COPY OF THE COMPANY'S PRESS RELEASE, ISSUED JULY 28, 2009
Published on July 29, 2009
Exhibit 99.1
RenaissanceRe Reports Net Income Available to RenaissanceRe Common Shareholders of $271.2 Million for
the Second Quarter of 2009 or $4.32 Per Diluted Common Share
Operating Income of $254.1 Million for the Second Quarter of 2009 or $4.05 Per Diluted Common Share
Pembroke, Bermuda, July 28, 2009 RenaissanceRe Holdings Ltd. (NYSE: RNR) today reported net income available to common shareholders of $271.2 million or $4.32 per diluted common share in the second quarter, compared to net income available to common shareholders of $135.7 million or $2.13 per diluted common share for the same quarter of 2008. Operating income available to common shareholders was $254.1 million, or $4.05 per diluted common share in second quarter, compared to operating income available to common shareholders of $159.9 million, or $2.50 per diluted common share for the same quarter of 2008. Operating income excludes net realized gains on investments and net other-than-temporary impairments on fixed maturity investments available for sale of $18.9 million and $1.8 million, respectively, in the second quarter of 2009 and $2.4 million and $26.6 million, respectively, in the second quarter of 2008.
The Company reported an annualized return on average common equity of 41.5% and an annualized operating return on average common equity of 38.9% in the second quarter of 2009, compared to 19.9% and 23.4%, respectively, in the second quarter of 2008. Book value per common share increased to $44.17 at June 30, 2009, an 11.4% increase in the second quarter of 2009, compared to a 2.8% increase in the second quarter of 2008.
Neill A. Currie, CEO, commented: I am pleased to report a strong quarter with an annualized operating ROE of 39% and over 11% growth in book value per share in the quarter. We generated strong underwriting profits and had a successful June 1st renewal season. We are pleased with our portfolio of risks, which reflects improving market conditions in our Reinsurance segment, and our investment results benefited from spreads tightening and improving valuations during the quarter.
Mr. Currie added: With our strong balance sheet, liquidity and market position, we were able to increase capacity for our clients in Florida, both via organic growth of our already strong portfolio and by the successful execution of our newest joint venture, Timicuan Reinsurance II Ltd. We also launched our Lloyds syndicate, RenaissanceRe Syndicate 1458, and announced an agreement to acquire Spectrum Partners Ltd, its managing agency, to establish a fully-integrated platform to meet our clients evolving needs. These activities reflect our commitment to strengthening our franchise by investing in people, risk management capabilities and underwriting tools while maintaining strong underwriting discipline.
SECOND QUARTER 2009 RESULTS
Underwriting Results
Gross premiums written for the second quarter of 2009 increased $47.6 million, or 5.9%, to $855.2 million, compared to $807.6 million for the second quarter of 2008. The increase was primarily due to a $67.8 million increase in gross premiums written in the Companys Reinsurance segment and partially offset by a $16.1 million decrease in gross premiums written within the Companys Individual Risk segment, as described in more detail below. The Company generated $213.6 million of underwriting income and had a combined ratio of 43.8% in the second quarter of 2009, compared to $175.2 million of underwriting income and a 53.5% combined ratio in the second quarter of 2008. The Companys underwriting results for the second quarter of 2009 were primarily driven by lower net claims and claim expenses incurred principally due to $106.2 million of favorable development on prior year reserves. The favorable development in the second quarter of 2009 is primarily due to the Companys Reinsurance segment and reflects reductions in estimated ultimate losses on certain specific events within the Companys catastrophe unit and better than expected claims emergence in the Companys specialty unit. Favorable development on prior year reserves in the second quarter of 2008 of $49.6 million was primarily due to lower than expected claims emergence in both the Companys Reinsurance and Individual Risk segments.
1
Reinsurance Segment
Gross premiums written for the Companys Reinsurance segment increased $67.8 million, or 13.9%, to $555.6 million in the second quarter of 2009, compared to $487.8 million in the second quarter of 2008. Included in the Companys Reinsurance segments gross premiums written is $41.8 million of premium written on behalf of a new fully-collateralized joint venture, Timicuan Reinsurance II Ltd. (Tim Re II), for which the Company can potentially receive a profit commission. Of the gross premiums written on behalf of Tim Re II, 83.2% is ceded to external parties, with the Company retaining the remaining 16.8% due to its 16.8% ownership interest in Tim Re II. The Companys managed catastrophe premiums increased $92.4 million, or 18.7%, to $586.0 million in the second quarter of 2009, compared to $493.6 million in the second quarter of 2008. The Companys growth in managed catastrophe premiums principally reflected the execution of the Tim Re II joint venture, the continuation of attractive market conditions on a risk-adjusted basis in the Companys core markets and the inception of several new programs and other organic growth of the Companys portfolio. This was partially offset by the impact on market demand of several large state catastrophe programs which purchased private market reinsurance in 2008 and prior periods, but have not done so to date in 2009. The Companys specialty reinsurance premiums decreased $26.5 million, to $(3.4) million in the second quarter of 2009, compared to $23.1 million in the second quarter of 2008. The decrease in the Companys specialty reinsurance premiums is due in part to the non-renewal and portfolio transfer out of a catastrophe exposed homeowners personal lines property quota share contract, representing a $24.2 million decrease in gross premiums written, which was partially offset by the inception of several new programs. The Companys specialty reinsurance premiums are prone to significant volatility due to the timing of contract inception and also due to the business being characterized by a relatively small number of relatively large transactions.
The Companys Reinsurance segment generated $212.4 million of underwriting income and had a combined ratio of 6.8% in the second quarter of 2009, compared to $157.9 million of underwriting income and a combined ratio of 30.2% in the second quarter of 2008. The increase in underwriting income in the second quarter of 2009 was primarily due to favorable development on prior year reserves of $96.4 million in the second quarter of 2009, compared to $37.7 million in the second quarter of 2008. As noted above, the favorable development on prior year reserves in the second quarter of 2009 was the result of reductions in estimated ultimate losses on certain specific events within the catastrophe unit, including hurricanes Gustav and Ike (2008), the United Kingdom flooding (2007) and European windstorm Kyrill (2007), and within the Companys specialty unit, lower than expected claims emergence on the 2005 through 2008 underwriting years. The Reinsurance segment experienced $37.7 million of favorable development in the second quarter of 2008 as a result of lower than expected claims emergence in the Companys catastrophe and specialty reinsurance units.
Individual Risk Segment
Gross premiums written for the Companys Individual Risk segment decreased $16.1 million, or 5.1%, to $298.7 million in the second quarter of 2009, compared to $314.8 million in the second quarter of 2008. The decrease in gross premiums written in the Individual Risk segment was primarily due to the Companys decision in late 2008 to terminate several program manager relationships and a commercial property quota share contract and, during the second quarter of 2009, to reduce its participation on a personal lines property quota share contract. The latter decision resulted in an $11.6 million reduction in gross premiums written. The decrease was partially offset by growth in the Companys multi-peril crop insurance gross premiums written during the second quarter of 2009, which increased $31.9 million, or 15.7%, to $235.0 million from $203.1 million in the second quarter of 2008, primarily driven by new business which more than offset a decline in commodity prices. Gross premiums written in the Companys Individual Risk segment can fluctuate, perhaps significantly between quarters and between years based on several factors, including, without limitation, the timing of the inception or cessation of new program managers and quota share reinsurance contracts, including whether or not the Company has portfolio transfers in, or portfolio transfers out, of quota share reinsurance contracts of in-force books of business.
