RenaissanceRe Reports Net Income of $146.8 Million for the Third Quarter of 2016 or $3.56 Per Diluted Common Share; Quarterly Operating Income of $87.0 Million or $2.09 Per Diluted Common Share
PEMBROKE,
Mr. O'Donnell continued: "We continue to see select opportunities for disciplined organic growth within our casualty and specialty franchise. Given where we are in the reinsurance cycle, we are executing our gross to net strategy, trading underwriting risk for fee income, and protecting our balance sheet for the long term. We continue to focus on deepening our customer relationships and look forward to meeting their needs during the upcoming renewal period."
THIRD QUARTER 2016 HIGHLIGHTS
-
Gross premiums written of
$430.2 million increased$60.6 million , or 16.4%, in the third quarter of 2016, compared to the third quarter of 2015, with the Company’s Specialty Reinsurance and Lloyd’s segments experiencing increases of$56.5 million , or 26.4%, and$18.4 million , or 25.0%, respectively, partially offset by a decrease in the Catastrophe Reinsurance segment of$14.3 million , or 17.5%. -
The Company generated underwriting income of
$112.9 million and a combined ratio of 67.4% in the third quarter of 2016, compared to$129.7 million and 64.2%, respectively, in the third quarter of 2015. The increase in the combined ratio in the third quarter of 2016, compared to the third quarter of 2015, was primarily driven by an increase in net claims and claim expenses, adding 4.9 percentage points to the combined ratio, primarily due to a decrease in favorable development on prior accident year net claims and claim reserves to$45.8 million in the third quarter of 2016, from$70.4 million in the third quarter of 2015, and partially offset by a decrease in underwriting expenses, reducing the combined ratio by 1.7 percentage points. -
The Company’s total investment result, which includes the sum of net
investment income and net realized and unrealized gains on
investments, was
$111.2 million in the third quarter of 2016, compared to a loss of$13.0 million in the third quarter of 2015, an increase of$124.2 million . The total investment result during the third quarter of 2016 was primarily driven by net unrealized gains on equity investments trading as a result of the strong performance of a number of the Company’s equity positions during the quarter as well as net realized gains on the Company’s fixed maturity investment portfolio. Partially offsetting these items was a modest level of net unrealized losses in the Company’s portfolio of fixed maturity investments trading, principally the result of an upward shift of the yield curve.
Underwriting Results by Segment
Catastrophe Reinsurance Segment
Gross premiums written in the Catastrophe Reinsurance segment were
Managed catastrophe premiums were
The Catastrophe Reinsurance segment generated underwriting income of
The Company experienced
Specialty Reinsurance Segment
Gross premiums written in the Specialty Reinsurance segment were
The Specialty Reinsurance segment generated underwriting income of
The Company experienced
Lloyd’s Segment
Gross premiums written in the Lloyd’s segment were
The Lloyd’s segment generated underwriting income of
The Lloyd’s segment experienced
Other Items
-
During the third quarter of 2016, the Company repurchased an aggregate
of 321 thousand common shares in open market transactions at an
aggregate cost of
$37.2 million and at an average share price of$115.68 . -
Equity in losses of other ventures in the third quarter of 2016 was a
loss of
$11.6 million , compared to equity in earnings of other ventures of a gain of$5.7 million in the third quarter of 2015, a decrease of$17.4 million . Primarily impacting equity in losses of other ventures during the third quarter of 2016 was a$15.0 million loss related to the Company’s 50% ownership inTop Layer Reinsurance Ltd. (“Top Layer Re”). During the third quarter of 2016, Top Layer Re reduced its estimated ultimate claim and claim expenses and related reinsurance recoverable associated with the 2011 Tohoku Earthquake to $Nil as a result of favorable loss emergence, resulting in an increase in underwriting income for Top Layer Re for the third quarter of 2016. However, the increase in underwriting income was more than offset by the reversal of an unrealized foreign exchange gain related to the reserve for claims and claim expenses, which were denominated in Japanese Yen. While Top Layer Re had fully hedged its net economic exposure to Japanese Yen associated with this loss since inception, because the hedged net liability went to $Nil, Top Layer Re recorded an unrealized foreign exchange loss for the quarter. If the reserve for net claims and claim expenses had been paid in full, rather than being reduced to $Nil, there would have been no financial statement impact to Top Layer Re. -
Net income attributable to noncontrolling interests in the third
quarter of 2016 was
$35.6 million , an increase from$31.2 million in the third quarter of 2015, principally due to an increase in the profitability ofDaVinciRe Holdings Ltd. (“DaVinciRe”). The Company’s ownership in DaVinciRe was 24.0% at September 30, 2016, compared to 26.3% at September 30, 2015. -
Corporate expenses increased
$4.2 million to $11.5 million in the third quarter of 2016, compared to$7.3 million in the third quarter of 2015, primarily reflecting expenses associated with an executive retirement during the third quarter of 2016, partially offset by a decrease to$0.2 million of corporate expenses associated with the acquisition and integration of Platinum incurred during the third quarter of 2016, compared to$3.4 million in the third quarter of 2015.
