0000913144 srt:NonGuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2019-09-30


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SeptemberJune 30, 20192020
OR
 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-14428
RENAISSANCERE HOLDINGS LTD.LTD.
(Exact Name Of Registrant As Specified In Its Charter)
Bermuda98-0141974
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer

Identification Number)
Renaissance House,, 12 Crow Lane,, Pembroke,, BermudaHM 19
(Address          (Address of Principal Executive Office)Offices)   (Zip Code)
(441) (441) 295-4513
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
symbol

symbol(s)		Name of each exchange on which registered
Common Shares, Par Value $1.00 per shareRNRNew York Stock Exchange
Series C 6.08% Preference Shares, Par Value $1.00 per shareRNR PRCNew York Stock Exchange
Series E 5.375% Preference Shares, Par Value $1.00 per shareRNR PRENew York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a Series F 5.750% Preference Share, Par Value $1.00 per shareRNR PRFNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒  No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒, Accelerated filer ☐, Non-accelerated filer ☐, Smaller reporting company ☐, Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐ No ☒
The number of Common Shares, par value US $1.00 per share, outstanding at October 25, 2019July 24, 2020 was 44,151,949.
51,216,780.




RENAISSANCERE HOLDINGS LTD.
TABLE OF CONTENTS
Page
NOTE ON FORWARD-LOOKING STATEMENTS
3
ITEM 1.
6
Page
NOTE ON FORWARD-LOOKING STATEMENTS
3
PART I
ITEM 1.
FINANCIAL STATEMENTS
Consolidated Balance Sheets at September 30, 2019 (unaudited) and December 31, 2018
5
Unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2019 and 2018
6
Unaudited Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2019 and 2018
7
Unaudited Consolidated Statements of Changes in Shareholders’ Equity for the three and nine months ended September 30, 2019 and 2018
8
Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018
9
Notes to the Consolidated Financial Statements
10
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
7065
ITEM 3.
113103
ITEM 4.
113103
ITEM 1.
114104
ITEM 1A.
114104
ITEM 2.
114104
ITEM 3.
114104
ITEM 4.
114104
ITEM 5.
114104
ITEM 6.
115105
116106


2

NOTE ON FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Form 10-Q”) of RenaissanceRe Holdings Ltd. (the “Company” or “RenaissanceRe”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, us. In particular, statements using words such as “may”, “should”, “estimate”, “expect”, “anticipate”, “intend”, “believe”, “predict”, “potential”,“may,” “should,” “estimate,” “expect,” “anticipate,” “intend,” “believe,” “predict,” “potential,” or words of similar import generally involve forward-looking statements. For example, we may include certain forward-looking statements in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” with regard to trends in results, prices, volumes, operations, investment results, margins, combined ratios, fees, reserves, market conditions, risk management and exchange rates. This Form 10-Q also contains forward-looking statements with respect to our business and industry, such as those relating to our strategy and management objectives, market standing and product volumes, competition and new entrants in our industry, industry capital, insured losses from loss events, government initiatives and regulatory matters affecting the reinsurance and insurance industries.
The inclusion of forward-looking statements in this report should not be considered as a representation by us or any other person that our current objectives or plans will be achieved. Numerous factors could cause our actual results to differ materially from those addressed by the forward-looking statements, including the following:
•the uncertainty of the continuing impact of the COVID-19 pandemic and measures taken in response thereto;
•the effect of legislative, regulatory, judicial or social influences related to the COVID-19 pandemic on our financial performance, including the emergence of unexpected or un-modeled insurance or reinsurance losses and our ability to conduct our business;
•the impact and potential future impacts of the COVID-19 pandemic on the value of our investments and our access to capital in the future or the pricing or terms of available financing;
•the effect that measures taken to mitigate the COVID-19 pandemic have on our operations and those of our counterparties;
•the frequency and severity of catastrophic and other events we cover;
•the effectiveness of our claims and claim expense reserving process;
our ability to maintain our financial strength ratings;  
•the effect of climate change on our business, including the trend towards increasingly frequent and severe climate events;
•our ability to maintain our financial strength ratings;
•the effect of emerging claims and coverage issues;
•collection on claimed retrocessional coverage, and new retrocessional reinsurance being available on acceptable terms and providing the coverage that we intended to obtain;
•our reliance on a small and decreasing number of reinsurance brokers and other distribution services for the preponderance of our revenue;
•our exposure to credit loss from counterparties in the normal course of business;
•the effect of emerging claims and coverage issues;continued challenging economic conditions throughout the world;
•the performance of our investment portfolio;
•a contention by the United States (the “U.S.”) Internal Revenue Service that Renaissance Reinsurance Ltd. (“Renaissance Reinsurance”), or any of our other Bermuda subsidiaries, is subject to taxation in the U.S.;
3

•the effects of United States (“U.S.”) tax reform legislation and possible future tax reform legislation and regulations, including changes to the tax treatment of our shareholders or investors in our joint ventures or other entities we manage;
soft reinsurance underwriting market conditions;
our reliance on a small and decreasing number of reinsurance brokers and other distribution services for the preponderance of our revenue;
our exposure to credit loss from counterparties in the normal course of business;
•the effect of continued challenging economic conditions throughout the world;cybersecurity risks, including technology breaches or failure, on our business;
a contention by the Internal Revenue Service (the “IRS”) that Renaissance Reinsurance Ltd. (“Renaissance Reinsurance”), or any of our other Bermuda subsidiaries, is subject to taxation in the U.S.;
•the success of any of our strategic investments or acquisitions, including our ability to manage our operations as our product and geographical diversity increases;
•our ability to retain our key senior officers and to attract or retain the executives and employees necessary to manage our business;
the performance of our investment portfolio;
losses we could face from terrorism, political unrest or war;
the effect of cybersecurity risks, including technology breaches or failure, on our business;
our ability to successfully implement our business strategies and initiatives;


our ability to determine the impairments taken on our investments;
the effects of inflation;
the ability of our ceding companies and delegated authority counterparties to accurately assess the risks they underwrite;
the effect of operational risks, including system or human failures;
•our ability to effectively manage capital on behalf of investors in joint ventures or other entities we manage;
•foreign currency exchange rate fluctuations;
•soft reinsurance underwriting market conditions;
•changes in the method for determining the London Inter-bank Offered Rate (“LIBOR”) and the potential replacement of LIBOR;
•losses we could face from terrorism, political unrest or war;
•our ability to successfully implement our business strategies and initiatives;
•our ability to determine any impairments taken on our investments;
•the effects of inflation;
•the ability of our ceding companies and delegated authority counterparties to accurately assess the risks they underwrite;
•the effect of operational risks, including system or human failures;
•our ability to raise capital if necessary;
•our ability to comply with covenants in our debt agreements;
•changes to the regulatory systems under which we operate, including as a result of increased global regulation of the insurance and reinsurance industries;
•changes in Bermuda laws and regulations and the political environment in Bermuda;
•our dependence on the ability of our operating subsidiaries to declare and pay dividends;
•aspects of our corporate structure that may discourage third-party takeovers and other transactions;
•difficulties investors may have in servicing process or enforcing judgments against us in the U.S.;
•the cyclical nature of the reinsurance and insurance industries;
•adverse legislative developments that reduce the size of the private markets we serve or impede their future growth;
•consolidation of competitors, customers and insurance and reinsurance brokers;
•the effect on our business of the highly competitive nature of our industry, including the effect of new entrants to, competing products for and consolidation in the (re)insurance industry;
•other political, regulatory or industry initiatives adversely impacting us;
increasing barriers to free trade and the free flow of capital;
•our ability to comply with applicable sanctions and foreign corrupt practices laws;
•increasing barriers to free trade and the free flow of capital;
•international restrictions on the writing of reinsurance by foreign companies and government intervention in the natural catastrophe market;
•the effect of Organisation for Economic Co-operation and Development (the “OECD”) or European Union (“EU”) measures to increase our taxes and reporting requirements;
the effect of the vote by the United Kingdom (the “U.K.”) to leave the EU;
4

•changes in regulatory regimes and accounting rules that may impact financial results irrespective of business operations;
•our need to make many estimates and judgments in the preparation of our financial statements; and
risks that •the ongoing integrationeffect of the TMR Group Entities (as defined herein) disrupts or distractsexit by the United Kingdom (the “U.K.”) from current plans and operations; and
our ability to recognize the benefits of the TMR Stock Purchase (as defined herein).EU.
As a consequence, our future financial condition and results may differ from those expressed in any forward-looking statements made by or on behalf of us. The factors listed above, which are discussed in more detail in our filings with the U.S. Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K (“Form 10-K”) for the year ended December 31, 2018,2019, Part II, Item 1A of this Quarterly Report on Form 10-Q and our prospectus supplement dated June 4, 2020, should not be construed as exhaustive. The effects of the events and circumstances described in the risk factors contained in this Form 10-Q may have the effect of heightening many of the risks contained in our Form 10-K. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to revise or update forward-looking statements to reflect new information, events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

5

PART I  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Consolidated Balance Sheets at June 30, 2020 (unaudited) and December 31, 2019
7
Consolidated Statements of Operations for the three and six months ended June 30, 2020 and 2019
8
Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2020 and 2019
9
Consolidated Statements of Changes in Shareholders’ Equity for the three and six months ended June 30, 2020 and 2019
10
Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019
11
Notes to the Consolidated Financial Statements
12
Note 1. Organization
12
Note 2. Significant Accounting Policies
14
Note 3. Investments
17
Note 4. Fair Value Measurements
19
Note 5. Reinsurance
29
Note 6. Reserve for Claims and Claim Expenses
30
Note 7. Debt and Credit Facilities
34
Note 8. Noncontrolling Interests
35
Note 9. Variable Interest Entities
38
Note 10. Shareholders’ Equity
41
Note 11. Earnings per Share
43
Note 12. Segment Reporting
44
Note 13. Derivative Instruments
48
Note 14. Commitments and Contingencies and Other Items
54
Note 15. Assets and Liabilities Held for Sale
55
Note 16. Condensed Consolidated Financial Information Provided in Connection with Outstanding Debt of Subsidiaries
56
Note 17. Subsequent Event
64
6

RenaissanceRe Holdings Ltd. and Subsidiaries
Consolidated Balance Sheets
(in thousands of United States Dollars, except share and per share amounts)
June 30,
2020		December 31,
2019
Assets(Unaudited)(Audited)
Fixed maturity investments trading, at fair value – amortized cost $12,188,507 at June 30, 2020 (December 31, 2019 – $11,067,414)$12,495,135  $11,171,655  
Short term investments, at fair value5,570,804  4,566,277  
Equity investments trading, at fair value470,087  436,931  
Other investments, at fair value1,093,338  1,087,377  
Investments in other ventures, under equity method94,285  106,549  
Total investments19,723,649  17,368,789  
Cash and cash equivalents1,185,844  1,379,068  
Premiums receivable3,519,965  2,599,896  
Prepaid reinsurance premiums1,266,203  767,781  
Reinsurance recoverable2,774,358  2,791,297  
Accrued investment income70,004  72,461  
Deferred acquisition costs and value of business acquired734,286  663,991  
Receivable for investments sold648,458  78,369  
Other assets298,396  346,216  
Goodwill and other intangible assets258,591  262,226  
Total assets$30,479,754  $26,330,094  
Liabilities, Noncontrolling Interests and Shareholders’ Equity
Liabilities
Reserve for claims and claim expenses$9,365,469  $9,384,349  
Unearned premiums3,549,641  2,530,975  
Debt1,135,216  1,384,105  
Reinsurance balances payable4,094,027  2,830,691  
Payable for investments purchased1,259,116  225,275  
Other liabilities342,014  932,024  
Total liabilities19,745,483  17,287,419  
Commitments and Contingencies
Redeemable noncontrolling interests3,387,099  3,071,308  
Shareholders’ Equity
Preference shares: $1.00 par value – 11,010,000 shares issued and outstanding at June 30, 2020 (December 31, 2019 – 16,010,000)525,000  650,000  
Common shares: $1.00 par value – 50,811,098 shares issued and outstanding at June 30, 2020 (December 31, 2019 – 44,148,116)50,811  44,148  
Additional paid-in capital1,602,738  568,277  
Accumulated other comprehensive loss(3,066) (1,939) 
Retained earnings5,171,689  4,710,881  
Total shareholders’ equity attributable to RenaissanceRe7,347,172  5,971,367  
Total liabilities, noncontrolling interests and shareholders’ equity$30,479,754  $26,330,094  
 September 30,
2019		 December 31,
2018
Assets(Unaudited) (Audited)
Fixed maturity investments trading, at fair value – amortized cost $11,214,394 at September 30, 2019 (December 31, 2018 – $8,163,962)$11,386,228
 $8,088,870
Short term investments, at fair value4,116,156
 2,586,520
Equity investments trading, at fair value379,422
 310,252
Other investments, at fair value962,109
 784,933
Investments in other ventures, under equity method103,978
 115,172
Total investments16,947,893
 11,885,747
Cash and cash equivalents871,251
 1,107,922
Premiums receivable2,799,954
 1,537,188
Prepaid reinsurance premiums972,047
 616,185
Reinsurance recoverable2,438,299
 2,372,221
Accrued investment income73,509
 51,311
Deferred acquisition costs and value of business acquired708,258
 476,661
Receivable for investments sold225,147
 256,416
Other assets344,593
 135,127
Goodwill and other intangible assets263,259
 237,418
Total assets$25,644,210
 $18,676,196
Liabilities, Noncontrolling Interests and Shareholders’ Equity   
Liabilities   
Reserve for claims and claim expenses$8,602,437
 $6,076,271
Unearned premiums2,967,535
 1,716,021
Debt1,383,498
 991,127
Reinsurance balances payable2,910,601
 1,902,056
Payable for investments purchased654,685
 380,332
Other liabilities395,186
 513,609
Total liabilities16,913,942
 11,579,416
Commitments and Contingencies


 


Redeemable noncontrolling interests2,779,033
 2,051,700
Shareholders’ Equity   
Preference shares: $1.00 par value – 16,010,000 shares issued and outstanding at September 30, 2019 (December 31, 2018 – 16,010,000)650,000
 650,000
Common shares: $1.00 par value – 44,151,949 shares issued and outstanding at September 30, 2019 (December 31, 2018 – 42,207,390)44,152
 42,207
Additional paid-in capital560,166
 296,099
Accumulated other comprehensive income (loss)4,988
 (1,433)
Retained earnings4,691,929
 4,058,207
Total shareholders’ equity attributable to RenaissanceRe5,951,235
 5,045,080
Total liabilities, noncontrolling interests and shareholders’ equity$25,644,210
 $18,676,196



See accompanying notes to the consolidated financial statements

7

RenaissanceRe Holdings Ltd. and Subsidiaries
Consolidated Statements of Operations
For the three and ninesix months endedSeptember June 30, 20192020 and 20182019
(in thousands of United States Dollars, except per share amounts) (Unaudited)
Three months ended Nine months endedThree months endedSix months ended
September 30,
2019		 September 30,
2018		 September 30,
2019		 September 30,
2018		June 30,
2020		June 30,
2019		June 30,
2020		June 30,
2019
Revenues       Revenues
Gross premiums written$861,068
 $625,677
 $3,902,271
 $2,762,672
Gross premiums written$1,701,872  $1,476,908  $3,727,593  $3,041,203  
Net premiums written$704,130
 $453,255
 $2,656,126
 $1,720,808
Net premiums written$1,180,803  $1,022,965  $2,450,611  $1,951,996  
Decrease (increase) in unearned premiums202,618
 78,594
 (287,848) (319,292)
Increase in unearned premiumsIncrease in unearned premiums(170,707) (111,463) (527,417) (490,466) 
Net premiums earned906,748
 531,849
 2,368,278
 1,401,516
Net premiums earned1,010,096  911,502  1,923,194  1,461,530  
Net investment income113,844
 80,696
 311,138
 208,528
Net investment income89,305  118,588  188,778  200,682  
Net foreign exchange losses(8,275) (4,566) (1,812) (11,496)
Net foreign exchange (losses) gainsNet foreign exchange (losses) gains(7,195) 9,309  (12,923) 6,463  
Equity in earnings of other ventures5,877
 7,648
 17,350
 14,331
Equity in earnings of other ventures9,041  6,812  13,605  11,473  
Other income1,016
 497
 5,109
 480
Net realized and unrealized gains (losses) on investments31,938
 13,630
 396,586
 (86,415)
Other (loss) incomeOther (loss) income(1,201) 922  (5,637) 4,093  
Net realized and unrealized gains on investmentsNet realized and unrealized gains on investments448,390  191,247  337,683  361,260  
Total revenues1,051,148
 629,754
 3,096,649
 1,526,944
Total revenues1,548,436  1,238,380  2,444,700  2,045,501  
Expenses       Expenses
Net claims and claim expenses incurred654,520
 410,510
 1,334,928
 642,380
Net claims and claim expenses incurred510,272  453,373  1,081,226  680,408  
Acquisition expenses202,181
 109,761
 553,614
 312,524
Acquisition expenses233,610  227,482  444,214  351,433  
Operational expenses53,415
 40,593
 158,162
 119,408
Operational expenses49,077  59,814  116,538  104,747  
Corporate expenses13,844
 6,841
 76,480
 21,875
Corporate expenses11,898  23,847  27,889  62,636  
Interest expense15,580
 11,769
 42,868
 35,304
Interest expense11,842  15,534  26,769  27,288  
Total expenses939,540
 579,474
 2,166,052
 1,131,491
Total expenses816,699  780,050  1,696,636  1,226,512  
Income before taxes111,608
 50,280
 930,597
 395,453
Income before taxes731,737  458,330  748,064  818,989  
Income tax expense(3,664) (1,451) (20,670) (2,550)Income tax expense(29,875) (9,475) (21,029) (17,006) 
Net income107,944
 48,829
 909,927
 392,903
Net income701,862  448,855  727,035  801,983  
Net income attributable to redeemable noncontrolling interests(62,057) (6,440) (204,091) (90,822)Net income attributable to redeemable noncontrolling interests(118,728) (71,812) (216,819) (142,034) 
Net income attributable to RenaissanceRe45,887
 42,389
 705,836
 302,081
Net income attributable to RenaissanceRe583,134  377,043  510,216  659,949  
Dividends on preference shares(9,189) (9,708) (27,567) (20,899)Dividends on preference shares(7,289) (9,189) (16,345) (18,378) 
Net income available to RenaissanceRe common shareholders$36,698
 $32,681
 $678,269
 $281,182
Net income available to RenaissanceRe common shareholders$575,845  $367,854  $493,871  $641,571  
Net income available to RenaissanceRe common shareholders per common share – basic$0.83
 $0.82
 $15.58
 $7.02
Net income available to RenaissanceRe common shareholders per common share – basic$12.64  $8.36  $11.04  $14.82  
Net income available to RenaissanceRe common shareholders per common share – diluted$0.83
 $0.82
 $15.57
 $7.02
Net income available to RenaissanceRe common shareholders per common share – diluted$12.63  $8.35  $11.02  $14.81  
Dividends per common share$0.34
 $0.33
 $1.02
 $0.99
Dividends per common share$0.35  $0.34  $0.70  $0.68  











See accompanying notes to the consolidated financial statements

8

RenaissanceRe Holdings Ltd. and Subsidiaries
Consolidated Statements of Comprehensive Income
For the three and ninesix months endedSeptember June 30, 20192020 and 20182019
(in thousands of United States Dollars) (Unaudited)
Three months endedSix months ended
June 30,
2020		June 30,
2019		June 30,
2020		June 30,
2019
Comprehensive income
Net income$701,862  $448,855  $727,035  $801,983  
Change in net unrealized (losses) gains on investments, net of tax(1,488) 1,309  (2,145) 1,272  
Foreign currency translation adjustments, net of tax86  (3,708) 1,018  (3,708) 
Comprehensive income700,460  446,456  725,908  799,547  
Net income attributable to redeemable noncontrolling interests(118,728) (71,812) (216,819) (142,034) 
Comprehensive income attributable to redeemable noncontrolling interests(118,728) (71,812) (216,819) (142,034) 
Comprehensive income attributable to RenaissanceRe$581,732  $374,644  $509,089  $657,513  
 
 Three months ended Nine months ended
 September 30,
2019		 September 30,
2018		 September 30,
2019		 September 30,
2018
Comprehensive income       
Net income$107,944
 $48,829
 $909,927
 $392,903
Change in net unrealized gains on investments, net of tax608
 (382) 1,880
 (1,707)
Foreign currency translation adjustments, net of tax8,249
 —
 4,541
 —
Comprehensive income116,801
 48,447
 916,348
 391,196
Net income attributable to redeemable noncontrolling interests(62,057) (6,440) (204,091) (90,822)
Comprehensive income attributable to redeemable noncontrolling interests(62,057) (6,440) (204,091) (90,822)
Comprehensive income attributable to RenaissanceRe$54,744
 $42,007
 $712,257
 $300,374


































See accompanying notes to the consolidated financial statements

9

RenaissanceRe Holdings Ltd. and Subsidiaries
Consolidated Statements of Changes in Shareholders’ Equity
For the three and ninesix months endedSeptember June 30, 20192020 and 20182019
(in thousands of United States Dollars) (Unaudited)
Three months endedSix months ended
June 30,
2020		June 30,
2019		June 30,
2020		June 30,
2019
Preference shares
Beginning balance$525,000  $650,000  $650,000  $650,000  
Repurchase of shares—  —  (125,000) —  
Ending balance525,000  650,000  525,000  650,000  
Common shares
Beginning balance44,034  44,159  44,148  42,207  
Issuance of shares6,777  —  6,777  1,739  
Repurchase of shares—  —  (406) —  
Exercise of options and issuance of restricted stock awards—  3  292  216  
Ending balance50,811  44,162  50,811  44,162  
Additional paid-in capital
Beginning balance502,608  543,889  568,277  296,099  
Issuance of shares1,088,772  —  1,088,772  248,259  
Repurchase of shares—  —  (62,215) —  
Change in redeemable noncontrolling interests(4) (213) (353) (216) 
Exercise of options and issuance of restricted stock awards11,362  8,534  8,257  8,068  
Ending balance1,602,738  552,210  1,602,738  552,210  
Accumulated other comprehensive loss
Beginning balance(1,664) (1,470) (1,939) (1,433) 
Change in net unrealized losses on investments, net of tax(1,488) 1,309  (2,145) 1,272  
Foreign currency translation adjustments, net of tax86  (3,708) 1,018  (3,708) 
Ending balance(3,066) (3,869) (3,066) (3,869) 
Retained earnings
Beginning balance4,613,548  4,317,455  4,710,881  4,058,207  
Net income701,862  448,855  727,035  801,983  
Net income attributable to redeemable noncontrolling interests(118,728) (71,812) (216,819) (142,034) 
Dividends on common shares(17,704) (14,970) (33,063) (29,439) 
Dividends on preference shares(7,289) (9,189) (16,345) (18,378) 
Ending balance5,171,689  4,670,339  5,171,689  4,670,339  
Total shareholders’ equity$7,347,172  $5,912,842  $7,347,172  $5,912,842  
 
 Three months ended Nine months ended
 September 30,
2019		 September 30,
2018		 September 30,
2019		 September 30,
2018
Preference shares       
Beginning balance$650,000
 $650,000
 $650,000
 $400,000
Issuance of shares—
 —
 —
 250,000
Ending balance650,000
 650,000
 650,000
 650,000
Common shares       
Beginning balance44,162
 40,263
 42,207
 40,024
Issuance of shares—
 —
 1,739
 —
Exercise of options and issuance of restricted stock awards(10) 3
 206
 242
Ending balance44,152
 40,266
 44,152
 40,266
Additional paid-in capital       
Beginning balance552,210
 35,094
 296,099
 37,355
Issuance of shares—
 —
 248,259
 —
Offering expenses—
 615
 —
 (7,883)
Change in redeemable noncontrolling interests(145) 13
 (361) 340
Exercise of options and issuance of restricted stock awards8,101
 6,673
 16,169
 12,583
Ending balance560,166
 42,395
 560,166
 42,395
Accumulated other comprehensive income (loss)       
Beginning balance(3,869) (1,101) (1,433) 224
Change in net unrealized gains on investments, net of tax608
 (382) 1,880
 (1,707)
Foreign currency translation adjustments, net of tax8,249
 —
 4,541
 —
Ending balance4,988
 (1,483) 4,988
 (1,483)
Retained earnings       
Beginning balance4,670,339
 4,135,805
 4,058,207
 3,913,772
Net income107,944
 48,829
 909,927
 392,903
Net income attributable to redeemable noncontrolling interests(62,057) (6,440) (204,091) (90,822)
Dividends on common shares(15,108) (13,143) (44,547) (39,611)
Dividends on preference shares(9,189) (9,708) (27,567) (20,899)
Ending balance4,691,929
 4,155,343
 4,691,929
 4,155,343
Total shareholders’ equity$5,951,235
 $4,886,521
 $5,951,235
 $4,886,521






See accompanying notes to the consolidated financial statements

10

RenaissanceRe Holdings Ltd. and Subsidiaries
Consolidated Statements of Cash Flows
For the ninesix months ended September June 30, 20192020 and 20182019
(in thousands of United States Dollars) (Unaudited)
 Nine months ended
 September 30,
2019		 September 30,
2018
Cash flows provided by operating activities   
Net income$909,927
 $392,903
Adjustments to reconcile net income to net cash provided by operating activities   
Amortization, accretion and depreciation(27,239) 30,936
Equity in undistributed earnings of other ventures1,754
 (13,016)
Net realized and unrealized (gains) losses on investments(396,586) 86,415
Net unrealized gains included in net investment income(7,284) (17,778)
Change in:   
Premiums receivable(625,031) (482,473)
Prepaid reinsurance premiums(216,064) (261,950)
Reinsurance recoverable482,663
 382,571
Deferred acquisition costs74,409
 (71,182)
Reserve for claims and claim expenses118,650
 (127,910)
Unearned premiums487,903
 581,242
Reinsurance balances payable738,442
 981,823
Other(277,112) (593,055)
Net cash provided by operating activities1,264,432
 888,526
Cash flows used in investing activities   
Proceeds from sales and maturities of fixed maturity investments trading12,835,916
 8,221,481
Purchases of fixed maturity investments trading(13,403,711) (8,692,688)
Net (purchases) sales of equity investments trading(6,937) 15,490
Net purchases of short term investments(1,362,151) (1,465,451)
Net purchases of other investments(130,476) (130,649)
Net purchases of investments in other ventures(2,341) (20,952)
Return of investment from investment in other ventures11,250
 8,464
Net purchase of other assets(4,108) —
Net purchase of the TMR Group Entities(276,206) —
Net cash used in investing activities(2,338,764) (2,064,305)
Cash flows provided by financing activities   
Dividends paid – RenaissanceRe common shares(44,547) (39,611)
Dividends paid – preference shares(27,567) (20,899)
Issuance of debt, net of expenses396,411
 —
Issuance of preference shares, net of expenses—
 242,371
Net third party redeemable noncontrolling interest share transactions515,952
 96,021
Taxes paid on withholding shares(7,229) (7,079)
Net cash provided by financing activities833,020
 270,803
Effect of exchange rate changes on foreign currency cash4,641
 (3,575)
Net decrease in cash and cash equivalents(236,671) (908,551)
Cash and cash equivalents, beginning of period1,107,922
 1,361,592
Cash and cash equivalents, end of period$871,251
 $453,041





Six months ended
June 30,
2020		June 30,
2019
Cash flows provided by operating activities
Net income$727,035  $801,983  
Adjustments to reconcile net income to net cash provided by operating activities
Amortization, accretion and depreciation(8,526) (16,529) 
Equity in undistributed earnings of other ventures1,388  5,380  
Net realized and unrealized gains on investments(337,683) (361,260) 
Change in:
Premiums receivable(920,069) (965,765) 
Prepaid reinsurance premiums(498,422) (402,551) 
Reinsurance recoverable16,939  55,812  
Deferred acquisition costs(70,295) 1,911  
Reserve for claims and claim expenses(18,880) 1,061  
Unearned premiums1,018,666  882,888  
Reinsurance balances payable1,263,336  1,107,889  
Other(316,524) (326,850) 
Net cash provided by operating activities856,965  783,969  
Cash flows used in investing activities
Proceeds from sales and maturities of fixed maturity investments trading8,340,351  9,405,348  
Purchases of fixed maturity investments trading(8,949,454) (9,230,000) 
Net (purchases) sales of equity investments trading(45,008) 125,597  
Net purchases of short term investments(990,604) (1,972,717) 
Net purchases of other investments(90,010) (133,889) 
Net purchases of investments in other ventures(1,994) (2,249) 
Return of investment from investment in other ventures9,157  11,250  
Net purchase of other assets—  (4,108) 
Net purchase of TMR—  (276,206) 
Net cash used in investing activities(1,727,562) (2,076,974) 
Cash flows provided by financing activities
Dividends paid – RenaissanceRe common shares(33,063) (29,439) 
Dividends paid – preference shares(16,345) (18,378) 
RenaissanceRe common share issuance, net of expenses1,095,549  —  
RenaissanceRe common share repurchases(62,621) —  
Issuance of debt, net of expenses—  396,411  
Repayment of debt(250,000) —  
Redemption of 6.08% Series C preference shares(125,000) —  
Net third-party redeemable noncontrolling interest share transactions79,283  514,732  
Taxes paid on withholding shares(10,243) (7,083) 
Net cash provided by financing activities677,560  856,243  
Effect of exchange rate changes on foreign currency cash(187) (534) 
Net decrease in cash and cash equivalents(193,224) (437,296) 
Cash and cash equivalents, beginning of period1,379,068  1,107,922  
Cash and cash equivalents, end of period$1,185,844  $670,626  
See accompanying notes to the consolidated financial statements

11

RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SeptemberJune 30, 20192020
(unless otherwise noted, amounts in tables expressed in thousands of United States (“U.S.”) dollars,
except shares, per share amounts and percentages) (Unaudited)
NOTE 1.ORGANIZATION
This report on Form 10-Q should be read in conjunction with RenaissanceRe’s Annual Report on Form 10-K (“Form 10-K”) for the fiscal year ended December 31, 2018.
2019. RenaissanceRe was formed under the laws of Bermuda on June 7, 1993. Together with its wholly owned and majority-owned subsidiaries and joint ventures, the Company provides property, casualty and specialty reinsurance and certain insurance solutions to its customers.
•On March 22, 2019, the Company’s wholly owned subsidiary, RenaissanceRe Specialty Holdings (UK) Limited (“RenaissanceRe Specialty Holdings”), completed its previously announced purchase of all of the share capital of RenaissanceRe Europe AG (formerly known as Tokio Millennium Re AG (now known as RenaissanceRe Europe AG) (“RenaissanceRe Europe”), RenaissanceRe (UK) Limited (formerly known as Tokio Millennium Re (UK) Limited (now known as RenaissanceRe (UK) Limited) (“RenaissanceRe UK”), and their respective subsidiaries (collectively, the “TMR Group Entities”“TMR”) pursuant to a Stock Purchase Agreement by and among the Company, Tokio Marine & Nichido Fire Insurance Co. Ltd. (“Tokio”) and, with respect to certain sections only, Tokio Marine Holdings, Inc. entered into on October 30, 2018 (the “TMR Stock Purchase Agreement”) (the “TMR Stock Purchase”). See “Note 3. Acquisition of Tokio Millennium Re” in the Company’s “Notes to the Consolidated Financial Statements” included in the Company’s Form 10-K for the year ended December 31, 2019 for additional information regarding the TMR Stock Purchase.acquisition of TMR.
•Renaissance Reinsurance Ltd. (“Renaissance Reinsurance”), a Bermuda-domiciled reinsurance company, is the Company’s principal reinsurance subsidiary and provides property, casualty and specialty reinsurance coverages to insurers and reinsurers on a worldwide basis.
•Renaissance Reinsurance U.S. Inc. (“Renaissance Reinsurance U.S.”) is a reinsurance company domiciled in the state of Maryland that provides property, casualty and specialty reinsurance coverages to insurers and reinsurers, primarily in the Americas.
•RenaissanceRe Underwriting Managers U.S. LLC, a specialty reinsurance agency domiciled in the state of Connecticut, provides specialty treaty reinsurance solutions on both a quota share and excess of loss basis; and writes business on behalf of RenaissanceRe Specialty U.S. Ltd. (“RenaissanceRe Specialty U.S.”), a Bermuda-domiciled reinsurer, which operates subject to U.S. federal income tax, and RenaissanceRe Syndicate 1458 (“Syndicate 1458”).
•Syndicate 1458 is the Company’s Lloyd’s syndicate. RenaissanceRe Corporate Capital (UK) Limited, (“RenaissanceRe CCL”), a wholly owned subsidiary of RenaissanceRe, is Syndicate 1458’s sole corporate member. RenaissanceRe Syndicate Management Ltd. (“RSML”), a wholly owned subsidiary of RenaissanceRe, is the managing agent for Syndicate 1458.
•RenaissanceRe Europe, a Swiss-domiciled reinsurance company, which has branches in Australia, Bermuda, the U.K. and the U.S., provides property, casualty and specialty reinsurance coverages to insurers and reinsurers on a worldwide basis.
•RenaissanceRe UK, a U.K.-domiciled reinsurance company in run-off, provided property, casualty and specialty reinsurance coverages on a worldwide basis. RenaissanceRe UK was placed into run-off effective July 1, 2015, from which date all new and renewal business was written by the U.K. branch of RenaissanceRe Europe. On February 4, 2020, RenaissanceRe Specialty Holdings entered into an agreement to sell RenaissanceRe UK to an investment vehicle managed by AXA Liabilities Managers, an affiliate of AXA XL. The sale received regulatory approval on July 17, 2020 and is expected to close in the third quarter of 2020.
•The Company also manages property, casualty and specialty reinsurance business written on behalf of joint ventures, which include Top Layer Reinsurance Ltd. (“Top Layer Re”), recorded under the equity method of accounting, and DaVinci Reinsurance Ltd. (“DaVinci”). Because the Company owns a noncontrolling equity interest in, but controls a majority of the outstanding voting power of, DaVinci’s parent,
12

DaVinciRe Holdings Ltd. (“DaVinciRe”), the results of DaVinci and DaVinciRe are consolidated in the Company’s consolidated financial statements and all significant intercompany transactions have been eliminated. Redeemable noncontrolling interest - DaVinciRe represents the interests of external parties with respect to the net income and shareholders’ equity of DaVinciRe. Renaissance Underwriting Managers, Ltd. (“RUM”), a wholly owned subsidiary of RenaissanceRe,


acts as exclusive underwriting manager for these joint ventures in return for fee-based income and profit participation.
•RenaissanceRe Medici Fund Ltd. (“Medici”) is an exempted fund,company, incorporated under the laws of Bermuda.Bermuda and registered as an institutional fund. Medici’s objective is to seek to invest substantially all of its assets in various insurance-based investment instruments that have returns primarily tied to property catastrophe risk. Third-party investors have subscribed for a portion of the participating, non-voting common shares of Medici. Because the Company owns a noncontrolling equity interest in, but controls a majority of the outstanding voting power of Medici’sMedici, through its wholly-owned parent, RenaissanceRe Fund Holdings Ltd. (“Fund Holdings”), the results of Medici and Fund Holdings are consolidated in the Company’s consolidated financial statements and all significant inter-company transactions have been eliminated. Redeemable noncontrolling interest - Medici represents the interests of external parties with respect to the net income and shareholders’ equity of Medici.
•Upsilon RFO Re Ltd., formerly known as Upsilon Reinsurance II Ltd. (“Upsilon RFO”), a Bermuda domiciled special purpose insurer (“SPI”), is a managed joint venture formed by the Company primarilyprincipally to provide additional capacity to the worldwide aggregate and per-occurrence primary and retrocessional property catastrophe excess of loss market. Upsilon RFO is considered a variable interest entity (“VIE”) and the Company is considered the primary beneficiary. As a result, Upsilon RFO is consolidated by the Company and all significant inter-company transactions have been eliminated.
•RenaissanceRe Upsilon Fund Ltd. (“Upsilon Fund”), an exempted Bermuda segregated accounts company registered as a Class A Professional Fund, was formed by the Company to provide a fund structure through which third-party investors can invest in reinsurance risk managed by the Company. As a segregated accounts company, Upsilon Fund is permitted to establish segregated accounts to invest in and hold identified pools of assets and liabilities. Each pool of assets and liabilities in each segregated account is structured to be ring-fenced from any claims from the creditors of Upsilon Fund’s general account and from the creditors of other segregated accounts within Upsilon Fund. Third-party investors purchase redeemable, non-voting preference shares linked to specific segregated accounts of Upsilon Fund and own 100% of these shares. Upsilon Fund is an investment company and is considered a VIE. The Company is not considered the primary beneficiary of Upsilon Fund and, as a result, the Company does not consolidate the financial position and results of operations of Upsilon Fund.
Fibonacci Reinsurance Ltd. ("Fibonacci Re"), a Bermuda-domiciled SPI, was formed to provide collateralized capacity to Renaissance Reinsurance and its affiliates. Fibonacci Re raises capital from third-party investors and the Company, via private placements of participating notes which are listed on the Bermuda Stock Exchange. Fibonacci Re is considered a VIE. •The Company is not considered the primary beneficiary of Fibonacci Re and, as a result, the Company does not consolidate the financial position and results of operations of Fibonacci Re.
Effective December 17, 2018, the Company formed Vermeer Reinsurance Ltd. (“Vermeer”), an exempted Bermuda reinsurer, with PGGM, a Dutch pension fund manager. Vermeer provides capacity focused on risk remote layers in the U.S. property catastrophe market. Vermeer is managed by RUM in return for a management fee. The Company maintains a majority voting control of Vermeer, while PGGM retains economic benefits. Vermeer is considered a VIE, as it has voting rights that are not proportional to its participating rights and the Company is the primary beneficiary. As a result, the Company consolidates Vermeer and all significant inter-company transactions have been eliminated. The Company does not currently expect its voting or economic interest in Vermeer to fluctuate.
Effective December 22, 2017,•Fibonacci Reinsurance Ltd. ("Fibonacci Re"), a Bermuda-domiciled SPI, provides collateralized capacity to Renaissance Reinsurance and its affiliates. Fibonacci Re raises capital from third-party investors and the Company, via private placements of participating notes which are listed on the Bermuda Stock Exchange. Fibonacci Re is considered a VIE. The Company is not considered the primary beneficiary of Fibonacci Re and, as a result, the Company does not consolidate the financial position and results of operations of Fibonacci Re.
•The Company and Reinsurance Group of America, Incorporated closed an initiative (“Langhorne”) to source third partythird-party capital to support reinsurers targeting large in-force life and annuity blocks. Langhorne Holdings LLC (“Langhorne Holdings”) is a company that owns and manages certain reinsurance entities within Langhorne. Langhorne Partners LLC (“Langhorne Partners”) is the
13

general partner for Langhorne and the entity which manages the third-parties investing in Langhorne Holdings. The Company concluded that Langhorne Holdings meets the definition of a VIE. The Company is not the primary beneficiary of Langhorne Holdings and as a result, the Company does not consolidate the financial position or results of operations of Langhorne Holdings. The Company concluded that Langhorne Partners is not a VIE. The Company will account


for its investments in Langhorne Holdings and Langhorne Partners under the equity method of accounting, one quarter in arrears.
•Mona Lisa Re Ltd. (“Mona Lisa Re”), a Bermuda domiciled SPI, provides reinsurance capacity to subsidiaries of RenaissanceRe, namely Renaissance Reinsurance and DaVinci, through reinsurance agreements which are collateralized and funded by Mona Lisa Re through the issuance of one or more series of principal-at-risk variable rate notes. The Company concluded that Mona Lisa Re meets the definition of a VIE as it does not have sufficient equity capital to finance its activities. The Company evaluated its relationship with Mona Lisa Re and concluded it is not the primary beneficiary of Mona Lisa Re as it does not have power over the activities that most significantly impact the economic performance of Mona Lisa Re. As a result, the financial position and results of operations of Mona Lisa Re are not consolidated by the Company.
•In connection with the acquisition of the TMR, Group Entities, the Company manages Shima Reinsurance Ltd. (“Shima Re”), Norwood Re Ltd. (“Norwood Re”) and Blizzard Re Ltd. (“Blizzard Re”) (together, the “TMR managed third-party capital vehicles”), which provide third-party investors with access to reinsurance risk formerly managed by the TMR Group Entities.risk. Following the closing of the acquisition, some of the retrocessionaires providing reinsurance to TMR on certain TMR managed third-party capital vehicles’ legacy portfolios of in-force and expired contracts were transferred to other stop loss reinsurance providers.replaced. The TMR managed third-party capital vehicles no longer write new business.
NOTE 2.SIGNIFICANT ACCOUNTING POLICIES
There have been no material changes to the Company’s significant accounting policies as described in its Form 10-K for the year ended December 31, 2018,2019, except as described below.
BASIS OF PRESENTATION
These consolidated financial statements have been prepared on the basis of accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and in conformity with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, these unaudited consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the Company’s financial position and results of operations as at the end of and for the periods presented. All significant intercompany accounts and transactions have been eliminated from these statements.
Certain comparative information has been reclassified to conform to the current presentation. Because of the seasonality of the Company’s business, the results of operations and cash flows for any interim period will not necessarily be indicative of the results of operations and cash flows for the full fiscal year or subsequent quarters.
USE OF ESTIMATES IN FINANCIAL STATEMENTS
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported and disclosed amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. The major estimates reflected in the Company’s consolidated financial statements include, but are not limited to, the reserve for claims and claim expenses; reinsurance recoverables, including allowances for reinsurance recoverables deemed uncollectible; estimates of written and earned premiums; fair value, including the fair value of investments, financial instruments and derivatives; impairment charges; deferred acquisition costs and the value of business acquired and the Company’s deferred tax valuation allowance.
14
DERIVATIVES
INVESTMENTS
Other Investments
From time to time, the Company enters into derivative instruments such as futures, options, swaps, forward contracts and other derivative contracts primarily to manage its foreign currency exposure, obtain exposure to a particular financial market, for yield enhancement, or for trading and to assume risk. The Company accounts for its derivativesother investments at fair value in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)FASB ASC Topic Derivatives and HedgingFinancial Instruments , which requires all derivatives to be recorded at fair value on the Company’s balance sheet as either assets or liabilities, depending on their rights or obligations, with changesinterest, dividend income, income distributions included in fair value reflected in current earnings. Commencing in the second quarter of 2019, the Company elected to adopt hedge accounting for certain of its derivative instruments used as hedges of a net investment in a foreign operation, as discussed below. The fair value of the Company’s derivatives is estimated by reference to quoted prices or broker quotes, where available, or in the absence of quoted prices or broker quotes, the use of industry or internal valuation models.


Hedges of the Net Investment in a Foreign Operation
Changes in the fair value of derivative instruments used to hedge the net investment in a foreign operation, to the extent effective as a hedge, are recorded as a component of accumulated other comprehensive income (loss)and realized and unrealized gains and losses included in foreign currency translation adjustments, net of tax. Cumulative changes in fair value recorded in accumulated other comprehensive income (loss) are reclassified into earnings upon the sale, or complete or substantially complete liquidation, of the foreign operation. Any hedge ineffectiveness is recorded immediately in current period earnings as net foreign exchange gains (losses).
Hedge Documentation and Effectiveness Testing
To qualify for hedge accounting treatment, a derivative must be highly effective in mitigating the designated changes in value or cash flow of the hedged item. At the inception of a hedge, the Company formally documents relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking each hedge transaction. The documentation process includes linking derivatives that are designated as net investment hedges to specific assets or liabilities on the consolidated balance sheet. The Company also formally assesses, both at the hedge's inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the net investment in a foreign operation. The Company will discontinue hedge accounting prospectively if it determines that the derivative is no longer highly effective in offsetting changes in the net investment in a foreign operation, the derivative is no longer designated as a hedging instrument, or the derivative expires or is sold, terminated or exercised. If hedge accounting is discontinued, the derivative continues to be carried at fair value on the consolidated balance sheet with changes in its fair value recognized in current period earnings through net realized and unrealized gains (losses) on investments.
FOREIGN EXCHANGE
Foreign Currency Revaluation and Translation
Monetary assets and liabilities denominated in a currency other than the functional currency The fair value of certain of the Company’s subsidiariesfund investments, which principally include private equity investments, senior secured bank loan funds and hedge funds, is recorded on its balance sheet in which those monetary assetsother investments, and liabilities reside are revalued into such subsidiary’s functional currency at the prevailing exchange rateis generally established on the balance sheet date. Revenues and expenses denominated in a currency other than the functional currencybasis of the Company’s subsidiaries, are valued atnet valuation criteria established by the exchange rate on the date on which the underlying revenue or expense transaction occurred.managers of such investments, if applicable. The net effectvaluation criteria established by the managers of these revaluation adjustments are recognizedsuch investments is established in accordance with the Company’s consolidated statementgoverning documents of operations as part of net foreign exchange (gains) losses.
The Company’s functional currency is the U.S. dollar.such investments. Certain of the Company’s subsidiaries havefund managers, fund administrators, or both, are unable to provide final fund valuations as of the Company’s current reporting date. The typical reporting lag experienced by the Company to receive a functional currency other thanfinal net asset value report is one month for hedge funds and senior secured bank loan funds and three months for private equity investments, although, in the U.S. dollar. Assetspast, in respect of certain of the Company’s private equity investments, the Company has on occasion experienced delays of up to six months at year end, as the private equity investments typically complete their respective year-end audits before releasing their final net asset value statements.
In circumstances where there is a reporting lag between the current period end reporting date and liabilitiesthe reporting date of foreign operations whose functional currency is not the U.S. dollar are translated intolatest fund valuation, the Company's U.S. dollar reporting currency at prevailing balance sheet-date exchange rates, while revenue and expenses of such foreign operations are translated intoCompany estimates the Company's U.S. dollar functional currency at monthly average exchange rates during the year. The net effectfair value of these translation adjustments,funds by starting with the most recently available prior month or quarter-end fund valuations, adjusting these valuations for actual capital calls, redemptions or distributions, as well as any gainsthe impact of changes in foreign currency exchange rates, and then estimating the return for the current period. In circumstances in which the Company estimates the return for the current period, all information available to the Company is utilized. This principally includes preliminary estimates reported to the Company by its fund managers, obtaining the valuation of underlying portfolio investments where such underlying investments are publicly traded and therefore have a readily observable price, using information that is available to the Company with respect to the underlying investments, reviewing various indices for similar investments or lossesasset classes, as well as estimating returns based on intercompany balancesthe results of similar types of investments for which settlement is not plannedthe Company has obtained reported results, or anticipated inother valuation methods, where possible. Actual final fund valuations may differ, perhaps materially so, from the foreseeable future, net of applicable deferred income taxes, is includedCompany’s estimates and these differences are recorded in the Company’s consolidated balance sheetstatement of operations in the period in which they are reported to the Company as currency translation adjustmentsa change in estimate.
The Company’s other investments also include investments in catastrophe bonds which are recorded at fair value and reflected within accumulated other comprehensive income (loss).the fair value is based on broker or underwriter bid indications.
RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS
Leases
In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, Leases and subsequently issued a number of other ASUs to amend the guidance, each ultimately reflected in FASB ASC Topic Leases. FASB ASC Topic Leases requires, among other items, lessees to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under the previous guidance. FASB ASC Topic Leases was effective for public business entities for annual and interim periods beginning after December 15, 2018. The Company has adopted FASB ASC Topic Leases through the application of the modified retrospective transition approach. In addition, the Company employed certain practical expedients permitted under the guidance and utilized its incremental borrowing rate in determining the present value of lease payments, not yet paid. The adoption of this guidance did not have a material


impact on the Company’s consolidated statements of operations and financial position. The Company determined it was not required to record a cumulative effect adjustment to opening retained earnings as of January 1, 2019.
Intra-Entity Transfers of Assets Other Than Inventory
In October 2016, the FASB issued ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”). ASU 2016-16 requires entities to recognize the income tax consequences of intra-entity transfers of assets other than inventory when the transfers occur; this is a change from current guidance which prohibits the recognition of current and deferred income taxes until the underlying assets have been sold to outside entities. ASU 2016-16 was effective for public business entities for annual and interim periods beginning after December 15, 2018. The adoption of this guidance did not have a material impact on the Company’s consolidated statements of operations and financial position.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED
Measurement of Credit Losses on Financial Instruments
In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 modifies the recognition of credit losses by replacing the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is applicable to financial assets such as loans, debt securities, trade receivables, off-balance sheet credit exposures, reinsurance receivables, and other financial assets that have the contractual right to receive cash. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The Company's invested assets are measured at fair value through net income, and therefore those invested assets would not be impacted by the adoption of ASU 2016-13. The Company has other financial assets, such as reinsurance recoverables, that could be impacted by the adoption of ASU 2016-13. ASU 2016-13 is effective for public business entities that are SEC filers for annual and interim periods beginning after December 15, 2019.2019, accordingly, the Company adopted ASU 2016-13 effective January 1, 2020. The adoption of ASU 2016-13 did not have a material impact on the Company’s consolidated statements of operations and financial position.
15

Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement
In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). The ASU 2018-13 modifies the disclosure requirements of fair value measurements as part of the disclosure framework project with the objective to improve the effectiveness of disclosures in the notes to the financial statements. ASU 2018-13 allows for removal of the amount and reasons for transfer between Level 1 and Level 2 of the fair value hierarchy; the policy for transfers between levels; and the valuation processes for Level 3 fair value measurements. ASU 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, accordingly, the Company adopted ASU 2018-13 effective January 1, 2020. Since ASU 2018-13 is currently evaluating the impact of this guidance; however,disclosure-related only, it isdid not expected to have a material impact on the Company’s consolidated statements of operations and financial position.
Simplifying the Test for Goodwill Impairment
In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). Among other things, ASU 2017-04 requires the following: (1) the elimination of step two of the goodwill impairment test; entities will no longer utilize the implied fair value of their assets and liabilities for purposes of testing goodwill for impairment, (2) the quantitative portion of the goodwill impairment test will be performed by comparing the fair value of a reporting unit with its carrying amount; an impairment charge is to be recognized for the excess of carrying amount over fair value, but only to the extent of the amount of goodwill allocated to that reporting unit, and (3) foreign currency translation adjustments are not to be allocated to a reporting unit from an entity’s accumulated other comprehensive income (loss); the reporting unit’s carrying amount should include only the currently translated balances of the assets and liabilities assigned to the reporting unit. ASU 2017-04 is effective for public business entities that are SEC filers for annual periods, or any interim goodwill impairment tests in annual periods, beginning after December 15, 2019.2019, accordingly, the Company adopted ASU 2017-04 effective January 1, 2020. The adoption of ASU 2017-04 did not have a material impact on the Company’s consolidated statements of operations and financial position.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED
Simplifying the Accounting for Income Taxes
In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (”ASU 2019-12”). Among other things, ASU 2019-12 eliminates certain exceptions for recognizing deferred taxes for investments, performing intraperiod tax allocation and calculating income taxes in interim periods. ASU 2019-12 also clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. ASU 2019-12 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.permitted. The Company is currently evaluating the impact of this guidance; however, it is not expected to have a material impact on the Company’s consolidated statements of operations and financial position.

16

Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement
In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). The ASU 2018-13 modifies the disclosure requirements of fair value measurements as part of the disclosure framework project with the objective to improve the effectiveness of disclosures in the notes to the financial statements. ASU 2018-13 allows for removal of the amount and reasons for transfer between Level 1 and Level 2 of the fair value hierarchy; the policy for transfers between levels; and the valuation processes for Level 3 fair value measurements. ASU 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The Company is currently evaluating the impact of this guidance; however, it is not expected to have a material impact on the Company’s consolidated statements of operations and financial position.
NOTE 3.ACQUISITION OF TOKIO MILLENNIUM RE
Overview
The aggregate consideration for the TMR Stock Purchase, which closed on March 22, 2019, was $1.6 billion, consisting of cash, RenaissanceRe common shares and a special dividend from the TMR Group Entities, as described in more detail below. The aggregate consideration paid at closing for the TMR Stock Purchase was based on the closing tangible book value of the TMR Group Entities, subject to a post-closing adjustment under the terms of the TMR Stock Purchase Agreement. The parties determined that no closing adjustment was required.
In connection with the closing of the TMR Stock Purchase, Tokio, RenaissanceRe Europe and RenaissanceRe UK entered into a reserve development agreement whereby RenaissanceRe Europe and RenaissanceRe UK agreed to cede to Tokio, and Tokio agreed to indemnify and reimburse RenaissanceRe Europe and RenaissanceRe UK for, substantially all of RenaissanceRe Europe and RenaissanceRe UK’s adverse development on stated reserves at time of the closing, including unearned premium reserves, subject to certain terms and conditions. The reserve development agreement provides the Company with indemnification on stated reserves, including unearned premium reserves, for RenaissanceRe Europe and RenaissanceRe UK, on a whole-account basis, and takes into consideration adverse performance across the Company’s reportable segments. To the extent the combined performance of acquired reserves for claims and claim expenses or unearned premiums is worse than expected on an aggregate basis across reportable segments, the Company is indemnified under the terms of the reserve development agreement and would expect to collect under the reserve development agreement.
At closing, RenaissanceRe Europe and Tokio entered into a retrocessional agreement pursuant to which RenaissanceRe Europe ceded to Tokio all of its liabilities arising from certain stop loss reinsurance contracts RenaissanceRe Europe entered into with third party capital partners which were either in force as of the closing date or which incept prior to December 31, 2021.
The Company recorded $4.0 million and $44.0 million of corporate expenses associated with the acquisition of the TMR Group Entities during the three and nine months ended September 30, 2019, respectively. Included in these expenses are compensation, transaction and integration-related costs.


Purchase Price
The Company's total purchase price for the TMR Group Entities was calculated as follows:
      
 Special Dividend    
 Special Dividend paid to common shareholders of Tokio and holders of Tokio equity awards  $500,000
 
 RenaissanceRe common shares    
 Common shares issued by RenaissanceRe to Tokio1,739,071
   
 Common share price of RenaissanceRe (1)$143.75
   
 Market value of RenaissanceRe common shares issued by RenaissanceRe to Tokio  249,998
 
 Cash consideration    
 Cash consideration paid by RenaissanceRe as acquisition consideration  813,595
 
 Total purchase price  1,563,593
 
 Less: Special Dividend paid to Tokio  (500,000) 
 Net purchase price  $1,063,593
 
      
(1)RenaissanceRe common share price was based on the 30-day trailing volume weighted average price of $143.7539 as of market close on March 15, 2019, which approximates fair value.


