RenaissanceRe Reports Net Income of $170.8 Million for the Fourth Quarter of 2014 or $4.42 Per Diluted Common Share; Quarterly Operating Income of $140.3 Million or $3.62 Per Diluted Common Share
Annual Net Income of
PEMBROKE,
For 2014, the Company reported net income available to
Mr. O'Donnell continued: "Over the past few years, we have steadily
developed the spectrum of products, platforms and scale we offer, in
anticipation of the evolving needs of our customers. The acquisition of
FOURTH QUARTER 2014 HIGHLIGHTS
-
The Company generated underwriting income of
$173.5 million and a combined ratio of 32.3% in the fourth quarter of 2014, compared to$188.9 million and 26.4%, respectively, in the fourth quarter of 2013. Underwriting income in the fourth quarter of 2014 was driven by a relatively light catastrophe loss quarter and$84.7 million of favorable development on prior accident years net claims and claims expenses, principally in the Company’s Catastrophe and Specialty Reinsurance segments. -
Gross premiums written of
$132.8 million increased$48.7 million , or 57.8%, in the fourth quarter of 2014, compared to the fourth quarter of 2013, with the Company’s Catastrophe Reinsurance, Specialty Reinsurance and Lloyd’s segments experiencing increases of$27.8 million ,$13.4 million and$7.1 million , respectively, as discussed below. -
The Company’s total investment result in the fourth quarter of 2014
was
$56.1 million , which includes the sum of net investment income, net realized and unrealized gains on investments and the change in net unrealized gains on fixed maturity investments available for sale, compared to$140.1 million in the fourth quarter of 2013. The total investment result was primarily driven by lower returns in the Company’s portfolios of private equity and public equity investments, each principally driven by weaker returns in the public equity markets during the fourth quarter of 2014, compared to the fourth quarter of 2013. -
During the fourth quarter of 2014, the Company repurchased an
aggregate of 358 thousand common shares in open market transactions at
an aggregate cost of
$35.7 million and at an average share price of$99.54 .
Underwriting Results by Segment
Catastrophe Reinsurance Segment
Gross premiums written in the Catastrophe Reinsurance segment were
Managed catastrophe premiums decreased
The Catastrophe Reinsurance segment generated underwriting income of
The Catastrophe Reinsurance segment experienced
Specialty Reinsurance Segment
Gross premiums written in the Specialty Reinsurance segment were
The Specialty Reinsurance segment generated underwriting income of
The underwriting expense ratio in the Specialty Reinsurance segment increased 10.2 percentage points to 44.0% in the fourth quarter of 2014, compared to 33.8% in the fourth quarter of 2013, primarily due to the relative increase in the percentage of quota share reinsurance premiums, compared to excess of loss reinsurance premiums, as a percentage of gross premiums written within the Specialty Reinsurance segment, as quota share reinsurance typically carries a higher acquisition expense ratio compared to excess of loss reinsurance premiums, as well as an increase in operational expenses due to the continued expansion of the Company’s Specialty Reinsurance segment.
Lloyd’s Segment
Gross premiums written in the Lloyd’s segment were
The Lloyd’s segment generated underwriting income of
The
Other Items
-
Net income attributable to noncontrolling interests in the fourth
quarter of 2014 was
$44.2 million and decreased from$54.2 million in the fourth quarter of 2013, principally due to a decrease in the profitability ofDaVinciRe Holdings Ltd. (“DaVinciRe”), partially offset by a decrease in the Company’s ownership in DaVinciRe to 23.4% at December 31, 2014, compared to 27.3% at December 31, 2013. -
During
January 2015 , DaVinciRe redeemed a portion of its outstanding shares from certain existing DaVinciRe shareholders, including the Company. The net redemption as a result of these transactions was$225.0 million . The Company’s noncontrolling economic ownership in DaVinciRe subsequent to these transactions was 26.3%, effectiveJanuary 1, 2015 . -
Corporate expenses increased
$7.3 million to $10.6 million in the fourth quarter of 2014, compared to$3.3 million in the fourth quarter of 2013, primarily due to$6.7 million of expenses associated with the proposed merger withPlatinum Underwriters Holdings, Ltd. (“Platinum”) announced onNovember 24, 2014 . -
Effective
November 13, 2014 , the Company formedRenaissanceRe Upsilon Fund Ltd. (“Upsilon Fund”), aBermuda limited segregated cell company.Upsilon Fund was incorporated to provide a fund structure through which third party investors can invest in reinsurance risk managed by the Company.Upsilon Fund raised capital effectiveJanuary 1, 2015 and will underwrite reinsurance and retrocessional coverage on a collateralized basis and invest in insurance-linked securities.Upsilon Fund will be managed by affiliates ofRenaissanceRe and is a continuation of business written through predecessor entities since 2012.
