RenaissanceRe Reports Net Income of $92.2 Million for the Fourth Quarter of 2015 or $2.09 Per Diluted Common Share; Quarterly Operating Income of $135.0 Million or $3.07 Per Diluted Common Share
Annual Net Income of
PEMBROKE,
For 2015, the Company reported net income available to
Mr. O'Donnell continued: "Our underwriting team executed well during the most recent renewal period, as pressure on pricing from abundant capacity persisted. We maintained discipline, coming off business that did not meet our return hurdles, buying more reinsurance protection, while also building an attractive portfolio of risks. We are a bigger, stronger company today, than a year ago, and have the management team, global operating platforms and risk management expertise to serve our clients, third party capital providers and shareholders well in the years ahead."
FOURTH QUARTER 2015 HIGHLIGHTS
-
Gross premiums written of
$336.1 million increased$203.3 million , or 153.1%, in the fourth quarter of 2015, compared to the fourth quarter of 2014, with the Company’s Specialty Reinsurance, Catastrophe Reinsurance and Lloyd’s segments experiencing increases of$195.5 million , or 271.8%,$2.4 million , or 24.2%, and$5.8 million , or 11.4%, respectively, in the fourth quarter of 2015. -
The Company generated underwriting income of
$139.9 million and a combined ratio of 61.3% in the fourth quarter of 2015, compared to$173.5 million and 32.3%, respectively, in the fourth quarter of 2014. The decrease in underwriting income was primarily driven by a$114.0 million increase in net claims and claim expenses incurred and a$24.7 million increase in underwriting expenses, each principally driven by the$105.1 million increase in net premiums earned. Impacting net claims and claim expenses incurred in the fourth quarter of 2015, compared to the fourth quarter of 2014, was a$66.2 million increase in current accident year net claims and claim expenses and a$47.8 million decrease in favorable development on prior accident years net claims and claim expenses. Favorable development on prior accident years net claims and claim expenses was$36.9 million in the fourth quarter of 2015, compared to$84.7 million in the fourth quarter of 2014. -
The Company’s total investment result, which includes the sum of net
investment income and net realized and unrealized (losses) gains on
investments, was
$2.8 million in the fourth quarter of 2015, compared to$56.1 million in the fourth quarter of 2014, a decrease of$53.2 million . The total investment result during the fourth quarter of 2015 was primarily driven by net unrealized losses in the Company’s portfolio of fixed maturity investments trading, principally the result of an upward shift in the yield curve driven by the increasing interest rate environment, combined with lower net realized and unrealized gains in the Company’s portfolio of equity investments trading, primarily the result of lower returns related to one large equity position, partially offset by higher average invested assets in this portfolio. Offsetting these items was an increase in net investment income in the Company’s portfolio of fixed maturity investments primarily driven by an increase in average invested assets and net realized and unrealized gains on investments-related derivatives due to the increasing interest rate environment. -
During the fourth quarter of 2015, the Company repurchased an
aggregate of 447 thousand common shares in open market transactions at
an aggregate cost of
$48.4 million and at an average share price of$108.33 . Subsequent to December 31, 2015 and through the period ended February 1, 2016, the Company repurchased 339 thousand common shares in open market transactions at an aggregate cost of$37.3 million and at an average share price of$110.07 .
Underwriting Results by Segment
Catastrophe Reinsurance Segment
Gross premiums written in the Catastrophe Reinsurance segment were
relatively flat at
The Catastrophe Reinsurance segment generated underwriting income of
The Company experienced
Specialty Reinsurance Segment
Gross premiums written in the Specialty Reinsurance segment were
The Specialty Reinsurance segment generated underwriting income of
The Specialty Reinsurance segment experienced
Lloyd’s Segment
Gross premiums written in the Lloyd’s segment were
The Lloyd’s segment incurred an underwriting loss of
The Lloyd’s segment experienced
Other Items
-
Net income attributable to noncontrolling interests in the fourth
quarter of 2015 was
$28.1 million , a decrease from$44.2 million in the fourth quarter of 2014, principally due to a decrease in the profitability of DaVinciRe. The Company’s ownership in DaVinciRe was 26.3% at December 31, 2015, compared to 23.4% at December 31, 2014. -
During
January 2016 , DaVinciRe redeemed a portion of its outstanding shares from certain existing DaVinciRe shareholders, includingRenaissanceRe , while new DaVinciRe shareholders purchased shares in DaVinciRe. The net redemption as a result of these transactions was$100.0 million . The Company’s noncontrolling economic ownership in DaVinciRe subsequent to these transactions was 24.0%, effectiveJanuary 1, 2016 . -
Corporate expenses in the fourth quarter of 2015 were
$11.0 million , compared to$10.6 million in the fourth quarter of 2014. Included in corporate expenses in the fourth quarter of 2015 was a$5.6 million impairment charge associated with the goodwill and other intangible assets of an investment in other ventures, recorded under the equity method, and$1.6 million of expenses associated with the acquisition and integration ofPlatinum Underwriters Holdings, Ltd. (“Platinum”), compared to$6.7 million of acquisition and integration expenses in the fourth quarter of 2014.
