RenaissanceRe Holdings Ltd. (NYSE: RNR) (the “Company” or
“RenaissanceRe”) today reported net income available to
RenaissanceRe common shareholders of $36.7 million, or $0.83 per
diluted common share, in the third quarter of 2019, compared to
$32.7 million, or $0.82 per diluted common share, in the third
quarter of 2018. Operating income available to RenaissanceRe common
shareholders was $13.0 million, or $0.29 per diluted common share,
in the third quarter of 2019, compared to $17.8 million, or $0.45
per diluted common share, in the third quarter of 2018. The Company
reported an annualized return on average common equity of 2.8% and
an annualized operating return on average common equity of 1.0% in
the third quarter of 2019, compared to 3.1% and 1.7%, respectively,
in the third quarter of 2018. Book value per common share increased
$0.90, or 0.8%, to $120.07 in the third quarter of 2019, compared
to a 0.6% increase in the third quarter of 2018. Tangible book
value per common share plus accumulated dividends increased $1.29,
or 1.1%, to $133.86 in the third quarter of 2019, compared to a
1.1% increase in the third quarter of 2018.
Kevin J. O’Donnell, President and Chief Executive Officer of
RenaissanceRe, commented: “In an active period for the industry, we
assisted our customers in managing the quarter’s catastrophic
events while rapidly paying their claims. I am proud of our team’s
hard work during the quarter and pleased to report positive net and
operating income and growth in tangible book value per share plus
accumulated dividends. Our value proposition lies in quantifying
risk and absorbing large losses as they occur, contributing to the
resilience of communities and building stronger relationships with
our partners. As we look forward to 2020, these strong
relationships combined with our differentiated strategy will
provide us with many opportunities to continue delivering long-term
value.”
Third Quarter of 2019 Summary
- Net negative impact on net income available to RenaissanceRe
common shareholders of $154.9 million from Hurricane Dorian and
Typhoon Faxai (collectively, the “Q3 2019 Catastrophe Events”) in
the third quarter of 2019.
- Gross premiums written increase of $235.4 million, or 37.6%, to
$861.1 million, in the third quarter of 2019 compared to the third
quarter of 2018, driven by an increase of $222.4 million in the
Casualty and Specialty segment and an increase of $13.0 million in
the Property segment.
- Underwriting loss of $3.4 million and a combined ratio of
100.4% in the third quarter of 2019, compared to an underwriting
loss of $29.0 million and a combined ratio of 105.5% in the third
quarter of 2018. The Property segment incurred an underwriting loss
of $7.7 million and had a combined ratio of 101.7% in the third
quarter of 2019. The Casualty and Specialty segment generated
underwriting income of $4.5 million and had a combined ratio of
99.0% the third quarter of 2019. The Company’s underwriting results
in the third quarter of 2019 were principally impacted by the Q3
2019 Catastrophe Events, which resulted in an underwriting loss of
$181.9 million and added 20.6 percentage points to the combined
ratio. The third quarter of 2018 included the impacts of Typhoons
Jebi, Mangkhut and Trami, Hurricane Florence and the wildfires in
California during the third quarter of 2018 (collectively, the “Q3
2018 Catastrophe Events”), which resulted in an underwriting loss
of $178.0 million and added 34.4 percentage points to the combined
ratio.
- Total investment result was a gain of $145.8 million in the
third quarter of 2019, generating an annualized total investment
return of 3.6%.
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, may vary from these estimates, perhaps materially.
Changes in these estimates will be recorded in the period in which
they occur.
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.
The financial data below provides additional information
detailing the net negative impact on the Company’s consolidated
financial statements in the third quarter of 2019 resulting from
the Q3 2019 Catastrophe Events.
