RenaissanceRe Announces Estimated Net Negative Impact from Third Quarter 2019 Catastrophe Events
October 15 2019 - 4:15PM
Business Wire
RenaissanceRe Holdings Ltd. (NYSE: RNR) (the “Company” or
“RenaissanceRe”) today announced it currently estimates that losses
from third quarter 2019 catastrophe events will have an estimated
net negative impact of approximately $155 million on its third
quarter 2019 results of operations. The estimated losses include
Typhoon Faxai and Hurricane Dorian, which will have an estimated
net negative impact of approximately $100 million and $55 million,
respectively. The Company expects to report modest net income and
operating income available to common shareholders for the third
quarter of 2019.
On October 12, 2019, Typhoon Hagibis made landfall in Japan with
sustained winds of 85 miles per hour and reported gusts over 100
miles per hour. Typhoon Hagibis affected an area of nearly 85,000
square miles, including the region impacted by Typhoon Faxai,
causing widespread flooding and damage. The Company is in the
preliminary stage of assessing the impact of Typhoon Hagibis, which
will be reflected in its fourth quarter financial results.
Kevin J. O’Donnell, CEO of RenaissanceRe, commented: “We extend
our sympathies to all those affected by recent catastrophic events
and recognize the significant human impact, particularly in the
Bahamas and Japan. As always, we hope to improve the resilience and
sustainability of communities by supporting recovery and rebuilding
efforts through rapid payment of claims and superior service to our
customers.”
Net negative impact includes the sum of estimates of net claims
and claim expenses incurred, earned reinstatement premiums assumed
and ceded, lost profit commissions and redeemable noncontrolling
interest. The Company’s estimates of net negative impact are based
on a review of its potential exposures, preliminary discussions
with certain counterparties and catastrophe modeling
techniques.
Meaningful uncertainty regarding the estimates and the nature
and extent of the losses from these events remains, driven by the
magnitude and recent occurrence of each event, the geographic areas
in which the events occurred, relatively limited claims data
received to date, the contingent nature of business interruption
and other exposures, potential uncertainties relating to
reinsurance recoveries and other factors inherent in loss
estimation, among other things. Accordingly, the Company’s actual
net negative impact from the catastrophe events in the third
quarter of 2019 may vary from these preliminary estimates, perhaps
materially. Updated estimates related to these events will be
reflected in RenaissanceRe’s third quarter 2019 results, when
reported, and changes in these estimates will be recorded in the
period in which they occur.
About RenaissanceRe
RenaissanceRe is a global provider of reinsurance and insurance
that specializes in matching well-structured risks with efficient
sources of capital. The Company provides property, casualty and
specialty reinsurance and certain insurance solutions to customers,
principally through intermediaries. Established in 1993, the
Company has offices in Bermuda, Australia, Ireland, Singapore,
Switzerland, the United Kingdom and the United States.
Cautionary Statement Regarding Forward-Looking
Statements
Any forward-looking statements made in this Press Release
reflect RenaissanceRe’s current views with respect to future events
and financial performance and are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
These statements are subject to numerous factors that could cause
actual results to differ materially from those set forth in or
implied by such forward-looking statements, including the
following: the frequency and severity of catastrophic and other
events that the Company covers; the effectiveness of the Company’s
claims and claim expense reserving process; the Company’s ability
to maintain its financial strength ratings; the effect of climate
change on the Company’s business, including the trend towards
increasingly frequent and severe climate events; collection on
claimed retrocessional coverage, and new retrocessional reinsurance
being available on acceptable terms and providing the coverage that
we intended to obtain; the effect of emerging claims and coverage
issues; the effects of U.S. tax reform legislation and possible
future tax reform legislation and regulations, including changes to
the tax treatment of the Company’s shareholders or investors in the
Company’s joint ventures or other entities the Company manages;
soft reinsurance underwriting market conditions; the Company’s
reliance on a small and decreasing number of reinsurance brokers
and other distribution services for the preponderance of its
revenue; the Company’s exposure to credit loss from counterparties
in the normal course of business; the effect of continued
challenging economic conditions throughout the world; a contention
by the Internal Revenue Service that Renaissance Reinsurance Ltd.,
or any of the Company’s other Bermuda subsidiaries, is subject to
taxation in the U.S.; the success of any of the Company’s strategic
investments or acquisitions, including the Company’s ability to
manage its operations as its product and geographical diversity
increases; the Company’s ability to retain key senior officers and
to attract or retain the executives and employees necessary to
manage its business; the performance of the Company’s investment
portfolio; losses that the Company could face from terrorism,
political unrest or war; the effect of cybersecurity risks,
including technology breaches or failure on the Company’s business;
the Company’s ability to successfully implement its business
strategies and initiatives; the Company’s ability to determine the
impairments taken on investments; the effects of inflation; the
ability of the Company’s ceding companies and delegated authority
counterparties to accurately assess the risks they underwrite; the
effect of operational risks, including system or human failures;
the Company’s ability to effectively manage capital on behalf of
investors in joint ventures or other entities it manages; foreign
currency exchange rate fluctuations; the Company’s ability to raise
capital if necessary; the Company’s ability to comply with
covenants in its debt agreements; changes to the regulatory systems
under which the Company operates, including as a result of
increased global regulation of the insurance and reinsurance
industries; changes in Bermuda laws and regulations and the
political environment in Bermuda; the Company’s dependence on the
ability of its operating subsidiaries to declare and pay dividends;
aspects of the Company’s corporate structure that may discourage
third-party takeovers or other transactions; the cyclical nature of
the reinsurance and insurance industries; adverse legislative
developments that reduce the size of the private markets the
Company serves or impede their future growth; consolidation of
competitors, customers and insurance and reinsurance brokers; the
effect on the Company’s business of the highly competitive nature
of its industry, including the effect of new entrants to, competing
products for and consolidation in the (re)insurance industry; other
political, regulatory or industry initiatives adversely impacting
the Company; the Company’s ability to comply with applicable
sanctions and foreign corrupt practices laws; increasing barriers
to free trade and the free flow of capital; international
restrictions on the writing of reinsurance by foreign companies and
government intervention in the natural catastrophe market; the
effect of Organisation for Economic Co-operation and Development or
European Union (“EU”) measures to increase the Company’s taxes and
reporting requirements; the effect of the vote by the U.K. to leave
the EU; changes in regulatory regimes and accounting rules that may
impact financial results irrespective of business operations; the
Company’s need to make many estimates and judgments in the
preparation of its financial statements; risks that the ongoing
integration of the TMR Group Entities disrupts or distracts from
current plans and operations; the Company’s ability to recognize
the benefits of the acquisition of the TMR Group Entities; and
other factors affecting future results disclosed in RenaissanceRe’s
filings with the Securities and Exchange Commission, including its
Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.
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version on businesswire.com: https://www.businesswire.com/news/home/20191015006095/en/
Investor Contact: RenaissanceRe Holdings Ltd. Keith McCue
Senior Vice President, Finance & Investor Relations (441)
239-4830 Media Contact: RenaissanceRe Holdings Ltd. Keil
Gunther Vice President, Marketing & Communications (441)
239-4932 Kekst CNC Dawn Dover (212) 521-4800
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