RenaissanceRe Reports Second Quarter 2020 Net Income Available to Common Shareholders of $575.8 Million, or $12.63 Per Diluted Common Share; Operating Income Available to Common Shareholders of $190.1 Million, or $4.06 Per Diluted Common Share
PEMBROKE,
Second Quarter of 2020 Summary
- Gross premiums written increased by
$225.0 million , or 15.2%, to$1.7 billion , in the second quarter of 2020 compared to the second quarter of 2019, driven by an increase of$203.3 million in the Property segment and an increase of$21.6 million in the Casualty and Specialty segment. - Underwriting income of
$217.1 million and a combined ratio of 78.5% in the second quarter of 2020, compared to underwriting income of$170.8 million and a combined ratio of 81.3% in the second quarter of 2019. The Property segment generated underwriting income of$200.6 million and had a combined ratio of 59.1% in the second quarter of 2020. The Casualty and Specialty segment generated underwriting income of$16.5 million and had a combined ratio of 96.8% in the second quarter of 2020. - Total investment result was a gain of
$537.7 million in the second quarter of 2020, generating an annualized total investment return of 11.8%, compared to a gain of$309.8 million and an annualized total investment return of 8.0% in the second quarter of 2019. - On
June 5, 2020 , the Company issued 6,325,000 of its common shares in an underwritten public offering at a public offering price of$166.00 per share. Concurrently with the public offering, the Company raised$75.0 million through the issuance of 451,807 of its common shares at a price of$166.00 per share toState Farm Mutual Automobile Insurance Company , one of the Company’s existing stockholders, in a private placement. The total net proceeds from the offerings were$1.1 billion . The Company intends to use the net proceeds from these offerings for general corporate purposes, which may include expanding existing business lines, entering new business lines, forming new joint ventures, or acquiring books of business from other companies. - Over
$250.0 million of gross capital raised in the second quarter of 2020 through the Company’s managed joint ventures and third-party capital vehicles, includingUpsilon RFO Re Ltd. ,Vermeer Reinsurance Ltd. (“Vermeer”) andRenaissanceRe Medici Fund Ltd (“Medici”).
Underwriting Results by Segment
Property Segment
Gross premiums written in the Property segment were
Gross premiums written in the catastrophe class of business were
Gross premiums written in the other property class of business were
Ceded premiums written in the Property segment were
The Property segment generated underwriting income of
Casualty and Specialty Segment
Gross premiums written in the Casualty and Specialty segment were
The Casualty and Specialty segment generated underwriting income of
COVID-19
The Company continues to evaluate industry trends and its own potential exposure associated with the ongoing COVID-19 pandemic, and expects historically significant industry losses to emerge over time as the full impact of the pandemic and its effects on the global economy are realized. Among other things, the Company continues to actively monitor information received from or reported by clients, brokers, industry actuaries, regulators, courts, and others, and to assess that information in the context of its own portfolio. Our loss estimates represent our best estimate based on currently available information, and actual losses may vary materially from these estimates.
Other Items
- The Company’s total investment result, which includes the sum of net investment income and net realized and unrealized gains on investments, was a gain of
$537.7 million in the second quarter of 2020, compared to a gain of$309.8 million in the second quarter of 2019, an increase of$227.9 million . The primary driver of the total investment result in the second quarter of 2020 was net realized and unrealized gains on investments of$448.4 million principally within the fixed maturity and equity investments trading portfolios. - Net income attributable to redeemable noncontrolling interests in the second quarter of 2020 was
$118.7 million , compared to$71.8 million in the second quarter of 2019. The increase was primarily driven by growth and improved performance ofDaVinciRe Holdings Ltd. , Medici and Vermeer. - In the second quarter of 2020, total fee income increased by
$5.3 million , to$45.5 million , compared to$40.2 million in the second quarter of 2019, primarily driven by an increase in the dollar value of capital being managed, combined with the improved underlying performance of our joint ventures and managed capital vehicles. - In the second quarter of 2020, corporate expenses decreased by
$11.9 million , to$11.9 million , compared to$23.8 million in the second quarter of 2019, primarily driven by$14.5 million of expenses incurred in connection with the acquisition ofTokio Millennium Re AG (now known asRenaissanceRe Europe AG ),Tokio Millennium Re (UK) Limited (now known asRenaissanceRe (UK ) Limited) and their subsidiaries (collectively, "TMR") during the second quarter of 2019 compared to$2.1 million in the second quarter of 2020. - Income tax expense was
$29.9 million in the second quarter of 2020, compared to$9.5 million in the second quarter of 2019, principally driven by investment gains in ourU.S. -based operations.
This Press Release includes certain financial measures that are not calculated in accordance with generally accepted accounting principles in the
Please refer to the “Investors - Financial Reports - Financial Supplements” section of the Company’s website at www.renre.com for a copy of the Financial Supplement which includes additional information on the Company’s financial performance.