FULL YEAR 2015 HIGHLIGHTS
-
Gross premiums written of
$2.0 billion increased$460.7 million , or 29.7%, in 2015, compared to 2014, with the increase principally driven by increases in the Company’s Specialty Reinsurance and Lloyd’s segments. Gross premiums written in the Specialty Reinsurance and Lloyd’s segments increased$419.4 million or 121.0%, and$107.1 million or 39.7%, respectively, partially offset by the Catastrophe Reinsurance segment which experienced a decrease of$65.3 million , or 7.0%. -
The Company generated underwriting income of
$494.6 million and a combined ratio of 64.7% in 2015, compared to$529.4 million and 50.2%, respectively, in 2014. The decrease in underwriting income was primarily driven by a$268.9 million increase in current accident year net claims and claim expenses and a$94.1 million increase in acquisition expenses, each principally driven by the$338.1 million increase in net premiums earned. Favorable development on prior accident years net claims and claim expenses was$162.4 million in 2015, compared to$143.8 million in 2014. -
The Company’s total investment result, which includes the sum of net
investment income, net realized and unrealized (losses) gains on
investments, and the change in net unrealized gains on fixed maturity
investments available for sale, was
$82.4 million in 2015 compared to$164.9 million in 2014, a decrease of$82.5 million . The decrease in the total investment result was primarily due to net unrealized losses in the Company’s portfolio of fixed maturity investments trading, principally the result of an upward shift in the yield curve driven by the increasing interest rate environment, combined with unrealized losses in the Company’s portfolio of equity investments trading and lower net investment income from private equity investments. Offsetting these items was an increase in net investment income in the Company’s portfolio of fixed maturity investments primarily driven by an increase in average invested assets and net realized and unrealized gains on investments-related derivatives due to the increasing interest rate environment. -
During 2015, the Company repurchased an aggregate of 2.5 million
common shares in open market transactions at an aggregate cost of
$259.9 million and at an average share price of$105.10 .
Underwriting Results by Segment
Catastrophe Reinsurance Segment
Gross premiums written in the Catastrophe Reinsurance segment decreased
by
The Catastrophe Reinsurance segment generated underwriting income of
During 2015, 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 prior accident years net claims and claim
expenses of
Lloyd’s Segment
Gross premiums written in the Company’s Lloyd’s segment increased
The Company’s Lloyd’s segment incurred an underwriting loss of
The
The Lloyd’s segment experienced adverse development of prior accident
years net claims and claim expenses of
Other Items
-
Net income attributable to noncontrolling interests in 2015 was
$111.1 million , a decrease from$153.5 million in 2014, principally due to a decrease in the profitability of DaVinciRe. The Company’s ownership in DaVinciRe was 26.3% at December 31, 2015, compared to 23.4% at December 31, 2014. -
Corporate expenses increased
$54.1 million to $77.1 million in 2015, compared to$23.0 million in 2014, primarily due to$53.5 million of expenses associated with the acquisition and integration of Platinum, comprised of$11.8 million of transaction-related expenses,$5.4 million of integration-related expenses and$36.3 million of compensation-related expenses. -
The Company recognized an income tax benefit of
$45.9 million in 2015, compared to an income tax expense of$608 thousand in 2014, primarily as a result of a reduction in its U.S.-based deferred tax asset valuation allowance from$48.5 million to $1.0 million in the first quarter of 2015 as a result of expected profits in its U.S.-based operations due principally to the acquisition of Platinum.
