RenaissanceRe Reports Net Income of $41.7 Million for the Fourth Quarter of 2012 or $0.87 Per Diluted Common Share; Quarterly Operating Income of $31.0 Million or $0.65 Per Diluted Common Share
Annual Net Income of
PEMBROKE,
For the year ended
See Comments on Regulation G for a reconciliation of non-GAAP measures.
Mr. Currie added: "Our performance in 2012 reflected the value of our "Three Superiors" - superior customer relationships, superior risk selection and superior capital management. As we enter our twentieth year of operation, we remain focused on perpetuating these strengths along with the discipline that has served our clients, joint venture partners and shareholders so well over the long-term."
FOURTH QUARTER 2012 HIGHLIGHTS (1)
-
Underwriting income of
$4.3 million and a combined ratio of 98.5%, compared to$127.1 million and 36.2%, respectively. These results were primarily driven by storm Sandy which negatively impacted the Company's underwriting results by$127.0 million and added 60.7 percentage points to the combined ratio. -
Total investment income of
$50.3 million , which includes the sum of net investment income, net realized and unrealized gains on investments and net other-than-temporary impairments, compared to$76.8 million . The decrease was driven by lower total returns in the Company's fixed maturity investment portfolio as a result of lower investment yields across most sectors during the quarter compared to the prior year, combined with weaker returns in the Company's portfolio of other investments, principally as a result of lower returns for the Company's private equity investments. -
Equity in earnings from other ventures of
$6.6 million , improved$29.3 million from a loss of$22.7 million , primarily driven by equity in earnings in Top Layer Re of$6.0 million , compared to a loss of$22.6 million , due to the absence of losses during the quarter compared to net losses related to the Tohoku earthquake in the comparative quarter. -
Net income attributable to redeemable noncontrolling interests of
$9.7 million decreased from$25.4 million , primarily impacted by a decrease in profitability of DaVinciRe as a result of storm Sandy and partially offset by a decrease in the Company's ownership percentage in DaVinciRe from 42.8% at December 31, 2011 to 30.8% at December 31, 2012.
The following is supplemental financial data regarding the net financial statement impact on the Company's segment underwriting results and consolidated results for the fourth quarter of 2012 due to storm Sandy:
Storm Sandy | ||||||||||||
Quarter ended December 31, 2012 |
Reinsurance | Lloyd's | Consolidated | |||||||||
(in thousands, except percentages) | ||||||||||||
Net claims and claim expenses incurred | $ | (169,477 | ) | $ | (18,467 | ) | $ | (187,944 | ) | |||
Reinstatement premiums earned | 36,030 | 1,407 | 37,437 | |||||||||
Ceded reinstatement premiums earned | (385 | ) | — | (385 | ) | |||||||
Lost profit commissions | 1,771 | — | 1,771 | |||||||||
Net negative impact on underwriting result | $ | (132,061 | ) | $ | (17,060 | ) | (149,121 | ) | ||||
Redeemable noncontrolling interest - DaVinciRe | 22,160 | |||||||||||
Net negative impact (2) | $ | (126,961 | ) | |||||||||
Percentage point impact on consolidated combined ratio | 63.9 | 55.6 | 60.7 |
Underwriting Results by Segment (1)
Reinsurance Segment
Gross premiums written in the Reinsurance segment were
Managed catastrophe premiums totaled
The Reinsurance segment generated underwriting income of
The Reinsurance segment experienced
Lloyd's Segment
Gross premiums written in the
Other Items (1)
-
On
October 1, 2012 , the Company entered into a loss portfolio transfer in respect of its contractor's liability book of business withinGlencoe Insurance Ltd. , whereby the Company transferred net liabilities of$29.1 million , resulting in a loss of$7.4 million which was recorded as prior accident years net claims and claims expenses in the Company's Other segment in the fourth quarter of 2012. -
The Company's weather and energy risk management operations generated
pre-tax income of
$8.6 million , compared to a pre-tax loss of$41.3 million , primarily due to positive trading results driven by winter positions in theUnited Kingdom combined with the absence of the losses which were experienced during the fourth quarter of 2011 as a result of unusually warm weather experienced in theUnited Kingdom and certain parts ofthe United States during late 2011. -
On November 27, 2012, the Company announced a mandatory partial
redemption of 6.0 million of its outstanding Series D Preference
Shares at a redemption price of
$25.00 per Series D Preference Share. The partial redemption was allocated by random lottery in accordance with theDepository Trust Company's rules and procedures and onDecember 27, 2012 the Company redeemed the 6.0 million Series D Preference Shares called for redemption for$150.0 million plus accrued and unpaid dividends thereon. Following this transaction, 6.0 million Series D Preference Shares remain outstanding. -
During the fourth quarter of 2012, the Company repurchased 2.8 million
common shares in open market transactions and a privately negotiated
transaction at an aggregate cost of
$222.5 million and at an average share price of$80.03 . -
Subsequent to December 31, 2012 and through the period ending
February 5, 2013 , the Company repurchased 1.4 million common shares in open market transactions at an aggregate cost of$111.3 million and at an average share price of$81.29 .
