RenaissanceRe Holdings Ltd. Aktie

Good morning. My name is Tasha, and I will be your conference operator today. At this time, I would like to welcome everyone to the RenaissanceRe Second Quarter 2026 Earnings Conference Call and Webcast. [Operator Instructions] I will now turn the call over to Keith McCue, Senior Vice President of Finance and Investor Relations. Please go ahead.

Thank you, Tasha. Good morning, and welcome to RenaissanceRe's Second Quarter Earnings Conference Call. Joining me today to discuss our results are Kevin O'Donnell, President and Chief Executive Officer; Bob Qutub, Executive Vice President and Chief Financial Officer; and David Marra, Executive Vice President and Group Chief Underwriting Officer. To begin, some housekeeping matters.

Our discussion today will include forward-looking statements, including new and updated expectations for our business and results of operations. Important to note that actual results may differ materially from the expectations shared today. Additional information regarding the factors shaping these outcomes can be found in our SEC filings and in our earnings release.

During today's call, we will also present non-GAAP financial measures. Reconciliations to GAAP metrics and other information concerning non-GAAP measures may be found in our earnings release and financial supplement, which are available on our website at renre.com.

And now I'd like to turn the call over to Kevin. Kevin?

Thanks, Keith. Good morning, everyone, and thank you for joining us today. For the second quarter, we reported operating income of $548 million and an annualized operating return on equity of 20%. Tangible book value per share grew approximately 6% in the quarter and 27% year-over-year. Each of our 3 drivers of profit, underwriting fee, and net investment income contributed meaningfully to these strong results. This reflects the long-term disciplined execution of our strategy that enables us to continue to grow tangible book value per share.

Our strategy does not change from quarter-to-quarter. We manage the business to build efficient portfolios of risk that maximize profitability. What does change, however, are the tactics we employ to achieve that strategy as markets shift. You can see this in action at the midyear renewals. David will discuss these in more detail, but property catastrophe rates were down high teens, which was consistent with our expectations. Our leadership position allowed us to grow property-cat limit with high-quality clients.

The result is a portfolio that remains rate-adequate at today's pricing. We continue to like the property-cat market. Recent rate decreases have come off the step change in pricing and terms that reset this market in 2023. As a result, property-cat rates remain broadly adequate, and that is what dictates our underwriting behavior. Thinking about our business in terms of rate adequacy provides us a more nuanced strategy than having one playbook for a hard market and another for a soft market.

What sets us apart is that we know how to navigate the transition between the 2 as well as having more tools to do so. We have been navigating the property-cat market for decades and know when to grow and when to exercise discipline. Rate changes tend to be asymmetric. Periods of gradual decreases are punctuated by rapid, large increases, which is what occurred in 2023. We recognized the opportunity at the time and aggressively grew both organically as well as through the Validus acquisition. This positions us well for the current market.

Ultimately, this is a margin business, not a growth business. In a declining-rate environment, discipline is not about how much you write, it's about how much you keep. We start by seeing the entire market on both the inwards and the outward side. This gives us an informed view of where the best risk actually sits. We exercise risk selection to concentrate on the specific accounts and layers where the economics are strongest, and manage line size aggressively.

We then deploy the rest of our toolkit, including retrocession buying and capital partners vehicles, to shape what we have retained. That combination lets us grow the gross portfolio where we see opportunity, while managing the net portfolio to achieve the optimal risk -- the optimal mix between risk and return that maximizes long-term growth in tangible book value. Shifting to capital management. This quarter, we repurchased $350 million of our shares at valuations rapidly accretive to tangible book value per share. We buy our own stock the way we underwrite; when the risk-adjusted return warrants it.

In this market, managing the denominator in the ROE calculation through proactive capital management is as important as managing the numerator by protecting margin. It is the combination of the 2 that allows us to continue compounding tangible book value per share, independent of changes to our top line. Let me now shift to a few comments on reserves. Once again, we reported significant favorable development. We recognize this benefit as the business seasons and if the data supports it. This was the case for most lines this quarter.

Where uncertainty remains and in casualty, it does, we remain cautious. Social inflation continues to impact casualty, and we have been proactive in recognizing trend over the last several years. You can see this is our reserve -- you can see this in our reserving actions where we have been strengthening, and you can see it in our pricing decisions, which reflected the higher initial loss picks for casualty.

Focusing now on Casualty and Specialty results. We reported a combined ratio that was above 100% this quarter. Our results were impacted by the settlement of the Baltimore Bridge collapse, which resulted in a shift of losses from property to specialty. The net effect on our bottom line was relatively small. The reason you see this as a shift between the 2, whereas we review it as largely unchanged, is because we divide our reinsurance business into 2 reporting segments.

This can sometimes lead to confusion as we manage our accounts holistically across both Property and Casualty and Specialty, but report them separately. Underlying Casualty and Specialty performance was in line with our guidance, and Dave will walk you through the mechanics. On the balance of the year, our view is positive. At this point, our underwriting portfolio is largely in place. The portfolio is well constructed and well protected as we approach the peak of the hurricane season.

There has been much discussion regarding to what extent potentially historic El Nino may influence the hurricane season. This is not how we think about underwriting risk, however. We have built a portfolio to perform across a range of outcomes, rather than one that depends on a benign season. Another topic of much discussion recently has been AI. As an organization, we are highly focused on continuing to integrate AI into our operations.

Our vision for AI is to elevate the impact of our people and enable better decisions. I think about this as a combination of augmentation and automation. Regarding augmentation, we have made a variety of generative AI tools broadly available to our employees. They are actively and creatively producing innovative use cases that should provide greater insight into the risk we assume. It has been satisfying to see the number of ways AI is being incorporated into our business, and it's probably fair to say that it is being used in one way or another across everything that we do.

We are now moving towards automation. That said, one thing we have learned is that AI is not a silver bullet. It does not automatically make everything better. Rather, especially in the case of automation, it needs to be employed carefully and thoughtfully. To maximize the benefit of AI, it is not sufficient to simply overlay it on top of existing processes. Rather, many processes need to be reimagined from the ground up.

This is progressing from humans in the loop to humans on the loop, and we are developing significant resources to this endeavor, and I expect it to impact increasing portions of our business over time. As I've discussed in the past, we are rebuilding our REMS underwriting system. And one of the upgrades is to include the integration of AI into underwriting. This is more augmentation, as the goal is to enhance judgment and expand what is possible, new risks, new clients, and new models.

Before I conclude my remarks, a word on our leadership transition. We have previously announced Bob will retire at year-end and Ross Curtis, our Chief Portfolio Officer. They will both remain actively involved in our operations until that time and are focused on ensuring a smooth transition. In 2027, Matt Nuber will become our Chief Financial Officer, bringing a proven record of financial leadership and deep expertise in corporate finance and capital management.

He played a central role in building our capital partners business and scaled our treasury function in step with the growth of our company. Matt has been with us for over a decade and has been deeply involved in every acquisition, capital decision, and significant change over this time. This gives him a deep appreciation for our history, culture, and business, and I look forward to him meeting more of you in the coming months.

To conclude my opening remarks, the goal that guides every decision we make has been consistent to maximize long-term growth in tangible book value per share. We pursue it through underwriting choices that optimize each of our 3 drivers of profit, combined with capital management that optimizes our efficiency. Bob will now discuss our financial performance for the quarter, followed by David, who will provide an update on the underwriting performance.

Thanks, Kevin, and good morning, everyone. This is another strong quarter where we generated operating earnings per share of $12.92 and an annualized operating return on equity of 20.1%. Annualized return on common equity was 24%, with $154 million of retained mark-to-market gains primarily from equities. We continue to steadily grow tangible book value per share by 6% in the quarter and 27% over the last 12 months. These strong results reflect the consistency and strength of our earnings with diversified income across 3 drivers.

There are a few numbers in the second quarter that help demonstrate this. First, 15 points, which is the continued contribution from fee and investment income to our ROE, which forms a stable base of earnings quarter-over-quarter. Second, $600 million, which was our underwriting income. Underwriting builds upon the stable base of income from fees and investments. And finally, $350 million, which was the amount of capital we returned to shareholders through share repurchases, a consistent level to the first quarter.

So far in the third quarter through July 20, we repurchased an additional $83 million of our shares. I'd like to spend some more time on capital management because it has been an important lever that we have been employing to grow shareholder value over the last 2 years. Kevin spoke about our focus on managing both the numerator and the denominator in the ROE equation. On the denominator side, since the beginning of Q2 2024 through Q2 2026, we have bought back $3 billion of our shares at an average price of $258 per share.

On the numerator side, over that same period of time, we generated $4.6 billion of operating earnings. Since the beginning of Q2 2024, our diligent capital management, coupled with consistently strong income from our 3 drivers of profit, has enabled us to grow tangible book value per share by 66% and benefit operating earnings per share by more than 20% as a result of the lower share count. Going forward, we remain focused on growing tangible book value for shareholders by optimizing our income and managing our capital.

Our underwriting book remains attractive. We continue to expect a similar level of management fee income and continue to have a positive outlook for investments. We will continue to take a disciplined approach to capital management and anticipate continued share repurchases in the third quarter. Now I'd like to turn to a more detailed view of our 3 drivers of profit in the quarter, starting with underwriting, where our portfolio continues to perform well with an adjusted combined ratio of 72%.

We reported strong accident year results with a low level of catastrophe activity and 9 percentage points of favorable development. In property catastrophe, the current accident year loss ratio was 12% and the adjusted combined ratio was 9%. This included 25 percentage points of favorable development from a variety of accident years. Other property had another excellent quarter with a current accident year loss ratio of 53% and adjusted combined ratio of 52%. We had 35 percentage points of favorable development primarily related to the attritional book.

In Casualty and Specialty, the current accident year loss ratio was 67%, 68%, and the adjusted combined ratio was 102%. We reported 4.4 percentage points of prior year adverse development in the segment, which included 4.1 points related to the Baltimore Bridge collapse. This was a result of a shift in reserves from other property to Specialty, and David will talk more about this in his prepared comments, but the overall impact to the company was an increase in net negative impact related to the bridge of only $12 million in the quarter.

Additionally, there were 0.4 percentage points from purchase accounting adjustments impacting the prior year. Overall, gross premiums written were $3 billion, down 12%. The largest movements were in property catastrophe, where the top line was down 14%, excluding the impact of reinstatement premiums and Casualty and Specialty, where it was down 15%. For property catastrophe specifically, lower rates at midyear drove most of the decline.

As David will detail, we continue to find this business to be rate adequate and successfully held our lines while finding select opportunities to grow, helping to offset some of the rate decline. We chose not to deploy our collateralized vehicle, Upsilon, at the midyear renewal, instead renewing the business on wholly-owned balance sheets. This should serve to limit the impact on the top-line decrease on the bottom-line profitability.

Other property gross premiums written were up 9.5% this quarter. Last year, there were a few one-off downward adjustments, and without these top line was roughly flat. In Casualty and Specialty, we continue to shape the book. A portion of the decline in the top-line growth was driven by proactive reductions, and a portion was driven by timing of deals or premium adjustments, specifically. General casualty was down 17% as we continued to reduce our general liability portfolio.

Specialty was down 16% due to a combination of exposure reduction in classes like cyber, rate reductions and premium adjustments and credit was down 19%, driven by timing of a few large deals that were not up for renewal this period. This quarter, we purchased additional ceded protection across our portfolio. In our property catastrophe book, our purchases were at more attractive rates than last year. This resulted in ceded spend being about flat. The decline in our ceded in our financials relates to the non-deployment of Upsilon, which I previously referenced.

In Casualty and Specialty, we have increased our cession rates across the portfolio, particularly in casualty lines, which you can see reflected in the growth in ceded spend and a decline in net premiums written. This quarter, between our ceded program and capital partners, we shared about 35% of Casualty and Specialty gross premium written compared to 25% a year ago. Looking ahead for the third quarter, we expect other property net premiums earned of around $330 million and an attritional loss ratio in the mid-50s.

Casualty and Specialty net premiums earned of approximately $1.3 billion, and adjusted combined ratio in the high 90s. Turning next to fee income, where we generated $83 million in fees, including management fees of $48 million and performance fees of $35 million. Management fees remained strong, although down compared to last year. And as a reminder, in the second quarter of 2025, management fees were elevated because we recaptured DaVinci fees that have been deferred because of the California wildfires. Performance fees were particularly strong, reflecting the favorable development we discussed earlier.

In the third quarter, we expect management fees of around $50 million. Performance fees are highly dependent on underwriting results, but should average around $30 million per quarter. However, this can change as a result of large loss events or prior year development. Turning now to investments, retained net investment income was $314 million, up 3% from the first quarter or 10% from a year ago. This is an all-time high.

Net investment income was a significant contributor to our results, with fixed maturity, short-term investments and credit contributing strongly. We reported $154 million of retained mark-to-market gains. This was driven by gains in equities, partially offset by losses in fixed maturity tied to higher Treasury rates and lower commodity prices. We continue to extend duration to lock in the benefit of higher rates.

In the quarter, the retained portfolio duration modestly increased from 3.4 years to 3.5 years, and this is up from 3 years at the end of 2025. For the third quarter, we expect retained net investment income to continue to trend modestly higher. Finally, a few comments on expenses and taxes. Our operating expense ratio was 4.3%, which is down from last year due to Bermuda tax credits and higher overrides from our casualty ceded program. We continue to invest in the business and expect the expense ratio to build towards 5% as the year progresses.

On tax, our overall effective tax rate on GAAP net income was 12%. But as a reminder, we are not taxed on the earnings attributable to our capital partners investors, which sits in non-controlling interest. The tax rate on the income applicable to RenaissanceRe shareholders was just over 17%, which reflects the 15% Bermuda corporate income tax as well as some tax in other jurisdictions. To wrap up, this was a strong quarter, demonstrating the power of our diversified earnings model and the benefit of the actions we have taken to manage capital to continue to drive strong shareholder returns.

And with that, now, I'll turn it over to David.

Thanks, Bob, and good morning, everyone. In the second quarter, our underwriting team led the market at the midyear renewal and constructed an optimal portfolio of risk. We applied rigorous risk and portfolio analysis to identify attractive opportunities and drew on the strength of our client relationships to turn those opportunities into signed lines. I couldn't be more pleased with the team's execution and with the attractive diversified portfolio we have built. Underwriting judgment, at its essence, is balancing margin, risk, and the value of a client relationship.

This is institutionalized within our underwriting culture and our integrated operating model, and we do this better than anyone. It has driven our strong underwriting results over the last several years and is core to RenaissanceRe's long-term success. As I've discussed on prior calls, at each renewal, our underwriting team has 2 objectives: First, to deliver our market-leading value proposition to clients and brokers. That supports a durable pipeline of renewable business, first-call status, and favorable signings that are resilient to competition.

Second, to construct the optimal underwriting portfolio across lines to support each of our 3 drivers of profit and generate capital-efficient, attractive returns, both in the current year and over the cycle. In a competitive market, you can see the benefit of the first objective, delivering our value proposition consistently year after year. Increasingly, we are seeing a 2-tiered market emerge in lines like property catastrophe and specialty.

Clients are coming to us first to anchor their programs because we support them through the cycle, deploy significant capacity, bring an expert view of risk, and engage with them across lines. This dynamic means that we can retain full lines where we choose to participate and grow where there are profitable opportunities. Excess capacity in the remainder of the program means that following markets are signed down and don't get the lines they want. This brings me to our second objective, which is what the majority of my comments are about this morning.

We maintain a diversified book across property, Casualty and Specialty because that diversification is what fuels all 3 of our drivers of profit. Our job is to know when to grow certain lines and when to shrink others. We then use retrocessional protection to optimize margin and capital efficiency across the portfolio. I'll step through our actions in the quarter, starting with property. At the midyear renewal, our leadership position in client relationships enabled us to grow property catastrophe limits with high-quality clients in the U.S. Rate decreases in our portfolio were in the high-teen percentages.

This is down somewhat from the low-teen percentages we saw at January 1, but we view the rate adequacy in our portfolio to be equally strong for both sets of renewals. Rates at the midyear renewal last year held up better than January 2025 because many programs were repricing after the California wildfires. To put this in perspective, over the last 2 years, rates in our January 1 and June 1 U.S. property-cat book are both down by about 20%.

Rates increased by around 50% in 2023. Set against that increase and improved terms and conditions, we continue to believe U.S. property catastrophe business has a strong level of rate adequacy. At the midyear renewal, we successfully grew U.S. property cat limit by $600 million. We did this by growing on nationwide accounts with key clients and California programs where rate adequacy is particularly strong.

In addition, we held our share on Florida domestics after 3 years of successful growth and maintained our private pricing on 65% of this Florida premium. We also reduced on some programs where the clear price did not reach our hurdle. Year-to-date, even though rates are down in the mid-teens, our property cat gross premiums written are only down 9%, excluding the impact of reinstatements. This is excellent execution and demonstrates our ability to deploy capital into high-margin opportunities.

Our Florida book is a good example of how we use all the tools at our disposal to shape a position over time. We reduced this business significantly in 2020, as we found it unattractive due to inadequate rates, poor claims practices, and excessive litigation. However, we maintained excellent client relationships. And over the last 3 years, we rebuilt our position to historical levels as rates improved, tort reform stabilized the market, and the private market expanded. We have a very attractive book of Florida domestic accounts.

In the second quarter, we successfully retained the business and maintained our favorable pricing above market terms. In other property, the business continues to produce strong results with low current year losses and favorable prior year development. We have selectively reduced risk in some areas such as South Florida, where rates are under pressure and we see better returns in the property-cat book. This business benefits from our expertise in individual location underwriting and portfolio shaping with ceded. If rates continue to deteriorate, we will reduce our exposure in a targeted way to maintain attractive expected returns.

Turning now to Casualty and Specialty. We continue to successfully shape our portfolio by maintaining our positions in preferred classes, actively managing our net exposure through ceded reinsurance on Fontana and supporting customers who are demonstrating the strongest underwriting and claims performance. As Kevin discussed, there are some shifts in how we reserve the Baltimore Bridge loss that impacted Casualty and Specialty results this quarter. Specifically, we part of that loss from other property to Specialty.

This resulted in an underwriting loss and adverse prior year development for the Casualty and Specialty segment. Excluding the Baltimore Bridge and purchase accounting adjustments, prior year development for the segment overall would have been modestly favorable with an adjusted combined ratio in the high 90s, consistent with our guidance. This shift between segments related to changes in the Baltimore Bridge settlement structure, which allows property insurers to recover against marine liability policies. The market's total industry loss estimate also increased.

But as we reserve this event to a $3 billion industry loss from the start, the overall net negative impact to our bottom line was small. Most specialty business renews at January 1. And with the increase in the Baltimore Bridge loss, the war in the Middle East and recent energy and aviation losses, we believe rates need to stay firm. Moving to general liability. We are continuing to monitor improvements in claims handling as well as rate change to ensure it is keeping up with trend.

The market has made good progress, but trend continues at an elevated level, and we remain cautious in our underwriting. We are continuing to support clients who are the most effective at managing both rate and claims and are selectively reducing on others. Credit continues to perform well and remains attractive. Profitability is resulting in increased competition, but we've been successful in holding our lines.

Finally, a brief comment on the war in the Middle East. The war has returned to an active phase with the tax on shipping and infrastructure in the region. We are aware of assets that have been impacted and believe any impact would be covered in our current reserves. But we'll continue to monitor the situation closely as facts on the ground could change rapidly. Moving on to a few comments on our ceded strategy.

As Kevin mentioned, our ceded purchases alongside our capital partners' balance sheets play an important role in shaping the portfolio and preserving margin. In property catastrophe, we increased ceded limit, maintained retentions and improved coverage on a larger subject portfolio while keeping spend flat. As a result, even though we wrote more property catastrophe limit, our risk going into wind season is essentially unchanged. In Casualty and Specialty, we also use ceded reinsurance to shape the net book.

As Bob said, between our ceded program and capital partners, we share about 35% of Casualty and Specialty gross premium written compared to 25% a year ago. This is consistent with historical levels for the segment. These ceded purchases help preserve margin, generate fee income through overrides and manage underwriting volatility. For the casualty book, most of the cession is proportional. Retrocessionaires pay an override, which covers our expenses plus the margin to assume a share of our book and benefit from our access to business and underwriting acumen.

For specialty lines, we purchased proportional coverage, and we also manage cat-like volatility through ceded excess of loss structures. In 2026, we expanded these covers in cyber, marine, energy and aviation. Looking ahead, we've already begun preparing for the January 1, 2027 renewal, and we're in active discussions with our clients about how we can support their portfolios across multiple lines. That forward engagement is central to how we manage these relationships, and it is how we position ourselves well ahead of year-end.

So to close, this quarter demonstrated both of our underwriting objectives working together. Our value proposition made us first call in an increasingly competitive market, and we built a diversified, well-protected portfolio, growing property catastrophe where the returns are strong, pulling back where they aren't and using our ceded protection to manage expected profitability.

And with that, I'll turn it back to Kevin.

Thanks, David. In closing, this was another strong quarter. We are making the underwriting and capital decisions that compound tangible book value per share over the long term. Property-cat business remains attractive, and we continue to find opportunities to grow the book. The interest rate environment continues to improve, supporting persistent net investment income. Fees remain robust and should continue to be a capital-light diversifying source of income. In short, each of our 3 drivers of profit performed well, and we continue to return capital to shareholders at attractive multiples, and we remain confident in the balance of 2026. And with that, we'll open it up for questions. Thanks.

[Operator Instructions] We'll now take our first question from Elyse Greenspan with Wells Fargo.