2
The Individual Risk segment generated $1.3 million of underwriting income and had a combined ratio of 99.2% in the second quarter of 2009, compared to $17.4 million of underwriting income and a combined ratio of 88.5% in the second quarter of 2008. The decrease in underwriting income was primarily due to a $13.5 million increase in net claims and claim expenses and a $3.3 million increase in acquisition expenses. The increase in the net claims and claim expenses was principally driven by several large losses reported in the Companys commercial property line of business. The increase in acquisition expenses is primarily related to the Company recognizing a full quarter of expenses for Agro National Inc. (Agro National) during the second quarter of 2009 compared to one month in the second quarter of 2008, since the Company acquired Agro National on June 2, 2008. The Companys Individual Risk segments prior year reserves experienced $9.9 million of favorable development in the second quarter of 2009 compared to $11.8 million of favorable development in the second quarter of 2008, primarily as a result of lower than expected reported claims on prior year reserves.
Investments
Returns on the Companys investment portfolio were significantly higher in the second quarter of 2009 compared to the second quarter of 2008, primarily due to higher total returns on the Companys fixed income portfolios including certain non-investment grade allocations which the Company includes in other investments. The Company also experienced higher returns in its hedge fund and private equity investments during the second quarter of 2009. The Companys total investment result, which includes the sum of net investment income, net realized gains on investments, net other-than-temporary impairments on fixed maturity investments available for sale and the net change in unrealized holding gains on fixed maturity investments available for sale, excluding a cumulative effect adjustment as a result of the adoption of FAS 115-2, as described in more detail below, was $150.8 million in the second quarter of 2009, compared to negative $20.7 million in the second quarter of 2008, an increase of $171.5 million. The Companys total investment result for the second quarter of 2009 benefitted from the significant tightening of credit spreads during the quarter, which resulted in increases in the fair value of many of the Companys investments. The Company does not anticipate a repeat of this quarters investment performance in future periods.
Net investment income was $114.3 million in the second quarter of 2009, compared to net investment income of $38.7 million in the second quarter of 2008. The $75.6 million increase in net investment income was principally driven by a $41.7 million increase from the Companys hedge fund and private equity investments and a $49.9 million increase in net investment income from its other investments, principally senior secured bank loan funds and non-U.S. fixed income funds, and partially offset by a $6.3 million and $9.3 million decrease in net investment income from the Companys fixed maturity investments available for sale and short term investments, respectively. The Companys hedge fund, private equity and other investments are accounted for at fair value with the change in fair value recorded in net investment income which included net unrealized gains of $69.3 million in the second quarter of 2009, compared to $24.4 million of net unrealized losses in the second quarter of 2008.
Net realized gains on investments were $18.9 million in the second quarter of 2009, compared to $2.4 million in the second quarter of 2008, an improvement of $16.5 million. Net other-than-temporary impairments recognized in earnings were $1.8 million in the second quarter of 2009, compared to $26.6 million for the second quarter of 2008.
Other Items
| | The Company adopted Financial Accounting Standards Board Staff Position (FSP) No. 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (FAS 157-4) effective April 1, 2009. The adoption of FAS 157-4 did not have a material impact on the Companys consolidated financial condition or results of operations. |
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| | The Company also adopted FSP No. 115-2, Recognition and Presentation of Other-Than-Temporary Impairments (FAS 115-2) effective April 1, 2009. FAS 115-2 required the Company to record, as of April 1, 2009, a cumulative effect adjustment in shareholders equity, to reclassify certain other-than-temporary impairments previously taken through earnings. In accordance with FAS 115-2, the Company determined that of the $117.8 million in other-than-temporary impairments previously recorded in earnings on fixed maturity investments available for sale for which the Company held as of April 1, 2009, $76.2 million (net of tax) of these losses are not considered other-than-temporary impairments under FAS 115-2. As a result, the Company increased the amortized cost basis of these fixed maturity investments available for sale by $76.6 million, resulting in a $76.2 million (net of tax) decrease in other comprehensive income and a $76.2 million (net of tax) increase in retained earnings. The cumulative effect adjustment had no net effect on the Companys shareholders equity or previously reported net income (loss) or operating income (loss). Of the $41.6 million difference between the $117.8 million of other-than-temporary impairments previously recorded in earnings and the $76.2 million cumulative effect adjustment, $20.6 million represents other-than-temporary impairments due to the Companys intent to sell these securities and $21.0 million represents other-than-temporary impairments due to the Company determining that the present value of the cash flows expected to be collected from these securities was below amortized cost (credit impairments). |
For the three months ended June 30, 2009, the Company recorded $1.8 million in other-than-temporary impairments which includes $0.2 million due to the Companys intent to sell securities as of June 30, 2009 and $1.6 million due to credit impairments.
