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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| RenaissanceRe Holdings Ltd | NYSE:RNR | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| -0.32 | -0.13% | 250.63 | 251.37 | 247.925 | 248.86 | 356,830 | 23:37:51 |
From Dec 2023 to Dec 2024
RenaissanceRe Reports $2.5 Billion of Annual Net Income Available to Common Shareholders and $1.8 Billion of Annual Operating Income Available to Common Shareholders in 2023.
Fourth Quarter 2023 Highlights
Full Year 2023 Highlights
RenaissanceRe Holdings Ltd. (NYSE: RNR) (“RenaissanceRe” or the “Company”) today announced its financial results for the fourth quarter and full year 2023.
Fourth Quarter 2023
Net Income Available to Common Shareholders per Diluted Common Share: $30.43
Operating Income Available to Common Shareholders per Diluted Common Share*: $11.77
Underwriting Income
$541.0M
Fee Income
$70.8M
Net Investment Income
$377.0M
Change in Book Value per Common Share: 23.6%
Change in Tangible Book Value per Common Share Plus Change in Accum. Dividends*: 11.6%
*
Operating Return on Average Common Equity, Operating Income (Loss) Available (Attributable) to Common Shareholders, Operating Income (Loss) Available (Attributable) to Common Shareholders per Diluted Common Share, Change in Tangible Book Value per Common Share Plus Change in Accumulated Dividends and Adjusted Combined Ratio are non-GAAP financial measures; see “Comments on Non-GAAP Financial Measures” for a reconciliation of non-GAAP financial measures.
Kevin J. O’Donnell, President and Chief Executive Officer, said, “We finished a strong year with an exceptional quarter, reporting an annualized operating return on average common equity of 33%. We begin 2024 stronger than ever. The Validus acquisition and integration has exceeded our expectations and positions us to continue delivering exceptional shareholder value. At the January 1 renewal we were successful in retaining our combined portfolio at favorable terms. Our underwriting portfolio is now larger, more diverse, and more efficient with great rate adequacy, providing the platform for continuing strong performance across our Three Drivers of Profit.”
Consolidated Financial Results - Fourth Quarter
Consolidated Highlights
Three months ended
December 31,
(in thousands, except per share amounts and percentages)
2023
2022
Gross premiums written
$
1,802,041
$
1,585,276
Net premiums written
1,587,047
1,345,616
Underwriting income (loss)
540,970
316,302
Combined ratio
76.0
%
80.5
%
Adjusted combined ratio (1)
73.6
%
80.6
%
Net Income (Loss)
Available (attributable) to common shareholders
1,576,682
448,092
Available (attributable) to common shareholders per diluted common share
$
30.43
$
10.27
Operating Income (Loss) (1)
Available (attributable) to common shareholders
623,110
322,135
Available (attributable) to common shareholders per diluted common share
$
11.77
$
7.33
Book value per common share
$
165.20
$
104.65
Change in book value per share
23.6
%
10.7
%
Tangible book value per common share plus accumulated dividends (1)
$
168.39
$
122.15
Change in book value per common share plus change in accumulated dividends
23.9
%
11.1
%
Change in tangible book value per common share plus change in accumulated dividends (1)
11.6
%
12.0
%
Return on average common equity - annualized
83.5
%
41.2
%
Operating return on average common equity - annualized (1)
33.0
%
29.6
%
(1) See “Comments on Non-GAAP Financial Measures” for a reconciliation of non-GAAP financial measures.
Acquisition of Validus
On November 1, 2023, the Company completed its acquisition (the “Validus Acquisition”) of Validus Holdings, Ltd. (“Validus Holdings”), Validus Specialty, LLC (“Validus Specialty”) and the renewal rights, records and customer relationships of the assumed treaty reinsurance business of Talbot Underwriting Limited from subsidiaries of American International Group, Inc., Validus Holdings, Validus Specialty, and their respective subsidiaries collectively are referred to herein as “Validus.”
The operating activities of Validus from the acquisition date, November 1, 2023, through December 31, 2023 are included in the Company's consolidated statements of operations for the three months and year ended December 31, 2023. As such, the results of operations for the three months and year ended December 31, 2023 compared to the three months and year ended December 31, 2022, should be viewed in that context. In addition, the results of operations for three months and year ended December 31, 2023 may not be reflective of the ongoing business of the combined entities. At December 31, 2023, the Company’s consolidated balance sheet reflects the combined entities.
Three Drivers of Profit: Underwriting, Fee and Investment Income - Fourth Quarter
Underwriting Results - Property Segment: Combined ratio of 43.1%; Underwriting income of $503.6 million
Property Segment
Three months ended
December 31,
Q/Q
Change
(in thousands, except percentages)
2023
2022
Gross premiums written
$
344,597
$
372,082
(7.4
)%
Net premiums written
357,953
372,998
(4.0
)%
Underwriting income (loss)
503,606
257,225
Underwriting Ratios
Net claims and claim expense ratio - current accident year
31.2
%
53.8
%
(22.6) pts
Net claims and claim expense ratio - prior accident years
(17.2
)%
(18.9
)%
1.7 pts
Net claims and claim expense ratio - calendar year
14.0
%
34.9
%
(20.9) pts
Underwriting expense ratio
29.1
%
27.7
%
1.4 pts
Combined ratio
43.1
%
62.6
%
(19.5) pts
Adjusted combined ratio (1)
41.7
%
62.2
%
(20.5) pts
(1) See “Comments on Non-GAAP Financial Measures” for a reconciliation of non-GAAP financial measures.
– an $86.6 million decrease in other property. The decrease in other property was primarily due to the non-renewal of certain catastrophe exposed quota share programs that did not meet the Company’s return hurdles, partially offset by an increase related to Validus.
– a $59.1 million increase in catastrophe, driven by a $41.8 million increase in gross reinstatement premiums in the fourth quarter of 2023.
– a 2.5 percentage point increase in the operating expense ratio, due in part to higher performance based compensation expense in the fourth quarter of 2023; partially offset by
– a 1.1 percentage point decrease in the acquisition expense ratio, driven by changes in the mix of business as a result of continued relative growth in catastrophe, which has a lower acquisition expense ratio than other property, partially offset by the increase in acquisition expenses from purchase accounting adjustments relating to the Validus acquisition.