Fair Value of Net Assets Acquired and Liabilities Assumed
The purchase price was allocated to the acquired assets and liabilities of the Company based on estimated fair values on March 22, 2019, the date the transaction closed, as detailed below. During the quarter ended March 31, 2019, the Company recognized goodwill of $13.1 million, based on foreign exchange rates on March 22, 2019, attributable to the excess of the purchase price over the fair value of the net assets of the acquired TMR Group Entities. The Company recognized identifiable finite lived intangible assets of $11.2 million, which will be amortized over a weighted average period of 10.5 years, identifiable indefinite lived intangible assets of $6.8 million, and certain other adjustments to the fair values of the assets acquired, liabilities assumed and shareholders’ equity of the TMR Group Entities at March 22, 2019, based on foreign exchange rates on March 22, 2019, as summarized in the table below:
    
 Shareholders’ equity of the TMR Group Entities at March 22, 2019$1,032,961
 
 Adjustments for fair value, by applicable balance sheet caption:  
 Net deferred acquisition costs and value of business acquired(56,788) 
 Net reserve for claims and claim expenses67,782
 
 Goodwill and intangible assets at March 22, 2019 of the TMR Group Entities(6,569) 
 Total adjustments for fair value by applicable balance sheet caption before tax impact4,425
 
 Other assets - net deferred tax liability related to fair value adjustments and value of business acquired(2,606) 
 Total adjustments for fair value by applicable balance sheet caption, net of tax1,819
 
 Adjustments for fair value of the identifiable intangible assets:  
 Identifiable indefinite lived intangible assets (insurance licenses)6,800
 
 Identifiable finite lived intangible assets (top broker relationships and renewal rights)11,200
 
 Identifiable intangible assets before tax impact18,000
 
 Other assets - deferred tax liability on identifiable intangible assets(2,281) 
 Total adjustments for fair value of the identifiable intangible assets and value of business acquired, net of tax15,719
 
 Total adjustments for fair value by applicable balance sheet caption, identifiable intangible assets and value of business acquired, net of tax17,538
 
 Shareholders’ equity of the TMR Group Entities at fair value1,050,499
 
 Total net purchase price paid by RenaissanceRe1,063,593
 
 Excess purchase price over the fair value of net assets acquired assigned to goodwill$13,094
 
    

An explanation of the significant fair value adjustments and related future amortization is as follows:
Net deferred acquisition costs and value of business acquired (“VOBA”) - to reflect the elimination of the TMR Group Entities’ net deferred acquisition costs, partially offset by the establishment of the value of business acquired asset, which represents the present value of the expected underwriting profit within the unearned premiums liability, net of reinsurance, less costs to service the related policies and a risk premium. The adjustment for VOBA will be amortized to acquisition expenses over approximately two years, as the contracts for business in-force as of the acquisition date expire. VOBA at March 22, 2019 was $287.6 million;
Reserve for claims and claim expenses - to reflect a decrease related to the present value of the net unpaid claims and claim expenses based on the estimated payout pattern, partially offset by an increase in net claims and claim expenses related to the estimated market based risk margin. The risk margin represents the estimated cost of capital required by a market participant to assume the net claims and claim expenses. This will be amortized using the projected discount and risk margin patterns of the net claims and claims expenses as of the acquisition date;
Identifiable indefinite lived and finite lived intangible assets - to establish the fair value of identifiable intangible assets related to the acquisition of the TMR Group Entities described in detail below; and


Other assets - to reflect the net deferred tax liability on identifiable intangible assets.
Identifiable intangible assets and accumulated amortization at September 30, 2019, consisted of the following, based on foreign exchange rates on March 22, 2019, and are included in goodwill and other intangible assets on the Company’s consolidated balance sheet:
      
  Amount Economic Useful Life 
 Top broker relationships$10,000
 10.0 years 
 Renewal rights1,200
 15.0 years 
 Insurance licenses6,800
 Indefinite 
 Gross identifiable intangible assets related to the acquisition of the TMR Group Entities, at March 22, 201918,000
   
 Accumulated amortization (from March 22, 2019 through September 30, 2019)540
   
 Net identifiable intangible assets related to the acquisition of the TMR Group Entities at September 30, 2019$17,460
   
      

Amortization from the acquisition date, March 22, 2019, through September 30, 2019 was included in the Company's consolidated statements of operations for the three and nine months ended September 30, 2019.
An explanation of the identifiable intangible assets is as follows:
Top broker relationships - the value of the TMR Group Entities’ relationships with their top four brokers (Marsh & McLennan Companies, Inc., Aon plc, Willis Group Holdings Public Limited Company and Jardine Lloyd Thompson Group plc.) after taking into consideration the expectation of the renewal of these relationships and the associated expenses. These will be amortized on a straight-line basis over the economic useful life as of the acquisition date;
Renewal rights - the value of policy renewal rights after taking into consideration written premiums on assumed retention ratios and the insurance cash flows and the associated equity cash flows from these renewal policies over the expected life of the renewals. These will be amortized on a straight-line basis over the economic useful life as of the acquisition date; and
Insurance licenses - the value of acquired insurance licenses, which provide the ability to write reinsurance in all 50 states of the U.S. and the District of Columbia.
As part of the allocation of the purchase price, included in the adjustment to other assets in the table above is a deferred tax liability of $2.3 million related to the estimated fair value of the intangible assets recorded, as well as a net deferred tax liability of $2.6 million related to certain other adjustments to the fair values of the assets acquired, VOBA, liabilities assumed and shareholders’ equity. Other net deferred tax liabilities recorded primarily relate to differences between financial reporting and tax bases of the acquired assets and liabilities as of the acquisition date, March 22, 2019. The Company estimates that none of the goodwill that was recorded will be deductible for income tax purposes.
Financial Results
The following table summarizes the net contribution from the acquisition of the TMR Group Entities since March 22, 2019 that has been included in the Company's consolidated statements of operations and comprehensive income for the three and nine months ended September 30, 2019. The operating activities of the TMR Group Entities from the acquisition date, March 22, 2019, through September 30, 2019 are included in the Company’s consolidated statements of operations for the nine months ended September 30, 2019. 
The unaudited net contribution of the acquisition and integration of the TMR Group Entities is provided for informational purposes only and is not necessarily, and should not be assumed to be, an indication of the results that may be achieved in the future. These results are not used as a part of management analysis of the financial performance of the Company’s business. These results primarily reflect items recorded directly by the TMR Group Entities, including: 1) net earned premium and net underwriting income on the in-force


portfolio acquired with the acquisition of the TMR Group Entities and currently retained on the TMR Group Entities balance sheets; 2) net earned premium and net underwriting income for those contracts which have renewed post-acquisition on one of the acquired TMR Group Entities’ balance sheets; 3) net investment income and net realized and unrealized gains recorded directly by the TMR Group Entities; and 4) certain direct costs incurred directly by the TMR Group Entities. In addition, these results, where possible, are adjusted for transaction and integration related costs incurred by the Company. However, these results do not reflect on-going operating costs incurred by the Company in supporting the TMR Group Entities unless such costs are incurred directly by the TMR Group Entities. These results also do not give consideration to the impact of possible revenue enhancements, expense efficiencies, synergies or asset dispositions that may be achieved in the future. These results involve significant estimates and are not indicative of the future results of the acquired TMR Group Entities, which will be further impacted by potential changes in targeted business mix, investment management strategies, and synergies recognized from changes in the combined entity’s operating structure, as well as the impact of changes in other business and capital management strategies. 
Since the acquisition date, a growing number of underlying policies have been underwritten onto different legal entities, staffing has been allocated to new activities, and reinsurance has been purchased to cover combined risks, only some of which would have been reflected in the underlying legacy TMR Group Entities results. In future quarters, the summary results of the TMR Group Entities will become increasingly impracticable to produce, and even less indicative of the results of the acquired TMR Group Entities, given the significant estimates involved and the nature and pace of our integration activities, which are intended to integrate the TMR Group Entities as quickly as possible.
     
  Three months ended September 30, 2019 Nine months ended September 30, 2019 (1) 
 Total revenues$313,250
 $730,080
 
 Net income available to RenaissanceRe common shareholders (2)$31,672
 $97,068
 
     
(1)Includes the net contribution from the acquisition of the TMR Group Entities since March 22, 2019 that has been included in the Company’s consolidated statements of operations and comprehensive income through September 30, 2019.
(2)Includes $4.0 million and $44.0 million of corporate expenses associated with the acquisition and integration of the TMR Group Entities for the three and nine months ended September 30, 2019, respectively.
Taxation
At the date of acquisition and in conjunction with the acquisition of the TMR Group Entities, the Company established a net deferred tax liability of $5.7 million and recorded a valuation allowance against the TMR Group Entities’ deferred tax assets of $35.7 million in its consolidated financial statements. A predominant amount of the valuation allowance related to the TMR Group Entities’ U.S. operations and was recorded by the TMR Group Entities prior to the acquisition.
Supplemental Pro Forma Information
The following table presents unaudited pro forma consolidated financial information for the three and nine months ended September 30, 2019 and 2018, respectively, and assumes the acquisition of the TMR Group Entities occurred on January 1, 2018. The unaudited pro forma consolidated financial information is provided for informational purposes only and is not necessarily, and should not be assumed to be, an indication of the results that would have been achieved had the transaction been completed as of January 1, 2018 or that may be achieved in the future. The unaudited pro forma consolidated financial information does not give consideration to the impact of possible revenue enhancements, expense efficiencies, synergies or asset dispositions that may result from the acquisition of the TMR Group Entities. In addition, unaudited pro forma consolidated financial information does not include the effects of costs associated with any restructuring or integration activities resulting from the acquisition of the TMR Group Entities, as they are nonrecurring.


         
  Three months ended Nine months ended 
  September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 
 Total revenues$1,051,148
 $930,825
 $3,437,674
 $2,478,934
 
 Net income available to RenaissanceRe common shareholders$36,698
 $59,174
 $734,946
 $309,715
 
         

Among other adjustments, and in addition to the fair value adjustments and recognition of goodwill, VOBA and identifiable intangible assets noted above, other material nonrecurring pro forma adjustments directly attributable to the acquisition of the TMR Group Entities principally included certain adjustments to recognize transaction related costs, align accounting policies, and amortize fair value adjustments, VOBA, and identifiable definite lived intangible assets, net of related tax impacts.
Defined Benefit Pension Plan
The TMR Group Entities have a contributory defined benefit pension plan for certain employees, which was not material to RenaissanceRe’s results of operations, financial condition or cash flows.
The plan offers mandatory benefits as prescribed by the applicable law, as well as voluntary benefits. The TMR Group Entities and the members of the plan contribute a defined percentage of salary to the pension arrangement. At retirement, the accumulated contributions are converted into a pension.
At March 22, 2019, the net balance sheet liability was $6.1 million, comprising $21.2 million of projected benefit obligation and $15.1 million of plan assets at fair value.


NOTE 4.3. INVESTMENTS
Fixed Maturity Investments Trading
The following table summarizes the fair value of fixed maturity investments trading:
      
  September 30,
2019		 December 31,
2018		 
 U.S. treasuries$4,314,006
 $3,331,411
 
 Agencies507,903
 174,883
 
 Municipal1,629
 6,854
 
 Non-U.S. government379,154
 279,818
 
 Non-U.S. government-backed corporate263,170
 160,063
 
 Corporate3,453,222
 2,450,244
 
 Agency mortgage-backed1,248,722
 817,880
 
 Non-agency mortgage-backed261,850
 278,680
 
 Commercial mortgage-backed406,268
 282,294
 
 Asset-backed550,304
 306,743
 
 Total fixed maturity investments trading$11,386,228
 $8,088,870
 
      

June 30,
2020		December 31,
2019
U.S. treasuries$4,258,675  $4,467,345  
Agencies505,038  343,031  
Non-U.S. government584,206  497,392  
Non-U.S. government-backed corporate314,833  321,356  
Corporate4,428,553  3,075,660  
Agency mortgage-backed985,851  1,148,499  
Non-agency mortgage-backed276,300  294,604  
Commercial mortgage-backed591,238  468,698  
Asset-backed550,441  555,070  
Total fixed maturity investments trading$12,495,135  $11,171,655  
Contractual maturities of fixed maturity investments trading are described in the following table. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
      
 September 30, 2019
Amortized 
Cost
 Fair Value 
 Due in less than one year$605,595
 $603,806
 
 Due after one through five years5,820,074
 5,893,946
 
 Due after five through ten years2,170,132
 2,232,264
 
 Due after ten years179,147
 189,068
 
 Mortgage-backed1,888,719
 1,916,840
 
 Asset-backed550,727
 550,304
 
 Total$11,214,394
 $11,386,228
 
      

June 30, 2020Amortized 
Cost		Fair Value
Due in less than one year$632,668  $638,686  
Due after one through five years5,388,088  5,513,103  
Due after five through ten years3,185,015  3,312,749  
Due after ten years602,473  626,768  
Mortgage-backed1,820,084  1,853,388  
Asset-backed560,179  550,441  
Total$12,188,507  $12,495,135  
Equity Investments Trading
The following table summarizes the fair value of equity investments trading:
      
  September 30,
2019		 December 31,
2018		 
 Financials$207,073
 $200,357
 
 Communications and technology70,057
 42,333
 
 Industrial, utilities and energy36,703
 24,520
 
 Consumer34,384
 20,639
 
 Healthcare26,051
 18,925
 
 Basic materials5,154
 3,478
 
 Total$379,422
 $310,252
 
      



June 30,
2020		December 31,
2019
Financials$228,710  $248,189  
Communications and technology114,650  79,206  
Consumer44,057  35,987  
Industrial, utilities and energy38,625  38,583  
Healthcare37,449  29,510  
Basic materials6,596  5,456  
Total$470,087  $436,931  
Pledged Investments
At SeptemberJune 30, 2019, $7.12020, $7.7 billion of cash and investments at fair value were on deposit with, or in trust accounts for the benefit of, various counterparties, including with respect to the Company’s letter of credit facilities (December(December 31, 20182019 - $5.7$7.0 billion). Of this amount, $2.9$1.8 billion is on deposit with, or in trust accounts for the benefit of, U.S. state regulatory authorities (December(December 31, 20182019 - $2.0 billion).
17

Reverse Repurchase Agreements
At SeptemberJune 30, 2019,2020, the Company held $188.2$132.7 million (December (December 31, 20182019 - $3.7 million)$57.6 million) of reverse repurchase agreements. These loans are fully collateralized, are generally outstanding for a short period of time and are presented on a gross basis as part of short term investments on the Company’s consolidated balance sheets. The required collateral for these loans typically includes high-quality, readily marketable instruments at a minimum amount of 102% of the loan principal. Upon maturity, the Company receives principal and interest income.
Net Investment Income
The components of net investment income are as follows:
          
  Three months ended Nine months ended 
  September 30,
2019		 September 30,
2018		 September 30,
2019		 September 30,
2018		 
 Fixed maturity investments$82,977
 $55,725
 $232,566
 $151,784
 
 Short term investments15,061
 9,403
 44,712
 22,340
 
 Equity investments1,326
 903
 3,269
 3,091
 
 Other investments        
 Private equity investments(4,597) 8,723
 8,166
 12,149
 
 Other22,538
 8,665
 30,413
 27,346
 
 Cash and cash equivalents1,978
 1,104
 5,801
 2,708
 
  119,283
 84,523
 324,927
 219,418
 
 Investment expenses(5,439) (3,827) (13,789) (10,890) 
 Net investment income$113,844
 $80,696
 $311,138
 $208,528
 
          



Three months endedSix months ended
June 30,
2020		June 30,
2019		June 30,
2020		June 30,
2019
Fixed maturity investments$69,943  $88,106  $143,281  $149,589  
Short term investments6,049  17,807  18,141  29,651  
Equity investments1,666  916  3,217  1,943  
Other investments
Catastrophe bonds13,519  11,781  27,658  20,472  
Other1,107  1,914  2,736  3,554  
Cash and cash equivalents837  2,306  2,341  3,823  
 93,121  122,830  197,374  209,032  
Investment expenses(3,816) (4,242) (8,596) (8,350) 
Net investment income$89,305  $118,588  $188,778  $200,682  
Net Realized and Unrealized Gains (Losses) on Investments
Net realized and unrealized gains (losses) on investments are as follows:
          
  Three months ended Nine months ended 
  September 30,
2019		 September 30,
2018		 September 30,
2019		 September 30,
2018		 
 Gross realized gains$34,710
 $5,229
 $87,595
 $14,945
 
 Gross realized losses(4,609) (15,327) (34,769) (67,699) 
 Net realized gains (losses) on fixed maturity investments30,101
 (10,098) 52,826
 (52,754) 
 Net unrealized gains (losses) on fixed maturity investments trading17,226
 (8,730) 243,139
 (73,522) 
 Net realized and unrealized gains (losses) on investments-related derivatives11,134
 2,563
 62,103
 (763) 
 Net realized (losses) gains on equity investments trading sold during the period(72) 21,259
 30,666
 21,841
 
 Net unrealized (losses) gains on equity investments trading still held at reporting date(26,451) 8,636
 7,852
 18,783
 
 Net realized and unrealized (losses) gains on equity investments trading(26,523) 29,895
 38,518
 40,624
 
 Net realized and unrealized gains (losses) on investments$31,938
 $13,630
 $396,586
 $(86,415) 
          
Three months endedSix months ended
June 30,
2020		June 30,
2019		June 30,
2020		June 30,
2019
Net realized gains on fixed maturity investments trading$105,849  $21,295  $163,336  $22,725  
Net unrealized gains on fixed maturity investments trading197,678  121,991  177,333  225,913  
Net realized and unrealized gains on fixed maturity investments trading303,527  143,286  340,669  248,638  
Net realized and unrealized gains on investments-related derivatives24,372  37,173  57,553  50,969  
Net realized gains (losses) on equity investments trading422  31,899  (14,625) 30,738  
Net unrealized gains (losses) on equity investments trading107,896  (18,355) 1,959  34,303  
Net realized and unrealized gains (losses) on equity investments trading108,318  13,544  (12,666) 65,041  
Net realized and unrealized gains (losses) on other investments - catastrophe bonds4,452  (11,902) (9,900) (14,112) 
Net realized and unrealized gains (losses) on other investments - other7,721  9,146  (37,973) 10,724  
Net realized and unrealized gains on investments$448,390  $191,247  $337,683  $361,260  
18



NOTE 5.4. FAIR VALUE MEASUREMENTS
The use of fair value to measure certain assets and liabilities with resulting unrealized gains or losses is pervasive within the Company’s consolidated financial statements. Fair value is defined under accounting guidance currently applicable to the Company to be the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between open market participants at the measurement date. The Company recognizes the change in unrealized gains and losses arising from changes in fair value in its consolidated statements of operations.
FASB ASC Topic Fair Value Measurements and Disclosures prescribes a fair value hierarchy that prioritizes the inputs to the respective valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to valuation techniques that use at least one significant input that is unobservable (Level 3). The three levels of the fair value hierarchy are described below:
•Fair values determined by Level 1 inputs utilize unadjusted quoted prices obtained from active markets for identical assets or liabilities for which the Company has access. The fair value is determined by multiplying the quoted price by the quantity held by the Company;
•Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals, broker quotes and certain pricing indices; and
•Level 3 inputs are based all or in part on significant unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In these cases, significant management assumptions can be used to establish management’s best estimate of the assumptions used by other market participants in determining the fair value of the asset or liability.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement of the asset or liability. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and the Company considers factors specific to the asset or liability.
In order to determine if a market is active or inactive for a security, the Company considers a number of factors, including, but not limited to, the spread between what a seller is asking for a security and what a buyer is bidding for the same security, the volume of trading activity for the security in question, the price of the security compared to its par value (for fixed maturity investments), and other factors that may be indicative of market activity. 
There have been no material changes in the Company’s valuation techniques, nor have there been any transfers between Level 1 and Level 2, or Level 2 and Level 3 during the period represented by these consolidated financial statements.
19


Below is a summary of the assets and liabilities that are measured at fair value on a recurring basis and also represents the carrying amount on the Company’s consolidated balance sheets:
At June 30, 2020TotalQuoted
Prices in Active
Markets for
Identical 
Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
Fixed maturity investments
U.S. treasuries$4,258,675  $4,258,675  $—  $—  
Agencies505,038  —  505,038  —  
Non-U.S. government584,206  —  584,206  —  
Non-U.S. government-backed corporate314,833  —  314,833  —  
Corporate4,428,553  —  4,428,553  —  
Agency mortgage-backed985,851  —  985,851  —  
Non-agency mortgage-backed276,300  —  276,300  —  
Commercial mortgage-backed591,238  —  591,238  —  
Asset-backed550,441  —  550,441  —  
Total fixed maturity investments12,495,135  4,258,675  8,236,460  —  
Short term investments5,570,804  —  5,570,804  —  
Equity investments trading470,087  470,087  —  —  
Other investments
Catastrophe bonds807,162  —  807,162  —  
Private equity investments (1)254,257  —  —  71,450  
Senior secured bank loan funds (1)22,261  —  —  —  
Hedge funds (1)9,658  —  —  —  
Total other investments1,093,338  —  807,162  71,450  
Other assets and (liabilities)
Assumed and ceded (re)insurance contracts (2)(6,711) —  —  (6,711) 
Derivatives (3)4,075  (310) 4,385  —  
Total other assets and (liabilities)(2,636) (310) 4,385  (6,711) 
 $19,626,728  $4,728,452  $14,618,811  $64,739  
(1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet.
(2) Included in assumed and ceded (re)insurance contracts at June 30, 2020 was $14.0 million of other assets and $20.7 million of other liabilities.
(3) See “Note 13. Derivative Instruments” for additional information related to the fair value, by type of contract, of derivatives entered into by the Company.
20

          
 At September 30, 2019Total 
Quoted
Prices in Active
Markets for
Identical 
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
 Fixed maturity investments        
 U.S. treasuries$4,314,006
 $4,314,006
 $—
 $—
 
 Agencies507,903
 —
 507,903
 —
 
 Municipal1,629
 —
 1,629
 —
 
 Non-U.S. government379,154
 —
 379,154
 —
 
 Non-U.S. government-backed corporate263,170
 —
 263,170
 —
 
 Corporate3,453,222
 —
 3,453,222
 —
 
 Agency mortgage-backed1,248,722
 —
 1,248,722
 —
 
 Non-agency mortgage-backed261,850
 —
 261,850
 —
 
 Commercial mortgage-backed406,268
 —
 406,268
 —
 
 Asset-backed550,304
 —
 550,304
 —
 
 Total fixed maturity investments11,386,228
 4,314,006
 7,072,222
 —
 
 Short term investments4,116,156
 —
 4,116,156
 —
 
 Equity investments trading379,422
 379,422
 —
 —
 
 Other investments        
 Catastrophe bonds659,466
 —
 659,466
 —
 
 Private equity investments (1)266,048
 —
 —
 74,210
 
 Senior secured bank loan funds (1)24,567
 —
 —
 —
 
 Hedge funds (1)12,028
 —
 —
 —
 
 Total other investments962,109
 —
 659,466
 74,210
 
 Other assets and (liabilities)        
 Assumed and ceded (re)insurance contracts (2)6,219
 —
 —
 6,219
 
 Derivatives (3)18,565
 212
 18,353
 —
 
 Total other assets and (liabilities)24,784
 212
 18,353
 6,219
 
  $16,868,699
 $4,693,640
 $11,866,197
 $80,429
 
          
(1)Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet.
(2)Included in assumed and ceded (re)insurance contracts at September 30, 2019 was $37.8 million of other assets and $31.6 million of other liabilities.
(3)See “Note 14. Derivative Instruments” for additional information related to the fair value by type of contract, of derivatives entered into by the Company.

At December 31, 2019TotalQuoted
Prices in Active
Markets for
Identical
 Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
Fixed maturity investments
U.S. treasuries$4,467,345  $4,467,345  $—  $—  
Agencies343,031  —  343,031  —  
Non-U.S. government497,392  —  497,392  —  
Non-U.S. government-backed corporate321,356  —  321,356  —  
Corporate3,075,660  —  3,075,660  —  
Agency mortgage-backed1,148,499  —  1,148,499  —  
Non-agency mortgage-backed294,604  —  294,604  —  
Commercial mortgage-backed468,698  —  468,698  —  
Asset-backed555,070  —  555,070  —  
Total fixed maturity investments11,171,655  4,467,345  6,704,310  —  
Short term investments4,566,277  —  4,566,277  —  
Equity investments trading436,931  436,931  —  —  
Other investments
Catastrophe bonds781,641  —  781,641  —  
Private equity investments (1)271,047  —  —  74,634  
Senior secured bank loan funds (1)22,598  —  —  —  
Hedge funds (1)12,091  —  —  —  
Total other investments1,087,377  —  781,641  74,634  
Other assets and (liabilities)
Assumed and ceded (re)insurance contracts (2)4,731  —  —  4,731  
Derivatives (3)16,937  (1,020) 17,957  —  
Total other assets and (liabilities)21,668  (1,020) 17,957  4,731  
 $17,283,908  $4,903,256  $12,070,185  $79,365  

(1)  Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet.

(2) Included in assumed and ceded (re)insurance contracts at December 31, 2019 was $32.9 million of other assets and $28.2 million of other liabilities.
(3)  See “Note 13. Derivative Instruments” for additional information related to the fair value, by type of contract, of derivatives entered into by the Company.
          
 At December 31, 2018Total 
Quoted
Prices in Active
Markets for
Identical
 Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
 Fixed maturity investments        
 U.S. treasuries$3,331,411
 $3,331,411
 $—
 $—
 
 Agencies174,883
 —
 174,883
 —
 
 Municipal6,854
 —
 6,854
 —
 
 Non-U.S. government279,818
 —
 279,818
 —
 
 Non-U.S. government-backed corporate160,063
 —
 160,063
 —
 
 Corporate2,450,244
 —
 2,450,244
 —
 
 Agency mortgage-backed817,880
 —
 817,880
 —
 
 Non-agency mortgage-backed278,680
 —
 278,680
 —
 
 Commercial mortgage-backed282,294
 —
 282,294
 —
 
 Asset-backed306,743
 —
 306,743
 —
 
 Total fixed maturity investments8,088,870
 3,331,411
 4,757,459
 —
 
 Short term investments2,586,520
 —
 2,586,520
 —
 
 Equity investments trading310,252
 310,252
 —
 —
 
 Other investments        
 Catastrophe bonds516,571
 —
 516,571
 —
 
 Private equity investments (1)242,647
 —
 —
 54,545
 
 Senior secured bank loan funds (1)14,482
 —
 —
 —
 
 Hedge funds (1)11,233
 —
 —
 —
 
 Total other investments784,933
 —
 516,571
 54,545
 
 Other assets and (liabilities)        
 Assumed and ceded (re)insurance contracts (2)(8,359) —
 —
 (8,359) 
 Derivatives (3)12,399
 484
 11,915
 —
 
 Total other assets and (liabilities)4,040
 484
 11,915
 (8,359) 
  $11,774,615
 $3,642,147
 $7,872,465
 $46,186
 
          
(1)Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet.
(2)Included in assumed and ceded (re)insurance contracts at December 31, 2018 was $5.0 million of other assets and $13.3 million of other liabilities.
(3)See “Note 14. Derivative Instruments” for additional information related to the fair value by type of contract, of derivatives entered into by the Company.
Level 1 and Level 2 Assets and Liabilities Measured at Fair Value
Fixed Maturity Investments
Fixed maturity investments included in Level 1 consist of the Company’s investments in U.S. treasuries. Fixed maturity investments included in Level 2 are agencies, municipal, non-U.S. government, non-U.S. government-backed corporate, corporate, agency mortgage-backed, non-agency mortgage-backed, commercial mortgage-backed and asset-backed.
The Company’s fixed maturity investments are primarily priced using pricing services, such as index providers and pricing vendors, as well as broker quotations. In general, the pricing vendors provide pricing for a high volume of liquid securities that are actively traded. For securities that do not trade on an exchange, the pricing services generally utilize market data and other observable inputs in matrix pricing


models to determine month end prices. Observable inputs include benchmark yields, reported trades,
21

broker-dealer quotes, issuer spreads, bids, offers, reference data and industry and economic events. Index pricing generally relies on market traders as the primary source for pricing; however, models are also utilized to provide prices for all index eligible securities. The models use a variety of observable inputs such as benchmark yields, transactional data, dealer runs, broker-dealer quotes and corporate actions. Prices are generally verified using third-party data. Securities which are priced by an index provider are generally included in the index.
In general, broker-dealers value securities through their trading desks based on observable inputs. The methodologies include mapping securities based on trade data, bids or offers, observed spreads, and performance on newly issued securities. Broker-dealers also determine valuations by observing secondary trading of similar securities. Prices obtained from broker quotations are considered non-binding, however they are based on observable inputs and by observing secondary trading of similar securities obtained from active, non-distressed markets.
The Company considers these broker quotations to be Level 2 inputs as they are corroborated with other market observable inputs. The techniques generally used to determine the fair value of the Company’s fixed maturity investments are detailed below by asset class.
U.S. treasuriesTreasuries
Level 1 - At SeptemberJune 30, 2019,2020, the Company’s U.S. treasuries fixed maturity investments were primarily priced by pricing services and had a weighted average yield to maturity of 1.7%0.3% and a weighted average credit quality of AA (December(December 31, 20182019 - 2.5%1.7% and AA, respectively). When pricing these securities, the pricing services utilize daily data from many real time market sources, including active broker-dealers. Certain data sources are regularly reviewed for accuracy to attempt to ensure the most reliable price source is used for each issue and maturity date.
Agencies
Level 2 - At SeptemberJune 30, 2019,2020, the Company’s agency fixed maturity investments had a weighted average yield to maturity of 2.0%0.7% and a weighted average credit quality of AA (December(December 31, 20182019 - 3.0%2.1% and AA, respectively). The issuers of the Company’s agency fixed maturity investments primarily consist of the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation and other agencies. Fixed maturity investments included in agencies are primarily priced by pricing services. When evaluating these securities, the pricing services gather information from market sources and integrate other observations from markets and sector news. Evaluations are updated by obtaining broker-dealer quotes and other market information including actual trade volumes, when available. The fair value of each security is individually computed using analytical models which incorporate option adjusted spreads and other daily interest rate data.
Municipal
Level 2 - At September 30, 2019, the Company’s municipal fixed maturity investments had a weighted average yield to maturity of 3.0% and a weighted average credit quality of AA (December 31, 2018 - 4.8% and A, respectively). The Company’s municipal fixed maturity investments are primarily priced by pricing services. When evaluating these securities, the pricing services gather information regarding the security from third-party sources such as trustees, paying agents or issuers. Evaluations are updated by obtaining broker-dealer quotes and other market information including actual trade volumes, when available. The pricing services also consider the specific terms and conditions of the securities, including any specific features which may influence risk. In certain instances, securities are individually evaluated using a spread over widely accepted market benchmarks.
Non-U.S. governmentGovernment
Level 2 - At SeptemberJune 30, 2019,2020, the Company’s non-U.S. government fixed maturity investments had a weighted average yield to maturity of 1.7%0.7% and a weighted average credit quality of AAAAA (December 31, 20182019 - 2.7%1.6% and AAA,AA, respectively). The issuers of securities in this sector are non-U.S. governments and their respective agencies as well as supranational organizations. Securities held in these sectors are primarily priced by pricing services that employ proprietary discounted cash flow models to value the


securities. Key quantitative inputs for these models are daily observed benchmark curves for treasury, swap and high issuance credits. The pricing services then apply a credit spread for each security which is developed by in-depth and real time market analysis. For securities in which trade volume is low, the pricing services utilize data from more frequently traded securities with similar attributes. These models may also be supplemented by daily market and credit research for international markets.
Non-U.S. government-backed corporateGovernment-backed Corporate
Level 2 - At SeptemberJune 30, 2019,2020, the Company’s non-U.S. government-backed corporate fixed maturity investments had a weighted average yield to maturity of 2.0%0.8% and a weighted average credit quality of AA (December(December 31, 20182019 - 2.8%2.0% and AA, respectively). Non-U.S. government-backed corporate fixed maturity investments are primarily priced by pricing services that employ proprietary discounted cash flow models to value the securities. Key quantitative inputs for these models are daily observed benchmark curves for
22

treasury, swap and high issuancequality credits. The pricing services then apply a credit spread to the respective curve for each security which is developed by in-depth and real time market analysis. For securities in which trade volume is low, the pricing services utilize data from more frequently traded securities with similar attributes. These models may also be supplemented by daily market and credit research for international markets.
Corporate
Level 2 - At SeptemberJune 30, 2019,2020, the Company’s corporate fixed maturity investments principally consisted of U.S. and international corporations and had a weighted average yield to maturity of 3.0%2.7% and a weighted average credit quality of A (DecemberBBB (December 31, 20182019 - 4.9%3.0% and BBB, respectively). The Company’s corporate fixed maturity investments are primarily priced by pricing services. When evaluating these securities, the pricing services gather information from market sources regarding the issuer of the security and obtain credit data, as well as other observations, from markets and sector news. Evaluations are updated by obtaining broker-dealer quotes and other market information including actual trade volumes, when available. The pricing services also consider the specific terms and conditions of the securities, including any specific features which may influence risk. In certain instances, securities are individually evaluated using a spread which is added to the U.S. treasury curve or a security specific swap curve as appropriate.
Agency mortgage-backedMortgage-backed
Level 2 - At SeptemberJune 30, 2019,2020, the Company’s agency mortgage-backed fixed maturity investments included agency residential mortgage-backed securities with a weighted average yield to maturity of 2.5%1.0%, a weighted average credit quality of AA and a weighted average life of 4.73.2 years (December(December 31, 20182019 - 3.5%2.5%, AA and 7.14.9 years, respectively). The Company’s agency mortgage-backed fixed maturity investments are primarily priced by pricing services using a mortgage pool specific model which utilizes daily inputs from the active to-be-announced market which is very liquid, as well as the U.S. treasury market. The model also utilizes additional information, such as the weighted average maturity, weighted average coupon and other available pool level data which is provided by the sponsoring agency. Valuations are also corroborated with daily active market quotes.
Non-agency mortgage-backedMortgage-backed
Level 2 - The Company’s non-agency mortgage-backed fixed maturity investments include non-agency prime, non-agency Alt-A and other non-agency residential mortgage-backed securities. At SeptemberJune 30, 2019,2020, the Company’s non-agency prime residential mortgage-backed fixed maturity investments had a weighted average yield to maturity of 3.1%, a weighted average credit quality of BBB and a weighted average life of 4.8 years (December 31, 2019 - 3.3%, BBB and 4.8 years, respectively). The Company’s non-agency Alt-A residential mortgage-backed fixed maturity investments held at June 30, 2020 had a weighted average yield to maturity of 3.7%, a weighted average credit quality of non-investment grade and a weighted average life of 4.76.1 years (December(December 31, 20182019 - 4.4%3.8%, non-investment grade and 4.7 years, respectively). The Company’s non-agency Alt-A fixed maturity investments held at September 30, 2019 had a weighted average yield to maturity of 3.7%, a weighted average credit quality of non-investment grade and a weighted average life of 6.6 years (December 31, 2018 - 4.7%, non-investment grade and 6.3 years, respectively). Securities held in these sectors are primarily priced by pricing services using an option adjusted spread model or other relevant models, which principally utilize inputs including benchmark yields, available trade information or broker quotes, and issuer spreads. The pricing services also review collateral prepayment speeds, loss severity and delinquencies among other collateral performance indicators for the securities valuation, when applicable.


Commercial mortgage-backedMortgage-backed
Level 2 - At SeptemberJune 30, 2019,2020, the Company’s commercial mortgage-backed fixed maturity investments had a weighted average yield to maturity of 2.5%2.0%, a weighted average credit quality of AAA, and a weighted average life of 5.65.5 years (December(December 31, 20182019 - 3.6%2.6%, AAA and 5.05.7 years, respectively). Securities held in these sectors are primarily priced by pricing services. The pricing services apply dealer quotes and other available trade information such as bids and offers, prepayment speeds which may be adjusted for the underlying collateral or current price data, the U.S. treasury curve and swap curve as well as cash settlement. The pricing services discount the expected cash flows for each security held in this sector using a spread adjusted benchmark yield based on the characteristics of the security.
23

Asset-backed
Level 2 - At SeptemberJune 30, 2019,2020, the Company’s asset-backed fixed maturity investments had a weighted average yield to maturity of 3.4%2.5%, a weighted average credit quality of AAA and a weighted average life of 3.33.0 years (December(December 31, 20182019 - 4.3%3.3%, AAA and 3.2 years, respectively). The underlying collateral for the Company’s asset-backed fixed maturity investments primarily consists of bank loans, student loans, credit card receivables, auto loans and other receivables. Securities held in these sectors are primarily priced by pricing services. The pricing services apply dealer quotes and other available trade information such as bids and offers, prepayment speeds which may be adjusted for the underlying collateral or current price data, the U.S. treasury curve and swap curve as well as cash settlement. The pricing services determine the expected cash flows for each security held in this sector using historical prepayment and default projections for the underlying collateral and current market data. In addition, a spread is applied to the relevant benchmark and used to discount the cash flows noted above to determine the fair value of the securities held in this sector.
Short Term Investments
Level 2 - At SeptemberJune 30, 2019,2020, the Company’s short term investments had a weighted average yield to maturity of 1.7%0.2% and a weighted average credit quality of AAA (December(December 31, 20182019 - 2.1%1.6% and AAA, respectively). The fair value of the Company’s portfolio of short term investments is generally determined using amortized cost which approximates fair value and, in certain cases, in a manner similar to the Company’s fixed maturity investments noted above.
Equity Investments, Classified as Trading
Level 1 - The fair value of the Company’s portfolio of equity investments, classified as trading is primarily priced by pricing services, reflecting the closing price quoted for the final trading day of the period. When pricing these securities, the pricing services utilize daily data from many real time market sources, including applicable securities exchanges. All data sources are regularly reviewed for accuracy to attempt to ensure the most reliable price source was used for each security.
Other investmentsInvestments
Catastrophe bondsBonds
Level 2 - The Company’s other investments include investments in catastrophe bonds which are recorded at fair value based on broker or underwriter bid indications.
Other assetsAssets and liabilitiesLiabilities
Derivatives
Level 1 and Level 2 - Other assets and liabilities include certain derivatives entered into by the Company. The fair value of these transactions includes certain exchange traded futures contracts which are considered Level 1, and foreign currency contracts and certain credit derivatives, determined using standard industry valuation models and considered Level 2, as the inputs to the valuation model are based on observable market inputs. For credit derivatives, these inputs include credit spreads, credit ratings of the underlying referenced security, the risk free rate and the contract term. For foreign currency contracts, these inputs include spot rates and interest rate curves.


24

Level 3 Assets and Liabilities Measured at Fair Value
Below is a summary of quantitative information regarding the significant unobservable inputs (Level 3) used in determining the fair value of assets and liabilities measured at fair value on a recurring basis:
              
 At September 30, 2019
Fair Value
(Level 3)
 Valuation Technique Unobservable
Inputs		 Low High Weighted Average or Actual 
 Other investments            
 Private equity investment$10,455
 External valuation model Indicative pricing $—
 $105.12
 $104.55
 
 Private equity investments63,755
 Internal valuation model Liquidity discount n/a
 n/a
 12.5% 
 Total other investments74,210
           
 Other assets and (liabilities)            
 Assumed and ceded (re)insurance contracts484
 Internal valuation model Bond price $100.32
 $106.08
 $103.49
 
      Liquidity discount n/a
 n/a
 1.3% 
 Assumed and ceded (re)insurance contracts(9,242) Internal valuation model Net undiscounted cash flows n/a
 n/a
 $(11,028) 
      Expected loss ratio n/a
 n/a
 34.9% 
      Discount rate n/a
 n/a
 1.6% 
 Assumed and ceded (re)insurance contracts14,977
 Internal valuation model Expected loss ratio n/a
 n/a
 0.0% 
              
 Total other assets and (liabilities)6,219
           
 Total other assets and (liabilities) measured at fair value on a recurring basis using Level 3 inputs$80,429
           
              


At June 30, 2020Fair Value
(Level 3)		Valuation TechniqueUnobservable
Inputs		LowHighWeighted Average or Actual
Other investments
Private equity investment$1,143  External valuation modelManager pricing$277.73  $369.09  $323.41  
Private equity investments70,307  Internal valuation modelDiscount raten/an/a8.0 %
Liquidity discountn/an/a15.0 %
Total other investments71,450  
Other assets and (liabilities)
Assumed and ceded (re)insurance contracts(1,442) Internal valuation modelBond price$88.09  $99.25  $93.59  
Liquidity discountn/an/a1.3 %
Assumed and ceded (re)insurance contracts(8,232) Internal valuation modelNet undiscounted cash flowsn/an/a$11,752  
Expected loss ration/an/a28.3 %
Discount raten/an/a0.3 %
Assumed and ceded (re)insurance contracts2,963  Internal valuation modelExpected loss ration/an/a0.0 %
Total other assets and (liabilities)(6,711) 
Total assets and (liabilities) measured at fair value on a recurring basis using Level 3 inputs$64,739  

Below is a reconciliation of the beginning and ending balances, for the periods shown, of assets and liabilities measured at fair value on a recurring basis using Level 3 inputs. Interest and dividend income are included in net investment income and are excluded from the reconciliation.
25
        
 
  
Other
investments
 
Other assets
and
(liabilities)
 Total 
 Balance - July 1, 2019$74,810
 $7,942
 $82,752
 
 Total realized and unrealized losses      
 Included in other income(592) (1,188) (1,780) 
 Total foreign exchange losses(8) —
 (8) 
 Purchases—
 (535) (535) 
 Balance - September 30, 2019$74,210
 $6,219
 $80,429
 
        
        
        
 
  
Other
investments
 
Other assets
and
(liabilities)
 Total 
 Balance - January 1, 2019$54,545
 $(8,359) $46,186
 
 Total realized and unrealized gains (losses)      
 Included in other income1,790
 (1,030) 760
 
 Total foreign exchange losses(16) —
 (16) 
 Purchases17,891
 (4,382) 13,509
 
 Settlements—
 20
 20
 
 Amounts acquired (1)—
 19,970
 19,970
 
 Balance - September 30, 2019$74,210
 $6,219
 $80,429
 
        
(1)Represents the fair value of the other assets acquired from the TMR Group Entities, measured at fair value on a recurring basis using Level 3 inputs at March 22, 2019. See “Note 3. Acquisition of Tokio Millennium Re” for additional information related to the acquisition of the TMR Group Entities.
    
 
  
Other assets  and (liabilities) 
 Balance - July 1, 2018$(2,018) 
 Total realized and unrealized gains  
 Included in other income1,754
 
 Purchases(9,668) 
 Settlements983
 
 Balance - September 30, 2018$(8,949) 
    
    
    
 
  
Other assets  and (liabilities) 
 Balance - January 1, 2018$(2,952) 
 Total realized and unrealized gains  
 Included in other income2,399
 
 Purchases(9,379) 
 Settlements983
 
 Balance - September 30, 2018$(8,949) 
    

  
Other
investments		Other assets
and
(liabilities)		Total
Balance - April 1, 2020$72,620  $1,223  $73,843  
Total realized and unrealized losses
Included in net realized and unrealized gains on investments
(380) —  (380) 
Included in other (loss) income—  (1,713) (1,713) 
Purchases—  (482) (482) 
Sales(790) —  (790) 
Settlements—  (5,739) (5,739) 
Balance - June 30, 2020$71,450  $(6,711) $64,739  
  
Other
investments		Other assets
and
(liabilities)		Total
Balance - January 1, 2020$74,634  $4,731  $79,365  
Total realized and unrealized losses
Included in net realized and unrealized gains on investments
(14,536) —  (14,536) 
Included in other (loss) income—  (4,610) (4,610) 
Total foreign exchange losses(21) —  (21) 
Purchases20,962  (1,093) 19,869  
Sales(9,589) —  (9,589) 
Settlements—  (5,739) (5,739) 
Balance - June 30, 2020$71,450  $(6,711) $64,739  
  
Other
investments		Other assets  and (liabilities)Total
Balance - April 1, 2019$63,695  $11,827  $75,522  
Total realized and unrealized gains (losses)
Included in net realized and unrealized gains on investments
3,493  —  3,493  
Included in other (loss) income—  (935) (935) 
Total foreign exchange losses(7) —  (7) 
Purchases7,629  (2,950) 4,679  
Balance - June 30, 2019$74,810  $7,942  $82,752  
  
Other
investments		Other assets  and (liabilities)Total
Balance - January 1, 2019$54,545  $(8,359) $46,186  
Total realized and unrealized gains
Included in net realized and unrealized gains on investments
2,382  —  2,382  
Included in other (loss) income—  158  158  
Total foreign exchange losses(8) —  (8) 
Purchases17,891  (3,847) 14,044  
Settlements—  20  20  
Amounts acquired (1)—  19,970  19,970  
Balance - June 30, 2019$74,810  $7,942  $82,752  
26


(1) Represents the fair value of the other assets acquired from TMR, measured at fair value on a recurring basis using Level 3 inputs at March 22, 2019. See “Note 3. Acquisition of Tokio Millennium Re” in the Company’s “Notes to the Consolidated Financial Statements” included in the Company’s Form 10-K for the year ended December 31, 2019 for additional information related to the acquisition of TMR.
Other investmentsInvestments
Private equity investmentsEquity Investments
Level 3 - At SeptemberJune 30, 2019,2020, the Company’s other investments included a $10.5$1.1 million private equity investment which is recorded at fair value, with the fair value obtained through the receipt of an indicative pricing obtained from the insurance manager of the security. The Company considers the price obtained to be unobservable, as there is little, if any, market activity for this security. This unobservable input in isolation can cause significant increases or decreases in fair value. Generally, an increase in the indicative pricing would result in an increase in the fair value of this private equity investment.
Level 3 - At SeptemberJune 30, 2019,2020, the Company’s other investments included $63.8$70.3 million of private equity investments which are recorded at fair value, with the fair value obtained through the use of internal valuation models. The Company measured the fair value of these investments using multiples of net tangible book value of the underlying entity. The significant unobservable inputs used in the fair value measurement of these investments are liquidity discount rates applied to each of the net tangible book value multiples used in the internal valuation models.models, and discount rates applied to the expected cash flows of the underlying entity in various scenarios. These unobservable inputs in isolation can cause significant increases or decreases in fair value. The discount rates are applied to each of the comparable net tangible book value multiples which are used to determine fair value. The comparable net tangible book value multiples are observable and based on the trading multiples of public industry peers of the underlying entity. Generally, an increase in the liquidity discount rate or discount rates would result in a decrease in the fair value of thisthese private equity investment.investments.
Other assetsAssets and liabilitiesLiabilities
Assumed and ceded (re)Ceded (Re)insurance contractsContracts
Level 3 - At SeptemberJune 30, 2019,2020, the Company had a $0.5$1.4 million net assetliability related to an assumed reinsurance contract accounted for at fair value, with the fair value obtained through the use of an internal valuation model. The inputs to the internal valuation model are principally based on indicative pricing obtained from independent brokers and pricing vendors for similarly structured marketable securities. The most significant unobservable inputs include prices for similar marketable securities and a liquidity premium. The Company considers the prices for similar securities to be unobservable, as there is little, if any market activity for these similar assets. In addition, the Company has estimated a liquidity premium that would be required if the Company attempted to effectively exit its position by executing a short sale of these securities. Generally, an increase in the prices for similar marketable securities or a decrease in the liquidity premium would result in an increase in the expected profit and ultimate fair value of this assumed reinsurance contract.
Level 3 - At SeptemberJune 30, 2019,2020, the Company had a $9.2$8.2 million net liability related to assumed and ceded (re)insurance contracts accounted for at fair value, with the fair value obtained through the use of an internal valuation model. The inputs to the internal valuation model are principally based on proprietary data as observable market inputs are generally not available. The most significant unobservable inputs include the assumed and ceded expected net cash flows related to the contracts, including the expected premium, acquisition expenses and losses; the expected loss ratio and the relevant discount rate used to present value the net cash flows. The contract period and acquisition expense ratio are considered an observable input as each is defined in the contract. Generally, an increase in the net expected cash flows and expected term of the contract and a decrease in the discount rate, expected loss ratio or acquisition expense ratio, would result in an increase in the expected profit and ultimate fair value of these assumed and ceded (re)insurance contracts.
Level 3 - At SeptemberJune 30, 2019,2020, the Company had a $15.0$3.0 million net asset related to assumed and ceded (re)insurance contracts accounted for at fair value, with the fair value obtained through the use of internal valuation models. The inputs to the models are primarily based on the unexpired period of risk and an evaluation of the probability of loss. The fair value of the contracts are sensitive to loss-triggering events. In the event of a loss, the Company would adjust the fair value of the contract to account for a recovery or
27

liability in accordance with the contract terms and the estimate of exposure under the contract. The inputs for the contracts are based on management’s evaluation and are unobservable.


Financial Instruments Disclosed, But Not Carried, at Fair Value
The Company uses various financial instruments in the normal course of its business. The Company’s insurance contracts are excluded from the fair value of financial instruments accounting guidance, unless the Company elects the fair value option, and therefore, are not included in the amounts discussed herein. The carrying values of cash and cash equivalents, accrued investment income, receivables for investments sold, certain other assets, payables for investments purchased, certain other liabilities, and other financial instruments not included herein approximated their fair values.
Debt
Included on the Company’s consolidated balance sheet at SeptemberJune 30, 20192020 were debt obligations of $1.1 billion (December 31, 2019 - $1.4 billion (December 31, 2018 - $991.1 million)billion). At SeptemberJune 30, 2019,2020, the fair value of the Company’s debt obligations was $1.2 billion (December 31, 2019 – $1.5 billion (December 31, 2018 – $974.7 million)billion).
The fair value of the Company’s debt obligations is determined using indicative market pricing obtained from third-party service providers, which the Company considers Level 2 in the fair value hierarchy. There have been no changes during the period in the Company’s valuation technique used to determine the fair value of the Company’s debt obligations. Refer to “Note 7. Debt and Credit Facilities” for additional information related to the Company’s debt obligations.
The Fair Value Option for Financial Assets and Financial Liabilities
The Company has elected to account for certain financial assets and financial liabilities at fair value using the guidance under FASB ASC Topic Financial Instruments as the Company believes it represents the most meaningful measurement basis for these assets and liabilities. Below is a summary of the balances the Company has elected to account for at fair value:
      
  September 30,
2019		 December 31,
2018		 
 Other investments$962,109
 $784,933
 
 Other assets$37,820
 $4,968
 
 Other liabilities$31,601
 $13,327
 
      

June 30,
2020		December 31,
2019
Other investments$1,093,338  $1,087,377  
Other assets$12,537  $32,944  
Other liabilities$19,248  $28,213  
Included in net investment incomerealized and unrealized gains on investments for the three and ninesix months endedSeptember June 30, 20192020 were net unrealized gains of $5.1$15.6 million and net unrealized gainslosses of $7.3$44.5 million, respectively, related to the changes in fair value of other investments (2018(2019 – net unrealized gainslosses of $9.1$2.7 million and $17.8$1.4 million, respectively). Included in other (loss) income (loss) for the three and ninesix months ended September June 30, 20192020 were net unrealized gains of $Nil$NaN and $Nil, respectively,$NaN related to the changes in the fair value of other assets and liabilities (2018(2019 - net unrealized gains of $Nil$NaN and $Nil,$NaN, respectively).
Measuring the Fair Value of Other Investments Using Net Asset Valuations
The table below shows the Company’s portfolio of other investments measured using net asset valuations as a practical expedient:
            
 At September 30, 2019Fair Value Unfunded
Commitments		 Redemption Frequency Redemption
Notice Period (Minimum Days)		 Redemption
Notice Period (Maximum Days)		 
 Private equity investments$191,838
 $359,470
 See below See below See below 
 Senior secured bank loan funds24,567
 7,400
 See below See below See below 
 Hedge funds12,028
 —
 See below See below See below 
 Total other investments measured using net asset valuations$228,433
 $366,870
       
            
At June 30, 2020Fair ValueUnfunded
Commitments		Redemption FrequencyRedemption
Notice Period (Minimum Days)		Redemption
Notice Period (Maximum Days)
Private equity investments$182,807  $455,883  See belowSee belowSee below
Senior secured bank loan funds22,261  6,995  See belowSee belowSee below
Hedge funds9,658  —  See belowSee belowSee below
Total other investments measured using net asset valuations$214,726  $462,878  
28

Private equity investments –Equity Investments
A significant portion of the Company’s investments in private equity investments include alternative asset limited partnerships (or similar corporate structures) that invest in certain private equity asset classes including U.S. and global leveraged buyouts, mezzanine investments,


distressed securities, real estate, and oil, gas and power. The Company generally has no right to redeem its interest in any of these private equity investments in advance of dissolution of the applicable private equity investment. Instead, the nature of these investments is that distributions are received by the Company in connection with the liquidation of the underlying assets of the respective private equity investment. It is estimated that the majority of the underlying assets of the limited partnerships would liquidate over 7 to 10 years from inception of the respective limited partnership.
Senior secured bank loan funds – Secured Bank Loan Funds
At SeptemberJune 30, 2019,2020, the Company had $24.6$22.3 million invested in closed end funds which invest primarily in loans. The Company has no right to redeem its investment in these funds. It is estimated that the majority of the underlying assets in these closed end funds would begin to liquidate over 4 to 5 years from inception of the applicable fund.
Hedge funds –Funds
At SeptemberJune 30, 2019,2020, the Company had $12.0$9.7 million of investments in hedge funds that are primarily focused on global credit opportunities which are generally redeemable at the option of the shareholder.
NOTE 6.5. REINSURANCE
The Company purchases reinsurance and other protection to manage its risk portfolio and to reduce its exposure to large losses. The Company currently has in place contracts that provide for recovery of a portion of certain claims and claim expenses, generally in excess of various retentions or on a proportional basis. In addition to loss recoveries, certain of the Company’s ceded reinsurance contracts provide for payments of additional premiums, for reinstatement premiums and for lost no-claims bonuses, which are incurred when losses are ceded to the respective reinsurance contracts. The Company remains liable to the extent that any reinsurer fails to meet its obligations.
The following table sets forth the effect of reinsurance and retrocessional activity on premiums written and earned and on net claims and claim expenses incurred:
          
  Three months ended Nine months ended 
  September 30,
2019		 September 30,
2018		 September 30,
2019		 September 30,
2018		 
 Premiums written        
 Direct$108,478
 $74,635
 $318,984
 $250,375
 
 Assumed752,590
 551,042
 3,583,287
 2,512,297
 
 Ceded(156,938) (172,422) (1,246,145) (1,041,864) 
 Net premiums written$704,130
 $453,255
 $2,656,126
 $1,720,808
 
 Premiums earned        
 Direct$103,446
 $73,356
 $283,898
 $213,292
 
 Assumed1,146,831
 760,920
 3,114,408
 1,968,138
 
 Ceded(343,529) (302,427) (1,030,028) (779,914) 
 Net premiums earned$906,748
 $531,849
 $2,368,278
 $1,401,516
 
 Claims and claim expenses        
 Gross claims and claim expenses incurred$714,714
 $514,873
 $1,804,889
 $817,560
 
 Claims and claim expenses recovered(60,194) (104,363) (469,961) (175,180) 
 Net claims and claim expenses incurred$654,520
 $410,510
 $1,334,928
 $642,380
 
          
Three months endedSix months ended
June 30,
2020		June 30,
2019		June 30,
2020		June 30,
2019
Premiums written
Direct$177,562  $99,538  $325,254  $210,506  
Assumed1,524,310  1,377,370  3,402,339  2,830,697  
Ceded(521,069) (453,943) (1,276,982) (1,089,207) 
Net premiums written$1,180,803  $1,022,965  $2,450,611  $1,951,996  
Premiums earned
Direct$138,327  $90,638  $272,556  $180,452  
Assumed1,281,357  1,202,144  2,431,090  1,967,577  
Ceded(409,588) (381,280) (780,452) (686,499) 
Net premiums earned$1,010,096  $911,502  $1,923,194  $1,461,530  
Claims and claim expenses
Gross claims and claim expenses incurred$647,226  $752,056  $1,394,941  $1,090,175  
Claims and claim expenses recovered(136,954) (298,683) (313,715) (409,767) 
Net claims and claim expenses incurred$510,272  $453,373  $1,081,226  $680,408  
29

The Company adopted ASU 2016-13 effective January 1, 2020. In assessing an allowance for reinsurance assets, which includes reinsurance balances receivable and reinsurance recoverables, the Company considers historical information, financial strength of reinsurers, collateralization amounts, and ratings to determine the appropriateness of the allowance. In assessing future default for reinsurance assets, the Company evaluates the valuation allowance under the probability of default and loss given default method. The Company utilizes its internal capital and risk models which uses counterparty ratings from major rating agencies, as well as assessing the current market conditions for the likelihood of default. Historically, the Company has not experienced material credit losses from reinsurance assets. The adoption of ASU 2016-13 did not have a material impact on the Company’s consolidated statements of operations and financial position.
At SeptemberJune 30, 2019,2020, the Company’s reinsurance recoverable balance was $2.4$2.8 billion (December 31, 20182019 - $2.4$2.8 billion). Of the Company’s reinsurance recoverable balance at SeptemberJune 30, 2019, 59.5%2020, 51.2% is fully collateralized by our reinsurers, 38.9%47.6% is recoverable from reinsurers rated A- or higher by major rating agencies and 1.6%1.2% is recoverable from reinsurers rated lower than A- by major rating agencies (December(December 31, 20182019 - 60.8%57.5%, 38.0%41.0% and 1.2%1.5%, respectively). The reinsurers with the three largest balances accounted for 14.6%14.2%, 8.2%9.0% and 8.0%7.2%, respectively, of the Company’s reinsurance recoverable balance at SeptemberJune 30, 2019 (December2020 (December 31, 20182019 - 15.5%12.7%, 6.7%7.2% and 6.5%7.0%, respectively). The valuation


allowance recorded against reinsurance recoverable was $7.1$9.7 million at SeptemberJune 30, 20192020 (December 31, 20182019 - $9.0$7.3 million). The three largest company-specific components of the valuation allowance represented 17.4%13.3%, 7.4%6.3% and 7.0%5.2%, respectively, of the Company’s total valuation allowance at SeptemberJune 30, 2019 (December2020 (December 31, 20182019 - 16.2%18.1%, 14.8%7.9% and 12.3%7.2%, respectively).
NOTE 7.6. RESERVE FOR CLAIMS AND CLAIM EXPENSES
The Company believes the most significant accounting judgment made by management is its estimate of claims and claim expense reserves. Claims and claim expense reserves represent estimates, including actuarial and statistical projections at a given point in time, of the ultimate settlement and administration costs for unpaid claims and claim expenses arising from the insurance and reinsurance contracts the Company sells. The Company establishes its claims and claim expense reserves by taking claims reported to the Company by insureds and ceding companies, but which have not yet been paid (“case reserves”), adding estimates for the anticipated cost of claims incurred but not yet reported to the Company, or incurred but not enough reported to the Company (collectively referred to as “IBNR”) and, if deemed necessary, adding costs for additional case reserves which represent the Company’s estimates for claims related to specific contracts previously reported to the Company which it believes may not be adequately estimated by the client as of that date, or adequately covered in the application of IBNR.
The following table summarizes the Company’s claims and claim expense reserves by segment, allocated between case reserves, additional case reserves and IBNR:
At June 30, 2020Case
Reserves		Additional
Case Reserves		IBNRTotal
Property$1,095,511  $1,650,244  $842,395  $3,588,150  
Casualty and Specialty1,682,299  127,588  3,967,100  5,776,987  
Other332  —  —  332  
Total$2,778,142  $1,777,832  $4,809,495  $9,365,469  
At December 31, 2019
Property$1,253,406  $1,631,223  $1,189,221  $4,073,850  
Casualty and Specialty1,596,426  129,720  3,583,913  5,310,059  
Other440  —  —  440  
Total$2,850,272  $1,760,943  $4,773,134  $9,384,349  
30

          
 At September 30, 2019
Case
Reserves
 
Additional
Case Reserves
 IBNR Total 
 Property$1,170,009
 $1,493,600
 $916,314
 $3,579,923
 
 Casualty and Specialty1,475,505
 151,555
 3,389,344
 5,016,404
 
 Other2,944
 —
 3,166
 6,110
 
 Total$2,648,458
 $1,645,155
 $4,308,824
 $8,602,437
 
          
 At December 31, 2018        
 Property$690,718
 $1,308,307
 $1,087,229
 $3,086,254
 
 Casualty and Specialty771,537
 116,877
 2,096,979
 2,985,393
 
 Other1,458
 —
 3,166
 4,624
 
 Total$1,463,713
 $1,425,184
 $3,187,374
 $6,076,271
 
          


Activity in the liability for unpaid claims and claim expenses is summarized as follows:
      
 Nine months ended September 30,2019 2018 
 Net reserves as of beginning of period$3,704,050
 $3,493,778
 
 Net incurred related to:    
 Current year1,349,448
 839,360
 
 Prior years(14,520) (196,980) 
 Total net incurred1,334,928
 642,380
 
 Net paid related to:    
 Current year128,471
 48,075
 
 Prior years563,539
 326,692
 
 Total net paid692,010
 374,767
 
 Amounts acquired (1)1,858,775
 —
 
 Foreign exchange (2)(41,605) (12,952) 
 Net reserves as of end of period6,164,138
 3,748,439
 
 Reinsurance recoverable as of end of period2,438,299
 1,204,059
 
 Gross reserves as of end of period$8,602,437
 $4,952,498
 
      

Six months ended June 30,20202019
Net reserves as of beginning of period$6,593,052  $3,704,050  
Net incurred related to:
Current year1,082,732  684,481  
Prior years(1,506) (4,073) 
Total net incurred1,081,226  680,408  
Net paid related to:
Current year61,625  52,332  
Prior years1,007,916  570,561  
Total net paid1,069,541  622,893  
Foreign exchange (1)(13,626) (642) 
Amounts acquired (2)—  1,858,775  
Net reserves as of end of period6,591,111  5,619,698  
Reinsurance recoverable as of end of period2,774,358  2,865,150  
Gross reserves as of end of period$9,365,469  $8,484,848  
(1)    Represents the fair value of the TMR Group Entities reserves for claims and claim expenses, net of reinsurance recoverables, acquired at March 22, 2019. See “Note 3. Acquisition of Tokio Millennium Re” for additional information related to the acquisition of the TMR Group Entities.
(2) Reflects the impact of the foreign exchange revaluation of net reserves denominated in non-U.S. dollars as at the balance sheet date.
(2) Represents the fair value of TMR's reserves for claims and claim expenses, net of reinsurance recoverables, acquired at March 22, 2019.
Prior Year Development of the Reserve for Net Claims and Claim Expenses
The Company’s estimates of claims and claim expense reserves are not precise in that, among other things, they are based on predictions of future developments and estimates of future trends and other variable factors. Some, but not all, of the Company’s reserves are further subject to the uncertainty inherent in actuarial methodologies and estimates. Because a reserve estimate is simply an insurer’s estimate at a point in time of its ultimate liability, and because there are numerous factors that affect reserves and claims payments that cannot be determined with certainty in advance, the Company’s ultimate payments will vary, perhaps materially, from its estimates of reserves. If the Company determines in a subsequent period that adjustments to its previously established reserves are appropriate, such adjustments are recorded in the period in which they are identified. On a net basis, the Company’s cumulative favorable or unfavorable development is generally reduced by offsetting changes in its reinsurance recoverables, as well as changes to loss related premiums such as reinstatement premiums and redeemable noncontrolling interest, for changes in claims and claim expenses that impact DaVinciRe, all of which generally move in the opposite direction to changes in the Company’s ultimate claims and claim expenses.
The following table details the Company’s prior year development by segment of its liability for unpaid claims and claim expenses:
      
 Nine months ended September 30,2019 2018 
  (Favorable) adverse development (Favorable) adverse development 
 Property$5,020
 $(172,872) 
 Casualty and Specialty(19,718) (24,020) 
 Other178
 (88) 
 Total net favorable development of prior accident years net claims and claim expenses$(14,520) $(196,980) 
      
Six months ended June 30,20202019
(Favorable) adverse development(Favorable) adverse development
Property$7,444  $12,640  
Casualty and Specialty(8,799) (16,730) 
Other(151) 17  
Total net favorable development of prior accident years net claims and claim expenses$(1,506) $(4,073) 
31



Changes to prior year estimated claims reserves increased net income by $14.5$1.5 million during the ninesix months ended SeptemberJune 30, 2019 (20182020 (2019 - increased net income by $197.0$4.1 million), excluding the consideration of changes in reinstatement, adjustment or other premium items, profit commissions, redeemable noncontrolling interest - DaVinciReinterests and income tax.
Property Segment
The following tables detail the development of the Company’s liability for unpaid claims and claim expenses for its Property segment, allocated between large and small catastrophe net claims and claim expenses and attritional net claims and claim expenses, included in the other line item:
    
 Nine months ended September 30,2019 
  (Favorable) adverse development 
 Catastrophe net claims and claim expenses  
 Large catastrophe events  
 2017 Large Loss Events$(90,817) 
 New Zealand Earthquake (2011)(7,497) 
 Tohoku Earthquake and Tsunami (2011)(4,693) 
 New Zealand Earthquake (2010)46,741
 
 2018 Large Loss Events61,592
 
 Other(10,717) 
 Total large catastrophe events(5,391) 
 Small catastrophe events and attritional loss movements  
 Other small catastrophe events and attritional loss movements1,166
 
 Total small catastrophe events and attritional loss movements1,166
 
 Total catastrophe and attritional net claims and claim expenses(4,225) 
 Actuarial assumption changes9,245
 
 Total net adverse development of prior accident years net claims and claim expenses$5,020
 
    

Six months ended June 30,2020
(Favorable) adverse development
Catastrophe net claims and claim expenses
Large catastrophe events
2019 Large Loss Events$(19,940)
2018 Large Loss Events(12,306)
2017 Large Loss Events(3,825)
Other7,004 
Total large catastrophe events(29,067)
Small catastrophe events and attritional loss movements
Other small catastrophe events and attritional loss movements36,511 
Total small catastrophe events and attritional loss movements36,511 
Total net adverse development of prior accident years net claims and claim expenses$7,444 
The net adverse development of prior accident years net claims and claim expenses within the Company’s Property segment in the ninesix months ended SeptemberJune 30, 20192020 of $5.0$7.4 million was comprised of net favorable development of $5.4 million related to large catastrophe events, net adverse development of $1.2$43.5 million primarily within the Company’s other property class of business and principally driven by higher than expected attritional losses related to small catastrophe eventslines of business where the Company principally estimates net claims and attritional loss movements and netclaim expenses using traditional actuarial methods, combined with the impact of certain of the Company’s whole account ceded protections. Partially offsetting this adverse development of $9.2 million related to actuarial assumption changes. Included in netwas favorable development ofon prior accident years net claims and claim expenses fromassociated with the following large catastrophe events was $90.8events:
•$19.9 million associated with Hurricane Dorian and Typhoon Faxai, Typhoon Hagibis and losses associated with aggregate loss contracts (collectively, the “2019 Large Loss Events”);
•$12.3 million associated with Typhoons Jebi, Mangkhut and Trami, Hurricane Florence, the wildfires in California during the third and fourth quarters of net decreases in2018, Hurricane Michael and certain losses associated with aggregate loss contracts (collectively, the estimated ultimate losses”2018 Large Loss Events”); and
•$3.8 million associated with Hurricanes Harvey, Irma and Maria, the Mexico City Earthquake, the wildfires in California during the fourth quarter of 2017 and certain losses associated with aggregate loss contracts (collectively, the “2017 Large Loss Events”), partially offset by $61.6 million of net increases in the estimated ultimate losses associated with Typhoons Jebi, Mangkhut and Trami, Hurricane Florence, the wildfires in California during the third and fourth quarters of 2018 and Hurricane Michael (collectively, the “2018“2017 Large Loss Events”) and $46.7 million of net increases in the estimated ultimate losses associated with the 2010 New Zealand Earthquake..

