RenaissanceRe Reports Net Loss of $504.8 Million for the Third Quarter of 2017, or a Loss of $12.75 Per Diluted Common Share; Quarterly Operating Loss of $546.9 Million or a Loss of $13.81 Per Diluted Common Share
PEMBROKE,
THIRD QUARTER 2017 SUMMARY
-
Net negative impact from Hurricanes Harvey, Irma and Maria, the Mexico
City Earthquake and certain losses associated with aggregate loss
contracts (“Q3 2017 Aggregate Losses”) (collectively referred to as
the “Q3 2017 Large Loss Events”) of
$615.1 million included in the Company’s net loss attributable toRenaissanceRe common shareholders in the third quarter of 2017. -
Underwriting loss of
$793.2 million and a combined ratio of 244.8% in the third quarter of 2017, driven by the Q3 2017 Large Loss Events, which resulted in an underwriting loss of$838.7 million and added 156.0 percentage points to the combined ratio in the third quarter of 2017. -
Gross premiums written increased
$210.0 million , or 48.8%, to$640.3 million , in the third quarter of 2017, compared to the third quarter of 2016. Included in gross premiums written in the third quarter of 2017 was$169.8 million of reinstatement premiums written associated with the Q3 2017 Large Loss Events. -
Total investment result was a gain of
$82.3 million in the third quarter of 2017, generating an annualized total investment return of 3.4%.
Net Negative Impact of the Q3 2017 Large Loss Events
Net negative impact from the Q3 2017 Large Loss Events includes the sum
of estimates of net claims and claim expenses incurred, earned
reinstatement premiums assumed and ceded, lost and earned profit
commissions and redeemable noncontrolling interest. The Company’s
estimates are based on a review of its potential exposures, preliminary
discussions with certain counterparties and catastrophe modeling
techniques. Meaningful uncertainty regarding the estimates and the
nature and extent of the losses from these events remains, driven by the
magnitude and recent occurrence of each event, relatively limited claims
data received to date, the contingent nature of business interruption
and other exposures, potential uncertainties relating to reinsurance
recoveries and other factors inherent in loss estimation, among other
things. The Company believes these estimates remain even more uncertain
for the two more recent events, Hurricane Maria and the
See the financial data below for additional information detailing the net negative impact of the Q3 2017 Large Loss Events on the Company’s consolidated financial statements in the third quarter of 2017.
Three months ended September 30, 2017 |
Hurricane |
Hurricane |
Hurricane |
Mexico |
Q3 2017 |
Total | |||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||
Net claims and claim expenses incurred | $ | (275,409 | ) | $ | (300,536 | ) | $ | (236,478 | ) | $ | (68,068 | ) | $ | (128,779 | ) | $ | (1,009,270 | ) | |||||||
Gross reinstatement premiums earned | 65,715 | 67,342 | 29,138 | 6,078 | 1,500 | 169,773 | |||||||||||||||||||
Ceded reinstatement premiums earned | (9,035 | ) | (18,190 | ) | (1,537 | ) | (43 | ) | — | (28,805 | ) | ||||||||||||||
(Lost) earned profit commissions | (11,358 | ) | 16,192 | 13,329 | 3,329 | 8,146 | 29,638 | ||||||||||||||||||
Net negative impact on underwriting result | (230,087 | ) | (235,192 | ) | (195,548 | ) | (58,704 | ) | (119,133 | ) | (838,664 | ) | |||||||||||||
Redeemable noncontrolling interest - DaVinciRe | 39,089 | 69,152 | 63,064 | 14,254 | 38,000 | 223,559 | |||||||||||||||||||
Net negative impact on net loss attributable to RenaissanceRe common shareholders | $ | (190,998 | ) | $ | (166,040 | ) | $ | (132,484 | ) | $ | (44,450 | ) | $ | (81,133 | ) | $ | (615,105 | ) | |||||||
Percentage point impact on consolidated combined ratio | 30.1 | 32.9 | 29.9 | 9.2 | 21.4 | 156.0 | |||||||||||||||||||
Net negative impact on Property segment underwriting result | $ | (219,976 | ) | $ | (232,783 | ) | $ | (178,896 | ) | $ | (57,860 | ) | $ | (119,133 | ) | $ | (808,648 | ) | |||||||
Net negative impact on Casualty and Specialty segment underwriting result | (10,111 | ) | (2,409 | ) | (16,652 | ) | (844 | ) | — | (30,016 | ) | ||||||||||||||
