Quarterly Operating Income Available to
Common Shareholders of $209.6 Million or $5.23 Per Diluted Common
Share
RenaissanceRe Holdings Ltd. (NYSE: RNR) (the “Company” or
“RenaissanceRe”) today reported net income available to
RenaissanceRe common shareholders of $191.8 million, or $4.78 per
diluted common share, in the second quarter of 2018, compared to
$171.1 million, or $4.24 per diluted common share, in the second
quarter of 2017. Operating income available to RenaissanceRe common
shareholders was $209.6 million, or $5.23 per diluted common share,
in the second quarter of 2018, compared to $116.8 million, or $2.88
per diluted common share, in the second quarter of 2017. The
Company reported an annualized return on average common equity of
18.6% and an annualized operating return on average common equity
of 20.3% in the second quarter of 2018, compared to 15.2% and
10.3%, respectively, in the second quarter of 2017. Book value per
common share increased $4.27, or 4.3%, to $104.56, in the second
quarter of 2018, compared to a 3.4% increase in the second quarter
of 2017. Tangible book value per common share plus accumulated
dividends increased $4.57, or 4.9%, to $116.53 in the second
quarter of 2018, compared to a 3.9% increase in the second quarter
of 2017.
Kevin J. O'Donnell, CEO, commented: “We celebrated our 25th
anniversary as a company this quarter, and I am proud to report
very strong results. We recorded annualized operating return
on average common equity of 20.3% and growth in tangible book value
per common share plus accumulated dividends of 4.9%. I am
especially pleased that we were also able to construct our best
portfolio of risk in years. Moving forward, a combination of
top line growth, an effective gross-to-net strategy, rising
interest rates and improved operational efficiency should provide
the foundations for continued superior shareholder return.”
SECOND QUARTER 2018
SUMMARY
- Gross premiums written increased by
$149.9 million, or 18.1%, to $977.3 million, in the second quarter
of 2018, compared to the second quarter of 2017, driven by
increases of $96.6 million in the Casualty and Specialty segment
and $53.3 million in the Property segment. Gross premiums written
in the Property segment included a $31.4 million reduction in
assumed reinstatement premiums written.
- Underwriting income of $226.6 million
and a combined ratio of 47.2% in the second quarter of 2018,
compared to $109.7 million and 71.3%, respectively, in the second
quarter of 2017. Decreases in the estimates of the net negative
impact of the 2017 Catastrophe Events (as defined herein) resulted
in a net positive impact on the underwriting result of $92.0
million, and a corresponding reduction in the combined ratio of
23.5 percentage points, in the second quarter of 2018, principally
within the Company’s Property segment.
- The Company’s portfolio of fixed
maturity and short term investments had a yield to maturity of 3.0%
at June 30, 2018.
Net Negative Impact
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.
The Company’s actual net negative impact, both individually and in
the aggregate, will vary from these estimates, perhaps materially.
Changes in these estimates will be recorded in the period in which
they occur.
Meaningful uncertainty remains regarding the estimates, and the
nature and extent of the losses, associated with Hurricanes Harvey,
Irma and Maria, the Mexico City Earthquake, and the Q4 2017
California Wildfires (collectively, the “2017 Catastrophe Events”),
driven by the magnitude and recent occurrence of each event,
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. Seismic events
generally have longer development periods than windstorm events,
which may be amplified in certain instances by dynamics such as the
risk of geological liquefaction and the potential for uncertainty
in claims adjudication.
See the financial data below for additional information
detailing the net positive impact on the Company’s consolidated
financial statements in the second quarter of 2018 resulting from
decreases in the estimates of the net negative impact of the 2017
Catastrophe Events.
Three months
ended June 30, 2018
Change in Estimates of2017
CatastropheEvents (1)
(in thousands, except percentages) Decrease in net claims and
claims expenses incurred $ 128,626 Assumed reinstatement premiums
earned (32,266 ) Ceded reinstatement premiums earned 2,180 Lost
profit commissions (6,577 ) Net positive impact on underwriting
result 91,963 Redeemable noncontrolling interest - DaVinciRe
(15,263 ) Net positive impact $ 76,700 Percentage point
impact on consolidated combined ratio (23.5 ) Net positive
impact on Property segment underwriting result $ 86,136 Net
positive impact on Casualty and Specialty segment underwriting
result 5,827 Net positive impact on underwriting result $
91,963 (1) An initial estimate of the net
negative impact of the 2017 Catastrophe Events was recorded in the
Company's consolidated financial statements during 2017. The
amounts noted in the table above reflect changes in the estimates
of the net negative impact of the 2017 Catastrophe Events recorded
in the second quarter of 2018.
