RenaissanceRe Reports Net Income of $69.4 Million for the Fourth Quarter of 2016 or $1.69 Per Diluted Common Share; Quarterly Operating Income of $119.4 Million or $2.92 Per Diluted Common Share
Annual Net Income of
For 2016, the Company reported net income available to
FOURTH QUARTER 2016 HIGHLIGHTS
-
Gross premiums written of
$323.1 million decreased$13.0 million , or 3.9%, in the fourth quarter of 2016, compared to the fourth quarter of 2015, with the Company’s Casualty and Specialty segment experiencing a decrease of$21.5 million , or 7.4%, partially offset by an increase of$8.5 million , or 19.4%, in the Property segment. -
The Company generated underwriting income of
$103.9 million and a combined ratio of 70.5% in the fourth quarter of 2016, compared to$139.9 million and 61.3%, respectively, in the fourth quarter of 2015. The increase in the combined ratio in the fourth quarter of 2016, compared to the fourth quarter of 2015, was driven by an increase in net claims and claim expenses and underwriting expenses, adding 7.0 and 2.2 percentage points to the combined ratio, respectively. -
Included in net claims and claim expenses in the fourth quarter of
2016 was
$60.1 million of net claims and claim expenses associated with Hurricane Matthew. The net negative impact of this event on the Company’s consolidated underwriting result was$51.0 million , adding 15.8 percentage points to the Company’s consolidated combined ratio. Also included in net claims and claim expenses in the fourth quarter of 2016 was favorable development on prior accident year net claims and claim reserves of$87.5 million , compared to$36.9 million in the fourth quarter of 2015. -
The Company’s total investment result, which includes the sum of net
investment income and net realized and unrealized gains on
investments, was a loss of
$4.0 million in the fourth quarter of 2016, compared to a gain of$2.8 million in the fourth quarter of 2015, a decrease of$6.9 million . The total investment result during the fourth quarter of 2016 was primarily driven by net realized and unrealized losses on investments of$50.0 million including$98.5 million 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, and$37.5 million of 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. The duration of the Company’s investment portfolio remained relatively short at 2.4 years, and is stable relative to where it has been in recent quarters.
Net Negative Impact of Hurricane Matthew
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 supplemental financial data below provides additional information
detailing the net negative impact of Hurricane Matthew on the Company’s
consolidated financial statements for the three months ended
Hurricane | |||||
Three months ended December 31, 2016 |
Matthew | ||||
(in thousands, except percentages) | |||||
Net claims and claim expenses incurred | $ | (60,117 | ) | ||
Assumed reinstatement premiums earned | 9,945 | ||||
Lost profit commissions | (824 | ) | |||
Net negative impact on underwriting result | (50,996 | ) | |||
Redeemable noncontrolling interest - DaVinciRe | 6,519 | ||||
Net negative impact | $ | (44,477 | ) | ||
Percentage point impact on consolidated combined ratio | 15.8 | ||||
Net negative impact on Property segment underwriting result | $ | (49,271 | ) | ||
Net negative impact on Casualty and Specialty segment underwriting result | (1,725 | ) | |||
Net negative impact on underwriting result | $ | (50,996 | ) | ||
Underwriting Results by Segment
Property Segment
Gross premiums written in the Property segment were
The Property segment generated underwriting income of
The
Casualty and Specialty Segment
Gross premiums written in the Casualty and Specialty segment were
The Casualty and Specialty segment generated underwriting income of
The Company experienced
Other Items
-
Net income attributable to noncontrolling interests in the fourth
quarter of 2016 was
$16.2 million , a decrease from$28.1 million in the fourth quarter of 2015, principally due to a decrease in the profitability ofDaVinciRe Holdings Ltd. (“DaVinciRe”). The Company’s ownership in DaVinciRe was 24.0% at December 31, 2016, compared to 26.3% at December 31, 2015. -
Corporate expenses increased
$1.1 million to $11.9 million in the fourth quarter of 2016, compared to$10.8 million in the fourth quarter of 2015, primarily reflecting expenses related to executive departures recorded in the fourth quarter of 2016, partially offset by a$5.6 million charge in the fourth quarter of 2015 associated with the impairment of the goodwill and other intangible assets of an investment in other ventures, recorded under the equity method. No such impairments were recorded during the fourth quarter of 2016. -
During
January 2017 , DaVinciRe redeemed$75.0 million of its outstanding shares from certain existing DaVinciRe shareholders, includingRenaissanceRe . In connection with the redemption, DaVinciRe will retain a$15.0 million holdback. In addition,RenaissanceRe sold an aggregate of$24.0 million of its shares in DaVinciRe to an existing shareholder and a new shareholder. The Company’s noncontrolling economic ownership in DaVinciRe subsequent to these transactions was 22.6%, effectiveJanuary 1, 2017 . -
Effective
January 1 2017,Fibonacci Reinsurance Ltd. ("Fibonacci Re") raised$140.0 million of capital from third party investors and the Company, via participating notes which are listed on theBermuda Stock Exchange . EffectiveJanuary 1, 2017 , the Company’s economic ownership interest in Fibonacci Re was 10.2%. -
During
January 2017 , Upsilon RFO returned$41.8 million of capital to its investors, including$9.5 million to the Company. In addition,$134.1 million of Upsilon RFO non-voting preference shares were issued to existing investors, including$9.5 million to the Company. EffectiveJanuary 1, 2017 , following these transactions, the Company’s participation in the risks assumed by Upsilon RFO was 18.8%.