FULL YEAR 2014 HIGHLIGHTS
-
The Company generated underwriting income of
$529.4 million and a combined ratio of 50.2% in 2014, compared to$626.7 million and 43.8% in 2013. The decrease in underwriting income was primarily driven by a$52.2 million decrease in net premiums earned due to a combination of lower gross premiums written during the preceding twelve months and an increase in ceded premiums written principally within the Company’s Catastrophe Reinsurance segment, a$19.0 million increase in acquisition expenses principally within the Company’s Specialty Reinsurance segment, and a$26.5 million increase in current accident year net claims and claim expenses. The increase in acquisition expenses and current accident year net claims and claim expenses was principally driven by the growth in the Company’s Specialty Reinsurance and Lloyd’s segments. -
Gross premiums written of
$1,550.6 million decreased$54.8 million , or 3.4%, in 2014, compared to 2013, with the decrease principally driven by the Company’s Catastrophe Reinsurance segment which experienced a decrease of$186.4 million or 16.6%, partially offset by increases in the Company’s Specialty Reinsurance and Lloyd’s segments’ gross premiums written of$87.1 million or 33.6%, and$43.1 million or 19.0%, respectively. -
The Company incurred current accident year net claims and claim
expenses of
$341.7 million and a current accident year net claims and claim expense ratio of 32.2% in 2014, compared to$315.2 million and 28.3% in 2013, respectively, driven by relatively light catastrophe losses during each respective year. In addition, the Company incurred favorable development on prior accident years net claims and claim expenses of$143.8 million in 2014, compared to$144.0 million in 2013, as discussed below. -
The Company’s total investment result was
$164.9 million in 2014, which includes the sum of net investment income, net realized and unrealized gains on investments, and the change in net unrealized gains on fixed maturity investments available for sale, compared to$235.1 million in 2013, a decrease of$70.2 million . The decrease in the total investment result was primarily driven by the Company’s investment inEssent Group Ltd. , which resulted in$6.7 million of net realized and unrealized gains in 2014, compared to$92.4 million of net unrealized gains in 2013, a decrease of$85.7 million . -
During 2014, the Company repurchased an aggregate of 5.4 million
common shares in open market transactions at an aggregate cost of
$514.2 million and at an average share price of$96.04 .
Underwriting Results by Segment
Catastrophe Reinsurance Segment
Gross premiums written in the Catastrophe Reinsurance segment decreased
by
For 2014, managed catastrophe premiums, net of negative reinstatement
premiums written of
The Catastrophe Reinsurance segment generated underwriting income of
The Company’s Catastrophe Reinsurance segment experienced a relatively
low level of insured catastrophe loss activity in 2014, resulting in
current accident year net claims and claim expenses of
During 2014, the Company experienced
Specialty Reinsurance Segment
Gross premiums written in the Specialty Reinsurance segment were
The Company’s Specialty Reinsurance segment generated underwriting
income of
The favorable development of
Lloyd’s Segment
Gross premiums written in the Company’s Lloyd’s segment increased
The Company’s Lloyd’s segment generated underwriting income of
The Company’s Lloyd’s segment experienced current accident year net
claims and claim expenses of
The Company’s Lloyd’s segment incurred underwriting expenses of
The favorable development of prior accident years net claims and claim
expenses within the Company’s Lloyd’s segment was
Other Items
-
Net income attributable to noncontrolling interests in 2014 was
$153.5 million , an increase from$151.1 million in 2013, principally due to a decrease in the Company’s ownership in DaVinciRe to 23.4% at December 31, 2014, compared to 27.3% at December 31, 2013, partially offset by a decrease in the profitability of DaVinciRe. -
Corporate expenses decreased
$10.6 million to $23.0 million in 2014, compared to$33.6 million in 2013, primarily due to costs associated with senior management transitions in 2013 that did not reoccur in 2014, partially offset by$6.7 million of expenses associated with the proposed merger with Platinum incurred during the fourth quarter of 2014.
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.
