press release

July 22, 2021, 4:16 p.m. EDT

RenaissanceRe Reports Net Income Available to Common Shareholders of $456.8 Million; Operating Income Available to Common Shareholders of $278.1 Million in the Second Quarter of 2021. Reports Strong Growth in Gross Premiums Written.

27.6% annualized return on average common equity; 16.8% annualized operating return on average common equity. 72.4% combined ratio; 48.0% current accident year net claims and claim expense ratio. Continued strong top-line growth across both segments; 23.1%growth in gross premiums written; representing 38.1% growth in the Casualty and Specialty segment and 13.5% growth in the Property segment. Repurchased $309.0 million of common shares in the second quarter; aggregate of $480.7 million of common shares repurchased in the first half of 2021; and an additional $137.5 million of common shares repurchased from July 1, 2021 through July 19, 2021. Continued growth in the Capital Partners business, primarily driven by capital raises in Upsilon RFO and Medici, with Medici’s capital surpassing $1 billion.

RenaissanceRe Holdings Ltd. /zigman2/quotes/210486659/composite RNR +0.44% (“RenaissanceRe” or the “Company”) today announced its financial results for the three months ended June 30, 2021.

Net Income Available to Common Shareholders per Diluted Common Share: $9.35
Underwriting Income Fee Income Net Investment Income
Change in Book Value per Common Share: 6.3%
*   Annualized Operating Return on Average Common Equity, Operating Income Available to Common Shareholders, Operating Income Available to Common Shareholders per Diluted Common Share and Change in Tangible Book Value per Common Share Plus Change in Accumulated Dividends are non-GAAP financial measures; see “Comments on Regulation G” for a reconciliation of non-GAAP financial measures.
Kevin J. O’Donnell , President and Chief Executive Officer, said, “We delivered a solid quarter for our shareholders, characterized by strong underwriting growth, high quality fee income and robust investment returns. Our Casualty and Specialty team extended its leadership by continuing to find opportunities to support our customers and our Property segment deployed capital in attractive business at the mid-year renewals. I am pleased with the continued execution of our strategy and resulting growth in tangible book value per share, and remain confident in our ability to provide superior shareholder returns over the long term.”
Consolidated Financial Results - Second Quarter
  Consolidated Highlights      
    Three months ended June 30
  (in thousands, except per share amounts and percentages) 2021   2020
  Gross premiums written $ 2,094,158     $ 1,701,872  
  Underwriting income   328,976       217,137  
  Combined ratio   72.4 %     78.5 %
         
  Net Income      
  Available to common shareholders   456,818       575,845  
  Available to common shareholders per diluted common share $ 9.35     $ 12.63  
  Operating income (1)      
  Available to common shareholders   278,050       190,076  
  Available to common shareholders per diluted common share $ 5.64     $ 4.06  
  Book value per common share $ 139.35     $ 134.27  
  Change in book value per share   6.3 %     14.6 %
  Tangible book value per common share plus accumulated dividends [(1)] $ 156.55     $ 150.09  
  Change in tangible book value per common share plus change in accumulated dividends [(1)]   6.7 %     16.6 %
         
  Return on average common equity - annualized   27.6 %     38.5 %
  Operating return on average common equity - annualized [(1)]   16.8 %     12.7 %
(1)   See “Comments on Regulation G” for a reconciliation of non-GAAP financial measures.
Three Drivers of Profit: Underwriting, Fee and Investment Income

Underwriting Results - Property Segment: Grew gross premiums written by 13.5%; combined ratio of 43.8%

  Property Segment            
    Three months ended June 30   Q/Q
  (in thousands, except percentages) 2021   2020  
  Gross premiums written $ 1,183,556   $ 1,042,536   13.5 %
  Underwriting income 315,122   200,682      
               
  Underwriting Ratios            
  Net claims and claim expense ratio - current accident year 26.4   %   34.7   %   (8.3 ) pts
  Net claims and claim expense ratio - prior accident years (9.1 ) %   (1.3 ) %   (7.8 ) pts
  Net claims and claim expense ratio - calendar year 17.3   %   33.4   %   (16.1 ) pts
  Underwriting expense ratio 26.5   %   25.7   %   0.8   pts
  Combined ratio 43.8   %   59.1   %   (15.3 ) pts
  • Gross premiums written increased 13.5%, driven by:

    Growth in the property catastrophe class of business of $49.5 million, or 7.0%, primarily driven by rate improvements, combined with increased shares on existing deals and new opportunities across underwriting platforms.

    Growth in the other property class of business of $91.5 million, or 27.7%, principally driven by rate improvements, which contributed to growth in new and existing business written in the current and prior periods across underwriting platforms, notably within catastrophe exposed U.S. property excess and surplus lines.

  • Ceded premiums written were $380.2 million, an increase of $41.8 million, or 12.4%. This increase was primarily driven by an increase in gross premiums written which were ceded to third-party investors in RenaissanceRe’s managed vehicles, principally RenaissanceRe Upsilon Fund Ltd.

  • Net claims and claim expense ratio decreased 16.1 percentage points, driven by lower current accident year net losses due to the relatively low level of catastrophe activity in the period and higher prior accident year net favorable development in the second quarter of 2021, compared to the second quarter of 2020. This decrease in the net claims and claim expense ratio resulted in a lower combined ratio in the second quarter of 2021, compared to the second quarter of 2020.

