualty and Specialty segment is our estimate of incurred claims and claim expenses. Standard actuarial techniques are used to calculate the ultimate claims and claim expenses. The key assumptions in the determination of ultimate claims and claim expenses include the estimated incurred claims and claim expenses ratio and the estimated loss reporting patterns. The table below shows our initial estimates of incurred claims and claim expenses for each accident year and how these initial estimates have developed over time. The initial estimate of accident year incurred claims and claim expenses represents our estimate of the ultimate settlement and administration costs for claims incurred in our Casualty and Specialty segment occurring during a particular accident year, and as reported as of December 31 of that year. The re-estimated incurred claims and claim expenses as of December 31 of subsequent years, represent our revised estimates as reported as of those dates. Our most recent estimates as reported at December 31, 2023 differ from our initial accident year estimates and demonstrates that our initial estimate of incurred claims and claim expenses are reasonably likely to vary from our most recent estimate, perhaps significantly. Changes in this estimate will be recorded in the period in which they occur. In accident years where our current estimates are lower than our initial

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estimates, we have experienced favorable development while accident years where our current estimates are higher than our original estimates indicate adverse development. The table is presented on a net basis and, therefore, includes the benefit of reinsurance recoverable. In addition, we have included historical incurred claims and claim expenses development information related to Platinum, TMR and Validus in the table below. For incurred accident year claims denominated in currencies other than USD, we have used the current year-end balance sheet foreign exchange rate for all periods provided, thereby eliminating the effects of changes in foreign currency translation rates from the incurred accident year claims development information included in the table below.

The following table details our Casualty and Specialty segment incurred claims and claim expenses, net of reinsurance, as of December 31, 2023.

[[GREPCENT_TABLE]]
[["","","","Incurred Claims and Claim Expenses, Net of Reinsurance"],["","(in thousands)","","For the year ended December 31,"],["","Accident Year","","2014","","2015","","2016","","2017","","2018","","2019","","2020","","2021","","2022","","2023"],["","2014","","$","969,060","","","$","939,468","","","$","930,359","","","$","905,126","","","$","884,566","","","$","897,806","","","$","874,342","","","$","869,487","","","$","863,156","","","$","853,413"],["","2015","","\u2014","","","1,171,452","","","1,153,180","","","1,163,709","","","1,135,289","","","1,123,054","","","1,117,356","","","1,128,857","","","1,119,160","","","1,118,464"],["","2016","","\u2014","","","\u2014","","","1,309,509","","","1,300,187","","","1,293,139","","","1,282,820","","","1,228,848","","","1,247,820","","","1,263,596","","","1,251,833"],["","2017","","\u2014","","","\u2014","","","\u2014","","","1,678,282","","","1,618,591","","","1,659,007","","","1,603,386","","","1,631,557","","","1,630,234","","","1,648,213"],["","2018","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","1,655,780","","","1,801,151","","","1,796,860","","","1,794,934","","","1,813,707","","","1,895,961"],["","2019","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","1,562,040","","","1,563,215","","","1,565,662","","","1,583,553","","","1,659,217"],["","2020","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","2,445,269","","","2,330,908","","","2,331,392","","","2,372,776"],["","2021","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","2,808,296","","","2,664,129","","","2,550,829"],["","2022","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","3,381,535","","","3,217,112"],["","2023","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","3,830,159"],["","Total","","","","","","","","","","","","","","","","","","","","$","20,397,977"]]
[[/GREPCENT_TABLE]]

As each accident year has developed, our estimated expected incurred claims and claim expenses, net of reinsurance, have changed. For example, our re-estimated incurred claims and claim expenses decreased for the 2021 accident year from the initial estimates. This decrease was principally driven by actual reported and paid net claims and claim expenses associated with the 2021 accident year being lower than expected, which has resulted in a reduction in our expected ultimate claims and claim expense ratio for this accident year. In comparison, the 2018 accident year has developed adversely compared to our initial estimates of incurred claims and claim expenses and our current estimates are higher than our initial estimates. The increase in incurred claims and claim expenses for the 2018 accident year is due to reported losses generally coming in higher than expected on attritional net claims and claim expenses.

The reserving methodology for our Casualty and Specialty segment is weighted more heavily to our initial estimate in the early periods immediately following the contracts’ inception through the use of the expected loss ratio method. The expected loss ratio method estimates the incurred losses by multiplying the initial expected loss ratio by the earned premium. Under the expected loss ratio method, no reliance is placed on the development of claims and claim expenses. The determination of when reported losses are sufficient and credible to warrant selection of an ultimate loss ratio different from the initial expected loss ratio also requires judgment. We generally make adjustments for reported loss experience indicating unfavorable variances from the initial expected loss ratio sooner than reported loss experience indicating favorable variances as reporting of losses in excess of expectations tends to have greater credibility than an absence of, or lower than expected level of, reported losses. Over time, as a greater number of claims are reported and the credibility of reported losses improves, actuarial estimates of IBNR are typically based on the Bornhuetter-Ferguson actuarial method. The Bornhuetter-Ferguson actuarial method places weight on claims and claim expenses development experience. If there is adverse development of prior accident years claims and claim expenses, we generally select the Bornhuetter-Ferguson actuarial method to ensure the claim experience is considered in the determination of our estimated claims and claim expenses with the associated business. If we believe we lack the claims experience in the early stages of development of a line of business, we may not select the Bornhuetter-Ferguson actuarial method until such time as we believe there is greater credibility in the level of reported losses. As development experience for claims and claim expenses on prior accident years becomes credible, the Bornhuetter-Ferguson actuarial method is

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generally selected which places greater weight on this reported experience as it develops. The Bornhuetter-Ferguson actuarial method estimates our expected ultimate claims and claim expenses by applying our initial estimated loss ratio to our undeveloped premium, and adding the reported losses to the estimate.

Sensitivity Analysis

The table below shows the impact on our Casualty and Specialty segment reserve for claims and claim expenses, net income (loss) and shareholders’ equity as of and for the year ended December 31, 2023, of a reasonable range of possible outcomes associated with a variety of reasonable actuarial assumptions for our estimates of gross ultimate claims and claim expense ratios and loss reporting patterns. The impact on net income (loss) and shareholders’ equity assumes no increase or decrease in reinsurance recoveries, loss related premium or profit commission, or redeemable noncontrolling interest.

Casualty and Specialty Claims and Claim Expense Reserve Sensitivity Analysis

[[GREPCENT_TABLE]]
[["","(in thousands, except percentages)","Estimated Loss Reporting Pattern","","$ Impact of Changeon Reserves forClaims and ClaimExpenses atDecember 31,2023","","% Impact of Changeon Reserve forClaims and ClaimExpenses atDecember 31,2023","","% Impact ofChange onNet Income (Loss)for the YearEndedDecember 31,2023","","% Impact ofChange onShareholders\u2019Equity atDecember 31,2023"],["","Increase expected claims and claim expense ratio by 10%","Slower reporting","","$","1,875,070","","","9.2","%","","(51.8)","%","","(19.8)","%"],["","Increase expected claims and claim expense ratio by 10%","Expected reporting","","$","1,196,233","","","5.8","%","","(33.0)","%","","(12.7)","%"],["","Increase expected claims and claim expense ratio by 10%","Faster reporting","","$","625,316","","","3.1","%","","(17.3)","%","","(6.6)","%"],["","Expected claims and claim expense ratio","Slower reporting","","$","620,519","","","3.0","%","","(17.1)","%","","(6.6)","%"],["","Expected claims and claim expense ratio","Expected reporting","","$","\u2014","","","\u2014","%","","\u2014","%","","\u2014","%"],["","Expected claims and claim expense ratio","Faster reporting","","$","(521,612)","","","(2.5)","%","","14.4","%","","5.5","%"],["","Decrease expected claims and claim expense ratio by 10%","Slower reporting","","$","(631,997)","","","(3.1)","%","","17.5","%","","6.7","%"],["","Decrease expected claims and claim expense ratio by 10%","Expected reporting","","$","(1,194,198)","","","(5.8)","%","","33.0","%","","12.6","%"],["","Decrease expected claims and claim expense ratio by 10%","Faster reporting","","$","(1,666,505)","","","(8.1)","%","","46.0","%","","17.6","%"]]
[[/GREPCENT_TABLE]]

We believe that ultimate claims and claim expense ratios 10.0 percentage points above or below our estimated assumptions constitute a reasonable range of possible outcomes based on our experience to date and our future expectations. In addition, we believe that the adjustments we made to speed up or slow down our estimated loss reporting patterns represent a reasonable range of possible outcomes. While we believe these are a reasonable range of possible outcomes, we do not believe the above sensitivity analysis should be considered an actuarial reserve range. In addition, the sensitivity analysis only reflects a reasonable range of possible outcomes in our underlying assumptions. It is possible that our initial estimated claims and claim expense ratios and loss reporting patterns could be significantly different from the sensitivity analysis described above. For example, we could be liable for exposures we do not currently believe are covered under our contracts. These changes could result in significantly larger changes to reserves for claims and claim expenses, net income and shareholders’ equity than those noted above, and could be recorded across multiple periods. The inflationary outlook is also highly uncertain and could result in larger changes than those depicted above. We continue to monitor the inflationary environment and reflect our view within our best estimate reserves. We also caution that the above sensitivity analysis is not used by management in developing our reserve estimates and is also not used by management in managing the business.

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Premiums and Related Expenses

Premiums are recognized as income, net of any applicable reinsurance or retrocessional coverage purchased, over the terms of the related contracts and policies. Premiums written are based on contract and policy terms and include estimates based on information received from both insureds and ceding companies. Subsequent revisions to premium estimates are recorded in the period in which they are determined. Unearned premiums represents the portion of premiums written that relate to the unexpired terms of contracts and policies in force. Amounts are computed by pro rata methods based on statistical data or reports received from ceding companies. Reinstatement premiums are estimated after the occurrence of a loss and are recorded in accordance with the contract terms based upon paid losses and case reserves. Reinstatement premiums are earned when written.

Due to the nature of reinsurance, ceding companies routinely report and remit premiums to us subsequent to the contract coverage period. Consequently, premiums written and receivable include amounts reported by the ceding companies, supplemented by our estimates of premiums that are written but not reported. The estimation of written premiums may be affected by early cancellation, election of contract provisions for cut-off and return of unearned premiums or other contract disruptions. The time lag involved in the process of reporting premiums is shorter than the lag in reporting losses. In addition to estimating premiums written, we estimate the earned portion of premiums written which is subject to judgment and uncertainty. Any adjustments to written and earned premiums, and the related losses and acquisition expenses, are accounted for as changes in estimates and are reflected in the results of operations in the period in which they are made. 

Lines of business that are similar in both the nature of their business and estimation process may be grouped for purposes of estimating premiums. Premiums are estimated based on ceding company estimates and our own judgment after considering factors such as: (1) the ceding company’s historical premium versus projected premium, (2) the ceding company’s history of providing accurate estimates, (3) anticipated changes in the marketplace and the ceding company’s competitive position therein, (4) reported premiums to date and (5) the anticipated impact of proposed underwriting changes. Estimates of premiums written and earned are based on the selected ultimate premium estimate, the terms and conditions of the reinsurance contracts and the remaining exposure from the underlying policies. We evaluate the appropriateness of these estimates in light of the actual premium reported by the ceding companies, information obtained during audits and other information received from ceding companies.

We estimate our provision for current expected credit losses by applying specific percentages against each premiums receivable based on the counterparty’s credit ratings. The percentages applied are based on information received from both insureds and ceding companies and are then adjusted by us based on industry knowledge and our judgment and estimates. We then evaluate the overall adequacy of the provision for current expected credit losses based on other qualitative and judgmental factors. At December 31, 2023, the Company’s premiums receivable balance was $7.3 billion (2022 - $5.1 billion). Of the Company’s premiums receivable balance as of December 31, 2023, the majority are receivables from highly rated counterparties. At December 31, 2023, the Company held a provision for current expected credit losses on its premiums receivable of $3.5 million (2022 - $4.6 million).

Reinsurance Recoverable

We enter into retrocessional reinsurance agreements in order to help reduce our exposure to large losses and to help manage our risk portfolio. Amounts recoverable from reinsurers are estimated in a manner consistent with the claims and claim expense reserves associated with the related assumed reinsurance. For multi-year retrospectively rated contracts, we accrue amounts (either assets or liabilities) that are due to or from our retrocessionaires based on estimated contract experience. If we determine that adjustments to earlier estimates are appropriate, such adjustments are recorded in the period in which they are determined.

The estimate of reinsurance recoverable can be more subjective than estimating the underlying claims and claim expense reserves as discussed under the heading “Claims and Claim Expense Reserves” above. In particular, reinsurance recoverable may be affected by deemed inuring reinsurance, frequency and timing of industry losses reported by various statistical reporting services, loss development, loss buffer tables and various other factors. Reinsurance recoverable on dual trigger reinsurance contracts require us to estimate our ultimate losses applicable to these contracts as well as estimate the ultimate amount of insured industry

64

losses that will be reported by the applicable statistical reporting agency, as per the contract terms. In addition, the level of our additional case reserves and IBNR reserves has a significant impact on reinsurance recoverable. These factors can impact the amount and timing of the reinsurance recoverable to be recorded.

The majority of the balance we have accrued as recoverable will not be due for collection until some point in the future. The amounts recoverable that will ultimately be collected are subject to uncertainty due to the ultimate ability and willingness of reinsurers to pay our claims at a future point in time, for reasons including insolvency or elective run-off, contractual dispute and various other reasons. In addition, because the majority of the balances recoverable will not be collected for some time, economic conditions as well as the financial and operational performance of a particular reinsurer may change, and these changes may affect the reinsurer’s willingness and ability to meet their contractual obligations to us on uncollateralized recoverable balances. To reflect these uncertainties, we estimate and record a provision for current expected credit losses for potential uncollectible reinsurance recoverable which reduces reinsurance recoverable and net income.

We estimate our provision for current expected credit losses by applying specific percentages against each reinsurance recoverable based on our counterparty’s credit rating. The percentages applied are based on historical industry default statistics developed by major rating agencies and are then adjusted by us based on industry knowledge and our judgment and estimates. We then evaluate the overall adequacy of the provision for current expected credit losses based on other qualitative and judgmental factors. At December 31, 2023, our reinsurance recoverable balance was $5.3 billion (2022 - $4.7 billion). Of this amount, 60.6% is fully collateralized by our reinsurers, 38.5% is recoverable from reinsurers rated A- or higher by major rating agencies and 0.9% is recoverable from reinsurers rated lower than A- by major rating agencies (2022 - 47.2%, 52.0% and 0.8%, respectively). The reinsurers with the three largest balances accounted for 17.6%, 14.3% and 8.7%, respectively, of our reinsurance recoverable balance at December 31, 2023 (2022 - 20.8%, 7.0% and 5.4%, respectively). The provision for current expected credit losses recorded against reinsurance recoverable was $13.3 million at December 31, 2023 (2022 - $12.2 million). The three largest company-specific components of the provision for current expected credit losses represented 10.9%, 10.7% and 8.1%, respectively, of our total provision for current expected credit losses at December 31, 2023 (2022 - 14.3%, 9.1% and 8.0%, respectively).

Fair Value Measurements and Impairments

Fair Value

The use of fair value to measure certain assets and liabilities with resulting unrealized gains or losses is pervasive within our consolidated financial statements. Fair value is defined under accounting guidance currently applicable to us to be the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between open market participants at the measurement date. We recognize the change in unrealized gains and losses arising from changes in fair value in our consolidated statements of operations.

FASB ASC Topic Fair Value Measurements and Disclosures prescribes a fair value hierarchy that prioritizes the inputs to the respective valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to valuation techniques that use at least one significant input that is unobservable (Level 3).

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement of the asset or liability. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and we consider factors specific to the asset or liability.