FULL YEAR 2012 HIGHLIGHTS (3)
-
Gross premiums written increased
$116.6 million , or 8.1% for the year, to$1,551.6 million . Excluding the impact of$20.1 million and$160.3 million of net reinstatement premiums written from large losses in 2012 and 2011, respectively, gross premiums written increased$256.8 million , or 20.1% for the year, due to a combination of improved pricing during the 2012 renewals within the Company's core markets, and continued growth across most lines of business within the Company's specialty unit andLloyd's segment. -
Underwriting income of
$451.3 million and a combined ratio of 57.8%, compared to an underwriting loss of$177.2 million and a combined ratio of 118.6%, was positively impacted by a decrease in net claims and claim expenses of$536.0 million due to significantly lower insured losses in respect of large events. Included in underwriting income for 2012 was$149.1 million and$26.3 million of underwriting losses related to storm Sandy and hurricane Isaac, respectively, which added a total of 19.0 percentage points to the combined ratio. In 2011 a number of large losses (namely the 2011 New Zealand and Tohoku earthquakes, the large U.S. tornadoes, the Australian floods, losses arising from aggregate contracts, hurricane Irene and theThailand floods (collectively referred to as the “2011 Large Losses”)) resulted in$725.2 million of underwriting losses and added 85.4 percentage points to the Company's combined ratio. Favorable development on prior accident years was$158.0 million , compared to$132.0 million , as discussed in more detail below. -
Total investment income of
$331.6 million , which includes the sum of net investment income, net realized and unrealized gains on investments and net other-than-temporary impairments, compared to$180.1 million . The increase in investment income was primarily due to higher total returns on the Company's fixed maturity investment portfolio as a result of the significant tightening of credit spreads and declining interest rates combined with higher average invested assets and an increase in net investment income of$38.4 million from the Company's other investments which was principally related to improved returns from the Company's portfolio of senior secured bank loan funds. -
Other loss deteriorated
$22.2 million to a loss of$22.9 million , primarily as a result of the Company's ceded reinsurance contracts accounted for at fair value which incurred a loss of$4.6 million , compared to income of$37.4 million , principally as a result of net recoverables from the Tohoku earthquake which did not reoccur in 2012, and partially offset by lower pre-tax trading losses of$20.8 million , compared to$45.0 million , within the Company's weather and energy risk management operations. -
Equity in earnings of other ventures of
$23.2 million compared to a loss of$36.5 million , primarily due to equity in earnings of Top Layer Re of$20.8 million , compared to a loss of$37.5 million , as a result of the absence of net claims and claim expenses in Top Layer Re during the year, compared to net claims and claim expenses related to the 2011 New Zealand and Tohoku earthquakes. -
Net income attributable to redeemable noncontrolling interests of
$148.0 million , compared to a net loss attributable to redeemable noncontrolling interests of$33.2 million , primarily due to increased profits at DaVinciRe as a result of significantly lower net claims and claim expenses in respect of large events and improved investment results and partially offset by a decrease in the Company's ownership percentage in DaVinciRe from 42.8% at December 31, 2011 to 30.8% at December 31, 2012.
Underwriting Results by Segment (3)
Reinsurance Segment
Gross premiums written in the Reinsurance segment were
For 2012, managed catastrophe premiums totaled
The Reinsurance segment generated underwriting income of
The Reinsurance segment experienced favorable development on prior years
reserves of
Lloyd's Segment
For 2012, gross premiums written in the
Other Items (3)
-
During 2012, the Company repurchased 6.4 million common shares in open
market transactions and a privately negotiated transaction at an
aggregate cost of
$494.4 million and at an average share price of$77.26 . -
During
January 2013 , DaVinciRe redeemed shares from certain DaVinciRe shareholders, including the Company, while certain other existing DaVinciRe shareholders purchased additional shares in DaVinciRe. The net redemption as a result of these transactions was$150.0 million . The Company's ownership in DaVinciRe was 30.8% at December 31, 2012 and subsequent to the above transactions, its ownership in DaVinciRe increased to 32.9% effectiveJanuary 1, 2013 .
This Press Release includes certain non-GAAP financial measures
including “operating income (loss) available (attributable) 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.
As of
Cautionary Statement under “Safe Harbor” Provisions of the Private
Securities Litigation Reform Act of 1995: Statements made in this
earnings release contain information about the Company's future business
prospects. These statements may be considered “forward-looking.”