32

    
 Nine months ended September 30,2018 
  (Favorable) adverse development 
 Catastrophe net claims and claim expenses  
 Large catastrophe events  
 2017 Large Loss Events$(151,155) 
 Other(7,313) 
 Total large catastrophe events(158,468) 
 Small catastrophe events and attritional loss movements  
 Other small catastrophe events and attritional loss movements(8,722) 
 Total small catastrophe events and attritional loss movements(8,722) 
 Total catastrophe and attritional net claims and claim expenses(167,190) 
 Actuarial assumption changes(5,682) 
 Total net favorable development of prior accident years net claims and claim expenses$(172,872) 
    

Six months ended June 30,2019
(Favorable) adverse development
Catastrophe net claims and claim expenses
Large catastrophe events
2017 Large Loss Events$(56,234)
2018 Large Loss Events52,132 
Other1,412 
Total large catastrophe events(2,690)
Small catastrophe events and attritional loss movements
Other small catastrophe events and attritional loss movements9,521 
Total small catastrophe events and attritional loss movements9,521 
Total catastrophe and attritional net claims and claim expenses6,831 
Actuarial assumption changes5,809 
Total net adverse development of prior accident years net claims and claim expenses$12,640 
The net favorableadverse development of prior accident years net claims and claim expenses within the Company’s Property segment in the ninesix months ended SeptemberJune 30, 20182019 of $172.9$12.6 million was principally comprised of net favorable development of $151.2$2.7 million related to the 2017 Large Loss Events andlarge catastrophe events, net favorableadverse development of $8.7$9.5 million related to small catastrophe events and attritional loss movements. In addition, the Company’s Property segment experiencedmovements and net adverse development of $5.8 million related to actuarial assumption changes. Included in net favorable development of $5.7prior accident years net claims and claim expenses from large catastrophe events within the Property segment was $56.2 million related to actuarial assumption changes of net decreases in the estimated ultimate losses associated with the 2017 Large Loss Events, partially offset by $52.1 million of net increases in the estimated ultimate losses associated with the 2018 Large Loss Events.
The Company’s Property segment also experienced net adverse development of $9.5 million associated with a number of other small catastrophe events and attritional loss movements primarily driven by increases in the estimated ultimate net claims and claim expenses within the Company’s other property class of business.
Casualty and Specialty Segment
The following table details the development of the Company’s liability for unpaid claims and claim expenses for its Casualty and Specialty segment:
      
 Nine months ended September 30,2019 2018 
  (Favorable) adverse development (Favorable) adverse development 
 Actuarial methods$(54,527) $(16,234) 
 Actuarial assumption changes34,809
 (7,786) 
 Total net favorable development of prior accident years net claims and claim expenses$(19,718) $(24,020) 
      

Six months ended June 30,20202019
(Favorable) adverse development(Favorable) adverse development
Actuarial methods$(8,799) $(28,850) 
Actuarial assumption changes—  12,120  
Total net favorable development of prior accident years net claims and claim expenses$(8,799) $(16,730) 
The net favorable development of prior accident years net claims and claim expenses within the Company’s Casualty and Specialty segment of $19.7$8.8 million in the ninesix months ended SeptemberJune 30, 20192020 was comprised of net favorable development of $54.5 million relateddue to reported losses generally coming in lowerbetter than expected on attritional net claims and claim expenses across a number of lines of business, partially offset by net adverse development of $34.8 million associated with certain actuarial assumption changes.expenses.
The net favorable development of prior accident years net claims and claim expenses within the Company’s Casualty and Specialty segment was $24.0$16.7 million in the ninesix months ended SeptemberJune 30, 2018 driven by2019 was comprised of net favorable development of $28.9 million related to reported losses generally coming in lower than expected on attritional net claims and claim expenses and
certain assumption changes across a number of
33

lines of business.business, partially offset by net adverse development of $12.1 million associated with actuarial assumption changes.


NOTE 8.7. DEBT AND CREDIT FACILITIES
Except as noted below, thereThere have been no material changes to the Company’s debt obligations and credit facilities as described in its Form 10-K for the year ended December 31, 2018.2019, except as described below.
Debt Obligations
A summary of the Company’s debt obligations on its consolidated balance sheets is set forth below:
          
  September 30, 2019 December 31, 2018 
  Fair Value Carrying Value Fair Value Carrying Value 
 3.600% Senior Notes due 2029$419,000
 $391,245
 $—
 $—
 
 3.450% Senior Notes due 2027309,480
 296,167
 283,680
 295,797
 
 3.700% Senior Notes due 2025315,837
 297,964
 292,557
 297,688
 
 5.750% Senior Notes due 2020259,600
 249,850
 255,938
 249,602
 
 4.750% Senior Notes due 2025 (DaVinciRe) (1)156,267
 148,272
 142,539
 148,040
 
 Total debt$1,460,184
 $1,383,498
 $974,714
 $991,127
 
          
June 30, 2020December 31, 2019
Fair ValueCarrying ValueFair ValueCarrying Value
3.600% Senior Notes due 2029$439,136  $391,932  $424,920  $391,475  
3.450% Senior Notes due 2027318,138  296,538  314,070  296,292  
3.700% Senior Notes due 2025317,055  298,242  318,567  298,057  
5.75% Senior Notes due 2020—  —  251,030  249,931  
4.750% Senior Notes due 2025 (DaVinciRe) (1)159,924  148,504  160,031  148,350  
Total debt$1,234,253  $1,135,216  $1,468,618  $1,384,105  
(1)  RenaissanceRe owns a noncontrolling economic interest in its joint venture DaVinciRe. Because RenaissanceRe controls a majority of DaVinciRe’s outstanding voting rights, the consolidated financial statements of DaVinciRe are included in the consolidated financial statements of RenaissanceRe. However, RenaissanceRe does not guarantee or provide credit support for DaVinciRe and RenaissanceRe’s financial exposure to DaVinciRe is limited to its investment in DaVinciRe’s shares and counterparty credit risk arising from reinsurance transactions.
3.600% Senior Notes Due 2029
On April 2, 2019, the Company issued $400.0 million of its 3.600%5.75% Senior Notes due April2020 of RenRe North America Holdings Inc. and RenaissanceRe Finance
On March 15, 2029, with interest on the notes payable on April 15 and October 15 of each year, commencing on October 15, 2019. The notes are redeemable at the applicable redemption price, subject to the terms described in the indenture for the notes. However, the notes may not be redeemed prior to April 15, 2022 without approval from the Bermuda Monetary Authority (the “BMA”) and may not be redeemed at any time prior to their maturity if enhanced capital requirements, as established by the BMA, would be breached immediately before or after giving effect to the redemption of such notes, unless, in each case,2020, the Company replaces the capital represented by the notes to be redeemed with capital having equal or better capital treatment as the notes under applicable BMA rules. The notes contain various covenants including limitations on mergers and consolidations, and restrictions as to the disposition of, and the placing of liens on, the stock of designated subsidiaries. The net proceeds from this offering were used to repay,repaid in full at maturity the $200.0aggregate principal amount of $250.0 million, outstanding under the Company’s revolving credit facility at March 31, 2019, which the Company used to partially fund the purchase price for the TMR Stock Purchase, and the remainderplus applicable accrued interest, of the net proceeds will be used for general corporate purposes. See “Note 3. Acquisition5.75% Senior Notes due 2020 of Tokio Millennium Re” for additional information related to the acquisition of the TMR Group Entities.


RenRe North America Holdings Inc. and RenaissanceRe Finance.
Credit Facilities
The outstanding amounts issued or drawn under each of the Company’s significant credit facilities is set forth below:
    
 At September 30, 2019Issued or Drawn 
 RenaissanceRe Revolving Credit Facility (1)$—
 
 Uncommitted Standby Letter of Credit Facility with Wells Fargo31,820
 
 Secured Letter of Credit Facility with Citibank Europe234,606
 
 Renaissance Reinsurance FAL Facility255,000
 
 Mizuho Letters of Credit (2)139,379
 
 Mitsubishi Letters of Credit (2)77,637
 
 Credit Suisse Letter of Credit Facility110,051
 
 Uncommitted, Unsecured Letter of Credit Facility with Citibank Europe218,684
 
 Total credit facilities in U.S. dollars$1,067,177
 
    
 Specialty Risks FAL Facility (1)£—
 
 Total credit facilities in pound sterling£—
 
    
(1)At September 30, 2019, no amounts were issued or drawn under these facilities.
(2)
These lettersAt June 30, 2020
Issued or Drawn
Revolving Credit Facility (1)$— 
Bilateral Letter of credit were transferred to the Company in connection with the acquisitionCredit Facilities
Secured329,341 
Unsecured367,771 
Funds at Lloyd’s Letter of the TMR Group Entities. See below under “TMR Group Entities Letters of Credit” for additional information and “Note 3. Acquisition of Tokio Millennium Re” for additional information related to the acquisition of the TMR Group Entities.Credit Facility290,000 
$987,112 
Uncommitted, Unsecured Letter of Credit Facility with Citibank Europe
On March 22, 2019, Renaissance Reinsurance, RenaissanceRe Specialty U.S., Renaissance Reinsurance U.S. and RenaissanceRe Europe and Citibank Europe Plc (“CEP”) entered into a Master Agreement for Issuance of Payment Instruments (the “Master Agreement”) and a Facility Letter for Issuance of Payment Instruments (the “Facility Letter” and, together with the Master Agreement, the “Citi Unsecured Facility”). On April 26, 2019, RenaissanceRe UK Limited (together with Renaissance Reinsurance, RenaissanceRe Specialty U.S., Renaissance Reinsurance U.S. and RenaissanceRe Europe, the “Citi Unsecured Applicants”) became a party to the Citi Unsecured Facility.
The Citi Unsecured Facility is an uncommitted, unsecured letter of credit facility pursuant to which CEP(1)  At June 30, 2020, no amounts were issued or one of its correspondents may issue standby letters of credit or similar instruments in multiple currencies for the account of one or more of the Citi Unsecured Applicants. The obligations of the Citi Unsecured Applicantsdrawn under the Citi Unsecured Facility are guaranteed by the Company.
In the Master Agreement, each Citi Unsecured Applicant makes representations and warranties that are customary for facilities of this type and agrees that it will comply with certain informational and other customary undertakings. The Master Agreement contains events of default customary for facilities of this type. In the case of an event of default under the Citi Unsecured Facility, CEP may exercise certain remedies, including requiring that the relevant Citi Unsecured Applicant pledge cash collateral in an amount equal to the maximum actual and contingent liability of the issuing bank under the letters of credit and similar instruments issued for such Citi Unsecured Applicant under the Citi Unsecured Facility, and taking certain actions with respect to the collateral pledged by such Citi Unsecured Applicant (including the sale thereof). In addition, CEP may require that the relevant Citi Unsecured Applicant pledge cash collateral if certain minimum ratings are not satisfied.
Credit Suisse Letter of Credit Facility
On March 22, 2019, RenaissanceRe Europe, the Company and Credit Suisse (Switzerland) Ltd. (“CS”) entered into an amended and restated letter of credit facility agreement (the “CS A&R LC Agreement”). The CS A&R LC Agreement is a $125 million committed, unsecured letter of credit facility pursuant to which CS (or any other fronting bank acting on behalf of CS) may issue letters of credit or similar instruments in


multiple currencies for the account of RenaissanceRe Europe. The obligations of RenaissanceRe Europe under the CS A&R LC Agreement are guaranteed by the Company.
In the CS A&R LC Agreement, RenaissanceRe Europe and the Company make representations, warranties and covenants that are customary for facilities of this type, and agree to comply with certain informational and other customary undertakings. The CS A&R LC Agreement also contains certain financial covenants applicable to the Company, including the requirement to maintain the ratio of consolidated debt to capital of not more than 0.35:1, to maintain a minimum consolidated net worth initially of approximately $3.0 billion, subject to an annual adjustment, and to maintain the Company’s credit rating with S&P and A.M. Best of at least A-.
The CS A&R LC Agreement contains events of default customary for facilities of this type. At any time on or after the occurrence of an event of default, CS may exercise remedies, including canceling the commitment, requiring that RenaissanceRe Europe pledge cash collateral in an amount equal to the maximum liability of the issuing bank under the letters of credit and similar instruments issued under the CS A&R LC Agreement, and demanding that RenaissanceRe Europe procure the release by the beneficiaries of the letters of credit and similar instruments issued under the CS A&R LC Agreement.facility.
Uncommitted, Secured Standby Letter of Credit Facility with Wells Fargo
Effective June 21, 2019, the Company,11, 2020, RenaissanceRe and certain of its subsidiaries and affiliates, including Renaissance Reinsurance, DaVinci, Renaissance Reinsurance U.S., DaVinci and RenaissanceRe Europe (such affiliates, collectively, the “Wells Fargo Applicants”) entered into an Amended and Restated Standby Letteramendment to its letter of Credit Agreementcredit facility with Wells Fargo Bank, National Association (“Wells Fargo”) which amended and restatedAssociation. Pursuant to the Standby Letter of Credit Agreement, dated as of December 23, 2014 (as amended,amendment, the “Wells Fargo A&R LC Agreement”). The Wells Fargo A&R LC Agreement provides for an uncommitted facility under which letters of credit may be issued from time to time for the respective accounts of the Wells Fargo Applicants. As of the effective date of the Wells Fargo A&R LC Agreement, all letters of credit that were issued and outstanding under the prior agreement were deemed issued under and governed by the terms and conditions of the Wells Fargo A&R LC Agreement and RenaissanceRe Europe was added as a new Wells Fargo Applicant. The obligations of the Wells Fargo Applicants other than DaVinci are guaranteed by the Company. The Wells Fargo A&R LC Agreement provides the Wells Fargo Applicants with the ability to request secured letter of credit issuances, and also includes an option for Wells Fargo Applicants to request the issuance of up to $25 millionmaximum amount of unsecured letters of credit that the applicants may request (outstanding on such request date).The Wells Fargo A&R LC Agreement contains representations, warranties and covenants in respect was increased from $25.0 million to $100.0 million. All other terms of the Company andfacility remained the Wells Fargo Applicants that are customary for facilities of this type. Under the Wells Fargo A&R LC Agreement, each Wells Fargo Applicant is required to pledge eligible collateral having a value sufficient to cover all of its obligations under the Wells Fargo A&R LC Agreement with respect to secured letters of credit issued for its account. In the case of an event of default under the Wells Fargo A&R LC Agreement, Wells Fargo may exercise certain remedies, including conversion of collateral into cash.same.
RenaissanceRe Revolving Credit Facility and Secured
34

Unsecured Letter of Credit Facility with Citibank EuropeCredit Suisse
InEffective June 2019, the Second Amended and Restated Credit Agreement, dated as of November 9, 2018, between Wells Fargo, the Company, Renaissance Reinsurance, RenaissanceRe Specialty U.S., Renaissance Reinsurance U.S., RenaissanceRe Finance Inc., RenRe North America Holdings Inc., and various financial institutions party thereto and the Facility Letter, dated of September 17, 2010, as amended, between CEP, Renaissance Reinsurance, DaVinci, RenaissanceRe Specialty U.S., Renaissance Reinsurance U.S. and Renaissance Reinsurance of Europe were amended to add26, 2020, RenaissanceRe Europe as a party.
Renaissance Reinsurance Funds at Lloyd’s Letter of Credit Facility
Effective March 7, 2019, the stated amount of the Funds at Lloyd’s letter of credit issuedand RenaissanceRe entered into an amendment to Renaissance Reinsurance pursuant to theits letter of credit facility with BankCredit Suisse (Switzerland) Ltd. Pursuant to the amendment, the maximum committed amount of Montreal, CEP and ING Bank N.V., London Branch as lenders, evidenced by athe unsecured letter of credit reimbursement agreement dated as of November 23, 2015 (the “Renaissance Reinsurance FAL Facility”),facility was increased from $180.0$125.0 million to $255.0$200.0 million.


 All other terms of the facility remained the same.
TMR Group Entities Letters of Credit
InDuring the quarter ended March 31, 2020, the following letters of credit and facilities that were transferred to the Company in connection with the acquisition of the TMR Group Entities, certain letters of credit were transferred to the Company, as follows:terminated: (a) Mizuho Bank, Ltd. issued certain letters of credit for the account of RenaissanceRe Europe issued by Mizuho Bank, Ltd. pursuant to a Letter of Credit and Reimbursement Agreement, dated as of May 14, 2012, as previously amended, (b) The Bank of Tokyo-Mitsubishi UFJ Ltd., Düsseldorf Branch, issued certain letters of credit for the account of RenaissanceRe Europe issued by The Bank of Tokyo-Mitsubishi UFJ Ltd., Düsseldorf Branch pursuant to a Committed Revolving Standby Letter of Credit Agreement, dated as of September 29, 2017, and (c) The Bank of Tokyo-Mitsubishi UFJ, Ltd. issued certain letters of credit for the account of RenaissanceRe UK issued by The Bank of Tokyo-Mitsubishi UFJ, Ltd. pursuant to a Facility Letter, dated as of December 21, 2006. The parties havehad previously agreed that no new letters of credit willwould be issued under these facilities.
NOTE 9.8. NONCONTROLLING INTERESTS
A summary of the Company’s redeemable noncontrolling interests on its consolidated balance sheets is set forth below:
      
  September 30,
2019		 December 31, 2018 
 Redeemable noncontrolling interest - DaVinciRe$1,462,677
 $1,034,946
 
 Redeemable noncontrolling interest - Medici534,618
 416,765
 
 Redeemable noncontrolling interest - Vermeer781,738
 599,989
 
 Redeemable noncontrolling interests$2,779,033
 $2,051,700
 
      
June 30,
2020		December 31, 2019
Redeemable noncontrolling interest - DaVinciRe$1,621,300  $1,435,581  
Redeemable noncontrolling interest - Medici682,118  632,112  
Redeemable noncontrolling interest - Vermeer1,083,681  1,003,615  
Redeemable noncontrolling interests$3,387,099  $3,071,308  
A summary of the Company’s redeemable noncontrolling interests on its consolidated statements of operations is set forth below:
          
  Three months ended Nine months ended 
  September 30,
2019		 September 30,
2018		 September 30,
2019		 September 30,
2018		 
 Redeemable noncontrolling interest - DaVinciRe$30,558
 $3,730
 $152,946
 $74,935
 
 Redeemable noncontrolling interest - Medici15,211
 2,710
 19,396
 15,887
 
 Redeemable noncontrolling interest - Vermeer16,288
 —
 31,749
 —
 
 Net income attributable to redeemable noncontrolling interests$62,057
 $6,440
 $204,091
 $90,822
 
          

Three months endedSix months ended
June 30,
2020		June 30,
2019		June 30,
2020		June 30,
2019
Redeemable noncontrolling interest - DaVinciRe$88,374  $59,855  $173,280  $122,388  
Redeemable noncontrolling interest - Medici13,151  1,704  8,473  4,185  
Redeemable noncontrolling interest - Vermeer17,203  10,253  35,066  15,461  
Net income attributable to redeemable noncontrolling interests$118,728  $71,812  $216,819  $142,034  
Redeemable Noncontrolling Interest – DaVinciRe
RenaissanceRe owns a noncontrolling economic interest in DaVinciRe; however, because RenaissanceRe controls a majority of DaVinciRe’s outstanding voting rights, the consolidated financial statements of DaVinciRe are included in the consolidated financial statements of the Company. The portion of DaVinciRe’s earnings owned by third parties is recorded in the consolidated statements of operations as net income attributable to redeemable noncontrolling interests. The Company’s noncontrolling economic ownership in DaVinciRe was 21.9%21.4% at SeptemberJune 30, 2019 (December2020 (December 31, 20182019 - 22.1%21.9%).
DaVinciRe shareholders are party to a shareholders agreement which provides DaVinciRe shareholders, excluding RenaissanceRe, with certain redemption rights that enable each shareholder to notify DaVinciRe of such shareholder’s desire for DaVinciRe to repurchase up to half of such shareholder’s initial aggregate number of shares held, subject to certain limitations, such as limiting the aggregate of all share repurchase requests to 25% of DaVinciRe’s capital in any given year and satisfying all applicable regulatory
35

requirements. If total shareholder requests exceed 25% of DaVinciRe’s capital, the number of shares repurchased will be reduced among the requesting shareholders pro-rata, based on the amounts desired to be repurchased. Shareholders desiring to have DaVinci repurchase their shares must notify DaVinciRe before March 1 of each year. The repurchase price will be based on GAAP book value as of the end of the year in which the shareholder notice is given, and the repurchase will be effective as of January 1 of the


following year. The repurchase price is generally subject to a true-up for potential development on outstanding loss reserves after settlement of all claims relating to the applicable years.
2020
Effective January 1, 2020, the Company sold an aggregate of $10.0 million of its shares in DaVinciRe to an existing third-party investor. The Company’s noncontrolling economic ownership in DaVinciRe subsequent to these transactions was 21.4%.
2019
Effective June 1, 2019, DaVinciRe completed an equity capital raise of $349.2 million, comprised of $263.1 million from third-party investors and $86.1 million from RenaissanceRe. In addition, RenaissanceRe sold an aggregate of $11.6 million of its shares in DaVinciRe to a third-party investor. The Company’s noncontrolling economic ownership in DaVinciRe subsequent to these transactions was 21.9%, effective June 1, 2019.
The Company expects its noncontrolling economic ownership in DaVinciRe to fluctuate over time.
The activity in redeemable noncontrolling interest – DaVinciRe is detailed in the table below:
          
  Three months ended Nine months ended 
  September 30,
2019		 September 30,
2018		 September 30,
2019		 September 30,
2018		 
 Beginning balance$1,431,101
 $1,082,425
 $1,034,946
 $1,011,659
 
 Redemption of shares from redeemable noncontrolling interest, net of adjustments1,018
 (170) 86
 (609) 
 Sale of shares to redeemable noncontrolling interests—
 —
 274,699
 —
 
 Net income attributable to redeemable noncontrolling interest30,558
 3,730
 152,946
 74,935
 
 Ending balance$1,462,677
 $1,085,985
 $1,462,677
 $1,085,985
 
          

Three months endedSix months ended
June 30,
2020		June 30,
2019		June 30,
2020		June 30,
2019
Beginning balance$1,533,085  $1,097,245  $1,435,581  $1,034,946  
Redemption of shares from redeemable noncontrolling interest, net of adjustments(159) (698) 2,448  (932) 
Sale of shares to redeemable noncontrolling interests—  274,699  9,991  274,699  
Net income attributable to redeemable noncontrolling interest88,374  59,855  173,280  122,388  
Ending balance$1,621,300  $1,431,101  $1,621,300  $1,431,101  
Redeemable Noncontrolling Interest - RenaissanceRe Medici Fund Ltd. (“Medici”)
Medici is an exempted company incorporated under the laws of Bermuda and itsregistered as an institutional fund. Medici’s objective is to seek to invest substantially all of its assets in various insurance-based investment instruments that have returns primarily tied to property catastrophe risk. RenaissanceRe owns a noncontrolling economic interest in Medici; however, because RenaissanceRe controls all of Medici’s outstanding voting rights, the financial statements of Medici are included in the consolidated financial statements of the Company. The portion of Medici’s earnings owned by third parties is recorded in the consolidated statements of operations as net income attributable to redeemable noncontrolling interests. Any shareholder may redeem all or any portion of its shares as of the last day of any calendar month, upon at least 30 calendar days’ prior irrevocable written notice to Medici.
20192020
During the ninesix months ended SeptemberJune 30, 2019,2020, third-party investors subscribed for $142.9$90.8 million and redeemed $44.4$49.2 million of the participating, non-voting common shares of Medici. As a result of these net subscriptions, the Company’s noncontrolling economic ownership in Medici was 13.7%11.4% at SeptemberJune 30, 2019.2020.
36

2018
2019
During the ninesix months ended SeptemberJune 30, 2018,2019, third-party investors subscribed for $199.5$132.4 million and redeemed $52.2$37.4 million of the participating, non-voting common shares of Medici. As a result of these net subscriptions, the Company’s noncontrolling economic ownership in Medici was 15.8%13.9% at SeptemberJune 30, 2018.2019.
The Company expects its noncontrolling economic ownership in Medici to fluctuate over time.


The activity in redeemable noncontrolling interest – Medici is detailed in the table below:
          
  Three months ended Nine months ended 
  September 30,
2019		 September 30,
2018		 September 30,
2019		 September 30,
2018		 
 Beginning balance$515,915
 $411,003
 $416,765
 $284,847
 
 Redemption of shares from redeemable noncontrolling interest, net of adjustments(7,008) (8,720) (44,448) (52,223) 
 Sale of shares to redeemable noncontrolling interests10,500
 43,000
 142,905
 199,482
 
 Net income attributable to redeemable noncontrolling interest15,211
 2,710
 19,396
 15,887
 
 Ending balance$534,618
 $447,993
 $534,618
 $447,993
 
          

Three months endedSix months ended
June 30,
2020		June 30,
2019		June 30,
2020		June 30,
2019
Beginning balance$677,283  $406,958  $632,112  $416,765  
Redemption of shares from redeemable noncontrolling interest, net of adjustments(44,474) (21,556) (49,238) (37,440) 
Sale of shares to redeemable noncontrolling interests36,158  128,809  90,771  132,405  
Net income attributable to redeemable noncontrolling interest13,151  1,704  8,473  4,185  
Ending balance$682,118  $515,915  $682,118  $515,915  
Redeemable Noncontrolling Interest – Vermeer
Vermeer is an exempted Bermuda reinsurer that provides capacity focused on risk remote layers in the U.S. property catastrophe market. Vermeer is managed by RUM in return for a management fee. The Company maintains majority voting control of Vermeer, while the sole third-party investor, PGGM, retains all of the economic benefits. The Company concluded that Vermeer is a VIE as it has voting rights that are not proportional to its participating rights, and the Company is the primary beneficiary. As a result, the Company consolidates Vermeer and all significant inter-company transactions have been eliminated. The portion of Vermeer’s earnings owned by PGGM is recorded in the consolidated statements of operations as net income attributable to redeemable noncontrolling interests. The Company has not provided any financial or other support to Vermeer that it was not contractually required to provide.
20192020
During the ninesix months ended SeptemberJune 30, 2020, PGGM subscribed for $45.0 million of the participating, non-voting common shares of Vermeer.
2019,
During the six months ended June 30, 2019, PGGM subscribed for $150.0 million of the participating, non-voting common shares of Vermeer.
2018The Company does not expect its noncontrolling economic ownership in Vermeer to fluctuate over time.
During the three months ended December 31, 2018, PGGM subscribed for $600.0 million of the participating, non-voting common shares of Vermeer and the Company subscribed for $1 thousand of all the voting, non-participating shares of Vermeer.
The activity in redeemable noncontrolling interest – Vermeer is detailed in the table below:
          
  Three months ended Nine months ended 
  September 30,
2019		 September 30,
2018		 September 30,
2019		 September 30,
2018		 
 Beginning balance$765,450
 $—
 $599,989
 $—
 
 Sale of shares to redeemable noncontrolling interest—
 —
 150,000
 —
 
 Net income attributable to redeemable noncontrolling interest16,288
 —
 31,749
 —
 
 Ending balance$781,738
 $—
 $781,738
 $—
 
          
Three months endedSix months ended
June 30,
2020		June 30,
2019		June 30,
2020		June 30,
2019
Beginning balance$1,021,478  $605,197  $1,003,615  $599,989  
Sale of shares to redeemable noncontrolling interest45,000  150,000  45,000  150,000  
Net income attributable to redeemable noncontrolling interest17,203  10,253  35,066  15,461  
Ending balance$1,083,681  $765,450  $1,083,681  $765,450  
37

NOTE 10.9. VARIABLE INTEREST ENTITIES
Upsilon RFO
Upsilon RFO is a managed joint venture and a Bermuda domiciled SPI that was formed by the Company primarilyprincipally to provide additional capacity to the worldwide aggregate and per-occurrence retrocessional property catastrophe excess of loss market.


The shareholders (other than the Class A shareholder) participate in substantially all of the profits or losses of Upsilon RFO while their shares remain outstanding. The shareholders (other than the Class A shareholder) indemnify Upsilon RFO against losses relating to insurance risk, and therefore, these shares have been accounted for as prospective reinsurance under FASB ASC Topic Financial Services - Insurance.
Upsilon RFO is considered a VIE as it has insufficient equity capital to finance its activities without additional financial support. The Company is the primary beneficiary of Upsilon RFO as it has the power over the activities that most significantly impact the economic performance of Upsilon RFO and has the obligation to absorb expected losses and the right to receive expected benefits that could be significant to Upsilon RFO, in accordance with the accounting guidance. As a result, the Company consolidates Upsilon RFO and all significant inter-company transactions have been eliminated. Other than its equity investment in Upsilon RFO, the Company has not provided financial or other support to Upsilon RFO that it was not contractually required to provide.
20192020
During the ninesix months ended SeptemberJune 30, 2019, Upsilon RFO returned $97.1 million of capital to its investors. In addition, during the nine months ended September 30, 2019, $604.82020, $802.0 million of Upsilon RFO non-voting preference shares were issued to existing investors, including $100.0$95.4 million to the Company. Also during the six months ended June 30, 2020 and following the release of collateral that was previously held by cedants associated with prior years’ contracts, Upsilon RFO returned $302.0 million of capital to its investors, including $61.6 million to the Company. At SeptemberJune 30, 2019,2020, the Company’s participation in the risks assumed by Upsilon RFO was 16.7%13.9%.
At SeptemberJune 30, 2019,2020, the Company’s consolidated balance sheet included total assets and total liabilities of Upsilon RFO of $2.8$3.5 billion and $2.8$3.5 billion, respectively (December 31, 20182019 - $2.2$3.1 billion and $2.2$3.1 billion, respectively). Of the total assets and liabilities, a net amount of $301.1 million is attributable to the Company, and $1.8 billion is attributable to third-party investors.
20182019
During 2018, $856.72019, $618.7 million of Upsilon RFO non-voting preference shares were issued to new and existing investors, including $109.8$100.0 million to the Company. In addition, Upsilon RFO returned $279.2 million of capital to its investors, including $31.0 million to the Company. At December 31, 2018,2019, the Company’s participation in the risks assumed by Upsilon RFO was 14.0%16.5%.
Payments for certain of the shares issued during 20182020 and 2019 that were received by the Company prior to January 1, 20182020 and January 1, 2019, respectively, were included in other liabilities on the Company’s consolidated balance sheet at December 31, 2017,2019 and December 31, 2018, respectively, and in other operating cash flows on the Company’s consolidated statements of cash flows for 2017.2019 and 2018, respectively. During 2018,2020 and 2019, in connection with the issuance of the non-voting preference shares of Upsilon RFO, other liabilities were reduced by this amount, and reinsurance balances payable were increased by an offsetting amount, with corresponding impacts to other operating cash flows and the change in reinsurance balances payable on the Company consolidated statements of cash flows for 2018.the six months ended June 30, 2020 and the year ended December 31, 2019, respectively.
Vermeer
Vermeer is an exempted Bermuda reinsurer that provides capacity focused on risk remote layers in the U.S. property catastrophe market. Vermeer is considered a VIE as it has voting rights that are not proportional to its participating rights. The Company is the primary beneficiary of Vermeer as it has power over the activities that most significantly impact the economic performance of Vermeer and has the obligation to absorb expected losses and the right to receive expected benefits that could be significant to Vermeer, in accordance with the accounting guidance. The portion of Vermeer’s earnings owned by PGGM is recorded
38

in the consolidated statements of operations as net income attributable to redeemable noncontrolling interests. See “Note 9.8. Noncontrolling Interests” for additional information regarding Vermeer. Other than the Company’s minimal equity investment, it has not provided any financial or other support to Vermeer that it was not contractually required to provide.
At SeptemberJune 30, 2019,2020, the Company’s consolidated balance sheet included total assets and total liabilities of Vermeer of $820.4 million$1.1 billion and $38.7$59.8 million, respectively (December 31, 20182019 - $600.4 million$1.0 billion and $0.4$23.2 million, respectively). In addition, the Company’s consolidated balance sheet included redeemable noncontrolling interests associated with Vermeer of $781.7$1.1 billion at June 30, 2020 (December 31, 2019 - $1.0 billion).
Mona Lisa Re
Mona Lisa Re is licensed as a Bermuda domiciled SPI to provide reinsurance capacity to subsidiaries of RenaissanceRe, namely Renaissance Reinsurance and DaVinci, through reinsurance agreements which are collateralized and funded by Mona Lisa Re through the issuance of one or more series of principal-at-risk variable rate notes.
Upon issuance of a series of notes by Mona Lisa Re, all of the proceeds from the issuance are deposited into collateral accounts, separated by series, to fund any potential obligation under the reinsurance agreements entered into with Renaissance Reinsurance and/or DaVinci underlying such series of notes. The outstanding principal amount of each series of notes generally will be returned to holders of such notes upon the expiration of the risk period underlying such notes, unless an event occurs which causes a loss under the applicable series of notes, in which case the amount returned will be reduced by such noteholder’s pro rata share of such loss, as specified in the applicable governing documents of such notes. In addition, holders of such notes are generally entitled to interest payments, payable quarterly, as determined by the applicable governing documents of each series of notes.
The Company concluded that Mona Lisa Re meets the definition of a VIE as it does not have sufficient equity capital to finance its activities. The Company evaluated its relationship with Mona Lisa Re and concluded it is not the primary beneficiary of Mona Lisa Re as it does not have power over the activities that most significantly impact the economic performance of Mona Lisa Re. As a result, the financial position and results of operations of Mona Lisa Re are not consolidated by the Company.
On July 6, 2018, all previously outstanding series of notes issued by Mona Lisa Re were redeemed and the proceeds were returned to the holders of such notes. Effective January 10, 2020, Mona Lisa Re issued two series of principal-at-risk variable rate notes to investors for a total principal amount of $400.0 million. At June 30, 2020, the total assets and total liabilities of Mona Lisa Re were $416.1 million and $416.1 million, respectively (December 31, 2019 - $6 thousand and $6 thousand, respectively).
The only transactions related to Mona Lisa Re that are recorded in the Company’s consolidated financial statements are the ceded reinsurance agreements entered into by Renaissance Reinsurance and DaVinci which are accounted for as prospective reinsurance under FASB ASC Topic Financial Services - Insurance, and the fair value of the principal-at-risk variable rate notes owned by the Company. Other than its investment in the principal-at-risk variable rate notes of Mona Lisa Re, the Company has not provided financial or other support to Mona Lisa Re that it was not contractually required to provide.
The fair value of the Company’s investment in the principal-at-risk variable rate notes of Mona Lisa Re is included in other investments. Net of third-party investors, the fair value of the Company’s investment in Mona Lisa Re was $2.7 million at SeptemberJune 30, 2019 (December 31, 20182020.
Renaissance Reinsurance and DaVinci have together entered into ceded reinsurance contracts with Mona Lisa Re with ceded premiums written of $24.3 million and $6.7 million, respectively, during the six months ended June 30, 2020 (2019 - $600.0 million)$NaN and $NaN, respectively).


 In addition, Renaissance Reinsurance and DaVinci recognized ceded premiums earned related to the ceded reinsurance contracts with Mona Lisa Re of $12.1 million and $3.4 million, respectively, during the six months ended June 30, 2020 (2019 - $NaN and $NaN, respectively).
Fibonacci Re
Fibonacci Re, a Bermuda-domiciled SPI, was formed to provide collateralized capacity to Renaissance Reinsurance and its affiliates.
Upon issuance of a series of notes by Fibonacci Re, all of the proceeds from
39

the issuance are deposited into collateral accounts, separated by series, to fund any potential obligation under the reinsurance agreements entered into with Renaissance Reinsurance underlying such series of notes. The outstanding principal amount of each series of notes generally is expected to be returned to holders of such notes upon the expiration of the risk period underlying such notes, unless an event occurs which causes a loss under the applicable series of notes, in which case the amount returned is expected to be reduced by such noteholder’s pro rata share of such loss, as specified in the applicable governing documents of such notes. In addition, holders of such notes are generally entitled to interest payments, payable quarterly, as determined by the applicable governing documents of each series of notes. RUM receives an origination and structuring fee in connection with the formation and operation of Fibonacci Re.
The Company concluded that Fibonacci Re meets the definition of a VIE as it does not have sufficient equity capital to finance its activities. The Company evaluated its relationship with Fibonacci Re and concluded it is not the primary beneficiary of Fibonacci Re as it does not have power over the activities that most significantly impact the economic performance of Fibonacci Re. As a result, the Company does not consolidate the financial position or results of operations of Fibonacci Re.
The only transactions related to Fibonacci Re that will beare recorded in the Company’s consolidated financial statements will beare the ceded reinsurance agreements entered into by Renaissance Reinsurance that are accounted for as prospective reinsurance under FASB ASC Topic Financial Services - Insurance, and the fair value of the participating notes owned by the Company. Other than its investment in the participating notes of Fibonacci Re, the Company has not provided financial or other support to Fibonacci Re that it was not contractually required to provide.
The fair value of the Company’s investment in the participating notes of Fibonacci Re is included in other investments. Net of third-party investors, the fair value of the Company’s investment in Fibonacci Re was $1.0$0.4 million at SeptemberJune 30, 20192020 (December 31, 20182019 - $6.0$0.4 million).
Renaissance Reinsurance entered into ceded reinsurance contracts with Fibonacci Re with ceded premiums written of $87$8 thousand and ceded premiums earned of $87$8 thousand during the ninesix months ended SeptemberJune 30, 2019 (20182020 (2019 - $9.1 million$47 thousand and $6.8 million,$47 thousand, respectively). During the ninesix months ended SeptemberJune 30, 2019,2020, Renaissance Reinsurance ceded $7.5 million ofreduced its net claims and claim expenses ceded to Fibonacci Re (2018by $1.1 million (2019 - $Nil)ceded net claims and claim expenses of $7.5 million) and as of SeptemberJune 30, 20192020 had a net reinsurance recoverable of $7.5$6.4 million from Fibonacci Re (December 31, 20182019 - $Nil)$7.5 million).
Langhorne
The Company and Reinsurance Group of America, Incorporated formed Langhorne, an initiative to source third partythird-party capital to support reinsurers targeting large in-force life and annuity blocks. In connection with Langhorne, as of SeptemberJune 30, 20192020 the Company has invested $1.7$1.9 million in Langhorne Holdings (December 31, 20182019 - $1.3$1.7 million), a company that owns and manages certain reinsurance entities within Langhorne. In addition, as of SeptemberJune 30, 20192020 the Company has invested $0.1 million in Langhorne Partners (December 31, 20182019 - $0.1 million), the general partner for Langhorne and the entity which manages the third-party investors investing into Langhorne Holdings.
The Company concluded that Langhorne Holdings meets the definition of a VIE as the voting rights are not proportional with the obligations to absorb losses and rights to receive residual returns. The Company evaluated its relationship with Langhorne Holdings and concluded it is not the primary beneficiary of Langhorne Holdings, as it does not have power over the activities that most significantly impact the economic performance of Langhorne Holdings. As a result, the Company does not consolidate the financial position or results of operations of Langhorne Holdings. The Company separately evaluated Langhorne Partners and concluded that it was not a VIE. The Company accounts for its investments in Langhorne Holdings and Langhorne Partners under the equity method of accounting, one quarter in arrears.
The Company anticipates that its absolute investment in Langhorne will increase, perhaps materially, as in-force life and annuity blocks of businesses are written. The Company expects its absolute and relative


ownership in Langhorne Partners to remain stable. Other than its current and committed future equity investment in Langhorne, the Company has not provided financial or other support to Langhorne that it was not contractually required to provide.
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Shima Re and Norwood Re
Shima Re and Norwood Re werewas acquired on March 22, 2019 in connection with the acquisition of the TMR Group Entities.TMR. See “Note 3. Acquisition of Tokio Millennium Re” in the Company’s “Notes to the Consolidated Financial Statements” included in the Company’s Form 10-K for the year ended December 31, 2019 for additional information related to the acquisition of the TMR Group Entities.TMR. Shima Re is a Bermuda domiciled Class 3 insurer. NorwoodShima Re is a Bermuda domiciled SPI and is wholly owned by the Norwood Re Purpose Trust. Shima Re and Norwood Re are each registered as a segregated accounts company and each provides third-party investors with access to reinsurance risk formerly managed by the TMR Group Entities. Following the closing of the acquisition, some of the TMR third-party capital vehicles’ legacy portfolios of in-force and expired contracts were transferred to other stop loss reinsurance providers.risk. The maximum remaining exposure of each segregated account is fully collateralized and is funded by cash and term deposits or investments as prescribed by the participant thereto. Shima Re no longer writes new business and the last in-force contract written by Shima Re expired on December 31, 2019.
Shima Re and Norwood Re areis considered VIEsa VIE as they haveit has voting rights that are not proportional to theirits participating rights. The Company evaluated its relationshipsrelationship with Shima Re and Norwood Re and concluded it is not the primary beneficiary of any segregated account, as it does not have power over the activities that most significantly impact the economic performance of any segregated account. As a result, the Company does not consolidate the financial position or results of operations of Shima Re Norwood Re or theirits segregated accounts. The Company has not provided any financial or other support to any segregated account of Shima Re that it was not contractually required to provide.
Norwood Re
A subsidiary of RenaissanceRe Europe that the Company acquired in the acquisition of TMR manages Norwood Re. See “Note 3. Acquisition of Tokio Millennium Re” in the Company’s “Notes to the Consolidated Financial Statements” included in the Company’s Form 10-K for the year ended December 31, 2019 for additional information related to the acquisition of TMR. Norwood Re is a Bermuda domiciled SPI registered as a segregated accounts company formed to provide solutions for reinsurance-linked asset investors. Norwood Re is wholly owned by the Norwood Re Purpose Trust. Risks assumed by the segregated accounts of Norwood Re are fronted by or ceded from only one cedant - RenaissanceRe Europe and/or its insurance affiliates. The obligations of each segregated account are funded through the issuance of non-voting preference shares to third-party investors. The maximum exposure of each segregated account is fully collateralized and is funded by cash and term deposits or investments as prescribed by the participant thereto. Norwood Re no longer writes new business, and the last in-force contract written by Norwood expired on June 30, 2020.
Norwood Re is considered a VIE as it has voting rights that are not proportional to its participating rights. The Company evaluated its relationship with Norwood Re and concluded it is not the primary beneficiary of Norwood Re and its segregated accounts, as it does not have power over the activities that most significantly impact the economic performance of Norwood Re and its segregated accounts. As a result, the Company does not consolidate the financial position or results of operations of Norwood Re and its segregated accounts. The Company has not provided any financial or other support to Norwood Re that it was not contractually required to provide.
NOTE 11.10. SHAREHOLDERS’ EQUITY
Dividends
The Board of Directors of RenaissanceRe declared dividends of $0.34$0.35 per common share, payable to common shareholders of record on March 13, 2020 and June 15, 2019, June 14, 2019 and September 13, 2019, respectively,2020, and the Company paid the dividends on March 29, 2019,31, 2020 and June 28, 2019 and September 30, 2019, respectively.2020.
The Board of Directors approved the payment of quarterly dividends on the Series C 6.08% Preference Shares, Series E 5.375% Preference Shares and 5.750% Series F Preference Shares to preference shareholders of record in the amounts and on the quarterly record dates and dividend payment dates set forth in the prospectus supplement and Certificate of Designation for the applicable series of preference shares, unless and until further action is taken by the Board of Directors. The dividend payment dates for the preference shares will be the first day of March, June, September and December of each year (or if this date is not a business day, on the business day immediately following this date). The record dates for the preference share dividends are one day prior to the dividend payment dates. The amount of the dividend on the Series C 6.08% Preference Shares is an amount per share equal to 6.08% of the liquidation preference per annum (the equivalent to $1.52 per share per annum, or $0.38 per share per quarter). The amount of
41

the dividend on the Series E 5.375% Preference Shares is an amount per share equal to 5.375% of the liquidation preference per annum (the equivalent to $1.34375 per share per annum, or $0.3359375 per share per quarter). The amount of the dividend on the 5.750% Series F Preference Shares is an amount per share equal to 5.750% of the liquidation preference per annum (the equivalent to $1,437.50 per 5.750% Series F Preference Share per annum, or $359.375 per 5.750% Series F Preference Share per quarter, or $1.4375 per Depositary Share per annum, or $0.359375 per Depositary Share per quarter).
During the ninesix months ended SeptemberJune 30, 2019,2020, the Company paid $27.6$16.3 million in preference share dividends (2018(2019 - $20.9$18.4 million) and $44.5$33.1 million in common share dividends (2018(2019 - $39.6$29.4 million).
TMR Stock PurchaseSeries C 6.08% Preference Shares Redemption
The Series C 6.08% Preference Shares were redeemed on March 26, 2020 for $125.0 million plus accrued and unpaid dividends thereon. Following the redemption, 0 Series C 6.08% Preference Shares remain outstanding.
Common Shares
On March 22, 2019, in connection with the closing of the acquisition of TMR, Stock Purchase, the Company issued 1,739,071 of its common shares to Tokio as part of the aggregate consideration payable to Tokio under the TMR Stock Purchase Agreement. See “Note 3. Acquisition of Tokio Millennium Re” in the Company’s “Notes to the Consolidated Financial Statements” included in the Company’s Form 10-K for the year ended December 31, 2019 for additional information related to the acquisition of TMR. On January 9, 2020, Tokio completed a secondary public offering of these common shares, which represented all of Tokio's remaining ownership in the TMR Group Entities.Company. The Company did not receive any proceeds from Tokio’s sale of its common shares.


On June 5, 2020, the Company issued 6,325,000 of its common shares in an underwritten public offering at a public offering price of $166.00 per share. Concurrently with the public offering, the Company raised $75.0 million through the issuance of 451,807 of its common shares at a price of $166.00 per share to State Farm Mutual Automobile Insurance Company, one of the Company’s existing stockholders, in a private placement. The total net proceeds from the offerings were $1.1 billion.
Share Repurchases
The Company’s share repurchase program may be effected from time to time, depending on market conditions and other factors, through open market purchases and privately negotiated transactions. On November 10, 2017, RenaissanceRe’s Board of Directors approved a renewal of its authorized share repurchase program for an aggregate amount of up to $500.0 million.$500.0 million. Unless terminated earlier by RenaissanceRe’s Board of Directors, the program will expire when the Company has repurchased the full value of the common shares authorized. The Company’s decision to repurchase common shares will depend on, among other matters, the market price of the common shares and the capital requirements of the Company. During the ninethree months ended September 30, 2019, March 31, 2020, the Company repurchased 405,682 common shares in open market transactions at an aggregate cost of $62.6 million and an average price of $154.36 per common share. Given the current economic environment and to preserve capital for both risk and opportunity, the Company suspended share repurchases in March 2020. The Company did 0tnot engage in any share repurchase any of its common shares.activity during the three months ended June 30, 2020. At SeptemberJune 30, 2019, $500.02020, $437.4 million remained available for repurchase under the share repurchase program. In the near term, the Company intends to prioritize capital for deployment into its business; however, we may resume repurchases at any time when we believe it is prudent to do so and without further notice.
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NOTE 12.11. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per common share:
Three months endedSix months ended
(common shares in thousands)June 30,
2020		June 30,
2019		June 30,
2020		June 30,
2019
Numerator:
Net income available to RenaissanceRe common shareholders$575,845  $367,854  $493,871  $641,571  
Amount allocated to participating common shareholders (1)(7,593) (4,393) (6,153) (7,483) 
Net income allocated to RenaissanceRe common shareholders$568,252  $363,461  $487,718  $634,088  
Denominator:
Denominator for basic income per RenaissanceRe common share - weighted average common shares44,939  43,483  44,190  42,774  
Per common share equivalents of employee stock options and non-vested shares64  38  63  32  
Denominator for diluted income per RenaissanceRe common share - adjusted weighted average common shares and assumed conversions45,003  43,521  44,253  42,806  
Net income available to RenaissanceRe common shareholders per common share – basic$12.64  $8.36  $11.04  $14.82  
Net income available to RenaissanceRe common shareholders per common share – diluted$12.63  $8.35  $11.02  $14.81  
(1)Represents earnings and dividends attributable to holders of unvested shares issued pursuant to the Company's stock compensation plans.
          
  Three months ended Nine months ended 
 (common shares in thousands)September 30,
2019		 September 30,
2018		 September 30,
2019		 September 30,
2018		 
 Numerator:        
 Net income available to RenaissanceRe common shareholders$36,698
 $32,681
 $678,269
 $281,182
 
 Amount allocated to participating common shareholders (1)(446) (294) (8,074) (2,977) 
 Net income allocated to RenaissanceRe common shareholders$36,252
 $32,387
 $670,195
 $278,205
 
 Denominator:        
 Denominator for basic income per RenaissanceRe common share - weighted average common shares43,462
 39,624
 43,003
 39,606
 
 Per common share equivalents of employee stock options and non-vested shares75
 13
 46
 21
 
 Denominator for diluted income per RenaissanceRe common share - adjusted weighted average common shares and assumed conversions43,537
 39,637
 43,049
 39,627
 
 Net income available to RenaissanceRe common shareholders per common share – basic$0.83
 $0.82
 $15.58
 $7.02
 
 Net income available to RenaissanceRe common shareholders per common share – diluted$0.83
 $0.82
 $15.57
 $7.02
 
          

(1)Represents earnings attributable to holders of non-vested shares issued pursuant to the Company’s 2001 Stock Incentive Plan, 2016 Long-Term Incentive Plan and to the Company’s non-employee directors.

