COPY OF THE COMPANY'S PRESS RELEASE
Published on October 31, 2007
RenaissanceRe Reports Operating Income of $167.8 Million for the Third Quarter of 2007 or $2.33 Per Common Share
Net Income of $133.4 Million for the Third Quarter of 2007 or $1.85 Per Common Share
Pembroke, Bermuda, October 30, 2007 -- RenaissanceRe Holdings Ltd. (NYSE: RNR) today reported $167.8 million in third quarter operating income available to common shareholders compared to $247.0 million in the third quarter of 2006. Operating income excludes net realized investment gains of $1.6 million and $4.2 million in the third quarters of 2007 and 2006, respectively, and net unrealized losses on credit derivatives issued by entities included in investments in other ventures, under equity method of $36.0 million in the third quarter of 2007. Operating income per diluted common share was $2.33 in the third quarter of 2007, compared to $3.42 in the third quarter of 2006. Net income available to common shareholders was $133.4 million or $1.85 per diluted common share in the quarter, compared to $251.1 million or $3.48 per diluted common share for the same quarter of 2006.
The Companys results for the third quarter of 2007 were impacted by a $36.0 million charge to reflect an anticipated third quarter loss at ChannelRe Holdings Ltd. (ChannelRe), an equity method investment, driven by unrealized mark-to-market losses in ChannelRes portfolio of financial guaranty contracts accounted for as derivatives under generally accepted accounting principles (GAAP).
Neill A. Currie, CEO, commented: We generated solid underwriting profits and strong investment returns during the third quarter. Financial results were positively affected by the lack of hurricanes making landfall in the U.S., and were negatively impacted by unrealized mark-to-market losses in ChannelRe, flood losses in the U.K., and claims reported in various lines of our specialty reinsurance book.
Mr. Currie added: Our focus is on growing book value per share over the long term. So far this year, book value per share has increased by 18% and we have generated an annualized operating return on equity in excess of 27%.
Mr. Currie concluded: Im very pleased with the quality of the portfolio of insurance and reinsurance business our team has constructed, which reflects our strong underwriting discipline. We look forward to continuing to serve our clients, brokers and joint venture partners during the upcoming renewal season.
THIRD QUARTER 2007 RESULTS
Underwriting Results
The Companys gross premiums written decreased $48.9 million to $208.8 million in the third quarter of 2007, compared to $257.8 million in the third quarter of 2006. As described in more detail below, the decrease in gross premiums written was driven by a $64.7 million decrease in gross premiums written in the Companys Individual Risk segment, partially offset by an $18.2 million increase in gross premiums written in the Companys Reinsurance segment. The Company generated $144.5 million of underwriting income and had a combined ratio of 60.6% in the third quarter of 2007, compared to $233.3 million of underwriting income and a combined ratio of 36.5% in the third quarter of 2006. The Companys underwriting results for the third quarter of 2007, as compared to the third quarter of 2006, were driven by a $103.9 million decrease in underwriting income in the Companys Reinsurance segment and a $15.2 million increase in underwriting income in the Companys Individual Risk segment. Net paid losses for the quarter were $114.3 million compared to $164.5 million in the third quarter of 2006.
1
Reinsurance Segment
Gross premiums written for the Companys Reinsurance segment increased $18.2 million to $141.5 million in the third quarter of 2007, compared to $123.3 million in the third quarter of 2006. The comparative change in gross premiums written in the quarter relative to the third quarter of 2006 was impacted by the commutation in 2006 of several large reinsurance contracts which resulted in the return of $28.3 million of premium in the third quarter of 2006. Net premiums earned increased $6.2 million to $242.5 million in the third quarter of 2007, compared to $236.3 million in the third quarter of 2006.
The Reinsurance segment generated $126.8 million of underwriting income in the third quarter of 2007, compared to $230.7 million of underwriting income in the third quarter of 2006. The decrease in underwriting income is in part driven by the impact of the 2006 commutations described above which increased underwriting income by $34.2 million in the third quarter of 2006 and resulted in a $31.4 million net positive impact to the Company after considering minority interest. The Reinsurance segment experienced $83.1 million of current accident year net claims and claim expenses in the third quarter of 2007, compared to $17.1 million in the third quarter of 2006, an increase of $66.0 million. The Reinsurance segments third quarter 2007 current accident year losses include $36.1 million of losses from the Companys catastrophe unit, principally driven by flood losses in the United Kingdom in July and hurricane Dean which made landfall in August, combined with $47.0 million of losses in the Companys specialty unit, principally driven by three relatively large reported losses in the quarter. In addition, the Reinsurance segment experienced $15.8 million of favorable loss reserve development in the third quarter of 2007, a $42.1 million decrease compared to the third quarter of 2006. Included in the favorable development in the third quarter of 2006 is a $44.4 million decrease in prior year reserves as a result of the commutations noted above. Overall, the Reinsurance segment generated a net claims and claim expense ratio of 27.8%, an underwriting expense ratio of 20.0% and a combined ratio of 47.8% in the third quarter of 2007, compared to a net claims and claim expense ratio, underwriting expense ratio and combined ratio of (17.2%), 19.6% and 2.4%, respectively, in the third quarter of 2006.
