- 13.5% annualized return on average common equity and 28.8%
annualized operating return on average common equity.
- Third consecutive quarter with annualized operating return on
average common equity exceeding 28%, driven by continued positive
momentum across the three drivers of profit.
- Strong performance across both segments; Property combined
ratio of 63.0% and Casualty and Specialty combined ratio of 93.2%;
overall combined ratio of 80.3%.
- Property catastrophe net premiums written grew by $273.4
million or 54.9%, driven by significant rate increases.
- Fee income of $56.7 million; 65.5% growth compared to Q2
2022.
- Net investment income of $292.7 million; 173.0% growth compared
to Q2 2022.
- Announced agreement to acquire Validus Re from American
International Group, Inc. in $2.985 billion transaction.
- Raised approximately $2.09 billion in net proceeds through the
issuance of 7.245 million common shares at $192.00 per share and
$750.0 million principal amount of 5.750% Senior Notes due 2033, in
accordance with our financing plan for the Validus
Acquisition.
RenaissanceRe Holdings Ltd. (NYSE: RNR) (“RenaissanceRe” or the
“Company”) today announced its financial results for the second
quarter of 2023.
Net Income Available to Common
Shareholders per Diluted Common Share: $4.09
Operating Income
Available to Common Shareholders per Diluted Common Share*:
$8.79
Underwriting Income
$351.0M
Fee Income
$56.7M
Net Investment Income
$292.7M
Change in Book Value per
Common Share: 11.6%
Change in Tangible Book
Value per Common Share Plus Change in Accum. Dividends*:
13.3%
*
Operating Return on Average
Common Equity, Operating Income (Loss) Available (Attributable) to
Common Shareholders, Operating Income (Loss) Available
(Attributable) 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 Non-GAAP Financial Measures” for a reconciliation of
non-GAAP financial measures.
Kevin J. O’Donnell, President and
Chief Executive Officer, said, “RenaissanceRe delivered a strong
quarter, distinguished by a 28.8% operating return on average
common equity with robust underwriting income and record fee and
net investment income. In addition, we accelerated our strategy by
agreeing to purchase Validus Re, which brings us a large,
diversified business in a favorable reinsurance market. In
aggregate, our accomplishments this quarter demonstrate the
effectiveness of our strategy and strengthen our foundation for
delivery of shareholder value.”
Consolidated Financial
Results
Consolidated Highlights
Three months ended
June 30,
(in thousands, except per share amounts
and percentages)
2023
2022
Gross premiums written
$
2,651,621
$
2,464,639
Net premiums written
2,195,803
1,863,616
Underwriting income (loss)
351,015
316,386
Combined ratio
80.3
%
78.3
%
Net Income (Loss)
Available (attributable) to common
shareholders
191,025
(324,913
)
Available (attributable) to common
shareholders per diluted common share
$
4.09
$
(7.53
)
Operating Income (Loss) (1)
Available (attributable) to common
shareholders
407,435
238,132
Available (attributable) to common
shareholders per diluted common share
$
8.79
$
5.51
Book value per common share
$
129.98
$
113.69
Change in book value per share
11.6
%
(6.4
)%
Tangible book value per common share plus
accumulated dividends (1)
$
150.79
$
132.05
Change in book value per common share plus
change in accumulated dividends
12.0
%
(6.1
)%
Change in tangible book value per common
share plus change in accumulated dividends (1)
13.3
%
(6.4
)%
Return on average common equity -
annualized
13.5
%
(25.1
)%
Operating return on average common equity
- annualized (1)
28.8
%
18.4
%
(1)
See “Comments on Non-GAAP
Financial Measures” for a reconciliation of non-GAAP financial
measures.
Net negative impact of the 2023 Large Loss Events
Net negative impact on underwriting result includes the sum of
(1) net claims and claim expenses incurred, (2) assumed and ceded
reinstatement premiums earned and (3) earned and lost profit
commissions. Net negative impact on net income (loss) available
(attributable) to RenaissanceRe common shareholders is the sum of
(1) net negative impact on underwriting result and (2) redeemable
noncontrolling interest, both before consideration of any related
income tax benefit (expense).
