RenaissanceRe Reports Net Income Available to Common Shareholders of $32.7 Million for the Third Quarter of 2018, or $0.82 Per Diluted Common Share
Quarterly Operating Income Available to Common Shareholders of
PEMBROKE,
Kevin J. O’Donnell, President and Chief Executive Officer of
THIRD QUARTER 2018 SUMMARY
- Net negative impact on the Company’s net income available to
RenaissanceRe common shareholders of$151.9 million from Typhoons Jebi, Mangkut and Trami, Hurricane Florence and the wildfires inCalifornia during the third quarter of 2018 (collectively, the “Q3 2018 Catastrophe Events”). - Underwriting loss of
$29.0 million and a combined ratio of 105.5% in the third quarter of 2018, compared to an underwriting loss of$793.2 million and a combined ratio of 244.8% in the third quarter of 2017. Principally impacting the Company’s underwriting results in the third quarter of 2018 were the Q3 2018 Catastrophe Events which resulted in an underwriting loss of$178.0 million and added 34.4 percentage points to the combined ratio. The third quarter of 2017 underwriting loss included the impacts of Hurricanes Harvey, Irma and Maria, the Mexico City Earthquake and certain losses associated with aggregate loss contracts (collectively, the “Q3 2017 Large Loss Events”), which resulted in an underwriting loss of$838.7 million and added 156.0 percentage points to the combined ratio in the third quarter of 2017. - Gross premiums written decreased by
$14.6 million , or 2.3%, to$625.7 million , in the third quarter of 2018, compared to the third quarter of 2017, driven by a decrease of$24.0 million in the Property segment, partially offset by an increase of$9.4 million in the Casualty and Specialty segment. Included in gross premiums written in the third quarter of 2018 was$16.9 million of reinstatement premiums written associated with the Q3 2018 Catastrophe Events, and$102.3 million of gross premiums written associated with certain large, non-recurring reinsurance transactions noted below, each within the Company’s Property segment. Included in the gross premiums written in the third quarter of 2017 was$169.8 million of reinstatement premiums written associated with the Q3 2017 Large Loss Events. - Net premiums earned and net income available to
RenaissanceRe common shareholders increased by$54.2 million and$41.9 million , respectively, as a result of certain large, non-recurring reinsurance transactions which are reflected in the Property segment. These transactions highlight the Company’s differentiated strategy and capability to provide bespoke or large solutions for its clients. - Total investment result was a gain of
$94.3 million in the third quarter of 2018, generating an annualized total investment return of 3.3%. The Company’s portfolio of fixed maturity and short term investments had a yield to maturity of 3.1% atSeptember 30, 2018 .
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, will vary from these estimates, perhaps materially. Changes in these estimates will be recorded in the period in which they occur.
Meaningful uncertainty remains regarding the estimates and the nature and extent of the losses associated with the Q3 2018 Catastrophe Events, driven by the magnitude and recent occurrence of each event, relatively limited claims data received to date, the contingent nature of business interruption and other exposures, potential uncertainties relating to reinsurance recoveries and other factors inherent in loss estimation, among other things.
The financial data below provides additional information detailing the net negative impact on the Company’s consolidated financial statements in the third quarter of 2018 resulting from the Q3 2018 Catastrophe Events.
Three months ended September 30, 2018 |
Typhoon |
Hurricane |
Other Q3 |
Total Q3 |
||||||||||||||
(in thousands, except percentages) | ||||||||||||||||||
Net claims and claims expenses incurred | $ | (90,228 | ) | $ | (74,040 | ) | $ | (32,763 | ) | $ | (197,031 | ) | ||||||
Assumed reinstatement premiums earned | 6,997 | 9,067 | 866 | 16,930 | ||||||||||||||
Ceded reinstatement premiums earned | — | (112 | ) | — | (112 | ) | ||||||||||||