Building upon that, right? If we see a lack of significant losses this hurricane season, when do you guys think the property-cat market might bottom? Or do you expect that we can continue to see rate declines right from a pretty attractive level until there are losses? Or when Kevin and David, do you think that we get to some kind of flattening in '27, '28? Like I guess, how do you think about the market developing in the absence of any significant losses?

Elyse, I think we missed the first thing that you said. There was a problem with the communication. Can you just repeat the first part?

Okay. I mean, I was just trying to ask, I guess, you guys are talking about the property-cat market remaining attractive. So building upon that, right? If we see a lack of any significant losses this hurricane season, how do you guys think about the market evolving from here? Would you expect that we continue to see rate declines coming off of this attractive level until there are losses? Or at some point, do you see us getting to a bottom in '27 or '28? Like how are you seeing the evolution of the property-cat pricing in the absence of significant losses for the reinsurers?

Okay. Thanks for the question. The market moves in cycles. I would expect that from a macro perspective, there's a lot of supply in the market. We're still seeing an increase in demand, but at a reducing level compared to what we've seen over the last couple of years. That dynamic, I think, will set up for continued pricing pressure moving forward. That's kind of what's going on in the overall environment. From our perspective, we have a long track record of executing into changing markets. This is not a soft market. It is a changing market, which I think you've highlighted well.

We like where the rates are. We are building a portfolio that uses more of the tools that are available to us, which we've done historically over time. So I would expect that there'll be more rate pressure. But as the market continues to become more competitive, we will increase our output to the market, which is historically what happens in a declining-rate environment. So when I look forward into '27, I would expect competition to remain robust, but I don't anticipate that it will create major obstacles for us to continue to build a great portfolio and to continue to compound tangible book value per share.

And then my second question is on the Casualty and Specialty segment. You guys saw a big reduction in premium there. You guys are still booking right, the accident year to around like 100 or slightly below that, right? Adjusting for the Baltimore Bridge this quarter. And you've pointed to conservatism, right? In your pick. So I guess my question is, first, like just a little bit more color on just why you're seeing such a big decline in premium there. And then secondly, like we hear about loss costs, right? You guys pointed to just some high loss costs in the business in your prepared comments. So can you just help us think about just the comfort in the back book and the picks you have there because away from the bridge, right? I think you guys highlighted there really was not any significant movement in reserves.

Elyse, this is David. I can take that. I think one of the things I'll comment on is you mentioned the movement in the book. So we're always optimizing the book with the opportunities we see. And what we saw this quarter, second quarter and a bit year-to-date was we have made some portfolio shaping decisions, mainly in the general liability space. I mean we're a couple of years into the market fully recognizing that trend was something that needed action. And the market has been doing a pretty good job taking action there, but some clients have done better than others.

So the trend is continuing. We're watching that very closely. And what we did in the second quarter was we took action and reduced some of the portfolio there. The other thing that's impacting our net written premium is the ceded structures. And ceded is something we have used for years in the Casualty Specialty segment, also in the Property segment. We see more opportunities to cede risk at attractive terms.

It does have a positive effect on the portfolio of reducing volatility, turning risk income into fee income through the overrides also lets us maintain an option on the upfront book. So with all the uncertainty that is in the market, this is the way that we're confident is the right way to manage through in an environment where trend is persistent and there's still a risk to the book, and we're doing the right things to manage that.

Our next question will come from Josh Shanker with Bank of America.

Yes. I hope this works. I'm on a train and I apologize. I wanted to dig a little bit into the credit decline. Bob said it was due to the nonrenewal of some large transactions in the quarter, they weren't up for renewal. Are they up for renewal in another quarter? Or has they deep decided to take all that business in-house?

Josh, this is David. I can comment on that. What we see in the credit book is a lot of the transactions are multiyear. And when they initiate, they're more lumpy. So it's not a smooth quarter-by-quarter renewal book. Our earned premium has stayed relatively consistent there. It's just that we had some multiyear transactions that we initiated last year that weren't repeated with this year's gross written premium. Overall, we're looking for opportunities in the credit space. We found some in 2025. We'll write more credit book, but I see our credit book is essentially flat.

All right. And then with the higher cessions in the general casualty book, because you see the pricing [indiscernible] combined ratio. When you see a bunch of business that was formerly retained and there's almost no underwriting profits in the book on a calendar or year basis, what is really the impact of the cessions? And how should we think about that?

Josh, you're breaking up a bit, but I think you were asking about the impact of the cessions on general liability in the Casualty and Specialty business?

About 100% combined ratio, it doesn't seem like it should impact it one way or the other.

Well, and so what we -- the way it comes to the books, and one thing I'll comment on is we were buying more cover in 2026. That cover essentially incepts in the beginning of 2026, but covers everything that we'll write during the year. So the amount of -- that will continue to ramp up and affect the books more and more over the year and into next year. It has a positive effect on the books in a couple of ways. We get an override.

So the override our expenses and then some. So that will work to improve the net margin in the book, all other things equal. We also get reduced volatility because as volatility may arise in the future, we've now ceded a portion of the book and there's less exposure at risk. So all those combined are the 2 effects on the overall book. The other piece is that we're able to maintain options on the inwards book with -- despite the uncertainty, and we're able to act on that even when the market improves in the future.

We'll take our next question from Yaron Kinar with Mizuho.

I wanted to go back to the other property book and understand what the drivers for the 5% growth [indiscernible] gross premiums written on an adjusted basis were because it seems like it's going against the trend we've seen in recent quarters of some declines.

Yaron, this is Bob. I'll take that. What I said in my prepared comments, I did acknowledge that it's roughly flat because last year, we had some premium adjustments that would have been downward pressure on it. So what you're seeing in terms of real risk change over year-over-year, it's about flat. It doesn't look like it grew by 5% or 6%. That makes sense as an EPI adjustment is what we've talked about in the past before.

So I thought it was 9% growth and then 5% with the adjustment. So maybe I misunderstood.

I didn't call out the adjustment. Actually, largely, it's flat. It's not 9%. The risk when you think about the underlying risk in terms of limits is flat.

Okay. That makes sense. And I guess I just misunderstood earlier. And then on the buyback front, I don't want to quibble too much here, but it seems like the quarter-to-date buyback is a little bit lower than where it was a quarter ago. Are you still thinking that $350 million is roughly the right run rate for the foreseeable future?

Great question. We're talking about a week earlier, okay? We're talking a week earlier than we did the quarter a year ago. In fact, we're -- I think right now, honestly, we're around $95 million as today. So we've pretty much exhausted the plan. And we're looking into wind season. We have the capacity and the capability, as I said in my prepared comments, we didn't give you a number, but we're still focused on buying through the wind season, absent any large events that occur. So nothing really changed in our capital plan.

We'll take our next question from Meyer Shields with KBW.

Kevin, in the past, you've talked about different views between the pricing and reserving actuaries for casualty lines. When you're increasing the cessions, which of those actuarial opinions is driving that?

Well, each of the cessions are going to somebody who's doing their own analysis as to what they are assessing for the performance of the portfolio. We share with them what we believe the portfolio looks like. Right now, there's not that much of a difference between our pricing and reserving. In other times, there's been a bigger gap between the 2. So it's probably less of an issue, but they're doing an independent assessment, and we're sharing the information with them. I would say most of them are probably looking more at the pricing, but it really depends on who the cedant is. And some of these are more structured as well, so it's a little bit more complicated.

Okay. Understood. And then I guess it's probably for Bob. But if we look at the acquisition expenses in other property, whether we look at it on a year-over-year basis or quarter-over-quarter, it's up about $20 million. I was wondering if there's anything unusual in that?

You're referring to the operating expenses or the -- I kind of missed the focus on the question that you were looking at, sorry.

Acquisition expenses in other property.

Right. It's down slightly because this is as a result of a prior year deal that boosted it up probably about 1 point that was down...

No, I was talking about. Go ahead, I'm sorry.

So the current accident year loss rate is about right, okay? The current acquisition rate in this quarter is more in line with what we expect. No, I'm going to change that. I was referring to a different -- sorry, the acquisition ratio is up. I apologize. It is up. There was a one-time event that came through that did run through this quarter as opposed to last year. 29% to 30% is roughly the right acquisition expense ratio for other property.

We'll take our next question from Mike Zaremski with BMO.

Thinking about some of the, I guess, opportunistic shrinking of the portfolio, especially in Casualty and Specialty on an exposure basis. Should we be thinking about a material capital free-up as well, or not so much because when you grew that, there was a big diversification benefit? Any color would be helpful.

Yes. We -- with or without the changes in the portfolio, we're in a very, very strong capital position. I think you point out something that's important. We actually deployed more limit into the property-cat space because we still find that to be quite attractive. As David mentioned, we -- our exposure this year compared to last year going into wind season is relatively flat. This isn't a perfect transition.

But with that, you can assume the capital consumption within the portfolio reflects the flat exposure that we have going into wind season. The casualty has a lower capital charge per dollar of premium compared to the property changes that we've made. So I wouldn't think about the changes in our top line being directly correlated to the capital deployment. That said, we're in a very strong capital position to continue to grow the book where we find opportunities and return capital to shareholders through share repurchases.

Okay. That's helpful. And then moving to operating expenses and investments, maybe for Bob. When we -- you called out the Bermuda tax credit benefit this quarter, but then I think in your prepared remarks, you're still kind of guiding to the 5% OpEx ratio for the back half. So it implies a big bump. Maybe you can remind us just as your views changed on the -- since the Bermuda tax credits are cumulative through '27, you got another big bump. Are you all still expecting to spend the vast majority of that? And if you are, would those maybe be onetime expenses in '26, '27, so there's an eventual kind of falloff in some of those technology costs if we're thinking really '28 and beyond?

Thanks for the question. Yes, you got the tax right. We modestly higher than 15%. The Bermuda tax credits came in through operating expenses, reminding you that only about 2/3 of them come through the operating and the other 1/3 comes through the corporate side of it. But we continue to invest in the business. That's something we've talked about.

We continue to invest in the business in areas as we continue to optimize at scale. So we're projecting growth, like I said, up to 5% by the end of the year. We had a couple of expense benefits that came through. So we feel that 5% kind of plus or minus is where we're at. I said 5% to 5.5% before. We feel we're coming in at the low end on it now.

Got it. And no comment about just some of these investments. Are some of these maybe onetime that would fall off in outer years? Or these would be just.

Yes, that's fair. That's fair. We're investing in our front office systems. There's going to be a surge in that expense. It will taper off over time. We have other investments we're building inside the company to help out with the scale that we've created. over the last couple of years. So those are investments that we make that will taper off over time and create efficiencies. And as we talked about reinventing processes, we're using AI to help in that, but that costs some money upfront, but we do have a significantly low operating expense ratio, and we feel very comfortable that, that gives us the opportunity to make these investments and knowing that we've got the payback coming.

We'll take our next question from Andrew Andersen with Jefferies.

Specialty and credit has become a larger percentage of that portfolio over the last several years within CNS. How much additional opportunity is there to increase the mix in that book? And at what point are you kind of running up against further competition or just internal constraints?

Andrew, this is David. I'll comment on that. So we're very focused on where we can deploy into high-margin businesses. As we think about growth opportunities, credit is one. It's a high-margin business. We're looking at the extent we can deploy more, we will. But those deals are lumpy. It's hard to know what will happen quarter-by-quarter, year-on-year. We have a great market position in Specialty. Regarding loss activity in Specialty, the Baltimore Bridge is now, I think, the largest marine loss ever on the marine liability side.

So we think that will present some opportunity in Q1. Most of that business is 1/1 renewal, so it's a bit early to tell. There's a lot that could happen between now and then. But we have a really strong team. Post-Validus, we have a market-leading specialty team as we put 2 market leads together and retain the book. So we're really well positioned for that. I think -- but the counterbalance is that there's a lot of competition in the market, both in property-cat and in Specialty. So we'll be well positioned when the growth opportunities come, but it may not result in top line quarter-on-quarter, year-on-year.

And I think you mentioned you chose not to deploy Upsilon at the midyear, but maybe you could just talk about how you're thinking about growing the fee-bearing capital versus balance sheet capital over the next year or so.

Yes. Upsilon is relatively small anyway. So that was a strategic decision we made for this year. We continue to see interest in our vehicles. We actually have more capital interest for the vehicles than we have opportunity to include them into the structures. The cat bond mandate continues to perform well, and we're continuing to see interest there.

So when we look at it, our capital partners business remains in a very strong position. We have very strong capital opportunities to deploy, should the market provide those risk opportunities to match them with. So we feel good about where we are. But I would say right now, where they're sized now is likely to be where they're sized next year. This year was relatively close to where they were sized last year.

We'll take our next question from Chris Hartwell with Autonomous Research.

First question really is just on -- back on to the renewals and specifically terms and conditions. I've been hearing a lot of chat amongst brokers around the balance of risk sharing between primary insurance and reinsurance. I was wondering if that had any bearing through the midyear renewals. And I guess, moreover, I'd be very interested in your thoughts on how brokers or cedants may push on terms and conditions through next year and whether the reinsurers can really defend current levels. So I'm sort of thinking about sort of attachment points, aggregates, that sort of thing.

Chris, this is David. I can comment on that. So overall, terms and conditions remain really strong on the property-cat space. Since the step change in 2023, that was a big reset in terms and conditions, which was coverage structure and level. And while we've seen pressure on rate, we've seen pretty stable terms and conditions. There's been talk about should companies buy down into the earnings level. In general, that's gone the opposite way.

There's been more demand at the top end and some reduction in demand at the bottom end, which might have been creeping into the earnings level. So still very healthy there. The aggregate programs where there's been a bit of demand and growth recently, that's all definitely at the capital level that we are participating there. They're well priced from an attritional loss model perspective, from a premium perspective, and attaching at the capital structure. So we look at terms and conditions and think that leads a lot of stability to our ability to continue to take risk on the cat side.

Wonderful. Actually, a follow-up question. I was wondering if you could give a little bit more color on the cyber environment. I noted that you've got some sort of volume adjustments that came through. I don't know whether that's environmental or sort of relating to ceding company activity. I presume the latter, but if you could share some thoughts there.

Yes. So cyber, we grew cyber rapidly in 2021, 2022 when rates were increasing significantly and the claims were also decreasing at that time. What we've seen is the rate has come off those peaks and claims have been returning back to previous norms. So we've been taking some cyber risk off the table. There's been some reinsurance portfolio adjustments that we've made proactively there. Also with the reducing rate, our clients end up writing smaller books.

So those are some of the premium adjustments that come through about a year after the fact. But that's the way we're managing cyber. We've also made some ceded purchase decisions on the cyber side. So we have a smaller and better-protected cyber book than we did at the peak of the market.

We'll take our next question from Ryan Tunis with Cantor Fitzgerald.

First question, just on capital planning. So year-to-date, the equity base has grown. I recognize only 2 quarters in. But just given the changing market environment, I wouldn't think that there would be a goal to continue to grow the equity base. I'm just wondering if I'm thinking about that right.

Yes. Thanks for the question. Year-to-date, we've grown through earnings with just over $900 million. We've repurchased probably close to, let's just call it, $800 million. So it's a modest increase year-to-date. I feel really good in the position that we're going into the wind season. And as I said in my prepared comments, we fully expect to continue buying shares back. But obviously, Q3, we started. We'll see where it goes. But backing off on buying shares is not going.

Got it. And then just a follow-up on the Florida renewal. Can you just share any general themes if there were any, when you did walk away from business, what were some of the general themes involved there?

Ryan, this is David. It was mostly just too much pressure on price based on the exposure in that cedent's portfolio and our view of that. As we model each individual portfolio from the ground up, each individual peril, the market may have a different view. And if the client was pushing too hard, the clearing price was lower than what our view of the appropriate clearing price was, that's when we walked away. There were very minor attempts to broaden coverage and we would have walked away from those, but those were largely unsuccessful. It was mostly rate.

Touch just on some of the stuff you're seeing in the casualty with rate and claims management?

Yes. And actually, that's a good point. So on the casualty side, we did make some portfolio adjustments there. And while we're seeing rate continue to keep up with trend in aggregate, we've seen that some companies have been less successful than others. And with their portfolios showed signs that they weren't able to keep up with trend, he on the right track to improving profit margins. Those are the targets that we use to reduce our support on the casualty side.

We'll take our next question from Pablo Singzon with JPMorgan.

Thanks for the detail you provided on your use of retrocession. I was wondering if you could provide perspective on the relative returns of the business you're writing on a gross versus net basis. It sounds like the returns on these placements are still attractive to you on a gross basis. Is that accurate?

That is accurate. I think we are using retrocessional coverage to position the portfolio for the future. One of the things we do, if you go back to October of last year, we built the pro forma portfolio as to what we wanted our risk to look like and what we thought for -- we have for pricing expectations going into this year. We've achieved our objectives on the portfolio included in those objectives was to manage the level of net risk, both on the casualty and specialty side on the property side with the use of retro.

We think that positions us well going into the 1/1/27 renewal, which, again, as we mentioned earlier, we expect that there'll still be quite a bit of supply coming into the market and some rate pressure. So a lot of this is about positioning the portfolio for where we want to be over the next several years. We are still seeing a gross portfolio that's well in excess of our cost of capital, and we're enhancing that with the use of retrocessional purchases on the net portfolio.

Makes sense. And then a follow-up. So many primary companies have flagged MGAs and the capital standing behind them, whether funds are reinsurers as an area of increasing risk. So do you agree with that assessment? And can you talk about your participation in that part of the market, right? And I guess maybe comment more broadly about your approach to client selection.

Yes. I think as the market softens and if you look back historically, careful monitoring of MGAs becomes increasingly important. I think that is going to be -- has been true and is going to be true as markets continue to change and evolve. From our perspective, we are not a very large writer of MGAs and the MGAs we have are more concentrated with relationships we've had for a long period of time.

Do you want to comment more specifically, Dave?

Yes. I would say on the underwriting side, where we deploy capacity through MGAs, the most significant piece is on the other property side, where we've written cat-exposed E&S property through MGAs who are an efficient distribution source for that. In those kind of situations, we control the underwriting and the pricing and the cat exposure. So we're very hands-on in systems that are tied directly into the MGAs to we make sure that we're on top of changes in risk there.

As an example, one thing we did earlier this year is we reduced significantly some of the other property risk in Southern Florida because we saw that we could deploy that capital more efficiently within property cat. So this is something we closely monitor. And I think we have a good degree of skill in thinking about how to deploy both with -- through the other property and then where we might enhance return to property cat.

We'll take our next question from Brian Meredith with UBS.

I was just curious, David, if you could comment a little bit about the new alternative capital that we've been seeing coming into the marketplace. Has it been disciplined? Or maybe are we heading towards a place with that where something like before 2020 where things got pretty competitive with alternative capital?

Yes. I think an area where we've seen a change over the last several months or even a year is the increase from private credit funds looking for long-term assets. I think we've talked about this before. If you look historically, property -- sorry, capital has come into the market looking for low beta risk from property-cat and thinking about how that can enhance their portfolios. Capital that's coming in now has existing investment strategies and looking for assets that can fund the investment strategies that they have. Those vehicles, there's been a lot of talk of them. There's been vehicles that have done. They haven't moved the market at this point in time, something we're very close to. We're in all those discussions, and we continue to monitor how much capital is coming in and what effect it's having. At this point, it's been negligible.

That's helpful. And then I'm just curious, any kind of meaningful movements in terms and conditions or loosening of terms and conditions at the renewals?

Terms and conditions have stayed very strong, really ever since the step change in 2023. We've seen pressure on rate, but the terms and conditions have remained strong. We're still attaching at the capital level rather than the earnings level, which is one of the most important and coverage has not broadened. So we're happy with that.

We'll take our next question from Tracy Benguigui with Wolfe Research.

You mentioned that you're still seeing positive gross portfolio that's well in excess of your cost of capital, enhanced by the use of retro on the net portfolio. Can you touch on the current pricing spread between retro and reinsurance prop-cat pricing? And what is the profile of your retrocession partners?

We have -- so the vocabulary we tend to use is how much we keep because we have so many different types of structures. We're sharing risk with balance sheets that are funded by third-party capital. We're trading with ILS funds. We're trading through traditional structures and some with our partners. It depends on the vehicle. We don't disclose what the spread is between the products we're buying and selling, but we have more tools and better transparency on that than I think anyone else. We've done this for a long time. And as I mentioned earlier in my comments, as markets become more competitive and rates compress because of that competition, we tend to increase our alpha to the market. And one of the ways we do that is by managing the amount of retained risk we're keeping.

Just a quick follow-up on the cyber discussion. Does any of your reduced exposures reflect maybe a lower appetite in the wake of Mythos specifically? And are you seeing the same pullback by cedents?

So I think Mythos is one example of how the risk landscape could be changing, and we're monitoring that very closely. We haven't seen any uptick in claims due to AI or Mythos or their effect on the market so far, but it's a kind of thing that we'll continue to monitor. Overall, even without that, the claims have come up to historical levels and with some increase in ceding commissions and some rate reductions, we don't see the profit margins as attractive as they were a couple of years ago, which is the main reason behind our change in portfolio.

We'll take our next question from Alex Scott with Barclays.

I wanted to circle back on the casualty business and particularly the pieces of it that you weren't willing to renew. Could you just talk about what you did in terms of looking at the reserves and your comfort with the loss picks on particularly the areas of the business that you weren't willing to renew? And just what would you say to help us gain some comfort with how those have been reserved for in light of not wanting to renew that stuff?

Alex, this is David. I guess the way I would characterize our approach to the casualty business is we've been following for the last couple of years very closely and getting more data from our cedents, monitoring their portfolio at a granular level. And overall, my underwriting view is that the market has been doing a good job, getting rate, improving claims handling. 2-year check-in, we're still early stages of what is a long process to get -- to fight the social inflation and the plaintiffs bar.

