UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 4, 2020
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
(Address of Principal Executive Office) (Zip Code)
(441 ) 295-4513
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report).
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading symbol | Name of each exchange on which registered |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 | Results of Operations and Financial Condition. |
On February 4, 2020, RenaissanceRe Holdings Ltd. (the “Company”) issued a press release announcing its financial results for the three and twelve months ended December 31, 2019 and the availability of its corresponding financial supplement. Copies of the press release and the financial supplement are attached as Exhibit 99.1 and 99.2, respectively, to this Form 8-K. This Form 8-K and Exhibits 99.1 and 99.2 hereto are each being furnished to the Securities and Exchange Commission (the “SEC”) pursuant to Item 2.02 of Form 8-K and are therefore not to be considered “filed” with the SEC.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit # Description
99.1* |
99.2* |
101 | Pursuant to Rule 406 of Regulation S-T, the cover page information is formatted in Inline XBRL. |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101). |
* Exhibits 99.1 and 99.2 are being furnished to the SEC pursuant to Item 2.02 and are not being filed with the SEC. Therefore, these exhibits are not incorporated by reference in any of the registrant’s other SEC filings.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
RENAISSANCERE HOLDINGS LTD. | ||||
Date: | By: | /s/ Robert Qutub | ||
February 4, 2020 | Robert Qutub | |||
Executive Vice President and Chief Financial Officer | ||||
RenaissanceRe Reports Fourth Quarter 2019 Net Income Available to Common Shareholders of
$33.8 Million, or $0.77 Per Diluted Common Share; Operating Income Available to Common Shareholders of $23.0 Million, or $0.52 Per Diluted Common Share
Annual Net Income Available to Common Shareholders of $712.0 million, or $16.29 Per Diluted Common Share; Operating Income Available to Common Shareholders of $402.9 million, or $9.13 Per Diluted Common Share
Pembroke, Bermuda, February 4, 2020 -- RenaissanceRe Holdings Ltd. (NYSE: RNR) (the “Company” or “RenaissanceRe”) today reported net income available to RenaissanceRe common shareholders of $33.8 million, or $0.77 per diluted common share, in the fourth quarter of 2019, compared to a net loss attributable to RenaissanceRe common shareholders of $83.9 million, or $2.10 per diluted common share, in the fourth quarter of 2018. Operating income available to RenaissanceRe common shareholders was $23.0 million, or $0.52 per diluted common share, in the fourth quarter of 2019, compared to $4.8 million, or $0.11 per diluted common share, in the fourth quarter of 2018. The Company reported an annualized return on average common equity of 2.5% and an annualized operating return on average common equity of 1.7% in the fourth quarter of 2019, compared to negative 7.8% and positive 0.4%, respectively, in the fourth quarter of 2018. Book value per common share increased $0.46, or 0.4%, to $120.53 in the fourth quarter of 2019, compared to a 1.0% decrease in the fourth quarter of 2018. Tangible book value per common share plus accumulated dividends increased $0.85, or 0.7%, to $134.71 in the fourth quarter of 2019, compared to a 0.4% decrease in the fourth quarter of 2018.
For 2019, the Company reported net income available to RenaissanceRe common shareholders of $712.0 million, or $16.29 per diluted common share, compared to $197.3 million, or $4.91 per diluted common share, in 2018. Operating income available to RenaissanceRe common shareholders was $402.9 million, or $9.13 per diluted common share, in 2019, compared to $349.0 million, or $8.73 per diluted common share, in 2018. The Company reported a return on average common equity of 14.1% and an operating return on average common equity of 8.0% in 2019, compared to 4.7% and 8.4%, respectively, in 2018. Book value per common share increased $16.40, or 15.7%, in 2019, to $120.53, compared to a 4.4% increase in 2018. Tangible book value per common share plus accumulated dividends increased $17.54, or 17.9%, to $134.71 in 2019, compared to a 6.4% increase in 2018.
Kevin J. O’Donnell, President and Chief Executive Officer of RenaissanceRe, commented: “I am pleased with our performance this year as we materially grew tangible book value per share plus accumulated dividends and earned a robust operating return on equity. We successfully executed our strategy by organically growing our business while efficiently integrating Tokio Millennium Re. Looking forward, I am excited about our opportunities to build a bigger and more attractive portfolio and am confident in our ability to continue delivering long-term value.”
Fourth Quarter of 2019 Summary
• | During the fourth quarter of 2019, Typhoon Hagibis and losses associated with aggregate loss contracts (the “2019 Aggregate Losses”) resulted in a net negative impact to net income available to RenaissanceRe common shareholders of $193.3 million. In addition, the Company reallocated certain losses from Hurricane Dorian and Typhoon Faxai (collectively, the “Q3 2019 Catastrophe Events”) to 2019 Aggregate Losses, which had no net impact on the Company’s net income available to RenaissanceRe common shareholders. |
• | Gross premiums written increased by $357.7 million, or 65.3%, to $905.5 million, in the fourth quarter of 2019 compared to the fourth quarter of 2018, driven by an increase of $312.6 million in the Casualty and Specialty segment and an increase of $45.1 million in the Property segment. Included in gross premiums written in the fourth quarter of 2019 was $30.2 million of reinstatement premiums written primarily associated with Typhoon Hagibis. Included in the gross premiums written in the fourth quarter of 2018 was $102.5 million of reinstatement premiums written primarily associated with the wildfires in California during the fourth quarter of 2018 (the “Q4 2018 California Wildfires”) and Hurricane Michael (collectively, the “Q4 2018 Catastrophe Events”). |
• | Underwriting loss of $65.2 million and a combined ratio of 106.7% in the fourth quarter of 2019, compared to an underwriting loss of $82.3 million and a combined ratio of 114.3% in the fourth quarter of 2018. The Property segment incurred an underwriting loss of $87.1 million and had a combined ratio of 118.6% in the fourth quarter of 2019. The Casualty and Specialty segment generated underwriting income of $20.8 million and had a |
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combined ratio of 95.9% in the fourth quarter of 2019. The Company’s underwriting results in the fourth quarter of 2019 were principally impacted by Typhoon Hagibis and the 2019 Aggregate Losses, which had a net negative impact on the underwriting result of $237.0 million and added 25.0 percentage points to the combined ratio.
• | Total investment result was a gain of $130.6 million in the fourth quarter of 2019, generating an annualized total investment return of 3.1%. |
• | Over $300 million of capital raised in the fourth quarter of 2019 through the Company’s managed joint ventures and third-party capital vehicles, including Vermeer Reinsurance Ltd. (“Vermeer”), Upsilon RFO Re Ltd. (“Upsilon RFO”) and RenaissanceRe Medici Fund Ltd (“Medici”). |
Net Negative Impact
Net negative impact includes the sum of estimates of net claims and claim expenses incurred, earned reinstatement premiums assumed and ceded, lost profit commissions and redeemable noncontrolling interest. The Company’s estimates of net negative impact are based on a review of its potential exposures, preliminary discussions with certain counterparties and catastrophe modeling techniques. The Company’s actual net negative impact, both individually and in the aggregate, may vary from these estimates, perhaps materially. Changes in these estimates will be recorded in the period in which they occur.
Meaningful uncertainty 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, the geographic areas in which the events occurred, 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 financial data in the table below provides additional information detailing the net negative impact on the Company’s consolidated financial statements in the fourth quarter of 2019 resulting from Typhoon Hagibis, the 2019 Aggregate Losses and a reallocation of certain losses from the Q3 2019 Catastrophe Events to 2019 Aggregate Losses.
During the fourth quarter of 2019, the Company announced a preliminary estimated net negative impact on net income available to RenaissanceRe common shareholders of losses from Typhoon Hagibis of approximately $175 million on its fourth quarter 2019 results of operations. The Company's estimated net negative impact from Typhoon Hagibis remains consistent with this initial estimate and is allocated between the Typhoon Hagibis column and the 2019 Aggregate Loss column in the table below.
During the third quarter of 2019, the Company’s initial estimate of the net negative impact of the Q3 2019 Catastrophe Events included loss estimates associated with aggregate loss contracts. Certain of those contracts have been reallocated to 2019 Aggregate Losses, with a comparable change reflected as a reduction to the Q3 2019 Catastrophe Events in the table below.
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Three months ended December 31, 2019 | Typhoon Hagibis | 2019 Aggregate Losses | Reallocation of certain losses from the Q3 2019 Catastrophe Events to 2019 Aggregate Losses | Total | |||||||||||||
(in thousands, except percentages) | |||||||||||||||||
(Increase) decrease in net claims and claims expenses incurred | $ | (199,305 | ) | $ | (97,591 | ) | $ | 21,723 | $ | (275,173 | ) | ||||||
Assumed reinstatement premiums earned | 28,829 | 183 | 1,158 | 30,170 | |||||||||||||
Ceded reinstatement premiums earned | (219 | ) | — | (92 | ) | (311 | ) | ||||||||||
Lost (earned) profit commissions | 7,509 | 1,740 | (935 | ) | 8,314 | ||||||||||||
Net (negative) positive impact on underwriting result | (163,186 | ) | (95,668 | ) | 21,854 | (237,000 | ) | ||||||||||
Redeemable noncontrolling interest - DaVinciRe | 35,078 | 12,932 | (4,317 | ) | 43,693 | ||||||||||||
Net (negative) positive impact on net income available to RenaissanceRe common shareholders | $ | (128,108 | ) | $ | (82,736 | ) | $ | 17,537 | $ | (193,307 | ) | ||||||
Percentage point impact on consolidated combined ratio | 17.1 | 9.8 | (2.3 | ) | 25.0 | ||||||||||||
Net (negative) positive impact on Property segment underwriting result | $ | (161,654 | ) | $ | (95,668 | ) | $ | 21,854 | $ | (235,468 | ) | ||||||
Net (negative) positive impact on Casualty and Specialty segment underwriting result | (1,532 | ) | — | — | (1,532 | ) | |||||||||||
Net (negative) positive impact on underwriting result | $ | (163,186 | ) | $ | (95,668 | ) | $ | 21,854 | $ | (237,000 | ) | ||||||
Acquisition of Tokio Millennium Re
On March 22, 2019, the Company completed its 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”). The Company accounted for the acquisition of TMR under the acquisition method of accounting in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic Business Combinations. The operating activities of TMR are included in the Company’s consolidated statements of operations from March 22, 2019, and comparisons of the Company’s results of operations for the fourth quarter and full year of 2019 to the fourth quarter and full year of 2018 should be viewed in that context. In addition, the results of operations for the fourth quarter and full year of 2019 may not be reflective of the ultimate ongoing business of the combined entities.
Underwriting Results by Segment
Property Segment
Gross premiums written in the Property segment were $245.0 million in the fourth quarter of 2019, an increase of $45.1 million, or 22.6%, compared to $199.9 million in the fourth quarter of 2018.
Gross premiums written in the catastrophe class of business were $44.8 million in the fourth quarter of 2019, a decrease of $64.1 million, or 58.9%, compared to the fourth quarter of 2018. In the fourth quarter of 2019, gross premiums written in the catastrophe class of business included $29.5 million of reinstatement premiums primarily associated with Typhoon Hagibis, compared to the fourth quarter of 2018, which included $102.8 million of reinstatement premiums associated with the Q4 2018 Catastrophe Events.
Gross premiums written in the other property class of business were $200.2 million in the fourth quarter of 2019, an increase of $109.2 million, or 120.0%, compared to the fourth quarter of 2018. The increase in gross premiums written in the other property class of business was primarily driven by growth from existing relationships, new opportunities across a number of the Company’s underwriting platforms, and business acquired in connection with the acquisition of TMR.
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Ceded premiums written in the Property segment were $2.1 million in the fourth quarter of 2019, a decrease of $27.2 million, or 92.9%, compared to the fourth quarter of 2018. The decrease in ceded premiums written in the fourth quarter of 2019 was principally due to $26.0 million of ceded reinstatement premiums written in the fourth quarter of 2018 associated with Q4 2018 Catastrophe Events which did not reoccur in the fourth quarter of 2019.
The Property segment incurred an underwriting loss of $87.1 million and had a combined ratio of 118.6% in the fourth quarter of 2019, compared to an underwriting loss of $35.0 million and a combined ratio of 110.6% in the fourth quarter of 2018. The Property segment underwriting result and combined ratio in the fourth quarter of 2019 were principally impacted by Typhoon Hagibis and the 2019 Aggregate Losses, which resulted in a net negative impact on the Property segment underwriting result of $235.5 million and added 52.5 percentage points to the Property segment combined ratio.
In comparison, the fourth quarter of 2018 was impacted by the Q4 2018 Catastrophe Events and changes in certain losses associated with aggregate loss contracts in 2018 (the “2018 Aggregate Losses”), which resulted in a net negative impact on the underwriting result of $205.7 million and added 74.1 percentage points to the Property segment combined ratio. In addition, the underwriting results in the fourth quarter of 2018 were positively impacted by changes in the estimates of the net negative impact of the wildfires in California during the third quarter of 2018 (the “Q3 2018 California Wildfires”), Typhoons Jebi, Mangkhut and Trami, and Hurricane Florence (collectively, the “Q3 2018 Catastrophe Events”) and Hurricanes Harvey, Irma and Maria, the Mexico City Earthquake, the wildfires in California during the fourth quarter of 2017 and certain losses associated with aggregate loss contracts (collectively, the “2017 Large Loss Events”) of $55.2 million and $24.8 million, respectively, reducing the Property segment combined ratio by 17.7 and 7.9 percentage points, respectively.
Casualty and Specialty Segment
Gross premiums written in the Casualty and Specialty segment were $660.5 million in the fourth quarter of 2019, an increase of $312.6 million, or 89.9%, compared to the fourth quarter of 2018. The increase was due to growth from new and existing business opportunities written in the current and prior periods across various classes of business within the segment, and business acquired in connection with the acquisition of TMR.
The Casualty and Specialty segment generated underwriting income of $20.8 million and had a combined ratio of 95.9% in the fourth quarter of 2019, compared to an underwriting loss of $47.4 million and a combined ratio of 119.3% in the fourth quarter of 2018. The improvement in the Casualty and Specialty segment combined ratio was driven by a decrease of 14.8 percentage points in the net claims and claim expense ratio, principally the result of lower current accident year losses in the fourth quarter of 2019 compared to the fourth quarter of 2018, which included loss estimates for liability exposures associated with the Q4 2018 California Wildfires. The Casualty and Specialty segment also experienced an 8.6 percentage point decrease in the underwriting expense ratio in the fourth quarter of 2019 compared to the fourth quarter of 2018, resulting from a decrease in both the acquisition expense ratio and the operating expense ratio. The acquisition ratio decreased in the fourth quarter of 2019 compared to the fourth quarter of 2018 primarily as a result of the effects of purchase accounting amortization related to the acquisition of TMR and changes in estimated commissions. The operating expense ratio decreased 3.6 percentage points due to improved operating leverage from the business acquired in connection with the acquisition of TMR.
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 $130.6 million in the fourth quarter of 2019, compared to a loss of $35.3 million in the fourth quarter of 2018, an improvement of $165.9 million. The improvement in the total investment result was principally due to higher returns on the Company’s equity investments trading, private equity investments and catastrophe bonds, partially offset by lower returns on its portfolio of fixed maturity investments trading. Also driving the investment result for the fourth quarter of 2019 were higher average invested assets primarily resulting from the acquisition of TMR, combined with capital raised during 2019 in certain of the Company’s consolidated third-party capital vehicles, including DaVinciRe Holdings Ltd. (“DaVinciRe”), Upsilon RFO, Vermeer and Medici, and the subsequent investment of those funds as part of the Company’s consolidated investment portfolio. |
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• | Net loss attributable to redeemable noncontrolling interests in the fourth quarter of 2019 was $2.6 million compared to $49.3 million in the fourth quarter of 2018. The change was primarily driven by improved performance from DaVinciRe in the fourth quarter of 2019, compared to the fourth quarter of 2018, which was negatively impacted by significant losses in DaVinciRe associated with Hurricane Michael, the Q4 2018 California Wildfires and changes in the 2018 Aggregate Losses. In addition, the fourth quarter of 2019 included net income attributable to Vermeer and improved performance in Medici. |
• | In the fourth quarter of 2019, total fee income increased by $4.6 million, to $13.2 million, compared to $8.6 million in the fourth quarter of 2018, primarily driven by an increase in the dollar value of capital being managed combined with improved underlying performance. |
FULL YEAR 2019 SUMMARY
• | Gross premiums written increased by $1.5 billion, or 45.2%, to $4.8 billion, in 2019, compared to 2018, driven by increases of $670.1 million in the Property segment and $827.3 million in the Casualty and Specialty segment. The increase was primarily driven by expanded participation on existing transactions, certain new transactions, rate improvements, and the impact of the acquisition of TMR. |
• | Underwriting income of $256.4 million and a combined ratio of 92.3% in 2019, compared to underwriting income of $244.9 million and a combined ratio of 87.6% in 2018. Underwriting income was comprised of $209.3 million in the Property segment and $46.0 million in the Casualty and Specialty segment. Impacting the underwriting result for 2019 were Typhoon Hagibis, the Q3 2019 Catastrophe Events and 2019 Aggregate Losses (collectively, the “2019 Large Loss Events”), which had a net negative impact on the Company’s underwriting result of $418.9 million and added 12.9 percentage points to the combined ratio. |
• | Net income available to RenaissanceRe common shareholders of $712.0 million in 2019 included total net negative impact on the Company’s net income available to RenaissanceRe common shareholders of $348.2 million from the 2019 Large Loss Events. |
• | Total investment result was a gain of $838.3 million in 2019, generating an annualized total investment return of 5.2%. The Company’s portfolio of fixed maturity and short term investments had a yield to maturity of 2.1% at December 31, 2019, contributing $423.8 million of net investment income included in the total investment result in 2019. |
• | Over $1.5 billion of capital raised in 2019 through the Company’s managed joint ventures and third-party capital vehicles, DaVinciRe, Upsilon RFO, Vermeer and Medici, including $175 million from the Company. In addition, effective January 1, 2020, the Company raised over $625 million of capital through Upsilon RFO and Medici, including over $100 million from the Company. |
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Net Negative Impact
The financial data below provides additional information detailing the net negative impact on the Company’s consolidated financial statements in 2019 resulting from the 2019 Large Loss Events, including Typhoon Hagibis, the Q3 2019 Catastrophe Events and the 2019 Aggregate Losses.