This Press Release includes certain non-GAAP financial measures
including “operating income available to
Please refer to the “Investor Information - Financial Reports - Financial Supplements” section of the Company’s website at www.renre.com for a copy of the Financial Supplement which includes additional information on the Company’s financial performance.
Cautionary Statement Regarding Forward Looking Statements
Any forward-looking statements made in this Press Release reflect
RenaissanceRe’s current views with respect to future events and
financial performance and are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
These statements are subject to numerous factors that could cause actual
results to differ materially from those set forth in or implied by such
forward-looking statements, including the following: the frequency and
severity of catastrophic and other events that the Company covers; the
effectiveness of the Company’s claims and claim expense reserving
process; the Company’s ability to maintain its financial strength
ratings; the effect of climate change on the Company’s business; the
effect of emerging claims and coverage issues; 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; continued soft reinsurance underwriting
market conditions; a contention by the
RenaissanceRe Holdings Ltd. | ||||||||||||||||
Summary Consolidated Statements of Operations | ||||||||||||||||
(in thousands of United States Dollars, except per share amounts and percentages) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
September 30, 2016 |
September 30, 2015 |
September 30, 2016 |
September 30, 2015 |
|||||||||||||
Revenues | ||||||||||||||||
Gross premiums written | $ | 430,224 | $ | 369,642 | $ | 2,051,485 | $ | 1,675,217 | ||||||||
Net premiums written | $ | 284,222 | $ | 266,820 | $ | 1,315,813 | $ | 1,179,532 | ||||||||
Decrease (increase) in unearned premiums | 62,299 | 95,568 | (264,284 | ) | (140,556 | ) | ||||||||||
Net premiums earned | 346,521 | 362,388 | 1,051,529 | 1,038,976 | ||||||||||||
Net investment income | 51,423 | 28,338 | 134,410 | 106,649 | ||||||||||||
Net foreign exchange (losses) gains | (5,986 | ) | 616 | (8,368 | ) | (4,254 | ) | |||||||||
Equity in (losses) earnings of other ventures | (11,630 | ) | 5,730 | (3,997 | ) | 17,185 | ||||||||||
Other income | 2,268 | 2,306 | 9,001 | 5,272 | ||||||||||||
Net realized and unrealized gains (losses) on investments | 59,870 | (41,138 | ) | 191,295 | (26,101 | ) | ||||||||||
Total revenues | 442,466 | 358,240 | 1,373,870 | 1,137,727 | ||||||||||||
Expenses | ||||||||||||||||
Net claims and claim expenses incurred | 112,575 | 100,028 | 406,930 | 346,225 | ||||||||||||
Acquisition expenses | 80,580 | 78,126 | 215,177 | 183,193 | ||||||||||||
Operational expenses | 40,493 | 54,518 | 147,801 | 154,812 | ||||||||||||
Corporate expenses | 11,537 | 7,322 | 25,514 | 65,723 | ||||||||||||
Interest expense | 10,536 | 10,542 | 31,610 | 25,720 | ||||||||||||
Total expenses | 255,721 | 250,536 | 827,032 | 775,673 | ||||||||||||
Income before taxes | 186,745 | 107,704 | 546,838 | 362,054 | ||||||||||||
Income tax benefit (expense) | 1,316 | 4,573 | (8,040 | ) | 54,319 | |||||||||||
Net income | 188,061 | 112,277 | 538,798 | 416,373 | ||||||||||||
Net income attributable to noncontrolling interests | (35,641 | ) | (31,153 | ) | (110,867 | ) | (82,982 | ) | ||||||||
Net income available to RenaissanceRe | 152,420 | 81,124 | 427,931 | 333,391 | ||||||||||||
Dividends on preference shares | (5,595 | ) | (5,595 | ) | (16,786 | ) | (16,786 | ) | ||||||||
Net income available to RenaissanceRe common shareholders | $ | 146,825 | $ | 75,529 | $ | 411,145 | $ | 316,605 | ||||||||
Net income available to RenaissanceRe common shareholders per common share - basic | $ | 3.58 | $ | 1.68 | $ | 9.77 | $ | 7.25 | ||||||||
Net income available to RenaissanceRe common shareholders per common share - diluted | $ | 3.56 | $ | 1.66 | $ | 9.71 | $ | 7.19 | ||||||||
Operating income available to RenaissanceRe common shareholders per common share - diluted (1) | $ | 2.09 | $ | 2.58 | $ | 5.14 | $ | 7.79 | ||||||||
Average shares outstanding - basic | 40,513 | 44,564 | 41,594 | 43,166 | ||||||||||||
Average shares outstanding - diluted | 40,733 | 44,913 | 41,842 | 43,531 | ||||||||||||
Net claims and claim expense ratio | 32.5 | % | 27.6 | % | 38.7 | % | 33.3 | % | ||||||||
Underwriting expense ratio | 34.9 | % | 36.6 | % | 34.5 | % | 32.6 | % | ||||||||
Combined ratio | 67.4 | % | 64.2 | % | 73.2 | % | 65.9 | % | ||||||||
Return on average common equity - annualized | 13.5 | % | 6.9 | % | 12.6 | % | 10.2 | % | ||||||||
Operating return on average common equity - annualized (1) | 8.0 | % | 10.7 | % | 6.7 | % | 11.0 | % | ||||||||
|
(1) See Comments on Regulation G for a reconciliation of non-GAAP financial measures.