About
Cautionary Statement Regarding Forward-Looking Statements
Any forward-looking statements made in this Press Release reflect RenaissanceRe’s current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are subject to numerous factors that could cause actual results to differ materially from those set forth in or implied by such forward-looking statements, including the following: the uncertainty of the continuing impact of the COVID-19 pandemic and measures taken in response thereto; the effect of legislative, regulatory, judicial or social influences related to the COVID-19 pandemic on the Company’s financial performance, including the emergence of unexpected or un-modeled insurance or reinsurance losses, and the Company’s ability to conduct its business; the impact and potential future impacts of the COVID-19 pandemic on the value of the Company’s investments and its access to capital in the future or the pricing or terms of available financing; the effect that measures taken to mitigate the COVID-19 pandemic have on the Company’s operations and those of its counterparties; the frequency and severity of catastrophic and other events the Company covers; the effectiveness of the Company’s claims and claim expense reserving process; the effect of climate change on the Company’s business, including the trend towards increasingly frequent and severe climate events; the Company’s ability to maintain its financial strength ratings; the effect of emerging claims and coverage issues; collection on claimed retrocessional coverage, and new retrocessional reinsurance being available on acceptable terms and providing the coverage that the Company intended to obtain; the Company’s reliance on a small and decreasing number of reinsurance brokers and other distribution services for the preponderance of its revenue; the Company’s exposure to credit loss from counterparties in the normal course of business; the effect of continued challenging economic conditions throughout the world; the performance of the Company’s investment portfolio; a contention by the
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|||||||||||||||
Summary Consolidated Statements of Operations |
|||||||||||||||
(in thousands of United States Dollars, except per share amounts and percentages) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
Three months ended |
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Six months ended |
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|
|
|
|
|
|
|
||||||||
Revenues |
|
|
|
|
|
|
|
||||||||
Gross premiums written |
$ |
1,701,872 |
|
|
$ |
1,476,908 |
|
|
$ |
3,727,593 |
|
|
$ |
3,041,203 |
|
Net premiums written |
$ |
1,180,803 |
|
|
$ |
1,022,965 |
|
|
$ |
2,450,611 |
|
|
$ |
1,951,996 |
|
Increase in unearned premiums |
(170,707) |
|
|
(111,463) |
|
|
(527,417) |
|
|
(490,466) |
|
||||
Net premiums earned |
1,010,096 |
|
|
911,502 |
|
|
1,923,194 |
|
|
1,461,530 |
|
||||
Net investment income |
89,305 |
|
|
118,588 |
|
|
188,778 |
|
|
200,682 |
|
||||
Net foreign exchange (losses) gains |
(7,195) |
|
|
9,309 |
|
|
(12,923) |
|
|
6,463 |
|
||||
Equity in earnings of other ventures |
9,041 |
|
|
6,812 |
|
|
13,605 |
|
|
11,473 |
|
||||
Other (loss) income |
(1,201) |
|
|
922 |
|
|
(5,637) |
|
|
4,093 |
|
||||
Net realized and unrealized gains on investments |
448,390 |
|
|
191,247 |
|
|
337,683 |
|
|
361,260 |
|
||||
Total revenues |
1,548,436 |
|
|
1,238,380 |
|
|
2,444,700 |
|
|
2,045,501 |
|
||||
Expenses |
|
|
|
|
|
|
|
||||||||
Net claims and claim expenses incurred |
510,272 |
|
|
453,373 |
|
|
1,081,226 |
|
|
680,408 |
|
||||
Acquisition expenses |
233,610 |
|
|
227,482 |
|
|
444,214 |
|
|
351,433 |
|
||||
Operational expenses |
49,077 |
|
|
59,814 |
|
|
116,538 |
|
|
104,747 |
|
||||
Corporate expenses |
11,898 |
|
|
23,847 |
|
|
27,889 |
|
|
62,636 |
|
||||
Interest expense |
11,842 |
|
|
15,534 |
|
|
26,769 |
|
|
27,288 |
|
||||
Total expenses |
816,699 |
|
|
780,050 |
|
|
1,696,636 |
|
|
1,226,512 |
|
||||
Income before taxes |
731,737 |
|
|
458,330 |
|
|
748,064 |
|
|
818,989 |
|
||||
Income tax expense |
(29,875) |
|
|
(9,475) |
|
|
(21,029) |
|
|
(17,006) |
|
||||
Net income |
701,862 |
|
|
448,855 |
|
|
727,035 |
|
|
801,983 |
|
||||
Net income attributable to noncontrolling interests |
(118,728) |
|
|
(71,812) |
|
|
(216,819) |
|
|