Underwriting Results by Segment
Property Segment
Gross premiums written in the Property segment were $552.6
million in the second quarter of 2018, an increase of $53.3
million, or 10.7%, compared to $499.3 million in the second quarter
of 2017.
Gross premiums written in the catastrophe class of business were
$437.7 million in the second quarter of 2018, an increase of $26.2
million, or 6.4%, compared to the second quarter of 2017. Excluding
a $31.2 million reduction in assumed reinstatement premiums written
in the catastrophe class of business in the second quarter of 2018
associated with the 2017 Catastrophe Events, gross premiums written
in the catastrophe class of business would have increased $57.4
million, or 14.0%. The increase in gross premiums written in the
catastrophe class of business was driven primarily by expanded
participation on existing transactions and certain new
transactions. Gross premiums written in the other property class of
business were $114.9 million in the second quarter of 2018, an
increase of $27.1 million, or 30.8%, compared to the second quarter
of 2017. The increase in gross premiums written in the other
property class of business was primarily driven by growth in the
Lloyd’s underwriting platform, both from existing relationships and
through new opportunities.
Ceded premiums written in the Property segment were $254.8
million in the second quarter of 2018, an increase of $91.9
million, or 56.4%, compared to the second quarter of 2017. The
increase in ceded premiums written was principally due to
additional purchases of retrocessional reinsurance as part of the
management of the Company’s risk portfolio.
Net premiums written in the Property segment were $297.8 million
in the second quarter of 2018, a decrease of $38.6 million or
11.5%, compared to the second quarter of 2017. Excluding a
$29.5 million reduction in net reinstatement premiums written in
the Property segment associated with the 2017 Catastrophe Events,
net premiums written decreased by $9.1 million due to an increase
in ceded purchases made as part of the Company’s gross-to-net
strategy which is core to the construction of its net portfolios of
risk.
The Property segment generated underwriting income of $213.7
million and a combined ratio of negative 4.7% in the second quarter
of 2018, compared to $106.6 million and positive 44.5%,
respectively, in the second quarter of 2017. Principally impacting
the Property segment underwriting result and combined ratio in the
second quarter of 2018 were decreases in the net negative impact of
the 2017 Catastrophe Events, which resulted in a net positive
impact on the underwriting result of $86.1 million, and a
corresponding reduction in the combined ratio of 50.1 percentage
points.
Primarily as a result of the decreases in the estimates of the
net negative impact of the 2017 Catastrophe Events noted above, the
Property segment experienced:
- favorable development on prior accident
years net claims and claim expenses of $143.1 million, or 70.1
percentage points, during the second quarter of 2018, compared to
$23.9 million, or 12.4 percentage points, in the second quarter of
2017; and
- an increase in the underwriting expense
ratio to 31.7% in the second quarter of 2018, compared to 27.3% in
the second quarter of 2017, principally driven by lower ceded
profit commissions, as well as a reduction in net premiums earned
due to the negative reinstatement premiums noted above.
Casualty and Specialty Segment
Gross premiums written in the Casualty and Specialty segment
were $424.7 million in the second quarter of 2018, an increase of
$96.6 million, or 29.5%, compared to the second quarter of 2017.
The increase was principally due to selective growth from new
business opportunities within the general casualty, financial lines
and other specialty classes of business. Much of this growth is a
result of the Company’s differentiated strategy to provide bespoke
customer solutions, which may be non-recurring.
The Casualty and Specialty segment generated underwriting income
of $13.0 million and had a combined ratio of 94.2% in the second
quarter of 2018, compared to $2.8 million and 98.5%, respectively,
in the second quarter of 2017. The improvement in the Casualty and
Specialty segment combined ratio was principally driven by a 6.2
percentage point decrease in the underwriting expense ratio,
primarily the result of a decrease in the net acquisition ratio and
a decrease in the operating expense ratio due to the combination of
both lower operating expenses and improved operating leverage as a
result of the increase in net premiums earned, partially offset by
a 1.9 percentage point increase in the net claims and claim
expenses ratio.