Underwriting Results - Casualty and Specialty Segment: Combined ratio of 97.3% and Adjusted combined ratio of 94.3%; Underwriting income of $37.4 million
Casualty and Specialty Segment
Three months ended
December 31,
Q/Q
Change
(in thousands, except percentages)
2023
2022
Gross premiums written
$
1,457,444
$
1,213,194
20.1
%
Net premiums written
1,229,094
972,618
26.4
%
Underwriting income (loss)
37,364
59,077
Underwriting Ratios
Net claims and claim expense ratio - current accident year
63.0
%
64.9
%
(1.9) pts
Net claims and claim expense ratio - prior accident years
(0.3
)%
(2.7
)%
2.4 pts
Net claims and claim expense ratio - calendar year
62.7
%
62.2
%
0.5 pts
Underwriting expense ratio
34.6
%
31.5
%
3.1 pts
Combined ratio
97.3
%
93.7
%
3.6 pts
Adjusted combined ratio (1)
94.3
%
94.0
%
0.3 pts
(1) See “Comments on Non-GAAP Financial Measures” for a reconciliation of non-GAAP financial measures.
– premium growth in the other specialty line of business of $189.4 million and the general casualty line of business of $175.4 million, primarily from Validus; partially offset by
– a decrease of $109.3 million in the professional liability line of business, reflecting proactive cycle management.
– a 1.9 percentage point increase in the acquisition expense ratio primarily due to the impact of the purchase accounting adjustments relating to the Validus Acquisition; and
– a 1.2 percentage point increase in the operating expense ratio, mainly due to a higher performance-based compensation expense as compared to the fourth quarter of 2022.
Fee Income: $70.8 million of fee income, up 133.2% from Q4 2022; increase in both management and performance fees
Fee Income
Three months ended
December 31,
Q/Q
Change
(in thousands)
2023
2022
Total management fee income
$
47,769
$
25,984
$
21,785
Total performance fee income (loss) (1)
23,014
4,363
18,651
Total fee income
$
70,783
$
30,347
$
40,436
(1)
Performance fees are based on the performance of the individual vehicles or products, and may be negative in a particular period if, for example, large losses occur, which can potentially result in no performance fees or the reversal of previously accrued performance fees.
– growth in the Company’s joint ventures and managed funds, specifically DaVinciRe Holdings Ltd. (“DaVinci”), Fontana Holdings L.P. (“Fontana”), Vermeer Reinsurance Ltd. (“Vermeer”) and RenaissanceRe Medici Fund Ltd. (“Medici”).
– the recording of management fees in DaVinci that were previously deferred as a result of the weather-related large losses experienced in prior years, as compared to the deferral of management fees in the fourth quarter of 2022 due to weather-related large losses.
Investment Results: Total investment result improved $583.5 million; net investment income growth of 78.5%
Investment Results
Three months ended
December 31,
Q/Q
Change
(in thousands, except percentages)
2023
2022
Net investment income
$
376,962
$
211,237
$
165,725
Net realized and unrealized gains (losses) on investments
585,939
168,139
417,800
Total investment result
$
962,901
$
379,376
$
583,525
Net investment income return - annualized
5.7
%
4.1
%
1.6 pts
Total investment return - annualized
15.2
%
7.4
%
7.8 pts
– Net realized and unrealized gains on fixed maturity investments trading of $578.1 million, primarily driven by decreases in interest rates, compared to net realized and unrealized gains of $77.1 million in the fourth quarter of 2022 due to modest reductions in interest rates during the period;
– Net realized and unrealized gains on equity investments of $11.2 million, compared to net realized and unrealized gains of $59.6 million in the fourth quarter of 2022, following a reduction in the size of the equity investments portfolio during 2023; and
– Net realized and unrealized losses on investment-related derivatives of $46.0 million, compared to net realized and unrealized losses of $3.3 million in the fourth quarter of 2022. The current quarter losses were primarily driven by the negative impact of tightening credit spreads on credit default swaps that the Company uses to hedge credit risk.
Other Items of Note - Fourth Quarter
– strong underwriting results in DaVinci and Vermeer;
– strong net investment income driven by higher interest rates and higher yielding assets within the investment portfolios of the Company’s joint ventures and managed funds; and
– net realized and unrealized gains on the investment portfolios of the Company’s joint ventures and managed funds, driven by decreases in interest rates, as described above.
Consolidated Highlights
Year ended
December 31,
(in thousands, except per share amounts and percentages)
2023
2022
Gross premiums written
$
8,862,366
$
9,213,540
Net premiums written
7,467,813
7,196,160
Underwriting income (loss)
1,647,408
149,852
Combined ratio
77.9
%
97.7
%
Adjusted combined ratio (1)
77.1
%
97.5
%
Net Income (Loss)
Available (attributable) to common shareholders
$
2,525,757
$
(1,096,578
)
Available (attributable) to common shareholders per diluted common share
$
52.27
$
(25.50
)
Operating Income (Loss) (1)
Available (attributable) to common shareholders
$
1,824,910
$
322,791
Available (attributable) to common shareholders per diluted common share
$
37.54
$
7.47
Book value per common share
$
165.20
$
104.65
Change in book value per share
57.9
%
(20.8
)%
Tangible book value per common share plus accumulated dividends (1)
$
168.39
$
122.15
Change in book value per common share plus change in accumulated dividends
57.9
%
(20.8
)%
Change in tangible book value per common share plus change in accumulated dividends (1)
47.6
%
(20.8
)%
Return on average common equity
40.5
%
(22.0
)%
Operating return on average common equity (1)
29.3
%
6.4
%
(1) See “Comments on Non-GAAP Financial Measures” for a reconciliation of non-GAAP financial measures.
Net negative impact of the 2023 Large Loss Events
Net negative impact on underwriting result includes the sum of (1) net claims and claim expenses incurred, (2) assumed and ceded reinstatement premiums earned and (3) earned and lost profit commissions. Net negative impact on net income (loss) available (attributable) to RenaissanceRe common shareholders is the sum of (1) net negative impact on underwriting result and (2) redeemable noncontrolling interest, both before consideration of any related income tax benefit (expense).
The Company’s estimates of net negative impact are based on a review of the Company’s potential exposures, preliminary discussions with certain counterparties and actuarial 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 remains regarding the estimates and the nature and extent of the losses from these catastrophe events, driven by the magnitude and recent nature of each event, the geographic areas impacted by the events, 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.