This Press Release includes certain non-GAAP financial measures including operating income, operating income available to RenaissanceRe common shareholders per common share diluted, operating return on average common equity annualized and managed catastrophe premiums. 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 Financial Reports Financial Supplements 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, July 29, 2009 at 9:30 a.m. (ET) to discuss this release. Live broadcast of the conference call will be available through the Investor Information Company Webcasts section of the Companys 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, 2008 and its quarterly reports on Form 10-Q.
| INVESTOR CONTACT: | MEDIA CONTACT: | |
| Rohan Pai | David Lilly or Dawn Dover | |
| Director of Investor Relations | Kekst and Company | |
| RenaissanceRe Holdings Ltd. | (212) 521-4800 | |
| (441) 295-4513 |
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RenaissanceRe Holdings Ltd. and Subsidiaries
Summary Consolidated Statements of Operations
(in thousands of United States Dollars, except per share amounts)
(Unaudited)
| Three months ended | Six months ended | |||||||||||||||
| June 30, 2009 |
June 30, 2008 |
June 30, 2009 |
June 30, 2008 |
|||||||||||||
| Revenues |
||||||||||||||||
| Gross premiums written |
$ | 855,172 | $ | 807,575 | $ | 1,453,473 | $ | 1,334,613 | ||||||||
| Net premiums written |
$ | 631,370 | $ | 614,022 | $ | 1,078,206 | $ | 1,017,138 | ||||||||
| Increase in unearned premiums |
(251,553 | ) | (237,449 | ) | (396,641 | ) | (331,651 | ) | ||||||||
| Net premiums earned |
379,817 | 376,573 | 681,565 | 685,487 | ||||||||||||
| Net investment income |
114,293 | 38,685 | 156,419 | 91,188 | ||||||||||||
| Net foreign exchange (losses) gains |
(4,162 | ) | (231 | ) | (14,317 | ) | 4,705 | |||||||||
| Equity in earnings of other ventures |
5,432 | 4,872 | 7,168 | 11,122 | ||||||||||||
| Other (loss) income |
(3,656 | ) | (24 | ) | (18,451 | ) | 7,988 | |||||||||
| Net realized gains on investments |
18,889 | 2,412 | 41,015 | 17,124 | ||||||||||||
| Total other-than-temporary impairments |
(5,289 | ) | (26,573 | ) | (24,311 | ) | (51,955 | ) | ||||||||
| Portion recognized in other comprehensive income, before taxes |
3,456 | | 3,456 | | ||||||||||||
| Net other-than-temporary impairments |
(1,833 | ) | (26,573 | ) | (20,855 | ) | (51,955 | ) | ||||||||
| Total revenues |
508,780 | 395,714 | 832,544 | 765,659 | ||||||||||||
| Expenses |
||||||||||||||||
| Net claims and claim expenses incurred |
66,823 | 114,217 | 153,020 | 196,373 | ||||||||||||
| Acquisition expenses |
52,495 | 53,613 | 97,099 | 100,041 | ||||||||||||
| Operational expenses |
46,865 | 33,494 | 86,622 | 63,607 | ||||||||||||
| Corporate expenses |
6,339 | 7,111 | 12,927 | 15,814 | ||||||||||||
| Interest expense |
4,200 | 5,937 | 8,336 | 12,741 | ||||||||||||
| Total expenses |
176,722 | 214,372 | 358,004 | 388,576 | ||||||||||||
| Income before taxes |
332,058 | 181,342 | 474,540 | 377,083 | ||||||||||||
| Income tax (expense) benefit |
(652 | ) | 6,295 | 200 | (1,391 | ) | ||||||||||
| Net income |
331,406 | 187,637 | 474,740 | 375,692 | ||||||||||||
| Net income attributable to redeemable noncontrolling interest - DaVinciRe |
(49,652 | ) | (41,341 | ) | (85,127 | ) | (81,656 | ) | ||||||||
| Net income attributable to RenaissanceRe |
281,754 | 146,296 | 389,613 | 294,036 | ||||||||||||
| Dividends on preference shares |
(10,575 | ) | (10,575 | ) | (21,150 | ) | (21,150 | ) | ||||||||
| Net income available to RenaissanceRe common shareholders |
$ | 271,179 | $ | 135,721 | $ | 368,463 | $ | 272,886 | ||||||||
| Operating income available to RenaissanceRe common shareholders per common share - diluted (1) |
$ | 4.05 | $ | 2.50 | $ | 5.57 | $ | 4.71 | ||||||||
| Net income available to RenaissanceRe common shareholders per common share - basic |
$ | 4.35 | $ | 2.16 | $ | 5.94 | $ | 4.25 | ||||||||
| Net income available to RenaissanceRe common shareholders per common share - diluted |
$ | 4.32 | $ | 2.13 | $ | 5.90 | $ | 4.18 | ||||||||
| Average shares outstanding - basic |
60,963 | 62,921 | 60,799 | 64,224 | ||||||||||||
| Average shares outstanding - diluted |
61,322 | 63,878 | 61,156 | 65,340 | ||||||||||||
| Net claims and claim expense ratio |
17.6 | % | 30.3 | % | 22.5 | % | 28.6 | % | ||||||||
| Underwriting expense ratio |
26.2 | % | 23.2 | % | 26.9 | % | 23.9 | % | ||||||||
| Combined ratio |
43.8 | % | 53.5 | % | 49.4 | % | 52.5 | % | ||||||||
| Operating return on average common equity - annualized (1) |
38.9 | % | 23.4 | % | 27.5 | % | 22.3 | % | ||||||||
| (1) | See Comments on Regulation G for a reconciliation of non-GAAP financial measures. |
5
RenaissanceRe Holdings Ltd. and Subsidiaries
Summary Consolidated Balance Sheets
(in thousands of United States Dollars, except per share amounts)
| At | ||||||
|
June 30, 2009 |
December 31, 2008 |
|||||
| (Unaudited) | (Audited) | |||||
| Assets |
||||||
| Fixed maturity investments available for sale, at fair value |
$ | 4,230,443 | $ | 2,996,885 | ||
| Short term investments, at fair value |
1,074,469 | 2,172,343 | ||||
| Other investments, at fair value |
779,416 | 773,475 | ||||
| Investments in other ventures, under equity method |
91,677 | 99,879 | ||||
| Total investments |
6,176,005 | 6,042,582 | ||||
| Cash and cash equivalents |
209,933 | 274,692 | ||||
| Premiums receivable |
1,071,666 | 565,630 | ||||
| Ceded reinsurance balances |
250,225 | 88,019 | ||||
| Losses recoverable |
266,993 | 299,534 | ||||
| Accrued investment income |
29,209 | 26,614 | ||||
| Deferred acquisition costs |
114,836 | 81,904 | ||||
| Receivable for investments sold |
332,763 | 236,485 | ||||
| Other secured assets |
76,509 | 76,424 | ||||
| Other assets |
206,455 | 217,986 | ||||
| Goodwill and other intangibles |
70,843 | 74,181 | ||||
| Total assets |
$ | 8,805,437 | $ | 7,984,051 | ||
| Liabilities, Redeemable Noncontrolling Interest and Shareholders Equity |
||||||
| Liabilities |
||||||
| Reserve for claims and claim expenses |
$ | 1,938,295 | $ | 2,160,612 | ||
| Reserve for unearned premiums |
1,069,082 | 510,235 | ||||
| Debt |
450,000 | 450,000 | ||||
| Reinsurance balances payable |
499,437 | 315,401 | ||||
| Payable for investments purchased |
468,329 | 378,111 | ||||
| Other secured liabilities |
77,420 | 77,420 | ||||
| Other liabilities |
198,710 | 290,998 | ||||
| Total liabilities |
4,701,273 | 4,182,777 | ||||
| Redeemable noncontrolling interest - DaVinciRe |
700,562 | 768,531 | ||||