Important Information for Investors and Shareholders
This communication relates in part to a proposed merger between
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 occurrence of
any event, change or other circumstances that could give rise to the
termination of the merger agreement; the inability to obtain Platinum’s
shareholder approval or the failure to satisfy other conditions to
completion of the merger, including receipt of regulatory approvals;
risks that the proposed transaction disrupts each company’s current
plans and operations; the ability to retain key personnel; the ability
to recognize the benefits of the merger; the amount of the costs, fees,
expenses and charges related to the merger; the frequency and severity
of catastrophic and other events; uncertainties in the companies’
reserving processes; the lowering or loss of any of the financial
strength, claims paying or enterprise wide risk management ratings of
either company or their respective subsidiaries or joint ventures; risks
associated with appropriately modeling, pricing for, and contractually
addressing new or potential factors in loss emergence; risks that the
companies might be bound to policyholder obligations beyond their
underwriting intent; risks due to the companies’ reliance on a small and
decreasing number of reinsurance brokers and other distribution
services; risks relating to operating in a highly competitive
environment; risks relating to deteriorating market conditions; the risk
that the companies’ customers may fail to make premium payments due to
them; the risk of failures of the companies’ reinsurers, brokers or
other counterparties to honor their obligations to the companies; 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 | Twelve months ended | |||||||||||||||
December 31, 2014 |
December 31, 2013 |
December 31, 2014 |
December 31, 2013 |
|||||||||||||
Revenues | ||||||||||||||||
Gross premiums written | $ | 132,780 | $ | 84,122 | $ | 1,550,572 | $ | 1,605,412 | ||||||||
Net premiums written | $ | 111,769 | $ | 80,784 | $ | 1,068,236 | $ | 1,203,947 | ||||||||
Decrease (increase) in unearned premiums | 144,718 | 175,981 | (5,820 | ) | (89,321 | ) | ||||||||||
Net premiums earned | 256,487 | 256,765 | 1,062,416 | 1,114,626 | ||||||||||||
Net investment income | 25,886 | 78,732 | 124,316 | 208,028 | ||||||||||||
Net foreign exchange (losses) gains | (107 | ) | 1,747 | 6,260 | 1,917 | |||||||||||
Equity in earnings of other ventures | 4,838 | 6,274 | 26,075 | 23,194 | ||||||||||||
Other income (loss) | 1,219 | (173 | ) | (423 | ) | (2,359 | ) | |||||||||
Net realized and unrealized gains on investments | 30,475 | 61,864 | 41,433 | 35,076 | ||||||||||||
Total revenues | 318,798 | 405,209 | 1,260,077 | 1,380,482 | ||||||||||||
Expenses | ||||||||||||||||
Net claims and claim expenses incurred | (12,003 | ) | (20,854 | ) | 197,947 | 171,287 | ||||||||||
Acquisition expenses | 39,749 | 31,026 | 144,476 | 125,501 | ||||||||||||
Operational expenses | 55,202 | 57,658 | 190,639 | 191,105 | ||||||||||||
Corporate expenses | 10,583 | 3,304 | 22,987 | 33,622 | ||||||||||||
Interest expense | 4,289 | 4,297 | 17,164 | 17,929 | ||||||||||||
Total expenses | 97,820 | 75,431 | 573,213 | 539,444 | ||||||||||||
Income from continuing operations before taxes | 220,978 | 329,778 | 686,864 | 841,038 | ||||||||||||
Income tax expense | (401 | ) | (1,336 | ) | (608 | ) | (1,692 | ) | ||||||||
Income from continuing operations | 220,577 | 328,442 | 686,256 | 839,346 | ||||||||||||
Income from discontinued operations | — | — | — | 2,422 | ||||||||||||
Net income | 220,577 | 328,442 | 686,256 | 841,768 | ||||||||||||
Net income attributable to noncontrolling interests | (44,215 | ) | (54,191 | ) | (153,538 | ) | (151,144 | ) | ||||||||
Net income available to RenaissanceRe | 176,362 | 274,251 | 532,718 | 690,624 | ||||||||||||
Dividends on preference shares | (5,595 | ) | (5,595 | ) | (22,381 | ) | (24,948 | ) | ||||||||
Net income available to RenaissanceRe common shareholders | $ | 170,767 | $ | 268,656 | $ | 510,337 | $ | 665,676 | ||||||||
Income from continuing operations available to RenaissanceRe common shareholders per common share - basic | $ | 4.46 | $ | 6.14 | $ | 12.77 | $ | 15.08 | ||||||||
Income from discontinued operations available to RenaissanceRe common shareholders per common share - basic | — | — | — | 0.06 | ||||||||||||
