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Document and Entity Information
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9 Months Ended | |
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Sep. 30, 2010
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Oct. 25, 2010
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| Document Type | 10-Q | |
| Amendment Flag | false | |
| Document Period End Date | Sep. 30, 2010 | |
| Document Fiscal Year Focus | 2010 | |
| Document Fiscal Period Focus | Q3 | |
| Trading Symbol | RNR | |
| Entity Registrant Name | RENAISSANCERE HOLDINGS LTD. | |
| Entity Central Index Key | 0000913144 | |
| Current Fiscal Year End Date | --12-31 | |
| Entity Filer Category | Large Accelerated Filer | |
| Entity Common Stock, Shares Outstanding | 54,877,458 |
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- Definition
If the value is true, then the document as an amendment to previously-filed/accepted document. No definition available.
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- Definition
End date of current fiscal year in the format --MM-DD. No definition available.
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- Definition
This is focus fiscal period of the document report. For a first quarter 2006 quarterly report, which may also provide financial information from prior periods, the first fiscal quarter should be given as the fiscal period focus. Values: FY, Q1, Q2, Q3, Q4, H1, H2, M9, T1, T2, T3, M8, CY. No definition available.
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- Definition
This is focus fiscal year of the document report in CCYY format. For a 2006 annual report, which may also provide financial information from prior periods, fiscal 2006 should be given as the fiscal year focus. Example: 2006. No definition available.
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- Definition
The end date of the period reflected on the cover page if a periodic report. For all other reports and registration statements this will be the filing date. The format of the date is CCYY-MM-DD. No definition available.
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- Definition
The type of document being provided (such as 10-K, 10-Q, N-1A, etc). The document type should be limited to the same value as the supporting SEC submission type. The acceptable values are as follows: S-1, S-3, S-4, S-11, F-1, F-3, F-4, F-9, F-10, 6-K, 8-K, 10, 10-K, 10-Q, 20-F, 40-F, N-1A, 485BPOS, NCSR, N-Q, and Other. No definition available.
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- Definition
A unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Indicate number of shares outstanding of each of registrant's classes of common stock, as of latest practicable date. Where multiple classes exist define each class by adding class of stock items such as Common Class A [Member], Common Class B [Member] onto the Instrument [Domain] of the Entity Listings, Instrument No definition available.
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- Definition
Indicate whether the registrant is one of the following: (1) Large Accelerated Filer, (2) Accelerated Filer, (3) Non-accelerated Filer, or (4) Smaller Reporting Company. Definitions of these categories are stated in Rule 12b-2 of the Exchange Act. This information should be based on the registrant's current or most recent filing containing the related disclosure. No definition available.
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- Definition
The exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Trading symbol of an instrument as listed on an exchange. No definition available.
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- Definition
Sum of the carrying amounts of all goodwill and intangible assets of the balance sheet date, net of accumulated amortization and impairment charges. No definition available.
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- Definition
Contractual rights under a purchase agreement, contingent purchase agreement and credit derivatives agreement to sell certain catastrophe linked securities. No definition available.
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- Definition
Contractual obligations under a purchase agreement, contingent purchase agreement and credit derivatives agreement to sell certain catastrophe linked securities. No definition available.
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- Definition
Interest, dividends, rents, ancillary and other revenues earned but not yet received by the entity on its investments. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Accumulated change in equity from transactions and other events and circumstances from non-owner sources, net of tax effect, at fiscal year-end. Excludes Net Income (Loss), and accumulated changes in equity from transactions resulting from investments by owners and distributions to owners. Includes foreign currency translation items, certain pension adjustments, and unrealized gains and losses on certain investments in debt and equity securities as well as changes in the fair value of derivatives related to the effective portion of a designated cash flow hedge. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Excess of issue price over par or stated value of the entity's capital stock and amounts received from other transactions involving the entity's stock or stockholders. Includes adjustments to additional paid in capital. Some examples of such adjustments include recording the issuance of debt with a beneficial conversion feature and certain tax consequences of equity instruments awarded to employees. Use this element for the aggregate amount of APIC associated with common AND preferred stock. For APIC associated with only common stock, use the element Additional Paid In Capital, Common Stock. For APIC associated with only preferred stock, use the element Additional Paid In Capital, Preferred Stock. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Details
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- Definition
For an unclassified balance sheet, total of debt securities categorized neither as held-to-maturity nor trading. Such securities are reported at fair value; unrealized gains and losses of such securities are excluded from earnings and included in other comprehensive income, a separate component of shareholders' equity, unless the Available-for-sale Security is designated as a hedge or is determined to have had an other than temporary decline in fair value below its amortized cost basis. All or a portion of the unrealized holding gain or loss of an Available-for-sale Security that is designated as being hedged in a fair value hedge shall be recognized in earnings during the period of the hedge, as should other than temporary declines in fair value below costs basis. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Includes currency on hand as well as demand deposits with banks or financial institutions. It also includes other kinds of accounts that have the general characteristics of demand deposits in that the Entity may deposit additional funds at any time and also effectively may withdraw funds at any time without prior notice or penalty. Cash equivalents, excluding items classified as marketable securities, include short-term, highly liquid investments that are both readily convertible to known amounts of cash, and so near their maturity that they present minimal risk of changes in value because of changes in interest rates. Generally, only investments with original maturities of three months or less qualify under that definition. Original maturity means original maturity to the entity holding the investment. For example, both a three-month US Treasury bill and a three-year Treasury note purchased three months from maturity qualify as cash equivalents. However, a Treasury note purchased three years ago does not become a cash equivalent when its remaining maturity is three months. Compensating balance arrangements that do not legally restrict the withdrawal or usage of cash amounts may be reported as Cash and Cash Equivalents, while legally restricted deposits held as compensating balances against borrowing arrangements, contracts entered into with others, or company statements of intention with regard to particular deposits should not be reported as cash and cash equivalents. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Represents the caption on the face of the balance sheet to indicate that the entity has entered into (1) purchase or supply arrangements that will require expending a portion of its resources to meet the terms thereof, and (2) is exposed to potential losses or, less frequently, gains, arising from (a) possible claims against a company's resources due to future performance under contract terms, and (b) possible losses or likely gains from uncertainties that will ultimately be resolved when one or more future events that are deemed likely to occur do occur or fail to occur. This caption alerts the reader that one or more notes to the financial statements disclose pertinent information about the entity's commitments and contingencies. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Dollar value of issued common stock whether issued at par value, no par or stated value. This item includes treasury stock repurchased by the entity. Note: elements for number of common shares, par value and other disclosure concepts are in another section within stockholders' equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Net amount of deferred policy acquisition costs capitalized on contracts remaining in force as of the balance sheet date. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
This item represents the carrying amount on the entity's balance sheet of its investment in common stock of an equity method investee. This is not an indicator of the fair value of the investment, rather it is the initial cost adjusted for the entity's share of earnings and losses of the investee, adjusted for any distributions (dividends) and other than temporary impairment losses recognized. No definition available.
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- Definition
Sum of the carrying amounts as of the balance sheet date of current and noncurrent investments. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Sum of the carrying amounts as of the balance sheet date of all liabilities that are recognized. Liabilities are probable future sacrifices of economic benefits arising from present obligations of an entity to transfer assets or provide services to other entities in the future. No definition available.
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- Details
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- Definition
Total of all Liabilities and Stockholders' Equity items. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The amount needed to reflect the estimated ultimate cost of settling claims relating to insured events that have occurred on or before the balance sheet date, whether or not reported to the insurer at that date. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Including current and noncurrent portions, aggregate carrying amount of long-term borrowings as of the balance sheet date. May include notes payable, bonds payable, commercial loans, mortgage loans, convertible debt, subordinated debt and other types of debt, which had initial maturities beyond one year or beyond the normal operating cycle, if longer, and after deducting unamortized discount or premiums, if any. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Total of all Stockholders' Equity (deficit) items, net of receivables from officers, directors owners, and affiliates of the entity which is directly or indirectly attributable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Carrying amount as of the balance sheet date of assets not otherwise specified in the taxonomy. Also serves as the sum of assets not individually reported in the financial statements, or not separately disclosed in notes. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Other investments not otherwise specified in the taxonomy. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Carrying amount as of the balance sheet date of liabilities not otherwise specified in the taxonomy. Also serves as the sum of liabilities not individually reported in the financial statements, or not separately disclosed in notes. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Other investments not otherwise specified in the taxonomy that will be realized in a short period of time, usually less than one year or the normal operating cycle, whichever is longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Aggregate amounts payable to broker-dealers and clearing organizations include amounts payable for securities failed to receive, certain deposits received for securities loaned, amounts payable to clearing organizations on open transactions, and floor-brokerage payables. In addition, the net receivable or payable arising from unsettled trades would be reflected in those captions. A broker-dealer that purchases securities, either for its own account or for a customer's account, but does not receive the securities on the settlement date records the amount of money representing the purchase price of the securities, including any accrued interest, as a liability to the selling broker-dealer. This liability is paid when the securities are received by the purchasing broker-dealer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Dollar value of issued nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer) whether issued at par value, no par or stated value. This item includes treasury stock repurchased by the entity. Note: elements for number of nonredeemable preferred shares, par value and other disclosure concepts are in another section within stockholders' equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The carrying amount as of the balance sheet date due the entity from (a) agents and insureds, (b) uncollected premiums and (c) others, net of the allowance for doubtful accounts. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The unexpired portion of premiums ceded on policies in force as of the balance sheet date. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Amount receivable from securities failed to deliver, certain deposits for securities borrowed, open transactions, good faith and margin deposits, commissions and floor brokerage items. Also cash and securities [guarantee] on deposit with [commodities] clearing organizations and other entities which provide services necessary to operations of the Company. This item would include, for instance, cash and securities advanced as [refundable] collateral for securities borrowed. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The carrying amount as of the balance sheet date of the known and estimated amounts owed to insurers under reinsurance treaties or other arrangements. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The known and estimated amount recoverable as of the balance sheet date from reinsurers for claims paid or incurred by the ceding insurer and associated claims settlement expenses, including estimated amounts for claims incurred but not reported, and policy benefits, net of any related valuation allowance. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The cumulative amount of the reporting entity's undistributed earnings or deficit. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Total of all Stockholders' Equity (deficit) items, net of receivables from officers, directors owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Details
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- Definition
This item represents debt securities that are bought and held principally for the purpose of selling them in the near term (thus held for only a short period of time) or for debt securities formerly categorized as available-for-sale or held-to-maturity which the entity held as of the date it opted to account for such securities at fair value. An enterprise may also categorize such a security as trading without the intent to sell it in the near term assuming the decision to categorize the security as trading occurred at acquisition; this is the reason why the trading category of investments in debt securities are bought and sold "principally" for sale in the near term. Transfers into and out of the trading category should be rare. Such financial instruments that are held as of the reporting date are measured at fair value with unrealized holding gains and losses (the difference between fair value and the previously reported carrying amount) included in earnings. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Carrying amount of premiums written on insurance contracts that have not been earned as of the balance sheet date. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2010
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Dec. 31, 2009
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| Fixed maturity investments available for sale, Amortized cost | $ 305,550 | $ 3,513,183 |
| Fixed maturity investments trading, Amortized cost | $ 4,382,667 | $ 747,983 |
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- Definition
This item represents the total of all debt securities grouped by maturity dates, at cost, net of adjustments made for accretion, amortization, other-than-temporary impairments, and hedging, if any, which are classified as trading securities. No definition available.