| Shareholders Equity |
||||||
| Preference shares |
650,000 | 650,000 | ||||
| Common shares |
62,345 | 61,503 | ||||
| Additional paid-in capital |
18,600 | | ||||
| Accumulated other comprehensive income |
12,065 | 75,387 | ||||
| Retained earnings |
2,660,592 | 2,245,853 | ||||
| Total shareholders equity |
3,403,602 | 3,032,743 | ||||
| Total liabilities, redeemable noncontrolling interest and shareholders equity |
$ | 8,805,437 | $ | 7,984,051 | ||
| Book value per common share |
$ | 44.17 | $ | 38.74 | ||
| Common shares outstanding |
62,345 | 61,503 | ||||
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RenaissanceRe Holdings Ltd. and Subsidiaries
Supplemental Financial Data - Segment Information
(in thousands of United States Dollars)
(Unaudited)
| Three months ended June 30, 2009 | |||||||||||||||||||
| Reinsurance | Individual Risk | Eliminations (1) | Other | Total | |||||||||||||||
| Gross premiums written |
$ | 555,632 | $ | 298,731 | $ | 809 | $ | | $ | 855,172 | |||||||||
| Net premiums written |
$ | 394,981 | $ | 236,389 | | $ | 631,370 | ||||||||||||
| Net premiums earned |
$ | 227,912 | $ | 151,905 | | $ | 379,817 | ||||||||||||
| Net claims and claim expenses incurred |
(40,789 | ) | 107,612 | | 66,823 | ||||||||||||||
| Acquisition expenses |
21,136 | 31,359 | | 52,495 | |||||||||||||||
| Operational expenses |
35,189 | 11,676 | | 46,865 | |||||||||||||||
| Underwriting income |
$ | 212,376 | $ | 1,258 | | 213,634 | |||||||||||||
| Net investment income |
114,293 | 114,293 | |||||||||||||||||
| Equity in earnings of other ventures |
5,432 | 5,432 | |||||||||||||||||
| Other loss |
(3,656 | ) | (3,656 | ) | |||||||||||||||
| Interest and preference share dividends |
(14,775 | ) | (14,775 | ) | |||||||||||||||
| Redeemable noncontrolling interest - DaVinciRe |
(49,652 | ) | (49,652 | ) | |||||||||||||||
| Other items, net |
(11,153 | ) | (11,153 | ) | |||||||||||||||
| Net realized gains on investments |
18,889 | 18,889 | |||||||||||||||||
| Net other-than-temporary impairments |
(1,833 | ) | (1,833 | ) | |||||||||||||||
| Net income available to RenaissanceRe common shareholders |
$ | 57,545 | $ | 271,179 | |||||||||||||||
| Net claims and claim expenses incurred - current accident year |
$ | 55,575 | $ | 117,465 | $ | 173,040 | |||||||||||||
| Net claims and claim expenses incurred - prior accident years |
(96,364 | ) | (9,853 | ) | (106,217 | ) | |||||||||||||
| Net claims and claim expenses incurred - total |
$ | (40,789 | ) | $ | 107,612 | $ | 66,823 | ||||||||||||
| Net claims and claim expense ratio - current accident year |
24.4 | % | 77.3 | % | 45.6 | % | |||||||||||||
| Net claims and claim expense ratio - prior accident years |
(42.3 | %) | (6.5 | %) | (28.0 | %) | |||||||||||||
| Net claims and claim expense ratio - calendar year |
(17.9 | %) | 70.8 | % | 17.6 | % | |||||||||||||
| Underwriting expense ratio |
24.7 | % | 28.4 | % | 26.2 | % | |||||||||||||
| Combined ratio |
6.8 | % | 99.2 | % | 43.8 | % | |||||||||||||
| (1) Represents gross premiums ceded from the Individual Risk segment to the Reinsurance segment. |
|
||||||||||||||||||
| Three months ended June 30, 2008 | |||||||||||||||||||
| Reinsurance | Individual Risk | Eliminations (1) | Other | Total | |||||||||||||||
| Gross premiums written |
$ | 487,793 | $ | 314,845 | $ | 4,937 | $ | | $ | 807,575 | |||||||||
| Net premiums written |
$ | 353,187 | $ | 260,835 | | $ | 614,022 | ||||||||||||
| Net premiums earned |
$ | 226,286 | $ | 150,287 | | $ | 376,573 | ||||||||||||
| Net claims and claim expenses incurred |
20,120 | 94,097 | | 114,217 | |||||||||||||||
| Acquisition expenses |
25,511 | 28,102 | | 53,613 | |||||||||||||||
| Operational expenses |
22,756 | 10,738 | | 33,494 | |||||||||||||||
| Underwriting income |
$ | 157,899 | $ | 17,350 | | 175,249 | |||||||||||||
| Net investment income |
38,685 | 38,685 | |||||||||||||||||
| Equity in earnings of other ventures |
4,872 | 4,872 | |||||||||||||||||
| Other loss |
(24 | ) | (24 | ) | |||||||||||||||
| Interest and preference share dividends |
(16,512 | ) | (16,512 | ) | |||||||||||||||
| Redeemable noncontrolling interest - DaVinciRe |
(41,341 | ) | (41,341 | ) | |||||||||||||||
| Other items, net |
(1,047 | ) | (1,047 | ) | |||||||||||||||
| Net realized gains on investments |
2,412 | 2,412 | |||||||||||||||||
| Net other-than-temporary impairments |
(26,573 | ) | (26,573 | ) | |||||||||||||||
| Net income available to RenaissanceRe common shareholders |
$ | (39,528 | ) | $ | 135,721 | ||||||||||||||
| Net claims and claim expenses incurred - current accident year |
$ | 57,861 | $ | 105,926 | $ | 163,787 | |||||||||||||
| Net claims and claim expenses incurred - prior accident years |
(37,741 | ) | (11,829 | ) | (49,570 | ) | |||||||||||||
| Net claims and claim expenses incurred - total |
$ | 20,120 | $ | 94,097 | $ | 114,217 | |||||||||||||
| Net claims and claim expense ratio - current accident year |
25.6 | % | 70.5 | % | 43.5 | % | |||||||||||||
| Net claims and claim expense ratio - prior accident years |
(16.7 | %) | (7.9 | %) | (13.2 | %) | |||||||||||||
| Net claims and claim expense ratio - calendar year |
8.9 | % | 62.6 | % | 30.3 | % | |||||||||||||
| Underwriting expense ratio |
21.3 | % | 25.9 | % | 23.2 | % | |||||||||||||
| Combined ratio |
30.2 | % | 88.5 | % | 53.5 | % | |||||||||||||
| (1) | Represents gross premiums ceded from the Individual Risk segment to the Reinsurance segment. |
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RenaissanceRe Holdings Ltd. and Subsidiaries
Supplemental Financial Data - Segment Information (contd.)
(in thousands of United States Dollars)
(Unaudited)
| Six months ended June 30, 2009 | |||||||||||||||||||
| Reinsurance | Individual Risk | Eliminations (1) | Other | Total | |||||||||||||||
| Gross premiums written |
$ | 1,088,548 | $ | 363,880 | $ | 1,045 | $ | | $ | 1,453,473 | |||||||||
| Net premiums written |
$ | 809,768 | $ | 268,438 | | $ | 1,078,206 | ||||||||||||
| Net premiums earned |
$ | 453,883 | $ | 227,682 | | $ | 681,565 | ||||||||||||
| Net claims and claim expenses incurred |
(24,218 | ) | 177,238 | | 153,020 | ||||||||||||||
| Acquisition expenses |
40,157 | 56,942 | | 97,099 | |||||||||||||||
| Operational expenses |
64,304 | 22,318 | | 86,622 | |||||||||||||||
| Underwriting income (loss) |