These statements are subject to risks and uncertainties that could
cause actual results to differ materially from those set forth in or
implied by such forward-looking statements. For further
information regarding cautionary statements and factors affecting future
results, please refer to
(1) | All comparisons are with the fourth quarter of 2011 unless specifically stated. | |
(2) | 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 - DaVinci Re. The Company's estimates are based on a review of its potential exposures, preliminary discussions with certain counterparties and catastrophe modeling techniques. Given the magnitude and recent occurrence of these events, delays in receiving claims data, the contingent nature of business interruption and other exposures, potential uncertainties relating to reinsurance recoveries, the unusual complexity of the coverage and legal issues relating to these events and other uncertainties inherent in loss estimation, meaningful uncertainty remains regarding losses from these events. Accordingly, the Company's actual net impact from these events will vary from these preliminary estimates, perhaps materially so. Changes in these estimates will be recorded in the period in which they occur. | |
(3) | All comparisons are with the full year 2011 unless specifically stated. |
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, |
December 31, |
December 31, |
December 31, |
|||||||||||||
Revenues | ||||||||||||||||
Gross premiums written | $ | 83,745 | $ | 42,970 | $ | 1,551,591 | $ | 1,434,976 | ||||||||
Net premiums written | $ | 77,417 | $ | 29,193 | $ | 1,102,657 | $ | 1,012,773 | ||||||||
Decrease (increase) in unearned premiums | 206,234 | 169,916 | (33,302 | ) | (61,724 | ) | ||||||||||
Net premiums earned | 283,651 | 199,109 | 1,069,355 | 951,049 | ||||||||||||
Net investment income | 40,497 | 52,331 | 167,375 | 118,000 | ||||||||||||
Net foreign exchange gains (losses) | 1,272 | (400 | ) | 5,223 | (6,911 | ) | ||||||||||
Equity in earnings (losses) of other ventures | 6,612 | (22,702 | ) | 23,238 | (36,533 | ) | ||||||||||
Other income (loss) | 5,781 | (43,648 | ) | (22,905 | ) | (685 | ) | |||||||||
Net realized and unrealized gains on fixed maturity investments | 10,617 | 23,920 | 163,991 | 70,668 | ||||||||||||
Total other-than-temporary impairments | — | (132 | ) | (395 | ) | (630 | ) | |||||||||
Portion recognized in other-than-temporary impairments | — | 29 | 52 | 78 | ||||||||||||
Net other-than-temporary impairments | — | (103 | ) | (343 | ) | (552 | ) | |||||||||
Total revenues | 348,430 | 208,507 | 1,405,934 | 1,095,036 | ||||||||||||
Expenses | ||||||||||||||||
Net claims and claim expenses incurred | 186,893 | 3,551 | 325,211 | 861,179 | ||||||||||||
Acquisition expenses | 39,385 | 25,101 | 113,542 | 97,376 | ||||||||||||
Operational expenses | 53,121 | 43,368 | 179,301 | 169,666 | ||||||||||||
Corporate expenses | 3,964 | 8,607 | 16,692 | 18,264 | ||||||||||||
Interest expense | 5,772 | 5,721 | 23,097 | 23,368 | ||||||||||||
Total expenses | 289,135 | 86,348 | 657,843 | 1,169,853 | ||||||||||||
Income (loss) from continuing operations before taxes | 59,295 | 122,159 | 748,091 | (74,817 | ) | |||||||||||
Income tax (expense) benefit | (424 | ) | (2,945 | ) | (1,429 | ) | 315 | |||||||||
Income (loss) from continuing operations | 58,871 | 119,214 | 746,662 | (74,502 | ) | |||||||||||
Income (loss) from discontinued operations | 1,121 | (3,305 | ) | 2,287 | (15,890 | ) | ||||||||||
Net income (loss) | 59,992 | 115,909 | 748,949 | (90,392 | ) | |||||||||||
Net (income) loss attributable to noncontrolling interests | (9,692 | ) | (25,388 | ) | (148,040 | ) | 33,157 | |||||||||
Net income (loss) available (attributable) to RenaissanceRe | 50,300 | 90,521 | 600,909 | (57,235 | ) | |||||||||||
Dividends on preference shares | (8,645 | ) | (8,750 | ) | (34,895 | ) | (35,000 | ) | ||||||||
Net income (loss) available (attributable) to RenaissanceRe |
$ | 41,655 | $ | 81,771 | $ | 566,014 | $ | (92,235 | ) | |||||||
Income (loss) from continuing operations available (attributable)
to |
$ | 0.86 | $ | 1.66 | $ | 11.35 | $ | (1.53 | ) | |||||||
Income (loss) from discontinued operations available
(attributable) to |
0.02 | (0.07 | ) | 0.05 | (0.31 | ) | ||||||||||
Net income (loss) available (attributable) to RenaissanceRe common |
$ | 0.88 | $ | 1.59 | $ | 11.40 | $ | (1.84 | ) | |||||||
Income (loss) from continuing operations available (attributable)
to |
$ | 0.85 | $ | 1.64 | $ | 11.18 | $ | (1.53 | ) | |||||||