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- Definition
This item represents the cost of debt and equity securities, which are categorized neither as held-to-maturity nor trading, net of adjustments made for accretion, amortization, other-than-temporary impairments, and hedging, if any. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Consolidated Statements of Operations (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2010
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Sep. 30, 2009
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Sep. 30, 2010
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Sep. 30, 2009
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| Revenues | ||||
| Gross premiums written | $ 126,679 | $ 202,413 | $ 1,531,650 | $ 1,655,886 |
| Net premiums written | 103,094 | 75,098 | 1,071,639 | 1,153,304 |
| Decrease (increase) in unearned premiums | 206,295 | 220,915 | (157,602) | (175,726) |
| Net premiums earned | 309,389 | 296,013 | 914,037 | 977,578 |
| Net investment income | 60,934 | 106,815 | 155,722 | 263,234 |
| Net foreign exchange (losses) gains | (529) | 1,556 | (12,480) | (12,761) |
| Equity in (losses) earnings of other ventures | (6,740) | 4,331 | (1,424) | 11,499 |
| Other income (loss) | 27,255 | 13,424 | 18,430 | (5,027) |
| Net realized and unrealized gains on fixed maturity investments | 98,011 | 16,794 | 217,715 | 57,809 |
| Total other-than-temporary impairments | (1,408) | (831) | (25,719) | |
| Portion recognized in other comprehensive income, before taxes | 1,062 | 2 | 4,518 | |
| Net other-than-temporary impairments | (346) | (829) | (21,201) | |
| Total revenues | 488,320 | 438,587 | 1,291,171 | 1,271,131 |
| Expenses | ||||
| Net claims and claim expenses incurred | 125,626 | 38,567 | 252,350 | 191,587 |
| Acquisition expenses | 49,977 | 44,203 | 134,596 | 141,302 |
| Operational expenses | 49,148 | 45,498 | 164,075 | 132,120 |
| Corporate expenses | 5,704 | (4,319) | 16,087 | 8,608 |
| Interest expense | 6,164 | 3,748 | 15,526 | 12,084 |
| Total expenses | 236,619 | 127,697 | 582,634 | 485,701 |
| Income before taxes | 251,701 | 310,890 | 708,537 | 785,430 |
| Income tax benefit (expense) | 1,148 | (3,993) | 3,215 | (3,793) |
| Net income | 252,849 | 306,897 | 711,752 | 781,637 |
| Net income attributable to redeemable noncontrolling interest - DaVinciRe | (37,524) | (37,694) | (99,989) | (122,821) |
| Net income attributable to RenaissanceRe | 215,325 | 269,203 | 611,763 | 658,816 |
| Dividends on preference shares | (10,575) | (10,575) | (31,725) | (31,725) |
| Net income available to RenaissanceRe common shareholders | $ 204,750 | $ 258,628 | $ 580,038 | $ 627,091 |
| Net income available to RenaissanceRe common shareholders per common share - basic | $ 3.73 | $ 4.15 | $ 10.13 | $ 10.09 |
| Net income available to RenaissanceRe common shareholders per common share - diluted | $ 3.70 | $ 4.12 | $ 10.04 | $ 10.03 |
| Dividends per common share | $ 0.25 | $ 0.24 | $ 0.75 | $ 0.72 |
| X | ||||||||||
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- Definition
Change during the period in the unearned portion of gross premiums written (direct and assumed) and ceded premiums written, excluding the portion amortized into income. No definition available.
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| X | ||||||||||
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- Definition
Total consideration paid and payable by direct and assumed policyholders for insurance and reinsurance contracts sold by the Entity during the period. This amount includes premium assumed from other insurers. No definition available.
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| X | ||||||||||
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- Definition
The sum of total revenues and total expenses for the period, before income taxes and redeemable noncontrolling interest. No definition available.
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- Definition
Net other-than-temporary-impairments. No definition available.
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| X | ||||||||||
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- Definition
Portion of impairment loss recognized in other comprehensive income. No definition available.
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| X | ||||||||||
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- Definition
The total amount of expense recognized during the period for future policy benefits, claims and claims adjustment costs, and for selling, general and administrative costs. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Details
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- Definition
Aggregate dividends declared during the period for each share of common stock outstanding. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Amount of deferred policy acquisition costs charged to expense in the period, generally in proportion to related revenue earned, estimated gross profits, or over the customer relationship or some other period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The amount of net income or loss for the period per each share of common stock outstanding during the reporting period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The amount of net income or loss for the period per each share of common stock and dilutive common stock equivalents outstanding during the reporting period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The aggregate foreign currency transaction gain or loss (both realized and unrealized) included in determining net income for the reporting period. Excludes foreign currency transactions designated as hedges of net investment in a foreign entity and intercompany foreign currency transactions that are of a long-term nature, when the entities to the transaction are consolidated, combined, or accounted for by the equity method in the reporting enterprise's financial statements. For certain enterprises, primarily banks, that are dealers in foreign exchange, foreign currency transaction gains or losses may be disclosed as dealer gains or losses. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
This item represents the net total realized and unrealized gain (loss) included in earnings for the period as a result of selling or holding marketable securities categorized as trading, available-for-sale, or held-to-maturity, including the unrealized holding gain or loss of held-to-maturity securities transferred to the trading security category and the cumulative unrealized gain or loss which was included in other comprehensive income (a separate component of shareholders' equity) for available-for-sale securities transferred to trading securities during the period. Additionally, this item would include any gains or losses realized during the period from the sale of investments accounted for under the cost method of accounting and losses recognized for other than temporary impairments of the subject investments. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The aggregate total of expenses of managing and administering the affairs of an entity, including affiliates of the reporting entity, which are not directly or indirectly associated with the manufacture, sale or creation of a product or product line. No definition available.
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- Definition
This item represents the entity's proportionate share for the period of the net income (loss) of its investee (such as unconsolidated subsidiaries and joint ventures) to which the equity method of accounting is applied. Such amount typically reflects adjustments similar to those made in preparing consolidated statements, including adjustments to eliminate intercompany gains and losses, and to amortize, if appropriate, any difference between cost and underlying equity in net assets of the investee at the date of investment. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The sum of the current income tax expense (benefit) and the deferred income tax expense (benefit) pertaining to continuing operations. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Provision for benefits, claims and claims settlement expenses incurred during the period for property and casualty insurance net of the effects of contracts assumed and ceded. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The cost of borrowed funds accounted for as interest that was charged against earnings during the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
This element represents the amount of loss recognized for other than temporary impairments of investments in debt and equity securities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The portion of consolidated profit or loss for the period, net of income taxes, which is attributable to the parent. If the entity does not present consolidated financial statements, the amount of profit or loss for the period, net of income taxes. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The portion of net income (loss) attributable to the noncontrolling interest (if any) deducted in order to derive the portion attributable to the parent. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Net income after adjustments for dividends on preferred stock (declared in the period) and/or cumulative preferred stock (accumulated for the period). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The income earned from investments in securities and property, equipment and other capital assets. It includes rent from property and equipment, dividends from shares in corporations, and interest from bonds, loans, mortgages, derivatives, commercial paper, bank accounts, certificates of deposits, treasuries, and other financial securities. It does not include realized gains and losses on investments. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The total amount of other operating cost and expense items that are associated with the entity's normal revenue producing operation. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Reflects the sum of all other revenue and income recognized by the entity in the period not otherwise specified in the income statement. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The amount of dividends declared or paid in the period to preferred shareholders, or the amount for which the obligation to pay them dividends arose in the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Premiums earned on the income statement for all insurance and reinsurance contracts after subtracting any amounts ceded to another insurer and adding premiums assumed from other insurers. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Premiums written for all insurance and reinsurance contracts, after adding premiums assumed from other insurers and subtracting any amounts ceded to another insurer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Aggregate revenue recognized during the period (derived from goods sold, services rendered, insurance premiums, or other activities that constitute an entity's earning process). For financial services companies, also includes investment and interest income, and sales and trading gains. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Details
|
| X | ||||||||||
|
- Definition
Par value of stock issued during the period as a result of any share-based compensation plan. No definition available.
|
| X | ||||||||||
|
- Definition
Portion of impairment loss recognized in other comprehensive income. No definition available.
|
| X | ||||||||||
|
- Definition
Cumulative effect of initial adoption of new accounting principle on beginning retained earnings, net of tax. This element can be used, generally, for the adjustment to retained earnings of a new accounting principle. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
Aggregate cash, stock, and paid-in-kind dividends declared for common shareholders during the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
Aggregate cash, stock, and paid-in-kind dividends declared for preferred shareholders during the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
Decrease in noncontrolling interest as a result of redeeming or purchasing the interests of noncontrolling shareholders. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The portion of net income (loss) attributable to the noncontrolling interest (if any) deducted in order to derive the portion attributable to the parent. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
Gross appreciation or the gross loss in value of the total unsold securities at the end of an accounting period, after tax, attributable to the parent entity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
Total of all Stockholders' Equity (deficit) items, net of receivables from officers, directors owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
Value of stock bought back by the entity at the exercise price or redemption price. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
|
Consolidated Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
|
Sep. 30, 2010
|
Sep. 30, 2009
|
Sep. 30, 2010
|
Sep. 30, 2009
|
|
| Net income | $ 252,849 | $ 306,897 | $ 711,752 | $ 781,637 |
| Change in net unrealized gains on fixed maturity investments available for sale | (1,979) | 75,777 | (21,086) | 91,699 |
| Portion of other-than-temporary impairments recognized in other comprehensive income | (1,062) | (2) | (4,518) | |
| Comprehensive income | 250,870 | 381,612 | 690,664 | 868,818 |
| Net income attributable to redeemable noncontrolling interest - DaVinciRe | (37,524) | (37,694) | (99,989) | (122,821) |
| Comprehensive income attributable to redeemable noncontrolling interest - DaVinciRe | (33,924) | (46,136) | (96,565) | (130,853) |
| Comprehensive income attributable to RenaissanceRe | 216,946 | 335,476 | 594,099 | 737,965 |
| Total realized and net unrealized holding gains on fixed maturity investments available for sale and net other-than-temporary impairments | 16,731 | 83,783 | 58,347 | 120,275 |
| Net realized gains on fixed maturity investments available for sale | (15,110) | (16,794) | (76,838) | (57,809) |
| Net other-than-temporary impairments recognized in earnings | 346 | 829 | 21,201 | |
|
Noncontrolling Interest
|
||||
| Change in net unrealized gains on fixed maturity investments available for sale | 3,600 | (8,442) | 3,424 | (8,032) |
|
Parent
|
||||
| Change in net unrealized gains on fixed maturity investments available for sale | $ 1,621 | $ 67,335 | $ (17,662) | $ 83,667 |
| X | ||||||||||
|
- Definition
Net other-than-temporary-impairments. No definition available.
|
| X | ||||||||||
|
- Definition
Other Comprehensive Income (Loss), Adjustment For Realized And Unrealized Investment Gains Losses And Net Other Than Temporary Impairments, Portion Attributable to Parent. No definition available.
|
| X | ||||||||||
|
- Definition
Portion of impairment loss recognized in other comprehensive income. No definition available.