Net negative impact on the consolidated financial statements
Year ended December 31, 2023
2023 Large
Loss Events (1)
(in thousands)
Net claims and claims expenses incurred
$
(354,228
)
Assumed reinstatement premiums earned
46,534
Ceded reinstatement premiums earned
(62
)
Earned (lost) profit commissions
9,130
Net negative impact on underwriting result
(298,626
)
Redeemable noncontrolling interest
85,276
Net negative impact on net income (loss) available (attributable) to RenaissanceRe common shareholders
$
(213,350
)
Net negative impact on the segment underwriting results and consolidated combined ratio
Year ended December 31, 2023
2023 Large
Loss Events (1)
(in thousands, except percentages)
Net negative impact on Property segment underwriting result
$
(298,119
)
Net negative impact on Casualty and Specialty segment underwriting result
(507
)
Net negative impact on underwriting result
$
(298,626
)
Percentage point impact on consolidated combined ratio
4.1
(1)
“2023 Large Loss Events” includes:(1) Hurricane Otis and Storm Ciaran in October and November 2023 (“Q4 2023 Large Loss Events); (2) the wildfires in Hawaii in August 2023 and Hurricane Idalia (“Q3 2023 Large Loss Events”); (3) a series of large, severe weather events in Texas and other southern and central U.S. states in June 2023 (“Q2 2023 Large Loss Events”); (4) the earthquakes in southern and central Turkey in February 2023, Cyclone Gabrielle, the flooding in northern New Zealand in January and February 2023, and various wind and thunderstorm events in both the Southern and Midwest U.S. during March 2023 (“Q1 2023 Large Loss Events”); and (5) certain aggregate loss contracts triggered during 2023.
Three Drivers of Profit: Underwriting, Fee, and Investment Income - Full Year
Underwriting Results - Property Segment: Combined ratio of 53.4%; 10.5 percentage points from the 2023 Large Loss Events.
Property Segment
Year ended
December 31,
Y/Y
Change
(in thousands, except percentages)
2023
2022
Gross premiums written
$
3,562,414
$
3,734,241
(4.6
)%
Net premiums written
2,967,309
2,847,659
4.2
%
Underwriting income (loss)
1,439,327
(16,109
)
Underwriting Ratios
Net claims and claim expense ratio - current accident year
39.1
%
81.2
%
(42.1) pts
Net claims and claim expense ratio - prior accident years
(13.2
)%
(7.4
)%
(5.8) pts
Net claims and claim expense ratio - calendar year
25.9
%
73.8
%
(47.9) pts
Underwriting expense ratio
27.5
%
26.8
%
0.7 pts
Combined ratio
53.4
%
100.6
%
(47.2) pts
Adjusted combined ratio (1)
52.9
%
100.4
%
(47.5) pts
(1) See “Comments on Non-GAAP Financial Measures” for a reconciliation of non-GAAP financial measures.
– a decrease in other property of $241.4 million, or 14.6%, principally due to the non-renewal of certain catastrophe exposed quota share programs that did not meet the Company’s return hurdles; partially offset by
– an increase in catastrophe gross premiums written of $69.6 million, or 3.3%, driven by an increase of $552.8 million in gross premiums written as a result of rate improvements during the year, largely offset by a decrease of $268.4 million in gross premiums written due to the non-renewal of deals written in Upsilon RFO, and a decrease of $214.8 million in gross reinstatement premiums.
– a reduction in ceded reinstatement premiums of $75.5 million, as well as a reduction of $237.4 million in premiums ceded to Upsilon RFO following a reduction in the size of Upsilon Diversified; partially offset by
– an increase in overall ceded premiums written due to higher levels of retrocessional purchases by the Company.
– 2023 Large Loss Events contributed 11.0 percentage points to the current accident year net claims and claim expense ratio, while weather-related large losses contributed 48.0 percentage points in 2022.
Casualty and Specialty Segment: Net premiums written increased by 3.5%; Combined ratio of 95.2% and Adjusted combined ratio of 94.2%
Casualty and Specialty Segment
Year ended
December 31,
Y/Y
Change
(in thousands, except percentages)
2023
2022
Gross premiums written
$
5,299,952
$
5,479,299
(3.3
)%
Net premiums written
4,500,504
4,348,501
3.5
%
Underwriting income (loss)
208,081
165,961
Underwriting Ratios
Net claims and claim expense ratio - current accident year
64.3
%
65.5
%
(1.2) pts
Net claims and claim expense ratio - prior accident years
(1.0
)%
(1.1
)%
0.1 pts
Net claims and claim expense ratio - calendar year
63.3
%
64.4
%
(1.1) pts
Underwriting expense ratio
31.9
%
30.9
%
1.0 pts
Combined ratio
95.2
%
95.3
%
(0.1) pts
Adjusted combined ratio (1)
94.2
%
95.3
%
(1.1) pts
(1) See “Comments on Non-GAAP Financial Measures” for a reconciliation of non-GAAP financial measures.– a $292.9 million decrease in the credit class of business, principally due to significant premium growth in 2022 associated with opportunistic deals written in the mortgage book of business, which do not renew annually and earn over several years; and
– a $516.2 million decrease in the professional liability line of business, reflecting proactive cycle management, partially offset by
– a $460.2 million increase in the other specialty class of business, and a $169.5 million increase in the general casualty class of business, which together were significantly impacted by Validus.
– Gross premiums written in 2022 was also impacted by significant positive adjustments to premium estimates for business underwritten in prior years.
Fee Income: $236.8 million of fee income; up 99.5% from 2022; increase in both management and performance fees
Fee Income
Year ended
December 31,
Y/Y
Change
(in thousands, except percentages)
2023
2022
Total management fee income
$
176,599
$
108,902
$
67,697
Total performance fee income (loss) (1)
60,195
9,777
50,418
Total fee income
$
236,794
$
118,679
$
118,115
(1)
Performance fees are based on the performance of the individual vehicles or products, and may be negative in a particular period if, for example, large losses occur, which can potentially result in no performance fees or the reversal of previously accrued performance fees.
Investment Results: Total investment result improved $2.9 billion; net investment income growth of 123.8%
Investment Results
Year ended
December 31,
Y/Y
Change
(in thousands, except percentages)
2023
2022
Net investment income
$
1,253,110
$
559,932
$
693,178
Net realized and unrealized gains (losses) on investments
414,522
(1,800,485
)
2,215,007
Total investment result
$
1,667,632
$
(1,240,553
)
$
2,908,185
Net investment income return
5.3
%
2.7
%
2.6 pts
Total investment return
6.9
%
(5.7
)%
12.6 pts
– a combination of higher yielding assets in the fixed maturity and short term portfolios; and
– higher average invested assets resulting from the equity and debt offerings in the second quarter of 2023, as well the Validus Acquisition in the fourth quarter of 2023.
– Net realized and unrealized gains on fixed maturity investments trading of $292.1 million in 2023 primarily due to modest interest rate movements through the year, compared to net realized and unrealized losses of $1.4 billion in 2022, primarily due to increasing yields on U.S. treasuries;
– Net realized and unrealized gains on equity investments of $45.8 million in 2023, which was primarily due to a combination of a reduced allocation to equity investments, and a higher equity market price environment, compared to net realized and unrealized losses of $123.8 million in 2022, which was the result of a generally lower equity market price environment; and
– Net realized and unrealized gains on catastrophe bonds of $101.9 million in 2023, compared to net realized and unrealized losses of $130.3 million in 2022. These catastrophe bonds are primarily held in Medici, the majority of which is owned by third party investors. Both years’ performance also reflected changes in risk spreads in the wider catastrophe bond market.