Income (loss) from discontinued operations available
(attributable) to |
0.02 | (0.06 | ) | 0.05 | (0.31 | ) | ||||||||||
Net income (loss) available (attributable) to RenaissanceRe common |
$ | 0.87 | $ | 1.58 | $ | 11.23 | $ | (1.84 | ) | |||||||
Average shares outstanding - basic | 46,442 | 50,501 | 48,873 | 50,747 | ||||||||||||
Average shares outstanding - diluted | 47,297 | 50,860 | 49,603 | 50,747 | ||||||||||||
Net claims and claim expense ratio | 65.9 | % | 1.8 | % | 30.4 | % | 90.6 | % | ||||||||
Expense ratio | 32.6 | % | 34.4 | % | 27.4 | % | 28.0 | % | ||||||||
Combined ratio | 98.5 | % | 36.2 | % | 57.8 | % | 118.6 | % | ||||||||
Operating income (loss) available (attributable) to RenaissanceRe |
$ | 0.65 | $ | 1.11 | $ | 7.93 | $ | (3.22 | ) | |||||||
Operating return on average common equity - annualized (1) | 3.9 | % | 7.7 | % | 12.6 | % | (5.3 | )% |
(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, |
December 31, |
||||||
Assets | |||||||
Fixed maturity investments trading, at fair value | $ | 4,665,421 | $ | 4,291,465 | |||
Fixed maturity investments available for sale, at fair value | 83,442 | 142,052 | |||||
Total fixed maturity investments, at fair value | 4,748,863 | 4,433,517 | |||||
Short term investments, at fair value | 821,163 | 905,477 | |||||
Equity investments trading, at fair value | 58,186 | 50,560 | |||||
Other investments, at fair value | 644,711 | 748,984 | |||||
Investments in other ventures, under equity method | 87,724 | 70,714 | |||||
Total investments | 6,360,647 | 6,209,252 | |||||
Cash and cash equivalents | 325,358 | 216,984 | |||||
Premiums receivable | 491,365 | 471,878 | |||||
Prepaid reinsurance premiums | 77,082 | 58,522 | |||||
Reinsurance recoverable | 192,512 | 404,029 | |||||
Accrued investment income | 33,478 | 33,523 | |||||
Deferred acquisition costs | 52,622 | 43,721 | |||||
Receivable for investments sold | 168,673 | 117,117 | |||||
Other assets | 218,405 | 180,992 | |||||
Goodwill and other intangibles | 8,486 | 8,894 | |||||
Total assets | $ | 7,928,628 | $ | 7,744,912 | |||
Liabilities, Noncontrolling Interests and Shareholders' Equity | |||||||
Liabilities | |||||||
Reserve for claims and claim expenses | $ | 1,879,377 | $ | 1,992,354 | |||
Unearned premiums | 399,517 | 347,655 | |||||
Debt | 351,775 | 353,620 | |||||
Reinsurance balances payable | 290,419 | 256,883 | |||||
Payable for investments purchased | 278,787 | 303,264 | |||||
Other liabilities | 253,438 | 211,369 | |||||
Liabilities of discontinued operations held for sale | — | 13,507 | |||||
Total liabilities | 3,453,313 | 3,478,652 | |||||
Redeemable noncontrolling interest - DaVinciRe | 968,259 | 657,727 | |||||
Shareholders' Equity | |||||||
Preference shares | 400,000 | 550,000 | |||||
Common shares | 45,542 | 51,543 | |||||
Accumulated other comprehensive income | 13,622 | 11,760 | |||||
Retained earnings | 3,043,901 | 2,991,890 | |||||
Total shareholders' equity attributable to RenaissanceRe | 3,503,065 | 3,605,193 | |||||
Noncontrolling interest | 3,991 | 3,340 | |||||
Total shareholders' equity | 3,507,056 | 3,608,533 | |||||
Total liabilities, noncontrolling interests and shareholders' equity | $ | 7,928,628 | $ | 7,744,912 | |||
Book value per common share | $ | 68.14 | $ | 59.27 |
RenaissanceRe Holdings Ltd. | ||||||||||||||||||||
Supplemental Financial Data - Segment Information | ||||||||||||||||||||
(in thousands of United States Dollars, except percentages) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended December 31, 2012 | ||||||||||||||||||||
Reinsurance | Lloyd’s | Other | Eliminations | Total | ||||||||||||||||
Gross premiums written | $ | 57,656 | $ | 26,151 | $ | — | $ | (62 | ) | $ | 83,745 | |||||||||
Net premiums written | $ | 51,416 | $ | 25,702 | $ | 299 | $ | 77,417 | ||||||||||||
Net premiums earned | $ | 247,950 | $ | 35,402 | $ | 299 | $ | 283,651 | ||||||||||||
Net claims and claim expenses incurred | 151,130 | 29,950 | 5,813 | 186,893 | ||||||||||||||||
Acquisition expenses | 32,749 | 6,635 | 1 | 39,385 | ||||||||||||||||
Operational expenses | 39,689 | 13,285 | 147 | 53,121 | ||||||||||||||||
Underwriting income (loss) | $ | 24,382 | $ | (14,468 | ) | $ | (5,662 | ) | 4,252 | |||||||||||
Net investment income | 40,497 | 40,497 | ||||||||||||||||||
Net foreign exchange gains | 1,272 | 1,272 | ||||||||||||||||||
Equity in earnings of other ventures | 6,612 | 6,612 | ||||||||||||||||||
Other income | 5,781 | 5,781 | ||||||||||||||||||