Year ended December 31, 2019 | Typhoon Hagibis | Q3 2019 Catastrophe Events | 2019 Aggregate Losses | Total 2019 Large Loss Events | |||||||||||||
(in thousands, except percentages) | |||||||||||||||||
Net claims and claims expenses incurred | $ | (199,305 | ) | $ | (187,188 | ) | $ | (97,591 | ) | $ | (484,084 | ) | |||||
Assumed reinstatement premiums earned | 28,829 | 24,596 | 183 | 53,608 | |||||||||||||
Ceded reinstatement premiums earned | (219 | ) | (574 | ) | — | (793 | ) | ||||||||||
Lost profit commissions | 7,509 | 3,100 | 1,740 | 12,349 | |||||||||||||
Net negative impact on underwriting result | (163,186 | ) | (160,066 | ) | (95,668 | ) | (418,920 | ) | |||||||||
Redeemable noncontrolling interest - DaVinciRe | 35,078 | 22,677 | 12,932 | 70,687 | |||||||||||||
Net negative impact on net income available to RenaissanceRe common shareholders | $ | (128,108 | ) | $ | (137,389 | ) | $ | (82,736 | ) | $ | (348,233 | ) | |||||
Percentage point impact on consolidated combined ratio | 5.0 | 4.9 | 2.8 | 12.9 | |||||||||||||
Net negative impact on Property segment underwriting result | $ | (161,654 | ) | $ | (157,064 | ) | $ | (95,668 | ) | $ | (414,386 | ) | |||||
Net negative impact on Casualty and Specialty segment underwriting result | (1,532 | ) | (3,002 | ) | — | (4,534 | ) | ||||||||||
Net negative impact on underwriting result | $ | (163,186 | ) | $ | (160,066 | ) | $ | (95,668 | ) | $ | (418,920 | ) | |||||
Underwriting Results by Segment
Property Segment
In 2019, gross premiums written in the Property segment increased by $670.1 million, or 38.1%, to $2.4 billion, compared to $1.8 billion in 2018.
Gross premiums written in the catastrophe class of business were $1.6 billion in 2019, an increase of $246.1 million, or 18.2%, compared to 2018. Impacting the catastrophe class of business in 2019 were expanded participation on existing transactions, certain new transactions, rate improvements, and the acquisition of TMR .
Gross premiums written in the other property class of business were $835.5 million in 2019, an increase of $423.9 million, or 103.0%, compared to 2018. The increase in gross premiums written in the other property class of business was primarily driven by growth across the Company’s underwriting platforms, both from existing relationships and through new opportunities the Company believes have comparably attractive risk-return attributes, rate improvements, and business acquired in connection with the acquisition of TMR.
The Company’s Property segment generated underwriting income of $209.3 million in 2019, compared to $262.1 million in 2018, a decrease of $52.8 million. In 2019, the Property segment generated a net claims and claim expense ratio of 59.3%, an underwriting expense ratio of 27.8% and a combined ratio of 87.1%, compared to 47.4%, 27.7% and 75.1%, respectively, in 2018.
Principally impacting the Property segment underwriting result and combined ratio in 2019 were the 2019 Large Loss Events, which resulted in a net negative impact on the Property segment underwriting result of $414.4 million and a corresponding increase in the Property segment combined ratio of 26.7 percentage points. In comparison, 2018 was impacted by the Q3 2018 Catastrophe Events, the Q4 2018 Catastrophe Events, and the 2018 Aggregate Losses (collectively, the “2018 Large Loss Events”). The 2018 Large Loss Events resulted in a net negative impact on the underwriting result of $338.7 million, and a corresponding increase in the Property segment combined ratio of 37.4 percentage points. This was partially offset by a net positive impact on the underwriting result associated with changes in the estimates of the net negative impact on the underwriting result of the 2017 Large Loss Events of $145.7 million, and a corresponding decrease in the combined ratio of 14.0 percentage points.
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Casualty and Specialty Segment
In 2019, gross premiums written in the Casualty and Specialty segment increased by $827.3 million, or 53.4%, to $2.4 billion, compared to $1.5 billion in 2018. The increase was principally due to growth from new and existing business opportunities written in the current and prior periods across various classes of business within the segment and business acquired in connection with the acquisition of TMR.
The Company’s Casualty and Specialty segment generated underwriting income of $46.0 million in 2019, compared to an underwriting loss of $17.0 million in 2018. In 2019, the Casualty and Specialty segment generated a net claims and claim expense ratio of 66.1%, an underwriting expense ratio of 31.2% and a combined ratio of 97.3%, compared to 67.3%, 34.5% and 101.8%, respectively, in 2018.
The decrease in the Company’s Casualty and Specialty segment’s combined ratio was primarily driven by an improved underwriting expense ratio as well as the overall decrease in the net claims and claim expense ratio. The decrease in the Casualty and Specialty segment net claims and claim expense ratio was principally due to lower current accident year losses, which reduced the net claims and claim expense ratio by 5.1 percentage points in 2019, compared to 2018, which was adversely impacted by liability exposures associated with the Q3 2018 California Wildfires and the Q4 2018 California Wildfires. The underwriting expense ratio in the Casualty and Specialty segment decreased 3.3 percentage points, to 31.2%, in 2019, compared to 34.5% in 2018, primarily due to a decrease in the operating expense ratio as a result of improved operating leverage.
Other Items
• | Net income attributable to redeemable noncontrolling interests in 2019 was $201.5 million, compared to $41.6 million in 2018, an increase of $159.9 million, principally due to improved performance from DaVinciRe and the addition of net income attributable to Vermeer in 2019, compared to 2018, which was negatively impacted by significant losses in DaVinciRe associated with Hurricane Michael, the Q4 2018 California Wildfires and changes in the 2018 Aggregate Losses. |
• | In 2019, total fee income increased by $24.3 million, to $114.2 million, compared to $89.9 million in 2018, primarily driven by an increase in the dollar value of capital being managed and improved underlying performance. |
• | The Company’s total investment result, which includes the sum of net investment income and net realized and unrealized gains and losses on investments, was $838.3 million in 2019, compared to $86.8 million in 2018, an increase of $751.5 million. The increase was primarily driven by net realized and unrealized gains on investments of $414.5 million in 2019, compared to net realized and unrealized losses on investments of $175.1 million in 2018. The net realized and unrealized gains on investments in 2019 were driven by net realized and unrealized gains on the fixed maturity investments portfolio, equity investments trading and investment-related derivatives. Additionally, higher net investment income was generated from the Company’s portfolio of fixed maturity investments trading, short term investments, private equity investments and catastrophe bonds. Also driving the investment result for 2019 were higher average invested assets primarily resulting from the acquisition of TMR, combined with capital raised during 2019 in certain of the Company’s consolidated third-party capital vehicles, including DaVinciRe, Upsilon RFO, Vermeer and Medici, and the subsequent investment of those funds as part of the Company’s consolidated investment portfolio. |
• | During 2019, the Company recorded $49.7 million of corporate expenses associated with the acquisition of TMR, which includes compensation-related costs, integration-related costs and transaction-related costs. |
• | On April 2, 2019, the Company issued $400.0 million of its 3.600% Senior Notes due April 15, 2029. A portion of the net proceeds were used to repay, in full, $200.0 million outstanding under the Company’s revolving credit facility, which was drawn on March 20, 2019 in connection with the acquisition of TMR. The remainder of the net proceeds will be used for general corporate purposes. |
• | On February 4, 2020, the Company’s wholly-owned subsidiary, RenaissanceRe Specialty Holdings (UK) Limited, entered into an agreement to sell its wholly owned subsidiary, RenaissanceRe (UK) Limited, a UK run-off company, to an investment vehicle managed by AXA Liabilities Managers, an affiliate of AXA XL. The sale is expected to close in 2020 and is subject to regulatory approval. |
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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, February 5, 2020 at 10:30 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 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 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 we 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; soft reinsurance underwriting market conditions; the performance of the Company’s investment portfolio; a contention by the 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 the Company’s joint ventures or other entities the Company manages; the success of any of the Company’s strategic investments or acquisitions, including the Company’s ability to manage its operations as its product and geographical diversity increases; the Company’s ability to retain 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; changes in the method for determining LIBOR and the potential replacement of LIBOR; losses the Company could face from terrorism, political unrest or war; the effect of cybersecurity risks, including technology breaches or failure, on the Company’s business; the Company’s ability to successfully implement its business strategies and initiatives; the Company’s ability to determine any impairments taken on 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
8
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; the effect of the vote by the U.K. to leave the EU; 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; risks that the ongoing integration of TMR disrupts or distracts from current plans and operations; the Company’s ability to recognize the benefits of the acquisition of TMR; 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 and Quarterly Reports on Form 10-Q.
INVESTOR CONTACT: | MEDIA CONTACT: |
Keith McCue | Keil Gunther |
Senior Vice President, Finance & Investor Relations | Vice President, Marketing & Communications |
RenaissanceRe Holdings Ltd. | RenaissanceRe Holdings Ltd. |
(441) 239-4830 | (441) 239-4932 |
or | |
Kekst CNC | |
Dawn Dover | |
(212) 521-4800 | |
9
RenaissanceRe Holdings Ltd. | |||||||||||||||
Summary Consolidated Statements of Operations | |||||||||||||||
(in thousands of United States Dollars, except per share amounts and percentages) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended | Twelve months ended | ||||||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | ||||||||||||
Revenues | |||||||||||||||
Gross premiums written | $ | 905,479 | $ | 547,755 | $ | 4,807,750 | $ | 3,310,427 | |||||||
Net premiums written | $ | 725,367 | $ | 411,094 | $ | 3,381,493 | $ | 2,131,902 | |||||||
Decrease (increase) in unearned premiums | 244,758 | 163,519 | (43,090 | ) | (155,773 | ) | |||||||||
Net premiums earned | 970,125 | 574,613 | 3,338,403 | 1,976,129 | |||||||||||
Net investment income | 112,695 | 53,338 | 423,833 | 261,866 | |||||||||||
Net foreign exchange losses | (1,126 | ) | (932 | ) | (2,938 | ) | (12,428 | ) | |||||||
Equity in earnings of other ventures | 5,874 | 4,143 | 23,224 | 18,474 | |||||||||||
Other (loss) income | (160 | ) | 5,489 | 4,949 | 5,969 | ||||||||||
Net realized and unrealized gains (losses) on investments | 17,897 | (88,654 | ) | 414,483 | (175,069 | ) | |||||||||
Total revenues | 1,105,305 | 547,997 | 4,201,954 | 2,074,941 | |||||||||||
Expenses | |||||||||||||||
Net claims and claim expenses incurred | 762,093 | 477,638 | 2,097,021 | 1,120,018 | |||||||||||
Acquisition expenses | 208,618 | 120,465 | 762,232 | 432,989 | |||||||||||
Operational expenses | 64,571 | 58,859 | 222,733 | 178,267 | |||||||||||
Corporate expenses | 17,642 | 12,108 | 94,122 | 33,983 | |||||||||||
Interest expense | 15,496 | 11,765 | 58,364 | 47,069 | |||||||||||
Total expenses | 1,068,420 | 680,835 | 3,234,472 | 1,812,326 | |||||||||||
Income (loss) before taxes | 36,885 | (132,838 | ) | 967,482 | 262,615 | ||||||||||
Income tax benefit (expense) | 3,455 | 8,852 | (17,215 | ) | 6,302 | ||||||||||
Net income (loss) | 40,340 | (123,986 | ) | 950,267 | 268,917 | ||||||||||
Net loss (income) attributable to noncontrolling interests | 2,622 | 49,269 | (201,469 | ) | (41,553 | ) | |||||||||
Net income (loss) attributable to RenaissanceRe | 42,962 | (74,717 | ) | 748,798 | 227,364 | ||||||||||
Dividends on preference shares | (9,189 | ) | (9,189 | ) | (36,756 | ) | (30,088 | ) | |||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | $ | 33,773 | $ | (83,906 | ) | $ | 712,042 | $ | 197,276 | ||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share - basic | $ | 0.77 | $ | (2.10 | ) | $ | 16.32 | $ | 4.91 | ||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted | $ | 0.77 | $ | (2.10 | ) | $ | 16.29 | $ | 4.91 | ||||||
Operating income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted (1) | $ | 0.52 | $ | 0.11 | $ | 9.13 | $ | 8.73 | |||||||
Average shares outstanding - basic | 43,467 | 40,111 | 43,119 | 39,732 | |||||||||||
Average shares outstanding - diluted | 43,552 | 40,111 | 43,175 | 39,755 | |||||||||||
Net claims and claim expense ratio | 78.6 | % | 83.1 | % | 62.8 | % | 56.7 | % | |||||||
Underwriting expense ratio | 28.1 | % | 31.2 | % | 29.5 | % | 30.9 | % | |||||||
Combined ratio | 106.7 | % | 114.3 | % | 92.3 | % | 87.6 | % | |||||||
Return on average common equity - annualized | 2.5 | % | (7.8 | )% | 14.1 | % | 4.7 | % | |||||||
Operating return on average common equity - annualized (1) | 1.7 | % | 0.4 | % | 8.0 | % | 8.4 | % | |||||||
(1) | See Comments on Regulation G for a reconciliation of non-GAAP financial measures. |
10
RenaissanceRe Holdings Ltd. | |||||||
Summary Consolidated Balance Sheets | |||||||
(in thousands of United States Dollars, except per share amounts) | |||||||
December 31, 2019 | December 31, 2018 | ||||||
Assets | (Unaudited) | (Audited) | |||||
Fixed maturity investments trading, at fair value | $ | 11,171,655 | $ | 8,088,870 | |||
Short term investments, at fair value | 4,566,277 | 2,586,520 | |||||
Equity investments trading, at fair value | 436,931 | 310,252 | |||||
Other investments, at fair value | 1,087,377 | 784,933 | |||||
Investments in other ventures, under equity method | 106,549 | 115,172 | |||||
Total investments | 17,368,789 | 11,885,747 | |||||
Cash and cash equivalents | 1,379,068 | 1,107,922 | |||||
Premiums receivable | 2,599,896 | 1,537,188 | |||||
Prepaid reinsurance premiums | 767,781 | 616,185 | |||||
Reinsurance recoverable | 2,791,297 | 2,372,221 | |||||
Accrued investment income | 72,461 | 51,311 | |||||
Deferred acquisition costs and value of business acquired | 663,991 | 476,661 | |||||
Receivable for investments sold | 78,369 | 256,416 | |||||
Other assets | 346,216 | 135,127 | |||||
Goodwill and other intangibles | 262,226 | 237,418 | |||||
Total assets | $ | 26,330,094 | $ | 18,676,196 | |||
Liabilities, Noncontrolling Interests and Shareholders’ Equity | |||||||
Liabilities | |||||||
Reserve for claims and claim expenses | $ | 9,384,349 | $ | 6,076,271 | |||
Unearned premiums | 2,530,975 | 1,716,021 | |||||
Debt | 1,384,105 | 991,127 | |||||
Reinsurance balances payable | 2,830,691 | 1,902,056 | |||||
Payable for investments purchased | 225,275 | 380,332 | |||||
Other liabilities | 932,024 | 513,609 | |||||
Total liabilities | 17,287,419 | 11,579,416 | |||||
Redeemable noncontrolling interest | 3,071,308 | 2,051,700 | |||||
Shareholders’ Equity | |||||||
Preference shares | 650,000 | 650,000 | |||||
Common shares | 44,148 | 42,207 | |||||
Additional paid-in capital | 568,277 | 296,099 | |||||
Accumulated other comprehensive loss | (1,939 | ) | (1,433 | ) | |||
Retained earnings | 4,710,881 | 4,058,207 | |||||
Total shareholders’ equity attributable to RenaissanceRe | 5,971,367 | 5,045,080 | |||||
Total liabilities, noncontrolling interests and shareholders’ equity | $ | 26,330,094 | $ | 18,676,196 | |||
Book value per common share | $ | 120.53 | $ | 104.13 | |||
11
RenaissanceRe Holdings Ltd. | |||||||||||||||
Supplemental Financial Data - Segment Information | |||||||||||||||
(in thousands of United States Dollars, except percentages) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended December 31, 2019 | |||||||||||||||
Property | Casualty and Specialty | Other | Total | ||||||||||||
Gross premiums written | $ | 245,001 | $ | 660,478 | $ | — | $ | 905,479 | |||||||
Net premiums written | $ | 242,932 | $ | 482,435 | $ | — | $ | 725,367 | |||||||
Net premiums earned | $ | 467,404 | $ | 502,721 | $ | — | $ | 970,125 | |||||||
Net claims and claim expenses incurred | 424,207 | 338,104 | (218 | ) | 762,093 | ||||||||||
Acquisition expenses | 90,790 | 117,849 | (21 | ) | 208,618 | ||||||||||
Operational expenses | 39,469 | 25,943 | (841 | ) | 64,571 | ||||||||||
Underwriting (loss) income | $ | (87,062 | ) | $ | 20,825 | $ | 1,080 | (65,157 | ) | ||||||
Net investment income | 112,695 | 112,695 | |||||||||||||
Net foreign exchange losses | (1,126 | ) | (1,126 | ) | |||||||||||
Equity in earnings of other ventures | 5,874 | 5,874 | |||||||||||||
Other loss | (160 | ) | (160 | ) | |||||||||||
Net realized and unrealized gains on investments | 17,897 | 17,897 | |||||||||||||
Corporate expenses | (17,642 | ) | (17,642 | ) | |||||||||||
Interest expense | (15,496 | ) | (15,496 | ) | |||||||||||
Income before taxes and redeemable noncontrolling interests | 36,885 | ||||||||||||||
Income tax benefit | 3,455 | 3,455 | |||||||||||||
Net loss attributable to redeemable noncontrolling interests | 2,622 | 2,622 | |||||||||||||
Dividends on preference shares | (9,189 | ) | (9,189 | ) | |||||||||||