Other Items of Note - Full Year and Subsequent Events
– strong underwriting results for DaVinci and Vermeer;
– strong net investment income driven by higher interest rates and higher yielding assets within the investment portfolios of the Company’s joint ventures and managed funds; and
– net realized and unrealized gains on the investment portfolios of the Company’s joint ventures and managed funds, driven by decreases in interest rates, as described above.
– net realized and unrealized gains on catastrophe bonds recorded during the year in Medici, as discussed above.
Conference Call Details and Additional Information
Non-GAAP Financial Measures and Additional Financial Information
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 income (loss) available (attributable) to RenaissanceRe common shareholders,” “operating income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted,” “operating return on average common equity - annualized,” “tangible book value per common share,” “tangible book value per common share plus accumulated dividends” and “adjusted combined ratio.” 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.
Conference Call Information
RenaissanceRe will host a conference call on Wednesday, January 31, 2024 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 desirable risk with efficient capital. The Company provides property, casualty and specialty reinsurance and certain insurance solutions to customers, principally through intermediaries. Established in 1993, RenaissanceRe has offices in Bermuda, Australia, Canada, 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. The Company may also make forward-looking statements with respect to its business and industry, such as those relating to its strategy and management objectives, plans and expectations regarding its response and ability to adapt to changing economic conditions, market standing and product volumes, estimates of net negative impact and insured losses from loss events, and the Validus Acquisition and its impact on the Company’s business, among other things. These statements are subject to numerous factors that could cause actual results to differ materially from those addressed by such forward-looking statements, including the following: the Company’s exposure to natural and non-natural catastrophic events and circumstances and the variance it may cause in the Company’s financial results; the effect of climate change on the Company’s business, including the trend towards increasingly frequent and severe climate events; the effectiveness of the Company’s claims and claim expense reserving process; the effect of emerging claims and coverage issues; the performance of the Company’s investment portfolio and financial market volatility; the effects of inflation; the ability of the Company’s ceding companies and delegated authority counterparties to accurately assess the risks they underwrite; the Company’s ability to maintain its financial strength ratings; the Company’s reliance on a small number of brokers; the highly competitive nature of the Company’s industry; the historically cyclical nature of the (re)insurance industries; collection on claimed retrocessional coverage, and new retrocessional reinsurance being available on acceptable terms or at all; the Company’s ability to attract and retain key executives and employees; the Company’s ability to successfully implement its business strategies and initiatives; difficulties in integrating Validus; the Company’s exposure to credit loss from counterparties; the Company’s need to make many estimates and judgments in the preparation of its financial statements; the Company’s exposure to risks associated with its management of capital on behalf of investors in joint ventures or other entities it manages; changes to the accounting rules and regulatory systems applicable to the Company’s business, including changes in Bermuda and U.S. laws and regulations; the effect of current or future macroeconomic or geopolitical events or trends, including the ongoing conflicts between Russia and Ukraine, and Israel and Hamas; other political, regulatory or industry initiatives adversely impacting the Company; the Company’s ability to comply with covenants in its debt agreements; the effect of adverse economic factors, including changes in prevailing interest rates; the impact of cybersecurity risks, including technology breaches or failure; a contention by the U.S. Internal Revenue Service that any of the Company’s Bermuda subsidiaries are subject to taxation in the U.S.; the effects of new or possible future tax reform legislation and regulations in the jurisdictions in which the Company operates, including recent changes in Bermuda tax law; the Company’s ability to determine any impairments taken on its investments; the Company’s ability to raise capital on acceptable terms, including through debt instruments, the capital markets, and third party investments in the Company’s joint ventures and managed fund partners; the Company’s ability to comply with applicable sanctions and foreign corrupt practices laws; the Company’s dependence on capital distributions from its subsidiaries; and other factors affecting future results disclosed in RenaissanceRe’s filings with the SEC, 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
Year ended
December 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022
Revenues
Gross premiums written
$
1,802,041
$
1,585,276
$
8,862,366
$
9,213,540
Net premiums written
$
1,587,047
$
1,345,616
$
7,467,813
$
7,196,160
Decrease (increase) in unearned premiums
662,398
278,544
3,320
(862,171
)
Net premiums earned
2,249,445
1,624,160
7,471,133
6,333,989
Net investment income
376,962
211,237
1,253,110
559,932
Net foreign exchange gains (losses)
12,398
10,781
(41,479
)
(56,909
)
Equity in earnings (losses) of other ventures
15,402
8,517
43,474
11,249
Other income (loss)
144
7,686
(6,152
)
12,636
Net realized and unrealized gains (losses) on investments
585,939
168,139
414,522
(1,800,485
)
Total revenues
3,240,290
2,030,520
9,134,608
5,060,412
Expenses
Net claims and claim expenses incurred
979,522
822,937
3,573,509
4,338,840
Acquisition expenses
594,487
413,217
1,875,034
1,568,606
Operational expenses
134,466
71,704
375,182
276,691
Corporate expenses
74,285
11,537
127,642
46,775
Interest expense
23,201
12,384
73,181
48,335
Total expenses
1,805,961
1,331,779
6,024,548
6,279,247
Income (loss) before taxes
1,434,329
698,741
3,110,060
(1,218,835
)
Income tax benefit (expense)
554,206
(5,408
)
510,067
59,019
Net income (loss)
1,988,535
693,333
3,620,127
(1,159,816
)
Net (income) loss attributable to redeemable noncontrolling interests