|
| X | ||||||||||
|
- Definition
The change in equity [net assets] of a business enterprise during a period from transactions and other events and circumstances from non-owner sources which are attributable to the reporting entity. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners, but excludes any and all transactions which are directly or indirectly attributable to that ownership interest in subsidiary equity which is not attributable to the parent. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The change in equity [net assets] of a business enterprise during a period from transactions and other events and circumstances from non-owner sources which are attributable to noncontrolling interests, if any. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners, which are directly or indirectly attributable to that ownership interest in subsidiary equity which is not attributable to the parent. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The change in equity [net assets] of a business enterprise during a period from transactions and other events and circumstances from non-owner sources which are attributable to the economic entity, including both controlling (parent) and noncontrolling interests. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners, including any and all transactions which are directly or indirectly attributable to that ownership interest in subsidiary equity which is not attributable to the parent. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The portion of net income (loss) attributable to the noncontrolling interest (if any) deducted in order to derive the portion attributable to the parent. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
Appreciation or loss in value (before reclassification adjustment) of the total of unsold securities during the period being reported on, net of tax. Reclassification adjustments include: (1) the unrealized holding gain or loss, net of tax, at the date of the transfer for a debt security from the held-to-maturity category transferred into the available-for-sale category. Also includes the unrealized gain or loss at the date of transfer for a debt security from the available-for-sale category transferred into the held-to-maturity category; (2) the unrealized gains or losses realized upon the sale of securities, after tax; and (3) the unrealized gains or losses realized upon the write-down of securities, after tax. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The net realized gains or losses on investments during the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
|
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified |
9 Months Ended | |
|---|---|---|
|
Sep. 30, 2010
|
Sep. 30, 2009
|
|
| Cash flows provided by operating activities | ||
| Net income | $ 711,752 | $ 781,637 |
| Adjustments to reconcile net income to net cash provided by operating activities | ||
| Amortization, accretion and depreciation | 40,026 | 1,749 |
| Equity in undistributed losses of other ventures | 14,956 | 356 |
| Net realized and unrealized gains on fixed maturity investments | (217,715) | (57,809) |
| Net other-than-temporary impairments | 829 | 21,201 |
| Net unrealized gains included in net investment income | (21,005) | (71,478) |
| Net unrealized losses (gains) included in other income (loss) | 18,856 | (8,745) |
| Change in: | ||
| Premiums receivable | (173,722) | (260,932) |
| Prepaid reinsurance premiums | (86,420) | (119,238) |
| Deferred acquisition costs | (18,436) | (13,710) |
| Reserve for claims and claim expenses, net | (2,345) | (276,511) |
| Unearned premiums | 244,022 | 294,964 |
| Reinsurance balances payable | (17,057) | 142,546 |
| Other | 2,700 | 18,584 |
| Net cash provided by operating activities | 496,441 | 452,614 |
| Cash flows used in investing activities | ||
| Proceeds from sales and maturities of investments available for sale | 3,666,224 | 7,233,832 |
| Purchases of investments available for sale | (402,524) | (8,687,053) |
| Proceeds from sales and maturities of investments trading | 5,418,604 | |
| Purchases of investments trading | (8,939,654) | |
| Net sales of short term investments | 117,519 | 1,291,937 |
| Net sales of other investments | 86,049 | 32,897 |
| Net sales of investments in other ventures | 13,835 | |
| Net sales of other assets | 2,730 | 69 |
| Net cash used in investing activities | (37,217) | (128,318) |
| Cash flows used in financing activities | ||
| Dividends paid - RenaissanceRe common shares | (42,381) | (44,894) |
| Dividends paid - preference shares | (31,725) | (31,725) |
| RenaissanceRe common share repurchases | (411,335) | |
| Third party DaVinciRe share transactions | (131,370) | (123,718) |
| Reverse repurchase agreement | (50,042) | |
| Issuance of 5.75% Senior Notes | 249,046 | |
| Net cash used in financing activities | (367,765) | (250,379) |
| Effect of exchange rate changes on foreign currency cash | (400) | (616) |
| Net increase in cash and cash equivalents | 91,059 | 73,301 |
| Cash and cash equivalents, beginning of period | 260,716 | 274,692 |
| Cash and cash equivalents, end of period | $ 351,775 | $ 347,993 |
| X | ||||||||||
|
- Definition
The net change during the reporting period in the amount needed to reflect the estimated ultimate cost of settling claims relating to insured events that have occurred on or before the balance sheet date, whether or not reported to the insurer at that date, net of the change during the reporting period in the amount of benefits the ceding insurer expects to recover on insurance policies ceded to other insurance entities as of the balance sheet date. No definition available.
|
| X | ||||||||||
|
- Definition
Net other-than-temporary-impairments. No definition available.
|
| X | ||||||||||
|
- Definition
The net cash inflow (outflow) associated with the acquisition or disposal of other investments during the period. No definition available.
|
| X | ||||||||||
|
- Definition
The net amount paid (received) by the reporting entity through acquisition (sale/maturities) of short-term investments with an original maturity that is one year or less which qualify for treatment as an investing activity based on management's intention and intended by management to be liquidated, if necessary, within the current operating cycle. No definition available.
|
| X | ||||||||||
|
- Definition
The cash inflow associated with the sale or maturity (principal being due) of securities classified as trading securities. No definition available.
|
| X | ||||||||||
|
- Definition
The cash outflow to acquire debt and equity securities classified as trading securities. No definition available.
|
| X | ||||||||||
|
- Details
|
| X | ||||||||||
|
- Definition
Includes currency on hand as well as demand deposits with banks or financial institutions. It also includes other kinds of accounts that have the general characteristics of demand deposits in that the Entity may deposit additional funds at any time and also effectively may withdraw funds at any time without prior notice or penalty. Cash equivalents, excluding items classified as marketable securities, include short-term, highly liquid investments that are both readily convertible to known amounts of cash, and so near their maturity that they present minimal risk of changes in value because of changes in interest rates. Generally, only investments with original maturities of three months or less qualify under that definition. Original maturity means original maturity to the entity holding the investment. For example, both a three-month US Treasury bill and a three-year Treasury note purchased three months from maturity qualify as cash equivalents. However, a Treasury note purchased three years ago does not become a cash equivalent when its remaining maturity is three months. Compensating balance arrangements that do not legally restrict the withdrawal or usage of cash amounts may be reported as Cash and Cash Equivalents, while legally restricted deposits held as compensating balances against borrowing arrangements, contracts entered into with others, or company statements of intention with regard to particular deposits should not be reported as cash and cash equivalents. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The net change between the beginning and ending balance of cash and cash equivalents. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The aggregate net amount of depreciation, amortization, and accretion recognized during an accounting period. As a noncash item, the net amount is added back to net income when calculating cash provided by (used in) operations using the indirect method. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The effect of exchange rate changes on cash balances held in foreign currencies. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
This item represents the net total realized and unrealized gain (loss) included in earnings for the period as a result of selling or holding marketable securities categorized as trading, available-for-sale, or held-to-maturity, including the unrealized holding gain or loss of held-to-maturity securities transferred to the trading security category and the cumulative unrealized gain or loss which was included in other comprehensive income (a separate component of shareholders' equity) for available-for-sale securities transferred to trading securities during the period. Additionally, this item would include any gains or losses realized during the period from the sale of investments accounted for under the cost method of accounting and losses recognized for other than temporary impairments of the subject investments. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
This element represents the undistributed income (or loss) of equity method investments, net of dividends or other distributions received from unconsolidated subsidiaries, certain corporate joint ventures, and certain noncontrolled corporations; such investments are accounted for under the equity method of accounting. This element excludes distributions that constitute a return of investment, which are classified as investing activities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The net change during the reporting period in the balance sheet value of capitalized sales costs that are associated with acquiring a new insurance customers. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Details
|
| X | ||||||||||
|
- Definition
For entities with classified balance sheets, the net change during the reporting period in the value of other assets or liabilities used in operating activities, that are not otherwise defined in the taxonomy. For entities with unclassified balance sheets, the net change during the reporting period in the value of all other assets or liabilities used in operating activities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The change in the premium receivable balance on the balance sheet Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The change, in prepaid reinsurance premiums recorded on the balance sheet, is needed to adjust net income to arrive at net cash flows provided by (used in) operations. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The net change during the reporting period in the amount due to other insurance companies when the reporting entity has assumed a portion of the cedant's insurance risk which has resulted in insurance losses. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
Change during the period in the unearned portion of premiums written, excluding the portion amortized into income. Premiums written are initially booked as unearned premiums and are recognized as revenue over the known or estimated life of the policy. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The net cash inflow (outflow) from financing activity for the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Details
|
| X | ||||||||||
|
- Definition
The net cash inflow (outflow) from investing activity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Details
|
| X | ||||||||||
|
- Definition
The net cash from (used in) all of the entity's operating activities, including those of discontinued operations, of the reporting entity. Operating activities generally involve producing and delivering goods and providing services. Operating activity cash flows include transactions, adjustments, and changes in value that are not defined as investing or financing activities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Details
|
| X | ||||||||||
|
- Definition
The net cash outflow (inflow) from other investing activities. This element is used when there is not a more specific and appropriate element in the taxonomy. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The cash outflow to reacquire common stock during the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The cash outflow from the distribution of an entity's earnings in the form of dividends to common shareholders. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The cash outflow for the return on capital for preferred shareholders. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The cash outflow to acquire debt and equity securities not classified as either held-to-maturity securities or trading securities which would be classified as available-for-sale securities and reported at fair value, with unrealized gains and losses excluded from earnings and reported in a separate component of shareholders' equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The cash inflow associated with the amount received from the sale of a business segment or subsidiary or sale of an entity that is related to it but not strictly controlled during the period (for example, an unconsolidated subsidiary, affiliate, joint venture or equity method investment). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The cash inflow from a borrowing with the highest claim on the assets of the entity in case of bankruptcy or liquidation (with maturities initially due after one year or beyond the operating cycle, if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The net cash inflow (outflow) from other financing activities. This element is used when there is not a more specific and appropriate element in the taxonomy. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The cash inflow associated with the sale or maturity (principal being due) of securities not classified as either held-to-maturity securities or trading securities which are classified as available-for-sale securities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The cash outflow for the payment of other borrowing not otherwise defined in the taxonomy. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The aggregate increase (decrease) in the market value of unsold investments whose gains (losses) are included in earnings. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The increases (decreases) in the market value of unsold securities whose gains (losses) were included in earnings. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
|
ORGANIZATION AND BASIS OF PRESENTATION
|
9 Months Ended | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Sep. 30, 2010
|
|||||||||||||||||||||||
| ORGANIZATION AND BASIS OF PRESENTATION |
The consolidated financial statements have been prepared on the basis of accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in conformity with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these unaudited consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the Company’s financial position and results of operations as at the end of and for the periods presented. All significant intercompany accounts and transactions have been eliminated from these statements. The preparation of unaudited consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The major estimates reflected in the Company’s consolidated financial statements include, but are not limited to, the reserve for claims and claim expenses; reinsurance recoverable, including allowances for reinsurance recoverable deemed uncollectible; estimates of written and earned premiums; the fair value of investments and financial instruments, including derivative instruments; premiums and other accounts receivable, including allowances for amounts deemed uncollectible; and estimates relating to the Company’s deferred tax asset valuation allowance. This report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009. RenaissanceRe Holdings Ltd. (“RenaissanceRe”) was formed under the laws of Bermuda on June 7, 1993. Together with its wholly owned and majority-owned subsidiaries and DaVinciRe (as defined below), which are collectively referred to herein as the “Company”, RenaissanceRe provides reinsurance and insurance coverages and related services to a broad range of customers.
