Here's Why You Should Retain RenaissanceRe Stock for Now

RenaissanceRe Holdings Ltd. RNR is strategically positioned to grow on increasing premiums, investment income, strategic acquisitions and partnerships, and strong cash generation. The rising returns from the fixed maturity portfolio, along with increasing underwriting results, drive further momentum. However, shares of RNR have fallen 2.5% in the year-to-date period against the industry’s growth of 7.5%.

RenaissanceRe — with a market cap of $11.4 billion — is a global reinsurance and insurance provider that specializes in matching well-structured risks with efficient sources of capital. The company provides property, casualty and specialty reinsurance, along with a range of insurance solutions to customers, primarily through intermediaries.

Courtesy of solid prospects, RNR currently carries a Zacks Rank #3 (Hold).

Where Do RNR’s Estimates Stand?

The Zacks Consensus Estimate for RenaissanceRe’s 2025 earnings is pegged at $23.45 per share and has witnessed six upward estimate revisions in the past 60 days against none in the opposite direction. Furthermore, the consensus mark for revenues is pegged at $11.9 billion for 2025, indicating 1.1% year-over-year growth. It beat earnings estimates in three of the past four quarters and missed once.

RenaissanceRe Holdings Ltd. Price and EPS Surprise

RenaissanceRe Holdings Ltd. price-eps-surprise | RenaissanceRe Holdings Ltd. Quote

RNR’s Growth Drivers

The company operates via two reportable segments: Property, and Casualty and Specialty. Also, it has an Other category, which mainly comprises its investment unit. Its total revenues rose 23% year over year in the first half of 2025, along with 3% growth in net premiums earned. We expect total net premiums earned to rise 1.1% year over year in 2025.

RNR is actively pursuing growth through strategic acquisitions and business expansion. The purchase of Validus Re and related businesses from AIG enhanced the scale of its global property and casualty reinsurance business and boosted profitability. The company also optimizes its portfolio by divesting non-core assets.

RNR’s recent Florida renewal shows strength, with most premiums written above market rate, boosting underwriting quality and return. Along with this, its cautious investment strategy continues to perform well, creating a strong balance between underwriting growth and investments. Increasing premiums from its Property and Casualty & Specialty segments are expected to drive performance further.

RNR’s robust cash generation abilities have enabled it to continue elevating shareholder value through share buybacks and dividend payouts. In the first half of 2025, the company rewarded its shareholders with share buybacks of $737.6 million. Additionally, from July 1 to July 21, 2025, it repurchased shares worth $70.2 million again. In July 2025, management approved a renewal of RenaissanceRe’s share repurchase program, increasing the total authorization to $750 million. This amount includes the remaining funds from previous authorizations.

Moreover, RNR is currently trading at a discount compared to the industry average. The stock is currently trading at 1.14X, trailing 12-month tangible book value, which compares to 1.53X for the industry, indicating undervaluation. The company has a Value Score of B.

Risks for RNR Stock

There are some factors, however, that investors should keep a careful eye on.

RenaissanceRe faces escalating expenses due to higher net claims and claim expenses, acquisition costs and operational expenses. Total expenses rose 44.4% year over year in 2024 and escalated 32.3% year over year in the first half of 2025. We expect the metric to rise 19.3% year over year in 2025. The rising expenses pose a risk to the company’s profit margins.

As of June 30, 2025, RenaissanceRe carried $2.3 billion in debt, with a total debt-to-capital ratio of 17.3%, above the industry average of 16.1%. Elevated debt levels have driven up interest expenses, which rose 28.1% year over year in 2024 and 26% in the first half of 2025. This growing interest burden could weigh on margins.

Key Picks

Some better-ranked stocks in the broader finance space are Houlihan Lokey, Inc. HLI, Heritage Insurance Holdings Inc. HRTG and Acadian Asset Management Inc. AAMI, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Houlihan Lokey’s current-year earnings of $7.67 per share has witnessed three upward revisions in the past 60 days against none in the opposite direction. Houlihan Lokey beat earnings estimates in each of the trailing four quarters, with the average surprise being 17.1%. The consensus estimate for current-year revenues is pegged at $2.7 billion, implying 13.1% year-over-year growth.

The Zacks Consensus Estimate for Heritage Insurance’s current-year earnings of $4.10 per share has witnessed two upward revisions in the past 60 days against no movement in the opposite direction. Heritage Insurance beat earnings estimates in each of the trailing four quarters, with the average surprise being 360.7%. The consensus estimate for current-year revenues is pegged at $842.2 million, calling for 3.1% year-over-year growth.

The Zacks Consensus Estimate for Acadian Asset Management’s current-year earnings is pegged at $3.72 per share and has witnessed one upward revision in the past 60 days against no movement in the opposite direction. Acadian Asset Management beat earnings estimates in three of the trailing four quarters and met once, with the average surprise being 15.7%. The consensus estimate for current-year revenues is pegged at $620.9 million, calling for 22.8% year-over-year growth.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research