This Press Release includes certain non-GAAP financial measures
including “operating income available to
Please refer to the “Investor Information - Financial Reports - Financial Supplements” section of the Company’s website at www.renre.com for a copy of the Financial Supplement which includes additional information on the Company’s financial performance.
Cautionary Statement Regarding Forward Looking Statements
Any forward-looking statements made in this Press Release reflect
RenaissanceRe’s current views with respect to future events and
financial performance and are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
These statements are subject to numerous factors that could cause actual
results to differ materially from those set forth in or implied by such
forward-looking statements, including the following: the frequency and
severity of catastrophic and other events that the Company covers; the
effectiveness of the Company’s claims and claim expense reserving
process; the Company’s ability to maintain its financial strength
ratings; the effect of climate change on the Company’s business; the
effect of emerging claims and coverage issues; the Company’s reliance on
a small and decreasing number of reinsurance brokers and other
distribution services for the preponderance of its revenue; the
Company’s exposure to credit loss from counterparties in the normal
course of business; the effect of continued challenging economic
conditions throughout the world; continued soft reinsurance underwriting
market conditions; a contention by the
RenaissanceRe Holdings Ltd. | |||||||||||||||||
Summary Consolidated Statements of Operations | |||||||||||||||||
(in thousands of United States Dollars, except per share amounts and percentages) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Three months ended | Twelve months ended | ||||||||||||||||
December 31, 2015 |
December 31, 2014 |
December 31, 2015 |
December 31, 2014 |
||||||||||||||
Revenues | |||||||||||||||||
Gross premiums written | $ | 336,093 | $ | 132,780 | $ | 2,011,310 | $ | 1,550,572 | |||||||||
Net premiums written | $ | 236,651 | $ | 111,769 | $ | 1,416,183 | $ | 1,068,236 | |||||||||
Decrease (increase) in unearned premiums | 124,924 | 144,718 | (15,632 | ) | (5,820 | ) | |||||||||||
Net premiums earned | 361,575 | 256,487 | 1,400,551 | 1,062,416 | |||||||||||||
Net investment income | 45,918 | 25,886 | 152,567 | 124,316 | |||||||||||||
Net foreign exchange gains (losses) | 1,203 | (107 | ) | (3,051 | ) | 6,260 | |||||||||||
Equity in earnings of other ventures | 3,296 | 4,838 | 20,481 | 26,075 | |||||||||||||
Other income (loss) | 8,200 | 1,219 | 13,472 | (423 | ) | ||||||||||||
Net realized and unrealized (losses) gains on investments | (42,817 | ) | 30,475 | (68,918 | ) | 41,433 | |||||||||||
Total revenues | 377,375 | 318,798 | 1,515,102 | 1,260,077 | |||||||||||||
Expenses | |||||||||||||||||
Net claims and claim expenses incurred | 102,013 | (12,003 | ) | 448,238 | 197,947 | ||||||||||||
Acquisition expenses | 55,399 | 39,749 | 238,592 | 144,476 | |||||||||||||
Operational expenses | 64,300 | 55,202 | 219,112 | 190,639 | |||||||||||||
Corporate expenses | 10,982 | 10,583 | 77,114 | 22,987 | |||||||||||||
Interest expense | 10,359 | 4,289 | 35,670 | 17,164 | |||||||||||||
Total expenses | 243,053 | 97,820 | 1,018,726 | 573,213 | |||||||||||||
Income before taxes | 134,322 | 220,978 | 496,376 | 686,864 | |||||||||||||
Income tax (expense) benefit | (8,453 | ) | (401 | ) | 45,866 | (608 | ) | ||||||||||
Net income | 125,869 | 220,577 | 542,242 | 686,256 | |||||||||||||