(142,034) |
|
||||
Net income attributable to |
583,134 |
|
|
377,043 |
|
|
510,216 |
|
|
659,949 |
|
||||
Dividends on preference shares |
(7,289) |
|
|
(9,189) |
|
|
(16,345) |
|
|
(18,378) |
|
||||
Net income available to |
$ |
575,845 |
|
|
$ |
367,854 |
|
|
$ |
493,871 |
|
|
$ |
641,571 |
|
|
|
|
|
|
|
|
|
||||||||
Net income available to |
$ |
12.64 |
|
|
$ |
8.36 |
|
|
$ |
11.04 |
|
|
$ |
14.82 |
|
Net income available to |
$ |
12.63 |
|
|
$ |
8.35 |
|
|
$ |
11.02 |
|
|
$ |
14.81 |
|
Operating income available to |
$ |
4.06 |
|
|
$ |
4.47 |
|
|
$ |
4.91 |
|
|
$ |
8.05 |
|
|
|
|
|
|
|
|
|
||||||||
Average shares outstanding - basic |
44,939 |
|
|
43,483 |
|
|
44,190 |
|
|
42,774 |
|
||||
Average shares outstanding - diluted |
45,003 |
|
|
43,521 |
|
|
44,253 |
|
|
42,806 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Net claims and claim expense ratio |
50.5 |
% |
|
49.7 |
% |
|
56.2 |
% |
|
46.6 |
% |
||||
Underwriting expense ratio |
28.0 |
% |
|
31.6 |
% |
|
29.2 |
% |
|
31.2 |
% |
||||
Combined ratio |
78.5 |
% |
|
81.3 |
% |
|
85.4 |
% |
|
77.8 |
% |
||||
|
|
|
|
|
|
|
|
||||||||
Return on average common equity - annualized |
38.5 |
% |
|
28.9 |
% |
|
17.1 |
% |
|
26.4 |
% |
||||
Operating return on average common equity - annualized (1) |
12.7 |
% |
|
15.6 |
% |
|
7.8 |
% |
|
14.4 |
% |
||||
(1) See Comments on Regulation G for a reconciliation of non-GAAP financial measures. |
|
|||||||
Summary Consolidated Balance Sheets |
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(in thousands of United States Dollars, except per share amounts) |
|||||||
|
|
|
|
||||
|
|
|
|
||||
Assets |
(Unaudited) |
|
(Audited) |
||||
Fixed maturity investments trading, at fair value |
$ |
12,495,135 |
|
|
$ |
11,171,655 |
|
Short term investments, at fair value |
5,570,804 |
|
|
4,566,277 |
|
||
Equity investments trading, at fair value |
470,087 |
|
|
436,931 |
|
||
Other investments, at fair value |
1,093,338 |
|
|
1,087,377 |
|
||
Investments in other ventures, under equity method |
94,285 |
|
|
106,549 |
|
||
Total investments |
19,723,649 |
|
|
17,368,789 |
|
||
Cash and cash equivalents |
1,185,844 |
|
|
1,379,068 |
|
||
Premiums receivable |
3,519,965 |
|
|
2,599,896 |
|
||
Prepaid reinsurance premiums |
1,266,203 |
|
|
767,781 |
|
||
Reinsurance recoverable |
2,774,358 |
|
|
2,791,297 |
|
||
Accrued investment income |
70,004 |
|
|
72,461 |
|
||
Deferred acquisition costs and value of business acquired |
734,286 |
|
|
663,991 |
|
||
Receivable for investments sold |
648,458 |
|
|
78,369 |
|
||
Other assets |
298,396 |
|
|
346,216 |
|
||
|
258,591 |
|
|
262,226 |
|
||
Total assets |
$ |
30,479,754 |
|
|
$ |
26,330,094 |
|
Liabilities, Noncontrolling Interests and Shareholders’ Equity |
|
|
|
||||
Liabilities |
|
|
|
||||
Reserve for claims and claim expenses |
$ |
9,365,469 |
|
|
$ |
9,384,349 |
|
Unearned premiums |
3,549,641 |
|
|
2,530,975 |
|
||
Debt |
1,135,216 |
|
|
1,384,105 |
|
||
Reinsurance balances payable |
4,094,027 |
|
|
2,830,691 |
|
||
Payable for investments purchased |
1,259,116 |
|
|
225,275 |
|
||
Other liabilities |
342,014 |
|
|
932,024 |
|
||
Total liabilities |
19,745,483 |
|
|
17,287,419 |
|
||
Redeemable noncontrolling interest |
3,387,099 |
|
|
3,071,308 |
|
||
Shareholders’ Equity |
|
|
|
||||
Preference shares |
525,000 |
|
|
650,000 |
|
||
Common shares |
50,811 |
|
|
44,148 |
|
||
Additional paid-in capital |
1,602,738 |
|
|
568,277 |
|
||
Accumulated other comprehensive loss |
(3,066) |
|
|
(1,939) |
|
||
Retained earnings |
5,171,689 |
|
|
4,710,881 |
|
||
Total shareholders’ equity attributable to |
7,347,172 |
|
|
5,971,367 |
|
||
Total liabilities, noncontrolling interests and shareholders’ equity |
$ |
30,479,754 |
|
|
$ |
26,330,094 |
|
|
|
|
|
||||
Book value per common share |
$ |
134.27 |
|
|
$ |
120.53 |
|
|
|||||||||||||||
Supplemental Financial Data - Segment Information |
|||||||||||||||
(in thousands of United States Dollars, except percentages) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
Three months ended |
||||||||||||||
|
Property |
|
Casualty and Specialty |
|
Other |
|
Total |
||||||||
Gross premiums written |
$ |
1,042,536 |
|
|
$ |
659,336 |
|
|
$ |
— |
|
|
$ |
1,701,872 |
|
Net premiums written |
$ |
704,138 |
|
|
$ |
476,665 |
|
|
$ |
— |
|
|
$ |
1,180,803 |
|
Net premiums earned |
$ |
491,116 |