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NOTE 13.12. SEGMENT REPORTING
The Company’s reportable segments are defined as follows: (1) Property, which is comprised of catastrophe and other property reinsurance and insurance written on behalf of the Company’s operating subsidiaries and certain joint ventures managed by the Company’s ventures unit, and (2) Casualty and Specialty, which is comprised of casualty and specialty reinsurance and insurance written on behalf of the Company’s operating subsidiaries and certain joint ventures managed by the Company’s ventures unit. In addition to its reportable segments, the Company has an Other category, which primarily includes its strategic investments, investments unit, corporate expenses, capital servicing costs, noncontrolling interests, certain expenses related to acquisitions and the remnants of its former Bermuda-based insurance operations. The results of operations of the TMR Group Entities from March 22, 2019, through September 30, 2019, are reflected in the Company’s existing reportable segments for the three and nine months ended September 30, 2019.
The Company’s Property segment is managed by the Chief Underwriting Officer - Property and the Casualty and Specialty segment is managed by the Chief Underwriting Officer - Casualty and Specialty, each of whom operate under the direction of the Company’s Group Chief Underwriting Officer, who in turn reports to the Company’s President and Chief Executive Officer.
The Company does not currently manage its assets by segment; accordingly, net investment income and total assets are not allocated to the segments.
A summary of the significant components of the Company’s revenues and expenses by segment is as follows:
          
 Three months ended September 30, 2019Property Casualty and Specialty Other Total 
 Gross premiums written$314,400
 $546,668
 $—
 $861,068
 
 Net premiums written$302,982
 $401,148
 $—
 $704,130
 
 Net premiums earned$444,332
 $462,416
 $—
 $906,748
 
 Net claims and claim expenses incurred338,260
 316,099
 161
 654,520
 
 Acquisition expenses79,521
 122,654
 6
 202,181
 
 Operational expenses34,238
 19,198
 (21) 53,415
 
 Underwriting (loss) income$(7,687) $4,465
 $(146) (3,368) 
 Net investment income    113,844
 113,844
 
 Net foreign exchange losses    (8,275) (8,275) 
 Equity in earnings of other ventures    5,877
 5,877
 
 Other income    1,016
 1,016
 
 Net realized and unrealized gains on investments    31,938
 31,938
 
 Corporate expenses    (13,844) (13,844) 
 Interest expense    (15,580) (15,580) 
 Income before taxes and redeemable noncontrolling interests      111,608
 
 Income tax expense    (3,664) (3,664) 
 Net income attributable to redeemable noncontrolling interests    (62,057) (62,057) 
 Dividends on preference shares    (9,189) (9,189) 
 Net income available to RenaissanceRe common shareholders      $36,698
 
          
 Net claims and claim expenses incurred – current accident year$345,880
 $319,087
 $—
 $664,967
 
 Net claims and claim expenses incurred – prior accident years(7,620) (2,988) 161
 (10,447) 
 Net claims and claim expenses incurred – total$338,260
 $316,099
 $161
 $654,520
 
          
 Net claims and claim expense ratio – current accident year77.8 % 69.0 %   73.3 % 
 Net claims and claim expense ratio – prior accident years(1.7)% (0.6)%   (1.1)% 
 Net claims and claim expense ratio – calendar year76.1 % 68.4 %   72.2 % 
 Underwriting expense ratio25.6 % 30.6 %   28.2 % 
 Combined ratio101.7 % 99.0 %   100.4 % 
          
Three months ended June 30, 2020PropertyCasualty and SpecialtyOtherTotal
Gross premiums written$1,042,536  $659,336  $—  $1,701,872  
Net premiums written$704,138  $476,665  $—  $1,180,803  
Net premiums earned$491,116  $518,980  $—  $1,010,096  
Net claims and claim expenses incurred164,050  346,266  (44) 510,272  
Acquisition expenses94,772  138,837  1  233,610  
Operational expenses31,656  17,422  (1) 49,077  
Underwriting income$200,638  $16,455  $44  217,137  
Net investment income89,305  89,305  
Net foreign exchange losses(7,195) (7,195) 
Equity in earnings of other ventures9,041  9,041  
Other loss(1,201) (1,201) 
Net realized and unrealized gains on investments448,390  448,390  
Corporate expenses(11,898) (11,898) 
Interest expense(11,842) (11,842) 
Income before taxes731,737  
Income tax expense(29,875) (29,875) 
Net income attributable to redeemable noncontrolling interests(118,728) (118,728) 
Dividends on preference shares(7,289) (7,289) 
Net income available to RenaissanceRe common shareholders$575,845  
Net claims and claim expenses incurred – current accident year$170,614  $355,064  $—  $525,678  
Net claims and claim expenses incurred – prior accident years(6,564) (8,798) (44) (15,406) 
Net claims and claim expenses incurred – total$164,050  $346,266  $(44) $510,272  
Net claims and claim expense ratio – current accident year34.7 %68.4 %52.0 %
Net claims and claim expense ratio – prior accident years(1.3)%(1.7)%(1.5)%
Net claims and claim expense ratio – calendar year33.4 %66.7 %50.5 %
Underwriting expense ratio25.7 %30.1 %28.0 %
Combined ratio59.1 %96.8 %78.5 %

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 Nine months ended September 30, 2019Property Casualty and Specialty Other Total 
 Gross premiums written$2,185,984
 $1,716,287
 $—
 $3,902,271
 
 Net premiums written$1,411,327
 $1,244,799
 $—
 $2,656,126
 
 Net premiums earned$1,160,090
 $1,208,188
 $—
 $2,368,278
 
 Net claims and claim expenses incurred541,217
 793,533
 178
 1,334,928
 
 Acquisition expenses222,971
 330,829
 (186) 553,614
 
 Operational expenses99,546
 58,603
 13
 158,162
 
 Underwriting income (loss)$296,356
 $25,223
 $(5) 321,574
 
 Net investment income    311,138
 311,138
 
 Net foreign exchange losses    (1,812) (1,812) 
 Equity in earnings of other ventures    17,350
 17,350
 
 Other income    5,109
 5,109
 
 Net realized and unrealized gains on investments    396,586
 396,586
 
 Corporate expenses    (76,480) (76,480) 
 Interest expense    (42,868) (42,868) 
 Income before taxes and redeemable noncontrolling interests      930,597
 
 Income tax expense    (20,670) (20,670) 
 Net income attributable to redeemable noncontrolling interests    (204,091) (204,091) 
 Dividends on preference shares    (27,567) (27,567) 
 Net income available to RenaissanceRe common shareholders      $678,269
 
          
 Net claims and claim expenses incurred – current accident year$536,197
 $813,251
 $—
 $1,349,448
 
 Net claims and claim expenses incurred – prior accident years5,020
 (19,718) 178
 (14,520) 
 Net claims and claim expenses incurred – total$541,217
 $793,533
 $178
 $1,334,928
 
          
 Net claims and claim expense ratio – current accident year46.2 % 67.3 %   57.0 % 
 Net claims and claim expense ratio – prior accident years0.5 % (1.6)%   (0.6)% 
 Net claims and claim expense ratio – calendar year46.7 % 65.7 %   56.4 % 
 Underwriting expense ratio27.8 % 32.2 %   30.0 % 
 Combined ratio74.5 % 97.9 %   86.4 % 
          


          
 Three months ended September 30, 2018Property Casualty and Specialty Other Total 
 Gross premiums written$301,413
 $324,264
 $—
 $625,677
 
 Net premiums written$232,632
 $220,623
 $—
 $453,255
 
 Net premiums earned$293,059
 $238,791
 $(1) $531,849
 
 Net claims and claim expenses incurred265,857
 144,671
 (18) 410,510
 
 Acquisition expenses45,524
 64,238
 (1) 109,761
 
 Operational expenses25,577
 14,976
 40
 40,593
 
 Underwriting (loss) income$(43,899) $14,906
 $(22) (29,015) 
 Net investment income    80,696
 80,696
 
 Net foreign exchange losses    (4,566) (4,566) 
 Equity in earnings of other ventures    7,648
 7,648
 
 Other income    497
 497
 
 Net realized and unrealized gains on investments    13,630
 13,630
 
 Corporate expenses    (6,841) (6,841) 
 Interest expense    (11,769) (11,769) 
 Income before taxes and redeemable noncontrolling interests      50,280
 
 Income tax expense    (1,451) (1,451) 
 Net income attributable to redeemable noncontrolling interests    (6,440) (6,440) 
 Dividends on preference shares    (9,708) (9,708) 
 Net income available to RenaissanceRe common shareholders      $32,681
 
          
 Net claims and claim expenses incurred – current accident year$268,022
 $151,904
 $—
 $419,926
 
 Net claims and claim expenses incurred – prior accident years(2,165) (7,233) (18) (9,416) 
 Net claims and claim expenses incurred – total$265,857
 $144,671
 $(18) $410,510
 
          
 Net claims and claim expense ratio – current accident year91.5 % 63.6 %   79.0 % 
 Net claims and claim expense ratio – prior accident years(0.8)% (3.0)%   (1.8)% 
 Net claims and claim expense ratio – calendar year90.7 % 60.6 %   77.2 % 
 Underwriting expense ratio24.3 % 33.2 %   28.3 % 
 Combined ratio115.0 % 93.8 %   105.5 % 
          



Six months ended June 30, 2020PropertyCasualty and SpecialtyOtherTotal
Gross premiums written$2,263,062  $1,464,531  $—  $3,727,593  
Net premiums written$1,378,719  $1,071,892  $—  $2,450,611  
Net premiums earned$912,451  $1,010,743  $—  $1,923,194  
Net claims and claim expenses incurred308,902  772,475  (151) 1,081,226  
Acquisition expenses180,123  264,090  1  444,214  
Operational expenses75,663  40,876  (1) 116,538  
Underwriting income (loss)$347,763  $(66,698) $151  281,216  
Net investment income188,778  188,778  
Net foreign exchange losses(12,923) (12,923) 
Equity in earnings of other ventures13,605  13,605  
Other loss(5,637) (5,637) 
Net realized and unrealized gains on investments337,683  337,683  
Corporate expenses(27,889) (27,889) 
Interest expense(26,769) (26,769) 
Income before taxes748,064  
Income tax expense(21,029) (21,029) 
Net income attributable to redeemable noncontrolling interests(216,819) (216,819) 
Dividends on preference shares(16,345) (16,345) 
Net income available to RenaissanceRe common shareholders$493,871  
Net claims and claim expenses incurred – current accident year$301,458  $781,274  $—  $1,082,732  
Net claims and claim expenses incurred – prior accident years7,444  (8,799) (151) (1,506) 
Net claims and claim expenses incurred – total$308,902  $772,475  $(151) $1,081,226  
Net claims and claim expense ratio – current accident year33.0 %77.3 %56.3 %
Net claims and claim expense ratio – prior accident years0.9 %(0.9)%(0.1)%
Net claims and claim expense ratio – calendar year33.9 %76.4 %56.2 %
Underwriting expense ratio28.0 %30.2 %29.2 %
Combined ratio61.9 %106.6 %85.4 %
          
 Nine months ended September 30, 2018Property Casualty and Specialty Other Total 
 Gross premiums written$1,561,008
 $1,201,664
 $—
 $2,762,672
 
 Net premiums written$884,541
 $836,267
 $—
 $1,720,808
 
 Net premiums earned$722,246
 $679,271
 $(1) $1,401,516
 
 Net claims and claim expenses incurred222,195
 420,273
 (88) 642,380
 
 Acquisition expenses127,095
 185,429
 —
 312,524
 
 Operational expenses75,933
 43,121
 354
 119,408
 
 Underwriting income (loss)$297,023
 $30,448
 $(267) 327,204
 
 Net investment income    208,528
 208,528
 
 Net foreign exchange losses    (11,496) (11,496) 
 Equity in earnings of other ventures    14,331
 14,331
 
 Other income    480
 480
 
 Net realized and unrealized losses on investments    (86,415) (86,415) 
 Corporate expenses    (21,875) (21,875) 
 Interest expense    (35,304) (35,304) 
 Income before taxes and redeemable noncontrolling interests      395,453
 
 Income tax expense    (2,550) (2,550) 
 Net income attributable to redeemable noncontrolling interests    (90,822) (90,822) 
 Dividends on preference shares    (20,899) (20,899) 
 Net income available to RenaissanceRe common shareholders      $281,182
 
          
 Net claims and claim expenses incurred – current accident year$395,067
 $444,293
 $—
 $839,360
 
 Net claims and claim expenses incurred – prior accident years(172,872) (24,020) (88) (196,980) 
 Net claims and claim expenses incurred – total$222,195
 $420,273
 $(88) $642,380
 
          
 Net claims and claim expense ratio – current accident year54.7 % 65.4 %   59.9 % 
 Net claims and claim expense ratio – prior accident years(23.9)% (3.5)%   (14.1)% 
 Net claims and claim expense ratio – calendar year30.8 % 61.9 %   45.8 % 
 Underwriting expense ratio28.1 % 33.6 %   30.9 % 
 Combined ratio58.9 % 95.5 %   76.7 % 
          
45

Three months ended June 30, 2019PropertyCasualty and SpecialtyOtherTotal
Gross premiums written$839,200  $637,708  $—  $1,476,908  
Net premiums written$544,115  $478,850  $—  $1,022,965  
Net premiums earned$425,013  $486,489  $—  $911,502  
Net claims and claim expenses incurred146,874  306,501  (2) 453,373  
Acquisition expenses89,711  137,963  (192) 227,482  
Operational expenses36,764  23,016  34  59,814  
Underwriting income$151,664  $19,009  $160  170,833  
Net investment income118,588  118,588  
Net foreign exchange gains9,309  9,309  
Equity in earnings of other ventures6,812  6,812  
Other income922  922  
Net realized and unrealized gains on investments191,247  191,247  
Corporate expenses(23,847) (23,847) 
Interest expense(15,534) (15,534) 
Income before taxes458,330  
Income tax expense(9,475) (9,475) 
Net income attributable to redeemable noncontrolling interests(71,812) (71,812) 
Dividends on preference shares(9,189) (9,189) 
Net income available to RenaissanceRe common shareholders$367,854  
Net claims and claim expenses incurred – current accident year$136,111  $317,029  $—  $453,140  
Net claims and claim expenses incurred – prior accident years10,763  (10,528) (2) 233  
Net claims and claim expenses incurred – total$146,874  $306,501  $(2) $453,373  
Net claims and claim expense ratio – current accident year32.0 %65.2 %49.7 %
Net claims and claim expense ratio – prior accident years2.6 %(2.2)%— %
Net claims and claim expense ratio – calendar year34.6 %63.0 %49.7 %
Underwriting expense ratio29.7 %33.1 %31.6 %
Combined ratio64.3 %96.1 %81.3 %
46

Six months ended June 30, 2019PropertyCasualty and SpecialtyOtherTotal
Gross premiums written$1,871,584  $1,169,619  $—  $3,041,203  
Net premiums written$1,108,345  $843,651  $—  $1,951,996  
Net premiums earned$715,758  $745,772  $—  $1,461,530  
Net claims and claim expenses incurred202,957  477,434  17  680,408  
Acquisition expenses143,450  208,175  (192) 351,433  
Operational expenses65,308  39,405  34  104,747  
Underwriting income$304,043  $20,758  $141  324,942  
Net investment income200,682  200,682  
Net foreign exchange gains6,463  6,463  
Equity in earnings of other ventures11,473  11,473  
Other income4,093  4,093  
Net realized and unrealized gains on investments361,260  361,260  
Corporate expenses(62,636) (62,636) 
Interest expense(27,288) (27,288) 
Income before taxes818,989  
Income tax expense(17,006) (17,006) 
Net income attributable to redeemable noncontrolling interests(142,034) (142,034) 
Dividends on preference shares(18,378) (18,378) 
Net income available to RenaissanceRe common shareholders$641,571  
Net claims and claim expenses incurred – current accident year$190,317  $494,164  $—  $684,481  
Net claims and claim expenses incurred – prior accident years12,640  (16,730) 17  (4,073) 
Net claims and claim expenses incurred – total$202,957  $477,434  $17  $680,408  
Net claims and claim expense ratio – current accident year26.6 %66.3 %46.8 %
Net claims and claim expense ratio – prior accident years1.8 %(2.3)%(0.2)%
Net claims and claim expense ratio – calendar year28.4 %64.0 %46.6 %
Underwriting expense ratio29.1 %33.2 %31.2 %
Combined ratio57.5 %97.2 %77.8 %
47

NOTE 14.13. DERIVATIVE INSTRUMENTS
From time to time, the Company may enter into derivative instruments such as futures, options, swaps, forward contracts and other derivative contracts primarily to manage its foreign currency exposure, obtain exposure to a particular financial market, for yield enhancement, or for trading and to assume risk. The Company’s derivative instruments can be exchange traded or over-the-counter, with over-the-counter derivatives generally traded under International Swaps and Derivatives Association master agreements, which establish the terms of the transactions entered into with the Company’s derivative counterparties. In the event a party becomes insolvent or otherwise defaults on its obligations, a master agreement generally permits the non-defaulting party to accelerate and terminate all outstanding transactions and net the transactions’ marked-to-market values so that a single sum in a single currency will be owed by, or owed to, the non-defaulting party. Effectively, this contractual close-out netting reduces credit exposure from gross to net exposure. Where the Company has entered into master netting agreements with counterparties, or the Company has the legal and contractual right to offset positions, the derivative positions are generally netted by counterparty and are reported accordingly in other assets and other liabilities. Commencing in the second quarter of 2019, the Company elected to adopt hedge accounting for certain of its derivative instruments used as hedges of a net investment in a foreign operation.
The tables below show the gross and net amounts of recognized derivative assets and liabilities at fair value, including the location on the consolidated balance sheets of the Company’s principal derivative instruments:
48

              
  Derivative Assets 
 At September 30, 2019Gross Amounts of Recognized Assets Gross Amounts Offset in the Balance Sheet  Net Amounts of Assets Presented in the Balance Sheet Balance Sheet Location Collateral Net Amount 
 Derivative instruments not designated as hedges            
 Interest rate futures$175
 $145
 $30
 Other assets $—
 $30
 
 Interest rate swaps5
 —
 5
 Other assets —
 5
 
 Foreign currency forward contracts (1)21,822
 —
 21,822
 Other assets —
 21,822
 
 Foreign currency forward contracts (2)1,105
 368
 737
 Other assets —
 737
 
 Credit default swaps209
 —
 209
 Other assets —
 209
 
 Total return swaps1,177
 —
 1,177
 Other assets —
 1,177
 
 Equity futures555
 —
 555
 Other assets —
 555
 
 Total derivative instruments not designated as hedges25,048
 513
 24,535
   —
 24,535
 
 Derivative instruments designated as hedges            
 Foreign currency forward contracts (3)1,072
 —
 1,072
 Other assets —
 1,072
 
 Total derivative instruments designated as hedges1,072
 —
 1,072
   —
 1,072
 
 Total$26,120
 $513
 $25,607
   $—
 $25,607
 
              
Derivative Assets
At June 30, 2020Gross Amounts of Recognized AssetsGross Amounts Offset in the Balance Sheet Net Amounts of Assets Presented in the Balance SheetBalance Sheet LocationCollateralNet Amount
Derivative instruments not designated as hedges
Interest rate futures$492  $(932) $1,424  Other assets$—  $1,424  
Foreign currency forward contracts (1)16,104  3,366  12,738  Other assets—  12,738  
Foreign currency forward contracts (2)209  76  133  Other assets—  133  
Credit default swaps261  —  261  Other assets—  261  
Total derivative instruments not designated as hedges17,066  2,510  14,556  —  14,556  
Derivative instruments designated as hedges
Foreign currency forward contracts (3)—  3,953  (3,953) Other assets—  (3,953) 
Total$17,066  $6,463  $10,603  $—  $10,603  
Derivative Liabilities
At June 30, 2020Gross Amounts of Recognized LiabilitiesGross Amounts Offset in the Balance Sheet Net Amounts of Liabilities Presented in the Balance SheetBalance Sheet LocationCollateral PledgedNet Amount
Derivative instruments not designated as hedges
Interest rate futures$196  $(932) $1,128  Other liabilities$1,128  $—  
Interest rate swaps37  —  37  Other assets37  —  
Foreign currency forward contracts (1)2,102  967  1,135  Other liabilities—  1,135  
Foreign currency forward contracts (2)2,919  76  2,843  Other liabilities—  2,843  
Credit default swaps—  —  —  Other assets—  —  
Total return swaps779  —  779  Other assets779  —  
Equity futures606  —  606  Other liabilities606  —  
Total$6,639  $111  $6,528  $2,550  $3,978  
(1)Contracts used to manage foreign currency risks in underwriting and non-investment operations.
(2)Contracts used to manage foreign currency risks in investment operations.
(3)Contracts designated as hedges of a net investment in a foreign operation.
49


Derivative Assets
At December 31, 2019Gross Amounts of Recognized AssetsGross Amounts Offset in the Balance Sheet Net Amounts of Assets Presented in the Balance SheetBalance Sheet LocationCollateralNet Amount
Derivative instruments not designated as hedges
Interest rate futures$234  $122  $112  Other assets$—  $112  
Foreign currency forward contracts (1)22,702  2,418  20,284  Other assets—  20,284  
Foreign currency forward contracts (2)1,082  622  460  Other assets—  460  
Credit default swaps37  —  37  Other assets—  37  
Total return swaps3,744  —  3,744  Other assets3,601  143  
Equity futures291  —  291  Other assets—  291  
Total derivative instruments not designated as hedges28,090  3,162  24,928  3,601  21,327  
Derivative instruments designated as hedges
Foreign currency forward contracts (3)64  667  (603) Other assets—  (603) 
Total$28,154  $3,829  $24,325  $3,601  $20,724  
Derivative Liabilities
At December 31, 2019Gross Amounts of Recognized LiabilitiesGross Amounts Offset in the Balance Sheet Net Amounts of Liabilities Presented in the Balance SheetBalance Sheet LocationCollateral PledgedNet Amount
Derivative instruments not designated as hedges
Interest rate futures$1,545  $122  $1,423  Other liabilities$1,423  $—  
Interest rate swaps50  —  50  Other liabilities50  —  
Foreign currency forward contracts (1)3,808  28  3,780  Other liabilities—  3,780  
Foreign currency forward contracts (2)939  622  317  Other liabilities—  317  
Total derivative instruments not designated as hedges6,342  772  5,570  1,473  4,097  
Derivative instruments designated as hedges
Foreign currency forward contracts (3)1,818  —  1,818  Other liabilities—  1,818  
Total$8,160  $772  $7,388  $1,473  $5,915  
(1)Contracts used to manage foreign currency risks in underwriting and non-investment operations.
              
  Derivative Liabilities 
 At September 30, 2019Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Balance Sheet  Net Amounts of Liabilities Presented in the Balance Sheet Balance Sheet Location Collateral Pledged Net Amount 
 Derivative instruments not designated as hedges            
 Interest rate futures$518
 $145
 $373
 Other liabilities $373
 $—
 
 Interest rate swaps16
 —
 16
 Other liabilities 16
 —
 
 Foreign currency forward contracts (1)6,676
 497
 6,179
 Other liabilities —
 6,179
 
 Foreign currency forward contracts (2)1,078
 368
 710
 Other liabilities —
 710
 
 Total return swaps180
 —
 180
 Other liabilities —
 180
 
 Total derivative instruments not designated as hedges8,468
 1,010
 7,458
   389
 7,069
 
 Derivative instruments designated as hedges            
 Foreign currency forward contracts (3)—
 416
 (416) Other liabilities —
 (416) 
 Total$8,468
 $1,426
 $7,042
   $389
 $6,653
 
              
(1)Contracts used to manage foreign currency risks in underwriting and non-investment operations.
(2)Contracts used to manage foreign currency risks in investment operations.
(3)Contracts designated as hedges of a net investment in a foreign operation.

(2)Contracts used to manage foreign currency risks in investment operations.

(3)Contracts designated as hedges of a net investment in a foreign operation.
              
  Derivative Assets 
 At December 31, 2018Gross Amounts of Recognized Assets Gross Amounts Offset in the Balance Sheet  Net Amounts of Assets Presented in the Balance Sheet Balance Sheet Location Collateral Net Amount 
 Derivative instruments not designated as hedges            
 Interest rate futures$971
 $636
 $335
 Other assets $—
 $335
 
 Interest rate swaps860
 —
 860
 Other assets —
 860
 
 Foreign currency forward contracts (1)16,459
 2,260
 14,199
 Other assets —
 14,199
 
 Foreign currency forward contracts (2)3,194
 71
 3,123
 Other assets —
 3,123
 
 Equity futures1,390
 977
 413
 Other assets —
 413
 
 Total$22,874
 $3,944
 $18,930
   $—
 $18,930
 
              
  Derivative Liabilities 
 At December 31, 2018Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Balance Sheet  Net Amounts of Liabilities Presented in the Balance Sheet Balance Sheet Location Collateral Pledged Net Amount 
 Derivative instruments not designated as hedges            
 Interest rate futures$910
 $636
 $273
 Other liabilities $273
 $—
 
 Interest rate swaps506
 —
 506
 Other liabilities 254
 252
 
 Foreign currency forward contracts (1)4,154
 —
 4,154
 Other liabilities —
 4,154
 
 Foreign currency forward contracts (2)72
 71
 1
 Other liabilities —
 1
 
 Credit default swaps1,606
 —
 1,606
 Other liabilities 1,605
 1
 
 Equity futures977
 977
 —
 Other liabilities —
 —
 
 Total$8,225
 $1,684
 $6,540
   $2,132
 $4,408
 
              
(1)Contracts used to manage foreign currency risks in underwriting and non-investment operations.
(2)Contracts used to manage foreign currency risks in investment operations.
See “Note 4.3. Investments” for information on reverse repurchase agreements.
50


The location and amount of the gain (loss) recognized in the Company’s consolidated statements of operations related to its principal derivative instruments are shown in the following table:
Location of gain (loss)
recognized on derivatives		Amount of gain (loss) recognized on
derivatives
Three months ended June 30,20202019
Derivative instruments not designated as hedges
Interest rate futuresNet realized and unrealized gains on investments$2,557  $22,253  
Interest rate swapsNet realized and unrealized gains on investments502  835  
Foreign currency forward contracts (1)Net foreign exchange (losses) gains6,908  (11,616) 
Foreign currency forward contracts (2)Net foreign exchange (losses) gains(7,613) 590  
Credit default swapsNet realized and unrealized gains on investments1,974  1,046  
Total return swapsNet realized and unrealized gains on investments14,151  4,501  
Equity futuresNet realized and unrealized gains on investments5,188  8,538  
Total derivative instruments not designated as hedges23,667  26,147  
Derivative instruments designated as hedges
Foreign currency forward contracts (3)Accumulated other comprehensive loss(8,694) 844  
Total derivative instruments designated as hedges(8,694) 844  
Total$14,973  $26,991  
Location of gain (loss)
recognized on derivatives		Amount of gain (loss) recognized on
derivatives
Six months ended June 30,20202019
Derivative instruments not designated as hedges
Interest rate futuresNet realized and unrealized gains on investments$90,563  $28,307  
Interest rate swapsNet realized and unrealized gains on investments2,609  1,184  
Foreign currency forward contracts (1)Net foreign exchange (losses) gains6,578  (7,174) 
Foreign currency forward contracts (2)Net foreign exchange (losses) gains(1,213) (2,281) 
Credit default swapsNet realized and unrealized gains on investments(2,923) 5,456  
Total return swapsNet realized and unrealized gains on investments(6,986) 5,035  
Equity futuresNet realized and unrealized gains on investments(25,710) 10,987  
Total derivative instruments not designated as hedges62,918  41,514  
Derivative instruments designated as hedges
Foreign currency forward contracts (3)Accumulated other comprehensive loss2,150  844  
Total derivative instruments designated as hedges2,150  844  
Total$65,068  $42,358  
(1)Contracts used to manage foreign currency risks in underwriting and non-investment operations.
(2)Contracts used to manage foreign currency risks in investment operations.
(3)Contracts designated as hedges of a net investment in a foreign operation.
51

       
  
Location of gain (loss)
recognized on derivatives
Amount of gain (loss) recognized on
derivatives
 
 Three months ended September 30, 2019 2018 
 Derivative instruments not designated as hedges     
 Interest rate futuresNet realized and unrealized gains (losses) on investments$7,199
 $2,731
 
 Interest rate swapsNet realized and unrealized gains (losses) on investments887
 (6) 
 Foreign currency forward contracts (1)Net foreign exchange losses(5,912) (2,596) 
 Foreign currency forward contracts (2)Net foreign exchange losses911
 650
 
 Credit default swapsNet realized and unrealized gains (losses) on investments65
 (191) 
 Total return swapsNet realized and unrealized gains (losses) on investments1,960
 —
 
 Equity futuresNet realized and unrealized gains (losses) on investments1,023
 29
 
 Total derivative instruments not designated as hedges 6,133
 617
 
 Derivative instruments designated as hedges     
 Foreign currency forward contracts (3)Accumulated other comprehensive income (loss)3,264
 —
 
 Total $9,397
 $617
 
       
       
       
  
Location of gain (loss)
recognized on derivatives
Amount of gain (loss) recognized on
derivatives
 
 Nine months ended September 30, 2019 2018 
 Derivative instruments not designated as hedges     
 Interest rate futuresNet realized and unrealized gains (losses) on investments$35,136
 $292
 
 Interest rate swapsNet realized and unrealized gains (losses) on investments2,071
 129
 
 Foreign currency forward contracts (1)Net foreign exchange losses(13,086) (2,227) 
 Foreign currency forward contracts (2)Net foreign exchange losses(1,370) 1,302
 
 Credit default swapsNet realized and unrealized gains (losses) on investments5,521
 (1,228) 
 Total return swapsNet realized and unrealized gains (losses) on investments6,995
 —
 
 Equity futuresNet realized and unrealized gains (losses) on investments12,380
 44
 
 Total derivative instruments not designated as hedges 47,647
 (1,688) 
 Derivative instruments designated as hedges     
 Foreign currency forward contracts (3)Accumulated other comprehensive income (loss)4,108
 —
 
 Total $51,755
 $(1,688) 
       
(1)Contracts used to manage foreign currency risks in underwriting and non-investment operations.
(2)Contracts used to manage foreign currency risks in investment operations.
(3)Contracts designated as hedges of a net investment in a foreign operation.


The Company is not aware of the existence of any credit-risk related contingent features that it believes would be triggered in its derivative instruments that are in a net liability position at SeptemberJune 30, 2019.2020.
Derivative Instruments Not Designated as Hedges
Interest Rate Derivatives
The Company uses interest rate futures and swaps within its portfolio of fixed maturity investments to manage its exposure to interest rate risk, which may result in increasing or decreasing its exposure to this risk.
Interest Rate Futures
The fair value of interest rate futures is determined using exchange traded prices. At SeptemberJune 30, 2019,2020, the Company had $2.2$2.1 billion of notional long positions and $456.9$913.4 million of notional short positions of primarily Eurodollar and U.S. treasury futures contracts (December(December 31, 20182019 - $1.9$2.5 billion and $545.8 million,$1.0 billion, respectively).
Interest Rate Swaps
The fair value of interest rate swaps is determined using the relevant exchange traded price where available or a discounted cash flow model based on the terms of the contract and inputs, including, where applicable, observable yield curves. At SeptemberJune 30, 2019,2020, the Company had $25.9 million$NaN of notional positions paying a fixed rate and $23.5 million receiving a fixed rate denominated in U.S. dollar swap contracts (December(December 31, 20182019 - $78.4$27.9 million and $32.1$25.5 million, respectively).
Foreign Currency Derivatives
The Company’s functionalreporting currency is the U.S. dollar. TheIn addition, the functional currency of the Company, and the majority of the Company’s subsidiaries, is the U.S. dollar. However, the Company writes a portion of its business in currencies other than U.S. dollars and may, from time to time, experience foreign exchange gains and losses in the Company’s consolidated financial statements. All changes in exchange rates, with the exception of non-monetary assets and liabilities, are recognized in the Company’s consolidated statements of operations.
Underwriting and Non-InvestmentsNon-investments Operations Related Foreign Currency Contracts
The Company’s foreign currency policy with regard to its underwriting operations is generally to holdenter into foreign currency assets, including cash, investmentsforward and receivablesoption contracts for notional values that approximate the foreign currency liabilities, including claims and claim expense reserves and reinsurance balances payable. When necessary,payable, net of any cash, investments and receivables held in the Company mayrespective foreign currency. The Company’s use of foreign currency forward and option contracts is intended to minimize the effect of fluctuating foreign currencies on the value of non-U.S. dollar denominated assets and liabilities associated with its underwriting operations. The fair value of the Company’s underwriting operations related foreign currency contracts is determined using indicative pricing obtained from counterparties or broker quotes. At SeptemberJune 30, 2019,2020, the Company had outstanding underwriting related foreign currency contracts of $536.1$464.0 million in notional long positions and $1.0 billion$514.0 million in notional short positions, denominated in U.S. dollars (December(December 31, 20182019 - $354.1$722.6 million and $601.2 million,$1.2 billion, respectively).
Investment Portfolio Related Foreign Currency Forward Contracts
The Company’s investment operations are exposed to currency fluctuations through its investments in non-U.S. dollar fixed maturity investments, short term investments and other investments. From time to time, the Company may employ foreign currency forward contracts in its investment portfolio to either assume foreign currency risk or to economically hedge its exposure to currency fluctuations from these investments. The fair value of the Company’s investment portfolio related foreign currency forward contracts is determined using an interpolated rate based on closing forward market rates. At SeptemberJune 30, 2019,2020, the Company had outstanding investment portfolio related foreign currency contracts of $145.5$219.9 million in notional long
52

positions and $42.9$64.2 million in notional short positions, denominated in U.S. dollars (December(December 31, 20182019 - $121.3$195.6 million and $42.9$61.0 million,, respectively).


Credit Derivatives
The Company’s exposure to credit risk is primarily due to its fixed maturity investments, short term investments, premiums receivable and reinsurance recoverable. From time to time, the Company may purchase credit derivatives to hedge its exposures in the insurance industry, and to assist in managing the credit risk associated with ceded reinsurance. The Company also employs credit derivatives in its investment portfolio to either assume credit risk or hedge its credit exposure.
Credit Default Swaps
The fair value of the Company’s credit default swaps is determined using industry valuation models, broker bid indications or internal pricing valuation techniques. The fair value of these credit default swaps can change based on a variety of factors including changes in credit spreads, default rates and recovery rates, the correlation of credit risk between the referenced credit and the counterparty, and market rate inputs such as interest rates. At SeptemberJune 30, 2019,2020, the Company had outstanding credit default swaps of $0.5 million$NaN in notional positions to hedge credit risk and $146.4$121.2 million in notional positions to assume credit risk, denominated in U.S. dollars (December(December 31, 20182019 - $1.0$0.5 million and $126.2$143.4 million,, respectively).
Total Return Swaps
During the nine months ended September 30, 2019, the Company entered into certain total return swap contracts. The Company uses total return swaps as a means to manage spread duration and credit exposure in its investment portfolio. The fair value of the Company’s total return swaps is determined using broker-dealer bid quotations, market-based prices from pricing vendors or valuation models. At SeptemberJune 30, 2019,2020, the Company had $230.2$26.1 million of notional long positions (long credit) and $Nil$NaN of notional short positions (short credit), denominated in U.S. dollars.dollars (December 31, 2019 - $173.5 million and $NaN, respectively).
Equity Derivatives
Equity Futures
The Company uses equity derivatives in its investment portfolio from time to time to either assume equity risk or hedge its equity exposure. The fair value of the Company’s equity futures is determined using market-based prices from pricing vendors. At SeptemberJune 30, 2019,2020, the Company had $112.4 million$NaN notional long position and $Nil$44.0 million notional short position of equity futures, denominated in U.S. dollars (December 31, 20182019 - $44.7$122.0 million and $Nil,$NaN, respectively).
Derivative Instruments Designated as Hedges of a Net Investment in a Foreign Operation
Foreign Currency Derivatives
Hedges of a Net Investment in a Foreign Operation
In connection with the acquisition of the TMR, Group Entities, the Company acquired certain entities with non-U.S. dollar functional currencies, including RenaissanceRe Europe, Australia Branch, which has an Australian dollar functional currency. The Company has entered into foreign exchange forwards to hedge the Australian dollar net investment in foreign operations, on an after-tax basis, from changes in the exchange rate between the U.S. dollar and the Australian dollar.
The Company utilizes foreign exchange forward contracts to hedge the fair value of its net investment in a foreign operation. During the three2020 and nine months ended September 30, 2019, the Company entered into foreign exchange forward contracts that were formally designated as hedges of its investment in RenaissanceRe Europe, Australia Branch. There was no ineffectiveness in these transactions.
53


The table below provides a summary of derivative instruments designated as hedges of a net investment in a foreign operation, including the weighted average U.S. dollar equivalent of foreign denominated net assets that were hedged and the resulting derivative gain that was recorded in foreign currency translation adjustments, net of tax, within accumulated other comprehensive loss on the Company’s consolidated statements of changes in shareholders’ equity:
Three months endedSix months ended
June 30,
2020		June 30,
2019		June 30,
2020		June 30,
2019
Weighted average of U.S. dollar equivalent of foreign denominated net assets$74,451  $80,037  $77,683  $80,037  
Derivative (losses) gains (1)$(8,694) $844  $2,150  $844  
(1) Derivative (losses) gains from derivative instruments designated as hedges of the net investment in a foreign operation are recorded in foreign currency translation adjustments, net of tax, within accumulated other comprehensive loss on the Company’s consolidated statements of changes in shareholders’ equity.
          
  Three months ended Nine months ended 
  September 30,
2019		 September 30,
2018		 September 30,
2019		 September 30,
2018		 
 Weighted average of U.S. dollar equivalent of foreign denominated net assets$79,538
 $—
 $80,303
 $—
 
 Derivative gains (1)$3,264
 $—
 $4,108
 $—
 
          
(1)Derivative gains from derivative instruments designated as hedges of the net investment in a foreign operation are recorded in foreign currency translation adjustments, net of tax, within accumulated other comprehensive loss on the Company’s consolidated statements of changes in shareholders’ equity.
NOTE 15.14. COMMITMENTS, CONTINGENCIES AND OTHER ITEMS
There are no material changes from the commitments, contingencies and other items previously disclosed in the Company’s Form 10-K for the year ended December 31, 2018, other than disclosures associated with the adoption of FASB ASC Topic Leases as outlined below. See “Note 2. Significant Accounting Policies” for additional information related to the adoption of FASB ASC Topic Leases.
Leases
The Company’s operating leases primarily relate to office space for its global underwriting platforms, principally in Bermuda, Australia, Ireland, Singapore, Switzerland, the U.K. and the U.S. These leases expire at various dates through 2027 with a weighted average lease term of 2.3 years. Included in other assets and other liabilities at September 30, 2019 is a right-to-use asset of $20.8 million and a lease liability of $20.9 million, respectively, associated with the Company’s operating leases and reflected as a result of the Company’s adoption of FASB ASC Topic Leases (December 31, 2018 - $Nil and $Nil, respectively). For the three and nine months ended September 30, 2019, the Company recorded an operating lease expense of $3.4 million and $7.6 million, respectively, included in other income (2018 - $Nil and $Nil, respectively).
The Company’s financing leases primarily relate to office space in Bermuda with an initial lease term of 20 years, ending in 2028, and a bargain renewal option for an additional 30 years. Included in other assets and other liabilities at September 30, 2019 is a right-to-use asset of $20.0 million and a lease liability of $25.3 million, respectively, associated with the Company’s finance leases and reflected as a result of the Company’s adoption of FASB ASC Topic Leases (December 31, 2018 - $20.6 million and $25.6 million, respectively). For the three and nine months ended September 30, 2019, the Company recorded interest expense of $0.6 million and $1.9 million, respectively, associated with its finance leases (2018 - $0.7 million and $2.0 million, respectively) and amortization of its finance leases right-to-use asset of $0.2 million and $0.7 million, respectively, included in other income (2018 - $0.2 million and $0.7 million, respectively).


Future minimum lease payments under existing operating and finance leases are detailed below, excluding the bargain renewal option on the finance lease related to office space in Bermuda:
      
  Future minimum lease payments 
  Operating leases Finance leases 
 2019 (remaining)$2,256
 $833
 
 20206,625
 3,336
 
 20216,397
 3,336
 
 20225,681
 3,336
 
 20232,690
 2,830
 
 20241,301
 2,661
 
 After 2024923
 10,129
 
 Future minimum lease payments under existing leases$25,873
 $26,461
 
      

2019.
Legal Proceedings
The Company and its subsidiaries are subject to lawsuits and regulatory actions in the normal course of business that do not arise from or directly relate to claims on reinsurance treaties or contracts or direct surplus lines insurance policies. In the Company’s industry, business litigation may involve allegations of underwriting or claims-handling errors or misconduct, disputes relating to the scope of, or compliance with, the terms of delegated underwriting agreements, employment claims, regulatory actions or disputes arising from the Company’s business ventures. The Company’s operating subsidiaries are subject to claims litigation involving, among other things, disputed interpretations of policy coverages. Generally, the Company’s direct surplus lines insurance operations are subject to greater frequency and diversity of claims and claims-related litigation than its reinsurance operations and, in some jurisdictions, may be subject to direct actions by allegedly injured persons or entities seeking damages from policyholders. These lawsuits, involving or arising out of claims on policies issued by the Company’s subsidiaries which are typical to the insurance industry in general and in the normal course of business, are considered in its loss and loss expense reserves. In addition, the Company may from time to time engage in litigation or arbitration related to its claims for payment in respect of ceded reinsurance, including disputes that challenge the Company’s ability to enforce its underwriting intent. Such matters could result, directly or indirectly, in providers of protection not meeting their obligations to the Company or not doing so on a timely basis. The Company may also be subject to other disputes from time to time, relating to operational or other matters distinct from insurance or reinsurance claims. Any litigation or arbitration, or regulatory process contains an element of uncertainty, and the value of an exposure or a gain contingency related to a dispute is difficult to estimate. The Company believes that no individual litigation or arbitration to which it is presently a party is likely to have a material adverse effect on its financial condition, business or operations.
54

NOTE 15. ASSETS AND LIABILITIES HELD FOR SALE
On February 4, 2020, RenaissanceRe Specialty Holdings entered into an agreement to sell its wholly owned subsidiary, RenaissanceRe UK, a U.K. run-off company, to an investment vehicle managed by AXA Liabilities Managers, an affiliate of AXA XL. The sale received regulatory approval on July 17, 2020 and is expected to close in the third quarter of 2020. The estimated purchase price was calculated based on preliminary book value. The ultimate purchase price will be determined following receipt of regulatory approval, based on the closing book value. The Company classified the assets and liabilities of RenaissanceRe UK as held for sale. The financial results of RenaissanceRe UK are recorded in the Company’s consolidated statements of operations as part of net income (loss) available (attributable) to RenaissanceRe common shareholders for the three and six months ended June 30, 2020. The underwriting activities of RenaissanceRe UK are principally all within the Company’s Casualty and Specialty segment.
The carrying value of the major classes of assets and liabilities held for sale at June 30, 2020 and December 31, 2019 are as follows:
June 30,
2020		December 31,
2019
Assets of RenaissanceRe UK held for sale
Total investments$316,401  $458,731  
Other assets22,527  40,284  
Total assets held for sale$338,928  $499,015  
Liabilities of RenaissanceRe UK held for sale
Reserve for claims and claim expenses$158,826  $199,436  
Other liabilities3,054  925  
Total liabilities held for sale$161,880  $200,361  

55

NOTE 16.CONDENSED CONSOLIDATING FINANCIAL INFORMATION PROVIDED IN CONNECTION WITH OUTSTANDING DEBT OF SUBSIDIARIES
The following tables are provided in connection with outstanding debt of the Company’s subsidiaries and present condensed consolidating balance sheets at SeptemberJune 30, 20192020 and December 31, 2018,2019, condensed consolidating statements of operations and condensed consolidating statements of comprehensive income for the three and ninesix months ended SeptemberJune 30, 20192020 and 2018,2019, and condensed consolidating statements of cash flows for the ninesix months ended SeptemberJune 30, 20192020 and 2018. Each of RenRe North America Holdings Inc. and2019. RenaissanceRe Finance Inc. is a 100% owned subsidiary of RenaissanceRe and has outstanding debt securities. For additional information related to the terms of the Company’s outstanding debt securities, see “Note 8. Debt and Credit Facilities” in the “Notes to the Consolidated Financial Statements” in the Company’s Form 10-K for the year ended December 31, 20182019 and “Note 8.7. Debt and Credit Facilities” in the “Notes to the Consolidated Financial Statements” included herein.
Condensed Consolidating Balance Sheet
at June 30, 2020		RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)		RenaissanceRe Finance Inc. (Subsidiary Issuer)Other
RenaissanceRe
Holdings Ltd.
Subsidiaries and
Eliminations
(Non-guarantor
Subsidiaries) 
(1)		Consolidating
Adjustments 
(2)		RenaissanceRe
Consolidated
Assets
Total investments$312,238  $122,960  $19,288,451  $—  $19,723,649  
Cash and cash equivalents5,466  8,374  1,172,004  —  1,185,844  
Investments in subsidiaries6,355,699  1,384,968  718,374  (8,459,041) —  
Due from subsidiaries and affiliates117,917  (131,162) 13,000  245  —  
Premiums receivable—  —  3,519,965  —  3,519,965  
Prepaid reinsurance premiums—  —  1,266,203  —  1,266,203  
Reinsurance recoverable—  —  2,774,358  —  2,774,358  
Accrued investment income366  —  69,638  —  70,004  
Deferred acquisition costs—  —  734,286  —  734,286  
Receivable for investments sold2,522  2,505  643,431  —  648,458  
Other assets848,856  8,447  394,545  (953,452) 298,396  
Goodwill and other intangible assets114,161  —  144,430  —  258,591  
Total assets$7,757,225  $1,396,092  $30,738,685  $(9,412,248) $30,479,754  
Liabilities, Noncontrolling Interests and Shareholders’ Equity
Liabilities
Reserve for claims and claim expenses$—  $—  $9,365,469  $—  $9,365,469  
Unearned premiums—  —  3,549,641  —  3,549,641  
Debt391,932  720,754  972,283  (949,753) 1,135,216  
Reinsurance balances payable—  —  4,094,027  —  4,094,027  
Payable for investments purchased2,505  —  1,256,611  —  1,259,116  
Other liabilities15,616  8,262  2,554,907  (2,236,771) 342,014  
Total liabilities410,053  729,016  21,792,938  (3,186,524) 19,745,483  
Redeemable noncontrolling interests—  —  3,387,099  —  3,387,099  
Shareholders’ Equity
Total shareholders’ equity7,347,172  667,076  5,558,648  (6,225,724) 7,347,172  
Total liabilities, noncontrolling interests and shareholders’ equity$7,757,225  $1,396,092  $30,738,685  $(9,412,248) $30,479,754  
(1)
Condensed Consolidating Balance Sheet at September 30, 2019RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)		 RenRe North
America
Holdings Inc.
(Subsidiary
Issuer)		 RenaissanceRe Finance Inc. (Subsidiary Issuer) Other
RenaissanceRe
Holdings Ltd.
Subsidiaries and
Eliminations
(Non-guarantor
Subsidiaries) 
(1)		 Consolidating
Adjustments 
(2)		 RenaissanceRe
Consolidated
Assets           
Total investments$138,084
 $117,077
 $18,987
 $16,673,745
 $—
 $16,947,893
Cash and cash equivalents5,099
 3,691
 3,324
 859,137
 —
 871,251
Investments in subsidiaries5,579,191
 50,786
 1,279,042
 —
 (6,909,019) —
Due from subsidiaries and affiliates8,595
 101,579
 —
 —
 (110,174) —
Premiums receivable—
 —
 —
 2,799,954
 —
 2,799,954
Prepaid reinsurance premiums—
 —
 —
 972,047
 —
 972,047
Reinsurance recoverable—
 —
 —
 2,438,299
 —
 2,438,299
Accrued investment income39
 208
 9
 73,253
 —
 73,509
Deferred acquisition costs—
 —
 —
 708,258
 —
 708,258
Receivable for investments sold482
 1
 —
 224,664
 —
 225,147
Other assets795,636
 13,853
 295,885
 (1,806,661) 1,045,880
 344,593
Goodwill and other intangible assets117,278
 —
 —
 145,981
 —
 263,259
Total assets$6,644,404
 $287,195
 $1,597,247
 $23,088,677
 $(5,973,313) $25,644,210
Liabilities, Noncontrolling Interests and Shareholders’ Equity           
Liabilities           
Reserve for claims and claim expenses$—
 $—
 $—
 $8,602,437
 $—
 $8,602,437
Unearned premiums—
 —
 —
 2,967,535
 —
 2,967,535
Debt691,245
 —
 843,981
 148,272
 (300,000) 1,383,498
Amounts due to subsidiaries and affiliates2,803
 92
 101,827
 —
 (104,722) —
Reinsurance balances payable—
 —
 —
 2,910,601
 —
 2,910,601
Payable for investments purchased—
 10
 —
 654,675
 —
 654,685
Other liabilities(879) 328
 9,381
 375,211
 11,145
 395,186
Total liabilities693,169
 430
 955,189
 15,658,731
 (393,577) 16,913,942
Redeemable noncontrolling interests—
 —
 —
 2,779,033
 —
 2,779,033
Shareholders’ Equity           
Total shareholders’ equity5,951,235
 286,765
 642,058
 4,650,913
 (5,579,736) 5,951,235
Total liabilities, noncontrolling interests and shareholders’ equity$6,644,404
 $287,195
 $1,597,247
 $23,088,677
 $(5,973,313) $25,644,210
Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations.
(1)Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations.
(2)Includes Parent Guarantor, Subsidiary Guarantor and Subsidiary Issuer consolidating adjustments.
(2)Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments.
56

Condensed Consolidating Balance Sheet
at December 31, 2019		RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)		RenaissanceRe Finance Inc. (Subsidiary Issuer)Other
RenaissanceRe
Holdings Ltd.
Subsidiaries and
Eliminations
(Non-guarantor
Subsidiaries) 
(1)		Consolidating
Adjustments 
(2)		RenaissanceRe
Consolidated
Assets
Total investments$190,451  $288,137  $16,890,201  $—  $17,368,789  
Cash and cash equivalents26,460  8,731  1,343,877  —  1,379,068  
Investments in subsidiaries5,204,260  1,426,838  48,247  (6,679,345) —  
Due from subsidiaries and affiliates10,725  —  101,579  (112,304) —  
Premiums receivable—  —  2,599,896  —  2,599,896  
Prepaid reinsurance premiums—  —  767,781  —  767,781  
Reinsurance recoverable—  —  2,791,297  —  2,791,297  
Accrued investment income—  1,171  71,290  —  72,461  
Deferred acquisition costs—  —  663,991  —  663,991  
Receivable for investments sold173  —  78,196  —  78,369  
Other assets847,406  12,211  312,556  (825,957) 346,216  
Goodwill and other intangible assets116,212  —  146,014  —  262,226  
Total assets$6,395,687  $1,737,088  $25,814,925  $(7,617,606) $26,330,094  
Liabilities, Noncontrolling Interest and Shareholders’ Equity
Liabilities
Reserve for claims and claim expenses$—  $—  $9,384,349  $—  $9,384,349  
Unearned premiums—  —  2,530,975  —  2,530,975  
Debt391,475  970,255  148,349  (125,974) 1,384,105  
Amounts due to subsidiaries and affiliates6,708  102,493  51  (109,252) —  
Reinsurance balances payable—  —  2,830,691  —  2,830,691  
Payable for investments purchased—  —  225,275  —  225,275  
Other liabilities26,137  14,162  899,960  (8,235) 932,024  
Total liabilities424,320  1,086,910  16,019,650  (243,461) 17,287,419  
Redeemable noncontrolling interests—  —  3,071,308  —  3,071,308  
Shareholders’ Equity
Total shareholders’ equity5,971,367  650,178  6,723,967  (7,374,145) 5,971,367  
Total liabilities, redeemable noncontrolling interest and shareholders’ equity$6,395,687  $1,737,088  $25,814,925  $(7,617,606) $26,330,094  
(1)Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations.
(2)Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments.

Condensed Consolidating Balance Sheet at December 31, 2018
RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)
 RenRe North
America
Holdings Inc.
(Subsidiary
Issuer)		 RenaissanceRe Finance Inc. (Subsidiary Issuer) 
Other
RenaissanceRe
Holdings Ltd.
Subsidiaries and
Eliminations
(Non-guarantor
Subsidiaries) 
(1)
 
Consolidating
Adjustments 
(2)
 
RenaissanceRe
Consolidated
Assets           
Total investments$313,360
 $77,842
 $28,885
 $11,465,660
 $—
 $11,885,747
Cash and cash equivalents3,534
 3,350
 9,604
 1,091,434
 —
 1,107,922
Investments in subsidiaries4,414,475
 58,458
 1,215,663
 —
 (5,688,596) —
Due from subsidiaries and affiliates57,039
 101,579
 —
 —
 (158,618) —
Premiums receivable—
 —
 —
 1,537,188
 —
 1,537,188
Prepaid reinsurance premiums—
 —
 —
 616,185
 —
 616,185
Reinsurance recoverable—
 —
 —
 2,372,221
 —
 2,372,221
Accrued investment income1,046
 310
 127
 49,828
 —
 51,311
Deferred acquisition costs—
 —
 —
 476,661
 —
 476,661
Receivable for investments sold203
 23,885
 —
 232,328
 —
 256,416
Other assets458,842
 22,571
 313,636
 (1,403,636) 743,714
 135,127
Goodwill and other intangible assets120,476
 —
 —
 116,942
 —
 237,418
Total assets$5,368,975
 $287,995
 $1,567,915
 $16,554,811
 $(5,103,500) $18,676,196
Liabilities, Redeemable Noncontrolling Interest and Shareholders’ Equity           
Liabilities           
Reserve for claims and claim expenses$—
 $—
 $—
 $6,076,271
 $—
 $6,076,271
Unearned premiums—
 —
 —
 1,716,021
 —
 1,716,021
Debt300,000
 —
 843,086
 148,041
 (300,000) 991,127
Amounts due to subsidiaries and affiliates6,453
 217
 102,243
 —
 (108,913) —
Reinsurance balances payable—
 —
 —
 1,902,056
 —
 1,902,056
Payable for investments purchased—
 24
 —
 380,308
 —
 380,332
Other liabilities17,442
 5,362
 13,918
 482,422
 (5,535) 513,609
Total liabilities323,895
 5,603
 959,247
 10,705,119
 (414,448) 11,579,416
Redeemable noncontrolling interests—
 —
 —
 2,051,700
 —
 2,051,700
Shareholders’ Equity           
Total shareholders’ equity5,045,080
 282,392
 608,668
 3,797,992
 (4,689,052) 5,045,080
Total liabilities, redeemable noncontrolling interest and shareholders’ equity$5,368,975
 $287,995
 $1,567,915
 $16,554,811
 $(5,103,500) $18,676,196
57

(1)Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations.
(2)Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments.

Condensed Consolidating Statement of Operations for the three months ended June 30, 2020RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)		RenaissanceRe Finance Inc. (Subsidiary Issuer)Other
RenaissanceRe
Holdings Ltd.
Subsidiaries and
Eliminations
(Non-guarantor
Subsidiaries) 
(1)		Consolidating
Adjustments 
(2)		RenaissanceRe
Consolidated
Revenues
Net premiums earned$—  $—  $1,010,096  $—  $1,010,096  
Net investment income10,415  110  89,488  (10,708) 89,305  
Net foreign exchange gains (losses)6,695  —  (13,218) (672) (7,195) 
Equity in earnings of other ventures—  787  8,254  —  9,041  
Other (loss) income(372) —  12,392  (13,221) (1,201) 
Net realized and unrealized gains on investments15,035  53  433,302  —  448,390  
Total revenues31,773  950  1,540,314  (24,601) 1,548,436  
Expenses
Net claims and claim expenses incurred—  —  510,272  —  510,272  
Acquisition expenses2,051  —  231,559  —  233,610  
Operational expenses2,390  13,966  46,278  (13,557) 49,077  
Corporate expenses8,534  —  3,364  —  11,898  
Interest expense4,096  6,906  11,525  (10,685) 11,842  
Total expenses17,071  20,872  802,998  (24,242) 816,699  
Income (loss) before equity in net income (loss) of subsidiaries and taxes14,702  (19,922) 737,316  (359) 731,737  
Equity in net income (loss) of subsidiaries567,028  93,652  (7,388) (653,292) —  
Income before taxes581,730  73,730  729,928  (653,651) 731,737  
Income tax benefit (expense)1,404  1,338  (32,617) —  (29,875) 
Net income583,134  75,068  697,311  (653,651) 701,862  
Net income attributable to redeemable noncontrolling interests—  —  (118,728) —  (118,728) 
Net income attributable to RenaissanceRe583,134  75,068  578,583  (653,651) 583,134  
Dividends on preference shares(7,289) —  —  —  (7,289) 
Net income available attributable to RenaissanceRe common shareholders$575,845  $75,068  $578,583  $(653,651) $575,845  
(1)Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations.
(2)Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments.