Net income attributable to noncontrolling interests | (28,068 | ) | (44,215 | ) | (111,050 | ) | (153,538 | ) | |||||||||
Net income available to RenaissanceRe | 97,801 | 176,362 | 431,192 | 532,718 | |||||||||||||
Dividends on preference shares | (5,595 | ) | (5,595 | ) | (22,381 | ) | (22,381 | ) | |||||||||
Net income available to RenaissanceRe common shareholders | $ | 92,206 | $ | 170,767 | $ | 408,811 | $ | 510,337 | |||||||||
Net income available to RenaissanceRe common shareholders per common share - basic | $ | 2.11 | $ | 4.46 | $ | 9.36 | $ | 12.77 | |||||||||
Net income available to RenaissanceRe common shareholders per common share - diluted | $ | 2.09 | $ | 4.42 | $ | 9.28 | $ | 12.60 | |||||||||
Average shares outstanding - basic | 43,131 | 37,752 | 43,157 | 39,425 | |||||||||||||
Average shares outstanding - diluted | 43,513 | 38,145 | 43,526 | 39,968 | |||||||||||||
Net claims and claim expense ratio | 28.2 | % | (4.7 | )% | 32.0 | % | 18.6 | % | |||||||||
Underwriting expense ratio | 33.1 | % | 37.0 | % | 32.7 | % | 31.6 | % | |||||||||
Combined ratio | 61.3 | % | 32.3 | % | 64.7 | % | 50.2 | % | |||||||||
Operating income available to RenaissanceRe common shareholders per common share - diluted (1) | $ | 3.07 | $ | 3.62 | $ | 10.86 | $ | 11.56 | |||||||||
Operating return on average common equity - annualized (1) | 12.5 | % | 16.5 | % | 11.4 | % | 13.7 | % |
(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, 2015 |
December 31, 2014 |
||||||
Assets | (Unaudited) | (Audited) | |||||
Fixed maturity investments trading, at fair value | $ | 6,765,005 | $ | 4,756,685 | |||
Fixed maturity investments available for sale, at fair value | 17,813 | 26,885 | |||||
Total fixed maturity investments, at fair value | 6,782,818 | 4,783,570 | |||||
Short term investments, at fair value | 1,208,401 | 1,013,222 | |||||
Equity investments trading, at fair value | 393,877 | 322,098 | |||||
Other investments, at fair value | 481,621 | 504,147 | |||||
Investments in other ventures, under equity method | 132,351 | 120,713 | |||||
Total investments | 8,999,068 | 6,743,750 | |||||
Cash and cash equivalents | 506,885 | 525,584 | |||||
Premiums receivable | 778,009 | 440,007 | |||||
Prepaid reinsurance premiums | 230,671 | 94,810 | |||||
Reinsurance recoverable | 134,526 | 66,694 | |||||
Accrued investment income | 39,749 | 26,509 | |||||
Deferred acquisition costs | 199,380 | 110,059 | |||||
Receivable for investments sold | 220,834 | 52,390 | |||||
Other assets | 186,595 | 135,845 | |||||
Goodwill and other intangibles | 265,154 | 7,902 | |||||
Total assets | $ | 11,560,871 | $ | 8,203,550 | |||
Liabilities, Noncontrolling Interests and Shareholders’ Equity | |||||||
Liabilities | |||||||
Reserve for claims and claim expenses | $ | 2,767,045 | $ | 1,412,510 | |||
Unearned premiums | 889,102 | 512,386 | |||||
Debt | 966,079 | 249,522 | |||||
Reinsurance balances payable | 523,974 | 454,580 | |||||
Payable for investments purchased | 391,378 | 203,021 | |||||
Other liabilities | 245,145 | 374,108 | |||||
Total liabilities | 5,782,723 | 3,206,127 | |||||
Redeemable noncontrolling interest | 1,045,964 | 1,131,708 | |||||
Shareholders’ Equity | |||||||
Preference shares | 400,000 | 400,000 | |||||
Common shares | 43,701 | 38,442 | |||||
Additional paid-in capital | 507,674 | — | |||||
Accumulated other comprehensive income | 2,108 | 3,416 | |||||
Retained earnings | 3,778,701 | 3,423,857 | |||||
Total shareholders’ equity attributable to RenaissanceRe | 4,732,184 | 3,865,715 | |||||
Total liabilities, noncontrolling interests and shareholders’ equity | $ | 11,560,871 | $ | 8,203,550 | |||
