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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 | |
---|---|---|---|---|---|---|---|---|
-0.30 | -0.13% | 222.85 | 224.295 | 220.79 | 221.34 | 263,989 | 22:30:00 |
RenaissanceRe Holdings Ltd. (NYSE: RNR) (the “Company” or “RenaissanceRe”) today reported net income available to RenaissanceRe common shareholders of $575.8 million, or $12.63 per diluted common share, in the second quarter of 2020, compared to net income available to RenaissanceRe common shareholders of $367.9 million, or $8.35 per diluted common share, in the second quarter of 2019. Operating income available to RenaissanceRe common shareholders was $190.1 million, or $4.06 per diluted common share, in the second quarter of 2020, compared to $198.8 million, or $4.47 per diluted common share, in the second quarter of 2019. The Company reported an annualized return on average common equity of 38.5% and an annualized operating return on average common equity of 12.7% in the second quarter of 2020, compared to 28.9% and 15.6%, respectively, in the second quarter of 2019. Book value per common share increased $17.12, or 14.6%, to $134.27 in the second quarter of 2020, compared to a 7.3% increase in the second quarter of 2019. Tangible book value per common share plus accumulated dividends increased $18.37, or 16.6%, to $150.09 in the second quarter of 2020, compared to an 8.2% increase in the second quarter of 2019.
Kevin J. O’Donnell, President and Chief Executive Officer of RenaissanceRe, commented: “I am proud of our team’s performance in the second quarter, where we delivered strong financial results and accomplished several strategic goals. We demonstrated market leadership in both our Property and Casualty and Specialty segments, constructing a larger and more efficient portfolio through disciplined and focused underwriting. While COVID-19 continues to present unprecedented economic and societal challenges, we feel confident with our portfolio and raised over $1 billion of new common equity in anticipation of future opportunities that we believe will deliver long-term value for our shareholders.”
Second Quarter of 2020 Summary
Underwriting Results by Segment
Property Segment
Gross premiums written in the Property segment were $1.0 billion in the second quarter of 2020, an increase of $203.3 million, or 24.2%, compared to $839.2 million in the second quarter of 2019.
Gross premiums written in the catastrophe class of business were $711.8 million in the second quarter of 2020, an increase of $109.1 million, or 18.1%, compared to the second quarter of 2019. This increase was primarily driven by expanded participation on existing transactions, certain new transactions and rate improvements.
Gross premiums written in the other property class of business were $330.8 million in the second quarter of 2020, an increase of $94.2 million, or 39.8%, compared to the second quarter of 2019. This increase 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 $338.4 million in the second quarter of 2020, an increase of $43.3 million, or 14.7%, compared to the second quarter of 2019. The increase in ceded premiums written was principally due to certain of the gross premiums written in the catastrophe class of business noted above being ceded to third-party investors in the Company’s managed vehicles, primarily RenaissanceRe Upsilon Fund Ltd.
The Property segment generated underwriting income of $200.6 million in the second quarter of 2020, compared to $151.7 million in the second quarter of 2019. In the second quarter of 2020, the Property segment generated a net claims and claim expense ratio of 33.4%, an underwriting expense ratio of 25.7% and a combined ratio of 59.1%, compared to 34.6%, 29.7% and 64.3%, respectively, in the second quarter of 2019. The underwriting result and combined ratio in the second quarter of 2020 improved principally due to a decrease in the underwriting expense ratio of 4.0 percentage points compared to the second quarter of 2019, driven by lower acquisition and operating expense ratios. The decrease in operating expenses was due in part to reduced travel, marketing and office operational expenses as a result of the COVID-19 pandemic. The decrease in the net claims and claim expense ratio was primarily driven by net favorable development on prior accident years net claims and claim expenses of $6.6 million, or 1.3 percentage points, during the second quarter of 2020, resulting from reductions in the estimated ultimate losses associated with a number of small catastrophe events in prior periods. This was partially offset by higher current accident year net claims and claim expenses due to a higher level of attritional losses associated with a larger proportion of the other property class of business being earned in the period compared to the second quarter of 2019. In addition, the underwriting result was impacted by losses related to a number of small weather-related catastrophe events that occurred during the second quarter of 2020.