Three months
ended September 30, 2019
Hurricane Dorian
Typhoon Faxai
Total Q3 2019 Catastrophe
Events
(in thousands, except percentages)
Net claims and claims expenses
incurred
$
(60,784
)
$
(148,127
)
$
(208,911
)
Assumed reinstatement premiums earned
5,106
18,332
23,438
Ceded reinstatement premiums earned
(364
)
(118
)
(482
)
Lost profit commissions
92
3,943
4,035
Net negative impact on underwriting
result
(55,950
)
(125,970
)
(181,920
)
Redeemable noncontrolling interest -
DaVinciRe
3,659
23,335
26,994
Net negative impact on net income
available to RenaissanceRe common shareholders
$
(52,291
)
$
(102,635
)
$
(154,926
)
Percentage point impact on consolidated
combined ratio
6.2
14.2
20.6
Net negative impact on Property segment
underwriting result
$
(53,378
)
$
(125,540
)
$
(178,918
)
Net negative impact on Casualty and
Specialty segment underwriting result
(2,572
)
(430
)
(3,002
)
Net negative impact on underwriting
result
$
(55,950
)
$
(125,970
)
$
(181,920
)
Acquisition of Tokio Millennium Re
As previously announced, on March 22, 2019, the Company
completed its acquisition of Tokio Millennium Re AG (now known as
RenaissanceRe Europe AG), Tokio Millennium Re (UK) Limited (now
known as RenaissanceRe (UK) Limited) and their subsidiaries
(collectively, the “TMR Group Entities”). The Company accounted for
the acquisition of the TMR Group Entities under the acquisition
method of accounting in accordance with Financial Accounting
Standards Board Accounting Standards Codification Topic Business
Combinations. The operating activities of the TMR Group Entities
are included in the Company’s consolidated statements of operations
from March 22, 2019, and comparisons of the Company’s results of
operations for the third quarter of 2019 to the third quarter of
2018 should be viewed in that context. In addition, the results of
operations for the third quarter of 2019 may not be reflective of
the ultimate ongoing business of the combined entities.
Underwriting Results by Segment
Property Segment
Gross premiums written in the Property segment were $314.4
million in the third quarter of 2019, an increase of $13.0 million,
or 4.3%, compared to $301.4 million in the third quarter of
2018.
Gross premiums written in the catastrophe class of business were
$102.8 million in the third quarter of 2019, a decrease of $109.6
million, or 51.6%, compared to the third quarter of 2018. In the
third quarter of 2018, gross premiums written in the catastrophe
class of business included $102.3 million associated with certain
large transactions that subsequently renewed and were reflected in
gross premiums written in the first quarter of 2019. Gross premiums
written in the third quarter of 2019 included $23.1 million of
reinstatement premiums associated with the Q3 2019 Catastrophe
Events, as compared to $16.8 million of reinstatement premiums
written in the third quarter of 2018 associated with the Q3 2018
Catastrophe Events. In addition, gross premiums written in the
third quarter of 2019 included $26.4 million of negative premium
adjustments related to the business of the third-party capital
vehicles that the Company manages in connection with the
acquisition of the TMR Group Entities. These negative premium
adjustments were fully ceded and are reflected in ceded premiums
written, resulting in no impact to the Company’s results of
operations.
Gross premiums written in the other property class of business
were $211.6 million in the third quarter of 2019, an increase of
$122.5 million, or 137.6%, compared to the third quarter of 2018.
The increase in gross premiums written in the other property class
of business was primarily driven by growth from existing
relationships and new opportunities across a number of the
Company’s underwriting platforms, as well as business acquired in
connection with the acquisition of the TMR Group Entities.
Ceded premiums written in the Property segment were $11.4
million in the third quarter of 2019, a decrease of $57.4 million,
or 83.4%, compared to the third quarter of 2018. The decrease in
ceded premiums written in the third quarter of 2019 was principally
due to the portion of gross premiums written in the catastrophe
class of business in the third quarter of 2018 that related to the
large transactions discussed above being ceded to third-party
investors in the Company’s managed vehicles. In addition, ceded
premiums written in the third quarter of 2019 were impacted by
$26.4 million of negative premium adjustments related to the
business of the third-party capital vehicles that the Company
manages in connection with the acquisition of the TMR Group
Entities, as discussed above.