The Company’s estimates of net negative impact are based on a
review of the Company’s potential exposures, preliminary
discussions with certain counterparties and actuarial modeling
techniques. The Company’s actual net negative impact, both
individually and in the aggregate, may vary from these estimates,
perhaps materially. Changes in these estimates will be recorded in
the period in which they occur.
Meaningful uncertainty remains regarding the estimates and the
nature and extent of the losses from these catastrophe events,
driven by the magnitude and recent nature of each event, the
geographic areas impacted by the events, relatively limited claims
data received to date, the contingent nature of business
interruption and other exposures, potential uncertainties relating
to reinsurance recoveries and other factors inherent in loss
estimation, among other things.
Net negative impact on the
consolidated financial statements
Three
months ended June 30, 2023
2023 Large
Loss Events (1)
(in thousands)
Net claims and claims expenses
incurred
$
(95,278
)
Assumed reinstatement premiums earned
26,752
Ceded reinstatement premiums earned
—
Earned (lost) profit commissions
—
Net negative impact on underwriting
result
(68,526
)
Redeemable noncontrolling interest
23,949
Net negative impact on net income (loss)
available (attributable) to RenaissanceRe common shareholders
$
(44,577
)
Net negative impact on the
segment underwriting results and consolidated combined
ratio
Three months
ended June 30, 2023
2023 Large
Loss Events (1)
(in thousands, except percentages)
Net negative impact on Property segment
underwriting result
$
(68,526
)
Net negative impact on Casualty and
Specialty segment underwriting result
—
Net negative impact on underwriting
result
$
(68,526
)
Percentage point impact on consolidated
combined ratio
4.2
(1)
“2023 Large Loss Events” includes
the earthquakes which impacted southern and central Turkey in
February 2023, Cyclone Gabrielle which impacted northern New
Zealand, the flooding that impacted northern New Zealand in January
and February 2023, and various wind and thunderstorm events which
impacted states in both the Southern and Midwest U.S. during March
2023 (“Q1 2023 Large Loss Events”), and a series of large, severe
weather events that impacted Texas and other southern and central
U.S. states in June 2023. Net negative impact for the three months
ended June 30, 2023 includes an increase of approximately $20.0
million in the net negative impact of the Q1 2023 Large Loss Events
during the second quarter.
Three Drivers of Profit: Underwriting, Fee and Investment
Income
Underwriting Results -
Property Segment: Combined ratio of 63.0%; Increase in property
catastrophe net premiums written of 54.9%
Property Segment
Three months ended
June 30,
Q/Q
Change
(in thousands, except percentages)
2023
2022
Gross premiums written
$
1,402,606
$
1,218,321
15.1
%
Net premiums written
1,144,655
887,975
28.9
%
Underwriting income (loss)
281,010
264,463
Underwriting Ratios
Net claims and claim expense ratio -
current accident year
41.3
%
33.2
%
8.1
pts
Net claims and claim expense ratio - prior
accident years
(4.1
)%
(5.6
)%
1.5
pts
Net claims and claim expense ratio -
calendar year
37.2
%
27.6
%
9.6
pts
Underwriting expense ratio
25.8
%
30.0
%
(4.2
)pts
Combined ratio
63.0
%
57.6
%
5.4
pts
- Gross premiums written increased by $184.3 million, or
15.1%, driven by:
- $198.5 million increase in the catastrophe class of business,
primarily due to rate improvements on deals written in the second
quarter of 2023 which were partially offset by a reduction of
premiums written in Upsilon of $110.0 million. In addition, the
growth in the catastrophe class of business included an increase in
gross reinstatement premiums written of $29.4 million.