Net income available to RenaissanceRe common shareholders | $ | 33,773 | |||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 432,160 | $ | 342,268 | $ | — | $ | 774,428 | |||||||
Net claims and claim expenses incurred – prior accident years | (7,953 | ) | (4,164 | ) | (218 | ) | (12,335 | ) | |||||||
Net claims and claim expenses incurred – total | $ | 424,207 | $ | 338,104 | $ | (218 | ) | $ | 762,093 | ||||||
Net claims and claim expense ratio – current accident year | 92.5 | % | 68.1 | % | 79.8 | % | |||||||||
Net claims and claim expense ratio – prior accident years | (1.7 | )% | (0.8 | )% | (1.2 | )% | |||||||||
Net claims and claim expense ratio – calendar year | 90.8 | % | 67.3 | % | 78.6 | % | |||||||||
Underwriting expense ratio | 27.8 | % | 28.6 | % | 28.1 | % | |||||||||
Combined ratio | 118.6 | % | 95.9 | % | 106.7 | % | |||||||||
Three months ended December 31, 2018 | |||||||||||||||
Property | Casualty and Specialty | Other | Total | ||||||||||||
Gross premiums written | $ | 199,918 | $ | 347,837 | $ | — | $ | 547,755 | |||||||
Net premiums written | $ | 170,647 | $ | 240,447 | $ | — | $ | 411,094 | |||||||
Net premiums earned | $ | 328,585 | $ | 246,027 | $ | 1 | $ | 574,613 | |||||||
Net claims and claim expenses incurred | 275,700 | 202,047 | (109 | ) | 477,638 | ||||||||||
Acquisition expenses | 50,817 | 69,650 | (2 | ) | 120,465 | ||||||||||
Operational expenses | 37,021 | 21,762 | 76 | 58,859 | |||||||||||
Underwriting (loss) income | $ | (34,953 | ) | $ | (47,432 | ) | $ | 36 | (82,349 | ) | |||||
Net investment income | 53,338 | 53,338 | |||||||||||||
Net foreign exchange losses | (932 | ) | (932 | ) | |||||||||||
Equity in earnings of other ventures | 4,143 | 4,143 | |||||||||||||
Other income | 5,489 | 5,489 | |||||||||||||
Net realized and unrealized losses on investments | (88,654 | ) | (88,654 | ) | |||||||||||
Corporate expenses | (12,108 | ) | (12,108 | ) | |||||||||||
Interest expense | (11,765 | ) | (11,765 | ) | |||||||||||
Loss before taxes and redeemable noncontrolling interests | (132,838 | ) | |||||||||||||
Income tax benefit | 8,852 | 8,852 | |||||||||||||
Net loss attributable to redeemable noncontrolling interests | 49,269 | 49,269 | |||||||||||||
Dividends on preference shares | (9,189 | ) | (9,189 | ) | |||||||||||
Net loss attributable to RenaissanceRe common shareholders | $ | (83,906 | ) | ||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 324,118 | $ | 227,289 | $ | — | $ | 551,407 | |||||||
Net claims and claim expenses incurred – prior accident years | (48,418 | ) | (25,242 | ) | (109 | ) | (73,769 | ) | |||||||
Net claims and claim expenses incurred – total | $ | 275,700 | $ | 202,047 | $ | (109 | ) | $ | 477,638 | ||||||
Net claims and claim expense ratio – current accident year | 98.6 | % | 92.4 | % | 96.0 | % | |||||||||
Net claims and claim expense ratio – prior accident years | (14.7 | )% | (10.3 | )% | (12.9 | )% | |||||||||
Net claims and claim expense ratio – calendar year | 83.9 | % | 82.1 | % | 83.1 | % | |||||||||
Underwriting expense ratio | 26.7 | % | 37.2 | % | 31.2 | % | |||||||||
Combined ratio | 110.6 | % | 119.3 | % | 114.3 | % | |||||||||
12
RenaissanceRe Holdings Ltd. | |||||||||||||||
Supplemental Financial Data - Segment Information | |||||||||||||||
(in thousands of United States Dollars, except percentages) | |||||||||||||||
(Unaudited) | |||||||||||||||
Year ended December 31, 2019 | |||||||||||||||
Property | Casualty and Specialty | Other | Total | ||||||||||||
Gross premiums written | $ | 2,430,985 | $ | 2,376,765 | $ | — | $ | 4,807,750 | |||||||
Net premiums written | $ | 1,654,259 | $ | 1,727,234 | $ | — | $ | 3,381,493 | |||||||
Net premiums earned | $ | 1,627,494 | $ | 1,710,909 | $ | — | $ | 3,338,403 | |||||||
Net claims and claim expenses incurred | 965,424 | 1,131,637 | (40 | ) | 2,097,021 | ||||||||||
Acquisition expenses | 313,761 | 448,678 | (207 | ) | 762,232 | ||||||||||
Operational expenses | 139,015 | 84,546 | (828 | ) | 222,733 | ||||||||||
Underwriting income | $ | 209,294 | $ | 46,048 | $ | 1,075 | 256,417 | ||||||||
Net investment income | 423,833 | 423,833 | |||||||||||||
Net foreign exchange losses | (2,938 | ) | (2,938 | ) | |||||||||||
Equity in earnings of other ventures | 23,224 | 23,224 | |||||||||||||
Other income | 4,949 | 4,949 | |||||||||||||
Net realized and unrealized gains on investments | 414,483 | 414,483 | |||||||||||||
Corporate expenses | (94,122 | ) | (94,122 | ) | |||||||||||
Interest expense | (58,364 | ) | (58,364 | ) | |||||||||||
Income before taxes and redeemable noncontrolling interests | 967,482 | ||||||||||||||
Income tax expense | (17,215 | ) | (17,215 | ) | |||||||||||
Net income attributable to redeemable noncontrolling interests | (201,469 | ) | (201,469 | ) | |||||||||||
Dividends on preference shares | (36,756 | ) | (36,756 | ) | |||||||||||
Net income attributable to RenaissanceRe common shareholders | $ | 712,042 | |||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 968,357 | $ | 1,155,519 | $ | — | $ | 2,123,876 | |||||||
Net claims and claim expenses incurred – prior accident years | (2,933 | ) | (23,882 | ) | (40 | ) | (26,855 | ) | |||||||
Net claims and claim expenses incurred – total | $ | 965,424 | $ | 1,131,637 | $ | (40 | ) | $ | 2,097,021 | ||||||
Net claims and claim expense ratio – current accident year | 59.5 | % | 67.5 | % | 63.6 | % | |||||||||
Net claims and claim expense ratio – prior accident years | (0.2 | )% | (1.4 | )% | (0.8 | )% | |||||||||
Net claims and claim expense ratio – calendar year | 59.3 | % | 66.1 | % | 62.8 | % | |||||||||
Underwriting expense ratio | 27.8 | % | 31.2 | % | 29.5 | % | |||||||||
Combined ratio | 87.1 | % | 97.3 | % | 92.3 | % | |||||||||
Year ended December 31, 2018 | |||||||||||||||
Property | Casualty and Specialty | Other | Total | ||||||||||||
Gross premiums written | $ | 1,760,926 | $ | 1,549,501 | $ | — | $ | 3,310,427 | |||||||
Net premiums written | $ | 1,055,188 | $ | 1,076,714 | $ | — | $ | 2,131,902 | |||||||
Net premiums earned | $ | 1,050,831 | $ | 925,298 | $ | — | $ | 1,976,129 | |||||||
Net claims and claim expenses incurred | 497,895 | 622,320 | (197 | ) | 1,120,018 | ||||||||||
Acquisition expenses | 177,912 | 255,079 | (2 | ) | 432,989 | ||||||||||
Operational expenses | 112,954 | 64,883 | 430 | 178,267 | |||||||||||
Underwriting income (loss) | $ | 262,070 | $ | (16,984 | ) | $ | (231 | ) | 244,855 | ||||||
Net investment income | 261,866 | 261,866 | |||||||||||||
Net foreign exchange losses | (12,428 | ) | (12,428 | ) | |||||||||||
Equity in earnings of other ventures | 18,474 | 18,474 | |||||||||||||
Other income | 5,969 | 5,969 | |||||||||||||
Net realized and unrealized losses on investments | (175,069 | ) | (175,069 | ) | |||||||||||
Corporate expenses | (33,983 | ) | (33,983 | ) | |||||||||||
Interest expense | (47,069 | ) | (47,069 | ) | |||||||||||
Income before taxes and redeemable noncontrolling interests | 262,615 | ||||||||||||||
Income tax benefit | 6,302 | 6,302 | |||||||||||||
Net income attributable to redeemable noncontrolling interests | (41,553 | ) | (41,553 | ) | |||||||||||
Dividends on preference shares | (30,088 | ) | (30,088 | ) | |||||||||||
Net income available to RenaissanceRe common shareholders | $ | 197,276 | |||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 719,185 | $ | 671,582 | $ | — | $ | 1,390,767 | |||||||
Net claims and claim expenses incurred – prior accident years | (221,290 | ) | (49,262 | ) | (197 | ) | (270,749 | ) | |||||||
Net claims and claim expenses incurred – total | $ | 497,895 | $ | 622,320 | $ | (197 | ) | $ | 1,120,018 | ||||||
Net claims and claim expense ratio – current accident year | 68.4 | % | 72.6 | % | 70.4 | % | |||||||||
Net claims and claim expense ratio – prior accident years | (21.0 | )% | (5.3 | )% | (13.7 | )% | |||||||||
Net claims and claim expense ratio – calendar year | 47.4 | % | 67.3 | % | 56.7 | % | |||||||||
Underwriting expense ratio | 27.7 | % | 34.5 | % | 30.9 | % | |||||||||
Combined ratio | 75.1 | % | 101.8 | % | 87.6 | % | |||||||||
13
RenaissanceRe Holdings Ltd. | |||||||||||||||
Supplemental Financial Data - Gross Premiums Written | |||||||||||||||
(in thousands of United States Dollars) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended | Twelve months ended | ||||||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | ||||||||||||
Property Segment | |||||||||||||||
Catastrophe | $ | 44,824 | $ | 108,937 | $ | 1,595,472 | $ | 1,349,324 | |||||||
Other property | 200,177 | 90,981 | 835,513 | 411,602 | |||||||||||
Property segment gross premiums written | $ | 245,001 | $ | 199,918 | $ | 2,430,985 | $ | 1,760,926 | |||||||
Casualty and Specialty Segment | |||||||||||||||
General casualty (1) | $ | 197,338 | $ | 75,797 | $ | 807,901 | $ | 453,097 | |||||||
Professional liability (2) | 189,838 | 119,391 | 650,750 | 485,851 | |||||||||||
Financial lines (3) | 126,983 | 102,167 | 457,000 | 352,902 | |||||||||||
Other (4) | 146,319 | 50,482 | 461,114 | 257,651 | |||||||||||
Casualty and Specialty segment gross premiums written | $ | 660,478 | $ | 347,837 | $ | 2,376,765 | $ | 1,549,501 | |||||||
(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. |
14
RenaissanceRe Holdings Ltd. | |||||||||||||||
Supplemental Financial Data - Total Investment Result | |||||||||||||||
(in thousands of United States Dollars, except percentages) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended | Twelve months ended | ||||||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | ||||||||||||
Fixed maturity investments | $ | 85,937 | $ | 60,189 | $ | 318,503 | $ | 211,973 | |||||||
Short term investments | 11,552 | 11,231 | 56,264 | 33,571 | |||||||||||
Equity investments trading | 1,539 | 1,383 | 4,808 | 4,474 | |||||||||||
Other investments | |||||||||||||||
Private equity investments | 6,815 | (11,672 | ) | 14,981 | 477 | ||||||||||
Other | 8,833 | (4,871 | ) | 39,246 | 22,475 | ||||||||||
Cash and cash equivalents | 1,875 | 1,102 | 7,676 | 3,810 | |||||||||||
116,551 | 57,362 | 441,478 | 276,780 | ||||||||||||
Investment expenses | (3,856 | ) | (4,024 | ) | (17,645 | ) | (14,914 | ) | |||||||
Net investment income | 112,695 | 53,338 | 423,833 | 261,866 | |||||||||||
Gross realized gains | 45,814 | 6,339 | 133,409 | 21,284 | |||||||||||
Gross realized losses | (8,380 | ) | (23,399 | ) | (43,149 | ) | (91,098 | ) | |||||||
Net realized gains (losses) on fixed maturity investments | 37,434 | (17,060 | ) | 90,260 | (69,814 | ) | |||||||||
Net unrealized (losses) gains on fixed maturity investments trading | (72,956 | ) | 16,212 | 170,183 | (57,310 | ) | |||||||||
Net realized and unrealized (losses) gains on investments-related derivatives | (3,212 | ) | (8,021 | ) | 58,891 | (8,784 | ) | ||||||||
Net realized gains on equity investments trading | 396 | 5,898 | 31,062 | 27,739 | |||||||||||
Net unrealized gains (losses) on equity investments trading | 56,235 | (85,683 | ) | 64,087 | (66,900 | ) | |||||||||
Net realized and unrealized gains (losses) on investments | 17,897 | (88,654 | ) | 414,483 | (175,069 | ) | |||||||||
Total investment result | $ | 130,592 | $ | (35,316 | ) | $ | 838,316 | $ | 86,797 | ||||||
Total investment return - annualized | 3.1 | % | (1.2 | )% | 5.2 | % | 0.8 | % | |||||||
15
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 (loss) available (attributable) 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 attributable to RenaissanceRe common shareholders, transaction and integration expenses associated with the acquisition of TMR and the income tax expense or benefit associated with these exclusions to “net income (loss) available (attributable) to RenaissanceRe common shareholders." 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 Company’s fixed maturity investment portfolio, equity investments trading and investments-related derivatives; certain transaction and integration expenses associated with the acquisition of TMR; and the associated income tax expense or benefit of these adjustments. 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 is a reconciliation of: (1) net income (loss) available (attributable) to RenaissanceRe common shareholders to operating income available to RenaissanceRe common shareholders; (2) net income (loss) available (attributable) 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:
16
Three months ended | Twelve months ended | ||||||||||||||
(in thousands of United States Dollars, except per share amounts and percentages) | December 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | |||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | $ | 33,773 | $ | (83,906 | ) | $ | 712,042 | $ | 197,276 | ||||||
Adjustment for net realized and unrealized (gains) losses on investments attributable to RenaissanceRe common shareholders (1) | (18,188 | ) | 88,987 | (379,453 | ) | 154,205 | |||||||||
Adjustment for transaction and integration expenses associated with the acquisition of TMR | 5,700 | 3,296 | 49,725 | 3,296 | |||||||||||
Adjustment for income tax expense (benefit) (2) | 1,728 | (3,580 | ) | 20,597 | (5,750 | ) | |||||||||
Operating income available to RenaissanceRe common shareholders | $ | 23,013 | $ | 4,797 | $ | 402,911 | $ | 349,027 | |||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted | $ | 0.77 | $ | (2.10 | ) | $ | 16.29 | $ | 4.91 | ||||||
Adjustment for net realized and unrealized (gains) losses on investments attributable to RenaissanceRe common shareholders (1) | (0.42 | ) | 2.22 | (8.79 | ) | 3.88 | |||||||||
Adjustment for transaction and integration expenses associated with the acquisition of TMR | 0.13 | 0.08 | 1.15 | 0.08 | |||||||||||
Adjustment for income tax expense (benefit) (2) | 0.04 | (0.09 | ) | 0.48 | (0.14 | ) | |||||||||
Operating income available to RenaissanceRe common shareholders per common share - diluted | $ | 0.52 | $ | 0.11 | $ | 9.13 | $ | 8.73 | |||||||
Return on average common equity - annualized | 2.5 | % | (7.8 | )% | 14.1 | % | 4.7 | % | |||||||
Adjustment for net realized and unrealized (gains) losses on investments attributable to RenaissanceRe common shareholders (1) | (1.3 | )% | 8.2 | % | (7.5 | )% | 3.7 | % | |||||||
Adjustment for transaction and integration expenses associated with the acquisition of TMR | 0.4 | % | 0.3 | % | 1.0 | % | 0.1 | % | |||||||
Adjustment for income tax expense (benefit) (2) | 0.1 | % | (0.3 | )% | 0.4 | % | (0.1 | )% | |||||||
Operating return on average common equity - annualized | 1.7 | % | 0.4 | % | 8.0 | % | 8.4 | % | |||||||
(1) | Adjustment for net realized and unrealized (gains) losses on investments attributable to RenaissanceRe common shareholders represents: net realized and unrealized gains (losses) on investments as set forth in the Company's consolidated statement of operations less net realized and unrealized gains (losses) attributable to redeemable noncontrolling interests, which is included in net loss (income) attributable to redeemable noncontrolling interests in the Company's consolidated statement of operations. Comparative information for all prior periods has been updated to conform to the current methodology and presentation. |
(2) | Adjustment for income tax expense (benefit) represents the income tax expense (benefit) 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. |
17
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 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 | |||||||||||||||||||
December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | |||||||||||||||
Book value per common share | $ | 120.53 | $ | 120.07 | $ | 119.17 | $ | 111.05 | $ | 104.13 | |||||||||
Adjustment for goodwill and other intangibles (1) | (6.50 | ) | (6.55 | ) | (6.60 | ) | (6.66 | ) | (6.28 | ) | |||||||||
Tangible book value per common share | 114.03 | 113.52 | 112.57 | 104.39 | 97.85 | ||||||||||||||
Adjustment for accumulated dividends | 20.68 | 20.34 | 20.00 | 19.66 | 19.32 | ||||||||||||||
Tangible book value per common share plus accumulated dividends | $ | 134.71 | $ | 133.86 | $ | 132.57 | $ | 124.05 | $ | 117.17 | |||||||||
Quarterly change in book value per common share | 0.4 | % | 0.8 | % | 7.3 | % | 6.6 | % | (1.0 | )% | |||||||||
Quarterly change in tangible book value per common share plus change in accumulated dividends | 0.7 | % | 1.1 | % | 8.2 | % | 7.0 | % | (0.4 | )% | |||||||||
Year to date change in book value per common share | 15.7 | % | 15.3 | % | 14.4 | % | 6.6 | % | 4.4 | % | |||||||||
Year to date change in tangible book value per common share plus change in accumulated dividends | 17.9 | % | 17.1 | % | 15.7 | % | 7.0 | % | 6.4 | % | |||||||||
(1) | At December 31, 2019, September 30, 2019, June 30, 2019, March 31, 2019 and December 31, 2018, goodwill and other intangibles included $24.9 million, $25.6 million, $26.3 million, $27.0 million and $27.7 million, respectively, of goodwill and other intangibles included in investments in other ventures, under equity method. |
18
RenaissanceRe Holdings Ltd.
Contents
Page | ||||
Basis of Presentation | ||||
Financial Highlights | ||||
Statements of Operations | ||||
a. | Summary Consolidated Statements of Operations | |||
b. | Consolidated Segment Underwriting Results | |||
c. | Segment Underwriting Results | |||
d. | DaVinciRe Holdings Ltd. and Subsidiary Consolidated Statements of Operations | |||
Balance Sheets | ||||
a. | Summary Consolidated Balance Sheets | |||
Investments | ||||
a. | Investment Portfolio - Composition | |||
b. | Investment Portfolio - Fixed Maturity Investments | |||
c. | Investment Portfolio - Weighted Average Yield to Maturity and Credit Rating | |||
d. | Total Investment Result | |||
Loss Reserve Analysis | ||||
a. | Reserves for Claims and Claim Expenses | |||
b. | Paid to Incurred Analysis | |||
Other Items | ||||
a. | Fee Income | |||
b. | Noncontrolling Interests | |||
c. | Earnings per Share | |||
d. | Ratings | |||
Supplemental Information | ||||
a. | Gross Premiums Written | |||
b. | Property Segment Supplemental Underwriting Results | |||
Comments on Regulation G | ||||
RenaissanceRe Holdings Ltd.