Net realized and unrealized gains on investments | 10,617 | 10,617 | ||||||||||||||||||
Corporate expenses | (3,964 | ) | (3,964 | ) | ||||||||||||||||
Interest expense | (5,772 | ) | (5,772 | ) | ||||||||||||||||
Income from continuing operations before taxes | 59,295 | |||||||||||||||||||
Income tax expense | (424 | ) | (424 | ) | ||||||||||||||||
Income from discontinued operations | 1,121 | 1,121 | ||||||||||||||||||
Net income attributable to noncontrolling interests | (9,692 | ) | (9,692 | ) | ||||||||||||||||
Dividends on preference shares | (8,645 | ) | (8,645 | ) | ||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 41,655 | ||||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 190,473 | $ | 32,747 | $ | — | $ | 223,220 | ||||||||||||
Net claims and claim expenses incurred – prior accident years | (39,343 | ) | (2,797 | ) | 5,813 | (36,327 | ) | |||||||||||||
Net claims and claim expenses incurred – total | $ | 151,130 | $ | 29,950 | $ | 5,813 | $ | 186,893 | ||||||||||||
Net claims and claim expense ratio – current accident year | 76.8 | % | 92.5 | % | — | 78.7 | % | |||||||||||||
Net claims and claim expense ratio – prior accident years | (15.8 | )% | (7.9 | )% | 1,944.1 | % | (12.8 | )% | ||||||||||||
Net claims and claim expense ratio – calendar year | 61.0 | % | 84.6 | % | 1,944.1 | % | 65.9 | % | ||||||||||||
Underwriting expense ratio | 29.2 | % | 56.3 | % | 49.5 | % | 32.6 | % | ||||||||||||
Combined ratio | 90.2 | % | 140.9 | % | 1,993.6 | % | 98.5 | % | ||||||||||||
Three months ended December 31, 2011 | ||||||||||||||||||||
Reinsurance | Lloyd’s | Other | Eliminations | Total | ||||||||||||||||
Gross premiums written | $ | 19,290 | $ | 23,711 | $ | (31 | ) | $ | — | $ | 42,970 | |||||||||
Net premiums written | $ | 7,332 | $ | 21,671 | $ | 190 | $ | 29,193 | ||||||||||||
Net premiums earned | $ | 176,124 | $ | 22,682 | $ | 303 | $ | 199,109 | ||||||||||||
Net claims and claim expenses incurred | (13,484 | ) | 19,976 | (2,941 | ) | 3,551 | ||||||||||||||
Acquisition expenses | 20,791 | 4,252 | 58 | 25,101 | ||||||||||||||||
Operational expenses | 33,525 | 9,565 | 278 | 43,368 | ||||||||||||||||
Underwriting income (loss) | $ | 135,292 | $ | (11,111 | ) | $ | 2,908 | 127,089 | ||||||||||||
Net investment income | 52,331 | 52,331 | ||||||||||||||||||
Net foreign exchange losses | (400 | ) | (400 | ) | ||||||||||||||||
Equity in losses of other ventures | (22,702 | ) | (22,702 | ) | ||||||||||||||||
Other loss | (43,648 | ) | (43,648 | ) | ||||||||||||||||
Net realized and unrealized gains on investments | 23,920 | 23,920 | ||||||||||||||||||
Net other-than-temporary impairments | (103 | ) | (103 | ) | ||||||||||||||||
Corporate expenses | (8,607 | ) | (8,607 | ) | ||||||||||||||||
Interest expense | (5,721 | ) | (5,721 | ) | ||||||||||||||||
Income from continuing operations before taxes | 122,159 | |||||||||||||||||||
Income tax expense | (2,945 | ) | (2,945 | ) | ||||||||||||||||
Loss from discontinued operations | (3,305 | ) | (3,305 | ) | ||||||||||||||||
Net income attributable to noncontrolling interests | (25,388 | ) | (25,388 | ) | ||||||||||||||||
Dividends on preference shares | (8,750 | ) | (8,750 | ) | ||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 81,771 | ||||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 18,484 | $ | 19,754 | $ | (129 | ) | $ | 38,109 | |||||||||||
Net claims and claim expenses incurred – prior accident years | (31,968 | ) | 222 | (2,812 | ) | (34,558 | ) | |||||||||||||
Net claims and claim expenses incurred – total | $ | (13,484 | ) | $ | 19,976 | $ | (2,941 | ) | $ | 3,551 | ||||||||||
Net claims and claim expense ratio – current accident year | 10.5 | % | 87.1 | % | (42.6 | )% | 19.1 | % | ||||||||||||
Net claims and claim expense ratio – prior accident years | (18.2 | )% | 1.0 | % | (928.0 | )% | (17.3 | )% | ||||||||||||
Net claims and claim expense ratio – calendar year | (7.7 | )% | 88.1 | % | (970.6 | )% | 1.8 | % | ||||||||||||
Underwriting expense ratio | 30.9 | % | 60.9 | % | 110.9 | % | 34.4 | % | ||||||||||||
Combined ratio | 23.2 | % | 149.0 | % | (859.7 | )% | 36.2 | % |
(1) | Represents $0.1 million of gross premiums ceded from the Reinsurance segment to the Lloyd's segment for the three months ended December 31, 2012 (2011 - $Nil). |
RenaissanceRe Holdings Ltd. | ||||||||||||||||||||
Supplemental Financial Data - Segment Information | ||||||||||||||||||||
(in thousands of United States Dollars, except percentages) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Twelve months ended December 31, 2012 | ||||||||||||||||||||