(403,009
)
(236,397
)
(1,058,995
)
98,613
Net income (loss) attributable to RenaissanceRe
1,585,526
456,936
2,561,132
(1,061,203
)
Dividends on preference shares
(8,844
)
(8,844
)
(35,375
)
(35,375
)
Net income (loss) available (attributable) to RenaissanceRe common shareholders
$
1,576,682
$
448,092
$
2,525,757
$
(1,096,578
)
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – basic
$
30.51
$
10.30
$
52.40
$
(25.50
)
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – diluted
$
30.43
$
10.27
$
52.27
$
(25.50
)
Operating (loss) income (attributable) available to RenaissanceRe common shareholders per common share - diluted (1)
$
11.77
$
7.33
$
37.54
$
7.47
Average shares outstanding - basic
50,937
42,795
47,493
43,040
Average shares outstanding - diluted
51,072
42,914
47,607
43,040
Net claims and claim expense ratio
43.5
%
50.7
%
47.8
%
68.5
%
Underwriting expense ratio
32.5
%
29.8
%
30.1
%
29.2
%
Combined ratio
76.0
%
80.5
%
77.9
%
97.7
%
Return on average common equity - annualized
83.5
%
41.2
%
40.5
%
(22.0
)%
Operating return on average common equity - annualized (1)
33.0
%
29.6
%
29.3
%
6.4
%
(1) See Comments on Non-GAAP Financial Measures 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)
December 31,
2023
December 31,
2022
Assets
Fixed maturity investments trading, at fair value
$
20,877,108
$
14,351,402
Short term investments, at fair value
4,604,079
4,669,272
Equity investments, at fair value
106,766
625,058
Other investments, at fair value
3,515,566
2,494,954
Investments in other ventures, under equity method
112,624
79,750
Total investments
29,216,143
22,220,436
Cash and cash equivalents
1,877,518
1,194,339
Premiums receivable
7,280,682
5,139,471
Prepaid reinsurance premiums
924,777
1,021,412
Reinsurance recoverable
5,344,286
4,710,925
Accrued investment income
205,713
121,501
Deferred acquisition costs and value of business acquired
1,751,437
1,171,738
Deferred tax asset
685,040
123,153
Receivable for investments sold
622,197
350,526
Other assets
323,960
261,549
Goodwill and other intangible assets
775,352
237,828
Total assets
$
49,007,105
$
36,552,878
Liabilities, Noncontrolling Interests and Shareholders’ Equity
Liabilities
Reserve for claims and claim expenses
$
20,486,869
$
15,892,573
Unearned premiums
6,136,135
4,559,107
Debt
1,958,655
1,170,442
Reinsurance balances payable
3,186,174
3,928,281
Payable for investments purchased
661,611
493,776
Other liabilities
1,021,872
648,036
Total liabilities
33,451,316
26,692,215
Redeemable noncontrolling interests
6,100,831
4,535,389
Shareholders’ Equity
Preference shares
750,000
750,000
Common shares
52,694
43,718
Additional paid-in capital
2,144,459
475,647
Accumulated other comprehensive income (loss)
(14,211
)
(15,462
)
Retained earnings
6,522,016
4,071,371
Total shareholders’ equity attributable to RenaissanceRe
9,454,958
5,325,274
Total liabilities, noncontrolling interests and shareholders’ equity
$
49,007,105
$
36,552,878
Book value per common share
$
165.20
$
104.65
RenaissanceRe Holdings Ltd.
Supplemental Financial Data - Segment Information
(in thousands of United States Dollars, except percentages)
(Unaudited)
Three months ended December 31, 2023
Property
Casualty and
Specialty
Other
Total
Gross premiums written
$
344,597
$
1,457,444
$
—
$
1,802,041
Net premiums written
$
357,953
$
1,229,094
$
—
$
1,587,047
Net premiums earned
$
884,321
$
1,365,124
$
—
$
2,249,445
Net claims and claim expenses incurred
123,942
855,580
—
979,522
Acquisition expenses
170,854
423,633
—
594,487
Operational expenses
85,919
48,547
—
134,466
Underwriting income (loss)
$
503,606
$
37,364
$
—
540,970
Net investment income
376,962
376,962
Net foreign exchange gains (losses)
12,398
12,398
Equity in earnings of other ventures
15,402
15,402
Other income (loss)
144
144
Net realized and unrealized gains (losses) on investments
585,939
585,939
Corporate expenses
(74,285
)
(74,285
)
Interest expense
(23,201
)
(23,201
)
Income (loss) before taxes and redeemable noncontrolling interests
1,434,329
Income tax benefit (expense)
554,206
554,206
Net (income) loss attributable to redeemable noncontrolling interests
(403,009
)
(403,009
)
Dividends on preference shares
(8,844
)
(8,844
)
Net income (loss) available (attributable) to RenaissanceRe common shareholders
$
1,576,682
Net claims and claim expenses incurred – current accident year
$
275,638
$
859,694
$
—
$
1,135,332
Net claims and claim expenses incurred – prior accident years
(151,696
)
(4,114
)
—
(155,810
)
Net claims and claim expenses incurred – total
$
123,942
$
855,580
$
—
$
979,522
Net claims and claim expense ratio – current accident year
31.2
%
63.0
%
50.5
%
Net claims and claim expense ratio – prior accident years
(17.2
)%
(0.3
)%
(7.0
)%
Net claims and claim expense ratio – calendar year
14.0
%
62.7
%
43.5
%
Underwriting expense ratio
29.1
%
34.6
%
32.5
%
Combined ratio
43.1
%
97.3
%
76.0
%
Three months ended December 31, 2022
Property
Casualty and
Specialty
Other
Total
Gross premiums written
$
372,082
$
1,213,194
$
—
$
1,585,276
Net premiums written
$
372,998
$
972,618
$
—
$
1,345,616
Net premiums earned
$
688,238
$
935,922
$
—
$
1,624,160
Net claims and claim expenses incurred
240,503
582,434
—
822,937
Acquisition expenses
140,872
272,345
—
413,217
Operational expenses
49,638
22,066
—
71,704
Underwriting income (loss)
$
257,225
$
59,077
$
—
316,302
Net investment income
211,237
211,237
Net foreign exchange gains (losses)
10,781
10,781
Equity in earnings of other ventures
8,517
8,517
Other income (loss)
7,686
7,686
Net realized and unrealized gains (losses) on investments
168,139
168,139
Corporate expenses
(11,537
)
(11,537
)
Interest expense
(12,384
)
(12,384
)
Income (loss) before taxes and redeemable noncontrolling interests
698,741
Income tax benefit (expense)
(5,408
)
(5,408
)
Net (income) loss attributable to redeemable noncontrolling interests
(236,397
)
(236,397
)
Dividends on preference shares
(8,844
)
(8,844
)
Net income (loss) available (attributable) to RenaissanceRe common shareholders
$
448,092
Net claims and claim expenses incurred – current accident year
$
370,175
$
607,648
$
—
$
977,823
Net claims and claim expenses incurred – prior accident years
(129,672
)
(25,214
)
—
(154,886
)
Net claims and claim expenses incurred – total
$
240,503
$
582,434
$
—
$
822,937
Net claims and claim expense ratio – current accident year
53.8
%
64.9
%
60.2
%
Net claims and claim expense ratio – prior accident years
(18.9
)%
(2.7
)%
(9.5
)%
Net claims and claim expense ratio – calendar year
34.9
%
62.2
%
50.7
%
Underwriting expense ratio
27.7
%
31.5
%
29.8
%
Combined ratio
62.6
%
93.7
%
80.5
%
RenaissanceRe Holdings Ltd.