RenaissanceRe Holdings Ltd. | |||||||
Summary Consolidated Balance Sheets | |||||||
(in thousands of United States Dollars, except per share amounts) | |||||||
September 30, 2016 |
December 31, 2015 |
||||||
Assets | (Unaudited) | (Audited) | |||||
Fixed maturity investments trading, at fair value | $ | 7,088,419 | $ | 6,765,005 | |||
Fixed maturity investments available for sale, at fair value | 11,721 | 17,813 | |||||
Total fixed maturity investments, at fair value | 7,100,140 | 6,782,818 | |||||
Short term investments, at fair value | 1,136,660 | 1,208,401 | |||||
Equity investments trading, at fair value | 345,565 | 393,877 | |||||
Other investments, at fair value | 511,621 | 481,621 | |||||
Investments in other ventures, under equity method | 120,569 | 132,351 | |||||
Total investments | 9,214,555 | 8,999,068 | |||||
Cash and cash equivalents | 493,330 | 506,885 | |||||
Premiums receivable | 1,181,331 | 778,009 | |||||
Prepaid reinsurance premiums | 511,421 | 230,671 | |||||
Reinsurance recoverable | 240,769 | 134,526 | |||||
Accrued investment income | 37,245 | 39,749 | |||||
Deferred acquisition costs | 351,841 | 199,380 | |||||
Receivable for investments sold | 193,071 | 220,834 | |||||
Other assets | 181,290 | 181,011 | |||||
Goodwill and other intangibles | 254,678 | 265,154 | |||||
Total assets | $ | 12,659,531 | $ | 11,555,287 | |||
Liabilities, Noncontrolling Interests and Shareholders’ Equity | |||||||
Liabilities | |||||||
Reserve for claims and claim expenses | $ | 2,861,099 | $ | 2,767,045 | |||
Unearned premiums | 1,434,136 | 889,102 | |||||
Debt | 951,620 | 960,495 | |||||
Reinsurance balances payable | 774,660 | 523,974 | |||||
Payable for investments purchased | 437,826 | 391,378 | |||||
Other liabilities | 227,847 | 245,145 | |||||
Total liabilities | 6,687,188 | 5,777,139 | |||||
Redeemable noncontrolling interest | 1,164,553 | 1,045,964 | |||||
Shareholders’ Equity | |||||||
Preference shares | 400,000 | 400,000 | |||||
Common shares | 41,156 | 43,701 | |||||
Additional paid-in capital | 213,053 | 507,674 | |||||
Accumulated other comprehensive income | 2,621 | 2,108 | |||||
Retained earnings | 4,150,960 | 3,778,701 | |||||
Total shareholders’ equity attributable to RenaissanceRe | 4,807,790 | 4,732,184 | |||||
Total liabilities, noncontrolling interests and shareholders’ equity | $ | 12,659,531 | $ | 11,555,287 | |||
Book value per common share | $ | 107.10 | $ | 99.13 | |||
RenaissanceRe Holdings Ltd. | ||||||||||||||||||||
Supplemental Financial Data - Segment Information | ||||||||||||||||||||
(in thousands of United States Dollars, except percentages) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended September 30, 2016 | ||||||||||||||||||||
Catastrophe |
Specialty |
Lloyd’s | Other | Total | ||||||||||||||||
Gross premiums written | $ | 67,394 | $ | 270,876 | $ | 91,954 | $ | — | $ | 430,224 | ||||||||||
Net premiums written | $ | 37,526 | $ | 177,331 | $ | 69,365 | $ | — | $ | 284,222 | ||||||||||
Net premiums earned | $ | 121,062 | $ | 150,766 | $ | 74,693 | $ | — | $ | 346,521 | ||||||||||
Net claims and claim expenses incurred | 927 | 82,113 | 29,337 | 198 | 112,575 | |||||||||||||||
Acquisition expenses | 7,603 | 52,019 | 20,958 | — | 80,580 | |||||||||||||||
Operational expenses | 16,355 | 15,360 | 8,760 | 18 | 40,493 | |||||||||||||||
Underwriting income (loss) | $ | 96,177 | $ | 1,274 | $ | 15,638 | $ | (216 | ) | 112,873 | ||||||||||
Net investment income | 51,423 | 51,423 | ||||||||||||||||||
Net foreign exchange losses | (5,986 | ) | (5,986 | ) | ||||||||||||||||
Equity in losses of other ventures | (11,630 | ) | (11,630 | ) | ||||||||||||||||
Other income | 2,268 | 2,268 | ||||||||||||||||||
Net realized and unrealized gains on investments | 59,870 | 59,870 | ||||||||||||||||||
Corporate expenses | (11,537 | ) | (11,537 | ) | ||||||||||||||||
Interest expense | (10,536 | ) | (10,536 | ) | ||||||||||||||||