Net income available to RenaissanceRe common shareholders per common share - basic | $ | 4.46 | $ | 6.14 | $ | 12.77 | $ | 15.14 | ||||||||
Income from continuing operations available to RenaissanceRe common shareholders per common share - diluted | $ | 4.42 | $ | 6.05 | $ | 12.60 | $ | 14.82 | ||||||||
Income from discontinued operations available to RenaissanceRe common shareholders per common share - diluted | — | — | — | 0.05 | ||||||||||||
Net income available to RenaissanceRe common shareholders per common share - diluted | $ | 4.42 | $ | 6.05 | $ | 12.60 | $ | 14.87 | ||||||||
Average shares outstanding - basic | 37,752 | 43,160 | 39,425 | 43,349 | ||||||||||||
Average shares outstanding - diluted | 38,145 | 43,769 | 39,968 | 44,128 | ||||||||||||
Net claims and claim expense ratio | (4.7 | )% | (8.1 | )% | 18.6 | % | 15.4 | % | ||||||||
Underwriting expense ratio | 37.0 | % | 34.5 | % | 31.6 | % | 28.4 | % | ||||||||
Combined ratio | 32.3 | % | 26.4 | % | 50.2 | % | 43.8 | % | ||||||||
Operating income available to RenaissanceRe common shareholders per common share - diluted (1) | $ | 3.62 | $ | 4.64 | $ | 11.56 | $ | 14.08 | ||||||||
Operating return on average common equity - annualized (1) | 16.5 | % | 24.3 | % | 13.7 | % | 19.4 | % |
(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, 2014 |
December 31, 2013 |
||||||
Assets | (Unaudited) | (Audited) | |||||
Fixed maturity investments trading, at fair value | $ | 4,756,685 | $ | 4,809,036 | |||
Fixed maturity investments available for sale, at fair value | 26,885 | 34,241 | |||||
Total fixed maturity investments, at fair value | 4,783,570 | 4,843,277 | |||||
Short term investments, at fair value | 1,013,222 | 1,044,779 | |||||
Equity investments trading, at fair value | 322,098 | 254,776 | |||||
Other investments, at fair value | 504,147 | 573,264 | |||||
Investments in other ventures, under equity method | 120,713 | 105,616 | |||||
Total investments | 6,743,750 | 6,821,712 | |||||
Cash and cash equivalents | 525,584 | 408,032 | |||||
Premiums receivable | 440,007 | 474,087 | |||||
Prepaid reinsurance premiums | 94,810 | 66,132 | |||||
Reinsurance recoverable | 66,694 | 101,025 | |||||
Accrued investment income | 26,509 | 34,065 | |||||
Deferred acquisition costs | 110,059 | 81,684 | |||||
Receivable for investments sold | 52,390 | 75,845 | |||||
Other assets | 135,845 | 108,438 | |||||
Goodwill and other intangibles | 7,902 | 8,111 | |||||
Total assets | $ | 8,203,550 | $ | 8,179,131 | |||
Liabilities, Noncontrolling Interests and Shareholders’ Equity | |||||||
Liabilities | |||||||
Reserve for claims and claim expenses | $ | 1,412,510 | $ | 1,563,730 | |||
Unearned premiums | 512,386 | 477,888 | |||||
Debt | 249,522 | 249,430 | |||||
Reinsurance balances payable | 454,580 | 293,022 | |||||
Payable for investments purchased | 203,021 | 193,221 | |||||
Other liabilities | 374,108 | 397,596 | |||||
Total liabilities | 3,206,127 | 3,174,887 | |||||
Redeemable noncontrolling interest | 1,131,708 | 1,099,860 | |||||
Shareholders’ Equity | |||||||
Preference shares | 400,000 | 400,000 | |||||
Common shares | 38,442 | 43,646 | |||||
Accumulated other comprehensive income | 3,416 | 4,131 | |||||
Retained earnings | 3,423,857 | 3,456,607 | |||||
Total shareholders’ equity attributable to RenaissanceRe | 3,865,715 | 3,904,384 | |||||
Total liabilities, noncontrolling interests and shareholders’ equity | $ | 8,203,550 | $ | 8,179,131 | |||
Book value per common share | $ | 90.15 | $ | 80.29 | |||
RenaissanceRe Holdings Ltd. | ||||||||||||||||||||
Supplemental Financial Data - Segment Information | ||||||||||||||||||||
(in thousands of United States Dollars, except percentages) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended December 31, 2014 | ||||||||||||||||||||
Catastrophe Reinsurance |
Specialty Reinsurance |
Lloyd’s | Other | Total | ||||||||||||||||
Gross premiums written (1) | $ | 9,923 | $ | 71,911 | $ | 50,637 | $ | 309 | $ | 132,780 | ||||||||||
Net premiums written | $ | 6,614 | $ | 62,233 | $ | 42,581 | $ | 341 | $ | 111,769 | ||||||||||
Net premiums earned | $ | 130,390 | $ | 66,846 | $ | 58,909 | $ | 342 | $ | 256,487 | ||||||||||
Net claims and claim expenses incurred | (40,762 | ) | 10,587 | 23,406 | (5,234 | ) | (12,003 | ) | ||||||||||||
Acquisition expenses | 9,098 | 16,884 | 13,624 | 143 | 39,749 | |||||||||||||||
Operational expenses | 29,078 | 12,516 | 13,549 | 59 | 55,202 | |||||||||||||||