Individual Risk Segment
Gross premiums written for the Companys Individual Risk segment decreased $64.7 million to $101.5 million in the third quarter of 2007, compared to $166.2 million in the third quarter of 2006. The Individual Risk segments commercial multi-line, commercial property and personal lines property lines of business all experienced a decrease in gross premiums written compared to the same period in 2006. The decrease in commercial multi-line gross premiums written was principally driven by the termination of one large program in 2006 and consequently the premium was not written in the third quarter of 2007. The decrease in the commercial property gross premiums written was due to the Company terminating one large commercial property quota share contract in the second quarter of 2007 combined with softening rates in the California earthquake commercial property market resulting in a decrease in business that met the Companys return hurdles. In addition, the decrease in personal lines property gross premiums written was principally due to the Companys decision last year to reduce its exposure to this market and redeploy its capacity within the property catastrophe excess of loss reinsurance market within the Companys Reinsurance segment where the Company found pricing and terms more attractive. Net premiums earned decreased $6.2 million to $124.5 million in the third quarter of 2007, compared to $130.8 million in the third quarter of 2006.
The Individual Risk segment generated $17.8 million of underwriting income in the third quarter of 2007, compared to $2.6 million of underwriting income in the third quarter of 2006. The increase in underwriting income in the third quarter of 2007 compared to the third quarter of 2006 was primarily due to a decrease in net claims and claim expenses incurred. The Individual Risk segment experienced $68.8 million of current accident year net claims and claim expenses in the third quarter of 2007, compared to $78.7 million in the third quarter of 2006, a decrease of $10.0 million. In addition, the Individual Risk segment experienced $4.4 million of favorable development in the third quarter of 2007 compared to $4.5 million of adverse development in the third quarter of 2006. Overall, the Individual Risk segment generated a net claims and claim expense ratio of 51.7%, an underwriting expense ratio of 34.1% and a combined ratio of 85.8% in the third quarter of 2007, compared to a net claims and claim expense ratio, underwriting expense ratio and combined ratio of 63.6%, 34.4% and 98.0%, respectively, in the third quarter of 2006.
2
Other Items
|
|
The Companys results for the third quarter of 2007 were impacted by a $36.0 million charge to reflect an anticipated third quarter loss at ChannelRe, driven by unrealized mark-to-market losses in ChannelRes portfolio of financial guaranty contracts accounted for as derivatives under GAAP. The unrealized mark-to-market losses were principally driven by the widening of credit spreads in the third quarter of 2007. |
|
|
Net investment income for the third quarter of 2007 was $95.6 million, compared to $80.4 million for the same quarter in 2006, principally reflecting higher average invested assets in the Companys portfolio of fixed maturity investments available for sale and short term investments and strong returns from the Companys hedge fund and private equity investments. Other investments, which include the Companys hedge fund and private equity investments, generated $19.8 million of net investment income in the third quarter of 2007 compared with $12.8 million in the third quarter of 2006. |
|
|
During the third quarter of 2007, the Company repurchased 1.4 million shares at an aggregate cost of $77.1 million. At September 30, 2007, $489.2 million remained available under the Companys share repurchase program. |
|
|
The Companys cash flows from operations were $284.9 million for the third quarter of 2007, compared to $176.9 million for the third quarter of 2006. |
This press release includes certain non-GAAP financial measures including operating income, operating income per common share diluted, operating return on average common equity - annualized and managed catastrophe premium. A reconciliation of such measures to the most comparable GAAP figures in accordance with Regulation G is presented in the attached supplemental financial data.
Please refer to the Investor Information section of the Companys website at www.renre.com for a copy of the Financial Supplement which includes additional information on the Companys financial performance.
RenaissanceRe Holdings Ltd. will host a conference call on Wednesday, October 31, 2007 at 8:30 a.m. (EST) to discuss this release. Live broadcast of the conference call will be available through the Investor Section of RenaissanceRes website at www.renre.com.
RenaissanceRe Holdings Ltd. is a global provider of reinsurance and insurance. The Companys business consists of two segments: (1) Reinsurance, which includes catastrophe reinsurance, specialty reinsurance and certain joint ventures and other investments managed by the Companys subsidiary RenaissanceRe Ventures Ltd., and (2) Individual Risk, which includes primary insurance and quota share reinsurance.
Cautionary Statement under Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995: Statements made in this news release contain information about the Companys future business prospects. These statements may be considered forward-looking. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by such forward-looking statements. For further information regarding cautionary statements and factors affecting future results, please refer to RenaissanceRe Holdings Ltd.s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2006 and its quarterly reports on Form 10-Q for the quarters ending March 31, 2007 and June 30, 2007.