Net negative impact on underwriting result | $ | (230,087 | ) | $ | (235,192 | ) | $ | (195,548 | ) | $ | (58,704 | ) | $ | (119,133 | ) | $ | (838,664 | ) | |||||||
Underwriting Results by Segment
Property Segment
Gross premiums written in the Property segment were
Excluding reinstatement premiums written associated with Q3 2017 Large
Loss Events, the increase in gross premiums written in the Property
segment was principally driven by the other property class of business,
where the Company was able to increase its participation on a select
number of transactions and enter into certain new transactions it
believes have comparably attractive risk-return attributes. Gross
premiums written in the other property class of business were
Gross premiums written in the catastrophe class of business were
The Property segment incurred an underwriting loss of
In addition, the Property segment experienced
Casualty and Specialty Segment
Gross premiums written in the Casualty and Specialty segment were
The Casualty and Specialty segment incurred an underwriting loss of
During the third quarter of 2017, the Casualty and Specialty segment
experienced adverse development on prior accident years net claims and
claim expenses of
The Casualty and Specialty segment experienced a 6.9 percentage point
decrease in its underwriting expense ratio in the third quarter of 2017,
compared to the third quarter of 2016, driven in part by a decrease in
the net acquisition ratio, combined with a
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
$82.3 million in the third quarter of 2017, compared to$111.2 million in the third quarter of 2016, a decrease of$28.9 million . The decrease in the Company’s total investment result was principally driven by unrealized losses in the Company’s other investment portfolio, specifically its catastrophe bond portfolio, which was impacted by a number of large catastrophe events occurring in the third quarter of 2017, combined with lower unrealized gains on the Company’s equity investments trading portfolio primarily due to lower returns in the current quarter. -
Net loss attributable to noncontrolling interests in the third quarter
of 2017 was
$204.3 million , compared to net income attributable to noncontrolling interests of$35.6 million in the third quarter of 2016, a change of$239.9 million , principally due to underwriting losses associated with the Q3 2017 Large Loss Events incurred byDaVinciRe Holdings Ltd. (“DaVinciRe”) and a decrease in the Company’s ownership in DaVinciRe to 23.5% at September 30, 2017, compared to 24.0% at September 30, 2016. -
Effective
October 1, 2017 , DaVinciRe completed an equity raise of$248.6 million from third-party investors andRenaissanceRe . In addition,RenaissanceRe sold an aggregate of$49.7 million of its shares in DaVinciRe to third-party shareholders. The Company’s noncontrolling economic ownership in DaVinciRe subsequent to these transactions was 22.1%, effectiveOctober 1, 2017 . -
Effective
October 1, 2017 , Upsilon RFO issued$46.5 million of non-voting preference shares to investors, including$17.7 million to the Company. EffectiveOctober 1, 2017 , the Company’s participation in the risks assumed by Upsilon RFO was 16.0%. -
During the third quarter of 2017, the Company repurchased 270 thousand
common shares in open market transactions at an aggregate cost of
$38.9 million and an average price of$144.01 per common share.
This Press Release includes certain non-GAAP financial measures
including “operating (loss) income (attributable) available to
Please refer to the “Investor Information - 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.
About
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 frequency and
severity of catastrophic and other events that the Company covers; the
effectiveness of the Company’s claims and claim expense reserving
process; the Company’s ability to maintain its financial strength
ratings; the effect of climate change on the Company’s business;
collection on claimed retrocessional coverage, and new retrocessional