In order to determine if a market is active or inactive for a security, we consider a number of factors, including, but not limited to, the volume of trading activity for the security in question, the price of the security compared to its par value (for fixed maturity investments), and other factors that may be indicative of market activity. 

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At December 31, 2023, we classified $159.8 million and $2.7 million of our assets and liabilities, respectively, at fair value on a recurring basis using Level 3 inputs (2022 - $170.3 million and $5.3 million, respectively). This represented 0.3% and 0.0% of our total assets and liabilities, respectively (2022 - 0.5% and 0.0%, respectively). Level 3 fair value measurements are based on valuation techniques that use at least one significant input that is unobservable. These measurements are made under circumstances in which there is little, if any, market activity for the asset or liability. We use valuation models or other pricing techniques that require a variety of inputs including contractual terms, market prices and rates, yield curves, credit curves, measures of volatility including credit spreads and projected cash flows, prepayment rates and correlations of such inputs, some of which may be unobservable, to value these Level 3 assets and liabilities.

Refer to “Note 6. Fair Value Measurements” in our “Notes to the Consolidated Financial Statements” for additional information about fair value measurements.

Impairments

The amount and timing of asset impairment is subject to significant estimation techniques and is a critical accounting estimate for us. The significant impairment reviews we complete are for our goodwill and other intangible assets and equity method investments, as described in more detail below.

Goodwill and Other Intangible Assets

Goodwill and other intangible assets acquired are initially recorded at fair value, the assessment of which requires significant judgments, assumptions and estimates which are inherently subjective. As discussed above, the measurement of fair values is a critical accounting estimate, and involves numerous inputs into the assessment, including a range of reasonable judgments that impact the determination of fair value. Subsequent to initial recognition, finite lived other intangible assets are amortized over their estimated useful life, subject to impairment, and goodwill and indefinite lived other intangible assets are carried at the lower of cost or fair value, subject to impairment. If goodwill or other intangible assets are impaired, they are written down to their estimated fair values with a corresponding expense reflected in our consolidated statements of operations.

We assess goodwill and other intangible assets for impairment in the second half of each year, or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable. For purposes of the annual impairment evaluation, we assess qualitative factors to determine if events or circumstances exist that would lead us to conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then we do not perform a quantitative evaluation. Should we determine that a quantitative analysis is required, we will first determine the fair value of the reporting unit and compare that with the carrying value, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, then goodwill is not considered impaired and no further analysis is required. If the carrying amount of a reporting unit exceeds its fair value, we then proceed to determine the amount of the impairment charge, if any. There are many assumptions and estimates underlying the fair value calculation. Principally, we identify the reporting unit or business entity that the goodwill or other intangible asset is attributed to, and review historical and forecasted operating and financial performance and other underlying factors affecting such analysis, including market conditions. Other assumptions used could produce significantly different results which may result in a change in the value of goodwill or our other intangible assets and a related charge in our consolidated statements of operations. An impairment charge could be recognized in the event of a significant decline in the implied fair value of those operations where the goodwill or other intangible assets are applicable. In the event we determine that the value of goodwill has become impaired, an accounting charge will be taken in the fiscal quarter in which such determination is made, which could have a material adverse effect on our results of operations in the period in which the impairment charge is recorded.

As a result of the Company’s impairment assessment performed during the second half of 2023, the Company determined that there was no impairment during 2023, and therefore the Company recorded no intangible asset impairment or goodwill charge during the year ended December 31, 2023.

As at December 31, 2023, excluding the amounts recorded in investments in other ventures, under the equity method, as noted below, our consolidated balance sheets include $300.5 million of goodwill (2022 -

66

$210.9 million) and $474.8 million of other intangible assets (2022 - $26.9 million). We have not recorded any impairment charges related to these balances in either of the two years ended December 31, 2023 or 2022. Refer to “Note 3. Acquisition of Validus” in our “Notes to the Consolidated Financial Statements” for additional information with respect to goodwill and intangible assets acquired in connection with the Validus Acquisition. In the future, it is possible we will hold more goodwill and intangible assets, which would increase the degree of judgment and uncertainty embedded in our financial statements, and potentially increase the volatility of our reported results.

Investments in Other Ventures, Under Equity Method

Investments in which we have significant influence over the operating and financial policies of the investee are classified as investments in other ventures, under equity method, and are accounted for under the equity method of accounting. Under this method, we record our proportionate share of income or loss from such investments in our results for the period. Any decline in the value of investments in other ventures, under equity method, including goodwill and other intangible assets arising upon acquisition of the investee, considered by management to be other-than-temporary, is reflected in our consolidated statements of operations in the period in which it is determined. As of December 31, 2023, we had $112.6 million (2022 - $79.8 million) in investments in other ventures, under equity method on our consolidated balance sheets, including $10.8 million of goodwill and $7.3 million of other intangible assets (2022 - $9.9 million and $7.9 million). The carrying value of our investments in other ventures, under equity method, individually or in the aggregate, may, and likely will, differ from the realized value we may ultimately attain, perhaps significantly so.

In determining whether an equity method investment is impaired, we take into consideration a variety of factors including the operating and financial performance of the investee, the investee’s future business plans and projections, recent transactions and market valuations of publicly traded companies where available, discussions with the investee’s management, and our intent and ability to hold the investment until it recovers in value. Accordingly, we make assumptions and estimates in assessing whether an impairment has occurred and if, in the future, our assumptions and estimates made in assessing the fair value of these investments change, this could result in a material decrease in the carrying value of these investments. This would cause us to write-down the carrying value of these investments and could have a material adverse effect on our results of operations in the period the impairment charge is taken. We do not have any current plans to dispose of these investments, and cannot assure you we will consummate future transactions in which we realize the value at which these holdings are reflected in our financial statements. We have not recorded any other-than-temporary impairment charges related to goodwill and other intangible assets associated with our investments in other ventures, under equity method in either of the two years ended December 31, 2023 or 2022. See “Note 4. Goodwill and Other Intangible Assets” in our “Notes to the Consolidated Financial Statements” for additional information.

Income Taxes

Income taxes have been determined in accordance with the provisions of FASB ASC Topic Income Taxes. Deferred tax assets and liabilities result from temporary differences between the amounts recorded in our consolidated financial statements and the tax basis of our assets and liabilities. Such temporary differences are primarily due to net operating loss and capital loss carryforwards and GAAP versus tax basis accounting differences relating to unearned premiums, reserves for claims and claim expenses, deferred finance charges, deferred underwriting results, accrued expenses, investments, value of in-force business, VOBA, deferred acquisition expenses, intangible assets, amortization and depreciation. The effect on deferred tax assets and liabilities of a change in tax laws or tax rates is recognized in income in the period in which the change is enacted. A valuation allowance against net deferred tax assets is recorded if it is more likely than not that all, or some portion, of the benefits related to deferred tax assets will not be realized. Significant judgments, assumptions and estimates which are inherently subjective are required in determining income tax expense, temporary differences, the deferred tax impact of a change in law, and valuation allowances.

At December 31, 2023, our net deferred tax asset (prior to our valuation allowance) and valuation allowance were $864.7 million (2022 - $316.8 million) and $213.3 million (2022 - $193.6 million), respectively. See “Note 15. Taxation” in our “Notes to the Consolidated Financial Statements” for additional information. At each balance sheet date, we assess the need to establish a valuation allowance that reduces the net

67

deferred tax asset when it is more likely than not that all, or some portion, of the net deferred tax assets will not be realized. The valuation allowance assessment is performed separately in each taxable jurisdiction based on all available information including projections of future GAAP taxable income from each tax-paying component in each tax jurisdiction. 

We have unrecognized tax benefits of $Nil as of December 31, 2023 (2022 - $Nil). Interest and penalties related to unrecognized tax benefits, would be recognized in income tax expense. At December 31, 2023, interest and penalties accrued on unrecognized tax benefits were $Nil (2022 - $Nil).

The following filed income tax returns are open for examination with the applicable tax authorities: tax years 2018 through 2022 with the U.S.; 2019 through 2022 with Ireland; 2021 through 2022 with the U.K.; 2019 through 2022 with Singapore; 2019 through 2022 with Switzerland; 2019 through 2022 with Australia; 2019 through 2022 with Canada; and 2018 through 2022 with Luxembourg. We do not expect the resolution of these open years to have a significant impact on our consolidated statements of operations and financial condition.

68

SUMMARY OF RESULTS OF OPERATIONS

[[GREPCENT_TABLE]]
[["","(in thousands, except per share amounts and percentages)"],["","Statements of Operations Highlights"],["","Year ended December 31,","2023","","2022","","Change"],["","Gross premiums written","$","8,862,366","","","$","9,213,540","","","$","(351,174)"],["","Net premiums written","$","7,467,813","","","$","7,196,160","","","$","271,653"],["","Net premiums earned","$","7,471,133","","","$","6,333,989","","","$","1,137,144"],["","Net claims and claim expenses incurred","3,573,509","","","4,338,840","","","(765,331)"],["","Acquisition expenses","1,875,034","","","1,568,606","","","306,428"],["","Operational expenses","375,182","","","276,691","","","98,491"],["","Underwriting income (loss)","$","1,647,408","","","$","149,852","","","$","1,497,556"],["","Net investment income","$","1,253,110","","","$","559,932","","","$","693,178"],["","Net realized and unrealized gains (losses) on investments","414,522","","","(1,800,485)","","","2,215,007"],["","Total investment result","$","1,667,632","","","$","(1,240,553)","","","$","2,908,185"],["","Net income (loss)","$","3,620,127","","","$","(1,159,816)","","","$","4,779,943"],["","Net income (loss) available (attributable) to RenaissanceRe common shareholders","$","2,525,757","","","$","(1,096,578)","","","$","3,622,335"],["","Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share \u2013 diluted","$","52.27","","","$","(25.50)","","","$","77.77"],["","Dividends per common share","$","1.52","","","$","1.48","","","$","0.04"],["","Key Ratios"],["","Year ended December 31,","2023","","2022","","Change"],["","Net claims and claim expense ratio \u2013 current accident year","53.9","%","","72.4","%","","(18.5)","pts"],["","Net claims and claim expense ratio \u2013 prior accident years","(6.1)","%","","(3.9)","%","","(2.2)","pts"],["","Net claims and claim expense ratio \u2013 calendar year","47.8","%","","68.5","%","","(20.7)","pts"],["","Underwriting expense ratio","30.1","%","","29.2","%","","0.9","pts"],["","Combined ratio","77.9","%","","97.7","%","","(19.8)","pts"],["","Return on average common equity","40.5","%","","(22.0)","%","","62.5","pts"],["","Book Value"],["","At December 31,","2023","","2022","","Change"],["","Book value per common share","$","165.20","","","$","104.65","","","$","60.55"],["","Accumulated dividends per common share","26.52","","","25.00","","","1.52"],["","Book value per common share plus accumulated dividends","$","191.72","","","$","129.65","","","$","62.07"],["","Change in book value per common share plus change in accumulated dividends","59.3","%","","(19.7)","%","","79.0","pts"],["","Balance Sheet Highlights"],["","At December 31,","2023","","2022","","Change"],["","Total assets","$","49,007,105","","","$","36,552,878","","","$","12,454,227"],["","Total shareholders\u2019 equity attributable to RenaissanceRe","$","9,454,958","","","$","5,325,274","","","$","4,129,684"]]
[[/GREPCENT_TABLE]]

69

Results of Operations for 2023 Compared to 2022

Net income available to RenaissanceRe common shareholders was $2.5 billion in 2023, compared to net loss attributable to RenaissanceRe common shareholders of $1.1 billion in 2022. As a result of our net income available to RenaissanceRe common shareholders in 2023, we generated an annualized return on average common equity of 40.5% and our book value per common share increased from $104.65 at December 31, 2022 to $165.20 at December 31, 2023, a 59.3% increase, after considering the change in accumulated dividends paid to our common shareholders.

The most significant items affecting our financial performance during 2023, on a comparative basis to 2022, include:

•Underwriting Results - we generated underwriting income of $1.6 billion and had a combined ratio of 77.9% in 2023, compared to underwriting income of $149.9 million and a combined ratio of 97.7% in 2022. Our underwriting income in 2023 was comprised of our Property segment, which generated underwriting income of $1.4 billion in and had a combined ratio of 53.4%, and our Casualty and Specialty segment, which generated underwriting income of $208.1 million in and had a combined ratio of 95.2%. In comparison, our underwriting income in 2022 was comprised of our Casualty and Specialty segment, which generated underwriting income of $166.0 million and had a combined ratio of 95.3%, partially offset by our Property segment, which generated an underwriting loss of $16.1 million and had a combined ratio of 100.6%;

Included in our underwriting results in 2023 was the impact of the 2023 Large Loss Events, which resulted in a net negative impact on the underwriting result of $298.6 million and added 4.1 percentage points to the combined ratio, primarily within our Property segment. In comparison, our underwriting results in 2022 were impacted by the 2022 Weather-Related Large Losses, which resulted in a net negative impact on the underwriting result of $1.2 billion and added 20.0 percentage points to the combined ratio, primarily in our Property segment;

•Gross Premiums Written - our gross premiums written decreased by $351.2 million, or 3.8%, to $8.9 billion, in 2023, compared to 2022. This was comprised of a decrease of $179.3 million in our Casualty and Specialty segment, in addition to a decrease of $171.8 million in our Property segment;

•Investment Results - our total investment result, which includes the sum of net investment income and net realized and unrealized gains (losses) on investments, was income of $1.7 billion in 2023, compared to a loss of $1.2 billion in 2022, an increase of $2.9 billion. The primary drivers of the improved total investment result were an improvement in net realized and unrealized gains (losses) on investments of $2.2 billion, driven by modest interest rate movements in 2023 compared to multiple interest rate increases during 2022. Net investment income increased $693.2 million, primarily driven by a combination of higher yielding assets and higher average invested assets in 2023, due to the equity and debt offerings in the second quarter of 2023, and the subsequent Validus Acquisition in the fourth quarter of 2023;

•Net Income Attributable to Redeemable Noncontrolling Interests - our net income attributable to redeemable noncontrolling interests was $1.1 billion in 2023, compared to a net loss attributable to redeemable noncontrolling interest of $98.6 million in 2022. Net income attributable to redeemable noncontrolling interests in 2023 was primarily driven by underwriting income generated by DaVinci and Vermeer, net investment income resulting from higher interest rates and yields within the investment portfolios of the Company’s joint ventures and managed funds, net realized and unrealized gains on the investment portfolios of the Company’s joint ventures and managed funds driven by modest interest rate movements in 2023 compared to multiple interest rate increases during 2022, and net realized and unrealized gains on catastrophe bonds held in Medici;

•Impact of Large Loss Events - we had a net negative impact on net income attributable to RenaissanceRe common shareholders of $213.4 million resulting from the 2023 Large Loss Events. This compares to a net negative impact on net loss attributable to RenaissanceRe common shareholders of $807.6 million resulting from the 2022 Weather-Related Large Losses and $23.9 million resulting from losses related to the Russia-Ukraine War in 2022.

•Income tax - we had an income tax benefit of $510.1 million in 2023, compared to $59.0 million in 2022. The increase in income tax benefit was primarily driven by the net deferred tax benefit recorded in

70

connection with the enactment of the 15% Bermuda corporate income tax on December 27, 2023. This was partially offset by increased income tax expense in the Company’s other operating jurisdictions resulting from higher operating income and investment gains.

Net Negative Impact

Net negative impact on underwriting result includes the sum of (1) net claims and claim expenses incurred, (2) assumed and ceded reinstatement premiums earned and (3) earned and lost profit commissions. Net negative impact on net income (loss) available (attributable) to RenaissanceRe common shareholders is the sum of (1) net negative impact on underwriting result and (2) redeemable noncontrolling interest, both before consideration of any related income tax benefit (expense).