But it's been clear in the data that some clients were more effective at doing that than others. And the way that shows up is we look at the actual versus expected emergence. We look at what their -- how they've evolved their portfolio and the layers they're writing. Are they in that kind of working layer right above the first excess where there's especially high amount of claims being kicked into that because the personal injury awards are the claims that are seeing the most inflation.

It's not the class actions that necessarily hit the 500x500 layer. It's the personal injury awards that might hit a 25x25 or 50x50. So it's some data-driven, but also underwriting judgment in terms of our opinion as to whether client A versus client B and structure A versus structure B will be the most resilient if inflation continues. And we do think inflation will continue. All the signs are -- while there is some tort reform, there have been some favorable court decisions at the Supreme Court level that could be reversing the tide, that will still take time to come through, and we're planning for continued inflation.

Okay. Follow-up on tort reform as well, actually. I wanted to see what you think on Florida tort reform and how that could be impacting property loss trend and just your view of potential losses from wind and that kind of thing. I've heard that's the reason for some of the softening. Is that something that you're giving credit for in your loss trend?

Yes. I think on previous calls, we've talked about the tort reform in Florida and that we were conservative in our assessment of the impact it would have in Florida. It actually had more impact than what that conservative original assessment anticipated. So we have seen a real benefit from it. When we were going in with a risk-adjusted view for Florida, part of that risk-adjusted view was the reductions taking into account the benefit of the tort reform. So we're pleased to see that other states are looking at that, and we've seen some expansion of it beyond Florida, but we do think it's been meaningful, and we were happy to give credit for it in this year's renewal.

We'll take our last question from David Motemaden from Evercore ISI.

So just wanted to just ask about property-cat rates, which is -- it's good to hear that they remain adequate after being down, call it, mid- to high teens after the big renewal this year. If we see similar rate declines next year, just wondering how you are thinking about just rate adequacy in the market.

Yes. I'll start, and then I'll turn it over to Dave. So there's 2 assessments that need to be done when thinking about property-cat because of the capital consumption and the correlations. One is what is the stand-alone economics and what's the marginal economics. Marginally, I expect that even with the same level of rate reduction and the associated increase in the loss ratio for the individual deals, we will like the portfolio.

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

Got it. And then I heard the $600 million increase in limit that you guys deployed at midyear. But Kevin, you also mentioned that demand is increasing, but at a reducing level going forward. So how are you thinking about the demand environment as we move into next year compared to this year?

David, this is Marra. On the demand side, we've had increasing demand but at a slower rate over the last few years. Two years ago, we counted $20 billion of demand in the U.S. cat side last year, $15 billion. This year, it's just over $10 billion. We think the long-term dynamics are very strong. The more Florida private market participation, lower public market, growth in TIVs, clients are all over this, and they're buying more limit. That being said, we wouldn't expect an accelerating growth in demand going forward, and there's still competition and competition from the cat bond space. So a bit of a mix there.

I'll turn the floor back to Kevin O'Donnell for any additional or closing remarks.

Thank you for joining today's call. We feel like we're in a great position, having built the portfolio that we targeted as we go into wind season and look forward to talking to you in a couple of months about the third quarter. Thanks very much for joining today's call.

This concludes the RenaissanceRe Second Quarter 2026 Earnings Call and Webcast. Please disconnect your line at this time, and have a wonderful day.

Good morning. My name is Madison, and I will be your conference operator today. At this time, I would like to welcome everyone to the RenaissanceRe First Quarter 2026 Earnings Conference Call and Webcast. [Operator Instructions]

I will now turn the call over to Keith McCue, Senior Vice President of Finance and Investor Relations. Please go ahead.

Thank you, Madison. Good morning, and welcome to RenaissanceRe's First Quarter Earnings Conference Call. Joining me today to discuss our results are Kevin O'Donnell, President and Chief Executive Officer; Bob Qutub, Executive Vice President and Chief Financial Officer; and David Marra, Executive Vice President and Group Chief Underwriting Officer.

To begin, some housekeeping matters. Our discussion today will include forward-looking statements, including new and updated expectations for our business and results of operations. It is important to note that actual results may differ materially from the expectations shared today. Additional information regarding the factors shaping these outcomes can be found in our SEC filings and in our earnings release.

During today's call, we will also present non-GAAP financial measures. Reconciliations to GAAP metrics and other information concerning non-GAAP measures may be found in our earnings release and financial supplement, which are available on our website at renre.com.

And now I'd like to turn the call over to Kevin. Kevin?

Thanks, Keith. Good morning, everyone. We are proud of the quarter's results, which reflect the strength of RenaissanceRe's business model and the value of our three drivers of profit. Once again, this quarter, underwriting, fee and investment income all contributed meaningfully to strong operating income. This is gratifying as the balanced contribution is central to the resilience we have been building and advances our strategy of reducing earnings dependency on any single market condition or source of volatility.

Before discussing the quarter in more detail, let me start with the broader backdrop. Geopolitical risk is elevated. Markets continue to adjust to higher-for-longer rate environment, and the macro environment remains increasingly fragmented, highly volatile and less predictable. Last year, I said that our business is anti-correlated to this kind of environment, and our results demonstrate that this remains true today. As the world becomes more uncertain and risk-averse, the value of the protection we provide increases.

Our business is [indiscernible] the volatility others seek to avoid. We manage it to reduce our customers' risk in exchange for strong returns to our shareholders. Ultimately, our strategy is to absorb volatility, manage it efficiently in the ordinary course and produce results over time, recognizing occasional losses will occur.

For the first quarter of 2026, we reported operating income of $591 million, a 22% annualized operating return on equity and operating earnings per share of $13.75. Tangible book value per share increased by 1.5% to $233.49. This reflects two influences: retained mark-to-market losses of $357 million and share repurchases of $353 million at a premium to book value.

I will address the mark-to-market losses and share repurchases in a few minutes, but we view these as temporary drags on book value per share and believe they help create the conditions for continuing strong overall performance.

Turning to our three drivers of profit, I will start with underwriting. We reported strong underwriting income of $589 million, driven by excellent current accident year performance and favorable prior-year development. We benefited from approximately $160 million of favorable reserve development with proportionately larger contribution from other property. This reflects our proactive portfolio positioning and superior underwriting over the last several years.

I want to highlight one accomplishment from the January 1 renewals that we alluded to last quarter. While rates were down low teen percentages, our team did an excellent job positioning into a more competitive environment. As a result, top line in property cat this quarter stayed relatively flat, excluding reinstatement premiums. Rates remain adequate, and we took an above-market share of new business, which demonstrates the strength of our franchise. As I wrote in our most recent shareholder letter, when rates are adequate, underwriters should be taking more risk, and we are.

Meanwhile, our Casualty and Specialty adjusted combined ratio was 99.4%. This was consistent with our guidance of high 90s and supports our view that the portfolio performed as expected.

David will provide more detail on our exposure to the war in the Middle East. In summary, we have limited exposure through lines narrowly designed to cover these risks, including war on land and marine war. I would not characterize our share in either of these markets as being outsized.

Moving now to fee income, which performed equally well this quarter. We reported total fee income of approximately $94 million. Performance fees were the main driver of the upside reflecting strong current-year underwriting results and favorable prior year development. Capital Partners continues to be an important source of persistent and diversified earnings. It allows us to leverage our industry-leading underwriting franchise to generate [ capital-light ] fees. This complements the income we earn on our balance sheet, creating an additional value from our underwriting business. That is another important source of resilience and remains a clear differentiator for RenaissanceRe, especially in markets where clients value scale, reliability and flexibility.

Moving to retained net investment income, which was $304 million for the quarter. We have executed well into difficult investment markets, and as a result, net investment income remains robust. This reflects the scale of our invested assets, the quality of the portfolio and a rate environment that remains favorable. Fixed maturity, short-term and private credit rates remained steady to higher during the quarter, which supported net investment income. Recent market moves allow us to extend duration and lock in at higher yields, which should continue to support earnings power over time.

We reduced our gold position during the quarter by about half. We originally put that hedge in place to protect the portfolio against inflation and geopolitical risk, and it served that purpose well. As markets evolved, we chose to reduce the position, lock in gains and lower potential future volatility in the portfolio. Importantly, the position remained profitable both in the quarter and since inception.

Let me spend a moment on the mark-to-market losses. The same market movements that pressure current period valuations also improve reinvestment yields and support future earnings power. So while book value takes a modest mark today, prospective earnings improve tomorrow. We view that trade-off as economically constructive. In addition, these losses largely unrealized, so this is more of an issue of timing reflecting the quarter's shift in the yield curve. The investment portfolio remains high quality and its underlying earnings capacity remains strong. Consequently, we remain comfortable with the overall credit quality of the underwriting securities.

That is also true of our private credit portfolio. About 5% of our investment portfolio is in private credit. Our exceptional capital strength and high liquidity are the foundation for this measured allocation to private credit, which enhances our book yield due to the associated illiquidity premium. Bob will provide more color on our credit book in his comments.

Shifting now to capital management, where our approach remains unchanged. We have a consistent track record of strong earnings performance, excess capital and ample liquidity. That positions us to continue returning substantial capital to shareholders. And this quarter, we repurchased $353 million of our shares. We did so in a disciplined manner, allocating capital where we see favorable risk-adjusted returns. This includes allocating to our own shares when they trade at levels we consider compelling relative to intrinsic value and future earnings power. Since 2024, we have repurchased over 20% of our outstanding shares. This totals almost 11 million shares or $2.7 billion up until April 24. We did this at very attractive valuations, very close to current book value which should boost returns to shareholders with minimal dilution.

At the same time, we remain well capitalized to support our underwriting portfolio, our partners and future growth opportunities. Ultimately, capital management should support long-term growth in tangible book value per share and long-term value creation for shareholders. That remains the standard we apply.

Looking ahead, the message is continuity, not change. The underwriting environment remains competitive, but rates remain adequate. Ultimately, our objective is to maximize long-term growth in tangible book value per share and operating earnings by preserving margin, constructing the right portfolio and allocating capital with discipline. That has been our approach through the cycle, and it remains our approach today. When we think about the balance of 2026, our outlook remains constructive. The underwriting portfolio is performing well, and our earnings model continues to benefit from multiple diversified sources of income.

With that, I'll turn it over to Bob to discuss the financials in more detail and then to David to provide additional color on underwriting and renewals.

Thanks, Kevin, and good morning to everyone. We delivered a strong start to 2026 in a quarter with both geopolitical and economic volatility. Our diversified earnings model continued to produce superior returns for shareholders. We generated operating earnings per share of $13.75, an annualized operating return on equity of 22%. Annualized return on equity was 10.5%, which included $357 million of retained mark-to-market losses. Importantly, each of our drivers of profit contributed meaningfully in the quarter, providing a diversified and resilient earnings profile.

There are a few numbers that will help demonstrate this. First, 15 points, which is the contribution from fee income and retained net investment income to our overall return on average common equity in the quarter. This provides a solid foundation of earnings each quarter, which we then build upon with income from our underwriting business. Second, $589 million, which is the underwriting income we generated this quarter. This reflects disciplined risk selection and cycle management. And third, $353 million, which is the capital we returned to shareholders through share repurchases during the quarter. We continue to view our shares as attractive at current valuations and share repurchases remain an important part of our capital management strategy.

Taking a step back, this performance is a continuation of the strong results we have been delivering over the last 3 years. In the last 4 quarters alone, we've delivered $2.5 billion of operating income with an operating return on average common equity of 24%. With such a strong base of earnings, we are better able to absorb volatility from a large event in any one quarter while continuing to grow shareholder value over time.

Now I'd like to turn to a more detailed view of our three drivers of profit, starting with underwriting. Let me begin with the key point. Even as rates decline in some parts of the reinsurance market, our underwriting book remains highly profitable. In the first quarter, we delivered an adjusted combined ratio of 72%, reflecting disciplined underwriting and portfolio construction. We reported favorable development across both segments, with most of it coming from other property where we fully retain in our bottom-line results.

Property catastrophe, we reported a current accident year loss ratio of 10.2% and an adjusted combined ratio of 19.2%. This reflected 11 percentage points of favorable development across a range of accident years. In other property, we had another excellent quarter with a current accident year loss ratio of 55.5% and an adjusted combined ratio of 56.1%. This included 29 percentage points of favorable development, primarily from our non-cat attritional book.

Casualty and Specialty remained in line with our expectations with an adjusted combined ratio of 99.4%.

Shifting to overall gross premiums written, which were $3.4 billion, down 16% from the comparable quarter or 9% without reinstatement premiums. It is important to remember that our results last year included the California wildfires, which increased loss activity and drove most of the $340 million of reinstatement premiums in Q1 2025. After accounting for reinstatement premiums, property catastrophe gross written premiums were nearly flat. Other property was down 7% and Casualty and Specialty was down 13%.

David will discuss this in more detail, but these movements reflect deliberate portfolio shaping towards the most attractive classes of business. Property catastrophe is generally our highest margin business, and we have successfully found opportunities to deploy capital to grow selectively, which help offset the impact of downward rate pressure.

In Casualty and Specialty, we have continued to trim back exposure in general casualty. We have also reduced on certain specialty classes like cyber, where rates have been under more pressure. Professional liability premiums were up in the quarter. However, this is not reflective of growth in the portfolio. It was driven by lower premium adjustments last year related to -- lower premiums last year related to negative premium adjustments and a reclassification from professional liability to general casualty.

Looking ahead, in the second quarter, we expect other property net premiums earned of around $350 million and an attritional loss ratio in the mid-50s, and Casualty and Specialty net premiums earned of approximately $1.3 billion and an adjusted combined ratio in the high 90s.

Turning now to fee income, where we generated $94 million of fees with management fees of $48 million and performance fees of $46 million. Performance fees were higher than our expectations due to a combination of strong underwriting results, favorable development and a onetime recognition of deferred performance fees related to a return of capital by DaVinci.

Looking ahead to the second quarter, we expect management fees to be around $50 million and performance fees will vary by quarter, but should come in around $120 million for the year, absent any large loss events or favorable development.

Turning now to investments where retained net investment income was $304 million. This was down about 3% from the fourth quarter due to lower average interest rates in the first 2 months of the [ quarter. ] We recorded [ $357 ] million of retained mark-to-market losses in the quarter. About half of these are related to our fixed maturity portfolio and the other half related to equity losses, which were consistent with the volatility experienced in the broader market.

While increased treasury yields have a short-term negative impact, they also improve reinvestment yields, which support our longer-term earnings power. During the quarter, we took advantage of financial market volatility to adjust the composition of our portfolio.

First, we reduced our retained investment portfolio's exposure to gold from 5% to 2%. In doing so, we realized gains from a hedge that has performed well for us and has been profitable both in the quarter and since inception. Second, we increased our exposure to high-quality investment-grade corporate credit, where spreads and all-in yields offered attractive risk-adjusted returns. At the same time, we reduced our exposure to shorter-term treasuries. And third, through these allocation changes, we extended duration on the retained portfolio to 3.4 years from 3 years and increased the yield on the portfolio. In the second quarter, we expect retained net investment income to trend slightly up.

Finally, I want to briefly address the private credit investments. Our private credit assets are diversified across managers, sub-strategies, sectors, geographies and vintage years. We invest through institutional closed-in structures run by high-quality managers. We emphasize senior secured lending and other areas where structure, collateral, and manager selectivity provide downside protection. Further, we have limited exposure to currently strained areas such as software or through BDCs. We believe current volatility provides opportunities to selectively increase our exposure to private credit.

In summary, our investment portfolio performed well, and we took advantage of market volatility to incrementally improve the investment portfolio composition. We believe these changes will improve expected net income on a growing invested asset base.

Moving now to a few comments on tax and expenses where our overall effective tax rate for our GAAP net income was 6%. We had a few one-off items, which benefited the tax rate, and we expect it will return to low double digits next quarter. As a reminder, although noncontrolling interest results are included in pretax income, we are not taxed on the earnings that belong to our Capital Partner investors, which reduces our GAAP effective tax rate.

This quarter, we also benefited from the Bermuda substance-based tax credits. As you'll recall, last year, we were able to realize 50% of the value. In 2026, we're able to recognize 75%. About 2/3 of the value is reflected in underwriting and had a 90 basis point impact on the combined ratio with the remainder in corporate expenses.

Inclusive of the credits are -- inclusive of the credits, our operating expense ratio for the quarter was 4.1%, up from 3.7% in the comparable quarter or flat when you factor in the impact of reinstatement premiums in the first quarter of 2025. There were a few onetime reductions in the quarter, which pushed this ratio down. But looking ahead, we continue to expect our operating expense ratio to grow to 5% to 5.5% over the year as we continue to invest in the business.

Let me close now with capital management, where our earnings strength and consistency continue to generate substantial capital. During the quarter, we repurchased 1.2 million shares for $353 million at an average price of $289 per share. And through April 24, we repurchased an additional $105 million of our shares for a year-to-date total of $458 million. We expect to continue our disciplined approach to capital management in 2026, first, by seeking to deploy capital into desirable underwriting opportunities; and second, by returning excess capital to our shareholders at attractive prices.

So in summary, I'm pleased with our performance in the quarter. Each of our three drivers of profit continue to deliver strong results and demonstrate the benefits of our diversified earnings model.

And with that, I'll now turn the call over to David.

Thanks, Bob, and good morning, everyone. In the first quarter, we delivered strong financial results across each of our drivers of profit and differentiated RenaissanceRe in the market through superior underwriting execution. I couldn't be more pleased with the underwriters' performance. The team retained profitable business, grew selectively and maintained underwriting discipline with a focus on preserving margin. Rate adequacy across the portfolio remains attractive and should continue to support strong shareholder returns.

At each renewal, our underwriting team has two objectives. First, deliver our market-leading value proposition to clients and brokers. That supports a durable pipeline of renewable business, first call status and favorable signings that are resilient to competition. Second, construct the optimal underwriting portfolio across business segments to support each of our three drivers of profit and generate capital-efficient, attractive returns both in the current year and over the cycle.

Our underwriting team's excellent execution of both objectives continues to differentiate RenaissanceRe. We combine underwriting expertise, portfolio management and capital flexibility to identify the best opportunities and we are able to convert those opportunities into signed business because of the value we bring to our clients. We support them consistently over the years, offer large lines and lead market quotes, often when others will not.

We transact with them holistically across products, geographies and balance sheets. And when they have claims, we differentiate with speed of payment and claims insights. This is why we are successful in securing the lines we target even when programs are oversubscribed. It is also why we have been able to capture more than our market share of new demand and continue to shape the portfolio towards more attractive risks.

Our first quarter results demonstrate the continued efficacy of these actions. Our portfolio drove underwriting income of over $580 million, supported by a strong current accident year loss ratio of 53% and favorable prior year development across both segments.

Let me cover our segments in more detail, starting with Property. As we discussed last quarter, the January 1 book saw property-cat reinsurance rates down on average in the low teens for our portfolio. U.S. accounts were down closer to 10% and international and global accounts closer to 15%. At today's rates and favorable terms and conditions, property cat is still highly accretive with strong rate adequacy.

We successfully deployed capital into this attractive market. We retained the majority of our portfolio and deployed $1 billion of new limit. This was a strong team effort and it demonstrates our ability to access high-quality opportunities in a competitive but still very profitable market. As a result, gross written premiums in property catastrophe, our highest margin business, were roughly flat, down only 3% from Q1 2025, excluding reinstatement premiums.

Specifically, we deployed additional limit by focusing on two main areas. First, we grew on accounts and layers with the most attractive margins, such as select California deals impacted by the wildfires and certain nationwide accounts. Second, we grew with several large U.S. clients where we captured new demand on business, which remains highly rate adequate.

Global accounts and international business experienced more rate pressure than the U.S portfolio. These accounts remain attractive due to the diversified portfolios we maintain with them and the pipeline of renewable business they represent. We also saw opportunities in the retro market to purchase additional protection at attractive terms. Ceded rates were down high teens across our portfolio. We are a significant buyer of retrocessional protection and our first call for purchasing opportunities, similar to our position in the inwards book. In addition, we upsized our Mona Lisa cat bond at significantly more attractive terms and conditions.

Looking ahead, we are making good progress on the U.S. midyear renewals. We've already bound about half of our U.S. midyear portfolio and roughly half of that has been on private terms. The Florida market continues to benefit from strong pricing, reduced social inflation due to tort reform and robust terms and conditions. As a result of this improved environment, policies at Citizens are at a record low.

The shift from public to private markets benefits the entire distribution chain, including increasing demand for reinsurance. We grew in Florida through the Validus acquisition and organically in 2025. I feel confident in the current positioning of our portfolio and our ability to access profitable business from existing programs and new demand in Q2.

In other property, we continue to shape the book to reduce peak exposure while preserving attractive margins. The business is performing well with strong current and prior-year loss ratios, reflecting the quality of our underwriting decisions and our disciplined management of the book. Terms and conditions remain strong, but pricing is under more pressure. We are trimming exposure in the most pressured areas and improving expected net profitability through ceded reinsurance.

Turning to Casualty and Specialty. Market conditions are a continuation of what we experienced at 1/1. We see ongoing rate increases in general liability, which are necessary in order to keep pace with loss trend, and we see increased competition in specialty and credit lines in response to recent profitability. We've been optimizing the Casualty and Specialty book through risk selection, portfolio mix and greater use of ceded reinsurance. Our team has done a fantastic job of underwriting our clients' business across the various classes they purchase. This is especially important for the Casualty and Specialty business as it allows us to pick the best deals within each class and construct a more diversified portfolio.