FULL YEAR 2016 HIGHLIGHTS
-
Gross premiums written of
$2.4 billion increased$363.3 million , or 18.1%, in 2016, compared to 2015, with the increase principally driven by an increase of$324.1 million in the Casualty and Specialty segment and an increase of$39.1 million in the Property segment. Impacting gross premiums written in 2016 was the inclusion of gross premiums written associated with entities acquired in connection with the Company’s acquisition ofPlatinum Underwriters Holdings, Ltd. (“Platinum”), for the period fromJanuary 1, 2016 throughDecember 31, 2016 , compared to 2015, which included gross premiums written from the acquired entities for the period fromMarch 2, 2015 (the date of acquisition) through December 31, 2015. -
The Company generated underwriting income of
$385.5 million and a combined ratio of 72.5% in 2016, compared to$494.6 million and 64.7%, respectively, in 2015. The increase in the combined ratio in 2016, compared to 2015, was driven by higher net claims and claim expenses and an increase in underwriting expenses, adding 5.8 and 2.0 percentage points, respectively, to the combined ratio. -
Included in net claims and claim expenses in 2016 was an aggregate of
$122.6 million associated with a number of weather-related events inTexas (the “2016 Texas Events”), a wildfire originating nearFort McMurray, Alberta (the “Fort McMurray Wildfire”) and Hurricane Matthew. The net negative impact of these events on the Company’s consolidated underwriting result was$102.9 million , and these events added 7.9 percentage points to the Company’s consolidated combined ratio. The net negative impact of these events on the Company’s net income available toRenaissanceRe common shareholders was$87.3 million . See below for additional information related to these events. -
The Company’s total investment result, which includes the sum of net
investment income, net realized and unrealized gains (losses) on
investments, and the change in net unrealized gains on fixed maturity
investments available for sale, was
$321.2 million in 2016 compared to$82.4 million in 2015, an increase of$238.8 million . Impacting the total investment result in 2016 was$141.3 million of net realized and unrealized gains on investments comprised of:$61.4 million of net realized and unrealized gains in the Company’s portfolio of fixed maturity investments trading, principally the result of significant credit spread tightening in 2016, compared to marginal credit spread widening during 2015;$95.4 million of net realized and unrealized gains on equity investments trading as a result of the strong performance of a number of the Company’s equity positions during the year; and partially offset by$15.4 million of net realized and unrealized losses on certain investment-related derivatives due to changes in the yield curve that occurred during the year. Also impacting the total investment result was an increase in net investment income in the Company’s portfolio of fixed maturity investments, driven by an increase in average invested assets.
Net Negative Impact of the Fort McMurray Wildfire, the 2016 Texas Events and Hurricane Matthew
The supplemental financial data below provides additional information
detailing the net negative impact of the Fort McMurray Wildfire, the
2016 Texas Events and Hurricane Matthew on the Company’s consolidated
financial statements for the year ended
Fort | ||||||||||||||||||||
McMurray | 2016 Texas | Hurricane | ||||||||||||||||||
Year ended December 31, 2016 |
Wildfire | Events | Matthew | Total | ||||||||||||||||
(in thousands, except percentages) | ||||||||||||||||||||
Net claims and claim expenses incurred | $ | (23,961 | ) | $ | (38,502 | ) | $ | (60,117 | ) | $ | (122,580 | ) | ||||||||
Assumed reinstatement premiums earned | 5,143 | 6,891 | 9,945 | 21,979 | ||||||||||||||||
Lost profit commissions | (330 | ) | (1,172 | ) | (824 | ) | (2,326 | ) | ||||||||||||
Net negative impact on underwriting result | (19,148 | ) | (32,783 | ) | (50,996 | ) | (102,927 | ) | ||||||||||||
Redeemable noncontrolling interest - DaVinciRe | 3,404 | 5,675 | 6,519 | 15,598 | ||||||||||||||||
Net negative impact | $ | (15,744 | ) | $ | (27,108 | ) | $ | (44,477 | ) | $ | (87,329 | ) | ||||||||
Percentage point impact on consolidated combined ratio | 1.4 | 2.5 | 3.8 | 7.9 | ||||||||||||||||