Book value per common share | $ | 99.13 | $ | 90.15 |
RenaissanceRe Holdings Ltd. | ||||||||||||||||||||
Supplemental Financial Data - Segment Information | ||||||||||||||||||||
(in thousands of United States Dollars, except percentages) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended December 31, 2015 | ||||||||||||||||||||
Catastrophe |
Specialty |
Lloyd’s | Other | Total | ||||||||||||||||
Gross premiums written | $ | 12,326 | $ | 267,375 | $ | 56,392 | $ | — | $ | 336,093 | ||||||||||
Net premiums written | $ | 9,057 | $ | 183,140 | $ | 44,413 | $ | 41 | $ | 236,651 | ||||||||||
Net premiums earned | $ | 156,601 | $ | 152,137 | $ | 52,796 | $ | 41 | $ | 361,575 | ||||||||||
Net claims and claim expenses incurred | (9,715 | ) | 77,840 | 34,716 | (828 | ) | 102,013 | |||||||||||||
Acquisition expenses | 6,248 | 36,439 | 12,712 | — | 55,399 | |||||||||||||||
Operational expenses | 27,528 | 20,946 | 15,741 | 85 | 64,300 | |||||||||||||||
Underwriting income (loss) | $ | 132,540 | $ | 16,912 | $ | (10,373 | ) | $ | 784 | 139,863 | ||||||||||
Net investment income | 45,918 | 45,918 | ||||||||||||||||||
Net foreign exchange gains | 1,203 | 1,203 | ||||||||||||||||||
Equity in earnings of other ventures | 3,296 | 3,296 | ||||||||||||||||||
Other income | 8,200 | 8,200 | ||||||||||||||||||
Net realized and unrealized losses on investments | (42,817 | ) | (42,817 | ) | ||||||||||||||||
Corporate expenses | (10,982 | ) | (10,982 | ) | ||||||||||||||||
Interest expense | (10,359 | ) | (10,359 | ) | ||||||||||||||||
Income before taxes and noncontrolling interests | 134,322 | |||||||||||||||||||
Income tax expense | (8,453 | ) | (8,453 | ) | ||||||||||||||||
Net income attributable to noncontrolling interests | (28,068 | ) | (28,068 | ) | ||||||||||||||||
Dividends on preference shares | (5,595 | ) | (5,595 | ) | ||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 92,206 | ||||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 18,249 | $ | 86,091 | $ | 34,549 | $ | — | $ | 138,889 | ||||||||||
Net claims and claim expenses incurred – prior accident years | (27,964 | ) | (8,251 | ) | 167 | (828 | ) | (36,876 | ) | |||||||||||
Net claims and claim expenses incurred – total | $ | (9,715 | ) | $ | 77,840 | $ | 34,716 | $ | (828 | ) | $ | 102,013 | ||||||||
Net claims and claim expense ratio – current accident year | 11.7 | % | 56.6 | % | 65.4 | % | 38.4 | % | ||||||||||||
Net claims and claim expense ratio – prior accident years | (17.9 | )% | (5.4 | )% | 0.4 | % | (10.2 | )% | ||||||||||||
Net claims and claim expense ratio – calendar year | (6.2 | )% | 51.2 | % | 65.8 | % | 28.2 | % | ||||||||||||
Underwriting expense ratio | 21.6 | % | 37.7 | % | 53.8 | % | 33.1 | % | ||||||||||||
Combined ratio | 15.4 | % | 88.9 | % | 119.6 | % | 61.3 | % | ||||||||||||
Three months ended December 31, 2014 | ||||||||||||||||||||
Catastrophe |
Specialty |
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 | )% | (33.0 | )% | ||||||||||||
Net claims and claim expense ratio – calendar year | (31.3 | )% | 15.8 | % | 39.7 | % | (4.7 | )% | ||||||||||||
Underwriting expense ratio | 29.3 | % | 44.0 | % | 46.2 | % | 37.0 | % | ||||||||||||
Combined ratio | (2.0 | )% | 59.8 | % | 85.9 | % | 32.3 | % |
(1) | Included in gross premiums written in the Other category is the elimination of inter-segment gross premiums written of $0.3 million for the three months ended December 31, 2014. |
RenaissanceRe Holdings Ltd. | ||||||||||||||||||||
Supplemental Financial Data - Segment Information | ||||||||||||||||||||