Underwriting income | $ | 132,976 | $ | 26,859 | $ | 8,330 | $ | 5,374 | 173,539 | |||||||||||
Net investment income | 25,886 | 25,886 | ||||||||||||||||||
Net foreign exchange losses | (107 | ) | (107 | ) | ||||||||||||||||
Equity in earnings of other ventures | 4,838 | 4,838 | ||||||||||||||||||
Other income | 1,219 | 1,219 | ||||||||||||||||||
Net realized and unrealized gains on investments | 30,475 | 30,475 | ||||||||||||||||||
Corporate expenses | (10,583 | ) | (10,583 | ) | ||||||||||||||||
Interest expense | (4,289 | ) | (4,289 | ) | ||||||||||||||||
Income before taxes and noncontrolling interests | 220,978 | |||||||||||||||||||
Income tax expense | (401 | ) | (401 | ) | ||||||||||||||||
Net income attributable to noncontrolling interests | (44,215 | ) | (44,215 | ) | ||||||||||||||||
Dividends on preference shares | (5,595 | ) | (5,595 | ) | ||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 170,767 | ||||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 6,605 | $ | 30,602 | $ | 35,472 | $ | — | $ | 72,679 | ||||||||||
Net claims and claim expenses incurred – prior accident years | (47,367 | ) | (20,015 | ) | (12,066 | ) | (5,234 | ) | (84,682 | ) | ||||||||||
Net claims and claim expenses incurred – total | $ | (40,762 | ) | $ | 10,587 | $ | 23,406 | $ | (5,234 | ) | $ | (12,003 | ) | |||||||
Net claims and claim expense ratio – current accident year | 5.1 | % | 45.8 | % | 60.2 | % | — | % | 28.3 | % | ||||||||||
Net claims and claim expense ratio – prior accident years | (36.4 | )% | (30.0 | )% | (20.5 | )% | (1,530.4 | )% | (33.0 | )% | ||||||||||
Net claims and claim expense ratio – calendar year | (31.3 | )% | 15.8 | % | 39.7 | % | (1,530.4 | )% | (4.7 | )% | ||||||||||
Underwriting expense ratio | 29.3 | % | 44.0 | % | 46.2 | % | 59.1 | % | 37.0 | % | ||||||||||
Combined ratio | (2.0 | )% | 59.8 | % | 85.9 | % | (1,471.3 | )% | 32.3 | % | ||||||||||
Three months ended December 31, 2013 | ||||||||||||||||||||
Catastrophe Reinsurance |
Specialty Reinsurance |
Lloyd’s | Other | Total | ||||||||||||||||
Gross premiums written | $ | (17,859 | ) | $ | 58,464 | $ | 43,517 | $ | — | $ | 84,122 | |||||||||
Net premiums written | $ | (21,507 | ) | $ | 59,978 | $ | 42,116 | $ | 197 | $ | 80,784 | |||||||||
Net premiums earned | $ | 152,155 | $ | 55,246 | $ | 49,167 | $ | 197 | $ | 256,765 | ||||||||||
Net claims and claim expenses incurred | (64,612 | ) | 13,513 | 27,454 | 2,791 | (20,854 | ) | |||||||||||||
Acquisition expenses | 11,295 | 9,399 | 10,485 | (153 | ) | 31,026 | ||||||||||||||
Operational expenses | 33,843 | 9,322 | 14,347 | 146 | 57,658 | |||||||||||||||
Underwriting income (loss) | $ | 171,629 | $ | 23,012 | $ | (3,119 | ) | $ | (2,587 | ) | 188,935 | |||||||||
Net investment income | 78,732 | 78,732 | ||||||||||||||||||
Net foreign exchange gains | 1,747 | 1,747 | ||||||||||||||||||
Equity in earnings of other ventures | 6,274 | 6,274 | ||||||||||||||||||
Other loss | (173 | ) | (173 | ) | ||||||||||||||||
Net realized and unrealized gains on investments | 61,864 | 61,864 | ||||||||||||||||||
Corporate expenses | (3,304 | ) | (3,304 | ) | ||||||||||||||||
Interest expense | (4,297 | ) | (4,297 | ) | ||||||||||||||||
Income before taxes and noncontrolling interests | 329,778 | |||||||||||||||||||
Income tax expense | (1,336 | ) | (1,336 | ) | ||||||||||||||||
Net income attributable to noncontrolling interests | (54,191 | ) | (54,191 | ) | ||||||||||||||||
Dividends on preference shares | (5,595 | ) | (5,595 | ) | ||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 268,656 | ||||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | (5,641 | ) | $ | 24,364 | $ | 32,675 | $ | — | $ | 51,398 | |||||||||
Net claims and claim expenses incurred – prior accident years | (58,971 | ) | (10,851 | ) | (5,221 | ) | 2,791 | (72,252 | ) | |||||||||||
Net claims and claim expenses incurred – total | $ | (64,612 | ) | $ | 13,513 | $ | 27,454 | $ | 2,791 | $ | (20,854 | ) | ||||||||
Net claims and claim expense ratio – current accident year | (3.7 | )% | 44.1 | % | 66.5 | % | — | % | 20.0 | % | ||||||||||
Net claims and claim expense ratio – prior accident years | (38.8 | )% | (19.6 | )% | (10.7 | )% | 1,416.8 | % | (28.1 | )% | ||||||||||
Net claims and claim expense ratio – calendar year | (42.5 | )% | 24.5 | % | 55.8 | % | 1,416.8 | % | (8.1 | )% | ||||||||||