  • Underwriting income of $315.1 million, primarily driven by growth in net earned premiums as well as lower current accident year net incurred losses and higher prior accident year net favorable development.

Underwriting Results - Casualty and Specialty Segment: Grew gross premiums written by 38.1%

  Casualty and Specialty Segment            
    Three months ended June 30   Q/Q
  (in thousands, except percentages) 2021   2020  
  Gross premiums written $ 910,602   $ 659,336   38.1 %
  Underwriting income 13,854   16,455      
               
  Underwriting Ratios            
  Net claims and claim expense ratio - current accident year 67.0 %   68.4 %   (1.4 ) pts
  Net claims and claim expense ratio - prior accident years (0.1) %   (1.7) %   1.6   pts
  Net claims and claim expense ratio - calendar year 66.9 %   66.7 %   0.2   pts
  Underwriting expense ratio 30.9 %   30.1 %   0.8   pts
  Combined ratio 97.8 %   96.8 %   1.0   pts
  • Gross premiums written increased 38.1 %, primarily driven by growth in the general casualty, professional liability and other specialty lines of business. This growth was principally driven by increases in new and existing business written in the current and prior periods, combined with rate improvements.

  • Net claims and claim expense ratio was comparable to the second quarter of 2020, as the decrease in the current accident year net claims and claim expense ratio, which resulted from lower attritional losses, was offset by lower favorable prior accident year loss development in the second quarter of 2021.

  • The underwriting expense ratio increased 0.8 percentage points driven by an increase in the net acquisition expense ratio, principally due to the effects of purchase accounting amortization related to the acquisition of TMR, which favorably impacted the ratio in the second quarter of 2020, partially offset by improved operating leverage in the second quarter of 2021.

Fee Income: Continued growth in management fee income related to increased capital under management

  Fee Income          
    Three months ended June 30   Q/Q
  (in thousands, except percentages) 2021   2020  
  Total management fee income $ 31,970     $ 27,437     $ 4,533  
  Total performance fee income [(1)] 14,187     18,073     (3,886
  Total fee income $ 46,157     $ 45,510     $ 647  
(1)   Performance fees are based on the performance of the individual vehicles or products, and may be negative in a particular period if, for example, large losses occur, which can potentially result in no performance fees or the reversal of previously accrued performance fees.
  • Total fee income increased by $0.6 million due to higher management fees related to increased capital under management compared to the second quarter of 2020. This was partially offset by lower performance fee income, primarily driven by the decrease in profit commissions resulting from underwriting losses from Winter Storm Uri in the first quarter of 2021.

Investment Results: Performance primarily driven by net realized and unrealized gains in fixed maturity and equity trading portfolios

  Investment Results          
    Three months ended June 30   Q/Q
  (in thousands, except percentages) 2021   2020  
  Net investment income $ 80,925   $ 89,305   $ (8,380)
  Net realized and unrealized gains on investments 191,018   448,390   (257,372)
  Total investment result 271,943   537,695   (265,752)
  Total investment return - annualized 5.2 %   11.8 %   (6.6)   pts
  • Total investment result decreased $265.8 million due to lower net realized and unrealized gains on investments in the second quarter of 2021 compared to the second quarter of 2020. The investment result in the second quarter of 2020 was favorably impacted by the market recovery following the disruption in global financial markets associated with the COVID-19 pandemic.

    The total investment result in the second quarter of 2021 was primarily driven by net realized and unrealized gains on investments of $191.0 million, principally within fixed maturity and equity investments, including:

Net realized and unrealized gains on fixed maturity investments, net of investments-related derivatives of $87.8 million, primarily as a result of decreasing yields on longer duration U.S. treasuries and a general decline in credit spreads.

Net realized and unrealized gains on equity investments, net of investments-related derivatives of $65.6 million, principally from realized and unrealized gains in the Company’s strategic investment portfolio.

Net realized and unrealized gains on other investments of $37.6 million, principally from fund investments as a result of fair value appreciation of the underlying investments.

  • Managed fixed maturity and short-term investment weighted average yield to maturity was 1.0% and average duration was 3.0 years on total consolidated fixed maturity and short-term investments, at fair value of $17.8 billion at June 30, 2021.

Other Items of Note
  • Net income attributable to redeemable noncontrolling interests was $113.5 million compared to $118.7 million in the second quarter of 2020, reflecting strong overall results across the Company’s consolidated joint ventures and managed funds in both periods.

  • Income tax expense of $13.9 million compared to $29.9 million in the second quarter of 2020. The income tax expense in both periods was principally driven by net realized and unrealized gains on investments, primarily in the Company’s U.S.-based operations, with significantly higher gains in the second quarter of 2020.

  • Raised capital totaling over $200 million in the second quarter of 2021 through RenaissanceRe Medici Fund Ltd. (“Medici”) and Upsilon RFO Re Ltd. (“Upsilon RFO”).

  • Raised gross proceeds of $500.0 million in July 2021 through the issuance of 20,000,000 Depositary Shares, each of which represents a 1/1,000th interest in a share of the Company’s 4.20% Series G Preference Shares, $1.00 par value and $25,000 liquidation preference per share (equivalent to $25.00 per Depositary Share). A portion of the proceeds from the issuance of the Series G Preference Shares will be used to redeem all of the outstanding 5.375% Series E Preference Shares, and the remaining net proceeds will be used for general corporate purposes.