Lost profit commissions | 1,973 | 313 | (109 | ) | 2,177 | |||||||||||||
Net negative impact on underwriting result | (81,258 | ) | (64,772 | ) | (32,006 | ) | (178,036 | ) | ||||||||||
Redeemable noncontrolling interest - DaVinciRe | 13,507 | 8,593 | 3,987 | 26,087 | ||||||||||||||
Net negative impact on net income available to |
$ | (67,751 | ) | $ | (56,179 | ) | $ | (28,019 | ) | $ | (151,949 | ) | ||||||
Percentage point impact on consolidated combined ratio | 15.5 | 12.3 | 6.1 | 34.4 | ||||||||||||||
Net negative impact on Property segment underwriting result | $ | (80,258 | ) | $ | (64,772 | ) | $ | (32,006 | ) | $ | (177,036 | ) | ||||||
Net negative impact on Casualty and Specialty segment |
(1,000 | ) | — | — | (1,000 | ) | ||||||||||||
Net negative impact on underwriting result | $ | (81,258 | ) | $ | (64,772 | ) | $ | (32,006 | ) | $ | (178,036 | ) |
(1) | Other Q3 2018 Catastrophe Events includes Typhoons Mangkhut and Trami and the wildfires in California during the third quarter of 2018. |
Underwriting Results by Segment
Property Segment
Gross premiums written in the Property segment were
Gross premiums written in the catastrophe class of business were
Gross premiums written in the other property class of business were
Ceded premiums written in the Property segment were
The Property segment incurred an underwriting loss of
Casualty and Specialty Segment
Gross premiums written in the Casualty and Specialty segment were
The Casualty and Specialty segment generated underwriting income of
During the third quarter of 2018, the Casualty and Specialty segment experienced net favorable development on prior accident years net claims and claim expenses of
Other Items
- 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 a gain of
$94.3 million in the third quarter of 2018, compared to a gain of$82.3 million in the third quarter of 2017, an increase of$12.0 million . The increase in the total investment result was principally due to an increase in net investment income, which was partially offset by lower realized and unrealized gains on investments. The increase in net investment income was principally driven by higher average invested assets and higher interest rates within the Company’s fixed maturity and short term investments portfolios, combined with higher returns in the Company’s catastrophe bond portfolio included in other investments. Conversely, net realized and unrealized gains were lower in the third quarter of 2018, compared to the third quarter of 2017, as a result of the higher interest rates experienced during the current quarter, generating both realized and unrealized losses in the Company’s fixed maturity investments portfolio. - Net income attributable to redeemable noncontrolling interests in the third quarter of 2018 was
$6.4 million , compared to a net loss attributable to redeemable noncontrolling interests of$204.3 million in the third quarter of 2017. The improvement was principally due to DaVinciRe generating underwriting income in the third quarter of 2018, compared to significant underwriting losses in the third quarter of 2017 driven by the Q3 2017 Large Loss Events. The Company’s ownership in DaVinciRe was 22.1% atSeptember 30, 2018 , compared to 23.5% atSeptember 30, 2017 . The Company expects its noncontrolling economic ownership in DaVinciRe to fluctuate over time. - The Company recognized income tax expense of
$1.5 million in the third quarter of 2018, compared to an income tax benefit of$19.0 million in the third quarter of 2017, which was principally driven by the underwriting losses associated with the Q3 2017 Large Loss Events. - The Company currently estimates, on a preliminary basis, that losses from Hurricane Michael will have an estimated net negative impact on net income (loss) available (attributable) to
RenaissanceRe common shareholders of approximately$100.0 million on its fourth quarter 2018 results of operations.
This Press Release includes certain non-GAAP financial measures including “operating income (loss) available (attributable) to
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.
About
Cautionary Statement Regarding Forward-Looking Statements