Net negative impact on Property segment underwriting result | $ | (18,956 | ) | $ | (32,783 | ) | $ | (49,271 | ) | $ | (101,010 | ) | ||||||||
Net negative impact on Casualty and Specialty segment underwriting result | (192 | ) | — | (1,725 | ) | (1,917 | ) | |||||||||||||
Net negative impact on underwriting result | $ | (19,148 | ) | $ | (32,783 | ) | $ | (50,996 | ) | $ | (102,927 | ) | ||||||||
Underwriting Results by Segment
Property Segment
Gross premiums written in the Property segment increased
Managed catastrophe premiums were
The Property segment generated underwriting income of
Included in net claims and claim expenses in the Property segment in
2016 was an aggregate of
During 2016, the Company experienced
Casualty and Specialty Segment
For 2016, gross premiums written in the Casualty and Specialty segment
were
The Company’s Casualty and Specialty segment generated underwriting
income of
Other Items
-
During 2016, the Company repurchased an aggregate of 2.7 million
common shares in open market transactions at an aggregate cost of
$309.4 million and at an average share price of$112.87 . -
Net income attributable to noncontrolling interests in 2016 was
$127.1 million , an increase from$111.1 million in 2015, principally due to an increase in the profitability of DaVinciRe. -
Corporate expenses decreased
$39.1 million to $37.4 million in 2016, compared to$76.5 million in 2015, primarily reflecting a decrease to$2.1 million of corporate expenses associated with the acquisition and integration of Platinum incurred during 2016, compared to$53.5 million in 2015, and a$5.6 million charge in the fourth quarter of 2015 associated with the impairment of the goodwill and other intangible assets of an investment in other ventures, recorded under the equity method. No such impairments were recorded during the fourth quarter of 2016. Partially offsetting these items were expenses related to executive departures recorded in 2016. -
The Company recognized income tax expense of
$0.3 million in 2016, compared to an income tax benefit of$45.9 million in 2015. The change is primarily due to the Company reducing its U.S.-based deferred tax asset valuation allowance from$48.5 million to $1.0 million in the first quarter of 2015 as a result of expected profits in its U.S.-based operations due principally to the acquisition of Platinum.
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 | Year ended | |||||||||||||||||||
December 31, 2016 |
December 31, 2015 |
December 31, 2016 |
December 31, 2015 |
|||||||||||||||||
Revenues | ||||||||||||||||||||
Gross premiums written | $ | 323,091 | $ | 336,093 | $ | 2,374,576 | $ | 2,011,310 | ||||||||||||
Net premiums written | $ | 219,499 | $ | 236,651 | $ | 1,535,312 | $ | 1,416,183 | ||||||||||||
Decrease (increase) in unearned premiums | 132,402 | 124,924 | (131,882 | ) | (15,632 | ) | ||||||||||||||
Net premiums earned | 351,901 | 361,575 | 1,403,430 | 1,400,551 | ||||||||||||||||
Net investment income | 47,316 | 45,918 | 181,726 | 152,567 | ||||||||||||||||
Net foreign exchange (losses) gains | (5,420 | ) | 1,203 | (13,788 | ) | (3,051 | ) | |||||||||||||
Equity in earnings of other ventures | 4,960 | 3,296 | 963 | 20,481 | ||||||||||||||||
Other income | 5,177 | 8,200 | 14,178 | 13,472 | ||||||||||||||||
Net realized and unrealized (losses) gains on investments | (49,967 | ) | (42,817 | ) | 141,328 | (68,918 | ) | |||||||||||||
Total revenues | 353,967 | 377,375 | 1,727,837 | 1,515,102 | ||||||||||||||||
Expenses | ||||||||||||||||||||
Net claims and claim expenses incurred | 123,901 | 102,013 | 530,831 | 448,238 | ||||||||||||||||
Acquisition expenses | 74,146 | 55,399 | 289,323 | 238,592 | ||||||||||||||||
Operational expenses | 49,948 | 64,300 | 197,749 | 219,112 | ||||||||||||||||
Corporate expenses | 11,888 | 10,791 | 37,402 | 76,514 | ||||||||||||||||
Interest expense | 10,534 | 10,550 | 42,144 | 36,270 | ||||||||||||||||
Total expenses | 270,417 | 243,053 | 1,097,449 | 1,018,726 | ||||||||||||||||
Income before taxes | 83,550 | 134,322 | 630,388 | 496,376 | ||||||||||||||||
Income tax benefit (expense) | 7,700 | (8,453 | ) | (340 | ) | 45,866 | ||||||||||||||
Net income | 91,250 | 125,869 | 630,048 | 542,242 | ||||||||||||||||
