What Happened?
Shares of reinsurance provider RenaissanceRe (NYSE: RNR) jumped 8.2% in the afternoon session after the company reported third-quarter 2025 results that easily surpassed Wall Street's profit forecasts. The reinsurance provider posted adjusted earnings of $15.62 per share, a significant 64.4% beat compared to analysts' average estimate of $9.50 per share. This strong performance was supported by a combined ratio of 68.4%, which was much better than the 81% Wall Street had anticipated. A combined ratio below 100% indicates an underwriting profit, so a lower number is better. In addition, the company's revenue of $3.2 billion, while down year on year, came in 9.7% ahead of consensus expectations.
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What Is The Market Telling Us
RenaissanceRe’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was about 1 month ago when the stock dropped 3.4% on the news that Wolfe Research initiated coverage on the stock with a 'Peer Perform' rating amid broader sector weakness. The initiation from analyst Tracy Benguigui came with a neutral outlook, suggesting the stock is expected to perform in line with its peers. This news coincided with a challenging day for the wider insurance industry. In Europe, insurance stocks dropped by approximately 1% as investors grew cautious ahead of a highly anticipated monetary policy announcement from the U.S. Federal Reserve expected on Wednesday. This combination of a neutral rating, rather than a more bullish 'Buy,' and overall market apprehension appears to have weighed on investor sentiment for RenaissanceRe.
RenaissanceRe is flat since the beginning of the year, and at $248.71 per share, it is trading 13.5% below its 52-week high of $287.47 from December 2024. Investors who bought $1,000 worth of RenaissanceRe’s shares 5 years ago would now be looking at an investment worth $1,493.
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