Underwriting expense ratio | 29.7 | % | 33.8 | % | 50.5 | % | (3.6 | )% | 34.5 | % | ||||||||||
Combined ratio | (12.8 | )% | 58.3 | % | 106.3 | % | 1,413.2 | % | 26.4 | % |
(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 - Segment Information | ||||||||||||||||||||
(in thousands of United States Dollars, except percentages) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Twelve months ended December 31, 2014 | ||||||||||||||||||||
Catastrophe Reinsurance |
Specialty Reinsurance |
Lloyd’s | Other | Total | ||||||||||||||||
Gross premiums written (1) | $ | 933,969 | $ | 346,638 | $ | 269,656 | $ | 309 | $ | 1,550,572 | ||||||||||
Net premiums written | $ | 541,608 | $ | 295,855 | $ | 230,429 | $ | 344 | $ | 1,068,236 | ||||||||||
Net premiums earned | $ | 590,845 | $ | 253,537 | $ | 217,666 | $ | 368 | $ | 1,062,416 | ||||||||||
Net claims and claim expenses incurred | 1,757 | 88,502 | 113,825 | (6,137 | ) | 197,947 | ||||||||||||||
Acquisition expenses | 43,161 | 60,936 | 46,927 | (6,548 | ) | 144,476 | ||||||||||||||
Operational expenses | 95,851 | 43,370 | 51,115 | 303 | 190,639 | |||||||||||||||
Underwriting income | $ | 450,076 | $ | 60,729 | $ | 5,799 | $ | 12,750 | 529,354 | |||||||||||
Net investment income | 124,316 | 124,316 | ||||||||||||||||||
Net foreign exchange gains | 6,260 | 6,260 | ||||||||||||||||||
Equity in earnings of other ventures | 26,075 | 26,075 | ||||||||||||||||||
Other loss | (423 | ) | (423 | ) | ||||||||||||||||
Net realized and unrealized gains on investments | 41,433 | 41,433 | ||||||||||||||||||
Corporate expenses | (22,987 | ) | (22,987 | ) | ||||||||||||||||
Interest expense | (17,164 | ) | (17,164 | ) | ||||||||||||||||
Income before taxes and noncontrolling interests | 686,864 | |||||||||||||||||||
Income tax expense | (608 | ) | (608 | ) | ||||||||||||||||
Net income attributable to noncontrolling interests | (153,538 | ) | (153,538 | ) | ||||||||||||||||
Dividends on preference shares | (22,381 | ) | (22,381 | ) | ||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 510,337 | ||||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 67,268 | $ | 144,411 | $ | 130,066 | $ | — | $ | 341,745 | ||||||||||
Net claims and claim expenses incurred – prior accident years | (65,511 | ) | (55,909 | ) | (16,241 | ) | (6,137 | ) | (143,798 | ) | ||||||||||
Net claims and claim expenses incurred – total | $ | 1,757 | $ | 88,502 | $ | 113,825 | $ | (6,137 | ) | $ | 197,947 | |||||||||
Net claims and claim expense ratio – current accident year | 11.4 | % | 57.0 | % | 59.8 | % | — | % | 32.2 | % | ||||||||||
Net claims and claim expense ratio – prior accident years | (11.1 | )% | (22.1 | )% | (7.5 | )% | (1,667.7 | )% | (13.6 | )% | ||||||||||
Net claims and claim expense ratio – calendar year | 0.3 | % | 34.9 | % | 52.3 | % | (1,667.7 | )% | 18.6 | % | ||||||||||
Underwriting expense ratio | 23.5 | % | 41.1 | % | 45.0 | % | (1,697.0 | )% | 31.6 | % | ||||||||||
Combined ratio | 23.8 | % | 76.0 | % | 97.3 | % | (3,364.7 | )% | 50.2 | % | ||||||||||
Twelve months ended December 31, 2013 | ||||||||||||||||||||
Catastrophe Reinsurance |
Specialty Reinsurance |
Lloyd’s | Other | Total | ||||||||||||||||
Gross premiums written (1) | $ | 1,120,379 | $ | 259,489 | $ | 226,532 | $ | (988 | ) | $ | 1,605,412 | |||||||||
Net premiums written | $ | 753,078 | $ | 248,562 | $ | 201,697 | $ | 610 | $ | 1,203,947 | ||||||||||
Net premiums earned | $ | 723,705 | $ | 214,306 | $ | 176,029 | $ | 586 | $ | 1,114,626 | ||||||||||
Net claims and claim expenses incurred | 7,908 | 67,236 | 95,693 | 450 | 171,287 | |||||||||||||||
Acquisition expenses | 49,161 | 41,538 | 34,823 | (21 | ) | 125,501 | ||||||||||||||
Operational expenses | 108,130 | 31,780 | 50,540 | 655 | 191,105 | |||||||||||||||
Underwriting income (loss) | $ | 558,506 | $ | 73,752 | $ | (5,027 | ) | $ | (498 | ) | 626,733 | |||||||||
Net investment income | 208,028 | 208,028 | ||||||||||||||||||
Net foreign exchange gains | 1,917 | 1,917 | ||||||||||||||||||
Equity in earnings of other ventures | 23,194 | 23,194 | ||||||||||||||||||
Other loss | (2,359 | ) | (2,359 | ) | ||||||||||||||||
Net realized and unrealized gains on investments | 35,076 | 35,076 | ||||||||||||||||||
Corporate expenses | (33,622 | ) | (33,622 | ) | ||||||||||||||||
Interest expense | (17,929 | ) | (17,929 | ) | ||||||||||||||||
Income from continuing operations before taxes and noncontrolling interests | 841,038 | |||||||||||||||||||