|
|
$ |
518,980 |
|
|
$ |
— |
|
|
$ |
1,010,096 |
|
Net claims and claim expenses incurred |
164,050 |
|
|
346,266 |
|
|
(44) |
|
|
510,272 |
|
||||
Acquisition expenses |
94,772 |
|
|
138,837 |
|
|
1 |
|
|
233,610 |
|
||||
Operational expenses |
31,656 |
|
|
17,422 |
|
|
(1) |
|
|
49,077 |
|
||||
Underwriting income |
$ |
200,638 |
|
|
$ |
16,455 |
|
|
$ |
44 |
|
|
217,137 |
|
|
Net investment income |
|
|
|
|
89,305 |
|
|
89,305 |
|
||||||
Net foreign exchange losses |
|
|
|
|
(7,195) |
|
|
(7,195) |
|
||||||
Equity in earnings of other ventures |
|
|
|
|
9,041 |
|
|
9,041 |
|
||||||
Other loss |
|
|
|
|
(1,201) |
|
|
(1,201) |
|
||||||
Net realized and unrealized gains on investments |
|
|
|
|
448,390 |
|
|
448,390 |
|
||||||
Corporate expenses |
|
|
|
|
(11,898) |
|
|
(11,898) |
|
||||||
Interest expense |
|
|
|
|
(11,842) |
|
|
(11,842) |
|
||||||
Income before taxes and redeemable noncontrolling interests |
|
|
|
|
|
|
731,737 |
|
|||||||
Income tax expense |
|
|
|
|
(29,875) |
|
|
(29,875) |
|
||||||
Net income attributable to redeemable noncontrolling interests |
|
|
|
|
(118,728) |
|
|
(118,728) |
|
||||||
Dividends on preference shares |
|
|
|
|
(7,289) |
|
|
(7,289) |
|
||||||
Net income available to |
|
|
|
|
|
|
$ |
575,845 |
|
||||||
|
|
|
|
|
|
|
|
||||||||
Net claims and claim expenses incurred – current accident year |
$ |
170,614 |
|
|
$ |
355,064 |
|
|
$ |
— |
|
|
$ |
525,678 |
|
Net claims and claim expenses incurred – prior accident years |
(6,564) |
|
|
(8,798) |
|
|
(44) |
|
|
(15,406) |
|
||||
Net claims and claim expenses incurred – total |
$ |
164,050 |
|
|
$ |
346,266 |
|
|
$ |
(44) |
|
|
$ |
510,272 |
|
|
|
|
|
|
|
|
|
||||||||
Net claims and claim expense ratio – current accident year |
34.7 |
% |
|
68.4 |
% |
|
|
|
52.0 |
% |
|||||
Net claims and claim expense ratio – prior accident years |
(1.3) |
% |
|
(1.7) |
% |
|
|
|
(1.5) |
% |
|||||
Net claims and claim expense ratio – calendar year |
33.4 |
% |
|
66.7 |
% |
|
|
|
50.5 |
% |
|||||
Underwriting expense ratio |
25.7 |
% |
|
30.1 |
% |
|
|
|
28.0 |
% |
|||||
Combined ratio |
59.1 |
% |
|
96.8 |
% |
|
|
|
78.5 |
% |
|||||
|
|
|
|
|
|
|
|
||||||||
|
Three months ended |
||||||||||||||
|
Property |
|
Casualty and Specialty |
|
Other |
|
Total |
||||||||
Gross premiums written |
$ |
839,200 |
|
|
$ |
637,708 |
|
|
$ |
— |
|
|
$ |
1,476,908 |
|
Net premiums written |
$ |
544,115 |
|
|
$ |
478,850 |
|
|
$ |
— |
|
|
$ |
1,022,965 |
|
Net premiums earned |
$ |
425,013 |
|
|
$ |
486,489 |
|
|
$ |
— |
|
|
$ |
911,502 |
|
Net claims and claim expenses incurred |
146,874 |
|
|
306,501 |
|
|
(2) |
|
|
453,373 |
|
||||
Acquisition expenses |
89,711 |
|
|
137,963 |
|
|
(192) |
|
|
227,482 |
|
||||
Operational expenses |
36,764 |
|
|
23,016 |
|
|
34 |
|
|
59,814 |
|
||||
Underwriting income |
$ |
151,664 |
|
|
$ |
19,009 |
|
|
$ |
160 |
|
|
170,833 |
|
|
Net investment income |
|
|
|
|
118,588 |
|
|
118,588 |
|
||||||
Net foreign exchange gains |
|
|
|
|
9,309 |
|
|
9,309 |
|
||||||
Equity in earnings of other ventures |
|
|
|
|
6,812 |
|
|
6,812 |
|
||||||
Other income |
|
|
|
|
922 |
|
|
922 |
|
||||||
Net realized and unrealized gains on investments |
|
|
|
|
191,247 |
|
|
191,247 |
|
||||||
Corporate expenses |
|
|
|
|
(23,847) |
|
|
(23,847) |
|
||||||
Interest expense |
|
|
|
|
(15,534) |
|
|
(15,534) |
|
||||||
Income before taxes and redeemable noncontrolling interests |
|
|
|
|
|
|
458,330 |
|
|||||||
Income tax expense |
|
|
|
|
(9,475) |
|
|
(9,475) |
|
||||||
Net income attributable to redeemable noncontrolling interests |
|
|
|
|
(71,812) |
|
|
(71,812) |
|
||||||
Dividends on preference shares |
|
|
|
|
(9,189) |
|
|
(9,189) |
|
||||||
Net income available to |
|
|
|
|
|
|
$ |
367,854 |
|
||||||
|
|
|
|
|
|
|
|
||||||||
Net claims and claim expenses incurred – current accident year |
$ |
136,111 |
|
|
$ |
317,029 |
|
|
$ |
— |
|
|
$ |
453,140 |
|
Net claims and claim expenses incurred – prior accident years |
10,763 |
|
|
(10,528) |
|
|
(2) |
|
|
233 |
|
||||
Net claims and claim expenses incurred – total |
$ |
146,874 |
|
|
$ |
306,501 |
|
|
$ |
(2) |
|
|
$ |
453,373 |
|
|
|
|
|
|
|
|
|
||||||||
Net claims and claim expense ratio – current accident year |
32.0 |
% |
|
65.2 |
% |
|
|
|
49.7 |
% |
|||||
Net claims and claim expense ratio – prior accident years |
2.6 |
% |
|
(2.2) |