Net income attributable to noncontrolling interests | (16,219 | ) | (28,068 | ) | (127,086 | ) | (111,050 | ) | ||||||||||||
Net income available to RenaissanceRe | 75,031 | 97,801 | 502,962 | 431,192 | ||||||||||||||||
Dividends on preference shares | (5,595 | ) | (5,595 | ) | (22,381 | ) | (22,381 | ) | ||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 69,436 | $ | 92,206 | $ | 480,581 | $ | 408,811 | ||||||||||||
Net income available to RenaissanceRe common shareholders per common share - basic | $ | 1.70 | $ | 2.11 | $ | 11.50 | $ | 9.36 | ||||||||||||
Net income available to RenaissanceRe common shareholders per common share - diluted | $ | 1.69 | $ | 2.09 | $ | 11.43 | $ | 9.28 | ||||||||||||
Operating income available to RenaissanceRe common shareholders per common share - diluted (1) | $ | 2.92 | $ | 3.07 | $ | 8.03 | $ | 10.86 | ||||||||||||
Average shares outstanding - basic | 40,474 | 43,131 | 41,314 | 43,157 | ||||||||||||||||
Average shares outstanding - diluted | 40,707 | 43,513 | 41,559 | 43,526 | ||||||||||||||||
Net claims and claim expense ratio | 35.2 | % | 28.2 | % | 37.8 | % | 32.0 | % | ||||||||||||
Underwriting expense ratio | 35.3 | % | 33.1 | % | 34.7 | % | 32.7 | % | ||||||||||||
Combined ratio | 70.5 | % | 61.3 | % | 72.5 | % | 64.7 | % | ||||||||||||
Return on average common equity - annualized | 6.3 | % | 8.5 | % | 11.0 | % | 9.8 | % | ||||||||||||
Operating return on average common equity - annualized (1) | 10.8 | % | 12.5 | % | 7.8 | % | 11.4 | % | ||||||||||||
(1) See Comments on Regulation G for a reconciliation of non-GAAP financial measures. |
||||||||||||||||||||
RenaissanceRe Holdings Ltd. | |||||||||
Summary Consolidated Balance Sheets | |||||||||
(in thousands of United States Dollars, except per share amounts) | |||||||||
December 31, 2016 |
December 31, 2015 |
||||||||
Assets | (Unaudited) | (Audited) | |||||||
Fixed maturity investments trading, at fair value | $ | 6,891,244 | $ | 6,765,005 | |||||
Fixed maturity investments available for sale, at fair value | — | 17,813 | |||||||
Total fixed maturity investments, at fair value | 6,891,244 | 6,782,818 | |||||||
Short term investments, at fair value | 1,368,379 | 1,208,401 | |||||||
Equity investments trading, at fair value | 383,313 | 393,877 | |||||||
Other investments, at fair value | 549,805 | 481,621 | |||||||
Investments in other ventures, under equity method | 124,227 | 132,351 | |||||||
Total investments | 9,316,968 | 8,999,068 | |||||||
Cash and cash equivalents | 421,157 | 506,885 | |||||||
Premiums receivable | 987,323 | 778,009 | |||||||
Prepaid reinsurance premiums | 441,260 | 230,671 | |||||||
Reinsurance recoverable | 279,564 | 134,526 | |||||||
Accrued investment income | 38,076 | 39,749 | |||||||
Deferred acquisition costs | 335,325 | 199,380 | |||||||
Receivable for investments sold | 105,841 | 220,834 | |||||||
Other assets | 175,382 | 181,011 | |||||||
Goodwill and other intangibles | 251,186 | 265,154 | |||||||
Total assets | $ | 12,352,082 | $ | 11,555,287 | |||||
Liabilities, Noncontrolling Interests and Shareholders’ Equity | |||||||||
Liabilities | |||||||||
Reserve for claims and claim expenses | $ | 2,848,294 | $ | 2,767,045 | |||||
Unearned premiums | 1,231,573 | 889,102 | |||||||
Debt | 948,663 | 960,495 | |||||||
Reinsurance balances payable | 673,983 | 523,974 | |||||||
Payable for investments purchased | 305,714 | 391,378 | |||||||
Other liabilities | 301,684 | 245,145 | |||||||
Total liabilities | 6,309,911 | 5,777,139 | |||||||
Redeemable noncontrolling interest | 1,175,594 | 1,045,964 | |||||||
Shareholders’ Equity | |||||||||
Preference shares | 400,000 | 400,000 | |||||||
Common shares | 41,187 | 43,701 | |||||||
Additional paid-in capital | 216,558 | 507,674 | |||||||
Accumulated other comprehensive income | 1,133 | 2,108 | |||||||
Retained earnings | 4,207,699 | 3,778,701 | |||||||
Total shareholders’ equity attributable to RenaissanceRe | 4,866,577 | 4,732,184 | |||||||
Total liabilities, noncontrolling interests and shareholders’ equity | $ | 12,352,082 | $ | 11,555,287 | |||||
Book value per common share | $ | 108.45 | $ | 99.13 | |||||
RenaissanceRe Holdings Ltd. | ||||||||||||||||||||
Supplemental Financial Data - Segment Information | ||||||||||||||||||||
