Good morning. My name is Emily, and I will be your conference operator today. At this time, I would like to welcome everyone to the RenaissanceRe Fourth Quarter 2018 Financial Results. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Keith McCue, Senior Vice President for Finance and Investor Relations. Please go ahead.

Good morning. Thank you for joining our fourth quarter 2018 financial results conference call. Yesterday, after the market closed we issued our quarterly release. If you didn't get a copy, please call me at 441-239-4830, and we'll make sure to provide you with one. There'll be an audio replay of the call available from about 1:00 PM Eastern Time today through midnight on March 11. The replay can be accessed by dialing 855-859-2056 US Toll free or 1-404-537-3406 internationally. The passcode you will need for both numbers is 5889825. Today's call is also available through the Investor information section of www.renre.com, and will be archived on RenaissanceRe's website through midnight on March 11, 2019. Before we begin, I'm obliged to caution that today's discussion may contain forward-looking statements and actual results may differ materially from those discussed. Additional information regarding the factors shaping these outcomes can be found in RenaissanceRe's SEC filings to which we direct you. With us to today to discuss our results are Kevin O'Donnell, President and Chief Executive Officer; and Bob Qutub, Executive Vice President and Chief Financial Officer. I'd now like to turn the call over to Kevin. Kevin?

Thanks Keith. And good morning and thank you for joining today's call. Looking back each year I think it's only fair that shareholders hold us accountable for the answer to two questions. First; are we satisfied with our financial performance and second; have we achieved the goals that we set forth for ourselves at the beginning of the year and further our strategy. In response to the first question; 2018 was a year with greater than $80 billion of insured natural catastrophe losses. Including the most significant typhoon impact Japan in decades, record breaking California wildfires; two landfall in US, hurricanes and numerous other events around the world. In addition there were numerous large individual risk losses and some significant losses of note within the casualty and specialty market. Against this backdrop we grew both our book value per share by 4% and our tangible book value per share plus change and accumulative dividends by 6.4%. For the year, our return on equity was 4.7% and our operating return on equity was 8.8% and we reported an operating profit for every quarter of 2018. Bob will discuss our quarterly results in more detail later. But relative to the loss activity I believe we performed well. We had many other financial successes in 2018, to begin with, in the fourth quarter we issued 250 million of our common shares to State Farm making them our fifth largest shareholders. Earlier in the year, we lowered our cost of capital by raising $250 million in a lower interest rate environment through the issuance of Series F Preference Shares paying a dividend of 5.75% and finally in our joint ventures business we raised over $1 billion between our existing UpsilonRe and latest vehicle Vermeer Re. Together these actions not only demonstrate our ability to…

Thanks Kevin and good morning, everyone. Against the backdrop wide spread industry catastrophe losses in volatile financial market. I believe we performed both well in the fourth quarter and for the full year. today I'd like to highlight a few of our key financial results, but first I'd like to update you on the TMR transaction the progress we'll be making and finally I'll turn it back over to Kevin. Starting with the TMR transaction and the preparation for the integration has been a significant focus for us. As Kevin discussed we have established an integration management office that is administering a number of work streams each of which is progressing well. As you would expect, we are primarily focused on preparing for what we call day one. Which concentrates on those work streams essential to ensuring that business continues uninterrupted, immediately after closing? We've also identified the final target state of the combined companies along with detailed plans for achieving it. When we first announced the TMR transaction, we anticipated it will close sometime in the first half of this year subject to regulatory approval. But we do not dictate the timeline of this progress, we remain optimistic regarding first half close. Until closing, we continue to operate as separate companies and our confident and our estimated target of between $700 million and $1 billion of acceptable gross written premiums on the TMR business resulting in $100 million run rate. As I discussed last quarter, we projected significant synergies will be achieved with TMR. These synergies will be auctioned in the first 12 months and realize over the first two years and once realized should allow us to continue to improve our operating leverage from where it stood prior to the TMR acquisition. As we discussed the financing of…

