AM Best has affirmed the credit ratings of Bermudian-based RenaissanceRe Holdings Ltd and its main subsidiaries, many of which are also domiciled on the island.

The ratings agency has:

• affirmed the financial strength rating of A+ (Superior) and the long-term issuer credit ratings of “aa-” (Superior) of Renaissance Reinsurance Ltd, Renaissance Reinsurance US Inc of Maryland, RenaissanceRe Specialty US Ltd, Renaissance Reinsurance of Europe Unlimited Company of Dublin and RenaissanceRe Europe AG of Zurich

• affirmed the long-term ICR of “a-” (Excellent) and the long-term issue credit ratings of RenaissanceRe Holdings Ltd

• affirmed the FSR of A (Excellent) and the long-term ICR of a+“ (Excellent) of DaVinci Reinsurance Ltd and the long-term ICR of bbb+” (Good) of DaVinciRe Holdings Ltd

• affirmed the FSR of A (Excellent) and the long-term ICR of “a+” (Excellent) of Fontana Reinsurance Ltd, Fontana Reinsurance US Ltd, and Vermeer Reinsurance Ltd

The outlook of these credit ratings is stable. All companies are domiciled in Bermuda, unless otherwise specified.

The ratings of RenaissanceRe reflect the group’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, very favourable business profile and very strong enterprise risk management.

AM Best said its assessment of RenaissanceRe’s overall balance sheet strength considers the positive impact of the financial flexibility provided by its ultimate parent, RNR, which typically maintains significant capital at the holding company level and is available to be downstreamed into its underwriting companies, as needed.

“RNR has consistently demonstrated its ability to raise capital through the public and private equity markets, as well as the public debt markets. RNR’s ability to attract and deploy capital during favourable and challenging market cycles is an important consideration in AM Best’s assessment of the enterprise’s overall balance sheet strength and the individual balance sheet assessments of RNR’s operating companies.”

The agency added: “RenaissanceRe’s operating performance has improved substantially in recent years in terms of dampened volatility as its specialty and casualty lines have earned into the portfolio and partially offset the volatility produced by the property catastrophe core of RenaissanceRe’s writings.

“Additionally, for the year ended December 31, 2023, which did not experience outsized property catastrophe activity, RenaissanceRe produced very strong operating performance from underwriting and fee generation.

“Lastly, investment returns have increased significantly as RenaissanceRe’s relatively short-duration fixed-income portfolio experienced a marked increase in yield as expiring issuances were reinvested at improved yields to maturity.”

AM Best said it has revised its assessment of RenaissanceRe’s business profile to very favourable from favourable, which partially reflects the company’s successful integration of Validus Reinsurance Ltd and its consolidated subsidiaries, which were acquired along with the rest of American International Group Inc’s treaty reinsurance business in a transaction that was completed in the fourth quarter of 2023.

“The addition of the Validus Re portfolio further strengthened RenaissanceRe’s already considerable global market position in the property catastrophe reinsurance segment, as well as in casualty and specialty lines that now comprise more than half of its underwriting premiums and have been consistently profitable.”

AM Best said RenaissanceRe’s business profile assessment also recognises the company’s leadership in ERM, modelling capabilities and third-party capital management, where it maintains a strong reputation in evaluating risk and effectively deploying capital.

“As a result, it has attracted capital from outside investors to form several successful joint ventures, including DaVinci, Top Layer Reinsurance Ltd, Vermeer, and most recently, Fontana Holdings LP, its first third-party reinsurance capital-backed joint venture focused on casualty and specialty risks.

“Partially offsetting these strengths is RenaissanceRe’s exposure to high-severity losses associated with global catastrophe events, although the company’s underwriting results and overall operating performance has grown increasingly less volatile, as diversifying business lines have mitigated the impact of catastrophe losses.

“Looking forward, RenaissanceRe appears well positioned to benefit from continued, favourable overall market conditions in the global reinsurance space.”

The ratings of DaVinci reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and very strong ERM. DaVinci’s profile is enhanced due to its affiliation to RenaissanceRe.

The ratings of Fontana Re, Fontana Re US and Vermeer reflect their balance sheet strength, which AM Best assesses as very strong, as well as their adequate operating performance, neutral business profile and very strong ERM.