% |
|
|
|
— |
% |
|||||
Net claims and claim expense ratio – calendar year |
34.6 |
% |
|
63.0 |
% |
|
|
|
49.7 |
% |
|||||
Underwriting expense ratio |
29.7 |
% |
|
33.1 |
% |
|
|
|
31.6 |
% |
|||||
Combined ratio |
64.3 |
% |
|
96.1 |
% |
|
|
|
81.3 |
% |
|
|||||||||||||||
Supplemental Financial Data - Segment Information |
|||||||||||||||
(in thousands of United States Dollars, except percentages) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
Six months ended |
||||||||||||||
|
Property |
|
Casualty and Specialty |
|
Other |
|
Total |
||||||||
Gross premiums written |
$ |
2,263,062 |
|
|
$ |
1,464,531 |
|
|
$ |
— |
|
|
$ |
3,727,593 |
|
Net premiums written |
$ |
1,378,719 |
|
|
$ |
1,071,892 |
|
|
$ |
— |
|
|
$ |
2,450,611 |
|
Net premiums earned |
$ |
912,451 |
|
|
$ |
1,010,743 |
|
|
$ |
— |
|
|
$ |
1,923,194 |
|
Net claims and claim expenses incurred |
308,902 |
|
|
772,475 |
|
|
(151) |
|
|
1,081,226 |
|
||||
Acquisition expenses |
180,123 |
|
|
264,090 |
|
|
1 |
|
|
444,214 |
|
||||
Operational expenses |
75,663 |
|
|
40,876 |
|
|
(1) |
|
|
116,538 |
|
||||
Underwriting income (loss) |
$ |
347,763 |
|
|
$ |
(66,698) |
|
|
$ |
151 |
|
|
281,216 |
|
|
Net investment income |
|
|
|
|
188,778 |
|
|
188,778 |
|
||||||
Net foreign exchange losses |
|
|
|
|
(12,923) |
|
|
(12,923) |
|
||||||
Equity in earnings of other ventures |
|
|
|
|
13,605 |
|
|
13,605 |
|
||||||
Other loss |
|
|
|
|
(5,637) |
|
|
(5,637) |
|
||||||
Net realized and unrealized gains on investments |
|
|
|
|
337,683 |
|
|
337,683 |
|
||||||
Corporate expenses |
|
|
|
|
(27,889) |
|
|
(27,889) |
|
||||||
Interest expense |
|
|
|
|
(26,769) |
|
|
(26,769) |
|
||||||
Income before taxes and redeemable noncontrolling interests |
|
|
|
|
|
|
748,064 |
|
|||||||
Income tax expense |
|
|
|
|
(21,029) |
|
|
(21,029) |
|
||||||
Net income attributable to redeemable noncontrolling interests |
|
|
|
|
(216,819) |
|
|
(216,819) |
|
||||||
Dividends on preference shares |
|
|
|
|
(16,345) |
|
|
(16,345) |
|
||||||
Net income attributable to |
|
|
|
|
|
|
$ |
493,871 |
|
||||||
|
|
|
|
|
|
|
|
||||||||
Net claims and claim expenses incurred – current accident year |
$ |
301,458 |
|
|
$ |
781,274 |
|
|
$ |
— |
|
|
$ |
1,082,732 |
|
Net claims and claim expenses incurred – prior accident years |
7,444 |
|
|
(8,799) |
|
|
(151) |
|
|
(1,506) |
|
||||
Net claims and claim expenses incurred – total |
$ |
308,902 |
|
|
$ |
772,475 |
|
|
$ |
(151) |
|
|
$ |
1,081,226 |
|
|
|
|
|
|
|
|
|
||||||||
Net claims and claim expense ratio – current accident year |
33.0 |
% |
|
77.3 |
% |
|
|
|
56.3 |
% |
|||||
Net claims and claim expense ratio – prior accident years |
0.9 |
% |
|
(0.9) |
% |
|
|
|
(0.1) |
% |
|||||
Net claims and claim expense ratio – calendar year |
33.9 |
% |
|
76.4 |
% |
|
|
|
56.2 |
% |
|||||
Underwriting expense ratio |
28.0 |
% |
|
30.2 |
% |
|
|
|
29.2 |
% |
|||||
Combined ratio |
61.9 |
% |
|
106.6 |
% |
|
|
|
85.4 |
% |
|||||
|
|
|
|
|
|
|
|
||||||||
|
Six months ended |
||||||||||||||
|
Property |
|
Casualty and Specialty |
|
Other |
|
Total |
||||||||
Gross premiums written |
$ |
1,871,584 |
|
|
$ |
1,169,619 |
|
|
$ |
— |
|
|
$ |
3,041,203 |
|
Net premiums written |
$ |
1,108,345 |
|
|
$ |
843,651 |
|
|
$ |
— |
|
|
$ |
1,951,996 |
|
Net premiums earned |
$ |
715,758 |
|
|
$ |
745,772 |
|
|
$ |
— |
|
|
$ |
1,461,530 |
|
Net claims and claim expenses incurred |
202,957 |
|
|
477,434 |
|
|
17 |
|
|
680,408 |
|
||||
Acquisition expenses |
143,450 |
|
|
208,175 |
|
|
(192) |
|
|
351,433 |
|
||||
Operational expenses |
65,308 |
|
|
39,405 |
|
|
34 |
|
|
104,747 |
|
||||
Underwriting income |
$ |
304,043 |
|
|
$ |
20,758 |
|
|
$ |
141 |
|
|
324,942 |
|
|
Net investment income |
|
|
|
|
200,682 |
|
|
200,682 |
|
||||||
Net foreign exchange gains |
|
|
|
|
6,463 |
|
|
6,463 |
|
||||||
Equity in earnings of other ventures |
|
|
|
|
11,473 |
|
|
11,473 |
|
||||||
Other income |
|
|
|
|
4,093 |
|
|
4,093 |
|
||||||
Net realized and unrealized gains on investments |
|
|
|
|
361,260 |
|
|
361,260 |
|
||||||
Corporate expenses |
|
|
|
|
(62,636) |
|
|
(62,636) |
|
||||||
Interest expense |
|
|
|
|
(27,288) |
|
|
(27,288) |
|
||||||
Income before taxes and redeemable noncontrolling interests |
|
|
|
|
|
|
818,989 |
|
|||||||
Income tax expense |
|
|
|
|
(17,006) |
|
|
(17,006) |
|
||||||