Thanks Bob. I'll divide my comments between our property segment and our casualty specialty segment. Starting with the discussion of the 2018 results and then moving onto the January 1 renewal and opportunities in 2019 and then I'll take any questions. For the full year in 2018, we grew gross written premiums in our property segment by 22%. As Bob explained this growth came from increases in top line premium in both property cat and other property as well as reinstatement premiums resulting from the year's catastrophe events. We experienced a number of large natural catastrophes in the quarter primarily in the US Hurricane Michael made landfall at Mexico beach in the Florida Panhandle as very strong Category 4 Hurricane with 155 mile an hour winds at landfall. Michael was the most intense US Hurricane since Camille in 1969 based on central pressure and the strongest by wind speed since Andrew in 1992. And industry loss estimates are around $10 billion for the storm at this time. California once again experienced wildfires in Q4. The Camp and Woolsey Fires were the most significant with the Camp fire being the deadliest in California history as well as the most destructive in terms of both acres and structures destroyed. We expect that the combined insured cost from these fires will ultimately exceed $15 billion. As Bob discussed two casualty deals that we rode in 2018 added materially to the underwriting loss for the wildfires. I spoke about these deals on prior calls. They were the result of our decision to pivot our net participation in this market to write more wildfire liability coverage. Our decision was driven by the more favorable risk adjusted returns these deals offered versus traditional property cat deals in the California market. The California wildfire liability market is…

[Operator Instructions] and our first question comes from the line of Josh Shanker from Deutsche Bank. Your line is open.

I bet there's going to be lot of California wildfire liability question, but you're not going to answer at those. I'd rather talk about the TMR transaction little bit. You had about three months since the last time you talked to us about it. What's your internal assessment on how much excess capital there is going to be generated by the combination of your two businesses and how do you come to that, is that a conversation with the rating agencies. And second, in terms of your conversations with regulators what is your confidence that you might be able to pull that capital out and over, what timeframe?

Josh. Good morning, let me see if I can kick this up. In terms of getting approval for the dividend that's really TMR and working with FINMA which is the regulators in Switzerland and I pointed out we're confident on $250 million and hopefully we're going to get more, but that's what we are working on right now. The dialog with them has been very, very good so the question is how much is existing in there the excess capital, it's somewhere north of 250 hopefully more than we can get out or going forward, the amount of capital be dependent on a couple of different factors. One; what we renew on and again then also that's the $700 million to $1 billion it's also going to be a factor of now they'll be able to consider the adverse development cover on that book, so that will help us on some capital, and the ongoing performance of the business. So there's a number of different factors, but I would sum it up as we feel very good. We've gotten a lot more insight into the process and the dialog with us and the regulators in FINMA as well as the rest around the world, the others has been very positive.

And do you have a timeline, well you know more before the close or are you going to will be a discussion in progress over the next year or two, I guess.

No we anticipate to have the dividend coming out, that we've been talking about prior to our closing.

Okay, thank you very much.

Our next question comes from the line of Elyse Greenspan from Wells Fargo. Your line is open.

My first question, Kevin throughout your remarks you referenced pricing getting better. You also pointed to some alternative capital being tied up at 1/1 [ph] and not necessarily seeing as much of this collateralized capacity throughout the year. What gives you conviction I guess that we won't see capital come back in advance of April 1 and then the mid-year is in Florida just as you know we hear chatter about prices being better for those two renewals.

Thanks. I think the - from my perspective we believe capital allocated from the ILS market to the reinsurance market will be down in 2019 compared to 2018. Part of that is based on the fact, how much is tied up and how much is been lost. What I would say though is? Is regardless of what happens with third party capital going into the renewals that I mentioned in my price expectations, we're in a preferred position to most to access that business and also to manage the third party capital as it comes in. I believe going forward the market is going to continue to consolidate with highest quality managers of which we're certainly one and I think the formations of Vermeer Re in the fourth quarter points to success in that management. So I think from the Florida renewal which is where a lot of this capacity is targeted, we will be in a preferred position whether there is increased ILS interest or not and the retro market frankly is really, largely 1/1 [ph] market and we did see a diminished participation in that by ILS capacity and we - to take advantage of that.