- $14.2 million decrease in the other property class of business,
primarily due to the non-renewal of certain catastrophe exposed
quota share programs that did not meet the Company’s return
hurdles.
- Net premiums written increased by $256.7 million, or
28.9%, with an increase of $273.4 million, or 54.9% in the
catastrophe class of business, driven by rate improvements and
lower ceded premiums written.
- Net claims and claim expense ratio - current accident
year increased 8.1 percentage points, primarily as a result of
the impact from the 2023 Large Loss Events, which contributed 11.5
percentage points to the current accident year net claims and claim
expense ratio.
- Net claims and claim expense ratio - prior accident
years reflects net favorable development, primarily from
weather-related large losses in the 2017 through 2020 accident
years, driven by better than expected loss emergence.
- Underwriting expense ratio decreased 4.2 percentage
points, largely driven by improved operating leverage from the
increase in net premiums earned from the catastrophe class of
business.
Underwriting Results -
Casualty and Specialty Segment: Combined ratio of 93.2% and
underwriting income of $70.0 million
Casualty and Specialty Segment
Three months ended
June 30,
Q/Q
Change
(in thousands, except percentages)
2023
2022
Gross premiums written
$
1,249,015
$
1,246,318
0.2
%
Net premiums written
1,051,148
975,641
7.7
%
Underwriting income (loss)
70,005
51,923
Underwriting Ratios
Net claims and claim expense ratio -
current accident year
63.3
%
65.1
%
(1.8
)pts
Net claims and claim expense ratio - prior
accident years
(0.1
)%
(0.9
)%
0.8
pts
Net claims and claim expense ratio -
calendar year
63.2
%
64.2
%
(1.0
)pts
Underwriting expense ratio
30.0
%
29.6
%
0.4
pts
Combined ratio
93.2
%
93.8
%
(0.6
)pts
- Gross premiums written were relatively flat, reflecting
proactive cycle management, as growth in the other specialty class
of business was largely offset by a decrease in the professional
liability class of business.
- Net premiums written increased 7.7% as a result of
decreases in ceded premiums written.
- Net claims and claim expense ratio - current accident
year decreased by 1.8 percentage points compared to the second
quarter of 2022 due to lower current accident year attritional
losses.
Fee Income: $56.7 million of
fee income, up 65.5% from Q2 2022; increase in both management and
performance fees
Fee Income
Three months ended
June 30,
Q/Q
Change
(in thousands, except percentages)
2023
2022
Total management fee income
$
43,439
$
30,707
$
12,732
Total performance fee income (loss)
(1)
13,242
3,548
9,694
Total fee income
$
56,681
$
34,255
$
22,426
(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.
- Management fee income increased $12.7 million,
reflecting increased capital managed at DaVinciRe Holdings Ltd.
(“DaVinci”), Vermeer Reinsurance Ltd. (“Vermeer”) and RenaissanceRe
Medici Fund Ltd. (“Medici”), as well as the recording of previously
deferred management fees in DaVinci related to the weather-related
large losses experienced in the prior years.
- Performance fee income increased $9.7 million, driven by
current year underwriting results.
Investment Results: Total
investment result improved $616.8 million; net investment income
growth of 173.0%
Investment Results
Three months ended
June 30,
Q/Q
Change
(in thousands, except percentages)
2023
2022
Net investment income
$
292,662
$
107,211
$
185,451
Net realized and unrealized gains (losses)
on investments
(222,781
)
(654,107
)
431,326
Total investment result
$
69,881
$
(546,896
)
$
616,777
Net investment income return -
annualized
5.3
%
2.1
%
3.2 pts
Total investment return - annualized
1.6
%
(10.1
)%
11.7 pts
- Net investment income increased $185.5 million,
primarily driven by higher interest rates, higher yielding assets
in the fixed maturity and short term portfolios as a result of our
reinvestment of the portfolio during the rising interest rate
environment throughout 2022 and 2023, as well as increased
catastrophe bond yields.
