RenaissanceRe Announces Estimated Net Negative Impact from Third Quarter 2020 Catastrophe Events
October 13 2020 - 4:15PM
Business Wire
RenaissanceRe Holdings Ltd. (NYSE: RNR) (the “Company” or
“RenaissanceRe”) today announced it currently estimates that losses
from third quarter 2020 catastrophe events will have an estimated
net negative impact of approximately $325 million on its third
quarter 2020 results of operations. The estimated net negative
impact is primarily driven by losses from Hurricanes Laura and
Sally, as well as the wildfires in California, Oregon and
Washington. In addition, losses from other catastrophe events
including the August 2020 derecho which impacted the U.S. Midwest,
Hurricane Isaias and Typhoon Maysak, as well as aggregate losses
associated with these and other events, contributed to the
estimated net negative impact. These events caused widespread
damage to both personal and commercial property in and around the
impacted regions. For the third quarter of 2020, the Company
expects to report modest net income available to common
shareholders; however, it expects to report an operating loss
attributable to common shareholders.
Hurricane Delta, a Category 2 hurricane, made landfall on the
Yucatán Peninsula on October 7, 2020, and subsequently in Louisiana
on October 9, 2020, causing widespread flooding and damage,
including in the region impacted by Hurricane Laura. Additionally,
the wildfires impacting California are ongoing. The Company is in
the preliminary stage of assessing the impact of Hurricane Delta
and the continuing impact of the California wildfires beyond the
third quarter of 2020. The estimated losses for these events will
be reported in the Company's fourth quarter financial results.
Kevin J. O’Donnell, Chief Executive Officer of RenaissanceRe,
commented: “We extend our sympathies to all those affected by the
quarter’s catastrophic events. This elevated wind and wildfire
season reinforces the value of reinsurance in ameliorating the
growing impact of climate change. Protecting communities from
climate-related disaster is an important part of our purpose, which
we fulfill through the rapid payment of claims 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.
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.
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 uncertainty of the continuing impact of the COVID-19
pandemic and measures taken in response thereto; the effect of
legislative, regulatory, judicial or social influences related to
the COVID-19 pandemic on the Company’s financial performance,
including the emergence of unexpected or un-modeled insurance or
reinsurance losses, and the Company’s ability to conduct its
business; the impact and potential future impacts of the COVID-19
pandemic on the value of the Company’s investments and its access
to capital in the future or the pricing or terms of available
financing; the effect that measures taken to mitigate the COVID-19
pandemic have on the Company’s operations and those of its
counterparties; the frequency and severity of catastrophic and
other events the Company covers; the effectiveness of the Company’s
claims and claim expense reserving process; the effect of climate
change on the Company’s business, including the trend towards
increasingly frequent and severe climate events; the Company’s
ability to maintain its financial strength ratings; the effect of
emerging claims and coverage issues; collection on claimed
retrocessional coverage, and new retrocessional reinsurance being
available on acceptable terms and providing the coverage that the
Company intended to obtain; 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; the performance of the Company’s investment
portfolio; a contention by the U.S. 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 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 its joint ventures or
other entities it manages; the effect of cybersecurity risks,
including technology breaches or failure, on the Company’s
business; the success of any of the Company’s strategic investments
or acquisitions, including its ability to manage its operations as
its product and geographical diversity increases; the Company’s
ability to retain its key senior officers and to attract or retain
the executives and employees necessary to manage its business; 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; soft reinsurance underwriting
market conditions; changes in the method for determining the London
Inter-bank Offered Rate (“LIBOR”) and the potential replacement of
LIBOR; losses the Company could face from terrorism, political
unrest or war; the Company’s ability to successfully implement its
business strategies and initiatives; the Company’s ability to
determine any impairments taken on its 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 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 and
other transactions; difficulties investors may have in servicing
process or enforcing judgments against the Company in the U.S.; 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; 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; the effect of the exit by the United Kingdom
from the EU; 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, Quarterly
Reports on Form 10-Q and prospectus supplement filed on June 4,
2020.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201013006078/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, Head of Global Marketing & Client
Communications (441) 239-4932
Kekst CNC Dawn Dover (212) 521-4800
RenaissanceRe (NYSE:RNR)
Historical Stock Chart
From Mar 2024 to Apr 2024
RenaissanceRe (NYSE:RNR)
Historical Stock Chart
From Apr 2023 to Apr 2024