The financial performance of an island-based reinsurance company has been boosted by the results of a firm it acquired last year.

Last week RenaissanceRe Holdings Ltd reported second-quarter net income available to common shareholders of $495 million, a jump of 159 per cent year-over-year.

Part of the reason for the performance was put down to the growth of Validus Re, which RenRe took over last November.

The firm said the Validus transaction “continues to accrete significant value to our shareholders by delivering substantial growth in both premium and invested assets in one of the most favourable business environments in our history”.

In an earnings call, RenRe chief executive Kevin J. O’Donnell added: “One more reason we are so excited about the future is the performance of our Validus Re acquisition.

“We have renewed most of the Validus book at this point, and we believe we achieved our most important objectives underwriting, people and capital.

“From an underwriting perspective, I am pleased to report that the Validus portfolio has outperformed initial expectations against every relevant metric.”

In the call, Mr O’Donnell said RenRe was “delivering results across each of our three drivers of profit and believe that we can continue to do so for several reasons”.

“First, property reinsurance rates remain attractive. We led the market pricing reset in 2023 and are confident that the rate strength we are currently experiencing will continue.

“The market is becoming increasingly stable. Primary companies are adjusting to the new reinsurance market by increasing property rates. This allows them to continue to add limit to their reinsurance protections.

“Over the preceding year, we estimate that demand for property catastrophe reinsurance limit in the US, excluding cat bonds, has increased by about $20 billion.

“This new demand was present at the beginning of the year and accelerated into the midyear renewals.” He said that supply ultimately met the demand, but did not exceed it.

He added: “Second, interest rates have proven to be sticky. And even with anticipated rate cuts, will likely remain higher than they have been over most of the past two decades.

“At the same time, our investment portfolio continues to grow. The combination of increased investment leverage, largely benefiting from our casualty and specialty portfolio and increased book yield are driving compelling returns and benefiting shareholders.”

Third, said Mr O’Donnell, “our fee-generating capital partners business is performing well”.

“We have attractive structures and provide our third-party capital partners access to several offerings, all of which benefit from the exceptional talent of our underwriting franchise.

“This aligns strategy continues to attract capital and separates us from other managers.

“Our capital partners business improves our offerings to customers, enhances our ability to optimise our portfolio and generate attractive fees for doing so.”