|
INVESTOR CONTACT: |
MEDIA CONTACT: |
|
Fred R. Donner |
David Lilly or Dawn Dover |
|
Executive Vice President |
Kekst and Company |
|
RenaissanceRe Holdings Ltd. |
(212) 521-4800 |
|
(441) 295-4513 |
|
3
RenaissanceRe Holdings Ltd. and Subsidiaries
Summary Consolidated Statements of Operations
For the three and nine months ended September 30, 2007 and 2006
(in thousands of U.S. dollars, except per share amounts)
(Unaudited)
|
|
|
Three months ended |
|
Nine months ended |
| ||||||||
|
|
|
September 30, 2007 |
|
September 30, 2006 |
|
September 30, 2007 |
|
September 30, 2006 |
| ||||
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross premiums written |
|
$ |
208,821 |
|
$ |
257,752 |
|
$ |
1,687,410 |
|
$ |
1,748,695 |
|
|
Net premiums written |
|
$ |
149,163 |
|
$ |
162,695 |
|
$ |
1,330,032 |
|
$ |
1,372,774 |
|
|
Decrease (increase) in unearned premiums |
|
|
217,894 |
|
|
204,381 |
|
|
(241,903 |
) |
|
(223,085 |
) |
|
Net premiums earned |
|
|
367,057 |
|
|
367,076 |
|
|
1,088,129 |
|
|
1,149,689 |
|
|
Net investment income |
|
|
95,594 |
|
|
80,427 |
|
|
321,749 |
|
|
234,873 |
|
|
Net foreign exchange losses |
|
|
(5,424 |
) |
|
(2,160 |
) |
|
(630 |
) |
|
(1,578 |
) |
|
Equity in (losses) earnings of other ventures |
|
|
(23,986 |
) |
|
10,131 |
|
|
(3,610 |
) |
|
25,904 |
|
|
Other (loss) income |
|
|
(10,008 |
) |
|
2,006 |
|
|
(17,709 |
) |
|
243 |
|
|
Net realized gains (losses) on investments |
|
|
1,592 |
|
|
4,151 |
|
|
(5,889 |
) |
|
(36,953 |
) |
|
Total revenues |
|
|
424,825 |
|
|
461,631 |
|
|
1,382,040 |
|
|
1,372,178 |
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net claims and claim expenses incurred |
|
|
131,700 |
|
|
42,436 |
|
|
416,546 |
|
|
348,950 |
|
|
Acquisition expenses |
|
|
63,719 |
|
|
63,998 |
|
|
186,957 |
|
|
207,409 |
|
|
Operational expenses |
|
|
27,126 |
|
|
27,364 |
|
|
82,177 |
|
|
77,351 |
|
|
Corporate expenses |
|
|
7,158 |
|
|
5,121 |
|
|
19,089 |
|
|
16,431 |
|
|
Interest expense |
|
|
7,226 |
|
|
9,492 |
|
|
26,400 |
|
|
29,163 |
|
|
Total expenses |
|
|
236,929 |
|
|
148,411 |
|
|
731,169 |
|
|
679,304 |
|
|
Income before minority interest and taxes |
|
|
187,896 |
|
|
313,220 |
|
|
650,871 |
|
|
692,874 |
|
|
Minority interest - DaVinciRe |
|
|
(43,820 |
) |
|
(52,830 |
) |
|
(110,326 |
) |
|
(105,494 |
) |
|
Income before taxes |
|
|
144,076 |
|
|
260,390 |
|
|
540,545 |
|
|
587,380 |
|
|
Income tax expense |
|
|
(101 |
) |
|
(616 |
) |
|
(888 |
) |
|
(893 |
) |
|
Net income |
|
|
143,975 |
|
|
259,774 |
|
|
539,657 |
|
|
586,487 |
|
|
Dividends on preference shares |
|
|
(10,575 |
) |
|
(8,662 |
) |
|
(32,286 |
) |
|
(25,987 |
) |
|
Net income available to common shareholders |
|
$ |
133,400 |
|
$ |
251,112 |
|
$ |
507,371 |
|
$ |
560,500 |
|
|
Operating income available to common shareholders per Common Share - diluted (1) |
|
$ |
2.33 |
|
$ |
3.42 |
|
$ |
7.60 |
|
$ |
8.30 |
|
|
Net income available to common shareholders per Common Share - basic |
|
$ |
1.89 |
|
$ |
3.53 |
|
$ |
7.14 |
|
$ |
7.89 |
|
|
Net income available to common shareholders per Common Share - diluted |
|
$ |
1.85 |
|
$ |
3.48 |
|
$ |
7.02 |
|
$ |
7.79 |
|
|
Average shares outstanding - basic |
|
|
70,575 |
|
|
71,093 |
|
|
71,038 |
|
|
71,026 |
|
|
Average shares outstanding - diluted |
|
|
71,945 |
|
|
72,115 |
|
|
72,296 |
|
|
71,942 |
|
|
Net claims and claim expense ratio |
|
|
35.9 |
% |
|
11.6 |
% |
|
38.3 |
% |
|
30.4 |
% |
|
Underwriting expense ratio |
|
|
24.7 |
% |
|
24.9 |
% |
|
24.7 |
% |
|
24.8 |
% |
|
Combined ratio |
|
|
60.6 |
% |
|
36.5 |
% |
|
63.0 |
% |
|
55.2 |
% |
|
Operating return on average common equity - annualized (1) |
|
|
23.6 |
% |
|
45.6 |
% |
|
27.1 |
% |
|
39.8 |
% |
|
(1) |