reinsurance being available on acceptable terms and providing the
coverage that we intended to obtain; the effect of U.S. business tax
reform proposals; adverse tax developments, including potential changes
to the taxation of inter-company or related party transactions, or
changes to the tax treatment of shareholders or investors in
RenaissanceRe Holdings Ltd. | ||||||||||||||||
Summary Consolidated Statements of Operations | ||||||||||||||||
(in thousands of United States Dollars, except per share amounts and percentages) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
September 30, 2017 |
September 30, 2016 |
September 30, 2017 |
September 30, 2016 |
|||||||||||||
Revenues | ||||||||||||||||
Gross premiums written | $ | 640,269 | $ | 430,224 | $ | 2,389,774 | $ | 2,051,485 | ||||||||
Net premiums written | $ | 483,221 | $ | 284,222 | $ | 1,583,102 | $ | 1,315,813 | ||||||||
Decrease (increase) in unearned premiums | 64,571 | 62,299 | (287,000 | ) | (264,284 | ) | ||||||||||
Net premiums earned | 547,792 | 346,521 | 1,296,102 | 1,051,529 | ||||||||||||
Net investment income | 40,257 | 51,423 | 148,745 | 134,410 | ||||||||||||
Net foreign exchange (losses) gains | (156 | ) | (5,986 | ) | 11,118 | (8,368 | ) | |||||||||
Equity in earnings (losses) of other ventures | 1,794 | (11,630 | ) | 5,830 | (3,997 | ) | ||||||||||
Other income | 2,996 | 2,268 | 7,053 | 9,001 | ||||||||||||
Net realized and unrealized gains on investments | 42,052 | 59,870 | 143,538 | 191,295 | ||||||||||||
Total revenues | 634,735 | 442,466 | 1,612,386 | 1,373,870 | ||||||||||||
Expenses | ||||||||||||||||
Net claims and claim expenses incurred | 1,221,696 | 112,575 | 1,557,364 | 406,930 | ||||||||||||
Acquisition expenses | 76,761 | 80,580 | 248,294 | 215,177 | ||||||||||||
Operational expenses | 42,537 | 40,493 | 131,586 | 147,801 | ||||||||||||
Corporate expenses | 4,413 | 11,537 | 14,335 | 25,514 | ||||||||||||
Interest expense | 11,799 | 10,536 | 32,416 | 31,610 | ||||||||||||
Total expenses | 1,357,206 | 255,721 | 1,983,995 | 827,032 | ||||||||||||
(Loss) income before taxes | (722,471 | ) | 186,745 | (371,609 | ) | 546,838 | ||||||||||
Income tax benefit (expense) | 18,977 | 1,316 | 14,739 | (8,040 | ) | |||||||||||
Net (loss) income | (703,494 | ) | 188,061 | (356,870 | ) | 538,798 | ||||||||||
Net loss (income) attributable to noncontrolling interests | 204,277 | (35,641 | ) | 132,338 | (110,867 | ) | ||||||||||
Net (loss) income attributable to RenaissanceRe | (499,217 | ) | 152,420 | (224,532 | ) | 427,931 | ||||||||||
Dividends on preference shares | (5,595 | ) | (5,595 | ) | (16,786 | ) | (16,786 | ) | ||||||||
Net (loss) income (attributable) available to RenaissanceRe common shareholders | $ | (504,812 | ) | $ | 146,825 | $ | (241,318 | ) | $ | 411,145 | ||||||
Net (loss) income (attributable) available to RenaissanceRe common shareholders per common share - basic | $ | (12.75 | ) | $ | 3.58 | $ | (6.04 | ) | $ | 9.77 | ||||||
Net (loss) income (attributable) available to RenaissanceRe common shareholders per common share - diluted | $ | (12.75 | ) | $ | 3.56 | $ | (6.04 | ) | $ | 9.71 | ||||||
Operating (loss) income (attributable) available to RenaissanceRe common shareholders per common share - diluted (1) | $ | (13.81 | ) | $ | 2.09 | $ | (9.63 | ) | $ | 5.14 | ||||||
Average shares outstanding - basic | 39,591 | 40,513 | 39,979 | 41,594 | ||||||||||||
Average shares outstanding - diluted | 39,591 | 40,733 | 39,979 | 41,842 | ||||||||||||
Net claims and claim expense ratio | 223.0 | % | 32.5 | % | 120.2 | % | 38.7 | % | ||||||||
Underwriting expense ratio | 21.8 | % | 34.9 | % | 29.3 | % | 34.5 | % | ||||||||
Combined ratio | 244.8 | % | 67.4 | % | 149.5 | % | 73.2 | % | ||||||||
Return on average common equity - annualized | (47.2 | )% | 13.5 | % | (7.4 | )% | 12.6 | % | ||||||||
Operating return on average common equity - annualized (1) | (51.1 | )% | 8.0 | % | (11.7 | )% | 6.7 | % | ||||||||
(1) See Comments on Regulation G for a reconciliation of non-GAAP financial measures. |
||||||||||||||||
RenaissanceRe Holdings Ltd. | |||||||