Okay and then subsequent, so you just said diminished ILS capacity within retro. So it sounds like you guys wrote more retro and then also it seems like purchasing as much as you're purchased last year. So is that correct in meaning that rates when up that you both wrote more and then also were able to did choose to purchase more just at higher rates or the same. I'm sorry.

Sure. So I'll divide it between our inwards and our outwards. With our inwards book, we did write more retro at 1/1 [ph] both on our owned balance sheets and then with the some of our third party partners. With regard to our purchasing, we have significant relationships that are long-term and those are already in place for 2019. Secondly we have purchases that are mid-year and we'll make determinations frankly based on price and the overall impact on our portfolios whether we're going to use those or other structures when it comes to structuring the portfolios at mid-year. So we're not tied to renewing the mid-year retro that we have, we can either put it into the seeded structures we have or retain it or put it onto other vehicles that we can either form or have.

Okay, thank you very much. I appreciate the color.

Our next question comes from the line of Amit Kumar from Buckingham Research. Your line is open.

Two questions, if I may. The first question I guess goes back to Elyse's question on the pricing. I was trying to look back at the transcripts for the six month call and then compared it to the last Q4 call. I just want to be very clear here, is the outlook 461, is that similar to what we've seen at the one month renewal i.e. are we expecting mid-teens or better pricing based on the losses over the past three years or does it sort of just go down a bit from these levels.

Let me just explain what I think is happening in Florida. There's kind of two cycles I think and Florida is a behaviour cycle and then there is a profitability cycle. From a profitability standpoint Florida has not been a good bet over the last couple of years because of the loss activity and I think there is a growing sense of frustration with the behavioral market in Florida. I think the structures that are being placed are not as precise as they need to be. The loss adjustment expense flowing through to reinsurers is at significantly elevated levels, more elevated than what we've historically seen and there's been the IOB [ph] issues and other issues. So with that, I think there's a sense of frustration with reinsurers who are protecting in that market from both the pricing and behavioral side which will drive an increase in required return and a reduction in supply, if it's not materialized. So I'm more optimistic about the Florida renewal than I was last year.

Okay that's a fair point. The only second question I have is, going back to the discussion on TMR. If you go back you know to the PowerPoint at that time, we had started with $700 million number. I think $1 billion was more aspirational [ph] at that time, but the earnings are in rate of $100 million I think was based more on the 700 number. I'm curious, am I over thinking? But it seems to me now that we've changed that number to a definitive range of $700 million to $1 billion. Is there upside to that $100 million number or is there something else going on?

Thanks for the question and clarification. We have kept the range at $700 million to a $1 billion as you were correct. The $100 million was what we thought would be our target. Sure there's upside to it. It depends on a number of different factors. The performance of the investment portfolio will definitely be a key contributor to it. The timing of the synergies will help the profitability and I gave you a timeframe on that which is not more definitive than the last update and then also the profitability of the book. The $700 million to $1 billion we have that optionality [ph] improving on the best. So there's very well could be upside to it and then.

Got it. I'll stop there. Thanks for answers and good luck.

Our next question comes from the line of Yaron Kinar from Goldman Sachs. Your line is open.

So listening to your comments earlier in the call. It sounds like Florida [indiscernible] will not be the most attractive market. Is that a market that you'd expect to shrink in 2019? And if so where would you see the greater geographical opportunities?

You broke up a little bit, I think did you say the Florida market?

Yes. I was just asking if Florida geography is one that you would expect to shrink in this coming year and if so, are there other geographies that surface have a better opportunity.

So I think if you go back in our history there have been periods of time where Florida was a significant portion of our gross write premium. Florida currently represents about 5% of our premium which is a representation of the fact that we believe the profitability and excess return that was available historically is no longer available. So I think we have upside in rate changing Florida and if rates do not improve, terms do not improve I would expect that 5% will reduce.