  • Announced the redemption of all 11,000,000 outstanding 5.375% Series E Preference Shares in July 2021. The 5.375% Series E Preference Shares are anticipated to be redeemed on August 11, 2021 for $275.0 million plus accrued and unpaid dividends thereon. Following the redemption, no 5.375% Series E Preference Shares will remain outstanding.

RenaissanceRe continues to monitor COVID-19 and expects that there may be significant industry losses

  • RenaissanceRe continues to evaluate industry trends and potential exposure associated with the ongoing COVID-19 pandemic, and expects historically significant industry losses to emerge over time as the full impact of the pandemic and its effects on the global economy are realized. Net claims and claim expenses incurred associated with the COVID-19 pandemic were not significant in the second quarter of 2021.

  • RenaissanceRe continues to actively monitor information received from or reported by clients, brokers, industry actuaries, regulators, courts, and others, and to assess that information in the context of its own portfolio. Loss estimates represent RenaissanceRe’s best estimate based on currently available information, and actual losses may vary materially from these estimates.  

Conference Call Details and Additional Information

Non-GAAP Financial Measures and Additional Financial Information

This Press Release includes certain financial measures that are not calculated in accordance with generally accepted accounting principles in the U.S. (“GAAP”) including “operating income (loss) available (attributable) to RenaissanceRe common shareholders,” “operating income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted,” “operating return on average common equity - annualized,” “tangible book value per common share” and “tangible book value per common share plus accumulated dividends.” 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 “Investors - Financial Reports - Financial Supplements” section of the Company’s website at www.renre.com for a copy of the Financial Supplement which includes additional information on the Company’s financial performance.

Conference Call Information

RenaissanceRe will host a conference call on Friday, July 23, 2021 at 10:00 a.m. ET to discuss this release. Live broadcast of the conference call will be available through the “Investors - Webcasts & Presentations” section of the Company’s website at www.renre.com .

About RenaissanceRe

RenaissanceRe is a global provider of reinsurance and insurance that specializes in matching well-structured risks with efficient sources of capital. The Company provides property, casualty and specialty reinsurance and certain insurance solutions to customers, principally through intermediaries. Established in 1993, RenaissanceRe has offices in Bermuda, Australia, Ireland, Singapore, Switzerland, the United Kingdom and the United States.

Cautionary Statement Regarding Forward-Looking Statements

Any forward-looking statements made in this Press Release reflect RenaissanceRe’s current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are subject to numerous factors that could cause actual results to differ materially from those set forth in or implied by such forward-looking statements, including the following: the uncertainty of the continuing and future impact of the COVID-19 pandemic, including measures taken in response thereto and the effect of legislative, regulatory and judicial influences on the Company’s financial performance and the Company’s ability to conduct its business; the frequency and severity of catastrophic and other events the Company covers; the effectiveness of the Company’s claims and claim expense reserving process; the effect of climate change on the Company’s business, including the trend towards increasingly frequent and severe climate events; the Company’s ability to maintain its financial strength ratings; the effect of emerging claims and coverage issues; collection on claimed retrocessional coverage, and new retrocessional reinsurance being available on acceptable terms and providing the coverage that the Company intended to obtain; the highly competitive nature of the Company’s industry, resulting in consolidation of competitors, customers and insurance and reinsurance brokers, and the Company’s reliance on a small and decreasing number of brokers for the preponderance of its revenue; the Company’s exposure to credit loss from counterparties in the normal course of business; the effect of continued challenging economic conditions throughout the world; the performance of the Company’s investment portfolio and financial market volatility; a contention by the U.S. Internal Revenue Service that Renaissance Reinsurance Ltd. or any of the Company’s other Bermuda subsidiaries is subject to taxation in the U.S.; the effects of U.S. tax reform legislation, Organization for Economic Co-operation and Development or European Union (“EU”) measures and possible future tax reform legislation and regulations, including changes to the tax treatment of the Company’s shareholders or investors in its joint ventures or other entities the Company manages; the effect of cybersecurity risks, including technology breaches or failure, on the Company’s business; the Company’s ability to successfully implement its business strategies and initiatives, and the success of any of the Company’s strategic investments or acquisitions, including its ability to manage its operations as its product and geographical diversity increases; the Company’s ability to retain its key senior officers and to attract or retain the executives and employees necessary to manage its business; the Company’s ability to effectively manage capital on behalf of investors in joint ventures or other entities it manages; foreign currency exchange rate fluctuations; soft reinsurance underwriting market conditions; changes in the method for determining the London Inter-bank Offered Rate (“LIBOR”) and the replacement of LIBOR; losses the Company could face from terrorism, political unrest or war; the Company’s ability to determine any impairments taken on its investments; the effects of inflation; the ability of the Company’s ceding companies and delegated authority counterparties to accurately assess the risks they underwrite; the effect of operational risks, including system or human failures; the Company’s ability to raise capital if necessary; the Company’s ability to comply with covenants in its debt agreements; changes to the accounting rules and regulatory systems applicable to the Company’s business, including changes in Bermuda laws or regulations or as a result of increased global regulation of the insurance and reinsurance industries; the Company’s dependence on the ability of its operating subsidiaries to declare and pay dividends; aspects of the Company’s corporate structure that may discourage third-party takeovers and other transactions; difficulties investors may have in serving process or enforcing judgments against the Company in the U.S.; the cyclical nature of the reinsurance and insurance industries; adverse legislative developments that reduce the size of the private markets the Company serves or impede their future growth and other political, regulatory or industry initiatives adversely impacting the Company; the Company’s ability to comply with applicable sanctions and foreign corrupt practices laws; international restrictions on the writing of reinsurance by foreign companies and government intervention in the natural catastrophe market; the Company’s need to make many estimates and judgments in the preparation of its financial statements; the effect of the exit by the United Kingdom from the EU; and other factors affecting future results disclosed in RenaissanceRe’s filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and prospectus supplement dated July 7, 2021.

