RENAISSANCERE: MANAGEMENT REPORT AND ANALYSIS OF THE FINANCIAL POSITION AND OPERATING RESULTS (Form 10-Q)

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The following is a discussion and analysis of our results of operations for the
three and six months ended June 30, 2021 and 2020, respectively, as well as our
liquidity and capital resources at June 30, 2021. This discussion and analysis
should be read in conjunction with the unaudited consolidated financial
statements and notes thereto included in this filing and the audited
consolidated financial statements and notes thereto contained in our Form 10-K
for the fiscal year ended December 31, 2020. This filing contains
forward-looking statements that involve risks and uncertainties. Actual results
may differ materially from the results described or implied by these
forward-looking statements. See "Note on Forward-Looking Statements."
In this Form 10-Q, references to "RenaissanceRe" refer to RenaissanceRe Holdings
Ltd. (the parent company) and references to "we," "us," "our" and the "Company"
refer to RenaissanceRe Holdings Ltd. together with its subsidiaries, unless the
context requires otherwise.
All dollar amounts referred to in this Form 10-Q are in U.S. dollars unless
otherwise indicated.
Due to rounding, numbers presented in the tables included in this Form 10-Q may
not add up precisely to the totals provided.
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INDEX OF DISCUSSION AND ANALYSIS BY THE FINANCIAL POSITION AND OPERATING RESULTS DEPARTMENT

                                                                  Page
  OVERVIEW                                                         54
  SUMMARY OF CRITICAL ACCOUNTING ESTIMATES                         56
  SUMMARY RESULTS OF OPERATIONS                                    66
  FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES             76
  Financial Condition                                              76
  Liquidity and Cash Flows                                         77
  Capital Resources                                                81
  Reserve for Claims and Claim Expenses                            82
  Investments                                                      83
  Ratings                                                          85
  SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION                     85
  EFFECTS OF INFLATION                                             87
  OFF-BALANCE SHEET AND SPECIAL PURPOSE ENTITY ARRANGEMENTS        87
  CONTRACTUAL OBLIGATIONS                                          87
  CURRENT OUTLOOK                                                  87


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PREVIEW

RenaissanceRe is a global provider of reinsurance and insurance. We offer our clients non-life and specialty reinsurance as well as certain insurance solutions, mainly through intermediaries. Established in 1993, we have offices in Bermuda, Australia, Ireland, Singapore, Swiss, the UK, and the we Our operating subsidiaries include Renaissance Reinsurance, Renaissance Reinsurance US Inc., RenaissanceRe Specialty US Ltd. (“RenaissanceRe Specialty we“), RenaissanceRe Europe AG (“RREAG”), Renaissance Reinsurance of Europe Unlimited Company and our Lloyd’s union, RenaissanceRe Syndicate 1458 (“Syndicate 1458”). We also underwrite reinsurance on behalf of joint ventures, including DaVinci Reinsurance Ltd. (“Da Vinci”), Top Layer Reinsurance Ltd. (“Top layer Re”), Upsilon RFO Re Ltd. (“Upsilon RFO”) and Vermeer Reinsurance Ltd.
(“Vermeer”). In addition, through RenaissanceRe Medici Fund Ltd. (“Medici”), we invest in various insurance-based investment vehicles the returns of which are primarily linked to the risk of real estate catastrophe. Our mission is to match desirable, well-structured risks with effective sources of capital to achieve our vision of being the best underwriter. We believe this will allow us to generate superior returns for our shareholders over the long term, protect communities and foster prosperity. We seek to achieve these goals by being a trusted long-term partner for our clients in risk assessment and management, providing responsive and innovative solutions, leveraging our core risk assessment capabilities and information management, investing in these core capabilities to serve our customers through market cycles and deliver on our promises. Our strategy focuses on superior risk selection, superior client relationships and superior capital management. We deliver value to our clients and our joint venture and managed fund partners in the form of financial security, innovative products and responsive service. We are recognized as a leader in the prompt resolution of valid claims. We primarily measure our financial success by the long-term growth in tangible book value per common share plus the change in accrued dividends. We believe this measure is the most appropriate measure of our financial performance, and on which we believe we have performed better over time. The main drivers of our profits are underwriting income, investment income and commission income generated by our third party capital management activities. Our core products include P&C and specialty reinsurance, as well as certain insurance products primarily distributed through intermediaries, with whom we have had strong, long-term relationships. We have believed that we have been one of the world’s leading providers of catastrophe reinsurance since our inception. Over the past few years, through the strategic execution of several initiatives, including organic growth and acquisitions, we have broadened and diversified our liability and specialty insurance platform and products, and believe we are a leader. leader in certain sectors of civil and specialized liability insurance. We are also looking for a number of other opportunities, such as building and managing our joint ventures and managed funds, executing custom reinsurance trades to assume or cede risk, and managing certain strategic focused investments. on risk categories other than catastrophe reinsurance. From time to time, we consider diversifying into new businesses, either through organic growth, forming new joint ventures or managed funds, or acquiring or investing in other companies or volumes of business. business of other companies. We have determined that our business consists of the following reportable segments: (1) Property, which includes reinsurance and catastrophe insurance and other property written on behalf of our operating subsidiaries and certain joint ventures and managed funds , and (2), which includes reinsurance and liability and specialist liability insurance underwritten on behalf of our operating subsidiaries and certain joint ventures and managed funds. To better serve our clients where they do business, we have operating subsidiaries, branches, joint ventures, managed funds and underwriting platforms around the world. We underwrite P&C and specialty reinsurance through our wholly owned operating subsidiaries, joint ventures, managed funds and Syndicate 1458 and certain insurance products primarily through Syndicate 1458 and RenaissanceRe Specialty. we Syndicate 1458 gives us access to Lloyd’s extensive distribution network and worldwide licenses, and also concludes business through delegation of authority agreements. The underwriting results of our operating subsidiaries and underwriting platforms are included in our P&C and Specialties segment results, where applicable.