Our estimates of net negative impact are based on a review of our potential exposures, preliminary discussions with certain counterparties and actuarial modeling techniques. Our actual net negative impact, both individually and in the aggregate, may vary from these estimates, perhaps materially. Changes in these estimates will be recorded in the period in which they occur.

Meaningful uncertainty remains regarding the estimates and the nature and extent of the losses from these catastrophe events, driven by the magnitude and recent nature of each event, the geographic areas impacted by the events, relatively limited claims data received to date, the contingent nature of business interruption and other exposures, potential uncertainties relating to reinsurance recoveries and other factors inherent in loss estimation, among other things.

2023 Net Negative Impact

The financial data below provides additional information detailing the net negative impact of the 2023 Large Loss Events on our consolidated financial statements in 2023.

[[GREPCENT_TABLE]]
[["","Year ended December 31, 2023","","2023 Large Loss Events"],["","(in thousands)"],["","Net claims and claims expenses incurred","","$","(354,228)"],["","Assumed reinstatement premiums earned","","46,534"],["","Ceded reinstatement premiums earned","","(62)"],["","Earned (lost) profit commissions","","9,130"],["","Net negative impact on underwriting result","","(298,626)"],["","Redeemable noncontrolling interest","","85,276"],["","Net negative impact on net income (loss) available (attributable) to RenaissanceRe common shareholders","","$","(213,350)"]]
[[/GREPCENT_TABLE]]

The financial data below provides additional information detailing the net negative impact of the 2023 Large Loss Events on our segment underwriting results and consolidated combined ratio in 2023.

[[GREPCENT_TABLE]]
[["","Year ended December 31, 2023","","2023 Large Loss Events"],["","(in thousands, except percentages)"],["","Net negative impact on Property segment underwriting result","","$","(298,119)"],["","Net negative impact on Casualty and Specialty segment underwriting result","","(507)"],["","Net negative impact on underwriting result","","$","(298,626)"],["","Percentage point impact on consolidated combined ratio","","4.1"]]
[[/GREPCENT_TABLE]]

(1)“2023 Large Loss Events” includes:(1) Hurricane Otis and Storm Ciaran in October and November 2023 (“Q4 2023 Large Loss Events); (2) the wildfires in Hawaii in August 2023 and Hurricane Idalia (“Q3 2023 Large Loss Events”); (3) a series of large, severe weather events in Texas and other southern and central U.S. states in June 2023 (“Q2 2023 Large Loss Events”); (4) the earthquakes in southern and central Turkey in February 2023, Cyclone Gabrielle, the flooding in northern New Zealand in January and February 2023, and various wind and thunderstorm events in both the Southern and Midwest U.S. during March 2023 (“Q1 2023 Large Loss Events”); and (5) certain aggregate loss contracts triggered during 2023.

71

2022 Net Negative Impact

The financial data below provides additional information detailing the net negative impact of the 2022 Weather-Related Large Losses on our consolidated financial statements in 2022.

[[GREPCENT_TABLE]]
[["","Year ended December 31, 2022","","","","","Hurricane Ian","","Other 2022 Catastrophe Events (1)","","Aggregate Losses","","2022 Weather-Related Large Losses (2)"],["","(in thousands)"],["","Net claims and claims expenses incurred","","","","","$","(982,189)","","","$","(330,973)","","","$","(93,810)","","","$","(1,406,972)"],["","Assumed reinstatement premiums earned","","","","","221,801","","","27,138","","","52","","","248,991"],["","Ceded reinstatement premiums earned","","","","","(57,913)","","","(579)","","","\u2014","","","(58,492)"],["","Earned (lost) profit commissions","","","","","(1,487)","","","(1,285)","","","(49)","","","(2,821)"],["","Net negative impact on underwriting result","","","","","(819,788)","","","(305,699)","","","(93,807)","","","(1,219,294)"],["","Redeemable noncontrolling interest","","","","","286,910","","","87,398","","","37,399","","","411,707"],["","Net negative impact on net income (loss) available (attributable) to RenaissanceRe common shareholders","","","","","$","(532,878)","","","$","(218,301)","","","$","(56,408)","","","$","(807,587)"]]
[[/GREPCENT_TABLE]]

The financial data below provides additional information detailing the net negative impact of the 2022 Weather-Related Large Losses on our segment underwriting results and consolidated combined ratio in 2022.

[[GREPCENT_TABLE]]
[["","Year ended December 31, 2022","","","","","Hurricane Ian","","Other 2022 Catastrophe Events (1)","","Aggregate Losses","","2022 Weather-Related Large Losses (2)"],["","(in thousands, except percentages)"],["","Net negative impact on Property segment underwriting result","","","","","$","(811,828)","","","$","(302,080)","","","$","(93,807)","","","$","(1,207,715)"],["","Net negative impact on Casualty and Specialty segment underwriting result","","","","","(7,960)","","","(3,619)","","","\u2014","","","(11,579)"],["","Net negative impact on underwriting result","","","","","$","(819,788)","","","$","(305,699)","","","$","(93,807)","","","$","(1,219,294)"],["","Percentage point impact on consolidated combined ratio","","","","","13.4","","","4.9","","","1.5","","","20.0"]]
[[/GREPCENT_TABLE]]

(1)“Other 2022 Catastrophe Events” includes the floods in Eastern Australia in February and March of 2022, Storm Eunice, the severe weather in France in May and June of 2022, Hurricane Fiona and the typhoons in Asia during the third quarter of 2022, and Hurricane Nicole and Winter Storm Elliott during the fourth quarter of 2022.

(2)“2022 Weather-Related Large Losses” includes Hurricane Ian, Other 2022 Catastrophe Events and loss estimates associated with certain aggregate loss contracts triggered during 2022 as a result of weather-related catastrophe events.

During 2022, losses related to Russia’s invasion of Ukraine resulted in a net negative impact on net income (loss) available (attributable) to RenaissanceRe common shareholders of $23.9 million. This reflects net claims and claims expenses incurred and a net negative impact on underwriting result of $26.1 million, which was solely in the Casualty and Specialty segment, partially offset by redeemable noncontrolling interest of $2.2 million. The net negative impact on the underwriting result had a 0.5 percentage point impact on the consolidated combined ratio.

72

Underwriting Results by Segment

Property Segment

Below is a summary of the underwriting results and ratios for our Property segment:

[[GREPCENT_TABLE]]
[["","Year ended December 31,","2023","","2022","","Change"],["","(in thousands, except percentages)"],["","Gross premiums written","$","3,562,414","","","$","3,734,241","","","$","(171,827)"],["","Net premiums written","$","2,967,309","","","$","2,847,659","","","$","119,650"],["","Net premiums earned","$","3,090,792","","","$","2,770,227","","","$","320,565"],["","Net claims and claim expenses incurred","799,905","","","2,044,771","","","(1,244,866)"],["","Acquisition expenses","600,127","","","547,210","","","52,917"],["","Operational expenses","251,433","","","194,355","","","57,078"],["","Underwriting income (loss)","$","1,439,327","","","$","(16,109)","","","$","1,455,436"],["","Net claims and claim expenses incurred \u2013 current accident year","$","1,208,810","","","$","2,250,512","","","$","(1,041,702)"],["","Net claims and claim expenses incurred \u2013 prior accident years","(408,905)","","","(205,741)","","","(203,164)"],["","Net claims and claim expenses incurred \u2013 total","$","799,905","","","$","2,044,771","","","$","(1,244,866)"],["","Net claims and claim expense ratio \u2013 current accident year","39.1","%","","81.2","%","","(42.1)","pts"],["","Net claims and claim expense ratio \u2013 prior accident years","(13.2)","%","","(7.4)","%","","(5.8)","pts"],["","Net claims and claim expense ratio \u2013 calendar year","25.9","%","","73.8","%","","(47.9)","pts"],["","Underwriting expense ratio","27.5","%","","26.8","%","","0.7","pts"],["","Combined ratio","53.4","%","","100.6","%","","(47.2)","pts"]]
[[/GREPCENT_TABLE]]

Property Gross Premiums Written

In 2023, our Property segment gross premiums written decreased by $171.8 million, or 4.6%, to $3.6 billion, compared to $3.7 billion in 2022.

Gross premiums written in the catastrophe class of business were $2.1 billion in 2023, an increase of $69.6 million, or 3.3%, compared to 2022. This increase was the result of an increase in gross premiums written of $552.8 million, primarily due to rate improvements on deals written in 2023, largely offset by a decrease in gross reinstatement premiums of $214.8 million, and a reduction in premiums due to the non-renewal of deals written in Upsilon RFO of $268.4 million.

Gross premiums written in the other property class of business were $1.4 billion in 2023, a decrease of $241.4 million, or 14.6%, compared to 2022. The decrease in gross premiums written in the other property class of business was principally due to the non-renewal of certain catastrophe exposed quota share programs that did not meet our return hurdles.

Our Property segment gross premiums continue to be characterized by a large proportion of U.S. and Caribbean premium, a significant amount of which provides coverage against windstorms, notably U.S. Atlantic windstorms, as well as earthquakes and other natural and man-made catastrophes.

73

Property Ceded Premiums Written

[[GREPCENT_TABLE]]
[["","Year ended December 31,","2023","","2022","","Change"],["","(in thousands)"],["","Ceded premiums written","$","595,105","","","$","886,582","","","$","(291,477)"]]
[[/GREPCENT_TABLE]]

Due to the potential volatility of the reinsurance contracts which we sell, we purchase reinsurance to reduce our exposure to large losses and to help manage our risk portfolio. To the extent that appropriately priced coverage is available, we anticipate continued use of retrocessional reinsurance to reduce the impact of large losses on our financial results and to manage our portfolio of risk; however, the buying of ceded reinsurance in our Property segment is based on market opportunities and is not based on placing a specific reinsurance program each year. In addition, in future periods, we may utilize the growing market for insurance-linked securities to expand our purchases of retrocessional reinsurance if we find the pricing and terms of such coverages attractive.

Ceded premiums written in our Property segment decreased 32.9%, to $595.1 million, in 2023, compared to $886.6 million in 2022. The decrease in ceded premiums written was driven by a reduction in ceded reinstatement premiums of $75.5 million, as well as a reduction in premiums ceded to Upsilon RFO of $237.4 million. This reduction followed a reduction in the size of Upsilon Diversified, a segregated account of Upsilon Fund, in connection with the reduction in gross premiums written, as discussed above. Partially offsetting this was a slight increase in overall ceded premiums written due to higher levels of retrocessional purchases as a part of our gross-to-net strategy.

Property Net Premiums Written

[[GREPCENT_TABLE]]
[["","Year ended December 31,","2023","","2022","","Change"],["","(in thousands)"],["","Net premiums written","$","2,967,309","","","$","2,847,659","","","$","119,650"]]
[[/GREPCENT_TABLE]]

Net premiums written in our Property segment were $3.0 billion in 2023, an increase of $119.7 million, or 4.2%, compared to 2022. The increase in net premiums written was driven by rate improvements on deals written in our catastrophe class of business in 2023, partially offset by a decrease in net reinstatement premiums of $160.2 million compared to 2022 as well as a reduction in our other property class of business principally due to the non-renewal of certain catastrophe exposed quota share programs that did not meet our return hurdles.

Property Underwriting Results

Our Property segment generated underwriting income of $1.4 billion in 2023, compared to a loss of $16.1 million in 2022, an increase in underwriting income of $1.5 billion. In 2023, our Property segment generated a net claims and claim expense ratio of 25.9%, an underwriting expense ratio of 27.5% and a combined ratio of 53.4%, compared to 73.8%, 26.8% and 100.6%, respectively, in 2022.

Impacting the Property segment underwriting result and combined ratio in 2023 were the 2023 Large Loss Events, which resulted in a net negative impact on the Property segment underwriting result of $298.1 million and added 10.5 percentage points to its combined ratio. In comparison, 2022 was impacted by the 2022 Weather-Related Large Losses, which resulted in a net negative impact on the Property segment underwriting result of $1.2 billion and added 46.8 percentage points to its combined ratio.

The net claims and claim expense ratio of 25.9% is comprised of a current accident year net claims and claim expense ratio of 39.1% and 13.2 percentage points of net favorable development on prior accident years. In comparison, 2022 had a net claims and claim expense ratio of 73.8%, comprised of a current accident year net claims and claim expense ratio of 81.2% and 7.4 percentage points of net favorable development on prior accident years.

The underwriting expense ratio increased 0.7 percentage points, largely driven by a reduced benefit in 2023 from net reinstatement premiums as compared to 2022 due to the lower level of catastrophe losses and correspondingly lower reinstatement premiums.

74

Refer to “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Summary of Critical Accounting Estimates—Claims and Claim Expense Reserves” and “Note 8. Reserve for Claims and Claim Expenses” in our “Notes to the Consolidated Financial Statements” for additional discussion of our reserving techniques and prior year development of net claims and claim expenses.

Casualty and Specialty Segment

Below is a summary of the underwriting results and ratios for our Casualty and Specialty segment:

[[GREPCENT_TABLE]]
[["","Year ended December 31,","2023","","2022","","Change"],["","(in thousands, except percentages)"],["","Gross premiums written","$","5,299,952","","","$","5,479,299","","","$","(179,347)"],["","Net premiums written","$","4,500,504","","","$","4,348,501","","","$","152,003"],["","Net premiums earned","$","4,380,341","","","$","3,563,762","","","$","816,579"],["","Net claims and claim expenses incurred","2,773,604","","","2,294,069","","","479,535"],["","Acquisition expenses","1,274,907","","","1,021,396","","","253,511"],["","Operational expenses","123,749","","","82,336","","","41,413"],["","Underwriting income (loss)","$","208,081","","","$","165,961","","","$","42,120"],["","Net claims and claim expenses incurred \u2013 current accident year","$","2,815,306","","","$","2,335,910","","","$","479,396"],["","Net claims and claim expenses incurred \u2013 prior accident years","(41,702)","","","(41,841)","","","139"],["","Net claims and claim expenses incurred \u2013 total","$","2,773,604","","","$","2,294,069","","","$","479,535"],["","Net claims and claim expense ratio \u2013 current accident year","64.3","%","","65.5","%","","(1.2)","pts"],["","Net claims and claim expense ratio \u2013 prior accident years","(1.0)","%","","(1.1)","%","","0.1","pts"],["","Net claims and claim expense ratio \u2013 calendar year","63.3","%","","64.4","%","","(1.1)","pts"],["","Underwriting expense ratio","31.9","%","","30.9","%","","1.0","pts"],["","Combined ratio","95.2","%","","95.3","%","","(0.1)","pts"]]
[[/GREPCENT_TABLE]]

Casualty and Specialty Gross Premiums Written

In 2023, our Casualty and Specialty segment gross premiums written decreased by $179.3 million, or 3.3%, to $5.3 billion, compared to $5.5 billion in 2022. The decrease in gross premiums written was mainly in the professional liability and credit classes of business, partially offset by increases in the other specialty and general casualty classes of business. The principal driver of the overall decrease in gross premiums written was changes in premium estimates for business underwritten in prior years. During 2023, gross premiums written included negative adjustments of $42.2 million to premium estimates on business underwritten in 2022 and prior years, as compared to positive premium adjustments of $450.0 million in 2022 on business underwritten in 2021 and prior years. These changes in premium estimates are driven by reported premiums and revised ceding company estimates which reflect market conditions and ceding companies’ ability to meet or exceed their rate and volume expectations. The decreases from year-over-year changes in premium estimates occurred across all classes of business, but principally in the professional liability and credit classes of business.

In addition, decreases in the professional liability and increases in general casualty and other specialty classes of business reflect proactive cycle management as we sought to shape our portfolio to favor attractive lines. The decrease in the credit class of business was principally due to significant premium growth in 2022 associated with opportunistic deals written in the mortgage book of business, which do not renew annually and earn over several years. The increase in gross premiums written within the other specialty class of business was mainly reflective of growth in new and existing business underwritten in both the current and prior periods, predominantly within the energy, cyber and aviation lines of business.