RenaissanceRe Holdings Ltd.
Summary Consolidated Statements of Operations
(in thousands of United States Dollars, except per share amounts and percentages)
(Unaudited)
  Three months ended   Six months ended
  June 30,
2021
  June 30,
2020
  June 30,
2021
  June 30,
2020
Revenues              
Gross premiums written $ 2,094,158     $ 1,701,872     $ 4,746,600     $ 3,727,593  
Net premiums written $ 1,512,292     $ 1,180,803     $ 3,336,375     $ 2,450,611  
Increase in unearned premiums   (319,502 )     (170,707 )     (989,749 )     (527,417 )
Net premiums earned   1,192,790       1,010,096       2,346,626       1,923,194  
Net investment income   80,925       89,305       160,729       188,778  
Net foreign exchange gains (losses)   3,234       (7,195 )     (19,554 )     (12,923 )
Equity in earnings of other ventures   8,732       9,041       3,174       13,605  
Other income (loss)   586       (1,201 )     2,757       (5,637 )
Net realized and unrealized gains (losses) on investments   191,018       448,390       (154,545 )     337,683  
Total revenues   1,477,285       1,548,436       2,339,187       2,444,700  
Expenses              
Net claims and claim expenses incurred   520,021       510,272       1,387,072       1,081,226  
Acquisition expenses   285,590       233,610       552,824       444,214  
Operational expenses   58,203       49,077       113,514       116,538  
Corporate expenses   10,125       11,898       20,530       27,889  
Interest expense   11,833       11,842       23,745       26,769  
Total expenses   885,772       816,699       2,097,685       1,696,636  
Income before taxes   591,513       731,737       241,502       748,064  
Income tax (expense) benefit   (13,862 )     (29,875 )     5,654       (21,029 )
Net income   577,651       701,862       247,156       727,035  
Net income attributable to redeemable noncontrolling interests   (113,544 )     (118,728 )     (66,694 )     (216,819 )
Net income available to RenaissanceRe   464,107       583,134       180,462       510,216  
Dividends on preference shares   (7,289 )     (7,289 )     (14,578 )     (16,345 )
Net income available to RenaissanceRe common shareholders $ 456,818     $ 575,845     $ 165,884     $ 493,871  
               
Net income available to RenaissanceRe common shareholders per common share – basic $ 9.36     $ 12.64     $ 3.36     $ 11.04  
Net income available to RenaissanceRe common shareholders per common share – diluted $ 9.35     $ 12.63     $ 3.35     $ 11.02  
Operating income available to RenaissanceRe common shareholders per common share - diluted [(1)] $ 5.64     $ 4.06     $ 5.73     $ 4.91  
               
Average shares outstanding - basic   48,163       44,939       48,871       44,190  
Average shares outstanding - diluted   48,226       45,003       48,940       44,253  
               
Net claims and claim expense ratio   43.6 %     50.5 %     59.1 %     56.2 %
Underwriting expense ratio   28.8 %     28.0 %     28.4 %     29.2 %
Combined ratio   72.4 %     78.5 %     87.5 %     85.4 %
               
Return on average common equity - annualized   27.6 %     38.5 %     4.9 %     17.1 %
Operating return on average common equity - annualized [(1)]   16.8 %     12.7 %     8.4 %     7.8 %
(1)   See Comments on Regulation G for a reconciliation of non-GAAP financial measures.
RenaissanceRe Holdings Ltd.
Summary Consolidated Balance Sheets
(in thousands of United States Dollars, except per share amounts)
       
  June 30,
2021
  December 31,
2020
Assets (Unaudited)   (Audited)
Fixed maturity investments trading, at fair value $ 13,418,389     $ 13,506,503  
Short term investments, at fair value   4,392,652       4,993,735  
Equity investments trading, at fair value   577,090       702,617  
Other investments, at fair value   1,585,036       1,256,948  
Investments in other ventures, under equity method   91,938       98,373  
Total investments   20,065,105       20,558,176  
Cash and cash equivalents   1,789,756       1,736,813  
Premiums receivable   4,481,492       2,894,631  
Prepaid reinsurance premiums   1,361,041       823,582  
Reinsurance recoverable   3,187,638       2,926,010  
Accrued investment income   56,804       66,743  
Deferred acquisition costs and value of business acquired   883,926       633,521  
Receivable for investments sold   457,458       568,293  
Other assets   196,959       363,170  
Goodwill and other intangible assets   246,576       249,641  
Total assets $ 32,726,755     $ 30,820,580  
Liabilities, Noncontrolling Interests and Shareholders’ Equity      
Liabilities      
Reserve for claims and claim expenses $ 10,944,742     $ 10,381,138  
Unearned premiums   4,284,260       2,763,599  
Debt   1,137,304       1,136,265  
Reinsurance balances payable   4,489,841       3,488,352  
Payable for investments purchased   795,185       1,132,538  
Other liabilities   201,398       970,121  
Total liabilities   21,852,730       19,872,013  
Redeemable noncontrolling interests   3,656,419       3,388,319  
Shareholders’ Equity      
Preference shares   525,000       525,000  
Common shares   48,026       50,811  
Additional paid-in capital   1,153,881       1,623,206  
Accumulated other comprehensive loss   (14,061 )     (12,642 )
Retained earnings   5,504,760       5,373,873  
Total shareholders’ equity attributable to RenaissanceRe   7,217,606       7,560,248  
Total liabilities, noncontrolling interests and shareholders’ equity $ 32,726,755     $ 30,820,580  
       