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A meaningful portion of the reinsurance and insurance we write provides
protection from damages relating to natural and man-made catastrophes. Our
results depend to a large extent on the frequency and severity of these
catastrophic events, and the coverages we offer to customers affected by these
events. We are exposed to significant losses from these catastrophic events and
other exposures we cover, which primarily impact our Property segment, in both
the property catastrophe and other property lines of business. Accordingly, we
expect a significant degree of volatility in our financial results and our
financial results may vary significantly from quarter-to-quarter and from
year-to-year, based on the level of insured catastrophic losses occurring around
the world. Our Casualty and Specialty business, which represents approximately
half of our gross premiums written annually, is an efficient use of capital that
is generally less correlated with our Property business. It allows us to bring
additional capacity to our clients, across a wider range of product offerings,
while continuing to be good stewards of our shareholders' capital.
We continually explore appropriate and efficient ways to address the risk needs
of our clients and the impact of various regulatory and legislative changes on
our operations. We have created and managed, and continue to manage, multiple
capital vehicles across several jurisdictions and may create additional risk
bearing vehicles or enter into additional jurisdictions in the future. In
addition, our differentiated strategy and capabilities position us to pursue
bespoke or large solutions for clients, which may be non-recurring. This, and
other factors including the timing of contract inception, could result in
significant volatility of premiums in both our Property and Casualty and
Specialty segments. As our product and geographical diversity increases, we may
be exposed to new risks, uncertainties and sources of volatility.
Our revenues are principally derived from three sources: (1) net premiums earned
from the reinsurance and insurance policies we sell; (2) net investment income
and net realized and unrealized gains from the investment of our capital funds
and the investment of the cash we receive on the policies which we sell; and (3)
fee income received from our joint ventures and managed funds, advisory services
and various other items.
Our expenses primarily consist of: (1) net claims and claim expenses incurred on
the policies of reinsurance and insurance we sell; (2) acquisition costs which
typically represent a percentage of the premiums we write; (3) operating
expenses which primarily consist of personnel expenses, rent and other operating
expenses; (4) corporate expenses which include certain executive, legal and
consulting expenses, costs for research and development, transaction and
integration-related expenses, and other miscellaneous costs, including those
associated with operating as a publicly traded company; (5) redeemable
noncontrolling interests, which represent the interests of third parties with
respect to the net income of DaVinciRe Holdings Ltd. ("DaVinciRe"), Medici and
Vermeer; and (6) interest and dividend costs related to our debt and preference
shares. We are also subject to taxes in certain jurisdictions in which we
operate. Since the majority of our income is currently earned in Bermuda, which
does not have a corporate income tax, the tax impact to our operations has
historically been minimal. In the future, our net tax exposure may increase as
our operations expand geographically, or as a result of adverse tax
developments.
The underwriting results of an insurance or reinsurance company are discussed
frequently by reference to its net claims and claim expense ratio, underwriting
expense ratio, and combined ratio. The net claims and claim expense ratio is
calculated by dividing net claims and claim expenses incurred by net premiums
earned. The underwriting expense ratio is calculated by dividing underwriting
expenses (acquisition expenses and operational expenses) by net premiums earned.
The combined ratio is the sum of the net claims and claim expense ratio and the