Any forward-looking statements made in this Press Release reflect RenaissanceRe’s current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are subject to numerous factors that could cause actual results to differ materially from those set forth in or implied by such forward-looking statements, including the following: the failure to obtain regulatory approvals or satisfy other conditions to completion of the proposed Tokio Millennium Re transaction; risks that the proposed Tokio Millennium Re transaction disrupts current plans and operations; the ability to recognize the benefits of the proposed Tokio Millenium Re transaction; the amount of the costs, fees, expenses and charges related to the proposed Tokio Millennium Re transaction; the frequency and severity of catastrophic and other events that the Company covers; the effectiveness of the Company’s claims and claim expense reserving process; the Company’s ability to maintain its financial strength ratings; the effect of climate change on the Company’s business; collection on claimed retrocessional coverage, and new retrocessional reinsurance being available on acceptable terms and providing the coverage that we intended to obtain; the 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 effect of emerging claims and coverage issues; continued soft reinsurance underwriting market conditions; 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; 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, 2018 |
September 30, 2017 |
September 30, 2018 |
September 30, 2017 |
|||||||||||||
Revenues | ||||||||||||||||
Gross premiums written | $ | 625,677 | $ | 640,269 | $ | 2,762,672 | $ | 2,389,774 | ||||||||
Net premiums written | $ | 453,255 | $ | 483,221 | $ | 1,720,808 | $ | 1,583,102 | ||||||||
Decrease (increase) in unearned premiums | 78,594 | 64,571 | (319,292 | ) | (287,000 | ) | ||||||||||
Net premiums earned | 531,849 | 547,792 | 1,401,516 | 1,296,102 | ||||||||||||
Net investment income | 80,696 | 40,257 | 208,528 | 148,745 | ||||||||||||
Net foreign exchange (losses) gains | (4,566 | ) | (156 | ) | (11,496 | ) | 11,118 | |||||||||
Equity in earnings of other ventures | 7,648 | 1,794 | 14,331 | 5,830 | ||||||||||||
Other income | 497 | 2,996 | 480 | 7,053 | ||||||||||||
Net realized and unrealized gains (losses) on investments | 13,630 | 42,052 | (86,415 | ) | 143,538 | |||||||||||
Total revenues | 629,754 | 634,735 | 1,526,944 | 1,612,386 | ||||||||||||
Expenses | ||||||||||||||||
Net claims and claim expenses incurred | 410,510 | 1,221,696 | 642,380 | 1,557,364 | ||||||||||||
Acquisition expenses | 109,761 | 76,761 | 312,524 | 248,294 | ||||||||||||
Operational expenses | 40,593 | 42,537 | 119,408 | 131,586 | ||||||||||||
Corporate expenses | 6,841 | 4,413 | 21,875 | 14,335 | ||||||||||||
Interest expense | 11,769 | 11,799 | 35,304 | 32,416 | ||||||||||||
Total expenses | 579,474 | 1,357,206 | 1,131,491 | 1,983,995 | ||||||||||||
Income (loss) before taxes | 50,280 | (722,471 | ) | 395,453 | (371,609 | ) | ||||||||||
Income tax (expense) benefit | (1,451 | ) | 18,977 | (2,550 | ) | 14,739 | ||||||||||
Net income (loss) | 48,829 | (703,494 | ) | 392,903 | (356,870 | ) | ||||||||||
Net (income) loss attributable to noncontrolling interests | (6,440 | ) | 204,277 | (90,822 | ) | 132,338 | ||||||||||
Net income (loss) attributable to RenaissanceRe | 42,389 | (499,217 | ) | 302,081 | (224,532 | ) | ||||||||||
Dividends on preference shares | (9,708 | ) | (5,595 | ) | (20,899 | ) | (16,786 | ) | ||||||||
Net income (loss) available (attributable) to |
$ | 32,681 | $ | (504,812 | ) | $ | 281,182 | $ | (241,318 | ) | ||||||
Net income (loss) available (attributable) to RenaissanceRe |
$ | 0.82 | $ | (12.75 | ) | $ | 7.02 | $ | (6.04 | ) | ||||||
Net income (loss) available (attributable) to RenaissanceRe |
$ | 0.82 | $ | (12.75 | ) | $ | 7.02 | $ | (6.04 | ) | ||||||
Operating income (loss) available (attributable) to |
$ | 0.52 | $ | (13.74 | ) | $ | 9.15 | $ | (9.35 | ) | ||||||
Average shares outstanding - basic | 39,624 | 39,591 | 39,606 | 39,979 | ||||||||||||
Average shares outstanding - diluted | 39,637 | 39,591 | 39,627 | 39,979 | ||||||||||||
Net claims and claim expense ratio | 77.2 | % | 223.0 | % | 45.8 | % | 120.2 | % | ||||||||