Certain comparative information has been reclassified to conform to the current presentation. Because of the seasonality of the Company’s business, the results of operations and cash flows for any interim period will not necessarily be indicative of the results of operations and cash flows for the full fiscal year or subsequent quarters.
|
| X | ||||||||||
|
- Definition
Description containing the entire organization, consolidation and basis of presentation of financial statements disclosure. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
|
CEDED REINSURANCE
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Sep. 30, 2010
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CEDED REINSURANCE |
The Company purchases reinsurance and other protection to manage its risk portfolio and to reduce its exposure to large losses. The Company currently has in place contracts that provide for recovery of a portion of certain claims and claim expenses, generally in excess of various retentions or on a proportional basis. In addition to loss recoveries, certain of the Company’s ceded reinsurance contracts provide for recoveries of additional premiums, reinstatement premiums and for lost no-claims bonuses, which are incurred when losses are ceded to other reinsurance contracts. The Company remains liable to the extent that any reinsurance company fails to meet its obligations. The following tables set forth the effect of reinsurance and retrocessional activity on premiums written and earned and on net claims and claim expenses incurred for the three and nine months ended September 30, 2010 and 2009:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| X | ||||||||||
|
- Definition
This element may be used as a single block of text to encapsulate the entire disclosure, including data and tables, pertaining to the existence, magnitude and information about insurance which has been ceded to or assumed from another insurance company, including the methodologies and assumptions used in determining recorded amounts. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
|
EARNINGS PER SHARE
|
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Sep. 30, 2010
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| EARNINGS PER SHARE |
The Company accounts for its weighted average shares in accordance with FASB ASC Topic Earnings per Share. Basic earnings per common share is based on weighted average common shares and excludes any dilutive effects of stock options and restricted stock. Diluted earnings per common share assumes the exercise of all dilutive stock options and restricted stock grants.
The following tables set forth the computation of basic and diluted earnings per common share for the three and nine months ended September 30, 2010 and 2009:
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- Definition
This element may be used to capture the complete disclosure pertaining to an entity's earnings per share. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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DIVIDENDS AND COMMON SHARE REPURCHASES
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Sep. 30, 2010
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| DIVIDENDS AND COMMON SHARE REPURCHASES |
The Board of Directors of RenaissanceRe declared, and RenaissanceRe paid, a dividend of $0.25 per common share to shareholders of record on each of March 15, 2010, June 15, 2010 and September 15, 2010. On August 11, 2010, the Board of Directors approved an increase in the Company’s authorized share repurchase program to an aggregate amount of $500.0 million, which remains fully available for share repurchases. Unless terminated earlier by resolution of the Company’s Board of Directors, the program will expire when the Company has repurchased the full value of the shares authorized. The Company repurchased 7.4 million shares in open market transactions during the six months ended June 30, 2010, at an aggregate cost of $411.3 million and at an average share price of $55.44. The Company did not repurchase any shares under its authorized share repurchase program during the three months ended September 30, 2010. Future repurchases of common shares will depend on, among other matters, the market price of the common shares and the capital requirements of the Company. See “Part II, Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds” for additional information.
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- Definition
Disclosures related to accounts comprising shareholders' equity, including other comprehensive income. Includes: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables; effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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SEGMENT REPORTING
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Sep. 30, 2010
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| SEGMENT REPORTING |
The Company has two reportable segments: Reinsurance and Insurance. The Reinsurance segment consists of: 1) property catastrophe reinsurance, primarily written through Renaissance Reinsurance and DaVinci; 2) specialty reinsurance, primarily written through Renaissance Reinsurance and DaVinci; 3) Lloyd’s, which includes reinsurance and insurance business written through Syndicate 1458; and 4) certain other activities of the Company’s ventures unit as described herein. The Reinsurance segment is managed by the Global Chief Underwriting Officer, who leads a team of underwriters, risk modelers and other industry professionals, who have access to the Company’s proprietary risk management, underwriting and modeling resources and tools. The Insurance segment, formerly known as the Individual Risk segment, includes underwriting that involves understanding the characteristics of the original underlying insurance policy. The Company’s Insurance segment is also managed by the Global Chief Underwriting Officer. The Insurance segment currently provides insurance written on both an admitted basis and an excess and surplus lines basis, and also provides some reinsurance which is written on a quota share basis. The Company’s financial results relating to the operating subsidiaries managed by the ventures unit include the financial results of Renaissance Trading and are included in the Other category of the Company’s segment results. Also included in the Other category of the Company’s segment results are the Company’s investments in other ventures, including Top Layer Re, Tower Hill Holdings Inc. and Tower Hill Insurance Group, LLC (collectively the “Tower Hill Companies”), and in respect of the Company’s ownership of a warrant to purchase 2.5 million common shares of Platinum Underwriters Holdings Ltd. (“Platinum”). The Company does not manage its assets by segment; accordingly, net investment income and total assets are not allocated to the segments.
A summary of the significant components of the Company’s revenues and expenses for the three and nine months ended September 30, 2010 and 2009 is as follows:
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- Definition
This element may be used to capture the complete disclosure of reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10% or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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INVESTMENTS
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Sep. 30, 2010
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| INVESTMENTS |
Fixed Maturity Investments Available For Sale The following table summarizes the amortized cost, fair value and related unrealized gains and losses and non-credit other-than-temporary impairments of fixed maturity investments available for sale at September 30, 2010 and December 31, 2009:
Fixed Maturity Investments Trading During the fourth quarter of 2009, the Company started designating, upon acquisition, certain fixed maturity investments as trading, rather than as available for sale. The Company made this change, due in part to the new authoritative other-than-temporary impairment GAAP guidance that became effective on April 1, 2009, which has resulted in additional accounting judgments required to be made on a quarterly basis, combined with an effort to report the Company’s fixed maturity investment portfolio results in the Company’s consolidated statements of operations in a manner consistent with the way in which the Company manages the portfolio, which is on a total investment return basis. The Company currently expects to continue to designate, in future periods, upon acquisition, certain fixed maturity investments as trading, rather than as available for sale, and, as a result, the Company currently expects its fixed maturity investments available for sale balance to decrease and its fixed maturity trading balance to increase over time, resulting in a reduction in other-than-temporary accounting judgments the Company makes. This change will over time result in additional volatility in the Company’s net income (loss) in future periods as net unrealized gains and losses on these fixed maturity investments will be recorded currently in net income (loss), rather than as a component of accumulated other comprehensive income (loss) in shareholders’ equity. The following table summarizes the fair value of fixed maturity investments trading at September 30, 2010 and December 31, 2009:
Contractual maturities of fixed maturity investments are as follows. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
Net Investment Income The components of net investment income are as follows:
Net realized gains on the sale of investments are determined on the basis of the first in, first out cost method and for fixed maturity investments available for sale include adjustments to the cost basis of investments for declines in value that are considered to be other-than-temporary. During the fourth quarter of 2009, the Company started designating upon acquisition certain fixed maturity investments as trading. As a result, unrealized gains (losses) on fixed maturity investments designated as trading are recorded in net realized and unrealized gains (losses) on the Company’s consolidated statement of operations. Unrealized gains (losses) on the Company’s fixed maturity investments available for sale are recorded in accumulated other comprehensive income on the Company’s consolidated balance sheet.
The Company’s net realized and unrealized gains on fixed maturity investments and net other-than-temporary impairments are as follows:
The following tables provide an analysis of the length of time the Company’s fixed maturity investments available for sale in an unrealized loss have been in a continual unrealized loss position.
At September 30, 2010, the Company held 23 fixed maturity investments available for sale securities that were in an unrealized loss position for twelve months or greater and does not intend to sell these securities and it is not more likely than not that the Company will be required to sell these securities before the anticipated recovery of the remaining amortized cost basis. The Company performed reviews of its investments for the nine months ended September 30, 2010 and 2009, respectively, in order to determine whether declines in the fair value below the amortized cost basis of its fixed maturity investments available for sale were considered other-than-temporary in accordance with the applicable guidance, as discussed below. At September 30, 2010, $1.4 billion of cash and investments at fair value were on deposit with, or in trust accounts for the benefit of various counterparties, including with respect to the Company’s principal letter of credit facility. Of this amount, $61.8 million is on deposit with, or in trust accounts for the benefit of, U.S. state regulatory authorities. Other-Than-Temporary Impairment Process Prior to April 1, 2009 Under the pre-existing guidance, which was in effect for the three months ended March 31, 2009, the Company assessed, on a quarterly basis, whether declines in the fair value of its fixed maturity investments available for sale represented impairments that were other-than-temporary based on several factors. The factors the Company considered in the assessment of a security included: (i) the time period during which there had been a significant decline below cost; (ii) the extent of the decline below cost; (iii) the Company’s intent and ability to hold the security; (iv) the potential for the security to recover in value; (v) an analysis of the financial condition of the issuer; and (vi) an analysis of the collateral structure and credit support of the security, if applicable. Where the Company determined that there was an other-than-temporary decline in the fair value of the security, the cost of the security was written down to its fair value and the unrealized loss at the time of determination was reflected in the Company’s consolidated statements of operations.
The majority of the Company’s fixed maturity investments available for sale are managed by external investment managers in accordance with specific investment mandates and guidelines. The investment managers are directed to manage the Company’s investments to maximize total investment return in accordance with these investment mandates and guidelines. While the Company has adequate capital and liquidity to support its operations and to hold its fixed maturity investments available for sale which were in an unrealized loss position until they recover in value, the Company has not prohibited or restricted its investment managers from selling these investments and its investment managers actively traded the Company’s investments. The Company was therefore unable to represent or certify that it had the intent or ability to hold these investments until they recovered in value. As a consequence, under the pre-existing guidance, the Company impaired essentially all of its fixed maturity investments available for sale that were in an unrealized loss position at each quarterly reporting date. For the three months ended March 31, 2009, the Company recorded other-than-temporary impairments of $19.0 million. As of March 31, 2009, the Company had essentially no fixed maturity investments available for sale in an unrealized loss position. Other-Than-Temporary Impairment Process Effective April 1, 2009 Pursuant to the guidance effective April 1, 2009, the Company revised its quarterly process for assessing whether declines in the fair value of its fixed maturity investments available for sale represent impairments that are other-than-temporary. The process now includes reviewing each fixed maturity investment available for sale that is impaired and determining: (i) if the Company has the intent to sell the debt security or (ii) if it is more likely than not that the Company will be required to sell the debt security before its anticipated recovery; and (iii) assessing whether a credit loss exists, that is, where the Company expects that the present value of the cash flows expected to be collected from the security are less than the amortized cost basis of the security. In assessing the Company’s intent to sell securities, the Company’s procedures may include actions such as discussing planned sales with its third party investment managers, reviewing sales that have occurred shortly after the balance sheet date, and consideration of other qualitative factors that may be indicative of the Company’s intent to sell or hold the relevant securities. For the nine months ended September 30, 2010, the Company recognized $nil, of other-than-temporary impairments due to the Company’s intent to sell these securities as of September 30, 2010. In assessing whether it is more likely than not that the Company will be required to sell a security before its anticipated recovery, the Company considers various factors including its future cash flow forecasts and requirements, legal and regulatory requirements, the level of its cash, cash equivalents, short term investments, fixed maturity investments trading and fixed maturity investments available for sale in an unrealized gain position, and other relevant factors. For the nine months ended September 30, 2010, the Company recognized $nil of other-than-temporary impairments due to required sales. In evaluating credit losses, the Company considers a variety of factors in the assessment of a security including: (i) the time period during which there has been a significant decline below cost; (ii) the extent of the decline below cost and par; (iii) the potential for the security to recover in value; (iv) an analysis of the financial condition of the issuer; (v) the rating of the issuer; (vi) the implied rating of the issuer based on an analysis of option adjusted spreads; (vii) the absolute level of the option adjusted spread for the issuer; and (viii) an analysis of the collateral structure and credit support of the security, if applicable. Once the Company determines that it is possible that a credit loss may exist for a security, the Company performs a detailed review of the cash flows expected to be collected from the issuer. The Company estimates expected cash flows by applying estimated default probabilities and recovery rates to the contractual cash flows of the issuer, with such default and recovery rates reflecting long-term historical averages adjusted to reflect current credit, economic and market conditions, giving due consideration to collateral and credit support, if applicable, and discounting the expected cash flows at the purchase yield on the security. In instances in which a determination is made that an impairment exists but the Company does not intend to sell the security and it is not more likely than not that the Company will be required to sell the security before the anticipated recovery of its remaining amortized cost basis, the impairment is separated into: (i) the amount of the total other-than-temporary impairment related to the credit loss; and (ii) the amount of the total other-than-temporary impairment related to all other factors. The amount of the other-than-temporary impairment related to the credit loss is recognized in earnings. The amount of the other-than-temporary impairment related to all other factors is recognized in other comprehensive income. For the three and nine months ended September 30, 2010, the Company recognized $nil and $0.8 million, respectively, of credit related other-than-temporary impairments which were recognized in earnings and $nil and $2 thousand, respectively, related to other factors.