75

Total gross premiums written in the Casualty and Specialty segment included $347.8 million of gross premiums written from Validus, predominantly in the other specialty and general casualty classes of business.

Our relative mix of business between proportional business and excess of loss business has fluctuated in the past and will likely continue to do so in the future. Proportional business, which represents the majority of our Casualty and Specialty segment business, typically has a higher expense ratio and tends to be exposed to more attritional and frequent losses, while being subject to less expected severity as compared to traditional excess of loss business.

Casualty and Specialty Ceded Premiums Written

[[GREPCENT_TABLE]]
[["","Year ended December 31,","2023","","2022","","Change"],["","(in thousands)"],["","Ceded premiums written","$","799,448","","","$","1,130,798","","","$","(331,350)"]]
[[/GREPCENT_TABLE]]

We purchase reinsurance to reduce our exposure to large losses and to help manage our risk portfolio. To the extent that appropriately priced coverage is available, we anticipate continued use of retrocessional reinsurance to reduce the impact of large losses on our financial results and to manage our portfolio of risk. As in our Property segment, the buying of ceded reinsurance in our Casualty and Specialty segment is based on market opportunities and is not based on placing a specific reinsurance program each year.

Ceded premiums written in our Casualty and Specialty segment decreased by 29.3%, to $799.4 million, in 2023, compared to $1.1 billion in 2022, primarily driven by the overall reduction in our retrocessional purchases as part of our gross-to-net strategy, in addition to the decrease in gross premiums written subject to our retrocessional quota share reinsurance programs.

Casualty and Specialty Net Premiums Written

[[GREPCENT_TABLE]]
[["","Year ended December 31,","2023","","2022","","Change"],["","(in thousands)"],["","Net premiums written","$","4,500,504","","","$","4,348,501","","","$","152,003"]]
[[/GREPCENT_TABLE]]

Net premiums written in our Casualty and Specialty segment increased by $152.0 million, or 3.5%, primarily driven by an overall reduction in our retrocessional purchases, as discussed above.

Casualty and Specialty Underwriting Results

Our Casualty and Specialty segment generated underwriting income of $208.1 million in 2023, compared to $166.0 million in 2022. In 2023, our Casualty and Specialty segment generated a net claims and claim expense ratio of 63.3%, an underwriting expense ratio of 31.9% and a combined ratio of 95.2%, compared to 64.4%, 30.9% and 95.3%, respectively, in 2022.

The Casualty and Specialty segment combined ratio in 2023 of 95.2% was comparable to 2022. The current accident year net claims and claim expense ratio of 64.3% decreased by 1.1 percentage points as compared to 2022, primarily as a result of lower current accident year attritional losses from a shift in mix of business toward other specialty lines which carry lower expected attritional loss ratios. During 2023 our Casualty and Specialty segment also experienced net favorable development on prior accident years net claims and claim expenses of $41.7 million, or 1.0 percentage points, compared to $41.8 million, or 1.1 percentage points during 2022. The net favorable development during 2023 and 2022 was primarily driven by reported losses generally coming in lower than expected on attritional net claims and claim expenses from our other specialty and credit lines of business.

The underwriting expense ratio increased 1.0 percentage points, primarily driven by the impact of purchase accounting adjustments related to the Validus Acquisition.

Refer to “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Summary of Critical Accounting Estimates—Claims and Claim Expense Reserves” and “Note

76

8. Reserve for Claims and Claim Expenses” in our “Notes to the Consolidated Financial Statements” for additional discussion of our reserving techniques and prior year development of net claims and claim expenses.

Fee Income

[[GREPCENT_TABLE]]
[["","Year ended December 31,","2023","","2022","","Change"],["","(in thousands)"],["","Management Fee Income"],["","Joint ventures","$","122,474","","","$","56,746","","","$","65,728"],["","Structured reinsurance products and other","27,754","","","26,592","","","1,162"],["","Managed funds","26,371","","","25,564","","","807"],["","Total management fee income","176,599","","","108,902","","","67,697"],["","Performance Fee Income"],["","Joint ventures","50,656","","","4,354","","","46,302"],["","Structured reinsurance products and other","8,582","","","4,451","","","4,131"],["","Managed funds","957","","","972","","","(15)"],["","Total performance fee income","60,195","","","9,777","","","50,418"],["","Total fee income","$","236,794","","","$","118,679","","","$","118,115"]]
[[/GREPCENT_TABLE]]

The table above shows total fee income earned through third-party capital management activities, including various joint ventures, managed funds and certain structured retrocession agreements to which we are a party. Performance fees are based on the performance of the individual vehicles or products, and may be zero or negative in a particular period if, for example, large losses occur, which can potentially result in no performance fees or the reversal of previously accrued performance fees. Joint ventures include DaVinci, Top Layer, Vermeer, and Fontana. Managed funds includes Upsilon Fund and Medici, as well as fee income earned by AlphaCat Managers. Structured reinsurance products and other includes certain reinsurance contracts and certain other vehicles through which we transfer risk to third-party capital.

In 2023, total fee income earned through our third-party capital management activities increased by $118.1 million, to $236.8 million, compared to $118.7 million in 2022, driven by both higher management fee income and higher performance fee income in 2023 compared to 2022.

The increase in management fee income of $67.7 million reflected growth in the Company’s joint ventures and managed funds, specifically DaVinci, Fontana, Vermeer, and Medici, as well as the recording of management fees in DaVinci in 2023, that were previously deferred in 2022 and 2021 as a result of the weather-related large losses experienced in prior years. The increase was partially offset by a decrease in fees associated with the decrease in capital managed at Upsilon.

Performance fee income increased $50.4 million compared to 2022, driven by favorable current year underwriting results, primarily in DaVinci.

77

The fees earned through third-party capital management activities are principally recorded through redeemable noncontrolling interest, or as an increase to underwriting income through a decrease in operating expenses or acquisition expenses. Below is a summary of the impact of fee income on the applicable financial statement line items.

[[GREPCENT_TABLE]]
[["","Year ended December 31","2023","","2022","","Change"],["","(in thousands)"],["","Underwriting income (loss) - fee income on third-party capital management activities (1)","$","34,432","","","$","49,946","","","$","(15,514)"],["","Equity in earnings of other ventures","(1,423)","","","94","","","(1,517)"],["","Net income (loss) attributable to redeemable noncontrolling interest","203,785","","","68,639","","","135,146"],["","Total fee income","$","236,794","","","$","118,679","","","$","118,115"]]
[[/GREPCENT_TABLE]]

(1)Reflects total fee income earned through third-party capital management as well as various joint ventures, managed funds and certain structured retrocession agreements to which we are a party, recorded through underwriting income (loss) as a decrease to operating expenses or acquisition expenses. The $34.4 million includes $46.4 million of management fee income, recorded as a reduction to operating expenses and $(12.0) million of performance fee income recorded as an increase to acquisition expenses (2022 - $49.9 million, $46.9 million and $3.0 million, respectively).

In addition to the $34.4 million of fee income earned through our third-party capital management activities that was recorded through underwriting income (loss), as detailed above, we also earn additional fee income on certain other underwriting-related activities. These fees, in the aggregate, are recorded as a reduction to operating expenses or acquisition expenses, as applicable. The total fees recorded through underwriting income (loss) are detailed in the table below.

[[GREPCENT_TABLE]]
[["","Year ended December 31","2023","","2022","","Change"],["","(in thousands)"],["","Underwriting income (loss) - fee income on third-party capital management activities","$","34,432","","","$","49,946","","","$","(15,514)"],["","Underwriting income (loss) - additional fee income on other underwriting-related activities","94,577","","","93,743","","","834"],["","Total fee income recorded through underwriting income (loss) (1)","$","129,009","","","$","143,689","","","(14,680)"],["","Impact of Total fees recorded through underwriting income (loss) on the combined ratio","1.7","%","","2.3","%","","(0.6)","pts"]]
[[/GREPCENT_TABLE]]

(1)The $129.0 million includes $125.1 million of management fee income, recorded as a reduction to operating expenses and $3.9 million of performance fee income recorded as a reduction to acquisition expenses (2022 - $143.7 million, $123.2 million and $20.5 million, respectively).

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Net Investment Income

[[GREPCENT_TABLE]]
[["","Year ended December 31,","2023","","2022","","Change"],["","(in thousands)"],["","Fixed maturity investments trading","$","744,457","","","$","382,165","","","$","362,292"],["","Short term investments","213,303","","","41,042","","","172,261"],["","Equity investments","7,261","","","20,864","","","(13,603)"],["","Other investments"],["","Catastrophe bonds","200,572","","","94,784","","","105,788"],["","Other","87,296","","","37,497","","","49,799"],["","Cash and cash equivalents","23,123","","","5,197","","","17,926"],["","","1,276,012","","","581,549","","","694,463"],["","Investment expenses","(22,902)","","","(21,617)","","","(1,285)"],["","Net investment income","$","1,253,110","","","$","559,932","","","$","693,178"]]
[[/GREPCENT_TABLE]]

Net investment income was $1.3 billion in 2023, compared to $559.9 million in 2022, an increase of $693.2 million. The increase was primarily driven by a combination of higher yielding assets in the fixed maturity and short term portfolios and higher average invested assets resulting from the equity and debt offerings in the second quarter of 2023, as well the Validus Acquisition in the fourth quarter of 2023.

Net Realized and Unrealized Gains (Losses) on Investments

[[GREPCENT_TABLE]]
[["","Year ended December 31,","2023","","2022","","Change"],["","(in thousands)"],["","Gross realized gains on fixed maturity investments trading","$","80,905","","","$","38,781","","","$","42,124"],["","Gross realized losses on fixed maturity investments trading","(473,946)","","","(771,342)","","","297,396"],["","Net realized gains (losses) on fixed maturity investments trading","(393,041)","","","(732,561)","","","339,520"],["","Net unrealized gains (losses) on fixed maturity investments trading","685,095","","","(636,762)","","","1,321,857"],["","Net realized and unrealized gains (losses) on investment-related derivatives (1)","(68,272)","","","(165,293)","","","97,021"],["","Net realized gains (losses) on equity investments","(27,492)","","","43,035","","","(70,527)"],["","Net unrealized gains (losses) on equity investments","73,243","","","(166,823)","","","240,066"],["","Net realized and unrealized gains (losses) on equity investments","45,751","","","(123,788)","","","169,539"],["","Net realized and unrealized gains (losses) on other investments - catastrophe bonds","101,897","","","(130,335)","","","232,232"],["","Net realized and unrealized gains (losses) on other investments - other","43,092","","","(11,746)","","","54,838"],["","Net realized and unrealized gains (losses) on investments","$","414,522","","","$","(1,800,485)","","","$","2,215,007"]]
[[/GREPCENT_TABLE]]

(1)Net realized and unrealized gains (losses) on investment-related derivatives includes fixed maturity investments related derivatives (interest rate futures, interest rate swaps, credit default swaps and total return swaps), and equity investments related derivatives (equity futures). See “Note 19. Derivative Instruments” in our “Notes to Consolidated Financial Statements” for additional information.

We structure our investment portfolio to emphasize the preservation of capital and the availability of liquidity to meet our claims obligations, to be well diversified across market sectors, and to generate relatively attractive returns on a risk-adjusted basis over time. A large majority of our investments are invested in the fixed income markets and, therefore, our realized and unrealized holding gains and losses on investments are highly correlated to fluctuations in interest rates. As interest rates decline, we will tend to have realized and unrealized gains from our investment portfolio, and as interest rates rise, we will tend to have realized and unrealized losses from our investment portfolio.

79

Net realized and unrealized gains on investments were $414.5 million in the twelve months ended December 31, 2023, compared to losses of $1.8 billion in the twelve months ended December 31, 2022, an improvement of $2.2 billion. Principally impacting our net realized and unrealized gains on investments in the twelve months ended December 31, 2023 were:

•net realized and unrealized gains on our fixed maturity investments trading of $292.1 million compared to losses of $1.4 billion in 2022, an improvement of $1.7 billion, driven by modest interest rate movements through the year, compared to increases in yields on U.S. treasuries in 2022;

•net realized and unrealized gains on catastrophe bonds of $101.9 million, compared to net realized and unrealized losses of $130.3 million in 2022, an improvement of $232.2 million. The net realized and unrealized gains and losses are primarily reflected in the Medici portfolio, and predominantly attributable to third party investors allocated through net income (loss) attributable to redeemable noncontrolling interest. Net realized and unrealized gains in 2023 were the result of the tightening of risk spreads in the wider catastrophe bond market, as compared to 2022, when there was a widening of risk spreads; and

•net realized and unrealized gains on equity investments of $45.8 million compared to net losses of $123.8 million in 2022, an improvement of $169.5 million. Net realized and unrealized gains in 2023 were primarily due to a combination of a reduced allocation to equity investments and a higher equity market price environment, while the losses in 2022 were a result of a generally lower equity market price environment.

Net Foreign Exchange Gains (Losses)

[[GREPCENT_TABLE]]
[["","Year ended December 31,","2023","","2022","","Change"],["","(in thousands)"],["","Total foreign exchange gains (losses)","$","(41,479)","","","$","(56,909)","","","$","15,430"]]
[[/GREPCENT_TABLE]]

In 2023, net foreign exchange losses were $41.5 million compared to $56.9 million in 2022. The net foreign exchange losses for 2023 and 2022 were driven by the impact of certain foreign exchange exposures related to our underwriting activities, and losses attributable to third-party investors in Medici which are allocated through net income (loss) attributable to redeemable noncontrolling interest.

Our functional currency is the U.S. dollar. We routinely write a portion of our business in currencies other than U.S. dollars and invest a portion of our cash and investment portfolio in those currencies. We are primarily impacted by foreign currency exposures associated with our underwriting operations and our investment portfolio, and may, from time to time, enter into foreign currency forward and option contracts to minimize the effect of fluctuating foreign currencies on the value of non-U.S. dollar denominated assets and liabilities.

Refer to “Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk” for additional information related to our exposure to foreign currency risk and “Note 19. Derivative Instruments” in our “Notes to the Consolidated Financial Statements” for additional information related to foreign currency forward and option contracts we have entered into.

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Equity in Earnings (Losses) of Other Ventures

[[GREPCENT_TABLE]]
[["","Year ended December 31,","2023","","2022","","Change"],["","(in thousands)"],["","Top Layer","$","15,977","","","$","6,347","","","$","9,630"],["","Tower Hill Companies","24,815","","","(921)","","","25,736"],["","Other","2,682","","","5,823","","","(3,141)"],["","Total equity in earnings (losses) of other ventures","$","43,474","","","$","11,249","","","$","32,225"]]
[[/GREPCENT_TABLE]]

Equity in earnings of other ventures represents our pro-rata share of the net income from our investments in the Tower Hill Companies, Top Layer, and our equity investments in a select group of insurance and insurance-related companies, which are included in Other. Except for Top Layer, which is recorded on a current quarter basis, equity in earnings of other ventures is recorded one quarter in arrears. The carrying value of these investments on our consolidated balance sheets, individually or in the aggregate, may differ from the realized value we may ultimately attain, perhaps significantly so.

Earnings from our investments in other ventures was $43.5 million in 2023, compared to $11.2 million in 2022, an increase of $32.2 million. The increase was principally driven by increased profitability of our equity investments in the Tower Hill Companies and Top Layer.

Corporate Expenses

[[GREPCENT_TABLE]]
[["","Year ended December 31,","2023","","2022","","Change"],["","(in thousands)"],["","Total corporate expenses","$","127,642","","","$","46,775","","","$","80,867"]]
[[/GREPCENT_TABLE]]

Corporate expenses include certain executive, director, legal and consulting expenses, costs for research and development, and other miscellaneous costs, including those associated with operating as a publicly traded company, as well as costs incurred in connection with the acquisition of Validus. From time to time, we may revise the allocation of certain expenses between corporate and operating expenses to better reflect the characteristic of the underlying expense.