Excludes net realized gains and losses on investments and, commencing in the third quarter of 2007, net unrealized gains and losses on credit derivatives issued by entities included in investments in other ventures, under equity method (see Comments on Regulation G). |
RenaissanceRe Holdings Ltd. and Subsidiaries
Summary Consolidated Balance Sheets
(in thousands of U.S. dollars, except per share amounts)
|
|
|
At |
| ||||
|
|
|
September 30, 2007 |
|
December 31, 2006 |
| ||
|
|
|
|
(Unaudited) |
|
|
(Audited) |
|
|
Assets |
|
|
|
|
|
|
|
|
Fixed maturity investments available for sale, at fair value |
|
$ |
3,475,449 |
|
$ |
3,111,930 |
|
|
Short term investments, at cost |
|
|
2,418,958 |
|
|
2,410,971 |
|
|
Other investments, at fair value |
|
|
716,686 |
|
|
592,829 |
|
|
Investments in other ventures, under equity method |
|
|
176,256 |
|
|
227,075 |
|
|
Total investments |
|
|
6,787,349 |
|
|
6,342,805 |
|
|
Cash and cash equivalents |
|
|
317,295 |
|
|
214,399 |
|
|
Premiums receivable |
|
|
714,495 |
|
|
419,150 |
|
|
Ceded reinsurance balances |
|
|
194,357 |
|
|
133,971 |
|
|
Losses recoverable |
|
|
220,037 |
|
|
301,854 |
|
|
Accrued investment income |
|
|
41,483 |
|
|
41,234 |
|
|
Deferred acquisition costs |
|
|
142,171 |
|
|
106,918 |
|
|
Receivable for investments sold |
|
|
197,110 |
|
|
61,061 |
|
|
Other assets |
|
|
147,041 |
|
|
147,634 |
|
|
Total assets |
|
$ |
8,761,338 |
|
$ |
7,769,026 |
|
|
Liabilities, Minority Interest and Shareholders Equity |
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Reserve for claims and claim expenses |
|
$ |
2,128,644 |
|
$ |
2,098,155 |
|
|
Reserve for unearned premiums |
|
|
880,714 |
|
|
578,424 |
|
|
Debt |
|
|
450,540 |
|
|
450,000 |
|
|
Subordinated obligation to capital trust |
|
|
|
|
|
103,093 |
|
|
Reinsurance balances payable |
|
|
358,333 |
|
|
395,083 |
|
|
Payable for investments purchased |
|
|
511,153 |
|
|
88,089 |
|
|
Other liabilities |
|
|
148,388 |
|
|
125,401 |
|
|
Total liabilities |
|
|
4,477,772 |
|
|
3,838,245 |
|
|
Minority interest - DaVinciRe |
|
|
761,815 |
|
|
650,284 |
|
|
Shareholders Equity |
|
|
|
|
|
|
|
|
Preference shares |
|
|
650,000 |
|
|
800,000 |
|
|
Common shares |
|
|
70,852 |
|
|
72,140 |
|
|
Additional paid-in capital |
|
|
212,297 |
|
|
284,123 |
|
|
Accumulated other comprehensive income |
|
|
29,649 |
|
|
25,217 |
|
|
Retained earnings |
|
|
2,558,953 |
|
|
2,099,017 |
|
|
Total shareholders equity |
|
|
3,521,751 |
|
|
3,280,497 |
|
|
Total liabilities, minority interest and shareholders equity |
|
$ |
8,761,338 |
|
$ |
7,769,026 |
|
|
Book value per common share |
|
$ |
40.53 |
|
$ |
34.38 |
|
|
Common shares outstanding |
|
|
70,852 |
|
|
72,140 |
|
RenaissanceRe Holdings Ltd. and Subsidiaries
Unaudited Supplemental Financial Data - Segment Information
(in thousands of U.S. dollars, except ratios)
|
|
Three months ended September 30, 2007 |
|
|||||||||||||
|
|
Reinsurance |
|
Individual Risk |
|
Eliminations (1) |
|
Other |
|
Total |
|
|||||
|
Gross premiums written |
|
$ |
141,545 |
|
$ |
101,534 |
|
$ |
(34,258 |
) |
$ |
|
|
$ |
208,821 |
|
|
Net premiums written |
|
$ |
91,112 |
|
$ |
58,051 |
|
|
|
|
|
|
|
$ |
149,163 |
|
|
Net premiums earned |
|
$ |
242,520 |
|
$ |
124,537 |
|
|
|
|
|
|
|
$ |
367,057 |
|
|
Net claims and claim expenses incurred |
|
|
67,335 |
|
|
64,365 |
|
|
|
|
|
|
|
|
131,700 |
|
|
Acquisition expenses |
|
|
32,122 |
|
|
31,597 |
|
|
|
|
|
|
|
|
63,719 |
|
|
Operational expenses |
|
|
16,301 |
|
|
10,825 |
|
|
|
|
|
|
|
|
27,126 |
|
|
Underwriting income |
|
$ |
126,762 |
|
$ |
17,750 |
|
|
|
|
|
|
|
|
144,512 |
|
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
|
95,594 |
|
|
95,594 |
|
|
Equity in losses of other ventures |
|
|
|
|
|
|
|
|
|
|
|
(23,986 |
) |
|
(23,986 |
) |
|
Other loss |
|
|
|
|
|
|
|
|
|
|
|
(10,008 |
) |
|
(10,008 |
) |
|
Interest and preference share dividends |
|
|
|
|
|
|
|
|
|
|
|
(17,801 |