Condensed Consolidating Statement of Comprehensive Income for the three months ended June 30, 2020RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)		RenaissanceRe Finance, Inc. (Subsidiary Issuer)Other
RenaissanceRe
Holdings Ltd.
Subsidiaries and
Eliminations
(Non-guarantor
Subsidiaries) 
(1)		Consolidating
Adjustments 
(2)		RenaissanceRe
Consolidated
Comprehensive income
Net income$583,134  $75,068  $697,311  $(653,651) $701,862  
Change in net unrealized (losses) gains on investments, net of tax(1,488) 6,934  7,088  (14,022) (1,488) 
Foreign currency translation adjustments, net of tax86  —  —  —  86  
Comprehensive income581,732  82,002  704,399  (667,673) 700,460  
Net income attributable to redeemable noncontrolling interests—  —  (118,728) —  (118,728) 
Comprehensive income attributable to redeemable noncontrolling interests—  —  (118,728) —  (118,728) 
Comprehensive income attributable to RenaissanceRe$581,732  $82,002  $585,671  $(667,673) $581,732  
(1)Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations.
(2)Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments.
58

Condensed Consolidating Statement of Operations for the six months ended June 30, 2020RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)		RenaissanceRe Finance Inc. (Subsidiary Issuer)Other
RenaissanceRe
Holdings Ltd.
Subsidiaries and
Eliminations
(Non-guarantor
Subsidiaries) 
(1)		Consolidating
Adjustments 
(2)		RenaissanceRe
Consolidated
Revenues
Net premiums earned$—  $—  $1,923,194  $—  $1,923,194  
Net investment income20,903  993  188,030  (21,148) 188,778  
Net foreign exchange losses(635) —  (11,616) (672) (12,923) 
Equity in earnings of other ventures—  1,176  12,429  —  13,605  
Other income (loss)—  —  23,465  (29,102) (5,637) 
Net realized and unrealized (losses) gains on investments(6,083) 169  343,597  —  337,683  
Total revenues14,185  2,338  2,479,099  (50,922) 2,444,700  
Expenses
Net claims and claim expenses incurred—  —  1,081,226  —  1,081,226  
Acquisition expenses2,051  —  442,163  —  444,214  
Operational expenses5,122  31,284  109,197  (29,065) 116,538  
Corporate expenses17,213  —  10,676  —  27,889  
Interest expense7,924  16,875  23,042  (21,072) 26,769  
Total expenses32,310  48,159  1,666,304  (50,137) 1,696,636  
(Loss) income before equity in net income of subsidiaries and taxes(18,125) (45,821) 812,795  (785) 748,064  
Equity in net income of subsidiaries527,355  59,983  9,251  (596,589) —  
Income before taxes509,230  14,162  822,046  (597,374) 748,064  
Income tax benefit (expense)986  3,524  (25,539) —  (21,029) 
Net income510,216  17,686  796,507  (597,374) 727,035  
Net income attributable to redeemable noncontrolling interests—  —  (216,819) —  (216,819) 
Net income attributable to RenaissanceRe510,216  17,686  579,688  (597,374) 510,216  
Dividends on preference shares(16,345) —  —  —  (16,345) 
Net income available to RenaissanceRe common shareholders$493,871  $17,686  $579,688  $(597,374) $493,871  
(1)Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations.
(2)Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments.
Condensed Consolidating Statement of Comprehensive Income for the six months ended June 30, 2020RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)		RenaissanceRe Finance Inc. (Subsidiary Issuer)Other
RenaissanceRe
Holdings Ltd.
Subsidiaries and
Eliminations
(Non-guarantor
Subsidiaries) 
(1)		Consolidating
Adjustments 
(2)		RenaissanceRe
Consolidated
Comprehensive income
Net income$510,216  $17,686  $796,507  $(597,374) $727,035  
Change in net unrealized (losses) gains on investments, net of tax(2,145) 7,679  (7,474) (205) (2,145) 
Foreign currency translation adjustments, net of tax1,018  —  —  1,018  
Comprehensive income509,089  25,365  789,033  (597,579) 725,908  
Net income attributable to redeemable noncontrolling interests—  —  (216,819) —  (216,819) 
Comprehensive income attributable to noncontrolling interests—  —  (216,819) —  (216,819) 
Comprehensive income attributable to RenaissanceRe$509,089  $25,365  $572,214  $(597,579) $509,089  
(1)Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations.
(2)Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments.

Condensed Consolidating Statement of Operations for
the three months ended September 30, 2019		RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)		 RenRe North
America
Holdings Inc.
(Subsidiary
Issuer)		 RenaissanceRe Finance Inc. (Subsidiary Issuer) Other
RenaissanceRe
Holdings Ltd.
Subsidiaries and
Eliminations
(Non-guarantor
Subsidiaries) 
(1)		 Consolidating
Adjustments 
(2)		 RenaissanceRe
Consolidated
Revenues           
Net premiums earned$—
 $—
 $—
 $906,748
 $—
 $906,748
Net investment income10,263
 570
 1,906
 113,705
 (12,600) 113,844
Net foreign exchange (losses) gains(14,786) —
 —
 6,511
 —
 (8,275)
Equity in earnings of other ventures—
 —
 1,298
 4,579
 —
 5,877
Other income (loss)1,234
 —
 —
 (218) —
 1,016
Net realized and unrealized gains on investments1,983
 1,147
 20
 28,788
 —
 31,938
Total revenues(1,306) 1,717
 3,224
 1,060,113
 (12,600) 1,051,148
Expenses           
Net claims and claim expenses incurred—
 —
 —
 654,520
 —
 654,520
Acquisition expenses—
 —
 —
��202,181
 —
 202,181
Operational expenses2,039
 11
 9,018
 34,814
 7,533
 53,415
Corporate expenses6,948
 —
 7
 5,010
 1,879
 13,844
Interest expense5,708
 —
 9,257
 615
 —
 15,580
Total expenses14,695
 11
 18,282
 897,140
 9,412
 939,540
(Loss) income before equity in net income of subsidiaries and taxes(16,001) 1,706
 (15,058) 162,973
 (22,012) 111,608
Equity in net income of subsidiaries61,021
 1,456
 14,365
 —
 (76,842) —
Income (loss) before taxes45,020
 3,162
 (693) 162,973
 (98,854) 111,608
Income tax benefit (expense)867
 (319) 1,562
 (5,774) —
 (3,664)
Net income45,887
 2,843
 869
 157,199
 (98,854) 107,944
Net income attributable to redeemable noncontrolling interests—
 —
 —
 (62,057) —
 (62,057)
Net income attributable to RenaissanceRe45,887
 2,843
 869
 95,142
 (98,854) 45,887
Dividends on preference shares(9,189) —
 —
 —
 —
 (9,189)
Net income available attributable to RenaissanceRe common shareholders$36,698
 $2,843
 $869
 $95,142
 $(98,854) $36,698
59

(1)Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations.
(2)
Condensed Consolidating Statement of Operations for the three months ended June 30, 2019RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)		RenaissanceRe Finance Inc. (Subsidiary Issuer)Other
RenaissanceRe
Holdings Ltd.
Subsidiaries and
Eliminations
(Non-guarantor
Subsidiaries) 
(1)		Consolidating
Adjustments 
(2)		RenaissanceRe
Consolidated
Revenues
Net premiums earned$—  $—  $911,502  $—  $911,502  
Net investment income10,676  2,017  118,244  (12,349) 118,588  
Net foreign exchange (losses) gains(6,059) —  15,368  —  9,309  
Equity in earnings of other ventures—  652  6,160  —  6,812  
Other income—  —  922  —  922  
Net realized and unrealized gains on investments4,516  102  186,629  —  191,247  
Total revenues9,133  2,771  1,238,825  (12,349) 1,238,380  
Expenses
Net claims and claim expenses incurred—  —  453,373  —  453,373  
Acquisition expenses—  —  227,482  —  227,482  
Operational expenses2,135  8,607  21,206  27,866  59,814  
Corporate expenses3,842  9  18,084  1,912  23,847  
Interest expense5,693  9,254  587  —  15,534  
Total expenses11,670  17,870  720,732  29,778  780,050  
(Loss) income before equity in net income of subsidiaries and taxes(2,537) (15,099) 518,093  (42,127) 458,330  
Equity in net income of subsidiaries378,726  28,655  1,717  (409,098) —  
Income before taxes376,189  13,556  519,810  (451,225) 458,330  
Income tax benefit (expense)854  1,732  (12,061) —  (9,475) 
Net income377,043  15,288  507,749  (451,225) 448,855  
Net income attributable to redeemable noncontrolling interests—  —  (71,812) —  (71,812) 
Net income attributable to RenaissanceRe377,043  15,288  435,937  (451,225) 377,043  
Dividends on preference shares(9,189) —  —  —  (9,189) 
Net income available to RenaissanceRe common shareholders$367,854  $15,288  $435,937  $(451,225) $367,854  
(1)Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations.
(2) Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments.

Condensed Consolidating Statement of Comprehensive Income for the three months ended June 30, 2019RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)		RenaissanceRe Finance Inc. (Subsidiary Issuer)Other
RenaissanceRe
Holdings Ltd.
Subsidiaries and
Eliminations
(Non-guarantor
Subsidiaries) 
(1)		Consolidating
Adjustments 
(2)		RenaissanceRe
Consolidated
Comprehensive income
Net income$377,043  $15,288  $507,749  $(451,225) $448,855  
Change in net unrealized losses on investments, net of tax—  —  1,309  —  1,309  
Foreign currency translation adjustments, net of tax—  —  (3,708) —  (3,708) 
Comprehensive income377,043  15,288  505,350  (451,225) 446,456  
Net income attributable to redeemable noncontrolling interests—  —  (71,812) —  (71,812) 
Comprehensive income attributable to redeemable noncontrolling interests—  —  (71,812) —  (71,812) 
Comprehensive income attributable to RenaissanceRe$377,043  $15,288  $433,538  $(451,225) $374,644  
(1)Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations.
(2) Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments.

60

Condensed Consolidating Statement of Comprehensive Income for the three months ended September 30, 2019RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)		 RenRe North
America
Holdings Inc.
(Subsidiary
Issuer)		 RenaissanceRe Finance, Inc. (Subsidiary Issuer) Other
RenaissanceRe
Holdings Ltd.
Subsidiaries and
Eliminations
(Non-guarantor
Subsidiaries) 
(1)		 Consolidating
Adjustments 
(2)		 RenaissanceRe
Consolidated
Comprehensive income           
Net income$45,887
 $2,843
 $869
 $157,199
 $(98,854) $107,944
Change in net unrealized gains on investments—
 —
 —
 608
 —
 608
Foreign currency translation adjustments, net of tax—
 —
 —
 8,249
 —
 8,249
Comprehensive income45,887
 2,843
 869
 166,056
 (98,854) 116,801
Net income attributable to redeemable noncontrolling interests—
 —
 —
 (62,057) —
 (62,057)
Comprehensive income attributable to redeemable noncontrolling interests—
 —
 —
 (62,057) —
 (62,057)
Comprehensive income attributable to RenaissanceRe$45,887
 $2,843
 $869
 $103,999
 $(98,854) $54,744
Condensed Consolidating Statement of Operations for the six months ended June 30, 2019RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)		RenaissanceRe
Finance Inc.
(Subsidiary
Issuer)		Other
RenaissanceRe
Holdings Ltd.
Subsidiaries and
Eliminations
(Non-guarantor
Subsidiaries) 
(1)		Consolidating
Adjustments 
(2)		RenaissanceRe
Consolidated
Revenues
Net premiums earned$—  $—  $1,461,530  $—  $1,461,530  
Net investment income18,953  4,077  198,803  (21,151) 200,682  
Net foreign exchange (losses) gains(6,060) —  12,523  —  6,463  
Equity in earnings of other ventures—  1,617  9,856  —  11,473  
Other income—  —  4,093  —  4,093  
Net realized and unrealized gains on investments5,518  211  355,531  —  361,260  
Total revenues18,411  5,905  2,042,336  (21,151) 2,045,501  
Expenses
Net claims and claim expenses incurred—  —  680,408  —  680,408  
Acquisition expenses—  —  351,433  —  351,433  
Operational expenses2,604  20,940  63,826  17,377  104,747  
Corporate expenses42,670  9  16,162  3,795  62,636  
Interest expense7,576  18,506  1,206  —  27,288  
Total expenses52,850  39,455  1,113,035  21,172  1,226,512  
(Loss) income before equity in net income of subsidiaries and taxes(34,439) (33,550) 929,301  (42,323) 818,989  
Equity in net income of subsidiaries693,613  62,187  2,545  (758,345) —  
Income before taxes659,174  28,637  931,846  (800,668) 818,989  
Income tax benefit (expense)775  3,394  (21,175) —  (17,006) 
Net income659,949  32,031  910,671  (800,668) 801,983  
Net income attributable to redeemable noncontrolling interests—  —  (142,034) —  (142,034) 
Net income attributable to RenaissanceRe659,949  32,031  768,637  (800,668) 659,949  
Dividends on preference shares(18,378) —  —  —  (18,378) 
Net income available to RenaissanceRe common shareholders$641,571  $32,031  $768,637  $(800,668) $641,571  
(1)Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations.
(2)Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments.
(1)Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations.
(2) Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments.
Condensed Consolidating Statement of Comprehensive Income for the six months ended June 30, 2019RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)		RenaissanceRe
Finance Inc.
(Subsidiary
Issuer)		Other
RenaissanceRe
Holdings Ltd.
Subsidiaries and
Eliminations
(Non-guarantor
Subsidiaries) 
(1)		Consolidating
Adjustments 
(2)		RenaissanceRe
Consolidated
Comprehensive income
Net income$659,949  $32,031  $910,671  $(800,668) $801,983  
Change in net unrealized losses on investments—  —  1,272  —  1,272  
Foreign currency translation adjustments, net of tax—  —  (3,708) —  (3,708) 
Comprehensive income659,949  32,031  908,235  (800,668) 799,547  
Net income attributable to redeemable noncontrolling interests—  —  (142,034) —  (142,034) 
Comprehensive income attributable to noncontrolling interests—  —  (142,034) —  (142,034) 
Comprehensive income attributable to RenaissanceRe$659,949  $32,031  $766,201  $(800,668) $657,513  
(1)Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations.
(2)Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments.

61


Condensed Consolidating Statement of Cash Flows for the six months ended June 30, 2020RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)		RenaissanceRe Finance Inc. (Subsidiary Issuer)Other
RenaissanceRe
Holdings Ltd.
Subsidiaries and
Eliminations
(Non-guarantor
Subsidiaries) 
(1)		RenaissanceRe
Consolidated
Cash flows provided by (used in) operating activities
Net cash provided by (used in) operating activities$8,180  $(41,978) $890,763  $856,965  
Cash flows (used in) provided by investing activities
Proceeds from sales and maturities of fixed maturity investments trading52,093  30,793  8,257,465  8,340,351  
Purchases of fixed maturity investments trading(220,197) (30,725) (8,698,532) (8,949,454) 
Net purchases of equity investments trading—  —  (45,008) (45,008) 
Net sales (purchases) of short term investments47,098  161,823  (1,199,525) (990,604) 
Net purchases of other investments—  —  (90,010) (90,010) 
Net purchases of investments in other ventures—  —  (1,994) (1,994) 
Return of investment from investments in other ventures—  —  9,157  9,157  
Dividends and return of capital from subsidiaries499,704  101,061  (600,765) —  
Contributions to subsidiaries(1,139,323) —  1,139,323  —  
Due (from) to subsidiary(116,826) 28,669  88,157  —  
Net cash (used in) provided by investing activities(877,451) 291,621  (1,141,732) (1,727,562) 
Cash flows provided by (used in) financing activities
Dividends paid – RenaissanceRe common shares(33,063) —  —  (33,063) 
Dividends paid – preference shares(16,345) —  —  (16,345) 
RenaissanceRe common share issuance, net of expenses1,095,549  —  —  1,095,549  
RenaissanceRe common share repurchases(62,621) —  —  (62,621) 
Redemption of 6.08% Series C preference shares(125,000) —  —  (125,000) 
Repayment of debt—  (250,000) —  (250,000) 
Net third-party redeemable noncontrolling interest share transactions—  —  79,283  79,283  
Taxes paid on withholding shares(10,243) —  —  (10,243) 
Net cash provided by (used in) financing activities848,277  (250,000) 79,283  677,560  
Effect of exchange rate changes on foreign currency cash—  —  (187) (187) 
Net decrease in cash and cash equivalents(20,994) (357) (171,873) (193,224) 
Cash and cash equivalents, beginning of period26,460  8,731  1,343,877  1,379,068  
Cash and cash equivalents, end of period$5,466  $8,374  $1,172,004  $1,185,844  
(1)Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations.
Condensed Consolidating Statement of Operations for
the nine months ended September 30, 2019		RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)		 RenRe North
America
Holdings Inc.
(Subsidiary
Issuer)		 RenaissanceRe Finance Inc. (Subsidiary Issuer) Other
RenaissanceRe
Holdings Ltd.
Subsidiaries and
Eliminations
(Non-guarantor
Subsidiaries) 
(1)		 Consolidating
Adjustments 
(2)		 RenaissanceRe
Consolidated
Revenues           
Net premiums earned$—
 $—
 $—
 $2,368,278
 $—
 $2,368,278
Net investment income29,216
 1,689
 5,983
 308,001
 (33,751) 311,138
Net foreign exchange (losses) gains(20,846) —
 —
 19,034
 —
 (1,812)
Equity in earnings of other ventures—
 —
 2,915
 14,435
 —
 17,350
Other income1,234
 —
 —
 3,875
 —
 5,109
Net realized and unrealized gains on investments7,501
 15,369
 231
 373,485
 —
 396,586
Total revenues17,105
 17,058
 9,129
 3,087,108
 (33,751) 3,096,649
Expenses           
Net claims and claim expenses incurred—
 —
 —
 1,334,928
 —
 1,334,928
Acquisition expenses—
 —
 —
 553,614
 —
 553,614
Operational expenses4,643
 38
 29,958
 98,613
 24,910
 158,162
Corporate expenses49,618
 —
 16
 21,172
 5,674
 76,480
Interest expense13,284
 —
 27,763
 1,821
 —
 42,868
Total expenses67,545
 38
 57,737
 2,010,148
 30,584
 2,166,052
(Loss) income before equity in net income of subsidiaries and taxes(50,440) 17,020
 (48,608) 1,076,960
 (64,335) 930,597
Equity in net income of subsidiaries754,634
 4,001
 76,552
 —
 (835,187) —
Income before taxes704,194
 21,021
 27,944
 1,076,960
 (899,522) 930,597
Income tax benefit (expense)1,642
 (3,472) 4,956
 (23,796) —
 (20,670)
Net income705,836
 17,549
 32,900
 1,053,164
 (899,522) 909,927
Net income attributable to redeemable noncontrolling interests—
 —
 —
 (204,091) —
 (204,091)
Net income attributable to RenaissanceRe705,836
 17,549
 32,900
 849,073
 (899,522) 705,836
Dividends on preference shares(27,567) —
 —
 —
 —
 (27,567)
Net income available to RenaissanceRe common shareholders$678,269
 $17,549
 $32,900
 $849,073
 $(899,522) $678,269
62
(1)Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations.
(2)Includes Parent Guarantor, Subsidiary Guarantor and Subsidiary Issuer consolidating adjustments.

Condensed Consolidating Statement of Comprehensive Income for the nine months ended September 30, 2019RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)		 RenRe North
America
Holdings Inc.
(Subsidiary
Issuer)		 RenaissanceRe Finance Inc. (Subsidiary Issuer) Other
RenaissanceRe
Holdings Ltd.
Subsidiaries and
Eliminations
(Non-guarantor
Subsidiaries) 
(1)		 Consolidating
Adjustments 
(2)		 RenaissanceRe
Consolidated
Comprehensive income           
Net income$705,836
 $17,549
 $32,900
 $1,053,164
 $(899,522) $909,927
Change in net unrealized gains on investments—
 —
 —
 1,880
 —
 1,880
Foreign currency translation adjustments, net of tax—
 —
 —
 4,541
 —
 4,541
Comprehensive income705,836
 17,549
 32,900
 1,059,585
 (899,522) 916,348
Net income attributable to redeemable noncontrolling interests—
 —
 —
 (204,091) —
 (204,091)
Comprehensive income attributable to noncontrolling interests—
 —
 —
 (204,091) —
 (204,091)
Comprehensive income attributable to RenaissanceRe$705,836
 $17,549
 $32,900
 $855,494
 $(899,522) $712,257
(1)Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations.
(2)Includes Parent Guarantor, Subsidiary Guarantor and Subsidiary Issuer consolidating adjustments.



Condensed Consolidating Statement of Operations for
the three months ended September 30, 2018		RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)		 RenRe North
America
Holdings Inc.
(Subsidiary
Issuer)		 RenaissanceRe Finance Inc. (Subsidiary Issuer) Other
RenaissanceRe
Holdings Ltd.
Subsidiaries and
Eliminations
(Non-guarantor
Subsidiaries) 
(1)		 Consolidating
Adjustments 
(2)		 RenaissanceRe
Consolidated
Revenues           
Net premiums earned$—
 $—
 $—
 $531,849
 $—
 $531,849
Net investment income6,542
 539
 1,541
 80,472
 (8,398) 80,696
Net foreign exchange gains (losses)3
 —
 —
 (4,569) —
 (4,566)
Equity in earnings of other ventures—
 —
 290
 7,358
 —
 7,648
Other income—
 —
 —
 497
 —
 497
Net realized and unrealized (losses) gains on investments(176) 4,479
 (73) 9,400
 —
 13,630
Total revenues6,369
 5,018
 1,758
 625,007
 (8,398) 629,754
Expenses           
Net claims and claim expenses incurred—
 —
 —
 410,510
 —
 410,510
Acquisition expenses—
 —
 —
 109,761
 —
 109,761
Operational expenses3,570
 29
 7,493
 42,682
 (13,181) 40,593
Corporate expenses3,778
 —
 —
 3,063
 —
 6,841
Interest expense1,478
 —
 9,257
 2,512
 (1,478) 11,769
Total expenses8,826
 29
 16,750
 568,528
 (14,659) 579,474
(Loss) income before equity in net income of subsidiaries and taxes(2,457) 4,989
 (14,992) 56,479
 6,261
 50,280
Equity in net income of subsidiaries45,130
 2,735
 11,666
 —
 (59,531) —
Income before taxes42,673
 7,724
 (3,326) 56,479
 (53,270) 50,280
Income tax (expense) benefit(284) (1,026) 1,840
 (1,981) —
 (1,451)
Net income (loss)42,389
 6,698
 (1,486) 54,498
 (53,270) 48,829
Net income attributable to redeemable noncontrolling interests—
 —
 —
 (6,440) —
 (6,440)
Net income (loss) attributable to RenaissanceRe42,389
 6,698
 (1,486) 48,058
 (53,270) 42,389
Dividends on preference shares(9,708) —
 —
 —
 —
 (9,708)
Net income (loss) available (attributable) to RenaissanceRe common shareholders$32,681
 $6,698
 $(1,486) $48,058
 $(53,270) $32,681
(1)Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations.
(2)Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments.

Condensed Consolidating Statement of Comprehensive Income (Loss) for the three months ended September 30, 2018RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)		 RenRe North
America
Holdings Inc.
(Subsidiary
Issuer)		 RenaissanceRe Finance Inc. (Subsidiary Issuer) Other
RenaissanceRe
Holdings Ltd.
Subsidiaries and
Eliminations
(Non-guarantor
Subsidiaries) 
(1)		 Consolidating
Adjustments 
(2)		 RenaissanceRe
Consolidated
Comprehensive income (loss)           
Net income (loss)$42,389
 $6,698
 $(1,486) $54,498
 $(53,270) $48,829
Change in net unrealized gains on investments—
 —
 —
 (382) —
 (382)
Comprehensive income (loss)42,389
 6,698
 (1,486) 54,116
 (53,270) 48,447
Net income attributable to redeemable noncontrolling interests—
 —
 —
 (6,440) —
 (6,440)
Comprehensive income attributable to redeemable noncontrolling interests—
 —
 —
 (6,440) —
 (6,440)
Comprehensive income (loss) attributable to RenaissanceRe$42,389
 $6,698
 $(1,486) $47,676
 $(53,270) $42,007
(1)Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations.
(2)Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments.



Condensed Consolidating Statement of Operations for the nine months ended September 30, 2018RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)		 
RenRe
North
America
Holdings
Inc.
(Subsidiary
Issuer)
 
RenaissanceRe
Finance Inc.
(Subsidiary
Issuer)
 Other
RenaissanceRe
Holdings Ltd.
Subsidiaries and
Eliminations
(Non-guarantor
Subsidiaries) 
(1)		 Consolidating
Adjustments 
(2)		 RenaissanceRe
Consolidated
Revenues           
Net premiums earned$—
 $—
 $—
 $1,401,516
 $—
 $1,401,516
Net investment income18,504
 1,629
 3,981
 208,034
 (23,620) 208,528
Net foreign exchange losses(1) —
 —
 (11,495) —
 (11,496)
Equity in earnings of other ventures—
 —
 2,045
 12,286
 —
 14,331
Other income—
 —
 —
 480
 —
 480
Net realized and unrealized (losses) gains on investments(821) 4,906
 (399) (90,101) —
 (86,415)
Total revenues17,682
 6,535
 5,627
 1,520,720
 (23,620) 1,526,944
Expenses           
Net claims and claim expenses incurred—
 —
 —
 642,380
 —
 642,380
Acquisition expenses—
 —
 —
 312,524
 —
 312,524
Operational expenses7,551
 60
 26,737
 113,721
 (28,661) 119,408
Corporate expenses12,498
 —
 7
 9,370
 —
 21,875
Interest expense3,694
 —
 27,763
 7,541
 (3,694) 35,304
Total expenses23,743
 60
 54,507
 1,085,536
 (32,355) 1,131,491
(Loss) income before equity in net income of subsidiaries and taxes(6,061) 6,475
 (48,880) 435,184
 8,735
 395,453
Equity in net income of subsidiaries310,081
 4,285
 29,005
 —
 (343,371) —
Income (loss) before taxes304,020
 10,760
 (19,875) 435,184
 (334,636) 395,453
Income tax (expense) benefit(1,939) (1,273) 5,677
 (5,015) —
 (2,550)
Net income (loss)302,081
 9,487
 (14,198) 430,169
 (334,636) 392,903
Net income attributable to redeemable noncontrolling interests—
 —
 —
 (90,822) —
 (90,822)
Net income (loss) attributable to RenaissanceRe302,081
 9,487
 (14,198) 339,347
 (334,636) 302,081
Dividends on preference shares(20,899) —
 —
 —
 —
 (20,899)
Net income (loss) available (attributable) to RenaissanceRe common shareholders$281,182
 $9,487
 $(14,198) $339,347
 $(334,636) $281,182
(1)Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations.
(2)Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments.
Condensed Consolidating Statement of Comprehensive Income (Loss) for the nine months ended September 30, 2018RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)		 
RenRe
North
America
Holdings
Inc.
(Subsidiary
Issuer)
 
RenaissanceRe
Finance Inc.
(Subsidiary
Issuer)
 Other
RenaissanceRe
Holdings Ltd.
Subsidiaries and
Eliminations
(Non-guarantor
Subsidiaries) 
(1)		 Consolidating
Adjustments 
(2)		 RenaissanceRe
Consolidated
Comprehensive income (loss)           
Net income (loss)$302,081
 $9,487
 $(14,198) $430,169
 $(334,636) $392,903
Change in net unrealized gains on investments—
 —
 —
 (1,707) —
 (1,707)
Comprehensive income (loss)302,081
 9,487
 (14,198) 428,462
 (334,636) 391,196
Net income attributable to redeemable noncontrolling interests—
 —
 —
 (90,822) —
 (90,822)
Comprehensive income attributable to noncontrolling interests—
 —
 —
 (90,822) —
 (90,822)
Comprehensive income (loss) attributable to RenaissanceRe$302,081
 $9,487
 $(14,198) $337,640
 $(334,636) $300,374
(1)Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations.
(2)Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments.



Condensed Consolidating Statement of Cash Flows for the nine months ended September 30, 2019RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)		 RenRe North
America
Holdings Inc.
(Subsidiary
Issuer)		 RenaissanceRe Finance Inc. (Subsidiary Issuer) Other
RenaissanceRe
Holdings Ltd.
Subsidiaries and
Eliminations
(Non-guarantor
Subsidiaries) 
(1)		 
RenaissanceRe
Consolidated
Cash flows (used in) provided by operating activities         
Net cash (used in) provided by operating activities$(381,508) $1,316
 $(30,943) $1,675,567
 $1,264,432
Cash flows provided by (used in) investing activities         
Proceeds from sales and maturities of fixed maturity investments trading277,030
 51,669
 43,746
 12,463,471
 12,835,916
Purchases of fixed maturity investments trading(66,740) (50,549) (15,910) (13,270,512) (13,403,711)
Net purchases of equity investments trading—
 (2,476) —
 (4,461) (6,937)
Net (purchases) sales of short term investments(34,209) 506
 (16,257) (1,312,191) (1,362,151)
Net purchases of other investments—
 —
 —
 (130,476) (130,476)
Net purchases of investments in other ventures—
 —
 —
 (2,341) (2,341)
Return of investment from investments in other ventures—
 —
 —
 11,250
 11,250
Net purchases of other assets—
 —
 —
 (4,108) (4,108)
Dividends and return of capital from subsidiaries855,396
 —
 13,500
 (868,896) —
Contributions to subsidiaries(1,013,916) —
 —
 1,013,916
 —
Due (from) to subsidiary48,444
 (125) (416) (47,903) —
Net purchase of the TMR Group Entities—
 —
 —
 (276,206) (276,206)
Net cash provided by (used in) investing activities66,005
 (975) 24,663
 (2,428,457) (2,338,764)
Cash flows provided by financing activities         
Dividends paid – RenaissanceRe common shares(44,547) —
 —
 —
 (44,547)
Dividends paid – preference shares(27,567) —
 —
 —
 (27,567)
Issuance of debt, net of expenses396,411
 —
 —
 —
 396,411
Net third party redeemable noncontrolling interest share transactions—
 —
 —
 515,952
 515,952
Taxes paid on withholding shares(7,229) —
 —
 —
 (7,229)
Net cash provided by financing activities317,068
 —
 —
 515,952
 833,020
Effect of exchange rate changes on foreign currency cash—
 —
 —
 4,641
 4,641
Net increase (decrease) in cash and cash equivalents1,565
 341
 (6,280) (232,297) (236,671)
Cash and cash equivalents, beginning of period3,534
 3,350
 9,604
 1,091,434
 1,107,922
Cash and cash equivalents, end of period$5,099
 $3,691
 $3,324
 $859,137
 $871,251
(1)Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations.


Condensed Consolidating Statement of Cash Flows for the six months ended June 30, 2019Condensed Consolidating Statement of Cash Flows for the six months ended June 30, 2019RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)		RenaissanceRe
Finance Inc.
(Subsidiary
Issuer)		Other
RenaissanceRe
Holdings Ltd.
Subsidiaries
and
Eliminations
(Non-guarantor
Subsidiaries)
(1)		RenaissanceRe
Consolidated
Cash flows (used in) provided by operating activitiesCash flows (used in) provided by operating activities
Net cash (used in) provided by operating activitiesNet cash (used in) provided by operating activities$(359,699) $(33,592) $1,177,260  $783,969  
Cash flows provided by (used in) investing activitiesCash flows provided by (used in) investing activities
Proceeds from sales and maturities of fixed maturity investments tradingProceeds from sales and maturities of fixed maturity investments trading277,030  43,746  9,084,572  9,405,348  
Purchases of fixed maturity investments tradingPurchases of fixed maturity investments trading(36,905) (14,098) (9,178,997) (9,230,000) 
Condensed Consolidating Statement of Cash Flows for the nine months ended September 30, 2018RenaissanceRe
Holdings Ltd.
(Parent
Guarantor)		 
RenRe
North
America
Holdings
Inc.
(Subsidiary
Issuer)
 
RenaissanceRe
Finance Inc.
(Subsidiary
Issuer)
 
Other
RenaissanceRe
Holdings Ltd.
Subsidiaries
and
Eliminations
(Non-guarantor
Subsidiaries)
(1)
 
RenaissanceRe
Consolidated
Cash flows (used in) provided by operating activities         
Net cash (used in) provided by operating activities$(5,869) $1,496
 $16,194
 $876,705
 $888,526
Cash flows used in investing activities         
Proceeds from sales and maturities of fixed maturity investments trading384,818
 91,118
 45,459
 7,700,086
 8,221,481
Purchases of fixed maturity investments trading(281,994) (65,988) (20,806) (8,323,900) (8,692,688)
Net (purchases) sales of equity investments trading—
 (624) —
 16,114
 15,490
Net sales of equity investments tradingNet sales of equity investments trading—  —  125,597  125,597  
Net sales (purchases) of short term investments85,598
 360
 (9,206) (1,542,203) (1,465,451)Net sales (purchases) of short term investments4,212  (8,544) (1,968,385) (1,972,717) 
Net purchases of other investments—
 —
 —
 (130,649) (130,649)Net purchases of other investments—  —  (133,889) (133,889) 
Net purchases of investments in other ventures—
 —
 —
 (20,952) (20,952)
Net purchases of investment in other ventureNet purchases of investment in other venture—  —  (2,249) (2,249) 
Net purchases of other assetsNet purchases of other assets—  —  (4,108) (4,108) 
Return of investment from investment in other ventures—
 —
 —
 8,464
 8,464
Return of investment from investment in other ventures—  —  11,250  11,250  
Dividends and return of capital from subsidiaries511,098
 —
 —
 (511,098) —
Dividends and return of capital from subsidiaries587,264  —  (587,264) —  
Contributions to subsidiaries(686,106) (16,847) (65,000) 767,953
 —
Contributions to subsidiaries(850,807) —  850,807  —  
Due (from) to subsidiaries(193,249) (9,598) 36,262
 166,585
 —
Net cash used in investing activities(179,835) (1,579) (13,291) (1,869,600) (2,064,305)
Due to (from) subsidiariesDue to (from) subsidiaries39,056  7,340  (46,396) —  
Net purchase of TMRNet purchase of TMR—  —  (276,206) (276,206) 
Net cash provided by (used in) investing activitiesNet cash provided by (used in) investing activities19,850  28,444  (2,125,268) (2,076,974) 
Cash flows provided by financing activities         Cash flows provided by financing activities
Dividends paid – RenaissanceRe common shares(39,611) —
 —
 —
 (39,611)Dividends paid – RenaissanceRe common shares(29,439) —  —  (29,439) 
Dividends paid – preference shares(20,899) —
 —
 —
 (20,899)Dividends paid – preference shares(18,378) —  —  (18,378) 
Issuance of preference shares, net of expenses242,371
 —
 —
 —
 242,371
Net third party redeemable noncontrolling interest share transactions—
 —
 —
 96,021
 96,021
Issuance of debt, net of expensesIssuance of debt, net of expenses396,411  —  —  396,411  
Net third-party redeemable noncontrolling interest share transactionsNet third-party redeemable noncontrolling interest share transactions—  —  514,732  514,732  
Taxes paid on withholding shares(7,079) —
 —
 —
 (7,079)Taxes paid on withholding shares(7,083) —  —  (7,083) 
Net cash provided by financing activities174,782
 —
 —
 96,021
 270,803
Net cash provided by financing activities341,511  —  514,732  856,243  
Effect of exchange rate changes on foreign currency cash—
 —
 —
 (3,575) (3,575)Effect of exchange rate changes on foreign currency cash—  —  (534) (534) 
Net (decrease) increase in cash and cash equivalents(10,922) (83) 2,903
 (900,449) (908,551)
Net increase (decrease) in cash and cash equivalentsNet increase (decrease) in cash and cash equivalents1,662  (5,148) (433,810) (437,296) 
Cash and cash equivalents, beginning of period14,656
 139
 1,469
 1,345,328
 1,361,592
Cash and cash equivalents, beginning of period3,534  9,604  1,094,784  1,107,922  
Cash and cash equivalents, end of period$3,734
 $56
 $4,372
 $444,879
 $453,041
Cash and cash equivalents, end of period$5,196  $4,456  $660,974  $670,626  
(1) Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations.


63

NOTE 17.SUBSEQUENT EVENTSEVENT
Typhoon Hagibis
TheOn July 25, 2020, Hurricane Hannah made landfall in Texas. While the Company currently estimates, on a preliminary basis, thatdoes not expect to incur significant or material losses from Typhoon Hagibis will have an estimated net negative impact on net income (loss) available (attributable)related to RenaissanceRe common shareholders of approximately $175 million on its fourth quarter 2019 results of operations.
Net negative impact includesthis event, due to the sum of estimates of net claims and claim expenses incurred, earned reinstatement premiums assumed and ceded, lost profit commissions and redeemable noncontrolling interest. The Company’s estimates of net negative impact are based on a review of its potential exposures, preliminary discussions with certain counterparties and catastrophe modeling techniques. The Company’s actual net negative impact, both individually and in the aggregate, may vary from these estimates, perhaps materially.
Meaningfulrecent occurrence, meaningful uncertainty regarding the estimates and the nature and extent of the losses from this event remains, driven by the magnitude and recent occurrence of the event, the geographic area in which the event occurred, relatively limited claims data received to date, the contingent nature of business interruption and other exposures, potential uncertainties relating to reinsurance recoveries and other factors inherent in loss estimation, among other things. Updated estimates related to this event will be reflected in RenaissanceRe’s fourth quarter 2019 results of operations, when reported, and changes in these estimates will be recorded in the period in which they occur.
Other Fourth Quarter 2019 Catastrophe Events
Other catastrophe events in the fourth quarter of 2019, including the ongoing wildfires in California and the tornadoes in North Texas in October 2019, may have an impact on the Company’s financial results. The wildfires in California, including the Kincade Fire in Sonoma County and the Getty and Tick Fires in Los Angeles County, have already forced widespread evacuations and caused extensive power outages. The Company’s assessment of the impact from these other catastrophe events remains at a very preliminary stage. It is difficult at this time to provide an accurate estimate of the financial impact of these events as a result of the ongoing nature of the wildfires and the preliminary nature of the information available and provided thus far by industry participants, among other factors.

Hurricane Hannah remains.

64

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is a discussion and analysis of our results of operations for the three and ninesix months ended SeptemberJune 30, 20192020 and 2018,2019, respectively, as well as our liquidity and capital resources at SeptemberJune 30, 2019.2020. 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, 2018.2019.
On March 22, 2019, we acquired the TMR Group Entities, including RenaissanceRe Europe AG (formerly known as Tokio Millennium Re AG) (“RenaissanceRe UKEurope”), RenaissanceRe (UK) Limited (formerly known as Tokio Millennium Re (UK) Limited) (“RenaissanceRe UK”), and their respective subsidiaries pursuant to the TMR Stock Purchase Agreement that we entered into on October 30, 2018. As a result of the acquisition, each of the TMR Group Entities became(collectively, “TMR”), and our wholly owned subsidiary. We accounted for the acquisition of the TMR Group Entities under the acquisition method of accounting in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic Business Combinations.
Our results of operations and financial condition for include TMR from the acquisition date. The three and nine months ended SeptemberJune 30, 2019, include was the first full period that reflected the results of TMR Group Entities foron the period from March 22, 2019 through September 30, 2019.Company’s results of operations. The following discussion and analysis of our results of operations for the three and ninesix months ended SeptemberJune 30, 2019,2020 compared to the three and ninesix months ended September 30, 2018, as well as our liquidity and capital resources at SeptemberJune 30, 2019 should be read in that context. In addition, the results of operations for the three and nine months ended September 30, 2019 and financial condition at September 30, 2019 may not be reflective of the ultimate ongoing business of the combined entities.
Refer to “Note 3. Acquisition of Tokio Millennium Re” in our “Notes to the Consolidated Financial Statements” included in our Form 10-K for the year ended December 31, 2019 for additional information with respect to the acquisition of the TMR Group Entities.TMR.
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 TO MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Page
OVERVIEW
66
SUMMARY OF CRITICAL ACCOUNTING ESTIMATES
68
SUMMARY RESULTS OF OPERATIONS
69
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
86
Financial Condition
86
Liquidity and Cash Flows
87
Capital Resources
91
Reserve for Claims and Claim Expenses
93
Investments
93
Ratings
95
EFFECTS OF INFLATION
96
OFF-BALANCE SHEET AND SPECIAL PURPOSE ENTITY ARRANGEMENTS
96
CONTRACTUAL OBLIGATIONS
96
CURRENT OUTLOOK
96
OVERVIEW
RenaissanceRe is a global provider of reinsurance and insurance. We provide property, casualty and specialty reinsurance and certain insurance solutions to customers, principally through intermediaries. Established in 1993, we have offices in Bermuda, Australia, Ireland, Singapore, Switzerland, the United Kingdom (the “U.K.”)U.K. and the U.S. Our operating subsidiaries include Renaissance Reinsurance, Renaissance Reinsurance U.S. Inc. (“Renaissance Reinsurance U.S.”), RenaissanceRe Specialty U.S. Ltd., Renaissance Reinsurance (“RenaissanceRe Specialty U.S.”), RenaissanceRe Europe, RenaissanceRe UK, Renaissance Reinsurance of Europe Unlimited Company (“Renaissance Reinsurance of Europe”) and RenaissanceRe Syndicate 1458.1458 (“Syndicate 1458”). We also underwrite reinsurance on behalf of joint ventures, including DaVinci Reinsurance Ltd. (“DaVinci”), Fibonacci Re,Reinsurance Ltd. ("Fibonacci Re"), Top Layer Re,Reinsurance Ltd. (“Top Layer Re”), Upsilon RFO Re Ltd. (“Upsilon RFO”) and Vermeer.Vermeer Reinsurance Ltd. (“Vermeer”). In addition, through RenaissanceRe Medici Fund Ltd. (“Medici”), we invest in various insurance basedinsurance-based investment instruments that have returns primarily tied to property catastrophe risk. We also pursue a number of other opportunities through our ventures unit, which has responsibility for creating and managing our joint ventures, executing customized reinsurance transactions to assume or cede risk and managing certain strategic investments directed at classes of risk other than catastrophe reinsurance.
We aspire to be the world’s best underwriter by matching well-structured risks with efficient sources of capital and our mission is to produce superior returns for our shareholders over the long term. We seek to accomplish these goals by being a trusted, long-term partner to our customers for assessing and managing risk, delivering responsive and innovative solutions, leveraging our core capabilities of risk assessment and information management, investing in these core capabilities in order to serve our customers across themarket cycles, that have historically characterized our markets and keeping our promises. Our strategy focuses on


superior risk selection, superior customer relationships and superior capital management. We provide value to our customers and joint venture partners in the form of financial security, innovative products, and responsive service. We are known as a leader in paying valid claims promptly. We principally measure our financial success through long-term growth in tangible book value per common share plus the change in accumulated dividends, which we believe is the most appropriate measure of our financial performance, and in respect of which we believe we have delivered superior performance over time.
Our core products include property, casualty and specialty reinsurance, and certain insurance products principally distributed through intermediaries, with whom we seek to cultivatehave cultivated strong long-term relationships. We believe we have been one of the world’s leading providers of catastrophe reinsurance since our founding. In recent years, through the strategic execution of a number ofseveral initiatives, including organic growth and acquisitions, we have expanded and diversified our casualty and specialty platform and products and believe we are a leader in certain casualty and specialty lines of business. We have determined our business consists of the following reportable segments: (1) Property, which is comprised of catastrophe and other property reinsurance and insurance written on behalf of our operating subsidiaries and certain joint
66

ventures managed by our ventures unit, and (2) Casualty and Specialty, which is comprised of casualty and specialty reinsurance and insurance written on behalf of our operating subsidiaries and certain joint ventures managed by our ventures unit. We also pursue a number of other opportunities through our ventures unit, which has responsibility for creating and managing our joint ventures, executing customized reinsurance transactions to assume or cede risk, and managing certain strategic investments directed at classes of risk other than catastrophe reinsurance. From time to time we consider diversification into new ventures, either through organic growth, the formation of new joint ventures, or the acquisition of, or the investment in, other companies or books of business of other companies.
To best serve our clients in the places they do business, we have operating subsidiaries, branches, joint ventures and underwriting platforms around the world, including DaVinci, Fibonacci Re, Renaissance Reinsurance, Top Layer Re, Upsilon RFO and Vermeer in Bermuda, Renaissance Reinsurance U.S. in the U.S., Syndicate 1458 in the U.K. and RenaissanceRe Europe in Switzerland, withwhich has branches in Australia, Bermuda, the U.K. and the U.S. We write property and casualty and specialty reinsurance through our wholly owned operating subsidiaries, joint ventures and Syndicate 1458 and certain insurance products primarily through Syndicate 1458. Syndicate 1458 provides us with access to Lloyd’s extensive distribution network and worldwide licenses and also writes business through delegated authority arrangements. The underwriting results of our operating subsidiaries and underwriting platforms are included in our Property and Casualty and Specialty segment results as appropriate.
Since 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 such 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. 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. We view our exposure to casualty and specialty lines of business as an efficient use of capital given these risks are generally less correlated with our property lines of business. This has allowed 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 a number ofseveral jurisdictions and may create additional risk bearing vehicles or enter into additional jurisdictions in the future. In addition, our differentiated strategy and capabilitycapabilities 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 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) fees and other income received from our joint ventures, 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
67

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 managed by our ventures unit, and (2) Casualty and Specialty, which is comprised of casualty and specialty reinsurance and insurance written on behalf of our operating subsidiaries and certain joint ventures managed by our ventures unit. 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, certain expenses related to acquisitions and the remnants of our former Bermuda-based insurance operations. The results of operations of the TMR Group Entities from March 22, 2019, through September 30, 2019, are reflected in the Company’s existing reportable segments for the three and nine months ended September 30, 2019.
Ventures
We pursue a number of other opportunities through our ventures unit, which has responsibility for creating and managing our joint ventures, executing customized reinsurance transactions to assume or cede risk and managing certain strategic investments directed at classes of risk other than catastrophe reinsurance.
New Business
From time to time we consider diversification into new ventures, either through organic growth, the formation of new joint ventures, or the acquisition of or the investment in other companies or books of business of other companies. This potential diversification includes opportunities to write targeted, additional classes of risk-exposed business, both directly for our own account and through new joint venture opportunities. We also regularly evaluate potential strategic opportunities we believe might utilize our skills, capabilities, proprietary technology and relationships to support possible expansion into further risk-related coverages, services and products. Generally, we focus on underwriting or trading risks where we believe reasonably sufficient data is available and our analytical abilities provide us with a competitive advantage, in order for us to seek to model estimated probabilities of losses and returns in respect of our then current portfolio of risks.
We regularly review potential strategic transactions that might improve our portfolio of business, enhance or focus our strategies, expand our distribution or capabilities, or provide other benefits. In evaluating potential new ventures or investments, we generally seek an attractive estimated return on equity, the ability to develop or capitalize on a competitive advantage, and opportunities which we believe will not detract from our core operations. We believe that our ability to attract investment and operational opportunities is


supported by our strong reputation and financial resources, and by the capabilities and track record of our ventures unit.
SUMMARY OF CRITICAL ACCOUNTING ESTIMATES
Our critical accounting estimates include “Claims and Claim Expense Reserves”,Reserves,” “Premiums and Related Expenses”,Expenses,” “Reinsurance Recoverables”,Recoverables,” “Fair Value Measurements and Impairments” and “Income Taxes”,Taxes,” and are discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K for the year ended December 31, 2018.2019. There have been no material changes to our critical accounting estimates as disclosed in our Form 10-K for the year ended December 31, 2018.
2019.

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SUMMARY OF RESULTS OF OPERATIONS
Below is a discussion of the results of operations for the thirdsecond quarter of 2019,2020, compared to the thirdsecond quarter of 2018.2019.
Three months ended June 30,20202019Change
(in thousands, except per share amounts and percentages)   
Statement of operations highlights
Gross premiums written$1,701,872  $1,476,908  $224,964  
Net premiums written$1,180,803  $1,022,965  $157,838  
Net premiums earned$1,010,096  $911,502  $98,594  
Net claims and claim expenses incurred510,272  453,373  56,899  
Acquisition expenses233,610  227,482  6,128  
Operational expenses49,077  59,814  (10,737) 
Underwriting income$217,137  $170,833  $46,304  
Net investment income$89,305  $118,588  $(29,283) 
Net realized and unrealized gains on investments448,390  191,247  257,143  
Total investment result$537,695  $309,835  $227,860  
Net income$701,862  $448,855  $253,007  
Net income available to RenaissanceRe common shareholders$575,845  $367,854  $207,991  
Net income available to RenaissanceRe common shareholders per common share – diluted$12.63  $8.35  $4.28  
Dividends per common share$0.35  $0.34  $0.01  
Key ratios
Net claims and claim expense ratio – current accident year52.0 %49.7 %2.3 %
Net claims and claim expense ratio – prior accident years(1.5)%— %(1.5)%
Net claims and claim expense ratio – calendar year50.5 %49.7 %0.8 %
Underwriting expense ratio28.0 %31.6 %(3.6)%
Combined ratio78.5 %81.3 %(2.8)%
Return on average common equity - annualized38.5 %28.9 %9.6 %
Book valueJune 30,
2020		March 31,
2020		Change
Book value per common share$134.27  $117.15  $17.12  
Accumulated dividends per common share21.38  21.03  0.35  
Book value per common share plus accumulated dividends$155.65  $138.18  $17.47  
Change in book value per common share plus change in accumulated dividends14.9 %
        
 Three months ended September 30,2019 2018 Change 
 (in thousands, except per share amounts and percentages)      
 Statement of operations highlights      
 Gross premiums written$861,068
 $625,677
 $235,391
 
 Net premiums written$704,130
 $453,255
 $250,875
 
 Net premiums earned$906,748
 $531,849
 $374,899
 
 Net claims and claim expenses incurred654,520
 410,510
 244,010
 
 Acquisition expenses202,181
 109,761
 92,420
 
 Operational expenses53,415
 40,593
 12,822
 
 Underwriting loss$(3,368) $(29,015) $25,647
 
        
 Net investment income$113,844
 $80,696
 $33,148
 
 Net realized and unrealized gains on investments31,938
 13,630
 18,308
 
 Total investment result$145,782
 $94,326
 $51,456
 
        
 Net income$107,944
 $48,829
 $59,115
 
 Net income available to RenaissanceRe common shareholders$36,698
 $32,681
 $4,017
 
        
 Net income available to RenaissanceRe common shareholders per common share – diluted$0.83
 $0.82
 $0.01
 
 Dividends per common share$0.34
 $0.33
 $0.01
 
        
 Key ratios      
 Net claims and claim expense ratio – current accident year73.3 % 79.0 % (5.7)% 
 Net claims and claim expense ratio – prior accident years(1.1)% (1.8)% 0.7 % 
 Net claims and claim expense ratio – calendar year72.2 % 77.2 % (5.0)% 
 Underwriting expense ratio28.2 % 28.3 % (0.1)% 
 Combined ratio100.4 % 105.5 % (5.1)% 
        
 Return on average common equity - annualized2.8 % 3.1 % (0.3)% 
        
 Book valueSeptember 30,
2019		 June 30,
2019		 Change 
 Book value per common share$120.07
 $119.17
 $0.90
 
 Accumulated dividends per common share20.34
 20.00
 0.34
 
 Book value per common share plus accumulated dividends$140.41
 $139.17
 $1.24
 
 Change in book value per common share plus change in accumulated dividends1.0 %     
        
Net income available to RenaissanceRe common shareholders was $36.7$575.8 million in the thirdsecond quarter of 2019,2020, compared to $32.7net income available to RenaissanceRe common shareholders of $367.9 million in the thirdsecond quarter of 2018,2019, an increase of $4.0$208.0 million. As a result of our net income available to RenaissanceRe common shareholders in the thirdsecond quarter of 2019,2020, we generated an annualized return on average common equity of 2.8%38.5% and our book value per common share increased from $119.17$117.15 at March 31, 2020 to $134.27 at June 30, 2019 to $120.07 at September 30, 2019,2020, a 1.0%14.9% increase, after considering the change in accumulated dividends paid to our common shareholders.
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The most significant events affecting our financial performance during the thirdsecond quarter of 2019,2020, on a comparative basis to the thirdsecond quarter of 20182019, include:
•Underwriting Results - we generated underwriting income of $217.1 million and a combined ratio of 78.5% in the second quarter of 2020, compared to $170.8 million and 81.3%, include:
•
TMR Group Entities - the second quarter of 2019 was the first quarter that reflected the results of the TMR Group Entities in our results of operations. As such, our results of operations for the third quarter of 2019, compared to the third quarter of 2018, should be viewed in that context;
•
Impact of Catastrophe Events - we had a net negative impact on our net income available to RenaissanceRe common shareholders of $154.9 million from Hurricane Dorian and Typhoon Faxai (collectively, the “Q3 2019 Catastrophe Events”) in the third quarter of 2019, compared to the third quarter of 2018 which had a net negative impact of $151.9 million from Typhoons Jebi, Mangkhut and Trami, Hurricane Florence and the wildfires in California during the third quarter of 2018 (collectively, the “Q3 2018 Catastrophe Events”);
•
Underwriting Results - we incurred an underwriting loss of $3.4 million and a combined ratio of 100.4% in the third quarter of 2019, compared to an underwriting loss of $29.0 million and a combined ratio of 105.5% in the third quarter of 2018. Our underwriting loss in the third quarter of 2019 was comprised of our Property segment, which incurred an underwriting loss of $7.7 million and had a combined ratio of 101.7%, partially offset by our Casualty and Specialty segment, which generated underwriting income of $4.5 million and a combined ratio of 99.0%. In comparison, our underwriting loss in the third quarter of 2018 was comprised of our Property segment, which incurred an underwriting loss of $43.9 million, partially offset by our Casualty and Specialty segment, which generated underwriting income of $14.9 million;
respectively in the second quarter of 2019. Our underwriting resultsincome in the thirdsecond quarter of 2020 was comprised of our Property segment, which generated underwriting income of $200.6 million and had a combined ratio of 59.1%, and our Casualty and Specialty segment, which generated underwriting income of $16.5 million and had a combined ratio of 96.8%. In comparison, our underwriting income in the second quarter of 2019 were principally impacted by the Q3 2019 Catastrophe Events, was comprised of our Property segment, which resulted in angenerated underwriting lossincome of $181.9$151.7 million and added 20.6 percentage pointsunderwriting income of $19.0 million in our Casualty and Specialty segment;
•Gross Premiums Written - our gross premiums written increased by $225.0 million, or 15.2%, to $1.7 billion, in the second quarter of 2020, compared to the combined ratio. The thirdsecond quarter of 2018 included the impacts2019. This was comprised of an increase of $203.3 million in our Property segment and an increase of $21.6 million in our Casualty and Specialty segment, driven by growth from existing relationships, rate improvements and new opportunities across a number of the Q3 2018 Catastrophe Events, which resulted in anCompany’s underwriting loss of $178.0 million and added 34.4 percentage points to the combined ratio;platforms;
•
Gross Premiums Written - our gross premiums written increased by $235.4 million, or 37.6%, to $861.1 million, in the third quarter of 2019, compared to the third quarter of 2018. This was comprised of an increase of $222.4 million in our Casualty and Specialty segment and an increase of $13.0 million in our Property segment, primarily driven by growth from existing relationships and new opportunities across a number our underwriting platforms, as well as the impact of the acquisition of the TMR Group Entities;
•
Investment Results - our total investment result, which includes the sum of net investment income and net realized and unrealized gains on investments, was a gain of $145.8 million in the third quarter of 2019, compared to a gain of $94.3 million in the third quarter of 2018, an increase of $51.5 million. The increase in the total investment result was principally due to higher returns on our portfolios of fixed maturity and short term investments, catastrophe bonds and investments-related derivatives, partially offset by net realized and unrealized losses on our portfolio of equity investments. Also driving the investment result for the third quarter of 2019 was higher average invested assets, primarily resulting from the acquisition of the TMR Group Entities, combined with capital raised during the second quarter of 2019 in certain of our consolidated third-party capital vehicles, including DaVinciRe, Upsilon RFO, Vermeer and Medici, and the subsequent investment of those funds as part of our consolidated investment portfolio; and
•
Net Income Attributable to Redeemable Noncontrolling Interests - our net income attributable to redeemable noncontrolling interests was $62.1 million in the third quarter of 2019, compared to $6.4 million in the third quarter of 2018. The increase was primarily driven by higher net income from DaVinciRe and an increase in net investment income from Medici, combined with the results of operations of Vermeer being included in net income attributable to redeemable noncontrolling interests in the third quarter of 2019.
Net Negative Impact
Net negative impact includes the sum of estimatesnet investment income and net realized and unrealized gains on investments, was a gain of $537.7 million in the second quarter of 2020, compared to a gain of $309.8 million in the second quarter of 2019, an increase of $227.9 million. The primary driver of the total investment result in the second quarter of 2020 was net claimsrealized and claim expenses incurred, earned reinstatement premiums assumedunrealized gains on investments of $448.4 million principally within our fixed maturity and ceded, lost profit commissions andequity investments trading portfolios;
•Net Income Attributable to Redeemable Noncontrolling Interests - our net income attributable to redeemable noncontrolling interest. The Company’s estimates of net negative impact are based on a review of its potential exposures, preliminary discussions with certain counterparties and catastrophe modeling techniques. The Company’s actual net negative impact, both individually andinterests was $118.7 million in the aggregate, may vary from these estimates, perhaps materially. Changes in these estimates will be recordedsecond quarter of 2020, compared to $71.8 million in the periodsecond quarter of 2019. The increase was primarily driven by growth and improved performance of DaVinciRe, Medici and Vermeer; and
•Common Share Offering - on June 5, 2020, we issued 6,325,000 of our common shares in which they occur.an underwritten public offering at a public offering price of $166.00 per share. Concurrently with the public offering, we raised $75.0 million through the issuance of 451,807 of our common shares at a price of $166.00 per share to State Farm Mutual Automobile Insurance Company, one of our existing stockholders, in a private placement. The total net proceeds from the offerings were $1.1 billion.

COVID-19 Pandemic

Meaningful uncertainty regardingIn late 2019 an outbreak of a novel strain of coronavirus originated in China and has since spread globally. In January 2020, the estimatesWorld Health Organization declared the outbreak a global health emergency, and on March 11, 2020, the nature and extentWorld Health Organization declared the COVID-19 outbreak a pandemic. It is not yet possible to give an estimate of all of the losses from these events remains, driven byCompany’s potential reinsurance, insurance or investment exposures, or any other effects that the magnitudeCOVID-19 pandemic may have on our results of operations or financial condition. Due to the ongoing and recent occurrence of each event, the geographic areas in which the events occurred, relatively limited claims data received to date, the contingentrapidly evolving nature of business interruption and other exposures, potential uncertainties relatingthe COVID-19 pandemic, we are continuing to reinsurance recoveries and other factors inherent in loss estimation, among other things.
The financial data below provides additional information detailingevaluate the net negative impact of the Q3 2019 Catastrophe EventsCOVID-19 pandemic on our consolidatedbusiness, operations and financial statements incondition, including our potential loss exposures.
We continue to evaluate industry trends and our potential exposure associated with the third quarter of 2019.
        
