RenaissanceRe Holdings Ltd. (NYSE: RNR) (the “Company” or
“RenaissanceRe”) today reported net income available to
RenaissanceRe common shareholders of $47.8 million, or $0.94 per
diluted common share, in the third quarter of 2020, compared to
$36.7 million, or $0.83 per diluted common share, in the third
quarter of 2019. Operating loss attributable to RenaissanceRe
common shareholders was $131.7 million, or $2.64 per diluted common
share, in the third quarter of 2020, compared to operating income
available to RenaissanceRe common shareholders of $32.7 million, or
$0.73 per diluted common share, in the third quarter of 2019. The
Company reported an annualized return on average common equity of
2.8% and an annualized operating return on average common equity of
negative 7.7% in the third quarter of 2020, compared to 2.8% and
2.5%, respectively, in the third quarter of 2019. Book value per
common share increased $0.86, or 0.6%, to $135.13 in the third
quarter of 2020, compared to a 0.8% increase in the third quarter
of 2019. Tangible book value per common share plus accumulated
dividends increased $1.24, or 1.0%, to $151.33 in the third quarter
of 2020, compared to a 1.1% increase in the third quarter of
2019.
Kevin J. O’Donnell, President and Chief Executive Officer of
RenaissanceRe, commented: “Another active quarter further confirms
the critical role RenaissanceRe plays in helping communities
rebuild. Our results for the third quarter reflect the
climate-change driven frequency of catastrophic events impacting
the world, but these are risks that we understand well and are paid
to take. As we approach the January renewal, I am confident we will
successfully execute our strategy and profitably deploy significant
capital by helping our customers solve their biggest problems.”
Third Quarter of 2020 Summary
- Net negative impact on net income available to RenaissanceRe
common shareholders of $321.7 million resulting from Hurricane
Laura, Hurricane Sally, the wildfires occurring in California,
Oregon and Washington (the “Q3 2020 Wildfires”), other catastrophe
events including the August 2020 derecho which impacted the U.S.
Midwest, Hurricane Isaias, and Typhoon Maysak (the “Other Q3 2020
Catastrophe Events”), and loss estimates associated with aggregate
loss contracts on these and other events in the third quarter of
2020 (collectively, the “Q3 2020 Large Loss Events”).
- Gross premiums written increased by $282.0 million, or 32.7%,
to $1.1 billion, in the third quarter of 2020 compared to the third
quarter of 2019, driven by an increase of $168.6 million in the
Casualty and Specialty segment and an increase of $113.4 million in
the Property segment.
- Underwriting loss of $206.1 million and a combined ratio of
120.6% in the third quarter of 2020, compared to an underwriting
loss of $3.4 million and a combined ratio of 100.4% in the third
quarter of 2019. The Property segment incurred an underwriting loss
of $206.6 million and had a combined ratio of 140.0% in the third
quarter of 2020. The Casualty and Specialty segment generated
underwriting income of $0.6 million and had a combined ratio of
99.9% in the third quarter of 2020. The Company’s underwriting
result in the third quarter of 2020 was principally impacted by the
Q3 2020 Large Loss Events, which resulted in a net negative impact
on the underwriting result of $422.4 million and added 43.4
percentage points to the combined ratio, primarily in the Property
segment. The third quarter of 2019 included the impacts of
Hurricane Dorian and Typhoon Faxai (collectively, 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.
- Total investment result was $307.8 million in the third quarter
of 2020, generating an annualized total investment return of 6.2%,
compared to $145.8 million and an annualized total investment
return of 3.6% in the third quarter of 2019.
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.
There remains meaningful uncertainty regarding the estimates and
the nature and extent of the losses from catastrophe events, 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 in the table below provides additional
information detailing the net negative impact of the Q3 2020 Large
Loss Events on the Company’s consolidated financial statements in
the third quarter of 2020.