Income tax expense | (1,692 | ) | (1,692 | ) | ||||||||||||||||
Income from discontinued operations | 2,422 | 2,422 | ||||||||||||||||||
Net income attributable to noncontrolling interests | (151,144 | ) | (151,144 | ) | ||||||||||||||||
Dividends on preference shares | (24,948 | ) | (24,948 | ) | ||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 665,676 | ||||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 109,945 | $ | 101,347 | $ | 103,949 | $ | — | $ | 315,241 | ||||||||||
Net claims and claim expenses incurred – prior accident years | (102,037 | ) | (34,111 | ) | (8,256 | ) | 450 | (143,954 | ) | |||||||||||
Net claims and claim expenses incurred – total | $ | 7,908 | $ | 67,236 | $ | 95,693 | $ | 450 | $ | 171,287 | ||||||||||
Net claims and claim expense ratio – current accident year | 15.2 | % | 47.3 | % | 59.1 | % | — | % | 28.3 | % | ||||||||||
Net claims and claim expense ratio – prior accident years | (14.1 | )% | (15.9 | )% | (4.7 | )% | 76.8 | % | (12.9 | )% | ||||||||||
Net claims and claim expense ratio – calendar year | 1.1 | % | 31.4 | % | 54.4 | % | 76.8 | % | 15.4 | % | ||||||||||
Underwriting expense ratio | 21.7 | % | 34.2 | % | 48.5 | % | 108.2 | % | 28.4 | % | ||||||||||
Combined ratio | 22.8 | % | 65.6 | % | 102.9 | % | 185.0 | % | 43.8 | % |
(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) | |||||||||||||||
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December 31, 2014 |
December 31, 2013 |
December 31, 2014 |
December 31, 2013 |
||||||||||||
Catastrophe Reinsurance Segment |
|||||||||||||||
Renaissance catastrophe premiums | $ | 10,569 | $ | (4,041 | ) | $ | 622,934 | $ | 729,887 | ||||||
DaVinci catastrophe premiums | (646 | ) | (13,818 | ) | 311,035 | 390,492 | |||||||||
Total Catastrophe Reinsurance segment gross premiums written | $ | 9,923 | $ | (17,859 | ) | $ | 933,969 | $ | 1,120,379 | ||||||
Specialty Reinsurance Segment |
|||||||||||||||
Renaissance specialty premiums | $ | 71,897 | $ | 58,014 | $ | 344,591 | $ | 256,354 | |||||||
DaVinci specialty premiums | 14 | 450 | 2,047 | 3,135 | |||||||||||
Total Specialty Reinsurance segment gross premiums written | $ | 71,911 | $ | 58,464 | $ | 346,638 | $ | 259,489 | |||||||
Lloyd’s Segment |
|||||||||||||||
Specialty | $ | 48,652 | $ | 43,154 | $ | 214,290 | $ | 188,663 | |||||||
Catastrophe | 1,985 | 363 | 55,366 | 37,869 | |||||||||||
Total Lloyd’s segment gross premiums written | $ | 50,637 | $ | 43,517 | $ | 269,656 | $ | 226,532 | |||||||
Managed Premiums (1) |
|||||||||||||||
Total Catastrophe Reinsurance segment gross premiums written | $ | 9,923 | $ | (17,859 | ) | $ | 933,969 | $ | 1,120,379 | ||||||
Catastrophe premiums written on behalf of the Company’s joint venture, Top Layer Re (2) | 3,162 | 3,694 | 42,556 | 63,721 | |||||||||||
Catastrophe premiums written in the Lloyd’s segment | 1,985 | 363 | 55,366 | 37,869 | |||||||||||
Catastrophe premiums written by the Company in its Catastrophe Reinsurance segment and ceded to Top Layer Re | — | — | (7,355 | ) | — | ||||||||||
Total managed catastrophe premiums (1) | $ | 15,070 | $ | (13,802 | ) | $ | 1,024,536 | $ | 1,221,969 |
(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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December 31, 2013 |
December 31, 2014 |
December 31, 2013 |
|||||||||||||
Fixed maturity investments | $ | 26,104 | $ | 24,759 | $ | 100,855 | $ | 95,907 | ||||||||
Short term investments | 217 | 380 | 944 | 1,698 | ||||||||||||
Equity investments trading | 1,139 | 1,245 | 3,450 | 2,295 | ||||||||||||
Other investments | ||||||||||||||||
Hedge funds and private equity investments | 1,530 | 14,514 | 18,867 | 45,810 | ||||||||||||
Other | (414 | ) | 40,818 | 11,144 | 73,692 | |||||||||||
Cash and cash equivalents | 95 | 83 | 395 | 191 | ||||||||||||
28,671 | 81,799 | 135,655 | 219,593 | |||||||||||||
Investment expenses | (2,785 | ) | (3,067 | ) | (11,339 | ) | (11,565 | ) | ||||||||
Net investment income | 25,886 | 78,732 | 124,316 | 208,028 | ||||||||||||
Gross realized gains | 11,973 | 12,055 | 45,568 | 72,492 | ||||||||||||
Gross realized losses | (3,997 | ) | (8,810 | ) | (14,868 | ) | (50,206 | ) | ||||||||
Net realized gains on fixed maturity investments | 7,976 | 3,245 | 30,700 | 22,286 | ||||||||||||
Net unrealized (losses) gains on fixed maturity investments trading | (1,520 | ) | (2,489 | ) | 19,680 | (87,827 | ) | |||||||||