The following table provides a rollforward of the amount of other-than-temporary impairments related to credit losses recognized in earnings for which a portion of an other-than-temporary impairment was recognized in accumulated other comprehensive income for the three and nine months ended September 30, 2010:
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- Definition
This item represents the entire disclosure related to Investments in Certain Debt and Equity Securities (and certain other trading assets) which include all debt and equity securities (other than those equity securities accounted for under the equity or cost methods of accounting) with readily determinable fair values. Other trading assets include assets that are carried on the balance sheet at fair value and held for trading purposes. A debt security represents a creditor relationship with an enterprise that is in the form of a security. Debt securities include, among other items, US Treasury securities, US government securities, municipal securities, corporate bonds, convertible debt, commercial paper, and all securitized debt instruments. An equity security represents an ownership interest in an enterprise or the right to acquire or dispose of an ownership interest in an enterprise at fixed or determinable prices. Equity securities include, among other things, common stock, certain preferred stock, warrant rights, call options, and put options, but do not include convertible debt. An entity may opt to provide the reader with additional narrative text to better understand the nature of investments in debt and equity securities (and other trading assets). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| FAIR VALUE MEASUREMENTS |
The use of fair value to measure certain assets and liabilities with resulting unrealized gains or losses is pervasive within the Company’s financial statements, and is a critical accounting policy and estimate for the Company. Fair value is defined under accounting guidance currently applicable to the Company to be the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between open market participants at the measurement date. The Company recognizes the change in unrealized gains and losses arising from changes in fair value in its consolidated statements of operations, with the exception of changes in unrealized gains and losses on its fixed maturity investments available for sale, which are recognized as a component of accumulated other comprehensive income in shareholders’ equity. FASB ASC Topic Fair Value Measurements and Disclosures prescribes a fair value hierarchy that prioritizes the inputs to the respective valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement of the asset or liability. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and the Company considers factors specific to the asset or liability. In order to determine if a market is active or inactive for a security, the Company considers a number of factors, including, but not limited to, the spread between what a seller is asking for a security and what a buyer is bidding for the same security, the volume of trading activity for the security in question, the price of the security compared to its par value (for fixed maturity investments), and other factors that may be indicative of market activity. There have been no material changes in the Company’s valuation techniques in the period represented by these consolidated financial statements.
Below is a summary of the assets and liabilities that are measured at fair value on a recurring basis and also represents the carrying amount on the Company’s consolidated balance sheet:
Fixed Maturity Investments Fixed maturity investments included in Level 1 consist of the Company’s investments in U.S. treasuries. Fixed maturity investments included in Level 2 are agencies, non-U.S. government, FDIC guaranteed corporate, non-U.S. government-backed corporate, corporate, agency mortgage-backed, non-agency mortgage-backed, commercial mortgage-backed and asset-backed fixed maturity investments.
The Company’s fixed maturity investments portfolios are priced using broker quotations and pricing services, such as index providers and pricing vendors. The pricing vendors provide pricing for a high volume of liquid securities that are actively traded. For securities that do not trade on an exchange, the pricing services generally utilize market data and other observable inputs in matrix pricing models to determine prices. Prices are generally verified using third party data. Prices obtained from broker quotations are considered non-binding, however they are based on observable inputs and by observing secondary trading of similar securities obtained from active, non-distressed markets. The Company considers these Level 2 inputs as they are corroborated with other externally obtained information. The techniques generally used to determine the fair value of our fixed maturity investments are detailed below by asset class. U.S. treasuries At September 30, 2010, the Company’s U.S. treasuries fixed maturity investments had a weighted average yield to maturity of 1.0%, a weighted average credit quality of AAA, and are primarily priced by pricing vendors. When pricing these securities, the vendor utilizes daily data from many real time market sources, including active broker dealers, as such, the Company considers its U.S. treasuries fixed maturity investments Level 1. All data sources are constantly reviewed for accuracy to ensure the most reliable price source is used for each issue and maturity date. Agencies At September 30, 2010, the Company’s agencies fixed maturity investments had a weighted average yield to maturity of 0.7% and a weighted average credit quality of AAA. The issuers of the Company’s agencies fixed maturity investments primarily consist of the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation and other agencies. Fixed maturity investments included in agencies are primarily priced by pricing vendors. When evaluating these securities, the vendor gathers information from market sources and integrate other observations from markets and sector news. Evaluations are updated by obtaining broker dealer quotes and other market information including actual trade volumes, when available. The dollar value for each security is individually computed using analytical models which incorporate option adjusted spreads and other daily interest rate data. The Company considers its agencies fixed maturity investments Level 2. Non-U.S. government (Sovereign debt) Non-U.S. government fixed maturity investments held by the Company at September 30, 2010, had a weighted average yield to maturity of 1.2% and a weighted average credit quality of AA. The issuers for securities in this sector are generally non-U.S. governments and agencies as well as supranational organizations. Securities held in these sectors are primarily priced by pricing vendors who employ proprietary discounted cash flow models to value the securities. Key quantitative inputs for these models are daily observed benchmark curves for treasury, swap and high issuance credits. The pricing vendor then applies a credit spread for each security which is developed by in-depth and real time market analysis. For securities in which trade volume is low, the pricing vendor utilizes data from more frequently traded securities with similar attributes. These models may also be supplemented by daily market and credit research for international markets. The Company considers its non-U.S. government fixed maturity investments Level 2. FDIC guaranteed corporate The Company’s FDIC guaranteed corporate fixed maturity investments had a weighted average yield to maturity of 0.5% and a weighted average credit quality of AAA at September 30, 2010. The issuers consist of well known corporate issuers who participate in the FDIC program. The Company’s FDIC guaranteed corporate fixed maturity investments are primarily priced by pricing vendors. When evaluating these securities, the vendor gathers information from market sources regarding the issuer of the security, obtain credit data, as well as other observations from markets and sector news. Evaluations are updated by obtaining broker dealer quotes and other market information including actual trade volumes, when available. The pricing vendor also considers the specific terms and conditions of the securities, including any specific features which may influence risk. Each security is individually evaluated using a spread model which is added to the U.S. treasury curve. The Company considers its FDIC guaranteed corporate fixed maturity investments Level 2.
Non-U.S. government-backed corporate Non-U.S. government-backed corporate fixed maturity investments are considered Level 2 by the Company and had a weighted average yield to maturity of 1.2% and a weighted average credit quality of AAA at September 30, 2010. Non-U.S. government-backed fixed maturity investments are primarily priced by pricing vendors who employ proprietary discounted cash flow models to value the securities. Key quantitative inputs for these models are daily observed benchmark curves for treasury, swap and high issuance credits. The pricing vendor then applies a credit spread for each security which is developed by in-depth and real time market analysis. For securities in which trade volume is low, the pricing vendor utilizes data from more frequently traded securities with similar attributes. These models may also be supplemented by daily market and credit research for international markets. Corporate At September 30, 2010, the Company’s corporate fixed maturity investments had a weighted average yield to maturity of 3.1% and a weighted average credit quality of A, and principally consist of U.S. and international corporations. The Company’s corporate fixed maturity investments are primarily priced by pricing vendors, and are considered Level 2 by the Company. When evaluating these securities, the vendor gathers information from market sources regarding the issuer of the security, obtain credit data, as well as other observations from markets and sector news. Evaluations are updated by obtaining broker dealer quotes and other market information including actual trade volumes, when available. The pricing vendor also considers the specific terms and conditions of the securities, including any specific features which may influence risk. Each security is individually evaluated using a spread model which is added to the U.S. treasury curve. Agency mortgage-backed At September 30, 2010, the Company’s agency mortgage-backed fixed maturity investments included agency residential mortgage-backed securities with a weighted average yield to maturity of 2.2%, a weighted average credit quality of AAA and a weighted average life of 2.5 years. The majority of the Company’s agency mortgage-backed fixed maturity investments held at September 30, 2010 are from vintage years 2009 and prior. The Company’s agency mortgage-backed fixed maturity investments are primarily priced by pricing vendors using a mortgage pool specific model which utilizes daily inputs from the active TBA market which is extremely liquid, as well as the U.S. treasury market. The vendor model also utilizes additional information, such as the weighted average maturity, weighted average coupon and other available pool level data which is provided by the sponsoring agency. Valuations are also corroborated with daily active market quotes. The Company considers its agency mortgage-backed fixed maturity investments Level 2. Non-agency mortgage-backed The Company’s non-agency mortgage-backed fixed maturity investments include non-agency prime residential mortgage-backed and non-agency Alt-A fixed maturity investments, and considers these fixed maturity investments Level 2. The Company has no fixed maturity investments classified as sub-prime held in its fixed maturity investments portfolio. At September 30, 2010, the Company’s non-agency prime residential mortgage-backed fixed maturity investments have a weighted average yield to maturity of 3.8%, a weighted average credit quality of AA and a weighted average life of 2.8 years. The Company’s non-agency Alt-A fixed maturity investments held at September 30, 2010 have a weighted average yield to maturity of 6.4%, a weighted average credit quality of AA, a weighted average life of 3.9 years, and are from vintage years 2005 and prior. Securities held in these sectors are primarily priced by pricing vendors using a mortgage pool specific model which utilizes daily inputs from the active TBA market which is extremely liquid, as well as the U.S. treasury market. The vendor model also utilizes additional information, such as the weighted average maturity, weighted average coupon and other available pool level data which is provided by the sponsoring agency. Valuations are also corroborated by daily active market quotes.