 Three months ended September 30, 2019Hurricane Dorian Typhoon Faxai Total Q3 2019 Catastrophe Events 
 (in thousands, except percentages)      
 Net claims and claims expenses incurred$(60,784) $(148,127) $(208,911) 
 Assumed reinstatement premiums earned5,106
 18,332
 23,438
 
 Ceded reinstatement premiums earned(364) (118) (482) 
 Lost profit commissions92
 3,943
 4,035
 
 Net negative impact on underwriting result(55,950) (125,970) (181,920) 
 Redeemable noncontrolling interest - DaVinciRe3,659
 23,335
 26,994
 
 Net negative impact on net income available to RenaissanceRe common shareholders$(52,291) $(102,635) $(154,926) 
 Percentage point impact on consolidated combined ratio6.2
 14.2
 20.6
 
        
 Net negative impact on Property segment underwriting result$(53,378) $(125,540) $(178,918) 
 Net negative impact on Casualty and Specialty segment underwriting result(2,572) (430) (3,002) 
 Net negative impact on underwriting result$(55,950) $(125,970) $(181,920) 
        
The financial data below provides additional information detailingongoing COVID-19 pandemic, and expect historically significant industry losses to emerge over time as the net negativefull impact of the Q3 2018 Catastrophe Eventspandemic and its effects on our consolidated financial statementsthe 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 third quartercontext of 2018.our own portfolio. Our loss estimates represent our best estimate based on currently available information, and actual losses may vary materially from these estimates. Additionally, losses incurred in respect of the COVID-19 pandemic subsequent to June 30, 2020 will be reflected in the periods in which those losses are incurred.
In addition to coverage exposures, volatility in global financial markets, together with low or negative interest rates, reduced liquidity and a continued slowdown in global economic conditions, have adversely impacted, and may adversely 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.
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 Three months ended September 30, 2018Typhoon Jebi Hurricane Florence Other Q3 2018 Catastrophe Events (1) Total Q3 2018 Catastrophe Events 
 (in thousands, except percentages)        
 Net claims and claims expenses incurred$(90,228) $(74,040) $(32,763) $(197,031) 
 Assumed reinstatement premiums earned6,997
 9,067
 866
 16,930
 
 Ceded reinstatement premiums earned—
 (112) —
 (112) 
 Lost profit commissions1,973
 313
 (109) 2,177
 
 Net negative impact on underwriting result(81,258) (64,772) (32,006) (178,036) 
 Redeemable noncontrolling interest - DaVinciRe13,507
 8,593
 3,987
 26,087
 
 Net negative impact on net income available to RenaissanceRe common shareholders$(67,751) $(56,179) $(28,019) $(151,949) 
 Percentage point impact on consolidated combined ratio15.5
 12.3
 6.1
 34.4
 
          
 Net negative impact on Property segment underwriting result$(80,258) $(64,772) $(32,006) $(177,036) 
 Net negative impact on Casualty and Specialty segment underwriting result(1,000) —
 —
 (1,000) 
 Net negative impact on underwriting result$(81,258) $(64,772) $(32,006) $(178,036) 
          
(1)Other Q3 2018 Catastrophe Events includes Typhoons Mangkhut and Trami and the wildfires in California during the third quarter of 2018.


While we believe we have been able to operate effectively with most of our employees working remotely, an extended period of remote work arrangements could strain the Company’s business continuity plans, introduce operational risk, including but not limited to cybersecurity risks, and adversely affect the Company’s ability to manage our business. For additional information see "Current Outlook" and "Part II, Item 1A, Risk Factors."
Underwriting Results by Segment
Property
Below is a summary of the underwriting results and ratios for our Property segment:
        
 Three months ended September 30,2019 2018 Change 
 (in thousands, except percentages)      
 Gross premiums written$314,400
 $301,413
 $12,987
 
 Net premiums written$302,982
 $232,632
 $70,350
 
 Net premiums earned$444,332
 $293,059
 $151,273
 
 Net claims and claim expenses incurred338,260
 265,857
 72,403
 
 Acquisition expenses79,521
 45,524
 33,997
 
 Operational expenses34,238
 25,577
 8,661
 
 Underwriting loss$(7,687) $(43,899) $36,212
 
        
 Net claims and claim expenses incurred – current accident year$345,880
 $268,022
 $77,858
 
 Net claims and claim expenses incurred – prior accident years(7,620) (2,165) (5,455) 
 Net claims and claim expenses incurred – total$338,260
 $265,857
 $72,403
 
        
 Net claims and claim expense ratio – current accident year77.8 % 91.5 % (13.7)% 
 Net claims and claim expense ratio – prior accident years(1.7)% (0.8)% (0.9)% 
 Net claims and claim expense ratio – calendar year76.1 % 90.7 % (14.6)% 
 Underwriting expense ratio25.6 % 24.3 % 1.3 % 
 Combined ratio101.7 % 115.0 % (13.3)% 
        
Three months ended June 30,20202019Change
(in thousands, except percentages)  
Gross premiums written$1,042,536  $839,200  $203,336  
Net premiums written$704,138  $544,115  $160,023  
Net premiums earned$491,116  $425,013  $66,103  
Net claims and claim expenses incurred164,050  146,874  17,176  
Acquisition expenses94,772  89,711  5,061  
Operational expenses31,656  36,764  (5,108) 
Underwriting income$200,638  $151,664  $48,974  
Net claims and claim expenses incurred – current accident year$170,614  $136,111  $34,503  
Net claims and claim expenses incurred – prior accident years(6,564) 10,763  (17,327) 
Net claims and claim expenses incurred – total$164,050  $146,874  $17,176  
Net claims and claim expense ratio – current accident year34.7 %32.0 %2.7 %
Net claims and claim expense ratio – prior accident years(1.3)%2.6 %(3.9)%
Net claims and claim expense ratio – calendar year33.4 %34.6 %(1.2)%
Underwriting expense ratio25.7 %29.7 %(4.0)%
Combined ratio59.1 %64.3 %(5.2)%
Property Gross Premiums Written
In the thirdsecond quarter of 2019,2020, our Property segment gross premiums written increased by $13.0$203.3 million, or 4.3%24.2%, to $314.4 million,$1.0 billion, compared to $301.4 million$0.8 billion in the thirdsecond quarter of 2018.2019.
Gross premiums written in the catastrophe class of business were $102.8$711.8 million in the thirdsecond quarter of 2019, a decrease2020, an increase of $109.6$109.1 million, or 51.6%18.1%, compared to the third quarter of 2018. In the third quarter of 2018, gross premiums written in the catastrophe class of business included $102.3 million associated with certain large transactions, which renewed and were reflected in gross premiums written in the firstsecond quarter of 2019. In addition, gross premiums written in the third quarter of 2019 included $26.4 million of negative premium adjustments related to the business of the TMR third-party capital vehicles. These negative premium adjustments were fully cededThis increase was driven by expanded participation on existing transactions, certain new transactions and are reflected in ceded premiums written, resulting in no impact to our results of operations.rate improvements.
Gross premiums written in the other property class of business were $211.6$330.8 million in the thirdsecond quarter of 2019,2020, an increase of $122.5$94.2 million, or 137.6%39.8%, compared to the thirdsecond quarter of 2018. The2019. This increase in gross premiums written in the other property class of business was primarily driven by growth from existing relationships and new opportunities across a number of the Company’s underwriting platforms, as well as business acquired in connection with the acquisition of the TMR Group Entities.platforms.


Property Ceded Premiums Written
        
 Three months ended September 30,2019 2018 Change 
 (in thousands)      
 Ceded premiums written - Property$11,418
 $68,781
 $(57,363) 
        
Three months ended June 30,20202019Change
(in thousands)
Ceded premiums written - Property$338,398  $295,085  $43,313  
Ceded premiums written in our Property segment were $11.4$338.4 million in the thirdsecond quarter of 2019, a decrease2020, an increase of $57.4$43.3 million, or 83.4%14.7%, compared to the thirdsecond quarter of 2018.2019. The decreaseincrease in ceded premiums written in the third quarter of 2019was principally due to a portioncertain of the gross premiums written in the catastrophe class of
71

business in the third quarter of 2018 related to the large transactions discussednoted above being ceded to third-party investors in ourthe Company’s managed vehicles, during that period. In addition, ceded premiums written in the third quarter of 2019 were impacted by $26.4 million of negative premium adjustments related to the business of the TMR third-party capital vehicles, as discussed above.primarily RenaissanceRe Upsilon Fund Ltd. (“Upsilon Fund”).
Due to the potential volatility of the reinsurance contracts which we sell, we purchase reinsurance to reduce our exposure to large losses and to help manage our risk portfolio. To the extent that appropriately priced coverage is available, we anticipate continued use of retrocessional reinsurance to reduce the impact of large losses on our financial results and to manage our portfolio of risk; however, the buying of ceded reinsurance in our Property segment is based on market opportunities and is not based on placing a specific reinsurance program each year. In addition, in future periods we may utilize the growing market for insurance-linked securities to expand our purchases of retrocessional reinsurance if we find the pricing and terms of such coverages attractive.
Property Underwriting Results
Our Property segment incurred angenerated underwriting lossincome of $7.7$200.6 million in the thirdsecond quarter of 2019,2020, compared to an underwriting loss of $43.9$151.7 million in the thirdsecond quarter of 2018.2019. In the thirdsecond quarter of 2019,2020, our Property segment generated a net claims and claim expense ratio of 76.1%33.4%, an underwriting expense ratio of 25.6%25.7% and a combined ratio of 101.7%59.1%, compared to 90.7%34.6%, 24.3%29.7% and 115.0%64.3%, respectively, in the thirdsecond quarter of 2018.2019.
Principally impacting theThe Property segment underwriting result and combined ratio in the thirdsecond quarter of 2019, were2020 improved principally due to a decrease in the Q3 2019 Catastrophe Events, which resulted in a net negative impactunderwriting expense ratio of 4.0 percentage points compared to the Property segmentsecond quarter of 2019, driven by lower acquisition and operating expense ratios. The decrease in operating expenses was due in part to reduced travel, marketing and office operational expenses as a result of the COVID-19 pandemic. The decrease in the net claims and claim expense ratio was primarily driven by net favorable development on prior accident years net claims and claim expenses of $6.6 million, or 1.3 percentage points, during the second quarter of 2020, resulting from reductions in the estimated ultimate losses associated with a number of small catastrophe events in prior periods. This was partially offset by higher current accident year net claims and claim expenses due to a higher level of attritional losses associated with a larger proportion of the other property class of business being earned in the period compared to the second quarter of 2019. In addition the underwriting result of $178.9 million and added 42.3 percentage points to the Property segment combined ratio. In comparison, the third quarter of 2018 was impacted by losses related to a number of small weather-related catastrophe events that occurred during the Q3 2018 Catastrophe Events, which resulted in a net negative impact on the Property segment underwriting resultsecond quarter of $177.0 million and added 63.2 percentage points to the Property segment combined ratio, partially offset by $52.9 million of underwriting income associated with the large reinsurance transactions noted above.2020.

72

Casualty and Specialty Segment
Below is a summary of the underwriting results and ratios for our Casualty and Specialty segment:
        
 Three months ended September 30,2019 2018 Change 
 (in thousands, except percentages)      
 Gross premiums written$546,668
 $324,264
 $222,404
 
 Net premiums written$401,148
 $220,623
 $180,525
 
 Net premiums earned$462,416
 $238,791
 $223,625
 
 Net claims and claim expenses incurred316,099
 144,671
 171,428
 
 Acquisition expenses122,654
 64,238
 58,416
 
 Operational expenses19,198
 14,976
 4,222
 
 Underwriting income$4,465
 $14,906
 $(10,441) 
        
 Net claims and claim expenses incurred – current accident year$319,087
 $151,904
 $167,183
 
 Net claims and claim expenses incurred – prior accident years(2,988) (7,233) 4,245
 
 Net claims and claim expenses incurred – total$316,099
 $144,671
 $171,428
 
        
 Net claims and claim expense ratio – current accident year69.0 % 63.6 % 5.4 % 
 Net claims and claim expense ratio – prior accident years(0.6)% (3.0)% 2.4 % 
 Net claims and claim expense ratio – calendar year68.4 % 60.6 % 7.8 % 
 Underwriting expense ratio30.6 % 33.2 % (2.6)% 
 Combined ratio99.0 % 93.8 % 5.2 % 
        
Three months ended June 30,20202019Change
(in thousands, except percentages)  
Gross premiums written$659,336  $637,708  $21,628  
Net premiums written$476,665  $478,850  $(2,185) 
Net premiums earned$518,980  $486,489  $32,491  
Net claims and claim expenses incurred346,266  306,501  39,765  
Acquisition expenses138,837  137,963  874  
Operational expenses17,422  23,016  (5,594) 
Underwriting income$16,455  $19,009  $(2,554) 
Net claims and claim expenses incurred – current accident year$355,064  $317,029  $38,035  
Net claims and claim expenses incurred – prior accident years(8,798) (10,528) 1,730  
Net claims and claim expenses incurred – total$346,266  $306,501  $39,765  
Net claims and claim expense ratio – current accident year68.4 %65.2 %3.2 %
Net claims and claim expense ratio – prior accident years(1.7)%(2.2)%0.5 %
Net claims and claim expense ratio – calendar year66.7 %63.0 %3.7 %
Underwriting expense ratio30.1 %33.1 %(3.0)%
Combined ratio96.8 %96.1 %0.7 %
Casualty and Specialty Gross Premiums Written
In the thirdsecond quarter of 2019,2020, our Casualty and Specialty segment gross premiums written increased by $222.4$21.6 million, or 68.6%3.4%, to $546.7$659.3 million, compared to $324.3$637.7 million in the thirdsecond quarter of 2018.2019. The increase was primarily due to business acquired in connection with the acquisition of the TMR Group Entities, as well as growth from new and existing relationships and newbusiness opportunities written in the current and prior periods across various classes of business within the segment, substantially offset by non-renewal of a numberportion of the Company’s underwriting platforms.business acquired in connection with the acquisition of TMR.
Casualty and Specialty Ceded Premiums Written
        
 Three months ended September 30,2019 2018 Change 
 (in thousands)      
 Ceded premiums written - Casualty and Specialty$145,520
 $103,641
 $41,879
 
        
Three months ended June 30,20202019Change
(in thousands)
Ceded premiums written - Casualty and Specialty$182,671  $158,858  $23,813  
Ceded premiums written in our Casualty and Specialty segment were $145.5$182.7 million in the thirdsecond quarter of 2019,2020, compared to $103.6$158.9 million in the thirdsecond quarter of 2018,2019, an increase of $41.9$23.8 million. The increase was primarily a result of increased gross premiums written subject to our retrocessional quota share reinsurance programs.
Casualty and Specialty Underwriting Results
Our Casualty and Specialty segment generated underwriting income of $4.5$16.5 million in the thirdsecond quarter of 2019,2020, compared to underwriting income of $14.9$19.0 million in the thirdsecond quarter of 2018.2019. In the thirdsecond quarter of 2019,2020, our Casualty and Specialty segment generated a net claims and claim expense ratio of 68.4%66.7%, an underwriting expense ratio of 30.6%30.1% and a combined ratio of 99.0%96.8% compared to 60.6%63.0%, 33.2%33.1% and 93.8%96.1%, respectively, in the thirdsecond quarter of 2018. The decrease in underwriting income was primarily due to higher than expected losses in the third quarter of 2019, compared to the third quarter of 2018.2019.
During the third quarter of 2019, theThe increase in the Casualty and Specialty segment combined ratio was driven by an increase of 7.8 percentage points in the net claims and claim expense ratio of 3.7 percentage points, was principally the


result of higher current accident year attritional losses combined with less net favorable development on prior accident years net claims and claim expenses in the thirdsecond quarter of 2019,2020 compared to the thirdsecond quarter of 2018. Partially offsetting the increase in the net claims and claim expense ratio was a 2.6 percentage point decrease in the2019 from specialty lines of business. The underwriting expense ratio primarily in
73

the Casualty and Specialty segment decreased 3.0 percentage points, to 30.1%, in the second quarter of 2020 compared to the second quarter of 2019, driven by lower acquisition and operating expense ratios. Operating expenses were impacted by reduced travel, marketing and office operational expenses as a result of a decrease in the operating expense ratio due to improved operating leverage from the business acquired in connection with the acquisition of the TMR Group Entities.COVID-19 pandemic.
Fee Income
        
 Three months ended September 30,2019 2018 Change 
 (in thousands)      
 Management fee income      
 Joint ventures$11,434
 $9,265
 $2,169
 
 Managed funds4,558
 3,260
 1,298
 
 Structured reinsurance products and other8,765
 8,530
 235
 
 Total management fee income24,757
 21,055
 3,702
 
        
 Performance fee income      
 Joint ventures5,278
 853
 4,425
 
 Managed funds1,688
 2,539
 (851) 
 Structured reinsurance products and other275
 (1,568) 1,843
 
 Total performance fee income7,241
 1,824
 5,417
 
 Total fee income$31,998
 $22,879
 $9,119
 
        
Three months ended June 30,20202019Change
(in thousands)
Management fee income
Joint ventures$12,190  $9,519  $2,671  
Structured reinsurance products and other8,739  9,976  (1,237) 
Managed funds6,508  6,467  41  
Total management fee income27,437  25,962  1,475  
Performance fee income
Joint ventures6,165  5,218  947  
Structured reinsurance products and other7,994  8,541  (547) 
Managed funds3,914  470  3,444  
Total performance fee income18,073  14,229  3,844  
Total fee income$45,510  $40,191  $5,319  
TotalThe table above shows total fee income is earned through third-party capital management, as well as various joint ventures and certain structured retrocession agreements to which we are a party. Performance fees are based on the performance of the individual vehicles or products, and may be negative in a particular period if, for example, large losses occur, which can potentially result in no performance fees or the reversal of previously accrued performance fees. Joint ventures include DaVinciRe, Top Layer Re, Vermeer and certain entities investing in Langhorne. Managed funds include Upsilon Fund and Medici. Structured reinsurance products and other includes Fibonacci Re, as well as certain other vehicles and reinsurance contracts which transfer risk to capital. The TMR third-party capital vehicles which we manage in connection with the acquisition of the TMR Group Entities also generate management and performance fee income, though thisincome. This fee income was not material to our results of operations for in the thirdthree and six months ended June 30, 2020 and 2019, respectively.
In the second quarter of 2019.
In the third quarter of 20192020, total fee income earned through third-party capital management, various joint ventures and certain structured retrocession agreements to which we are a party increased $9.1$5.3 million, to $32.0$45.5 million, compared to $22.9$40.2 million in the thirdsecond quarter of 2018,2019, primarily driven by improved underlying performance, combined with an increase in the dollar value of capital being managed.managed combined with improved underlying performance. Of the $45.5 million in total fee income earned through third-party capital management in the second quarter of 2020, $25.6 million was recorded through redeemable noncontrolling interest and $19.9 million was recorded through underwriting income as a reduction to operating expenses and acquisition expenses (2019 - $18.1 million and $22.1 million, respectively).
In addition to the fee income earned through third-party capital management, various joint ventures and certain structured retrocession agreements to which we are a party, as detailed in the table above, we also earn fee income on certain other underwriting-related activities. These fees, in the aggregate, are recorded as a reduction to operating expenses or acquisition expenses, as applicable. The total fees, as described above and including fee income earned on certain other underwriting-related activities, earned by us in the second quarter of 2020 that were recorded as a reduction to operating expenses or acquisition expenses were $28.5 million and $5.8 million, respectively, resulting in a reduction to the combined ratio of 3.4% (2019 - $23.1 million, $7.7 million and 3.4%, respectively).
74

Net Investment Income
        
 Three months ended September 30,2019 2018 Change 
 (in thousands)      
 Fixed maturity investments$82,977
 $55,725
 $27,252
 
 Short term investments15,061
 9,403
 5,658
 
 Equity investments trading1,326
 903
 423
 
 Other investments      
 Private equity investments(4,597) 8,723
 (13,320) 
 Other22,538
 8,665
 13,873
 
 Cash and cash equivalents1,978
 1,104
 874
 
  119,283
 84,523
 34,760
 
 Investment expenses(5,439) (3,827) (1,612) 
 Net investment income$113,844
 $80,696
 $33,148
 
        
Three months ended June 30,20202019Change
(in thousands)  
Fixed maturity investments trading$69,943  $88,106  $(18,163) 
Short term investments6,049  17,807  (11,758) 
Equity investments trading1,666  916  750  
Other investments
Catastrophe bonds13,519  11,781  1,738  
Other1,107  1,914  (807) 
Cash and cash equivalents837  2,306  (1,469) 
 93,121  122,830  (29,709) 
Investment expenses(3,816) (4,242) 426  
Net investment income$89,305  $118,588  $(29,283) 


Net investment income was $113.8$89.3 million in the thirdsecond quarter of 2019,2020, compared to $80.7$118.6 million in the thirdsecond quarter of 2018, an increase2019, a decrease of $33.1$29.3 million. Impacting our net investment income for the thirdsecond quarter of 2019 was higher2020 were lower returns in our fixed maturity and short term investment and catastrophe bond portfolios, partially offset byinvestments, primarily as a result of lower returnyields on our portfolio of private equity investments. Also impacting net investment income was higher average invested assets, primarily resulting fromthese investments following the acquisition of the TMR Group Entities and additional capital raisedrecent decline in certain of our consolidated third-party capital vehicles.interest rates.
Our private equity and other investment portfolios are accounted for at fair value with the change in fair value recorded in net investment income, which included net unrealized gains of $5.1 million in the third quarter of 2019, compared to unrealized gains of $9.1 million in the third quarter of 2018.
Net Realized and Unrealized Gains on Investments
        
 Three months ended September 30,2019 2018 Change 
 (in thousands)      
 Gross realized gains$34,710
 $5,229
 $29,481
 
 Gross realized losses(4,609) (15,327) 10,718
 
 Net realized gains (losses) on fixed maturity investments30,101
 (10,098) 40,199
 
 Net unrealized gains (losses) on fixed maturity investments trading17,226
 (8,730) 25,956
 
 Net realized and unrealized gains on investments-related derivatives11,134
 2,563
 8,571
 
 Net realized (losses) gains on equity investments trading(72) 21,259
 (21,331) 
 Net unrealized (losses) gains on equity investments trading(26,451) 8,636
 (35,087) 
 Net realized and unrealized gains on investments$31,938
 $13,630
 $18,308
 
        
Three months ended June 30,20202019Change
(in thousands)  
Net realized gains on fixed maturity investments trading105,849  21,295  84,554  
Net unrealized gains on fixed maturity investments trading197,678  121,991  75,687  
Net realized and unrealized gains on fixed maturity investments trading303,527  143,286  160,241  
Net realized and unrealized gains on investments-related derivatives24,372  37,173  (12,801) 
Net realized gains on equity investments trading422  31,899  (31,477) 
Net unrealized gains (losses) on equity investments trading107,896  (18,355) 126,251  
Net realized and unrealized gains on equity investments trading108,318  13,544  94,774  
Net realized and unrealized gains (losses) on other investments - catastrophe bonds4,452  (11,902) 16,354  
Net realized and unrealized gains on other investments - other7,721  9,146  (1,425) 
Net realized and unrealized gains on investments$448,390  $191,247  $257,143  
An important element of ourOur investment portfolio strategy is to seekseeks to preserve capital and provide us with a high level of liquidity. A large majority of our investments are invested in the fixed income markets and, therefore, our realized and unrealized holding gains and losses on investments are highly correlated to fluctuations in interest rates.rates and credit spreads. Therefore, everything else being constant, as interest rates or credit spreads decline, we will tend to have realized and unrealized gains from our investmentfixed maturity investments portfolio, and as interest rates and credit spreads rise, we will tend to have realized and unrealized losses from our investmentfixed maturity investments portfolio.
Net realized and unrealized gains on investments were $31.9$448.4 million in the thirdsecond quarter of 2019,2020, compared to net realized and unrealized gains of $13.6$191.2 million in the thirdsecond quarter of 2018,2019, an increase of $18.3$257.1 million. Principally impacting our net realized and unrealized gains on investments were the improved performances from ournet realized and unrealized gains on fixed maturity investments trading and investments-related derivative portfolios, partially offset by lower performance on our equity investments portfolio.trading, which includes our strategic investments in Essent Group Ltd. and Trupanion Inc., due in part to the market recovery following the recent disruption in global financial markets associated with the COVID-19 pandemic.
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Net Foreign Exchange Losses
(Losses) Gains
        
 Three months ended September 30,2019 2018 Change 
 (in thousands)      
 Net foreign exchange losses$(8,275) $(4,566) $(3,709) 
        
Three months ended June 30,20202019Change
(in thousands)   
Net foreign exchange (losses) gains$(7,195) $9,309  $(16,504) 
Our functional currency is the U.S. dollar. We routinely write a portion of our business in currencies other than U.S. dollars and invest a portion of our cash and investment portfolio in those currencies. In addition, and in connection with the acquisition of the TMR, Group Entities, we acquired certain entities with non-U.S. dollar functional currencies. As a result, we may experience foreign exchange gains and losses in our consolidated financial statements. We are primarily impacted by the foreign currency risk exposures associated with our underwriting operations, investment portfolio, and our operations with non-U.S. dollar functional currencies, and may, from time to time, enter into foreign currency forward and option contracts to minimize the effect of fluctuating foreign currencies on the value of non-U.S. dollar denominated assets and liabilities.

Refer to “Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in our Form 10-K for the year ended December 31, 2019 for additional information related to our exposure to foreign currency risk and “Note 13. Derivative Instruments” in our “Notes to the Consolidated Financial Statements” for additional information related to foreign currency forward and option contracts we have entered into.

Equity in Earnings of Other Ventures
        
 Three months ended September 30,2019 2018 Change 
 (in thousands)      
 Tower Hill Companies$4,068
 $4,629
 $(561) 
 Top Layer Re1,943
 2,170
 (227) 
 Other(134) 849
 (983) 
 Total equity in earnings of other ventures$5,877
 $7,648
 $(1,771) 
        
Three months ended June 30,20202019Change
(in thousands) 
Tower Hill Companies$4,904  $3,953  $951  
Top Layer Re2,510  2,342  168  
Other1,627  517  1,110  
Total equity in earnings of other ventures$9,041  $6,812  $2,229  
Equity in earnings of other ventures primarily represents our pro-rata share of the net income (loss) from our investments in a group of Tower Hill affiliated companies, including Bluegrass Insurance Management, LLC, Tower Hill Claims Service, LLC, Tower Hill Holdings, Inc., Tower Hill Insurance Group, LLC, Tower Hill Insurance Managers, LLC, Tower Hill Re Holdings, Inc., Tower Hill Select Insurance Holdings, Inc., Tower Hill Signature Insurance Holdings, Inc. and Tomoka Re Holdings, Inc. (collectively, the “Tower Hill Companies”) and Top Layer Re, and, except for Top Layer Re, is recorded one quarter in arrears. Top Layer Re is recorded on a current quarter basis. The carrying value of these investments on our consolidated balance sheets, individually or in the aggregate, may differ from the realized value we may ultimately attain, perhaps significantly so. The other category includes our equity investments in a select group of insurance and insurance-related companies.
Equity in earnings of other ventures was $5.9$9.0 million in the thirdsecond quarter of 2019,2020, compared to $7.6$6.8 million in the thirdsecond quarter of 2018, a decrease2019, an increase of $1.8$2.2 million, principally driven by slightly lowerimproved profitability acrossof our equity investments in the Tower Hill Companies and in a select group of insurance and insurance-related companies within the other ventures.category.
Other (Loss) Income
        
 Three months ended September 30,2019 2018 Change 
 (in thousands)      
 Assumed and ceded reinsurance contracts accounted for as derivatives and deposits$(318) $543
 $(861) 
 Other items1,334
 (46) 1,380
 
 Total other income$1,016
 $497
 $519
 
        
Three months ended June 30,20202019Change
(in thousands)  
Assumed and ceded reinsurance contracts accounted for as derivatives and deposits$(1,632) $759  $(2,391) 
Other items431  163  268  
Total other (loss) income$(1,201) $922  $(2,123) 
In the thirdsecond quarter of 2019,2020, we generatedincurred an other loss of $1.2 million, compared to other income of $1.0$0.9 million, compared to $0.5 million in the thirdsecond quarter of 2018, an increase2019, a decrease of $0.5 million.$2.1 million, primarily related to our assumed and ceded reinsurance contracts accounted for as derivatives and deposits.
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Corporate Expenses
        
 Three months ended September 30,2019 2018 Change 
 (in thousands)      
 Corporate expenses$13,844
 $6,841
 $7,003
 
        
Three months ended June 30,20202019Change
(in thousands)  
Corporate expenses$11,898  $23,847  $(11,949) 
Corporate expenses include certain executive, director, legal and consulting expenses, costs for research and development, costs associated with corporate acquisitions, impairment charges related to goodwill and other intangible assets, and other miscellaneous costs, including those associated with operating as a publicly traded company. company, as well as costs incurred in connection with the acquisition of TMR. From time to time, we may revise the allocation of certain expenses between corporate and operating expenses to better reflect the characteristic of the underlying expense.
Corporate expenses increaseddecreased to $13.8$11.9 million in the thirdsecond quarter of 2020, compared to $23.8 million in the second quarter of 2019,, compared to $6.8 million in the third quarter of 2018, primarily due to $4.0$14.5 million of corporate expenses associated with the acquisition of TMR during the TMR Group Entities.second quarter of 2019, compared to $2.1 million in the second quarter of 2020.
Income Tax Expense
        
 Three months ended September 30,2019 2018 Change 
 (in thousands)      
 Income tax expense$(3,664) $(1,451) $(2,213) 
        


Three months ended June 30,20202019Change
(in thousands)  
Income tax expense$(29,875) $(9,475) $(20,400) 
We are subject to income taxes in certain jurisdictions in which we operate; however, since the majority of our income is generally earned in Bermuda, which does not have a corporate income tax, the tax impact to our operations has historically been minimal.
We recognized an income tax expense of $3.7$29.9 million in the thirdsecond quarter of 2019,2020, compared to $1.5an expense of $9.5 million in the thirdsecond quarter of 2018, principally2019, primarily driven by investment gains in our U.S. and U.K. basedU.S.-based operations.
Net Income Attributable to Redeemable Noncontrolling Interests
        
 Three months ended September 30,2019 2018 Change 
 (in thousands)      
 Net income attributable to redeemable noncontrolling interests$(62,057) $(6,440) $(55,617) 
        
Three months ended June 30,20202019Change
(in thousands)  
Net income attributable to redeemable noncontrolling interests$(118,728) $(71,812) $(46,916) 
Our net income attributable to redeemable noncontrolling interests was $62.1$118.7 million in the thirdsecond quarter of 2019,2020, compared to $6.4$71.8 million in the thirdsecond quarter of 2018, a change of $55.6 million, principally due to higher net income from DaVinciRe and2019, an increase in net investment income fromof $46.9 million. The increase was primarily driven by growth and improved performance of DaVinciRe, Medici combined with the results of operations of Vermeer being included in net income attributable to redeemable noncontrolling interests in the third quarter of 2019.
and Vermeer.

77

SUMMARY OF RESULTS OF OPERATIONS
Below is a discussion of the results of operations for the ninesix months ended SeptemberJune 30, 2019,2020, compared to the ninesix months ended SeptemberJune 30, 2018.2019.
Six months ended June 30,20202019Change
(in thousands, except per share amounts and percentages)   
Statement of operations highlights
Gross premiums written$3,727,593  $3,041,203  $686,390  
Net premiums written$2,450,611  $1,951,996  $498,615  
Net premiums earned$1,923,194  $1,461,530  $461,664  
Net claims and claim expenses incurred1,081,226  680,408  400,818  
Acquisition expenses444,214  351,433  92,781  
Operational expenses116,538  104,747  11,791  
Underwriting income$281,216  $324,942  $(43,726) 
Net investment income$188,778  $200,682  $(11,904) 
Net realized and unrealized gains on investments337,683  361,260  (23,577) 
Total investment result$526,461  $561,942  $(35,481) 
Net income$727,035  $801,983  $(74,948) 
Net income available to RenaissanceRe common shareholders$493,871  $641,571  $(147,700) 
Net income available to RenaissanceRe common shareholders per common share – diluted$11.02  $14.81  $(3.79) 
Dividends per common share$0.70  $0.68  $0.02  
Key ratios
Net claims and claim expense ratio – current accident year56.3 %46.8 %9.5 %
Net claims and claim expense ratio – prior accident years(0.1)%(0.2)%0.1 %
Net claims and claim expense ratio – calendar year56.2 %46.6 %9.6 %
Underwriting expense ratio29.2 %31.2 %(2.0)%
Combined ratio85.4 %77.8 %7.6 %
Return on average common equity - annualized17.1 %26.4 %(9.3)%
Book valueJune 30,
2020		December 31,
2019		Change
Book value per common share$134.27  $120.53  $13.74  
Accumulated dividends per common share21.38  20.68  0.70  
Book value per common share plus accumulated dividends$155.65  $141.21  $14.44  
Change in book value per common share plus change in accumulated dividends12.0 %
        
 Nine months ended September 30,2019 2018 Change 
 (in thousands, except per share amounts and percentages)      
 Statement of operations highlights      
 Gross premiums written$3,902,271
 $2,762,672
 $1,139,599
 
 Net premiums written$2,656,126
 $1,720,808
 $935,318
 
 Net premiums earned$2,368,278
 $1,401,516
 $966,762
 
 Net claims and claim expenses incurred1,334,928
 642,380
 692,548
 
 Acquisition expenses553,614
 312,524
 241,090
 
 Operational expenses158,162
 119,408
 38,754
 
 Underwriting income$321,574
 $327,204
 $(5,630) 
        
 Net investment income$311,138
 $208,528
 $102,610
 
 Net realized and unrealized gains (losses) on investments396,586
 (86,415) 483,001
 
 Total investment result$707,724
 $122,113
 $585,611
 
        
 Net income$909,927
 $392,903
 $517,024
 
 Net income available to RenaissanceRe common shareholders$678,269
 $281,182
 $397,087
 
        
 Net income available to RenaissanceRe common shareholders per common share – diluted$15.57
 $7.02
 $8.55
 
 Dividends per common share$1.02
 $0.99
 $0.03
 
        
 Key ratios      
 Net claims and claim expense ratio – current accident year57.0 % 59.9 % (2.9)% 
 Net claims and claim expense ratio – prior accident years(0.6)% (14.1)% 13.5 % 
 Net claims and claim expense ratio – calendar year56.4 % 45.8 % 10.6 % 
 Underwriting expense ratio30.0 % 30.9 % (0.9)% 
 Combined ratio86.4 % 76.7 % 9.7 % 
        
 Return on average common equity - annualized18.2 % 9.1 % 9.1 % 
        
 Book valueSeptember 30,
2019		 December 31,
2018		 Change 
 Book value per common share$120.07
 $104.13
 $15.94
 
 Accumulated dividends per common share20.34
 19.32
 1.02
 
 Book value per common share plus accumulated dividends$140.41
 $123.45
 $16.96
 
 Change in book value per common share plus change in accumulated dividends16.3 %     
        
Net income available to RenaissanceRe common shareholders was $678.3$493.9 million in the ninesix months ended SeptemberJune 30, 2019,2020, compared to net income available to RenaissanceRe common shareholders of $281.2$641.6 million in the ninesix months ended SeptemberJune 30, 2018, an increase2019, a decrease of $397.1 million.$147.7 million. As a result of our net income available to RenaissanceRe common shareholders in the ninesix months ended SeptemberJune 30, 2019,2020, we generated an annualized return on average common equity of 18.2%17.1% and our book value per common share increased from $104.13$120.53 at December 31, 20182019 to $120.07$134.27 at SeptemberJune 30, 2019,2020, a 16.3%12.0% increase, after considering the change in accumulated dividends paid to our common shareholders.


The most significant events affecting our financial performance during the ninesix months ended SeptemberJune 30, 2019,2020, on a comparative basis to the six months ended June 30, 2019, include:
78

•TMR - the ninesecond quarter of 2019 was the first quarter that reflected the results of TMR in our results of operations. As such, our results of operations for the six months ended SeptemberJune 30, 20182020, compared to the six months ended June 30, 2019, should be viewed in that context;
•, include:Underwriting Results -
•
TMR Group Entities - the second quarter of 2019 was the first quarter that reflected the results of the TMR Group Entities in our results of operations. As such, our results of operations for the nine months ended September 30, 2019, compared to the nine months ended September 30, 2018, should be viewed in that context;
•
Impact of Catastrophe Events - in the nine months ended September 30, 2019, we had a net negative impact on our net income available to RenaissanceRe common shareholders of $154.9 million from the Q3 2019 Catastrophe Events. This compares to a net negative impact on our net income available to RenaissanceRe common shareholders of $151.9 million from the Q3 2018 Catastrophe Events, partially offset by a net positive impact of $110.4 million from decreases in the estimates of the net negative impact of the 2017 Large Loss Events (as defined herein), in the nine months ended September 30, 2018;
•
Underwriting Results - we generated underwriting income of $321.6 million and had a combined ratio of 86.4% in the nine months ended September 30, 2019, compared to underwriting income of $327.2 million and a combined ratio of 76.7% in the nine months ended September 30, 2018. Our underwriting income in the nine months ended September 30, 2019 was comprised of $296.4we generated underwriting income of $281.2 million and had a combined ratio of 85.4% in the six months ended June 30, 2020, compared to underwriting income of $324.9 million and a combined ratio of 77.8% in the six months ended June 30, 2019. Our underwriting income in the six months ended June 30, 2020 was comprised of $347.8 million of underwriting income in our Property segment and $25.2 million of underwriting income in our Casualty and Specialty segment. In comparison, our underwriting income in the nine months ended September 30, 2018 was comprised of our Property segment, which generated underwriting income of $297.0 million, and our Casualty and Specialty segment, which generated underwriting income of $30.4 million.
Included in our Property segment and a $66.7 million underwriting result is theloss in our Casualty and Specialty segment. The Casualty and Specialty segment was negatively impacted by net negative impactclaims and claim expenses associated with the Q3COVID-19 pandemic of $103.8 million during the first quarter of 2020. The losses primarily represent the cost of claims incurred but not yet reported, with respect to exposures such as event contingency and event-based casualty covers. In comparison, our underwriting income in the six months ended June 30, 2019 Catastrophe Eventswas comprised of $181.9our Property segment, which generated underwriting income of $304.0 million, and a correspondingour Casualty and Specialty segment, which generated underwriting income of $20.8 million;
•Gross Premiums Written - our gross premiums written increased by $686.4 million, or 22.6%, to $3.7 billion, in the six months ended June 30, 2020, compared to the six months ended June 30, 2019, with an increase of 7.9 percentage points to$391.5 million in the combined ratio. In comparison,Property segment and an increase of $294.9 million in the Casualty and Specialty segment, driven by growth from existing relationships, new opportunities across a number of our underwriting platforms, rate improvements, and business acquired in connection with the acquisition of TMR;
•Investment Results - our total investment result, which includes the ninesum of net investment income and net realized and unrealized gains on investments, was a gain of $526.5 million in the six months ended SeptemberJune 30, 2018,2020, compared to a gain of $561.9 million in the underwritingsix months ended June 30, 2019, a decrease of $35.5 million. Impacting the investment result included the net negative impact associated with the Q3 2018 Catastrophe Events of $178.0 million,were realized and unrealized gains on fixed maturity investments trading and investment related derivatives, partially offset by therealized and unrealized losses on other investments and realized losses on equity investments trading; and
•Net Income Attributable to Redeemable Noncontrolling Interests - our net positive impact of a decreaseincome attributable to redeemable noncontrolling interests was $216.8 million in the estimate of the net negative impact on the underwriting result from the 2017 Large Loss Events of $127.7 million, which collectively increased the combined ratio by 3.5 percentage points, principally within our Property segment;
•
Gross Premiums Written - our gross premiums written increased by $1.1 billion, or 41.2%, to $3.9 billion, in the nine months ended September 30, 2019, compared to the nine months ended September 30, 2018, with an increase of $625.0 million in the Property segment and an increase of $514.6 million in the Casualty and Specialty segment. These increases were primarily driven by expanded participation on existing transactions and certain new transactions, rate improvements and the impact of the acquisition of the TMR Group Entities;
•
Investment Results - our total investment result, which includes the sum of net investment income and net realized and unrealized gains on investments, was a gain of $707.7 million in the nine months ended September 30, 2019, compared to a gain of $122.1 million in the nine months ended September 30, 2018, an increase of $585.6 million. Impacting the investment results were higher returns on portfolios of fixed maturity and short term investments, catastrophe bonds and investments-related derivatives. Also driving the investment result for the nine months ended September 30, 2019 was higher average invested assets, primarily resulting from the acquisition of the TMR Group Entities, combined with capital raised in certain of our consolidated third-party capital vehicles during the second quarter of 2019, including DaVinciRe, Upsilon RFO, Vermeer and Medici, and the subsequent investment of those funds as part of our consolidated investment portfolio; and
•
Net Income Attributable to Redeemable Noncontrolling Interests - our net income attributable to redeemable noncontrolling interests was $204.1 million in the nine months ended September 30, 2019, compared to $90.8 million in the nine months ended September 30, 2018. The increase was primarily driven by the results of operations of Vermeer being included in net income attributable to redeemable noncontrolling interests in the nine months ended September 30, 2019, combined with DaVinciRe and Medici both generating higher net income.


Net Negative Impact
The financial data below provides additional information detailing the net negative impact of the Q3 2019 Catastrophe Events on our consolidated financial statements in the ninesix months ended SeptemberJune 30, 2019.
        
 Nine months ended September 30, 2019Hurricane Dorian Typhoon Faxai Total Q3 2019 Catastrophe Events 
 (in thousands, except percentages)      
 Net claims and claims expenses incurred$(60,784) $(148,127) $(208,911) 
 Assumed reinstatement premiums earned5,106
 18,332
 23,438
 
 Ceded reinstatement premiums earned(364) (118) (482) 
 Lost profit commissions92
 3,943
 4,035
 
 Net negative impact on underwriting result(55,950) (125,970) (181,920) 
 Redeemable noncontrolling interest - DaVinciRe3,659
 23,335
 26,994
 
 Net negative impact on net income available to RenaissanceRe common shareholders$(52,291) $(102,635) $(154,926) 
 Percentage point impact on consolidated combined ratio2.4
 5.4
 7.9
 
        
 Net negative impact on Property segment underwriting result$(53,378) $(125,540) $(178,918) 
 Net negative impact on Casualty and Specialty segment underwriting result(2,572) (430) (3,002) 
 Net negative impact on underwriting result$(55,950) $(125,970) $(181,920) 
        


The financial data below provides additional information detailing2020, compared to $142.0 million in the net negative impact of the Q3 2018 Catastrophe Events and the net positive impact of decreases in our estimates of the net negative impact of the 2017 Large Loss Events on our consolidated financial statements in the ninesix months ended SeptemberJune 30, 20182019. The increase was primarily driven by growth and improved performance, with higher net income from DaVinciRe, Medici and Vermeer during the six months ended June 30, 2020 as compared to the six months ended June 30, 2019..
              
 Nine months ended September 30, 2018Typhoon Jebi Hurricane Florence Other Q3 2018 Catastrophe Events (1) Total Q3 2018 Catastrophe Events Change in Estimates of the 2017 Large Loss Events (2) Total 
 (in thousands, except percentages)            
 (Increase) decrease in net claims and claims expenses incurred$(90,228) $(74,040) $(32,763) $(197,031) $158,461
 $(38,570) 
 Assumed reinstatement premiums earned6,997
 9,067
 866
 16,930
 (24,976) (8,046) 
 Ceded reinstatement premiums earned—
 (112) —
 (112) 758
 646
 
 Lost (earned) profit commissions1,973
 313
 (109) 2,177
 (6,577) (4,400) 
 Net (negative) positive impact on underwriting result(81,258) (64,772) (32,006) (178,036) 127,666
 (50,370) 
 Redeemable noncontrolling interest - DaVinciRe13,507
 8,593
 3,987
 26,087
 (17,284) 8,803
 
 Net (negative) positive impact on net income available to RenaissanceRe common shareholders$(67,751) $(56,179) $(28,019) $(151,949) $110,382
 $(41,567) 
 Percentage point impact on consolidated combined ratio6.0
 4.8
 2.3
 13.2
 (9.3) 3.5
 
              
 Net (negative) positive impact on Property segment underwriting result$(80,258) $(64,772) $(32,006) $(177,036) $120,895
 $(56,141) 
 Net (negative) positive impact on Casualty and Specialty segment underwriting result(1,000) —
 —
 (1,000) 6,771
 5,771
 
 Net (negative) positive impact on underwriting result$(81,258) $(64,772) $(32,006) $(178,036) $127,666
 $(50,370) 
              
(1)Other Q3 2018 Catastrophe Events includes Typhoons Mangkhut and Trami and the wildfires in California during the third quarter of 2018.
(2)An initial estimate of the net negative impact of Hurricanes Harvey, Irma and Maria, the Mexico City Earthquake, the wildfires in California during the fourth quarter of 2017 and certain losses associated with aggregate loss contracts (collectively referred to as the “2017 Large Loss Events”) was recorded in our consolidated financial statements during 2017. The amounts noted in the table above reflect changes in the estimates of the net negative impact of the 2017 Large Loss Events recorded in the nine months ended September 30, 2018.


79

Underwriting Results by Segment
Property Segment
Below is a summary of the underwriting results and ratios for our Property segment:
        
 Nine months ended September 30,2019 2018 Change 
 (in thousands, except percentages)      
 Gross premiums written$2,185,984
 $1,561,008
 $624,976
 
 Net premiums written$1,411,327
 $884,541
 $526,786
 
 Net premiums earned$1,160,090
 $722,246
 $437,844
 
 Net claims and claim expenses incurred541,217
 222,195
 319,022
 
 Acquisition expenses222,971
 127,095
 95,876
 
 Operational expenses99,546
 75,933
 23,613
 
 Underwriting income$296,356
 $297,023
 $(667) 
        
 Net claims and claim expenses incurred – current accident year$536,197
 $395,067
 $141,130
 
 Net claims and claim expenses incurred – prior accident years5,020
 (172,872) 177,892
 
 Net claims and claim expenses incurred – total$541,217
 $222,195
 $319,022
 
        
 Net claims and claim expense ratio – current accident year46.2% 54.7 % (8.5)% 
 Net claims and claim expense ratio – prior accident years0.5% (23.9)% 24.4 % 
 Net claims and claim expense ratio – calendar year46.7% 30.8 % 15.9 % 
 Underwriting expense ratio27.8% 28.1 % (0.3)% 
 Combined ratio74.5% 58.9 % 15.6 % 
        
Six months ended June 30,20202019Change
(in thousands, except percentages)   
Gross premiums written$2,263,062  $1,871,584  $391,478  
Net premiums written$1,378,719  $1,108,345  $270,374  
Net premiums earned$912,451  $715,758  $196,693  
Net claims and claim expenses incurred308,902  202,957  105,945  
Acquisition expenses180,123  143,450  36,673  
Operational expenses75,663  65,308  10,355  
Underwriting income$347,763  $304,043  $43,720  
Net claims and claim expenses incurred – current accident year$301,458  $190,317  $111,141  
Net claims and claim expenses incurred – prior accident years7,444  12,640  (5,196) 
Net claims and claim expenses incurred – total$308,902  $202,957  $105,945  
Net claims and claim expense ratio – current accident year33.0 %26.6 %6.4 %
Net claims and claim expense ratio – prior accident years0.9 %1.8 %(0.9)%
Net claims and claim expense ratio – calendar year33.9 %28.4 %5.5 %
Underwriting expense ratio28.0 %29.1 %(1.1)%
Combined ratio61.9 %57.5 %4.4 %
Property Gross Premiums Written
In the ninesix months ended SeptemberJune 30, 2019,2020, our Property segment gross premiums written increased by $625.0$391.5 million, or 40.0%20.9%, to $2.2$2.3 billion, compared to $1.6$1.9 billion in the ninesix months ended SeptemberJune 30, 2018.2019.
Gross premiums written in the catastrophe class of business were $1.6 billion in the ninesix months ended SeptemberJune 30, 2019,2020, an increase of $310.3$200.1 million, or 25.0%13.8%, compared to the ninesix months ended SeptemberJune 30, 2018.2019. The increase in gross premiums written in the catastrophe class of business was primarily driven by expanded participation on existing transactions, and certain new transactions, rate improvements and the impact of the acquisition of the TMR Group Entities.TMR.
Gross premiums written in the other property class of business were $635.3$615.1 million in the ninesix months ended SeptemberJune 30, 2019,2020, an increase of $314.7$191.4 million, or 98.2%45.2%, compared to the ninesix months ended SeptemberJune 30, 2018.2019. The increase in gross premiums written in the other property class of business was primarily driven by growth across our underwriting platforms, both from existing relationships, and through new opportunities we believe have comparably attractive risk-return attributes, rate improvementsacross a number of the Company’s underwriting platforms, and business acquired in connection with the acquisition of the TMR Group Entities.TMR.


Property Ceded Premiums Written
        
 Nine months ended September 30,2019 2018 Change 
 (in thousands)      
 Ceded premiums written - Property$774,657
 $676,467
 $98,190
 
        
Six months ended June 30,20202019Change
(in thousands)
Ceded premiums written - Property$884,343  $763,239  $121,104  
Ceded premiums written in our Property segment increased $98.2$121.1 million, to $774.7$884.3 million, in the ninesix months ended SeptemberJune 30, 2019,2020, compared to $676.5$763.2 million in the ninesix months ended SeptemberJune 30, 2018.2019. The increase in ceded premiums written was principally due to a significant portioncertain of the increase in gross premiums written in the
80

catastrophe class of business noted above being ceded to third-party investors in our managed vehicles, in particularprimarily Upsilon RFO,Fund and Mona Lisa Re Ltd., as well as an overall increase in ceded purchases.purchases made as part of the Company’s gross-to-net strategy.
Property Underwriting Results
Our Property segment generated underwriting income of $296.4$347.8 million in the ninesix months ended SeptemberJune 30, 2019,2020, compared to underwriting income of $297.0$304.0 million in the ninesix months ended SeptemberJune 30, 2018, a decrease2019, an increase of $0.7$43.7 million. In the ninesix months ended SeptemberJune 30, 2019,2020, our Property segment generated a net claims and claim expense ratio of 46.7%33.9%, an underwriting expense ratio of 27.8%28.0% and a combined ratio of 74.5%61.9%, compared to 30.8%28.4%, 28.1%29.1% and 58.9%57.5%, respectively, in the ninesix months ended SeptemberJune 30, 2018.2019.
Principally impacting the Property segment underwriting result and combined ratio in the ninesix months ended SeptemberJune 30, 20192020 were higher current accident year net claims and claim expenses primarily driven by a higher level of attritional losses associated with a larger proportion of the Q3 2019 Catastrophe Events, which resulted in a net negative impact on the Property segment underwriting resultother property class of $178.9 million and a corresponding increasebusiness being earned in the combined ratio of 16.3 percentage points. In comparison, period compared to the ninesix months ended SeptemberJune 30, 2018 were impacted by the Q3 2018 Catastrophe Events, which resulted in a net negative impact on the Property segment underwriting result of $177.0 million, and a corresponding increase in the combined ratio of 27.6 percentage points. This was partially offset by a net positive impact on2019. In addition the underwriting result was impacted by losses related to a number of $120.9 million, and a corresponding decrease insmall weather-related catastrophe events that occurred during the combined ratiosecond quarter of 17.5 percentage points, resulting from a decrease in2020.
In the estimates of the net negative impact on the underwriting result of the 2017 Large Loss Events.
In addition, in the ninesix months ended SeptemberJune 30, 2019,2020, net adverse development on prior accident years net claims and claim expenses of $5.0$7.4 million, or an increase in the combined ratio of 0.50.9 percentage points, compared to $12.6 million, or an increase in the combined ratio of 1.8 percentage points in the six months ended June 30, 2019. The net adverse development in the current period was primarily driven by higher than expected attritional losses in the other property class of business, compared to net favorable developmentcombined with the impact of $172.9 million, or 23.9certain of our whole account ceded protections. In addition, the decrease in the underwriting expense ratio of 1.1 percentage points was primarily driven by lower acquisition and operating expense ratios. The decrease in the nine months ended September 30, 2018. The net favorable developmentoperating expenses was due in the nine months ended September 30, 2018 included the decreases in the estimatespart to reduced travel, marketing and office operational expenses as a result of the net negative impact of the 2017 Large Loss Events noted above. COVID-19 pandemic.
See “Note 7.6. Reserve for Claims and Claim Expenses” in our “Notes to the Consolidated Financial Statements” for additional information related to the development of prior accident years net claims and claim expenses.