(in thousands of United States Dollars, except percentages) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended December 31, 2016 | ||||||||||||||||||||
Casualty and | ||||||||||||||||||||
Property | Specialty | Other | Total | |||||||||||||||||
Gross premiums written | $ | 52,447 | $ | 270,644 | $ | — | $ | 323,091 | ||||||||||||
Net premiums written | $ | 50,960 | $ | 168,396 | $ | 143 | $ | 219,499 | ||||||||||||
Net premiums earned | $ | 181,998 | $ | 169,761 | $ | 142 | $ | 351,901 | ||||||||||||
Net claims and claim expenses incurred | 25,927 | 98,279 | (305 | ) | 123,901 | |||||||||||||||
Acquisition expenses | 26,418 | 47,728 | — | 74,146 | ||||||||||||||||
Operational expenses | 29,201 | 20,723 | 24 | 49,948 | ||||||||||||||||
Underwriting income | $ | 100,452 | $ | 3,031 | $ | 423 | 103,906 | |||||||||||||
Net investment income | 47,316 | 47,316 | ||||||||||||||||||
Net foreign exchange losses | (5,420 | ) | (5,420 | ) | ||||||||||||||||
Equity in earnings of other ventures | 4,960 | 4,960 | ||||||||||||||||||
Other income | 5,177 | 5,177 | ||||||||||||||||||
Net realized and unrealized losses on investments | (49,967 | ) | (49,967 | ) | ||||||||||||||||
Corporate expenses |
(11,888 |
) | (11,888 | ) | ||||||||||||||||
Interest expense | (10,534 | ) | (10,534 | ) | ||||||||||||||||
Income before taxes and redeemable noncontrolling interests | 83,550 | |||||||||||||||||||
Income tax benefit | 7,700 | 7,700 | ||||||||||||||||||
Net income attributable to redeemable noncontrolling interests | (16,219 | ) | (16,219 | ) | ||||||||||||||||
Dividends on preference shares | (5,595 | ) | (5,595 | ) | ||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 69,436 | ||||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 93,291 | $ | 118,092 | $ | — | $ | 211,383 | ||||||||||||
Net claims and claim expenses incurred – prior accident years | (67,364 | ) | (19,813 | ) | (305 | ) | (87,482 | ) | ||||||||||||
Net claims and claim expenses incurred – total | $ | 25,927 | $ | 98,279 | $ | (305 | ) | $ | 123,901 | |||||||||||
Net claims and claim expense ratio – current accident year | 51.3 | % | 69.6 | % | 60.1 | % | ||||||||||||||
Net claims and claim expense ratio – prior accident years | (37.1 | )% | (11.7 | )% | (24.9 | )% | ||||||||||||||
Net claims and claim expense ratio – calendar year | 14.2 | % | 57.9 | % | 35.2 | % | ||||||||||||||
Underwriting expense ratio | 30.6 | % | 40.3 | % | 35.3 | % | ||||||||||||||
Combined ratio | 44.8 | % | 98.2 | % | 70.5 | % | ||||||||||||||
Three months ended December 31, 2015 | ||||||||||||||||||||
Casualty and | ||||||||||||||||||||
Property | Specialty | Other | Total | |||||||||||||||||
Gross premiums written | $ | 43,920 | $ | 292,173 | $ | — | $ | 336,093 | ||||||||||||
Net premiums written | $ | 40,595 | $ | 196,015 | $ | 41 | $ | 236,651 | ||||||||||||
Net premiums earned | $ | 202,336 | $ | 159,198 | $ | 41 | $ | 361,575 | ||||||||||||
Net claims and claim expenses incurred | 3,226 | 99,737 | (950 | ) | 102,013 | |||||||||||||||
Acquisition expenses | 18,523 | 36,876 | — | 55,399 | ||||||||||||||||
Operational expenses | 34,749 | 29,466 | 85 | 64,300 | ||||||||||||||||
Underwriting income (loss) | $ | 145,838 | $ | (6,881 | ) | $ | 906 | 139,863 | ||||||||||||
Net investment income | 45,918 | 45,918 | ||||||||||||||||||
Net foreign exchange gains | 1,203 | 1,203 | ||||||||||||||||||
Equity in earnings of other ventures | 3,296 | 3,296 | ||||||||||||||||||
Other income | 8,200 | 8,200 | ||||||||||||||||||
Net realized and unrealized losses on investments | (42,817 | ) | (42,817 | ) | ||||||||||||||||
Corporate expenses | (10,791 | ) | (10,791 | ) | ||||||||||||||||
Interest expense | (10,550 | ) | (10,550 | ) | ||||||||||||||||
Income before taxes and noncontrolling interests | 134,322 | |||||||||||||||||||
Income tax expense | (8,453 | ) | (8,453 | ) | ||||||||||||||||
Net income attributable to noncontrolling interests | (28,068 | ) | (28,068 | ) | ||||||||||||||||
Dividends on preference shares | (5,595 | ) | (5,595 | ) | ||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 92,206 | ||||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 38,736 | $ | 100,153 | $ | — | $ | 138,889 | ||||||||||||
Net claims and claim expenses incurred – prior accident years | (35,510 | ) | (416 | ) | (950 | ) | (36,876 | ) | ||||||||||||