Basis of Presentation
RenaissanceRe Holdings Ltd. (the "Company" or "RenaissanceRe") is a global provider of reinsurance and insurance. 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.
On March 22, 2019, the Company's wholly owned subsidiary RenaissanceRe Specialty Holdings (UK) Limited completed its previously announced purchase of all the share capital of RenaissanceRe Europe AG (formerly known as Tokio Millennium Re AG), RenaissanceRe (UK) Limited (formerly known as Tokio Millennium Re (UK) Limited) and their subsidiaries (collectively, “TMR”) (the “TMR Stock Purchase”). The Company accounted for the acquisition of TMR under the acquisition method of accounting in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic Business Combinations. The operating activities of TMR from the acquisition date, March 22, 2019, through March 31, 2019 were not material and, as a result, were not included in the Company's consolidated statements of operations for the three months ended March 31, 2019. The operating activities of TMR from the acquisition date, March 22, 2019, through December 31, 2019 are included in the Company's consolidated statements of operations for the three and twelve months ended December 31, 2019. At December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019, the Company's consolidated balance sheet reflects the combined entities.
This financial supplement 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,” “tangible book value per common share plus accumulated dividends," "retained investment result" and "retained fixed maturity and short term investments, at fair value." A reconciliation of such measures to the most comparable GAAP figures in accordance with Regulation G is presented in the attached supplemental financial data. See pages 20 through 24 for "Comments on Regulation G."
Cautionary Statement under “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995; Statements made in this financial supplement 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 results, please refer to RenaissanceRe Holdings Ltd.'s filings with the U.S. Securities and Exchange Commission, including its Annual Reports on Form 10-K and its Quarterly Reports on Form 10-Q.
All information contained herein is unaudited. Unless otherwise noted, amounts are in thousands of United States Dollars, except for share and per share amounts and ratio information. Certain prior period comparatives have been reclassified to conform to the current presentation. This supplement is being provided for informational purposes only. It should be read in conjunction with documents filed by RenaissanceRe with the U.S. Securities and Exchange Commission, including its Annual Reports on Form 10-K and its Quarterly Reports on Form 10-Q. Please refer to the Company's website at www.renre.com for further information about RenaissanceRe.
i | ||
RenaissanceRe Holdings Ltd. | |||||||||||||||||||||||||||
Financial Highlights | |||||||||||||||||||||||||||
Three months ended | Twelve months ended | ||||||||||||||||||||||||||
December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | |||||||||||||||||||||
Highlights | |||||||||||||||||||||||||||
Gross premiums written | $ | 905,479 | $ | 861,068 | $ | 1,476,908 | $ | 1,564,295 | $ | 547,755 | $ | 4,807,750 | $ | 3,310,427 | |||||||||||||
Underwriting (loss) income | $ | (65,157 | ) | $ | (3,368 | ) | $ | 170,833 | $ | 154,109 | $ | (82,349 | ) | $ | 256,417 | $ | 244,855 | ||||||||||
Net investment income | $ | 112,695 | $ | 113,844 | $ | 115,832 | $ | 81,462 | $ | 53,338 | $ | 423,833 | $ | 261,866 | |||||||||||||
Net realized and unrealized gains (losses) on investments | 17,897 | 31,938 | 194,003 | 170,645 | (88,654 | ) | 414,483 | (175,069 | ) | ||||||||||||||||||
Total investment result | $ | 130,592 | $ | 145,782 | $ | 309,835 | $ | 252,107 | $ | (35,316 | ) | $ | 838,316 | $ | 86,797 | ||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | $ | 33,773 | $ | 36,698 | $ | 367,854 | $ | 273,717 | $ | (83,906 | ) | $ | 712,042 | $ | 197,276 | ||||||||||||
Operating income available to RenaissanceRe common shareholders (1) | $ | 23,013 | $ | 12,966 | $ | 212,572 | $ | 154,360 | $ | 4,797 | $ | 402,911 | $ | 349,027 | |||||||||||||
Total investments | $ | 17,368,789 | $ | 16,947,893 | $ | 16,388,316 | $ | 14,852,848 | $ | 11,885,747 | $ | 17,368,789 | $ | 11,885,747 | |||||||||||||
Total assets | $ | 26,330,094 | $ | 25,644,210 | $ | 26,086,961 | $ | 24,559,600 | $ | 18,676,196 | $ | 26,330,094 | $ | 18,676,196 | |||||||||||||
Reserve for claims and claim expenses | $ | 9,384,349 | $ | 8,602,437 | $ | 8,484,848 | $ | 8,391,484 | $ | 6,076,271 | $ | 9,384,349 | $ | 6,076,271 | |||||||||||||
Total shareholders' equity attributable to RenaissanceRe | $ | 5,971,367 | $ | 5,951,235 | $ | 5,912,842 | $ | 5,554,033 | $ | 5,045,080 | $ | 5,971,367 | $ | 5,045,080 | |||||||||||||
Per share data | |||||||||||||||||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted | $ | 0.77 | $ | 0.83 | $ | 8.35 | $ | 6.43 | $ | (2.10 | ) | $ | 16.29 | $ | 4.91 | ||||||||||||
Operating income available to RenaissanceRe common shareholders per common share - diluted (1) | $ | 0.52 | $ | 0.29 | $ | 4.78 | $ | 3.60 | $ | 0.11 | $ | 9.13 | $ | 8.73 | |||||||||||||
Book value per common share | $ | 120.53 | $ | 120.07 | $ | 119.17 | $ | 111.05 | $ | 104.13 | $ | 120.53 | $ | 104.13 | |||||||||||||
Tangible book value per common share (1) | $ | 114.03 | $ | 113.52 | $ | 112.57 | $ | 104.39 | $ | 97.85 | $ | 114.03 | $ | 97.85 | |||||||||||||
Tangible book value per common share plus accumulated dividends (1) | $ | 134.71 | $ | 133.86 | $ | 132.57 | $ | 124.05 | $ | 117.17 | $ | 134.71 | $ | 117.17 | |||||||||||||
Change in tangible book value per common share plus change in accumulated dividends (1) | 0.7 | % | 1.1 | % | 8.2 | % | 7.0 | % | (0.4 | )% | 17.9 | % | 6.4 | % | |||||||||||||
Financial ratios | |||||||||||||||||||||||||||
Combined ratio | 106.7 | % | 100.4 | % | 81.3 | % | 72.0 | % | 114.3 | % | 92.3 | % | 87.6 | % | |||||||||||||
Return on average common equity - annualized | 2.5 | % | 2.8 | % | 28.9 | % | 23.5 | % | (7.8 | )% | 14.1 | % | 4.7 | % | |||||||||||||
Operating return on average common equity - annualized (1) | 1.7 | % | 1.0 | % | 16.7 | % | 13.3 | % | 0.4 | % | 8.0 | % | 8.4 | % | |||||||||||||
Total investment return - annualized | 3.1 | % | 3.6 | % | 8.0 | % | 8.0 | % | (1.2 | )% | 5.2 | % | 0.8 | % | |||||||||||||
(1) | See "Comments on Regulation G" for a reconciliation of non-GAAP financial measures. |
1 | | |
RenaissanceRe Holdings Ltd. | |||||||||||||||||||||||||||
Summary Consolidated Statements of Operations | |||||||||||||||||||||||||||
Three months ended | Twelve months ended | ||||||||||||||||||||||||||
December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | |||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||
Gross premiums written | $ | 905,479 | $ | 861,068 | $ | 1,476,908 | $ | 1,564,295 | $ | 547,755 | $ | 4,807,750 | $ | 3,310,427 | |||||||||||||
Net premiums written | $ | 725,367 | $ | 704,130 | $ | 1,022,965 | $ | 929,031 | $ | 411,094 | $ | 3,381,493 | $ | 2,131,902 | |||||||||||||
Decrease (increase) in unearned premiums | 244,758 | 202,618 | (111,463 | ) | (379,003 | ) | 163,519 | (43,090 | ) | (155,773 | ) | ||||||||||||||||
Net premiums earned | 970,125 | 906,748 | 911,502 | 550,028 | 574,613 | 3,338,403 | 1,976,129 | ||||||||||||||||||||
Net investment income | 112,695 | 113,844 | 115,832 | 81,462 | 53,338 | 423,833 | 261,866 | ||||||||||||||||||||
Net foreign exchange (losses) gains | (1,126 | ) | (8,275 | ) | 9,309 | (2,846 | ) | (932 | ) | (2,938 | ) | (12,428 | ) | ||||||||||||||
Equity in earnings of other ventures | 5,874 | 5,877 | 6,812 | 4,661 | 4,143 | 23,224 | 18,474 | ||||||||||||||||||||
Other (loss) income | (160 | ) | 1,016 | 922 | 3,171 | 5,489 | 4,949 | 5,969 | |||||||||||||||||||
Net realized and unrealized gains (losses) on investments | 17,897 | 31,938 | 194,003 | 170,645 | (88,654 | ) | 414,483 | (175,069 | ) | ||||||||||||||||||
Total revenues | 1,105,305 | 1,051,148 | 1,238,380 | 807,121 | 547,997 | 4,201,954 | 2,074,941 | ||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||
Net claims and claim expenses incurred | 762,093 | 654,520 | 453,373 | 227,035 | 477,638 | 2,097,021 | 1,120,018 | ||||||||||||||||||||
Acquisition expenses | 208,618 | 202,181 | 227,482 | 123,951 | 120,465 | 762,232 | 432,989 | ||||||||||||||||||||
Operational expenses | 64,571 | 53,415 | 59,814 | 44,933 | 58,859 | 222,733 | 178,267 | ||||||||||||||||||||
Corporate expenses | 17,642 | 13,844 | 23,847 | 38,789 | 12,108 | 94,122 | 33,983 | ||||||||||||||||||||
Interest expense | 15,496 | 15,580 | 15,534 | 11,754 | 11,765 | 58,364 | 47,069 | ||||||||||||||||||||
Total expenses | 1,068,420 | 939,540 | 780,050 | 446,462 | 680,835 | 3,234,472 | 1,812,326 | ||||||||||||||||||||
Income (loss) before taxes | 36,885 | 111,608 | 458,330 | 360,659 | (132,838 | ) | 967,482 | 262,615 | |||||||||||||||||||
Income tax benefit (expense) | 3,455 | (3,664 | ) | (9,475 | ) | (7,531 | ) | 8,852 | (17,215 | ) | 6,302 | ||||||||||||||||
Net income (loss) | 40,340 | 107,944 | 448,855 | 353,128 | (123,986 | ) | 950,267 | 268,917 | |||||||||||||||||||
Net loss (income) attributable to noncontrolling interests | 2,622 | (62,057 | ) | (71,812 | ) | (70,222 | ) | 49,269 | (201,469 | ) | (41,553 | ) | |||||||||||||||
Net income (loss) attributable to RenaissanceRe | 42,962 | 45,887 | 377,043 | 282,906 | (74,717 | ) | 748,798 | 227,364 | |||||||||||||||||||
Dividends on preference shares | (9,189 | ) | (9,189 | ) | (9,189 | ) | (9,189 | ) | (9,189 | ) | (36,756 | ) | (30,088 | ) | |||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | $ | 33,773 | $ | 36,698 | $ | 367,854 | $ | 273,717 | $ | (83,906 | ) | $ | 712,042 | $ | 197,276 | ||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share - basic | $ | 0.77 | $ | 0.83 | $ | 8.36 | $ | 6.43 | $ | (2.10 | ) | $ | 16.32 | $ | 4.91 | ||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted | $ | 0.77 | $ | 0.83 | $ | 8.35 | $ | 6.43 | $ | (2.10 | ) | $ | 16.29 | $ | 4.91 | ||||||||||||
Operating income available to RenaissanceRe common shareholders per common share - diluted (1) | $ | 0.52 | $ | 0.29 | $ | 4.78 | $ | 3.60 | $ | 0.11 | $ | 9.13 | $ | 8.73 | |||||||||||||
Return on average common equity - annualized | 2.5 | % | 2.8 | % | 28.9 | % | 23.5 | % | (7.8 | )% | 14.1 | % | 4.7 | % | |||||||||||||
Operating return on average common equity - annualized (1) | 1.7 | % | 1.0 | % | 16.7 | % | 13.3 | % | 0.4 | % | 8.0 | % | 8.4 | % | |||||||||||||
(1) | See "Comments on Regulation G" for a reconciliation of non-GAAP financial measures. |
2 | | |
RenaissanceRe Holdings Ltd. | |||||||||||||||
Consolidated Segment Underwriting Results | |||||||||||||||
Three months ended December 31, 2019 | |||||||||||||||
Property | Casualty and Specialty | Other | Total | ||||||||||||
Gross premiums written | $ | 245,001 | $ | 660,478 | $ | — | $ | 905,479 | |||||||
Net premiums written | $ | 242,932 | $ | 482,435 | $ | — | $ | 725,367 | |||||||
Net premiums earned | $ | 467,404 | $ | 502,721 | $ | — | $ | 970,125 | |||||||
Net claims and claim expenses incurred | 424,207 | 338,104 | (218 | ) | 762,093 | ||||||||||
Acquisition expenses | 90,790 | 117,849 | (21 | ) | 208,618 | ||||||||||
Operational expenses | 39,469 | 25,943 | (841 | ) | 64,571 | ||||||||||
Underwriting (loss) income | $ | (87,062 | ) | $ | 20,825 | $ | 1,080 | $ | (65,157 | ) | |||||
Net claims and claim expenses incurred - current accident year | $ | 432,160 | $ | 342,268 | $ | — | $ | 774,428 | |||||||
Net claims and claim expenses incurred - prior accident years | (7,953 | ) | (4,164 | ) | (218 | ) | (12,335 | ) | |||||||
Net claims and claim expenses incurred - total | $ | 424,207 | $ | 338,104 | $ | (218 | ) | $ | 762,093 | ||||||
Net claims and claim expense ratio - current accident year | 92.5 | % | 68.1 | % | 79.8 | % | |||||||||
Net claims and claim expense ratio - prior accident years | (1.7 | )% | (0.8 | )% | (1.2 | )% | |||||||||
Net claims and claim expense ratio - calendar year | 90.8 | % | 67.3 | % | 78.6 | % | |||||||||
Underwriting expense ratio | 27.8 | % | 28.6 | % | 28.1 | % | |||||||||
Combined ratio | 118.6 | % | 95.9 | % | 106.7 | % | |||||||||
Three months ended December 31, 2018 | |||||||||||||||
Property | Casualty and Specialty | Other | Total | ||||||||||||
Gross premiums written | $ | 199,918 | $ | 347,837 | $ | — | $ | 547,755 | |||||||
Net premiums written | $ | 170,647 | $ | 240,447 | $ | — | $ | 411,094 | |||||||
Net premiums earned | $ | 328,585 | $ | 246,027 | $ | 1 | $ | 574,613 | |||||||
Net claims and claim expenses incurred | 275,700 | 202,047 | (109 | ) | 477,638 | ||||||||||
Acquisition expenses | 50,817 | 69,650 | (2 | ) | 120,465 | ||||||||||
Operational expenses | 37,021 | 21,762 | 76 | 58,859 | |||||||||||
Underwriting (loss) income | $ | (34,953 | ) | $ | (47,432 | ) | $ | 36 | $ | (82,349 | ) | ||||
Net claims and claim expenses incurred - current accident year | $ | 324,118 | $ | 227,289 | $ | — | $ | 551,407 | |||||||
Net claims and claim expenses incurred - prior accident years | (48,418 | ) | (25,242 | ) | (109 | ) | (73,769 | ) | |||||||
Net claims and claim expenses incurred - total | $ | 275,700 | $ | 202,047 | $ | (109 | ) | $ | 477,638 | ||||||
Net claims and claim expense ratio - current accident year | 98.6 | % | 92.4 | % | 96.0 | % | |||||||||
Net claims and claim expense ratio - prior accident years | (14.7 | )% | (10.3 | )% | (12.9 | )% | |||||||||
Net claims and claim expense ratio - calendar year | 83.9 | % | 82.1 | % | 83.1 | % | |||||||||
Underwriting expense ratio | 26.7 | % | 37.2 | % | 31.2 | % | |||||||||
Combined ratio | 110.6 | % | 119.3 | % | 114.3 | % | |||||||||
3 | | |
RenaissanceRe Holdings Ltd. | |||||||||||||||
Consolidated Segment Underwriting Results | |||||||||||||||
Year ended December 31, 2019 | |||||||||||||||
Property | Casualty and Specialty | Other | Total | ||||||||||||
Gross premiums written | $ | 2,430,985 | $ | 2,376,765 | $ | — | $ | 4,807,750 | |||||||
Net premiums written | $ | 1,654,259 | $ | 1,727,234 | $ | — | $ | 3,381,493 | |||||||
Net premiums earned | $ | 1,627,494 | $ | 1,710,909 | $ | — | $ | 3,338,403 | |||||||
Net claims and claim expenses incurred | 965,424 | 1,131,637 | (40 | ) | 2,097,021 | ||||||||||
Acquisition expenses | 313,761 | 448,678 | (207 | ) | 762,232 | ||||||||||
Operational expenses | 139,015 | 84,546 | (828 | ) | 222,733 | ||||||||||
Underwriting income | $ | 209,294 | $ | 46,048 | $ | 1,075 | $ | 256,417 | |||||||
