Renaissancere Holdings Ltd. · NYSE:RNR

Renaissancere — Conference Presentation (November 2017)

18 slides from Renaissancere's conference presentation, Nov 29, 2017

  1. Slide 1: Closing the Protection Gap for Natural Catastrophe Risk

    Closing the Protection Gap for Natural Catastrophe Risk RenaissanceRe Holdings Ltd. Kevin J. O’Donnell November 29, 2017

  2. Slide 2: Q3 2017 – Reminder that natural catastrophes occur

    Q3 2017 – Reminder that natural catastrophes occur Harvey Irma Maria [Storm Track Image] 17th Aug 3rd Sept 30th Aug 16th Sept 3rd Oct First Landfall (US) First Landfall (US) First Landfall (Puerto Rico) Aug 25th 10:00PM; Rockport, Texas Sept 10th 9:10AM; Cudjoe Key Sept 20th 6:15AM; Yabucoa Homes af

  3. Slide 3: This year is on track to be one of the largest loss years ever

    This year is on track to be one of the largest loss years ever… “2017 will be the third year having more than $100B of insured losses over the previous 15” Historical Annual Insured Losses Tohoku, Thai 140 Flood, NZ EQ KRW 120 $10 $100B Loss 100 Losses ($B) 80 $90 $134 $126 60 40 $73 $61 $57 $51 $50

  4. Slide 4: Responding to natural catastrophes

    Responding to natural catastrophes  Natural catastrophes are unavoidable  Impact of natural catastrophes include: ‒ Economic loss ‒ Can be quantified monetarily ‒ Theoretically insurable ‒ Social impact – loss of life, displaced families, etc. ‒ Difficult to quantify monetarily ‒ Insurance not a p

  5. Slide 5: Mitigation and risk transfer reduce impact of catastrophes

    Mitigation and risk transfer reduce impact of catastrophes Natural Catastrophes Economic Losses Mitigation reduces economic loss Tradeoff #1 Insurance Recoveries Uninsured Ex ante risk Losses financing reduces uninsured loss Protection Gap Ex post Tradeoff #2 Proprietary and Confidential Information

  6. Slide 6: Significant protection gap

    Significant protection gap Harvey, Irma and Maria highlight the extent of the insurance “Protection Gap”; the industry is striving to close this gap by growing the insurable pool of risk… Estimate of 3Q Cat Losses & Source of Claims Payment In region of 70% of $250B ~$238B $20B estimated economic lo

  7. Slide 7: The protection gap is even greater in the developing world

    The protection gap is even greater in the developing world… Global Avg. Developing Countries e.g. Haiti Proprietary and Confidential Information renre.com | pg. 7

  8. Slide 8: Cost of the protection gap – effect on GDP

    Cost of the protection gap – effect on GDP  Ex post financing results in significant decrease in GDP post-disaster  Ex ante financing (insurance) results in permanent increase in GDP post- disaster Source: BIS Working Paper No 394, Unmitigated disasters? Proprietary and Confidential Information re

  9. Slide 9: Example of Protection Gap - 2015 Nepal Earthquake

    Example of Protection Gap - 2015 Nepal Earthquake  Magnitude 7.8 earthquake  Economic cost - $6B  Social impact - 9,000 fatalities, extreme displacement of families  Insufficient mitigation and ex ante risk financing ‒ Mitigation - Most of population live in unreinforced masonry buildings ‒ Risk

  10. Slide 10: Why is there a protection gap?

    Why is there a protection gap?  Economic losses must be absorbed - Why chose ex post financing?  Developing countries ‒ Ex ante funding may not be economically feasible ‒ Lack of awareness of risk ‒ Underdeveloped insurance market/regulatory framework ‒ Poor construction/weak building codes  Deve

  11. Slide 11: Role of public/private partnerships in closing the protection gap - Flood Re

    Role of public/private partnerships in closing the protection gap - Flood Re  Private reinsurance transforms ex post Private government insurance to ex ante financing Reinsurance ‒ Makes government part of the solution  Government transfers contractual duty to save to private insurer, which cannot

  12. Slide 12: NFIP – recognizing the value of reinsurance

    NFIP – recognizing the value of reinsurance  NFIP historically dependent on ex post funding  Demonstrated by its $30B+ of unfunded losses (i.e., taxes)  Purchasing private reinsurance is a step towards real ex ante financing and decreasing the protection gap  Anticipate full limit loss on $1 bil

  13. Slide 13: Closing the protection gap - collaboration and alliances are key

    Closing the protection gap - collaboration and alliances are key… DRF Proprietary and Confidential Information renre.com | pg. 13

  14. Slide 14: Lloyd's Disaster Risk Facility

    Lloyd’s Disaster Risk Facility  Solutions to help developing DRF economies tackle underinsurance and improve their resilience against the economic impact of natural catastrophes  Emerging economies across Latin America, Africa, and Asia currently contribute 40% to global GDP, yet represent only 16

  15. Slide 15: Summary

    Summary  Every society must make tradeoffs between mitigation, ex ante risk financing and ex post risk financing  Many of these tradeoffs are difficult, and can result in a protection gap ‒ Especially in developing countries  In developed countries, the protection gap is often a function of polit

  16. Slide 16: RenRe – Significant investment in hazard and risk assessment

    RenRe – Significant investment in hazard and risk assessment Proprietary and Confidential Information renre.com | pg. 16

  17. Slide 17: Nepal earthquake: social impact on children

    Nepal earthquake: social impact on children “We don’t know when we will have a new house.” “We don’t have safe drinking water.” “We are living in a tent and cannot sleep at night.” “I’d like to go to school just like before.” Proprietary and Confidential Information renre.com | pg. 17

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