Net realized and unrealized (losses) gains on investments-related derivatives | (11,280 | ) | 6,570 | (30,931 | ) | 31,058 | ||||||||||
Net realized gains on equity investments trading | 2,330 | 8,455 | 10,908 | 26,650 | ||||||||||||
Net unrealized gains on equity investments trading | 32,969 | 46,083 | 11,076 | 42,909 | ||||||||||||
Net realized and unrealized gains on investments | 30,475 | 61,864 | 41,433 | 35,076 | ||||||||||||
Change in net unrealized gains on fixed maturity investments available for sale | (292 | ) | (252 | ) | (855 | ) | (8,029 | ) | ||||||||
Total investment result | $ | 56,069 | $ | 140,125 | $ | 164,894 | $ | 235,075 | ||||||||
Total investment return - annualized | 3.3 | % | 8.6 | % | 2.4 | % | 3.6 | % | ||||||||
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 in
this Press Release within the meaning of Regulation
The Company uses “operating income available to
Three months ended | Twelve months ended | |||||||||||||||
(in thousands of United States Dollars, except percentages) |
December 31, 2014 |
December 31, 2013 |
December 31, 2014 |
December 31, 2013 |
||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 170,767 | $ | 268,656 | $ | 510,337 | $ | 665,676 | ||||||||
Adjustment for net realized and unrealized gains on investments from continuing operations | (30,475 | ) | (61,864 | ) | (41,433 | ) | (35,076 | ) | ||||||||
Adjustment for net realized and unrealized losses on investments from discontinued operations | — | — | — | 18 | ||||||||||||
Operating income available to RenaissanceRe common shareholders | $ | 140,292 | $ | 206,792 | $ | 468,904 | $ | 630,618 | ||||||||
Net income available to RenaissanceRe common shareholders per common share - diluted | $ | 4.42 | $ | 6.05 | $ | 12.60 | $ | 14.87 | ||||||||
Adjustment for net realized and unrealized gains on investments from continuing operations | (0.80 | ) | (1.41 | ) | (1.04 | ) | (0.79 | ) | ||||||||
Adjustment for net realized and unrealized losses on investments from discontinued operations | — | — | — | — | ||||||||||||
Operating income available to RenaissanceRe common shareholders per common share - diluted | $ | 3.62 | $ | 4.64 | $ | 11.56 | $ | 14.08 | ||||||||
Return on average common equity - annualized | 20.1 | % | 31.5 | % | 14.9 | % | 20.5 | % | ||||||||
Adjustment for net realized and unrealized gains on investments from continuing operations | (3.6 | )% | (7.3 | )% | (1.2 | )% | (1.1 | )% | ||||||||
Adjustment for net realized and unrealized losses on investments from discontinued operations | — | % | — | % | — | % | — | % | ||||||||
Operating return on average common equity - annualized | 16.5 | % | 24.3 | % | 13.7 | % | 19.4 | % | ||||||||
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.
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. “Tangible book value per common share” differs from book value per common share, which the Company believes is the most directly comparable GAAP measure, due to the exclusion of goodwill and intangible assets per share. 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, 2014 |
September 30, 2014 |
June 30, 2014 |
March 31, 2014 |
December 31, 2013 |
||||||||||||||||
Book value per common share | $ | 90.15 | $ | 85.78 | $ | 84.79 | $ | 82.30 | $ | 80.29 | ||||||||||
Adjustment for goodwill and other intangibles (1) | (0.86 | ) | (0.88 | ) | (0.86 | ) | (0.89 | ) | (0.85 | ) | ||||||||||
Tangible book value per common share | 89.29 | 84.90 | 83.93 | 81.41 | 79.44 | |||||||||||||||
Adjustment for accumulated dividends | 14.28 | 13.99 | 13.70 | 13.41 | 13.12 | |||||||||||||||
Tangible book value per common share plus accumulated dividends | $ | 103.57 | $ | 98.89 | $ | 97.63 | $ | 94.82 | $ | 92.56 | ||||||||||
Quarterly change in book value per common share | 5.1 | % | 1.2 | % | 3.0 | % | 2.5 | % | 7.7 | % | ||||||||||
Quarterly change in tangible book value per common share plus change in accumulated dividends | 5.5 | % | 1.5 | % | 3.5 | % | 2.8 | % | 8.1 | % | ||||||||||
Year to date change in book value per common share | 12.3 | % | 17.8 | % | ||||||||||||||||
Year to date change in tangible book value per common share plus change in accumulated dividends | 13.9 | % | 19.7 | % |
(1) At
Source:
INVESTORS:
RenaissanceRe Holdings Ltd.
Rohan Pai,
441-295-4513
Director - Corporate Finance
or
MEDIA:
Kekst
and Company
Peter Hill or Dawn Dover, 212-521-4800