RenaissanceRe Holdings Ltd.’s net income for the first quarter of 2016 fell 23.7% from a year earlier to $128.0 million, in part because of losses in its specialty book of business, the Pembroke, Bermuda-based reinsurer said.

RenRe’s net written premiums increased 26.6% to $511.7 million. That includes $260.0 million in specialty reinsurance business, $188.8 million in catastrophe reinsurance and $62.8 million in Lloyd’s of London business.

Net investment income, however, dropped 27.3% to $28.9 million and the reinsurer’s combined ratio, though still profitable, deteriorated to 70.3% from 55.9% a year earlier.

The market “remains difficult,” RenRe CEO Kevin J. O’Donnell said Wednesday during an earnings call.

With still-softening insurance rates, “we will continue to exercise the same level of underwriting discipline as we have in the pastm” Mr. O’Donnell said Tuesday in a statement accompanying the results of the environment he also called “volatile.”

While some RenRe competitors are becoming more tolerant risk tolerant, “we are becoming less so,” Mr. O’Donnell said Wednesday.

He said the casualty and specialty losses were “idiosyncratic,” stemming from a series of unrelated events. “We don’t take away any trend” as a result of the events, he said during the analyst call.

“The specialty reinsurance segment’s combined ratio was impacted by a 17.4 percentage point increase in the net claims and claim expense ratio in the first quarter of 2016… principally driven by adverse development” on prior years’ net claims and expense ratio, the company said in the statement. The prior-year adverse development was “associated with a small number of relatively large losses primarily from the 2015 accident year. Partially offsetting this were actual reported losses coming in better than expected on attritional net claims and claim expenses.”

“While there were a few positives, the focus will be on the very weak results in specialty, which include both a weaker accident year and adverse development,” Mark Dwelle, an analyst at RBC Capital Markets L.L.C. in Richmond, Virginia, said in an investor note.

“Reserve development was worse than expected in all segments, which we expect to overshadow better-than-expected core loss ratios in all segments,” Meyer Shields, managing director at Keefe Bruyette & Woods Inc. in Baltimore, said in a research note. “Higher-than-expected acquisition expenses in catastrophe and specialty reinsurance — likely due to premium mix — drove the expense ratio miss.”