Casualty and Specialty Segment
Gross premiums written in the Casualty and Specialty segment were $659.3 million in the second quarter of 2020, an increase of $21.6 million, or 3.4%, as compared to the second 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, substantially offset by non-renewal of a portion of the business acquired in connection with the acquisition of TMR (as defined herein).
The Casualty and Specialty segment generated underwriting income of $16.5 million in the second quarter of 2020, compared to $19.0 million in the second quarter of 2019. In the second quarter of 2020, the Casualty and Specialty segment generated a net claims and claim expense ratio of 66.7%, an underwriting expense ratio of 30.1% and a combined ratio of 96.8%, compared to 63.0%, 33.1% and 96.1%, respectively, in the second quarter of 2019. The increase in the net claims and claim expense ratio of 3.7 percentage points, was principally the result of higher current accident year attritional losses in the second quarter of 2020 compared to the second quarter of 2019 from specialty lines of business. The underwriting expense ratio in the Casualty and Specialty segment decreased 3.0 percentage points, to 30.1%, in the second quarter of 2020 compared to the second quarter of 2019, driven by lower acquisition and operating expense ratios. 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
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 available to RenaissanceRe common shareholders,” “operating income available to RenaissanceRe common shareholders per common share - diluted,” “operating return on average common equity - annualized,” “tangible book value per common share” and “tangible book value per common share plus accumulated dividends.” A reconciliation of such measures to the most comparable GAAP figures in accordance with Regulation G is presented in the attached supplemental financial data.
Please refer to the “Investors - Financial Reports - Financial Supplements” section of the Company’s website at www.renre.com for a copy of the Financial Supplement which includes additional information on the Company’s financial performance.
RenaissanceRe will host a conference call on Wednesday, July 29, 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
Six months ended
June 30, 2020
June 30, 2019
June 30, 2020
June 30, 2019
Revenues
Gross premiums written
$
1,701,872
$
1,476,908
$
3,727,593
$
3,041,203
Net premiums written
$
1,180,803
$
1,022,965
$
2,450,611
$
1,951,996
Increase in unearned premiums
(170,707)
(111,463)
(527,417)
(490,466)
Net premiums earned
1,010,096
911,502
1,923,194
1,461,530
Net investment income
89,305
118,588
188,778
200,682
Net foreign exchange (losses) gains
(7,195)
9,309
(12,923)
6,463
Equity in earnings of other ventures
9,041
6,812
13,605
11,473
Other (loss) income
(1,201)
922
(5,637)
4,093
Net realized and unrealized gains on investments
448,390
191,247
337,683
361,260
Total revenues
1,548,436
1,238,380
2,444,700
2,045,501
Expenses
Net claims and claim expenses incurred
510,272
453,373
1,081,226
680,408
Acquisition expenses
233,610
227,482
444,214
351,433
Operational expenses
49,077
59,814
116,538
104,747
Corporate expenses
11,898
23,847
27,889
62,636
Interest expense
11,842
15,534
26,769
27,288
Total expenses
816,699
780,050
1,696,636
1,226,512
Income before taxes
731,737
458,330
748,064
818,989
Income tax expense
(29,875)
(9,475)
(21,029)
(17,006)
Net income
701,862
448,855
727,035
801,983
Net income attributable to noncontrolling interests
(118,728)
(71,812)
(216,819)
(142,034)
Net income attributable to RenaissanceRe
583,134
377,043
510,216
659,949
Dividends on preference shares
(7,289)
(9,189)
(16,345)
(18,378)
Net income available to RenaissanceRe common shareholders
$
575,845
$
367,854
$
493,871
$
641,571
Net income available to RenaissanceRe common shareholders per common share – basic
$
12.64
$
8.36
$
11.04
$
14.82
Net income available to RenaissanceRe common shareholders per common share – diluted
$
12.63
$
8.35
$
11.02
$
14.81
Operating income available to RenaissanceRe common shareholders per common share - diluted
$
4.06
$
4.47
$
4.91
$
8.05
Average shares outstanding - basic
44,939
43,483
44,190
42,774
Average shares outstanding - diluted
45,003
43,521
44,253
42,806
Net claims and claim expense ratio
50.5
%
49.7
%
56.2
%
46.6
%
Underwriting expense ratio
28.0
%
31.6
%
29.2
%
31.2
%
Combined ratio
78.5
%
81.3
%
85.4
%
77.8
%
Return on average common equity - annualized
38.5
%
28.9
%
17.1
%
26.4
%
Operating return on average common equity - annualized (1)
12.7
%
15.6
%
7.8
%
14.4
%
(1) See Comments on Regulation G for a reconciliation of non-GAAP financial measures.