In general liability, we have reduced on deals which are most exposed to social inflation. Our exposure to this class is down 40% over the last 2 years, but premiums are down significantly less because of rate increases. In addition, we have been proactively shifting the portfolio mix to weight the best returning business with specialty and credit now making up more than half of the portfolio. We've consistently used ceded reinsurance in this segment to manage risk and optimize returns. And at 1/1, we found new attractive opportunities to increase these protections on long-tail lines of general and professional liability and specialty classes such as marine and energy. Today, we cede 20% of Casualty and Specialty premiums compared to 13% a year ago.

As in Property, we see the entire market from an inwards and outwards perspective and are uniquely positioned to construct the optimal net portfolio. These actions are important examples of how we shape the portfolio. They allow us to stay on the right panels, preserve valuable options and enhance the overall quality of the book. Improved margins will take time to emerge, but at the same time, we continue to benefit from the investment income generated by float on casualty reserves. So even in a period when underwriting margins in casualty remain tight, the business continues to support book value growth and shareholder returns.

Before I close, I want to address the war in the Middle East. Based on what we know today, we do not believe the war will have a significant impact on our book for several reasons. First, we have low underwriting exposure to the region. Second, war is excluded from standard property policies. Finally, our potential exposure would come primarily from our specialty portfolio, specifically war on land and marine war, and we purchased retrocessional protection on these portfolios.

War on land is a line where property damage from war is explicitly covered, modeled and priced for. Some of the damaged hotels and refineries in the region have purchased this cover, but take-up rates and coverage limits are relatively small compared to property policies. Marine war coverage is included in most marine policies, but can be canceled and repriced on 72 hours' notice. We have detailed information on locations and vessels that have been hit, and we'll continue to monitor developments closely as the war evolves.

Stepping back, we continue to manage our underwriting portfolio to generate attractive returns even in a competitive market. We are growing where economics are attractive and reducing where they are not. That discipline supports all three of our drivers of profit. Property is contributing mostly through underwriting income and fee income, while Casualty and Specialty is contributing mostly through fee income and investment income. All of these factors support strong shareholder returns and sustainable earnings power.

And with that, I'll turn it back to Kevin.

Thanks, David. In closing, this was a strong quarter and another good example of the earnings power and resilience of our business. Each driver of profit performed well. Underwriting was especially strong, including excellent current accident year performance and significant favorable development. Fee income exceeded expectations. Net investment income remained robust with stronger reinvestment economics supporting future earnings power, and we repurchased shares in a disciplined way while maintaining a strong capital and liquidity position.

Taken together, this quarter demonstrates what RenaissanceRe was built to do, generate attractive returns across environments by combining underwriting expertise, third-party capital management and investment capability. Three diversified drivers of profit rather than any single one allow us to deliver more consistent earnings through the cycle than we could have produced even 3 years ago. The market remains competitive, but opportunities remain attractive. Most importantly, we remain focused on the same objective that guides our decisions every quarter, grow earnings, compounding book value over term and creating long-term value for our shareholders.

And with that, we'll open it up for questions. Thank you.

[Operator Instructions] And we'll take our first question from Elyse Greenspan with Wells Fargo.

My first question is on the midyear renewals. I was hoping -- I guess, it's a couple of parts, right? You guys said, I think you bound around half of the U.S. book already. So I was hoping to get a sense of the pricing you saw on what's been bound, expectations, right, on the remainder that will be bound between now, right, and the midyear? And then are you guys observing any changes in demand across that renewal?

Elyse, this is David. So I think the Q2 deals that we've seen so far is pretty much a continuation of what we saw in Q1. In Q1, our rates were down mid-teens in the portfolio, but that was split between closer to 10% for U.S. cat and closer to 15% for international and global. So we've seen that mostly continue.

Into Q2, we were still seeing a lot of opportunities for private terms. If you recall, last year Q2, there was a lot of Florida business that we were able to access a lot of private terms. What we're able to do with these early renewals is lock up our capacity early at terms better than the market and the clients are able to fill out the placement from there. So we're really encouraged by how the team has been able to engage in that.

New demand is actually higher than we thought at 1/1. If you go back a little bit, we were saying $20 billion of new demand in 2024, $15 billion in 2025, and we thought -- $10 billion was our estimate for 2026. That's looking closer to $15 billion now, but we won't know until all the Q2s are done.

So we're seeing really good opportunities across the normal Q2s and the Florida book. That growth in demand, I'd also add, is from a lot of core personal lines clients, which are buying new reinsurance because they have growth in TIV and keeping up their programs with inflation. So really good combination for us to deploy capital into that.

And then my second question, can you just give us a sense of how much losses you booked for Iran in the quarter? And I'm assuming that all stays within the Specialty, Casualty segment within the combined ratio there. And then would you expect to book additional losses in the Q2?

So let me start there. The -- as David had mentioned, we're generally somewhat underexposed to the lines that are most exposed to the Iran war. We have good transparency on the ships that were hit and the other on land targeted properties as well. And those are all reserved within our portfolio.

Additionally, we are being cautious in thinking about the uncertainty from the ongoing war and being cautious about releasing IBNR within the Casualty and Specialty segment. The losses are within Specialty. They are within marine and marine energy. But it is fully reflected. If more happens in the second quarter, we'll have to reflect that in the second quarter, but we feel good about where we are. It's really just a couple of points into the Casualty and Specialty segment, but it doesn't foreshadow what could be happening going forward.

And we'll take our next question from Josh Shanker with Bank of America.

So in Bob's prepared remarks, he spoke about the operating expense ratio moving to somewhere around 5.5%. You said on the last conference call that you said you were targeting 5%, 5.5%. You did 4.1% this quarter. I guess a few questions. Number one, that's a lot of money, 150 basis points in annual expenses. What are you investing in? And two, don't you get the offsetting tax benefit from the payroll tax adjustment? And isn't that pushing that down at the same time you're guiding investors think it's going to rise?

Josh, thanks for the question. I did address in the prepared comments, but let me expand a little bit more. The 4.1% that you saw in the first quarter was down because of some onetime items that came through, typically nonrecurring in the first quarter. The core is probably closer to mid-4%, maybe mid-4% plus, maybe mid 4.6% that we have out there. Yes, we are investing in the business.

Here's how I see it, 4.5%, 5% is relatively -- is a very relatively low expense ratio relative to the industry. So we feel good about that. That gives us the opportunity to invest in people, in our platform to be able to operate at scale, and we will continue to operate at scale.

Specifically, we're building out a new front office system for REMS that we've talked about before. So these are significant investments and we expect to continue over time to grow so we need that operational expense base to be there.

And yes, we do get -- for expenses that we incur in Bermuda, we will get that tax credit relative to the people and what we invest in non-people. So we did reflect whatever we're investing will come in as a small offset to it. And I did also say, we expect to grow into this over the course of the year, okay? So it's a gradual...

Okay. So 5.5% is not your targeted 2026 expense ratio. You expect it to creep towards 5.5% through year-end?

5% to 5.5%. We have control over that in terms of how we spend it, but it will grow.

And are these onetime expenses? Or are these -- is this like an investment in capabilities that will moderate in '27? Or do you think that's going to be the new normal?

People are part of our run rate. When we build out a system in REMS, that's a nonrecurring over time.

And we'll take our next question from Mike Zaremski with BMO.

Great. Going back to the commentary about the specialty segment, the net to gross kind of changing. It sounds like that's a permanent change. So there was no guidance change on the kind of combined ratio in that segment. So just curious how we should think about it? Are you laying off just more tail risk? I know that segment, especially on the marine side has had some cats in recent years, even though I don't know if cats are embedded within that high 90s guidance for that segment, too.

Mike, this is David. I can address what we're doing from an underwriting perspective on that. So first of all, in the Casualty and Specialty segment, we've used ceded for many years. If you go back about 10 years, we ceded about 28%, 30% of the book. So this is in the normal course of how we use ceded to shape the portfolio. We see the whole market inwards and outwards. So we're able to make those trades and construct the portfolio with all that in mind.

The types of ceded that we've grown into has been more quota share on the long-tail book and on the marine and energy book, we've bought more excess of loss with broader coverage. So those are the two things. They perform distinctly different roles. The quota share provides risk income in the short term, but it also provides protection if losses deteriorate. And on the energy side, it would provide some protection for events such as the Iran war to the extent that those might grow.

So it's a really effective way to position the portfolio. And that's what we're accomplishing now on it, and we'll continue to -- we expect to continue to see opportunities throughout the year as capacity comes into the market and as the year develops.

Got it. That's helpful. And then switching to the investment portfolio. Bob, you talked about some fairly material changes, some of the -- I think we'll have to kind of go through the transcript, but I guess at a high level, I just want to confirm, moving gold -- or sorry, taking profits in gold puts a good chunk of additional assets into the fixed income bucket, which probably extended duration, so we should add an additional bump to the fixed income run rate from that reallocation? Or is there other -- or there are more moving parts that we should be thinking about?

I think -- thanks for the question. I did try -- there was a lot going on in the portfolio, but when you really break it down, it comes in probably three kind of distinct buckets. One is the gold we reduced. I mean, as Kevin pointed out in his prepared comments, we knew that was going to be a good hedge. The value just accreted to us faster, so we reduced the exposure, and we still have a small piece of gold in our portfolio, which we think that's a prudent allocation across our investment guidelines that we have internally.

Second is we focused on the structure of the portfolio, kind of holding in a higher rate for longer. My comment about reducing short-term treasuries that had a high yield and moving that out to investment-grade credit in a significant way allowed us to extend that and lock it in, hence, the duration increased. And therefore, we have a higher credit quality and gave us an impact to our new money yield that went from 4.8% to 5.1%. So that, we saw, was a good structure and a long-term position.

And then we wanted to clarify the importance of private credit to our investment portfolio. We feel good about it. And I think that's what I was trying to share in the comments.

So if you break it down, it's really those three areas with an outcome of a little bit longer duration and overall a higher yield that you'll start to see trending in next quarter.

And Bob, just quickly, if you move further into private credit, opportunistically, what -- just roughly, what type of yields are you seeing?

We don't really share. We are capturing the liquidity premium that we get above the investment-grade positions out there, which can range from 200 to 300 basis points. And then we have -- because it's hard to look at it because when you think about it, we've got direct lending, we've got distressed and we've got secondary, and they have different return profiles over time. So they're all performing within our expectations, in some cases, exceeding them.

And our next question comes from Andrew Andersen with Jefferies.

On the new demand at June, is that skewing towards more traditional layers versus aggregate covers? And of the aggregate business, what is the appetite to write that?

So the new demand has been -- I think the most important thing from our perspective is the quality of the pricing, the quality of the overall risk and the quality of the buyer. So we've seen demand come from sustained buyers, the nationwide personal lines companies, which are a big -- a core client base for us.

There are some aggregate programs in there. I think our view on aggregate is that there is good aggregates and bad aggregates. The aggregates that are placed in the market now and the ones that we write as part of our portfolio are well structured. They're attaching at the capital level, not the earnings level. They're also well priced. And the level of attritional losses is really well understood by the market at this point. So they do make an attractive piece of the overall tower.

But our approach to that new demand, we're a go-to-market on that middle and bottom end regardless of whether there's an aggregate program in there. So we can secure our line there and then use efficient capital sources to play on the top end as well and provide that one-stop shop across the board and then have really attractive returns on that, that meet the program for RenRe shareholders.

And on other property, can you maybe just talk about how durable the mid-50s attritional loss ratio there is as competition increases on that line?

This is David. I can talk about what we're seeing in the market. So we've -- the other property has had really good performance. It's had several years of sustained rate increases and improvements in terms and conditions. The rate is coming under pressure, but terms and conditions are still holding, and we've seen favorable claims trends.

With the current pressure on rates, we have shifted some of the capacity there and taking some risk off the table, finding it better priced in the cat book, mainly some Florida risk there. So we have confidence in continued sustained returns on the other property book where we have options to manage through some of the softening. But I'll let Bob comment on the going forward.

Yes, this is Bob. As I said in my prepared comments, mid-50s is where we feel comfortable given the mix of the portfolio. I mean it will have some ups and downs based on large events that come through. But right now, mid-50s, I think I said [ 55%, ] plus or minus, is kind of where I'd think about it.

And our next question comes from Meyer Shields with KBW.

When we think about this year's pricing for Florida at midyear, is there any reduction in maybe the provision for initial skepticism over how well the reforms were going to work? In other words, besides risk-adjusted pricing, is there another discount working its way into pricing? Or is that not relevant?

Yes. So I think, often, we talk in terms of risk-adjusted pricing. So I would say that if we look back at our credit for the reforms when they're originally put into place, we have seen more tangible benefit from the reforms, which is coming into pricing. But I would say that the overall economics within Florida are reducing on a comparable level to what we saw at 1/1, and the portfolio is extremely well rated.

I think we've got good flexibility to leverage into the market. We're finding new opportunities to growing in Florida to give you some sense as to how much we like it. David's comment between other property and property cat. Right now, property cat is returning, particularly in the tri-county area, stronger returns than some of the other property, and we've made some shifts there. So we like the portfolio. We have begun to give more recognition through the reforms, which I think is warranted and continue to think the market is highly accretive.

Okay. That's very helpful. And then a question for Bob. So you gave guidance for fees in the second quarter. But the press release also noted some funds returned to some of your partners. Does that have an impact in future quarters' management fees?

Just to make sure I got the question, Meyer, correctly. You're talking about the capital return we had this year for the joint ventures, the $730 million. That's really a distribution that would be out there. Does it affect this year's performance? No. We'll keep in each of the vehicles, the capital we need to deploy versus currently in our expectations.

I mean, we had a good year. I mean, they had a good year in 2025. You can see the NCI was $900 million plus that we earned. We're returning some of that back to our -- the investors in those funds. So I think that's a good thing. That was the bulk of it, the $700 million, and we're positioned well for -- as we underwrite in '26.

Yes. One thing I'd add to it. The vehicles are about the same size as this year as last year. So this is really just returning earnings. And it's our normal process. We do it every year.

And our next question comes from Pablo Singzon with JPMorgan.

Most of my questions have been answered already. Sorry about that. I'll drop off.

And we'll move next to Ryan Tunis with Cantor.

Just one for me for Kevin. Kevin, I was hoping that you could just remind us of the history of Ren in terms of appetite for writing Florida domestic companies. I feel like at one point, they were a good number and then there were almost none. And then maybe put in perspective, given where the health of the market is today, how you compare that relative to history in terms of your willingness, not just to write in terms of size, but just breadth of cedents?

Yes. I've been here almost 30 years, and I've seen us participate in lots of different ways in the Florida market. We remain highly influential in the Florida market even today, although it is a much smaller percent of our overall premium. I can reflect back into early 2000s, probably late '90s where that was about 30% of our premium coming from Florida broadly participating, highly structured over the years, and I think we've talked probably starting 5 to 7 years ago that we decided to take more of our Florida risk coming through nationwide programs.

We always had good participation on some of the larger programs in Florida, larger writers in Florida and then kind of selected more aggressively as we went through the stack of domestic companies. Right now, our participation remains split between some of the larger Florida companies, probably a little bit more breadth into the mid-tier companies and a lot of exposure still coming from the nationwides.

So a smaller percent of the portfolio, still large enough to drive the tail in the -- our tail capital for the property cat portfolio for Southeast hurricane. So it's a constantly evolving strategy in Florida, but it's one in which we know extremely well, and we have all the levers to be able to think about where best to take it, other property, nationwides, large domestics, small domestics.

And our next question comes from Tracy Benguigui with Wolfe Research.

Most of my questions were asked. I'll just have one for me. I was going through your proxy and your 2025 ROE target of 10.27% in the STI plan. It stood out given how far above you've been operating. And it naturally raises questions about potentially being in the long haul of pricing decreases, given it will take a lot for your ROE to fall to that level. But you convinced me very well that you could land at 15% just from NII and fees. So could you help us understand how you want investors to interpret this ROE target?

It's not a target. It's simply something that is used formulaically to produce a change in the slope of the curve in our compensation program. So we are -- we try to be careful not to put it out there as a target. It's simply a formulaic input to a formula for long-term compensation. There's no perfect way for compensation to work for the types of risk we're taking, where casualty risks are stretching 7 years and volatility from property cat doesn't always reflect the performance of the quality of the underwriting. So it is simply, I think, a good way for us to think about how to compensate employees over the long term.

If you look at me, my compensation varies with the performance of the company. But more importantly, I am deeply invested in the company with a large holding, and I put myself very much aligned with shareholders in the way I think about the performance of the company. One proxy for that is you can think about it as closer to cost of capital than a target for ROE, but it's not exactly that. It is really simply a mechanism for us to think about changing the slope and the curve of the compensation scheme.

Our next question comes from Matthew Heimermann with Citi.

Two quick questions. First was just thinking about all -- having fewer opportunities than you -- to deploy your capital than you do quantum of capital and recognizing you've repurchased all the shares you issued with Validus. I'm just curious whether or not inorganic corporate development is on the table for you as you think about the outlook? And how that -- if so, just like at this point, given what you've grown into, what would be additive?

Thanks. Firstly, obviously, we're well positioned to think about inorganic growth, having fully integrated our last acquisition, being Validus. Nothing's changed. If we see something that advances our strategy and is financially actionable, we would take a look and be able to execute.

We are not looking -- we're looking to advance the strategy that we have. We feel like we're a complete company with each of the components for us to continue to be successful. So if something becomes available, I think we'd be on the list for people to call. But we're focused very much on executing the strategy that we have, and we see inorganic growth as an accelerant, not as a change.

Is it -- just following up on the complete platform comment, is it unreasonable to think about perhaps business development that might have historically we would have thought about in traditional M&A terms maybe taking place more in dedicated third-party capital solutions?

Yes. I think we're always looking at adding different capital to our franchise if it serves our customers. So I don't think of that necessarily as inorganic growth if we start a vehicle or bring a new structure online. But that's something that is kind of, I would say, fundamental to our strategy, not something that I would think of as inorganic, even if it is a strategy that we don't otherwise have today.

No, that's fair. Just for clarification, I was thinking about it more in terms of like maybe there's a book of business at a subscale participant and buying an entity doesn't make sense, but solving for both parties on a -- with third-party -- with additional capital in an off-balance sheet way could make the difference.

We can do that. I think -- again, I think of that, not to get too technical, often that type of structure is a renewal right structure, if it's a take-out from an existing, and that's something we're pretty comfortable in knowing how to do. So all of that stuff are things that we look at. It's really some of the more production-focused stuff, the multiples still remain quite high, though.

Yes. And then one clarifier was just with respect to the $15 billion of potential incremental demand at midyear, can you just remind us, relative to what, just to put it in kind of like underlying exposure growth terms?

Yes. The $15 billion that we referenced was $10 billion going to $15 billion, and that is for U.S. cat limit. So limit that is exposed to primarily from U.S. cat buyers and U.S. cat exposure. We had $20 billion a couple of years ago, $15 billion last year, and it will be between $10 billion to $15 billion this year.

If I -- and I can just use a rate online -- similar rate online for that relative to the rest to kind of think about what the incremental exposure growth is then?

Yes, that would be a good start.

Our next question comes from Alex Scott with Barclays.

First one I had for you is on some of the comments you're making around the reduced exposure or I guess, over 40% exposure reduction to social inflation impacted or the most social inflation impacted parts of casualty. Could you just extrapolate on what are you seeing there? What's preventing enough rate coming through that, that doesn't become attractive at some point? Like how far away are we from that? Are any of the initiatives in states, other than Florida who's already adopted some tort reform, is any of that working? I would just love to hear the thoughts behind the reduction and whether at some point, that could become a growth area again.

Yes. I can give you a more detailed update as to what's going on there. Yes. So for about the last 24 months, the market has recognized that social inflation and inflation in general on claims has accelerated. And that's when rates started going up. And 10% to 12% is our estimated range for loss trend, but that will vary by class, it will vary by subclass. And insurers are getting rate. Sometimes it's above that, sometimes it's around that. The key is trend is cumulative, and that rate has to keep going or we'll see slippage in combined ratios and loss ratios in the casualty space.

So we're happy with where the business is headed. The insurers are doing the right things. Rate is the most easy way to measure that. The other areas that are important to the future success of the business is how insurers are investing in claims handling. And the plaintiffs' bar has been highly successful in combating insurers and winning increasing awards. Insurers are now investing in the right data and technology, they're coordinating through the towers better. It's a C-suite issue all the way from the top down. That gets a lot of focus with insurance companies.

The flip side of that is that it will take a long time for the investments they're making to start coming through the numbers because of the way these claims get processed. So we're watching that really closely, too.

But the third area that we have in order to optimize our own portfolio is figure out an inflationary environment, which deals we want to be on, which deals we may not want to be on. And so that's where we've been saying we've been reducing on the deals that are most exposed to claims inflation and social inflation, that would be deal structures where there's a lower layer excess of loss or covering the parts of the business that are most at risk for social inflation or if an insurance company isn't making the right adjustments in claims handling. And that's been the primary area of focus for us.

I think going forward, like I said, the business is on the right track. We have a substantial position in that market. We have a leadership position. We're well positioned to grow if we see those margins turning around. But with the length of time it takes for margins to come through, we're going to be cautious there for now.

Got it. That all makes sense. And then the growth opportunity with some of the large cedents on nationwide contracts. Could you give a little more color there on like what's the opportunity? Why are you finding that more rate adequate? And do we need to think at all about just like is it enough mix shift for us to think about convective storm versus hurricane risk and having a little more exposure to some of the convective storm?