Underwriting expense ratio | 28.3 | % | 21.8 | % | 30.9 | % | 29.3 | % | ||||||||
Combined ratio | 105.5 | % | 244.8 | % | 76.7 | % | 149.5 | % | ||||||||
Return on average common equity - annualized | 3.1 | % | (47.2 | )% | 9.1 | % | (7.4 | )% | ||||||||
Operating return on average common equity - annualized (1) | 1.9 | % | (50.8 | )% | 11.8 | % | (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) | |||||||
September 30, |
December 31, |
||||||
Assets | (Unaudited) | (Audited) | |||||
Fixed maturity investments trading, at fair value | $ | 7,814,779 | $ | 7,426,555 | |||
Short term investments, at fair value | 2,461,415 | 991,863 | |||||
Equity investments trading, at fair value | 413,271 | 388,254 | |||||
Other investments, at fair value | 738,919 | 594,793 | |||||
Investments in other ventures, under equity method | 117,307 | 101,974 | |||||
Total investments | 11,545,691 | 9,503,439 | |||||
Cash and cash equivalents | 453,041 | 1,361,592 | |||||
Premiums receivable | 1,787,095 | 1,304,622 | |||||
Prepaid reinsurance premiums | 795,496 | 533,546 | |||||
Reinsurance recoverable | 1,204,059 | 1,586,630 | |||||
Accrued investment income | 46,690 | 42,235 | |||||
Deferred acquisition costs | 497,733 | 426,551 | |||||
Receivable for investments sold | 406,062 | 103,145 | |||||
Other assets | 121,724 | 121,226 | |||||
Goodwill and other intangibles | 238,803 | 243,145 | |||||
Total assets | $ | 17,096,394 | $ | 15,226,131 | |||
Liabilities, Noncontrolling Interests and Shareholders’ Equity | |||||||
Liabilities | |||||||
Reserve for claims and claim expenses | $ | 4,952,498 | $ | 5,080,408 | |||
Unearned premiums | 2,058,851 | 1,477,609 | |||||
Debt | 990,749 | 989,623 | |||||
Reinsurance balances payable | 1,970,913 | 989,090 | |||||
Payable for investments purchased | 555,556 | 208,749 | |||||
Other liabilities | 147,328 | 792,771 | |||||
Total liabilities | 10,675,895 | 9,538,250 | |||||
Redeemable noncontrolling interest | 1,533,978 | 1,296,506 | |||||
Shareholders’ Equity | |||||||
Preference shares | 650,000 | 400,000 | |||||
Common shares | 40,266 | 40,024 | |||||
Additional paid-in capital | 42,395 | 37,355 | |||||
Accumulated other comprehensive (loss) income | (1,483 | ) | 224 | ||||
Retained earnings | 4,155,343 | 3,913,772 | |||||
Total shareholders’ equity attributable to RenaissanceRe | 4,886,521 | 4,391,375 | |||||
Total liabilities, noncontrolling interests and shareholders’ equity | $ | 17,096,394 | $ | 15,226,131 | |||
Book value per common share | $ | 105.21 | $ | 99.72 |
RenaissanceRe Holdings Ltd. | ||||||||||||||||
Supplemental Financial Data - Segment Information | ||||||||||||||||
(in thousands of United States Dollars, except percentages) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three months ended September 30, 2018 | ||||||||||||||||
Property |
Casualty and |
Other | Total | |||||||||||||
Gross premiums written | $ | 301,413 | $ | 324,264 | $ | — | $ | 625,677 | ||||||||
Net premiums written | $ | 232,632 | $ | 220,623 | $ | — | $ | 453,255 | ||||||||
Net premiums earned | $ | 293,059 | $ | 238,791 | $ | (1 | ) | $ | 531,849 | |||||||
Net claims and claim expenses incurred | 265,857 | 144,671 | (18 | ) | 410,510 | |||||||||||
Acquisition expenses | 45,524 | 64,238 | (1 | ) | 109,761 | |||||||||||
Operational expenses | 25,577 | 14,976 | 40 | 40,593 | ||||||||||||
Underwriting (loss) income | $ | (43,899 | ) | $ | 14,906 | $ | (22 | ) | (29,015 | ) | ||||||
Net investment income | 80,696 | 80,696 | ||||||||||||||
Net foreign exchange losses | (4,566 | ) | (4,566 | ) | ||||||||||||
Equity in earnings of other ventures | 7,648 | 7,648 | ||||||||||||||
Other income | 497 | 497 | ||||||||||||||
Net realized and unrealized gains on investments | 13,630 | 13,630 | ||||||||||||||
Corporate expenses | (6,841 | ) | (6,841 | ) | ||||||||||||
Interest expense | (11,769 | ) | (11,769 | ) | ||||||||||||
Income before taxes and redeemable noncontrolling interests | 50,280 | |||||||||||||||
Income tax expense | (1,451 | ) | (1,451 | ) | ||||||||||||
Net income attributable to redeemable noncontrolling interests | (6,440 | ) | (6,440 | ) | ||||||||||||
Dividends on preference shares | (9,708 | ) | (9,708 | ) | ||||||||||||
