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
- Gross premiums written increased by $225.0 million, or 15.2%,
to $1.7 billion, in the second quarter of 2020 compared to the
second quarter of 2019, driven by an increase of $203.3 million in
the Property segment and an increase of $21.6 million in the
Casualty and Specialty segment.
- Underwriting income of $217.1 million and a combined ratio of
78.5% in the second quarter of 2020, compared to underwriting
income of $170.8 million and a combined ratio of 81.3% in the
second quarter of 2019. The Property segment generated underwriting
income of $200.6 million and had a combined ratio of 59.1% in the
second quarter of 2020. The Casualty and Specialty segment
generated underwriting income of $16.5 million and had a combined
ratio of 96.8% in the second quarter of 2020.
- Total investment result was a gain of $537.7 million in the
second quarter of 2020, generating an annualized total investment
return of 11.8%, compared to a gain of $309.8 million and an
annualized total investment return of 8.0% in the second quarter of
2019.
- On June 5, 2020, the Company issued 6,325,000 of its common
shares in an underwritten public offering at a public offering
price of $166.00 per share. Concurrently with the public offering,
the Company raised $75.0 million through the issuance of 451,807 of
its common shares at a price of $166.00 per share to State Farm
Mutual Automobile Insurance Company, one of the Company’s existing
stockholders, in a private placement. The total net proceeds from
the offerings were $1.1 billion. The Company intends to use the net
proceeds from these offerings for general corporate purposes, which
may include expanding existing business lines, entering new
business lines, forming new joint ventures, or acquiring books of
business from other companies.
- Over $250.0 million of gross capital raised in the second
quarter of 2020 through the Company’s managed joint ventures and
third-party capital vehicles, including Upsilon RFO Re Ltd.,
Vermeer Reinsurance Ltd. (“Vermeer”) and RenaissanceRe Medici Fund
Ltd (“Medici”).
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
- The Company’s total investment result, which includes the sum
of net investment income and net realized and unrealized gains on
investments, was a gain of $537.7 million in the second quarter of
2020, compared to a gain of $309.8 million in the second quarter of
2019, an increase of $227.9 million. The primary driver of the
total investment result in the second quarter of 2020 was net
realized and unrealized gains on investments of $448.4 million
principally within the fixed maturity and equity investments
trading portfolios.
- Net income attributable to redeemable noncontrolling interests
in the second quarter of 2020 was $118.7 million, compared to $71.8
million in the second quarter of 2019. The increase was primarily
driven by growth and improved performance of DaVinciRe Holdings
Ltd., Medici and Vermeer.
- In the second quarter of 2020, total fee income increased by
$5.3 million, to $45.5 million, compared to $40.2 million in the
second quarter of 2019, primarily driven by an increase in the
dollar value of capital being managed, combined with the improved
underlying performance of our joint ventures and managed capital
vehicles.
- In the second quarter of 2020, corporate expenses decreased by
$11.9 million, to $11.9 million, compared to $23.8 million in the
second quarter of 2019, primarily driven by $14.5 million of
expenses incurred in connection with the acquisition of Tokio
Millennium Re AG (now known as RenaissanceRe Europe AG), Tokio
Millennium Re (UK) Limited (now known as RenaissanceRe (UK)
Limited) and their subsidiaries (collectively, "TMR") during the
second quarter of 2019 compared to $2.1 million in the second
quarter of 2020.
- Income tax expense was $29.9 million in the second quarter of
2020, compared to $9.5 million in the second quarter of 2019,
principally driven by investment gains in our U.S.-based
operations.
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
RenaissanceRe (NYSE:RNR)
Historical Stock Chart
From Apr 2024 to May 2024
RenaissanceRe (NYSE:RNR)
Historical Stock Chart
From May 2023 to May 2024