Summary Consolidated Balance Sheets | |||||||
(in thousands of United States Dollars, except per share amounts) | |||||||
September 30, 2017 |
December 31, 2016 |
||||||
Assets | (Unaudited) | (Audited) | |||||
Fixed maturity investments trading, at fair value | $ | 7,092,969 | $ | 6,891,244 | |||
Short term investments, at fair value | 1,497,262 | 1,368,379 | |||||
Equity investments trading, at fair value | 402,035 | 383,313 | |||||
Other investments, at fair value | 548,492 | 549,805 | |||||
Investments in other ventures, under equity method | 101,420 | 124,227 | |||||
Total investments | 9,642,178 | 9,316,968 | |||||
Cash and cash equivalents | 581,576 | 421,157 | |||||
Premiums receivable | 1,521,266 | 987,323 | |||||
Prepaid reinsurance premiums | 635,756 | 441,260 | |||||
Reinsurance recoverable | 1,588,304 | 279,564 | |||||
Accrued investment income | 38,366 | 38,076 | |||||
Deferred acquisition costs | 434,914 | 335,325 | |||||
Receivable for investments sold | 193,758 | 105,841 | |||||
Other assets | 164,019 | 175,382 | |||||
Goodwill and other intangibles | 244,787 | 251,186 | |||||
Total assets | $ | 15,044,924 | $ | 12,352,082 | |||
Liabilities, Noncontrolling Interests and Shareholders’ Equity | |||||||
Liabilities | |||||||
Reserve for claims and claim expenses | $ | 5,192,313 | $ | 2,848,294 | |||
Unearned premiums | 1,713,069 | 1,231,573 | |||||
Debt | 989,245 | 948,663 | |||||
Reinsurance balances payable | 1,034,454 | 673,983 | |||||
Payable for investments purchased | 377,543 | 305,714 | |||||
Other liabilities | 301,559 | 301,684 | |||||
Total liabilities | 9,608,183 | 6,309,911 | |||||
Redeemable noncontrolling interest | 1,033,729 | 1,175,594 | |||||
Shareholders’ Equity | |||||||
Preference shares | 400,000 | 400,000 | |||||
Common shares | 40,029 | 41,187 | |||||
Additional paid-in capital | 32,852 | 216,558 | |||||
Accumulated other comprehensive income | 161 | 1,133 | |||||
Retained earnings | 3,929,970 | 4,207,699 | |||||
Total shareholders’ equity attributable to RenaissanceRe | 4,403,012 | 4,866,577 | |||||
Total liabilities, noncontrolling interests and shareholders’ equity | $ | 15,044,924 | $ | 12,352,082 | |||
Book value per common share | $ | 100.00 | $ | 108.45 | |||
RenaissanceRe Holdings Ltd. | |||||||||||||||||||
Supplemental Financial Data - Segment Information | |||||||||||||||||||
(in thousands of United States Dollars, except percentages) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three months ended September 30, 2017 | |||||||||||||||||||
Property |
Casualty and |
Other | Total | ||||||||||||||||
Gross premiums written | $ | 325,395 | $ | 314,881 | $ | (7 | ) | $ | 640,269 | ||||||||||
Net premiums written | $ | 269,393 | $ | 213,835 | $ | (7 | ) | $ | 483,221 | ||||||||||
Net premiums earned | $ | 336,838 | $ | 210,961 | $ | (7 | ) | $ | 547,792 | ||||||||||
Net claims and claim expenses incurred | 1,044,418 | 177,433 | (155 | ) | 1,221,696 | ||||||||||||||
Acquisition expenses | 17,514 | 59,248 | (1 | ) | 76,761 | ||||||||||||||
Operational expenses | 25,123 | 17,389 | 25 | 42,537 | |||||||||||||||
Underwriting (loss) income | $ | (750,217 | ) | $ | (43,109 | ) | $ | 124 | (793,202 | ) | |||||||||
Net investment income | 40,257 | 40,257 | |||||||||||||||||
Net foreign exchange losses | (156 | ) | (156 | ) | |||||||||||||||
Equity in earnings of other ventures | 1,794 | 1,794 | |||||||||||||||||
Other income | 2,996 | 2,996 | |||||||||||||||||
Net realized and unrealized gains on investments | 42,052 | 42,052 | |||||||||||||||||
Corporate expenses | (4,413 | ) | (4,413 | ) | |||||||||||||||
Interest expense | (11,799 | ) | (11,799 | ) | |||||||||||||||
(Loss) income before taxes and redeemable noncontrolling interests | (722,471 | ) | |||||||||||||||||
Income tax benefit | 18,977 | 18,977 | |||||||||||||||||
Net loss attributable to redeemable noncontrolling interests | 204,277 | 204,277 | |||||||||||||||||
Dividends on preference shares | (5,595 | ) | (5,595 | ) | |||||||||||||||
Net loss attributable to RenaissanceRe common shareholders | $ | (504,812 | ) | ||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 1,036,586 | $ | 172,675 | $ | — | $ | 1,209,261 | |||||||||||