The Property segment incurred an underwriting loss of $7.7
million and had a combined ratio of 101.7% in the third quarter of
2019, compared to an underwriting loss of $43.9 million and a
combined ratio of 115.0% in the third quarter of 2018. The Property
segment underwriting result and combined ratio in the third quarter
of 2019 were principally impacted by the Q3 2019 Catastrophe
Events, which resulted in a net negative impact on the Property
segment underwriting result of $178.9 million and added 42.3
percentage points to the Property segment combined ratio. In
comparison, the third quarter of 2018 was impacted by the Q3 2018
Catastrophe Events, which resulted in a net negative impact on the
Property segment underwriting result of $177.0 million and added
63.2 percentage points to the Property segment combined ratio,
partially offset by $52.9 million of underwriting income associated
with the large reinsurance transactions noted above.
Casualty and Specialty Segment
Gross premiums written in the Casualty and Specialty segment
were $546.7 million in the third quarter of 2019, an increase of
$222.4 million, or 68.6%, compared to the third quarter of 2018.
The increase was due to business acquired in connection with the
acquisition of the TMR Group Entities, as well as growth from new
and existing business opportunities written in the current and
prior periods across various classes of business within the
segment.
The Casualty and Specialty segment generated underwriting income
of $4.5 million and had a combined ratio of 99.0% in the third
quarter of 2019, compared to $14.9 million and 93.8%, respectively,
in the third quarter of 2018. The unfavorable movement in the
Casualty and Specialty segment combined ratio was driven by an
increase of 7.8 percentage points in the net claims and claim
expense ratio, principally the result of higher current accident
year losses in the third quarter of 2019 compared to the third
quarter of 2018. Partially offsetting the increase in the net
claims and claim expense ratio was a 2.6 percentage point decrease
in the underwriting expense ratio, primarily the result of a
decrease in the operating expense ratio due to improved operating
leverage from the business acquired in connection with the
acquisition of the TMR Group Entities.
Other Items
- The Company’s total investment result, which includes the sum
of net investment income and net realized and unrealized gains on
investments, was a gain of $145.8 million in the third quarter of
2019, compared to a gain of $94.3 million in the third quarter of
2018, an increase of $51.5 million. The increase in the total
investment result was principally due to higher returns on the
Company’s portfolios of fixed maturity and short term investments,
catastrophe bonds and investments-related derivatives, partially
offset by net realized and unrealized losses on the Company’s
portfolio of equity investments. Also driving the investment result
for the third quarter of 2019 were higher average invested assets
primarily resulting from the acquisition of the TMR Group Entities,
combined with capital raised during the second quarter of 2019 in
certain of the Company’s consolidated third-party capital vehicles,
including DaVinciRe Holdings Ltd. (“DaVinciRe”), Upsilon RFO Re
Ltd. (“Upsilon RFO”), Vermeer Reinsurance Ltd. (“Vermeer”) and
RenaissanceRe Medici Fund Ltd. (“Medici”), and the subsequent
investment of those funds as part of the Company’s consolidated
investment portfolio.
- Net income attributable to redeemable noncontrolling interests
in the third quarter of 2019 was $62.1 million compared to $6.4
million in the third quarter of 2018. The increase was primarily
driven by higher net income from DaVinciRe and an increase in net
investment income from Medici, combined with the results of
operations of Vermeer being included in net income attributable to
redeemable noncontrolling interests in the third quarter of
2019.
- In the third quarter of 2019, total fee income increased by
$9.1 million, to $32.0 million, compared to $22.9 million in the
third quarter of 2018, primarily driven by improved underlying
performance, combined with an increase in the dollar value of
capital being managed.
- The Company currently estimates, on a preliminary basis, that
losses from Typhoon Hagibis will have an estimated net negative
impact on net income (loss) available (attributable) to
RenaissanceRe common shareholders of approximately $175 million on
its fourth quarter 2019 results of operations.
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, October
30, 2019 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, 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.
RenaissanceRe Holdings
Ltd.