During the second quarter of 2018, the Casualty and Specialty
segment experienced net favorable development on prior accident
years net claims and claim expenses of $13.0 million, or 5.8
percentage points, compared to $21.0 million, or 11.0 percentage
points, in the second quarter of 2017. The net favorable
development during the second quarter of 2018 was principally
driven by reported losses generally coming in lower than expected
on attritional net claims and claim expenses across a number of
lines of business, and a decrease in the estimate of the net
negative impact of the 2017 Catastrophe Events.
Other Items
- The Company’s total investment result,
which includes the sum of net investment income and net realized
and unrealized gains and losses on investments, was a gain of $53.5
million in the second quarter of 2018, compared to a gain of $112.3
million in the second quarter of 2017, a decrease of $58.8 million.
The decrease in the total investment result was principally due to
realized and unrealized losses on the Company’s fixed maturity
investment portfolio in the second quarter of 2018 driven by an
upward shift of the interest rate yield curve, compared to realized
and unrealized gains in the second quarter of 2017 primarily driven
by a tightening of credit spreads and a decrease in interest rates
at the longer end of the yield curve. In addition, the Company’s
equity investments trading portfolio experienced lower realized and
unrealized gains during the second quarter of 2018, compared to
second quarter of 2017.
- During the second quarter of 2018,
Upsilon RFO issued $205.4 million of non-voting preference shares
to investors, including $32.8 million to the Company. At
June 30, 2018, the Company’s participation in the risks
assumed by Upsilon RFO was 14.6%.
- In June 2018, the Company raised $250.0
million through the issuance of 10,000,000 Depositary Shares, each
of which represents 1/1,000th interest in a share of the Company’s
5.750% Series F Preference Shares, $1.00 par value and $25,000
liquidation preference per share (equivalent to $25.00 per
Depositary Share). The proceeds of the issuance of the Series F
Preference Shares will be used for general corporate purposes.
This Press Release includes certain non-GAAP financial measures
including “operating income available to RenaissanceRe common
shareholders”, “operating income available to RenaissanceRe common
shareholders per common share - diluted”, “operating return on
average common equity - annualized”, “tangible book value per
common share” and “tangible book value per common share plus
accumulated dividends.” A reconciliation of such measures to the
most comparable GAAP figures in accordance with Regulation G is
presented in the attached supplemental financial data.
Please refer to the “Investors - Financial Reports - Financial
Supplements” section of the Company’s website at www.renre.com for
a copy of the Financial Supplement which includes additional
information on the Company’s financial performance.
RenaissanceRe will host a conference call on Wednesday, July 25,
2018 at 10:00 a.m. ET to discuss this release. Live broadcast of
the conference call will be available through the “Investors -
Webcasts & Presentations” section of the Company’s website at
www.renre.com.
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, 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; collection on claimed
retrocessional coverage, and new retrocessional reinsurance being
available on acceptable terms and providing the coverage that we
intended to obtain; 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; 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 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 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; 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; 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.
RenaissanceRe Holdings Ltd. Summary Consolidated
Statements of Operations (in thousands of United States