Okay. And in terms of other geographies.

So I think what we've, so Florida is kind of unique market. I think we all know some of the reasons for that. I would say that the restructuring of the way in which we're thinking about taking risk holistically is the new Florida geography. The fact that we're looking to broadly protect across casualty and property and which provides us unique access particularly for bespoke deals is where we're getting a significant - to the market. So I feel it's not switching florae to a different geography that's replacing it. It's looking at how we're structuring our capital and then how we're positioning with our core clients to make sure that we have access to their most desirable covers is really the way that we're thinking about building the portfolios currently.

Okay, got it. My follow-up will be thoughts on being on aggregate covers as oppose to prevent, is there more appetite to go deeper into ag covers.

Aggregate covers are enormously valuable for buyers. With that, we're much more likely to sell aggregate covers to companies in which we have the broadest and deepest relationships. So I think we have a very strong ability to understand aggregates I think. There has have been some pressure on aggregate pricing particularly from ILS capital and I think we've generally have put in a more fulsome loss assessment particularly from non-critical cat elements that can contribute to that. so I feel like we're in pretty good spot to continue to sell those, but we'll target our sale of those to our, to our biggest and strongest relationships.

Got it. And thank you very much and great quarter.

Our next question comes from the line of Ryan Tunis from Autonomous Research. Your line is open.

My first question is on, I guess in regard to the fee disclosure which is thoughtful Bob, thanks. But I have three questions on it. The first was because it seems like a pretty significant area of earnings growth, the management fee income one from$50 million to $71 million last year. I guess based on - Jan 1 is there any visibility on how we could see the management fee number growing next year. and then my other question was performance fees didn't really grow up, but I'm not sure if that's [indiscernible] performance. So just trying to get a feel for like what that number would look like if you didn't have losses last year. and then lastly, how do we think about margins on that fee income? Thanks.

Those are good questions, thanks Ryan. I hope you're doing well. on the management fee decline those tend to be more stable. There is a little bit of unique volatility in it, you can see it more pronounced in Q3 to Q4 as a result of one of our joint ventures was down about $6 million that's really timing and that's timing while in effect, but in that quarter we reduced it, but then recaptured it back overtime. Similar to what we did last year with the events. On the performance, you kind of have to look at that's going to be volatile and you saw Q4 and Q3 this year having volatility similar to what we saw last year. if you look at non-cap quarter you start to see a more normalized in Q2, Q1 is kind of where you should look at it, in the event we don't have stress on it. And fee income on your question on margin. It's a reflection of the business overall, we don't carve that out but all of these results are reflected in our property book right now.

One thing I would add on the margin for this business is because we're so tightly integrated the way we think about risk and capital. The underwriters that write on behalf on RenRe limited are the same underwriters that allocate into our third party vehicles. So in many instances we're just writing a larger line and then allocating it to different balance sheets that have different supporting capital. So we're able to leverage our infrastructure in a way that's difficult for many others who are managing their third party capital in a less integrated way.

Okay that's helpful and then my follow-up. Just trying to, I mean obviously a volatile business, but this year your overall return on equity was about 9% and I think you mentioned earlier on the call. you had Japanese typhoon, you had wildfires put, I mean [indiscernible] it didn't really seemed to be that negatively impacted by either of those and you also benefited from quite a bit of favorable development on the 2017 events. So looking at [indiscernible] we actually feels like a pretty good results, how are you thinking about where that could go next year and how [indiscernible] loss experience just trying to get feel for what you think normal returns are in this business.

So what I said my comments, is that our strategy for the way we construct our portfolios in 2019 well need to be different than we did in 2018, but we anticipate that on an expected basis. Our portfolios will be at least as profitable as they were in 2018. With that because of the structural changes that we think we're going to build into our portfolio. I think our no loss return will be higher, but we'll probably take a little bit more tail risk, that will panned out as back to Elyse's question depending on what we see for seeded opportunities of mid-year. so I don't think, so we're not going to give guidance as to what we think an expected basis would be, I think this year was a heavy cat loss year, next year now who knows what 2019 will bring, but we'll build a portfolio that we think will perform against all potential outcomes.