) |
|
(17,801 |
) |
|
Minority interest - DaVinciRe |
|
|
|
|
|
|
|
|
|
|
|
(43,820 |
) |
|
(43,820 |
) |
|
Other items, net |
|
|
|
|
|
|
|
|
|
|
|
(12,683 |
) |
|
(12,683 |
) |
|
Net realized gains on investments |
|
|
|
|
|
|
|
|
|
|
|
1,592 |
|
|
1,592 |
|
|
Net income available to common shareholders |
|
|
|
|
|
|
|
|
|
|
$ |
(11,112 |
) |
$ |
133,400 |
|
|
Net claims and claim expenses incurred - current accident year |
|
$ |
83,104 |
|
$ |
68,755 |
|
|
|
|
|
|
|
$ |
151,859 |
|
|
Net claims and claim expenses incurred - prior accident years |
|
|
(15,769 |
) |
|
(4,390 |
) |
|
|
|
|
|
|
|
(20,159 |
) |
|
Net claims and claim expenses incurred - total |
|
$ |
67,335 |
|
$ |
64,365 |
|
|
|
|
|
|
|
$ |
131,700 |
|
|
Net claims and claim expense ratio - current accident year |
|
|
34.3 |
% |
|
55.2 |
% |
|
|
|
|
|
|
|
41.4 |
% |
|
Net claims and claim expense ratio - prior accident years |
|
|
(6.5 |
%) |
|
(3.5 |
%) |
|
|
|
|
|
|
|
(5.5 |
%) |
|
Net claims and claim expense ratio - calendar year |
|
|
27.8 |
% |
|
51.7 |
% |
|
|
|
|
|
|
|
35.9 |
% |
|
Underwriting expense ratio |
|
|
20.0 |
% |
|
34.1 |
% |
|
|
|
|
|
|
|
24.7 |
% |
|
Combined ratio |
|
|
47.8 |
% |
|
85.8 |
% |
|
|
|
|
|
|
|
60.6 |
% |
|
(1) |
Represents gross premiums ceded from the Individual Risk segment to the Reinsurance segment. |
|
|
Three months ended September 30, 2006 |
|
|||||||||||||
|
|
Reinsurance |
|
Individual Risk |
|
Eliminations (1) |
|
Other |
|
Total |
|
|||||
|
Gross premiums written |
|
$ |
123,345 |
|
$ |
166,238 |
|
$ |
(31,831 |
) |
$ |
|
|
$ |
257,752 |
|
|
Net premiums written |
|
$ |
77,062 |
|
$ |
85,633 |
|
|
|
|
|
|
|
$ |
162,695 |
|
|
Net premiums earned |
|
$ |
236,310 |
|
$ |
130,766 |
|
|
|
|
|
|
|
$ |
367,076 |
|
|
Net claims and claim expenses incurred |
|
|
(40,756 |
) |
|
83,192 |
|
|
|
|
|
|
|
|
42,436 |
|
|
Acquisition expenses |
|
|
27,890 |
|
|
36,108 |
|
|
|
|
|
|
|
|
63,998 |
|
|
Operational expenses |
|
|
18,495 |
|
|
8,869 |
|
|
|
|
|
|
|
|
27,364 |
|
|
Underwriting income |
|
$ |
230,681 |
|
$ |
2,597 |
|
|
|
|
|
|
|
|
233,278 |
|
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
|
80,427 |
|
|
80,427 |
|
|
Equity in earnings of other ventures |
|
|
|
|
|
|
|
|
|
|
|
10,131 |
|
|
10,131 |
|
|
Other income |
|
|
|
|
|
|
|
|
|
|
|
2,006 |
|
|
2,006 |
|
|
Interest and preference share dividends |
|
|
|
|
|
|
|
|
|
|
|
(18,154 |
) |
|
(18,154 |
) |
|
Minority interest - DaVinciRe |
|
|
|
|
|
|
|
|
|
|
|
(52,830 |
) |
|
(52,830 |
) |
|
Other items, net |
|
|
|
|
|
|
|
|
|
|
|
(7,897 |
) |
|
(7,897 |
) |
|
Net realized gains on investments |
|
|
|
|
|
|
|
|
|
|
|
4,151 |
|
|
4,151 |
|
|
Net income available to common shareholders |
|
|
|
|
|
|
|
|
|
|
$ |
17,834 |
|
$ |
251,112 |
|
|
Net claims and claim expenses incurred - current accident year |
|
$ |
17,131 |
|
$ |
78,736 |
|
|
|
|
|
|
|
$ |
95,867 |
|
|
Net claims and claim expenses incurred - prior accident years |
|
|
(57,887 |
) |
|
4,456 |
|
|
|
|
|
|
|
|
(53,431 |
) |
|
Net claims and claim expenses incurred - total |
|
$ |
(40,756 |
) |
$ |
83,192 |
|
|
|
|
|
|
|
$ |
42,436 |
|
|
Net claims and claim expense ratio - current accident year |
|
|
7.2 |
% |
|
60.2 |
% |
|
|
|
|
|
|
|
26.1 |
% |
|
Net claims and claim expense ratio - prior accident years |
|
|
(24.4 |
%) |
|
3.4 |
% |
|
|
|
|
|
|
|
(14.5 |
%) |
|
Net claims and claim expense ratio - calendar year |
|
|
(17.2 |
%) |
|
63.6 |
% |
|
|
|
|
|
|
|
11.6 |
% |
|
Underwriting expense ratio |
|
|
19.6 |
% |
|
34.4 |
% |
|
|
|
|
|
|
|
24.9 |
% |
|
Combined ratio |
|
|
2.4 |
% |
|
98.0 |
% |
|
|
|
|
|
|
|
36.5 |
% |
|
(1) |
Represents gross premiums ceded from the Individual Risk segment to the Reinsurance segment. |
RenaissanceRe Holdings Ltd. and Subsidiaries
Unaudited Supplemental Financial Data - Segment Information (contd.)