(in thousands of United States Dollars, except percentages) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Twelve months ended December 31, 2015 | ||||||||||||||||||||
Catastrophe |
Specialty |
Lloyd’s | Other | Total | ||||||||||||||||
Gross premiums written (1) | $ | 868,631 | $ | 766,051 | $ | 376,718 | $ | (90 | ) | $ | 2,011,310 | |||||||||
Net premiums written | $ | 557,369 | $ | 582,909 | $ | 275,953 | $ | (48 | ) | $ | 1,416,183 | |||||||||
Net premiums earned | $ | 622,714 | $ | 548,810 | $ | 229,075 | $ | (48 | ) | $ | 1,400,551 | |||||||||
Net claims and claim expenses incurred | 75,574 | 244,495 | 128,667 | (498 | ) | 448,238 | ||||||||||||||
Acquisition expenses | 47,264 | 135,811 | 55,269 | 248 | 238,592 | |||||||||||||||
Operational expenses | 93,494 | 70,525 | 54,827 | 266 | 219,112 | |||||||||||||||
Underwriting income (loss) | $ | 406,382 | $ | 97,979 | $ | (9,688 | ) | $ | (64 | ) | 494,609 | |||||||||
Net investment income | 152,567 | 152,567 | ||||||||||||||||||
Net foreign exchange losses | (3,051 | ) | (3,051 | ) | ||||||||||||||||
Equity in earnings of other ventures | 20,481 | 20,481 | ||||||||||||||||||
Other income | 13,472 | 13,472 | ||||||||||||||||||
Net realized and unrealized losses on investments | (68,918 | ) | (68,918 | ) | ||||||||||||||||
Corporate expenses | (77,114 | ) | (77,114 | ) | ||||||||||||||||
Interest expense | (35,670 | ) | (35,670 | ) | ||||||||||||||||
Income before taxes and noncontrolling interests | 496,376 | |||||||||||||||||||
Income tax benefit | 45,866 | 45,866 | ||||||||||||||||||
Net income attributable to noncontrolling interests | (111,050 | ) | (111,050 | ) | ||||||||||||||||
Dividends on preference shares | (22,381 | ) | (22,381 | ) | ||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 408,811 | ||||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 145,951 | $ | 336,407 | $ | 128,327 | $ | — | $ | 610,685 | ||||||||||
Net claims and claim expenses incurred – prior accident years | (70,377 | ) | (91,912 | ) | 340 | (498 | ) | (162,447 | ) | |||||||||||
Net claims and claim expenses incurred – total | $ | 75,574 | $ | 244,495 | $ | 128,667 | $ | (498 | ) | $ | 448,238 | |||||||||
Net claims and claim expense ratio – current accident year | 23.4 | % | 61.3 | % | 56.0 | % | 43.6 | % | ||||||||||||
Net claims and claim expense ratio – prior accident years | (11.3 | )% | (16.7 | )% | 0.2 | % | (11.6 | )% | ||||||||||||
Net claims and claim expense ratio – calendar year | 12.1 | % | 44.6 | % | 56.2 | % | 32.0 | % | ||||||||||||
Underwriting expense ratio | 22.6 | % | 37.5 | % | 48.0 | % | 32.7 | % | ||||||||||||
Combined ratio | 34.7 | % | 82.1 | % | 104.2 | % | 64.7 | % | ||||||||||||
Twelve months ended December 31, 2014 | ||||||||||||||||||||
Catastrophe |
Specialty |
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 | )% | (13.6 | )% | ||||||||||||
Net claims and claim expense ratio – calendar year | 0.3 | % | 34.9 | % | 52.3 | % | 18.6 | % | ||||||||||||
Underwriting expense ratio | 23.5 | % | 41.1 | % | 45.0 | % | 31.6 | % | ||||||||||||
Combined ratio | 23.8 | % | 76.0 | % | 97.3 | % | 50.2 | % |
(1) |
Included in gross premiums written in the Other category is the elimination of inter-segment gross premiums written of $(0.1) million for the twelve months ended December 31, 2015 (2014 - $0.3 million). |
RenaissanceRe Holdings Ltd. | |||||||||||||||||
Supplemental Financial Data - Gross Premiums Written and Managed Premiums | |||||||||||||||||
(in thousands of United States Dollars) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
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Catastrophe Reinsurance Segment |