$ | 373,640 | $ | (28,816 | ) | | 344,824 | ||||||||||||
| Net investment income |
156,419 | 156,419 | |||||||||||||||||
| Equity in earnings of other ventures |
7,168 | 7,168 | |||||||||||||||||
| Other loss |
(18,451 | ) | (18,451 | ) | |||||||||||||||
| Interest and preference share dividends |
(29,486 | ) | (29,486 | ) | |||||||||||||||
| Redeemable noncontrolling interest - DaVinciRe |
(85,127 | ) | (85,127 | ) | |||||||||||||||
| Other items, net |
(27,044 | ) | (27,044 | ) | |||||||||||||||
| Net realized gains on investments |
41,015 | 41,015 | |||||||||||||||||
| Net other-than-temporary impairments |
(20,855 | ) | (20,855 | ) | |||||||||||||||
| Net income available to RenaissanceRe common shareholders |
$ | 23,639 | $ | 368,463 | |||||||||||||||
| Net claims and claim expenses incurred - current accident year |
$ | 96,881 | $ | 155,094 | $ | 251,975 | |||||||||||||
| Net claims and claim expenses incurred - prior accident years |
(121,099 | ) | 22,144 | (98,955 | ) | ||||||||||||||
| Net claims and claim expenses incurred - total |
$ | (24,218 | ) | $ | 177,238 | $ | 153,020 | ||||||||||||
| Net claims and claim expense ratio - current accident year |
21.3 | % | 68.1 | % | 37.0 | % | |||||||||||||
| Net claims and claim expense ratio - prior accident years |
(26.6 | %) | 9.7 | % | (14.5 | %) | |||||||||||||
| Net claims and claim expense ratio - calendar year |
(5.3 | %) | 77.8 | % | 22.5 | % | |||||||||||||
| Underwriting expense ratio |
23.0 | % | 34.9 | % | 26.9 | % | |||||||||||||
| Combined ratio |
17.7 | % | 112.7 | % | 49.4 | % | |||||||||||||
| (1) | Represents gross premiums ceded from the Individual Risk segment to the Reinsurance segment. |
| Six months ended June 30, 2008 | |||||||||||||||||||
| Reinsurance | Individual Risk | Eliminations (1) | Other | Total | |||||||||||||||
| Gross premiums written |
$ | 931,521 | $ | 395,666 | $ | 7,426 | $ | | $ | 1,334,613 | |||||||||
| Net premiums written |
$ | 696,107 | $ | 321,031 | | $ | 1,017,138 | ||||||||||||
| Net premiums earned |
$ | 458,513 | $ | 226,974 | | $ | 685,487 | ||||||||||||
| Net claims and claim expenses incurred |
67,189 | 129,184 | | 196,373 | |||||||||||||||
| Acquisition expenses |
44,026 | 56,015 | | 100,041 | |||||||||||||||
| Operational expenses |
43,895 | 19,712 | | 63,607 | |||||||||||||||
| Underwriting income |
$ | 303,403 | $ | 22,063 | | 325,466 | |||||||||||||
| Net investment income |
91,188 | 91,188 | |||||||||||||||||
| Equity in earnings of other ventures |
11,122 | 11,122 | |||||||||||||||||
| Other income |
7,988 | 7,988 | |||||||||||||||||
| Interest and preference share dividends |
(33,891 | ) | (33,891 | ) | |||||||||||||||
| Redeemable noncontrolling interest - DaVinciRe |
(81,656 | ) | (81,656 | ) | |||||||||||||||
| Other items, net |
(12,500 | ) | (12,500 | ) | |||||||||||||||
| Net realized gains on investments |
17,124 | 17,124 | |||||||||||||||||
| Net other-than-temporary impairments |
(51,955 | ) | (51,955 | ) | |||||||||||||||
| Net income available to RenaissanceRe common shareholders |
$ | (52,580 | ) | $ | 272,886 | ||||||||||||||
| Net claims and claim expenses incurred - current accident year |
$ | 128,437 | $ | 162,591 | $ | 291,028 | |||||||||||||
| Net claims and claim expenses incurred - prior accident years |
(61,248 | ) | (33,407 | ) | (94,655 | ) | |||||||||||||
| Net claims and claim expenses incurred - total |
$ | 67,189 | $ | 129,184 | $ | 196,373 | |||||||||||||
| Net claims and claim expense ratio - current accident year |
28.0 | % | 71.6 | % | 42.5 | % | |||||||||||||
| Net claims and claim expense ratio - prior accident years |
(13.3 | %) | (14.7 | %) | (13.9 | %) | |||||||||||||
| Net claims and claim expense ratio - calendar year |
14.7 | % | 56.9 | % | 28.6 | % | |||||||||||||
| Underwriting expense ratio |
19.1 | % | 33.4 | % | 23.9 | % | |||||||||||||
| Combined ratio |
33.8 | % | 90.3 | % | 52.5 | % | |||||||||||||
| (1) | Represents gross premiums ceded from the Individual Risk segment to the Reinsurance segment. |
8
RenaissanceRe Holdings Ltd. and Subsidiaries
Supplemental Financial Data - Gross Premiums Written Analysis
(in thousands of United States Dollars) (Unaudited)
| Three months ended | Six months ended | ||||||||||||
| Reinsurance Segment |
June 30, 2009 | June 30, 2008 | June 30, 2009 | June 30, 2008 | |||||||||
| Renaissance catastrophe premiums |
$ | 356,269 | $ | 291,317 | $ | 645,899 | $ | 516,285 | |||||
| Renaissance specialty premiums |
(3,370 | ) | 22,955 | 65,603 | 98,418 | ||||||||
| Total Renaissance premiums |
352,899 | 314,272 | 711,502 | 614,703 | |||||||||
| DaVinci catastrophe premiums |
202,733 | 173,349 | 374,519 | 312,527 | |||||||||
| DaVinci specialty premiums |
| 172 | 2,527 | 4,291 | |||||||||
| Total DaVinci premiums |
202,733 | 173,521 | 377,046 | 316,818 | |||||||||
| Total Reinsurance premiums |
$ | 555,632 | $ | 487,793 | $ | 1,088,548 | $ | 931,521 | |||||
| Total specialty premiums |
$ | (3,370 | ) | $ | 23,127 | $ | 68,130 | $ | 102,709 | ||||
| Total catastrophe premiums |
$ | 559,002 | $ | 464,666 | $ | 1,020,418 | $ | 828,812 | |||||
| Catastrophe premiums written on behalf of our joint venture, Top Layer Re (1) |
26,184 | 24,042 | 49,976 | 55,663 | |||||||||
| Catastrophe premiums assumed from the Individual Risk segment |
809 | 4,937 | 1,045 | 7,426 | |||||||||
| Total managed catastrophe premiums (2) |
$ | 585,995 | $ | 493,645 | $ | 1,071,439 | $ | 891,901 | |||||
| (1) | Top Layer Re is accounted for under the equity method of accounting. |
| (2) | See Comments on Regulation G for a reconciliation of non-GAAP financial measures. |
| Three months ended | Six months ended | |||||||||||
| Individual Risk Segment |
June 30, 2009 | June 30, 2008 | June 30, 2009 | June 30, 2008 | ||||||||
| Multi-peril crop |
$ | 234,994 | $ | 203,077 | $ | 243,146 | $ | 208,449 | ||||
| Commercial multi-line |
25,447 | 31,699 | 50,089 | 63,083 | ||||||||
| Commercial property |
32,366 | 60,830 | 48,487 | 91,683 | ||||||||
| Personal lines property |
5,924 | 19,239 | 22,158 | 32,451 | ||||||||
| Total Individual Risk premiums |
$ | 298,731 | $ | 314,845 | $ | 363,880 | $ | 395,666 | ||||
RenaissanceRe Holdings Ltd. and Subsidiaries
Supplemental Financial Data - Total Investment Result
(in thousands of United States Dollars) (Unaudited)
| Three months ended | Six months ended | |||||||||||||||