Reinsurance | Lloyd’s | Other | Eliminations | Total | ||||||||||||||||
Gross premiums written | $ | 1,392,094 | $ | 159,987 | $ | — | $ | (490 | ) | $ | 1,551,591 | |||||||||
Net premiums written | $ | 967,587 | $ | 135,131 | $ | (61 | ) | $ | 1,102,657 | |||||||||||
Net premiums earned | $ | 946,423 | $ | 122,968 | $ | (36 | ) | $ | 1,069,355 | |||||||||||
Net claims and claim expenses incurred | 242,022 | 80,242 | 2,947 | 325,211 | ||||||||||||||||
Acquisition expenses | 90,491 | 22,864 | 187 | 113,542 | ||||||||||||||||
Operational expenses | 132,935 | 45,680 | 686 | 179,301 | ||||||||||||||||
Underwriting income (loss) | $ | 480,975 | $ | (25,818 | ) | $ | (3,856 | ) | 451,301 | |||||||||||
Net investment income | 167,375 | 167,375 | ||||||||||||||||||
Net foreign exchange gains | 5,223 | 5,223 | ||||||||||||||||||
Equity in earnings of other ventures | 23,238 | 23,238 | ||||||||||||||||||
Other loss | (22,905 | ) | (22,905 | ) | ||||||||||||||||
Net realized and unrealized gains on investments | 163,991 | 163,991 | ||||||||||||||||||
Net other-than-temporary impairments | (343 | ) | (343 | ) | ||||||||||||||||
Corporate expenses | (16,692 | ) | (16,692 | ) | ||||||||||||||||
Interest expense | (23,097 | ) | (23,097 | ) | ||||||||||||||||
Income from continuing operations before taxes | 748,091 | |||||||||||||||||||
Income tax expense | (1,429 | ) | (1,429 | ) | ||||||||||||||||
Income from discontinued operations | 2,287 | 2,287 | ||||||||||||||||||
Net income attributable to noncontrolling interests | (148,040 | ) | (148,040 | ) | ||||||||||||||||
Dividends on preference shares | (34,895 | ) | (34,895 | ) | ||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 566,014 | ||||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 386,736 | $ | 96,444 | $ | — | $ | 483,180 | ||||||||||||
Net claims and claim expenses incurred – prior accident years | (144,714 | ) | (16,202 | ) | 2,947 | (157,969 | ) | |||||||||||||
Net claims and claim expenses incurred – total | $ | 242,022 | $ | 80,242 | $ | 2,947 | $ | 325,211 | ||||||||||||
Net claims and claim expense ratio – current accident year | 40.9 | % | 78.4 | % | — | 45.2 | % | |||||||||||||
Net claims and claim expense ratio – prior accident years | (15.3 | )% | (13.1 | )% | (8,186.1 | )% | (14.8 | )% | ||||||||||||
Net claims and claim expense ratio – calendar year | 25.6 | % | 65.3 | % | (8,186.1 | )% | 30.4 | % | ||||||||||||
Underwriting expense ratio | 23.6 | % | 55.7 | % | (2,425.0 | )% | 27.4 | % | ||||||||||||
Combined ratio | 49.2 | % | 121.0 | % | (10,611.1 | )% | 57.8 | % | ||||||||||||
Twelve months ended December 31, 2011 | ||||||||||||||||||||
Reinsurance | Lloyd’s | Other | Eliminations | Total | ||||||||||||||||
Gross premiums written | $ | 1,323,187 | $ | 111,584 | $ | 282 | $ | (77 | ) | $ | 1,434,976 | |||||||||
Net premiums written | $ | 913,499 | $ | 98,617 | $ | 657 | $ | 1,012,773 | ||||||||||||
Net premiums earned | $ | 873,088 | $ | 76,386 | $ | 1,575 | $ | 951,049 | ||||||||||||
Net claims and claim expenses incurred | 783,704 | 73,259 | 4,216 | 861,179 | ||||||||||||||||
Acquisition expenses | 82,978 | 14,031 | 367 | 97,376 | ||||||||||||||||
Operational expenses | 131,251 | 36,732 | 1,683 | 169,666 | ||||||||||||||||
Underwriting loss | $ | (124,845 | ) | $ | (47,636 | ) | $ | (4,691 | ) | (177,172 | ) | |||||||||
Net investment income | 118,000 | 118,000 | ||||||||||||||||||
Net foreign exchange losses | (6,911 | ) | (6,911 | ) | ||||||||||||||||
Equity in losses of other ventures | (36,533 | ) | (36,533 | ) | ||||||||||||||||
Other loss | (685 | ) | (685 | ) | ||||||||||||||||
Net realized and unrealized gains on investments | 70,668 | 70,668 | ||||||||||||||||||
Net other-than-temporary impairments | (552 | ) | (552 | ) | ||||||||||||||||
Corporate expenses | (18,264 | ) | (18,264 | ) | ||||||||||||||||
Interest expense | (23,368 | ) | (23,368 | ) | ||||||||||||||||
Loss from continuing operations before taxes | (74,817 | ) | ||||||||||||||||||
Income tax benefit | 315 | 315 | ||||||||||||||||||
Loss from discontinued operations | (15,890 | ) | (15,890 | ) | ||||||||||||||||
Net loss attributable to noncontrolling interests | 33,157 | 33,157 | ||||||||||||||||||
Dividends on preference shares | (35,000 | ) | (35,000 | ) | ||||||||||||||||
Net loss attributable to RenaissanceRe common shareholders | $ | (92,235 | ) | |||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 920,602 | $ | 72,781 | $ | (215 | ) | $ | 993,168 | |||||||||||