Three months
ended September 30, 2020
Hurricane Laura
Hurricane Sally
Q3 2020 Wildfires
Other Q3 2020 Catastrophe
Events
Aggregate Losses
Total Q3 2020 Large Loss
Events
(in thousands)
Net claims and claims expenses
incurred
$
(123,076
)
$
(72,531
)
$
(91,107
)
$
(61,586
)
$
(120,118
)
$
(468,418
)
Assumed reinstatement premiums earned
18,282
5,110
17,604
7,407
5,123
53,526
Ceded reinstatement premiums earned
(334
)
(236
)
—
—
—
(570
)
Lost profit commissions
(254
)
(418
)
(491
)
(549
)
(5,179
)
(6,891
)
Net negative impact on underwriting
result
(105,382
)
(68,075
)
(73,994
)
(54,728
)
(120,174
)
(422,353
)
Redeemable noncontrolling interest
20,008
11,834
19,580
17,958
31,262
100,642
Net negative impact on net income
available to RenaissanceRe common shareholders
$
(85,374
)
$
(56,241
)
$
(54,414
)
$
(36,770
)
$
(88,912
)
$
(321,711
)
The financial data below provides additional information
detailing the net negative impact of the Q3 2020 Large Loss Events
on the Company’s segment underwriting results and consolidated
combined ratio in the third quarter of 2020.
Three months
ended September 30, 2020
Hurricane Laura
Hurricane Sally
Q3 2020 Wildfires
Other Q3 2020 Catastrophe
Events
Aggregate Losses
Total Q3 2020 Large Loss
Events
(in thousands, except percentages)
Net negative impact on Property segment
underwriting result
$
(95,845
)
$
(68,075
)
$
(73,994
)
$
(54,728
)
$
(120,174
)
$
(412,816
)
Net negative impact on Casualty and
Specialty segment underwriting result
(9,537
)
—
—
—
—
(9,537
)
Net negative impact on underwriting
result
$
(105,382
)
$
(68,075
)
$
(73,994
)
$
(54,728
)
$
(120,174
)
$
(422,353
)
Percentage point impact on consolidated
combined ratio
10.3
6.7
7.2
5.4
12.0
43.4
Underwriting Results by Segment
Property Segment
Gross premiums written in the Property segment were $427.8
million in the third quarter of 2020, an increase of $113.4
million, or 36.1%, compared to $314.4 million in the third quarter
of 2019.
Gross premiums written in the catastrophe class of business were
$179.7 million in the third quarter of 2020, an increase of $76.9
million, or 74.8%, compared to the third quarter of 2019. Gross
written premiums in the third quarter of 2020 included $52.9
million of reinstatement premiums associated with the Q3 2020 Large
Loss Events, as compared to $23.1 million of reinstatement premiums
written in the third quarter of 2019 associated with the Q3 2019
Catastrophe Events. In addition, gross written premiums 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 as a result of the acquisition of
Tokio Millennium Re AG (now known as RenaissanceRe Europe AG),
Tokio Millennium Re (UK) Limited (now known as RenaissanceRe (UK)
Limited) (“RenaissanceRe UK”) and their subsidiaries (collectively,
"TMR"). The negative premium adjustments were fully ceded and were
reflected in ceded premiums written, resulting in no impact to the
Company’s results of operations in the third quarter of 2019.
Gross premiums written in the other property class of business
were $248.1 million in the third quarter of 2020, an increase of
$36.5 million, or 17.2%, compared to the third quarter of 2019. 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.
Ceded premiums written in the Property segment were $49.1
million in the third quarter of 2020, an increase of $37.6 million,
or 329.6%, compared to the third quarter of 2019. In the third
quarter of 2020, ceded premiums written included certain of the
gross premiums written ceded to third-party investors in the
Company’s managed vehicles, primarily RenaissanceRe Upsilon Fund
Ltd. Ceded premiums written in the third quarter of 2019 included
$26.4 million negative premium adjustments related to the business
of the third-party capital vehicles that the Company manages as a
result of the acquisition of TMR, as discussed above.