|
June 30, 2009 |
June 30, 2008 |
June 30, 2009 |
June 30, 2008 |
|||||||||||||
| Fixed maturity investments available for sale |
$ | 40,007 | $ | 46,308 | $ | 79,134 | $ | 95,843 | ||||||||
| Short term investments |
2,741 | 12,054 | 5,812 | 31,134 | ||||||||||||
| Other investments |
||||||||||||||||
| Hedge funds and private equity investments |
12,327 | (29,395 | ) | (7,414 | ) | (31,335 | ) | |||||||||
| Other |
61,740 | 11,863 | 83,561 | (2,578 | ) | |||||||||||
| Cash and cash equivalents |
157 | 1,042 | 530 | 3,944 | ||||||||||||
| 116,972 | 41,872 | 161,623 | 97,008 | |||||||||||||
| Investment expenses |
(2,679 | ) | (3,187 | ) | (5,204 | ) | (5,820 | ) | ||||||||
| Net investment income |
114,293 | 38,685 | 156,419 | 91,188 | ||||||||||||
| Gross realized gains |
33,213 | 18,606 | 64,636 | 38,878 | ||||||||||||
| Gross realized losses |
(14,324 | ) | (16,194 | ) | (23,621 | ) | (21,754 | ) | ||||||||
| Net realized gains on investments |
18,889 | 2,412 | 41,015 | 17,124 | ||||||||||||
| Total other-than-temporary impairments |
(5,289 | ) | (26,573 | ) | (24,311 | ) | (51,955 | ) | ||||||||
| Portion recognized in other comprehensive income, before taxes |
3,456 | | 3,456 | | ||||||||||||
| Net other-than-temporary impairments |
(1,833 | ) | (26,573 | ) | (20,855 | ) | (51,955 | ) | ||||||||
| Net unrealized losses on fixed maturity investments available for sale |
(57,166 | ) | (35,248 | ) | (62,573 | ) | (11,519 | ) | ||||||||
| FAS 115-2 cumulative effect adjustment (1) |
76,615 | | 76,615 | | ||||||||||||
| Net change in unrealized holding gains on fixed maturity investments available for sale |
19,449 | (35,248 | ) | 14,042 | (11,519 | ) | ||||||||||
| Total investment result |
$ | 150,798 | $ | (20,724 | ) | $ | 190,621 | $ | 44,838 | |||||||
| (1) | Cumulative effect adjustment to opening retained earnings as of April 1, 2009, as a result of the adoption of FAS 115-2. |
9
RenaissanceRe Holdings Ltd. and Subsidiaries
Supplemental Financial Data Investment Portfolio Yield to Maturity and Credit Rating
(in thousands of United States Dollars)
(Unaudited)
| Amortized Cost |
Fair Value |
% of Total Managed Investment Portfolio |
Yield to Maturity |
Credit Rating (1) | |||||||||||||||||||||||||||||||||
| At June 30, 2009 |
AAA | AA | A | BBB |
Non- Investment Grade |
Not Rated |
|||||||||||||||||||||||||||||||
| Short term investments |
$ | 1,074,469 | $ | 1,074,469 | 17.7 | % | 0.4 | % | $ | 1,047,170 | $ | 23,160 | $ | 3,815 | $ | 124 | $ | 200 | $ | | |||||||||||||||||
| 100.0 | % | 97.5 | % | 2.2 | % | 0.3 | % | 0.0 | % | 0.0 | % | 0.0 | % | ||||||||||||||||||||||||
| Fixed maturity investments available for sale |
|||||||||||||||||||||||||||||||||||||
| U.S. treasuries |
299,300 | 300,521 | 4.9 | % | 1.7 | % | 300,521 | | | | | | |||||||||||||||||||||||||
| Agencies |
|||||||||||||||||||||||||||||||||||||
| Fannie Mae & Freddie Mac |
613,535 | 610,877 | 10.0 | % | 2.5 | % | 606,198 | | 4,679 | | | | |||||||||||||||||||||||||
| Other agencies |
68,365 | 69,122 | 1.1 | % | 2.0 | % | 69,122 | | | | | | |||||||||||||||||||||||||
| Total agencies |
681,900 | 679,999 | 11.1 | % | 2.5 | % | 675,320 | | 4,679 | | | | |||||||||||||||||||||||||
| Non U.S. government |
94,365 | 98,382 | 1.6 | % | 5.0 | % | 67,647 | 5,000 | 791 | 11,734 | 13,210 | | |||||||||||||||||||||||||
| FDIC guaranteed corporate |
809,743 | 812,509 | 13.4 | % | 1.8 | % | 812,509 | | | | | | |||||||||||||||||||||||||
| Non-U.S. government-backed corporate |
142,525 | 143,284 | 2.4 | % | 2.7 | % | 129,992 | 13,292 | | | | | |||||||||||||||||||||||||
| Corporate |
726,114 | 741,295 | 12.2 | % | 4.6 | % | 61,751 | 324,996 | 222,027 | 73,260 | 59,261 | | |||||||||||||||||||||||||
| Mortgage-backed securities |
|||||||||||||||||||||||||||||||||||||
| Residential mortgage-backed securities |
|||||||||||||||||||||||||||||||||||||
| Agency securities |
1,056,022 | 1,069,621 | 17.6 | % | 4.2 | % | 1,069,621 | | | | | | |||||||||||||||||||||||||
| Non-agency securities |
37,039 | 34,407 | 0.6 | % | 9.5 | % | 32,084 | 1,129 | | 1,194 | | | |||||||||||||||||||||||||
| Non-agency securities - Alt A |
16,015 | 15,183 | 0.2 | % | 15.0 | % | 14,081 | 471 | 306 | | 325 | | |||||||||||||||||||||||||
| Non-agency securities - Sub-prime |
| | 0.0 | % | 0.0 | % | | | | | | | |||||||||||||||||||||||||
| Total residential mortgage-backed securities |
1,109,076 | 1,119,211 | 18.4 | % | 4.5 | % | 1,115,786 | 1,600 | 306 | 1,194 | 325 | | |||||||||||||||||||||||||
| Commercial mortgage-backed securities |
217,382 | 204,275 | 3.4 | % | 8.7 | % | 204,275 | | | | | | |||||||||||||||||||||||||
| Total mortgage-backed securities |
1,326,458 | 1,323,486 | 21.8 | % | 5.2 | % | 1,320,061 | 1,600 | 306 | 1,194 | 325 | | |||||||||||||||||||||||||
| Asset-backed securities |
|||||||||||||||||||||||||||||||||||||
| Auto |
61,047 | 62,137 | 1.0 | % | 2.5 | % | 62,137 | | | | | | |||||||||||||||||||||||||
| Stranded cost |
6,996 | 7,105 | 0.1 | % | 1.9 | % | 7,105 | | | | | | |||||||||||||||||||||||||
| Credit cards |
6,460 | 6,574 | 0.1 | % | 2.1 | % | 6,574 | | | | | | |||||||||||||||||||||||||
| Other |
58,214 | 55,151 | 0.9 | % | 5.6 | % | 55,151 | | | | | | |||||||||||||||||||||||||
| Total asset-backed securities |
132,717 | 130,967 | 2.1 | % | 3.8 | % | 130,967 | | | | | | |||||||||||||||||||||||||
| Total securitized assets |
1,459,175 | 1,454,453 | 23.9 | % | 5.0 | % | 1,451,028 | 1,600 | 306 | 1,194 | 325 | | |||||||||||||||||||||||||
| Total fixed maturity investments available for sale |
4,213,122 | 4,230,443 | 69.5 | % | 3.6 | % | 3,498,768 | 344,888 | 227,803 | 86,188 | 72,796 | | |||||||||||||||||||||||||
| 100.0 | % | 8.27 | % | 8.2 | % | 5.4 | % | 2.0 | % | 1.7 | % | 0.0 | % | ||||||||||||||||||||||||
| Other investments |
|||||||||||||||||||||||||||||||||||||
| Private equity partnerships |
263,263 | 4.3 | % | | | | | | 263,263 | ||||||||||||||||||||||||||||
| Senior secured bank loan funds |
259,234 | 4.3 | % | | | | | 259,234 | | ||||||||||||||||||||||||||||
| Catastrophe bonds |
100,502 | 1.6 | % | | 24,214 | | | 76,288 | | ||||||||||||||||||||||||||||
| Non-U.S. fixed income funds |
68,192 | 1.1 | % | | | | 38,337 | 29,855 | | ||||||||||||||||||||||||||||
| Hedge funds |
66,625 | 1.1 | % | | | | | | 66,625 | ||||||||||||||||||||||||||||
| Miscellaneous other investments |