Dollars, except per share amounts and percentages) (Unaudited)
Three months ended Six
months ended June 30, 2018 June
30, 2017 June 30, 2018
June 30, 2017 Revenues Gross premiums written
$ 977,343 $ 827,415 $ 2,136,995 $ 1,749,505
Net premiums written $ 604,509 $ 555,745 $ 1,267,553 $
1,099,881 Increase in unearned premiums (175,124 ) (173,480 )
(397,886 ) (351,571 ) Net premiums earned 429,385 382,265 869,667
748,310 Net investment income 71,356 54,163 127,832 108,488 Net
foreign exchange (losses) gains (10,687 ) 3,109 (6,930 ) 11,274
Equity in earnings of other ventures 5,826 5,543 6,683 4,036 Other
income (losses) 1,225 2,392 (17 ) 4,057 Net realized and unrealized
(losses) gains on investments (17,901 ) 58,113 (100,045 )
101,486
Total revenues 479,204 505,585
897,190 977,651
Expenses Net claims and claim
expenses incurred 60,167 142,587 231,870 335,668 Acquisition
expenses 105,052 88,251 202,763 171,533 Operational expenses 37,543
41,766 78,815 89,049 Corporate expenses 8,301 4,636 15,034 9,922
Interest expense 11,768 10,091 23,535 20,617
Total expenses 222,831 287,331 552,017
626,789 Income before taxes 256,373 218,254 345,173
350,862 Income tax expense (4,506 ) (3,904 ) (1,099 ) (4,238 )
Net income 251,867 214,350 344,074 346,624 Net income
attributable to noncontrolling interests (54,483 ) (37,612 )
(84,382 ) (71,939 )
Net income attributable to RenaissanceRe
197,384 176,738 259,692 274,685 Dividends on preference shares
(5,596 ) (5,596 ) (11,191 ) (11,191 )
Net income available to
RenaissanceRe common shareholders $ 191,788 $ 171,142
$ 248,501 $ 263,494 Net income
available to RenaissanceRe common shareholders per common share -
basic $ 4.78 $ 4.25 $ 6.21 $ 6.50 Net income available to
RenaissanceRe common shareholders per common share - diluted $ 4.78
$ 4.24 $ 6.21 $ 6.47 Operating income available to RenaissanceRe
common shareholders per common share - diluted (1) $ 5.23 $ 2.88 $
8.64 $ 4.16 Average shares outstanding - basic 39,641 39,937
39,597 40,172 Average shares outstanding - diluted 39,654 40,024
39,622 40,324 Net claims and claim expense ratio 14.0 % 37.3
% 26.7 % 44.9 % Underwriting expense ratio 33.2 % 34.0 % 32.3 %
34.8 % Combined ratio 47.2 % 71.3 % 59.0 % 79.7 % Return on
average common equity - annualized 18.6 % 15.2 % 12.2 % 11.7 %
Operating return on average common equity - annualized (1) 20.3 %
10.3 % 16.9 % 7.4 % (1) See Comments on Regulation G
for a reconciliation of non-GAAP financial measures.
RenaissanceRe Holdings Ltd. Summary Consolidated Balance
Sheets (in thousands of United States Dollars, except per share
amounts)
June 30,
2018 December 31, 2017 Assets
(Unaudited) (Audited) Fixed maturity investments trading, at fair
value $ 7,420,778 $ 7,426,555 Short term investments, at fair value
2,031,943 991,863 Equity investments trading, at fair value 432,804
388,254 Other investments, at fair value 713,200 594,793
Investments in other ventures, under equity method 111,935
101,974 Total investments 10,710,660 9,503,439 Cash and cash
equivalents 548,472 1,361,592 Premiums receivable 1,959,647
1,304,622 Prepaid reinsurance premiums 925,501 533,546 Reinsurance
recoverable 1,454,991 1,586,630 Accrued investment income 44,810
42,235 Deferred acquisition costs 511,155 426,551 Receivable for
investments sold 505,907 103,145 Other assets 122,048 121,226
Goodwill and other intangibles 240,187 243,145
Total
assets $ 17,023,378 $ 15,226,131
Liabilities,
Noncontrolling Interests and Shareholders’ Equity
Liabilities Reserve for claims and claim expenses $
4,702,345 $ 5,080,408 Unearned premiums 2,267,450 1,477,609 Debt
990,371 989,623 Reinsurance balances payable 2,085,034 989,090
Payable for investments purchased 490,589 208,749 Other liabilities
134,100 792,771
Total liabilities 10,669,889
9,538,250 Redeemable noncontrolling interest 1,493,428 1,296,506
Shareholders’ Equity Preference shares 650,000 400,000
Common shares 40,263 40,024 Additional paid-in capital 35,094
37,355 Accumulated other comprehensive (loss) income (1,101 ) 224
Retained earnings 4,135,805 3,913,772