Net claims and claim expenses incurred – prior accident years | 7,832 | 4,758 | (155 | ) | 12,435 | ||||||||||||||
Net claims and claim expenses incurred – total | $ | 1,044,418 | $ | 177,433 | $ | (155 | ) | $ | 1,221,696 | ||||||||||
Net claims and claim expense ratio – current accident year | 307.7 | % | 81.9 | % | 220.8 | % | |||||||||||||
Net claims and claim expense ratio – prior accident years | 2.4 | % | 2.2 | % | 2.2 | % | |||||||||||||
Net claims and claim expense ratio – calendar year | 310.1 | % | 84.1 | % | 223.0 | % | |||||||||||||
Underwriting expense ratio | 12.6 | % | 36.3 | % | 21.8 | % | |||||||||||||
Combined ratio | 322.7 | % | 120.4 | % | 244.8 | % | |||||||||||||
Three months ended September 30, 2016 | |||||||||||||||||||
Property |
Casualty and |
Other | Total | ||||||||||||||||
Gross premiums written | $ | 119,904 | $ | 310,320 | $ | — | $ | 430,224 | |||||||||||
Net premiums written | $ | 90,909 | $ | 193,313 | $ | — | $ | 284,222 | |||||||||||
Net premiums earned | $ | 172,661 | $ | 173,860 | $ | — | $ | 346,521 | |||||||||||
Net claims and claim expenses incurred | 23,539 | 89,844 | (808 | ) | 112,575 | ||||||||||||||
Acquisition expenses | 21,663 | 58,917 | — | 80,580 | |||||||||||||||
Operational expenses | 24,258 | 16,217 | 18 | 40,493 | |||||||||||||||
Underwriting income | $ | 103,201 | $ | 8,882 | $ | 790 | 112,873 | ||||||||||||
Net investment income | 51,423 | 51,423 | |||||||||||||||||
Net foreign exchange losses | (5,986 | ) | (5,986 | ) | |||||||||||||||
Equity in losses of other ventures | (11,630 | ) | (11,630 | ) | |||||||||||||||
Other income | 2,268 | 2,268 | |||||||||||||||||
Net realized and unrealized gains on investments | 59,870 | 59,870 | |||||||||||||||||
Corporate expenses | (11,537 | ) | (11,537 | ) | |||||||||||||||
Interest expense | (10,536 | ) | (10,536 | ) | |||||||||||||||
Income before taxes and noncontrolling interests | 186,745 | ||||||||||||||||||
Income tax benefit | 1,316 | 1,316 | |||||||||||||||||
Net income attributable to noncontrolling interests | (35,641 | ) | (35,641 | ) | |||||||||||||||
Dividends on preference shares | (5,595 | ) | (5,595 | ) | |||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 146,825 | |||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 42,062 | $ | 116,298 | $ | — | $ | 158,360 | |||||||||||
Net claims and claim expenses incurred – prior accident years | (18,523 | ) | (26,454 | ) | (808 | ) | (45,785 | ) | |||||||||||
Net claims and claim expenses incurred – total | $ | 23,539 | $ | 89,844 | $ | (808 | ) | $ | 112,575 | ||||||||||
Net claims and claim expense ratio – current accident year | 24.4 | % | 66.9 | % | 45.7 | % | |||||||||||||
Net claims and claim expense ratio – prior accident years | (10.8 | )% | (15.2 | )% | (13.2 | )% | |||||||||||||
Net claims and claim expense ratio – calendar year | 13.6 | % | 51.7 | % | 32.5 | % | |||||||||||||
Underwriting expense ratio | 26.6 | % | 43.2 | % | 34.9 | % | |||||||||||||
Combined ratio | 40.2 | % | 94.9 | % | 67.4 | % | |||||||||||||
RenaissanceRe Holdings Ltd. | ||||||||||||||||
Supplemental Financial Data - Segment Information | ||||||||||||||||
(in thousands of United States Dollars, except percentages) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Nine months ended September 30, 2017 | ||||||||||||||||
Property |
Casualty and |
Other | Total | |||||||||||||
Gross premiums written | $ | 1,345,271 | $ | 1,044,510 | $ | (7 | ) | $ | 2,389,774 | |||||||
Net premiums written | $ | 895,728 | $ | 687,381 | $ | (7 | ) | $ | 1,583,102 | |||||||
Net premiums earned | $ | 716,024 | $ | 580,085 | $ | (7 | ) | $ | 1,296,102 | |||||||
Net claims and claim expenses incurred | 1,116,273 | 441,801 | (710 | ) | 1,557,364 | |||||||||||
Acquisition expenses | 75,117 | 173,179 | (2 | ) | 248,294 | |||||||||||
Operational expenses | 76,841 | 54,708 | 37 | 131,586 | ||||||||||||
Underwriting (loss) income | $ | (552,207 | ) | $ | (89,603 | ) | $ | 668 | (641,142 | ) | ||||||
Net investment income | 148,745 | 148,745 | ||||||||||||||