Supplemental Financial Data - Segment Information
(in thousands of United States Dollars, except percentages)
(Unaudited)
Year ended December 31, 2023
Property
Casualty and
Specialty
Other
Total
Gross premiums written
$
3,562,414
$
5,299,952
$
—
$
8,862,366
Net premiums written
$
2,967,309
$
4,500,504
$
—
$
7,467,813
Net premiums earned
$
3,090,792
$
4,380,341
$
—
$
7,471,133
Net claims and claim expenses incurred
799,905
2,773,604
—
3,573,509
Acquisition expenses
600,127
1,274,907
—
1,875,034
Operational expenses
251,433
123,749
—
375,182
Underwriting income (loss)
$
1,439,327
$
208,081
$
—
1,647,408
Net investment income
1,253,110
1,253,110
Net foreign exchange gains (losses)
(41,479
)
(41,479
)
Equity in earnings of other ventures
43,474
43,474
Other income (loss)
(6,152
)
(6,152
)
Net realized and unrealized gains (losses) on investments
414,522
414,522
Corporate expenses
(127,642
)
(127,642
)
Interest expense
(73,181
)
(73,181
)
Income (loss) before taxes and redeemable noncontrolling interests
3,110,060
Income tax benefit (expense)
510,067
510,067
Net (income) loss attributable to redeemable noncontrolling interests
(1,058,995
)
(1,058,995
)
Dividends on preference shares
(35,375
)
(35,375
)
Net income (loss) available (attributable) to RenaissanceRe common shareholders
$
2,525,757
Net claims and claim expenses incurred – current accident year
$
1,208,810
$
2,815,306
$
—
$
4,024,116
Net claims and claim expenses incurred – prior accident years
(408,905
)
(41,702
)
—
(450,607
)
Net claims and claim expenses incurred – total
$
799,905
$
2,773,604
$
—
$
3,573,509
Net claims and claim expense ratio – current accident year
39.1
%
64.3
%
53.9
%
Net claims and claim expense ratio – prior accident years
(13.2
)%
(1.0
)%
(6.1
)%
Net claims and claim expense ratio – calendar year
25.9
%
63.3
%
47.8
%
Underwriting expense ratio
27.5
%
31.9
%
30.1
%
Combined ratio
53.4
%
95.2
%
77.9
%
Year ended December 31, 2022
Property
Casualty and
Specialty
Other
Total
Gross premiums written
$
3,734,241
$
5,479,299
$
—
$
9,213,540
Net premiums written
$
2,847,659
$
4,348,501
$
—
$
7,196,160
Net premiums earned
$
2,770,227
$
3,563,762
$
—
$
6,333,989
Net claims and claim expenses incurred
2,044,771
2,294,069
—
4,338,840
Acquisition expenses
547,210
1,021,396
—
1,568,606
Operational expenses
194,355
82,336
—
276,691
Underwriting income (loss)
$
(16,109
)
$
165,961
$
—
149,852
Net investment income
559,932
559,932
Net foreign exchange gains (losses)
(56,909
)
(56,909
)
Equity in earnings of other ventures
11,249
11,249
Other income (loss)
12,636
12,636
Net realized and unrealized gains (losses) on investments
(1,800,485
)
(1,800,485
)
Corporate expenses
(46,775
)
(46,775
)
Interest expense
(48,335
)
(48,335
)
Income (loss) before taxes and redeemable noncontrolling interests
(1,218,835
)
Income tax benefit (expense)
59,019
59,019
Net (income) loss attributable to redeemable noncontrolling interests
98,613
98,613
Dividends on preference shares
(35,375
)
(35,375
)
Net income (loss) available (attributable) to RenaissanceRe common shareholders
$
(1,096,578
)
Net claims and claim expenses incurred – current accident year
$
2,250,512
$
2,335,910
$
—
$
4,586,422
Net claims and claim expenses incurred – prior accident years
(205,741
)
(41,841
)
—
(247,582
)
Net claims and claim expenses incurred – total
$
2,044,771
$
2,294,069
$
—
$
4,338,840
Net claims and claim expense ratio – current accident year
81.2
%
65.5
%
72.4
%
Net claims and claim expense ratio – prior accident years
(7.4
)%
(1.1
)%
(3.9
)%
Net claims and claim expense ratio – calendar year
73.8
%
64.4
%
68.5
%
Underwriting expense ratio
26.8
%
30.9
%
29.2
%
Combined ratio
100.6
%
95.3
%
97.7
%
RenaissanceRe Holdings Ltd.
Supplemental Financial Data - Gross Premiums Written
(in thousands of United States Dollars)
(Unaudited)
Three months ended
Year ended
December 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022
Property Segment
Catastrophe
$
55,068
$
(4,019
)
$
2,146,323
$
2,076,752
Other property
289,529
376,101
1,416,091
1,657,489
Property segment gross premiums written
$
344,597
$
372,082
$
3,562,414
$
3,734,241
Casualty and Specialty Segment
General casualty (1)
$
535,311
$
359,901
$
1,730,102
$
1,560,594
Professional liability (2)
240,597
349,925
1,212,393
1,728,570
Credit (3)
206,476
217,736
769,321
1,062,183
Other specialty (4)
475,060
285,632
1,588,136
1,127,952
Casualty and Specialty segment gross premiums written
$
1,457,444
$
1,213,194
$
5,299,952
$
5,479,299
(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, professional indemnity and transactional liability.