Corporate expenses increased $80.9 million to $127.6 million, in 2023, compared to $46.8 million in 2022. The increase was primarily driven by $76.4 million of expenses associated with the closing of the Validus Acquisition and subsequently incurred as part of the related integration activities.

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Interest Expense and Preferred Share Dividends

[[GREPCENT_TABLE]]
[["","Year ended December 31,","2023","","2022","","Change"],["","(in thousands)"],["","Interest Expense"],["","$750.0 million 5.750% Senior Notes due 2033","$","24,557","","","$","\u2014","","","$","24,557"],["","$400.0 million 3.600% Senior Notes due 2029","14,400","","","14,400","","","\u2014"],["","$300.0 million 3.450% Senior Notes due 2027","10,350","","","10,350","","","\u2014"],["","$300.0 million 3.700% Senior Notes due 2025","11,100","","","11,100","","","\u2014"],["","$150.0 million 4.750% Senior Notes due 2025 (DaVinci)","7,125","","","7,125","","","\u2014"],["","Other","5,649","","","5,360","","","289"],["","Total interest expense","73,181","","","48,335","","","24,846"],["","Preferred Share Dividends"],["","$250.0 million 5.750% Series F Preference Shares","14,375","","","14,375","","","\u2014"],["","$500.0 million 4.20% Series G Preference Shares","21,000","","","21,000","","","\u2014"],["","Total preferred share dividends","35,375","","","35,375","","","\u2014"],["","Total interest expense and preferred share dividends","$","108,556","","","$","83,710","","","$","24,846"]]
[[/GREPCENT_TABLE]]

Interest expense increased $24.8 million to $73.2 million in 2023, compared to $48.3 million in 2022, primarily driven by additional interest expense resulting from the issuance of $750.0 million principal amount in June 2023 of 5.750% Senior Notes due 2033.

Income Tax Benefit (Expense)

[[GREPCENT_TABLE]]
[["","Year ended December 31,","2023","","2022","","Change"],["","(in thousands)"],["","Income tax benefit (expense)","$","510,067","","","$","59,019","","","$","451,048"]]
[[/GREPCENT_TABLE]]

We are subject to income taxes in certain jurisdictions in which we operate; however, since the majority of our income is generally earned in Bermuda, which has not had a corporate income tax, the tax impact to our operations has historically been minimal. On December 27, 2023, the Corporate Income Tax Act 2023 was enacted. As a result, certain Bermuda businesses which are part of large multinational groups will be subject to a 15% corporate income tax in fiscal years beginning on or after January 1, 2025. We expect our Bermuda operations, except the Bermuda operations of our joint ventures and managed funds, will be subject to the Bermuda corporate income tax starting in 2025. As a result, we expect our income taxes to increase beginning in 2025.

In 2023, we recognized an income tax benefit of $510.1 million, compared to an income tax benefit of $59.0 million in 2022. The income tax benefit was primarily driven by the deferred tax benefit recorded as a result of the enactment of the Bermuda Corporate Income Tax Act 2023, partially offset by increased income tax expense in the Company’s other operating jurisdictions as a result of higher operating income and investment gains in 2023, compared to the income tax benefit for 2022, which was driven by investment losses and lower operating income primarily in our taxable jurisdictions.

At December 31, 2023, our net deferred tax asset before and after valuation allowance totaled $864.7 million and $651.4 million, respectively. Our operations in Ireland, the U.K. (except RREAG, UK Branch), Switzerland, the RREAG, US Branch, and the Singapore and Luxembourg operations of Validus have historically produced GAAP taxable losses and we currently do not believe it is more likely than not that we will be able to recover the predominant amount of our net deferred tax assets in these jurisdictions. Accordingly we have recorded a valuation allowance on the majority of the net deferred tax asset in these jurisdictions. In addition, we recorded a valuation allowance in the current year of $20.0 million against a portion of the realized and unrealized losses in the U.S. investment portfolio.

82

Our effective income tax rate, which we calculate as income tax (expense) benefit divided by income or loss before taxes, may fluctuate significantly from period to period depending on the geographic distribution of pre-tax income or loss in any given period between different jurisdictions with comparatively higher tax rates and those with comparatively lower tax rates. Generally, the preponderance of our revenue and pre-tax income or loss is generated by our domestic (i.e., Bermuda) operations, in the form of underwriting income or loss and net investment income or loss, rather than our foreign operations. However, the geographic distribution of pre-tax income or loss can vary significantly between periods for a variety of reasons, including the business mix and geographic location of the balance sheet on which net premiums are written and earned, the size and nature of net claims and claim expenses incurred, the amount and geographic location of operating expenses, net investment income and net realized and unrealized gains (losses) on investments and the amount of specific adjustments to determine the income tax basis in each of our operating jurisdictions. We expect our consolidated effective tax rate will increase in 2025 as a result of the enactment of the CIT in Bermuda and the implementation of the GloBE Rules in certain jurisdictions where we operate. In addition, it is possible we could be adversely affected by other future changes in tax laws, regulation, or enforcement, any of which could increase our effective tax rate more rapidly or steeply than we currently anticipate.

Net Income (Loss) Attributable to Redeemable Noncontrolling Interests

[[GREPCENT_TABLE]]
[["","Year ended December 31,","2023","","2022","","Change"],["","(in thousands)"],["","Redeemable noncontrolling interest - DaVinci","$","545,812","","","$","(65,514)","","","$","611,326"],["","Redeemable noncontrolling interest - Medici","239,250","","","(70,504)","","","309,754"],["","Redeemable noncontrolling interest - Vermeer","239,457","","","43,058","","","196,399"],["","Redeemable noncontrolling interest - Fontana","34,476","","","(5,653)","","","40,129"],["","Net income (loss) attributable to redeemable noncontrolling interests","$","1,058,995","","","$","(98,613)","","","$","1,157,608"]]
[[/GREPCENT_TABLE]]

Our net income attributable to redeemable noncontrolling interests was $1.1 billion compared to a net loss of $98.6 million in 2022, an increase of $1.2 billion. The increase was primarily driven by the following:

•DaVinci, which had net income in 2023, primarily resulting from lower realized and unrealized losses on investments in 2023, compared to the prior year, driven by the decrease in interest rates discussed previously, improved underwriting results in 2023, as well as higher net investment income.

•Medici, which had net income in 2023 due to realized and unrealized gains on its catastrophe bond portfolio, in addition to increased net investment income. This compares to net losses in 2022, driven by realized and unrealized losses on its catastrophe bond portfolio;

•Vermeer, which had higher net income in 2023 compared to 2022, primarily resulting from improved underwriting results and higher net investment income; and

•Fontana, which had net income in 2023 compared to net loss in 2022, primarily due to increased net investment income driven by higher yielding assets.

Refer to “Note 10. Noncontrolling Interests” in our “Notes to Consolidated Financial Statements” for additional information regarding our redeemable noncontrolling interests.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Financial Condition

As a Bermuda-domiciled holding company, RenaissanceRe has limited operations of its own. Its assets consist primarily of investments in subsidiaries and cash and securities in amounts which fluctuate over time. We therefore rely on dividends and distributions (and other statutorily permissible payments) from our subsidiaries, investment income and fee income to meet our liquidity requirements, which primarily include making principal and interest payments on our debt and dividend payments to our preference and common shareholders.

83

The payment of dividends by our subsidiaries is, under certain circumstances, limited by the applicable laws and regulations in the various jurisdictions in which our subsidiaries operate. In addition, insurance laws require our insurance subsidiaries to maintain certain measures of solvency and liquidity. We believe that each of our insurance subsidiaries and branches exceeded the minimum solvency, capital and surplus requirements in their applicable jurisdictions at December 31, 2023. Certain of our subsidiaries and branches are required to file FCRs, with their regulators, which provide details on solvency and financial performance. Where required, these FCRs will be posted on our website. The regulations governing our and our principal operating subsidiaries’ ability to pay dividends and to maintain certain measures of solvency and liquidity, and requirements to file FCRs are discussed in detail in “Part I, Item 1. Business, Regulation” and “Note 18. Statutory Requirements” in our “Notes to the Consolidated Financial Statements.”

Liquidity and Cash Flows

Holding Company Liquidity

RenaissanceRe’s principal uses of liquidity are: (1) common share related transactions including dividend payments to our common shareholders and common share repurchases, (2) preference share related transactions including dividend payments to our preference shareholders and preference share redemptions, (3) interest and principal payments on debt, (4) capital investments in our subsidiaries, (5) acquisition of, or investments in, new or existing companies or books of business of other companies, such as the Validus Acquisition, and (6) certain corporate and operating expenses.

We attempt to structure our organization in a way that facilitates efficient capital movements between RenaissanceRe and our operating subsidiaries and to ensure that adequate liquidity is available when required, giving consideration to applicable laws and regulations, and the domiciliary location of sources of liquidity and related obligations. For example, our internal investment structures and cash pooling arrangements among the Company and certain of our subsidiaries help to efficiently facilitate capital and liquidity movements.

In the aggregate, our principal operating subsidiaries have historically produced sufficient cash flows to meet their expected claims payments and operational expenses and to provide dividend payments to us. In addition, our subsidiaries maintain a concentration of investments in high quality liquid securities, which management believes will provide additional liquidity for extraordinary claims payments should the need arise. However, in some circumstances, RenaissanceRe may determine it is necessary or advisable to contribute capital to our subsidiaries, or may be contractually required to contribute capital to our joint ventures or managed funds. For example, in 2023, RenaissanceRe contributed capital to RenaissanceRe Specialty U.S. to support growth in premiums. In addition, from time to time we invest in new managed joint ventures or managed funds, increase our investments in certain of our managed joint ventures or managed funds and contribute cash to investment subsidiaries. For instance, effective April 1, 2022, RenaissanceRe launched Fontana, an innovative joint venture dedicated to writing Casualty and Specialty risks. In certain instances, we may be required to make capital contributions to our subsidiaries or joint ventures or managed funds, for example, we have net worth maintenance agreements with certain operating subsidiaries, and Renaissance Reinsurance is obligated to make a mandatory capital contribution of up to $50.0 million in the event that a loss reduces Top Layer’s capital below a specified level.

Sources of Liquidity

Historically, cash receipts from operations, consisting primarily of premiums, investment income and fee income, have provided sufficient funds to pay the losses and operating expenses incurred by our subsidiaries and to fund dividends and distributions to RenaissanceRe. Other potential sources of liquidity include borrowings under our credit facilities and issuances of securities.

The premiums received by our operating subsidiaries are generally received months or even years before losses are paid under the policies related to such premiums. Premiums and acquisition expenses generally are received within the first two years of inception of a contract, while operating expenses are generally paid within a year of being incurred. It generally takes much longer for net claims and claims expenses incurred to be reported and ultimately settled, requiring the establishment of reserves for claims and claim expenses and losses recoverable. Therefore, the amount of net claims paid in any one year is not necessarily related to the amount of net claims and claims expenses incurred in that year, as reported in the consolidated statement of operations.

84

We expect that our liquidity needs for the next 12 months will be met by our cash receipts from operations. However, as a result of a combination of market conditions, turnover of our investment portfolios and changes in investment yields, and the nature of our business where a large portion of the coverages we provide can produce losses of high severity and low frequency, future cash flows from operating activities cannot be accurately predicted and may fluctuate significantly between individual quarters and years. In addition, due to the magnitude and complexity of certain large loss events, meaningful uncertainty remains regarding losses from these events and our actual ultimate net losses from these events may vary materially from preliminary estimates, which would impact our cash flows from operations.

Our “shelf” registration statement on Form S-3 under the Securities Act allows for the public offering of various types of securities, including common shares, preference shares and debt securities, which provides a source of liquidity. Because we are a “well-known seasoned issuer” as defined by the rules promulgated under the Securities Act, we are also eligible to file additional automatically effective registration statements on Form S-3 in the future for the potential offering and sale of additional debt and equity securities. From time to time, we raise capital through public offerings pursuant to our registration statements. For example, on May 26, 2023, we completed an offering of 7,245,000 of our common shares at the public offering price of $192.00 per share. We received net proceeds of approximately $1,352 million from the equity offering, after deducting underwriting discounts and offering expenses. We used the net proceeds from this offering to fund a portion of the cash consideration for the Validus Acquisition, to pay related costs and expenses, and for general corporate purposes. On June 5, 2023, we issued $750.0 million of 5.750% Senior Notes due June 5, 2033. We received net proceeds of approximately $741.0 million from the offering, after deducting underwriting discounts and offering expenses. We used the net proceeds from this offering to fund a portion of the cash consideration for the Validus Acquisition, to pay related costs and expenses, and for general corporate purposes.

Credit Facilities, Trusts and Other Collateral Arrangements

We also maintain various other arrangements that allow us to access liquidity and satisfy collateral requirements, including revolving credit facilities, letter of credit facilities, and regulatory trusts, as well as other types of trust and collateral arrangements. Regulatory and other requirements to post collateral to support our reinsurance obligations could impact our liquidity. For example, many jurisdictions in the U.S. do not permit insurance companies to take credit for reinsurance obtained from unlicensed or non-admitted insurers on their statutory financial statements unless security is posted, so our contracts generally require us to post a letter of credit or provide other security (such as through a multi-beneficiary reinsurance trust). However, certain of our subsidiaries qualify as certified reinsurers or reciprocal reinsurers in one or more U.S. states, which has, and may continue to, reduce the amount of collateral that we are required to post. In addition, if we were to fail to comply with certain covenants in our debt agreements, we may have to pledge additional collateral.

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Letter of Credit and Revolving Credit Facilities

We and certain of our subsidiaries, joint ventures, and managed funds maintain secured and unsecured revolving credit facilities and letter of credit facilities that provide liquidity and allow us to satisfy certain collateral requirements. The outstanding amounts drawn under each of our significant credit facilities are set forth below:

[[GREPCENT_TABLE]]
[["","At December 31, 2023","Issued or Drawn"],["","(in thousands)"],["","Revolving Credit Facility (1)","$","\u2014"],["","Medici Revolving Credit Facility (2)","75,000"],["","Bilateral Letter of Credit Facilities"],["","Secured","571,625"],["","Unsecured","709,740"],["","Funds at Lloyd\u2019s Letter of Credit Facility","225,000"],["","","$","1,581,365"]]
[[/GREPCENT_TABLE]]

(1)At December 31, 2023, no amounts were issued or drawn under this facility.

(2)RenaissanceRe owns a noncontrolling economic interest in Medici. Because RenaissanceRe controls all of Medici’s issued voting shares, the financial statements of Medici are included in RenaissanceRe’s consolidated financial statements. However, RenaissanceRe does not guarantee or provide credit support for Medici, and RenaissanceRe’s financial exposure to Medici is limited to its investment in Medici’s shares and counterparty credit risk arising from reinsurance transactions. Subsequent to December 31, 2023, Medici repaid in full the aggregate principal amount drawn under the Medici Revolving Credit Facility.

Refer to “Note 9. Debt and Credit Facilities” in our “Notes to the Consolidated Financial Statements” for additional information related to our significant debt and credit facilities.

Funds at Lloyd’s

As a member of Lloyd’s, the underwriting capacity, or stamp capacity, of Syndicate 1458 must be supported by providing a deposit, the FAL, in the form of cash, securities or letters of credit. At December 31, 2023, the FAL required to support the underwriting activities at Lloyd’s through Syndicate 1458 was £730.9 million (2022 - £986.8 million). Actual FAL posted for Syndicate 1458 at December 31, 2023 by RenaissanceRe Corporate Capital (UK) Limited was $935.8 million (2022 - $1.0 billion), supported by a $225.0 million letter of credit and a $710.8 million deposit of cash and fixed maturity securities (2022 - $275.0 million and $737.6 million, respectively). Refer to “Note 9. Debt and Credit Facilities” in our “Notes to the Consolidated Financial Statements” for additional information related to this letter of credit facility.