Net claims and claim expenses incurred – total | $ | 3,226 | $ | 99,737 | $ | (950 | ) | $ | 102,013 | |||||||||||
Net claims and claim expense ratio – current accident year | 19.1 | % | 62.9 | % | 38.4 | % | ||||||||||||||
Net claims and claim expense ratio – prior accident years | (17.5 | )% | (0.3 | )% | (10.2 | )% | ||||||||||||||
Net claims and claim expense ratio – calendar year | 1.6 | % | 62.6 | % | 28.2 | % | ||||||||||||||
Underwriting expense ratio | 26.3 | % | 41.7 | % | 33.1 | % | ||||||||||||||
Combined ratio | 27.9 | % | 104.3 | % | 61.3 | % | ||||||||||||||
RenaissanceRe Holdings Ltd. | ||||||||||||||||||||
Supplemental Financial Data - Segment Information | ||||||||||||||||||||
(in thousands of United States Dollars, except percentages) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Year ended December 31, 2016 | ||||||||||||||||||||
Casualty and | ||||||||||||||||||||
Property | Specialty | Other | Total | |||||||||||||||||
Gross premiums written | $ | 1,111,263 | $ | 1,263,313 | $ | — | $ | 2,374,576 | ||||||||||||
Net premiums written | $ | 725,321 | $ | 809,848 | $ | 143 | $ | 1,535,312 | ||||||||||||
Net premiums earned | $ | 720,951 | $ | 682,337 | $ | 142 | $ | 1,403,430 | ||||||||||||
Net claims and claim expenses incurred | 151,545 | 380,396 | (1,110 | ) | 530,831 | |||||||||||||||
Acquisition expenses | 97,594 | 191,729 | — | 289,323 | ||||||||||||||||
Operational expenses | 108,642 | 88,984 | 123 | 197,749 | ||||||||||||||||
Underwriting income | $ | 363,170 | $ | 21,228 | $ | 1,129 | 385,527 | |||||||||||||
Net investment income | 181,726 | 181,726 | ||||||||||||||||||
Net foreign exchange losses | (13,788 | ) | (13,788 | ) | ||||||||||||||||
Equity in earnings of other ventures | 963 | 963 | ||||||||||||||||||
Other income | 14,178 | 14,178 | ||||||||||||||||||
Net realized and unrealized gains on investments | 141,328 | 141,328 | ||||||||||||||||||
Corporate expenses | (37,402 | ) | (37,402 | ) | ||||||||||||||||
Interest expense | (42,144 | ) | (42,144 | ) | ||||||||||||||||
Income before taxes and redeemable noncontrolling interests | 630,388 | |||||||||||||||||||
Income tax expense | (340 | ) | (340 | ) | ||||||||||||||||
Net income attributable to redeemable noncontrolling interests | (127,086 | ) | (127,086 | ) | ||||||||||||||||
Dividends on preference shares | (22,381 | ) | (22,381 | ) | ||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 480,581 | ||||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 256,421 | $ | 438,536 | $ | — | $ | 694,957 | ||||||||||||
Net claims and claim expenses incurred – prior accident years | (104,876 | ) | (58,140 | ) | (1,110 | ) | (164,126 | ) | ||||||||||||
Net claims and claim expenses incurred – total | $ | 151,545 | $ | 380,396 | $ | (1,110 | ) | $ | 530,831 | |||||||||||
Net claims and claim expense ratio – current accident year | 35.6 | % | 64.3 | % | 49.5 | % | ||||||||||||||
Net claims and claim expense ratio – prior accident years | (14.6 | )% | (8.6 | )% | (11.7 | )% | ||||||||||||||
Net claims and claim expense ratio – calendar year | 21.0 | % | 55.7 | % | 37.8 | % | ||||||||||||||
Underwriting expense ratio | 28.6 | % | 41.2 | % | 34.7 | % | ||||||||||||||
Combined ratio | 49.6 | % | 96.9 | % | 72.5 | % | ||||||||||||||
Year ended December 31, 2015 | ||||||||||||||||||||
Casualty and | ||||||||||||||||||||
Property | Specialty | Other | Total | |||||||||||||||||
Gross premiums written | $ | 1,072,159 | $ | 939,241 | $ | (90 | ) | $ | 2,011,310 | |||||||||||
Net premiums written | $ | 726,145 | $ | 690,086 | $ | (48 | ) | $ | 1,416,183 | |||||||||||
Net premiums earned | $ | 805,985 | $ | 594,614 | $ | (48 | ) | $ | 1,400,551 | |||||||||||
Net claims and claim expenses incurred | 128,290 | 320,818 | (870 | ) | 448,238 | |||||||||||||||
Acquisition expenses | 94,249 | 144,095 | 248 | 238,592 | ||||||||||||||||
Operational expenses | 118,666 | 100,180 | 266 | 219,112 | ||||||||||||||||
Underwriting income | $ | 464,780 | $ | 29,521 | $ | 308 | 494,609 | |||||||||||||
Net investment income | 152,567 | 152,567 | ||||||||||||||||||
Net foreign exchange losses | (3,051 | ) | (3,051 | ) | ||||||||||||||||
Equity in earnings of other ventures | 20,481 | 20,481 | ||||||||||||||||||
Other income | 13,472 | 13,472 | ||||||||||||||||||
Net realized and unrealized losses on investments | (68,918 | ) | (68,918 | ) | ||||||||||||||||