Income before taxes and redeemable noncontrolling interests | 186,745 | |||||||||||||||||||
Income tax benefit | 1,316 | 1,316 | ||||||||||||||||||
Net income attributable to redeemable noncontrolling interests | (35,641 | ) | (35,641 | ) | ||||||||||||||||
Dividends on preference shares | (5,595 | ) | (5,595 | ) | ||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 146,825 | ||||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 18,267 | $ | 102,025 | $ | 38,068 | $ | — | $ | 158,360 | ||||||||||
Net claims and claim expenses incurred – prior accident years | (17,340 | ) | (19,912 | ) | (8,731 | ) | 198 | (45,785 | ) | |||||||||||
Net claims and claim expenses incurred – total | $ | 927 | $ | 82,113 | $ | 29,337 | $ | 198 | $ | 112,575 | ||||||||||
Net claims and claim expense ratio – current accident year | 15.1 | % | 67.7 | % | 51.0 | % | 45.7 | % | ||||||||||||
Net claims and claim expense ratio – prior accident years | (14.3 | )% | (13.2 | )% | (11.7 | )% | (13.2 | )% | ||||||||||||
Net claims and claim expense ratio – calendar year | 0.8 | % | 54.5 | % | 39.3 | % | 32.5 | % | ||||||||||||
Underwriting expense ratio | 19.8 | % | 44.7 | % | 39.8 | % | 34.9 | % | ||||||||||||
Combined ratio | 20.6 | % | 99.2 | % | 79.1 | % | 67.4 | % | ||||||||||||
Three months ended September 30, 2015 | ||||||||||||||||||||
Catastrophe |
Specialty |
Lloyd’s | Other | Total | ||||||||||||||||
Gross premiums written | $ | 81,692 | $ | 214,372 | $ | 73,578 | $ | — | $ | 369,642 | ||||||||||
Net premiums written | $ | 55,182 | $ | 155,987 | $ | 55,651 | $ | — | $ | 266,820 | ||||||||||
Net premiums earned | $ | 159,641 | $ | 146,213 | $ | 56,534 | $ | — | $ | 362,388 | ||||||||||
Net claims and claim expenses incurred | 22,319 | 41,005 | 36,425 | 279 | 100,028 | |||||||||||||||
Acquisition expenses | 14,048 | 50,432 | 13,654 | (8 | ) | 78,126 | ||||||||||||||
Operational expenses | 23,513 | 17,542 | 13,427 | 36 | 54,518 | |||||||||||||||
Underwriting income (loss) | $ | 99,761 | $ | 37,234 | $ | (6,972 | ) | $ | (307 | ) | 129,716 | |||||||||
Net investment income | 28,338 | 28,338 | ||||||||||||||||||
Net foreign exchange gains | 616 | 616 | ||||||||||||||||||
Equity in earnings of other ventures | 5,730 | 5,730 | ||||||||||||||||||
Other income | 2,306 | 2,306 | ||||||||||||||||||
Net realized and unrealized losses on investments | (41,138 | ) | (41,138 | ) | ||||||||||||||||
Corporate expenses | (7,322 | ) | (7,322 | ) | ||||||||||||||||
Interest expense | (10,542 | ) | (10,542 | ) | ||||||||||||||||
Income before taxes and noncontrolling interests | 107,704 | |||||||||||||||||||
Income tax benefit | 4,573 | 4,573 | ||||||||||||||||||
Net income attributable to noncontrolling interests | (31,153 | ) | (31,153 | ) | ||||||||||||||||
Dividends on preference shares | (5,595 | ) | (5,595 | ) | ||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 75,529 | ||||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 36,244 | $ | 96,737 | $ | 37,397 | $ | — | $ | 170,378 | ||||||||||
Net claims and claim expenses incurred – prior accident years | (13,925 | ) | (55,732 | ) | (972 | ) | 279 | (70,350 | ) | |||||||||||
Net claims and claim expenses incurred – total | $ | 22,319 | $ | 41,005 | $ | 36,425 | $ | 279 | $ | 100,028 | ||||||||||
Net claims and claim expense ratio – current accident year | 22.7 | % | 66.2 | % | 66.1 | % | 47.0 | % | ||||||||||||
Net claims and claim expense ratio – prior accident years | (8.7 | )% | (38.2 | )% | (1.7 | )% | (19.4 | )% | ||||||||||||
Net claims and claim expense ratio – calendar year | 14.0 | % | 28.0 | % | 64.4 | % | 27.6 | % | ||||||||||||
Underwriting expense ratio | 23.5 | % | 46.5 | % | 47.9 | % | 36.6 | % | ||||||||||||
Combined ratio | 37.5 | % | 74.5 | % | 112.3 | % | 64.2 | % | ||||||||||||
RenaissanceRe Holdings Ltd. | ||||||||||||||||||||
Supplemental Financial Data - Segment Information | ||||||||||||||||||||