Net foreign exchange gains | 11,118 | 11,118 | ||||||||||||||
Equity in earnings of other ventures | 5,830 | 5,830 | ||||||||||||||
Other income | 7,053 | 7,053 | ||||||||||||||
Net realized and unrealized gains on investments | 143,538 | 143,538 | ||||||||||||||
Corporate expenses | (14,335 | ) | (14,335 | ) | ||||||||||||
Interest expense | (32,416 | ) | (32,416 | ) | ||||||||||||
Loss before taxes and redeemable noncontrolling interests | (371,609 | ) | ||||||||||||||
Income tax benefit | 14,739 | 14,739 | ||||||||||||||
Net loss attributable to redeemable noncontrolling interests | 132,338 | 132,338 | ||||||||||||||
Dividends on preference shares | (16,786 | ) | (16,786 | ) | ||||||||||||
Net loss attributable to RenaissanceRe common shareholders | $ | (241,318 | ) | |||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 1,133,241 | $ | 427,786 | $ | — | $ | 1,561,027 | ||||||||
Net claims and claim expenses incurred – prior accident years | (16,968 | ) | 14,015 | (710 | ) | (3,663 | ) | |||||||||
Net claims and claim expenses incurred – total | $ | 1,116,273 | $ | 441,801 | $ | (710 | ) | $ | 1,557,364 | |||||||
Net claims and claim expense ratio – current accident year | 158.3 | % | 73.7 | % | 120.4 | % | ||||||||||
Net claims and claim expense ratio – prior accident years | (2.4 | )% | 2.5 | % | (0.2 | )% | ||||||||||
Net claims and claim expense ratio – calendar year | 155.9 | % | 76.2 | % | 120.2 | % | ||||||||||
Underwriting expense ratio | 21.2 | % | 39.2 | % | 29.3 | % | ||||||||||
Combined ratio | 177.1 | % | 115.4 | % | 149.5 | % | ||||||||||
Nine months ended September 30, 2016 | ||||||||||||||||
Property |
Casualty and |
Other | Total | |||||||||||||
Gross premiums written | $ | 1,058,816 | $ | 992,669 | $ | — | $ | 2,051,485 | ||||||||
Net premiums written | $ | 674,361 | $ | 641,452 | $ | — | $ | 1,315,813 | ||||||||
Net premiums earned | $ | 538,953 | $ | 512,576 | $ | — | $ | 1,051,529 | ||||||||
Net claims and claim expenses incurred | 125,618 | 282,117 | (805 | ) | 406,930 | |||||||||||
Acquisition expenses | 71,176 | 144,001 | — | 215,177 | ||||||||||||
Operational expenses | 79,441 | 68,261 | 99 | 147,801 | ||||||||||||
Underwriting income | $ | 262,718 | $ | 18,197 | $ | 706 | 281,621 | |||||||||
Net investment income | 134,410 | 134,410 | ||||||||||||||
Net foreign exchange losses | (8,368 | ) | (8,368 | ) | ||||||||||||
Equity in losses of other ventures | (3,997 | ) | (3,997 | ) | ||||||||||||
Other income | 9,001 | 9,001 | ||||||||||||||
Net realized and unrealized gains on investments | 191,295 | 191,295 | ||||||||||||||
Corporate expenses | (25,514 | ) | (25,514 | ) | ||||||||||||
Interest expense | (31,610 | ) | (31,610 | ) | ||||||||||||
Income before taxes and noncontrolling interests | 546,838 | |||||||||||||||
Income tax expense | (8,040 | ) | (8,040 | ) | ||||||||||||
Net income attributable to noncontrolling interests | (110,867 | ) | (110,867 | ) | ||||||||||||
Dividends on preference shares | (16,786 | ) | (16,786 | ) | ||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 411,145 | ||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 163,130 | $ | 320,444 | $ | — | $ | 483,574 | ||||||||
Net claims and claim expenses incurred – prior accident years | (37,512 | ) | (38,327 | ) | (805 | ) | (76,644 | ) | ||||||||
Net claims and claim expenses incurred – total | $ | 125,618 | $ | 282,117 | $ | (805 | ) | $ | 406,930 | |||||||
Net claims and claim expense ratio – current accident year | 30.3 | % | 62.5 | % | 46.0 | % | ||||||||||
Net claims and claim expense ratio – prior accident years | (7.0 | )% | (7.5 | )% | (7.3 | )% | ||||||||||
Net claims and claim expense ratio – calendar year | 23.3 | % | 55.0 | % | 38.7 | % | ||||||||||
Underwriting expense ratio | 28.0 | % | 41.4 | % | 34.5 | % | ||||||||||
Combined ratio | 51.3 | % | 96.4 | % | 73.2 | % | ||||||||||
RenaissanceRe Holdings Ltd. | |||||||||||||||
Supplemental Financial Data - Gross Premiums Written | |||||||||||||||
(in thousands of United States Dollars) | |||||||||||||||
(Unaudited) | |||||||||||||||