Net claims and claim expenses incurred - current accident year | $ | 968,357 | $ | 1,155,519 | $ | — | $ | 2,123,876 | |||||||
Net claims and claim expenses incurred - prior accident years | (2,933 | ) | (23,882 | ) | (40 | ) | (26,855 | ) | |||||||
Net claims and claim expenses incurred - total | $ | 965,424 | $ | 1,131,637 | $ | (40 | ) | $ | 2,097,021 | ||||||
Net claims and claim expense ratio - current accident year | 59.5 | % | 67.5 | % | 63.6 | % | |||||||||
Net claims and claim expense ratio - prior accident years | (0.2 | )% | (1.4 | )% | (0.8 | )% | |||||||||
Net claims and claim expense ratio - calendar year | 59.3 | % | 66.1 | % | 62.8 | % | |||||||||
Underwriting expense ratio | 27.8 | % | 31.2 | % | 29.5 | % | |||||||||
Combined ratio | 87.1 | % | 97.3 | % | 92.3 | % | |||||||||
Year ended December 31, 2018 | |||||||||||||||
Property | Casualty and Specialty | Other | Total | ||||||||||||
Gross premiums written | $ | 1,760,926 | $ | 1,549,501 | $ | — | $ | 3,310,427 | |||||||
Net premiums written | $ | 1,055,188 | $ | 1,076,714 | $ | — | $ | 2,131,902 | |||||||
Net premiums earned | $ | 1,050,831 | $ | 925,298 | $ | — | $ | 1,976,129 | |||||||
Net claims and claim expenses incurred | 497,895 | 622,320 | (197 | ) | 1,120,018 | ||||||||||
Acquisition expenses | 177,912 | 255,079 | (2 | ) | 432,989 | ||||||||||
Operational expenses | 112,954 | 64,883 | 430 | 178,267 | |||||||||||
Underwriting income (loss) | $ | 262,070 | $ | (16,984 | ) | $ | (231 | ) | $ | 244,855 | |||||
Net claims and claim expenses incurred - current accident year | $ | 719,185 | $ | 671,582 | $ | — | $ | 1,390,767 | |||||||
Net claims and claim expenses incurred - prior accident years | (221,290 | ) | (49,262 | ) | (197 | ) | (270,749 | ) | |||||||
Net claims and claim expenses incurred - total | $ | 497,895 | $ | 622,320 | $ | (197 | ) | $ | 1,120,018 | ||||||
Net claims and claim expense ratio - current accident year | 68.4 | % | 72.6 | % | 70.4 | % | |||||||||
Net claims and claim expense ratio - prior accident years | (21.0 | )% | (5.3 | )% | (13.7 | )% | |||||||||
Net claims and claim expense ratio - calendar year | 47.4 | % | 67.3 | % | 56.7 | % | |||||||||
Underwriting expense ratio | 27.7 | % | 34.5 | % | 30.9 | % | |||||||||
Combined ratio | 75.1 | % | 101.8 | % | 87.6 | % | |||||||||
4 | | |
RenaissanceRe Holdings Ltd. | |||||||||||||||||||
Segment Underwriting Results | |||||||||||||||||||
Three months ended | |||||||||||||||||||
Property Segment | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | ||||||||||||||
Gross premiums written | $ | 245,001 | $ | 314,400 | $ | 839,200 | $ | 1,032,384 | $ | 199,918 | |||||||||
Net premiums written | $ | 242,932 | $ | 302,982 | $ | 544,115 | $ | 564,230 | $ | 170,647 | |||||||||
Net premiums earned | $ | 467,404 | $ | 444,332 | $ | 425,013 | $ | 290,745 | $ | 328,585 | |||||||||
Net claims and claim expenses incurred | 424,207 | 338,260 | 146,874 | 56,083 | 275,700 | ||||||||||||||
Acquisition expenses | 90,790 | 79,521 | 89,711 | 53,739 | 50,817 | ||||||||||||||
Operational expenses | 39,469 | 34,238 | 36,764 | 28,544 | 37,021 | ||||||||||||||
Underwriting (loss) income | $ | (87,062 | ) | $ | (7,687 | ) | $ | 151,664 | $ | 152,379 | $ | (34,953 | ) | ||||||
Net claims and claim expenses incurred - current accident year | $ | 432,160 | $ | 345,880 | $ | 136,111 | $ | 54,206 | $ | 324,118 | |||||||||
Net claims and claim expenses incurred - prior accident years | (7,953 | ) | (7,620 | ) | 10,763 | 1,877 | (48,418 | ) | |||||||||||
Net claims and claim expenses incurred - total | $ | 424,207 | $ | 338,260 | $ | 146,874 | $ | 56,083 | $ | 275,700 | |||||||||
Net claims and claim expense ratio - current accident year | 92.5 | % | 77.8 | % | 32.0 | % | 18.6 | % | 98.6 | % | |||||||||
Net claims and claim expense ratio - prior accident years | (1.7 | )% | (1.7 | )% | 2.6 | % | 0.7 | % | (14.7 | )% | |||||||||
Net claims and claim expense ratio - calendar year | 90.8 | % | 76.1 | % | 34.6 | % | 19.3 | % | 83.9 | % | |||||||||
Underwriting expense ratio | 27.8 | % | 25.6 | % | 29.7 | % | 28.3 | % | 26.7 | % | |||||||||
Combined ratio | 118.6 | % | 101.7 | % | 64.3 | % | 47.6 | % | 110.6 | % | |||||||||
Three months ended | |||||||||||||||||||
Casualty and Specialty Segment | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | ||||||||||||||
Gross premiums written | $ | 660,478 | $ | 546,668 | $ | 637,708 | $ | 531,911 | $ | 347,837 | |||||||||
Net premiums written | $ | 482,435 | $ | 401,148 | $ | 478,850 | $ | 364,801 | $ | 240,447 | |||||||||
Net premiums earned | $ | 502,721 | $ | 462,416 | $ | 486,489 | $ | 259,283 | $ | 246,027 | |||||||||
Net claims and claim expenses incurred | 338,104 | 316,099 | 306,501 | 170,933 | 202,047 | ||||||||||||||
Acquisition expenses | 117,849 | 122,654 | 137,963 | 70,212 | 69,650 | ||||||||||||||
Operational expenses | 25,943 | 19,198 | 23,016 | 16,389 | 21,762 | ||||||||||||||
Underwriting income (loss) | $ | 20,825 | $ | 4,465 | $ | 19,009 | $ | 1,749 | $ | (47,432 | ) | ||||||||
Net claims and claim expenses incurred - current accident year | $ | 342,268 | $ | 319,087 | $ | 317,029 | $ | 177,135 | $ | 227,289 | |||||||||
Net claims and claim expenses incurred - prior accident years | (4,164 | ) | (2,988 | ) | (10,528 | ) | (6,202 | ) | (25,242 | ) | |||||||||
Net claims and claim expenses incurred - total | $ | 338,104 | $ | 316,099 | $ | 306,501 | $ | 170,933 | $ | 202,047 | |||||||||
Net claims and claim expense ratio - current accident year | 68.1 | % | 69.0 | % | 65.2 | % | 68.3 | % | 92.4 | % | |||||||||
Net claims and claim expense ratio - prior accident years | (0.8 | )% | (0.6 | )% | (2.2 | )% | (2.4 | )% | (10.3 | )% | |||||||||
Net claims and claim expense ratio - calendar year | 67.3 | % | 68.4 | % | 63.0 | % | 65.9 | % | 82.1 | % | |||||||||
Underwriting expense ratio | 28.6 | % | 30.6 | % | 33.1 | % | 33.4 | % | 37.2 | % | |||||||||
Combined ratio | 95.9 | % | 99.0 | % | 96.1 | % | 99.3 | % | 119.3 | % | |||||||||
5 | | |
DaVinciRe Holdings Ltd. and Subsidiary | |||||||||||||||||||||||||||
Consolidated Statements of Operations | |||||||||||||||||||||||||||
Three months ended | Twelve months ended | ||||||||||||||||||||||||||
December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | |||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||
Gross premiums written | $ | 15,566 | $ | 32,986 | $ | 206,052 | $ | 186,114 | $ | 33,940 | $ | 440,718 | $ | 386,796 | |||||||||||||
Net premiums written | $ | 15,210 | $ | 30,605 | $ | 165,394 | $ | 167,919 | $ | 26,108 | $ | 379,128 | $ | 317,172 | |||||||||||||
Decrease (increase) in unearned premiums | 90,674 | 63,671 | (78,769 | ) | (89,594 | ) | 72,709 | (14,018 | ) | (8,694 | ) | ||||||||||||||||
Net premiums earned | 105,884 | 94,276 | 86,625 | 78,325 | 98,817 | 365,110 | 308,478 | ||||||||||||||||||||
Net investment income | 13,506 | 13,813 | 13,597 | 12,823 | 13,543 | 53,739 | 47,059 | ||||||||||||||||||||
Net foreign exchange (losses) gains | (399 | ) | (174 | ) | (936 | ) | (256 | ) | (244 | ) | (1,765 | ) | 442 | ||||||||||||||
Other income | — | — | 139 | 205 | 209 | 344 | 489 | ||||||||||||||||||||
Net realized and unrealized (losses) gains on investments | (1,307 | ) | 6,493 | 20,914 | 22,435 | 427 | 48,535 | (26,775 | ) | ||||||||||||||||||
Total revenues | 117,684 | 114,408 | 120,339 | 113,532 | 112,752 | 465,963 | 329,693 | ||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||
Net claims and claim expenses incurred | 135,397 | 45,325 | 10,986 | 3,663 | 169,716 | 195,371 | 207,647 | ||||||||||||||||||||
Acquisition expenses | 1,313 | 15,762 | 21,211 | 16,966 | (2,591 | ) | 55,252 | 45,316 | |||||||||||||||||||
Operational and corporate expenses | 12,238 | 12,139 | 9,777 | 10,650 | 4,490 | 44,804 | 33,180 | ||||||||||||||||||||
Interest expense | 1,859 | 1,859 | 1,858 | 1,858 | 1,859 | 7,434 | 7,434 | ||||||||||||||||||||
Total expenses | 150,807 | 75,085 | 43,832 | 33,137 | 173,474 | 302,861 | 293,577 | ||||||||||||||||||||
(Loss) income before taxes | (33,123 | ) | 39,323 | 76,507 | 80,395 | (60,722 | ) | 163,102 | 36,116 | ||||||||||||||||||
Income tax (expense) benefit | (6 | ) | (177 | ) | 243 | (142 | ) | 21 | (82 | ) | (646 | ) | |||||||||||||||
Net (loss) income (attributable) available to DaVinciRe common shareholders | $ | (33,129 | ) | $ | 39,146 | $ | 76,750 | $ | 80,253 | $ | (60,701 | ) | $ | 163,020 | $ | 35,470 | |||||||||||
Net claims and claim expenses incurred - current accident year | $ | 113,743 | $ | 80,022 | $ | 5,623 | $ | 10,300 | $ | 206,323 | $ | 209,688 | $ | 298,765 | |||||||||||||
Net claims and claim expenses incurred - prior accident years | 21,654 | (34,697 | ) | 5,363 | (6,637 | ) | (36,607 | ) | (14,317 | ) | (91,118 | ) | |||||||||||||||
Net claims and claim expenses incurred - total | $ | 135,397 | $ | 45,325 | $ | 10,986 | $ | 3,663 | $ | 169,716 | $ | 195,371 | $ | 207,647 | |||||||||||||
Net claims and claim expense ratio - current accident year | 107.4 | % | 84.9 | % | 6.5 | % | 13.2 | % | 208.8 | % | 57.4 | % | 96.9 | % | |||||||||||||
Net claims and claim expense ratio - prior accident years | 20.5 | % | (36.8 | )% | 6.2 | % | (8.5 | )% | (37.1 | )% | (3.9 | )% | (29.6 | )% | |||||||||||||
Net claims and claim expense ratio - calendar year | 127.9 | % | 48.1 | % | 12.7 | % | 4.7 | % | 171.7 | % | 53.5 | % | 67.3 | % | |||||||||||||
Underwriting expense ratio | 12.8 | % | 29.6 | % | 35.8 | % | 35.2 | % | 2.0 | % | 27.4 | % | 25.5 | % | |||||||||||||
Combined ratio | 140.7 | % | 77.7 | % | 48.5 | % | 39.9 | % | 173.7 | % | 80.9 | % | 92.8 | % | |||||||||||||
6 | | |
RenaissanceRe Holdings Ltd. | |||||||||||||||||||
Summary Consolidated Balance Sheets | |||||||||||||||||||
December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | |||||||||||||||
Assets | |||||||||||||||||||
Fixed maturity investments trading, at fair value | $ | 11,171,655 | $ | 11,386,228 | $ | 10,479,666 | $ | 9,473,160 | $ | 8,088,870 | |||||||||
Short term investments, at fair value | 4,566,277 | 4,116,156 | 4,579,171 | 4,012,815 | 2,586,520 | ||||||||||||||
Equity investments trading, at fair value | 436,931 | 379,422 | 273,646 | 389,937 | 310,252 | ||||||||||||||
Other investments, at fair value | 1,087,377 | 962,109 | 955,437 | 878,373 | 784,933 | ||||||||||||||
Investments in other ventures, under equity method | 106,549 | 103,978 | 100,396 | 98,563 | 115,172 | ||||||||||||||
Total investments | 17,368,789 | 16,947,893 | 16,388,316 | 14,852,848 | 11,885,747 | ||||||||||||||
Cash and cash equivalents | 1,379,068 | 871,251 | 670,626 | 1,021,275 | 1,107,922 | ||||||||||||||
Premiums receivable | 2,599,896 | 2,799,954 | 3,140,688 | 2,753,098 | 1,537,188 | ||||||||||||||
Prepaid reinsurance premiums | 767,781 | 972,047 | 1,158,534 | 1,086,027 | 616,185 | ||||||||||||||
Reinsurance recoverable | 2,791,297 | 2,438,299 | 2,865,150 | 2,908,343 | 2,372,221 | ||||||||||||||
Accrued investment income | 72,461 | 73,509 | 76,949 | 64,615 | 51,311 | ||||||||||||||
Deferred acquisition costs and value of business acquired | 663,991 | 708,258 | 780,756 | 841,528 | 476,661 | ||||||||||||||
Receivable for investments sold | 78,369 | 225,147 | 395,787 | 411,172 | 256,416 | ||||||||||||||
Other assets | 346,216 | 344,593 | 344,938 | 353,543 | 135,127 | ||||||||||||||
Goodwill and other intangibles | 262,226 | 263,259 | 265,217 | 267,151 | 237,418 | ||||||||||||||
Total assets | $ | 26,330,094 | $ | 25,644,210 | $ | 26,086,961 | $ | 24,559,600 | $ | 18,676,196 | |||||||||
Liabilities, Noncontrolling Interests and Shareholders' Equity | |||||||||||||||||||
Liabilities | |||||||||||||||||||
Reserve for claims and claim expenses | $ | 9,384,349 | $ | 8,602,437 | $ | 8,484,848 | $ | 8,391,484 | $ | 6,076,271 | |||||||||
Unearned premiums | 2,530,975 | 2,967,535 | 3,362,520 | 3,188,678 | 1,716,021 | ||||||||||||||
Debt | 1,384,105 | 1,383,498 | 1,382,890 | 1,191,499 | 991,127 | ||||||||||||||
Reinsurance balances payable | 2,830,691 | 2,910,601 | 3,280,048 | 3,009,492 | 1,902,056 | ||||||||||||||
Payable for investments purchased | 225,275 | 654,685 | 554,696 | 679,596 | 380,332 | ||||||||||||||
Other liabilities | 932,024 | 395,186 | 396,651 | 435,418 | 513,609 | ||||||||||||||
Total liabilities | 17,287,419 | 16,913,942 | 17,461,653 | 16,896,167 | 11,579,416 | ||||||||||||||
Redeemable noncontrolling interest | 3,071,308 | 2,779,033 | 2,712,466 | 2,109,400 | 2,051,700 | ||||||||||||||
Shareholders' Equity | |||||||||||||||||||
Preference shares | 650,000 | 650,000 | 650,000 | 650,000 | 650,000 | ||||||||||||||
Common shares | 44,148 | 44,152 | 44,162 | 44,159 | 42,207 | ||||||||||||||
Additional paid-in capital | 568,277 | 560,166 | 552,210 | 543,889 | 296,099 | ||||||||||||||
Accumulated other comprehensive (loss) income | (1,939 | ) | 4,988 | (3,869 | ) | (1,470 | ) | (1,433 | ) | ||||||||||
Retained earnings | 4,710,881 | 4,691,929 | 4,670,339 | 4,317,455 | 4,058,207 | ||||||||||||||
Total shareholders' equity attributable to RenaissanceRe | 5,971,367 | 5,951,235 | 5,912,842 | 5,554,033 | 5,045,080 | ||||||||||||||
Total liabilities, noncontrolling interests and shareholders' equity | $ | 26,330,094 | $ | 25,644,210 | $ | 26,086,961 | $ | 24,559,600 | $ | 18,676,196 | |||||||||
Book value per common share | $ | 120.53 | $ | 120.07 | $ | 119.17 | $ | 111.05 | $ | 104.13 | |||||||||
7 | | |
RenaissanceRe Holdings Ltd. | ||||||||||||||||||||||||||||||||||
Investment Portfolio - Composition | ||||||||||||||||||||||||||||||||||
Type of Investment | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||
U.S. treasuries | $ | 4,467,345 | 25.7 | % | $ | 4,314,006 | 25.4 | % | $ | 3,961,306 | 24.2 | % | $ | 3,097,089 | 20.9 | % | $ | 3,331,411 | 28.0 | % | ||||||||||||||
Agencies | 343,031 | 1.9 | % | 507,903 | 3.0 | % | 334,923 | 2.0 | % | 182,904 | 1.2 | % | 174,883 | 1.5 | % | |||||||||||||||||||
Municipal | — | — | % | 1,629 | — | % | 2,859 | — | % | 256,967 | 1.7 | % | 6,854 | 0.1 | % | |||||||||||||||||||
Non-U.S. government | 497,392 | 2.9 | % | 379,154 | 2.2 | % | 370,505 | 2.3 | % | 687,021 | 4.6 | % | 279,818 | 2.4 | % | |||||||||||||||||||
Non-U.S. government-backed corporate | 321,356 | 1.9 | % | 263,170 | 1.6 | % | 207,668 | 1.3 | % | 286,331 | 1.9 | % | 160,063 | 1.3 | % | |||||||||||||||||||
Corporate | 3,075,660 | 17.7 | % | 3,453,222 | 20.4 | % | 3,268,511 | 19.9 | % | 2,971,018 | 20.0 | % | 2,450,244 | 20.6 | % | |||||||||||||||||||
Agency mortgage-backed | 1,148,499 | 6.6 | % | 1,248,722 | 7.4 | % | 1,167,735 | 7.1 | % | 955,616 | 6.4 | % | 817,880 | 6.8 | % | |||||||||||||||||||
Non-agency mortgage-backed | 294,604 | 1.7 | % | 261,850 | 1.5 | % | 266,963 | 1.6 | % | 272,880 | 1.8 | % | 278,680 | 2.4 | % | |||||||||||||||||||