21,600 | 0.4 | % | | | | 13,319 | 8,281 | | ||||||||||||||||||||||||||||
| Total other investments |
779,416 | 12.8 | % | | 24,214 | | 51,656 | 373,658 | 329,888 | ||||||||||||||||||||||||||||
| Total managed investment portfolio |
$ | 6,084,328 | 100.0 | % | $ | 4,545,938 | $ | 392,262 | $ | 231,618 | $ | 137,968 | $ | 446,654 | $ | 329,888 | |||||||||||||||||||||
| 100.0 | % | 74.8 | % | 6.4 | % | 3.8 | % | 2.3 | % | 7.3 | % | 5.4 | % | ||||||||||||||||||||||||
| (1) | The credit ratings included in this table are those assigned by Standard & Poors Corporation (S&P). When ratings provided by S&P were not available, ratings from other nationally recognized rating agencies were used. The Company has grouped short term investments with an A-1+ and A-1 short-term issue credit rating as AAA, short term investments with A-2 short-term issue credit rating as AA and short term investments with an A-3 short-term issue credit rating as A. |
10
RenaissanceRe Holdings Ltd. and Subsidiaries
Supplemental Financial DataInvestment Portfolio
(in thousands of United States Dollars)
(Unaudited)
| At June 30, 2009 | At December 31, 2008 | Change | |||||||||||||||||
| Fair Value | % of Total Managed Investment Portfolio |
Fair Value | % of Total Managed Investment Portfolio |
$ | % | ||||||||||||||
| Short term investments |
$ | 1,074,469 | 17.7 | % | $ | 2,172,343 | 36.6 | % | $ | (1,097,874 | ) | (50.5 | %) | ||||||
| Fixed maturity investments available for sale |
|||||||||||||||||||
| U.S. treasuries |
300,521 | 4.9 | % | 467,480 | 7.9 | % | (166,959 | ) | (35.7 | %) | |||||||||
| Agencies |
|||||||||||||||||||
| Fannie Mae & Freddie Mac |
610,877 | 10.0 | % | 385,229 | 6.4 | % | 225,648 | 58.6 | % | ||||||||||
| Other agencies |
69,122 | 1.1 | % | 63,292 | 1.1 | % | 5,830 | 9.2 | % | ||||||||||
| Total agencies |
679,999 | 11.1 | % | 448,521 | 7.5 | % | 231,478 | 51.6 | % | ||||||||||
| Non U.S. government |
98,382 | 1.6 | % | 55,370 | 0.9 | % | 43,012 | 77.7 | % | ||||||||||
| FDIC guaranteed corporate |
812,509 | 13.4 | % | 207,393 | 3.5 | % | 605,116 | 291.8 | % | ||||||||||
| Non-U.S. government-backed corporate |
143,284 | 2.4 | % | 3,530 | 0.1 | % | 139,754 | 3959.0 | % | ||||||||||
| Corporate |
741,295 | 12.2 | % | 537,975 | 9.1 | % | 203,320 | 37.8 | % | ||||||||||
| Mortgage-backed securities |
|||||||||||||||||||
| Residential mortgage-backed securities |
|||||||||||||||||||
| Agency securities |
1,069,621 | 17.6 | % | 756,902 | 12.7 | % | 312,719 | 41.3 | % | ||||||||||
| Non-agency securities |
34,407 | 0.6 | % | 70,916 | 1.2 | % | (36,509 | ) | (51.5 | %) | |||||||||
| Non-agency securities - Alt A |
15,183 | 0.2 | % | 27,756 | 0.5 | % | (12,573 | ) | (45.3 | %) | |||||||||
| Non-agency securities - Sub-prime |
| 0.0 | % | | 0.0 | % | | 0.0 | % | ||||||||||
| Total residential mortgage-backed securities |
1,119,211 | 18.4 | % | 855,574 | 14.4 | % | 263,637 | 30.8 | % | ||||||||||
| Commercial mortgage-backed securities |
204,275 | 3.4 | % | 255,020 | 4.3 | % | (50,745 | ) | (19.9 | %) | |||||||||
| Total mortgage-backed securities |
1,323,486 | 21.8 | % | 1,110,594 | 18.7 | % | 212,892 | 19.2 | % | ||||||||||
| Asset-backed securities |
|||||||||||||||||||
| Auto |
62,137 | 1.0 | % | 95,812 | 1.6 | % | (33,675 | ) | (35.1 | %) | |||||||||
| Stranded cost |
7,105 | 0.1 | % | 7,639 | 0.1 | % | (534 | ) | (7.0 | %) | |||||||||
| Credit cards |
6,574 | 0.1 | % | 12,056 | 0.2 | % | (5,482 | ) | (45.3 | %) | |||||||||
| Other |
55,151 | 0.9 | % | 50,515 | 0.8 | % | (4,636 | ) | 9.2 | % | |||||||||
| Total asset-backed securities |
130,967 | 2.1 | % | 166,022 | 2.7 | % | (35,055 | ) | (21.1 | %) | |||||||||
| Total securitized assets |
1,454,453 | 23.9 | % | 1,276,616 | 21.4 | % | 177,837 | 13.9 | % | ||||||||||
| Total fixed maturity investments available for sale |
4,230,443 | 69.5 | % | 2,996,885 | 50.4 | % | 1,233,558 | 41.2 | % | ||||||||||
| Other investments |
|||||||||||||||||||
| Private equity partnerships |
263,263 | 4.3 | % | 258,901 | 4.3 | % | 4,362 | 1.7 | % | ||||||||||
| Senior secured bank loan funds |
259,234 | 4.3 | % | 215,870 | 3.6 | % | 43,364 | 20.1 | % | ||||||||||
| Catastrophe bonds |
100,502 | 1.6 | % | 93,085 | 1.8 | % | 7,417 | 8.0 | % | ||||||||||
| Non-U.S. fixed income funds |
68,192 | 1.1 | % | 81,719 | 1.6 | % | (13,527 | ) | (16.6 | %) | |||||||||
| Hedge funds |
66,625 | 1.1 | % | 105,838 | 1.4 | % | (39,213 | ) | (37.1 | %) | |||||||||
| Miscellaneous other investments |
21,600 | 0.04 | % | 18,062 | 0.3 | % | 3,538 | 19.6 | % | ||||||||||
| Total other investments |
779,416 | 12.8 | % | 773,475 | 13.0 | % | 5,941 | 0.8 | % | ||||||||||
| Total managed investment portfolio |
$ | 6,084,328 | 100.0 | % | $ | 5,942,703 | 100.0 | % | $ | 141,625 | 2.4 | % | |||||||
11
RenaissanceRe Holdings Ltd. and Subsidiaries
Supplemental Financial Data - Fixed Maturity Investments Available for Sale - Securitized Assets
(in thousands of United States Dollars)
(Unaudited)
| At June 30, 2009 |
Fair Value | % of Total Managed Investment Portfolio |
% of Total Managed Investment Portfolio | % of Total Securitized Assets |
Weighted Average Life |
||||||||||||||||||||||||
| Vintage | |||||||||||||||||||||||||||||
| 2009 | 2008 | 2007 | 2006 | 2005 | 2004 & Prior |
||||||||||||||||||||||||
| Total managed investment portfolio |
$ | 6,084,328 | 100.0 | % | |||||||||||||||||||||||||
| Mortgage-backed securities |
|||||||||||||||||||||||||||||
| Residential mortgage-backed securities |
|||||||||||||||||||||||||||||
| Agency securities |
1,069,621 | 17.6 | % | 3.0 | % | 7.3 | % | 4.0 | % | 0.7 | % | 0.8 | % | 1.8 | % | 73.5 | % | 4.4 | |||||||||||
| Non-agency securities |
34,407 | 0.6 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.1 | % | 0.2 | % | 0.3 | % | 2.4 | % | 4.4 | |||||||||||
| Non-agency securities - Alt A |
15,183 | 0.2 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.1 | % | 0.1 | % | 1.0 | % | 4.0 | |||||||||||
| Non-agency securities - Sub-prime |
| 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | | |||||||||||
| Total non-agency securities |
49,590 | 0.8 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.1 | % | 0.3 | % | 0.4 | % | 3.4 | % | 4.3 | |||||||||||
| Total residential mortgage-backed securities |
1,119,211 | 18.4 | % | 3.0 | % | 7.3 | % | 4.0 | % | 0.8 | % | 1.1 | % | 2.2 | % | 76.9 | % | 4.4 | |||||||||||