(in thousands of United States Dollars, except percentages) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Nine months ended September 30, 2016 | ||||||||||||||||||||
Catastrophe |
Specialty |
Lloyd’s | Other | Total | ||||||||||||||||
Gross premiums written | $ | 825,271 | $ | 840,598 | $ | 385,616 | $ | — | $ | 2,051,485 | ||||||||||
Net premiums written | $ | 481,956 | $ | 569,842 | $ | 264,015 | $ | — | $ | 1,315,813 | ||||||||||
Net premiums earned | $ | 399,663 | $ | 443,252 | $ | 208,614 | $ | — | $ | 1,051,529 | ||||||||||
Net claims and claim expenses incurred | 64,878 | 241,666 | 100,185 | 201 | 406,930 | |||||||||||||||
Acquisition expenses | 33,410 | 127,871 | 53,896 | — | 215,177 | |||||||||||||||
Operational expenses | 55,308 | 57,092 | 35,302 | 99 | 147,801 | |||||||||||||||
Underwriting income (loss) | $ | 246,067 | $ | 16,623 | $ | 19,231 | $ | (300 | ) | 281,621 | ||||||||||
Net investment income | 134,410 | 134,410 | ||||||||||||||||||
Net foreign exchange losses | (8,368 | ) | (8,368 | ) | ||||||||||||||||
Equity in losses of other ventures | (3,997 | ) | (3,997 | ) | ||||||||||||||||
Other income | 9,001 | 9,001 | ||||||||||||||||||
Net realized and unrealized gains on investments | 191,295 | 191,295 | ||||||||||||||||||
Corporate expenses | (25,514 | ) | (25,514 | ) | ||||||||||||||||
Interest expense | (31,610 | ) | (31,610 | ) | ||||||||||||||||
Income before taxes and redeemable noncontrolling interests | 546,838 | |||||||||||||||||||
Income tax expense | (8,040 | ) | (8,040 | ) | ||||||||||||||||
Net income attributable to redeemable noncontrolling interests | (110,867 | ) | (110,867 | ) | ||||||||||||||||
Dividends on preference shares | (16,786 | ) | (16,786 | ) | ||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 411,145 | ||||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 102,471 | $ | 275,520 | $ | 105,583 | $ | — | $ | 483,574 | ||||||||||
Net claims and claim expenses incurred – prior accident years | (37,593 | ) | (33,854 | ) | (5,398 | ) | 201 | (76,644 | ) | |||||||||||
Net claims and claim expenses incurred – total | $ | 64,878 | $ | 241,666 | $ | 100,185 | $ | 201 | $ | 406,930 | ||||||||||
Net claims and claim expense ratio – current accident year | 25.6 | % | 62.2 | % | 50.6 | % | 46.0 | % | ||||||||||||
Net claims and claim expense ratio – prior accident years | (9.4 | )% | (7.7 | )% | (2.6 | )% | (7.3 | )% | ||||||||||||
Net claims and claim expense ratio – calendar year | 16.2 | % | 54.5 | % | 48.0 | % | 38.7 | % | ||||||||||||
Underwriting expense ratio | 22.2 | % | 41.7 | % | 42.8 | % | 34.5 | % | ||||||||||||
Combined ratio | 38.4 | % | 96.2 | % | 90.8 | % | 73.2 | % | ||||||||||||
Nine months ended September 30, 2015 | ||||||||||||||||||||
Catastrophe |
Specialty |
Lloyd’s | Other | Total | ||||||||||||||||
Gross premiums written (1) | $ | 856,305 | $ | 498,676 | $ | 320,326 | $ | (90 | ) | $ | 1,675,217 | |||||||||
Net premiums written | $ | 548,312 | $ | 399,769 | $ | 231,540 | $ | (89 | ) | $ | 1,179,532 | |||||||||
Net premiums earned | $ | 466,113 | $ | 396,673 | $ | 176,279 | $ | (89 | ) | $ | 1,038,976 | |||||||||
Net claims and claim expenses incurred | 85,289 | 166,655 | 93,951 | 330 | 346,225 | |||||||||||||||
Acquisition expenses | 41,016 | 99,372 | 42,557 | 248 | 183,193 | |||||||||||||||
Operational expenses | 65,966 | 49,579 | 39,086 | 181 | 154,812 | |||||||||||||||
Underwriting income (loss) | $ | 273,842 | $ | 81,067 | $ | 685 | $ | (848 | ) | 354,746 | ||||||||||
Net investment income | 106,649 | 106,649 | ||||||||||||||||||
Net foreign exchange losses | (4,254 | ) | (4,254 | ) | ||||||||||||||||
Equity in earnings of other ventures | 17,185 | 17,185 | ||||||||||||||||||
Other income | 5,272 | 5,272 | ||||||||||||||||||
Net realized and unrealized losses on investments | (26,101 | ) | (26,101 | ) | ||||||||||||||||
Corporate expenses | (65,723 | ) | (65,723 | ) | ||||||||||||||||