Net claims and claim expenses incurred – prior accident years | (136,898 | ) | 478 | 4,431 | (131,989 | ) | ||||||||||||||
Net claims and claim expenses incurred – total | $ | 783,704 | $ | 73,259 | $ | 4,216 | $ | 861,179 | ||||||||||||
Net claims and claim expense ratio – current accident year | 105.4 | % | 95.3 | % | (13.7 | )% | 104.4 | % | ||||||||||||
Net claims and claim expense ratio – prior accident years | (15.6 | )% | 0.6 | % | 281.4 | % | (13.8 | )% | ||||||||||||
Net claims and claim expense ratio – calendar year | 89.8 | % | 95.9 | % | 267.7 | % | 90.6 | % | ||||||||||||
Underwriting expense ratio | 24.5 | % | 66.5 | % | 130.1 | % | 28.0 | % | ||||||||||||
Combined ratio | 114.3 | % | 162.4 | % | 397.8 | % | 118.6 | % |
(1) | Represents $0.5 million of gross premiums ceded from the Reinsurance segment to the Lloyd's segment for the twelve months ended December 31, 2012 (2011 - $0.1 million). |
RenaissanceRe Holdings Ltd. | ||||||||||||||
Supplemental Financial Data - Gross Premiums Written and Managed Premiums | ||||||||||||||
(in thousands of United States Dollars) | ||||||||||||||
(Unaudited) | ||||||||||||||
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Twelve months ended |
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December 31, |
December 31, |
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December 31, |
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Reinsurance Segment |
||||||||||||||
Renaissance catastrophe premiums | $ | 13,743 | $ | (652 | ) | $ | 733,963 | $ | 742,236 | |||||
Renaissance specialty premiums | 34,132 | 21,117 | 207,387 | 144,192 | ||||||||||
Total Renaissance premiums | 47,875 | 20,465 | 941,350 | 886,428 | ||||||||||
DaVinci catastrophe premiums | 9,781 | (1,193 | ) | 448,244 | 435,060 | |||||||||
DaVinci specialty premiums | — | 18 | 2,500 | 1,699 | ||||||||||
Total DaVinci premiums | 9,781 | (1,175 | ) | 450,744 | 436,759 | |||||||||
Total catastrophe unit premiums | 23,524 | (1,845 | ) | 1,182,207 | 1,177,296 | |||||||||
Total specialty unit premiums | 34,132 | 21,135 | 209,887 | 145,891 | ||||||||||
Total Reinsurance segment gross premiums written | $ | 57,656 | $ | 19,290 | $ | 1,392,094 | $ | 1,323,187 | ||||||
Lloyd's Segment |
||||||||||||||
Specialty | $ | 24,390 | $ | 22,570 | $ | 123,099 | $ | 83,641 | ||||||
Catastrophe | 1,761 | 1,141 | 36,888 | 27,943 | ||||||||||
Total Lloyd's segment gross premiums written | $ | 26,151 | $ | 23,711 | $ | 159,987 | $ | 111,584 | ||||||
Other |
||||||||||||||
Commercial property | $ | — | $ | (31 | ) | $ | — | $ | 282 | |||||
Total Other gross premiums written | $ | — | $ | (31 | ) | $ | — | $ | 282 | |||||
Managed Premiums (1) |
||||||||||||||
Total catastrophe unit gross premiums written | $ | 23,524 | $ | (1,845 | ) | $ | 1,182,207 | $ | 1,177,296 | |||||
Catastrophe premiums written on behalf of the Company's joint |
1,781 | 1,497 | 72,648 | 55,483 | ||||||||||
Catastrophe premiums written in the Lloyd's segment | 1,761 | 1,141 | 36,888 | 27,943 | ||||||||||
Total managed catastrophe premiums (1) | $ | 27,066 | $ | 793 | $ | 1,291,743 | $ | 1,260,722 |
(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) | ||||||||||||||||
Three months ended |
Twelve months ended |
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December 31, |
December 31, |
December 31, |
December 31, |
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Fixed maturity investments | $ | 28,922 | $ | 26,084 | $ | 102,476 | $ | 89,858 | ||||||||
Short term investments | 54 | 357 | 1,007 | 1,666 | ||||||||||||
Equity investments trading | 554 | 174 | 1,086 | 471 | ||||||||||||
Other investments | ||||||||||||||||
Hedge funds and private equity investments | 8,192 | 21,506 | 36,635 | 27,541 | ||||||||||||
Other | 5,902 | 6,458 | 37,784 | 8,458 | ||||||||||||
Cash and cash equivalents | 51 | 11 | 194 | 163 | ||||||||||||
43,675 | 54,590 | 179,182 | 128,157 | |||||||||||||
Investment expenses | (3,178 | ) | (2,259 | ) | (11,807 | ) | (10,157 | ) | ||||||||
Net investment income | 40,497 | 52,331 | 167,375 | 118,000 | ||||||||||||
Gross realized gains |
22,152 |
15,312 |
97,787 |
79,358 | ||||||||||||
Gross realized losses | (3,650 | ) | (7,787 | ) | (16,705 | ) | (30,659 | ) | ||||||||
Net realized gains on fixed maturity investments |
18,502 |
7,525 |
81,082 |
48,699 | ||||||||||||
Net unrealized (losses) gains on fixed maturity investments trading | (8,454 | ) | 11,441 | 75,283 | 19,404 | |||||||||||