81

Casualty and Specialty Segment
Below is a summary of the underwriting results and ratios for our Casualty and Specialty segment:
        
 Nine months ended September 30,2019 2018 Change 
 (in thousands, except percentages)      
 Gross premiums written$1,716,287
 $1,201,664
 $514,623
 
 Net premiums written$1,244,799
 $836,267
 $408,532
 
 Net premiums earned$1,208,188
 $679,271
 $528,917
 
 Net claims and claim expenses incurred793,533
 420,273
 373,260
 
 Acquisition expenses330,829
 185,429
 145,400
 
 Operational expenses58,603
 43,121
 15,482
 
 Underwriting income$25,223
 $30,448
 $(5,225) 
        
 Net claims and claim expenses incurred – current accident year$813,251
 $444,293
 $368,958
 
 Net claims and claim expenses incurred – prior accident years(19,718) (24,020) 4,302
 
 Net claims and claim expenses incurred – total$793,533
 $420,273
 $373,260
 
        
 Net claims and claim expense ratio – current accident year67.3 % 65.4 % 1.9 % 
 Net claims and claim expense ratio – prior accident years(1.6)% (3.5)% 1.9 % 
 Net claims and claim expense ratio – calendar year65.7 % 61.9 % 3.8 % 
 Underwriting expense ratio32.2 % 33.6 % (1.4)% 
 Combined ratio97.9 % 95.5 % 2.4 % 
        
Six months ended June 30,20202019Change
(in thousands, except percentages)   
Gross premiums written$1,464,531  $1,169,619  $294,912  
Net premiums written$1,071,892  $843,651  $228,241  
Net premiums earned$1,010,743  $745,772  $264,971  
Net claims and claim expenses incurred772,475  477,434  295,041  
Acquisition expenses264,090  208,175  55,915  
Operational expenses40,876  39,405  1,471  
Underwriting (loss) income$(66,698) $20,758  $(87,456) 
Net claims and claim expenses incurred – current accident year$781,274  $494,164  $287,110  
Net claims and claim expenses incurred – prior accident years(8,799) (16,730) 7,931  
Net claims and claim expenses incurred – total$772,475  $477,434  $295,041  
Net claims and claim expense ratio – current accident year77.3 %66.3 %11.0 %
Net claims and claim expense ratio – prior accident years(0.9)%(2.3)%1.4 %
Net claims and claim expense ratio – calendar year76.4 %64.0 %12.4 %
Underwriting expense ratio30.2 %33.2 %(3.0)%
Combined ratio106.6 %97.2 %9.4 %
Casualty and Specialty Gross Premiums Written
In the ninesix months ended SeptemberJune 30, 2019,2020, our Casualty and Specialty segment gross premiums written increased by $514.6$294.9 million, or 42.8%25.2%, to $1.7$1.5 billion, compared to $1.2 billion in the ninesix months ended SeptemberJune 30, 2018.2019. The increase in gross premiums written in the Casualty and Specialty segment was primarily due to growth from new and existing relationships and newbusiness opportunities written in the current and prior periods across a numbervarious classes of business within the Company’s underwriting platforms, as well assegment, and business acquired in connection with the acquisition of the TMR Group Entities.TMR.
Casualty and Specialty Ceded Premiums Written
        
 Nine months ended September 30,2019 2018 Change 
 (in thousands)      
 Ceded premiums written - Casualty and Specialty$471,488
 $365,397
 $106,091
 
        
Six months ended June 30,20202019Change
(in thousands)
Ceded premiums written - Casualty and Specialty$392,639  $325,968  $66,671  
Ceded premiums written in our Casualty and Specialty segment increased by $106.1$66.7 million, to $471.5$392.6 million, in the ninesix months ended SeptemberJune 30, 2019,2020, compared to $365.4$326.0 million in the ninesix months ended SeptemberJune 30, 2018,2019, primarily resulting from increased gross premiums written subject to our retrocessional quota share reinsurance programs.
Casualty and Specialty Underwriting Results
Our Casualty and Specialty segment generatedincurred an underwriting incomeloss of $25.2$66.7 million in the ninesix months ended SeptemberJune 30, 2019,2020, compared to underwriting income of $30.4$20.8 million in the ninesix months ended SeptemberJune 30, 2018.2019. In the ninesix months ended SeptemberJune 30, 2019,2020, our Casualty and Specialty segment generated a net claims and claim expense ratio of 65.7%76.4%, an underwriting expense ratio of 32.2%30.2% and a


combined ratio of 97.9%106.6%, compared to 61.9%64.0%, 33.6%33.2% and 95.5%97.2%, respectively, in the ninesix months ended SeptemberJune 30, 2018.
During 2019. The underwriting loss in the ninesix months ended SeptemberJune 30, 2019, the increase in the Casualty and Specialty segment combined ratio2020 was principally driven by an increase of 3.8 percentage points in the net claims and claim expense, principally the result of higher current accident year losses combined with less net favorable development on prior accident years net claims and claim expenses comparedassociated
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with the COVID-19 pandemic of $103.8 million during the first quarter of 2020, which added 10.3 percentage points to the ninecombined ratio during the six months ended SeptemberJune 30, 2018. Partially offsetting the increase in the net claims and claim expense ratio was a 1.4 percentage point decrease in the underwriting expense ratio primarily driven by a decrease in the operating expense ratio due to improved operating leverage as a result of the business acquired in connection with the acquisition of the TMR Group Entities.2020.
Our Casualty and Specialty segment experienced net favorable development on prior accident years net claims and claim expenses of $19.7$8.8 million, or 1.60.9 percentage points, during the ninesix months ended SeptemberJune 30, 2019,2020, compared to $24.0$16.7 million, or 3.52.3 percentage points, respectively, in the ninesix months ended SeptemberJune 30, 2018.2019. The net favorable development during the ninesix months ended SeptemberJune 30, 20192020 and 20182019 was principally driven by reported losses coming in lower than expected. See “Note 7.6. Reserve for Claims and Claim Expenses” in our “Notes to the Consolidated Financial Statements” for additional information related to the development of prior accident years net claims and claim expenses.
While the additional net claims and claim expenses associated with the COVID-19 pandemic that we incurred in the second quarter of 2020 were not significant, the Company continues to evaluate industry trends and its own potential exposure associated with the ongoing COVID-19 pandemic, and expects historically significant industry losses to emerge over time as the full impact of the pandemic and its effects on the global economy are realized. Among other things, the Company continues 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 its own portfolio. Our loss estimates represent our best estimate based on currently available information, and actual losses may vary materially from these estimates. Additionally, losses incurred in respect of the COVID-19 pandemic subsequent to June 30, 2020 will be reflected in the periods in which those losses are incurred.
Fee Income
        
 Nine months ended September 30,2019 2018 Change 
 (in thousands)      
 Management fee income      
 Joint ventures$30,688
 $22,759
 $7,929
 
 Managed funds14,822
 8,411
 6,411
 
 Structured reinsurance products and other26,986
 25,099
 1,887
 
 Total management fee income72,496
 56,269
 16,227
 
        
 Performance fee income      
 Joint ventures13,034
 11,900
 1,134
 
 Managed funds2,456
 4,492
 (2,036) 
 Structured reinsurance products and other13,007
 8,600
 4,407
 
 Total performance fee income28,497
 24,992
 3,505
 
 Total fee income$100,993
 $81,261
 $19,732
 
        
Six months ended June 30,20202019Change
(in thousands)
Management fee income
Joint ventures$23,971  $19,254  $4,717  
Structured reinsurance products and other17,336  18,221  (885) 
Managed funds12,926  10,264  2,662  
Total management fee income54,233  47,739  6,494  
Performance fee income
Joint ventures13,993  7,756  6,237  
Structured reinsurance products and other16,369  12,732  3,637  
Managed funds6,277  768  5,509  
Total performance fee income36,639  21,256  15,383  
Total fee income$90,872  $68,995  $21,877  
In the ninesix months ended SeptemberJune 30, 2019,2020, total fee income earned through third-party capital management, various joint ventures and certain structured retrocession agreements to which we are a party increased $19.7$21.9 million, to $101.0$90.9 million, compared to $81.3$69.0 million in the ninesix months ended SeptemberJune 30, 2018,2019, primarily driven by an increase in the dollar value of capital being managed combined with improved underlying performance. FeeOf the $90.9 million in total fee income generated byearned in the TMRsix months ended June 30, 2020 through third-party capital vehiclesmanagement, various joint ventures and certain structured retrocession agreements to which we are a party, $52.5 million was not materialrecorded through redeemable noncontrolling interest and $38.4 million was recorded through underwriting income as a reduction to our results of operations for operating expenses and acquisition expenses (2019 - $33.6 million and $35.4 million, respectively).
In addition to the ninefee income earned through third-party capital management, joint ventures and certain structured retrocession agreements to which we are a party, as detailed in the table above, we also earn fee income on certain other underwriting-related activities. These fees, in the aggregate, are recorded as a reduction to operating expenses or acquisition expenses, as applicable. The total fees, as described above and including fee income earned on certain other underwriting-related activities, earned by us in the six months ended SeptemberJune 30, 2019.2020 that were recorded as a reduction to operating expenses or acquisition
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expenses were $54.8 million and $9.4 million, respectively, resulting in a reduction to the combined ratio of 3.3% (2019 - $44.4 million, $9.5 million and 3.7%, respectively).
Net Investment Income
        
 Nine months ended September 30,2019 2018 Change 
 (in thousands)      
 Fixed maturity investments$232,566
 $151,784
 $80,782
 
 Short term investments44,712
 22,340
 22,372
 
 Equity investments trading3,269
 3,091
 178
 
 Other investments    
 
 Private equity investments8,166
 12,149
 (3,983) 
 Other30,413
 27,346
 3,067
 
 Cash and cash equivalents5,801
 2,708
 3,093
 
  324,927
 219,418
 105,509
 
 Investment expenses(13,789) (10,890) (2,899) 
 Net investment income$311,138
 $208,528
 $102,610
 
        
Six months ended June 30,20202019Change
(in thousands)   
Fixed maturity investments trading$143,281  $149,589  $(6,308) 
Short term investments18,141  29,651  (11,510) 
Equity investments trading3,217  1,943  1,274  
Other investments
Catastrophe bonds27,658  20,472  7,186  
Other2,736  3,554  (818) 
Cash and cash equivalents2,341  3,823  (1,482) 
 197,374  209,032  (11,658) 
Investment expenses(8,596) (8,350) (246) 
Net investment income$188,778  $200,682  $(11,904) 
Net investment income was $311.1$188.8 million in the ninesix months ended SeptemberJune 30, 2019,2020, compared to $208.5$200.7 million in the ninesix months ended SeptemberJune 30, 2018, an increase2019, a decrease of $102.6$11.9 million. Impacting our net investment income for the ninesix months ended SeptemberJune 30, 2019 was improved performance2020 were lower returns in our fixed maturity and short term investment portfolios, combined withinvestments, primarily as a result of lower yields on these investments following the recent decline in interest rates, partially offset by higher average invested assets, primarily resulting fromreturns on our catastrophe bonds due to growth in the acquisition of the TMR Group Entities and additional capital raised in certain of our consolidated third-party capital vehicles.portfolio.
Our private equity and other investment portfolios are accounted for at fair value with the change in fair value recorded in net investment income, which included net unrealized gains of $7.3 million in the nine months ended September 30, 2019, compared to net unrealized gains of $17.8 million in the nine months ended September 30, 2018.
Net Realized and Unrealized Gains (Losses) on Investments
        
 Nine months ended September 30,2019 2018 Change 
 (in thousands)      
 Gross realized gains$87,595
 $14,945
 $72,650
 
 Gross realized losses(34,769) (67,699) 32,930
 
 Net realized gains (losses) on fixed maturity investments52,826
 (52,754) 105,580
 
 Net unrealized gains (losses) on fixed maturity investments trading243,139
 (73,522) 316,661
 
 Net realized and unrealized gains (losses) on investments-related derivatives62,103
 (763) 62,866
 
 Net realized gains on equity investments trading30,666
 21,841
 8,825
 
 Net unrealized gains on equity investments trading7,852
 18,783
 (10,931) 
 Net realized and unrealized gains (losses) on investments$396,586
 $(86,415) $483,001
 
        
Six months ended June 30,20202019Change
(in thousands)   
Net realized gains on fixed maturity investments trading$163,336  $22,725  $140,611  
Net unrealized gains on fixed maturity investments trading177,333  225,913  (48,580) 
Net realized and unrealized gains on fixed maturity investments trading340,669  248,638  92,031  
Net realized and unrealized gains on investments-related derivatives57,553  50,969  6,584  
Net realized (losses) gains on equity investments trading(14,625) 30,738  (45,363) 
Net unrealized gains on equity investments trading1,959  34,303  (32,344) 
Net realized and unrealized (losses) gains on equity investments trading(12,666) 65,041  (77,707) 
Net realized and unrealized losses on other investments - catastrophe bonds(9,900) (14,112) 4,212  
Net realized and unrealized (losses) gains on other investments - other(37,973) 10,724  (48,697) 
Net realized and unrealized gains on investments$337,683  $361,260  $(23,577) 
Net realized and unrealized gains on investments were $396.6$337.7 million in the ninesix months ended SeptemberJune 30, 2019,2020, compared to net realized and unrealized lossesgains of $86.4$361.3 million in the ninesix months ended SeptemberJune 30, 2018, an increase2019, a decrease of $483.0$23.6 million. Principally impacting our net realized and unrealized gains on investments in the ninesix months ended SeptemberJune 30, 20192020 were:
• were:
•
net realized and unrealized gains on our fixed maturity investments trading of $296.0 million in the nine months ended Septembernet realized and unrealized gains on our fixed maturity investments trading of $340.7 million in the six months ended June 30, 2020, compared to net realized and unrealized gains of $248.6 million in the six months ended June 30, 2019,, compared to net realized and unrealized losses of $126.3 million in the nine months ended September 30, 2018, an increase of $422.2 million, principally driven by a downward shift in the interest rate yield curve during the nine months ended September 30, 2019, compared to an upward shift in the yield curve in the nine months ended September 30, 2018;
•
net realized and unrealized gains on our investment-related derivatives of $62.1 million in the nine months ended September 30, 2019, compared to losses of $0.8 million in the nine months ended


September 30, 2018, an increase of $62.9$92.0 million, principally driven by higher derivative exposure during realized gains generated on the sale of fixed maturity investments, partially offset by lower unrealized gains on fixed maturity investments trading;
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•net realized and unrealized losses on equity investments trading of $12.7 million in the ninesix months ended SeptemberJune 30, 2019,2020, compared to gains of $65.0 million in additionthe six months ended June 30, 2019, a decrease of $77.7 million, principally driven by a net decrease in the value of our strategic investments during the six months ended June 30, 2020, compared to the interest rate activity noted above;six months ended June 30, 2019; and
•
net realized and unrealized gains on equity investments trading of $38.5 million in the nine months ended September 30, 2019, compared to $40.6 million in the nine months ended September 30, 2018, a decrease of $2.1 million, principally driven by lower returns on certain of our larger equity positions during the nine months ended September 30, 2019, compared to the nine months ended September 30, 2018.
•net realized and unrealized losses on our other investments of $38.0 million in the six months ended June 30, 2020, compared to gains of $10.7 million in the six months ended June 30, 2019, a decrease of $48.7 million, principally driven by lower returns in our private equity investment portfolio.
Net Foreign Exchange Losses
(Losses) Gains
        
 Nine months ended September 30,2019 2018 Change 
 (in thousands)      
 Net foreign exchange losses$(1,812) $(11,496) $9,684
 
        
Six months ended June 30,20202019Change
(in thousands)   
Net foreign exchange (losses) gains$(12,923) $6,463  $(19,386) 
Our functional currency is the U.S. dollar. We routinely write a portion of our business in currencies other than U.S. dollars and invest a portion of our cash and investment portfolio in those currencies. In addition, and in connection with the acquisition of the TMR, Group Entities, we acquired certain entities with non-U.S. dollar functional currencies. As a result, we may experience foreign exchange gains and losses in our consolidated financial statements. We are primarily impacted by the foreign currency risk exposures associated with our underwriting operations, investment portfolio, and operations with non-U.S. dollar functional currencies, and may, from time to time, enter into foreign currency forward and option contracts to minimize the effect of fluctuating foreign currencies on the value of non-U.S. dollar denominated assets and liabilities.
Equity in Earnings of Other Ventures
        
 Nine months ended September 30,2019 2018 Change 
 (in thousands)      
 Tower Hill Companies$8,522
 $8,274
 $248
 
 Top Layer Re6,550
 6,202
 348
 
 Other2,278
 (145) 2,423
 
 Total equity in earnings of other ventures$17,350
 $14,331
 $3,019
 
        
Six months ended June 30,20202019Change
(in thousands)  
Tower Hill Companies$5,313  $4,454  $859  
Top Layer Re4,916  4,607  309  
Other3,376  2,412  964  
Total equity in earnings of other ventures$13,605  $11,473  $2,132  
Equity in earnings of other ventures was $17.3$13.6 million in the ninesix months ended SeptemberJune 30, 2019,2020, compared to $14.3$11.5 million in the ninesix months ended SeptemberJune 30, 2018,2019, an increase of $3.0$2.1 million, principally driven by improved profitability of our equity investments in the Tower Hill Companies and in a select group of insurance and insurance-related companies within the other category.
Other (Loss) Income
        
 Nine months ended September 30,2019 2018 Change 
 (in thousands)      
 Assumed and ceded reinsurance contracts accounted for as derivatives and deposits$3,547
 $(193) 3,740
 
 Other1,562
 673
 889
 
 Total other income$5,109
 $480
 $4,629
 
        
Six months ended June 30,20202019Change
(in thousands)  
Assumed and ceded reinsurance contracts accounted for as derivatives and deposits$(6,639) $3,865  (10,504) 
Other1,002  228  774  
Total other (loss) income$(5,637) $4,093  $(9,730) 
In the ninesix months ended SeptemberJune 30, 2019,2020, we generatedincurred an other loss of $5.6 million, compared to other income of $5.1 million, compared to $0.5$4.1 million in the ninesix months ended SeptemberJune 30, 2018, an increase2019, a decrease of $4.6$9.7 million, driven by our assumed and ceded reinsurance contracts accounted for as derivatives and deposits.
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Corporate Expenses
        
 Nine months ended September 30,2019 2018 Change 
 (in thousands)      
 Corporate expenses$76,480
 $21,875
 $54,605
 
        
Six months ended June 30,20202019Change
(in thousands)  
Corporate expenses$27,889  $62,636  $(34,747) 
Corporate expenses include certain executive, director, legal and consulting expenses, costs for research and development, costs associated with corporate acquisitions, impairment charges related to goodwill and other intangible assets, and other miscellaneous costs, including those associated with operating as a publicly traded company. Corporate expenses increased $54.6decreased $34.7 million to $76.5$27.9 million, in the ninesix months ended SeptemberJune 30, 2019,2020, compared to $21.9$62.6 million in the ninesix months ended SeptemberJune 30, 2018. During the nine months ended September 30, 2019,, we recorded $44.0 primarily due to $6.5 million of corporate expenses associated with the acquisition of TMR during the TMR Group Entities, comprised of $20.5six months ended June 30, 2020, compared to $40.0 million of compensation-related costs, $13.8 million of transaction-related costs and $9.7 million of integration-related costs.such expenses in the six months ended June 30, 2019.
Income Tax Expense
        
 Nine months ended September 30,2019 2018 Change 
 (in thousands)      
 Income tax expense$(20,670) $(2,550) $(18,120) 
        
Six months ended June 30,20202019Change
(in thousands)   
Income tax expense$(21,029) $(17,006) $(4,023) 
In the ninesix months ended SeptemberJune 30, 2019,2020, we recognized an income tax expense of $20.7$21.0 million, compared to $2.6an income tax expense of $17.0 million in the ninesix months ended SeptemberJune 30, 2018.2019. The income tax expense in the ninesix months ended SeptemberJune 30, 20192020 was principally driven by investment gains in our U.S. and U.K. basedU.S.-based operations.
Net Income Attributable to Redeemable Noncontrolling Interests
        
 Nine months ended September 30,2019 2018 Change 
 (in thousands)      
 Net income attributable to redeemable noncontrolling interests$(204,091) $(90,822) $(113,269) 
        
Six months ended June 30,20202019Change
(in thousands)  
Net income attributable to redeemable noncontrolling interests$(216,819) $(142,034) $(74,785) 
Our net income attributable to redeemable noncontrolling interests was $204.1$216.8 million in the ninesix months ended SeptemberJune 30, 2019,2020, compared to $90.8$142.0 million in the ninesix months ended SeptemberJune 30, 2018,2019, a change of $113.3$74.8 million. The increase was primarily driven by the results of operations of Vermeer being included ingrowth and improved performance, with higher net income attributable to redeemable noncontrolling interests in from DaVinciRe, Medici and Vermeer during the ninesix months ended SeptemberJune 30, 2019, combined with DaVinciRe generating higher net income.2020 as compared to the six months ended June 30, 2019.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity and capital resources were not materially impacted by the COVID-19 pandemic and related volatility and slowdown in the global financial markets during the first six months of 2020. For further discussion regarding the potential future impacts of the COVID-19 pandemic and related economic conditions on the Company's liquidity and capital resources, see "Current Outlook" and "Part II, Item 1A, Risk Factors."
Financial Condition
RenaissanceRe isAs a Bermuda-domiciled holding company, RenaissanceRe has limited operations of its own. Its assets consist primarily of investments in subsidiaries, and, weto a degree, cash and securities in amounts which fluctuate over time. We therefore rely on dividends and distributions (and other statutorily permissible payments) from our subsidiaries, and investment income and fee income to makemeet our liquidity requirements, which primarily include making principal and interest payments on our debt and to make dividend payments to our preference and common shareholders.
The payment of dividends by our subsidiaries is, under certain circumstances, limited by the applicable laws and regulations in the various jurisdictions in which our subsidiaries operate, including Bermuda, the U.S.,
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the U.K., Switzerland, Australia, Singapore and Ireland. For example,In addition, insurance laws require our insurance subsidiaries to maintain certain measures of solvency and liquidity. We believe that each of our insurance subsidiaries and branches exceeded the minimum solvency, capital and surplus requirements in their applicable jurisdictions at June 30, 2020. Certain of our subsidiaries and branches are required to file financial condition reports, or FCRs, with their regulators, which provide details on solvency and financial performance. Where required, these FCRs will be posted on our website. The regulations governing our and our principal operating subsidiaries’ ability to pay dividends and to maintain certain measures of solvency and liquidity, and requirements to file FCRs are discussed in detail in “Part II,I, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Liquidity and Capital Resources, Financial Condition”1. Business, Regulation” and “Note 17.18. Statutory Requirements” in our “Notes to the Consolidated Financial Statements” in our Form 10-K for the year ended December 31, 2018.2019.
In the aggregate, our principal operating subsidiaries have historically produced sufficient cash flows to meet their expected claims payments and operational expenses and to provide dividend payments to us. In


addition, our subsidiaries maintain a concentration of investments in high quality liquid securities, which management believes will provide additional liquidity for extraordinary claims payments should the need arise. See “Capital Resources” below.
During the nine months ended September 30, 2019, RenaissanceRe contributed capital to RenaissanceRe Specialty Holdings (UK) Limited to fund the acquisition of the TMR Group Entities and made a capital contribution of $250.0 million to Renaissance Reinsurance to increase its shareholders’ equity to $2.25 billion, consistent with past practice following a significant acquisition and to support growth in premiums. In addition, during 2018 and 2019 we increased our investments in certain of our managed joint ventures and contributed cash to certain of our investment subsidiaries. As a result, net capital contributions by RenaissanceRe to our subsidiaries, net of dividends and return of capital by our subsidiaries to RenaissanceRe, were $404.9 million during the nine months ended September 30, 2019 (2018 - $130.0 million). We believe RenaissanceRe and our principal operating subsidiaries continue to be adequately capitalized following the events noted above.
Group Supervision
The Bermuda Monetary Authority (“BMA”) is our group supervisor. Under the Insurance Act 1978, amendments thereto and related regulations of Bermuda (collectively, the “Insurance Act”), we are required to maintain capital at a level equal to our enhanced capital requirement (“ECR”), which is established by reference to the Bermuda Solvency Capital Requirement (the “BSCR”) model. The BSCR is a mathematical model designed to give the BMA robust methods for determining an insurer’s capital adequacy. Underlying the BSCR is the belief that all insurers should operate on an ongoing basis with a view to maintaining their capital at a prudent level in excess of the minimum solvency margin otherwise prescribed under the Insurance Act. At September 30, 2019, we believe the statutory capital and surplus of our group exceeded the minimum amount required to be maintained under Bermuda law. Our 2018 group BSCR was filed with the BMA in advance of the May 31, 2019 filing deadline, and we exceeded the minimum amount required to be maintained under Bermuda law.
Class 3A, 3B and 4 insurers and insurance groups are also required to prepare and publish a financial condition report (“FCR”). The FCR provides, among other things, details of measures governing the business operations, corporate governance framework and solvency and financial performance of the insurer or insurance group. We received approval from the BMA to file a consolidated group FCR, inclusive of our Bermuda-domiciled insurance subsidiaries and Top Layer Re. Our most recent FCR is available on our website.
Bermuda
Bermuda regulations require BMA approval for any reduction of capital in excess of 15% of statutory capital, as defined in the Insurance Act. The Insurance Act also requires the Bermuda insurance subsidiaries of RenaissanceRe to maintain certain measures of solvency and liquidity. At September 30, 2019, we believe the statutory capital and surplus of our Bermuda insurance subsidiaries exceeded the minimum amount required to be maintained under Bermuda law.
Under the Insurance Act, RenaissanceRe Specialty U.S. and Vermeer are defined as Class 3B insurers, and DaVinci and Renaissance Reinsurance are classified as Class 4 insurers, and must each maintain capital at a level equal to an ECR which is established by reference to the BSCR model. The 2018 BSCR for DaVinci, Renaissance Reinsurance and RenaissanceRe Specialty U.S. was filed with the BMA on or before the April 30, 2019 filing deadline, and each company exceeded the minimum amount required to be maintained under Bermuda law. Vermeer was not required to file a BSCR for 2018. In addition, audited annual financial statements prepared in accordance with GAAP for each of DaVinci, Renaissance Reinsurance, RenaissanceRe Specialty U.S. and Vermeer are filed prior to April 30 of each year with the BMA, if applicable, and are available free of charge on the BMA’s website. RenaissanceRe Europe’s Bermuda branch is also registered as a Class 3B insurer under the Insurance Act. However, for the year ended December 31, 2018, it applied for and was granted exemptions and modifications to the requirements to file an annual statutory financial return, maintain minimum levels of statutory capital and surplus and file a capital and solvency return.


U.K.
As a member of Lloyd’s, the underwriting capacity, or stamp capacity, of Syndicate 1458 must be supported by providing a deposit in the form of cash, securities or letters of credit, which are referred to as Funds at Lloyd’s (“FAL”). The amount of FAL is determined by Lloyd’s and is based on Syndicate 1458’s solvency and capital requirement as calculated through its internal model. In addition, if the FAL are not sufficient to cover all losses, the Lloyd’s Central Fund provides an additional level of security for policyholders. At September 30, 2019, the FAL required to support the underwriting activities at Lloyd’s through Syndicate 1458 was £514.4 million (December 31, 2018 - £427.5 million). Actual FAL posted for Syndicate 1458 at September 30, 2019 was £561.0 million, supported by a $255.0 million letter of credit and a $434.6 million deposit of cash and fixed maturity securities (December 31, 2018 - $180.0 million and $390.8 million, respectively). See “Note 8. Debt and Credit Facilities” in our “Notes to the Consolidated Financial Statements” for additional information related to this letter of credit facility.
RenaissanceRe Europe’s U.K. branch is authorized by the Prudential Regulation Authority (the “PRA”), and is regulated by both the PRA and Financial Conduct Authority (the “FCA”). It is subject to the Solvency II regime and applied for and was granted a modification of the rules for the year ended December 31, 2018.
RenaissanceRe UK is authorized by the PRA, and is regulated by both the PRA and FCA. RenaissanceRe UK is subject to the Solvency II regime and applied for and was granted waivers of certain reporting requirements for the year ended December 31, 2018, including in respect of group supervision. As of December 31, 2018 it met its minimum capital and surplus requirements. RenaissanceRe UK was required to prepare a FCR for the year ended December 31, 2018, which is available on our website.
U.S.
Renaissance Reinsurance U.S. is domiciled in Maryland, which has adopted the National Association of Insurance Commissioners' model law that uses a risk-based capital ("RBC") model to monitor and regulate the solvency of licensed life, health, and property and casualty insurance and reinsurance companies. The RBC calculation is used to measure an insurer's capital adequacy with respect to the risk characteristics of the insurer's premiums written and net claims and claim expenses, rate of growth and quality of assets, among other measures. At September 30, 2019, we believe the statutory capital and surplus of Renaissance Reinsurance U.S. exceeded the minimum capital adequacy level required to be maintained under U.S. law.
Renaissance Reinsurance U.S. is subject to certain restrictions on its ability to pay dividends pursuant to Maryland law, including making appropriate filings with and obtaining certain approvals from its regulator. During 2019, Renaissance Reinsurance U.S. will have an ordinary dividend capacity of $31.2 million (2018 - $24.1 million).
RenaissanceRe Europe’s U.S. branch is required to file financial statements prepared in accordance with statutory accounting practices prescribed or permitted by the U.S. insurance regulators. Its minimum required statutory capital and surplus is based on the greater of the RBC level that would trigger regulatory action or minimum requirements per state insurance regulation. At September 30, 2019, we believe RenaissanceRe Europe’s U.S. branch exceeded the minimum required statutory capital and surplus requirement and also exceeded the RBC minimum required level.
RenaissanceRe Europe’s U.S. branch does not pay ordinary dividends and would need approval from the New York State Department of Financial Services for any return of capital to RenaissanceRe Europe.
Switzerland
RenaissanceRe Europe is regulated by the Swiss Financial Market Supervisory Authority (“FINMA”) pursuant to the Insurance Supervision Act. Its accounts are prepared in accordance with the Swiss Code of Obligations, the Insurance Supervision Act and the Insurance Supervision Ordinance. RenaissanceRe Europe is obligated to maintain a minimum level of capital based on the Swiss Code of Obligations and Insurance Supervision Act. In addition, it is required to perform a minimum solvency margin calculation based on the Swiss Solvency Test (“SST”) regulations as stipulated by the Insurance Supervision Act and the Insurance Supervision Ordinance. The SST is based on an economic view and required capital is derived from a combination of internal and standard models. The amount of dividends that RenaissanceRe Europe is permitted to distribute is restricted to freely distributable reserves which consist of retained


earnings and the current year profit. The solvency and capital requirements must still be met following any distribution. At September 30, 2019, we believe RenaissanceRe Europe exceeded the minimum solvency and capital requirements required to be maintained under Swiss law. RenaissanceRe Europe was required to prepare a FCR for the year ended December 31, 2018, which is available on our website.
Australia
RenaissanceRe Europe’s Australia branch is regulated by the Australian Prudential Regulation Authority (“APRA”) and is authorized to carry on insurance business under subsection 12(2) of the Insurance Act 1973. RenaissanceRe Europe’s Australia branch’s regulatory reporting is prepared in accordance with the Australian Accounting Standards and APRA Prudential Standards. APRA Prudential Standards require the maintenance of net assets in Australia in excess of a calculated Prescribed Capital Amount (“PCA”). At September 30, 2019, we believe the net assets in Australia of RenaissanceRe Europe’s Australia branch were above the PCA estimated under the APRA Prudential Standards.
Top Layer Re
Renaissance Reinsurance is obligated to make a mandatory capital contribution of up to $50.0 million in the event that a loss reduces Top Layer Re’s capital below a specified level.
Liquidity and Cash Flows
Holding Company Liquidity
As a Bermuda-domiciled holding company, RenaissanceRe has limited operations of its own and its assets consist primarily of investments in subsidiaries, and, to a degree, cash and securities in amounts which fluctuate over time. Accordingly, RenaissanceRe’s future cash flows largely depend on the availability of dividends or other statutorily permissible payments from our subsidiaries. As discussed above, the ability to pay such dividends is limited by the applicable laws and regulations in the various jurisdictions in which our subsidiaries operate.
RenaissanceRe’s principal uses of liquidity are: (1) common share related transactions including dividend payments to our common shareholders and common share repurchases, (2) preference share related transactions including dividend payments to our preference shareholders and preference share redemptions, (3) interest and principal payments on debt, (4) capital investments in our subsidiaries, (5) acquisition of new or existing companies or businesses, such as our recent acquisition of the TMR Group Entities and (6) certain corporate and operating expenses.
We attempt to structure our organization in a way that facilitates efficient capital movements between RenaissanceRe and our operating subsidiaries and to ensure that adequate liquidity is available when required, giving consideration to applicable laws and regulations, and the domiciliary location of sources of liquidity and related obligations.
In the aggregate, our principal operating subsidiaries have historically produced sufficient cash flows to meet their expected claims payments and operational expenses and to provide dividend payments to us. In addition, our subsidiaries maintain a concentration of investments in high quality liquid securities, which management believes will provide additional liquidity for extraordinary claims payments should the need arise. However, in some circumstances, RenaissanceRe may contribute capital to its subsidiaries. For example, during 2018 and 2017 we experienced significant losses from large catastrophe events, and as we would expect following events of this magnitude, it was necessary for RenaissanceRe to contribute capital to certain of our principal operating subsidiaries to ensure they were able to maintain levels of capital adequacy and liquidity in compliance with various laws and regulations, support rating agency capital requirements, pay valid claims quickly and be adequately capitalized to pursue business opportunities as they arise. During 2019, RenaissanceRe contributed capital to RenaissanceRe Specialty Holdings (UK) Limited to fund the acquisition of TMR and made a capital contribution to Renaissance Reinsurance to increase its shareholders’ equity, consistent with past practice following a significant acquisition and to support growth in premiums. In addition, from time to time we invest in new managed joint ventures, increase our investments in certain of our managed joint ventures and contribute cash to investment subsidiaries. In certain instances, we are required to make capital contributions to our subsidiaries, for example, Renaissance Reinsurance is obligated to make a mandatory capital contribution of up to $50.0 million in the event that a loss reduces Top Layer Re’s capital below a specified level.
Sources of Liquidity
Historically, cash receipts from operations, consisting primarily of premiums, investment income and investmentfee income, have provided sufficient funds to pay losses and operating expenses of our subsidiaries and to fund dividends and distributions to RenaissanceRe. Other potential sources of liquidity include borrowings under our credit facilities and issuances of securities. For example, in June 2020, we raised $1.1 billion of net proceeds in an underwritten public offering and concurrent private placement of our common shares.
The premiums received by our operating subsidiaries are generally received months or even years before losses are paid under the policies related to such premiums. Premiums and acquisition expenses generally are received within the first two years of inception of a contract while operating expenses are generally paid within a year of being incurred. It generally takes much longer for claims and claims expenses to be reported and ultimately settled, requiring the establishment of reserves for claims and claim expenses.
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Therefore, the amount of claims paid in any one year is not necessarily related to the amount of net claims incurred in that year, as reported in the consolidated statement of operations.
While we expect that our liquidity needs will continue to be met by our cash receipts from operations, as a result of the combination of current market conditions, lower than usual investment yields, and the nature of our business where a large portion of the coverages we provide can produce losses of high severity and low frequency, future cash flows from operating activities cannot be accurately predicted and may fluctuate significantly between individual quarters and years. In addition, due to the magnitude and complexity of


certain large loss events, meaningful uncertainty remains regarding losses from these events and our actual ultimate net losses from these events may vary materially from preliminary estimates, which would impact our cash flows from operations. Further, we expect historically significant industry losses related to the COVID-19 pandemic to emerge over time as the full impact of the pandemic and its effects on the global economy are realized, which may impact our cash flows from operations.
Our “shelf” registration statement on Form S-3 under the Securities Act allows for the public offering of various types of securities, including common shares, preference shares and debt securities, and thus provides a source of liquidity. Because we are a “well-known seasoned issuer” as defined by the rules promulgated under the Securities Act, we are also eligible to file additional automatically effective registration statements on Form S-3 in the future for the potential offering and sale of an unlimited amount of debt and equity securities.
Credit Facilities
In addition, we maintain lettercredit facilities that provide liquidity and allow us to satisfy certain collateral requirements. The outstanding amounts drawn under each of our significant credit facilities are set forth below:
At June 30, 2020Issued or Drawn
Revolving Credit Facility (1)$— 
Bilateral Letter of Credit Facilities
Secured329,341 
Unsecured367,771 
Funds at Lloyd’s Letter of Credit Facility290,000 
$987,112 
(1)  At June 30, 2020, no amounts were issued or drawn under this facility.
During the six months ended June 30, 2020, the letters of credit and facilities which provide liquidity. Referthat were transferred to “Part II, Item 7. Management’s Discussion and Analysisthe Company in connection with the acquisition of Financial Condition and Results of Operations, Liquidity and Capital Resources, Capital Resources”TMR were terminated. There have been no other material changes to our credit facilities as disclosed in our Form 10-K for the year ended December 31, 20182019.
Refer to “Note 7. Debt and “Part I, Item 2. Management’s DiscussionCredit Facilities” in our “Notes to the Consolidated Financial Statements” for additional information related to our debt and Analysissignificant credit facilities.
Funds at Lloyd’s
As a member of Lloyd’s, the underwriting capacity, or stamp capacity, of Syndicate 1458 must be supported by providing a deposit in the form of cash, securities or letters of credit, which are referred to as Funds at Lloyd’s. At June 30, 2020, the FAL required to support the underwriting activities at Lloyd’s through Syndicate 1458 was £509.0 million (December 31, 2019 - £524.3 million). Actual FAL posted for Syndicate 1458 at June 30, 2020 by RenaissanceRe Corporate Capital (UK) Limited was £559.5 million (December 31, 2019 - £522.5 million), supported by a $290.0 million letter of credit and a $403.8 million deposit of cash and fixed maturity securities (December 31, 2019 - $290.0 million and $385.9 million, respectively).
Multi-Beneficiary Reinsurance Trusts and Multi-Beneficiary Reduced Collateral Reinsurance Trusts
Certain of our insurance subsidiaries use multi-beneficiary reinsurance trusts and multi-beneficiary reduced collateral reinsurance trusts to collateralize reinsurance liabilities. Refer to “Note 18. Statutory
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Requirements” in our “Notes to the Consolidated Financial Condition and Results of Operations, Capital Resources”Statements” in our Form 10-Q10-K for the nineyear ended December 31, 2019 for additional information.
Multi-Beneficiary Reinsurance Trusts
Assets held under trust at June 30, 2020 with respect to our multi-beneficiary reinsurance trusts totaled $1.2 billion and $277.1 million for Renaissance Reinsurance and DaVinci, respectively (December 31, 2019 - $1.3 billion and $336.5 million, respectively), compared to the minimum amount required under U.S. state regulations of $896.4 million and $214.8 million, respectively, at June 30, 2020 (December 31, 2019 - $927.4 million and $249.4 million, respectively).
Multi-Beneficiary Reduced Collateral Reinsurance Trusts
Assets held under trust at June 30, 2020 with respect to our multi-beneficiary reduced collateral reinsurance trusts totaled $55.1 million and $46.7 million for Renaissance Reinsurance and DaVinci, respectively (December 31, 2019 - $51.7 million and $43.8 million, respectively), compared to the minimum amount required under U.S. state regulations of $38.2 million and $38.5 million, respectively (December 31, 2019 - $40.3 million and $40.9 million, respectively).
Cash Flows
Six months ended June 30,20202019
(in thousands)  
Net cash provided by operating activities$856,965  $783,969  
Net cash used in investing activities(1,727,562) (2,076,974) 
Net cash provided by financing activities677,560  856,243  
Effect of exchange rate changes on foreign currency cash(187) (534) 
Net decrease in cash and cash equivalents(193,224) (437,296) 
Cash and cash equivalents, beginning of period1,379,068  1,107,922  
Cash and cash equivalents, end of period$1,185,844  $670,626  
2020
During the six months ended SeptemberJune 30, 2019 for details of these facilities.
Cash Flows
      
 Nine months ended September 30,2019 2018 
 (in thousands)    
 Net cash provided by operating activities$1,264,432
 $888,526
 
 Net cash used in investing activities(2,338,764) (2,064,305) 
 Net cash provided by financing activities833,020
 270,803
 
 Effect of exchange rate changes on foreign currency cash4,641
 (3,575) 
 Net decrease in cash and cash equivalents(236,671) (908,551) 
 Cash and cash equivalents, beginning of period1,107,922
 1,361,592
 
 Cash and cash equivalents, end of period$871,251
 $453,041
 
      
2019
During the nine months ended September 30, 2019,2020, our cash and cash equivalents decreased by $236.7$193.2 million, to $871.3 million$1.2 billion at SeptemberJune 30, 2019,2020, compared to $1.1$1.4 billion at December 31, 2018.2019.
Cash flows provided by operating activities. Cash flows provided by operating activities during the ninesix months ended SeptemberJune 30, 20192020 were $1.3 billion,$857.0 million, compared to $888.5$784.0 million during the ninesix months ended SeptemberJune 30, 2018.2019. Cash flows provided by operating activities during the ninesix months ended SeptemberJune 30, 20192020 were primarily the result of certain adjustments to reconcile our net income of $909.9$727.0 million to net cash provided by operating activities, including:
•an increase in reinsurance balances payable of $738.4 million$1.3 billion principally driven by the issuance of non-voting preference shares to investors in Upsilon RFO, which are accounted for as prospective reinsurance and included in reinsurance balances payable on our consolidated balance sheet. See “Note 9. Variable Interest Entities” in our “Notes to the Consolidated Financial Statements” for additional information related to Upsilon RFO’s non-voting preference shares;
•an increase in unearned premiums of $1.0 billion due to the growth in gross premiums written across both our Property and Casualty and Specialty segments; partially offset by
•an increase in premiums receivable of $920.1 million due to the timing of receipts and increase in our gross premiums written;
•an increase of $498.4 million in our prepaid reinsurance premiums due to the timing of payments and increase in ceded premiums written;
•net realized and unrealized gains on investments of $337.7 million principally driven by higher realized gains generated on the sale of fixed maturity investments trading, partially offset by lower overall returns in our portfolios of equity investments trading and other investments; and
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•a decrease in other operating cash flows of $316.5 million primarily reflecting subscriptions received in advance of the issuance of Upsilon RFO’s non-voting preference shares effective January 1, 2020, which were recorded in other liabilities at December 31, 2019. During the six months ended June 30, 2020, in connection with the issuance of the non-voting preference shares of Upsilon RFO, other liabilities were reduced by the subscriptions received in advance, and reinsurance balances payable were increased by an offsetting amount, with corresponding impacts to other operating cash flows and the change in reinsurance balances payable, as noted above, on our consolidated statements of cash flows for the six months ended June 30, 2020. See “Note 9. Variable Interest Entities” in our “Notes to the Consolidated Financial Statements” for additional information related to Upsilon RFO’s non-voting preference shares.
Cash flows used in investing activities. During the six months ended June 30, 2020, our cash flows used in investing activities were $1.7 billion, principally reflecting net purchases of short term investments, fixed maturity investments trading, other investments and equity investments trading of $990.6 million,$609.1 million, $90.0 million and $45.0 million, respectively. The net purchase of short term investments was primarily associated with capital received from investors in Upsilon RFO during the six months ended June 30, 2020, whereas the net purchase of fixed maturity investments trading and equity investments trading was primarily funded by cash flows provided by operating activities and as described below, the issuance of RenaissanceRe common shares during the second quarter of 2020. The net purchase of other investments during the six months ended June 30, 2020, was primarily driven by an increased allocation to catastrophe bonds.
Cash flows provided by financing activities. Our cash flows provided by financing activities in the six months ended June 30, 2020 were $677.6 million, and were principally the result of:
•the issuance of 6,325,000 of our common shares in an underwritten public offering at a public offering price of $166.00 per share, combined with an additional $75.0 million raised through the issuance of 451,807 of our common shares at a price of $166.00 per share to State Farm Mutual Automobile Insurance Company, one of our existing stockholders, in a private placement. The total net proceeds from the offerings were $1.1 billion;
•net inflows of $79.3 million primarily related to net third-party redeemable noncontrolling interest share transactions in Medici and Vermeer; partially offset by
•the repayment in full at maturity the aggregate principal amount of $250.0 million, plus applicable accrued interest, of our 5.75% Senior Notes due 2020 of RenRe North America Holdings Inc. and RenaissanceRe Finance;
•the redemption of all 5 million of our outstanding Series C 6.08% Preference Shares on March 26, 2020 for $125.0 million plus accrued and unpaid dividends thereon;
•the repurchase of 406 thousand of our common shares in open market transactions at an aggregate cost of $62.6 million and an average price of $154.36 per common share; and
•dividends paid on our common and preference shares of $33.1 million and $16.3 million, respectively.
2019
During the six months ended June 30, 2019, our cash and cash equivalents decreased by $437.3 million, to $670.6 million at June 30, 2019, compared to $1.1 billion at December 31, 2018.
Cash flows provided by operating activities. Cash flows provided by operating activities during the six months ended June 30, 2019 were $784.0 million, compared to cash flows used by operating activities of $349.1 million during the six months ended June 30, 2018. Cash flows provided by operating activities during the six months ended June 30, 2019 were primarily the result of certain adjustments to reconcile our net income of $802.0 million to net cash provided by operating activities, including:
•an increase in reinsurance balances payable of $1.1 billion principally driven by the issuance of non-voting preference shares to investors in Upsilon RFO, which are accounted for as prospective reinsurance and included in reinsurance balances payable on our consolidated balance sheet. See
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“Note 10. Variable Interest Entities” in our “Notes to the Consolidated Financial Statements” for additional information related to Upsilon RFO’s non-voting preference shares;
•an increase in unearned premiums of $487.9$882.9 million due to the growth in gross premiums written across both our Property and Casualty and Specialty segments;segments, combined with the timing of the January and June renewals; partially offset by
•
a net decrease in reinsurance recoverable of $482.7 million, after taking into account the acquisition of the TMR Group Entities, primarily resulting from the collection of $930.7 million during the nine months ended September 30, 2019, partially offset by increases to reinsurance recoverable principally driven by increases in net claims and claim expenses associated with current accident year losses, combined with the continued execution of our gross-to-net strategy;
•
an increase in reserve for claims and claim expenses of $118.7 million as a result of claims and claims expenses incurred of $1.8 billion during the nine months ended September 30, 2019 principally driven by current accident year losses, partially offset by claims payments of $1.6 billion primarily associated with prior accident years losses; partially offset by


increases in premiums receivable of $625.0$965.8 million due to the timing of receipts of our gross premiums written;
•an increase of $216.1$402.6 million in our prepaid reinsurance premiums due to an increase in ceded premiums written;written associated with the January and June renewals;
•a decrease in other operating cash flows of $277.1$326.9 million primarily reflecting subscriptions received in advance of the issuance of Upsilon RFO’s non-voting preference shares effective January 1, 2019, which were recorded in other liabilities at December 31, 2018. During the first ninesix months of 2019, in connection with the issuance of the non-voting preference shares of Upsilon RFO, other liabilities were reduced by the subscriptions received in advance, and reinsurance balances payable were increased by an offsetting amount, with corresponding impacts to other operating cash flows and the change in reinsurance balances payable, as noted above, on our consolidated statements of cash flows for the first ninesix months of 2019. See “Note 10.9. Variable Interest Entities” in our “Notes to the Consolidated Financial Statements” for additional information related to Upsilon RFO’s non-voting preference shares; and
•net realized and unrealized gains on investments of $396.6$361.3 million principally due to improved performances from our fixed maturity, public equity and investments-related derivative portfolios.
Cash flows used in investing activities. investing activities. During the ninesix months ended SeptemberJune 30, 2019,, our cash flows used in investing activities were $2.3$2.1 billion, principally reflecting net purchases of short term investments and other investments of $2.0 billion and $133.9 million, respectively, partially offset by net sales of fixed maturity investments and otherequity investments of $1.4 billion, $567.8$175.3 million and $130.5$125.6 million, respectively. The net purchase of short term investments was funded in part by the capital received from investors in Upsilon RFO and otherthe net cash flows provided by operating activities.sales of fixed maturity and equity investments, as noted above. The net purchase of other investments during the ninesix months ended SeptemberJune 30, 2019,, was primarily driven by an increased allocation to catastrophe bonds. In addition, we completed our acquisition of the TMR Group Entities on March 22, 2019, resulting in a net cash outflow of $276.2 million, comprised of cash consideration paid by RenaissanceRe as acquisition consideration of $813.6 million, net of cash acquired from the TMR Group Entities of $537.4 million. SeeRefer to “Note 3. Acquisition of Tokio Millennium Re” in our “Notes to the Consolidated Financial Statements” in our Form 10-K for the year ended December 31, 2019 for additional information related to the acquisition of the TMR Group Entities.TMR.
Cash flows provided by financing activities. financing activities. Our cash flows provided by financing activities in the ninesix months ended SeptemberJune 30, 2019 were $833.0$856.2 million, and were principally the result of:
net inflows of $516.0 million related to net third party redeemable noncontrolling interest share transactions in DaVinciRe, Medici and Vermeer;
•net inflows of $396.4 million associated with the April 2, 2019 issuance of $400.0 million of our 3.600% Senior Notes due April 15, 2029; partially offset by
dividends paid on our common and preference shares of $44.5 million and $27.6 million, respectively.
2018
During the nine months ended September 30, 2018, our cash and cash equivalents decreased by $908.6 million, to $453.0 million at September 30, 2018, compared to $1.4 billion at December 31, 2017.
Cash flows provided by operating activities. Cash flows provided by operating activities during the nine months ended September 30, 2018 were $888.5 million, compared to $601.7 million during the nine months ended September 30, 2017. Cash flows provided by operating activities during the nine months ended September 30, 2018 were primarily the result of certain adjustments to reconcile our net income of $392.9 million to net cash provided by operating activities, including:
an increase in reinsurance balances payable of $981.8 million principally driven by the issuance of non-voting preference shares to investors in Upsilon RFO, following capital being deployed in the vehicle, which are accounted for as prospective reinsurance and included in reinsurance balances payable on our consolidated balance sheet. See “Note 10. Variable Interest Entities” for additional information related to Upsilon RFO’s non-voting preference shares;
an increase in unearned premiums of $581.2 million due to the timing of renewals;


a decrease in reinsurance recoverable of $382.6 million due to receipt of these balances in connection with the 2017 Large Loss Events;
net realized and unrealized losses on investments of $86.4 million principally related to our portfolio of fixed maturity investments which experienced an upward shift in the interest rate yield curve during the nine months ended September 30, 2018; partially offset by
increases in premiums receivable and deferred acquisition costs of $482.5 million and $71.2 million, respectively, due to the timing of payments of our gross premiums written and amortization of deferred acquisition costs, respectively;
a decrease in other operating cash flows of $593.1 million primarily reflecting subscriptions received in advance of the issuance of Upsilon RFO’s non-voting preference shares effective January 1, 2018, which were recorded in other liabilities at December 31, 2017. During the nine months ended September 30, 2018, in connection with the issuance of the non-voting preference shares of Upsilon RFO, other liabilities were reduced by the subscriptions received in advance, and reinsurance balances payable were increased by an offsetting amount, with corresponding impacts to other operating cash flows and the change in reinsurance balances payable on our consolidated statements of cash flows for the nine months ended September 30, 2018, as discussed above. See “Note 10. Variable Interest Entities” for additional information related to Upsilon RFO’s non-voting preference shares;
an increase of $262.0 million in our prepaid reinsurance premiums due to ceded premiums written associated renewals in the nine months ended September 30, 2018; and
a decrease in our reserve for claims and claim expenses of $127.9 million as a result of claims and claims expenses incurred of $817.6 million during the nine months ended September 30, 2018, more than offset by claims payments of $932.5 million, largely associated with the 2017 Large Loss Events.
Cash flows used in investing activities. During the nine months ended September 30, 2018, our cash flows used in investing activities were $2.1 billion, principally reflecting net purchases of short term, fixed maturity and other investments of $1.5 billion, $471.2 million and $130.6 million, respectively. The net purchase of short term and fixed maturity investments was funded in part by the capital received from investors in Upsilon RFO, as discussed above, and the proceeds from the issuance of our 5.750% Series F Preference Shares, as discussed below. In addition, we increased our allocation to other investments during the nine months ended September 30, 2018.
Cash flows provided by financing activities. •Our cash flows provided by financing activities in the nine months ended September 30, 2018 were $270.8 million, and were principally the result of:
net inflows of $242.4 million associated with the issuance of $250.0 million of Depositary Shares (each representing a 1/1000th interest in a share of our 5.750% Series F Preference Shares), net of underwriting discount;
net inflows of $96.0$514.7 million related to a net contribution of capital from third-party shareholders, principally in Medici;DaVinciRe, Medici, Vermeer and Upsilon RFO; partially offset by
•dividends paid on our common and preference shares of $39.6$29.4 million and $20.9$18.4 million, respectively.
Capital Resources
We monitor our capital adequacy on a regular basis and seek to adjust our capital according to the needs of our business. In particular, we require capital sufficient to meet or exceed the capital adequacy ratios established by rating agencies for maintenance of appropriate financial strength ratings, the capital adequacy tests performed by regulatory authorities and the capital requirements under our credit facilities. We may seek to raise additional capital or return capital to our shareholders through common share repurchases and cash dividends (or a combination of such methods). In the normal course of our operations, we may from time to time evaluate additional share or debt issuances given prevailing market conditions and capital management strategies, including for our operating subsidiaries and joint ventures. In
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addition, as noted above, we enter into agreements with financial institutions to obtain letter of credit facilities for the benefit of our operating subsidiaries in their reinsurance and insurance business.


Our total shareholders’ equity attributable to RenaissanceRe and debt was as follows:
        
  At September 30, 2019 At December 31, 2018 Change 
 (in thousands)      
 Common shareholders’ equity$5,301,235
 $4,395,080
 $906,155
 
 Preference shares650,000
 650,000
 —
 
 Total shareholders’ equity attributable to RenaissanceRe5,951,235
 5,045,080
 906,155
 
 3.600% Senior Notes due 2029391,245
 —
 391,245
 
 3.450% Senior Notes due 2027296,167
 295,797
 370
 
 3.700% Senior Notes due 2025297,964
 297,688
 276
 
 5.750% Senior Notes due 2020249,850
 249,602
 248
 
 4.750% Senior Notes due 2025 (DaVinciRe) (1)148,272
 148,040
 232
 
 Total debt$1,383,498
 $991,127
 $392,371
 
 Total shareholders’ equity attributable to RenaissanceRe and debt$7,334,733
 $6,036,207
 $1,298,526
 
        
At June 30, 2020At December 31, 2019Change
(in thousands)  
Common shareholders’ equity$6,822,172  $5,321,367  $1,500,805  
Preference shares525,000  650,000  (125,000) 
Total shareholders’ equity attributable to RenaissanceRe7,347,172  5,971,367  1,375,805  
3.600% Senior Notes due 2029391,932  391,475  457  
3.450% Senior Notes due 2027296,538  296,292  246  
3.700% Senior Notes due 2025298,242  298,057  185  
5.750% Senior Notes due 2020 (2)—  249,931  (249,931) 
4.750% Senior Notes due 2025 (DaVinciRe) (1)148,504  148,350  154  
Total debt$1,135,216  $1,384,105  $(248,889) 
Total shareholders’ equity attributable to RenaissanceRe and debt$8,482,388  $7,355,472  $1,126,916  
(1)  RenaissanceRe owns a noncontrolling economic interest in its joint venture DaVinciRe. Because RenaissanceRe controls a majority of DaVinciRe’s outstanding voting rights, the consolidated financial statements of DaVinciRe are included in the consolidated financial statements of RenaissanceRe. However, RenaissanceRe does not guarantee or provide credit support for DaVinciRe and RenaissanceRe’s financial exposure to DaVinciRe is limited to its investment in DaVinciRe’s shares and counterparty credit risk arising from reinsurance transactions.
(2)  The 5.750% Senior Notes due 2020 were repaid in full at maturity on March 15, 2020.
During the ninesix months ended SeptemberJune 30, 2019,2020, our total shareholders’ equity attributable to RenaissanceRe and debt increased by $1.3$1.1 billion, to $7.3$8.5 billion.
Our shareholders’ equity attributable to RenaissanceRe increased $906.2 million$1.4 billion during the ninesix months ended SeptemberJune 30, 20192020 principally as a result of:
•
our comprehensive income attributable to RenaissanceRe of $712.3 million;
the issuancesale of 1,739,0716,325,000 common shares in an underwritten public offering and the concurrent sale of our451,807 common shares to Tokio in connection with the TMR Stock Purchase; andState Farm, each at a price per share of $166.00, for total aggregate net proceeds of $1.1 billion;
•our comprehensive income available to RenaissanceRe of $509.1 million; partially offset by
•
$44.5 million and $27.6 million of dividends on our common and preference shares, respectively.
•the redemption of all 5 million of our outstanding Series C 6.08% Preference Shares for $125.0 million plus accrued and unpaid dividends thereon;
•the repurchase of 406 thousand common shares in open market transactions at an aggregate cost of $62.6 million and an average price of $154.36 per common share; and
•$33.1 million and $16.3 million of dividends on our common and preference shares, respectively.
Our debt increased $392.4decreased $248.9 million during the ninesix months ended SeptemberJune 30, 20192020 principally as a result of the April 2, 2019 issuancerepayment in full at maturity of $400.0 million of 3.600%our 5.75% Senior Notes due April 15, 2029. The net proceeds from this offering were used to repay, in full, the $200.0 million that was outstanding under our revolving credit agreement at March 31, 2019,2020 of RenRe North America Holdings Inc. and the remainder of the net proceeds will be used for general corporate purposes. See “Note 3. Acquisition of Tokio Millennium Re” in our “Notes to the Consolidated Financial Statements” for additional information regarding the acquisition of the TMR Group Entities and “Note 8. Debt and Credit Facilities” in our “Notes to the Consolidated Financial Statements” for additional information regarding the issuance of our 3.600% Senior Notes Due 2029.


Credit Facilities
The outstanding amounts drawn under each of our significant credit facilities is set forth below:
    
 At September 30, 2019Issued or Drawn 
 RenaissanceRe Revolving Credit Facility (1)$—
 
 Uncommitted Standby Letter of Credit Facility with Wells Fargo31,820
 
 Secured Letter of Credit Facility with Citibank Europe234,606
 
 Renaissance Reinsurance FAL Facility255,000
 
 Mizuho Letters of Credit (2)139,379
 
 Mitsubishi Letters of Credit (2)77,637
 
 Credit Suisse Letter of Credit Facility110,051
 
 Uncommitted, Unsecured Letter of Credit Facility with Citibank Europe218,684
 
 Total credit facilities in U.S. dollars$1,067,177
 
    
 Specialty Risks FAL Facility (1)£—
 
 Total credit facilities in pound sterling£—
 
    
(1)At September 30, 2019, no amounts were issued or drawn under these facilities.
(2)These letters of credit were transferred to us in connection with the acquisition of the TMR Group Entities. See “Note 3. Acquisition of Tokio Millennium Re” in our “Notes to the Consolidated Financial Statements” for additional information related to the acquisition of the TMR Group Entities.
During the nine months ended September 30, 2019, we amended certain of our existing credit facilities and entered into several new credit facilities following the TMR Stock Purchase to address the need to transfer or replace certain letters of credit that were transferred to us as a result of the acquisition of the TMR Group Entities. In addition, we exercised our option to increase the FAL Facility letter of credit by $75.0 million. The material amendments to the existing credit facilities and new credit facilities are described further in “Note 8. Debt and Credit Facilities” in our “Notes to the Consolidated Financial Statements”. There have been no other material changes to our credit facilities as disclosed in our Form 10-KRenaissanceRe Finance for the year ended December 31, 2018.aggregate principal amount of $250.0 million, plus applicable accrued interest.
For additional information related to the terms of our debt and significant credit facilities, see “Note 8.7. Debt and Credit Facilities” in our “Notes to the Consolidated Financial Statements” in this Form 10-Q and “Note 8.9. Debt and Credit Facilities” in our “Notes to the Consolidated Financial Statements” in our Form 10-K for the year ended December 31, 2018. Refer2019. See “Note 10. Shareholders’ Equity” in our “Notes to the Consolidated Financial Statements” in this Form 10-Q and “Note 11.12. Shareholders’ Equity” in our “Notes to the Consolidated Financial Statements” in our Form 10-K for the year ended December 31, 20182019 for additional information related to our common and preference shares.
Multi-Beneficiary Reinsurance Trusts
Assets held under trust at September 30, 2019 with respect to our multi-beneficiary reinsurance trusts totaled $1.3 billion and $334.9 million for Renaissance Reinsurance and DaVinci, respectively (December 31, 2018 - $1.2 billion and $385.8 million, respectively), compared to the minimum amount required under U.S. state regulations of $1.0 billion and $205.9 million, respectively, at September 30, 2019 (December 31, 2018 - $1.1 billion and $356.9 million, respectively).
Multi-Beneficiary Reduced Collateral Reinsurance Trusts
Assets held under trust at September 30, 2019 with respect to our multi-beneficiary reduced collateral reinsurance trusts totaled $51.5 million and $38.8 million for Renaissance Reinsurance and DaVinci, respectively (December 31, 2018 - $50.3 million and $63.2 million, respectively), compared to the minimum amount required under U.S. state regulations of $36.6 million and $30.5 million, respectively (December 31, 2018 - $36.8 million and $26.9 million, respectively).