Summary Consolidated
Statements of Operations
(in thousands of United States
Dollars, except per share amounts and percentages)
(Unaudited)
Three months ended
Nine months ended
September 30, 2019
September 30, 2018
September 30, 2019
September 30, 2018
Revenues
Gross premiums written
$
861,068
$
625,677
$
3,902,271
$
2,762,672
Net premiums written
$
704,130
$
453,255
$
2,656,126
$
1,720,808
Decrease (increase) in unearned
premiums
202,618
78,594
(287,848
)
(319,292
)
Net premiums earned
906,748
531,849
2,368,278
1,401,516
Net investment income
113,844
80,696
311,138
208,528
Net foreign exchange losses
(8,275
)
(4,566
)
(1,812
)
(11,496
)
Equity in earnings of other ventures
5,877
7,648
17,350
14,331
Other (loss) income
1,016
497
5,109
480
Net realized and unrealized gains (losses)
on investments
31,938
13,630
396,586
(86,415
)
Total revenues
1,051,148
629,754
3,096,649
1,526,944
Expenses
Net claims and claim expenses incurred
654,520
410,510
1,334,928
642,380
Acquisition expenses
202,181
109,761
553,614
312,524
Operational expenses
53,415
40,593
158,162
119,408
Corporate expenses
13,844
6,841
76,480
21,875
Interest expense
15,580
11,769
42,868
35,304
Total expenses
939,540
579,474
2,166,052
1,131,491
Income before taxes
111,608
50,280
930,597
395,453
Income tax expense
(3,664
)
(1,451
)
(20,670
)
(2,550
)
Net income
107,944
48,829
909,927
392,903
Net income attributable to noncontrolling
interests
(62,057
)
(6,440
)
(204,091
)
(90,822
)
Net income attributable to
RenaissanceRe
45,887
42,389
705,836
302,081
Dividends on preference shares
(9,189
)
(9,708
)
(27,567
)
(20,899
)
Net income available to RenaissanceRe
common shareholders
$
36,698
$
32,681
$
678,269
$
281,182
Net income available to RenaissanceRe
common shareholders per common share - basic
$
0.83
$
0.82
$
15.58
$
7.02
Net income available to RenaissanceRe
common shareholders per common share - diluted
$
0.83
$
0.82
$
15.57
$
7.02
Operating income available to
RenaissanceRe common shareholders per common share - diluted
(1)
$
0.29
$
0.45
$
8.64
$
8.62
Average shares outstanding - basic
43,462
39,624
43,003
39,606
Average shares outstanding - diluted
43,537
39,637
43,049
39,627
Net claims and claim expense ratio
72.2
%
77.2
%
56.4
%
45.8
%
Underwriting expense ratio
28.2
%
28.3
%
30.0
%
30.9
%
Combined ratio
100.4
%
105.5
%
86.4
%
76.7
%
Return on average common equity -
annualized
2.8
%
3.1
%
18.2
%
9.1
%
Operating return on average common equity
- annualized (1)
1.0
%
1.7
%
10.2
%
11.1
%
(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)
September 30, 2019
December 31, 2018
Assets
(Unaudited)
(Audited)
Fixed maturity investments trading, at
fair value
$
11,386,228
$
8,088,870
Short term investments, at fair value
4,116,156
2,586,520
Equity investments trading, at fair
value
379,422
310,252
Other investments, at fair value
962,109
784,933
Investments in other ventures, under
equity method
103,978
115,172
Total investments
16,947,893
11,885,747
Cash and cash equivalents
871,251
1,107,922
Premiums receivable
2,799,954
1,537,188
Prepaid reinsurance premiums
972,047
616,185
Reinsurance recoverable
2,438,299
2,372,221
Accrued investment income
73,509
51,311
Deferred acquisition costs and value of
business acquired
708,258
476,661
Receivable for investments sold
225,147
256,416
Other assets
344,593
135,127
Goodwill and other intangibles
263,259
237,418
Total assets
$
25,644,210
$
18,676,196
Liabilities, Noncontrolling Interests
and Shareholders’ Equity
Liabilities
Reserve for claims and claim expenses
$
8,602,437
$
6,076,271
Unearned premiums
2,967,535
1,716,021
Debt
1,383,498
991,127
Reinsurance balances payable
2,910,601
1,902,056
Payable for investments purchased
654,685
380,332
Other liabilities
395,186
513,609
Total liabilities
16,913,942
11,579,416
Redeemable noncontrolling interest
2,779,033
2,051,700
Shareholders’ Equity
Preference shares
650,000
650,000
Common shares
44,152
42,207
Additional paid-in capital
560,166
296,099
Accumulated other comprehensive income
(loss)
4,988
(1,433
)
Retained earnings
4,691,929
4,058,207
Total shareholders’ equity attributable
to RenaissanceRe
5,951,235
5,045,080
Total liabilities, noncontrolling
interests and shareholders’ equity
$
25,644,210
$
18,676,196
Book value per common share
$
120.07
$
104.13
RenaissanceRe Holdings
Ltd.