Book value per common share $ 139.35     $ 138.46  
RenaissanceRe Holdings Ltd.
Supplemental Financial Data - Segment Information
(in thousands of United States Dollars, except percentages)
(Unaudited)
  Three months ended June 30, 2021
  Property   Casualty and   Other   Total
Gross premiums written $ 1,183,556     $ 910,602     $     $ 2,094,158  
Net premiums written $ 803,335     $ 708,957     $     $ 1,512,292  
Net premiums earned $ 560,397     $ 632,393     $     $ 1,192,790  
Net claims and claim expenses incurred   97,150       422,871             520,021  
Acquisition expenses   109,238       176,352             285,590  
Operational expenses   38,887       19,316             58,203  
Underwriting income $ 315,122     $ 13,854     $       328,976  
Net investment income           80,925       80,925  
Net foreign exchange gains           3,234       3,234  
Equity in earnings of other ventures           8,732       8,732  
Other income           586       586  
Net realized and unrealized gains on investments           191,018       191,018  
Corporate expenses           (10,125 )     (10,125 )
Interest expense           (11,833 )     (11,833 )
Income before taxes and redeemable noncontrolling interests               591,513  
Income tax expense           (13,862 )     (13,862 )
Net income attributable to redeemable noncontrolling interests           (113,544 )     (113,544 )
Dividends on preference shares           (7,289 )     (7,289 )
Net income available to RenaissanceRe common shareholders             $ 456,818  
               
Net claims and claim expenses incurred – current accident year $ 148,133     $ 423,917     $     $ 572,050  
Net claims and claim expenses incurred – prior accident years   (50,983 )     (1,046 )           (52,029 )
Net claims and claim expenses incurred – total $ 97,150     $ 422,871     $     $ 520,021  
               
Net claims and claim expense ratio – current accident year   26.4 %     67.0 %         48.0 %
Net claims and claim expense ratio – prior accident years   (9.1 )%     (0.1 )%         (4.4 )%
Net claims and claim expense ratio – calendar year   17.3 %     66.9 %         43.6 %
Underwriting expense ratio   26.5 %     30.9 %         28.8 %
Combined ratio   43.8 %     97.8 %         72.4 %
               
  Three months ended June 30, 2020
  Property   Casualty and   Other   Total
Gross premiums written $ 1,042,536     $ 659,336     $     $ 1,701,872  
Net premiums written $ 704,138     $ 476,665     $     $ 1,180,803  
Net premiums earned $ 491,116     $ 518,980     $     $ 1,010,096  
Net claims and claim expenses incurred   164,006       346,266             510,272  
Acquisition expenses   94,773       138,837             233,610  
Operational expenses   31,655       17,422             49,077  
Underwriting income $ 200,682     $ 16,455     $       217,137  
Net investment income           89,305       89,305  
Net foreign exchange losses           (7,195 )     (7,195 )
Equity in earnings of other ventures           9,041       9,041  
Other loss           (1,201 )     (1,201 )
Net realized and unrealized gains on investments           448,390       448,390  
Corporate expenses           (11,898 )     (11,898 )
Interest expense           (11,842 )     (11,842 )
Income before taxes and redeemable noncontrolling interests               731,737  
Income tax expense           (29,875 )     (29,875 )
Net income attributable to redeemable noncontrolling interests           (118,728 )     (118,728 )
Dividends on preference shares           (7,289 )     (7,289 )
Net income available to RenaissanceRe common shareholders             $ 575,845  
               
Net claims and claim expenses incurred – current accident year $ 170,614     $ 355,064     $     $ 525,678  
Net claims and claim expenses incurred – prior accident years   (6,608 )     (8,798 )           (15,406 )
Net claims and claim expenses incurred – total $ 164,006     $ 346,266     $     $ 510,272  
               