RenaissanceRe Holdings Ltd.
Summary Consolidated Balance Sheets
(in thousands of United States Dollars, except per share amounts)
June 30, 2020
December 31, 2019
Assets
(Unaudited)
(Audited)
Fixed maturity investments trading, at fair value
$
12,495,135
$
11,171,655
Short term investments, at fair value
5,570,804
4,566,277
Equity investments trading, at fair value
470,087
436,931
Other investments, at fair value
1,093,338
1,087,377
Investments in other ventures, under equity method
94,285
106,549
Total investments
19,723,649
17,368,789
Cash and cash equivalents
1,185,844
1,379,068
Premiums receivable
3,519,965
2,599,896
Prepaid reinsurance premiums
1,266,203
767,781
Reinsurance recoverable
2,774,358
2,791,297
Accrued investment income
70,004
72,461
Deferred acquisition costs and value of business acquired
734,286
663,991
Receivable for investments sold
648,458
78,369
Other assets
298,396
346,216
Goodwill and other intangibles
258,591
262,226
Total assets
$
30,479,754
$
26,330,094
Liabilities, Noncontrolling Interests and Shareholders’ Equity
Liabilities
Reserve for claims and claim expenses
$
9,365,469
$
9,384,349
Unearned premiums
3,549,641
2,530,975
Debt
1,135,216
1,384,105
Reinsurance balances payable
4,094,027
2,830,691
Payable for investments purchased
1,259,116
225,275
Other liabilities
342,014
932,024
Total liabilities
19,745,483
17,287,419
Redeemable noncontrolling interest
3,387,099
3,071,308
Shareholders’ Equity
Preference shares
525,000
650,000
Common shares
50,811
44,148
Additional paid-in capital
1,602,738
568,277
Accumulated other comprehensive loss
(3,066)
(1,939)
Retained earnings
5,171,689
4,710,881
Total shareholders’ equity attributable to RenaissanceRe
7,347,172
5,971,367
Total liabilities, noncontrolling interests and shareholders’ equity
$
30,479,754
$
26,330,094
Book value per common share
$
134.27
$
120.53
RenaissanceRe Holdings Ltd.