Commercial mortgage-backed | 468,698 | 2.7 | % | 406,268 | 2.4 | % | 374,584 | 2.3 | % | 245,323 | 1.7 | % | 282,294 | 2.4 | % | |||||||||||||||||||
Asset-backed | 555,070 | 3.2 | % | 550,304 | 3.3 | % | 524,612 | 3.2 | % | 518,011 | 3.5 | % | 306,743 | 2.6 | % | |||||||||||||||||||
Total fixed maturity investments, at fair value | 11,171,655 | 64.3 | % | 11,386,228 | 67.2 | % | 10,479,666 | 63.9 | % | 9,473,160 | 63.7 | % | 8,088,870 | 68.1 | % | |||||||||||||||||||
Short term investments, at fair value | 4,566,277 | 26.3 | % | 4,116,156 | 24.3 | % | 4,579,171 | 28.0 | % | 4,012,815 | 27.1 | % | 2,586,520 | 21.8 | % | |||||||||||||||||||
Total consolidated fixed maturity and short term investments, at fair value | 15,737,932 | 90.6 | % | 15,502,384 | 91.5 | % | 15,058,837 | 91.9 | % | 13,485,975 | 90.8 | % | 10,675,390 | 89.9 | % | |||||||||||||||||||
Equity investments trading, at fair value | 436,931 | 2.5 | % | 379,422 | 2.2 | % | 273,646 | 1.7 | % | 389,937 | 2.6 | % | 310,252 | 2.6 | % | |||||||||||||||||||
Other investments, at fair value | 1,087,377 | 6.3 | % | 962,109 | 5.7 | % | 955,437 | 5.8 | % | 878,373 | 5.9 | % | 784,933 | 6.5 | % | |||||||||||||||||||
Total managed investment portfolio | 17,262,240 | 99.4 | % | 16,843,915 | 99.4 | % | 16,287,920 | 99.4 | % | 14,754,285 | 99.3 | % | 11,770,575 | 99.0 | % | |||||||||||||||||||
Investments in other ventures, under equity method | 106,549 | 0.6 | % | 103,978 | 0.6 | % | 100,396 | 0.6 | % | 98,563 | 0.7 | % | 115,172 | 1.0 | % | |||||||||||||||||||
Total investments | $ | 17,368,789 | 100.0 | % | $ | 16,947,893 | 100.0 | % | $ | 16,388,316 | 100.0 | % | $ | 14,852,848 | 100.0 | % | $ | 11,885,747 | 100.0 | % | ||||||||||||||
Managed fixed maturity and short term investments portfolio (1) | ||||||||||||||||||||||||||||||||||
Total consolidated fixed maturity and short term investments, at fair value | $ | 15,737,932 | $ | 15,502,384 | $ | 15,058,837 | $ | 13,485,975 | $ | 10,675,390 | ||||||||||||||||||||||||
Weighted average yield to maturity of fixed maturity and short term investments | 2.1 | % | 2.2 | % | 2.4 | % | 2.7 | % | 3.2 | % | ||||||||||||||||||||||||
Average duration of fixed maturities and short term investments | 2.9 | 2.8 | 2.7 | 2.5 | 2.1 | |||||||||||||||||||||||||||||
Retained fixed maturity and short term investments portfolio (2) | ||||||||||||||||||||||||||||||||||
Retained fixed maturity and short term investments, at fair value | $ | 11,154,174 | $ | 11,075,699 | $ | 10,787,618 | $ | 9,811,977 | $ | 7,647,460 | ||||||||||||||||||||||||
Weighted average yield to maturity of retained fixed maturity and short term investments | 2.2 | % | 2.3 | % | 2.5 | % | 2.8 | % | 3.4 | % | ||||||||||||||||||||||||
Average duration of retained fixed maturities and short term investments | 3.6 | 3.5 | 3.1 | 3.0 | 2.3 | |||||||||||||||||||||||||||||
(1) | Includes total consolidated fixed maturity and short term investments, at fair value, as presented on the Company's consolidated balance sheets. |
(2) | Includes total consolidated fixed maturity and short term investments, at fair value, less the portion of fixed maturity and short term investments, at fair value attributable to redeemable noncontrolling interests, certain third party vehicles and joint ventures. See "Comments on Regulation G" for a reconciliation of non-GAAP financial measures. |
8 | | |
RenaissanceRe Holdings Ltd. | ||||||||||||||||||||||||||||||||||
Investment Portfolio - Fixed Maturity Investments | ||||||||||||||||||||||||||||||||||
Credit Quality of Fixed Maturity Investments | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||
AAA | $ | 1,338,265 | 12.0 | % | $ | 1,215,518 | 10.7 | % | $ | 1,121,450 | 10.7 | % | $ | 1,221,347 | 12.9 | % | $ | 769,757 | 9.5 | % | ||||||||||||||
AA | 6,677,219 | 59.8 | % | 6,699,860 | 58.8 | % | 6,073,777 | 58.0 | % | 5,302,980 | 56.0 | % | 4,745,307 | 58.7 | % | |||||||||||||||||||
A | 1,453,212 | 13.0 | % | 1,671,934 | 14.7 | % | 1,548,705 | 14.8 | % | 1,385,193 | 14.6 | % | 928,205 | 11.5 | % | |||||||||||||||||||
BBB | 874,730 | 7.8 | % | 967,928 | 8.5 | % | 898,740 | 8.6 | % | 758,720 | 8.0 | % | 658,825 | 8.1 | % | |||||||||||||||||||
Non-investment grade and not rated | 828,229 | 7.4 | % | 830,988 | 7.3 | % | 836,994 | 7.9 | % | 804,920 | 8.5 | % | 986,776 | 12.2 | % | |||||||||||||||||||
Total fixed maturity investments, at fair value | $ | 11,171,655 | 100.0 | % | $ | 11,386,228 | 100.0 | % | $ | 10,479,666 | 100.0 | % | $ | 9,473,160 | 100.0 | % | $ | 8,088,870 | 100.0 | % | ||||||||||||||
Maturity Profile of Fixed Maturity Investments | ||||||||||||||||||||||||||||||||||
Due in less than one year | $ | 544,636 | 4.9 | % | $ | 603,806 | 5.3 | % | $ | 616,578 | 5.9 | % | $ | 744,030 | 7.8 | % | $ | 507,728 | 6.3 | % | ||||||||||||||
Due after one through five years | 5,522,769 | 49.4 | % | 5,893,946 | 51.8 | % | 5,176,183 | 49.4 | % | 5,301,425 | 56.0 | % | 4,762,712 | 58.9 | % | |||||||||||||||||||
Due after five through ten years | 2,420,602 | 21.7 | % | 2,232,264 | 19.6 | % | 1,896,176 | 18.1 | % | 1,154,682 | 12.2 | % | 1,056,087 | 13.1 | % | |||||||||||||||||||
Due after ten years | 216,777 | 1.9 | % | 189,068 | 1.7 | % | 456,835 | 4.3 | % | 281,193 | 3.0 | % | 76,746 | 0.9 | % | |||||||||||||||||||
Mortgage-backed securities | 1,911,801 | 17.1 | % | 1,916,840 | 16.8 | % | 1,809,282 | 17.3 | % | 1,473,819 | 15.5 | % | 1,378,854 | 17.0 | % | |||||||||||||||||||
Asset-backed securities | 555,070 | 5.0 | % | 550,304 | 4.8 | % | 524,612 | 5.0 | % | 518,011 | 5.5 | % | 306,743 | 3.8 | % | |||||||||||||||||||
Total fixed maturity investments, at fair value | $ | 11,171,655 | 100.0 | % | $ | 11,386,228 | 100.0 | % | $ | 10,479,666 | 100.0 | % | $ | 9,473,160 | 100.0 | % | $ | 8,088,870 | 100.0 | % | ||||||||||||||
9 | | |
RenaissanceRe Holdings Ltd. | |||||||||||||||||||||||||||||||||||||
Investment Portfolio - Weighted Average Yield to Maturity and Credit Rating | |||||||||||||||||||||||||||||||||||||
Credit Rating (1) | |||||||||||||||||||||||||||||||||||||
December 31, 2019 | Amortized Cost | Fair Value | % of Total Investment Portfolio | Weighted Average Yield to Maturity | AAA | AA | A | BBB | Non- Investment Grade | Not Rated | |||||||||||||||||||||||||||
Short term investments | $ | 4,566,277 | $ | 4,566,277 | 26.3 | % | 1.6 | % | $ | 4,293,369 | $ | 258,477 | $ | 12,480 | $ | 1,376 | $ | 545 | $ | 30 | |||||||||||||||||
100.0 | % | 94.0 | % | 5.7 | % | 0.3 | % | — | % | — | % | — | % | ||||||||||||||||||||||||
Fixed maturity investments | |||||||||||||||||||||||||||||||||||||
U.S. treasuries | 4,439,533 | 4,467,345 | 25.7 | % | 1.7 | % | — | 4,467,345 | — | — | — | — | |||||||||||||||||||||||||
Agencies | |||||||||||||||||||||||||||||||||||||
Fannie Mae and Freddie Mac | 41,956 | 41,965 | 0.2 | % | 2.2 | % | — | 41,965 | — | — | — | — | |||||||||||||||||||||||||
Other agencies | 300,206 | 301,066 | 1.7 | % | 2.0 | % | — | 301,066 | — | — | — | — | |||||||||||||||||||||||||
Total agencies | 342,162 | 343,031 | 1.9 | % | 2.1 | % | — | 343,031 | — | — | — | — | |||||||||||||||||||||||||
Non-U.S. government | 495,465 | 497,392 | 2.9 | % | 1.6 | % | 262,457 | 204,036 | 11,292 | 18,259 | 1,348 | — | |||||||||||||||||||||||||
Non-U.S. government-backed corporate | 321,303 | 321,356 | 1.9 | % | 2.0 | % | 169,357 | 113,459 | 37,300 | 550 | 690 | — | |||||||||||||||||||||||||
Corporate | 3,010,615 | 3,075,660 | 17.7 | % | 3.0 | % | 47,337 | 221,494 | 1,395,626 | 802,372 | 593,371 | 15,460 | |||||||||||||||||||||||||
Mortgage-backed | |||||||||||||||||||||||||||||||||||||
Residential mortgage-backed | |||||||||||||||||||||||||||||||||||||
Agency securities | 1,130,746 | 1,148,499 | 6.6 | % | 2.5 | % | — | 1,148,499 | — | — | — | — | |||||||||||||||||||||||||
Non-agency securities - Alt A | 218,846 | 229,055 | 1.3 | % | 3.8 | % | 32,026 | 6,671 | 2,227 | 8,000 | 146,434 | 33,697 | |||||||||||||||||||||||||
Non-agency securities - Prime | 63,421 | 65,549 | 0.4 | % | 3.3 | % | 23,535 | 3,142 | 2,657 | 582 | 20,814 | 14,819 | |||||||||||||||||||||||||
Total residential mortgage-backed | 1,413,013 | 1,443,103 | 8.3 | % | 2.7 | % | 55,561 | 1,158,312 | 4,884 | 8,582 | 167,248 | 48,516 | |||||||||||||||||||||||||
Commercial mortgage-backed | 489,352 | 468,698 | 2.7 | % | 2.6 | % | 365,272 | 84,859 | 2,701 | 14,270 | 1,596 | — | |||||||||||||||||||||||||
Total mortgage-backed | 1,902,365 | 1,911,801 | 11.0 | % | 2.7 | % | 420,833 | 1,243,171 | 7,585 | 22,852 | 168,844 | 48,516 | |||||||||||||||||||||||||
Asset-backed | |||||||||||||||||||||||||||||||||||||
Collateralized loan obligations | 515,116 | 513,743 | 3.0 | % | 3.4 | % | 399,378 | 84,683 | — | 29,682 | — | — | |||||||||||||||||||||||||
Credit cards | 13,273 | 13,386 | 0.1 | % | 2.0 | % | 13,386 | — | — | — | — | — | |||||||||||||||||||||||||
Auto loans | 21,091 | 21,372 | 0.1 | % | 2.1 | % | 21,372 | — | — | — | — | — | |||||||||||||||||||||||||
Other | 6,491 | 6,569 | — | % | 2.5 | % | 4,145 | — | 1,409 | 1,015 | — | — | |||||||||||||||||||||||||
Total asset-backed | 555,971 | 555,070 | 3.2 | % | 3.3 | % | 438,281 | 84,683 | 1,409 | 30,697 | — | — | |||||||||||||||||||||||||
Total securitized assets | 2,458,336 | 2,466,871 | 14.2 | % | 2.8 | % | 859,114 | 1,327,854 | 8,994 | 53,549 | 168,844 | 48,516 | |||||||||||||||||||||||||
Total fixed maturity investments | 11,067,414 | 11,171,655 | 64.3 | % | 2.3 | % | 1,338,265 | 6,677,219 | 1,453,212 | 874,730 | 764,253 | 63,976 | |||||||||||||||||||||||||
100.0 | % | 12.0 | % | 59.8 | % | 13.0 | % | 7.8 | % | 6.8 | % | 0.6 | % | ||||||||||||||||||||||||
Weighted average yield to maturity of fixed maturity and short term investments | 2.1 | % | |||||||||||||||||||||||||||||||||||
Equity investments trading | 436,931 | 2.5 | % | — | — | — | — | — | 436,931 | ||||||||||||||||||||||||||||
100.0 | % | — | % | — | % | — | % | — | % | — | % | 100.0 | % | ||||||||||||||||||||||||
Other investments | |||||||||||||||||||||||||||||||||||||
Catastrophe bonds | 781,641 | 4.5 | % | — | — | — | — | 781,641 | — | ||||||||||||||||||||||||||||
Private equity investments | 271,047 | 1.6 | % | — | — | — | — | — | 271,047 | ||||||||||||||||||||||||||||
Senior secured bank loan funds | 22,598 | 0.1 | % | — | — | — | — | — | 22,598 | ||||||||||||||||||||||||||||
Hedge funds | 12,091 | 0.1 | % | — | — | — | — | — | 12,091 | ||||||||||||||||||||||||||||
Total other investments | 1,087,377 | 6.3 | % | — | — | — | — | 781,641 | 305,736 | ||||||||||||||||||||||||||||
100.0 | % | — | % | — | % | — | % | — | % | 71.9 | % | 28.1 | % | ||||||||||||||||||||||||
Investments in other ventures | 106,549 | 0.6 | % | — | — | — | — | — | 106,549 | ||||||||||||||||||||||||||||
100.0 | % | — | % | — | % | — | % | — | % | — | % | 100.0 | % | ||||||||||||||||||||||||
Total investment portfolio | $ | 17,368,789 | 100.0 | % | $ | 5,631,634 | $ | 6,935,696 | $ | 1,465,692 | $ | 876,106 | $ | 1,546,439 | $ | 913,222 | |||||||||||||||||||||
100.0 | % | 32.4 | % | 40.0 | % | 8.4 | % | 5.0 | % | 8.9 | % | 5.3 | % | ||||||||||||||||||||||||
(1) | The credit ratings included in this table are those assigned by Standard & Poor’s Corporation ("S&P"). When ratings provided by S&P were not available, ratings from other nationally recognized rating agencies were used. The Company has grouped short term investments with an A-1+ and A-1 short term issue credit rating as AAA, short term investments with an A-2 short term issue credit rating as AA and short term investments with an A-3 short term issue credit rating as A. |
10 | | |
RenaissanceRe Holdings Ltd. | |||||||||||||||||||||||||||
Total Investment Result | |||||||||||||||||||||||||||
Three months ended | Twelve months ended | ||||||||||||||||||||||||||
December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | |||||||||||||||||||||
Fixed maturity investments | $ | 85,937 | $ | 82,977 | $ | 88,106 | $ | 61,483 | $ | 60,189 | $ | 318,503 | $ | 211,973 | |||||||||||||
Short term investments | 11,552 | 15,061 | 17,807 | 11,844 | 11,231 | 56,264 | 33,571 | ||||||||||||||||||||
Equity investments trading | 1,539 | 1,326 | 916 | 1,027 | 1,383 | 4,808 | 4,474 | ||||||||||||||||||||
Other investments | |||||||||||||||||||||||||||
Private equity investments | 6,815 | (4,597 | ) | 10,309 | 2,454 | (11,672 | ) | 14,981 | 477 | ||||||||||||||||||
Other | 8,833 | 22,538 | 630 | 7,245 | (4,871 | ) | 39,246 | 22,475 | |||||||||||||||||||
Cash and cash equivalents | 1,875 | 1,978 | 2,306 | 1,517 | 1,102 | 7,676 | 3,810 | ||||||||||||||||||||
116,551 | 119,283 | 120,074 | 85,570 | 57,362 | 441,478 | 276,780 | |||||||||||||||||||||
Investment expenses | (3,856 | ) | (5,439 | ) | (4,242 | ) | (4,108 | ) | (4,024 | ) | (17,645 | ) | (14,914 | ) | |||||||||||||
Net investment income | 112,695 | 113,844 | 115,832 | 81,462 | 53,338 | 423,833 | 261,866 | ||||||||||||||||||||
Gross realized gains | 45,814 | 34,710 | 28,512 | 24,373 | 6,339 | 133,409 | 21,284 | ||||||||||||||||||||
Gross realized losses | (8,380 | ) | (4,609 | ) | (7,217 | ) | (22,943 | ) | (23,399 | ) | (43,149 | ) | (91,098 | ) | |||||||||||||
Net realized gains (losses) on fixed maturity investments | 37,434 | 30,101 | 21,295 | 1,430 | (17,060 | ) | 90,260 | (69,814 | ) | ||||||||||||||||||
Net unrealized (losses) gains on fixed maturity investments trading | (72,956 | ) | 17,226 | 121,991 | 103,922 | 16,212 | 170,183 | (57,310 | ) | ||||||||||||||||||
Net realized and unrealized (losses) gains on investments-related derivatives | (3,212 | ) | 11,134 | 37,173 | 13,796 | (8,021 | ) | 58,891 | (8,784 | ) | |||||||||||||||||
Net realized gains (losses) on equity investments trading | 396 | (72 | ) | 31,899 | (1,161 | ) | 5,898 | 31,062 | 27,739 | ||||||||||||||||||
Net unrealized gains (losses) on equity investments trading | 56,235 | (26,451 | ) | (18,355 | ) | 52,658 | (85,683 | ) | 64,087 | (66,900 | ) | ||||||||||||||||
Net realized and unrealized gains (losses) on investments | 17,897 | 31,938 | 194,003 | 170,645 | (88,654 | ) | 414,483 | (175,069 | ) | ||||||||||||||||||
Total investment result | $ | 130,592 | $ | 145,782 | $ | 309,835 | $ | 252,107 | $ | (35,316 | ) | $ | 838,316 | $ | 86,797 | ||||||||||||
Total investment return - annualized | 3.1 | % | 3.6 | % | 8.0 | % | 8.0 | % | (1.2 | )% | 5.2 | % | 0.8 | % | |||||||||||||
Retained total investment result (1) | |||||||||||||||||||||||||||
Retained net investment income | $ | 90,568 | $ | 81,193 | $ | 101,279 | $ | 62,659 | $ | 46,388 | $ | 335,699 | $ | 206,876 | |||||||||||||
Retained net realized and unrealized gains (losses) on investments | 18,922 | 26,979 | 177,478 | 153,111 | (88,987 | ) | 376,490 | (154,206 | ) | ||||||||||||||||||