Interest expense | (25,720 | ) | (25,720 | ) | ||||||||||||||||
Income before taxes and noncontrolling interests | 362,054 | |||||||||||||||||||
Income tax benefit | 54,319 | 54,319 | ||||||||||||||||||
Net income attributable to noncontrolling interests | (82,982 | ) | (82,982 | ) | ||||||||||||||||
Dividends on preference shares | (16,786 | ) | (16,786 | ) | ||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 316,605 | ||||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 127,702 | $ | 250,316 | $ | 93,778 | $ | — | $ | 471,796 | ||||||||||
Net claims and claim expenses incurred – prior accident years | (42,413 | ) | (83,661 | ) | 173 | 330 | (125,571 | ) | ||||||||||||
Net claims and claim expenses incurred – total | $ | 85,289 | $ | 166,655 | $ | 93,951 | $ | 330 | $ | 346,225 | ||||||||||
Net claims and claim expense ratio – current accident year | 27.4 | % | 63.1 | % | 53.2 | % | 45.4 | % | ||||||||||||
Net claims and claim expense ratio – prior accident years | (9.1 | )% | (21.1 | )% | 0.1 | % | (12.1 | )% | ||||||||||||
Net claims and claim expense ratio – calendar year | 18.3 | % | 42.0 | % | 53.3 | % | 33.3 | % | ||||||||||||
Underwriting expense ratio | 22.9 | % | 37.6 | % | 46.3 | % | 32.6 | % | ||||||||||||
Combined ratio | 41.2 | % | 79.6 | % | 99.6 | % | 65.9 | % | ||||||||||||
(1) Included in gross premiums written in the Other category is the
elimination of inter-segment gross premiums written of
RenaissanceRe Holdings Ltd. | ||||||||||||||||
Supplemental Financial Data - Gross Premiums Written and Managed Premiums | ||||||||||||||||
(in thousands of United States Dollars) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
September 30, 2016 |
September 30, 2015 |
September 30, 2016 |
September 30, 2015 |
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Catastrophe Reinsurance Segment |
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Renaissance catastrophe premiums | $ | 52,857 | $ | 61,479 | $ | 550,641 | $ | 570,455 | ||||||||
DaVinci catastrophe premiums | 14,537 | 20,213 | 274,630 | 285,850 | ||||||||||||
Total Catastrophe Reinsurance segment gross premiums written | $ | 67,394 | $ | 81,692 | $ | 825,271 | $ | 856,305 | ||||||||
Specialty Reinsurance Segment |
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Casualty | $ | 118,408 | $ | 116,851 | $ | 354,198 | $ | 263,909 | ||||||||
Credit | 108,835 | 66,839 | 318,860 | 115,461 | ||||||||||||
Property | 25,163 | 10,405 | 83,022 | 38,829 | ||||||||||||
Other | 18,470 | 20,277 | 84,518 | 80,477 | ||||||||||||
Total Specialty Reinsurance segment gross premiums written | $ | 270,876 | $ | 214,372 | $ | 840,598 | $ | 498,676 | ||||||||
Lloyd’s Segment |
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Casualty | $ | 54,810 | $ | 41,352 | $ | 187,848 | $ | 151,749 | ||||||||
Property | 19,334 | 18,717 | 79,875 | 66,616 | ||||||||||||
Catastrophe | 8,013 | 7,465 | 70,648 | 66,489 | ||||||||||||
Credit | 1,936 | 3,377 | 9,000 | 7,496 | ||||||||||||
Other | 7,861 | 2,667 | 38,245 | 27,976 | ||||||||||||
Total Lloyd’s segment gross premiums written | $ | 91,954 | $ | 73,578 | $ | 385,616 | $ | 320,326 | ||||||||
Managed Premiums (1) |
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Total Catastrophe Reinsurance segment gross premiums written | $ | 67,394 | $ | 81,692 | $ | 825,271 | $ | 856,305 | ||||||||
Catastrophe premiums written in the Lloyd’s segment | 8,013 | 7,465 | 70,648 | 66,489 | ||||||||||||
Catastrophe premiums written on behalf of the Company’s joint venture, Top Layer Re (2) | 1,493 | 1,089 | 38,278 | 36,664 | ||||||||||||
Catastrophe premiums written by the Company in its Catastrophe Reinsurance segment and ceded to Top Layer Re | — | — | (9,263 | ) | (6,785 | ) | ||||||||||
Total managed catastrophe premiums (1) | $ | 76,900 | $ | 90,246 | $ | 924,934 | $ | 952,673 | ||||||||
(1) See Comments on Regulation G for a reconciliation of non-GAAP
financial measures.