Supplemental Financial Data - Segment Information
(in thousands of United States Dollars, except percentages)
(Unaudited)
Three months ended June 30, 2020
Property
Casualty and Specialty
Other
Total
Gross premiums written
$
1,042,536
$
659,336
$
—
$
1,701,872
Net premiums written
$
704,138
$
476,665
$
—
$
1,180,803
Net premiums earned
$
491,116
$
518,980
$
—
$
1,010,096
Net claims and claim expenses incurred
164,050
346,266
(44)
510,272
Acquisition expenses
94,772
138,837
1
233,610
Operational expenses
31,656
17,422
(1)
49,077
Underwriting income
$
200,638
$
16,455
$
44
217,137
Net investment income
89,305
89,305
Net foreign exchange losses
(7,195)
(7,195)
Equity in earnings of other ventures
9,041
9,041
Other loss
(1,201)
(1,201)
Net realized and unrealized gains on investments
448,390
448,390
Corporate expenses
(11,898)
(11,898)
Interest expense
(11,842)
(11,842)
Income before taxes and redeemable noncontrolling interests
731,737
Income tax expense
(29,875)
(29,875)
Net income attributable to redeemable noncontrolling interests
(118,728)
(118,728)
Dividends on preference shares
(7,289)
(7,289)
Net income available to RenaissanceRe common shareholders
$
575,845
Net claims and claim expenses incurred – current accident year
$
170,614
$
355,064
$
—
$
525,678
Net claims and claim expenses incurred – prior accident years
(6,564)
(8,798)
(44)
(15,406)
Net claims and claim expenses incurred – total
$
164,050
$
346,266
$
(44)
$
510,272
Net claims and claim expense ratio – current accident year
34.7
%
68.4
%
52.0
%
Net claims and claim expense ratio – prior accident years
(1.3)
%
(1.7)
%
(1.5)
%
Net claims and claim expense ratio – calendar year
33.4
%
66.7
%
50.5
%
Underwriting expense ratio
25.7
%
30.1
%
28.0
%
Combined ratio
59.1
%
96.8
%
78.5
%
Three months ended June 30, 2019
Property
Casualty and Specialty
Other
Total
Gross premiums written
$
839,200
$
637,708
$
—
$
1,476,908
Net premiums written
$
544,115
$
478,850
$
—
$
1,022,965
Net premiums earned
$
425,013
$
486,489
$
—
$
911,502
Net claims and claim expenses incurred
146,874
306,501
(2)
453,373
Acquisition expenses
89,711
137,963
(192)
227,482
Operational expenses
36,764
23,016
34
59,814
Underwriting income
$
151,664
$
19,009
$
160
170,833
Net investment income
118,588
118,588
Net foreign exchange gains
9,309
9,309
Equity in earnings of other ventures
6,812
6,812
Other income
922
922
Net realized and unrealized gains on investments
191,247
191,247
Corporate expenses
(23,847)
(23,847)
Interest expense
(15,534)
(15,534)
Income before taxes and redeemable noncontrolling interests
458,330
Income tax expense
(9,475)
(9,475)
Net income attributable to redeemable noncontrolling interests
(71,812)
(71,812)
Dividends on preference shares
(9,189)
(9,189)
Net income available to RenaissanceRe common shareholders
$
367,854
Net claims and claim expenses incurred – current accident year
$
136,111
$
317,029
$
—
$
453,140
Net claims and claim expenses incurred – prior accident years
10,763
(10,528)
(2)
233
Net claims and claim expenses incurred – total
$
146,874
$
306,501
$
(2)
$
453,373
Net claims and claim expense ratio – current accident year
32.0
%
65.2
%
49.7
%
Net claims and claim expense ratio – prior accident years
2.6
%
(2.2)
%
—
%
Net claims and claim expense ratio – calendar year
34.6
%
63.0
%
49.7
%
Underwriting expense ratio
29.7
%
33.1
%
31.6
%
Combined ratio
64.3
%
96.1
%
81.3
%
RenaissanceRe Holdings Ltd.