Multi-Beneficiary Reinsurance Trusts, Multi-Beneficiary Reduced Collateral Reinsurance Trusts

Renaissance Reinsurance, DaVinci Reinsurance, RREAG, Validus Re and Validus Switzerland, use multi-beneficiary reinsurance trusts and/or multi-beneficiary reduced collateral reinsurance trusts to collateralize reinsurance liabilities. As of December 31, 2023, all of these trusts were funded in accordance with the relevant regulatory thresholds. However, assets held in these trusts have in the past, and may in the future, exceed the amount required under U.S. state regulations.

Refer to “Note 18. Statutory Requirements” in our “Notes to the Consolidated Financial Statements” for additional information on our multi-beneficiary reinsurance trusts and multi-beneficiary reduced collateral reinsurance trusts.

86

Contractual Obligations

In assessing our liquidity requirements and cash needs, we also consider contractual obligations to which we are a party. In certain circumstances, our contractual obligations may be accelerated due to defaults under the agreements governing those obligations (including pursuant to cross-default provisions in such agreements) or in connection with certain changes in control of the Company, for example. In addition, in certain circumstances, in the event of a default these obligations may bear an increased interest rate or be subject to penalties.

The table below shows certain of our current and long-term contractual obligations:

[[GREPCENT_TABLE]]
[["","At December 31, 2023","Total","","Less Than 1 Year","","1-3 Years","","3-5 Years","","More Than 5 Years"],["","(in thousands)"],["","Long term debt obligations (1)"],["","5.750% Senior Notes due 2033","$","1,156,693","","","$","43,125","","","$","86,250","","","$","86,250","","","$","941,068"],["","3.600% Senior Notes due 2029","476,200","","","14,400","","","28,800","","","28,800","","","404,200"],["","3.450% Senior Notes due 2027","336,225","","","10,350","","","20,700","","","305,175","","","\u2014"],["","3.700% Senior Notes due 2025","313,875","","","11,100","","","302,775","","","\u2014","","","\u2014"],["","4.750% Senior Notes due 2025 (DaVinci)","159,500","","","7,125","","","152,375","","","\u2014","","","\u2014"],["","Total long term debt obligations","2,442,493","","","86,100","","","590,900","","","420,225","","","1,345,268"],["","Investment commitments (2)","1,633,978","","","1,633,978","","","\u2014","","","\u2014","","","\u2014"],["","Operating lease obligations","133,814","","","14,798","","","28,100","","","27,953","","","62,963"],["","Capital lease obligations","14,324","","","2,661","","","5,322","","","4,807","","","1,534"],["","Payable for investments purchased","661,611","","","661,611","","","\u2014","","","\u2014","","","\u2014"],["","Reserve for claims and claim expenses (3)","20,486,869","","","5,531,454","","","6,555,798","","","3,687,637","","","4,711,980"],["","Total contractual obligations","$","25,373,089","","","$","7,930,602","","","$","7,180,120","","","$","4,140,622","","","$","6,121,745"]]
[[/GREPCENT_TABLE]]

(1)Includes contractual interest payments.

(2)The investment commitments do not have a defined contractual commitment date and we have therefore included them in the less than one year category.

(3)The amount and timing of the cash flows associated with our policy liabilities are highly uncertain. Refer to “Note 8. Reserve for Claims and Claim Expenses” in our “Notes to the Consolidated Financial Statements” for more information on our estimate of claims and claim expense reserves.

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Cash Flows

[[GREPCENT_TABLE]]
[["","Year ended December 31,","2023","","2022"],["","(in thousands)"],["","Net cash provided by (used in) operating activities","$","1,911,634","","","$","1,603,683"],["","Net cash provided by (used in) investing activities","(3,822,636)","","","(3,016,176)"],["","Net cash provided by (used in) financing activities","2,588,639","","","725,342"],["","Effect of exchange rate changes on foreign currency cash","5,542","","","22,471"],["","Net increase (decrease) in cash and cash equivalents","683,179","","","(664,680)"],["","Cash and cash equivalents, beginning of period","1,194,339","","","1,859,019"],["","Cash and cash equivalents, end of period","$","1,877,518","","","$","1,194,339"]]
[[/GREPCENT_TABLE]]

2023

During 2023, our cash and cash equivalents decreased by $683.2 million, to $1.9 billion at December 31, 2023, compared to $1.2 billion at December 31, 2022.

Cash flows provided by operating activities. Cash flows provided by operating activities during 2023 were $1.9 billion, compared to $1.6 billion during 2022. Cash flows provided by operating activities during 2023 were primarily the result of certain adjustments to reconcile our net income of $3.6 billion to net cash provided by operating activities, which exclude the acquired net assets of Validus, including:

•a decrease in reinsurance balances payable of $1.0 billion, principally driven by the redemption of capital from Upsilon RFO and the timing of payments related to underwriting activity;

•net realized and unrealized gains on investments of $482.8 million, primarily driven by unrealized gains in our fixed maturity investments due to movements in interest rates;

•a decrease in unearned premiums of $227.0 million due to a decrease in gross premiums written across both our Property and Casualty and Specialty segments;

•an increase in premiums receivable of $126.9 million due to the timing of receipts and an increase in our gross premiums written; partially offset by

•a decrease in reinsurance recoverable of $663.9 million due to the decrease in current year large losses as compared to prior year, as well as an increase in collected recoveries and higher level of prior year favorable development; and

•an increase in prepaid reinsurance premiums of $223.4 million due to the timing of payments.

Cash flows used in investing activities. During 2023, our cash flows used in investing activities were $3.8 billion, principally reflecting net purchases of fixed maturity investments trading of $3.0 billion and other investments of $801.8 million, partially offset by cash flows from net sales of short term investments of $1.8 billion and equity investments of $564.3 million. The net purchases of fixed maturity investments trading was primarily funded by cash flows provided by operating activities, as described above, and cash flows provided by the capital raised as part of our financing plan for the Validus Acquisition, as described below. The net purchase of other investments during 2023 was primarily driven by net purchases of catastrophe bonds in Medici, which were funded by new capital contributions. In addition, we completed our acquisition of Validus on November 1, 2023, resulting in a net cash outflow of $2.4 billion. Refer to “Note 3. Acquisition of Validus” in our “Notes to the Consolidated Financial Statements” for additional information related to the acquisition of Validus.

Cash flows provided by financing activities. Our cash flows provided by financing activities in 2023 were $2.6 billion, and were principally the result of:

•the issuance of 7,245,000 of our common shares in an underwritten public offering at a public offering price of $192.00 per share. The total net proceeds from the offering were $1,351.6 million;

•the issuance of $750.0 million of 5.750% Senior Notes due June 5, 2033, with net proceeds from the offering of $740.6 million;

88

•net inflows of $582.5 million primarily related to net third-party redeemable noncontrolling interest share transactions in Medici and DaVinci;

•net inflows of $75.0 million from the drawdown of the Medici Revolving Credit Facility; partially offset by

•dividends paid on our common and preference shares of $75.1 million and $35.4 million, respectively; and

•repayment of debt of $30.0 million related to the Medici Revolving Credit Facility.

2022

During 2022, our cash and cash equivalents decreased by $664.7 million, to $1.2 billion at December 31, 2022, compared to $1.9 billion at December 31, 2021.

Cash flows provided by operating activities. Cash flows provided by operating activities during 2022 were $1.6 billion, compared to $1.2 billion during 2021. Cash flows provided by operating activities during 2022 were primarily the result of certain adjustments to reconcile our net loss of $1.2 billion to net cash provided by operating activities, including:

•an increase in reserve for claims and claim expenses of $2.6 billion primarily resulting from net claims and claim expenses associated with the 2022 Weather-Related Large Losses;

•net realized and unrealized losses on investments of $1.6 billion primarily driven by unrealized mark-to-market losses resulting from the significant increase in interest rates;

•an increase in unearned premiums of $1.0 billion due to the growth in gross premiums written in the Casualty and Specialty segment;

•an increase in reinsurance balances payable of $67.3 million principally driven by the issuance of non-voting preference shares to investors in Upsilon RFO, which are accounted for as prospective reinsurance and included in reinsurance balances payable on our consolidated balance sheet. See “Note 11. Variable Interest Entities” in our “Notes to the Consolidated Financial Statements” for additional information related to Upsilon RFO’s non-voting preference shares; partially offset by

•an increase in premiums receivable of $1.4 billion due to the timing of receipts and increase in our gross premiums written;

•an increase in reinsurance recoverable of $442.3 million due to the increase in net claims and claim expenses and recoverables associated with the 2022 Weather-Related Large Losses; and

•an increase of $166.7 million in our prepaid reinsurance premiums due to the timing of payments.

Cash flows used in investing activities. During 2022, our cash flows used in investing activities were $3.0 billion, principally reflecting net purchases of fixed maturity investments trading of $2.8 billion, equity investments of $202.3 million, and other investments of $618.8 million, partially offset by cash flow from net sales of short term investments of $640.4 million. The net purchases of fixed maturity investments trading was primarily funded by cash flows provided by operating activities, as described above, whereas the net purchase of other investments during 2022, was primarily driven by an increased allocation to catastrophe bonds and fund investments.

Cash flows provided by financing activities. Our cash flows provided by financing activities in 2022 were $725.3 million, and were principally the result of:

•net inflows of $1.0 billion primarily related to net third-party redeemable noncontrolling interest share transactions in Medici, DaVinci and Fontana; partially offset by

•the repurchase of 1.1 million of our common shares in open market transactions at an aggregate cost of $162.8 million and an average price of $155.00 per common share; and

•dividends paid on our common shares of $64.7 million and on our preference shares of $35.4 million.

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Capital Resources

We monitor our capital adequacy on a regular basis and seek to adjust our capital according to the needs of our business. In particular, we require capital sufficient to meet or exceed the capital adequacy ratios established by rating agencies for maintenance of appropriate financial strength ratings, the capital adequacy tests performed by regulatory authorities and the capital requirements under our credit facilities. From time to time, rating agencies may make changes in their capital models and rating methodologies, which could increase the amount of capital required to support our ratings. We may seek to raise additional capital or return capital to our shareholders through common share repurchases and cash dividends (or a combination of such methods). In the normal course of our operations, we may from time to time evaluate additional share or debt issuances given prevailing market conditions and capital management strategies, including for our operating subsidiaries, joint ventures and managed funds. In addition, as noted above, we enter into agreements with financial institutions to obtain letter of credit facilities for the benefit of our operating subsidiaries and certain of our joint ventures and managed funds in their reinsurance and insurance business.

Our total shareholders’ equity attributable to RenaissanceRe and total debt was as follows:

[[GREPCENT_TABLE]]
[["","At December 31,","2023","","2022","","Change"],["","(in thousands)"],["","Common shareholders\u2019 equity","$","8,704,958","","","$","4,575,274","","","$","4,129,684"],["","Preference shares","750,000","","","750,000","","","\u2014"],["","Total shareholders\u2019 equity attributable to RenaissanceRe","$","9,454,958","","","$","5,325,274","","","$","4,129,684"],["","5.750% Senior Notes due 2033","$","741,124","","","$","\u2014","","","$","741,124"],["","3.600% Senior Notes due 2029","395,137","","","394,221","","","916"],["","3.450% Senior Notes due 2027","298,270","","","297,775","","","495"],["","3.700% Senior Notes due 2025","299,537","","","299,168","","","369"],["","4.750% Senior Notes due 2025 (DaVinci) (1)","149,587","","","149,278","","","309"],["","Total senior notes","1,883,655","","","1,140,442","","","743,213"],["","Medici Revolving Credit Facility (2)","75,000","","","30,000","","","45,000"],["","Total debt","$","1,958,655","","","$","1,170,442","","","$","788,213"]]
[[/GREPCENT_TABLE]]

(1)RenaissanceRe owns a noncontrolling economic interest in its joint venture DaVinci. Because RenaissanceRe controls a majority of DaVinci’s issued voting shares, the consolidated financial statements of DaVinci are included in the consolidated financial statements of RenaissanceRe. However, RenaissanceRe does not guarantee or provide credit support for DaVinci and RenaissanceRe’s financial exposure to DaVinci is limited to its investment in DaVinci’s shares and counterparty credit risk arising from reinsurance transactions.

(2)RenaissanceRe owns a noncontrolling economic interest in Medici. Because RenaissanceRe controls all of Medici’s outstanding issued voting shares, the financial statements of Medici are included in RenaissanceRe’s consolidated financial statements. However, RenaissanceRe does not guarantee or provide credit support for Medici and RenaissanceRe’s financial exposure to Medici is limited to its investment in Medici’s shares and counterparty credit risk arising from reinsurance transactions. Subsequent to December 31, 2023, Medici repaid in full the aggregate principal amount drawn under the Medici Revolving Credit Facility.

Our shareholders’ equity attributable to RenaissanceRe increased $4.1 billion during 2023 principally as a result of:

•the sale of 7,245,000 common shares at the public offering price of $192.00 per share for total net proceeds of approximately $1,352.0 million, which were used to fund a portion of the cash consideration for the Validus Acquisition, and to pay related costs and expenses, and for general corporate purposes,

•the issuance of 1,322,541 common shares to AIG at the closing of the Validus Acquisition, which were valued at approximately $250.0 million based on a value of $189.03 per share at signing, pursuant to the Stock Purchase Agreement, and

•our comprehensive income attributable to RenaissanceRe of $2,562.4 million; partially offset by

•$75.1 million and $35.4 million of dividends on our common and preference shares, respectively.

90

Our total debt increased by $788.2 million during 2023 principally as a result of the issuance of $750.0 million of 5.750% Senior Notes due 2033. The net proceeds of approximately $741.0 million were used to fund a portion of the cash consideration for the Validus Acquisition, and to pay related costs and expenses, and for general corporate purposes. See “Note 3. Acquisition of Validus” in our “Notes to the Consolidated Financial Statements” for additional information regarding the Validus Acquisition.

For additional information related to the terms of our debt and significant credit facilities, see “Note 9. Debt and Credit Facilities” in our “Notes to the Consolidated Financial Statements.” See “Note 12. Shareholders’ Equity” in our “Notes to the Consolidated Financial Statements” for additional information related to our common and preference shares.

Impact of Validus Acquisition on Liquidity and Capital Resources

On November 1, 2023, we completed the Validus Acquisition and paid AIG aggregate consideration of $2.985 billion, consisting of: (i) cash consideration of $2.735 billion; and (ii) 1,322,541 common shares, which were valued at approximately $250.0 million based on a value of $189.03 per share at signing, pursuant to the Stock Purchase Agreement. We funded a portion of the cash consideration with the net proceeds of approximately $1,352.0 million from the equity offering completed on May 26, 2023, and the net proceeds of approximately $741.0 million from the offering of 5.750% Senior Notes due 2033 completed on June 5, 2023. The proceeds of the equity and Senior Notes offerings were invested in U.S. Treasuries and short term investments prior to the closing. We funded the remainder of the cash consideration from available cash resources and the liquidation of certain of our fixed maturity investments trading.

We incurred $76.4 million of corporate expenses associated with the Validus Acquisition in 2023 and expect to incur additional costs and expenses associated with the Validus Acquisition over the course of 2024. These additional one time costs may be significant, and it is possible that our ultimate costs will exceed our current estimates.

See “Note 3. Acquisition of Validus” in our “Notes to the Consolidated Financial Statements” for additional information regarding the Validus Acquisition.

Reserve for Claims and Claim Expenses

We believe the most significant accounting judgment made by management is our estimate of claims and claim expense reserves. Claims and claim expense reserves represent estimates, including actuarial and statistical projections at a given point in time, of the ultimate settlement and administration costs for unpaid claims and claim expenses arising from the insurance and reinsurance contracts we sell. Our actual net claims and claim expenses paid will differ, perhaps materially, from the estimates reflected in our financial statements, which may adversely impact our financial condition, liquidity and capital resources.