(in thousands of United States Dollars, except ratios)
|
|
|
Nine months ended September 30, 2007 |
| |||||||||||||
|
|
|
Reinsurance |
|
Individual Risk |
|
Eliminations (1) |
|
Other |
|
Total |
| |||||
|
Gross premiums written |
|
$ |
1,263,727 |
|
$ |
463,241 |
|
$ |
(39,558 |
) |
$ |
|
|
$ |
1,687,410 |
|
|
Net premiums written |
|
$ |
995,686 |
|
$ |
334,346 |
|
|
|
|
|
|
|
$ |
1,330,032 |
|
|
Net premiums earned |
|
$ |
723,286 |
|
$ |
364,843 |
|
|
|
|
|
|
|
$ |
1,088,129 |
|
|
Net claims and claim expenses incurred |
|
|
221,990 |
|
|
194,556 |
|
|
|
|
|
|
|
|
416,546 |
|
|
Acquisition expenses |
|
|
86,411 |
|
|
100,546 |
|
|
|
|
|
|
|
|
186,957 |
|
|
Operational expenses |
|
|
50,943 |
|
|
31,234 |
|
|
|
|
|
|
|
|
82,177 |
|
|
Underwriting income |
|
$ |
363,942 |
|
$ |
38,507 |
|
|
|
|
|
|
|
|
402,449 |
|
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
|
321,749 |
|
|
321,749 |
|
|
Equity in losses of other ventures |
|
|
|
|
|
|
|
|
|
|
|
(3,610 |
) |
|
(3,610 |
) |
|
Other loss |
|
|
|
|
|
|
|
|
|
|
|
(17,709 |
) |
|
(17,709 |
) |
|
Interest and preference share dividends |
|
|
|
|
|
|
|
|
|
|
|
(58,686 |
) |
|
(58,686 |
) |
|
Minority interest - DaVinciRe |
|
|
|
|
|
|
|
|
|
|
|
(110,326 |
) |
|
(110,326 |
) |
|
Other items, net |
|
|
|
|
|
|
|
|
|
|
|
(20,607 |
) |
|
(20,607 |
) |
|
Net realized losses on investments |
|
|
|
|
|
|
|
|
|
|
|
(5,889 |
) |
|
(5,889 |
) |
|
Net income available to common shareholders |
|
|
|
|
|
|
|
|
|
|
$ |
104,922 |
|
$ |
507,371 |
|
|
Net claims and claim expenses incurred - current accident year |
|
$ |
317,718 |
|
$ |
225,207 |
|
|
|
|
|
|
|
$ |
542,925 |
|
|
Net claims and claim expenses incurred - prior accident years |
|
|
(95,728 |
) |
|
(30,651 |
) |
|
|
|
|
|
|
|
(126,379 |
) |
|
Net claims and claim expenses incurred - total |
|
$ |
221,990 |
|
$ |
194,556 |
|
|
|
|
|
|
|
$ |
416,546 |
|
|
Net claims and claim expense ratio - current accident year |
|
|
43.9 |
% |
|
61.7 |
% |
|
|
|
|
|
|
|
49.9 |
% |
|
Net claims and claim expense ratio - prior accident years |
|
|
(13.2 |
%) |
|
(8.4 |
%) |
|
|
|
|
|
|
|
(11.6 |
%) |
|
Net claims and claim expense ratio - calendar year |
|
|
30.7 |
% |
|
53.3 |
% |
|
|
|
|
|
|
|
38.3 |
% |
|
Underwriting expense ratio |
|
|
19.0 |
% |
|
36.1 |
% |
|
|
|
|
|
|
|
24.7 |
% |
|
Combined ratio |
|
|
49.7 |
% |
|
89.4 |
% |
|
|
|
|
|
|
|
63.0 |
% |
|
(1) |
Represents gross premiums ceded from the Individual Risk segment to the Reinsurance segment. |
|
|
|
Nine months ended September 30, 2006 |
| |||||||||||||
|
|
|
Reinsurance |
|
Individual Risk |
|
Eliminations (1) |
|
Other |
|
Total |
| |||||
|
Gross premiums written |
|
$ |
1,269,444 |
|
$ |
547,791 |
|
$ |
(68,540 |
) |
$ |
|
|
$ |
1,748,695 |
|
|
Net premiums written |
|
$ |
987,077 |
|
$ |
385,697 |
|
|
|
|
|
|
|
$ |
1,372,774 |
|
|
Net premiums earned |
|
$ |
727,744 |
|
$ |
421,945 |
|
|
|
|
|
|
|
$ |
1,149,689 |
|
|
Net claims and claim expenses incurred |
|
|
93,869 |
|
|
255,081 |
|
|
|
|
|
|
|
|
348,950 |
|
|
Acquisition expenses |
|
|
87,487 |
|
|
119,922 |
|
|
|
|
|
|
|
|
207,409 |
|
|
Operational expenses |
|
|
50,802 |
|
|
26,549 |
|
|
|
|
|
|
|
|
77,351 |
|
|
Underwriting income |
|
$ |
495,586 |
|
$ |
20,393 |
|
|
|
|
|
|
|
|
515,979 |
|
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
|
234,873 |
|
|
234,873 |
|
|
Equity in earnings of other ventures |
|
|
|
|
|
|
|
|
|
|
|
25,904 |
|
|
25,904 |
|
|
Other income |
|
|
|
|
|
|
|
|
|
|
|
243 |
|
|
243 |
|
|
Interest and preference share dividends |
|
|
|
|
|
|
|
|
|
|
|
(55,150 |
) |
|
(55,150 |
) |
|
Minority interest - DaVinciRe |
|
|
|
|
|
|
|
|
|
|
|
(105,494 |
) |
|
(105,494 |
) |
|
Other items, net |
|
|
|
|
|
|
|
|
|
|
|
(18,902 |
) |
|
(18,902 |
) |
|
Net realized losses on investments |
|
|
|
|
|
|
|
|
|
|
|
(36,953 |
) |
|
(36,953 |
) |
|
Net income available to common shareholders |
|
|
|
|
|
|
|
|
|
|
$ |
44,521 |
|
$ |
560,500 |
|
|
Net claims and claim expenses incurred - current accident year |
|
$ |
193,620 |
|
$ |
261,995 |
|
|
|
|
|
|
|
$ |
455,615 |
|
|