Supplemental Financial Data - Segment Information
(in thousands of United States Dollars, except percentages)
(Unaudited)
Six months ended June 30, 2020
Property
Casualty and Specialty
Other
Total
Gross premiums written
$
2,263,062
$
1,464,531
$
—
$
3,727,593
Net premiums written
$
1,378,719
$
1,071,892
$
—
$
2,450,611
Net premiums earned
$
912,451
$
1,010,743
$
—
$
1,923,194
Net claims and claim expenses incurred
308,902
772,475
(151)
1,081,226
Acquisition expenses
180,123
264,090
1
444,214
Operational expenses
75,663
40,876
(1)
116,538
Underwriting income (loss)
$
347,763
$
(66,698)
$
151
281,216
Net investment income
188,778
188,778
Net foreign exchange losses
(12,923)
(12,923)
Equity in earnings of other ventures
13,605
13,605
Other loss
(5,637)
(5,637)
Net realized and unrealized gains on investments
337,683
337,683
Corporate expenses
(27,889)
(27,889)
Interest expense
(26,769)
(26,769)
Income before taxes and redeemable noncontrolling interests
748,064
Income tax expense
(21,029)
(21,029)
Net income attributable to redeemable noncontrolling interests
(216,819)
(216,819)
Dividends on preference shares
(16,345)
(16,345)
Net income attributable to RenaissanceRe common shareholders
$
493,871
Net claims and claim expenses incurred – current accident year
$
301,458
$
781,274
$
—
$
1,082,732
Net claims and claim expenses incurred – prior accident years
7,444
(8,799)
(151)
(1,506)
Net claims and claim expenses incurred – total
$
308,902
$
772,475
$
(151)
$
1,081,226
Net claims and claim expense ratio – current accident year
33.0
%
77.3
%
56.3
%
Net claims and claim expense ratio – prior accident years
0.9
%
(0.9)
%
(0.1)
%
Net claims and claim expense ratio – calendar year
33.9
%
76.4
%
56.2
%
Underwriting expense ratio
28.0
%
30.2
%
29.2
%
Combined ratio
61.9
%
106.6
%
85.4
%
Six months ended June 30, 2019
Property
Casualty and Specialty
Other
Total
Gross premiums written
$
1,871,584
$
1,169,619
$
—
$
3,041,203
Net premiums written
$
1,108,345
$
843,651
$
—
$
1,951,996
Net premiums earned
$
715,758
$
745,772
$
—
$
1,461,530
Net claims and claim expenses incurred
202,957
477,434
17
680,408
Acquisition expenses
143,450
208,175
(192)
351,433
Operational expenses
65,308
39,405
34
104,747
Underwriting income
$
304,043
$
20,758
$
141
324,942
Net investment income
200,682
200,682
Net foreign exchange gains
6,463
6,463
Equity in earnings of other ventures
11,473
11,473
Other income
4,093
4,093
Net realized and unrealized gains on investments
361,260
361,260
Corporate expenses
(62,636)
(62,636)
Interest expense
(27,288)
(27,288)
Income before taxes and redeemable noncontrolling interests
818,989
Income tax expense
(17,006)
(17,006)
Net income attributable to redeemable noncontrolling interests
(142,034)
(142,034)
Dividends on preference shares
(18,378)
(18,378)
Net income available to RenaissanceRe common shareholders
$
641,571
Net claims and claim expenses incurred – current accident year
$
190,317
$
494,164
$
—
$
684,481
Net claims and claim expenses incurred – prior accident years
12,640
(16,730)
17
(4,073)
Net claims and claim expenses incurred – total
$
202,957
$
477,434
$
17
$
680,408
Net claims and claim expense ratio – current accident year
26.6
%
66.3
%
46.8
%
Net claims and claim expense ratio – prior accident years
1.8
%
(2.3)
%
(0.2)
%
Net claims and claim expense ratio – calendar year
28.4
%
64.0
%
46.6
%
Underwriting expense ratio
29.1
%
33.2
%
31.2
%
Combined ratio
57.5
%
97.2
%
77.8
%
RenaissanceRe Holdings Ltd.
