RenaissanceRe Achieves Record Operating EPS of $3.72 per Common Share for 2002 First Quarter, vs. $1.84 for Comparable Quarter of 2001
-- Achieves ROE of 31% for the First Quarter -- 73% Growth in Managed Cat Premium for the First Quarter -- Reports Growth in Premiums from Specialty Reinsurance and Cat Exposed Primary Insurance of $100 million -- Comfortable with Increase in 2002 EPS Estimates to between $12.00 and $12.50RenaissanceRe Holdings Ltd. (NYSE: RNR) today reported $86.6 million in first quarter net operating income available to common shareholders (excluding realized investment gains and losses), compared to $37.3 million in the first quarter of 2001. Operating earnings per common share grew to $3.72 in the first quarter, from $1.84 per common share in the first quarter of the previous year. Net income available to common shareholders rose 94% to $87.3 million, or $3.75 per common share in the quarter, from $44.9 million or $2.22 per common share for the same quarter of 2001.
James N. Stanard, Chairman and CEO, commented: "Our record first quarter demonstrates the earnings power of our business in a period with low catastrophe losses. In addition, we achieved outstanding success, reflected by substantial revenue growth, across all our key business activities--catastrophe reinsurance, specialty reinsurance and catastrophe exposed commercial insurance. Lower than usual first quarter loss activity, together with projected increases in 2002 premiums, lead us to be comfortable with estimates of $12.00 to $12.50 for 2002 operating EPS."
Gross premiums written for the first quarter of 2002 increased by over 100% to $460.8 million, compared to $198.2 million for the same quarter of 2001. Net premiums written for the first quarter of 2002 were $379.1 million, versus $121.2 million for the same quarter of 2001. Net premiums earned for the first quarter of 2002 were $150.3 million, compared to $83.9 million for the same quarter of 2001. Those premiums include $95.3 million of gross written premiums, $95.3 million of net written premiums and $23.6 million of net premiums earned by the Company's joint venture, DaVinci Re. Premiums also include $34.9 million assumed from the OPCat Ltd. joint venture in connection with the previously announced decision of Overseas Partners Ltd. to exit the reinsurance business.
Total written Managed Catastrophe Premiums, representing gross catastrophe premiums written by RenaissanceRe Holdings Ltd. and by related joint ventures, increased by 73% and were $370.4 million for the first quarter, compared to $214.7 million for the same quarter of 2001.
Net investment income, excluding realized and unrealized investment gains and losses, for the first quarter of 2002 increased to $22.8 million, compared to $17.9 million for the same period in 2001, due primarily to the Company's capital raising activities during the second half of 2001.
The Company also reported an increase in other income to $8.1 million for the quarter, from $3.9 million for the same quarter in 2001. The increase primarily relates to an increase of $1.6 million from profits and fees earned from its joint venture activities and to $2.5 million of gains from contracts triggered by physical variables, recognized during the quarter.
The Company benefited from the low level of catastrophe losses in the quarter and, accordingly, the Company's claims and claim expenses incurred for the quarter ended March 31, 2002 were $43.1 million, or 28.7% of net premiums earned. In comparison, claims and claim expenses incurred for the quarter ended March 31, 2001 were $41.9 million, or 49.9% of net premiums earned.
The Company is reporting for the first time its pro-forma "other income", representing aggregate earnings from its joint venture activities, other fees related to catastrophe business, and other items. The principal difference between other income as reported and the pro-forma presentation is that the results of DaVinciRe Holdings Ltd. are reflected as if it were reported under the equity method and the pro-forma presentation also includes fees from other managed cat business. During the quarter, the Company recorded pro-forma other income of $22.3 million, compared to $6.3 million during the first quarter of 2001. Of the total $22.3 million of pro-forma other income during the quarter, $12.0 million relates to fees and profit commissions, compared to $3.1 million in the first quarter of 2001, $7.2 million relates to the Company's equity pick up from joint ventures, versus $2.7 million in the comparable quarter of 2001 and the remaining $3.1 million relates primarily to income from contracts triggered by physical variables, compared to $0.5 million in the first quarter of last year.
Operating expenses were $10.7 million for the first quarter of 2002, compared to $8.5 million for the same quarter of 2001. The increase was due to additional costs for personnel and operating expenses associated with the Company's increase in operations.
Shareholders' equity at March 31, 2002 was $1.29 billion. Shareholders' equity attributable to common shareholders was $1.14 billion at March 31, 2002, compared to $1.08 billion at December 31, 2001. Book value per common share at March 31, 2002 was $50.25 per common share, compared to $47.50 per common share at December 31, 2001.
Separately, the Company announced that DaVinciRe Holdings Ltd. signed a definitive agreement to replace the $100 million bridge financing provided by RenaissanceRe with a third party credit facility led by Citibank, N.A.
RenaissanceRe Holdings Ltd. will host a conference call on Tuesday, April 23, 2002 at 9:30 a.m. (ET) to discuss this release. Live broadcast of the conference call will be available through the Investor Section of RenaissanceRe's website at www.renre.com.
RenaissanceRe Holdings Ltd. is a global provider of reinsurance and insurance. The Company's principal product is property catastrophe reinsurance.
Cautionary Statement under "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995: Statements made in this news release contain information about the Company's future business prospects. These statements may be considered "forward-looking." These statements are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by such forward-looking statements. For further information regarding cautionary statements and factors affecting future operations results, please refer to RenaissanceRe Holdings Ltd.'s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2001.