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Renaissance catastrophe premiums | $ | 11,207 | $ | 10,569 | $ | 581,662 | $ | 622,934 | |||||||||
DaVinci catastrophe premiums | 1,119 | (646 | ) | 286,969 | 311,035 | ||||||||||||
Total Catastrophe Reinsurance segment gross premiums written | $ | 12,326 | $ | 9,923 | $ | 868,631 | $ | 933,969 | |||||||||
Specialty Reinsurance Segment |
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Casualty | $ | 93,004 | $ | 40,150 | $ | 356,913 | $ | 132,535 | |||||||||
Credit | 141,939 | 19,401 | 257,400 | 147,720 | |||||||||||||
Property Other | 14,176 | 7,652 | 53,005 | 21,924 | |||||||||||||
Other | 18,256 | 4,708 | 98,733 | 44,459 | |||||||||||||
Total Specialty Reinsurance segment gross premiums written | $ | 267,375 | $ | 71,911 | $ | 766,051 | $ | 346,638 | |||||||||
Lloyd’s Segment |
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Casualty | $ | 37,161 | $ | 30,562 | $ | 188,910 | $ | 131,972 | |||||||||
Property Other | 14,578 | 17,179 | 81,194 | 63,631 | |||||||||||||
Catastrophe | 2,840 | 1,985 | 69,329 | 55,366 | |||||||||||||
Credit | 274 | (119 | ) | 7,770 | 741 | ||||||||||||
Other | 1,539 | 1,030 | 29,515 | 17,946 | |||||||||||||
Total Lloyd’s segment gross premiums written | $ | 56,392 | $ | 50,637 | $ | 376,718 | $ | 269,656 | |||||||||
Managed Premiums (1) |
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Total Catastrophe Reinsurance segment gross premiums written | $ | 12,326 | $ | 9,923 | $ | 868,631 | $ | 933,969 | |||||||||
Catastrophe premiums written in the Lloyd’s segment | 2,840 | 1,985 | 69,329 | 55,366 | |||||||||||||
Catastrophe premiums written on behalf of the Company’s joint |
1,923 | 3,162 | 38,587 | 42,556 | |||||||||||||
Catastrophe premiums written by the Company in its Catastrophe |
— | — | (6,785 | ) | (7,355 | ) | |||||||||||
Total managed catastrophe premiums (1) | $ | 17,089 | $ | 15,070 | $ | 969,762 | $ | 1,024,536 |
(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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Fixed maturity investments | $ | 38,047 | $ | 26,104 | $ | 134,800 | $ | 100,855 | ||||||||
Short term investments | 466 | 217 | 1,227 | 944 | ||||||||||||
Equity investments trading | 2,038 | 1,139 | 8,346 | 3,450 | ||||||||||||
Other investments | ||||||||||||||||
Private equity investments | 8,260 | 1,579 | 9,455 | 18,974 | ||||||||||||
Other | 891 | (463 | ) | 12,472 | 11,037 | |||||||||||
Cash and cash equivalents | 112 | 95 | 467 | 395 | ||||||||||||
49,814 | 28,671 | 166,767 | 135,655 | |||||||||||||
Investment expenses | (3,896 | ) | (2,785 | ) | (14,200 | ) | (11,339 | ) | ||||||||
Net investment income | 45,918 | 25,886 | 152,567 | 124,316 | ||||||||||||
Gross realized gains | 11,124 | 11,973 | 50,488 | 45,568 | ||||||||||||
Gross realized losses | (13,487 | ) | (3,997 | ) | (53,630 | ) | (14,868 | ) | ||||||||
Net realized (losses) gains on fixed maturity investments | (2,363 | ) | 7,976 | (3,142 | ) | 30,700 | ||||||||||
Net unrealized (losses) gains on fixed maturity investments trading | (52,984 | ) | (1,520 | ) | (64,908 | ) | 19,680 | |||||||||
Net realized and unrealized gains (losses) on investments-related derivatives | 6,447 | (11,280 | ) | 5,443 | (30,931 | ) | ||||||||||
Net realized gains on equity investments trading | 149 | 2,330 | 16,348 | 10,908 | ||||||||||||
Net unrealized gains (losses) on equity investments trading | 5,934 | 32,969 | (22,659 | ) | 11,076 | |||||||||||
Net realized and unrealized (losses) gains on investments | (42,817 | ) | 30,475 | (68,918 | ) | 41,433 | ||||||||||
