RenaissanceRe Holdings Ltd. (NYSE:RNR.PRE) Q1 2016 Earnings Conference Call - Preliminary Transcript
Apr 27, 2016 • 10:00 am ET
which we are able to generate the best returns.
The characteristics of this market match well with our three competitive advantages of customer relationships with selection and capital management and we are optimistic there will be more opportunities to deploy capital in this area. Moving to our Lloyd's business now. Our Lloyd's unit had a profitable quarter, delivering a 90 combined ratio. We're seeing steady progress in the growth of this business, which continues to develop as a winning franchise with great potential.
We believe that we are building an efficient portfolio in Lloyd's and look to that segment to be a meaningful contributor to our profitability overtime. Results for the quarter was substantially better than for the previous quarters. While we are very pleased with Syndicate 1458's performance, we should remain mindful that results for this business will average out over the long-term. And as discussed last quarter, one should not be overly focused on a good quarter or a bad quarter. On the gross to net side, we had constructed an attractive gross portfolio, having capital efficiency of the book was improved by virtue of our ceded strategy.
Finally, I'd like to briefly discuss few of the losses that occurred after the close of the quarter. Let me start with the earthquakes in Japan and Ecuador. While it's too early to accurately estimate the losses from either of these earthquakes. Our initial expectation is that due to the way in which the personal and commercial risk is covered and also the types of business our exposure emanates from; our losses will be limited.
In Japan, the excess of loss covers purchased by Japanese companies are not likely to be materially impacted and therefore by extension should not affect the retro market. While the Japanese proportional covers may result in losses to reinsurance, we are not a significant writer of this business. In Ecuador, we anticipate that our loss will be low given the level of insurance penetration in the country. Similar to Japan, we don't see Ecuador impacting our retro book and as we will remember, we reduced our exposure to this area significantly at the January renewal.
In addition to the earthquake, Texas is experiencing volatile weather, including significant hailstorm losses. As with any large U.S. property cat event, we will likely have some exposure. While we are in the preliminary stages of evaluating the losses, we think that the hail activity will likely result in some losses to the lower end of regional covers that will be retained by the national primary carriers. With that, while we expect some loss and to blow to us in the reinsurance market generally, but for the most part, losses will be retained by cedes.
And with that, I'll turn it over for questions. Operator?