RenaissanceRe Holdings Ltd. and Subsidiaries Summary Consolidated Balance Sheets (in thousands of United States Dollars, except per share amounts) As at March 31, 2002 December 31, 2001 (Unaudited) (Audited) Assets Fixed maturity investments available for sale, at fair value (Amortized cost $1,545,137 and $1,266,188 at March 31, 2002 and December 31, 2001, respectively) $ 1,551,140 $ 1,282,483 Short term investments 10,131 7,372 Other investments 49,965 38,307 Cash and cash equivalents 709,743 866,268 Total investments and cash 2,320,979 2,194,430 Premiums receivable 348,113 102,202 Ceded reinsurance balances 77,828 41,690 Losses and premiums recoverable 213,558 217,556 Accrued investment income 18,192 17,696 Deferred acquisition costs 42,345 12,814 Other assets 69,734 57,264 Total assets $ 3,090,749 $ 2,643,652 Liabilities, Minority Interest and Shareholders' Equity Liabilities Reserve for claims and claim expenses $ 610,493 $ 572,877 Reserve for unearned premiums 402,797 125,053 Debt 183,500 183,500 Reinsurance balances payable 135,923 115,967 Other 71,777 58,650 Total liabilities 1,404,490 1,056,047 Minority Interest - Capital Securities 84,630 87,630 Minority Interest - DaVinci 308,530 274,951 Shareholders' Equity Series A Preference Shares 150,000 150,000 Common shares and additional paid-in capital 263,173 264,623 Unearned stock grant compensation (17,968) (20,163) Accumulated other comprehensive income 6,003 16,295 Retained earnings 891,891 814,269 Total shareholders' equity 1,293,099 1,225,024 Total liabilities, minority interest, and shareholders' equity $ 3,090,749 $ 2,643,652 Book value per Common Share $ 50.25 $ 47.50 Common Shares outstanding 22,748 22,631 RenaissanceRe Holdings Ltd. and Subsidiaries Summary Consolidated Statements of Income For the periods ended March 31, 2002 and 2001 (in thousands of United States Dollars, except per share amounts) (Unaudited) Quarters Ended March 31, 2002 March 31, 2001 Revenues Gross premiums written $ 460,834 $ 198,208 Net premiums written $ 379,096 $ 121,232 Increase in unearned premiums (228,788) (37,332) Net premiums earned 150,308 83,900 Net investment income 22,783 17,884 Net foreign exchange losses (1,950) (296) Other income 8,129 3,868 Net realized gains on investments 686 7,616 Total revenues 179,956 112,972 Expenses Claims and claim expenses incurred 43,118 41,895 Acquisition expenses 18,549 12,545 Operational expenses 10,663 8,512 Corporate expenses 2,690 1,528 Interest expense 2,714 864 Total expenses 77,734 65,344 Income before minority interest and taxes 102,222 47,628 Minority interest - Capital Securities 1,833 1,847 Minority interest - DaVinci 9,477 - Income before taxes 90,912 45,781 Income tax expense 596 876 Net income $ 90,316 $ 44,905 Dividends on Series A Preference Shares 3,038 - Net income available to Common Shareholders $ 87,278 $ 44,905 Operating earnings per Common Share - diluted $ 3.72 $ 1.84 Earnings per Common Share - basic $ 3.92 $ 2.34 Earnings per Common Share - diluted $ 3.75 $ 2.22 Average shares outstanding - basic 22,263 19,227 Average shares outstanding - diluted 23,262 20,230 Claims and claim expense ratio 28.7% 49.9% Expense ratio 19.4% 25.1% Combined ratio 48.1% 75.0% Operating return on average equity (annualized) 31.2% 20.7% RenaissanceRe Holdings Ltd. and Subsidiaries Supplemental Financial Data (in thousands of United States Dollars) (Unaudited) Gross Written Premiums Quarters Ended March 31, 2002 March 31, 2001 Cat Premium Renaissance $ 201,920 $ 166,047 Assumed from OPCat 34,873 - DaVinci 95,269 - Total Cat Premium 332,062 166,047 Specialty Reinsurance Premium 101,023 22,266 Total Reinsurance Premium 433,085 188,313 Glencoe Premium 22,677 1,756 Other Primary Premium 5,072 8,139 Total Primary 27,749 9,895 Total Premiums $ 460,834 $ 198,208 Top Layer Re Premiums $ 38,292 $ 19,540 Total Managed Cat Premiums $ 370,354 $ 214,652 Other Income Quarters Ended March 31, 2002 March 31, 2001 As Reported Cat business - fee income $ 1,001 $ 675 Cat business - equity pick up 3,990 2,700 Other items 3,138 493 Total other income - as reported $ 8,129 $ 3,868 Pro-forma (1) Cat business - fee income $ 11,976 $ 3,053 Cat business - equity pick up 7,146 2,700 Other items 3,138 539 Total other income - pro-forma $ 22,260 $ 6,292 (1) Adjusted to reflect DaVinci under the equity method and other fee income on managed cat business.
CONTACT: RenaissanceRe Holdings Ltd. Investor: Martin J. Merritt, 441/299-7230 or Kekst and Company Media: Sarah Zitter Milstein or Dawn Dover, 212/521-4800 URL: http://www.businesswire.com Today's News On The Net - Business Wire's full file on the Internet with Hyperlinks to your home page.
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