Net income attributable to redeemable noncontrolling interests |
|
|
|
|
(142,034) |
|
|
(142,034) |
|
||||||
Dividends on preference shares |
|
|
|
|
(18,378) |
|
|
(18,378) |
|
||||||
Net income available to |
|
|
|
|
|
|
$ |
641,571 |
|
||||||
|
|
|
|
|
|
|
|
||||||||
Net claims and claim expenses incurred – current accident year |
$ |
190,317 |
|
|
$ |
494,164 |
|
|
$ |
— |
|
|
$ |
684,481 |
|
Net claims and claim expenses incurred – prior accident years |
12,640 |
|
|
(16,730) |
|
|
17 |
|
|
(4,073) |
|
||||
Net claims and claim expenses incurred – total |
$ |
202,957 |
|
|
$ |
477,434 |
|
|
$ |
17 |
|
|
$ |
680,408 |
|
|
|
|
|
|
|
|
|
||||||||
Net claims and claim expense ratio – current accident year |
26.6 |
% |
|
66.3 |
% |
|
|
|
46.8 |
% |
|||||
Net claims and claim expense ratio – prior accident years |
1.8 |
% |
|
(2.3) |
% |
|
|
|
(0.2) |
% |
|||||
Net claims and claim expense ratio – calendar year |
28.4 |
% |
|
64.0 |
% |
|
|
|
46.6 |
% |
|||||
Underwriting expense ratio |
29.1 |
% |
|
33.2 |
% |
|
|
|
31.2 |
% |
|||||
Combined ratio |
57.5 |
% |
|
97.2 |
% |
|
|
|
77.8 |
% |
|
|||||||||||||||
Supplemental Financial Data - Gross Premiums Written |
|||||||||||||||
(in thousands of United States Dollars) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
|
|
|
||||||||||||
|
Three months ended |
|
Six months ended |
||||||||||||
|
|
|
|
|
|
|
|
||||||||
Property Segment |
|
|
|
|
|
|
|
||||||||
Catastrophe |
$ |
711,786 |
|
|
$ |
602,656 |
|
|
$ |
1,647,976 |
|
|
$ |
1,447,869 |
|
Other property |
330,750 |
|
|
236,544 |
|
|
615,086 |
|
|
423,715 |
|
||||
Property segment gross premiums written |
$ |
1,042,536 |
|
|
$ |
839,200 |
|
|
$ |
2,263,062 |
|
|
$ |
1,871,584 |
|
|
|
|
|
|
|
|
|
||||||||
Casualty and Specialty Segment |
|
|
|
|
|
|
|
||||||||
General casualty (1) |
$ |
206,666 |
|
|
$ |
258,357 |
|
|
$ |
453,333 |
|
|
$ |
411,691 |
|
Professional liability (2) |
222,737 |
|
|
167,206 |
|
|
453,224 |
|
|
316,583 |
|
||||
Financial lines (3) |
101,635 |
|
|
91,202 |
|
|
248,714 |
|
|
218,558 |
|
||||
Other (4) |
128,298 |
|
|
120,943 |
|
|
309,260 |
|
|
222,787 |
|
||||
Casualty and Specialty segment gross premiums written |
$ |
659,336 |
|
|
$ |
637,708 |
|
|
$ |
1,464,531 |
|
|
$ |
1,169,619 |
|
(1) |
Includes automobile liability, casualty clash, employer’s liability, umbrella or excess casualty, workers’ compensation and general liability. |
|
(2) |
Includes directors and officers, medical malpractice, and professional indemnity. |
|
(3) |
Includes financial guaranty, mortgage guaranty, political risk, surety and trade credit. |
|
(4) |
Includes accident and health, agriculture, aviation, cyber, energy, marine, satellite and terrorism. Lines of business such as regional multi-line and whole account may have characteristics of various other classes of business, and are allocated accordingly. |
|
|||||||||||||||
Supplemental Financial Data - Total Investment Result |
|||||||||||||||
(in thousands of United States Dollars, except percentages) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three months ended |
|
Six months ended |
||||||||||||
|
|
|
|
|
|
|
|
||||||||
Fixed maturity investments trading |
$ |
69,943 |
|
|
$ |
88,106 |
|
|
$ |
143,281 |
|
|
$ |
149,589 |
|
Short term investments |
6,049 |
|
|
17,807 |
|
|
18,141 |
|
|
29,651 |
|
||||
Equity investments trading |
1,666 |
|
|
916 |
|
|
3,217 |
|
|
1,943 |
|
||||
Other investments |
|
|
|
|
|
|
|
||||||||
Catastrophe bonds |
13,519 |
|
|
11,781 |
|
|
27,658 |
|
|
20,472 |
|
||||
Other |
1,107 |
|
|
1,914 |
|
|
2,736 |
|
|
3,554 |
|
||||
Cash and cash equivalents |
837 |
|
|
2,306 |
|
|
2,341 |
|
|
3,823 |
|
||||
|
93,121 |
|
|
122,830 |
|
|
197,374 |
|
|
209,032 |
|
||||
Investment expenses |
(3,816) |
|
|
(4,242) |
|
|
(8,596) |
|
|
(8,350) |
|
||||
Net investment income |
89,305 |
|
|
118,588 |
|
|
188,778 |
|
|
200,682 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Net realized and unrealized gains (losses) on: |
|
|
|
|
|
|
|
||||||||
Fixed maturity investments trading (1) |
322,711 |
|
|
171,920 |
|
|
423,932 |
|
|
288,621 |
|
||||
Equity investments trading (1) |
113,506 |
|
|
22,083 |
|
|
(38,376) |
|
|
76,027 |
|
||||
Other investments |
|
|
|
|
|
|
|
||||||||
Catastrophe bonds |
4,452 |
|
|
(11,902) |
|
|
(9,900) |
|
|
(14,112) |
|
||||
Other |
7,721 |
|
|
9,146 |
|
|
(37,973) |