The Property segment incurred an underwriting loss of $206.6
million in the third quarter of 2020, compared to an underwriting
loss of $7.7 million in the third quarter of 2019. In the third
quarter of 2020, the Property segment generated a net claims and
claim expense ratio of 114.4%, an underwriting expense ratio of
25.6% and a combined ratio of 140.0%, compared to 76.1%, 25.6% and
101.7%, respectively, in the third quarter of 2019. The
underwriting result and combined ratio in the third quarter of 2020
were principally impacted by the Q3 2020 Large Loss Events, which
resulted in a net negative impact on the Property segment
underwriting result of $412.8 million and added 84.4 percentage
points to the Property segment combined ratio. In comparison, the
third quarter of 2019 was 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.
Casualty and Specialty Segment
Gross premiums written in the Casualty and Specialty segment
were $715.3 million in the third quarter of 2020, an increase of
$168.6 million, or 30.8%, as compared to the third quarter of 2019.
This increase was primarily due to growth from new and existing
business opportunities written in the current and prior periods
across various classes of business within the segment, partially
offset by the non-renewal of a portion of the business acquired in
connection with the acquisition of TMR.
The Casualty and Specialty segment generated underwriting income
of $0.6 million in the third quarter of 2020, compared to $4.5
million in the third quarter of 2019. In the third quarter of 2020,
the Casualty and Specialty segment generated a net claims and claim
expense ratio of 72.6%, an underwriting expense ratio of 27.3% and
a combined ratio of 99.9%, compared to 68.4%, 30.6% and 99.0%,
respectively, in the third quarter of 2019.
The increase in the net claims and claim expense ratio of 4.2
percentage points was principally the result of higher current
accident year losses in the third quarter of 2020 compared to the
third quarter of 2019. The net claims and claim expense ratio was
impacted by net losses resulting from the impact of Hurricane Laura
and the purchase of an adverse development cover associated with
RenaissanceRe Syndicate 1458’s casualty reserves, which combined to
add 3.2 percentage points. While the net claims and claim expense
ratio was also impacted by increased reserves in our mortgage
guaranty book within our financial lines business, there was an
offsetting impact to acquisition expenses as a result of reduced
profit commission expense associated with this business. The
underwriting expense ratio in the Casualty and Specialty segment
decreased 3.3 percentage points, to 27.3%, in the third quarter of
2020 compared to the third quarter of 2019, driven by lower
acquisition and operating expense ratios. The decrease in profit
commission expense noted above was the principal driver of the
decrease in acquisition costs. Operating expenses were impacted by
reduced travel, marketing and office operational expenses as a
result of the COVID-19 pandemic.
COVID-19
The Company continues to evaluate industry trends and its own
potential exposure associated with the ongoing COVID-19 pandemic,
and expects historically significant industry losses to emerge over
time as the full impact of the pandemic and its effects on the
global economy are realized. Among other things, the Company
continues to actively monitor information received from or reported
by clients, brokers, industry actuaries, regulators, courts, and
others, and to assess that information in the context of its own
portfolio. Our loss estimates represent our best estimate based on
currently available information, and actual losses may vary
materially from these estimates.
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 $307.8 million in the third quarter of
2020, compared to a gain of $145.8 million in the third quarter of
2019, an increase of $162.0 million. The primary driver of the
total investment result in the third quarter of 2020 was net
realized and unrealized gains on investments of $224.2 million,
principally within the equity and fixed maturity investments
trading portfolios.
- Net income attributable to redeemable noncontrolling interests
in the third quarter of 2020 was $19.3 million, compared to $62.1
million in the third quarter of 2019. The decrease was primarily
driven by underwriting losses in DaVinciRe Holdings Ltd., partially
offset by an increase in the net income of RenaissanceRe Medici
Fund Ltd. (“Medici”) compared to the third quarter of 2019.
- In the third quarter of 2020, total fee income decreased by
$13.6 million, to $18.4 million, compared to $32.0 million in the
third quarter of 2019, primarily driven by a decrease in
performance fee income due to lower underlying performance of the
Company’s joint ventures and structured reinsurance products,
primarily related to the Q3 2020 Large Loss Events, partially
offset by an increase in the dollar value of managed capital
compared to the third quarter of 2019.