Retained total investment result | $ | 109,490 | $ | 108,172 | $ | 278,757 | $ | 215,770 | $ | (42,599 | ) | $ | 712,189 | $ | 52,670 | ||||||||||||
(1) | Includes total investment return, less the portion attributable to redeemable noncontrolling interests, certain third-party vehicles and joint ventures. See "Comments on Regulation G" for a reconciliation of non-GAAP financial measures. |
11 | | |
RenaissanceRe Holdings Ltd. | |||||||||||||||
Reserves for Claims and Claim Expenses | |||||||||||||||
Case Reserves | Additional Case Reserves | IBNR | Total | ||||||||||||
December 31, 2019 | |||||||||||||||
Property | $ | 1,253,406 | $ | 1,631,223 | $ | 1,189,221 | $ | 4,073,850 | |||||||
Casualty and Specialty | 1,596,426 | 129,720 | 3,583,913 | 5,310,059 | |||||||||||
Other | 440 | — | — | 440 | |||||||||||
Total | $ | 2,850,272 | $ | 1,760,943 | $ | 4,773,134 | $ | 9,384,349 | |||||||
September 30, 2019 | |||||||||||||||
Property | $ | 1,170,009 | $ | 1,493,600 | $ | 916,314 | $ | 3,579,923 | |||||||
Casualty and Specialty | 1,475,505 | 151,555 | 3,389,344 | 5,016,404 | |||||||||||
Other | 2,944 | — | 3,166 | 6,110 | |||||||||||
Total | $ | 2,648,458 | $ | 1,645,155 | $ | 4,308,824 | $ | 8,602,437 | |||||||
June 30, 2019 | |||||||||||||||
Property | $ | 1,191,810 | $ | 1,635,595 | $ | 791,628 | $ | 3,619,033 | |||||||
Casualty and Specialty | 1,450,805 | 128,701 | 3,280,133 | 4,859,639 | |||||||||||
Other | 3,010 | — | 3,166 | 6,176 | |||||||||||
Total | $ | 2,645,625 | $ | 1,764,296 | $ | 4,074,927 | $ | 8,484,848 | |||||||
March 31, 2019 | |||||||||||||||
Property | $ | 1,243,455 | $ | 1,598,283 | $ | 844,681 | $ | 3,686,419 | |||||||
Casualty and Specialty | 1,454,164 | 121,165 | 3,125,166 | 4,700,495 | |||||||||||
Other | 1,404 | — | 3,166 | 4,570 | |||||||||||
Total (1) | $ | 2,699,023 | $ | 1,719,448 | $ | 3,973,013 | $ | 8,391,484 | |||||||
December 31, 2018 | |||||||||||||||
Property | $ | 690,718 | $ | 1,308,307 | $ | 1,087,229 | $ | 3,086,254 | |||||||
Casualty and Specialty | 771,537 | 116,877 | 2,096,979 | 2,985,393 | |||||||||||
Other | 1,458 | — | 3,166 | 4,624 | |||||||||||
Total | $ | 1,463,713 | $ | 1,425,184 | $ | 3,187,374 | $ | 6,076,271 | |||||||
(1) | Included in the Company’s reserves for claims and claim expenses balance at March 31, 2019 is $2.4 billion of gross reserves for claims and claim expenses, at fair value, acquired as a result of the acquisition of TMR. |
12 | | |
RenaissanceRe Holdings Ltd. | |||||||||||||||||||||||
Paid to Incurred Analysis | |||||||||||||||||||||||
Three months ended December 31, 2019 | Three months ended December 31, 2018 | ||||||||||||||||||||||
Gross | Recoveries | Net | Gross | Recoveries | Net | ||||||||||||||||||
Reserve for claims and claim expenses, beginning of period | $ | 8,602,437 | $ | 2,438,299 | $ | 6,164,138 | $ | 4,952,498 | $ | 1,204,059 | $ | 3,748,439 | |||||||||||
Incurred claims and claim expenses | |||||||||||||||||||||||
Current year | 1,236,137 | 461,709 | 774,428 | 1,843,454 | 1,292,047 | 551,407 | |||||||||||||||||
Prior years | 180,752 | 193,087 | (12,335 | ) | (82,478 | ) | (8,709 | ) | (73,769 | ) | |||||||||||||
Total incurred claims and claim expenses | 1,416,889 | 654,796 | 762,093 | 1,760,976 | 1,283,338 | 477,638 | |||||||||||||||||
Paid claims and claim expenses | |||||||||||||||||||||||
Current year | 148,468 | 11,290 | 137,178 | 386,378 | 43,392 | 342,986 | |||||||||||||||||
Prior years | 563,976 | 295,110 | 268,866 | 248,798 | 71,782 | 177,016 | |||||||||||||||||
Total paid claims and claim expenses | 712,444 | 306,400 | 406,044 | 635,176 | 115,174 | 520,002 | |||||||||||||||||
Foreign exchange (1) | 77,467 | 4,602 | 72,865 | (2,027 | ) | (2 | ) | (2,025 | ) | ||||||||||||||
Reserve for claims and claim expenses, end of period | $ | 9,384,349 | $ | 2,791,297 | $ | 6,593,052 | $ | 6,076,271 | $ | 2,372,221 | $ | 3,704,050 | |||||||||||
Year ended December 31, 2019 | Year ended December 31, 2018 | ||||||||||||||||||||||
Gross | Recoveries | Net | Gross | Recoveries | Net | ||||||||||||||||||
Reserve for claims and claim expenses, beginning of period | $ | 6,076,271 | $ | 2,372,221 | $ | 3,704,050 | $ | 5,080,408 | $ | 1,586,630 | $ | 3,493,778 | |||||||||||
Incurred claims and claim expenses | |||||||||||||||||||||||
Current year | 2,863,163 | 739,287 | 2,123,876 | 2,910,525 | 1,519,758 | 1,390,767 | |||||||||||||||||
Prior years | 358,615 | 385,470 | (26,855 | ) | (331,989 | ) | (61,240 | ) | (270,749 | ) | |||||||||||||
Total incurred claims and claim expenses | 3,221,778 | 1,124,757 | 2,097,021 | 2,578,536 | 1,458,518 | 1,120,018 | |||||||||||||||||
Paid claims and claim expenses | |||||||||||||||||||||||
Current year | 286,836 | 21,187 | 265,649 | 445,756 | 54,695 | 391,061 | |||||||||||||||||
Prior years | 2,048,366 | 1,215,961 | 832,405 | 1,121,930 | 618,222 | 503,708 | |||||||||||||||||
Total paid claims and claim expenses | 2,335,202 | 1,237,148 | 1,098,054 | 1,567,686 | 672,917 | 894,769 | |||||||||||||||||
Amounts acquired (2) | 2,388,210 | 529,435 | 1,858,775 | — | — | — | |||||||||||||||||
Foreign exchange (1) | 33,292 | 2,032 | 31,260 | (14,987 | ) | (10 | ) | (14,977 | ) | ||||||||||||||
Reserve for claims and claim expenses, end of period | $ | 9,384,349 | $ | 2,791,297 | $ | 6,593,052 | $ | 6,076,271 | $ | 2,372,221 | $ | 3,704,050 | |||||||||||
(1) | Reflects the impact of the foreign exchange revaluation of net reserves denominated in non-U.S. dollars as at the balance sheet date. |
(2) | Represents the fair value of TMR's reserves for claims and claim expenses, net of reinsurance recoverables, acquired at March 22, 2019. |
13 | | |
RenaissanceRe Holdings Ltd. | |||||||||||||||||||||
Fee Income | |||||||||||||||||||||
The table below reflects the total fee income earned through third-party capital management as well as various joint ventures and certain structured retrocession agreements to which the Company is a party. Joint ventures include DaVinciRe Holdings Ltd. ("DaVinciRe"), Top Layer Reinsurance Ltd., Vermeer Reinsurance Ltd. ("Vermeer") and certain entities investing in Langhorne Holdings LLC. Managed funds include RenaissanceRe Upsilon Fund Ltd. and RenaissanceRe Medici Fund Ltd. ("Medici"). Structured reinsurance products and other include Fibonacci Reinsurance Ltd., as well as certain other vehicles and reinsurance contracts which transfer risk to capital.
Three months ended | Twelve months ended | ||||||||||||||||||||||||||
December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | |||||||||||||||||||||
Management fee income | |||||||||||||||||||||||||||
Joint ventures | $ | 11,858 | $ | 11,434 | $ | 9,519 | $ | 9,735 | $ | 3,628 | $ | 42,546 | $ | 26,387 | |||||||||||||
Managed funds | 3,814 | 4,558 | 6,467 | 3,797 | 3,051 | 18,636 | 11,462 | ||||||||||||||||||||
Structured reinsurance products and other | 8,252 | 8,765 | 9,976 | 8,245 | 8,213 | 35,238 | 33,312 | ||||||||||||||||||||
Total management fee income | 23,924 | 24,757 | 25,962 | 21,777 | 14,892 | 96,420 | 71,161 | ||||||||||||||||||||
Performance fee (loss) income | |||||||||||||||||||||||||||
Joint ventures | (3,374 | ) | 5,278 | 5,218 | 2,538 | 3,193 | 9,660 | 15,093 | |||||||||||||||||||
Managed funds | (2,036 | ) | 1,688 | 470 | 298 | (4,430 | ) | 420 | 62 | ||||||||||||||||||
Structured reinsurance products and other | (5,314 | ) | 275 | 8,541 | 4,191 | (5,020 | ) | 7,693 | 3,580 | ||||||||||||||||||
Total performance fee (loss) income (1) | (10,724 | ) | 7,241 | 14,229 | 7,027 | (6,257 | ) | 17,773 | 18,735 | ||||||||||||||||||
Total fee income | $ | 13,200 | $ | 31,998 | $ | 40,191 | $ | 28,804 | $ | 8,635 | $ | 114,193 | $ | 89,896 | |||||||||||||
(1) | Performance fees are based on the performance of the individual vehicles or products, and may be negative in a particular period if, for example, large losses occur, which can potentially result in no performance fees or the reversal of previously accrued performance fees. |
14 | | |
RenaissanceRe Holdings Ltd. | |||||||||||||
Noncontrolling Interests | |||||||||||||
The Company consolidates the results of certain of its joint ventures and managed capital vehicles, namely, DaVinciRe, Medici and Vermeer (collectively, the "Consolidated Vehicles"), in its consolidated statements of operations. Net loss (income) attributable to redeemable noncontrolling interests represents the portion of the loss (income) associated with the Company's Consolidated Vehicles included in the Company's consolidated statements of operations that is attributable to third-party investors in these Consolidated Vehicles. A negative number in the table below represents the allocation of net income earned by the Company's Consolidated Vehicles to third-party investors, with a corresponding decrease (increase) to the Company's net income (loss) attributable to RenaissanceRe. Conversely, a positive number in the table below represents the allocation of net losses incurred by the Company's Consolidated Vehicles to third-party investors, with a corresponding increase (decrease) to the Company's net income (loss) attributable to RenaissanceRe.
A summary of the redeemable noncontrolling interests on the Company's consolidated statements of operations is set forth below:
Three months ended | Twelve months ended | ||||||||||||||||||||||||||
December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | |||||||||||||||||||||
Redeemable noncontrolling interest - DaVinciRe | $ | 25,862 | $ | (30,558 | ) | $ | (59,855 | ) | $ | (62,533 | ) | $ | 47,297 | $ | (127,084 | ) | $ | (27,638 | ) | ||||||||
Redeemable noncontrolling interest - Medici | (6,363 | ) | (15,211 | ) | (1,704 | ) | (2,481 | ) | 1,961 | (25,759 | ) | (13,926 | ) | ||||||||||||||
Redeemable noncontrolling interest - Vermeer | (16,877 | ) | (16,288 | ) | (10,253 | ) | (5,208 | ) | 11 | (48,626 | ) | 11 | |||||||||||||||
Net loss (income) attributable to redeemable noncontrolling interests | $ | 2,622 | $ | (62,057 | ) | $ | (71,812 | ) | $ | (70,222 | ) | $ | 49,269 | $ | (201,469 | ) | $ | (41,553 | ) | ||||||||
A summary of the redeemable noncontrolling economic ownership of third parties in the Company's consolidated Consolidated Vehicles is set forth below:
December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | ||||||||||||||
DaVinciRe | 78.1 | % | 78.1 | % | 78.1 | % | 77.9 | % | 77.9 | % | ||||||||
Medici | 87.9 | % | 86.3 | % | 86.1 | % | 82.9 | % | 83.4 | % | ||||||||
Vermeer | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
15 | | |
RenaissanceRe Holdings Ltd. | |||||||||||||||||||
Earnings per Share | |||||||||||||||||||
Three months ended | |||||||||||||||||||
(common shares in thousands) | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | ||||||||||||||
Numerator: | |||||||||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | $ | 33,773 | $ | 36,698 | $ | 367,854 | $ | 273,717 | $ | (83,906 | ) | ||||||||
Amount allocated to participating common shareholders (1) | (409 | ) | (446 | ) | (4,393 | ) | (3,121 | ) | (157 | ) | |||||||||
$ | 33,364 | $ | 36,252 | $ | 363,461 | $ | 270,596 | $ | (84,063 | ) | |||||||||
Denominator: | |||||||||||||||||||
Denominator for basic income (loss) per RenaissanceRe common share - | |||||||||||||||||||
Weighted average common shares | 43,467 | 43,462 | 43,483 | 42,065 | 40,111 | ||||||||||||||
Per common share equivalents of employee stock options and non-vested shares | 85 | 75 | 38 | 26 | — | ||||||||||||||
Denominator for diluted income (loss) per RenaissanceRe common share - | |||||||||||||||||||
Adjusted weighted average common shares and assumed conversions | 43,552 | 43,537 | 43,521 | 42,091 | 40,111 | ||||||||||||||
Basic income (loss) per RenaissanceRe common share | $ | 0.77 | $ | 0.83 | $ | 8.36 | $ | 6.43 | $ | (2.10 | ) | ||||||||
Diluted income (loss) per RenaissanceRe common share | $ | 0.77 | $ | 0.83 | $ | 8.35 | $ | 6.43 | $ | (2.10 | ) | ||||||||
Twelve months ended | |||||||||||||||||||
(common shares in thousands) | December 31, 2019 | December 31, 2018 | |||||||||||||||||
Numerator: | |||||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 712,042 | $ | 197,276 | |||||||||||||||
Amount allocated to participating common shareholders (1) | (8,545 | ) | (2,121 | ) | |||||||||||||||
$ | 703,497 | $ | 195,155 | ||||||||||||||||
Denominator: | |||||||||||||||||||
Denominator for basic income per RenaissanceRe common share - | |||||||||||||||||||
Weighted average common shares | 43,119 | 39,732 | |||||||||||||||||
Per common share equivalents of employee stock options and non-vested shares | 56 | 23 | |||||||||||||||||
Denominator for diluted income per RenaissanceRe common share - | |||||||||||||||||||
Adjusted weighted average common shares and assumed conversions | 43,175 | 39,755 | |||||||||||||||||
Basic income per RenaissanceRe common share | $ | 16.32 | $ | 4.91 | |||||||||||||||
Diluted income per RenaissanceRe common share | $ | 16.29 | $ | 4.91 | |||||||||||||||
(1) | Represents earnings attributable to holders of non-vested shares issued pursuant to the Company's 2001 Stock Incentive Plan, 2016 Long-Term Incentive Plan and to the Company's non-employee directors. |
16 | | |
RenaissanceRe Holdings Ltd. | |||||||
Ratings | |||||||
A.M. Best (1) | S&P (2) | Moody's (3) | Fitch (4) | ||||
Renaissance Reinsurance Ltd. | A+ | A+ | A1 | A+ | |||
DaVinci Reinsurance Ltd. | A | A+ | A3 | — | |||
Renaissance Reinsurance of Europe Unlimited Company | A+ | A+ | — | — | |||
Renaissance Reinsurance U.S. Inc. | A+ | A+ | — | — | |||
RenaissanceRe Europe AG | A+ | A+ | — | — | |||
RenaissanceRe Specialty U.S. | A+ | A+ | — | — | |||
Top Layer Reinsurance Ltd. | A+ | AA | — | — | |||
Vermeer Reinsurance Ltd. | A | — | — | — | |||
RenaissanceRe Syndicate 1458 | — | — | — | — | |||
Lloyd's Overall Market Rating | A | A+ | — | AA- | |||
RenaissanceRe | Very Strong | Very Strong | — | — | |||
Ratings as of February 3, 2020.
(1) The A.M. Best ratings for the Company's principal operating subsidiaries and joint ventures represent the insurer’s financial strength rating. The Lloyd’s Overall Market Rating represents RenaissanceRe Syndicate 1458’s financial strength rating. The A.M. Best rating for RenaissanceRe represents the Company’s Enterprise Risk Management (“ERM”) score.
(2) The S&P ratings for the Company's principal operating subsidiaries and joint ventures represent the insurer’s financial strength rating and the issuer’s long-term issuer credit rating. The Lloyd’s Overall Market Rating represents RenaissanceRe Syndicate 1458’s financial strength rating. The S&P rating for RenaissanceRe represents the rating on its ERM practices.