Net income attributable to RenaissanceRe common shareholders | $ | 32,681 | ||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 268,022 | $ | 151,904 | $ | — | $ | 419,926 | ||||||||
Net claims and claim expenses incurred – prior accident years | (2,165 | ) | (7,233 | ) | (18 | ) | (9,416 | ) | ||||||||
Net claims and claim expenses incurred – total | $ | 265,857 | $ | 144,671 | $ | (18 | ) | $ | 410,510 | |||||||
Net claims and claim expense ratio – current accident year | 91.5 | % | 63.6 | % | 79.0 | % | ||||||||||
Net claims and claim expense ratio – prior accident years | (0.8 | )% | (3.0 | )% | (1.8 | )% | ||||||||||
Net claims and claim expense ratio – calendar year | 90.7 | % | 60.6 | % | 77.2 | % | ||||||||||
Underwriting expense ratio | 24.3 | % | 33.2 | % | 28.3 | % | ||||||||||
Combined ratio | 115.0 | % | 93.8 | % | 105.5 | % | ||||||||||
Three months ended September 30, 2017 | ||||||||||||||||
Property |
Casualty and |
Other | Total | |||||||||||||
Gross premiums written | $ | 325,395 | $ | 314,881 | $ | (7 | ) | $ | 640,269 | |||||||
Net premiums written | $ | 269,393 | $ | 213,835 | $ | (7 | ) | $ | 483,221 | |||||||
Net premiums earned | $ | 336,838 | $ | 210,961 | $ | (7 | ) | $ | 547,792 | |||||||
Net claims and claim expenses incurred | 1,044,418 | 177,433 | (155 | ) | 1,221,696 | |||||||||||
Acquisition expenses | 17,514 | 59,248 | (1 | ) | 76,761 | |||||||||||
Operational expenses | 25,123 | 17,389 | 25 | 42,537 | ||||||||||||
Underwriting (loss) income | $ | (750,217 | ) | $ | (43,109 | ) | $ | 124 | (793,202 | ) | ||||||
Net investment income | 40,257 | 40,257 | ||||||||||||||
Net foreign exchange losses | (156 | ) | (156 | ) | ||||||||||||
Equity in earnings of other ventures | 1,794 | 1,794 | ||||||||||||||
Other income | 2,996 | 2,996 | ||||||||||||||
Net realized and unrealized gains on investments | 42,052 | 42,052 | ||||||||||||||
Corporate expenses | (4,413 | ) | (4,413 | ) | ||||||||||||
Interest expense | (11,799 | ) | (11,799 | ) | ||||||||||||
Loss before taxes and redeemable noncontrolling interests | (722,471 | ) | ||||||||||||||
Income tax benefit | 18,977 | 18,977 | ||||||||||||||
Net loss attributable to redeemable noncontrolling interests | 204,277 | 204,277 | ||||||||||||||
Dividends on preference shares | (5,595 | ) | (5,595 | ) | ||||||||||||
Net loss attributable to RenaissanceRe common shareholders | $ | (504,812 | ) | |||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 1,036,586 | $ | 172,675 | $ | — | $ | 1,209,261 | ||||||||
Net claims and claim expenses incurred – prior accident years | 7,832 | 4,758 | (155 | ) | 12,435 | |||||||||||
Net claims and claim expenses incurred – total | $ | 1,044,418 | $ | 177,433 | $ | (155 | ) | $ | 1,221,696 | |||||||
Net claims and claim expense ratio – current accident year | 307.7 | % | 81.9 | % | 220.8 | % | ||||||||||
Net claims and claim expense ratio – prior accident years | 2.4 | % | 2.2 | % | 2.2 | % | ||||||||||
Net claims and claim expense ratio – calendar year | 310.1 | % | 84.1 | % | 223.0 | % | ||||||||||
Underwriting expense ratio | 12.6 | % | 36.3 | % | 21.8 | % | ||||||||||
Combined ratio | 322.7 | % | 120.4 | % | 244.8 | % |
RenaissanceRe Holdings Ltd. | ||||||||||||||||
Supplemental Financial Data - Segment Information | ||||||||||||||||
(in thousands of United States Dollars, except percentages) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Nine months ended September 30, 2018 | ||||||||||||||||
Property |
Casualty and |
Other | Total | |||||||||||||
Gross premiums written | $ | 1,561,008 | $ | 1,201,664 | $ | — | $ | 2,762,672 | ||||||||
Net premiums written | $ | 884,541 | $ | 836,267 | $ | — | $ | 1,720,808 | ||||||||
Net premiums earned | $ | 722,246 | $ | 679,271 | $ | (1 | ) | $ | 1,401,516 | |||||||
Net claims and claim expenses incurred | 222,195 | 420,273 | (88 | ) | 642,380 | |||||||||||
Acquisition expenses | 127,095 | 185,429 | — | 312,524 | ||||||||||||
Operational expenses | 75,933 | 43,121 | 354 | 119,408 | ||||||||||||
Underwriting income (loss) | $ | 297,023 | $ | 30,448 | $ | (267 | ) | 327,204 | ||||||||
Net investment income | 208,528 | 208,528 | ||||||||||||||