- In the third quarter of 2020, corporate expenses increased by
$34.2 million, to $48.1 million, compared to $13.8 million in the
third quarter of 2019, primarily driven by the $30.2 million loss
on the sale of RenaissanceRe UK on August 18, 2020, as well as
related transaction and other expenses, and expenses associated
with senior management departures during the quarter. The loss on
sale includes amounts related to prior purchase GAAP adjustments
and cumulative currency translation adjustments recorded since the
acquisition of RenaissanceRe UK.
- Income tax benefit was $8.2 million in the third quarter of
2020 compared to income tax expense of $3.7 million in the third
quarter of 2019. The income tax benefit was principally driven by
lower underwriting performance and other miscellaneous items in the
U.S., including amounts resulting from the continued impacts of
U.S. tax reform, partially offset by investment gains, primarily in
the U.S. based operations.
- Net foreign exchange gains of $17.4 million in the third
quarter of 2020 compared to net foreign exchange losses of $8.3
million in the third quarter of 2019. The net foreign exchange
gains were primarily driven by gains attributable to third-party
investors in Medici and miscellaneous foreign exchange gains in the
Company’s operations with non-U.S. dollar functional
currencies.
- 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. The Company is
also monitoring Hurricane Zeta, which made landfall on October 26,
2020 on the Yucatán Peninsula and is currently in the Gulf of
Mexico. Additionally, wildfires impacting several Western U.S.
states are ongoing.
This Press Release includes certain financial measures that are
not calculated in accordance with generally accepted accounting
principles in the U.S. (“GAAP”) including “operating (loss) income
(attributable) available to RenaissanceRe common shareholders,”
“operating (loss) income (attributable) 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
28, 2020 at 11:00 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 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.
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,
2020
September 30,
2019
September 30,
2020
September 30,
2019
Revenues
Gross premiums written
$
1,143,058
$
861,068
$
4,870,651
$
3,902,271
Net premiums written
$
899,411
$
704,130
$
3,350,022
$
2,656,126
Decrease (increase) in unearned
premiums
100,772
202,618
(426,645
)
(287,848
)
Net premiums earned
1,000,183
906,748
2,923,377
2,368,278
Net investment income
83,543
111,387
272,321
312,069
Net foreign exchange gains (losses)
17,426
(8,275
)
4,503
(1,812
)
Equity in earnings of other ventures
5,457
5,877
19,062
17,350
Other income (loss)
1,476
1,016
(4,161
)
5,109
Net realized and unrealized gains on
investments
224,208
34,395
561,891
395,655
Total revenues
1,332,293
1,051,148
3,776,993
3,096,649
Expenses
Net claims and claim expenses incurred
942,030
654,520
2,023,256
1,334,928
Acquisition expenses
215,180
202,181
659,394
553,614
Operational expenses
49,045
53,415
165,583
158,162
Corporate expenses
48,050
13,844
75,939
76,480
Interest expense
11,843
15,580
38,612
42,868
Total expenses
1,266,148
939,540
2,962,784
2,166,052
Income before taxes
66,145
111,608
814,209
930,597
Income tax benefit (expense)
8,244
(3,664
)
(12,785
)
(20,670
)
Net income
74,389
107,944
801,424
909,927
Net income attributable to noncontrolling
interests
(19,301
)
(62,057
)
(236,120
)
(204,091
)
Net income attributable to
RenaissanceRe
55,088
45,887
565,304
705,836
Dividends on preference shares
(7,289
)
(9,189
)
(23,634
)
(27,567
)
Net income available to RenaissanceRe
common shareholders
$
47,799
$
36,698
$
541,670
$
678,269
Net income available to RenaissanceRe
common shareholders per common share – basic
$
0.94
$
0.83
$
11.60
$
15.58
Net income available to RenaissanceRe
common shareholders per common share – diluted
$
0.94
$
0.83
$
11.58
$
15.57
Operating (loss) income (attributable)
available to RenaissanceRe common shareholders per common share -
diluted
$
(2.64
)
$
0.73
$
1.84
$
8.76
Average shares outstanding - basic
50,009
43,462
46,130
43,003
Average shares outstanding - diluted
50,094
43,537
46,200
43,049
Net claims and claim expense ratio