Commercial mortgage-backed The Company’s commercial mortgage-backed fixed maturity investments held at September 30, 2010 have a weighted average yield to maturity of 2.9%, a weighted average credit quality of AAA and a weighted average life of 3.8 years. Securities held in these sectors are primarily priced by pricing vendors and are considered Level 2 by the Company. The pricing vendor applies dealer quotes and other available trade information such as bid and offers, prepayment speeds which may be adjusted for the underlying collateral or current price data, the U.S. treasury curve, swap curve and TBA values as well as cash settlement. The model utilizes a single cash flow stream and computes both a yield to call and weighted average yield to maturity. The model generates a derived price for the bond by applying the most likely scenario. Asset-backed At September 30, 2010, the Company’s asset-backed fixed maturity investments had a weighted average yield to maturity of 1.6%, a weighted average credit quality of AAA and a weighted average life of 3.4 years. The underlying collateral for the Company’s asset-backed fixed maturity investments primarily consists of student loans, automobile loans and credit card receivables. Securities held in these sectors are primarily priced by pricing vendors and are considered Level 2 by the Company. The pricing vendor applies dealer quotes and other available trade information such as bids and offers, prepayment speeds which may be adjusted for the underlying collateral or current price data, the U.S. treasury curve, swap curve and TBA values as well as cash settlement. The model utilizes a single cash flow stream and computes both a yield to call and weighted average yield to maturity. The model generates a derived price for the bond by applying the most likely scenario. Short term investments Short term investments are considered Level 2 and fair values are generally determined using amortized cost which approximates fair value and, in certain cases, in a manner similar to the Company’s fixed maturity investments noted above. Other Investments Private equity partnerships Included in the Company’s investments in private equity partnerships at September 30, 2010 are alternative asset limited partnerships that invest in certain private equity asset classes including U.S. and global leveraged buyouts; mezzanine investments; distressed securities; real estate; oil, gas and power; and secondaries. The fair value of private equity partnership investments is based on net asset values obtained from the investment manager or general partner of the respective entity. The type of underlying investments held by the investee which form the basis of the net asset valuation include assets such as private business ventures, for which the Company does not have access, and as a result is unable to corroborate the fair value measurement and therefore requires significant management judgment to determine the underlying value of the private equity partnership and accordingly the fair value of the Company’s investment in each private equity partnership is considered Level 3. The Company also considers factors such as recent financial information, the value of capital transactions with the partnership and management’s judgment regarding whether any adjustments should be made to the net asset value. The Company regularly reviews the performance of its private equity partnerships directly with the fund managers. Catastrophe bonds The Company’s other investments include investments in catastrophe bonds which are recorded at fair value based on quoted market prices, or when such prices are not available, by reference to broker or underwriter bid indications. As such, the Company considers its catastrophe bonds Level 2.
Senior secured bank loan funds At September 30, 2010, the Company’s investments in senior secured bank loan funds include funds that invest primarily in bank loans and other senior debt instruments. The fair value of the Company’s senior secured bank loan funds are estimated using the net asset value per share of the funds. Investments of $154.4 million are redeemable, in whole or in part, on a monthly basis, and are valued at the net asset value of the fund and are considered Level 2. In addition, the Company has a $6.1 million investment in a bank loan fund for which it has no right to redeem its investment in advance of dissolution of the fund. Instead, the nature of this investment is that distributions are received by the Company in connection with the liquidation of the underlying assets of the fund. The Company’s investment in this bank loan fund is valued using monthly net asset valuations received from the investment manager. However, the lock up provisions in this fund result in a lack of current observable market transactions between the fund participants and the fund, and therefore, the Company considers the fair value of its investment in this fund to be determined using Level 3 inputs. The management of the senior secured bank loan funds which previously could generally not be redeemed has restructured these investments during 2010 to a fund structure which would liquidate in the near term, and the Company has elected to transfer its investment to the new fund structure. Subsequently, the Company has received $94.7 million in distributions from the new fund structure. The Company also has a $7.8 million investment in a closed end fund which invests primarily in loans. The Company has no right to redeem its investment in this fund. The Company’s investment in this fund is valued using monthly net asset valuations received from the investment manager. The lock up provisions in this fund result in a lack of current observable market transactions between the fund participants and the fund, and therefore, the Company considers the fair value of its investment in this fund to be determined using Level 3 inputs. Non-U.S. fixed income funds The Company considers its investments in non-U.S. fixed income funds Level 2. The Company’s non-U.S. fixed income funds invest primarily in European high yield bonds and non-U.S. convertible securities. The fair values of the investments in this category have been estimated using the net asset value per share of the investments which are provided by third parties such as the relevant investment manager or administrator, recent financial information issued by the applicable investee entity or available market data. Hedge funds The Company has investments in hedge funds that pursue multiple strategies without limiting itself to a predefined strategy or set of strategies. The strategies employed include, among others, the following: fundamentally driven long/short; event oriented; global multi-strategy; and private investments. The fair values of the Company’s hedge funds have been estimated using the net asset value per share of the investments which are provided by third parties such as the relevant investment manager or administrator, recent financial information issued by the applicable investee entity or available market data to estimate fair value. The Company considers its hedge fund investments Level 2. Other secured assets Other secured assets represent contractual rights under a purchase agreement, contingent purchase agreement and credit derivatives agreement with a major bank to sell certain securities within the Company’s catastrophe-linked securities portfolio. The Company’s other secured assets are accounted for at fair value based on quoted market prices, or when such prices are not available, by reference to broker or underwriter bid indications. As such, the Company considers its catastrophe bonds Level 2.
Other assets and liabilities Included in other assets and liabilities measured at fair value is the Company’s investment in a warrant to purchase 2.5 million common shares of Platinum, estimated using the Black-Scholes option pricing model, which the Company has considered Level 2 as the inputs to the option pricing model are based on observable market inputs. Other assets and liabilities also include the Company’s weather and energy risk management operations, which principally includes certain derivative-based risk management products primarily to address weather and energy risks, and hedging and trading activities related to these risks. The trading markets for these derivatives are generally linked to energy and agriculture commodities, weather and other natural phenomena and the fair value of these contracts is obtained through the use of exchange traded market prices, or in the absence of such market prices, industry or internal valuation models, as such, these products are considered Level 1 and Level 3, respectively. The Company considers assumed and ceded (re)insurance contracts accounted for at fair value as Level 3, as the fair value of these contracts is obtained through the use of internal valuation models with the inputs to the internal valuation model based on proprietary data as observable market inputs are not available. In addition, other assets and liabilities include certain other derivatives entered into by the Company; the fair value of these transactions include the fair value of certain exchange traded foreign currency forward contracts which are considered Level 1, and the fair value of certain credit derivatives, determined using industry valuation models and considered Level 2, as the inputs to the valuation model are based on observable market inputs. Below is a reconciliation of the beginning and ending balances, for the periods shown, of assets and liabilities measured at fair value on a recurring basis using Level 3 inputs. Interest and dividend income are included in net investment income and are excluded from the reconciliation.
Reinsurance Contracts Accounted for at Fair Value The Company assumes and cedes certain reinsurance contracts that are accounted for at fair value under the fair value option. The fair value of these contracts is obtained through the use of internal valuation models. These contracts are recorded on the Company’s balance sheet in other assets and other liabilities and totaled $3.1 million and $0.3 million, respectively, at September 30, 2010 (December 31, 2009 – $2.2 million and $nil, respectively). During the three and nine months ended September 30, 2010, the Company recorded losses of $0.8 million and $3.1 million, respectively, which are included in other income (loss) and represent changes in the fair value of these contracts (September 30, 2009 – $14.9 million and $22.3 million, respectively). Insurance Contracts Accounted for at Fair Value The Company enters into certain insurance contracts that are accounted for at fair value under the fair value option. The fair value of these contracts is obtained through the use of internal valuation models. These contracts are recorded on the Company’s balance sheet in other liabilities and totaled $8.4 million at September 30, 2010 (December 31, 2009 – $13.5 million). During the three and nine months ended September 30, 2010, the Company recorded unrealized gains of $1.6 million and $1.0 million, respectively (September 30, 2009 – $2.4 million and $2.1 million, respectively), and realized gains of $0.3 million and $2.2 million, respectively (September 30, 2009 – realized losses of $3.1 million and realized gains of $77 thousand, respectively) which are included in other income (loss) and represent changes in the fair value and realized gains of these contracts. Weather and Energy Transactions Accounted for at Fair Value Through the business conducted by Renaissance Trading on a regular basis and otherwise from time to time, the Company enters into certain weather and energy insurance type contracts through its trading activities that it has elected to account for at fair value under the fair value option. These contracts are recorded on the Company’s balance sheet in other liabilities and totaled $0.3 million at September 30, 2010 (December 31, 2009 – $0.5 million). During the three and nine months ended September 30, 2010, the Company recorded unrealized losses of $1.9 million and $0.9 million, respectively, which are included in other income (loss) and represent changes in the fair value of these contracts (September 30, 2009 – $nil and $nil, respectively).
Senior Notes In January 2003, RenaissanceRe issued $100.0 million, which represents the carrying amount on the Company’s consolidated balance sheet, of 5.875% Senior Notes due February 15, 2013, with interest on the notes payable on February 15 and August 15 of each year. The notes can be redeemed by RenaissanceRe prior to maturity subject to payment of a “make-whole” premium. The notes, which are senior obligations, contain various covenants, including limitations on mergers and consolidations, restrictions as to the disposition of the stock of designated subsidiaries and limitations on liens of the stock of designated subsidiaries. At September 30, 2010, the fair value of the 5.875% Senior Notes was $105.4 million (December 31, 2009 – $103.7 million). In March 2010, RenRe North America Holdings Inc. (“RRNAH”) issued $250.0 million of 5.75% Senior Notes due March 15, 2020, with interest on the notes payable on March 15 and September 15 of each year. The notes are guaranteed by RenaissanceRe and can be redeemed by RRNAH prior to maturity subject to payment of a “make-whole” premium. The notes, which are senior obligations, contain various covenants, including limitations on mergers and consolidations, restrictions as to the disposition of the stock of designated subsidiaries and limitations on liens of the stock of designated subsidiaries. At September 30, 2010, the fair value of the 5.75% Senior Notes was $257.9 million. The fair value of RenaissanceRe’s 5.875% Senior Notes and RRNAH’s 5.75% Senior Notes is determined using indicative market pricing obtained from third-party service providers. The Fair Value Option for Financial Assets and Financial Liabilities The Company has elected to account for certain assets and liabilities at fair value under FASB ASC Topic Financial Instruments. The Company has elected to use the guidance under FASB ASC Topic Financial Instruments, as it represents the most current authoritative GAAP. Below is a summary of the balances the Company has elected to account for at fair value:
Included in net investment income for the three and nine months ended September 30, 2010 was $15.3 million and $21.0 million, respectively, of net unrealized gains related to the changes in fair value of other investments (September 30, 2009 – $19.2 million and $71.4 million, respectively, of net unrealized gains). Net unrealized gains related to the changes in the fair value of other secured assets recorded in other income (loss) was $345 thousand and $56 thousand for the three and nine months ended September 30, 2010, respectively (September 30, 2009 – $1.0 million and $1.1 million, respectively). Net unrealized gains (losses) related to the changes in the fair value of other assets and liabilities recorded in other income (loss) was $1.1 million and $(0.5) million for the three and nine months ended September 30, 2010, respectively (September 30, 2009 – $2.1 million and $2.4 million, respectively).