Supplemental Financial Data - Gross Premiums Written
(in thousands of United States Dollars)
(Unaudited)
Three months ended
Six months ended
June 30, 2020
June 30, 2019
June 30, 2020
June 30, 2019
Property Segment
Catastrophe
$
711,786
$
602,656
$
1,647,976
$
1,447,869
Other property
330,750
236,544
615,086
423,715
Property segment gross premiums written
$
1,042,536
$
839,200
$
2,263,062
$
1,871,584
Casualty and Specialty Segment
General casualty (1)
$
206,666
$
258,357
$
453,333
$
411,691
Professional liability (2)
222,737
167,206
453,224
316,583
Financial lines (3)
101,635
91,202
248,714
218,558
Other (4)
128,298
120,943
309,260
222,787
Casualty and Specialty segment gross premiums written
$
659,336
$
637,708
$
1,464,531
$
1,169,619
(1)
Includes automobile liability, casualty clash, employer’s liability, umbrella or excess casualty, workers’ compensation and general liability.
(2)
Includes directors and officers, medical malpractice, and professional indemnity.
(3)
Includes financial guaranty, mortgage guaranty, political risk, surety and trade credit.
(4)
Includes accident and health, agriculture, aviation, cyber, energy, marine, satellite and terrorism. Lines of business such as regional multi-line and whole account may have characteristics of various other classes of business, and are allocated accordingly.
RenaissanceRe Holdings Ltd.
Supplemental Financial Data - Total Investment Result
(in thousands of United States Dollars, except percentages)
(Unaudited)
Three months ended
Six months ended
June 30, 2020
June 30, 2019
June 30, 2020
June 30, 2019
Fixed maturity investments trading
$
69,943
$
88,106
$
143,281
$
149,589
Short term investments
6,049
17,807
18,141
29,651
Equity investments trading
1,666
916
3,217
1,943
Other investments
Catastrophe bonds
13,519
11,781
27,658
20,472
Other
1,107
1,914
2,736
3,554
Cash and cash equivalents
837
2,306
2,341
3,823
93,121
122,830
197,374
209,032
Investment expenses
(3,816)
(4,242)
(8,596)
(8,350)
Net investment income
89,305
118,588
188,778
200,682
Net realized and unrealized gains (losses) on:
Fixed maturity investments trading (1)
322,711
171,920
423,932
288,621
Equity investments trading (1)
113,506
22,083
(38,376)
76,027
Other investments
Catastrophe bonds
4,452
(11,902)
(9,900)
(14,112)
Other
7,721
9,146
(37,973)
10,724
Net realized and unrealized gains on investments
448,390
191,247
337,683
361,260
Total investment result
$
537,695
$
309,835
$
526,461
$
561,942
Total investment return - annualized
11.8
%
8.0
%
5.8
%
7.3
%
(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 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 Income Available to RenaissanceRe Common Shareholders and Operating Return on Average Common Equity - Annualized
The Company uses “operating income available to RenaissanceRe common shareholders” as a measure to evaluate the underlying fundamentals of its operations and believes it to be a useful measure of its corporate performance. “Operating income available to RenaissanceRe common shareholders” as used herein differs from “net income available to RenaissanceRe common shareholders,” which the Company believes is the most directly comparable GAAP measure, by the exclusion of net realized and unrealized gains and losses on investments, excluding other investments - catastrophe bonds, net foreign exchange gains and losses, transaction and integration expenses associated with the acquisition of TMR, 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 income available to RenaissanceRe common shareholders” is useful to investors because it more accurately measures and predicts the Company’s results of operations by removing the variability arising from: fluctuations in the 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; certain transaction and integration expenses associated with the acquisition of TMR; 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 income available to RenaissanceRe common shareholders” to calculate “operating income available to RenaissanceRe common shareholders per common share - diluted” and “operating return on average common equity - annualized.” The following table is a reconciliation of: (1) net income available to RenaissanceRe common shareholders to “operating income available to RenaissanceRe common shareholders”; (2) net income available to RenaissanceRe common shareholders per common share - diluted to “operating income available to RenaissanceRe common shareholders per common share - diluted”; and (3) return on average common equity - annualized to “operating return on average common equity - annualized.” Comparative information for all prior periods has been updated to conform to the current methodology and presentation.