Total shareholders’
equity attributable to RenaissanceRe 4,860,061 4,391,375
Total liabilities, noncontrolling interests and shareholders’
equity $ 17,023,378 $ 15,226,131
Book value
per common share $ 104.56 $ 99.72
RenaissanceRe Holdings Ltd. Supplemental Financial Data -
Segment Information (in thousands of United States Dollars,
except percentages) (Unaudited)
Three
months ended June 30, 2018 Property
Casualty andSpecialty
Other Total Gross
premiums written $ 552,627 $ 424,716 $ — $
977,343 Net premiums written $ 297,832 $ 306,677
$ — $ 604,509 Net premiums earned $ 204,138 $
225,247 $ — $ 429,385 Net claims and claim expenses incurred
(74,269 ) 134,524 (88 ) 60,167 Acquisition expenses 40,850 64,201 1
105,052 Operational expenses 23,810 13,552 181
37,543 Underwriting income (loss) $ 213,747 $ 12,970
$ (94 ) 226,623 Net investment income 71,356 71,356 Net
foreign exchange losses (10,687 ) (10,687 ) Equity in earnings of
other ventures 5,826 5,826 Other income 1,225 1,225 Net realized
and unrealized losses on investments (17,901 ) (17,901 ) Corporate
expenses (8,301 ) (8,301 ) Interest expense (11,768 ) (11,768 )
Income before taxes and redeemable noncontrolling interests 256,373
Income tax expense (4,506 ) (4,506 ) Net income attributable to
redeemable noncontrolling interests (54,483 ) (54,483 ) Dividends
on preference shares (5,596 ) (5,596 ) Net income attributable to
RenaissanceRe common shareholders $ 191,788 Net
claims and claim expenses incurred – current accident year $ 68,876
$ 147,520 $ — $ 216,396 Net claims and claim expenses incurred –
prior accident years (143,145 ) (12,996 ) (88 ) (156,229 ) Net
claims and claim expenses incurred – total $ (74,269 ) $ 134,524
$ (88 ) $ 60,167 Net claims and claim expense
ratio – current accident year 33.7 % 65.5 % 50.4 % Net claims and
claim expense ratio – prior accident years (70.1 )% (5.8 )% (36.4
)% Net claims and claim expense ratio – calendar year (36.4 )% 59.7
% 14.0 % Underwriting expense ratio 31.7 % 34.5 % 33.2 % Combined
ratio (4.7 )% 94.2 % 47.2 %
Three months ended June 30,
2017 Property
Casualty andSpecialty
Other Total Gross premiums written $ 499,347 $
328,068 $ — $ 827,415 Net premiums written $
336,464 $ 219,281 $ — $ 555,745 Net
premiums earned $ 192,198 $ 190,065 $ 2 $ 382,265 Net claims and
claim expenses incurred 33,017 109,797 (227 ) 142,587 Acquisition
expenses 28,500 59,752 (1 ) 88,251 Operational expenses 24,053
17,712 1 41,766 Underwriting income $
106,628 $ 2,804 $ 229 109,661 Net investment
income 54,163 54,163 Net foreign exchange gains 3,109 3,109 Equity
in earnings of other ventures 5,543 5,543 Other income 2,392 2,392
Net realized and unrealized gains on investments 58,113 58,113
Corporate expenses (4,636 ) (4,636 ) Interest expense (10,091 )
(10,091 ) Income before taxes and noncontrolling interests 218,254
Income tax expense (3,904 ) (3,904 ) Net income attributable to
noncontrolling interests (37,612 ) (37,612 ) Dividends on
preference shares (5,596 ) (5,596 ) Net income available to
RenaissanceRe common shareholders $ 171,142 Net
claims and claim expenses incurred – current accident year $ 56,889
$ 130,802 $ — $ 187,691 Net claims and claim expenses incurred –
prior accident years (23,872 ) (21,005 ) (227 ) (45,104 ) Net
claims and claim expenses incurred – total $ 33,017 $
109,797 $ (227 ) $ 142,587 Net claims and
claim expense ratio – current accident year 29.6 % 68.8 % 49.1 %
Net claims and claim expense ratio – prior accident years (12.4 )%
(11.0 )% (11.8 )% Net claims and claim expense ratio – calendar
year 17.2 % 57.8 % 37.3 % Underwriting expense ratio 27.3 % 40.7 %
34.0 % Combined ratio 44.5 % 98.5 % 71.3 %
RenaissanceRe Holdings Ltd. Supplemental Financial Data -
Segment Information (in thousands of United States Dollars,
except percentages) (Unaudited)
Six months
ended June 30, 2018 Property
Casualty andSpecialty
Other Total Gross
premiums written $ 1,259,595 $ 877,400 $ — $
2,136,995 Net premiums written $ 651,909 $ 615,644
$ — $ 1,267,553 Net premiums earned $ 429,187