94.2
%
72.2
%
69.2
%
56.4
%
Underwriting expense ratio
26.4
%
28.2
%
28.2
%
30.0
%
Combined ratio
120.6
%
100.4
%
97.4
%
86.4
%
Return on average common equity -
annualized
2.8
%
2.8
%
12.0
%
18.2
%
Operating return on average common equity
- annualized (1)
(7.7
)%
2.5
%
2.0
%
10.2
%
(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,
2020
December 31,
2019
Assets
(Unaudited)
(Audited)
Fixed maturity investments trading, at
fair value
$
13,391,318
$
11,171,655
Short term investments, at fair value
5,158,961
4,566,277
Equity investments trading, at fair
value
547,381
436,931
Other investments, at fair value
1,122,683
1,087,377
Investments in other ventures, under
equity method
98,990
106,549
Total investments
20,319,333
17,368,789
Cash and cash equivalents
1,287,378
1,379,068
Premiums receivable
3,337,120
2,599,896
Prepaid reinsurance premiums
1,082,270
767,781
Reinsurance recoverable
2,883,808
2,791,297
Accrued investment income
71,947
72,461
Deferred acquisition costs and value of
business acquired
697,346
663,991
Receivable for investments sold
752,936
78,369
Other assets
306,265
346,216
Goodwill and other intangibles
257,437
262,226
Total assets
$
30,995,840
$
26,330,094
Liabilities, Noncontrolling Interests
and Shareholders’ Equity
Liabilities
Reserve for claims and claim expenses
$
9,900,615
$
9,384,349
Unearned premiums
3,276,156
2,530,975
Debt
1,135,740
1,384,105
Reinsurance balances payable
3,915,804
2,830,691
Payable for investments purchased
1,597,893
225,275
Other liabilities
391,494
932,024
Total liabilities
20,217,702
17,287,419
Redeemable noncontrolling interest
3,387,317
3,071,308
Shareholders’ Equity
Preference shares
525,000
650,000
Common shares
50,810
44,148
Additional paid-in capital
1,615,328
568,277
Accumulated other comprehensive loss
(2,083
)
(1,939
)
Retained earnings
5,201,766
4,710,881
Total shareholders’ equity attributable
to RenaissanceRe
7,390,821
5,971,367
Total liabilities, noncontrolling
interests and shareholders’ equity
$
30,995,840
$
26,330,094
Book value per common share
$
135.13
$
120.53
RenaissanceRe Holdings
Ltd.
Supplemental Financial Data -
Segment Information
(in thousands of United States
Dollars, except percentages)
(Unaudited)
Three months ended September
30, 2020
Property
Casualty and Specialty
Other
Total
Gross premiums written
$
427,765
$
715,293
$
—
$
1,143,058
Net premiums written
$
378,708
$
520,703
$
—
$
899,411
Net premiums earned
$
516,623
$
483,560
$
—
$
1,000,183
Net claims and claim expenses incurred
590,958
351,052
20
942,030
Acquisition expenses
98,545
116,636
(1
)
215,180
Operational expenses
33,672
15,319
54
49,045
Underwriting (loss) income
$
(206,552
)
$
553
$
(73
)
(206,072
)
Net investment income
83,543
83,543
Net foreign exchange gains
17,426
17,426
Equity in earnings of other ventures
5,457
5,457
Other income
1,476
1,476
Net realized and unrealized gains on
investments
224,208
224,208
Corporate expenses
(48,050
)
(48,050
)
Interest expense
(11,843
)
(11,843
)
Income before taxes and redeemable
noncontrolling interests
66,145
Income tax benefit
8,244
8,244
Net income attributable to redeemable
noncontrolling interests
(19,301
)
(19,301
)
Dividends on preference shares
(7,289
)
(7,289
)
Net income available to RenaissanceRe
common shareholders
$
47,799
Net claims and claim expenses incurred –
current accident year
$
629,827
$
366,080
$
—
$
995,907
Net claims and claim expenses incurred –
prior accident years
(38,869
)
(15,028
)
20
(53,877
)
Net claims and claim expenses incurred –
total
$
590,958
$
351,052
$
20
$
942,030
Net claims and claim expense ratio –
current accident year
121.9
%
75.7
%
99.6
%
Net claims and claim expense ratio – prior
accident years
(7.5
)%
(3.1
)%
(5.4
)%
Net claims and claim expense ratio –
calendar year
114.4
%
72.6
%
94.2
%
Underwriting expense ratio
25.6
%
27.3
%
26.4
%
Combined ratio
140.0
%
99.9
%
120.6
%
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
111,387
111,387
Net foreign exchange losses
(8,275
)
(8,275
)
Equity in earnings of other ventures
5,877
5,877
Other income
1,016
1,016
Net realized and unrealized gains on
investments
34,395
34,395
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
%
RenaissanceRe Holdings
Ltd.