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Ratings
Financial strength ratings are important to the competitive position of reinsurance and insurance companies. We have received high long-term issuer credit and financial strength ratings from A.M. Best Company, Inc. (“A.M. Best”), S&P Global Ratings (“S&P”), Moody’s Investors Service (“Moody’s”) and Fitch Ratings Ltd. (“Fitch”), as applicable. These ratings represent independent opinions of an insurer’s financial strength, operating performance and ability to meet policyholder obligations, and are not an evaluation directed toward the protection of investors or a recommendation to buy, sell or hold any of our securities. Rating organizations continually review the financial positions of our principal operating subsidiaries and joint ventures and ratings may be revised or revoked by the agencies which issue them.
The ratings of our principal operating subsidiaries and joint ventures and the Enterprise Risk Management rating of RenaissanceRe as of October 25, 2019 are presented below.
A.M. BestS&PMoody’sFitch
Renaissance Reinsurance Ltd. (1)A+A+A1A+
DaVinci Reinsurance Ltd. (1)AA+A3—
Renaissance Reinsurance of Europe Unlimited Company (1)A+A+——
Renaissance Reinsurance U.S. Inc. (1)A+A+——
RenaissanceRe Europe AG (1)A+A+——
RenaissanceRe Specialty U.S. (1)A+A+——
Top Layer Reinsurance Ltd. (1)A+AA——
Vermeer Reinsurance Ltd. (1)A———
RenaissanceRe Syndicate 1458————
Lloyd's Overall Market Rating (2)AA+—AA-
RenaissanceRe (3)Very StrongVery Strong——
(1) The A.M. Best, S&P, Moody's and Fitch ratings for the companies set forth in the table above reflect the insurer's financial strength rating and, in addition to the insurer’s financial strength rating, the S&P ratings reflect the applicable insurer's long-term issuer credit rating.
(2) The A.M. Best, S&P and Fitch ratings for the Lloyd's Overall Market Rating represent RenaissanceRe Syndicate 1458's financial strength rating.
(3) The A.M. Best rating for RenaissanceRe reflects a very strong Enterprise Risk Management ("ERM") score within A.M. Best’s credit ratings methodology. The S&P rating for RenaissanceRe represents the rating on its ERM practices.
On March 22, 2019, following the closing of the acquisition of the TMR Group Entities, A.M. Best removed from under review with developing implications and affirmed the long-term issuer credit and financial strength ratings of RenaissanceRe, Renaissance Reinsurance, DaVinci, Renaissance Reinsurance U.S., RenaissanceRe Specialty U.S. and Renaissance Reinsurance of Europe, affirmed the ratings of Vermeer, and aligned the ratings of RenaissanceRe Europe with those of our other entities. The ratings were assigned a “stable” outlook.
On March 25, 2019, S&P revised its outlook on RenaissanceRe and its operating subsidiaries to stable from negative. In addition, S&P removed its ratings on RenaissanceRe Europe from CreditWatch with negative implications, where they were placed on November 2, 2018, and affirmed its “A+” issuer credit rating and financial strength rating on RenaissanceRe Europe.
On September 25, 2019, at our request, S&P withdrew it’s ”A+” long-term issuer credit and financial strength ratings on RenaissanceRe UK. The ratings of RenaissanceRe UK had previously been on CreditWatch negative.
As of October 25, 2019, there were no other material changes to our ratings as disclosed in our Form 10-K for the year ended December 31, 2018.


Reserve for Claims and Claim Expenses
We believe the most significant accounting judgment made by management is our estimate of claims and claim expense reserves. Claims and claim expense reserves represent estimates, including actuarial and statistical projections at a given point in time, of the ultimate settlement and administration costs for unpaid claims and claim expenses arising from the insurance and reinsurance contracts we sell. We establish our claims and claim expense reserves by taking claims reported to us by insureds and ceding companies, but which have not yet been paid (“case reserves”), adding IBNR and, if deemed necessary, adding costs for additional case reserves. Additional case reserves represent our estimates for claims related to specific contracts previously reported to us which we believe may not be adequately estimated by the client as of that date, or adequately covered in the setting of IBNR.
Our reserving techniques, assumptions and processes differ among our Property and Casualty and Specialty segments. See “Note 7. Reserve for Claims and Claim Expenses” in our “Notes to the Consolidated Financial Statements” included herein for more information on prior year development of the reserve foractual net claims and claim expenses paid will differ, perhaps materially, from the estimates reflected in our financial statements, which may adversely impact our financial condition, liquidity and analysis of our incurred and paid claims development for each of our Property and Casualty and Specialty segments. Seecapital resources.
Refer to “Note 7.8. Reserve for Claims and Claim Expenses” in our “Notes to the Consolidated Financial Statements” in our Form 10-K for the year ended December 31, 20182019 for more information on the risks we insure and reinsure, the reserving techniques, assumptions and processes we follow to estimate our claims and claim expense reserves, prior year development of the reserve for claims and claim expenses, analysis of our incurred and paid claims development and claims duration information for each of our Property and Casualty and Specialty segments. In addition, refer to “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Summary of Critical Accounting Estimates, Claims and Claim Expense Reserves” in our Form 10-K for the year ended December 31, 20182019 for more information on the reserving techniques, assumptions and processes we follow to estimate our claims and claim expense reserves, our current estimates versus our initial estimates of our claims reserves, and sensitivity analysis for each of our Property and Casualty and Specialty segments.


Investments
The table below shows our invested assets:
            
  September 30, 2019 December 31, 2018 Change 
 (in thousands, except percentages)          
 U.S. treasuries$4,314,006
 25.4% $3,331,411
 28.0% $982,595
 
 Agencies507,903
 3.0% 174,883
 1.5% 333,020
 
 Municipal1,629
 —% 6,854
 0.1% (5,225) 
 Non-U.S. government379,154
 2.2% 279,818
 2.4% 99,336
 
 Non-U.S. government-backed corporate263,170
 1.6% 160,063
 1.3% 103,107
 
 Corporate3,453,222
 20.4% 2,450,244
 20.6% 1,002,978
 
 Agency mortgage-backed1,248,722
 7.4% 817,880
 6.8% 430,842
 
 Non-agency mortgage-backed261,850
 1.5% 278,680
 2.4% (16,830) 
 Commercial mortgage-backed406,268
 2.4% 282,294
 2.4% 123,974
 
 Asset-backed550,304
 3.3% 306,743
 2.6% 243,561
 
 Total fixed maturity investments, at fair value11,386,228
 67.2% 8,088,870
 68.1% 3,297,358
 
 Short term investments, at fair value4,116,156
 24.3% 2,586,520
 21.8% 1,529,636
 
 Equity investments trading, at fair value379,422
 2.2% 310,252
 2.6% 69,170
 
 Other investments, at fair value962,109
 5.7% 784,933
 6.5% 177,176
 
 Total managed investment portfolio16,843,915
 99.4% 11,770,575
 99.0% 5,073,340
 
 Investments in other ventures, under equity method103,978
 0.6% 115,172
 1.0% (11,194) 
 Total investments$16,947,893
 100.0% $11,885,747
 100.0% $5,062,146
 
            
June 30, 2020December 31, 2019Change
(in thousands, except percentages)    
U.S. treasuries$4,258,675  21.6 %$4,467,345  25.7 %$(208,670) 
Agencies505,038  2.6 %343,031  1.9 %162,007  
Non-U.S. government584,206  3.0 %497,392  2.9 %86,814  
Non-U.S. government-backed corporate314,833  1.6 %321,356  1.9 %(6,523) 
Corporate4,428,553  22.5 %3,075,660  17.7 %1,352,893  
Agency mortgage-backed985,851  5.0 %1,148,499  6.6 %(162,648) 
Non-agency mortgage-backed276,300  1.4 %294,604  1.7 %(18,304) 
Commercial mortgage-backed591,238  3.0 %468,698  2.7 %122,540  
Asset-backed550,441  2.8 %555,070  3.2 %(4,629) 
Total fixed maturity investments, at fair value12,495,135  63.5 %11,171,655  64.3 %1,323,480  
Short term investments, at fair value5,570,804  28.2 %4,566,277  26.3 %1,004,527  
Equity investments trading, at fair value470,087  2.4 %436,931  2.5 %33,156  
Other investments, at fair value1,093,338  5.5 %1,087,377  6.3 %5,961  
Total managed investment portfolio19,629,364  99.6 %17,262,240  99.4 %2,367,124  
Investments in other ventures, under equity method94,285  0.4 %106,549  0.6 %(12,264) 
Total investments$19,723,649  100.0 %$17,368,789  100.0 %$2,354,860  
At SeptemberJune 30, 2019,2020, we held investments totaling $16.9$19.7 billion,, compared to $11.9$17.4 billion at December 31, 2018.2019. In connection with the acquisition of the TMR, Group Entities, we acquired total investments with a fair market value of $2.3 billion on March 22, 2019, the date of acquisition. Our investment guidelines stress preservation of capital, market liquidity, and diversification of risk. Notwithstanding the foregoing, our investments are subject to market-wide risks and fluctuations, as well as to risks inherent in particular securities. In addition to the information presented above and below, see “Note 4.3. Investments” and “Note 5.4. Fair Value Measurements” in our “Notes to the Consolidated Financial Statements” for additional information regarding our investments and the fair value measurement of our investments, respectively.
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As the reinsurance coverages we sell include substantial protection for damages resulting from natural and man-made catastrophes, as well as for potentially large casualty and specialty exposures, we expect from time to time to become liable for substantial claim payments on short notice. Accordingly, our investment portfolio as a whole is structured to seek to preserve capital and provide a high level of liquidity, which means that the large majority of our investment portfolio consists of highly rated fixed income securities, including U.S. treasuries, agencies, municipals, highly rated sovereign and supranational securities, high-grade corporate securities and mortgage-backed and asset-backed securities. We also have an allocation to publicly traded equities reflected on our consolidated balance sheet as equity investments trading and an allocation to other investments (including catastrophe bonds, private equity investments, senior secured bank loan funds and hedge funds). At September 30, 2019, our portfolio of equity investments trading totaled $379.4 million, or 2.2%, of our total investments (December 31, 2018 - $310.3 million or 2.6%). Our portfolio of other investments totaled $962.1 million, or 5.7%, of our total investments at September 30, 2019 (December 31, 2018 - $784.9 million or 6.5%).


Other Investments
The table below shows our portfolio of other investments: 
        
  September 30,
2019		 December 31,
2018		 Change 
 (in thousands)      
 Catastrophe bonds$659,466
 $516,571
 $142,895
 
 Private equity investments266,048
 242,647
 23,401
 
 Senior secured bank loan funds24,567
 14,482
 10,085
 
 Hedge funds12,028
 11,233
 795
 
 Total other investments$962,109
 $784,933
 $177,176
 
        
June 30,
2020		December 31,
2019		Change
(in thousands)  
Catastrophe bonds$807,162  $781,641  $25,521  
Private equity investments254,257  271,047  (16,790) 
Senior secured bank loan funds22,261  22,598  (337) 
Hedge funds9,658  12,091  (2,433) 
Total other investments$1,093,338  $1,087,377  $5,961  
We account for our other investments at fair value in accordance with FASB ASC Topic Financial Instruments. The fair value of certain of our fund investments, which principally include private equity funds, senior secured bank loan funds and hedge funds, is recorded on our consolidated balance sheet in other investments, and is generally established on the basis of the net valuation criteria established by the managers of such investments, if applicable. The net valuation criteria established by the managers of such investments is established in accordance with the governing documents of such investments. Many of our fund investments are subject to restrictions on redemptions and sales which are determined by the governing documents and limit our ability to liquidate these investments in the short term.
Some of our fund managers and fund administrators are unable to provide final fund valuations as of our current reporting date. We typically experience a reporting lag to receive a final net asset value report of one month for our hedge funds and senior secured bank loan funds and three months for private equity funds, although we have occasionally experienced delays of up to six months at year end, as the private equity funds typically complete their year-end audits before releasing their final net asset value statements.
In circumstances where there is a reporting lag between the current period end reporting date and the reporting date of the latest fund valuation, we estimate the fair value of these funds by starting with the prior month or quarter-end fund valuations, adjusting these valuations for actual capital calls, redemptions or distributions, and the impact of changes in foreign currency exchange rates, and then estimating the return for the current period. In circumstances in which we estimate the return for the current period, all information available to us is utilized. This principally includes using preliminary estimates reported to us by our fund managers, obtaining the valuation of underlying portfolio investments where such underlying investments are publicly traded and therefore have a readily observable price, using information that is available to us with respect to the underlying investments, reviewing various indices for similar investments or asset classes, and estimating returns based on the results of similar types of investments for which we have obtained reported results, or other valuation methods, where possible. Actual final fund valuations may differ, perhaps materially so, from our estimates and these differences are recorded in our consolidated statement of operations in the period in which they are reported to us as a change in estimate. Included in net investment incomerealized and unrealized gains (losses) on investments for the ninesix months ended SeptemberJune 30, 20192020 is a loss of $5.5$2.4 million (2018 (2019 - incomeloss of $0.3 million)$5.6 million) representing the change in estimate during the period related to the difference between our estimated net investment incomerealized and unrealized gains (losses) due to the lag in reporting discussed above and the actual amount as reported in the final net asset values provided by our fund managers.
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Our estimate of the fair value of catastrophe bonds is based on quoted market prices, or when such prices are not available, by reference to broker or underwriter bid indications. See “Note 5.4. Fair Value Measurements” in our “Notes to the Consolidated Financial Statements” for additional information regarding the fair value of measurement of our investments.
We have committed capital to private equity investments, other investments and investments in other ventures of $1.1$1.3 billion,, of which $715.9$752.3 million has been contributed at SeptemberJune 30, 2019.2020. Our remaining commitments to these investments at SeptemberJune 30, 20192020 totaled $418.2 million.$513.5 million. In the future, we may enter into additional commitments in respect of private equity investments or individual portfolio company investment opportunities.
Ratings
Financial strength ratings are important to the competitive position of reinsurance and insurance companies. We have received high long-term issuer credit and financial strength ratings from A.M. Best Company, Inc. (“A.M. Best”), S&P Global Ratings (“S&P”), Moody’s Investors Service (“Moody’s”) and Fitch Ratings Ltd. (“Fitch”), as applicable. These ratings represent independent opinions of an insurer’s financial strength, operating performance and ability to meet policyholder obligations, and are not an evaluation directed toward the protection of investors or a recommendation to buy, sell or hold any of our securities. Rating organizations continually review the financial positions of our principal operating subsidiaries and joint ventures and ratings may be revised or revoked by the agencies which issue them.
The ratings of our principal operating subsidiaries and joint ventures and the Enterprise Risk Management rating of RenaissanceRe as of July 24, 2020 are presented below.
A.M. Best (1)S&P (2)Moody's (3)Fitch (4)
Renaissance Reinsurance Ltd.A+A+A1A+
DaVinci Reinsurance Ltd.AA+A3—
Renaissance Reinsurance of Europe Unlimited CompanyA+A+——
Renaissance Reinsurance U.S. Inc.A+A+——
RenaissanceRe Europe AGA+A+——
RenaissanceRe Specialty U.S.A+A+——
Top Layer Reinsurance Ltd.A+AA——
Vermeer Reinsurance Ltd.A———
RenaissanceRe Syndicate 1458————
Lloyd's Overall Market RatingAA+—AA-
RenaissanceReVery StrongVery Strong——
(1) The A.M. Best ratings for our principal operating subsidiaries and joint ventures represent the insurer’s financial strength rating. The Lloyd’s Overall Market Rating represents RenaissanceRe Syndicate 1458’s financial strength rating. The A.M. Best rating for RenaissanceRe represents our Enterprise Risk Management (“ERM”) score
(2) The S&P ratings for our principal operating subsidiaries and joint ventures represent the insurer’s financial strength rating and the issuer’s long-term issuer credit rating. The Lloyd’s Overall Market Rating represents RenaissanceRe Syndicate 1458’s financial strength rating. The S&P rating for RenaissanceRe represents the rating on its ERM practices.
(3) The Moody’s ratings represent the insurer’s financial strength rating.
(4)  The Fitch rating for Renaissance Reinsurance represents the insurer’s financial strength rating. The Lloyd’s Overall Market Rating represents RenaissanceRe Syndicate 1458’s financial strength rating.
As of July 24, 2020, there were no other material changes to our ratings as disclosed in our Form 10-K for the year ended December 31, 2019.

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EFFECTS OF INFLATION
The potential exists, after a catastrophe loss, for the development of inflationary pressures in a local economy. We consider the anticipated effects on us in our catastrophe loss models. Our estimates of the potential effects of inflation are also considered in pricing and in estimating reserves for unpaid claims and claim expenses. In addition, itIt is possible that the risk of general economic inflation has increased which could, among other things, cause claims and claim expenses to increase and also impact the performance of our investment portfolio. This risk may be exacerbated by the steps taken by governments throughout the world in responding to the COVID-19 pandemic. The actual effects of this potential increase in inflation on our results cannot be accurately known until, among other items, claims are ultimately settled. The onset, duration and severity of an inflationary period cannot be estimated with precision. We consider the anticipated effects of inflation on us in our catastrophe loss models. Our estimates of the potential effects of inflation are also considered in pricing and in estimating reserves for unpaid claims and claim expenses. The potential exists, after a catastrophe loss, for the development of inflationary pressures in a local economy.
OFF-BALANCE SHEET AND SPECIAL PURPOSE ENTITY ARRANGEMENTS
At SeptemberJune 30, 2019,2020, we had not entered into any off-balance sheet arrangements, as defined in Item 303(a)(4) of Regulation S-K.
CONTRACTUAL OBLIGATIONS
In the normal course of business, we are party to a variety of contractual obligations as summarized in our Form 10-K for the year ended December 31, 2018.2019. We consider these contractual obligations when assessing our liquidity requirements. As of SeptemberJune 30, 2019,2020, there were no material changes in our contractual obligations as disclosed in the table of contractual obligations and related footnotes included in our Form 10-K for the year ended December 31, 2018, except2019.
CURRENT OUTLOOK
The COVID-19 Pandemic and General Economic Conditions
The global COVID-19 pandemic has had immense impacts on a global scale, including on the insurance and reinsurance industries, where it has contributed to an accelerating hard market across property, casualty and specialty lines. Notwithstanding our view of current opportunities available to RenaissanceRe, the COVID-19 pandemic has raised and continues to raise many new questions and challenges for us and our industry. It is not possible to predict precisely all of the potential impacts of the COVID-19 pandemic on RenaissanceRe, or their respective potential timing. Estimating the impact of the COVID-19 pandemic is complicated and challenging, and its ultimate impact and the extent of losses is highly unpredictable and uncertain at this time. Among the uncertainties that render such estimation unusually challenging are the unknown length and severity of the COVID-19 pandemic, the unknown duration and depth of the economic recession, and the extent and duration of society’s response to the COVID-19 pandemic and economic downturn. From governments’ unprecedented imposition of constraints on economic and social activity, to longer term changes in societal behaviors that may result from people’s reactions to the COVID-19 pandemic, we believe that the COVID-19 pandemic could change demand for (re)insurance products going forward, potentially having significant impacts on the industry. We expect insured losses to emerge over time as described below.primary insurance claims are handled and public sector initiatives develop, and as the full impact of the COVID-19 pandemic and its effects on the global economy are realized. We are closely monitoring these developments, including potential government actions which may impact the insurance and reinsurance sectors.
We expect that stress in the global economy will continue, possibly with a deep recession and severe unemployment, but we are unable to predict the ultimate duration and severity of the economic downturn. Given that the demand for insurance is significantly influenced by prevailing economic conditions, continued declining and weak global economic conditions may lead to a suppression of demand for insurance and reinsurance generally, although we believe there will be opportunities for the business we write, including in the second half of 2020. In addition, this pressure may inordinately affect smaller competitors in the primary insurance, reinsurance and retrocessional markets. In turn, these pressures may lead, among other things, to increased consolidation as larger, better capitalized competitors will be in a stronger position to withstand prolonged periods of economic downturn and sustain their business through the financial volatility. In the current environment, capital and liquidity are extremely important, and we believe our capital and liquidity
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On March 22, 2019,
positions are strong. In furtherance of our strategic plan, in the second quarter of 2020 we raised over $1 billion of new common equity to support our pursuit of successfully executing on future opportunities.
We currently believe that current economic conditions have, and will likely continue to, heighten our counterparty credit risk due to the strain that the COVID-19 pandemic is putting on potentially all companies, including our own customers, agents, brokers, retrocessionaires, and capital providers. If there is a sustained economic downturn resulting from the COVID-19 pandemic, these effects could be magnified or could manifest themselves in ways that we cannot currently predict. Economic disruption and changing market dynamics may also lead to significant changes and mismatches in the market as different insurance products compete for similar coverages. While we believe that we are well positioned to continue to execute on our strategic plan and compete for and meet the demand for the protection that we provide, it is difficult to predict all of the potential impacts of the COVID-19 pandemic on the markets in which we participate and our ability to effectively respond to these changing market dynamics.
More broadly, steps taken by governments throughout the world in responding to the COVID-19 pandemic, including the reduction of interest rates in certain jurisdictions in the U.S., could lead to higher inflation over time than we had anticipated, leading to higher costs of claims and claim expenses and the need to increase our reserves. The effects of this trend could be magnified for longer-tail business lines that are more inflation sensitive, particularly our casualty business. At the time, these actions and other dynamics are likely to reduce broadly available realized economic returns on investments.
In addition, market conditions have adversely impacted, and may adversely affect, our investment portfolio in the future. Over the longer term, as the COVID-19 pandemic continues and continues to create volatility in the financial markets, we expect that it is likely that the strain on financial markets will increase. In addition, access to public capital markets and private, third-party capital may become unavailable or constrained, or more expensive than in recent periods, or contain more onerous terms and conditions. Notwithstanding the many uncertainties and challenges that lie ahead, we believe that our track record of responding to industry events, differentiated risk management and client service capabilities, and access to diverse sources of both capital and risk position us favorably in the current environment.
While much of the positive performance in our investment portfolio in the first half of 2020 reflected mark-to-market gains, we expect that it is highly likely that we will realize losses in certain individual positions in our investment portfolio in future periods, particularly in our equity investments trading portfolio and in lower rated corporate credit, as a result of the acquisitioneconomic changes from the COVID-19 pandemic. These losses could be significant in respect of a particular financial period, or otherwise. Our ability to derive investment income from our investments may also become more difficult as economic sluggishness, or market volatility, continues. The sustained environment of low interest rates in recent years lowered the TMR Group Entities,yields at which was accounted for underwe invest our assets relative to longer-term historical levels. In 2019 and the acquisition methodfirst half of accounting2020, decreases in prevailing interest rates contributed significantly to comparably high net realized and unrealized gains from our invested assets. However, as we invest cash from new premiums written or reinvest the proceeds of invested assets, we expect the yield on our portfolio to be adversely impacted by the anticipated period of low interest rates and broader economic uncertainty.
Operationally, we believe we have adjusted well to the remote and socially distant work paradigms required by the COVID-19 pandemic, benefiting from prior and enhanced investments in technology, systems and training. Recently, and as appropriate, certain of our offices have begun to open on an optional and limited basis in accordance with FASB ASC Topic Business Combinations, total consideration paid was allocated among acquired assetsapplicable rules and assumed liabilities based onregulations in their respective jurisdictions. However, an extended period of remote work arrangements could strain our business continuity plans, introduce additive operational risk, including but not limited to cybersecurity risks, and adversely affect our ability to manage our business.
Reinsurance Market Trends and Developments
Even before the fair valuesonset of the assets acquired and liabilities assumed. See “Note 3. AcquisitionCOVID-19 pandemic, rates were rising across most lines of Tokio Millennium Re”business. We continue to believe that the COVID-19 pandemic is accelerating the recent rate increases we have seen in our “Notes to the Consolidated Financial Statements” for additional information related to the acquisitionmany of the TMR Group Entities.
Reserve for Claimslines of business that we write. We believe mid-year renewals reflected tightening conditions as industry participants assess the broad impacts and Claim Expenses
Claims and claim expense reserves acquiredongoing uncertainties of the COVID-19 pandemic. As an organization, we believe these market conditions have created significant opportunities in the acquisitionlines of the TMR Group Entities totaled $2.4 billion at March 22, 2019. Because of the nature of the coveragesbusiness that we provide,write, and that we are well positioned to deploy capital in this environment to pursue superior returns for our shareholders. Our current expectation is that we will seek to deploy the amount and timing ofproceeds
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from our recent equity offerings into the cash flows associated2021 market beginning with our policy liabilities will fluctuate, perhaps significantly, and therefore are highly uncertain.
3.600% Senior Notes Due 2029
On April 2, 2019, we issued $400.0 million of our 3.600% Senior Notes due April 15, 2029. The net proceeds from this offering were used to repay, in full, the $200.0 million outstanding under our revolving credit facility at March 31, 2019, which we used to partially fund the purchase price for the TMR Stock Purchase, and the remainder of the net proceeds will be usedJanuary 1 renewal period for general corporate purposes. See “Note 8. Debtpurposes, which may include expanding our existing business lines, entering new business lines, forming new joint ventures, or acquiring books of business from other companies. This capital may be deployed from our holding company to our regulated operating subsidiaries or our joint ventures, and Credit Facilities” inonce contributed, our “Notesability to reallocate such capital may be constrained by regulators or, for our joint ventures, the Consolidated Financial Statements” for additional information regarding the issuanceterms and conditions of our 3.600% Senior Notes Due 2029.shareholder agreements.
CURRENT OUTLOOKThe market has also been impacted by a tightened supply of capital. Among other things, capital in the insurance-linked securities market, which we estimated had already declined to a degree over recent periods, has been further impacted by recent developments, further reducing supply, particularly in respect of certain regions and perils. In addition, partly as a result of expected reductions in the availability of retrocessional capacity from third-party investors as third-party capital becomes less abundant, we expect that the trend of increasing rates for retrocessional coverage may accelerate. Accordingly, this trend may affect the amount of such protection we purchase in the future. However, consistent with our strategy of retaining more risk when prices are rising, we expect to manage any potential reductions in the availability of retrocessional reinsurance. We believe that we may also see additional opportunities to be a provider of retrocessional reinsurance as rates increase. Another factor that may contribute to rising rates is that we anticipate reinsurers will be less inclined to write certain classes of business in which we participate that are most impacted by social inflation trends, the risks of climate change, regional or market segment weakness, or other factors, without proper pricing adjustments if other, less risky, opportunities to deploy capital are available to them. Certain classes of business, like Florida homeowners’ coverage and certain forms of casualty coverage, may be impacted by more than one of these factors. Our assessment of these changes in risk exposure will impact our appetite to renew or pursue business we perceive to be adversely impacted, either absolutely or relative to other market opportunities.
Property Exposed Market Developments
In 2019,While the impact of the COVID-19 pandemic may be the most significant driver of market dynamics in the near-term, there are other recent trends that have impacted property exposed markets. Prior to the emergence of the COVID-19 pandemic, property exposed markets were already experiencing constrained supply and elevated demand, resulting in upward pressure on rates. We estimate that the insurance and reinsurance markets have been impacted by significant loss events including Hurricane Dorian, Typhoons Faxai and Hagibis, tornadoes in North Texas and currently ongoing wildfires in California. These events follow a numberexperienced some of significant large loss events in 2018 including Typhoons Jebi, Mangkhut and Trami, Hurricanes Florence and Michael in the U.S. and wildfires across the state of California, as well as the significant natural disasters in 2017, including Hurricanes Harvey, Irma and Maria, the Mexico City Earthquake in the third quarter of 2017, and wildfires in many areas of California. In addition, the market has been impacted by continuing, significant adverse development from these events, particularly Typhoon Jebi and Hurricanes Irma and Michael. In sum, we estimate that 2017 and 2018


represent the largest back-to-back years for insured natural disaster losses in history from 2017 to 2019 from multiple hurricanes, typhoons, wildfires and view the incidents experienced to date in 2019 as consistent with this trend.
Given the nature and breadth of these events, theearthquakes. The associated losses over this period affected an unusually large number of regions, and, accordingly, insureds, reinsurance lines and reinsurers. In addition, the ultimate scale of the losses, difficulty of loss estimation, length of payout periods, social inflation risk and other factors continuehave contributed to be uncertain foruncertainty around these loss events both forand the individual events and in the aggregate. Moreover, we believe a large number of our clients and competitors havemarket has been impacted by continuing, significant ongoing adverse development ondevelopments from these large events; inevents. In particular, we estimate that by itself, the industry’s reported 2019 adverse developmentdevelopments on Typhoon Jebi would constitute the largest insured industry loss event of 2019 to date, just as the reported 2018 adverse developmentand on Hurricane Irma would have been one of the largesteach represent, by themselves, historically large insured loss eventsevents. Moreover, to date the 2020 Atlantic storm season has been active, with an unusual number of 2018. We believe that this adverse development arose from underestimations of exposure and incurred loss; loss reporting delays in the regions impacted by Typhoon Jebi; aggressive litigation and adjustment practices, particularly but not limited to in the state of Florida; other elevated loss adjustment expenses; and other factors. We currently estimate that Typhoon Faxai will approach a $10 billion industry event and currently estimate likely industry-wide insured losses arising from Typhoon Hagibis at approximately $15 billion, subject in each case to significant uncertainty. In total, during the past two years, ten tropical cyclones have made landfall in Japan, giving rise to more than $50 billion of currently estimated insured losses.early season named storms forming thus far.
We believe that revised views of risk as a result of this experience, both in respect of the Japanese and U.S. markets and perils,these experiences and the potential diminishmentreduction of capacity or risk appetite from the insurance-linked securities market, may contributehave contributed favorably to market conditions, in future periods, although there can be no assurance that these developments will occurcontinue or be sustained.
Overall, Based on our experience, intermediary reports and other industry commentary, in respect of the January and June 2019 renewal2020 renewals, rates for retrocessional reinsurance and some lines of primary insurance were up substantially, while rates on other layers of reinsurance, if loss free in expiring periods, were generally stable. However, when viewed as a whole, lossup less markedly. Loss affected reinsurance programs and lines, did manifestsuch as treaties exposed to the California wildfires, showed more substantially improved termsterms. In respect of the April 2020 renewal, which includes our Japanese property catastrophe business, the industry saw significant rate improvements in certain lines, such as wind risk, while earthquake-only risk remained flat, but at attractive levels. This momentum continued through the June 1 renewals. With respect to the COVID-19 pandemic, we were generally able to obtain COVID-19 pandemic exclusions on many of the new deals that we wrote, and conditions, and other property-exposed coverages have also exhibited beneficial changes, particularly retrocessional coverages. only wrote deals without such exclusion that met certain specific criteria.
These developments facilitated our growth in gross premiums written, both in our existing operations and more particularly by presenting opportunities to deploy additional third partythird-party capital. Nonetheless, in generalrespect of certain regions and perils we assessedcontinue to assess that prevailing rate increases were not sufficient to offset increases in
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exposure, continuing risks from social inflation and the potential for sustained elevation in exposure due to changes in climate conditions and demographics. Moreover,For example, we believe thatcontinue to carefully monitor ongoing, adverse trends in the adverse impact of years of sustained reinsurance rate decreases have not yet been offset by the recent positive rate environment. Accordingly, we soughtFlorida market with respect to re-balanceclaims practices, litigation risks, and exposure growth, and are prepared to continue to reduce our portfolio, managing our net exposure to southeast windstorm risk to a relatively flat level compared to the prior year measured in terms of the proportion of our shareholders’ equity we believe to berisks and accounts exposed to southeast windstorm risk, but reducing our estimated modeled net exposure to the domestic Florida market.
We believe it is possible that these large loss events, the scale and pace of adverse development and other market dynamics may contribute to sustainable general market dynamics that could continue to support improving market conditions in lines and regions we target and in which we have differentiating expertise. In addition, public rate filings, reports from intermediaries and public reports from primary insurance companies reflect rate increases in the U.S. in respect of property-exposed direct insurance coverages. We also expect that the broader market will reflect rate increases in respect of retrocessional coverages. Accordingly, we currently intend to allocate relatively more capital in coming periods to our assumed retrocessional portfolio, target products in the U.S. excess and surplus lines direct insurance market, and our other property business. We also anticipate continuing improvements in the reinsurance sector, and in particular in respect of the complex, holistic and bespoke product coverages for which we believe we have competitive advantages. However, at this time we cannot know with certainty whether any such positive developments will transpire or be sustained, or the degree to which we will continue to benefit from them.
We expect that over time reinsurance demand for many coverages and solutions will continue to lag the pace of growth in available capital and we believe we are well positioned to benefit from these developments as shown, for example, in our efforts to optimize our gross-to-net portfolio. However, we estimate that to date in 2019 capital supply from alternative capital providers has not, for the first time in some time, continued to grow. It is possible that the recent large loss events, and the uncertainty relating to the ultimate insured losses arising from these events, may contribute to a continuation of this trend for the capital raising cycle in respect of the January 1, 2020 market cycle. Nonetheless, over the medium and


longer term, we anticipate the market will continue to be characterized by an ample supply of capital, including third party capital, notwithstanding the significant impacts of the large loss events of 2017, 2018 and 2019, and the continuing adverse development therefrom.
Furthermore, cedants in many of the key markets we serve are large and increasingly sophisticated. They may be able to manage large and growing retentions, access risk transfer capital in expanding forms, and may seek to focus their reinsurance relationships on a core group of well-capitalized, highly-rated reinsurers who can provide a complete product suite as well as value-added service.trends. While we believe we are well positioned to compete for business we find attractive, thesea number of dynamics may limit the degree to which the market sustains favorable improvements in the near-term or continue to introduce or exacerbate long-term challenges in our markets.
Casualty and Specialty Exposed Market Developments
Certain of the markets in which our Casualty and Specialty segment operate experienced generally experienced favorable rate trends and stable terms and conditions in respect of the earlyJanuary 2020 renewals. We have found increasing opportunities to write additional or new business in this segment, contributing to meaningful economic growth in our gross written business, especially when adjusting for the re-underwriting of the portfolio we purchased from TMR. In general, we have seen meaningful improvements in terms and conditions, including broad-based reductions in ceding commissions, from 2019 renewals. Concurrently, however, the casualty and specialty markets have continuedinto 2020 to broadly exhibit adverse loss development and negative exposure trends, including a meaningful increase in both the incidence and severity of civil jury awards.date. In 2019,particular, across that period we have observed favorable conditions for accounts that exhibited elevated loss emergence or underlying rate deterioration, but we also estimate that the favorable market trends have extended more broadly. In the near term, we continue to expect that the COVID-19 pandemic will put further pressure on rates and that current pricing trends exhibited during the year are likely to continue, with terms and conditions for loss-affected lines of business continuing to show moderateparticular improvement and certain other areas of the casualty and specialty market potentially maintaining less pronounced but positive adjustments. Moreover, we believe that pockets of casualty and specialty lines may provide attractive opportunities for stronger or well-positioned reinsurers and that, given our strong ratings, expanded product offerings, and increased U.S. market presence, we are well positioned to compete for business that we find attractive.
At the same time, we also estimate that underlying loss costs for many casualty and specialty lines of business will continue to rise. rise, while the costs of capital increases and opportunities for investment income decrease. The casualty and specialty markets have continued to broadly exhibit adverse loss development and negative exposure trends, including a meaningful increase in both the incidence and severity of civil jury awards and other social inflation trends.
We plan to continue to seek unique or differentiated opportunities to provide coverage on large programs open only to us on a differentiated basis or to select markets.markets. However, we cannot assure you that positive market trends will continue, that we will succeed in identifying and expanding on attractive programs or obtain potentially attractive new programs, or that future, currently unforeseen, developments will not adversely impact the casualty and specialty markets.
Relatedly, specific renewal terms vary widely by insured account and our ability to shape our portfolio to improve its estimated risk and return characteristics is subject to a range of competitive and commercial factors. We cannot assure you that these positive dynamics will be sustained, or that we will participate fully in improving terms. We intend to seek to maintain strong underwriting discipline and, in light of prevailing market conditions, cannot provide assurance that we will succeed in growing or maintaining our current combined in-force book of business.
General Economic Conditions
Underlying economic conditions in several of the key markets we serve remained generally stable in 2019, with certain of our core markets, including the U.S., experiencing economic growth, partly offset by reporting declines in manufacturing activity in certain key markets and a reduction in trade flows. Economic growth contributes positively to demand for our coverages and services, particularly in jurisdictions with high insurance penetration and the potential for risk concentration. We also continue to seek and participate in efforts to enhance insurance penetration in respect of select perils and regions, although such efforts are complex and frequently long-term and uncertain in nature.
We continue to believe that meaningful risk remains for political and economic uncertainty, economic weakness or adverse disruptions in general economic and financial market conditions. Moreover, any future economic growth may be at a comparatively suppressed rate for a relatively extended period of time. Declining or weak economic conditions could reduce demand for the products sold by us or our customers, impact the risk-adjusted attractiveness and absolute returns and yields of our investment portfolio, or weaken our overall ability to write business at risk-adequate rates. Persistent low levels of economic activity could also adversely impact other areas of our financial performance, by contributing to unforeseen premium adjustments, mid-term policy cancellations or commutations or asset devaluation, among other things. In addition, it is possible that increasing uncertainties related to cross-border trade will diminish


economic growth for specific sectors which drive the insurance market disproportionately. Our specialty and casualty reinsurance and Lloyd’s portfolios in particular could be exposed to risks arising from economic weakness or dislocations, including with respect to a potential increase of claims in directors and officers, errors and omissions, surety, casualty clash and other lines of business. In addition, we believe our consolidated credit risk, reflecting our counterparty dealings with customers, agents, brokers, retrocessionaires, capital providers and parties associated with our investment portfolio, among others, is likely to be higher during a period of economic weakness. Any of the foregoing or other outcomes of a period of economic weakness could adversely impact our financial position or results of operations.
The sustained environment of low interest rates in recent years lowered the yields at which we invest our assets relative to longer-term historical levels. In 2018, rates increased in respect of the securities which predominantly characterize our portfolio, contributing to comparatively high net realized and unrealized losses over those periods, while increasing the then-projected forward yields on our portfolio. More recently, we have seen decreases in prevailing interest rates, contributing significantly to comparably high net realized and unrealized gains from our invested assets over the immediate period. However, as we invest cash from new premiums written or reinvest the proceeds of invested assets that mature or that we choose to sell, we expect the yield on our portfolio to be adversely impacted by a declining interest rate environment. While it is possible that yields will improve in future periods, we currently anticipate a period of declining interest rates and broader uncertainty. We are unable to predict with certainty when conditions will substantially and sustainably improve, or the pace of any such improvement.
We continue to monitor the risk that our principal markets will experience increased inflationary conditions, potentially exacerbated by interest rate cuts. Inflationary conditions would cause costs related to our claims and claim expenses to increase and impact the performance of our investment portfolio, among other things. The onset, duration and severity of an inflationary period cannot be estimated with precision.
Legislative and Regulatory Update
The Tax Bill was signed into law on December 22, 2017. The Tax Bill amendsAs a range of U.S. federal tax rules applicable to individuals, businesses and international taxation, including, among other things, altering the current taxation of insurance premiums ceded from a U.S. domestic corporation to any non-U.S. affiliate. The Tax Bill and future regulatory actions pertaining to it could adversely impact the insurance and reinsurance industry and our own results of operations by increasing taxation of certain activities and structures in our industry. We are unable to predict allresult of the ultimate impacts of the Tax BillCOVID-19 pandemic, we are seeing many legislative and other proposed tax reform regulations and legislationregulatory initiatives that, if enacted, could have a significant adverse effect on our business and results of operations. While we continueLegislative, regulatory, judicial or social influences may seek to estimateimpose new obligations on (re)insurers in connection with the COVID-19 pandemic that extend coverage beyond the near term economic impactintended contractual obligations or result in an increase in the frequency or severity of claims beyond expected levels, thereby resulting in unexpected or modeled insurance or reinsurance losses. Certain governments and regulatory bodies are also considering proposals that would retroactively change the terms of existing insurance contracts that generally exclude business interruption losses from pandemics. Further, a number of legislative proposals have been introduced or proposed to alter the financing of pandemic-related risk in several of the Tax Bill to us will be minimal, uncertainty regardingmarkets in which we operate, and the impact of these and other proposals on our business is uncertain at this time. For example, at the Tax Bill remains,federal level, following the initial onset of the COVID-19 pandemic, Congress considered legislation that would have retroactively forced insurers to cover pandemic claims in business interruption policies even if specifically excluded. These bills have currently been withdrawn, although we cannot assure you that they or similar legislation will not be re-introduced in the future. At the state level in the U.S., at least eight states and the District of Columbia have considered legislation to require retroactive
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business interruption coverage, and while none have yet passed legislation, we expect that any such legislation will be challenged in court should it become law, however, any legal action challenging such legislation could take years to resolve and there can be no assurance that the outcomes would be favorable. Moreover, a number of stakeholder groups have advocated that, regardless of the passage of any such legislation, primary insurers voluntarily pay business interruption claims, even if excluded. While we are prepared to engage constructively with our cedants in respect of any such developments, we are also committed to enforcing our own contractual and legal rights, and the outcome of any of these developments is challenging to currently assess.
Congress is also considering several proposals which, if enacted, would impact the financing of future pandemic exposure and, accordingly, related markets for insurance, reinsurance and other financial products. For example, one such proposal would establish a Pandemic Risk Insurance Act, which would establish a public-private partnership with insurers retaining 5% of the risk of a future pandemic and the federal government assuming the remainder of the risk, with businesses charged an “actuarial premium.” Another proposal would create a standing, multi-billion-dollar fund which the federal government would use to pay businesses directly for pandemic losses, rather than through an insurance product.
It is also possible that the economic uncertainty resulting from the COVID-19 pandemic could cause some governments, including cities, counties, states, and national governments, to look at risk transfer as a resultmeans to create budgeting certainty. These initiatives could create public entity risk transfer opportunities in the U.S. and globally. We have been a leader in several iterations of factorsinnovative governmental risk transfer initiatives, at the U.S. federal and state level, and in a number of other jurisdictions, across a range of perils. We believe we are well positioned to collaborate on, and participate in, any such new initiatives. However, given the early stages of these proposals, it is difficult to predict at this time the impact they may have on our business in the future, and we cannot assure you that we would succeed in participating, or that the terms of any such facilities would be attractive.
Across the world, many governments have reacted to COVID-19 pandemic by proposing or enacting stimulus measures which incorporate a variety of strategies, including future regulatorycertain tax relief measures and rulemaking processes,incentives. In general, we do not expect to participate in, or benefit from, any such initiatives. Accordingly, at this time, we do not anticipate any tax law changes or incentives in the prospectsjurisdictions where we operate will have a beneficial impact on our results of additional correctiveoperations or supplemental legislation, potential trade or other litigation and other factors. For example, as contemplated by the Tax Bill, in July 2019 the Department of Treasury and the IRS issued comprehensive proposed regulations on passive foreign investment companies (also known as PFICs), which could potentially impact U.S. shareholders of RenaissanceRe Holdings Ltd. or certain of our joint venture vehicles. While we estimate, from our initial assessment, that our public shareholders should not be directly impacted, we could be adversely impacted if joint venture vehicles were competitively harmed by the final form of such regulation. The proposed regulations are not finalized and are subject, among other things, to a comment period. Further,financial position. Over time, it is possible that othermany jurisdictions in which we operate, or markets where we provide coverages or services, may consider changes to their tax legislationand revenue systems in light of the unprecedented stimulus, borrowing, and fiscal measures undertaken recently and which may yet be enacted as the COVID-19 pandemic and its impacts continue. It is possible that such measures could be introduced and enactedincrease tax burdens on companies operating in such jurisdictions, or operating multilaterally, or which transact in or with respect to such jurisdictions. At this time, we cannot anticipate or estimate the costs of any such future that would have an adverse impact on us.initiatives.
In prior Congressional sessions, Congress has considered a range of potential legislation which would, if enacted, provide for matters such as the creation of (i) a federal reinsurance catastrophe fund; (ii) a federal consortium to facilitate qualifying state residual markets and catastrophe funds in securing reinsurance; and (iii) a federal bond guarantee program for state catastrophe funds in qualifying state residual markets. In April 2016, H.R.4947, the Natural Disaster Reinsurance Act of 2016, which would create a federal reinsurance program to cover any losses insured or reinsured by eligible state programs arising from natural catastrophes, including losses from floods, earthquakes, tropical storms, tornadoes, volcanic eruption and winter storms, was introduced. If enacted, this bill, or legislation, similar to any of these proposals, would, we believe, likely contribute to the growth of state entities offering below-market priced insurance and reinsurance in a manner adverse to us and market participants more generally. Such legislation could also encourage cessation, or even reversal, of reforms and stabilization initiatives that have been enacted in the state of Florida and other catastrophe-exposed states in recent years. While we


believe such legislation will continue to be vigorously opposed, if adopted these bills would likely diminish the role of private market catastrophe reinsurers and could adversely impact our financial results, perhaps materially.
In May 2020, the Federal Housing Finance Administration, the regulator and conservator of Fannie Mae and Freddie Mac, issued a proposed capital rule that would significantly reduce the value of credit risk transfer to government sponsored entities (“GSEs”), reinsurers and other capital market participants if enacted. The proposal includes a series of “haircuts” to the GSEs’ credit for risk transfer, meaning they would be
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expected to require a larger capital reserve even after transferring risk off their balance sheets. Accordingly, this could adversely impact the attractiveness to the GSE’s of investing in private financial protection, including reinsurance, which have been a source of private market demand growth in our sector over recent periods. We cannot assess with precision the probability these changes will be enacted or their exact impact on the markets in which we participate if they are.
In June 2012, Congress passed the Biggert-Waters Bill, which provided for a five-year renewal of the National Flood Insurance Program (the “NFIP”) and, among other things, authorized the Federal Emergency Management Agency (“FEMA”) to carry out initiatives to determine the capacity of private insurers, reinsurers, and financial markets to assume a greater portion of the flood risk exposure in the U.S., and to assess the capacity of the private reinsurance market to assume some of the program’s risk. Commencing in January 2017, FEMA has, acting under authority contemplated by the Biggert-Waters Bill, secured annual reinsurance protection for the NFIP. Most recently, in January 2018,2020, FEMA announced that it had renewed its reinsurance program to provide for $1.32$1.33 billion of protection in respect of 2019,2020, covering 14%10.25% of NFIP’s losses between $4 billion and $6 billion, 25.6%34.7% of its losses between $6 billion and $8 billion, and 26.6%21.8% of its losses between $8 billion and $10 billion. In addition, NFIP has procured an additional $500 million of private market protection via the FloodSmart Re $500 million Series 2018-1 Notes. It is possible this program will continue and potentially expand in future periods and may encourage other U.S. federal programs to explore private market risk transfer initiatives; however, we cannot assure you that any such developments will in fact occur, or that if they do transpire we will succeed in participating.
The statutory authorization for the operation and continuation of the NFIP has expired and received a series of short termshort-term extensions. The NFIP’s current authorization has been extended to November 21, 2019. Legislative language under consideration in the House of Representatives would clarify that flood insurance provided by private firms satisfies the requirement that homeowners maintain flood coverage on mortgaged properties that are backed by a federal guarantee and located in a flood zone.September 30, 2020. In January 2019, the Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency issued rules requiring lenders to accept private flood insurance policies that have coverage at least as comprehensive as that offered by NFIP, and providing a framework to evaluate alternative flood coverage; these rules went into effect on July 1, 2019. Congress is also considering legislative language that would direct FEMA to consider policyholders who discontinue an NFIP policy and then later return to the NFIP as having continuous coverage if they can demonstrate that a flood insurance policy from a private firm was maintained throughout the interim period. To the extent these laws, rules and regulations are adopted and enforced, they could incrementally contribute to the growth of private residential flood opportunities and the financial stabilization of the NFIP. However, reauthorization of the NFIP remains subject to meaningful uncertainty; and whether a successful reauthorization would continue market-enhancing reforms is significantly uncertain. Accordingly, we cannot assure you that legislation to reform the NFIP will indeed be enacted or that the private market for residential flood protection will be enhanced if it is.
In recent years, market conditions for insurance in the state of Florida have been significantly impacted by the increasingly prevalent utilization of a practice referred to as “assignment of benefits,” or “AOB”.“AOB.” We currently estimate that the impacts of AOB have contributed adversely and significantly to the ultimate economic losses borne by the insurance market in light of recent large Florida loss events, including Hurricanes Irma and Michael. An AOB is an instrument executed by a primary policyholder that is deemed to permit certain third parties, such as water extraction companies, roofers or plumbers, to “stand in the shoes” of the insured and seek direct payments from the policyholder’s insurance company.
In April 2019, SB 122: The Insurance Assignment Agreements Act (the “AOB Reform Bill”) became law in Florida, effective July 1, 2019. Among other things, the AOB Reform Bill is intended to change the way attorneys’ fees are calculated to provide less incentive for plaintiff attorneys to file frivolous suits; requires written notice to the insurer of a filing; more clearly informs insureds of their rights; allows Florida domestic insurers the option of offering policies with and without AOB language included; and requires service providers in Florida to give an insurer and the consumer prior written notice of at least 10 business days before filing suit on a claim. WeWhile we are cautiously optimistic that this law will eliminatecould somewhat mitigate, in respect of losses subsequent to July 2019, some of the more egregious practices that have contributed to adverse industry results in Florida. However,Florida, we continue to believe that the likely estimated impact to exposed loss in reinsurance treaties and programs will not be material. Moreover, media outlets have reported that there has been a measurable spike in AOB filings before the bill’s effective date of July 1, 2019 and that plaintiff firms have announced identified “workarounds” to the AOB Reform Bill provisions. In addition, the AOB Reform Bill is not intended to remediate the adverse impacts of prior practices in respect ofearlier events, such as the large losses in 2017 and 2018.2018, which continue to exhibit loss development well beyond modeled expectations. In general, we continue to estimate that the dynamics and practices we refer to as “social inflation” will continue to adversely impact


loss trends in Florida. Moreover, reforms of social inflation trends in Florida or other jurisdictions do not impact the increased risks attributable to changes in climate, demographics and other factors which we estimate are increasing the probability and severity of meteorologically-driven hazards. Accordingly,
In January 2020 media reports announced that the rating agency responsible for assigning financial stability ratings to more than 40 Florida domestic insurers had warned that several carriers would be expected to receive downgrades due to deteriorating conditions in the state’s property insurance market, and that more than a dozen of such carriers could be downgraded in the next few months. Factors cited by this agency
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included what the firm deemed to be the cumulative impact of prolonged periods of inadequate rate revisions by these carriers, as well as state judicial rulings adversely impacting claims awards, including in respect of the natural disasters of recent years.
Further, in February 2020, legislation was introduced in the Florida Senate, Bill No. SB 1334, which would, if ultimately adopted, significantly expand the Florida Hurricane Catastrophe Fund for a statutory period of several years. While the bill did not attain passage in this year’s session, it could be revisited in a future scheduled or special legislation session. In sum, taken together, these ongoing challenges have impacted our own risk selection criteria with respect to Florida exposures, and our estimation of the number of programs we believe are submitted at attractive risk-adjusted terms.
exposures.

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ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are principally exposed to four types of market risk: interest rate risk,risk; foreign currency risk,risk; credit risk,risk; and equity price risk. Our investment guidelines permit, subject to approval, investments in derivative instruments such as futures, options, foreign currency forward contracts and swap agreements, which may be used to assume risks or for hedging purposes.
There were no material changes to these market risks, as disclosed in “Part II, Item 7A. Quantitative and Qualitative Disclosures about Market Risk” in our Form 10-K for the year ended December 31, 2018,2019, during the ninesix months ended SeptemberJune 30, 2019,2020, except as described below. See “Part II, Item 7A. Quantitative and Qualitative Disclosures about Market Risk,” in our Form 10-K for the year ended December 31, 20182019 for a discussion of our exposure to these risks.
In connection withDue to the acquisitionongoing and rapidly evolving nature of the TMR Group Entities,COVID-19 pandemic, a longer or more severe recession may increase the probability of credit losses in the Company’s investment portfolio. Volatility in global financial markets, together with low or negative interest rates, reduced liquidity and a continued slowdown in global economic conditions, have adversely affected, and may continue to adversely affect, the Company’s investment portfolio. Additionally, we anticipate a modestare exposed to counterparty credit risk, including with respect to reinsurance brokers, customers and retrocessionaires, which may materially increase into the extent the COVID-19 pandemic affects our foreign currency risk as it relates to: (i) the potential for increased volatility in our realized and unrealized foreign exchange gains (losses) in our consolidated statements of operations resulting from the addition of foreign currency denominated assets and liabilities, and (ii) non-U.S. dollar functional currency for certain of the TMR Group Entities and the resulting impact from currency translation adjustments in our statement of changes in shareholders’ equity as the non-U.S. dollar financial statements are translated into U.S. dollars.ability to collect premiums receivable or reinsurance recoverables.
ITEM 4.     CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures:Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(b) and 15d-15(b) of the Exchange Act, as of the end of the period covered by this report. Based upon that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that, at SeptemberJune 30, 2019,2020, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in Company reports filed or submitted under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting:Reporting
There were no changes in our internal control over financial reporting during the quarter ended SeptemberJune 30, 2019,2020, which were identified in connection with our evaluation required pursuant to Rules 13a-15 or 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II  OTHER INFORMATION
ITEM 1.    LEGAL PROCEEDINGS
There have been no material changes to the legal proceedings previously disclosed in our Form 10-K for the year ended December 31, 2018.2019.
ITEM 1A.     RISK FACTORS
ThereExcept as previously reported in the “Risk Factors” section of our prospectus supplement filed with the SEC on June 4, 2020, there have been no material changes to the risk factors previously disclosed in our Form 10-K for the fiscal year ended December 31, 2018. Certain of these risk factors were updated in our prospectus supplement filed with2019 and Form 10-Q for the SEC on April 1, 2019.quarter ended March 31, 2020.
ITEM 2.     UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Our share repurchase program may be effected from time to time, depending on market conditions and other factors, through open market purchases and privately negotiated transactions. On November 10, 2017, our Board of Directors approved a renewal of our authorized share repurchase program to an aggregate amount of up to $500.0 million. Unless terminated earlier by our Board of Directors, the program will expire when we have repurchased the full value of the shares authorized. The table below details the repurchases that were made under the program during the thirdsecond quarter of 2019,2020, and also includes other shares purchased, which represents common shares surrendered by employees in respect of withholding tax obligations on the vesting of restricted stock, or in lieu of cash payments for the exercise price of employee stock options.
Total shares purchasedOther shares purchasedShares purchased under publicly announced repurchase programDollar maximum amount still available under repurchase program
  
Shares
purchased		Average
price per
share		Shares
purchased		Average
price per
share		Shares
purchased		Average
price per
share
      (in thousands)
Beginning dollar amount available to be repurchased$437,379  
April 1 - 30, 2020—  $—  —  $—  —  $—  —  
May 1 - 31, 2020284  $155.32  284  $155.32  —  $—  —  
June 1 - 30, 2020129  $146.10  129  $146.10  —  $—  —  
Total413  $152.44  413  $152.44  —  $—  $437,379  
                
  Total shares purchased Other shares purchased Shares purchased under publicly announced repurchase program Dollar maximum amount still available under repurchase program 
 
  
Shares
purchased
 
Average
price per
share
 
Shares
purchased
 
Average
price per
share
 
Shares
purchased
 
Average
price per
share
  
              (in thousands) 
 Beginning dollar amount available to be repurchased            $500,000
 
 July 1 - 31, 201999
 $181.96
 99
 $181.96
 —
 $—
 —
 
 August 1 - 31, 2019—
 $—
 —
 $—
 —
 $—
 —
 
 September 1 - 30, 2019688
 $186.27
 688
 $186.27
 —
 $—
 —
 
 Total787
 $185.73
 787
 $185.73
 —
 $—
 $500,000
 
                
During the ninesix months ended SeptemberJune 30, 2019, we did not repurchase any of our2020, the Company repurchased 406 thousand common shares in open market transactions at an aggregate cost of $62.6 million and an average price of $154.36 per common share. Given the current economic environment and to preserve capital for both risk and opportunity, the Company suspended share repurchases in March 2020. The Company did not engage in any share repurchase activity during the three months ended June 30, 2020. At June 30, 2020, $437.4 million remained available for repurchase under ourthe share repurchase program. In the future,near term, the Company intends to prioritize capital for deployment into its business; however, we may authorize additional purchase activities under the currently authorized share repurchase program, increase the amount authorized under the share repurchase program, or adopt additional trading plans.resume repurchases at any time when we believe it is prudent to do so and without further notice.
ITEM 3.    DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.     MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5.  OTHER INFORMATION
None.

104

ITEM 6.    EXHIBITS

31.1 Certification of Kevin J. O’Donnell, Chief Executive Officer of RenaissanceRe Holdings Ltd., pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.210.1Investment Agreement, dated June 2, 2020, by and between RenaissanceRe Holdings Ltd. and State Farm Mutual Automobile Insurance. (1)
10.2Amended and Restated Registration Rights Agreement, dated June 2, 2020, by and between RenaissanceRe Holdings Ltd. and State Farm Mutual Automobile Insurance. (1)
10.3
31.1
Certification of Kevin J. O’Donnell, Chief Executive Officer of RenaissanceRe Holdings Ltd., pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2
Certification of Robert Qutub, Chief Financial Officer of RenaissanceRe Holdings Ltd., pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1
Certification of Kevin J. O’Donnell, Chief Executive Officer of RenaissanceRe Holdings Ltd., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification of Robert Qutub, Chief Financial Officer of RenaissanceRe Holdings Ltd., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2
Certification of Robert Qutub, Chief Financial Officer of RenaissanceRe Holdings Ltd., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCHInline XBRL Taxonomy Extension Schema Document
Document.
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.LABInline XBRL Taxonomy Extension Label Linkbase Document
Document.
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
Document.
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101).

(1) Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on June 5, 2020.












105

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
RENAISSANCERE HOLDINGS LTD. 

Date: October 30, 2019
Date: July 29, 2020 /s/ Robert Qutub
Robert Qutub
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Duly Authorized Officer)




Date: October 30, 2019
Date: July 29, 2020 /s/ James C. Fraser
James C. Fraser
Senior Vice President and Chief Accounting Officer
(Principal Accounting Officer)


             


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