Net unrealized gains on equity investments trading |
569 |
4,954 |
7,626 |
2,565 | ||||||||||||
Net realized and unrealized gains on investments | 10,617 | 23,920 | 163,991 | 70,668 | ||||||||||||
Total other-than-temporary impairments | — | (132 | ) | (395 | ) | (630 | ) | |||||||||
Portion recognized in other comprehensive income, before taxes | — | 29 | 52 | 78 | ||||||||||||
Net other-than-temporary impairments | — | (103 | ) | (343 | ) | (552 | ) | |||||||||
Change in net unrealized gains on fixed maturity investments |
(784 | ) | 697 | 614 | (7,985 | ) | ||||||||||
Total investment income | $ | 50,330 | $ | 76,845 | $ | 331,637 | $ | 180,131 |
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 (loss) available (attributable) to
Three months ended |
Twelve months ended |
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(in thousands of United States Dollars, except percentages) |
December 31, |
December 31, |
December 31, |
December 31, |
||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common |
$ | 41,655 | $ | 81,771 | $ | 566,014 | $ | (92,235 | ) | |||||||
Adjustment for net realized and unrealized gains on investments of |
(10,617 | ) | (23,920 | ) | (163,991 | ) | (70,668 | ) | ||||||||
Adjustment for net other-than-temporary impairments of continuing |
— | 103 | 343 | 552 | ||||||||||||
Adjustment for net realized and unrealized gains on fixed maturity |
— | — | — | (42 | ) | |||||||||||
Operating income (loss) available (attributable) to RenaissanceRe |
$ | 31,038 | $ | 57,954 | $ | 402,366 | $ | (162,393 | ) | |||||||
Net income (loss) available (attributable) to RenaissanceRe common |
$ | 0.87 | $ | 1.58 | $ | 11.23 | $ | (1.84 | ) | |||||||
Adjustment for net realized and unrealized gains on investments of |
(0.22 | ) | (0.47 | ) | (3.31 | ) | (1.39 | ) | ||||||||
Adjustment for net other-than-temporary impairments of continuing |
— | — | 0.01 | 0.01 | ||||||||||||
Adjustment for net realized and unrealized gains on fixed maturity |
— | — | — | — | ||||||||||||
Operating income (loss) available (attributable) to RenaissanceRe |
$ | 0.65 | $ | 1.11 | $ | 7.93 | $ | (3.22 | ) | |||||||
Return on average common equity - annualized | 5.2 | % | 10.8 | % | 17.7 | % | (3.0 | )% | ||||||||
Adjustment for net realized and unrealized gains on investments of |
(1.3 | )% | (3.1 | )% | (5.1 | )% | (2.3 | )% | ||||||||
Adjustment for net other-than-temporary impairments of continuing |
— | — | — | — | ||||||||||||
Adjustment for net realized and unrealized gains on fixed maturity |
— | — | — | — | ||||||||||||
Operating return on average common equity - annualized | 3.9 | % | 7.7 | % | 12.6 | % | (5.3 | )% |
The Company has also included in this Press Release “managed catastrophe
premiums”. “Managed catastrophe premiums” is defined as gross
catastrophe premiums written by Renaissance Reinsurance and its related
joint ventures. “Managed catastrophe premiums” differs from total
catastrophe unit 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
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, |
September 30, |
June 30, |
March 31, |
December 31, |
||||||||||||||||
Book value per common share | $ | 68.14 | $ | 68.20 | $ | 65.07 | $ | 62.68 | $ | 59.27 | ||||||||||
Adjustment for goodwill and other |
(0.86 | ) | (0.85 | ) | (0.83 | ) | (0.84 | ) | (0.82 | ) | ||||||||||
Tangible book value per common share | 67.28 | 67.35 | 64.24 | 61.84 | 58.45 | |||||||||||||||
Adjustment for accumulated dividends | 12.00 | 11.73 | 11.46 | 11.19 | 10.92 | |||||||||||||||
Tangible book value per common share |
$ | 79.28 | $ | 79.08 | $ | 75.70 | $ | 73.03 | $ | 69.37 | ||||||||||
Quarter change in book value per |
(0.1 | )% | 4.8 | % | 3.8 | % | 5.8 | % | 2.4 | % | ||||||||||
Quarter change in tangible book value per |
0.3 | % | 5.3 | % | 4.3 | % | 6.3 | % | 3.1 | % | ||||||||||
Annual change in book value per common |
15.0 | % | (5.3 | )% | ||||||||||||||||
Annual change in tangible book value per |
17.0 | % | (1.8 | )% |
(1) | At December 31, 2012, September 30, 2012, June 30, 2012, March 31, 2012 and December 31, 2011, goodwill and other intangibles included $30.4 million, $32.2 million, $33.3 million, $34.5 million and $33.5 million, respectively, of goodwill and other intangibles included in investments in other ventures, under equity method. |
Source:
Investor:
RenaissanceRe Holdings Ltd.
Rohan Pai
Director
of Investor Relations
441-295-4513
or
Media:
Kekst
and Company
Peter Hill or Dawn Dover
212-521-4800