Supplemental Financial Data -
Segment Information
(in thousands of United States
Dollars, except percentages)
(Unaudited)
Nine months ended September
30, 2020
Property
Casualty and Specialty
Other
Total
Gross premiums written
$
2,690,827
$
2,179,824
$
—
$
4,870,651
Net premiums written
$
1,757,427
$
1,592,595
$
—
$
3,350,022
Net premiums earned
$
1,429,074
$
1,494,303
$
—
$
2,923,377
Net claims and claim expenses incurred
899,860
1,123,527
(131
)
2,023,256
Acquisition expenses
278,668
380,726
—
659,394
Operational expenses
109,335
56,195
53
165,583
Underwriting income (loss)
$
141,211
$
(66,145
)
$
78
75,144
Net investment income
272,321
272,321
Net foreign exchange gains
4,503
4,503
Equity in earnings of other ventures
19,062
19,062
Other loss
(4,161
)
(4,161
)
Net realized and unrealized gains on
investments
561,891
561,891
Corporate expenses
(75,939
)
(75,939
)
Interest expense
(38,612
)
(38,612
)
Income before taxes and redeemable
noncontrolling interests
814,209
Income tax expense
(12,785
)
(12,785
)
Net income attributable to redeemable
noncontrolling interests
(236,120
)
(236,120
)
Dividends on preference shares
(23,634
)
(23,634
)
Net income attributable to RenaissanceRe
common shareholders
$
541,670
Net claims and claim expenses incurred –
current accident year
$
931,285
$
1,147,354
$
—
$
2,078,639
Net claims and claim expenses incurred –
prior accident years
(31,425
)
(23,827
)
(131
)
(55,383
)
Net claims and claim expenses incurred –
total
$
899,860
$
1,123,527
$
(131
)
$
2,023,256
Net claims and claim expense ratio –
current accident year
65.2
%
76.8
%
71.1
%
Net claims and claim expense ratio – prior
accident years
(2.2
)%
(1.6
)%
(1.9
)%
Net claims and claim expense ratio –
calendar year
63.0
%
75.2
%
69.2
%
Underwriting expense ratio
27.1
%
29.2
%
28.2
%
Combined ratio
90.1
%
104.4
%
97.4
%
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 (loss)
$
296,356
$
25,223
$
(5
)
321,574
Net investment income
312,069
312,069
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
395,655
395,655
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 available 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
%
RenaissanceRe Holdings
Ltd.