(2) Top Layer Re is accounted for under the
equity method of accounting.
RenaissanceRe Holdings Ltd. | ||||||||||||||||
Supplemental Financial Data - Total Investment Result | ||||||||||||||||
(in thousands of United States Dollars) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
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September 30, 2016 |
September 30, 2015 |
September 30, 2016 |
September 30, 2015 |
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Fixed maturity investments | $ | 39,959 | $ | 37,023 | $ | 122,056 | $ | 96,753 | ||||||||
Short term investments | 1,174 | 267 | 3,401 | 761 | ||||||||||||
Equity investments trading | 797 | 1,791 | 3,325 | 6,308 | ||||||||||||
Other investments | ||||||||||||||||
Private equity investments | 4,572 | (14,505 | ) | (430 | ) | 1,333 | ||||||||||
Other | 8,765 | 7,261 | 17,109 | 11,443 | ||||||||||||
Cash and cash equivalents | 246 | 80 | 584 | 355 | ||||||||||||
55,513 | 31,917 | 146,045 | 116,953 | |||||||||||||
Investment expenses | (4,090 | ) | (3,579 | ) | (11,635 | ) | (10,304 | ) | ||||||||
Net investment income | 51,423 | 28,338 | 134,410 | 106,649 | ||||||||||||
Gross realized gains | 20,383 | 9,160 | 60,794 | 39,364 | ||||||||||||
Gross realized losses | (3,363 | ) | (13,720 | ) | (25,832 | ) | (40,143 | ) | ||||||||
Net realized gains (losses) on fixed maturity investments | 17,020 | (4,560 | ) | 34,962 | (779 | ) | ||||||||||
Net unrealized (losses) gains on fixed maturity investments trading | (4,235 | ) | 10,208 | 125,501 | (11,924 | ) | ||||||||||
Net realized and unrealized gains (losses) on investments-related derivatives | 1,727 | (16,612 | ) | (26,873 | ) | (1,004 | ) | |||||||||
Net realized gains (losses) on equity investments trading | 127 | (114 | ) | 14,038 | 16,199 | |||||||||||
Net unrealized gains (losses) on equity investments trading | 45,231 | (30,060 | ) | 43,667 | (28,593 | ) | ||||||||||
Net realized and unrealized gains (losses) on investments | 59,870 | (41,138 | ) | 191,295 | (26,101 | ) | ||||||||||
Change in net unrealized gains on fixed maturity investments available for sale | (113 | ) | (243 | ) | (472 | ) | (986 | ) | ||||||||
Total investment result | $ | 111,180 | $ | (13,043 | ) | $ | 325,233 | $ | 79,562 | |||||||
Total investment return - annualized | 4.9 | % | (0.6 | )% | 4.7 | % | 1.2 | % | ||||||||
Comments on Regulation G
In addition to the GAAP financial measures set forth in this Press
Release, the Company has included certain non-GAAP financial measures
within the meaning of Regulation
The Company uses “operating income available to
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(in thousands of United States Dollars, except percentages) |
September 30, 2016 |
September 30, 2015 |
September 30, 2016 |
September 30, 2015 |
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Net income available to RenaissanceRe common shareholders | $ | 146,825 | $ | 75,529 | $ | 411,145 | $ | 316,605 | ||||||||
Adjustment for net realized and unrealized (gains) losses on investments | (59,870 | ) | 41,138 | (191,295 | ) | 26,101 | ||||||||||
Operating income available to RenaissanceRe common shareholders | $ | 86,955 | $ | 116,667 | $ | 219,850 | $ | 342,706 | ||||||||
Net income available to RenaissanceRe common shareholders per common share - diluted | $ | 3.56 | $ | 1.66 | $ | 9.71 | $ | 7.19 | ||||||||
Adjustment for net realized and unrealized (gains) losses on investments | (1.47 | ) | 0.92 | (4.57 | ) | 0.60 | ||||||||||
Operating income available to RenaissanceRe common shareholders per common share - diluted | $ | 2.09 | $ | 2.58 | $ | 5.14 | $ | 7.79 | ||||||||
Return on average common equity - annualized | 13.5 | % | 6.9 | % | 12.6 | % | 10.2 | % | ||||||||
Adjustment for net realized and unrealized (gains) losses on investments | (5.5 | )% | 3.8 | % | (5.9 | )% | 0.8 | % | ||||||||
Operating return on average common equity - annualized | 8.0 | % | 10.7 | % | 6.7 | % | 11.0 | % | ||||||||