| Commercial mortgage-backed securities |
204,275 | 3.4 | % | 0.0 | % | 0.2 | % | 0.3 | % | 0.5 | % | 0.8 | % | 1.6 | % | 14.0 | % | 3.1 | |||||||||||
| Total mortgage-backed securities |
1,323,486 | 21.8 | % | 3.0 | % | 7.5 | % | 4.3 | % | 1.3 | % | 1.9 | % | 3.8 | % | 90.9 | % | 4.2 | |||||||||||
| Asset-backed securities |
|||||||||||||||||||||||||||||
| Auto |
62,137 | 1.0 | % | 0.0 | % | 0.1 | % | 0.0 | % | 0.7 | % | 0.2 | % | 0.0 | % | 4.3 | % | 0.8 | |||||||||||
| Stranded cost |
7,105 | 0.1 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.1 | % | 0.0 | % | 0.5 | % | 1.5 | |||||||||||
| Credit cards |
6,574 | 0.1 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.1 | % | 0.0 | % | 0.5 | % | 1.5 | |||||||||||
| Other |
55,151 | 0.9 | % | 0.0 | % | 0.6 | % | 0.0 | % | 0.0 | % | 0.2 | % | 0.1 | % | 3.8 | % | 5.0 | |||||||||||
| Total asset-backed securities |
130,967 | 2.1 | % | 0.0 | % | 0.7 | % | 0.0 | % | 0.7 | % | 0.6 | % | 0.1 | % | 9.1 | % | 2.6 | |||||||||||
| Total securitized assets |
$ | 1,454,453 | 23.9 | % | 3.0 | % | 8.2 | % | 4.3 | % | 2.0 | % | 2.5 | % | 3.9 | % | 100.0 | % | 4.1 | ||||||||||
RenaissanceRe Holdings Ltd. and Subsidiaries
Supplemental Financial Data - Investment Portfolio - Fixed Maturity Investments Available for Sale - Corporate
(in thousands of United States Dollars)
(Unaudited)
| At June 30, 2009 | ||||||||||||||||||
| Sector |
Total | AAA | AA | A | BBB | Non-Investment Grade |
||||||||||||
| Financials |
$ | 382,355 | $ | 13,891 | $ | 228,693 | $ | 115,292 | $ | 13,383 | $ | 11,096 | ||||||
| Industrial, utilities and energy |
112,710 | 3,164 | 28,569 | 36,632 | 26,514 | 17,831 | ||||||||||||
| Consumer |
157,290 | 29,838 | 67,734 | 27,834 | 13,809 | 18,075 | ||||||||||||
| Communications and technology |
80,439 | 14,858 | | 37,999 | 17,678 | 9,904 | ||||||||||||
| Basic materials |
8,501 | | | 4,270 | 1,876 | 2,355 | ||||||||||||
| Total corporate fixed maturity investments available for sale, at fair value (1) |
$ | 741,295 | $ | 61,751 | $ | 324,996 | $ | 222,027 | $ | 73,260 | $ | 59,261 | ||||||
| (1) | Excludes FDIC guaranteed and non-U.S. government backed corporate fixed maturity investments available for sale, at fair value. |
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RenaissanceRe Holdings Ltd. and Subsidiaries
Supplemental Financial Data - Investment Portfolio
Short Term Investments and Fixed Maturity Investments Available for Sale - Top 10 Corporate Issuers by Fair Value
(in thousands of United States Dollars)
(Unaudited)
| At June 30, 2009 | |||||||||
| Issuer |
Total | Short term investments |
Fixed maturity investments available for sale |
||||||
| General Electric Company |
$ | 85,369 | $ | | $ | 85,369 | |||
| Wells Fargo & Company |
62,693 | | 62,693 | ||||||
| JP Morgan Chase & Co. |
34,761 | 4,909 | 29,852 | ||||||
| Pfizer Inc. |
28,172 | | 28,172 | ||||||
| The Bank of New York Mellon Corporation |
26,334 | | 26,334 | ||||||
| Novartis AG |
24,276 | | 24,276 | ||||||
| Wal-mart Stores Inc. |
17,571 | | 17,571 | ||||||
| Microsoft Corporation |
14,858 | | 14,858 | ||||||
| US Bancorp |
13,606 | 9,129 | 4,477 | ||||||
| BP Plc |
13,058 | | 13,058 | ||||||
| Total (1) |
$ | 320,698 | $ | 14,038 | $ | 306,660 | |||
| (1) | Excludes FDIC guaranteed and non-U.S. government backed corporate fixed maturity investments available for sale, at fair value. |
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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 RenaissanceRe common shareholders, which the Company believes is the most directly comparable GAAP measure, by the exclusion of net realized gains and losses on investments and net other-than-temporary impairments on fixed maturity investments available for sale. 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, which is not considered by management to be a relevant indicator of its 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 RenaissanceRe common shareholders to operating income available to RenaissanceRe common shareholders; 2) net income available to RenaissanceRe common shareholders per common share diluted to operating income available to RenaissanceRe 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 | Six months ended | |||||||||||||||
| (in thousands of United States Dollars, except for per share amounts) |
June 30, 2009 | June 30, 2008 | June 30, 2009 | June 30, 2008 | ||||||||||||
| Net income available to RenaissanceRe common shareholders |
$ | 271,179 | $ | 135,721 | $ | 368,463 | $ | 272,886 | ||||||||
| Adjustment for net realized gains on investments |
(18,889 | ) | (2,412 | ) | (41,015 | ) | (17,124 | ) | ||||||||
| Adjustment for net other-then-temporary impairments |
1,833 | 26,573 | 20,855 | 51,955 | ||||||||||||
| Operating income available to RenaissanceRe common shareholders |
$ | 254,123 | $ | 159,882 | $ | 348,303 | $ | 307,717 | ||||||||
| Net income available to RenaissanceRe common shareholders per common share - diluted |
$ | 4.32 | $ | 2.13 | $ | 5.90 | $ | 4.18 | ||||||||
| Adjustment for net realized gains on investments |
(0.31 | ) | (0.04 | ) | (0.67 | ) | (0.26 | ) | ||||||||
| Adjustment for net other-then-temporary impairments |
0.04 | 0.41 | 0.34 | 0.79 | ||||||||||||
| Operating income available to RenaissanceRe common shareholders per common share - diluted |
$ | 4.05 | $ | 2.50 | $ | 5.57 | $ | 4.71 | ||||||||
| Return on average common equity - annualized |
41.5 | % | 19.9 | % | 29.1 | % | 19.8 | % | ||||||||
| Adjustment for net realized gains on investments |
(2.9 | %) | (0.4 | %) | (3.2 | %) | (1.2 | %) | ||||||||
| Adjustment for net other-then-temporary impairments |
0.3 | % | 3.9 | % | 1.6 | % | 3.7 | % | ||||||||
| Operating return on average common equity - annualized |
38.9 | % | 23.4 | % | 27.5 | % | 22.3 | % | ||||||||
The Company has also included in this Press Release managed catastrophe premiums. Managed catastrophe premiums is defined as gross catastrophe premiums written by Renaissance Reinsurance and its related joint ventures, excluding catastrophe premiums assumed from the Companys Individual Risk segment. 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, and the exclusion of catastrophe premiums assumed from the Companys Individual Risk segment. 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.
14