Corporate expenses | (76,514 | ) | (76,514 | ) | ||||||||||||||||
Interest expense | (36,270 | ) | (36,270 | ) | ||||||||||||||||
Income before taxes and noncontrolling interests | 496,376 | |||||||||||||||||||
Income tax benefit | 45,866 | 45,866 | ||||||||||||||||||
Net income attributable to noncontrolling interests | (111,050 | ) | (111,050 | ) | ||||||||||||||||
Dividends on preference shares | (22,381 | ) | (22,381 | ) | ||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 408,811 | ||||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 222,076 | $ | 388,609 | $ | — | $ | 610,685 | ||||||||||||
Net claims and claim expenses incurred – prior accident years | (93,786 | ) | (67,791 | ) | (870 | ) | (162,447 | ) | ||||||||||||
Net claims and claim expenses incurred – total | $ | 128,290 | $ | 320,818 | $ | (870 | ) | $ | 448,238 | |||||||||||
Net claims and claim expense ratio – current accident year | 27.6 | % | 65.4 | % | 43.6 | % | ||||||||||||||
Net claims and claim expense ratio – prior accident years | (11.7 | )% | (11.4 | )% | (11.6 | )% | ||||||||||||||
Net claims and claim expense ratio – calendar year | 15.9 | % | 54.0 | % | 32.0 | % | ||||||||||||||
Underwriting expense ratio | 26.4 | % | 41.0 | % | 32.7 | % | ||||||||||||||
Combined ratio | 42.3 | % | 95.0 | % | 64.7 | % | ||||||||||||||
RenaissanceRe Holdings Ltd. | ||||||||||||||||||||
Supplemental Financial Data - Total Investment Result | ||||||||||||||||||||
(in thousands of United States Dollars) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | Year ended | |||||||||||||||||||
December 31, 2016 |
December 31, 2015 |
December 31, 2016 |
December 31, 2015 |
|||||||||||||||||
Fixed maturity investments | $ | 38,605 | $ | 38,047 | $ | 160,661 | $ | 134,800 | ||||||||||||
Short term investments | 1,726 | 466 | 5,127 | 1,227 | ||||||||||||||||
Equity investments trading | 910 | 2,038 | 4,235 | 8,346 | ||||||||||||||||
Other investments | ||||||||||||||||||||
Private equity investments | 6,585 | 8,260 | 6,155 | 9,455 | ||||||||||||||||
Other | 3,072 | 891 | 20,181 | 12,472 | ||||||||||||||||
Cash and cash equivalents | 204 | 112 | 788 | 467 | ||||||||||||||||
51,102 | 49,814 | 197,147 | 166,767 | |||||||||||||||||
Investment expenses | (3,786 | ) | (3,896 | ) | (15,421 | ) | (14,200 | ) | ||||||||||||
Net investment income | 47,316 | 45,918 | 181,726 | 152,567 | ||||||||||||||||
Gross realized gains | 11,945 | 11,124 | 72,739 | 50,488 | ||||||||||||||||
Gross realized losses | (12,483 | ) | (13,487 | ) | (38,315 | ) | (53,630 | ) | ||||||||||||
Net realized (losses) gains on fixed maturity investments | (538 | ) | (2,363 | ) | 34,424 | (3,142 | ) | |||||||||||||
Net unrealized (losses) gains on fixed maturity investments trading | (98,547 | ) | (52,984 | ) | 26,954 | (64,908 | ) | |||||||||||||
Net realized and unrealized gains (losses) on investments-related derivatives | 11,459 | 6,447 | (15,414 | ) | 5,443 | |||||||||||||||
Net realized gains on equity investments trading | 152 | 149 | 14,190 | 16,348 | ||||||||||||||||
Net unrealized gains (losses) on equity investments trading | 37,507 | 5,934 | 81,174 | (22,659 | ) | |||||||||||||||
Net realized and unrealized (losses) gains on investments | (49,967 | ) | (42,817 | ) | 141,328 | (68,918 | ) | |||||||||||||
Change in net unrealized gains on fixed maturity investments available for sale | (1,398 | ) | (257 | ) | (1,870 | ) | (1,243 | ) | ||||||||||||
Total investment result | $ | (4,049 | ) | $ | 2,844 | $ | 321,184 | $ | 82,406 | |||||||||||
Total investment return - annualized | (0.2 | )% | 0.1 | % | 3.5 | % | 0.9 | % | ||||||||||||
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
Three months ended | Year ended | |||||||||||||||||||
(in thousands of United States Dollars, except percentages) |
December 31, 2016 |
December 31, 2015 |
December 31, 2016 |
December 31, 2015 |
||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 69,436 | $ | 92,206 | $ | 480,581 | $ | 408,811 | ||||||||||||
Adjustment for net realized and unrealized losses (gains) on investments | 49,967 | 42,817 | (141,328 | ) | 68,918 | |||||||||||||||
Operating income available to RenaissanceRe common shareholders | $ | 119,403 | $ | 135,023 | $ | 339,253 | $ | 477,729 | ||||||||||||