Net foreign exchange losses | (11,496 | ) | (11,496 | ) | ||||||||||||
Equity in earnings of other ventures | 14,331 | 14,331 | ||||||||||||||
Other income | 480 | 480 | ||||||||||||||
Net realized and unrealized losses on investments | (86,415 | ) | (86,415 | ) | ||||||||||||
Corporate expenses | (21,875 | ) | (21,875 | ) | ||||||||||||
Interest expense | (35,304 | ) | (35,304 | ) | ||||||||||||
Income before taxes and redeemable noncontrolling interests | 395,453 | |||||||||||||||
Income tax expense | (2,550 | ) | (2,550 | ) | ||||||||||||
Net income attributable to redeemable noncontrolling interests | (90,822 | ) | (90,822 | ) | ||||||||||||
Dividends on preference shares | (20,899 | ) | (20,899 | ) | ||||||||||||
Net income attributable to RenaissanceRe common shareholders | $ | 281,182 | ||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 395,067 | $ | 444,293 | $ | — | $ | 839,360 | ||||||||
Net claims and claim expenses incurred – prior accident years | (172,872 | ) | (24,020 | ) | (88 | ) | (196,980 | ) | ||||||||
Net claims and claim expenses incurred – total | $ | 222,195 | $ | 420,273 | $ | (88 | ) | $ | 642,380 | |||||||
Net claims and claim expense ratio – current accident year | 54.7 | % | 65.4 | % | 59.9 | % | ||||||||||
Net claims and claim expense ratio – prior accident years | (23.9 | )% | (3.5 | )% | (14.1 | )% | ||||||||||
Net claims and claim expense ratio – calendar year | 30.8 | % | 61.9 | % | 45.8 | % | ||||||||||
Underwriting expense ratio | 28.1 | % | 33.6 | % | 30.9 | % | ||||||||||
Combined ratio | 58.9 | % | 95.5 | % | 76.7 | % | ||||||||||
Nine months ended September 30, 2017 | ||||||||||||||||
Property |
Casualty and |
Other | Total | |||||||||||||
Gross premiums written | $ | 1,345,271 | $ | 1,044,510 | $ | (7 | ) | $ | 2,389,774 | |||||||
Net premiums written | $ | 895,728 | $ | 687,381 | $ | (7 | ) | $ | 1,583,102 | |||||||
Net premiums earned | $ | 716,024 | $ | 580,085 | $ | (7 | ) | $ | 1,296,102 | |||||||
Net claims and claim expenses incurred | 1,116,273 | 441,801 | (710 | ) | 1,557,364 | |||||||||||
Acquisition expenses | 75,117 | 173,179 | (2 | ) | 248,294 | |||||||||||
Operational expenses | 76,841 | 54,708 | 37 | 131,586 | ||||||||||||
Underwriting (loss) income | $ | (552,207 | ) | $ | (89,603 | ) | $ | 668 | (641,142 | ) | ||||||
Net investment income | 148,745 | 148,745 | ||||||||||||||
Net foreign exchange gains | 11,118 | 11,118 | ||||||||||||||
Equity in earnings of other ventures | 5,830 | 5,830 | ||||||||||||||
Other income | 7,053 | 7,053 | ||||||||||||||
Net realized and unrealized gains on investments | 143,538 | 143,538 | ||||||||||||||
Corporate expenses | (14,335 | ) | (14,335 | ) | ||||||||||||
Interest expense | (32,416 | ) | (32,416 | ) | ||||||||||||
Loss before taxes and redeemable noncontrolling interests | (371,609 | ) | ||||||||||||||
Income tax benefit | 14,739 | 14,739 | ||||||||||||||
Net loss attributable to redeemable noncontrolling interests | 132,338 | 132,338 | ||||||||||||||
Dividends on preference shares | (16,786 | ) | (16,786 | ) | ||||||||||||
Net loss attributable to RenaissanceRe common shareholders | $ | (241,318 | ) | |||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 1,133,241 | $ | 427,786 | $ | — | $ | 1,561,027 | ||||||||
Net claims and claim expenses incurred – prior accident years | (16,968 | ) | 14,015 | (710 | ) | (3,663 | ) | |||||||||
Net claims and claim expenses incurred – total | $ | 1,116,273 | $ | 441,801 | $ | (710 | ) | $ | 1,557,364 | |||||||
Net claims and claim expense ratio – current accident year | 158.3 | % | 73.7 | % | 120.4 | % | ||||||||||
Net claims and claim expense ratio – prior accident years | (2.4 | )% | 2.5 | % | (0.2 | )% | ||||||||||
Net claims and claim expense ratio – calendar year | 155.9 | % | 76.2 | % | 120.2 | % | ||||||||||
Underwriting expense ratio | 21.2 | % | 39.2 | % | 29.3 | % | ||||||||||
Combined ratio | 177.1 | % | 115.4 | % | 149.5 | % |
RenaissanceRe Holdings Ltd. | |||||||||||||||
Supplemental Financial Data - Gross Premiums Written | |||||||||||||||
(in thousands of United States Dollars) | |||||||||||||||
(Unaudited) | |||||||||||||||
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September 30, |