Measuring the Fair Value of Other Investments Using Net Asset Valuations The table below shows the Company’s portfolio of other investments measured using net asset valuations:
Private equity partnerships – Included in the Company’s investments in private equity partnerships are alternative asset limited partnerships that invest in certain private equity asset classes including U.S. and global leveraged buyouts; mezzanine investments; distressed securities; real estate; oil, gas and power; and secondaries. The fair values of the investments in this category have been estimated using the net asset value per share of the investments. The Company generally has no right to redeem its interest in any of these private equity partnerships in advance of dissolution of the applicable partnership. Instead, the nature of these investments is that distributions are received by the Company in connection with the liquidation of the underlying assets of the applicable limited partnership. If these investments were held, it is estimated that the majority of the underlying assets of the limited partnerships would liquidate over 7 to 10 years. Senior secured bank loan funds – The Company’s investment in senior secured bank loan funds includes funds that invest primarily in bank loans and other senior debt instruments. The fair values of the investments in this category have been estimated using the net asset value per share of the funds. Investments of $154.4 million are redeemable, in whole or in part, on a monthly basis. Currently, the Company generally has no right to redeem its $6.1 million investment in bank loan funds in advance of dissolution of the applicable funds. Instead, the nature of this investment is that distributions are received by the Company in connection with the liquidation of the underlying assets of the applicable fund. The management of the senior secured bank loan funds which previously could generally not be redeemed has restructured these investments during 2010 to a fund structure which would liquidate in the near term, and the Company has elected to transfer its investment to the new fund structure. Subsequently, the Company has received $94.7 million in distributions from the new fund structure. The Company also has a $7.8 million investment in a closed end fund which invests in loans. The Company has no right to redeem its investment in this fund. Non-U.S. fixed income funds – The Company’s non-U.S. fixed income funds invest primarily in European high yield bonds and non-U.S. convertible securities. The fair values of the investments in this category have been estimated using the net asset value per share of the investments. Investments of $45.7 million are redeemable, in whole or in part, on a bi-monthly basis. The remaining $33.2 million can generally only be redeemed by the Company at a rate of 10% per month. The issuers of these securities may permit redemptions which exceed this amount, but they are not obliged to do so. Hedge funds – The Company invests in hedge funds that pursue multiple strategies without limiting itself to a pre-defined strategy or set of strategies. The strategies employed include, among others, the following: fundamentally driven long/short; event oriented; and private investments. The fair values of the investments in this category have been estimated using the net asset value per share of the investments. Included in the Company’s hedge fund investments is $9.2 million of so called “side pocket” investments which are not redeemable at the option of the shareholder. As to each investment in a hedge fund that includes side pocket investments, if the investment is otherwise fully redeemed, the Company will still retain its interest in the side pocket investments until the underlying investments attributable to such side pockets are liquidated, realized or deemed realized at the discretion of the fund manager.
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- Definition
This element represents the disclosure related to the fair value measurement of assets and liabilities which includes [financial] instruments measured at fair value that are classified in stockholders' equity. Such assets and liabilities may be measured on a recurring or nonrecurring basis. The disclosures which may be required or desired include: (1) for assets and liabilities measured on a recurring basis, disclosure may include: (a) the fair value measurements at the reporting date; (b) the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3); (c) for fair value measurements using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (ii) purchases, sales, issuances, and settlements (net); (iii) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs); (d) the amount of the total gains or losses for the period in subparagraph (c) (i) above included in earnings (or changes in net assets) that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date and a description of where those unrealized gains or losses are reported in the statement of income (or activities); (e) the valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques, if any, during the period and (2) for assets and liabilities that are measured at fair value on a nonrecurring basis (for example, impaired assets) disclosure may include, in addition to (a) above: (a) the reasons for the fair value measurements recorded; (b) the same as (b) above; (c) for fair value measurements using significant unobservable inputs (Level 3), a description of the inputs and the information used to develop the inputs; and (d) the valuation technique(s) used to measure fair value and a discussion of changes, if any, in the valuation technique(s) used to measure similar assets and/or liabilities in prior periods. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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REDEEMABLE NONCONTROLLING INTEREST
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Sep. 30, 2010
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| REDEEMABLE NONCONTROLLING INTEREST |
In October 2001, the Company formed DaVinciRe and DaVinci with other equity investors. RenaissanceRe owns a noncontrolling economic interest in DaVinciRe; however, because RenaissanceRe controls a majority of DaVinciRe’s outstanding voting rights, the consolidated financial statements of DaVinciRe are included in the consolidated financial statements of the Company. The portion of DaVinciRe’s earnings owned by third parties for the three and nine months ended September 30, 2010 and 2009 is recorded in the consolidated statements of operations as redeemable noncontrolling interest. DaVinciRe shareholders are party to a shareholders agreement (the “Shareholders Agreement”) which provides DaVinciRe shareholders, excluding RenaissanceRe, with certain redemption rights that enable each shareholder to notify DaVinciRe of such shareholder’s desire for DaVinciRe to repurchase up to half of such shareholder’s initial aggregate number of shares held, subject to certain limitations, such as limiting the aggregate of all share repurchase requests to 25% of DaVinciRe’s capital in any given year and satisfying all applicable regulatory requirements. If total shareholder requests exceed 25% of DaVinciRe’s capital, the number of shares repurchased will be reduced among the requesting shareholders pro-rata, based on the amounts desired to be repurchased. Shareholders desiring to have DaVinci repurchase their shares must notify DaVinciRe before March 1 of each year. The repurchase price will be based on GAAP book value as of the end of the year in which the shareholder notice is given, and the repurchase will be effective as of such date. Payment will be made by April 1 of the following year, following delivery of the audited financial statements for the year in which the repurchase was effective. The repurchase price is subject to a true-up for development on outstanding loss reserves after settlement of all claims relating to the applicable years. RenaissanceRe’s ownership in DaVinciRe was 41.2% at September 30, 2010 (December 31, 2009 – 38.2%). Certain third party shareholders of DaVinciRe submitted repurchase notices on or before the required annual redemption notice date of March 1, 2010, in accordance with the third amended and restated shareholders agreement, which provides shareholders, excluding RenaissanceRe, with certain redemption rights such as allowing each shareholder to notify DaVinciRe of such shareholder’s desire for DaVinciRe to repurchase up to half of their initial aggregate number of shares held, subject to certain limitations. The repurchase notices submitted on or before March 1, 2010, were for shares of DaVinciRe with a GAAP book value of $86.5 million at September 30, 2010. The Company expects its ownership in DaVinciRe to fluctuate over time. The activity in the Company’s redeemable noncontrolling interest – DaVinciRe is detailed in the table below for the three and nine months ended September 30, 2010 and 2009:
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- Definition
Description of noncontrolling interest in consolidated subsidiaries which could include the name of the subsidiary, the ownership percentage held by the parent, the ownership percentage held by the noncontrolling owners, the amount of the noncontrolling interest, the location of this amount on the balance sheet (when not reported separately), an explanation of the increase or decrease in the amount of the noncontrolling interest, the noncontrolling interest share of the net income (loss) of the subsidiary, the location of this amount on the income statement (when not reported separately), the nature of the noncontrolling interest such as background information and terms, the amount of the noncontrolling interest represented by preferred stock, a description of the preferred stock, and the dividend requirements of the preferred stock. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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DERIVATIVE INSTRUMENTS
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Sep. 30, 2010
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| DERIVATIVE INSTRUMENTS |
The Company enters into derivative instruments such as futures, options, swaps, forward contracts and other derivative contracts primarily in order to manage its foreign currency exposure, obtain exposure to a particular financial market, for yield enhancement, or for trading and speculation. The Company accounts for its derivatives in accordance with FASB ASC Topic Derivatives and Hedging, which requires all derivatives to be recorded at fair value on the Company’s balance sheet as either assets or liabilities, depending on the rights or obligations of the derivatives, with changes in fair value reflected in current earnings. The Company does not currently apply hedge accounting in respect of any positions reflected in its consolidated financial statements. The fair value of the Company’s derivatives are estimated by reference to quoted prices or broker quotes, where available, or in the absence of quoted prices or broker quotes, the use of industry or internal valuation models. Where the Company has entered into master netting agreements with counterparties, or the Company has the legal and contractual right to offset positions, the derivative positions are generally netted by counterparty and are reported accordingly in other assets and other liabilities. The Company’s guidelines permit investments in derivative instruments such as futures, forward contracts, options, swap agreements and other derivative contracts which may be used to assume risk or for hedging purposes. The Company principally has exposure to derivatives related to the following types of risks: interest rate risk; foreign currency risk; credit risk; energy and weather-related risk; and equity price risk.
The table below shows the location on the consolidated balance sheets and fair value of the Company’s principal derivative instruments:
The location and amount of the gain (loss) recognized in the Company’s consolidated statements of operations related to its derivative instruments is shown in the following table:
The Company is not aware of the existence of any credit risk-related contingent features that it believes would be triggered in its derivative instruments that are in a net liability position at September 30, 2010. Interest Rate Futures The Company uses interest rate futures within its portfolio of fixed maturity investments to manage its exposure to interest rate risk, which can include increasing or decreasing its exposure to this risk. At September 30, 2010, the Company had $757.6 million of notional long positions and $122.6 million of notional short positions of primarily Eurodollar and U.S. Treasury and non-U.S. dollar futures contracts. The fair value of these derivatives is determined using exchange traded prices.
Foreign Currency Derivatives The Company’s functional currency is the U.S. dollar. The Company writes a portion of its business in currencies other than U.S. dollars and may, from time to time, experience foreign exchange gains and losses in the Company’s consolidated financial statements. All changes in exchange rates, with the exception of non-U.S. dollar denominated investments classified as available for sale, are recognized currently in the Company’s consolidated statements of operations. Underwriting Operations Related Foreign Currency Contracts The Company’s foreign currency policy with regard to its underwriting operations is generally to hold foreign currency assets, including cash, investments and receivables that approximate the foreign currency liabilities, including claims and claim expense reserves and reinsurance balances payable. When necessary, the Company may use foreign currency forward and option contracts to minimize the effect of fluctuating foreign currencies on the value of non-U.S. dollar denominated assets and liabilities associated with its underwriting operations. At September 30, 2010, the total notional amount in U.S. dollars of the Company’s underwriting related foreign currency contracts was $63.1 million. Investment Portfolio Related Foreign Currency Forward Contracts The Company’s investment operations are exposed to currency fluctuations through its investments in non-U.S. dollar fixed maturity investments, short term investments and other investments. To economically hedge its exposure to currency fluctuations from these investments, the Company has entered into foreign currency forward contracts. Foreign exchange gains (losses) associated with the Company’s hedging of these non-U.S. dollar investments are recorded in net foreign exchange losses in its consolidated statements of operations. At September 30, 2010, the Company had outstanding investment portfolio related foreign currency contracts of $30.2 million in long positions and $286.9 million in short positions, denominated in U.S. dollars. Energy and Risk Operations Related Foreign Currency Contracts The Company’s energy and risk operations are exposed to currency fluctuations through certain derivative transactions it enters into that are denominated in non-U.S. dollars. The Company may, from time to time, use foreign currency forward and option contracts to minimize the effect of fluctuating foreign currencies on the value of non-U.S. dollar denominated assets and liabilities associated with these operations. At September 30, 2010, the total notional amount in United States dollars of the Company’s energy and risk management operations related to foreign currency contracts was $30.3 million. Credit Derivatives The Company’s exposure to credit risk is primarily due to its fixed maturity investments, short term investments, premiums receivable and prepaid reinsurance premiums. From time to time, the Company purchases credit derivatives to hedge its exposures in the insurance industry, to assist in managing the credit risk associated with ceded reinsurance, or to assume credit risk. The fair value of the credit derivatives is determined using industry valuation models. The fair value of these credit derivatives can change based on a variety of factors including changes in credit spreads, default rates and recovery rates, the correlation of credit risk between the referenced credit and the counterparty, and market rate inputs such as interest rates. At September 30, 2010, the Company had outstanding credit derivatives of $15.0 million in long positions and $29.6 million in short positions, denominated in U.S. dollars. Energy and Weather-Related Derivatives The Company regularly transacts certain derivative-based risk management products primarily to address weather and energy risks and engages in hedging and trading activities related to these risks. The trading markets for these derivatives are generally linked to energy and agriculture commodities, weather and other natural phenomena. Currently, a significant percentage of the Company’s derivative-based risk management products are transacted on a dual-trigger basis combining weather or other natural phenomenon, with prices for commodities or securities related to energy or agriculture. The fair value of these contracts is obtained through the use of quoted market prices, or in the absence of such quoted prices, industry or internal valuation models. Generally, the Company’s current portfolio of such derivative contracts is of comparably short duration and such contracts are predominantly seasonal in nature. Over time, the Company currently expects that its participation in these markets, and the impact of these operations on its financial results, is likely to increase on both an absolute and relative basis. At September 30, 2010, the Company had the following gross derivative contract positions outstanding relating to its energy and weather derivatives trading activities.