Yes. That's a great question. And if we just step back a little bit. So first of all, we've been able to deploy $1 billion of limit in Q1 into the market. That's the easiest metric for us to measure that there have been some rate decreases, so rates are roughly flat rather than showing the decreases that are going on in the market. But the rate adequacy overall in U.S. cat is still highly adequate, coming off the highs of the best markets we've seen in a generation. So we're really comfortable with the returns in the U.S. cat space.

Now -- but not every cat deal is created equal. So not every layer, not every client. Our goal is to underwrite each deal, each client, make sure we have our -- to have confidence in our independent view of risk. And once we get that, we see a wide dispersion in terms of where the best deals and the worst deals are. And while there's overall strong level of rate adequacy, the team has done a great job in not only recognizing where the best deals are but also having the client relationships to lock up the lines in those deals early. And that's another differentiator.

So that's how we're approaching it and how that growth in deploying capital into a high-margin business is going to continue to impact returns going forward.

And our next question comes from David Motemaden with Evercore.

Just a quick one on Casualty and Specialty, just on the accident year loss ratio. If I back out the Iran losses, it looks like the loss ratio deteriorated by 120 basis points year-on-year, and that's definitely above the sort of where it's been running recently. I was hoping you could elaborate on what was driving that underlying movement there.

I think if you go back and compare it to last year in the first quarter, again, comparisons to last year are difficult because of the wildfires. And we did take some specialty losses there, which would have elevated the current accident year loss rate.

As Kevin said, we printed a current accident year of [ 70% ]. But that included a couple of points related to the Iran war going on right now. So that's kind of a better starting point when you think about it in terms of where we are before you get events that would come through and drive that up.

We are not seeing an uptick in our loss ratio other than we've added a couple of points for Iran. So I'm not sure about the reconciliation you're doing, but that's not something that is part of our dialogue in managing the book right now.

Got it. And then maybe just quickly, just I know you guys don't disclose PMLs, but maybe just an update on how you think that will shape up just as we go through the midyear renewals here. I think you had talked about that being flat for Southeast wind. So I'm just wondering, is that still the case? Is it going to be a little higher now just because of -- it sounds like there might be more opportunities and more demand coming. Just hoping for an update there.

Yes, I'd say that David had mentioned, we're deploying a little bit more capacity into the market. That will push up the exposure we have for Southeast hurricane a bit.

I would say -- if I was giving 10,000-foot guidance, I would say, relatively flat, biased a little bit more exposure, but it's not really going to change the overall profile of the risk that we're taking as an organization.

This concludes our question-and-answer session. I will now turn the meeting back to Kevin O'Donnell for any closing remarks.

Thank you for joining the call. We're proud of the results we achieved this quarter. We feel like the book is in a great position, and we look forward to talking to you next quarter. Thank you.

This concludes the RenaissanceRe First Quarter 2026 Earnings Call and Webcast. Please disconnect your line at this time, and have a wonderful day.

Good morning. My name is Nikki and I will be your conference operator today. At this time, I would like to welcome everyone to the RenaissanceRe Fourth Quarter and Year-End 2025 Earnings Conference Call and Webcast.

[Operator Instructions]

I will now turn the call over to Keith McCue, Senior Vice President of Finance and Investor Relations. Please go ahead.

Thank you, Nikki. Good morning, and welcome to RenaissanceRe's Fourth Quarter and Year-End 2025 Earnings Conference Call. Joining me today to discuss our results are Kevin O'Donnell, President and Chief Executive Officer; Bob Qutub, Executive Vice President and Chief Financial Officer, and David Marra, Executive Vice President and Group Chief Underwriting Officer.

To begin some housekeeping matters. Our discussion today will include forward-looking statements, including new and updated expectations for our business and results of operations. It's important to note that actual results may differ materially from the expectations shared today.

Additional information regarding the factors shaping these outcomes can be found in our SEC filings and in our earnings release. During today's call, we will also present non-GAAP financial measures. Reconciliations to GAAP metrics and other information concerning non-GAAP measures may be found in our earnings release and financial supplement, which are available on our website at renre.com.

And now I'd like to turn the call over to Kevin. Kevin?

Thanks, Keith. Good morning, everyone, and thank you for joining today's call. The company we have built is fundamentally different from what it was just a few years ago. We are larger and significantly more diversified, geographically by line of business and by source of income, with much larger contributions from investment and fees.

I begin with this context because this time last year, a few would have predicted the strong financial performance we delivered in 2025. Our industry faced multiple headwinds, including the California wildfires, a softening reinsurance market and lower interest rates.

In the face of these headwinds, our larger size and greater diversification allowed us to deliver strong financial results. Bob will, of course, walk through the financials. But first, I would like to highlight some of the most notable achievements. Operating income was $1.9 billion. Operating ROE was 18% and tangible book value per share plus accumulated dividends, our primary metric grew by 30%. This is the third year in a row where we have grown this metric by over 25%. As a result, over the last 3 years, we have more than doubled tangible book value per share.

Capital management was also notable. We repurchased $650 million of our shares during the fourth quarter, 13% of our shares over the course of 2025 and 17% of our shares since the first quarter of 2024 when we began repurchasing post Validus.

I am pleased to report that we have now repurchased more shares than we issued in connection with the Validus acquisition. The cumulative return on our share since then a little over 2 years ago has been around 30%. This demonstrates our ability to raise capital and we have an attractive opportunity, reward investors by returning capital as we realize its benefits and execute transactions with minimal long-term dilution.

Bob will speak to you in greater depth regarding our financial results, but overall, I am proud of our performance.

Moving now to address strategic results in 2025. Strategically, if 2024 was about retaining the Validus portfolio and successfully integrating the company, 2025 was about maintaining our underwriting book and optimizing our larger and more dispersed operations. We undertook a number of internal initiatives to improve efficiency and effectiveness and better manage our increased scale. We are upgrading our underwriting system to be more customer-centric and enhancing the architecture to be more efficiently organized to benefit from the growing influence of artificial intelligence.

Moving now to some remarks on our Casualty & Specialty segment. Aggregate underwriting profits on the portfolio have been almost $500 million over the last 5 years without the impact of purchase accounting. As we have discussed, however, earnings from this business emanate from 3 separate income streams, underwriting fees and investments. It's harder to see the full benefit of Casualty because fees are offset in our NCI and investments are not split by segment.

This year alone, Casualty & Specialty contributed about 1/3 of our operating income across our 3 drivers of profit. The goal of any line of business is to grow tangible book value per share over time. In Casualty, there is a trade-off between underwriting results and investment results. Typically, when one is high, the other is lower and vice versa. Over a 10-year cycle, this balance of profit shifts back and forth, but nevertheless contributes to growth in tangible book value per share.

Currently, the balance within the officially portfolio is heavily skewed toward investment returns. As a result, the market has tolerated rising technical ratios. This reduces underwriting margins available to compensate for inherent volatility. My belief is that technical ratios will fall, but is difficult to predict when. For now, we will continue to monitor this class closely and make appropriate adjustments.

That said, while margins are tight, Investment in fee income from Casualty are currently a substantial driver of book value growth. So we are not recognizing much underwriting profit today, which we think is the right approach in the current environment and are still making a strong overall return.

I want to briefly touch on the January 1 renewal and our outlook for 2026. David will address this in more detail. Property CAT rates for us were down low teen percentages. We found some opportunities to grow, which should keep top line premium in Property CAT down only mid-single digits, excluding the impact of reinstatement premiums.

Terms and conditions mostly held solid including retentions. As I previously mentioned, we are a larger and more diversified company. Two drivers of these changes occurred in 2023. The step change in Property CAT and our acquisition of Validus. So I think a comparison of our present opportunity set to the pre- '22 to 2023 period is constructive.

To begin, rates in Property CAT remain attractive and well above return levels realized in the years before 2023. Equally important, most of the structural changes made in 2023 are still in place. As a result, our reinsurance portfolio in 2026 is still one of our best, a few other favorable comparisons to 2022.

Our underwriting portfolio is roughly 1/3 larger. Our retained net investment income has tripled and our fee income has more than doubled. In aggregate, when we look at our current state versus where we were before 2023, all points of comparison are favorable. Our increased scale and diversified sources of income mean we are more resilient to loss. This gives us great confidence in our reinsurance portfolio and our continued ability to deliver consistent, superior returns to our shareholders.

I'd like to finish my comments with a discussion about how we plan to continue growing tangible book value per share this year at an attractive pace by employing a similar strategy to last year. This strategy was something I discussed last quarter and was composed of the following factors: first, to maintain or grow our property business; second, focus on preserving underwriting margin; third, prioritize Casualty cedents who focus on claims handle practicing over those who solely focus on rate; fourth, continue to grow fees in our capital partners business; fifth, continue to grow invested assets; and finally, continue returning capital to our shareholders by repurchasing shares at attractive valuations.

I should add one more point to this list, which is continue to execute our gross-to-net strategy to arbitrage competitive cap on market and retro markets. As you can see, we have quite a few strategic levers to keep returns attractive. This is the playbook we successfully ran in 2025 and is the one we will run 2026.

That concludes my initial comments. I'll turn it over to Bob to discuss our financial performance for the quarter and for the year before Dave provides a more detailed update on renewal in our segments. Thank you.

Thanks, Kevin, and good morning, everyone. In 2025, we demonstrated the efficacy of our strategy and the persistence of our earnings profile, delivering operating income of $1.9 billion, even with a $786 million net negative impact from margin.

My comments today will focus primarily on the drivers and sustainability of these annual results. I also want to touch on some highlights from the fourth quarter, where we delivered operating earnings per share of $13.34 and an operating return on equity of 22%.

In the quarter, all 3 drivers of profit produced strong results, specifically, underwriting income was $669 million with a combined ratio of 71%, fee income was $102 million and retained investment income was $314 million. Both fees and retained net investment income are among the highest we have ever reported and demonstrate that we have continued to optimize these drivers as our underwriting portfolio has grown.

Building on this, there are 4 numbers I have consistently highlighted that demonstrate the strength of our earnings profile and our ability to absorb volatility. The first number is 15 points which is the annual aggregate contribution to our overall return on average common equity from our investment and fee income in 2025. This is consistent with 2024 and creates a stable base of earnings each quarter, which we then build upon.

The second number is $1.3 billion, which is the underwriting income we generated in 2025 including a $1.1 billion underwriting loss from the California wildfires. Underwriting is the core of our business and provide significant upside to the earnings base from fees and investments.

The third number is $1.6 billion which is the amount of capital we return to shareholders in 2025. Throughout the year, we purchased over 6.4 million shares. The average price of these share repurchases was near book value, essentially returning all of our operating income with minimal dilution. We believe that our stock represents excellent value at current levels and expect share repurchases to continue in 2026, in line with our long history of being good stewards of our shareholders' capital.

And finally, the fourth number is 31%, which is the amount we grew tangible book value per share plus change in accumulated dividends in 2025. As Kevin highlighted, we have more than doubled this metric over the last 3 years through a combination of strong retained earnings and disciplined capital management.

Now I'd like to turn to a detailed view of our three drivers of profit, starting with underwriting where we delivered excellent results with an adjusted combined ratio of 85% for the year. This performance is particularly strong, given that we absorbed several large losses across both segments.

For Property Catastrophe specifically, we reported a current accident year loss ratio of 64% for the year and an adjusted combined ratio of 60%. This current accident year loss ratio included 50 percentage points of losses from the California wildfires and 3 percentage points of losses from Hurricane Melissa. Property catastrophe also benefited from 24 percentage points of prior year favorable development primarily from large events in 2022 through 2024 and changes to attritional loss estimates.

Note that in the fourth quarter, in Property Catastrophe, we reduced our total estimate of net negative impact from the California wildfires by $42 million driven by lower case reserves reported by our cedents during the renewal process.

In Other Property, we delivered exceptional results in 2025 with a current accident year loss ratio of 62% and an adjusted combined ratio of 60%. This is the lowest annual combined ratio we have delivered since we started reporting the Other Property class of business.

The Other Property current accident loss year ratio for the year included 8 percentage points from the California wildfires and 2 percentage points of losses from Hurricane Melissa. Other Property had 33 points of favorable development from prior years, primarily related to attritional losses.

In Casualty & Specialty, we reported an adjusted combined ratio of 102% for the year. This includes 4 percentage points from large loss events in 2025. In the fourth quarter specifically, we reported losses on two recent events, the UPS aircraft crash and the Grasberg mine landslide in Indonesia. These 2 events impacted our quarterly adjusted combined ratio by 4 percentage points, pushing it to 102%.

Prior year development and Casualty & Specialty on a cash basis was slightly favorable for both year and the fourth quarter, before the impact of 50 basis points of purchase accounting adjustments.

Across our underwriting portfolio, gross premiums written for the year were $11.7 billion and net premiums written were $9.9 billion. Both roughly flat compared to 2024.

In Property Catastrophe, we leaned into opportunities in the U.S. and grew gross premiums written by 5% this year and by $17 million in the fourth quarter in both instances without the impact of reinstatement premiums. Gross premiums written in Other Property declined by 11% in the year. We have been holding exposure flat in this class while managing a declining rate environment. This book continues to produce strong results.

In Casualty & Specialty, gross premiums written in 2025 were roughly flat compared to last year. We found opportunities to grow our credit book, primarily through seasoned mortgage deals. This offset declines in Casualty, where we have been optimizing the book and negative premium adjustments in Specialty, largely from rate deceleration in cyber.

Looking ahead to the first quarter, we expect other property net premiums earned to be approximately $360 million and attritional loss ratio in the mid-50s. In Casualty & Specialty, net premiums earned of around $1.4 billion and adjusted combined ratio in the high 90s, absent the impact of large losses.

Moving now to our second driver of profit, fee income in our Capital Partners business. Fees were $329 million for the year, up from 2024. Within this management fees were $207 million and performance fees were $121 million. This performance is particularly impressive given that the California wildfires suppressed fees in the first quarter. We fully recovered from this event in the first half of the year and performance fees have surpassed our expectations for the last 3 quarters due to strong underwriting results and favorable prior year development.

Capital Partners produced excellent results throughout 2025 and continued strong engagement from our third-party investors and fees should remain a key driver of our financial success. Looking ahead to the first quarter, we expect management fees to be around $50 million and performance fees to return to around $30 million, absent the impact of large catastrophe losses or favorable development.

Moving now to our third driver of profit, Investments where our retained net investment income for the year was $1.2 billion, up 4%. We increased retained net investment income every quarter starting at $279 million in the first quarter and rising to $314 million in the fourth quarter. This outcome is primarily the result of net growth in underlying assets as well as proactive actions to selectively add credit throughout the year. This included increasing exposure to investment-grade credit, agency mortgage-backed securities and high yield.

Additionally, we have retained mark-to-market gains of $1.1 billion, driven by gains from equities, interest rate movements in our fixed maturity portfolio, and commodities, mainly gold.

As we have previously discussed, we took a position in gold at the end of '23, which we added over the last 2 years as an inflationary and geopolitical hedge. Since we made the investment, gold has doubled in price and led to over $400 million in retained mark-to-market gains this year. Our retained yield to maturity of 4.8% reduced from 5.3% in December of 2024 due to falling short-term yields. And our retained duration decreased from 3.4 years to 3 years. This was primarily related to our decision to reduce duration at the long end of the curve, while increasing exposure to securities with a 3- to 5-year duration.

Looking ahead, we expect investment income to remain a persistent and meaningful contributor to our results and anticipate retained net investment income around similar levels in the first quarter.

Now moving to some comments on tax. 2025 was the first year we incurred a 15% corporate income tax in Bermuda, and we demonstrated our ability to continue producing excellent returns in a higher tax environment. As a reminder, our overall effective tax rate on our GAAP net income is often lower than this 15%. This is related to noncontrolling interest, which is subject to a minimal amount of income tax. You'll see this in the rate reconciliation in our 10-K when it's filed.

In the fourth quarter, the Bermuda government introduced substance-based tax credits designed to encourage investment in Bermuda. There are two main components of the credit. Compensation-related and expense-related. The credits will be phased over time, scaling from 50% of the benefit in 2025, increasing to 100% in 2027. We have a significant presence on the island and the credits provide a positive tailwind to our results, acting as an offset to certain operating and corporate expenses.

Due to the timing of the legislation, we recognize all the 2025 credits in the fourth quarter, that were applied at the phase-in rate of 50%, and you can see the benefit to our expense ratios. Specifically, the credits reduced our annual operating expense ratio by about 60 basis points and our annual corporate expenses by about 15%.

Starting in 2026, we will recognize the credits on a quarterly basis at 75% of their value and then their full value in 2027. We also recognized about $70 million in cash benefit from our Bermuda deferred tax asset in 2025. This is in addition to the tax credits I outlined above.

Next, moving to expenses, where our operating expense ratio for the year was 4.7%, down slightly from last year. This reduction is largely driven by the substance-based tax credits I just discussed and partially offset by continued investment in our business and the year-end bonus accruals. Looking ahead, we expect our operating expense ratio to average between 5% and 5.5% as we continue to invest in the business.

In conclusion, we delivered strong results in the fourth quarter and throughout 2025, driven by meaningful contributions from all three drivers of profit and disciplined capital management. As we look forward, our three drivers are positioned to produce similarly strong results in 2026 for the benefit of our shareholders.

And with that, I'll turn the call over to David.

Thanks, Bob, and good morning, everyone. As Kevin and Bob both explained, we have maintained profitability throughout a wide range of market conditions because of the diversification across our 3 drivers of profit. Strong underwriting underpins the stability of our earnings because each of our 3 drivers of profit are ultimately fueled by our portfolio. I'm proud of the underwriting portfolio's contribution to our financial results in 2025 and equally proud of our execution at the recent renewals, which will support sustainability of strong returns going forward.

I will expand on both topics, beginning with our 2025 performance and how superior underwriting supported strong results across each driver. Starting with underwriting income. During 2025, we shaped our already attractive portfolio to make it even better, growing Property CAT, holding our profitable positions in other Property, Specialty and credit and reducing in the Casualty lines that were most exposed to high levels of claims inflation.

As a result, in 2025, our underwriting portfolio generated $1.3 billion in income with solid current year performance despite several large Property and Specialty events. Prior year performance was highly favorable, reflecting the strength of our historical underwriting decisions and a disciplined reserving approach.

With respect to fee income, we deployed efficient partner capital in both Property and Casualty & Specialty. This enabled us to trade broadly across programs with large capacity while also resulting in $329 million of fee income for the year. With respect to investment income, our underwriting portfolio has generated a $22 billion diversified pool of reserves. These reserves are our primary source of float, which gives us meaningful investment leverage and result in substantial sustainable net investment income for our shareholders.

Both segments contributed significantly to our overall return on equity through these 3 drivers of profit. Property contributed primarily to underwriting and fee income and Casualty & Specialty contributed primarily to investment and fee income. This was by design. And as our results demonstrate, it was a highly profitable to construct our portfolio in this market.

Moving on to the January 1, 2026, renewal. As an underwriting team, we have 2 primary goals at each renewal. First, deliver our market-leading value proposition to clients and brokers. This ensures a sustainable pipeline of renewable business, first call status and favorable signings, which are resilient to competition. Second, construct the optimal underwriting portfolio across business segments to feed each of our drivers of profit and generate capital-efficient risk-adjusted returns in any given year and over the cycle. I believe we achieved both objectives at January 1.

Competition follows favorable reinsurance results, and we saw increased supply of reinsurance capacity with pressure on rates and margins. We were starting from a strong position, however, and remain confident in rate adequacy across the portfolio. As I mentioned last quarter, this is not a market where all risks are equally attractive or equally accessible. We succeeded in building a differentiated portfolio by deploying our underwriting expertise to select the most attractive risks and our broad client relationships to achieve the most attractive signings.

We took a deal-by-deal and client-by-client approach, trading our participation on programs holistically across lines and geographies. This resulted in us securing our desired lines when many others were signed down due to competition. It also facilitated targeted reductions in some cases without impacting the lines we wanted to maintain.

I'll now walk through our actions at the January 1 renewal in more detail by segment, starting with Property. Our goal in Property Catastrophe was to maintain our existing portfolio and deploy additional capacity into attractive opportunities. Reinsurance supply was up following several years of strong results. This additional supply resulted in increased rate pressure globally with rates down on average in the low teens for our portfolio. Retentions and terms and conditions remain consistent with recent strong levels. We successfully renewed our existing line and deployed new limits selectively across our owned and managed balance sheets.

Overall, we expect to see a reduction in gross premiums written in Q1 due to rate decreases, which will be partially offset by growth from new demand. Modeled margin in the Property Catastrophe book remains well above the cost of capital. And as we described last quarter, there are several mitigants to the effect of rate decreases on our net retained business.

First, we shape our portfolio with ceded reinsurance, which improves our net result. Ceded rates were down high teens across our portfolio. In addition, we renewed a series of our Mona Lisa CAT bond at a larger size with spread tightening by more than 50% on a risk-adjusted basis.

And finally, we share a significant part of our portfolio with capital partner vehicles, which produces fee income, which is less sensitive to rate movement. This strategy has resulted in an average underwriting margin of over 50% over the last 3 years, and we remain confident in our ability to continue producing strong returns in our Property CAT book.

In other Property, our goal was to optimize the book to reduce peak exposure and maintain attractive margins. Following several years of profitable results and favorable claims trends, we are experiencing rate pressure. Terms and conditions such as deductibles and policy supplements remain strong. At the January 1 renewal, we maintained our positions across other property but reduced exposure in areas with the most rate pressure and managed net profitability through improved ceded purchases.