Supplemental Financial Data -
Gross Premiums Written
(in thousands of United States
Dollars)
(Unaudited)
Three months ended
Nine months ended
September 30,
2020
September 30,
2019
September 30,
2020
September 30,
2019
Property Segment
Catastrophe
$
179,689
$
102,779
$
1,827,665
$
1,550,648
Other property
248,076
211,621
863,162
635,336
Property segment gross premiums
written
$
427,765
$
314,400
$
2,690,827
$
2,185,984
Casualty and Specialty Segment
General casualty (1)
$
260,265
$
191,447
$
713,598
$
610,563
Professional liability (2)
175,459
151,754
628,683
460,912
Financial lines (3)
143,455
111,459
392,169
330,017
Other (4)
136,114
92,008
445,374
314,795
Casualty and Specialty segment gross
premiums written
$
715,293
$
546,668
$
2,179,824
$
1,716,287
(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,
2020
September 30,
2019
September 30,
2020
September 30,
2019
Fixed maturity investments trading
$
68,022
$
82,977
$
211,303
$
232,566
Short term investments
1,611
15,061
19,752
44,712
Equity investments trading
1,559
1,326
4,776
3,269
Other investments
Catastrophe bonds
13,626
12,812
41,284
33,284
Other
2,598
2,672
5,334
6,226
Cash and cash equivalents
441
1,978
2,782
5,801
87,857
116,826
285,231
325,858
Investment expenses
(4,314
)
(5,439
)
(12,910
)
(13,789
)
Net investment income
83,543
111,387
272,321
312,069
Net realized and unrealized gains
(losses) on:
Fixed maturity investments trading (1)
78,348
57,502
502,280
346,123
Equity investments trading (1)
119,622
(25,564
)
81,246
50,463
Other investments
Catastrophe bonds
12,611
9,242
2,711
(4,870
)
Other
13,627
(6,785
)
(24,346
)
3,939
Net realized and unrealized gains on
investments
224,208
34,395
561,891
395,655
Total investment result
$
307,751
$
145,782
$
834,212
$
707,724
Total investment return -
annualized
6.2
%
3.6
%
5.8
%
6.0
%
(1)
Net realized and unrealized gains (losses)
on fixed maturity investments trading includes the impacts of
interest rate futures, interest rate swaps, credit default swaps
and total return swaps. Net realized and unrealized gains (losses)
on equity investments trading includes the impact of equity
futures.
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.
Operating (Loss) Income (Attributable) Available to
RenaissanceRe Common Shareholders and Operating Return on Average
Common Equity - Annualized
The Company uses “operating (loss) income (attributable)
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
(loss) income (attributable) 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, excluding
other investments - catastrophe bonds, net foreign exchange gains
and losses, corporate expenses associated with the acquisition of
TMR and the subsequent sale of RenaissanceRe UK, the income tax
expense or benefit associated with these adjustments and the
portion of these adjustments attributable to the Company's
redeemable noncontrolling interests." The Company’s management
believes that “operating (loss) income (attributable) 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 fair value of the Company’s fixed maturity investment
portfolio, equity investments trading, other investments (excluding
catastrophe bonds) and investments-related derivatives;
fluctuations in foreign exchange rates; corporate expenses
associated with the acquisition of TMR and the subsequent sale of
RenaissanceRe UK; the associated income tax expense or benefit of
these adjustments; and the portion of these adjustments
attributable to the Company's redeemable noncontrolling interests.
The Company also uses “operating (loss) income (attributable)
available to RenaissanceRe common shareholders” to calculate
“operating (loss) income (attributable) available to RenaissanceRe
common shareholders per common share - diluted” and “operating
return on average common equity - annualized.” The following table
is a reconciliation of: (1) net income available to RenaissanceRe
common shareholders to “operating (loss) income (attributable)
available to RenaissanceRe common shareholders”; (2) net income
available to RenaissanceRe common shareholders per common share -
diluted to “operating (loss) income (attributable) 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.” Comparative
information for all prior periods has been updated to conform to
the current methodology and presentation.