|
|
10,724 |
|
||||
Net realized and unrealized gains on investments |
448,390 |
|
|
191,247 |
|
|
337,683 |
|
|
361,260 |
|
||||
Total investment result |
$ |
537,695 |
|
|
$ |
309,835 |
|
|
$ |
526,461 |
|
|
$ |
561,942 |
|
|
|
|
|
|
|
|
|
||||||||
Total investment return - annualized |
11.8 |
% |
|
8.0 |
% |
|
5.8 |
% |
|
7.3 |
% |
(1) |
Net realized and unrealized gains (losses) on fixed maturity investments trading includes the impacts of interest rate futures, interest rate swaps, credit default swaps and total return swaps. Net realized gains (losses) on equity investments trading includes the impact of equity futures. |
Comments on Regulation G
In addition to the GAAP financial measures set forth in this Press Release, the Company has included certain non-GAAP financial measures within the meaning of Regulation
Operating Income Available to RenaissanceRe Common Shareholders and Operating Return on Average Common Equity - Annualized
The Company uses “operating income available to
|
Three months ended |
|
Six months ended |
||||||||||||
(in thousands of United States Dollars, except per share amounts and percentages) |
|
|
|
|
|
|
|
||||||||
Net income available to |
$ |
575,845 |
|
|
$ |
367,854 |
|
|
$ |
493,871 |
|
|
$ |
641,571 |
|
Adjustment for net realized and unrealized gains on investments, excluding other investments - catastrophe bonds |
(443,938) |
|
|
(203,149) |
|
|
(347,583) |
|
|
(375,372) |
|
||||
Adjustment for net foreign exchange losses (gains) |
7,195 |
|
|
(9,309) |
|
|
12,923 |
|
|
(6,463) |
|
||||
Adjustment for transaction and integration expenses associated with the acquisition of TMR |
2,279 |
|
|
14,483 |
|
|
6,702 |
|
|
40,003 |
|
||||
Adjustment for income tax expense (1) |
21,223 |
|
|
10,442 |
|
|
17,082 |
|
|
18,776 |
|
||||
Adjustment for net income attributable to redeemable noncontrolling interests (2) |
27,472 |
|
|
18,518 |
|
|
40,491 |
|
|
33,932 |
|
||||
Operating income available to |
$ |
190,076 |
|
|
$ |
198,839 |
|
|
$ |
223,486 |
|
|
$ |
352,447 |
|
|
|
|
|
|
|
|
|
||||||||
Net income available to |
$ |
12.63 |
|
|
$ |
8.35 |
|
|
$ |
11.02 |
|
|
$ |
14.81 |
|
Adjustment for net realized and unrealized gains on investments, excluding other investments - catastrophe bonds |
(9.86) |
|
|
(4.67) |
|
|
(7.85) |
|
|
(8.77) |
|
||||
Adjustment for net foreign exchange losses (gains) |
0.16 |
|
|
(0.21) |
|
|
0.29 |
|
|
(0.15) |
|
||||
Adjustment for transaction and integration expenses associated with the acquisition of TMR |
0.05 |
|
|
0.33 |
|
|
0.15 |
|
|
0.93 |
|
||||
Adjustment for income tax expense (1) |
0.47 |
|
|
0.24 |
|
|
0.39 |
|
|
0.44 |
|
||||
Adjustment for net income attributable to redeemable noncontrolling interests (2) |
0.61 |
|
|
0.43 |
|
|
0.91 |
|
|
0.79 |
|
||||
Operating income available to |
$ |
4.06 |
|
|
$ |
4.47 |
|
|
$ |
4.91 |
|
|
$ |
8.05 |
|
|
|
|
|
|
|
|
|
||||||||
Return on average common equity - annualized |
38.5 |
% |
|
28.9 |
% |
|
17.1 |
% |
|
26.4 |
% |
||||
Adjustment for net realized and unrealized gains on investments, excluding other investments - catastrophe bonds |
(29.7) |
% |
|
(16.0) |
% |
|
(11.9) |
% |
|
(15.5) |
% |
||||
Adjustment for net foreign exchange losses (gains) |
0.5 |
% |
|
(0.7) |
% |
|
0.4 |
% |
|
(0.3) |
% |
||||
Adjustment for transaction and integration expenses associated with the acquisition of TMR |
0.2 |
% |
|
1.1 |
% |
|
0.2 |
% |
|
1.6 |
% |
||||
Adjustment for income tax expense (1) |
1.4 |
% |
|
0.8 |
% |
|
0.6 |
% |
|
0.8 |
% |
||||
Adjustment for net income attributable to redeemable noncontrolling interests (2) |
1.8 |
% |
|
1.5 |
% |
|
1.4 |
% |
|
1.4 |
% |
||||
Operating return on average common equity - annualized |
12.7 |
% |
|
15.6 |
% |
|
7.8 |
% |
|
14.4 |
% |
(1) |
Adjustment for income tax expense represents the income tax expense associated with the adjustments to net income available to |
|
(2) |
Represents the portion of these adjustments that are attributable to the Company's redeemable noncontrolling interests, including the income tax impact of those adjustments. |
Tangible Book Value Per Common Share and Tangible Book Value Per Common Share Plus Accumulated Dividends