Refer to “Note 8. Reserve for Claims and Claim Expenses” in our “Notes to the Consolidated Financial Statements” for more information on the risks we insure and reinsure, the reserving techniques, assumptions and processes we follow to estimate our claims and claim expense reserves, prior year development of the reserve for claims and claim expenses, analysis of our incurred and paid claims development and claims duration information for each of our Property and Casualty and Specialty segments. In addition, refer to “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Summary of Critical Accounting Estimates, Claims and Claim Expense Reserves” for more information on the reserving techniques, assumptions and processes we follow to estimate our claims and claim expense reserves, our current estimates versus our initial estimates of our claims reserves, and sensitivity analysis for each of our Property and Casualty and Specialty segments.

91

Investments

The table below shows our invested assets:

[[GREPCENT_TABLE]]
[["","At December 31,","2023","","2022","","Change"],["","(in thousands, except percentages)"],["","U.S. treasuries","$","10,060,203","","","34.4","%","","$","7,180,129","","","32.3","%","","$","2,880,074"],["","Corporate (1)","6,499,075","","","22.2","%","","4,390,568","","","19.8","%","","2,108,507"],["","Asset-backed","1,491,695","","","5.0","%","","1,077,302","","","4.8","%","","414,393"],["","Residential mortgage-backed","1,420,362","","","4.9","%","","710,429","","","3.2","%","","709,933"],["","Agencies","489,117","","","1.7","%","","395,149","","","1.8","%","","93,968"],["","Non-U.S. government","483,576","","","1.7","%","","383,838","","","1.7","%","","99,738"],["","Commercial mortgage-backed","433,080","","","1.5","%","","213,987","","","1.0","%","","219,093"],["","Total fixed maturity investments, at fair value","20,877,108","","","71.4","%","","14,351,402","","","64.6","%","","6,525,706"],["","Short term investments, at fair value","4,604,079","","","15.8","%","","4,669,272","","","21.0","%","","(65,193)"],["","Equity investments, at fair value","106,766","","","0.4","%","","625,058","","","2.8","%","","(518,292)"],["","Catastrophe bonds","1,942,199","","","6.7","%","","1,241,468","","","5.6","%","","700,731"],["","Term loans","97,658","","","0.3","%","","100,000","","","0.5","%","","(2,342)"],["","Direct private equity investments","59,905","","","0.2","%","","66,780","","","0.3","%","","(6,875)"],["","Fund investments","1,415,804","","","4.9","%","","1,086,706","","","4.9","%","","329,098"],["","Total other investments, at fair value","3,515,566","","","12.1","%","","2,494,954","","","11.3","%","","1,020,612"],["","Investments in other ventures, under equity method","112,624","","","0.3","%","","79,750","","","0.3","%","","32,874"],["","Total investments","$","29,216,143","","","100.0","%","","$","22,220,436","","","100.0","%","","$","6,995,707"]]
[[/GREPCENT_TABLE]]

(1)Corporate fixed maturity investments include non-U.S. government-backed corporate fixed maturity investments.

We structure our investment portfolio to emphasize the preservation of capital and the availability of liquidity to meet our claims obligations, to be well diversified across market sectors, and to generate relatively attractive returns on a risk-adjusted basis over time. Notwithstanding the foregoing, our investments are subject to market-wide risks and fluctuations, as well as to risks inherent in particular securities. For additional information regarding our investments and the fair value measurement of our investments refer to “Note 5. Investments” and “Note 6. Fair Value Measurements” in our “Notes to the Consolidated Financial Statements.”

As the reinsurance coverages we sell include substantial protection for damages resulting from natural and man-made catastrophes, as well as for potentially large casualty and specialty exposures, we expect, from time to time, to become liable for substantial claim payments on short notice. Accordingly, our investment portfolio as a whole is structured to seek to preserve capital and provide a high level of liquidity, which means that the large majority of our investments are highly rated fixed income securities, including U.S. treasuries, agencies, highly rated sovereign and supranational securities, high-grade corporate securities and mortgage-backed and asset-backed securities. We also have an allocation to publicly traded equities reflected on our consolidated balance sheet as equity investments and an allocation to other investments (including catastrophe bonds, fund investments, term loans and direct private equity investments).

92

The following table summarizes the composition of our investment portfolio, including the amortized cost, fair value, credit ratings and effective yields.

[[GREPCENT_TABLE]]
[["","","","","","","Credit Rating (1)"],["","December 31, 2023","","","Fair Value","","","","AAA","","AA","","A","","BBB","","Non- Investment Grade","","Not Rated","","Investments not subject to credit ratings"],["","Fixed maturity investments trading, at fair value"],["","U.S. treasuries","","","$","10,060,203","","","","","$","\u2014","","","$","10,060,203","","","$","\u2014","","","$","\u2014","","","$","\u2014","","","$","\u2014","","","$","\u2014"],["","Corporate (2)","","","6,499,075","","","","","161,076","","","395,251","","","2,340,818","","","2,494,723","","","1,097,461","","","9,746","","","\u2014"],["","Agencies","","","489,117","","","","","\u2014","","","488,217","","","\u2014","","","\u2014","","","\u2014","","","900","","","\u2014"],["","Non-U.S. government","","","483,576","","","","","305,635","","","159,461","","","12,866","","","5,614","","","\u2014","","","\u2014","","","\u2014"],["","Residential mortgage-backed","","","1,420,362","","","","","208,069","","","1,051,075","","","1,042","","","8,267","","","82,880","","","69,029","","","\u2014"],["","Commercial mortgage-backed","","","433,080","","","","","381,613","","","42,459","","","4,222","","","\u2014","","","1,240","","","3,546","","","\u2014"],["","Asset-backed","","","1,491,695","","","","","1,125,320","","","246,742","","","93,268","","","15,901","","","864","","","9,600","","","\u2014"],["","Total fixed maturity investments trading, at fair value","","","20,877,108","","","","","2,181,713","","","12,443,408","","","2,452,216","","","2,524,505","","","1,182,445","","","92,821","","","\u2014"],["","Short term investments, at fair value","","","4,604,079","","","","","4,258,276","","","155,789","","","106,876","","","76,067","","","2,480","","","4,591","","","\u2014"],["","Equity investments, at fair value","","","106,766","","","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","106,766"],["","Other investments, at fair value"],["","Catastrophe bonds","","","1,942,199","","","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","1,942,199","","","\u2014","","","\u2014"],["","Fund investments:"],["","Private credit funds","","","982,016","","","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","982,016"],["","Private equity funds","","","433,788","","","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","433,788"],["","Term loans","","","97,658","","","","","\u2014","","","\u2014","","","97,658","","","\u2014","","","\u2014","","","\u2014","","","\u2014"],["","Direct private equity investments","","","59,905","","","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","59,905"],["","Total other investments, at fair value","","","3,515,566","","","","","\u2014","","","\u2014","","","97,658","","","\u2014","","","1,942,199","","","\u2014","","","1,475,709"],["","Investments in other ventures, under equity method","","","112,624","","","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","\u2014","","","112,624"],["","Total investments","","","$","29,216,143","","","","","$","6,439,989","","","$","12,599,197","","","$","2,656,750","","","$","2,600,572","","","$","3,127,124","","","$","97,412","","","$","1,695,099"],["","","","","100.0","%","","","","22.0","%","","43.1","%","","9.1","%","","8.9","%","","10.7","%","","0.4","%","","5.8","%"]]
[[/GREPCENT_TABLE]]

(1)The credit ratings included in this table are those assigned by Standard & Poor’s Corporation (“S&P”). When ratings provided by S&P were not available, ratings from other recognized rating agencies were used. We have grouped short term investments with an A-1+ and A-1 short term issue credit rating as AAA, short term investments with an A-2 short term issue credit rating as AA and short term investments with an A-3 short term issue credit rating as A.

(2)Corporate fixed maturity investments include non-U.S. government-backed corporate fixed maturity investments.

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Fixed Maturity Investments and Short Term Investments

At December 31, 2023, our fixed maturity investments and short term investment portfolio had a weighted average credit quality rating of AA (2022 – AA) and a weighted average effective yield of 5.0% (2022 – 5.0%). At December 31, 2023, our non-investment grade and not-rated fixed maturity investments totaled $1.3 billion or 6.1% of our fixed maturity investments (2022 - $1.2 billion or 8.7%, respectively). In addition, within our other investments category we have funds that invest in non-investment grade and not-rated fixed income securities and non-investment grade cat-linked securities. At December 31, 2023, the funds that invest in non-investment grade and not-rated fixed income securities and non-investment grade cat-linked securities totaled $2.9 billion (2022 – $2.0 billion).

At December 31, 2023, we had $4.6 billion of short term investments (2022 – $4.7 billion). Short term investments are managed as part of our investment portfolio and have a maturity of one year or less when purchased. Short term investments are carried at fair value.

The duration of our fixed maturity investments and short term investments at December 31, 2023 was 2.9 years (2022 - 2.7 years). From time to time, we may reevaluate the duration of our portfolio in light of the duration of our liabilities and market conditions.

The value of our fixed maturity investments will fluctuate with changes in the interest rate environment and when changes occur in economic conditions or the investment markets. Additionally, our differing asset classes expose us to other risks which could cause a reduction in the value of our investments.

Equity Investments

The following table summarizes the fair value of equity investments:

[[GREPCENT_TABLE]]
[["","At December 31,","2023","","2022","","Change"],["","(in thousands)"],["","Financials","$","106,542","","","$","103,250","","","$","3,292"],["","Consumer","212","","","33,447","","","(33,235)"],["","Communications and technology","12","","","48,687","","","(48,675)"],["","Fixed income exchange traded funds","\u2014","","","295,481","","","(295,481)"],["","Equity exchange traded funds","\u2014","","","90,510","","","(90,510)"],["","Industrial, utilities and energy","\u2014","","","25,326","","","(25,326)"],["","Healthcare","\u2014","","","24,617","","","(24,617)"],["","Basic materials","\u2014","","","3,740","","","(3,740)"],["","Total equity investments","$","106,766","","","$","625,058","","","$","(518,292)"]]
[[/GREPCENT_TABLE]]

A portion of our investments included in equity investments is managed pursuant to diversified public equity securities mandates with third-party investment managers. In addition, our equity investments include more concentrated public equity positions that we invest in through our strategic investment portfolio. These investments are subject to a variety of risks including: company performance, the availability of strategic investment opportunities, and macro-economic, industry, and systemic risks of the equity markets overall. Consequently, the carrying value of our investment portfolio will vary over time as the value or size of our portfolio of strategic investments in marketable equity securities fluctuates. It is possible we will increase our equity allocation in the future, and it could, from time to time, have a material effect on our financial results.

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Other Investments

The table below shows our portfolio of other investments: 

[[GREPCENT_TABLE]]
[["","At December 31,","2023","","2022","","Change"],["","(in thousands)"],["","Catastrophe bonds","$","1,942,199","","","$","1,241,468","","","$","700,731"],["","Fund investments","1,415,804","","","1,086,706","","","329,098"],["","Term loans","97,658","","","100,000","","","(2,342)"],["","Direct private equity investments","59,905","","","66,780","","","(6,875)"],["","Total other investments","$","3,515,566","","","$","2,494,954","","","$","1,020,612"]]
[[/GREPCENT_TABLE]]

We account for our other investments at fair value in accordance with FASB ASC Topic Financial Instruments. The fair value of our fund investments, which include private equity funds, private credit funds and hedge funds, is recorded on our consolidated balance sheet in other investments, and is generally established on the basis of the net asset value per share (or its equivalent), determined by the managers of these investments in accordance with the applicable governing documents. Many of our fund investments are subject to restrictions on redemptions and sales which limit our ability to liquidate these investments in the short term.

Our fund managers and their fund administrators are generally unable to provide final fund valuations as of our current reporting date. We typically experience a reporting lag to receive a final net asset value report of one month for our hedge funds and three months for both private equity funds and private credit funds, although we have occasionally experienced delays of up to six months, particularly at year end. In circumstances where there is a reporting lag, we estimate the fair value of these funds by starting with the prior month or quarter-end fund valuation, adjusting these valuations for actual capital calls, redemptions or distributions, as well as the impact of changes in foreign currency exchange rates, and then estimating the return for the current period. This principally includes using preliminary estimates reported to us by our fund managers, where available, and estimating returns based on the performance of broad market indices, or other valuation methods. Actual final fund valuations may differ, perhaps materially, from our estimates and these differences are recorded in our consolidated statement of operations in the period in which they are reported to us as a change in estimate. A net loss of $3.0 million is recorded for 2023 (2022 - net income of $19.8 million), representing the change in estimate during the period related to the difference between our estimate recorded on December 31, 2022 (2022 - December 31, 2021) due to the lag in reporting discussed above, and the actual amount reported in the final net asset values provided by our fund managers in the current year.

Our estimate of the fair value of catastrophe bonds is based on quoted market prices or, when such prices are not available, by reference to broker or underwriter bid indications. Refer to “Note 6. Fair Value Measurements” in our “Notes to the Consolidated Financial Statements” for additional information regarding the fair value measurement of our investments.

We have committed capital to direct private equity investments, fund investments, term loans and investments in other ventures of $3.6 billion, of which $2.0 billion has been contributed at December 31, 2023 (2022 - $2.9 billion and $1.7 billion, respectively). Our remaining commitments to these investments at December 31, 2023 totaled $1.6 billion (2022 - $1.2 billion). In the future, we may enter into additional commitments in respect of these investments or individual portfolio company investment opportunities.

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Investments in Other Ventures, under Equity Method

The table below shows our investments in other ventures, under equity method: 

[[GREPCENT_TABLE]]
[["","At December 31,","2023","","2022"],["","(in thousands, except percentages)","Investment","","Ownership %","","Carrying Value","","Investment","","Ownership %","","Carrying Value"],["","Tower Hill Companies (1)","$","78,698","","","2.0% - 25.0%","","$","13,970","","","$","78,698","","","2.0% - 25.0%","","$","10,897"],["","Top Layer","65,375","","","50.0","%","","31,768","","","65,375","","","50.0","%","","23,562"],["","Other","70,411","","","25.3","%","","66,886","","","47,517","","","22.8","%","","45,291"],["","Total investments in other ventures, under equity method","$","214,484","","","","","$","112,624","","","$","191,590","","","","","$","79,750"]]
[[/GREPCENT_TABLE]]

(1) The Company has equity interests in Bluegrass Insurance Management, LLC, Tower Hill Claims Service, LLC, Tower Hill Holdings, Inc., Tower Hill Insurance Group, LLC, Tower Hill Insurance Managers, LLC, Tower Hill Re Holdings, Inc., Tower Hill Risk Management LLC and Tomoka Re Holdings, Inc. (collectively, the “Tower Hill Companies”).

The equity in earnings of the Tower Hill Companies and other ventures, under the equity method, are reported one quarter in arrears and Top Layer is reported on a current quarter basis. The realized value we ultimately attain for our investments in other ventures, under equity method will likely differ from the carrying value, perhaps materially.

Ratings

Financial strength ratings are important to the competitive position of reinsurance and insurance companies. We have received high financial strength ratings from A.M. Best, S&P, Moody’s and Fitch. These ratings represent independent opinions of an insurer’s financial strength, operating performance and ability to meet policyholder obligations, and are not an evaluation directed toward the protection of investors or a recommendation to buy, sell or hold any of our securities. Certain of our entities and the senior notes and preference shares issued by them also have issuer credit ratings. Rating organizations continually review the financial positions of our principal operating subsidiaries and joint ventures and ratings may be revised or revoked by the agencies which issue them. Additionally, rating organizations may change their rating methodology, which could have a material impact on our financial strength ratings.

In addition, S&P and A.M. Best assess companies’ ERM practices, which is an opinion on the many critical dimensions of risk that determine overall creditworthiness. RenaissanceRe has been assigned an ERM score of “Very Strong” from each of these agencies, which is the highest ERM score assigned.