$ 440,480 $ — $ 869,667 Net claims and claim expenses incurred
(43,662 ) 275,602 (70 ) 231,870 Acquisition expenses 81,571 121,191
1 202,763 Operational expenses 50,356 28,145 314
78,815 Underwriting income (loss) $ 340,922 $
15,542 $ (245 ) 356,219 Net investment income 127,832
127,832 Net foreign exchange losses (6,930 ) (6,930 ) Equity in
earnings of other ventures 6,683 6,683 Other loss (17 ) (17 ) Net
realized and unrealized losses on investments (100,045 ) (100,045 )
Corporate expenses (15,034 ) (15,034 ) Interest expense (23,535 )
(23,535 ) Income before taxes and redeemable noncontrolling
interests 345,173 Income tax expense (1,099 ) (1,099 ) Net income
attributable to redeemable noncontrolling interests (84,382 )
(84,382 ) Dividends on preference shares (11,191 ) (11,191 ) Net
income attributable to RenaissanceRe common shareholders $ 248,501
Net claims and claim expenses incurred – current
accident year $ 127,045 $ 292,389 $ — $ 419,434 Net claims and
claim expenses incurred – prior accident years (170,707 ) (16,787 )
(70 ) (187,564 ) Net claims and claim expenses incurred – total $
(43,662 ) $ 275,602 $ (70 ) $ 231,870 Net
claims and claim expense ratio – current accident year 29.6 % 66.4
% 48.2 % Net claims and claim expense ratio – prior accident years
(39.8 )% (3.8 )% (21.5 )% Net claims and claim expense ratio –
calendar year (10.2 )% 62.6 % 26.7 % Underwriting expense ratio
30.8 % 33.9 % 32.3 % Combined ratio 20.6 % 96.5 % 59.0 %
Six months ended June 30, 2017 Property
Casualty andSpecialty
Other Total Gross premiums written $ 1,019,876
$ 729,629 $ — $ 1,749,505 Net premiums written
$ 626,335 $ 473,546 $ — $ 1,099,881 Net
premiums earned $ 379,186 $ 369,124 $ — $ 748,310 Net claims and
claim expenses incurred 71,855 264,368 (555 ) 335,668 Acquisition
expenses 57,603 113,931 (1 ) 171,533 Operational expenses 51,718
37,319 12 89,049 Underwriting income
(loss) $ 198,010 $ (46,494 ) $ 544 152,060 Net
investment income 108,488 108,488 Net foreign exchange gains 11,274
11,274 Equity in earnings of other ventures 4,036 4,036 Other
income 4,057 4,057 Net realized and unrealized gains on investments
101,486 101,486 Corporate expenses (9,922 ) (9,922 ) Interest
expense (20,617 ) (20,617 ) Income before taxes and noncontrolling
interests 350,862 Income tax expense (4,238 ) (4,238 ) Net income
attributable to noncontrolling interests (71,939 ) (71,939 )
Dividends on preference shares (11,191 ) (11,191 ) Net income
available to RenaissanceRe common shareholders $ 263,494
Net claims and claim expenses incurred – current accident
year $ 96,655 $ 255,111 $ — $ 351,766 Net claims and claim expenses
incurred – prior accident years (24,800 ) 9,257 (555 )
(16,098 ) Net claims and claim expenses incurred – total $ 71,855
$ 264,368 $ (555 ) $ 335,668 Net claims
and claim expense ratio – current accident year 25.5 % 69.1 % 47.0
% Net claims and claim expense ratio – prior accident years (6.6 )%
2.5 % (2.1 )% Net claims and claim expense ratio – calendar year
18.9 % 71.6 % 44.9 % Underwriting expense ratio 28.9 % 41.0 % 34.8
% Combined ratio 47.8 % 112.6 % 79.7 %
RenaissanceRe Holdings Ltd. Supplemental Financial Data -
Gross Premiums Written (in thousands of United States Dollars)
(Unaudited)
Three months
ended Six months ended June 30, 2018
June 30, 2017 June 30,
2018 June 30, 2017
Property
Segment
Catastrophe $ 437,720 $ 411,500 $ 1,028,057 $ 825,924 Other
property 114,907 87,847 231,538 193,952
Property segment gross premiums written $ 552,627 $ 499,347
$ 1,259,595 $ 1,019,876
Casualty and
Specialty Segment
General casualty (1) $ 153,648 $ 107,994 $ 280,274 $ 230,287
Professional liability (2) 97,811 101,447 254,924 233,753 Financial
lines (3) 88,215 69,314 181,482 154,457 Other (4) 85,042
49,313 160,720 111,132 Casualty and Specialty segment
gross premiums written $ 424,716 $ 328,068 $ 877,400
$ 729,629 (1)
Includes automobile liability, casualty
clash, employer’s liability, umbrella or excess casualty, workers’
compensation and general liability.
