Validus Re brought 22% in 9M GWP growth and $304m in profits to RenRe
Validus Re arrived in the RenaissanceRe group sporting 22% growth in gross written premium over the first 9M and having swung to a handy profit from prior year losses.
Validus Holdings, almost exclusively consisting of Validus Re, the key element of the 2023 M&A deal between RenaissanceRe and AIG, swung to a $304.1 million 9M net profit, updated transaction terms showed.
That profit was a far cry from the $352 million in net losses over the prior year period, a loss driven primarily by $400 million in unrealized investment losses following the global interest rate reset of early 2022.
But underwriting performance had improved as well. A rough and ready measure of underwriting profits (NEP - LAE, G&A & acquisition costs) grew 15 times year on year to $311 million as loss expense grew by a comparatively minor 5.9% year on year.
Renaissance Re announced in May 2023 that it would pay AIG $2.74 billion in cash and $250 million in new equity for AIG’s reinsurance operations, chiefly Validus Re, exclusive of 95% of existing reserve development, plus the ILS manager AlphaCat and renewal rights to the treaty reinsurance book at unit Talbots, a specialty (re)insurance group operating on the Lloyd’s market. That deal closed in November 2023.
Validus Specialty, a tag-along asset to the deal, brought $34 million in 9M revenues and just under $2 million in profits.
RenaissanceRe obviously could offer no P&L on the Talbots treaty reinsurance book, to which it bought renewal rights but not existing exposure. But it did book the fair value of total acquired renewal rights, including at Talbots, at $215 million.
The combined group, had it existed through the first 9M of 2023, would have boasted $9.87 billion in gross written premium and hauled in $1.35 billion in attributable net profits, pro forma calculations showed.
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