(3) | The Moody’s ratings represent the insurer’s financial strength rating. |
(4) | The Fitch rating for Renaissance Reinsurance represents the insurer’s financial strength rating. The Lloyd’s Overall Market Rating represents RenaissanceRe Syndicate 1458’s financial strength rating. |
17 | | |
RenaissanceRe Holdings Ltd. | |||||||||||||||||||||||||||
Gross Premiums Written | |||||||||||||||||||||||||||
Three months ended | Twelve months ended | ||||||||||||||||||||||||||
December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | |||||||||||||||||||||
Property Segment | |||||||||||||||||||||||||||
Catastrophe | $ | 44,824 | $ | 102,779 | $ | 602,656 | $ | 845,213 | $ | 108,937 | $ | 1,595,472 | $ | 1,349,324 | |||||||||||||
Other property | 200,177 | 211,621 | 236,544 | 187,171 | 90,981 | 835,513 | 411,602 | ||||||||||||||||||||
Property segment gross premiums written | $ | 245,001 | $ | 314,400 | $ | 839,200 | $ | 1,032,384 | $ | 199,918 | $ | 2,430,985 | $ | 1,760,926 | |||||||||||||
Casualty and Specialty Segment | |||||||||||||||||||||||||||
General casualty (1) | $ | 197,338 | $ | 191,447 | $ | 258,357 | $ | 153,334 | $ | 75,797 | 807,901 | 453,097 | |||||||||||||||
Professional liability (2) | 189,838 | 151,754 | 167,206 | 149,377 | 119,391 | 650,750 | 485,851 | ||||||||||||||||||||
Financial lines (3) | 126,983 | 111,459 | 91,202 | 127,356 | 102,167 | 457,000 | 352,902 | ||||||||||||||||||||
Other (4) | 146,319 | 92,008 | 120,943 | 101,844 | 50,482 | 461,114 | 257,651 | ||||||||||||||||||||
Casualty and Specialty segment gross premiums written | $ | 660,478 | $ | 546,668 | $ | 637,708 | $ | 531,911 | $ | 347,837 | $ | 2,376,765 | $ | 1,549,501 | |||||||||||||
(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. |
18 | | |
RenaissanceRe Holdings Ltd. | |||||||||||||||||||||||
Property Segment Supplemental Underwriting Results | |||||||||||||||||||||||
Three months ended December 31, 2019 | Three months ended December 31, 2018 | ||||||||||||||||||||||
Catastrophe | Other Property | Total | Catastrophe | Other Property | Total | ||||||||||||||||||
Gross premiums written | $ | 44,824 | $ | 200,177 | $ | 245,001 | $ | 108,937 | $ | 90,981 | $ | 199,918 | |||||||||||
Net premiums written | $ | 42,797 | $ | 200,135 | $ | 242,932 | $ | 79,209 | $ | 91,438 | $ | 170,647 | |||||||||||
Net premiums earned | $ | 267,356 | $ | 200,048 | $ | 467,404 | $ | 233,107 | $ | 95,478 | $ | 328,585 | |||||||||||
Net claims and claim expenses incurred | 306,042 | 118,165 | 424,207 | 192,810 | 82,890 | 275,700 | |||||||||||||||||
Acquisition expenses | 41,631 | 49,159 | 90,790 | 23,165 | 27,652 | 50,817 | |||||||||||||||||
Operational expenses | 29,605 | 9,864 | 39,469 | 30,984 | 6,037 | 37,021 | |||||||||||||||||
Underwriting (loss) income | $ | (109,922 | ) | $ | 22,860 | $ | (87,062 | ) | $ | (13,852 | ) | $ | (21,101 | ) | $ | (34,953 | ) | ||||||
Net claims and claim expenses incurred - current accident year | $ | 310,228 | $ | 121,932 | $ | 432,160 | $ | 238,402 | $ | 85,716 | $ | 324,118 | |||||||||||
Net claims and claim expenses incurred - prior accident years | (4,186 | ) | (3,767 | ) | (7,953 | ) | (45,592 | ) | (2,826 | ) | (48,418 | ) | |||||||||||
Net claims and claim expenses incurred - total | $ | 306,042 | $ | 118,165 | $ | 424,207 | $ | 192,810 | $ | 82,890 | $ | 275,700 | |||||||||||
Net claims and claim expense ratio - current accident year | 116.0 | % | 61.0 | % | 92.5 | % | 102.3 | % | 89.8 | % | 98.6 | % | |||||||||||
Net claims and claim expense ratio - prior accident years | (1.5 | )% | (1.9 | )% | (1.7 | )% | (19.6 | )% | (3.0 | )% | (14.7 | )% | |||||||||||
Net claims and claim expense ratio - calendar year | 114.5 | % | 59.1 | % | 90.8 | % | 82.7 | % | 86.8 | % | 83.9 | % | |||||||||||
Underwriting expense ratio | 26.6 | % | 29.5 | % | 27.8 | % | 23.2 | % | 35.3 | % | 26.7 | % | |||||||||||
Combined ratio | 141.1 | % | 88.6 | % | 118.6 | % | 105.9 | % | 122.1 | % | 110.6 | % | |||||||||||
Year ended December 31, 2019 | Year ended December 31, 2018 | ||||||||||||||||||||||
Catastrophe | Other Property | Total | Catastrophe | Other Property | Total | ||||||||||||||||||
Gross premiums written | $ | 1,595,472 | $ | 835,513 | $ | 2,430,985 | $ | 1,349,324 | $ | 411,602 | $ | 1,760,926 | |||||||||||
Net premiums written | $ | 902,205 | $ | 752,054 | $ | 1,654,259 | $ | 699,255 | $ | 355,933 | $ | 1,055,188 | |||||||||||
Net premiums earned | $ | 911,528 | $ | 715,966 | $ | 1,627,494 | $ | 710,417 | $ | 340,414 | $ | 1,050,831 | |||||||||||
Net claims and claim expenses incurred (recovered) | 489,315 | 476,109 | 965,424 | 282,713 | 215,182 | 497,895 | |||||||||||||||||
Acquisition expenses | 131,111 | 182,650 | 313,761 | 77,950 | 99,962 | 177,912 | |||||||||||||||||
Operational expenses | 109,736 | 29,279 | 139,015 | 93,897 | 19,057 | 112,954 | |||||||||||||||||
Underwriting income | $ | 181,366 | $ | 27,928 | $ | 209,294 | $ | 255,857 | $ | 6,213 | $ | 262,070 | |||||||||||
Net claims and claim expenses incurred - current accident year | $ | 544,895 | $ | 423,462 | $ | 968,357 | $ | 476,190 | $ | 242,995 | $ | 719,185 | |||||||||||
Net claims and claim expenses incurred - prior accident years | (55,580 | ) | 52,647 | (2,933 | ) | (193,477 | ) | (27,813 | ) | (221,290 | ) | ||||||||||||
Net claims and claim expenses incurred - total | $ | 489,315 | $ | 476,109 | $ | 965,424 | $ | 282,713 | $ | 215,182 | $ | 497,895 | |||||||||||
Net claims and claim expense ratio - current accident year | 59.8 | % | 59.1 | % | 59.5 | % | 67.0 | % | 71.4 | % | 68.4 | % | |||||||||||
Net claims and claim expense ratio - prior accident years | (6.1 | )% | 7.4 | % | (0.2 | )% | (27.2 | )% | (8.2 | )% | (21.0 | )% | |||||||||||
Net claims and claim expense ratio - calendar year | 53.7 | % | 66.5 | % | 59.3 | % | 39.8 | % | 63.2 | % | 47.4 | % | |||||||||||
Underwriting expense ratio | 26.4 | % | 29.6 | % | 27.8 | % | 24.2 | % | 35.0 | % | 27.7 | % | |||||||||||
Combined ratio | 80.1 | % | 96.1 | % | 87.1 | % | 64.0 | % | 98.2 | % | 75.1 | % | |||||||||||
19 | | |
RenaissanceRe Holdings Ltd.
Comments on Regulation G
In addition to the GAAP financial measures set forth in this Financial Supplement, the Company has included certain non-GAAP financial measures within the meaning of Regulation G. The Company has consistently 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 (loss) available (attributable) 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 attributable to RenaissanceRe common shareholders, transaction and integration expenses associated with the acquisition of TMR and the income tax expense or benefit associated with these exclusions to “net income (loss) available (attributable) to RenaissanceRe common shareholders." 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 Company's fixed maturity investment portfolio, equity investments trading and investments-related derivatives; certain transaction and integration expenses associated with the acquisition of TMR; and the associated income tax expense or benefit of these adjustments. 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 is a reconciliation of: (1) net income (loss) available (attributable) to RenaissanceRe common shareholders to operating income available to RenaissanceRe common shareholders; (2) net income (loss) available (attributable) 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:
RenaissanceRe Holdings Ltd.
Comments on Regulation G
Operating Income Available to RenaissanceRe Common Shareholders and Operating Return on Average Common Equity - Annualized
Three months ended | Twelve months ended | ||||||||||||||||||||||||||
December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | |||||||||||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | $ | 33,773 | $ | 36,698 | $ | 367,854 | $ | 273,717 | $ | (83,906 | ) | $ | 712,042 | $ | 197,276 | ||||||||||||
Adjustment for net realized and unrealized (gains) losses on investments attributable to RenaissanceRe common shareholders (1) | (18,188 | ) | (30,683 | ) | (177,418 | ) | (153,164 | ) | 88,987 | (379,453 | ) | 154,205 | |||||||||||||||
Adjustment for transaction and integration expenses associated with the acquisition of TMR | 5,700 | 4,022 | 14,483 | 25,520 | 3,296 | 49,725 | 3,296 | ||||||||||||||||||||
Adjustment for income tax expense (benefit) (2) | 1,728 | 2,929 | 7,653 | 8,287 | (3,580 | ) | 20,597 | (5,750 | ) | ||||||||||||||||||
Operating income available to RenaissanceRe common shareholders | $ | 23,013 | $ | 12,966 | $ | 212,572 | $ | 154,360 | $ | 4,797 | $ | 402,911 | $ | 349,027 | |||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted | $ | 0.77 | $ | 0.83 | $ | 8.35 | $ | 6.43 | $ | (2.10 | ) | $ | 16.29 | $ | 4.91 | ||||||||||||
Adjustment for net realized and unrealized (gains) losses on investments attributable to RenaissanceRe common shareholders (1) | (0.42 | ) | (0.70 | ) | (4.08 | ) | (3.64 | ) | 2.22 | (8.79 | ) | 3.88 | |||||||||||||||
Adjustment for transaction and integration expenses associated with the acquisition of TMR | 0.13 | 0.09 | 0.33 | 0.61 | 0.08 | 1.15 | 0.08 | ||||||||||||||||||||
Adjustment for income tax expense (benefit) (2) | 0.04 | 0.07 | 0.18 | 0.20 | (0.09 | ) | 0.48 | (0.14 | ) | ||||||||||||||||||
Operating income available to RenaissanceRe common shareholders per common share - diluted | $ | 0.52 | $ | 0.29 | $ | 4.78 | $ | 3.60 | $ | 0.11 | $ | 9.13 | $ | 8.73 | |||||||||||||
Return on average common equity - annualized | 2.5 | % | 2.8 | % | 28.9 | % | 23.5 | % | (7.8 | )% | 14.1 | % | 4.7 | % | |||||||||||||
Adjustment for net realized and unrealized (gains) losses on investments attributable to RenaissanceRe common shareholders (1) | (1.3 | )% | (2.3 | )% | (13.9 | )% | (13.2 | )% | 8.2 | % | (7.5 | )% | 3.7 | % | |||||||||||||
Adjustment for transaction and integration expenses associated with the acquisition of TMR | 0.4 | % | 0.3 | % | 1.1 | % | 2.2 | % | 0.3 | % | 1.0 | % | 0.1 | % | |||||||||||||
Adjustment for income tax expense (benefit) (2) | 0.1 | % | 0.2 | % | 0.6 | % | 0.8 | % | (0.3 | )% | 0.4 | % | (0.1 | )% | |||||||||||||
Operating return on average common equity - annualized | 1.7 | % | 1.0 | % | 16.7 | % | 13.3 | % | 0.4 | % | 8.0 | % | 8.4 | % | |||||||||||||
(1) | Adjustment for net realized and unrealized (gains) losses on investments attributable to RenaissanceRe common shareholders represents: net realized and unrealized gains (losses) on investments as set forth in the Company's consolidated statement of operations less net realized and unrealized gains (losses) attributable to redeemable noncontrolling interests, which is included in net loss (income) attributable to redeemable noncontrolling interests in the Company's consolidated statement of operations. Comparative information for all prior periods has been updated to conform to the current methodology and presentation. |
(2) | Adjustment for income tax expense (benefit) represents the income tax expense (benefit) associated with the adjustments to net income (loss) available (attributable) to RenaissanceRe common shareholders. The income tax impact is estimated by applying the statutory rates of applicable jurisdictions, after consideration of other relevant factors. |
20 | | |
RenaissanceRe Holdings Ltd.
Comments on Regulation G
Tangible Book Value Per Common Share and Tangible Book Value Per Common Share Plus Accumulated Dividends
The Company has included in this Financial Supplement “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 | |||||||||||||||||||
December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | |||||||||||||||
Book value per common share | $ | 120.53 | $ | 120.07 | $ | 119.17 | $ | 111.05 | $ | 104.13 | |||||||||
Adjustment for goodwill and other intangibles (1) | (6.50 | ) | (6.55 | ) | (6.60 | ) | (6.66 | ) | (6.28 | ) | |||||||||
Tangible book value per common share | 114.03 | 113.52 | 112.57 | 104.39 | 97.85 | ||||||||||||||
Adjustment for accumulated dividends | 20.68 | 20.34 | 20.00 | 19.66 | 19.32 | ||||||||||||||
Tangible book value per common share plus accumulated dividends | $ | 134.71 | $ | 133.86 | $ | 132.57 | $ | 124.05 | $ | 117.17 | |||||||||
Quarterly change in book value per common share | 0.4 | % | 0.8 | % | 7.3 | % | 6.6 | % | (1.0 | )% | |||||||||
Quarterly change in tangible book value per common share plus change in accumulated dividends | 0.7 | % | 1.1 | % | 8.2 | % | 7.0 | % | (0.4 | )% | |||||||||
Year to date change in book value per common share | 15.7 | % | 15.3 | % | 14.4 | % | 6.6 | % | 4.4 | % | |||||||||
Year to date change in tangible book value per common share plus change in accumulated dividends | 17.9 | % | 17.1 | % | 15.7 | % | 7.0 | % | 6.4 | % | |||||||||
(1) | At December 31, 2019, September 30, 2019, June 30, 2019, March 31, 2019 and December 31, 2018, goodwill and other intangibles included $24.9 million, $25.6 million, $26.3 million, $27.0 million and $27.7 million, respectively, of goodwill and other intangibles included in investments in other ventures, under equity method. |
21 | | |
RenaissanceRe Holdings Ltd.
Comments on Regulation G
Retained Fixed Maturity and Short Term Investments, at Fair Value
The Company has included in this Financial Supplement “retained fixed maturity and short term investments, at fair value.” “Retained fixed maturity and short term investments, at fair value" is defined as total consolidated fixed maturity and short term investments, at fair value, less the portion of fixed maturity and short term investments, at fair value attributable to redeemable noncontrolling interests, certain third party vehicles and joint ventures. “Retained fixed maturity and short term investments, at fair value” differs from total consolidated fixed maturity and short term investments, at fair value, which the Company believes is the most directly comparable GAAP measure, due to the exclusion of fixed maturity and short term investments, at fair value, attributable to redeemable noncontrolling interests, certain third party vehicles and joint ventures. The Company's management believes “retained fixed maturity and short term investments, at fair value” is useful to investors and other interested parties because it provides a measure of the portion of the Company's fixed maturity and short term investments, at fair value, that impacts the investment result included in net income (loss) available (attributable) to RenaissanceRe common shareholders. A reconciliation of total consolidated fixed maturity and short term investments, at fair value, to “retained fixed maturity and short term investments, at fair value” is included below:
At | |||||||||||||||||||
December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | |||||||||||||||
Fixed maturity investments, at fair value | $ | 11,171,655 | $ | 11,386,228 | $ | 10,479,666 | $ | 9,473,160 | $ | 8,088,870 | |||||||||
Short term investments, at fair value | 4,566,277 | 4,116,156 | 4,579,171 | 4,012,815 | 2,586,520 | ||||||||||||||
Total consolidated fixed maturity and short term investments, at fair value | $ | 15,737,932 | $ | 15,502,384 | $ | 15,058,837 | $ | 13,485,975 | $ | 10,675,390 | |||||||||
Adjustment for fixed maturity and short term investments attributable to redeemable noncontrolling interests, certain third-party vehicles and joint ventures | (4,583,758 | ) | (4,426,685 | ) | (4,271,219 | ) | (3,673,998 | ) | (3,027,930 | ) | |||||||||
Retained fixed maturity and short term investments, at fair value | $ | 11,154,174 | $ | 11,075,699 | $ | 10,787,618 | $ | 9,811,977 | $ | 7,647,460 | |||||||||
22 | | |
RenaissanceRe Holdings Ltd.
Comments on Regulation G
Retained Total Investment Result
The Company has included in this Financial Supplement “retained total investment result.” “Retained total investment result" is defined as consolidated total investment result less the portion attributable to redeemable noncontrolling interests, certain third-party vehicles and joint ventures. “Retained total investment result” differs from consolidated total investment result, which the Company believes is the most directly comparable GAAP measure, due to the exclusion of the investment result attributable to redeemable noncontrolling interests, certain third-party vehicles and joint ventures. The Company's management believes “retained total investment result” is useful to investors and other interested parties because it provides a measure of the portion of the Company's investment result, that impacts the investment result included in net income (loss) available (attributable) to RenaissanceRe common shareholders. A reconciliation of consolidated total investment result to “retained total investment result” is included below:
Three months ended | Twelve months ended | ||||||||||||||||||||||||||
December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | |||||||||||||||||||||
Net investment income | $ | 112,695 | $ | 113,844 | 115,832 | $ | 81,462 | $ | 53,338 | $ | 423,833 | $ | 261,866 | ||||||||||||||
Adjustment for net investment income attributable to redeemable noncontrolling interests, certain third-party vehicles and joint ventures | (22,127 | ) | (32,651 | ) | $ | (14,553 | ) | (18,803 | ) | (6,950 | ) | (88,134 | ) | 54,990 | |||||||||||||
Retained net investment income | 90,568 | 81,193 | 101,279 | 62,659 | 46,388 | 335,699 | 206,876 | ||||||||||||||||||||
Net realized and unrealized gains (losses) on investments | 17,897 | 31,938 | 194,003 | 170,645 | (88,654 | ) | 414,483 | (175,069 | ) | ||||||||||||||||||
Adjustment for net realized and unrealized losses (gains) on investments attributable to redeemable noncontrolling interests, certain third-party vehicles and joint ventures | 1,025 | (4,959 | ) | (16,525 | ) | (17,534 | ) | (333 | ) | (37,993 | ) | (20,863 | ) | ||||||||||||||
Retained net realized and unrealized gains (losses) on investments | 18,922 | 26,979 | 177,478 | 153,111 | (88,987 | ) | 376,490 | (154,206 | ) | ||||||||||||||||||
Total investment result | 130,592 | 145,782 | 309,835 | 252,107 | (35,316 | ) | 838,316 | 86,797 | |||||||||||||||||||
Adjustment for investment result attributable to redeemable noncontrolling interests, certain third-party vehicles and joint ventures | (21,102 | ) | (37,610 | ) | (31,078 | ) | (36,337 | ) | (7,283 | ) | (126,127 | ) | 34,127 | ||||||||||||||
Retained total investment result | $ | 109,490 | $ | 108,172 | $ | 278,757 | $ | 215,770 | $ | (42,599 | ) | $ | 712,189 | $ | 52,670 | ||||||||||||
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