Change in net unrealized gains on fixed maturity investments available for sale | (257 | ) | (292 | ) | (1,243 | ) | (855 | ) | ||||||||
Total investment result | $ | 2,844 | $ | 56,069 | $ | 82,406 | $ | 164,894 | ||||||||
Total investment return - annualized | 0.1 | % | 3.3 | % | 0.9 | % | 2.4 | % |
Comments on Regulation G
In addition to the GAAP financial measures set forth in this Press
Release, the Company has included certain non-GAAP financial measures
within the meaning of Regulation
The Company uses “operating income available to
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December 31, 2014 |
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Net income available to RenaissanceRe common shareholders | $ | 92,206 | $ | 170,767 | $ | 408,811 | $ | 510,337 | |||||||||
Adjustment for net realized and unrealized losses (gains) on investments | 42,817 | (30,475 | ) | 68,918 | (41,433 | ) | |||||||||||
Operating income available to RenaissanceRe common shareholders | $ | 135,023 | $ | 140,292 | $ | 477,729 | $ | 468,904 | |||||||||
Net income available to RenaissanceRe common shareholders per common share - diluted | $ | 2.09 | $ | 4.42 | $ | 9.28 | $ | 12.60 | |||||||||
Adjustment for net realized and unrealized losses (gains) on investments | 0.98 | (0.80 | ) | 1.58 | (1.04 | ) | |||||||||||
Operating income available to RenaissanceRe common shareholders per common share - diluted | $ | 3.07 | $ | 3.62 | $ | 10.86 | $ | 11.56 | |||||||||
Return on average common equity - annualized | 8.5 | % | 20.1 | % | 9.8 | % | 14.9 | % | |||||||||
Adjustment for net realized and unrealized losses (gains) on investments | 4.0 | % | (3.6 | )% | 1.6 | % | (1.2 | )% | |||||||||
Operating return on average common equity - annualized | 12.5 | % | 16.5 | % | 11.4 | % | 13.7 | % |
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, 2015 |
September 30, 2015 |
June 30, 2015 |
March 31, 2015 |
December 31, 2014 |
||||||||||||||||
Book value per common share | $ | 99.13 | $ | 97.41 | $ | 96.43 | $ | 95.21 | $ | 90.15 | ||||||||||
Adjustment for goodwill and other intangibles (1) | (6.59 | ) | (6.65 | ) | (6.51 | ) | (6.64 | ) | (0.86 | ) | ||||||||||
Tangible book value per common share | 92.54 | 90.76 | 89.92 | 88.57 | 89.29 | |||||||||||||||
Adjustment for accumulated dividends | 15.48 | 15.18 | 14.88 | 14.58 | 14.28 | |||||||||||||||
Tangible book value per common share plus accumulated dividends | $ | 108.02 | $ | 105.94 | $ | 104.80 | $ | 103.15 | $ | 103.57 | ||||||||||
Quarterly change in book value per common share | 1.8 | % | 1.0 | % | 1.3 | % | 5.6 | % | 5.1 | % | ||||||||||
Quarterly change in tangible book value per common share plus change in accumulated dividends | 2.3 | % | 1.3 | % | 1.9 | % | (0.5 | )% | 5.5 | % | ||||||||||
Year to date change in book value per common share | 10.0 | % | 12.3 | % | ||||||||||||||||
Year to date change in tangible book value per common share plus change in accumulated dividends | 5.0 | % | 13.9 | % |
(1) | At December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015 and December 31, 2014, goodwill and other intangibles included $23.2 million, $22.9 million, $23.5 million, $24.4 million and $25.3 million, respectively, of goodwill and other intangibles included in investments in other ventures, under equity method. |
View source version on businesswire.com: http://www.businesswire.com/news/home/20160202006632/en/
Source:
INVESTOR:
RenaissanceRe Holdings Ltd.
Rohan Pai
Director
- Corporate Finance
(441) 295-4513
or
MEDIA:
Kekst
and Company
Peter Hill or Dawn Dover
(212) 521-4800