September 30, 2017 |
September 30, 2018 |
September 30, 2017 |
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Property Segment |
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Catastrophe | $ | 212,330 | $ | 243,514 | $ | 1,240,387 | $ | 1,069,438 | |||||||
Other property | 89,083 | 81,881 | 320,621 | 275,833 | |||||||||||
Property segment gross premiums written | $ | 301,413 | $ | 325,395 | $ | 1,561,008 | $ | 1,345,271 | |||||||
Casualty and Specialty Segment |
|||||||||||||||
General casualty (1) | $ | 97,026 | $ | 107,055 | $ | 377,300 | $ | 337,342 | |||||||
Professional liability (2) | 111,536 | 101,482 | 366,460 | 335,235 | |||||||||||
Financial lines (3) | 69,253 | 66,186 | 250,735 | 220,643 | |||||||||||
Other (4) | 46,449 | 40,158 | 207,169 | 151,290 | |||||||||||
Casualty and Specialty segment gross premiums written | $ | 324,264 | $ | 314,881 | $ | 1,201,664 | $ | 1,044,510 |
(1) | Includes automobile liability, casualty clash, employer’s liability, umbrella or excess casualty, workers’ compensation and general liability | |
(2) | Includes directors and officers, medical malpractice, and professional indemnity. | |
(3) | Includes financial guaranty, mortgage guaranty, political risk, surety and trade credit. | |
(4) | Includes accident and health, agriculture, aviation, cyber, energy, marine, satellite and terrorism. Lines of business such as regional multi-line and whole account may have characteristics of various other classes of business, and are allocated accordingly. |
RenaissanceRe Holdings Ltd. | ||||||||||||||||
Supplemental Financial Data - Total Investment Result | ||||||||||||||||
(in thousands of United States Dollars, except percentages) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
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September 30, 2018 |
September 30, 2017 |
September 30, 2018 |
September 30, 2017 |
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Fixed maturity investments | $ | 55,725 | $ | 45,305 | $ | 151,784 | $ | 133,080 | ||||||||
Short term investments | 9,403 | 2,771 | 22,340 | 7,476 | ||||||||||||
Equity investments trading | 903 | 930 | 3,091 | 2,630 | ||||||||||||
Other investments | ||||||||||||||||
Private equity investments | 8,723 | 6,371 | 12,149 | 20,784 | ||||||||||||
Other | 8,665 | (11,491 | ) | 27,346 | (4,520 | ) | ||||||||||
Cash and cash equivalents | 1,104 | 352 | 2,708 | 836 | ||||||||||||
84,523 | 44,238 | 219,418 | 160,286 | |||||||||||||
Investment expenses | (3,827 | ) | (3,981 | ) | (10,890 | ) | (11,541 | ) | ||||||||
Net investment income | 80,696 | 40,257 | 208,528 | 148,745 | ||||||||||||
Gross realized gains | 5,229 | 16,343 | 14,945 | 43,053 | ||||||||||||
Gross realized losses | (15,327 | ) | (6,126 | ) | (67,699 | ) | (29,902 | ) | ||||||||
Net realized (losses) gains on fixed maturity investments | (10,098 | ) | 10,217 | (52,754 | ) | 13,151 | ||||||||||
Net unrealized (losses) gains on fixed maturity investments |
(8,730 | ) | 5,545 | (73,522 | ) | 48,940 | ||||||||||
Net realized and unrealized gains (losses) on investments- |
2,563 | (4,020 | ) | (763 | ) | (4,344 | ) | |||||||||
Net realized gains on equity investments trading | 21,259 | 13,675 | 21,841 | 49,736 | ||||||||||||
Net unrealized gains on equity investments trading | 8,636 | 16,635 | 18,783 | 36,055 | ||||||||||||
Net realized and unrealized gains (losses) on investments | 13,630 | 42,052 | (86,415 | ) | 143,538 | |||||||||||
Total investment result | $ | 94,326 | $ | 82,309 | $ | 122,113 | $ | 292,283 | ||||||||
Total investment return - annualized | 3.3 | % | 3.4 | % | 1.5 | % | 4.1 | % |
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 (loss) available (attributable) to
Three months ended | Nine months ended | |||||||||||||||
(in thousands of United States Dollars, except per share amounts and |
September 30, 2018 |
September 30, 2017 |
September 30, 2018 |
September 30, 2017 |
||||||||||||
Net income (loss) available (attributable) to RenaissanceRe |
$ | 32,681 | $ | (504,812 | ) | $ | 281,182 | $ | (241,318 | ) | ||||||
Adjustment for net realized and unrealized (gains) losses on |
(13,630 | ) | (42,052 | ) | 86,415 | (143,538 | ) | |||||||||
