RenaissanceRe Announces $90 Million Initial Estimated Net Negative Impact from October 2017 California Wildfires
December 06 2017 - 8:30AM
Business Wire
RenaissanceRe Holdings Ltd. (NYSE: RNR) (“RenaissanceRe” or the
“Company”) today announced it currently estimates that losses from
the October 2017 California Wildfires will have a net negative
impact of $90 million on its fourth quarter 2017 results of
operations. The October 2017 California Wildfires caused widespread
damage to both personal and commercial property in and around the
impacted regions.
Kevin J. O’Donnell, CEO of RenaissanceRe, commented: "We extend
our sympathies to all those affected by the October 2017 California
Wildfires. This catastrophe once again highlights the critical role
that the insurance and reinsurance industry plays in protecting
people and rebuilding communities in the wake of natural disasters.
As we have demonstrated consistently in the past, we stand ready to
serve our customers in responding to the losses and promptly paying
claims."
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 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 the October 2017 California Wildfires remains,
driven by the magnitude and recent occurrence, 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 October 2017 California Wildfires will
vary from this preliminary estimate, perhaps materially. Updated
loss estimates related to the October 2017 California Wildfires
will be reflected in RenaissanceRe’s fourth quarter 2017 results,
when reported.
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, Ireland, Singapore, 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; 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 U.S. business tax reform
proposals; adverse tax developments, including potential changes to
the taxation of inter-company or related party transactions, or
changes to the tax treatment of shareholders or investors in
RenaissanceRe or joint ventures or other entities the Company
manages; the effect of emerging claims and coverage issues;
continued 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 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 retain key senior officers and to attract or retain the
executives and employees necessary to manage its business; the
Company’s ability to determine the impairments taken on
investments; the effect 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
industry; 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; 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;
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; other political,
regulatory or industry initiatives adversely impacting the Company;
risks related to Solvency II; 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; consolidation of competitors,
customers and insurance and reinsurance brokers; 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; 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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Investors:RenaissanceRe Holdings Ltd.Aditya Dutt,
441-239-4778Senior Vice President and
TreasurerorMedia:RenaissanceRe Holdings Ltd.Elizabeth
Tillman, 212-238-9224Director – CommunicationsorKekst and
CompanyPeter Hill / Dawn Dover, 212-521-4800
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