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September 30, 2016 |
September 30, 2017 |
September 30, 2016 |
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Property Segment |
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Catastrophe | $ | 243,514 | $ | 71,606 | $ | 1,069,438 | $ | 876,656 | |||||||
Other property | 81,881 | 48,298 | 275,833 | 182,160 | |||||||||||
Property segment gross premiums written | $ | 325,395 | $ | 119,904 | $ | 1,345,271 | $ | 1,058,816 | |||||||
Casualty and Specialty Segment |
|||||||||||||||
General casualty (1) | $ | 107,055 | $ | 82,234 | $ | 337,342 | $ | 248,270 | |||||||
Professional liability (2) | 101,482 | 90,984 | 335,235 | 293,776 | |||||||||||
Financial lines (3) | 66,186 | 110,771 | 220,643 | 327,860 | |||||||||||
Other (4) | 40,158 | 26,331 | 151,290 | 122,763 | |||||||||||
Casualty and Specialty segment gross premiums written | $ | 314,881 | $ | 310,320 | $ | 1,044,510 | $ | 992,669 |
(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) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
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September 30, 2017 |
September 30, 2016 |
September 30, 2017 |
September 30, 2016 |
|||||||||||||
Fixed maturity investments | $ | 45,305 | $ | 39,959 | $ | 133,080 | $ | 122,056 | ||||||||
Short term investments | 2,771 | 1,174 | 7,476 | 3,401 | ||||||||||||
Equity investments trading | 930 | 797 | 2,630 | 3,325 | ||||||||||||
Other investments | ||||||||||||||||
Private equity investments | 6,371 | 4,572 | 20,784 | (430 | ) | |||||||||||
Other | (11,491 | ) | 8,765 | (4,520 | ) | 17,109 | ||||||||||
Cash and cash equivalents | 352 | 246 | 836 | 584 | ||||||||||||
44,238 | 55,513 | 160,286 | 146,045 | |||||||||||||
Investment expenses | (3,981 | ) | (4,090 | ) | (11,541 | ) | (11,635 | ) | ||||||||
Net investment income | 40,257 | 51,423 | 148,745 | 134,410 | ||||||||||||
Gross realized gains | 16,343 | 20,383 | 43,053 | 60,794 | ||||||||||||
Gross realized losses | (6,126 | ) | (3,363 | ) | (29,902 | ) | (25,832 | ) | ||||||||
Net realized gains on fixed maturity investments | 10,217 | 17,020 | 13,151 | 34,962 | ||||||||||||
Net unrealized gains (losses) on fixed maturity investments trading | 5,545 | (4,235 | ) | 48,940 | 125,501 | |||||||||||
Net realized and unrealized (losses) gains on investments-related derivatives | (4,020 | ) | 1,727 | (4,344 | ) | (26,873 | ) | |||||||||
Net realized gains on equity investments trading | 13,675 | 127 | 49,736 | 14,038 | ||||||||||||
Net unrealized gains on equity investments trading | 16,635 | 45,231 | 36,055 | 43,667 | ||||||||||||
Net realized and unrealized gains on investments | 42,052 | 59,870 | 143,538 | 191,295 | ||||||||||||
Change in net unrealized gains on fixed maturity investments available for sale | — | (113 | ) | — | (472 | ) | ||||||||||
Total investment result | $ | 82,309 | $ | 111,180 | $ | 292,283 | $ | 325,233 | ||||||||
Total investment return - annualized | 3.4 | % | 4.9 | % | 4.1 | % | 4.7 | % | ||||||||
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
The Company uses “operating (loss) income (attributable) available to
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(in thousands of United States Dollars, except percentages) |
September 30, 2017 |
September 30, 2016 |
September 30, 2017 |
September 30, 2016 |
||||||||||||
Net (loss) income (attributable) available to RenaissanceRe common shareholders | $ | (504,812 | ) | $ | 146,825 | $ | (241,318 | ) | $ | 411,145 | ||||||
Adjustment for net realized and unrealized gains on investments | (42,052 | ) | (59,870 | ) | (143,538 | ) | (191,295 | ) | ||||||||
Operating (loss) income (attributable) available to RenaissanceRe common shareholders | $ | (546,864 | ) | $ | 86,955 | $ | (384,856 | ) | $ | 219,850 | ||||||
Net (loss) income (attributable) available to RenaissanceRe common shareholders per common share - diluted | $ | (12.75 | ) | $ | 3.56 | $ | (6.04 | ) | $ | 9.71 | ||||||
Adjustment for net realized and unrealized gains on investments | (1.06 | ) | (1.47 | ) | (3.59 | ) | (4.57 | ) | ||||||||