Three months ended
Nine months ended
(in thousands of United States Dollars,
except per share amounts and percentages)
September 30,
2020
September 30,
2019
September 30,
2020
September 30,
2019
Net income available to RenaissanceRe
common shareholders
$
47,799
$
36,698
$
541,670
$
678,269
Adjustment for net realized and unrealized
gains on investments, excluding other investments - catastrophe
bonds
(211,597
)
(25,153
)
(559,180
)
(400,525
)
Adjustment for net foreign exchange
(gains) losses
(17,426
)
8,275
(4,503
)
1,812
Adjustment for corporate expenses
associated with the acquisition of TMR and the subsequent sale of
RenaissanceRe UK (1)
33,916
4,022
40,618
44,025
Adjustment for income tax expense (2)
5,058
5,298
22,140
24,074
Adjustment for net income attributable to
redeemable noncontrolling interests (3)
10,526
3,541
51,017
37,473
Operating (loss) income (attributable)
available to RenaissanceRe common shareholders
$
(131,724
)
$
32,681
$
91,762
$
385,128
Net income available to RenaissanceRe
common shareholders per common share - diluted
$
0.94
$
0.83
$
11.58
$
15.57
Adjustment for net realized and unrealized
gains on investments, excluding other investments - catastrophe
bonds
(4.22
)
(0.58
)
(12.10
)
(9.30
)
Adjustment for net foreign exchange
(gains) losses
(0.35
)
0.19
(0.10
)
0.04
Adjustment for corporate expenses
associated with the acquisition of TMR and the subsequent sale of
RenaissanceRe UK (1)
0.68
0.09
0.88
1.02
Adjustment for income tax expense (2)
0.10
0.12
0.48
0.56
Adjustment for net income attributable to
redeemable noncontrolling interests (3)
0.21
0.08
1.10
0.87
Operating (loss) income (attributable)
available to RenaissanceRe common shareholders per common share -
diluted
$
(2.64
)
$
0.73
$
1.84
$
8.76
Return on average common equity -
annualized
2.8
%
2.8
%
12.0
%
18.2
%
Adjustment for net realized and unrealized
gains on investments, excluding other investments - catastrophe
bonds
(12.4
)%
(1.9
)%
(12.4
)%
(10.8
)%
Adjustment for net foreign exchange
(gains) losses
(1.0
)%
0.6
%
(0.1
)%
—
%
Adjustment for corporate expenses
associated with the acquisition of TMR and the subsequent sale of
RenaissanceRe UK (1)
2.0
%
0.3
%
0.9
%
1.2
%
Adjustment for income tax expense (2)
0.3
%
0.4
%
0.5
%
0.6
%
Adjustment for net income attributable to
redeemable noncontrolling interests (3)
0.6
%
0.3
%
1.1
%
1.0
%
Operating return on average common equity
- annualized
(7.7
)%
2.5
%
2.0
%
10.2
%
(1)
Included in the three and nine months
ended September 30, 2020 is the loss on sale of RenaissanceRe UK of
$30.2 million.
(2)
Adjustment for income tax expense
represents the income tax expense 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.
(3)
Represents the portion of these
adjustments that are attributable to the Company's redeemable
noncontrolling interests, including the income tax impact of those
adjustments.
Tangible Book Value Per Common Share and Tangible Book Value
Per Common Share Plus Accumulated Dividends
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 table 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.”
September 30,
2020
June 30, 2020
March 31, 2020
December 31,
2019
September 30,
2019
Book value per common share
$
135.13
$
134.27
$
117.15
$
120.53
$
120.07
Adjustment for goodwill and other
intangibles (1)
(5.53
)
(5.56
)
(6.46
)
(6.50
)
(6.55
)
Tangible book value per common share
129.60
128.71
110.69
114.03
113.52
Adjustment for accumulated dividends
21.73
21.38
21.03
20.68
20.34
Tangible book value per common share plus
accumulated dividends
$
151.33
$
150.09
$
131.72
$
134.71
$
133.86
Quarterly change in book value per common
share
0.6
%
14.6
%
(2.8
)%
0.4
%
0.8
%
Quarterly change in tangible book value
per common share plus change in accumulated dividends
1.0
%
16.6
%
(2.6
)%
0.7
%
1.1
%
Year to date change in book value per
common share
12.1
%
11.4
%
(2.8
)%
15.7
%
15.3
%
Year to date change in tangible book value
per common share plus change in accumulated dividends
14.6
%
13.5
%
(2.6
)%
17.9
%
17.1
%
(1)
At September 30, 2020, June 30, 2020,
March 31, 2020, December 31, 2019, and September 30, 2019, goodwill
and other intangibles included $23.2 million, $23.5 million, $24.2
million, $24.9 million and $25.6 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/20201027006187/en/
INVESTOR CONTACT: Keith McCue Senior Vice President,
Finance & Investor Relations RenaissanceRe Holdings Ltd. (441)
239-4830 MEDIA CONTACT: Keil Gunther Vice President, Head of
Global Marketing & Client Communication RenaissanceRe Holdings
Ltd. (441) 239-4932 or 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