Supplemental Financial Data -
Segment Information
(in thousands of United States
Dollars, except percentages)
(Unaudited)
Three months ended September
30, 2019
Property
Casualty and Specialty
Other
Total
Gross premiums written
$
314,400
$
546,668
$
—
$
861,068
Net premiums written
$
302,982
$
401,148
$
—
$
704,130
Net premiums earned
$
444,332
$
462,416
$
—
$
906,748
Net claims and claim expenses incurred
338,260
316,099
161
654,520
Acquisition expenses
79,521
122,654
6
202,181
Operational expenses
34,238
19,198
(21
)
53,415
Underwriting (loss) income
$
(7,687
)
$
4,465
$
(146
)
(3,368
)
Net investment income
113,844
113,844
Net foreign exchange losses
(8,275
)
(8,275
)
Equity in earnings of other ventures
5,877
5,877
Other loss
1,016
1,016
Net realized and unrealized gains on
investments
31,938
31,938
Corporate expenses
(13,844
)
(13,844
)
Interest expense
(15,580
)
(15,580
)
Income before taxes and redeemable
noncontrolling interests
111,608
Income tax expense
(3,664
)
(3,664
)
Net income attributable to redeemable
noncontrolling interests
(62,057
)
(62,057
)
Dividends on preference shares
(9,189
)
(9,189
)
Net income available to RenaissanceRe
common shareholders
$
36,698
Net claims and claim expenses incurred –
current accident year
$
345,880
$
319,087
$
—
$
664,967
Net claims and claim expenses incurred –
prior accident years
(7,620
)
(2,988
)
161
(10,447
)
Net claims and claim expenses incurred –
total
$
338,260
$
316,099
$
161
$
654,520
Net claims and claim expense ratio –
current accident year
77.8
%
69.0
%
73.3
%
Net claims and claim expense ratio – prior
accident years
(1.7
)%
(0.6
)%
(1.1
)%
Net claims and claim expense ratio –
calendar year
76.1
%
68.4
%
72.2
%
Underwriting expense ratio
25.6
%
30.6
%
28.2
%
Combined ratio
101.7
%
99.0
%
100.4
%
Three months ended September
30, 2018
Property
Casualty and Specialty
Other
Total
Gross premiums written
$
301,413
$
324,264
$
—
$
625,677
Net premiums written
$
232,632
$
220,623
$
—
$
453,255
Net premiums earned
$
293,059
$
238,791
$
(1
)
$
531,849
Net claims and claim expenses incurred
265,857
144,671
(18
)
410,510
Acquisition expenses
45,524
64,238
(1
)
109,761
Operational expenses
25,577
14,976
40
40,593
Underwriting (loss) income
$
(43,899
)
$
14,906
$
(22
)
(29,015
)
Net investment income
80,696
80,696
Net foreign exchange losses
(4,566
)
(4,566
)
Equity in earnings of other ventures
7,648
7,648
Other income
497
497
Net realized and unrealized gains on
investments
13,630
13,630
Corporate expenses
(6,841
)
(6,841
)
Interest expense
(11,769
)
(11,769
)
Income before taxes and redeemable
noncontrolling interests
50,280
Income tax expense
(1,451
)
(1,451
)
Net income attributable to redeemable
noncontrolling interests
(6,440
)
(6,440
)
Dividends on preference shares
(9,708
)
(9,708
)
Net income available to RenaissanceRe
common shareholders
$
32,681
Net claims and claim expenses incurred –
current accident year
$
268,022
$
151,904
$
—
$
419,926
Net claims and claim expenses incurred –
prior accident years
(2,165
)
(7,233
)
(18
)
(9,416
)
Net claims and claim expenses incurred –
total
$
265,857
$
144,671
$
(18
)
$
410,510
Net claims and claim expense ratio –
current accident year
91.5
%
63.6
%
79.0
%
Net claims and claim expense ratio – prior
accident years
(0.8
)%
(3.0
)%
(1.8
)%
Net claims and claim expense ratio –
calendar year
90.7
%
60.6
%
77.2
%
Underwriting expense ratio
24.3
%
33.2
%
28.3
%
Combined ratio
115.0
%
93.8
%
105.5
%
RenaissanceRe Holdings
Ltd.