Net claims and claim expense ratio – current accident year   34.7 %     68.4 %         52.0 %
Net claims and claim expense ratio – prior accident years   (1.3 )%     (1.7 )%         (1.5 )%
Net claims and claim expense ratio – calendar year   33.4 %     66.7 %         50.5 %
Underwriting expense ratio   25.7 %     30.1 %         28.0 %
Combined ratio   59.1 %     96.8 %         78.5 %
RenaissanceRe Holdings Ltd.
Supplemental Financial Data - Segment Information
(in thousands of United States Dollars, except percentages)
(Unaudited)
  Six months ended June 30, 2021
  Property   Casualty and   Other   Total
Gross premiums written $ 2,800,375     $ 1,946,225     $     $ 4,746,600  
Net premiums written $ 1,811,795     $ 1,524,580     $     $ 3,336,375  
Net premiums earned $ 1,165,563     $ 1,181,063     $     $ 2,346,626  
Net claims and claim expenses incurred   595,982       791,090             1,387,072  
Acquisition expenses   221,992       330,832             552,824  
Operational expenses   74,262       39,252             113,514  
Underwriting income $ 273,327     $ 19,889     $       293,216  
Net investment income           160,729       160,729  
Net foreign exchange losses           (19,554 )     (19,554 )
Equity in earnings of other ventures           3,174       3,174  
Other income           2,757       2,757  
Net realized and unrealized losses on investments           (154,545 )     (154,545 )
Corporate expenses           (20,530 )     (20,530 )
Interest expense           (23,745 )     (23,745 )
Income before taxes and redeemable noncontrolling interests               241,502  
Income tax benefit           5,654       5,654  
Net income attributable to redeemable noncontrolling interests           (66,694 )     (66,694 )
Dividends on preference shares           (14,578 )     (14,578 )
Net income available to RenaissanceRe common shareholders             $ 165,884  
               
Net claims and claim expenses incurred – current accident year $ 652,127     $ 796,006     $     $ 1,448,133  
Net claims and claim expenses incurred – prior accident years   (56,145 )     (4,916 )           (61,061 )
Net claims and claim expenses incurred – total $ 595,982     $ 791,090     $     $ 1,387,072  
               
Net claims and claim expense ratio – current accident year   55.9 %     67.4 %         61.7 %
Net claims and claim expense ratio – prior accident years   (4.8 )%     (0.4 )%         (2.6 )%
Net claims and claim expense ratio – calendar year   51.1 %     67.0 %         59.1 %
Underwriting expense ratio   25.4 %     31.3 %         28.4 %
Combined ratio   76.5 %     98.3 %         87.5 %
               
  Six months ended June 30, 2020
  Property   Casualty and   Other   Total
Gross premiums written $ 2,263,062     $ 1,464,531     $     $ 3,727,593  
Net premiums written $ 1,378,719     $ 1,071,892     $     $ 2,450,611  
Net premiums earned $ 912,451     $ 1,010,743     $     $ 1,923,194  
Net claims and claim expenses incurred   308,751       772,475             1,081,226  
Acquisition expenses   180,124       264,090             444,214  
Operational expenses   75,662       40,876             116,538  
Underwriting income (loss) $ 347,914     $ (66,698 )   $       281,216  
Net investment income           188,778       188,778  
Net foreign exchange losses           (12,923 )     (12,923 )
Equity in earnings of other ventures           13,605       13,605  
Other loss           (5,637 )     (5,637 )
Net realized and unrealized gains on investments           337,683       337,683  
Corporate expenses           (27,889 )     (27,889 )
Interest expense           (26,769 )     (26,769 )
Income before taxes and redeemable noncontrolling interests               748,064  
Income tax expense           (21,029 )     (21,029 )
Net income attributable to redeemable noncontrolling interests           (216,819 )     (216,819 )
Dividends on preference shares           (16,345 )     (16,345 )
Net income available to RenaissanceRe common shareholders             $ 493,871  
               
Net claims and claim expenses incurred – current accident year $ 301,458     $ 781,274     $     $ 1,082,732  
Net claims and claim expenses incurred – prior accident years   7,293       (8,799 )           (1,506 )
Net claims and claim expenses incurred – total $ 308,751     $ 772,475     $     $ 1,081,226  
               
Net claims and claim expense ratio – current accident year   33.0 %     77.3 %         56.3 %
Net claims and claim expense ratio – prior accident years   0.8 %     (0.9 )%         (0.1 )%
Net claims and claim expense ratio – calendar year   33.8 %     76.4 %         56.2 %
Underwriting expense ratio   28.1 %     30.2 %         29.2 %
Combined ratio   61.9 %     106.6 %         85.4 %
RenaissanceRe Holdings Ltd.
Supplemental Financial Data - Gross Premiums Written
(in thousands of United States Dollars)
(Unaudited)
       
  Three months ended   Six months ended
  June 30,
2021
  June 30,
2020
  June 30,
2021
  June 30,
2020
Property Segment              
Catastrophe $ 761,323     $ 711,786     $ 1,892,448     $ 1,647,976  
Other property 422,233     330,750     907,927     615,086  
Property segment gross premiums written $ 1,183,556     $ 1,042,536     $ 2,800,375     $ 2,263,062  
               
Casualty and Specialty Segment              
General casualty [(1)] $ 286,686     $ 206,666     $ 629,856     $ 453,333  
Professional liability [(2)] 306,387     222,737     620,759     453,224  
Financial lines [(3)] 86,175     101,635     230,561     248,714  
Other [(4)] 231,354     128,298     465,049     309,260  
Casualty and Specialty segment gross premiums written $ 910,602     $ 659,336     $ 1,946,225     $ 1,464,531  
(1)   Includes automobile liability, casualty clash, employer’s liability, umbrella or excess casualty, workers’ compensation and general liability.
(2)   Includes directors and officers, medical malpractice, and professional indemnity.
(3)   Includes financial guaranty, mortgage guaranty, political risk, surety and trade credit.
(4)   Includes accident and health, agriculture, aviation, cyber, energy, marine, satellite and terrorism. Lines of business such as regional multi-line and whole account may have characteristics of various other classes of business, and are allocated accordingly.
RenaissanceRe Holdings Ltd.
Supplemental Financial Data - Total Investment Result
(in thousands of United States Dollars, except percentages)
(Unaudited)
               