Thanks so much.

Our next question comes from the line of Kai Pan from Morgan Stanley. Your line is open.

Since nobody has asked the California wildfire yet so, obliged to Josh's question on that. so I'm more interested in about to property side, so you said industry loss more than $15 billion versus last year's lessen that, yet your loss is much, much less than last year. So just wondered that [indiscernible] this year in the [indiscernible] and also just your general sense going forward seeing like last two years of elevated losses in California. Is California insurable from both property as well as liability perspective going forward?

So our face to the market for California risk was similar to our face to the market in 2017 from a profit perspective. So yes we did think differently and the part of the reason we did that differently is because we wanted to manage our overall risk at the holding level and in order to do that, we needed to hedge down our property risk so that we created room to take the better returning in casualty risk. So yes we did do things differently I wouldn't get into all of the elements. You should assume that we deployed the gross to net strategy quite like fulsome way and that is beyond just using seeded retro. With regard to, is California insurable going forward? I think the answer to that is yes, but one needs to think very carefully about what not only is the sarcastic probability of loss, but are there elements in a given year that will raise or lower the expected losses. Is there drought? Is 2019 going to change behaviour of the seedings with regard to whether they shut power off or leave power on and I think there's a significant different in the risk control measures within the public utilities in particular in California. So I think picking your spots, understanding the overall climate, regime that's in place and then being specific about how you want to structure it against the capital you want to retain and the capital you want to see. I think it's absolutely insurable, but it's one that it's going to take a fulsome analysis beyond just looking at a cap model.

So just to be sure on the liability side, even without any legislative changes you still think, you would participate in the public utilities.

Yes at the right price we'll participate in the [indiscernible] public utility market.

Okay, great. my second follow-up question is on capital management. Last year you take pause in term of share buybacks because lot of deals going down and elevate catastrophes. I just wonder going forward this year, do you still feel you have lots of things or opportunity on your plate that you will continue to take pause on the share buybacks.

Well you're right, 2018 we've made a significant investment all the way through the course of the year end of the b business. Culminating with this year will be the investment or acquisition of TMR, so that's where our capital is now, we're constantly looking where we can deploy it and I think we've shown in the past we've done a good job and then a good steward of it, but obviously we have overall a long-term track record of being fair and balanced between investing in the business and returning capital back to [indiscernible].

Okay, great. thank you so much and good luck.

Our last question comes from line of Josh Shanker from Deutsche Bank. Your line is open.

So I'm going to ask more California wildfire question, it should be quick ones. The California wildfire loss that's not included or is included in your net negative impact disclosure at the top of your press release.

The California no, the casualty losses are not in the net negative.

And given that you're - so precise about giving that information you told us like you've been profitable can you give us some specific numbers around that. or just you would have been profitable as good as we're going to get.

I think what we showed is, in our overall construct of our reserves we think we have it covered. The incremental amount that we had to rebalance. I was trying to direct you down to some number between $50 million and $60 million if you go back to the mid-60s that's the number I was trying to steer everybody too on the call Josh.

Okay and then the investigators cleared PG&E of liability in the Tubbs Fire of 2017. I know you said this might take years to resolve. [Indiscernible] the timeline of that situation is the Tubbs situation resolved and could the Camp fire situation be resolved in terms of liability within a single year.

Potentially I guess it could be resolved within the single year, but the way these typically happen is Cal Fires makes a determination of in these instances whether the public utility is culpable in the ignition of the fire. Once that happens and you'll go through a process of cost and liabilities which can take a long time and it's very complex. So anytime I guess is potentially achievable but I wouldn't expect that these will be settled in a particularly timely fashion.

Okay, thank you very much and have a great day.

And that is all the time we have for questions. I will turn it back to Kevin O'Donnell for closing remarks.

Thank you for your time today and we look forward to speaking to you next quarter.

And this concludes today's conference call. you may now disconnect.