Net income available to RenaissanceRe common shareholders per common share - diluted | $ | 1.69 | $ | 2.09 | $ | 11.43 | $ | 9.28 | ||||||||||||
Adjustment for net realized and unrealized losses (gains) on investments | 1.23 | 0.98 | (3.40 | ) | 1.58 | |||||||||||||||
Operating income available to RenaissanceRe common shareholders per common share - diluted | $ | 2.92 | $ | 3.07 | $ | 8.03 | $ | 10.86 | ||||||||||||
Return on average common equity - annualized | 6.3 | % | 8.5 | % | 11.0 | % | 9.8 | % | ||||||||||||
Adjustment for net realized and unrealized losses (gains) on investments | 4.5 | % | 4.0 | % | (3.2 | )% | 1.6 | % | ||||||||||||
Operating return on average common equity - annualized | 10.8 | % | 12.5 | % | 7.8 | % | 11.4 | % | ||||||||||||
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, 2016 |
September 30, 2016 |
June 30, 2016 |
March 31, 2016 |
December 31, 2015 |
|||||||||||||||||||||
Book value per common share | $ | 108.45 | $ | 107.10 | $ | 103.70 | $ | 101.19 | $ | 99.13 | |||||||||||||||
Adjustment for goodwill and other intangibles (1) | (6.58 | ) | (6.69 | ) | (6.73 | ) | (6.59 | ) | (6.59 | ) | |||||||||||||||
Tangible book value per common share | 101.87 | 100.41 | 96.97 | 94.60 | 92.54 | ||||||||||||||||||||
Adjustment for accumulated dividends | 16.72 | 16.41 | 16.10 | 15.79 | 15.48 | ||||||||||||||||||||
Tangible book value per common share plus accumulated dividends | $ | 118.59 | $ | 116.82 | $ | 113.07 | $ | 110.39 | $ | 108.02 | |||||||||||||||
Quarterly change in book value per common share | 1.3 | % | 3.3 | % | 2.5 | % | 2.1 | % | 1.8 | % | |||||||||||||||
Quarterly change in tangible book value per common share plus change in accumulated dividends | 1.8 | % | 3.9 | % | 2.8 | % | 2.6 | % | 2.3 | % | |||||||||||||||
Year to date change in book value per common share | 9.4 | % | 10.0 | % | |||||||||||||||||||||
Year to date change in tangible book value per common share plus change in accumulated dividends | 11.4 | % | 5.0 | % |
(1) |
At December 31, 2016, September 30, 2016, June 30, 2016, March 31, 2016 and December 31, 2015, goodwill and other intangibles included $19.7 million, $20.6 million, $21.4 million, $22.3 million and $23.2 million, respectively, of goodwill and other intangibles included in investments in other ventures, under equity method. |
|
The Company has included in this Press Release “managed catastrophe
premiums” which is defined as gross catastrophe premiums written by the
Company and its related joint ventures. “Managed catastrophe premiums”
differs from Property segment gross premiums written, which the Company
believes is the most directly comparable GAAP measure, due to the
exclusion of other property gross premiums written and the inclusion of
catastrophe premiums written on behalf of the Company's joint venture
Three months ended | Year ended | |||||||||||||||||||
December 31, 2016 |
December 31, 2015 |
December 31, 2016 |
December 31, 2015 |
|||||||||||||||||
Property Segment |
||||||||||||||||||||
Catastrophe | $ | 7,705 | $ | 15,264 | $ | 884,361 | $ | 930,578 | ||||||||||||
Other property | 44,742 | 28,656 | 226,902 | 141,581 | ||||||||||||||||
Property segment gross premiums written | $ | 52,447 | $ | 43,920 | $ | 1,111,263 | $ | 1,072,159 | ||||||||||||
Managed Catastrophe Premiums |
||||||||||||||||||||
Property segment gross premiums written | $ | 52,447 | $ | 43,920 | $ | 1,111,263 | $ | 1,072,159 | ||||||||||||
Other property gross premiums written | (44,742 | ) | (28,656 | ) | (226,902 | ) | (141,581 | ) | ||||||||||||
Catastrophe gross premiums written | $ | 7,705 | $ | 15,264 | $ | 884,361 | $ | 930,578 | ||||||||||||
Catastrophe premiums written on behalf of the Company's joint venture, Top Layer Re | 1,389 | 1,923 | 39,667 | 38,587 | ||||||||||||||||
Catastrophe premiums written by the Company and ceded to Top Layer Re | — | — | (9,263 | ) | (6,785 | ) | ||||||||||||||
Managed catastrophe premiums | $ | 9,094 | $ | 17,187 | $ | 914,765 | $ | 962,380 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20170131006381/en/
Source:
Investors:
RenaissanceRe Holdings Ltd.
Aditya Dutt,
441-295-4513
Senior Vice President
or
Media:
RenaissanceRe
Holdings Ltd.
Elizabeth Tillman, 212-238-9224
Director -
Communications
or
Kekst and Company
Peter Hill or Dawn
Dover, 212-521-4800