(2) Includes directors and officers, medical malpractice, and
professional indemnity. (3) Includes financial guaranty, mortgage
guaranty, political risk, surety and trade credit. (4) Includes
accident and health, agriculture, aviation, cyber, energy, marine,
satellite and terrorism. Lines of business such as regional
multi-line and whole account may have characteristics of various
other classes of business, and are allocated accordingly.
RenaissanceRe Holdings Ltd. Supplemental Financial
Data - Total Investment Result (in thousands of United States
Dollars, except percentages) (Unaudited)
Three months ended
Six months ended June 30, 2018 June 30,
2017 June 30, 2018 June 30, 2017
Fixed maturity investments $ 50,416 $ 44,356 $ 96,059 $ 87,775
Short term investments 7,633 2,981 12,937 4,705 Equity investments
trading 1,490 889 2,188 1,700 Other investments Private equity
investments 3,860 6,611 3,426 14,413 Other 10,658 2,899 18,681
6,971 Cash and cash equivalents 1,039 295 1,604
484 75,096 58,031 134,895 116,048 Investment expenses
(3,740 ) (3,868 ) (7,063 ) (7,560 )
Net investment income
71,356 54,163 127,832 108,488
Gross realized gains 5,133 15,249 9,716 26,710 Gross realized
losses (26,519 ) (7,243 ) (52,372 ) (23,776 ) Net realized (losses)
gains on fixed maturity investments (21,386 ) 8,006 (42,656 ) 2,934
Net unrealized (losses) gains on fixed maturity investments trading
(9,420 ) 18,760 (64,792 ) 43,395 Net realized and unrealized gains
(losses) on investments-related derivatives 1,038 (268 ) (3,326 )
(324 ) Net realized gains on equity investments trading 348 15,146
582 36,061 Net unrealized gains on equity investments trading
11,519 16,469 10,147 19,420
Net
realized and unrealized (losses) gains on investments (17,901 )
58,113 (100,045 ) 101,486
Total investment
result $ 53,455 $ 112,276 $ 27,787 $
209,974
Total investment return - annualized
2.0 % 4.8 % 0.5 % 4.5 %
Comments on Regulation G
In addition to the GAAP financial measures set forth in this
Press Release, the Company has included certain non-GAAP financial
measures within the meaning of Regulation G. The Company has
provided these financial measures in previous investor
communications and the Company’s management believes that these
measures are important to investors and other interested persons,
and that investors and such other persons benefit from having a
consistent basis for comparison between quarters and for comparison
with other companies within the industry. These measures may not,
however, be comparable to similarly titled measures used by
companies outside of the insurance industry. Investors are
cautioned not to place undue reliance on these non-GAAP measures in
assessing the Company’s overall financial performance.
The Company uses “operating income available to RenaissanceRe
common shareholders” as a measure to evaluate the underlying
fundamentals of its operations and believes it to be a useful
measure of its corporate performance. “Operating income
available to RenaissanceRe common shareholders” as used herein
differs from “net income available to RenaissanceRe common
shareholders,” which the Company believes is the most directly
comparable GAAP measure, by the exclusion of net realized and
unrealized gains and losses on investments and the associated
income tax expense or benefit. The Company’s management believes
that “operating income available to RenaissanceRe common
shareholders” is useful to investors because it more accurately
measures and predicts the Company’s results of operations by
removing the variability arising from fluctuations in the Company’s
fixed maturity investment portfolio, equity investments trading and
investments-related derivatives and the associated income tax
expense or benefit of those fluctuations. The Company also uses
“operating income available to RenaissanceRe common shareholders”
to calculate “operating income available to RenaissanceRe common
shareholders per common share - diluted” and “operating return on
average common equity - annualized”. The following is a
reconciliation of: 1) net income available to RenaissanceRe
common shareholders to operating income available to RenaissanceRe
common shareholders; 2) net income available to RenaissanceRe
common shareholders per common share - diluted to operating income
available to RenaissanceRe common shareholders per common share -