underwriting expense ratio. A combined ratio below 100% indicates profitable
underwriting prior to the consideration of investment income. A combined ratio
over 100% indicates unprofitable underwriting prior to the consideration of
investment income. We also discuss our net claims and claim expense ratio on a
current accident year basis and a prior accident years basis. The current
accident year net claims and claim expense ratio is calculated by taking current
accident year net claims and claim expenses incurred, divided by net premiums
earned. The prior accident years net claims and claim expense ratio is
calculated by taking prior accident years net claims and claim expenses
incurred, divided by net premiums earned.
Segments
Our reportable segments are defined as follows: (1) Property, which is comprised
of catastrophe and other property reinsurance and insurance written on behalf of
our operating subsidiaries and certain joint ventures and managed funds, and (2)
Casualty and Specialty, which is comprised of casualty and specialty
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reinsurance and insurance written on behalf of our operating subsidiaries and
certain joint ventures and managed funds. In addition to our two reportable
segments, we have an Other category, which primarily includes our strategic
investments, investments unit, corporate expenses, capital servicing costs,
noncontrolling interests and certain expenses related to acquisitions and
disposals.
COVID-19 Pandemic
In late 2019, an outbreak of a novel strain of coronavirus emerged and has since
spread globally. It is not yet possible to give an estimate of all of the
Company's potential reinsurance, insurance or investment exposures, or any other
effects that the COVID-19 pandemic may have on our results of operations or
financial condition. Due to the ongoing and rapidly evolving nature of the
COVID-19 pandemic, we are continuing to evaluate the impact of the COVID-19
pandemic on our business, operations and financial condition, including our
potential loss exposures.
We approach estimation of our potential loss exposure by dividing our exposures
into three categories: (1) event-like losses, such as event contingency,
event-based casualty class and certain types of accident and health, (2)
developing losses, such as traditional casualty lines, financial credit lines,
such as mortgage and trade credit and surety, and (3) known unknowns, which is
primarily business interruption. We continue to evaluate industry trends and our
potential exposure associated with the ongoing COVID-19 pandemic, and expect
historically significant industry losses to emerge over time as the full impact
of the pandemic and its effects on the global economy are realized. A longer or
more severe recession will increase the probability of losses. Potential
legislative, regulatory and judicial actions are also causing significant
uncertainty with respect to policy coverage and other issues. Among other
things, we continue to actively monitor information received from or reported by
clients, brokers, industry actuaries, regulators, courts, and others, and to
assess that information in the context of our own portfolio.
In addition to coverage exposures, volatility in global financial markets,
together with low or negative interest rates, reduced liquidity or a slowdown in
global economic conditions in many economies, have impacted, and may affect, our
investment portfolio in the future. These conditions may also negatively impact
our ability to access liquidity and capital markets financing, which may not be
available or may only be available on unfavorable terms.

SUMMARY OF CRITICAL ACCOUNTING ESTIMATES Our critical accounting estimates include “provisions for claims and claims related expenses”, “premiums and related charges”, “reinsurance receivables”, “fair value measurements and impairments” and “Income taxes”, and are discussed in the MD&A and Analysis of Financial Position and Results of Operations in our Form 10-K for the year ended December 31, 2020. There have been no material changes to our critical accounting estimates as disclosed in our Form 10-K for the year ended. December 31, 2020.

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