The Company uses value-at-risk (“VaR”) analysis to monitor the risks associated with its energy and weather derivatives trading portfolio. VaR is a tool that measures the potential loss that could occur if the Company’s trading positions were maintained over a defined period of time, calculated at a given statistical confidence level. Due to the seasonal nature of the Company’s energy and weather derivatives trading activities, the VaR is based on a rolling two season (one-year) holding period assuming no dynamic trading during the holding period. A 99% confidence level is used for the VaR analysis. A 99% confidence level implies that within a one-year period, the potential loss in the Company’s portfolio is not expected to exceed the VaR estimate in 99% of the possible modeled outcomes. In the remaining estimated 1% of the possible outcomes, the anticipated potential loss is expected to be higher than the VaR figure, and on average substantially higher. The VaR model, based on a Monte Carlo simulation methodology, seeks to take into account correlations between different positions and potential for movements to offset one another within the portfolio. The expected value of the risk factors in the Company’s portfolio are generally obtained from exchange-traded futures markets. For most of the risk factors, the volatility is derived from exchange-traded options markets. For those risk factors for which exchange-traded options might not exist, the volatility is based on historical analysis matched to broker quotes from the over-the-counter market, where available. The joint distribution of outcomes is based on the Company’s estimate of the historical seasonal dependence among the underlying risk factors, scaled to the current market levels. The Company then estimates the expected outcomes by applying a Monte Carlo simulation to these risk factors. The joint distribution of the simulated risk factors is then filtered through the portfolio positions, and then the distribution of the outcomes is realized. The 99th percentile of this distribution is then calculated as the portfolio VaR. The major limitation of this methodology is that the market data used to forecast parameters of the model may not be an appropriate proxy of those parameters. The VaR methodology uses a number of assumptions, such as (i) risks are measured under average market conditions, assuming normal distribution of market risk factors, (ii) future movements in market risk factors follow estimated historical movements, and (iii) the assessed exposures do not change during the holding period. There is no guarantee that these assumptions will prove correct. The Company expects that, for any given period, its actual results will differ from its assumptions, including with respect to previously estimated potential losses and that such losses could be substantially higher than the estimated VaR. At September 30, 2010, the estimated VaR for the Company’s portfolio of energy and weather-related derivatives, as described above, calculated at an estimated 99% confidence level, was $29.9 million. The average, low and high amounts calculated by the Company’s VaR analysis during the nine months ended September 30, 2010 were $16.0 million, $0.4 million and $35.0 million, respectively. At September 30, 2010, RenaissanceRe had provided guarantees in the amount of $220.2 million to certain counterparties of the weather and energy risk operations of Renaissance Trading. In the future, RenaissanceRe may issue guarantees for other purposes or increase the amount of guarantees issued to counterparties of Renaissance Trading.
Platinum Warrant The Company holds a warrant, which expires on October 30, 2012, to purchase up to 2.5 million common shares of Platinum for $27.00 per share. The Company has recorded its investment in the Platinum warrant at fair value. The fair value of the warrant is estimated using the Black-Scholes option pricing model.
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- Definition
This element can be used to disclose the entity's entire derivative instruments and hedging activities disclosure as a single block of text. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising there from, and the amounts of and methodologies and assumptions used in determining the amounts of such items. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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CONDENSED CONSOLIDATING FINANCIAL INFORMATION PROVIDED IN CONNECTION WITH OUTSTANDING DEBT OF SUBSIDIARIES
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Sep. 30, 2010
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| CONDENSED CONSOLIDATING FINANCIAL INFORMATION PROVIDED IN CONNECTION WITH OUTSTANDING DEBT OF SUBSIDIARIES |
The following tables present condensed consolidating balance sheets at September 30, 2010 and December 31, 2009, condensed consolidating statements of operations for the three and nine months ended September 30, 2010 and 2009, and statements of cash flows for the nine months ended September 30, 2010 and 2009, respectively, for RenaissanceRe, RRNAH and RenaissanceRe’s other subsidiaries. RRNAH is a wholly owned subsidiary of RenaissanceRe. On March 17, 2010, RRNAH issued, and RenaissanceRe guaranteed, $250.0 million of 5.75% Senior Notes due March 15, 2020, with interest on the notes payable on March 15 and September 15. The notes can be redeemed by RRNAH prior to maturity subject to payment of a “make-whole” premium. The notes, which are senior obligations, contain various covenants, including limitations on mergers and consolidations, restrictions as to the disposition of the stock of designated subsidiaries and limitations on liens of the stock of designated subsidiaries.
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- Definition
Text block that encapsulates the detailed table comprising the condensed financial statements (balance sheet, income statement and statement of cash flows), normally using the registrant (parent) as the sole domain member. If condensed consolidating financial statements are being presented, other domain members (in addition to parent) such as guarantor subsidiaries, non-guarantor subsidiaries, and the consolidation eliminations, will be included in order that the respective monetary amounts for each of the domains will aggregate to the respective amounts on the consolidated financial statements. The line items are the various captions used to compile the condensed financial statements. Using extensions, most, if not all, of the elements representing condensed financial statement captions will be the same as those used for the consolidated financial statements captions. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
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Sep. 30, 2010
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| RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS |
Accounting for Transfers of Financial Assets In June 2009, the FASB issued Statement No. 166, Accounting for Transfers of Financial Assets – an amendment of FASB Statement No. 140, and the FASB subsequently codified it as Accounting Standard Update (“ASU”) 2009-16, updating ASC Topic 860 Transfers and Servicing. The objective of ASU 2009-16 is to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferor’s continuing involvement, if any, in transferred financial assets. ASU 2009-16 must be applied as of the beginning of the reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual period and for interim and annual reporting periods thereafter. Earlier application is prohibited. ASU 2009-16 must be applied to transfers occurring on or after the effective date. Additionally, the disclosure provisions of ASU 2009-16 should be applied to transfers that occurred both before and after the effective date. The Company adopted ASU 2009-16 effective January 1, 2010 and the adoption of this guidance did not have a material impact on the Company’s consolidated statements of operations and financial condition.
Variable Interest Entities In June 2009, the FASB issued Statement No. 167, Amendments to FASB Interpretation No. 46(R,) and the FASB subsequently codified it as ASU 2009-17, updating ASC Topic 810 Consolidations. The objective of ASU 2009-17 is to improve financial reporting by enterprises involved with variable interest entities. The FASB undertook this project to address (1) the effects on certain provisions of FASB Interpretation No. 46, Consolidation of Variable Interest Entities – an Interpretation of ARB No. 51, as revised (“FIN 46(R)”), as a result of the elimination of the qualifying special-purpose entity concept in ASU 2009-16, and (2) constituent concerns about the application of certain key provisions of FIN 46(R), including those in which the accounting and disclosures under the interpretation do not always provide timely and useful information about an enterprise’s involvement in a variable interest entity. ASU 2009-17 was effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. Earlier application is prohibited. The Company adopted ASU 2009-17 effective January 1, 2010 and the adoption of this guidance did not have a material impact on the Company’s consolidated statements of operations and financial condition. Improving Fair Value Disclosure In January 2010, the FASB issued ASU 2010-6 which updated FASB ASU Topic 820 Fair Value Measurements and Disclosures. The objective of ASU 2010-6 is to improve fair value disclosures by requiring the following: (1) disclose significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers; (2) present separately information about purchases, sales, issuances, and settlements on a gross basis; (3) provide fair value measurement disclosures for each class of assets and liabilities, where a class is often a subset of a financial statement line; and (4) provide disclosures about the valuation techniques and inputs for Level 2 and Level 3 fair value measurements. ASU 2010-06 was effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter, except for item (2) noted above, which shall become effective for fiscal years beginning after December 15, 2010, including interim periods within those fiscal years. The Company adopted ASU 2010-06 effective January 1, 2010 and the adoption of this guidance did not have a material impact on the Company’s consolidated statements of operations and financial condition as it was a disclosure based ASU.
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- Definition
For a new accounting pronouncement that has been issued, an entity's disclosure should (1) describe the new pronouncement, the date that adoption is required and the date that the entity plans to adopt, if earlier; (2) discuss the methods of adoption allowed by the pronouncement and the method expected to be utilized by the entity, if determined; (3) discuss the impact that adoption of the pronouncement is expected to have on the financial statements of the entity, unless such impact is not known or reasonably estimable (in which case, a statement to that effect should be made) and; (4) disclose the potential impact of other significant matters that the entity believes might result from the adoption of the pronouncement (for example, technical violations of debt covenant agreements and planned or intended changes in business practices). No definition available.
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LITIGATION
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Sep. 30, 2010
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| LITIGATION |
There are no material changes from the legal proceedings previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009. The Company’s operating subsidiaries are subject to claims litigation involving disputed interpretations of policy coverages. Generally, the Company’s primary insurance operations are subject to greater frequency and diversity of claims and claims-related litigation and, in some jurisdictions, may be subject to direct actions by allegedly injured persons or entities seeking damages from policyholders. These lawsuits, involving claims on policies issued by the Company’s subsidiaries which are typical to the insurance industry in general and in the normal course of business, are considered in its loss and loss expense reserves which are discussed in its loss reserves discussion. In addition to claims litigation, the Company and its subsidiaries are subject to lawsuits and regulatory actions in the normal course of business that do not arise from or directly relate to claims on insurance policies. This category of business litigation may involve allegations of underwriting or claims-handling errors or misconduct, employment claims, regulatory activity or disputes arising from the Company’s business ventures. Any such litigation or arbitration contains an element of uncertainty, and the Company believes the inherent uncertainty in such matters may have increased recently and will likely continue to increase. Currently, the Company believes that no individual, normal course litigation or arbitration to which it is presently a party is likely to have a material adverse effect on its financial condition, business or operations. |
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- Definition
Includes disclosure of commitments and contingencies. This element may be used as a single block of text to encapsulate the entire disclosure including data and tables. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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