  Three months ended   Six months ended
  June 30,
2021
  June 30,
2020
  June 30,
2021
  June 30,
2020
Fixed maturity investments trading $ 59,510     $ 69,943     $ 122,443     $ 143,281  
Short term investments   782       6,049       1,355       18,141  
Equity investments trading   1,626       1,666       3,117       3,217  
Other investments              
Catastrophe bonds   16,681       13,519       31,149       27,658  
Other   9,339       1,107       13,140       2,736  
Cash and cash equivalents   159       837       261       2,341  
    88,097       93,121       171,465       197,374  
Investment expenses   (7,172 )     (3,816 )     (10,736 )     (8,596 )
Net investment income   80,925       89,305       160,729       188,778  
               
Net realized and unrealized gains (losses) on:              
Fixed maturity investments trading, net of investments-related derivatives [(1)]   87,847       322,711       (173,912 )     423,932  
Equity investments trading, net of investments-related derivatives [(1)]   65,566       113,506       (2,356 )     (38,376 )
Other investments              
Catastrophe bonds   2       4,452       (19,081 )     (9,900 )
Other   37,603       7,721       40,804       (37,973 )
Net realized and unrealized gains (losses) on investments   191,018       448,390       (154,545 )     337,683  
Total investment result $ 271,943     $ 537,695     $ 6,184     $ 526,461  
               
Total investment return - annualized   5.2 %     11.8 %     0.1 %     5.8 %
(1)   Net realized and unrealized gains (losses) on fixed maturity investments trading includes the impacts of interest rate futures, interest rate swaps, credit default swaps and total return swaps. Net realized and unrealized gains (losses) on equity investments trading includes the impact of equity futures.
Comments on Regulation G

In addition to the GAAP financial measures set forth in this Press Release, the Company has included certain non-GAAP financial measures within the meaning of Regulation G. The Company has provided these financial measures in previous investor communications and the Company’s management believes that these measures 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 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 Company’s overall financial performance.

Operating Income (Loss) Available (Attributable) to RenaissanceRe Common Shareholders and Operating Return on Average Common Equity - Annualized

The Company uses “operating income (loss) available (attributable) to RenaissanceRe common shareholders” 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 (loss) available (attributable) to RenaissanceRe common shareholders” as used herein differs from “net income (loss) attributable to RenaissanceRe common shareholders,” which the Company believes is the most directly comparable GAAP measure, by the exclusion of net realized and unrealized gains and losses on investments, excluding other investments - catastrophe bonds, net foreign exchange gains and losses, corporate expenses associated with the acquisition of TMR and the subsequent sale of RenaissanceRe (UK) Limited (“RenaissanceRe UK”), the income tax expense or benefit associated with these adjustments and the portion of these adjustments attributable to the Company's redeemable noncontrolling interests. The Company’s management believes that “operating income (loss) available (attributable) to RenaissanceRe common shareholders” is useful to investors because it more accurately measures and predicts the Company’s results of operations by removing the variability arising from: fluctuations in the fair value of the Company’s fixed maturity investment portfolio, equity investments trading, other investments (excluding catastrophe bonds) and investments-related derivatives; fluctuations in foreign exchange rates; corporate expenses associated with the acquisition of TMR and the subsequent sale of RenaissanceRe UK; the associated income tax expense or benefit of these adjustments; and the portion of these adjustments attributable to the Company's redeemable noncontrolling interests. The Company also uses “operating income (loss) available (attributable) to RenaissanceRe common shareholders” to calculate “operating income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted” and “operating return on average common equity - annualized.” The following table is a reconciliation of: (1) net income (loss) attributable to RenaissanceRe common shareholders to “operating income (loss) available (attributable) to RenaissanceRe common shareholders”; (2) net income (loss) attributable to RenaissanceRe common shareholders per common share - diluted to “operating income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted”; and (3) return on average common equity - annualized to “operating return on average common equity - annualized.” Comparative information for all prior periods has been updated to conform to the current methodology and presentation.

  Three months ended   Six months ended
(in thousands of United States Dollars, except per share amounts and percentages) June 30,
2021
  June 30,
2020
  June 30,
2021
  June 30,
2020
Net income available to RenaissanceRe common shareholders $ 456,818     $ 575,845     $ 165,884     $ 493,871  
Adjustment for net realized and unrealized (gains) losses on investments, excluding other investments - catastrophe bonds   (191,016 )     (443,938 )     135,464       (347,583 )
Adjustment for net foreign exchange (gains) losses   (3,234 )     7,195       19,554       12,923  
Adjustment for corporate expenses associated with the acquisition of TMR and the subsequent sale of RenaissanceRe UK         2,279       135       6,702  
Adjustment for income tax expense (benefit) [(1)]   11,786       21,223       (8,179 )     17,082  
Adjustment for net income (loss) available (attributable) to redeemable noncontrolling interests [(2)]   3,696       27,472       (30,413 )     40,491  
Operating income available to RenaissanceRe common shareholders $ 278,050     $ 190,076     $ 282,445     $ 223,486  
               