(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
Year ended
December 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022
Fixed maturity investments trading
$
230,437
$
136,019
$
744,457
$
382,165
Short term investments
63,400
23,908
213,303
41,042
Equity investments
586
7,474
7,261
20,864
Other investments
Catastrophe bonds
57,636
31,441
200,572
94,784
Other
21,874
13,793
87,296
37,497
Cash and cash equivalents
10,114
3,947
23,123
5,197
384,047
216,582
1,276,012
581,549
Investment expenses
(7,085
)
(5,345
)
(22,902
)
(21,617
)
Net investment income
$
376,962
$
211,237
1,253,110
559,932
Net investment income return - annualized
5.7
%
4.1
%
5.3
%
2.7
%
Net realized gains (losses) on fixed maturity investments trading
$
(92,952
)
$
(110,762
)
$
(393,041
)
$
(732,561
)
Net unrealized gains (losses) on fixed maturity investments trading
671,088
187,900
685,095
(636,762
)
Net realized and unrealized gains (losses) on fixed maturity investments trading
578,136
77,138
292,054
(1,369,323
)
Net realized and unrealized gains (losses) on investment-related derivatives
(45,977
)
(3,347
)
(68,272
)
(165,293
)
Net realized gains (losses) on equity investments
11
4,397
(27,492
)
43,035
Net unrealized gains (losses) on equity investments
11,204
55,251
73,243
(166,823
)
Net realized and unrealized gains (losses) on equity investments
11,215
59,648
45,751
(123,788
)
Net realized and unrealized gains (losses) on other investments - catastrophe bonds
7,111
29,578
101,897
(130,335
)
Net realized and unrealized gains (losses) on other investments - other
35,454
5,122
43,092
(11,746
)
Net realized and unrealized gains (losses) on investments
585,939
168,139
414,522
(1,800,485
)
Total investment result
$
962,901
$
379,376
$
1,667,632
$
(1,240,553
)
Total investment return - annualized
15.2
%
7.4
%
6.9
%
(5.7
)%
Comments on Non-GAAP Financial Measures
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 certain of these financial measures in previous investor communications and the Company’s management believes that such 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 or outside the industry. These measures may not, however, be comparable to similarly titled measures used by companies within or 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 Income (Loss) Available (Attributable) to RenaissanceRe Common Shareholders and Operating Return on Average Common Equity - Annualized
The Company uses “operating income (loss) available (attributable) 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 (loss) available (attributable) to RenaissanceRe common shareholders” as used herein differs from “net income (loss) available (attributable) to RenaissanceRe common shareholders,” which the Company believes is the most directly comparable GAAP measure, by the exclusion of (1) net realized and unrealized gains and losses on investments, excluding other investments - catastrophe bonds, (2) net foreign exchange gains and losses, (3) corporate expenses associated with acquisitions and dispositions, (4) acquisition related purchase accounting adjustments, (5) the Bermuda net deferred tax asset, (6) the income tax expense or benefit associated with these adjustments, and (7) the portion of these adjustments attributable to the Company’s redeemable noncontrolling interests. The Company updated it’s calculation of “operating income (loss) available (attributable) to RenaissanceRe common shareholders” to exclude “acquisition related purchase accounting adjustments” because it believes that excluding the impact of acquisition related accounting adjustments provides more comparability and a more accurate measure of the Company’s results of operations. The Company also uses “operating income (loss) available (attributable) to RenaissanceRe common shareholders” to calculate “operating income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted” and “operating return on average common equity - annualized.”
The Company’s management believes that “operating income (loss) available (attributable) to RenaissanceRe common shareholders,” “operating income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted” and “operating return on average common equity - annualized” are useful to management and investors because they provide for better comparability and more accurately measures the Company’s results of operations and removes variability.
The following table is a reconciliation of: (1) net income (loss) available (attributable) to RenaissanceRe common shareholders to “operating income (loss) available (attributable) to RenaissanceRe common shareholders”; (2) net income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted to “operating income (loss) available (attributable) 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 the prior periods presented have been updated to conform to the current methodology and presentation.
Three months ended
Year ended
(in thousands of United States Dollars, except per share amounts and percentages)
December 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022
Net income (loss) available (attributable) to RenaissanceRe common shareholders
$
1,576,682
$
448,092
$
2,525,757
$
(1,096,578
)
Adjustment for:
Net realized and unrealized losses (gains) on investments, excluding other investments - catastrophe bonds
(578,828
)
(138,561
)
(312,625
)
1,670,150
Net foreign exchange losses (gains)
(12,398
)
(10,781
)
41,479
56,909
Corporate expenses associated with acquisitions and dispositions
61,666
—
76,380
—
Acquisition related purchase accounting adjustments (1)
52,812
(18
)
64,866
7,235
Bermuda net deferred tax asset (2)
(593,765
)
—
(593,765
)
—
Income tax expense (benefit) (3)
12,250
(5,818
)
3,289
(83,149
)
Net income (loss) attributable to redeemable noncontrolling interests (4)
104,691
29,221
19,529
(231,776
)
Operating income (loss) available (attributable) to RenaissanceRe common shareholders
$
623,110
$
322,135
$
1,824,910
$
322,791
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted
$
30.43
$
10.27
$
52.27
$
(25.50
)
Adjustment for:
Net realized and unrealized losses (gains) on investments, excluding other investments - catastrophe bonds
(11.33
)
(3.23
)
(6.57
)
38.80
Net foreign exchange losses (gains)
(0.24
)
(0.25
)
0.87
1.32
Corporate expenses associated with acquisitions and dispositions
1.21
—
1.60
—
Acquisition related purchase accounting adjustments (1)
1.04
—
1.36
0.17
Bermuda net deferred tax asset (2)
(11.63
)
—
(12.47
)
—
Income tax expense (benefit) (3)
0.24
(0.14
)
0.07
(1.93
)
Net income (loss) attributable to redeemable noncontrolling interests (4)
2.05
0.68
0.41
(5.39
)
Operating income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted
$
11.77
$
7.33
$
37.54
$
7.47
Return on average common equity - annualized
83.5
%
41.2
%
40.5
%
(22.0
)%
Adjustment for:
Net realized and unrealized losses (gains) on investments, excluding other investments - catastrophe bonds
(30.6
)%
(12.8
)%
(5.0
)%
33.5
%
Net foreign exchange losses (gains)
(0.7
)%
(1.0
)%
0.7
%
1.1
%
Corporate expenses associated with acquisitions and dispositions
3.3
%
—
%
1.2
%
—
%
Acquisition related purchase accounting adjustments (1)
2.8
%
—
%
1.0
%
0.1
%
Bermuda net deferred tax asset (2)
(31.4
)%
—
%
(9.5
)%
—
%
Income tax expense (benefit) (3)
0.6
%
(0.5
)%
0.1
%
(1.7
)%
Net income (loss) attributable to redeemable noncontrolling interests (4)
5.5
%
2.7
%
0.3
%
(4.6
)%
Operating return on average common equity - annualized
33.0
%
29.6
%
29.3
%
6.4
%
(1)
Represents the purchase accounting adjustments related to the amortization of acquisition related intangible assets, amortization (accretion) of VOBA and acquisition costs, and the fair value adjustments to the net reserves for claims and claim expenses for the three months ended December 31, 2023 for the acquisitions of Validus $48.8 million (2022 - $Nil); and TMR and Platinum $4.0 million (2022 - $(18.0) thousand) and for the year ended December 31, 2023 for the acquisitions of Validus $48.8 million (2022 - $Nil); and TMR and Platinum $16.1 million (2022 - $7.2 million).