Operating (loss) income (attributable) available to RenaissanceRe common shareholders per common share - diluted | $ | (13.81 | ) | $ | 2.09 | $ | (9.63 | ) | $ | 5.14 | ||||||
Return on average common equity - annualized | (47.2 | )% | 13.5 | % | (7.4 | )% | 12.6 | % | ||||||||
Adjustment for net realized and unrealized gains on investments | (3.9 | )% | (5.5 | )% | (4.3 | )% | (5.9 | )% | ||||||||
Operating return on average common equity - annualized | (51.1 | )% | 8.0 | % | (11.7 | )% | 6.7 | % | ||||||||
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 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 | ||||||||||||||||||||
September 30, 2017 |
June 30, 2017 |
March 31, 2017 |
December 31, 2016 |
September 30, 2016 |
||||||||||||||||
Book value per common share | $ | 100.00 | $ | 113.08 | $ | 109.37 | $ | 108.45 | $ | 107.10 | ||||||||||
Adjustment for goodwill and other intangibles (1) | (6.55 | ) | (6.56 | ) | (6.55 | ) | (6.58 | ) | (6.69 | ) | ||||||||||
Tangible book value per common share | 93.45 | 106.52 | 102.82 | 101.87 | 100.41 | |||||||||||||||
Adjustment for accumulated dividends | 17.68 | 17.36 | 17.04 | 16.72 | 16.41 | |||||||||||||||
Tangible book value per common share plus accumulated dividends | $ | 111.13 | $ | 123.88 | $ | 119.86 | $ | 118.59 | $ | 116.82 | ||||||||||
Quarterly change in book value per common share | (11.6 | )% | 3.4 | % | 0.8 | % | 1.3 | % | 3.3 | % | ||||||||||
Quarterly change in tangible book value per common share plus change in accumulated dividends | (12.0 | )% | 3.9 | % | 1.2 | % | 1.8 | % | 3.9 | % | ||||||||||
Year to date change in book value per common share | (7.8 | )% | 4.3 | % | 0.8 | % | 9.4 | % | 8.0 | % | ||||||||||
Year to date change in tangible book value per common share plus change in accumulated dividends | (7.3 | )% | 5.2 | % | 1.2 | % | 11.4 | % | 9.5 | % |
(1) | At September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016 and September 30, 2016, goodwill and other intangibles included $17.4 million, $18.1 million, $18.9 million, $19.7 million and $20.6 million, respectively, of goodwill and other intangibles included in investments in other ventures, under equity method. | |
The Company has included in this Press Release “managed catastrophe
premiums” which is defined as gross catastrophe premiums written by the
Company and its related joint ventures. “Managed catastrophe premiums”
differs from Property segment gross premiums written, which the Company
believes is the most directly comparable GAAP measure, due to the
exclusion of other property gross premiums written and the inclusion of
catastrophe premiums written on behalf of the Company's joint venture
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September 30, 2017 |
September 30, 2016 |
September 30, 2017 |
September 30, 2016 |
|||||||||||||
Property Segment |
||||||||||||||||
Catastrophe | $ | 243,514 | $ | 71,606 | $ | 1,069,438 | $ | 876,656 | ||||||||
Other property | 81,881 | 48,298 | 275,833 | 182,160 | ||||||||||||
Property segment gross premiums written | $ | 325,395 | $ | 119,904 | $ | 1,345,271 | $ | 1,058,816 | ||||||||
Managed Catastrophe Premiums |
||||||||||||||||
Property segment gross premiums written | $ | 325,395 | $ | 119,904 | $ | 1,345,271 | $ | 1,058,816 | ||||||||
Other property gross premiums written | (81,881 | ) | (48,298 | ) | (275,833 | ) | (182,160 | ) | ||||||||
Catastrophe gross premiums written | $ | 243,514 | $ | 71,606 | $ | 1,069,438 | $ | 876,656 | ||||||||
Catastrophe premiums written on behalf of the Company's joint venture, Top Layer Re | 1,510 | 1,493 | 40,232 | 38,278 | ||||||||||||
Catastrophe premiums written by the Company and ceded to Top Layer Re | — | — | — | (9,263 | ) | |||||||||||
Managed catastrophe premiums | $ | 245,024 | $ | 73,099 | $ | 1,109,670 | $ | 905,671 | ||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20171031006521/en/
Source:
RenaissanceRe Holdings Ltd.
Investors:
Aditya Dutt,
441-295-4513
Senior Vice President and Treasurer
or
Media:
RenaissanceRe
Holdings Ltd.
Elizabeth Tillman, 212-238-9224
Director -
Communications
or
Kekst and Company
Peter Hill or Dawn
Dover, 212-521-4800