diluted; and 3) return on average common equity - annualized to
operating return on average common equity - annualized:
Three months ended Six
months ended (in thousands of United States Dollars, except per
share amounts and percentages)
June 30, 2018
June 30, 2017 June 30, 2018
June 30, 2017 Net income available to
RenaissanceRe common shareholders $ 191,788 $ 171,142 $ 248,501 $
263,494 Adjustment for net realized and unrealized losses (gains)
on investments 17,901 (58,113 ) 100,045 (101,486 ) Adjustment for
income tax (benefit) expense (1) (58 ) 3,785 (3,706 ) 8,492
Operating income available to RenaissanceRe common
shareholders $ 209,631 $ 116,814 $ 344,840 $
170,500 Net income available to RenaissanceRe common
shareholders per common share - diluted $ 4.78 $ 4.24 $ 6.21 $ 6.47
Adjustment for net realized and unrealized losses (gains) on
investments 0.45 (1.45 ) 2.52 (2.52 ) Adjustment for income tax
(benefit) expense (1) — 0.09 (0.09 ) 0.21
Operating income available to RenaissanceRe common shareholders per
common share - diluted $ 5.23 $ 2.88 $ 8.64 $
4.16 Return on average common equity - annualized
18.6 % 15.2 % 12.2 % 11.7 % Adjustment for net realized and
unrealized losses (gains) on investments 1.7 % (5.2 )% 4.9 % (4.5
)% Adjustment for income tax (benefit) expense (1) — % 0.3 % (0.2
)% 0.2 % Operating return on average common equity - annualized
20.3 % 10.3 % 16.9 % 7.4 % (1) Adjustment for income
tax (benefit) expense represents the income tax (benefit) expense
associated with the adjustment for net realized and unrealized
losses (gains) on investments. The income tax impact is estimated
by applying the statutory rates of applicable jurisdictions, after
consideration of other relevant factors.
The Company has included in this Press Release “tangible book
value per common share” and “tangible book value per common share
plus accumulated dividends”. “Tangible book value per common share”
is defined as book value per common share excluding goodwill and
intangible assets per share. “Tangible book value per common share
plus accumulated dividends” is defined as book value per common
share excluding goodwill and intangible assets per share, plus
accumulated dividends. The Company’s management believes “tangible
book value per common share” and “tangible book value per common
share plus accumulated dividends” are useful to investors because
they provide a more accurate measure of the realizable value of
shareholder returns, excluding the impact of goodwill and
intangible assets. The following is a reconciliation of book value
per common share to tangible book value per common share and
tangible book value per common share plus accumulated
dividends:
At June 30, 2018
March 31, 2018 December
31, 2017 September 30, 2017
June 30, 2017 Book value per common
share $ 104.56 $ 100.29 $ 99.72 $ 100.00 $ 113.08 Adjustment for
goodwill and other intangibles (1) (6.69 ) (6.66 ) (6.49 ) (6.55 )
(6.56 ) Tangible book value per common share 97.87 93.63 93.23
93.45 106.52 Adjustment for accumulated dividends 18.66
18.33 18.00 17.68 17.36 Tangible book
value per common share plus accumulated dividends $ 116.53 $
111.96 $ 111.23 $ 111.13 $ 123.88
Quarterly change in book value per common share 4.3 % 0.6 %
(0.3 )% (11.6 )% 3.4 % Quarterly change in tangible book value per
common share plus change in accumulated dividends 4.9 % 0.8 % 0.1 %
(12.0 )% 3.9 % Year to date change in book value per common share
4.9 % 0.6 % (8.0 )% (7.8 )% 4.3 % Year to date change in tangible
book value per common share plus change in accumulated dividends
5.7 % 0.8 % (7.2 )% (7.3 )% 5.2 % (1) At June 30,
2018, December 31, 2017, September 30, 2017 and June 30, 2017,
goodwill and other intangibles included $29.1 million, $26.3
million, $16.7 million, $17.4 million and $18.1 million,
respectively, of goodwill and other intangibles included in
investments in other ventures, under equity method.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180724005951/en/
INVESTORS:RenaissanceRe Holdings Ltd.Keith McCue,
441-239-4830Senior Vice President, Finance & Investor
RelationsorMEDIA:RenaissanceRe Holdings Ltd.Keil Gunther,
441-239-4932Vice President, Marketing & CommunicationsorKekst
and CompanyPeter Hill or Dawn Dover, 212-521-4800
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