Shifting now to our Casualty & Specialty book. In Casualty, we aimed to fine-tune our positions to continue to manage exposure to areas most at risk of continued loss inflation. After reducing exposure significantly in 2025, our approach at the January 1 renewal was lighter time. We trimmed back on programs where we saw below average results while continuing to benefit from rate increases across the book. Over the last 18 months, clients have been keeping up with trend in general liability by increasing rates. Many clients are further differentiating themselves through investments in claims handling. These improvements will take time to be reflected in results, but we like the progress that is being made.

We measure the success of our Casualty business over a 10-year period and believe we have made the right underwriting decisions for this point in the cycle. Maintaining our Casualty positions on the best panels gives us options to benefit from improved underwriting margins as the market strengthens, while still allowing us to earn a strong return from the float in the interim. For every dollar of Casualty business we write, we benefit from more than $0.20 of investment income. This is the best way to construct our portfolio in this market and makes our casualty portfolio highly accretive to book value over both the short and long term.

And finally, in Specialty and Credit, our goal was to hold our positions in profitable lines and shift the balance towards the highest margin classes. In Specialty, we have a strong leadership position across lines, and we're successful in achieving positive differential terms on several placements. Our ability to trade with clients across classes of Property, Casualty & Specialty enabled us to successfully maintain lines despite competition, and we increased diversification by geography and line of business.

In Credit at this renewal, we maintained our shares in profitable business and selectively grew into opportunities across the portfolio. We expect profitability to remain strong. We purchased a significant amount of ceded reinsurance in the Casualty & Specialty business and found attractive opportunities at 1/1 to increase our protection. Putting this all together, gross premiums in our Casualty & Specialty portfolio are likely to be down in 2026 compared to 2025. Net premiums will be down more than gross given increased ceded purchases.

Underwriting margins remain tight in the segment. We continue to expect an adjusted combined ratio in the high 90s. As I described earlier, however, we are confident that we have effectively balanced trade-offs between underwriting margin and investment income, driving healthy returns for shareholders.

In closing, we enter 2026 with deep client relationships and an underwriting portfolio built to optimally support our 3 drivers of profit, all of which position us to continue delivering superior shareholder returns this year and over the long term.

And with that, I'll turn it back to Kevin.

Thanks, David. To close our prepared comments, our performance in 2025 gives me great confidence in the future. We anticipate that each of our 3 drivers of profit will remain robust sources of income in 2026. More importantly, we have the strongest team in the industry, and I couldn't imagine a company better positioned to succeed in any and all market environments. As a result, we expect to continue to deliver outstanding shareholder value over the course of the year.

Thanks. And with that, I'll turn it back to you to take the questions.

[Operator Instructions]

We will now take our first question from Elyse Greenspan with Wells Fargo.

My first question is on Property CAT. You guys said that you expected, I think, premiums to be down mid-single digits, right? Because due to some changes, right, that's obviously better than the price decline you saw. I just want to confirm, is that -- that's a view for all of '26? And then if that is the case, I guess, what are you assuming within that guide happens for pricing during the other renewal seasons of the year?

Thanks, Elyse. Yes, that is our expectation for the year. If you look at the supply-demand dynamics at 1/1, we expect them to persist. So we anticipate that there'll be continued rate reductions going into the midyear renewals. That said, if we look at -- I think there's a lot of focus on rate change. If we look at rate adequacy, it's a bit of a different story. There's very strong rate adequacy in the midyear renewals. A lot of those are U.S. focused and many were affected by the wildfires.

So we go into that renewal at the same risk-adjusted reduction. So if top line reductions are a little less, I think the rating environment -- a little bit more, excuse me, the robustness of the rate adequacy should serve to produce results similar to what we got at 1/1.

And then I guess my second question, I guess, is just, I guess, a number question for Bob. You guided to an expense ratio, I think, in the range of 5% to 5.5%, right? I think it was 4.7% in '25. Is that including the benefit of the Bermuda tax credits, which I know go up, right, you'll see the 75% in '26? Because I know you said your investments in the business? Or is it before or after? I just want to make sure I'm understanding the numbers correctly.

That would be after. That would be after giving effect to all things that we understand in 2026 that we'll be investing in and other dynamics. But again, I'll point out, it's still an incredibly low expense ratio.

But then what are, I guess, is it just like talent and underwriting? I guess, what are the things that you guys are investing in that, I guess, that is taking that ratio up a little bit even with the tax credit benefit?

Sure. That's a good question. We bought Validus. We brought them on Board in 2024. And as we talked about the integration of it. Each year, we layer on another $11 billion to $12 billion of premium. Each year brings more operational complexity, and we continue to invest in that. We have the scale. We've gone through a lot of work internally to be able to process that, but that takes people as we get to scale.

But again, we are managing that as efficiently as we can. It comes in through new systems, better efficiency on technology, but we'll continue to manage that. I give you a range. We'll probably be at the low end of that range.

Our next question comes from Josh Shanker with Bank of America.

Yes. I'm going to ask 2 questions. I start with the odd ball because it's so interesting. Let's talk about gold. Can you talk about how that appears on your balance sheet, whether the $400 million gain is in the book value? And two, let's just say the political situation on Planet Earth doesn't change. Do you care whether gold is $5,000 an ounce or $10,000 an ounce, you're going to hold it until political circumstances change?

Let me -- I'll take the second part of your question first, and Bob can answer the accounting question. We looked at -- we put the gold position on in '24 -- '23, sorry, in '23 as we looked at the world and saw different risks emerging, and we think about the enterprise risk that we have to manage. And we thought it was a good hedge against the underwriting portfolio and a good hedge against some of the interest rate risk in the investment portfolio. It continues to serve as a hedge in the portfolio. So whether it's at $4,000 or $5,000, it's something that we're constantly looking at, but we don't have a price target to say that it's an investment and we're exiting at this point. We continue to monitor it actively against the enterprise risk we're managing.

Josh, on the second question, it represents because these are futures contracts, it's the unrealized gain on the mark-to-market. And we have a modest margin up against it. It doesn't really draw a lot of capital.

Okay. And then on the question of capital, there's a lot of companies give us PMLs and things and RenRe does not. It's part of the secret sauce. But can you talk about in any way that we can think how much more aggregate you want to put to work in property risk in 2026 or whether it's going to be a similar year 2025 and the money you make basically can be returned to shareholders?

Yes. We normally talk more about this at the next call. But our plan as we put together the pro forma for where we're going to structure the business, on a net basis, I would say we'll probably hold risk relatively flat for the hurricane -- Southeast hurricane, which is still our dominant peak. That could change if we see more opportunities or better-than-expected pricing going into the summer renewals. But at this point, I would say our risk will be on a net basis, relatively stable as far as our plan at this point, but that could change.

Our next question comes from Yaron Kinar with Mizuho.

Just want to go back to the Property CAT market. Given the declines that we saw in rates in 1/1 renewals, and I think there's some expectation of further declines in 4/1 and 6/1. How are you thinking of expected returns and rate adequacy in that book in 2026? And how are you looking to deploy capacity into that market? What areas would be more or less interesting compared to '25?

Yes. This is David. I can take that one. I think, first of all, like we said, we did see pressure, but we were starting from a very good spot. So rate adequacy is still strong. I can break that down a little bit more for you and the low teens that we saw in the overall CAT book, that is a bit separate. The U.S. CAT book that renews in Q1 at 1/1, it's about 1/3 of the U.S. CAT book. That was down about 10%, whereas the International and Global portfolio was down about 15%.

So part of what we're faced with is not all risks are the same. Both of those risks are attractive in their own ways. But rating level is still high. We also see really strong terms and conditions consistent with the last 3 years. So it's not as much about how will we react to rate decreases. We have a strong level of adequacy, access to all the business and a lot of options to construct the portfolio. We do see growing demand on the U.S. side that we saw at 1/1, and we expect more in Q2 that will present opportunities. But our approach is to select the best opportunities, make sure we get the best signings and construct an attractive portfolio.

Okay. And then my second question, on recent calls, we've heard brokers talk a lot about the large opportunity for data centers in the insurance market. And I'd imagine that while a lot of that would fall into the reinsurance market as underwriters in an attempt to be prudent would look to manage their exposures. I guess I'd be curious to hear how you as a reinsurer that has both a traditional balance sheet and a large JV business, how you think about that opportunity and how you go about managing that risk?

Yes. This is David again. I'll continue to take that. So first of all, data centers are something that we currently reinsure. What's the new opportunity is the fact that there are more mega projects, which do require reinsurance capacity or third-party capacity. So it is early stages of a positive opportunity, and we're working with our clients and brokers to understand the risk as well as we can and how we deploy capacity.

Our focus first is to get the underwriting and pricing right and get terms and conditions and coverage and also get the aggregation right. So we're well along the path there, and we think it will continue to be an opportunity as it grows as a market.

We will move next with Meyer Shields with KBW.

So I'm inferring from the high 90s expected combined ratio in Casualty & Specialty that you're not anticipating much of a change in reserve philosophy for Casualty lines. And I'm wondering if you look at the older accident years that are close to being settled, I was hoping you could talk about how reserves for those accident years have played out where conservative reserving is just less relevant?

Yes. I think overall, I think we're trying to be as transparent as we can on kind of the Casualty & Specialty segment and specifically GL. The book -- the Casualty & Specialty looks great. We've had favorable development last year. But the overall reserve pool for Casualty & Specialty, I think of it as the old story of a duck. It's relatively stable on top, but there's a lot of pieces moving around down below. It's moving by year and it's moving by line of business.

And we continue to be extremely cautious in thinking about how to reflect and particularly in GL, the increased pricing that's coming through where pricing actuaries are putting it through on the pricing. But from a reserving perspective, we're being cautious and continuing to not reflect that at this point.

So from the overall portfolio, it's behaving well with regard to the years. Most of the years that are older seem to be settling down. And much of those older years still have the protections with regard to the protections that were part of the acquisitions of both Validus and Platinum. So they're less relevant for us than they are for some others.

Okay. That makes perfect sense. And so going in a slightly different direction. One of the, I guess, chatter points for the 1/1 renewals was the increased inclusion of riot and civil commotion coverage. I was hoping you could talk about whether your exposure to that specific risk is materially different than in 2025?

Meyer, this is David. There's no real change in our exposure there. It's apparel, which was -- is covered in a very specific way with tight terms and conditions. So while the risk is in there at the levels we attach at, the retentions keep us insulated from a lot of attritional loss, and there's really no change into 2026.

We will move next with Mike Zaremski with BMO.

Bob, back to the tax credits and all the tax legislation. I think clear about '26 the expense ratio net of the credits. I guess we'll just have to see how the tax credits go up in '27. So I guess we'll have to decide if we want to also kind of re-spend some of that -- the credits as an investment unless you want to comment. And the DTA, is there clarity on how that's going to play out? Or is there going to be a write-down? I know it was a benefit this quarter.

That's a good question. I'll tackle them both. The DTA, I'll start with that one. That's a legislation here by Bermuda. So it's a matter of law, we used it this year to defer our tax liability, and we fully intend to use it in 2026 to defer the liability. The only way that changes is if the law changes, and I don't control that. I haven't been any conversation about it. So we're still moving forward on it.

With respect to the credit, I kind of led in my prepared comments that it was 60 basis points on the annualized operating expense. It goes up to 75% next quarter. So it means it goes up to around 90, all things constant as my economics feature used to say, and then it goes to the full impact of 2027. We don't intend to spend that specifically as a part that comes in on the back of our spend. It does reduce our net spend. But I stick by what I was talking about with Elyse was the -- we're investing in our infrastructure, technology to be able to operate at scale.

Okay. Great. And maybe pivoting back to the Casualty & Specialty segment and specifically on Casualty, I know you've given us some good commentary so far. But if we -- let's say, if we use the Marsh pricing gauge, excess Casualty rates, which Bermuda writes a lot of, you're seeing pricing kind of accelerate up into the close to 20% range. I know Ren is taking -- you guys have taken a lot of positive reserving actions to put in conservatism. But curious, is there something brewing for the industry that is causing rate to accelerate so much in excess Casualty?

This is David. So you're right to point out that the excess Casualty, the high layers that are written by the Bermuda insurance market, some of which are our clients, although we service the global casualty portfolio, that is accelerating more than the lower layers. And that's just the effect of what the market has been doing for the last 18 months or so, where Casualty rates for all excess Casualty has accelerated as a response to accelerating loss trend.

At the higher layers, it's -- the market is taking more rate than at the lower and the mid-layers. But that's what's going on there. There's nothing unique about those layers. What we're seeing overall is it's not just the rate acceleration, but it's also the investment in the claims handling. That helps all open claims, not just the new underwriting years. So really encouraged by the signs, but it's going to take time for that to come through the numbers.

Our next question comes from Ryan Tunis with Cantor Fitzgerald.

First question, just looking at the trajectory of fee income, in particular, management fee income, I would think that, that would move with the growth in the partner capital, but that was down in 2025. And it sounds like Bob's guidance was for that to kind of be flat in '26. Could you just kind of walk us through, I guess, why we're not seeing growth on that line?

Ryan, specifically, my guidance was in the first quarter. It was at 59% based on what we had.

First quarter?

Right. Yes.

That was down from the fourth quarter...

It's around the same. There was some -- a lot of noise in 2025. But the guidance what I was trying to give you was it 59% in the first quarter. And you're right, if we grow the asset significantly, the fees will follow. Performance fees are a different measure based on the volatility that can happen in the earnings stream in each of the JVs.

If it's helpful, the joint ventures are all -- none of them are smaller going into '26 than where they were in '25, and we haven't changed the fee structure on our -- on any of the vehicles that we're managing. So just as a starting point, there will be ups and downs as new capital comes on Board or there will be changes in the existing capital, but it's relatively stable from last year to this year.

Helpful. And a follow-up probably for David and Bob, but on the other property side, curious at 1/1, what you're seeing from a demand perspective? Clearly, a lot of cedings have had really strong accident years in '24, '25. Are you seeing them buy down? Or what are the trends there? And then I guess, separately, just given the competitive environment in Property, I was a little bit surprised that the other property margin guidance is still for mid-50s. I guess just walk me through your confidence in that.

Ryan, this is David. I'll start with your question on retentions in terms of conditions. So terms and conditions across other Property and CAT remain strong and a big piece of that is retention. So the other Property CAT exposed structures or risks have had a step change after 2022. Those remain at strong levels. There's competition on price, and we're able to move around that portfolio to make sure that we're getting the best return on the risk that we put out. But we're really comfortable with the way the terms and conditions have held strong there.

And on the CAT side also, clients elected generally not to buy down their retentions as they save money on their CAT towers, they didn't spend it on cover below.

Ryan, on the mid-50s, that was our guidance for the other property book. And that's kind of a mix issue that you have between the attritional versus the CAT exposed, non-CAT exposed. But we view that as a strong current accident year loss ratio. It's a little elevated this year, obviously, because of the events that came through, but that's what we're steering is the mid-50s.

We will move next with Matthew Heimermann with Citi.

I guess just a couple -- one, Kevin, following up on your comment on Casualty with technical ratios eventually decreasing. I'm curious if you think that will have more to do with a change in loss trend turning out to be better than you think or rates going up?

Yes. I think right now, our pricing actuaries are reflecting the benefit of the price change. So if all works out well, I would hope our reserving will ratios trend to the pricing ratios. So I would say it's more of a reflection of the benefit of price having persistence and us increasing our confidence in that. I would love to say that I see the trend decreasing over time. I think if we'll certainly monitor that. Any change in trend will reflect over time, whether it's going up or going down. But I would say more likely price.

And I guess I was curious, I mean, happy to listen if there are more details you want to share on some of the investments you're making around the platform and embedding that in underwriting systems. But I also am curious whether or not from a talent perspective, being in Bermuda, there's any limitations in terms of the speed or with which you can execute your technology road map?

Yes. So with regard to our thinking about how to manage our risk, this isn't the first time we've used the capital markets to think about hedging risk in our underwriting portfolio or in our investment portfolio, obviously.

With regard to talent, we have a global platform. Our investment team is split between New York, Bermuda and Dublin. So we've got kind of good coverage there, good access to talent. And almost all of the groups that we have within the company are split across multiple platforms. So I don't see any constraint with our ability to access talent. And with the technology that we have for collaboration, we can easily link teams in any location. So we have access to the best talent, I believe, anywhere in the world.

And just any color on the types of add-ons that you're -- or enhancements you're making to the underwriting side. And I wasn't sure if you meant REMS specifically or other platforms.

Yes. We are enhancing our REMS program, which is the underwriting platform. We're probably 1 year, 1.5 years into the actual technology rebuild. And that really is a shift in a couple of kind of material ways. As we've diversified, we want to make sure that our system is not as much of a deal system, but more of a client system. So it's easier for us to look at profitability per client and understand how to engage with the client to best bring our capacity to their problems.

And then secondly, we're updating our architecture so that as AI becomes more meaningful in either automation or augmentation of our processes, we will have the infrastructure to plug it in much seamlessly than what we currently have. So we think these investments put us in a very strong competitive position to continue to adopt the best technology as it becomes proven.

Our next question comes from Dean Criscitiello with Wolfe Research.

I was hoping if you could talk about how ceding commissions in your Casualty book trended during January 1 renewals.

Yes, absolutely. So ceding commissions and Casualty were pretty flat overall. Most of the improvements that are coming in the market are on the insurance side with insurance rate going up and insurers investing in claims handling to better be able to fight the plaintiffs bar. But the transfer to reinsurance and the reinsurance supply/demand was pretty stable. The best accounts might have gotten the tick up. The worst accounts got a tick down, but that's pretty much the case across Casualty and professional lines.

Got it. And then within the Casualty & Specialty segment, you guys have been growing a lot within like the credit line. So I was wondering what kind of impact that would have on like the underlying losses and maybe the expense ratio going forward?

Yes, we did see some good opportunities in credit. Credit is one of the 3 main pillars of the book. We have Casualty, Specialty and Credit with Casualty being split into the general liability and professional liability. Credit has been a really profitable class. The pillars of the credit book are the mortgage business and the standard credit bond and political risk and then some structured credit business. All of those are performing well. What we found in the last quarter and the last year was we found opportunities in the structured credit business and in the mortgage business. Both of those are high profit margin and good opportunities for us to add to the portfolio.

We will move next with Peter Knudsen with Evercore.

In the prepared remarks, you noted prioritizing Casualty cedents who focus on claims handling practices. I think going back to 2024, you had made a couple of comments around making a larger effort to work more closely with Casualty cedents to sort of ramp up information flow at renewals. So now at 1/1/26, can you maybe talk a little bit about how this renewal period was different and how it's evolved in that regard, if at all? Would you say there's a material difference in what's being collected now versus 1/1/23 before you guys were calling that out, for example?

Yes. It's been 2 strong renewals since we started that, and we're working collaboratively with clients. We get materially better information than we got previously. And that information is not only geared towards understanding claims trends, but also geared towards how do we then understand our overall business approach and has led a lot into claims conversations. So where we can then use that in our underwriting to make sure we're picking the best risks and avoiding those that are worse.

It's been a very positive process and collaborative with the clients. One of the things on the -- that we've noticed overall on the claims side is there is -- the trend is not -- the plaintiff's bar has not let up in how they're approaching trying to get big settlements. But the insurance carriers have gotten much more proactive from the top down. There's a lot of awareness of how they can invest, how they can use data, how they can collaborate across the tower -- and so it's not always the quantitative things we get from that process, but it's those qualitative things, which we're confident will have a strong impact over time.

Okay. Great. And then just a quick one for me on the Casualty favorable ex the GAAP adjustment. I know it was minor, but I was just wondering if -- and maybe I missed it, I'm sorry, but if you could talk about the drivers, the puts and takes on that?

On the Casualty, I talked about the favorable -- favorable development on a cash basis. The purchase accounting layers in around -- somewhere around $8 million on top of it. So that kind of pushes it around. That's what I was trying to point out that we have been favorable at the top of the house for that segment this year.

We will move next with Rob Cox with Goldman Sachs.

I just wanted to follow up on the artificial intelligence technology discussion from earlier. I think a lot of the programs that we hear in insurance, there's an automation efficiency component that often results in lower employee costs. And the reinsurance businesses tend to have lower employee costs and noncompensation operating costs relative to other insurance businesses. So I'm just hoping for some color on how that dynamic informs your plans to use AI and how we should be thinking about potential benefits.

Yes. I think it's -- your observation is consistent with ours. I'd say from the top of the house, many companies are looking at trying to measure ROI, the way to measure that is with automation and efficiency. And then I think a lot of the improvements, certainly what we're seeing in how we're thinking about our processes and our analysis augmentation coming from the bottom up.

So our focus really is becoming a stronger, better underwriter if we become -- and those 2 co-mingle at a point where if we -- like one example with -- we have some work that we've done with AI in some of our investment analysis where we're taking what -- I'll make the numbers up 10 hours of analysis and doing it in 1. Well, that allows for better judgment to be applied to stronger data. So one could argue that, yes, we've increased efficiency, but it really is to augment our decision-making process.

So I would say I don't anticipate that AI is going to materially improve us as a company through efficiency and automation as much as it will over time through augmentation of our judgment.

Okay. That's very helpful. And I just wanted to follow up on Property CAT pricing. You guys laid out the supply-demand dynamic that's out there right now. I'm curious if we model forward sort of a normal year of weather Catastrophe losses in 2026, how would you expect Property CAT pricing to change next year in 1/1 renewals in 2027? I realize that's pretty far out there, but curious your thoughts.

Yes. I would -- markets tend to move in curves. So if it's going one direction, I think our planning will be that the direction will continue, but it's way too early for us to think about building our '27 pro forma. Our portfolios have been constructed with our best judgment and reflect where we think we'll be on October 1, so sort of the heat of wind season. Where it goes from there, I think there's a lot of things that can shift. Interest rates can change, geopolitical situations can change materially and then certainly, losses can change. So I think of it as in curve. So it's going a direction. I generally think it will continue, but it's not something that we have a strong view on at this point.