Net claims and claim expenses incurred - prior accident years |
|
|
(99,751 |
) |
|
(6,914 |
) |
|
|
|
|
|
|
|
(106,665 |
) |
|
Net claims and claim expenses incurred - total |
|
$ |
93,869 |
|
$ |
255,081 |
|
|
|
|
|
|
|
$ |
348,950 |
|
|
Net claims and claim expense ratio - current accident year |
|
|
26.6 |
% |
|
62.1 |
% |
|
|
|
|
|
|
|
39.6 |
% |
|
Net claims and claim expense ratio - prior accident years |
|
|
(13.7 |
%) |
|
(1.6 |
%) |
|
|
|
|
|
|
|
(9.2 |
%) |
|
Net claims and claim expense ratio - calendar year |
|
|
12.9 |
% |
|
60.5 |
% |
|
|
|
|
|
|
|
30.4 |
% |
|
Underwriting expense ratio |
|
|
19.0 |
% |
|
34.7 |
% |
|
|
|
|
|
|
|
24.8 |
% |
|
Combined ratio |
|
|
31.9 |
% |
|
95.2 |
% |
|
|
|
|
|
|
|
55.2 |
% |
|
(1) |
Represents gross premiums ceded from the Individual Risk segment to the Reinsurance segment. |
RenaissanceRe Holdings Ltd. and Subsidiaries
Unaudited Supplemental Financial Data
(in thousands of U.S. dollars)
|
|
|
Three months ended |
|
Nine months ended |
| ||||||||
|
Reinsurance Segment |
|
September 30, |
|
September 30, |
|
September 30, |
|
September |
| ||||
|
Renaissance catastrophe premiums |
|
$ |
84,271 |
|
$ |
92,150 |
|
$ |
665,211 |
|
$ |
753,009 |
|
|
Renaissance specialty premiums |
|
|
39,536 |
|
|
20,367 |
|
|
240,384 |
|
|
169,947 |
|
|
Total Renaissance premiums |
|
|
123,807 |
|
|
112,517 |
|
|
905,595 |
|
|
922,956 |
|
|
DaVinci catastrophe premiums |
|
|
17,856 |
|
|
10,578 |
|
|
348,708 |
|
|
322,922 |
|
|
DaVinci specialty premiums |
|
|
(118 |
) |
|
250 |
|
|
9,424 |
|
|
23,566 |
|
|
Total DaVinci premiums |
|
|
17,738 |
|
|
10,828 |
|
|
358,132 |
|
|
346,488 |
|
|
Total Reinsurance premiums |
|
$ |
141,545 |
|
$ |
123,345 |
|
$ |
1,263,727 |
|
$ |
1,269,444 |
|
|
Total specialty premiums |
|
$ |
39,418 |
|
$ |
20,617 |
|
$ |
249,808 |
|
$ |
193,513 |
|
|
Total catastrophe premiums |
|
$ |
102,127 |
|
$ |
102,728 |
|
$ |
1,013,919 |
|
$ |
1,075,931 |
|
|
Catastrophe premiums written on behalf of our joint venture, Top Layer Re (1) |
|
|
|
|
|
1,189 |
|
|
63,725 |
|
|
51,244 |
|
|
Catastrophe premiums assumed from the Individual Risk segment |
|
|
(34,258 |
) |
|
(31,109 |
) |
|
(39,558 |
) |
|
(66,205 |
) |
|
Total managed catastrophe premiums (2) |
|
|
67,869 |
|
|
72,808 |
|
|
1,038,086 |
|
|
1,060,970 |
|
|
Managed premiums assumed for fully-collateralized joint ventures |
|
|
(938 |
) |
|
(3,046 |
) |
|
(60,301 |
) |
|
(114,299 |
) |
|
Total managed catastrophe premiums, net of fully-collateralized joint ventures (2) |
|
$ |
66,931 |
|
$ |
69,762 |
|
$ |
977,785 |
|
$ |
946,671 |
|
|
(1) |
Top Layer Re is accounted for under the equity method of accounting. |
|
(2) |
See Comments on Regulation G. |
|
|
|
Three months ended |
|
Nine months ended |
| ||||||||
|
Individual Risk Segment |
|
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
| ||||
|
Commercial multi-line |
|
$ |
60,428 |
|
$ |
92,056 |
|
$ |
280,694 |
|
$ |
296,045 |
|
|
Commercial property |
|
|
26,361 |
|
|
46,597 |
|
|
143,879 |
|
|
179,006 |
|
|
Personal lines property |
|
|
14,745 |
|
|
27,585 |
|
|
38,668 |
|
|
72,740 |
|
|
Total Individual Risk premiums |
|
$ |
101,534 |
|
$ |
166,238 |
|
$ |
463,241 |
|
$ |
547,791 |
|
Comments on Regulation G
In addition to the GAAP financial measures set forth in this Press Release, the Company has included certain non-GAAP financial measures in this Press Release within the meaning of Regulation G. The Company has provided these financial measurements in previous investor communications and the Companys management believes that these measurements are important to investors and other interested persons, and that investors and such other persons benefit from having a consistent basis for comparison between quarters and for the comparison with other companies within the industry. These measures may not, however, be comparable to similarly titled measures used by companies outside of the insurance industry. Investors are cautioned not to place undue reliance on these non-GAAP measures in assessing the Companys overall financial performance.