Net income available to RenaissanceRe common shareholders per common share - diluted $ 9.35     $ 12.63     $ 3.35     $ 11.02  
Adjustment for net realized and unrealized (gains) losses on investments, excluding other investments - catastrophe bonds   (3.96 )     (9.86 )     2.77       (7.85 )
Adjustment for net foreign exchange (gains) losses   (0.07 )     0.16       0.40       0.29  
Adjustment for corporate expenses associated with the acquisition of TMR and the subsequent sale of RenaissanceRe UK         0.05             0.15  
Adjustment for income tax expense (benefit) [(1)]   0.24       0.47       (0.17 )     0.39  
Adjustment for net income (loss) available (attributable) to redeemable noncontrolling interests [(2)]   0.08       0.61       (0.62 )     0.91  
Operating income available to RenaissanceRe common shareholders per common share - diluted $ 5.64     $ 4.06     $ 5.73     $ 4.91  
               
Return on average common equity - annualized   27.6 %     38.5 %     4.9 %     17.1 %
Adjustment for net realized and unrealized (gains) losses on investments, excluding other investments - catastrophe bonds   (11.5 )%     (29.7 )%     4.0 %     (11.9 )%
Adjustment for net foreign exchange (gains) losses   (0.2 )%     0.5 %     0.6 %     0.4 %
Adjustment for corporate expenses associated with the acquisition of TMR and the subsequent sale of RenaissanceRe UK   %     0.2 %     %     0.2 %
Adjustment for income tax expense (benefit) [(1)]   0.7 %     1.4 %     (0.2 )%     0.6 %
Adjustment for net income (loss) available (attributable) to redeemable noncontrolling interests [(2)]   0.2 %     1.8 %     (0.9 )%     1.4 %
Operating return on average common equity - annualized   16.8 %     12.7 %     8.4 %     7.8 %
(1)   Adjustment for income tax expense (benefit) represents the income tax (expense) benefit associated with the adjustments to net income available to RenaissanceRe common shareholders. The income tax impact is estimated by applying the statutory rates of applicable jurisdictions, after consideration of other relevant factors.
(2)   Represents the portion of these adjustments that are attributable to the Company's redeemable noncontrolling interests, including the income tax impact of those adjustments.

Tangible Book Value Per Common Share and Tangible Book Value Per Common Share Plus Accumulated Dividends

The Company has included in this Press Release “tangible book value per common share” and “tangible book value per common share plus accumulated dividends.” “Tangible book value per common share” is defined as book value per common share excluding goodwill and intangible assets per share. “Tangible book value per common share plus accumulated dividends” is defined as book value per common share excluding goodwill and intangible assets per share, plus accumulated dividends. The Company’s management believes “tangible book value per common share” and “tangible book value per common share plus accumulated dividends” are useful to investors because they provide a more accurate measure of the realizable value of shareholder returns, excluding the impact of goodwill and intangible assets. The following table is a reconciliation of book value per common share to “tangible book value per common share” and “tangible book value per common share plus accumulated dividends.”

  June 30,
2021
  March 31,
2021
  December 31,
2020
  September 30,
2020
  June 30,
2020
Book value per common share $ 139.35     $ 131.15     $ 138.46     $ 135.13     $ 134.27  
Adjustment for goodwill and other intangibles [(1)]   (5.60 )     (5.42 )     (5.37 )     (5.53 )     (5.56 )
Tangible book value per common share   133.75       125.73       133.09       129.60       128.71  
Adjustment for accumulated dividends   22.80       22.44       22.08       21.73       21.38  
Tangible book value per common share plus accumulated dividends $ 156.55     $ 148.17     $ 155.17     $ 151.33     $ 150.09  
                   
Quarterly change in book value per common share   6.3 %     (5.3 )%     2.5 %     0.6 %     14.6 %
Quarterly change in tangible book value per common share plus change in accumulated dividends   6.7 %     (5.3 )%     3.0 %     1.0 %     16.6 %
Year to date change in book value per common share   0.6 %     (5.3 )%     14.9 %     12.1 %     11.4 %
Year to date change in tangible book value per common share plus change in accumulated dividends   1.0 %     (5.3 )%     17.9 %     14.6 %     13.5 %
(1)   At June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020, and June 30, 2020, goodwill and other intangibles included $22.4 million, $22.7 million, $23.0 million, $23.2 million, and $23.5 million, respectively, of goodwill and other intangibles included in investments in other ventures, under equity method.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210722005965/en/

SOURCE: RenaissanceRe Holdings Ltd.

INVESTORS:
RenaissanceRe Holdings Ltd.
Keith McCue
Senior Vice President, Finance & Investor Relations
(441) 239-4830 MEDIA:
RenaissanceRe Holdings Ltd.
Keil Gunther
Senior Vice President, Head of Global Marketing & Client Communication
(441) 239-4932
or
Kekst CNC
Dawn Dover
(212) 521-4800

COMTEX_390260713/2456/2021-07-22T16:15:31

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/zigman2/quotes/210486659/composite
US : U.S.: NYSE
$ 148.00
+0.65 +0.44%
Volume: 393,511
Oct. 21, 2021 4:00p
P/E Ratio
18.12
Dividend Yield
0.97%
Market Cap
$6.94 billion
Rev. per Employee
$8.53M
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