Supplemental Financial Data -
Segment Information
(in thousands of United States
Dollars, except percentages)
(Unaudited)
Nine months ended September
30, 2019
Property
Casualty and Specialty
Other
Total
Gross premiums written
$
2,185,984
$
1,716,287
$
—
$
3,902,271
Net premiums written
$
1,411,327
$
1,244,799
$
—
$
2,656,126
Net premiums earned
$
1,160,090
$
1,208,188
$
—
$
2,368,278
Net claims and claim expenses incurred
541,217
793,533
178
1,334,928
Acquisition expenses
222,971
330,829
(186
)
553,614
Operational expenses
99,546
58,603
13
158,162
Underwriting income
$
296,356
$
25,223
$
(5
)
321,574
Net investment income
311,138
311,138
Net foreign exchange losses
(1,812
)
(1,812
)
Equity in earnings of other ventures
17,350
17,350
Other income
5,109
5,109
Net realized and unrealized gains on
investments
396,586
396,586
Corporate expenses
(76,480
)
(76,480
)
Interest expense
(42,868
)
(42,868
)
Income before taxes and redeemable
noncontrolling interests
930,597
Income tax expense
(20,670
)
(20,670
)
Net income attributable to redeemable
noncontrolling interests
(204,091
)
(204,091
)
Dividends on preference shares
(27,567
)
(27,567
)
Net income attributable to RenaissanceRe
common shareholders
$
678,269
Net claims and claim expenses incurred –
current accident year
$
536,197
$
813,251
$
—
$
1,349,448
Net claims and claim expenses incurred –
prior accident years
5,020
(19,718
)
178
(14,520
)
Net claims and claim expenses incurred –
total
$
541,217
$
793,533
$
178
$
1,334,928
Net claims and claim expense ratio –
current accident year
46.2
%
67.3
%
57.0
%
Net claims and claim expense ratio – prior
accident years
0.5
%
(1.6
)%
(0.6
)%
Net claims and claim expense ratio –
calendar year
46.7
%
65.7
%
56.4
%
Underwriting expense ratio
27.8
%
32.2
%
30.0
%
Combined ratio
74.5
%
97.9
%
86.4
%
Nine months ended September
30, 2018
Property
Casualty and Specialty
Other
Total
Gross premiums written
$
1,561,008
$
1,201,664
$
—
$
2,762,672
Net premiums written
$
884,541
$
836,267
$
—
$
1,720,808
Net premiums earned
$
722,246
$
679,271
$
(1
)
$
1,401,516
Net claims and claim expenses incurred
222,195
420,273
(88
)
642,380
Acquisition expenses
127,095
185,429
—
312,524
Operational expenses
75,933
43,121
354
119,408
Underwriting income (loss)
$
297,023
$
30,448
$
(267
)
327,204
Net investment income
208,528
208,528
Net foreign exchange losses
(11,496
)
(11,496
)
Equity in earnings of other ventures
14,331
14,331
Other income
480
480
Net realized and unrealized losses on
investments
(86,415
)
(86,415
)
Corporate expenses
(21,875
)
(21,875
)
Interest expense
(35,304
)
(35,304
)
Income before taxes and redeemable
noncontrolling interests
395,453
Income tax expense
(2,550
)
(2,550
)
Net income attributable to redeemable
noncontrolling interests
(90,822
)
(90,822
)
Dividends on preference shares
(20,899
)
(20,899
)
Net income available to RenaissanceRe
common shareholders
$
281,182
Net claims and claim expenses incurred –
current accident year
$
395,067
$
444,293
$
—
$
839,360
Net claims and claim expenses incurred –
prior accident years
(172,872
)
(24,020
)
(88
)
(196,980
)
Net claims and claim expenses incurred –
total
$
222,195
$
420,273
$
(88
)
$
642,380
Net claims and claim expense ratio –
current accident year
54.7
%
65.4
%
59.9
%
Net claims and claim expense ratio – prior
accident years
(23.9
)%
(3.5
)%
(14.1
)%
Net claims and claim expense ratio –
calendar year
30.8
%
61.9
%
45.8
%
Underwriting expense ratio
28.1
%
33.6
%
30.9
%
Combined ratio
58.9
%
95.5
%
76.7
%
RenaissanceRe Holdings
Ltd.