The Company uses operating income as a measure to evaluate the underlying fundamentals of its operations and believes it to be a useful measure of its corporate performance. Operating income as used herein differs from net income available to common shareholders, which the Company believes is the most directly comparable GAAP measure, by the exclusion of net realized gains and losses on the Companys investments and, commencing in the third quarter of 2007, net unrealized gains and losses on credit derivatives issued by entities included in investments in other ventures, under equity method. Prior to the third quarter of 2007, the Company had no net unrealized gains and losses on credit derivatives issued by entities included in investments in other ventures, under equity method. In the presentation below, the only adjustments in respect of unrealized gains and losses for the current period reflect unrealized mark-to-market losses on credit derivatives and other credit-related products issued by ChannelRe, a financial guarantee reinsurer whose investment is accounted for by the Company under the equity method. The Company believes that the prevailing convention among financial guarantee insurers, reinsurers and other market participants, such as ChannelRe, is to exclude from operating income such unrealized gains and losses attributable to credit derivatives and other credit-related products. The Companys management believes that operating income is useful to investors because it more accurately measures and predicts the Companys results of operations by removing the variability arising from fluctuations in the Companys investment portfolio and credit derivatives issued by entities included in investments in other ventures, under equity method, which are not considered by management to be relevant indicators of business operations. The Company also uses operating income to calculate operating income per common share diluted and operating return on average common equity annualized. The following is a reconciliation of: 1) net income available to common shareholders to operating income available to common shareholders; 2) net income available to common shareholders per common share diluted to operating income available to common shareholders per common share diluted; and 3) return on average common equity annualized to operating return on average common equity annualized:
|
|
Three months ended |
|
Nine months ended |
|
||||||||
(In thousands of U.S. dollars, except for per share amounts) |
|
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
||||
Net income available to common shareholders |
|
$ |
133,400 |
|
$ |
251,112 |
|
$ |
507,371 |
|
$ |
560,500 |
|
Adjustment for net realized (gains) losses on investments |
|
|
(1,592 |
) |
|
(4,151 |
) |
|
5,889 |
|
|
36,953 |
|
Adjustment for net unrealized losses on credit derivatives issued by entities included in investments in other ventures, under equity method |
|
|
35,970 |
|
|
|
|
|
35,970 |
|
|
|
|
Operating income available to common shareholders |
|
$ |
167,778 |
|
$ |
246,961 |
|
$ |
549,230 |
|
$ |
597,453 |
|
Net income available to common shareholders per common share - diluted |
|
$ |
1.85 |
|
$ |
3.48 |
|
$ |
7.02 |
|
$ |
7.79 |
|
Adjustment for net realized (gains) losses on investments |
|
|
(0.02 |
) |
|
(0.06 |
) |
|
0.08 |
|
|
0.51 |
|
Adjustment for net unrealized losses on credit derivatives issued by entities included in investments in other ventures, under equity method |
|
|
0.50 |
|
|
|
|
|
0.50 |
|
|
|
|
Operating income available to common shareholders per common share - diluted |
|
$ |
2.33 |
|
$ |
3.42 |
|
$ |
7.60 |
|
$ |
8.30 |
|
Return on average common equity - annualized |
|
|
18.8 |
% |
|
46.3 |
% |
|
25.0 |
% |
|
37.3 |
% |
Adjustment for net realized (gains) losses on investments |
|
|
(0.2 |
%) |
|
(0.7 |
%) |
|
0.3 |
% |
|
2.5 |
% |
Adjustment for net unrealized losses on credit derivatives issued by entities included in investments in other ventures, under equity method |
|
|
5.0 |
% |
|
0.0 |
% |
|
1.8 |
% |
|
0.0 |
% |
Operating return on average common equity - annualized |
|
|
23.6 |
% |
|
45.6 |
% |
|
27.1 |
% |
|
39.8 |
% |
The Company has also included in this Press Release managed catastrophe premiums and managed catastrophe premiums, net of fully-collateralized joint ventures. Managed catastrophe premiums is defined as gross catastrophe premiums written by Renaissance Reinsurance and its related joint ventures. Managed catastrophe premiums differ from total catastrophe premiums, which the Company believes is the most directly comparable GAAP measure, due to the inclusion of catastrophe premiums written on behalf of the Companys joint venture Top Layer Re, which is accounted for under the equity method of accounting. Managed catastrophe premiums, net of fully-collateralized joint ventures differ from total catastrophe premiums, which the Company believes is the most directly comparable GAAP measure, due to: 1) the inclusion of catastrophe premiums written on behalf of the Companys joint venture Top Layer Re, which is accounted for under the equity method of accounting; and 2) the deduction of catastrophe premiums that are written by the Company and ceded directly to the Companys fully-collateralized joint ventures which include Starbound Reinsurance Ltd., Starbound Reinsurance II Ltd. and Timicuan Reinsurance Ltd. The Companys management believes managed catastrophe premiums is useful to investors and other interested parties because it provides a measure of total catastrophe reinsurance premiums assumed by the Company through its consolidated subsidiaries and related joint ventures. The Company believes managed catastrophe premiums, net of fully-collateralized joint ventures is also a useful measure to investors and other interested parties because it provides a measure of total catastrophe reinsurance premiums assumed by the Company through its consolidated subsidiaries and related joint ventures, net of catastrophe premiums written directly on behalf of the Companys fully-collateralized joint ventures.
9