Three months ended
Six months ended
(in thousands of United States Dollars, except per share amounts and percentages)
June 30, 2020
June 30, 2019
June 30, 2020
June 30, 2019
Net income available to RenaissanceRe common shareholders
$
575,845
$
367,854
$
493,871
$
641,571
Adjustment for net realized and unrealized gains on investments, excluding other investments - catastrophe bonds
(443,938)
(203,149)
(347,583)
(375,372)
Adjustment for net foreign exchange losses (gains)
7,195
(9,309)
12,923
(6,463)
Adjustment for transaction and integration expenses associated with the acquisition of TMR
2,279
14,483
6,702
40,003
Adjustment for income tax expense (1)
21,223
10,442
17,082
18,776
Adjustment for net income attributable to redeemable noncontrolling interests (2)
27,472
18,518
40,491
33,932
Operating income available to RenaissanceRe common shareholders
$
190,076
$
198,839
$
223,486
$
352,447
Net income available to RenaissanceRe common shareholders per common share - diluted
$
12.63
$
8.35
$
11.02
$
14.81
Adjustment for net realized and unrealized gains on investments, excluding other investments - catastrophe bonds
(9.86)
(4.67)
(7.85)
(8.77)
Adjustment for net foreign exchange losses (gains)
0.16
(0.21)
0.29
(0.15)
Adjustment for transaction and integration expenses associated with the acquisition of TMR
0.05
0.33
0.15
0.93
Adjustment for income tax expense (1)
0.47
0.24
0.39
0.44
Adjustment for net income attributable to redeemable noncontrolling interests (2)
0.61
0.43
0.91
0.79
Operating income available to RenaissanceRe common shareholders per common share - diluted
$
4.06
$
4.47
$
4.91
$
8.05
Return on average common equity - annualized
38.5
%
28.9
%
17.1
%
26.4
%
Adjustment for net realized and unrealized gains on investments, excluding other investments - catastrophe bonds
(29.7)
%
(16.0)
%
(11.9)
%
(15.5)
%
Adjustment for net foreign exchange losses (gains)
0.5
%
(0.7)
%
0.4
%
(0.3)
%
Adjustment for transaction and integration expenses associated with the acquisition of TMR
0.2
%
1.1
%
0.2
%
1.6
%
Adjustment for income tax expense (1)
1.4
%
0.8
%
0.6
%
0.8
%
Adjustment for net income attributable to redeemable noncontrolling interests (2)
1.8
%
1.5
%
1.4
%
1.4
%
Operating return on average common equity - annualized
12.7
%
15.6
%
7.8
%
14.4
%
(1)
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.
(2)
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”.
At
June 30, 2020
March 31, 2020
December 31, 2019
September 30, 2019
June 30, 2019
Book value per common share
$
134.27
$
117.15
$
120.53
$
120.07
$
119.17
Adjustment for goodwill and other intangibles (1)
(5.56)
(6.46)
(6.50)
(6.55)
(6.60)
Tangible book value per common share
128.71
110.69
114.03
113.52
112.57
Adjustment for accumulated dividends
21.38
21.03
20.68
20.34
20.00
Tangible book value per common share plus accumulated dividends
$
150.09
$
131.72
$
134.71
$
133.86
$
132.57
Quarterly change in book value per common share
14.6
%
(2.8)
%
0.4
%
0.8
%
7.3
%
Quarterly change in tangible book value per common share plus change in accumulated dividends
16.6
%
(2.6)
%
0.7
%
1.1
%
8.2
%
Year to date change in book value per common share
11.4
%
(2.8)
%
15.7
%
15.3
%
14.4
%
Year to date change in tangible book value per common share plus change in accumulated dividends
13.5
%
(2.6)
%
17.9
%
17.1
%
15.7
%
(1)
At June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019 and June 30, 2019, goodwill and other intangibles included $23.5 million, $24.2 million, $24.9 million, $25.6 million, $26.3 million and $27.0 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/20200728005977/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
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