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The financial strength ratings of our principal operating subsidiaries and joint ventures and the ERM score of RenaissanceRe as of February 14, 2024 are presented below.

[[GREPCENT_TABLE]]
[["","","A.M. Best (1)","","S&P (2)","","Moody\u2019s (3)","","Fitch (4)"],["","Renaissance Reinsurance Ltd.","A+","","A+","","A1","","A+"],["","DaVinci Reinsurance Ltd.","A","","A+","","A3","","\u2014"],["","Fontana Reinsurance Ltd.","A","","\u2014","","\u2014","","\u2014"],["","Fontana Reinsurance U.S. Ltd.","A","","\u2014","","\u2014","","\u2014"],["","Renaissance Reinsurance of Europe Unlimited Company","A+","","A+","","\u2014","","\u2014"],["","Renaissance Reinsurance U.S. Inc.","A+","","A+","","\u2014","","\u2014"],["","RenaissanceRe Europe AG","A+","","A+","","\u2014","","\u2014"],["","RenaissanceRe Specialty U.S. Ltd.","A+","","A+","","\u2014","","\u2014"],["","Top Layer Reinsurance Ltd.","A+","","AA","","\u2014","","\u2014"],["","Vermeer Reinsurance Ltd.","A","","\u2014","","\u2014","","\u2014"],["","Validus Reinsurance Ltd.","A","","A+","","\u2014","","\u2014"],["","Validus Reinsurance (Switzerland) Ltd","A","","A+","","\u2014","","\u2014"],["","RenaissanceRe Syndicate 1458","\u2014","","\u2014","","\u2014","","\u2014"],["","Lloyd\u2019s Overall Market Rating","A","","AA-","","\u2014","","AA-"],["","RenaissanceRe ERM Score","Very Strong","","Very Strong","","\u2014","","\u2014"]]
[[/GREPCENT_TABLE]]

(1)    The A.M. Best ratings for our principal operating subsidiaries and joint ventures represent the insurer’s financial strength rating. The Lloyd’s Overall Market Rating represents RenaissanceRe Syndicate 1458’s financial strength rating. RenaissanceRe has been assigned a “Very Strong” ERM score by A.M. Best. On May 25, 2023, following the Validus Acquisition, A.M. Best placed the financial strength ratings of Validus Re and Validus Switzerland under review with developing implications.

(2)    The S&P ratings for our principal operating subsidiaries and joint ventures represent the insurer’s financial strength rating. The Lloyd’s Overall Market Rating represents RenaissanceRe Syndicate 1458’s financial strength rating. RenaissanceRe has been assigned a “Very Strong” ERM score by S&P.

(3)    The Moody’s ratings represent the insurer’s financial strength rating.

(4)    The Fitch rating for Renaissance Reinsurance represents the insurer’s financial strength rating. The Lloyd’s Overall Market Rating represents Syndicate 1458’s financial strength rating.

A.M. Best

The outlook for all of our A.M. Best ratings is stable. “A+” is the second highest designation of A.M. Best’s rating levels. “A+” rated insurance companies are defined as “Superior” companies and are considered by A.M. Best to have a very strong ability to meet their obligations to policyholders. “A” is the third highest designation assigned by A.M. Best, representing A.M. Best’s opinion that the insurer has an “Excellent” ability to meet its ongoing obligations to policyholders.

S&P

The outlook for all of our S&P ratings is stable. The “A” range (“A+,” “A,” “A-”), which is the third highest rating assigned by S&P, indicates that S&P believes the insurers have strong capacity to meet their respective financial commitments but they are somewhat more susceptible to adverse effects or changes in circumstances and economic conditions than insurers rated higher.

Moody’s

The outlook for all of our Moody’s ratings is stable. Moody’s Insurance Financial Strength Ratings represent its opinions of the ability of insurance companies to pay punctually policyholder claims and obligations and senior unsecured debt instruments. Moody’s believes that insurance companies rated “A1” and “A3” offer good financial security.

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Fitch

The outlook for all of our Fitch ratings is stable. Fitch believes that insurance companies rated “A+” have “Strong” capacity to meet policyholders and contract obligations on a timely basis with a low expectation of ceased or interrupted payments. Insurers rated “AA-” by Fitch are believed to have a very low expectation of ceased or interrupted payments and very strong capital to meet policyholder obligations.

Lloyd’s Overall Market Rating

A.M. Best, S&P and Fitch have each assigned a financial strength rating to the Lloyd’s overall market. The financial risks to policy holders of syndicates within the Lloyd’s market are partially mutualized through the Lloyd’s Central Fund, to which all underwriting members contribute. Because of the presence of the Lloyd’s Central Fund, and the current legal and regulatory structure of the Lloyd’s market, financial strength ratings on individual syndicates would not be particularly meaningful and in any event would not be lower than the financial strength rating of the Lloyd’s overall market.

SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

RenaissanceRe Finance, a 100% owned subsidiary of RenaissanceRe, is the issuer of certain 3.700% Senior Notes due 2025 and 3.450% Senior Notes due 2027, each of which are fully and unconditionally guaranteed by RenaissanceRe. The guarantees are senior unsecured obligations of RenaissanceRe and rank equally in right of payment with all other existing and future unsecured and unsubordinated indebtedness of RenaissanceRe which may be outstanding from time to time. Each series of notes contain various covenants, including limitations on mergers and consolidations, and restrictions as to the disposition of, and the placing of liens on, stock of designated subsidiaries. For additional information related to the terms of our outstanding debt securities, see “Note 9. Debt and Credit Facilities” in our “Notes to the Consolidated Financial Statements”.

The following tables present supplemental summarized financial information for RenaissanceRe and RenaissanceRe Finance, collectively the “Obligor Group.” Intercompany transactions among the members of the Obligor Group have been eliminated. The financial information of non-obligor subsidiaries has been excluded from the summarized financial information. In addition, assets as detailed in the table below exclude investments in subsidiaries for the Obligor Group. Significant intercompany transactions and receivable/payable balances between the Obligor Group and non-obligor subsidiaries are presented separately in the summarized financial information:

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Summarized Balance Sheets

[[GREPCENT_TABLE]]
[["","At December 31,","2023"],["","(in thousands)"],["","Assets"],["","Receivables due from non-obligor subsidiaries","$","17,992"],["","Other current assets","530,471"],["","Total current assets","$","548,463"],["","Goodwill and other intangibles","$","101,509"],["","Loan receivable from non-obligor subsidiaries","624,152"],["","Other noncurrent assets","39,951"],["","Total noncurrent assets","$","765,612"],["","Liabilities"],["","Payables due to non-obligor subsidiaries","$","137,322"],["","Other current liabilities","87,066"],["","Total current liabilities","$","224,388"],["","Loan payable to non-obligor subsidiaries","$","201,380"],["","Other noncurrent liabilities","1,837,360"],["","Total noncurrent liabilities","$","2,038,740"]]
[[/GREPCENT_TABLE]]

Summarized Statement of Operations

[[GREPCENT_TABLE]]
[["","Year ended December 31,","2023"],["","(in thousands)"],["","Revenues"],["","Intercompany revenue with non-obligor subsidiaries","$","73,196"],["","Other revenue","59,871"],["","Total revenues","133,067"],["","Expenses"],["","Intercompany expense with non-obligor subsidiaries","58,556"],["","Other expense","221,228"],["","Total expenses","279,784"],["","Income tax benefit (expense)","5,721"],["","Net income (loss)","(140,996)"],["","Dividends on RenaissanceRe preference shares","(35,375)"],["","Net income (loss) attributable to Obligor Group","$","(176,371)"]]
[[/GREPCENT_TABLE]]

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CURRENT OUTLOOK

Over the last 10 years, we have made key strategic decisions to build the capabilities and scale that we believe will allow us to generate superior returns in an evolving marketplace. We have diversified our sources of capital through various owned and managed balance sheets as well as equity, debt and insurance-linked securities markets. We believe that the prior planning initiatives we implemented provide the flexibility to manage large loss events and efficiently distribute capital across balance sheets. We are unique among our peers in that we have both owned and managed, and rated and fronted, vehicles across the risks that we write. This has afforded us significant flexibility to react when the world changes.

In 2023, we accomplished several strategic milestones, including achieving a step change in property catastrophe reinsurance pricing, and completing the Validus Acquisition, which will help us accelerate our growth in a favorable market.

Validus Acquisition

On November 1, 2023, we completed the Validus Acquisition, accelerating our strategy at a critical juncture in the reinsurance cycle. The Validus Acquisition has several significant strategic benefits for us, and advances our position as a global property and casualty reinsurer, providing additional scale and diversification, and increasing our importance with customers and brokers. Through the Validus Acquisition, we have gained access to a large book of attractive reinsurance business that is closely aligned with our existing business mix. We believe that the integration of Validus has been proceeding smoothly.

The Validus Acquisition was immediately accretive to our shareholders across our three drivers of profit. At the same time, we have expanded our relationship with a core trading partner, AIG, who is one of our five largest clients by premium volume, as the Validus Acquisition provides options for increased strategic engagement.

Reinsurance Market Trends and Developments

At the January 1, 2023 renewals, we sought to reset the relationship between insurers and reinsurers, and believe that there was a structural shift that should allow us to achieve the risk-adjusted returns that our investors require while providing the access to reliable, high-quality capital that our customers need. We did this by increasing rates and retentions, improving terms and conditions, and rationalizing structures.

Over the course of 2023, we saw a shift in the reinsurance market environment that we think sustained the step change momentum and has inured to our benefit. We created significant opportunities to source attractive risk in the lines of business that we write, and these opportunities should result in superior returns for our shareholders. Overall, the shift in the reinsurance market environment has resulted in an increase in rates across certain lines of business throughout the year.

At the January 1, 2024 renewals, our objective was to retain our legacy lines while renewing the Validus business that we chose to keep. Providing consistency to customers and brokers across market cycles is a critical component of our value proposition, and when coupled with our position as the incumbent on many lines of business across the RenaissanceRe and Validus portfolios, contributed to our successful January 1 renewals.

The January 1, 2024 renewals should benefit many of our stakeholders: our customers benefit from access to our highly rated and well capitalized balance sheets; our brokers benefit from access to an expanded and more influential market; our capital partners benefit from increased access to desirable risk; and our shareholders benefit from improvements to each of our Three Drivers of Profit. We think that the momentum that we witnessed in 2023 will persist into 2024.

We believe that our understanding of volatility places us in a preferred position to accept risk, and we continue to see strong opportunities for growth across our portfolio. We have a strategic commitment to reinsurance that we think enhances our value proposition to customers because our reinsurance participation is consistent and broad, and our focus on reinsurance minimizes potential channel conflict with our customers. This commitment was only reinforced by the Validus Acquisition.

We are uniquely positioned to write a variety of risks, leveraging the enhancements we have made over the last several years to our risk and capital management technology and underwriting expertise to cover additional lines of business. In particular, we have invested heavily to understand the influence of climate change on the weather and its impact on the risks that we take. We believe that the RenaissanceRe Risk

100

Sciences team gives us an advantage in properly reflecting the evolving phenomenon of climate change in our models as compared to commercially available models. Our scientists and underwriters have consistently adjusted our global views of risk to consider our present and future expectations of hazard and loss drivers from all sources including, but not limited to climate change, inflation and other factors. We plan to continue to seek to take advantage of additional available opportunities and think that the strategic decisions we have made in prior periods have laid the foundation for these initiatives. Our clients value our ability to be a long-term partner who brings access to multiple forms of capital and innovative, large-scale solutions.

General Economic Conditions

We think that the stresses in the global economy will continue and that this may result in increased market volatility. Global events and geopolitical instability have contributed to widespread economic inflation. We consider the anticipated effects of inflation, including social, economic, and event-driven, in our loss models, on our investment portfolio, and generally in the running of our business, and actively monitor trends in these areas.

Many central banks have been raising interest rates, which could act as a countervailing force against some inflationary pressures. The effects of interest rate trends on our reinsurance and insurance business could be magnified for longer-tail business lines that are more inflation-sensitive, particularly in our Casualty and Specialty segment, and in our other property class of business within our Property segment.

The risk of a global recession is a continuing concern. However, we think that our business model is well positioned to be less sensitive to an inflationary or recessionary environment. Notwithstanding the many uncertainties and challenges that lie ahead, we believe that our track record of responding to industry events, differentiated risk management and client service capabilities, and access to diverse sources of both capital and risk position us favorably in the current environment.

Tax Updates

On December 27, 2023, the Government of Bermuda enacted the Corporate Income Tax Act 2023, which will apply a 15% corporate income tax to certain Bermuda businesses in fiscal years beginning on or after January 1, 2025. The act includes a provision referred to as the economic transition adjustment, which is intended to provide a fair and equitable transition into the tax regime, and results in a deferred tax benefit for the Company. Pursuant to this legislation, the Company recorded a net deferred tax asset in the fourth quarter of 2023, expected to be utilized predominantly over a 10-year period. The Company expects to incur and pay increased taxes in Bermuda beginning in 2025. We believe that the flexible global operating model that we have utilized will continue to prove resilient.

Three Drivers of Profit

We have built a strong foundation across all three drivers of profit, and each made a strong contribution to our successful results for the year.

Underwriting Income

Through disciplined underwriting, we aim to manage the cycle and allocate our capital to the business that will generate the best returns. Over the course of 2023, we were focused on managing the cycle to shape our underwriting portfolio to favor attractive lines. We believe that we have constructed a large and profitable underwriting portfolio that was bolstered by our ability to participate broadly across our clients’ portfolios.

Property

With the global impact of climate change, we expect the frequency and severity of perils such as drought, flood, rain, hail and wildfire to continue at the elevated levels we have seen in recent years. Industry insured losses in 2023 approached $120 billion, and inflation, climate change and geopolitical instability have continued to drive exposure. Due to the underwriting changes we made during the course of the year, including requiring higher rates and attachment points, we believe that this catastrophe activity had a smaller impact on our financial results than it otherwise may have.

At the January 1, 2024 renewals, we improved on what we think was an already strong Property segment portfolio. Rates in the property catastrophe market remained strong and the markets remained disciplined.

101

The other property market continued to experience rate increases, and we will continue to monitor rate adequacy in this area for potential growth opportunities.

Casualty and Specialty

The renewal in our Casualty and Specialty segment was also successful. The Validus Acquisition provided us with significant access to additional Casualty and Specialty business and provided us with an even more influential position in the market. We continued to manage the cycle, focusing growth in the specialty and general casualty lines of business, while reducing in the professional liability and mortgage lines of business.

Our prior work building strong relationships with key customers has allowed us to gain superior access to desirable business. We have focused our growth in attractive areas while reducing on deals that do not meet our return hurdles. We believe that we have a prudent reserving process for our Casualty and Specialty business and remain confident in our reserves.

Fee Income

We take a differentiated approach to our Capital Partners unit, with a focus on first sourcing the risks that we intend to write, and then matching it with the appropriate third-party capital. Our Capital Partners unit continues to grow into an attractive market and benefited from increased access to desirable risk as a result of the Validus Acquisition. We view this as a growing and sustainable driver of profit that we expect will continue to generate increasing low-volatility management fee income. We continue to deepen our relationship with AIG, and they made a significant investment in our Capital Partners business.

Investment Income

We are benefiting from higher interest rates and growth in this driver of profit as a result of our proactive rotation of the portfolio into higher yielding securities as we saw historic increases in interest rates. However, we continue to maintain a relatively conservative position for our investment portfolio.

With the close of the Validus Acquisition, we obtained a relatively large investment portfolio that should contribute to our investment income in future periods.

See the “Risk Factors” section in our Form 10-K for additional information on factors that could cause our actual results to differ materially from those in the forward-looking statements contained in this Form 10-K and other documents we file with the SEC.