I will now turn the floor back over to Kevin O'Donnell for any additional or closing remarks.

So we're proud of the performance we achieved in '25 and eagerly working to build the best portfolio and maximize returns in 2026. I want to thank you for your attention and your questions today.

Thank you. This concludes the RenaissanceRe Fourth Quarter and Full Year-end 2025 Earnings Call and Webcast. Please disconnect your line at this time, and have a wonderful day.

Good morning. My name is Stephanie, and I'll be your conference operator today. At this time, I would like to welcome everybody to RenaissanceRe's Third Quarter 2025 Earnings Conference Call and Webcast. [Operator Instructions]

I will now turn the call over to Keith McCue, Senior Vice President of Finance and Investor Relations. Please go ahead.

Thank you, Stephanie.

Good morning, and welcome to RenaissanceRe's third quarter earnings conference call. Joining me today to discuss our results are Kevin O'Donnell, President and Chief Executive Officer; Bob Qutub, Executive Vice President and Chief Financial Officer; and David Marra, Executive Vice President and Chief Underwriting Officer.

To begin, some housekeeping matters. Our discussion today will include forward-looking statements, including new and updated expectations for our business and results of operations. It's important to note that actual results may differ materially from the expectations shared today. Additional information regarding the factors shaping these outcomes can be found in our SEC filings and in our earnings release.

During today's call, we will also present non-GAAP financial measures. Reconciliations to GAAP metrics and other information concerning non-GAAP measures may be found in our earnings release and financial supplement, which are available on our website at renre.com.

And now I'd like to turn the call over to Kevin. Kevin?

Thanks, Keith. Good morning, everyone, and thank you for joining today's call.

Before we begin, I want to take a moment to acknowledge the devastating impact of Hurricane Melissa. Being in Bermuda, we are familiar with the challenges of hurricanes, but the scale of this storm is unprecedented, and our thoughts are with the people of Jamaica, Haiti and Cuba at this difficult time.

Shifting now to RenaissanceRe's third quarter performance. We delivered another strong quarter with operating income of $734 million and an operating return on average common equity of 28%. In aggregate, year-to-date, we have earned almost $1.3 billion in operating income and delivered about a 17% operating return on average commonality.

Finally, we grew our primary metric tangible book value per share plus change in accumulated dividends by 10% in the quarter and almost 22% year-to-date. These results are consistent with our track record of strong returns over the last 3 years. In fact, since Q4 2022, the quarter after Hurricane Ian and just prior to the step change in property cat, and we have delivered operating return on equities above 20% in 10 of the 12 -- in 10 out of 12 quarters at an average return of 24%. As a consequence, we more than doubled tangible book value per share during this period.

As strong as our performance has been over the last 3 years, I believe we can continue growing tangible book value per share in the future at an attractive pace. This is because many of the factors that have contributed to our success since 2023 should persist into 2026 and beyond.

Looking back over our achievements. First, we grew into an attractive property cat market, increasing our property portfolio from $2 billion of gross written premium in 2022 to around $3 billion today, which creates a strong base of profit in our portfolio going forward. Second, we focused on preserving our underwriting margin. Our average combined ratio in property cat since 2023 has been about 50%. David will explain the many tools we have to preserve this margin going forward. Third, we nearly tripled our capital partner fees from $120 million in 2022 to just over $300 million over the trailing 4 quarters. As we have discussed, these fees are consistent, low volatility addition to our earnings stream that should continue to grow in 2026. Fourth, we grew retained net investment income from $392 million in 2022 to almost $1.2 billion over the trailing 4 quarters. Despite declining interest rates, we expect investment income to persist and potentially grow over time as our asset base continues to increase. Finally, we returned over $1 billion in capital to shareholders so far this year. We continue to have considerable excess capital and believe our shares represent exceptional value making share repurchases highly accretive to our bottom line.

Looking forward to 2026, while we are facing decreasing property cat rates and falling short-term interest rates, these are challenges we successfully overcame in 2025. We will continue to do so in 2026 by executing on the 5 factors I just enumerated and building upon the foundation that we have established.

Our success starts with strong underwriting. In 2026, we will continue to prioritize margin over growth. Strong returns have resulted in reinsurers increasing supply through retained earnings. Demand, however, is expected to grow at a slower rate than what we have seen over the last few years. This dynamic will likely put pressure on rates, resulting in some reduction in excess margin. That said, given the strong profitability of this business, we are confident in our ability to construct an attractive property portfolio. To be clear, we will always pursue top line growth when it makes sense. That said, reinsurance is a risk business where jointly managing the bottom line is more important than consistently growing the top line. Over emphasizing top line growth is the surest way to fail to grow tangible book value per share over the long term. Managing this business is knowing where and when to expand, and where and when to hold. In the current environment, the best move is to focus on margin. By doing so, I'm confident that our growth in tangible book value per share will significantly exceed our cost of capital.

In our Casualty business, you can see our strong underwriting reflected in how we pulled back on several lines this year, such as general casualty and professional liability. We did this in a way that was sensitive to the needs of our customers, which will help preserve future options. While we believe rate is outpacing trend in general liability, we will not reflect this in our reserves until we have more confidence in sustainability of the improved results. Having maintained good relationships with our customers opens opportunities for future growth if conditions improve.

Moving now to a few comments on the upcoming January 1 renewal, which David will elaborate on later in the call. We begin with a very profitable property cat book. While we expect some market reductions return levels should remain very attractive. I expect the market to remain disciplined with reinsurers holding on retentions and terms and conditions. Consequently, in 2026, property catastrophe rates should remain strong and should produce returns significantly in excess of our cost of capital. In other property, this book is performing very well. As you saw this quarter, and we believe this momentum will carry into 2026. We are seeing increased competition in the cat-exposed pro rata delegated book and are keeping a close eye on it. Ultimately, we will manage our exposure based on the expected profitability and the opportunities in the market.

Moving now to our cash Specialty segment, where January 1 is a significant renewal. We expect increased competition in some lines but are confident that our customer relationships and risk expertise will enable us to select the best risk and construct an attractive portfolio.

Ending now with some comments on capital management. Consistent execution of the 5 factors I mentioned earlier has created a cash-generating engine. On a GAAP basis, we have earned $1.9 billion so far this year, while generating $3.2 billion in operating cash flow. This facilitated growing limit in our property cat portfolio by over $1.7 billion during 2025. Adding new business and strong expected returns for all of our capital providers. It has also allowed us to share our success with our shareholders through repurchases. Despite significant capital return, we have grown tangible book value by $1 billion year-to-date. So we have grown assets, grown capital deployed significantly into a high-margin business and returned capital to shareholders. Bob will address our future capital management plans in greater detail shortly. But for all the reasons I just gave, we expect to continue generating profits and cash at an attractive rate. And one of the best uses for that cash right now is repurchasing our shares because we believe they represent exceptional value.

That concludes my opening comments. And as discussed, Bob will cover our financial performance for the quarter, followed by David who will provide an update on our segment performance.

Thank you, Kevin, and good morning, everyone. We delivered excellent results this quarter with annualized return on equity of 35% and operating return on equity of 28%. Year-to-date, annualized return on equity is 25% and operating return on equity of 17%. As Kevin mentioned, this is the 10 quarter out of 12 where we have delivered an operating return on equity over 20%. Operating income per share was $15.62 in the quarter. This is our strongest operating EPS to date driven by continued growth in all 3 drivers of profit. Specifically, we reported underwriting income of $770 million, nearly double from Q3 2024. Retained net investment income of $305 million, up 4% and fee income of $102 million, up 24%. One of the key messages you should take away from this call is that our earnings has improved significantly over the last 3 years. Our underwriting and fee businesses as well as our investment portfolio have reached a scale where earnings are consistently higher and large individual loss events are having a smaller impact on our financial outcomes. As a result, we are better able to deliver strong annual returns with less volatility now than we could 10 or even 5 years ago. Last quarter, I shared 4 numbers that demonstrated this strong earnings profile. I would like to highlight these numbers again on a year-to-date basis, which means they include the impact of the California wildfires.

Reviewing our financials through this lens shows the improved returns and lower volatility of our business. The first number is 15 points, which is the aggregate contribution from fee income and net investment income to our overall return on average common equity so far this year. This is consistent with last year. And together, these 2 drivers of profit created a stable base of earnings quarter-over-quarter. The second number is $600 million, which is our underwriting profit so far this year, including the impact of California wildfires. This profit complements the stable earnings base we generate from fees and investments each quarter. The third number is 22%, which is the amount we have grown tangible book value per share plus change in accumulated dividends so far this year. Ultimately, we measure our ability to deliver enduring value to our shareholders through growth in tangible book value per share plus change in accumulated dividends. This metric reflects the aggregation of our past successes and most directly comparable to our peers. The final number is $1 billion, which is the amount of capital this year we have returned to our shareholders through repurchases as of October 24th.

As you can see, we are consistently generating substantial capital. Consequently, capital management will continue to play an important role in creating value for shareholders going forward. We pride ourselves in being good stewards of your capital and sharing our successes with you, our shareholders. Since Q2 2024, we have returned over $1.7 billion of capital through share buybacks. This represents about half of the net income during this period or alternatively over 80% of the shares we issued to support the Validus acquisition. In the third quarter specifically, we bought back over 850,000 shares for $205 million. We continued repurchasing post quarter end buying back another $100 million as of October 24, 2025. Repurchasing over $300 million in the wind season demonstrates confidence in our sustainable earnings, our strong capital position and our conviction in the compelling value of our stock. For all these reasons, we anticipate continuing share buybacks, consistent with our long-term track record of being good stewards of our shareholders' capital.

Now I'd like to provide a detailed view of our third quarter results, starting with our first driver of profit underwriting. In the third quarter, our adjusted combined ratio was 67%. This result reflects disciplined underwriting, coupled with a low level of catastrophic losses and favorable prior year development. Specifically, property catastrophe, we reported a current accident year loss ratio of 10% and an adjusted combined ratio of negative 8%. This benefited from 44 percentage points of favorable development on prior years, primarily from large catastrophes in 2022 and small events across accident years. Other property results were exceptional again this quarter with a 50% current accident year loss ratio and an adjusted combined ratio of 44%. Reported significant prior year favorable development, which was related to large catastrophes as well as attritional losses. Our Casualty and Specialty adjusted combined ratio was 99% this quarter consistent with our expectations. Prior year development in Casualty and Specialty was slightly favorable -- slightly unfavorable, however -- it was slightly favorable, excuse me, however, noncash purchase accounting adjustments of 50 basis points pushed the segment's prior year to adverse. We remain comfortable with reserve development in this book and have not experienced heightened trend this quarter.

Across our underwriting portfolio, gross premiums written were $2.3 billion and net premiums written were $2 billion, both slightly down to the comparable quarter. Within both these segments, we continue to shape the portfolio. Specifically, in property, we grew property catastrophe the midyear renewal while keeping other property flat.

As you can see on Page 12 of the financial supplement, underlying growth in property catastrophe was 22%, excluding the $116 million year-over-year change in reinstatement premiums. These reinstatement premiums were negative $50 million this quarter due to reversals of reinstatement premiums from accident years that have developed more favorably than expected. Conversely, gross reinstatement premiums were positive $66 million in Q3 2024 related to Hurricane Helene.

In Casualty and Specialty, gross premiums written were roughly flat to the comparable quarter, but there was movement at a class of business level as we manage the cycle, specifically in general Casualty, we have been reducing our exposure to U.S. general liability. As a result, gross premiums written in general Casualty were down 7% this quarter with continuing rate increases helping to offset exposure reductions.

In Credit, gross premiums written increased by 19%, largely driven by additional premium on seasoned mortgage deals from older underwriting years. And finally, we held specialty largely flat as we continued to retain our share in this attractive market.

Looking ahead, in the fourth quarter, we expect other property net premiums earned of around $360 million and an attritional loss ratio in the mid-50s. Casualty and Specialty net premiums earned of about $1.5 billion and an adjusted combined ratio in the high 90s.

Moving now to fee income on our Capital Partners business, where fee income continues to be a strong contributor to our results with $102 million in fees in the third quarter. As you can see on Page 17 of our financial supplement, only $13 million of these fees are included in underwriting income. The remaining $89 million of these fees are incremental to our earnings as they flow through noncontrolling interest. This quarter, management fees were $53 million and performance fees were $49 million. Performance fees were particularly strong due to the impact of favorable development on prior years. Looking ahead to the fourth quarter, we expect management fees to be around $50 million and performance fees to be around $30 million, absent the impact of large losses or favorable development. Once again, we expect the significant majority of these fees to flow through noncontrolling interest, which means they are incremental to our underwriting income.

Moving to our third profit investments where retained net investment income was $305 million, up 6.5% from the previous quarter, driven by continued growth in our investment assets. In addition, we reported significant retained mark-to-market gains of $258 million, primarily from equity and gold futures. As I've discussed in the past, we have increased our allocations to derivatives over time, including equity, interest rate, credit and commodity futures. We use these derivative positions to shape our portfolio, and as part of this, we carry cash collateral to sort the positions. Looking ahead, we anticipate our investment income to persist at similar levels and potentially grow over time as our asset base increases.

Next, I'd like to provide an additional update on expenses, where our operating expense ratio was in line with expectations at 5.1%, flat from the comparable quarter. In the fourth quarter, we expect our run rate and operating expense ratio to be about flat. That said, we typically make accruals for performance-based compensation expenses at the end of the year, which may impact the ratio.

In conclusion, each of our 3 drivers of profit outperformed this quarter and contributed meaningfully to our results. We deployed significant capital through share repurchases while also growing into opportunities in property catastrophe business. We believe the strong earnings engine that we have built will continue to generate enduring value for our shareholders in the fourth quarter and beyond.

And with that, I'll now turn the call over to David.

Thanks, Bob, and good morning, everyone.

We're pleased to deliver another excellent underwriting quarter, both financially and strategically. Financially, we grew underwriting income to $770 million with strong current and prior year loss ratios and low catastrophe activity. These results reflect our disciplined underwriting approach in addition to our market-leading access to business. Strategically, this preferential access enabled us to continue deploying capacity into an attractive market in 2025. We closed out a highly successful midyear renewal and began planning for January 1. Looking across the reinsurance market, we believe it remains highly attractive for underwriters with deep expertise and strong access to risk like RenaissanceRe.

Our vision is to be the best underwriter. Our integrated systems and our underwriting culture are aligned around this goal. Our 2025 portfolio is largely underwritten, and I'm proud of the book we built. This is not a market where all risks are equally attractive. In fact, returns vary significantly between classes of business and between deals within each class, which presents opportunities for us.

We've been successful in 2025 because we applied our deep underwriting expertise to differentiate the best deals and deployed our strong customer value proposition to secure these lines. This combination is a differentiator and enables us to build a portfolio that is accretive to shareholders year after year. You saw this benefit when we were able to bring on the full Validus portfolio in 2024. You saw it again in 2025 when we were able to shape our larger portfolio by growing property cat, holding lines in other property and specialty and reducing risk in Casualty.

In 2026, we will follow the same disciplined playbook, engaging early with customers on how we can solve their risk challenges across lines, leveraging our underwriting excellence to identify the best opportunities and deploying our owned and partner capital balance sheets to construct an attractive portfolio.

Moving now to a discussion of our segments and outlook for January 1 renewal in more detail, starting with property, focusing on property catastrophe first. Over the last 3 years, we have grown this business by about 60% in one of the most attractive rate environments in history. It has been highly profitable with an average margin of 50% over this period, even with significant catastrophe activity. In 2025, we grew U.S. property cat, which is our RIS margin business by 13%. We did this by selecting the most attractive risks in areas like Florida, California and loss-impacted nationwide accounts and securing these lines with our strong access to business. As a result, we captured more than our share -- market share of the $15 billion in new demand this year.

Looking ahead to 2026, we expect continued growth in demand. supply will likely exceed this demand, which will result in some rate pressure at January 1. The market anticipates rates could be down about 10%. As we have seen in 2025, however, this will not be uniform across all accounts. There are some renewals, which are impacted by California wildfires, and some of our accounts are already secured on a multiyear basis.

Our experienced team has a fantastic track record of underwriting and dynamic markets like this as we demonstrated at the midyear renewal, where we grew faster and at better rates than the market average.

Let me provide some more context on our view of the market and our underwriting approach to deliver superior risk-adjusted returns. Since the 2023 step change, the market has appropriately balanced risk between reinsurers and insurers with reinsurers largely providing balance sheet protection. Interests are appropriately aligned. Insurers have adjusted their business to support current retention levels and the level of expected attritional losses is well understood in the market. We do not expect insurers -- reinsurers to sell new bottom layers below expected cost, and we do not expect clients to pay high rates for these layers. Therefore, we expect new demand to be mostly at the top end of programs and most of the competition to be focused on rate rather than terms and conditions and retentions, which will help insulate our bottom line profitability differences decline.

In addition, our gross-to-net strategy is a key differentiator and supports sustained attractive returns. We retain approximately 50% of our assumed property catastrophe premiums making our returns less elastic to rate change. To achieve this, we typically share about 1/3 of our property cat business with partners in our joint venture vehicles, which produces fee income that is less sensitive to movements in rate. We also protect and shape our portfolio with ceded reinsurance.

As we look 2026, I'm confident in our ability to deliver underwriting results that are substantially accretive to the guidance Bob gave on our other 2 drivers of profit. Following several years of strong growth, our focus is on preserving margin, enabling us to continue delivering market-leading returns on equity.

Shifting now to other property, where we continued our disciplined approach through 2025 renewals and to deliver excellent returns. This book includes a combination and non-cat business, and we adjust its composition based on market opportunities. Following years of rate increases, we are seeing pressure on rates in the most profitable areas. Similar to property cat, terms and conditions such as deductibles policy supplements remain attractive. This combination of rate and terms and conditions has led to profitable returns since 2023. We have seen positive development on our initial loss estimates from prior years, which has benefited our results in 2025. This consistent prior year favorable development, combined with strong current year underwriting results and solid terms and conditions favorably impacts our view of the sustained profitability of the other property business, despite pressure on rates.

Moving now to Casualty and Specialty. Over the last year, we have seen positive progress in the Casualty market as clients have acted with determination to combat social inflation trends in U.S. general liability. Rates have nearly tripled since 2018. And in early 2024, rates further accelerated and have been covering loss trend. In addition, clients are implementing increasingly sophisticated claims management practices. As we have discussed with you, we reduced our exposure to general liability business significantly through, 2025, we did this carefully and thoughtfully taking the data-driven approach and working to understand our customer portfolio actions in order to position our portfolio with the best programs for the next cycle.

At January 1, we will continue to stay closely connected with our clients to understand the trends they are seeing, and how they are managing claims. Actions of our clients and our portfolio repositioning will take time to show up in the claims data. Until this happens, we will not reflect the benefit in our reserving. As Bob discussed, we expect the Casualty and Specialty segment to deliver a high 90s combined ratio. This segment remains highly accretive due to the substantial float that it generates in an attractive interest rate environment. In addition, it is strategically important to our goal of being the best underwriter, allowing us to trade with clients across classes and access the most attractive lines across property, Casualty and Specialty.

In closing, through 2025, we built an attractive portfolio by focusing on our clients, identifying accretive growth opportunities in the market and preserving margin through disciplined execution. This market is one where underwriting excellence will produce a more attractive portfolio. We believe that this will continue to be true in 2026. Our underwriting expertise and access to risk will enable us to deliver superior underwriting returns in the short term and value creation for our shareholders over the long term.

And with that, I'll turn it back to Kevin.

Thanks, David.

In closing, we had another strong quarter in which all 3 drivers of profit performed well. We delivered excellent underwriting income as well as strong fee and investment income. Together with robust share repurchases, we delivered record-high operating EPS results. This outcome is especially impressive given our status this year as a Bermuda taxpayer.

Looking forward, even with anticipated market dynamics, we are confident that our underwriting excellence, investment management capabilities and gross to net strategy will continue providing us with significant competitive advantages. Consequently, we are very optimistic regarding our potential for future performance and ability to continue delivering superior shareholder value. Thanks.

And with that, I'll turn it over for questions.

[Operator Instructions] We will now take our first question from Elyse Greenspan with Wells Fargo.

For my first question, I wanted to start with something Bob said, right? So we said there was 15 points this year on your return from the aggregate contribution from fee income and net investment income. So obviously, this year, right fee income, I think, would have been higher than normal, right, just because it's been a pretty low cat year. So for that 15-point contribution from those 2 pieces, what is, I guess, normal expectations? Like what would you be expecting from fee income and net investment income on your return for 2026?

Thanks, Elyse. I'll take that. This is Bob. My context was the full year, 15 points. So we look at around 11% to 12% from investment income and around 3-plus percent that comes in from the fees. That's our starting point. And that when you look back over the last 3 quarters and even back into last year, that's been what has been the absolute contribution to our our operating return on equity. And that's how we think about it. We think about that as our starting point. And David goes, and I've said this on the past calls, has built his book of business, that is and will be accretive to that number, which is telling you that we have an outlook of a strong financial performance and giving you a foundation from where we start from. I also want to point out I did say for the full year. So this isn't a low cat year. Remember, we took a $750 million charge on a $50 billion event in the first quarter, and that was the point I was trying to emphasize on that for the full year.

Okay. I appreciate that color. And then for my second question, just thinking about the market dynamics that you laid out on the property cat side, right, it sounds like baseline expectation 10% decline in price at 1/1. Obviously, it will vary depending upon where you are in programs and maybe some incremental demand higher up, I think, is what you said. But as you guys kind of think about the factors impacting the renewal, if it comes together based on how you expect today, what do you think the expected ROE on cat business [indiscernible] 2026 will be?