Supplemental Financial Data -
Gross Premiums Written
(in thousands of United States
Dollars)
(Unaudited)
Three months ended
Nine months ended
September 30, 2019
September 30, 2018
September 30, 2019
September 30, 2018
Property Segment
Catastrophe
$
102,779
$
212,330
$
1,550,648
$
1,240,387
Other property
211,621
89,083
635,336
320,621
Property segment gross premiums
written
$
314,400
$
301,413
$
2,185,984
$
1,561,008
Casualty and Specialty Segment
General casualty (1)
$
191,447
$
97,026
610,563
377,300
Professional liability (2)
151,754
111,536
460,912
366,460
Financial lines (3)
111,459
69,253
330,017
250,735
Other (4)
92,008
46,449
314,795
207,169
Casualty and Specialty segment gross
premiums written
$
546,668
$
324,264
$
1,716,287
$
1,201,664
(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
Nine months ended
September 30, 2019
September 30, 2018
September 30, 2019
September 30, 2018
Fixed maturity investments
$
82,977
$
55,725
$
232,566
$
151,784
Short term investments
15,061
9,403
44,712
22,340
Equity investments trading
1,326
903
3,269
3,091
Other investments
Private equity investments
(4,597
)
8,723
8,166
12,149
Other
22,538
8,665
30,413
27,346
Cash and cash equivalents
1,978
1,104
5,801
2,708
119,283
84,523
324,927
219,418
Investment expenses
(5,439
)
(3,827
)
(13,789
)
(10,890
)
Net investment income
113,844
80,696
311,138
208,528
Gross realized gains
34,710
5,229
87,595
14,945
Gross realized losses
(4,609
)
(15,327
)
(34,769
)
(67,699
)
Net realized gains (losses) on fixed
maturity investments
30,101
(10,098
)
52,826
(52,754
)
Net unrealized gains (losses) on fixed
maturity investments trading
17,226
(8,730
)
243,139
(73,522
)
Net realized and unrealized gains (losses)
on investments-related derivatives
11,134
2,563
62,103
(763
)
Net realized (losses) gains on equity
investments trading
(72
)
21,259
30,666
21,841
Net unrealized (losses) gains on equity
investments trading
(26,451
)
8,636
7,852
18,783
Net realized and unrealized gains
(losses) on investments
31,938
13,630
396,586
(86,415
)
Total investment result
$
145,782
$
94,326
$
707,724
$
122,113
Total investment return -
annualized
3.6
%
3.3
%
6.0
%
1.5
%
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 attributable to RenaissanceRe common shareholders,
transaction and integration expenses associated with the
acquisition of the TMR Group Entities and the income tax expense or
benefit associated with these exclusions to “net income available
to RenaissanceRe common shareholders". 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; certain transaction
and integration expenses associated with the acquisition of the TMR
Group Entities; and the associated income tax expense or benefit of
these adjustments. 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
Nine months ended
(in thousands of United States Dollars,
except per share amounts and percentages)
September 30, 2019
September 30, 2018
September 30, 2019
September 30, 2018
Net income available to RenaissanceRe
common shareholders
$
36,698
$
32,681
$
678,269
$
281,182
Adjustment for net realized and unrealized
(gains) losses on investments attributable to RenaissanceRe common
shareholders (1)
(30,683
)
(16,371
)
(361,265
)
65,218
Adjustment for transaction and integration
expenses associated with the acquisition of the TMR Group
Entities
4,022
—
44,025
—
Adjustment for income tax expense
(benefit) (2)
2,929
1,536
18,869
(2,170
)
Operating income available to
RenaissanceRe common shareholders
$
12,966