(2)
Represents the net deferred tax benefit resulting from the recognition of deferred tax assets net of deferred tax liabilities in connection with a 15% Bermuda corporate income tax rate, pursuant to the Corporate Income Tax Act 2023, enacted on December 27, 2023.
(3)
Represents the income tax (expense) benefit associated with the adjustments to net income (loss) available (attributable) to RenaissanceRe common shareholders. The income tax impact is estimated by applying the statutory rates of applicable jurisdictions, after consideration of other relevant factors.
(4)
Represents the portion of the adjustments above 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 per share amounts for (1) acquisition related goodwill and other intangible assets, (2) acquisition related purchase accounting adjustments, and (3) other goodwill and intangible assets. “Tangible book value per common share plus accumulated dividends” is defined as book value per common share excluding per share amounts for (1) acquisition related goodwill and other intangible assets, (2) acquisition related purchase accounting adjustments, and (3) other goodwill and intangible assets, plus accumulated dividends. The Company updated its calculation of “tangible book value per common share” to exclude “acquisition related purchase accounting adjustments” because it believes that excluding the impact of acquisition related purchase accounting adjustments provides more comparability and a more accurate measure of the Company’s realizable returns.
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 and acquisition related purchase accounting adjustments. 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.” Comparative information for the prior periods presented have been updated to conform to the current methodology and presentation.
December 31,
2023
December 31,
2022
Book value per common share
$
165.20
$
104.65
Adjustment for:
Acquisition related goodwill and other intangible assets (1)
(14.71
)
(5.44
)
Other goodwill and intangible assets (2)
(0.35
)
(0.40
)
Acquisition related purchase accounting adjustments (3)
(8.27
)
(1.66
)
Tangible book value per common share
141.87
97.15
Adjustment for accumulated dividends
26.52
25.00
Tangible book value per common share plus accumulated dividends
$
168.39
$
122.15
Quarterly change in book value per common share
23.6
%
10.7
%
Quarterly change in book value per common share plus change in accumulated dividends
23.9
%
11.1
%
Quarterly change in tangible book value per common share plus change in accumulated dividends
11.6
%
12.0
%
Year to date change in book value per common share
57.9
%
(20.8
)%
Year to date change in book value per common share plus change in accumulated dividends
59.3
%
(19.7
)%
Year to date change in tangible book value per common share plus change in accumulated dividends
47.6
%
(20.8
)%
(1)
Represents the acquired goodwill and other intangible assets at December 31, 2023 for the acquisitions of Validus $542.7 million (2022 - $Nil), TMR $27.2 million (2022 - $28.3 million) and Platinum $205.5 million (2022 - $209.6 million).
(2)
At December 31, 2023, the adjustment for goodwill and other intangibles included $18.1 million (2022 - $17.8 million) of goodwill and other intangibles included in investments in other ventures, under equity method. Previously reported “adjustment for goodwill and other intangibles” has been bifurcated into “acquisition related goodwill and other intangible assets” and “other goodwill and intangible assets.”
(3)
Represents the purchase accounting adjustments related to the unamortized VOBA and acquisition costs, and the fair value adjustments to reserves at December 31, 2023 for the acquisitions of Validus $374.4 million (2022 - $Nil), TMR $62.2 million (2022 - $73.4 million) and Platinum $(0.8) million (2022 - $(1.0) million).
Adjusted Combined Ratio
The Company has included in this Press Release “adjusted combined ratio. “Adjusted combined ratio” is defined as the combined ratio adjusted for the impact of acquisition related purchase accounting, which includes the amortization of acquisition related intangible assets, purchase accounting adjustments related to the amortization (accretion) of VOBA and acquisition costs, and the fair value adjustments to the net reserve for claims and claim expenses for the acquisitions of Validus, TMR and Platinum. The combined ratio is calculated as the sum of (1) net claims and claim expenses incurred, (2) acquisition expenses, and (3) operational expenses; divided by net premiums earned. The acquisition related purchase accounting adjustments impact net claims and claim expenses incurred and acquisition expenses. The Company’s management believes “adjusted combined ratio” is useful to management and investors because it provides for better comparability and more accurately measures the Company’s underlying underwriting performance. The following table is a reconciliation of combined ratio to “adjusted combined ratio.”
Three months ended December 31, 2023
Catastrophe
Other
Property
Property
Casualty
and
Specialty
Total
Combined ratio
17.8
%
79.9
%
43.1
%
97.3
%
76.0
%
Adjustment for acquisition related purchase accounting adjustments (1)
(2.0
)%
(0.5
)%
(1.4
)%
(3.0
)%
(2.4
)%
Adjusted combined ratio
15.8
%
79.4
%
41.7
%
94.3
%
73.6
%
Three months ended December 31, 2022
Catastrophe
Other
Property
Property
Casualty
and
Specialty
Total
Combined ratio
25.2
%
90.8
%
62.6
%
93.7
%
80.5
%
Adjustment for acquisition related purchase accounting adjustments (1)
(1.0
)%
—
%
(0.4
)%
0.3
%
0.1
%
Adjusted combined ratio
24.2
%
90.8
%
62.2
%
94.0
%
80.6
%
Year ended December 31, 2023
Catastrophe
Other
Property
Property
Casualty
and
Specialty
Total
Combined ratio
29.8
%
82.6
%
53.4
%
95.2
%
77.9
%
Adjustment for acquisition related purchase accounting adjustments (1)
(0.7
)%
(0.2
)%
(0.5
)%
(1.0
)%
(0.8
)%
Adjusted combined ratio
29.1
%
82.4
%
52.9
%
94.2
%
77.1
%
Year ended December 31, 2022
Catastrophe
Other
Property
Property
Casualty
and
Specialty
Total
Combined ratio
88.3
%
112.4
%
100.6
%
95.3
%
97.7
%
Adjustment for acquisition related purchase accounting adjustments (1)
(0.4
)%
—
%
(0.2
)%
—
%
(0.2
)%
Adjusted combined ratio
87.9
%
112.4
%
100.4
%
95.3
%
97.5
%
(1)
Adjustment for acquisition related purchase accounting includes the amortization of the acquisition related intangible assets and purchase accounting adjustments related to the net amortization (accretion) of VOBA and acquisition costs, and the fair value adjustments to the net reserve for claims and claim expenses for the acquisitions of Validus, TMR and Platinum.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240130492276/en/
INVESTOR CONTACT: RenaissanceRe Holdings Ltd. Keith McCue Senior Vice President, Finance & Investor Relations (441) 239-4830
MEDIA CONTACT: RenaissanceRe Holdings Ltd. Hayden Kenny Vice President, Investor Relations & Communications (441) 239-4946 or Kekst CNC Nicholas Capuano (917) 842-7859
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