That's a tough question to answer because it's part of our portfolio. So they're stand-alone and kind of the marginal. But what I would say is, Dave's comments, I think, are important and twofold. One is rate change. which is a benchmark is, what is '25 and '26, relatively look like together. But more importantly, the bigger comment we're trying to make is rate adequacy. So if we -- maybe one way to frame it is, if we go back to when things changed, and the property cat was rerated at 1/1/23, if it was rerated 10% less, which is where we ultimately expect '26 to look relative to '25, we would have done exactly the same thing over the last 3 years that we have done. So having the rates pull back a little bit is simply pulling some of the excess margin that we've been enjoying in property cat. It is not bringing property cat anywhere close to and it's still abundantly above rate adequacy. So we still have very strong rate adequacy even with some reduction in rate change. I don't know if the you'd add, Dave.

That's true. We still remain very positive on the business. It's been very profitable over the last few years. We expect the terms and conditions to largely persist and some pressure on rate. Our team is well positioned to figure out how to underwrite around that. Not all risks will be equal. So we'll be able to pick the best risks based on what happens on each individual program and construct an attractive portfolio.

We'll take our next question from Josh Shanker with Bank of America.

Typically, when people see pricing going down, there's an assumption that too much capital is chasing too little risk or something to that effect. I'm curious to the extent that your third-party investors or potential new third-party investors are showing interest such that 2026 might be a strong or maybe a weak year for capital raising. Can you sort of speak to that a little bit?

Yes, I'll start there. That's a -- it's a broad question. So we -- because of the structures we have and because of the reputation we have in managing third-party capital, we have very good access to third-party capital, and that has been true even when it's been more constrained for others. Right now, I don't think third-party capital is going to be the driving influence on pricing in 2026. I think it's more about comfort with return levels within Property cat, and I think reinsurers having a little bit more confidence and a little bit more capital. Good news is we expect that the demand side, so there'll be more -- will grow. So more property cat demand, although that level of increase is smaller than what we saw in '26. So that said, the market will be slightly more favorable for buyers than for sellers, where I would say 25% was a little bit better balanced. That's the reason we're projecting about a 10% reduction in rate. The other thing I want to mention is there is more third-party capital that is becoming interested in longer-tail liabilities. So basically looking at that to fund their investment strategies, I think that will continue through 2026. So I think there'll be a little bit more third-party capital coming into perhaps longer tail Casualty or Specialty lines. So all in all, it's going to be driven by traditional reinsurers, third-party capital will continue to be available, but not driving the show. I don't know if anything you'd add?

Yes, we're definitely -- the competition we're seeing, especially on the cat side is from retained earnings on the traditional reinsurers more so than new capital projections.

Thanks, Dave.

And given that situation, I mean there's a lot baton that you'll be in the market for your own stock given where it's trading and how much capital you have. But in this third-party business, a part of the reason why it's been so successful is because you eat your own cooking and your investors know that whatever risks they're taking, giving you money, you're also taking yourself. When we look at the minority interest on our balance sheet and we look at your own shareholders' equity, there's obviously some off-balance sheet third-party [indiscernible] as well. They're -- somewhere close to the same amount. You're returning capital, do we ever think there could be a situation where third-party capital is a bigger balance sheet for RenRe than the proprietary capital of the company?

It's a good question. One of the things we look at each year is what is the right balance between what we're retaining and what we're sharing. And I think Dave mentioned, we share about 50% of our property cat and anywhere, but depending on the line of business, 15% to 30% on the casualty specialty lines. There are scenarios where even -- we can make this narrow enough that within a certain target strategy, we are larger in third-party capital than we are with our own deployment of risk into that narrow strategy. So there are scenarios where we could have larger third-party balance sheets than our own balance sheet. I don't see that occurring in '26.

We'll take our next question from Andrew Kligerman with TD Cowen.

I was a little curious shifting over to the Casualty line or the Casualty or Specialty area. It looked like you talked on the call about pricing being very firm, but you're still pulling back a bit on the U.S. general liability, Yet, when I've talked to others in reinsurance, I've been hearing that there's certainly upward movement in pricing at the primary level, but a lot of reinsurers are kind of softening their pricing a little bit. So I was wondering if you could share some color on what you're seeing in the Casualty reinsurance line and how pricing is coming along.

Thanks, Andrew. This is David. So we're seeing a continuation of what we've seen for the last several quarters as overall, the market is responding to elevated loss trend we're seeing the market respond in a couple of different ways. Most of the pricing increase has happened at the insurer level. And reinsurance is normally quota share of an insurer, so we're taking a share of every policy they write every loss they pay. And as they get additional rate that enures to our benefit. So that's what's going on in the market. They've been getting rate, which has been exceeding trend. They're also investing in better claims management practices. So the third angle that we have to improve our own portfolio is to take action and reposition our reinsurance lines to those that we think that are doing that the best. And that's what we've been doing over the last year. It's just a standard part of how we would always optimize our Casualty and Specialty segment within a class like we're doing in general liability and then also the overall balance between classes.

I see. So rent is not increasing their seating commissions at all. It's sort of [indiscernible] as she goes.

So the ceding commissions that we pay to our clients have been pretty flat, mostly improvements in the economics have been insurers getting more great and imputing claims handily.

Got it. And then just one last thing on casualty. So you talked about a slight favorable development. And I was wondering if you could provide some color around the vintages the product lines that had played out. Were there any big movements in one direction or another with a specific product or vintage?

Yes. So the way I think about the overall Casualty and Specialty segment, like Bob described, there was slight favorable development. That -- our view is that was flat. That was stable reserves. And we think just from the top down, we've shown a lot of favorable development as a group, a lot of those products, our reinsurance book. A lot of those clients buy products across Property, Casualty and Specialty. Within Casualty and Specialty reserves have been stable. Combined ratios are in the high 90s, and the main contribution we get is from the float, which is an attractive piece of the RME contribution with stable reserves and growing float.

We'll take our next question from Bob Huang with Morgan Stanley.

My first question is a little bit of a follow-up on what Josh was asking earlier. If we look at -- so one of the things you've said was that you talked about loss volatilities are smaller now. And so consequently, earnings are more steady despite catastrophe risk. If this trend continue longer term doesn't that also imply that longer-term pricing should be pressured by stable earnings, less volatility to me, feels like it should have less pricing volatility as well? Like theoretically, how do you think about that? Like should we see less pricing increase going forward if we have medium-sized hurricanes running through Florida here and there?

Yes. So thank you for the question. I'm hearing 2 things in the question. What's going on in the market and what's going on at RenRe. The volatility from from catastrophes is relatively consistent from an exposure perspective and how it represents thinking you mentioned Florida and Florida, RenRe is different. We have much greater investment leverage with that, we have more stability coming from the investment earnings in our portfolio. We have a much bigger fee platform, which provides stability and buffers volatility. And then our property cat has been touched on a few different points is shared between third-party capital and our own capital. third-party capital represents the stability of fees. Our own capital represents the return for risk. So it's -- what we're trying to say is the representation of volatility from catastrophes is buffered because of who we are today compared to who we were 5 years ago, within the market itself, it is about unchanged.

Okay. That's very helpful. My second question is on gold. Just given the volatility that we've seen, obviously, it was a strong quarter for gold in the third quarter. But just given the volatility in gold in October. Curious if you have any updates on holdings, or have you have any strategy or change in strategy or change in view about the investments in gold? And then what is the impact of gold on the book value for October?

Thank you for the question. Our view on gold from a strategic standpoint hasn't changed. We've been in gold for all of '25 and a good bit in '24, and we went into it as more of a hedge against our portfolio with the geopolitical environment and a lot of change going on and the shifting of the central governments and how they approach their base currency. This has proven to be a good strategy. I mentioned in my comments that part of our mark-to-market gain, the $258 million, a large chunk of that came from the gold position that we have out there. There's been some volatility up and down here in there, but we still see that within our strategic remit for the foreseeable future.

We'll move next to Mike Zaremski with BMO.

I was curious on the Property segment, if we look at property, IBNR reserves and additional case reserves, those levels are hovering currently in the 70%-plus range. We all have the historical levels, they bob around a lot, but still above like the long-term historical levels. I'm just curious, do you -- is there a way for you guys to frame whether the reserves for those 2 buckets are kind of higher than historical levels for a certain reason, or is there any color you could add to trying to frame whether there's some of just maybe some added conservatism here, how you guys think about it?

Yes. There's no added conservativism or any shift in the way that we've built our reserves. On the property side, it can be difficult because any movement in any single large event can have a meaningful impact on whether we have adverse or favorable development within the Property segment. The -- I spent last time when I look at our reserves differentiating between ACR and IBNR for the property cat portfolio, and I look at it as relative -- the normal process for us is looking at each large event on the anniversary of the event. So you saw some third quarter events coming through with some favorable development from older years. I would say there's no story to tell with regard to the numbers or the way that you're looking at the reserves there, it's pretty much steady as she goes from a reserving perspective.

Okay. Got it, got it. Well, it's been a good thing you guys have been releasing a lot more than expected. So I'll keep trying to figure out how to to develop that. Maybe just pivoting, you've made the point, and I think we got it that this year, because 1Q isn't a benign year for large losses, for example, would you be willing to frame kind of if you look at the year-to-date 9 months combined ratios, you could either use calendar year or year or both. Would you still describe this year, 9 months year-to-date as being below average, better than average year or about normal? Any help there?

It's a question because there are some moving parts and we can get to this taking 20 different journeys. This journey began with a large wildfire loss and then light wind season and then some favorable development is in strong pricing. If I look at the economic balance sheet and our model loss ratios and then I look at the actual loss ratios that are produced, they're not wildly apart. So it's hard to say because this is an event-driven book. So one change in the fourth quarter with the earthquake somewhere, it can change things dramatically. But this year doesn't look wildly dissimilar witih our modeled portfolio.

We'll take our next question from Meyer Shields with KBW.

I don't know if there's a question for Kevin or for Bob. But when you have the sort of favorable development that we've seen in recent quarters in either the past segment or in property. How does that flow through to the models that you're using for pricing?

It's all part of the information because theory that we have out there. We look at our pricing. We look at our reserving, we do actual versus observed and what we do in terms of the pricing model. As we go into the 1, 1 season, and David can talk about this, look at 1,1s, whether it's casualty or whether it's property with an emphasis on loss ratios on property. As we look at the experience that we've had and over the years, we've seen that converge become closer, but that's based on the information and the data sets that we have. So they are connected, and we do observe that, and it does play into roles. But with reserving it's historical with pricing, it's forecasting in the future based on that information, I don't know if you want to add anything to that, David?

Yes. I think from an underwriting perspective, we take into account both qualitative and quantitative part of the risk when we think about future underwriting and rate change trend that goes into the quantitative side. But some of the things that have driven favorable development will go into the qualitative side and take other property, for example, a lot of the terms and conditions like the supplements and deductibles have held up as claims have settled out. So something like that will go into our qualitative view and that will have a positive impact on our expectations in future years.

Okay. That's helpful. And the second question, and I'm not really sure how to ask this, but Kevin, you talked about an increase in demand, which makes sense, I guess, when that materializes in the marketplace, is competition for that increased demand different from the renewing demand?

You're right. It was a difficult one to ask. It's also difficult to answer. So what's happened last year, just to frame and maybe as a real example is a lot of the demand came in at the top of programs. Not every reinsurer is equally hungry for high layers as they are for low layers. But those that traditionally write high layers will have probably a pretty consistent targeting for the new demand if it's within their target appetite already. One of the things that David mentioned is we took a greater market share of the increased demand last year. That was partially because we have vehicles that complement our own targeted demand. And secondly, we recognize that the rate adequacy is at such attractive levels we should deploy into that because we'll be able to retain it for several years and continue to produce attractive returns. So I would say it's generally consistent if it's well already within their appetite. And it doesn't -- it could be that it's between the traditional market and the cat bonds, but it's not as if it's binary between third-party capital and reinsurers. It's really whether it's consistent with appetite.

We'll take our next question from Andrew Andersen with Jefferies.

Just on the Casualty and Specialty segment, I think you called out some higher attritional losses in the quarter. Was that on the specialty side and more one-off in nature?

Andrew, this is David. I'll take it from an underwriting perspective. So it's about 4 quarters now that we've had a higher view of casualty trend. And so that has been baked in for the last 4 quarters, and there's no change there. And if you look at the comparable quarter, if you're comparing now to Q3 2024, that would be a difference. But that's been stable in the last 4 quarters.

Okay. And then just on the reducing some of the exposures to U.S. general liability, I think this kind of started the back half of '24. But maybe where are you in the reduction cycle here? Should we see this continuing throughout '26? And is it just ceding commissions that we need to see change here to get a bit more positive?

I think the thing with general liability is that the momentum in the market is very strong. It just needs to be continued momentum. So we'll be watching to make sure that clients are continuing to get rate above trend, continuing to invest in the claims. And with that, our appetite will be largely stable. If we see that slip, then we'll still be always optimizing the portfolio based on how we see the risk.

Yes. And one thing I'd add to Dave's comments is this isn't a re-underwriting of the casualty portfolio. This is simply recognizing that certain companies are doing a better job changing claims behavior, underwriting and rating to address the elevated trend more effectively than others. So we just are continuing to optimize our portfolio into the best performers.

We'll take our next question from Alex Scott with Barclays.

I wanted to ask one on the capital. Maybe if you could frame for us the way you're thinking about the amount of excess capital you have based on the PMLs and all the things you guys look at internally today. And maybe just help us think as well about if growth ends up being more limited next year, or maybe more flattish. So what would your approach to capital management and capital return be how aggressive would you be in terms of taking the operating earnings and funneling it back?

This is Bob. Thanks for the question. There's a lot packed into the question. Let me see if I can open it up a little bit. In my prepared comments, I did talk about a couple of things, probably more than a couple of things. One is that the earnings capacity in the foreseeable future, we do feel strong. As we've talked about, all 3 drivers of profit, a couple of times on the call, and we pointed it out in our prepared comments. So we feel that the earnings, the numerator, if you will, is performing quite well, and we're expecting that to continue. We're focused on margins. We're focused on protection growth is challenging, but we'll continue to find it and deploy it where we can, like what we did in property cat in the third quarter where we grew that. A lot of our comments were based on managing the denominator, which would be the capital aspect and $1 billion this year. We expect the earnings trend to continue. We expect the capital generation to continue. And rather than accumulate capital, we're looking to give back -- return that capital in the form of buybacks as we've done and we're expecting that return to continue.

Got it. And second one I had is just if you could talk about an ongoing situation in California. And as we move into 2026, is the thing we should be considering, particularly around 1/1 renewals that would be impacted by maybe moving out of some of those areas in California that you're impacted by.

Yes. Actually, we grew in California after the wildfires. I think the rerating was in excess of what was required from the learnings from the wildfires that occurred. So from our perspective, we continue to like the California market. A lot of the issues that you're -- I think, that are resident within the market are affecting the primary companies more than they're affecting us as reinsurers because we're setting our own rate and our own terms for taking the wildfire risk out of California. So I would say our -- if everything continues as it is in California, our appetite is to continue to grow.

We'll move next to David Motemaden with Evercore.

Kevin, you had said, I guess, this year, which sounds like not far off from what you had expected from a model basis, 17% operating ROE year-to-date, including that $50 billion event, I guess just given sort of everything that you're seeing as we get into 1/1, do you think that -- how should we think about that ROE profile as we head into 2026, just given everything that you're seeing from a pricing standpoint?

Yes. So to be clear, the question was is this year an outlier from an average year with regards specifically to property cat. So my comment was really on what is the modeled loss ratio of [indiscernible] to what's our actual. If rates are down 10%, you can assume loss ratios are up. So I would say the important thing is within property cat, it's going to be a well-rated book of business in '26. It is just going to be slightly less well rated than it was in '25. So the guidance we're trying to give or the directional information we're trying to give is fees look strong, investments look strong. And the underwriting in '26 is largely going to look like the underwriting in '25.

Got it. And then I think, David, you had mentioned just more interest from third-party capital and some of the longer-tail liabilities. So I'm just wondering how you're thinking about that dynamic strategically sort of how it can impact your business, the opportunities, the risks? I mean, just interested in your thoughts there.

Yes. We have a long history of finding efficient capital and matching a desirable risk. This is an opportunity for us. So we will look -- we know the capital that's interested in property cat. We know the capital is interested in other property, and we know the capital that is coming in, a lot of it to the longer-tail casualty lines. A lot of it is capital that's already been active in Bermuda, many of which have been in the life sector. So these are -- it's a different strategy where they're looking at the reserves is funding their investment strategy, not looking for low beta risk, which has been the traditional third-party capital appetite for property cat risk. We're well positioned to produce that risk. We're well positioned to structured vehicles that allow them to share that risk that we have. The other side of that is it's capital that's coming in that we'll compete with, so we're just trying to figure out how it's going to move the market, if it's going to move the market and then how it can be a tool for us to service it and to bring fee income to our shareholders.

We'll take our next question from Ryan Tunis with Cantor.

I guess just for Kevin. So we're talking down 10% as sort of a base case. But I'm just curious, in a marketplace like this, as we move toward the renewal, what are the type -- for somewhere in the year sea, what are the types of, I don't know, red flags that you'd be looking for that might suggest that the market is being a little bit less disciplined?

So it can be on any number of things. I am going into this renewal with optimism. It's going to be a pricing shift, not a terms and conditions shift, which I think is likely to be the case. Sometimes terms and conditions changing have material impact on economics and it's less transparent to see in the portfolio. I don't think that's what we're going to see this one one. So from my perspective, I think it will be a relatively transparent shift in economics, and we think it's in the ballpark of a 10% rate reduction. So there are numerous other things we'll monitor. We've got great underwriting capabilities. We have great tools to see changes in the portfolio. So we do see other ships. And economics that are less transparent than price will react accordingly, but it's not my expectation.

Got it. And then I'll just end here with a couple of separate ones. First one, just for Bob. So in the 2024 10-K, the Property segment shows about $1.2 billion of IBNR for 2022 and prior years. I'm wondering after all the releases this year if that's still a solidly positive number. And then just separately, just curious if there's anything you guys want to say at this juncture on Melissa exposure?

I'll handle the first, I'll give exposure to listen to David. Generally speaking, that's a question the way I would look at that and approach it. Our point in time reserves in property right now are about $6.3 billion now. And a year ago, they were $6.5 billion. So we've continued to build reserves. We've had some reserve releases, and they're mutually exclusive of one another. The reserve releases are based on information that we get over time and we act accordingly. We've got independent advisers that look at this and test it, one of them is PricewaterhouseCoopers. So as far as absolute levels, they're relatively constant.

Yes. And Ryan, this is David. I'll take the Melissa question. First of all, Cat 5, a very powerful Cat 5 directed on Jamaica. So our sympathies are with the people in Jamaica as they work through this. It's too soon to put any number on it. We have a couple of locations and not a lot of exposure in the cat book, but a couple of locations in the other property book. So we don't think it will be that anything of an outlier financial event, but too early to put a number on it. And it is still a live event that's going to the Hamas next. So we'll be continuing that in the capital, particularly, we don't write any of the local Jamaica companies. So we've already looked into that part of it.

We'll take our final question from Tracy Benguigui with Wolfe Research.

Interesting comments on demand, but you also mentioned that supply outweighs demand looking ahead into 2026. So this is more of a macro question. than a run rate question specifically, but if you had to take an educated guess, how much of the $800 billion-ish reinsurance dedicated capital need to leave the industry, whether it be from like cat losses or capital returns to get to a state of equilibrium?

That's a -- I don't know how to answer your question. I would say what we look at is what is the overplay programs, and maybe that is a barometer as to kind of what level of capitalization brings us back to a balanced market. I don't anticipate substantial over placement. So that would indicate that we're relatively close to balance. The fact that rates or forecast or our expectation is down 10%, which suggests we're relatively close to balance. So I think there's a bit of -- sometimes bringing together the amount of capital and then the appetite for risk. I think the appetite of risk is unlikely to be wildly disconnected from the increase in demand, which will be less than what it was last year, but still there. So I don't think we're far out of balance from a willingness to deploy into the market. So I don't think it's a matter of x billion dollars leaving the market, and then we're back in. It's really about the perception of risk, and what is the comfort level for deployment into peak zone, particularly property cat.

Okay. That was interesting. I understand the lot of property business that used to be underwritten by an insurer as a whole account backed by facultative reinsurance, and now that risk is being unwritten shared and layered. So as a reinsurer, how is this trend impacting your opportunity set and relative pricing? Like I heard that some of the layers have different terms and conditions.

Yes, this is David. I think what you're referring to is a business that would go into our other Property segment or subsegment you're right. Cat-exposed E&S business, a lot of that shared and layered that's coming under competition. It's performed very well, but that competition for the large account E&S Fortune-1000 is where some of that is going on. That's a minority portion of our book. We also have positions in middle market, small commercial homeowners. Overall, the book has performed really well. And like I think I said earlier, the favorable development we're seeing is a good example of how the terms and conditions that are on our portfolio are holding up really well. So there'll be some additional competition, but still optimistic with how that book is performing.

This does conclude the time we have for questions today. I would like to now turn the call back to Kevin O'Donnell for any additional or closing remarks.

Thank you for joining today's call. We hope the comments were helpful. We look forward to the renewal and talking to you after year-end. Thanks again for joining.

This concludes today's RenaissanceRe third quarter 2025 earnings call and webcast. Please disconnect your line at this time, and have a wonderful day.