$
17,846
$
379,898
$
344,230
Net income available to RenaissanceRe
common shareholders per common share - diluted
$
0.83
$
0.82
$
15.57
$
7.02
Adjustment for net realized and unrealized
(gains) losses on investments attributable to RenaissanceRe common
shareholders (1)
(0.70
)
(0.41
)
(8.39
)
1.65
Adjustment for transaction and integration
expenses associated with the acquisition of the TMR Group
Entities
0.09
—
1.02
—
Adjustment for income tax expense
(benefit) (2)
0.07
0.04
0.44
(0.05
)
Operating income available to
RenaissanceRe common shareholders per common share - diluted
$
0.29
$
0.45
$
8.64
$
8.62
Return on average common equity -
annualized
2.8
%
3.1
%
18.2
%
9.1
%
Adjustment for net realized and unrealized
(gains) losses on investments attributable to RenaissanceRe common
shareholders (1)
(2.3
)%
(1.5
)%
(9.7
)%
2.1
%
Adjustment for transaction and integration
expenses associated with the acquisition of the TMR Group
Entities
0.3
%
—
%
1.2
%
—
%
Adjustment for income tax expense
(benefit) (2)
0.2
%
0.1
%
0.5
%
(0.1
)%
Operating return on average common equity
- annualized
1.0
%
1.7
%
10.2
%
11.1
%
(1)
Adjustment for net realized and unrealized
(gains) losses on investments attributable to RenaissanceRe common
shareholders represents: net realized and unrealized gains (losses)
on investments as set forth in the Company's consolidated statement
of operations less net realized and unrealized gains (losses)
attributable to redeemable noncontrolling interests, which is
included in net income attributable to redeemable noncontrolling
interests in the Company's consolidated statement of operations.
Comparative information for all prior periods has been updated to
conform to the current methodology and presentation.
(2)
Adjustment for income tax expense
(benefit) represents the income tax expense (benefit) associated
with the adjustments to net income available to RenaissanceRe
common shareholders. 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
September 30, 2019
June 30, 2019
March 31, 2019
December 31, 2018
September 30, 2018
Book value per common share
$
120.07
$
119.17
$
111.05
$
104.13
$
105.21
Adjustment for goodwill and other
intangibles (1)
(6.55
)
(6.60
)
(6.66
)
(6.28
)
(6.63
)
Tangible book value per common share
113.52
112.57
104.39
97.85
98.58
Adjustment for accumulated dividends
20.34
20.00
19.66
19.32
18.99
Tangible book value per common share plus
accumulated dividends
$
133.86
$
132.57
$
124.05
$
117.17
$
117.57
Quarterly change in book value per common
share
0.8
%
7.3
%
6.6
%
(1.0
)%
0.6
%
Quarterly change in tangible book value
per common share plus change in accumulated dividends
1.1
%
8.2
%
7.0
%
(0.4
)%
1.1
%
Year to date change in book value per
common share
15.3
%
14.4
%
6.6
%
4.4
%
5.5
%
Year to date change in tangible book value
per common share plus change in accumulated dividends
17.1
%
15.7
%
7.0
%
6.4
%
6.8
%
(1)
At September 30, 2019, June 30, 2019,
March 31, 2019, December 31, 2018 and September 30, 2018, goodwill
and other intangibles included $25.6 million, $26.3 million, $27.0
million, $27.7 million and $28.4 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/20191029006084/en/
INVESTOR: Keith McCue Senior Vice President, Finance
& Investor Relations RenaissanceRe Holdings Ltd. (441)
239-4830
MEDIA: Keil Gunther Vice President, Marketing &
Communications RenaissanceRe Holdings Ltd. (441) 239-4932 or Kekst
CNC Dawn Dover (212) 521-4800
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