Adjustment for income tax expense (benefit) (1) | 1,536 | 2,711 | (2,170 | ) | 11,203 | |||||||||||
Operating income (loss) available (attributable) to |
$ | 20,587 | $ | (544,153 | ) | $ | 365,427 | $ | (373,653 | ) | ||||||
Net income (loss) available (attributable) to RenaissanceRe |
$ | 0.82 | $ | (12.75 | ) | $ | 7.02 | $ | (6.04 | ) | ||||||
Adjustment for net realized and unrealized (gains) losses on |
(0.34 | ) | (1.06 | ) | 2.18 | (3.59 | ) | |||||||||
Adjustment for income tax expense (benefit) (1) | 0.04 | 0.07 | (0.05 | ) | 0.28 | |||||||||||
Operating income (loss) available (attributable) to |
$ | 0.52 | $ | (13.74 | ) | $ | 9.15 | $ | (9.35 | ) | ||||||
Return on average common equity - annualized | 3.1 | % | (47.2 | )% | 9.1 | % | (7.4 | )% | ||||||||
Adjustment for net realized and unrealized (gains) losses on |
(1.3 | )% | (3.9 | )% | 2.8 | % | (4.3 | )% | ||||||||
Adjustment for income tax expense (benefit) (1) | 0.1 | % | 0.3 | % | (0.1 | )% | 0.3 | % | ||||||||
Operating return on average common equity - annualized | 1.9 | % | (50.8 | )% | 11.8 | % | (11.4 | )% |
(1) | Adjustment for income tax expense (benefit) represents the income tax expense (benefit) associated with the adjustment for net realized and unrealized (gains) losses on investments. The income tax impact is estimated by applying the statutory rates of applicable jurisdictions, after consideration of other relevant factors. |
The Company has included in this Press Release “tangible book value per common share” and “tangible book value per common share plus accumulated dividends”. “Tangible book value per common share” is defined as book value per common share excluding goodwill and intangible assets per share. “Tangible book value per common share plus accumulated dividends” is defined as book value per common share excluding goodwill and intangible assets per share, plus accumulated dividends. The Company’s management believes “tangible book value per common share” and “tangible book value per common share plus accumulated dividends” are useful to investors because they provide a more accurate measure of the realizable value of shareholder returns, excluding the impact of goodwill and intangible assets. The following is a reconciliation of book value per common share to tangible book value per common share and tangible book value per common share plus accumulated dividends:
At | ||||||||||||||||||||
September 30, 2018 |
June 30, 2018 |
March 31, 2018 |
December 31, 2017 |
September 30, 2017 |
||||||||||||||||
Book value per common share | $ | 105.21 | $ | 104.56 | $ | 100.29 | $ | 99.72 | $ | 100.00 | ||||||||||
Adjustment for goodwill and other |
(6.63 | ) | (6.69 | ) | (6.66 | ) | (6.49 | ) | (6.55 | ) | ||||||||||
Tangible book value per common share | 98.58 | 97.87 | 93.63 | 93.23 | 93.45 | |||||||||||||||
Adjustment for accumulated dividends | 18.99 | 18.66 | 18.33 | 18.00 | 17.68 | |||||||||||||||
Tangible book value per common share plus |
$ | 117.57 | $ | 116.53 | $ | 111.96 | $ | 111.23 | $ | 111.13 | ||||||||||
Quarterly change in book value per common |
0.6 | % | 4.3 | % | 0.6 | % | (0.3 | )% | (11.6 | )% | ||||||||||
Quarterly change in tangible book value per |
1.1 | % | 4.9 | % | 0.8 | % | 0.1 | % | (12.0 | )% | ||||||||||
Year to date change in book value per |
5.5 | % | 4.9 | % | 0.6 | % | (8.0 | )% | (7.8 | )% | ||||||||||
Year to date change in tangible book value per |
6.8 | % | 5.7 | % | 0.8 | % | (7.2 | )% | (7.3 | )% |
(1) | At September 30, 2018, June 30, 2018, March 31, 2018, December 31, 2017 and September 30, 2017, goodwill and other intangibles included $28.4 million, $29.1 million, $26.3 million, $16.7 million and $17.4 million, respectively, of goodwill and other intangibles included in investments in other ventures, under equity method. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20181030006143/en/
Source:
INVESTOR:
Keith McCue
Senior Vice President, Finance & Investor Relations
RenaissanceRe Holdings Ltd.
(441) 239-4830
or
MEDIA:
Keil Gunther
Vice President, Marketing & Communications
RenaissanceRe Holdings Ltd.
(441) 239-4932
or
Kekst and Company
Peter Hill or Dawn Dover
(212) 521-4800