2 months ago
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DaVinci, the sidecar-like third-party capitalised reinsurance joint-venture vehicle operated by RenaissanceRe has received an upgrade from Moody’s, with the ratings agency citing DaVinci’s increased scale and long-term profitability as key drivers.
DaVinci, operates a bit like a reinsurance sidecar, providing a structure through which institutional investors can share in the underwriting profits and losses of RenaissanceRe, but is equity backed and a rated reinsurer.
It primarily writes property catastrophe reinsurance business, through companion lines taken alongside Renaissance Reinsurance Ltd.
This business is written at the same terms and price, which provides a strong pipeline of opportunities, given RenRe’s position in the global property cat marketplace.
Moody’s Ratings said today that it has upgraded the senior debt rating and long-term issuer rating of DaVinciRe Holdings Ltd. (DaVinciRe) to Baa1 from Baa2 and also upgraded the insurance financial strength (IFS) rating of DaVinci Reinsurance Ltd. (DaVinci) to A2 from A3, with all ratings having stable outlooks.
“The upgrade of DaVinciRe’s ratings reflects the company’s improving credit metrics, its increased scale and its solid long-term profitability,” Moody’s explained.
Adding, “DaVinci’s A2 IFS rating incorporates one-notch of rating uplift for implicit support from RenaissanceRe.”
Underscoring the importance of the DaVinci platform for RenRe, Moody’s notes that in 2023, “more than 30% of RenaissanceRe’s consolidated property segment premiums were written on DaVinci’s balance sheet.”
The ratings agency added, “For the first nine months of 2024, DaVinciRe reported net income available to common shareholders of $696 million and a combined ratio of 47.0%, reflecting good underwriting results for the current accident year, higher investment income and approximately $187 million of favorable loss reserve development on prior years’ losses.”
Gross premiums written reached $1.3 billion at DaVinci in the first nine months of this year.
The DaVinci join-venture has now tripled its shareholders’ equity base to approximately $4 billion through organic growth and raising more than $1.9 billion of equity capital since 2017, which is impressive growth and shows how meaningful the structure has become for RenRe.
It is a “significant player in the property catastrophe reinsurance market,” Moody’s said.
It provides a flexible companion capital source for RenaissanceRe’s own balance-sheet, being able to grow its investor funds through capital raises in response to market conditions and underwriting opportunities to enhance its own firepower, while allowing it to earn fee income from its underwriting and management capabilities at the same time.
As we reported in September, DaVinci has been a stand-out for RenaissanceRe Capital Partners growth in assets under management (AUM) lately.
DaVinci is one of the most consistent third-party capital strategies operated by any reinsurance company in the world and for its operator, RenaissanceRe, and the investors in the structure, has delivered significant value over the years.
English (US) ·