The Company has included in this Press Release “tangible book value per common share” and “tangible book value per common share plus accumulated dividends.” “Tangible book value per common share” is defined as book value per common share excluding goodwill and intangible assets per share. “Tangible book value per common share plus accumulated dividends” is defined as book value per common share excluding goodwill and intangible assets per share, plus accumulated dividends. The Company’s management believes “tangible book value per common share” and “tangible book value per common share plus accumulated dividends” are useful to investors because they provide a more accurate measure of the realizable value of shareholder returns, excluding the impact of goodwill and intangible assets. The following table is a reconciliation of book value per common share to “tangible book value per common share” and “tangible book value per common share plus accumulated dividends”.
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At |
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Book value per common share |
$ |
134.27 |
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$ |
117.15 |
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$ |
120.53 |
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$ |
120.07 |
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$ |
119.17 |
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Adjustment for goodwill and other intangibles (1) |
(5.56) |
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(6.46) |
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(6.50) |
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(6.55) |
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(6.60) |
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Tangible book value per common share |
128.71 |
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|
110.69 |
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|
114.03 |
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|
113.52 |
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|
112.57 |
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Adjustment for accumulated dividends |
21.38 |
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|
21.03 |
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|
20.68 |
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|
20.34 |
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|
20.00 |
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Tangible book value per common share plus accumulated dividends |
$ |
150.09 |
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|
$ |
131.72 |
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$ |
134.71 |
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$ |
133.86 |
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$ |
132.57 |
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Quarterly change in book value per common share |
14.6 |
% |
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(2.8) |
% |
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0.4 |
% |
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0.8 |
% |
|
7.3 |
% |
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Quarterly change in tangible book value per common share plus change in accumulated dividends |
16.6 |
% |
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(2.6) |
% |
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0.7 |
% |
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1.1 |
% |
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8.2 |
% |
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Year to date change in book value per common share |
11.4 |
% |
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(2.8) |
% |
|
15.7 |
% |
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15.3 |
% |
|
14.4 |
% |
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Year to date change in tangible book value per common share plus change in accumulated dividends |
13.5 |
% |
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(2.6) |
% |
|
17.9 |
% |
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17.1 |
% |
|
15.7 |
% |
(1) |
At |
View source version on businesswire.com: https://www.businesswire.com/news/home/20200728005977/en/
INVESTOR CONTACT:
Senior Vice President, Finance & Investor Relations
(441) 239-4830
MEDIA CONTACT:
Vice President, Head of Global Marketing & Client Communication
(441) 239-4932
or
Kekst CNC
(212) 521-4800
Source: