Bermudian-based RenaissanceRe Holdings Ltd recorded a $593.8 million net deferred tax asset in the fourth quarter of 2023, which it says is expected to be utilised predominantly over a ten-year period.

The news came as RenRe reported its fiscal-year 2023 and fourth-quarter results.

Bermuda enacted the Corporate Income Tax Act 2023 last month.

A RenRe spokesman said: “The Act includes a provision referred to as the economic transition adjustment, which is intended to provide a fair and equitable transition into the tax regime, and results in a deferred tax benefit for the company.

“The Act will also require the company to reverse certain transaction-related purchase accounting adjustments in determining its taxable income, which results in a deferred tax expense.”

The spokesman added: “The company expects to incur and pay increased taxes in Bermuda beginning in 2025.”

Overall, the company said, it recorded an income tax benefit of $554.2 million compared with an expense of $5.4 million in the fourth quarter of 2022.

It said the increase in income tax benefit was primarily driven by the net deferred tax benefit, partially offset by increased income tax expense in the company’s other operating jurisdictions as a result of higher operating income and investment gains.

A strong fourth quarter helped propel RenRe to $2.5 billion of annual net income available to common shareholders in fiscal year 2023.

The annual operating income available to common shareholders during the period was $1.8 billion.

RenRe reported $1.6 billion of quarterly net income available to common shareholders and $623.1 million of quarterly operating income available to common shareholders in Q4.

Kevin J. O’Donnell, president and chief executive officer, said: “We finished a strong year with an exceptional quarter, reporting an annualised operating return on average common equity of 33 per cent.

“We begin 2024 stronger than ever. The Validus acquisition and integration has exceeded our expectations and positions us to continue delivering exceptional shareholder value.

“At the January 1 renewal, we were successful in retaining our combined portfolio at favourable terms. Our underwriting portfolio is now larger, more diverse and more efficient with great rate adequacy, providing the platform for continuing strong performance across our three drivers of profit.”

For the full year, RenRe’s return on average common equity was 40.5 per cent and the operating return on average common equity was 29.3 per cent.

The company reported 57.9 per cent growth in book value per share.

RenRe recorded strong performance across its three drivers of profit: underwriting income of $1.6 billion, net investment income of $1.2 billion, and fee income of $236.8 million.

The combined ratio was 77.9 per cent and the adjusted combined ratio was 77.1 per cent.

RenRe said it raised $1.2 billion of third-party capital in the Capital Partners unit, with a further $494.8 million raised from third-party investors effective January 1.

In November, the company completed its acquisition of Validus Holdings Ltd, Validus Specialty LLC and the renewal rights, records and customer relationships of the assumed treaty reinsurance business of Talbot Underwriting Ltd from subsidiaries of American International Group.

The operating activities of Validus from the acquisition date, November 1, through December 31, are included in RenRe's consolidated statements of operations for the three months and year ended December 31.