The Company has also included in this Press Release “managed catastrophe premiums”. “Managed catastrophe premiums” is defined as gross catastrophe premiums written by the Company and its related joint ventures. “Managed catastrophe premiums” differs from total Catastrophe Reinsurance segment gross premiums written, which the Company believes is the most directly comparable GAAP measure, due to the inclusion of catastrophe premiums written on behalf of the Company’s joint venture Top Layer Re, which is accounted for under the equity method of accounting, and the inclusion of catastrophe premiums written on behalf of the Company’s Lloyd’s segment. The Company’s management believes “managed catastrophe premiums” is useful to investors and other interested parties because it provides a measure of total catastrophe premiums assumed by the Company through its consolidated subsidiaries and related joint ventures. A reconciliation of “managed catastrophe premiums” to Catastrophe Reinsurance segment gross premiums written is included on page 10 of this Press Release.
The Company has also included in this Press Release “tangible book value per common share” and “tangible book value per common share plus accumulated dividends”. “Tangible book value per common share” is defined as book value per common share excluding goodwill and intangible assets per share. “Tangible book value per common share plus accumulated dividends” is defined as book value per common share excluding goodwill and intangible assets per share, plus accumulated dividends. The Company’s management believes “tangible book value per common share” and “tangible book value per common share plus accumulated dividends” are useful to investors because they provide a more accurate measure of the realizable value of shareholder returns, excluding the impact of goodwill and intangible assets.
The following is a reconciliation of book value per common share to tangible book value per common share and tangible book value per common share plus accumulated dividends:
At | ||||||||||||||||||||
September 30, 2016 |
June 30, 2016 |
March 31, 2016 |
December 31, 2015 |
September 30, 2015 |
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Book value per common share | $ | 107.10 | $ | 103.70 | $ | 101.19 | $ | 99.13 | $ | 97.41 | ||||||||||
Adjustment for goodwill and other intangibles (1) | (6.69 | ) | (6.73 | ) | (6.59 | ) | (6.59 | ) | (6.65 | ) | ||||||||||
Tangible book value per common share | 100.41 | 96.97 | 94.60 | 92.54 | 90.76 | |||||||||||||||
Adjustment for accumulated dividends | 16.41 | 16.10 | 15.79 | 15.48 | 15.18 | |||||||||||||||
Tangible book value per common share plus accumulated dividends | $ | 116.82 | $ | 113.07 | $ | 110.39 | $ | 108.02 | $ | 105.94 | ||||||||||
Quarterly change in book value per common share | 3.3 | % | 2.5 | % | 2.1 | % | 1.8 | % | 1.0 | % | ||||||||||
Quarterly change in tangible book value per common share plus change in accumulated dividends | 3.9 | % | 2.8 | % | 2.6 | % | 2.3 | % | 1.3 | % | ||||||||||
Year to date change in book value per common share | 8.0 | % | 8.1 | % | ||||||||||||||||
Year to date change in tangible book value per common share plus change in accumulated dividends | 9.5 | % | 2.7 | % |
(1) | At September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015 and September 30, 2015, goodwill and other intangibles included $20.6 million, $21.4 million, $22.3 million, $23.2 million and $22.9 million, respectively, of goodwill and other intangibles included in investments in other ventures, under equity method. |
View source version on businesswire.com: http://www.businesswire.com/news/home/20161101006767/en/
Source:
Investors:
RenaissanceRe Holdings Ltd.
Mark Wilcox,
441-295-4513
Senior Vice President, Chief Accounting Officer and
Corporate
Controller
or
Media:
RenaissanceRe Holdings Ltd.
Elizabeth
Tillman, 212-238-9224
Director - Communications
or
Kekst
and Company
Peter Hill or Dawn Dover, 212-521-4800