- Net realized and unrealized gains on investments
increased $431.3 million, principally driven by:
- Net realized and unrealized losses on fixed maturity
investments trading of $214.0 million, compared to net realized and
unrealized losses of $437.0 million in the second quarter of 2022,
driven by interest rate increases, which were generally lower in
the second quarter of 2023 compared to the interest rate increases
in the second quarter of 2022.
- Equity investments contributed net realized and unrealized
gains of $1.9 million, compared to net realized and unrealized
losses of $91.5 million in the second quarter of 2022. Both the
current and comparative quarter equity investment results were in
line with wider equity market movements; and
- Catastrophe bonds contributed net realized and unrealized gains
of $38.2 million compared to net realized and unrealized losses of
$24.7 million in the second quarter of 2022. Both the current and
comparative quarter reflected changes in risk spreads in the wider
catastrophe bond market.
- Total investments were $25.5 billion at June 30, 2023
(December 31, 2022 - $22.2 billion). Weighted average yield to
maturity and duration on the Company’s investment portfolio
(excluding investments that have no final maturity, yield to
maturity or duration) was 6.1% and 2.4 years (December 31, 2022 -
5.7% and 2.5 years, respectively).
Other Items of Note
- Net income attributable to redeemable noncontrolling
interests of $174.9 million was primarily driven by:
- Strong underwriting results for DaVinci and Vermeer;
- Strong net investment income driven by higher interest rates
and yields within the investment portfolios of the Company’s joint
ventures and managed funds; and
- Net realized and unrealized gains on catastrophe bonds recorded
during the quarter in Medici.
- Raised third-party capital of $350.5 million in the
second quarter of 2023, including $170.5 million in Medici and
$150.0 million in a newly formed segregated account focused on
investing in insurance-linked securities (ILS), primarily
catastrophe bonds.
- Redemptions of third-party capital of $313.0 million
during the second quarter of 2023, of which $285.6 million was from
Upsilon Diversified Fund, as a result of the release of collateral
associated with prior years’ contracts.
- Corporate expenses increased by $11.0 million, primarily
driven by expenses associated with the Validus Acquisition.
- Income tax expense of $5.9 million compared to a benefit
of $30.5 million in the second quarter of 2022. The increase in
income tax expense was driven by lower investment losses and
increased operating income in the Company’s taxable jurisdictions,
primarily from the Company’s U.S. operations compared to the second
quarter of 2022.
- On May 22, 2023, the Company entered into a Stock Purchase
Agreement (the “Stock Purchase Agreement”) with American
International Group, Inc. (together with its affiliates and
subsidiaries, “AIG”) pursuant to which, upon the terms and subject
to the conditions thereof, the Company agreed to purchase certain
direct and indirect subsidiaries of AIG, including Validus
Holdings, Ltd., Validus Specialty, LLC, and Validus Reinsurance,
Ltd. (the acquisitions under the Stock Purchase Agreement, together
with the other transactions contemplated thereby, the “Validus
Acquisition”). The Validus Acquisition, which is currently expected
to close during the fourth quarter of 2023, is subject to customary
closing conditions, including, among others, receipt of required
regulatory approvals.
- On May 26, 2023, the Company completed an offering of 7,245,000
of our common shares at the public offering price of $192.00 per
share. The Company received net proceeds of approximately $1,352.0
million from the offering of common shares after deducting the
underwriting discounts and estimated offering expenses
payable.
- On June 5, 2023, the Company completed an offering of $750.0
million aggregate principal amount of the Company’s 5.750% Senior
Notes due 2033. The Company received net proceeds of approximately
$741.0 million from the offering of senior notes after deducting
the underwriting discounts and estimated offering expenses
payable.
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 Wednesday, July 26,
2023 at 11:00 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.
The Company may also make forward-looking statements with respect
to its business and industry, such as those relating to its
strategy and management objectives, plans and expectations
regarding its response and ability to adapt to changing economic
conditions, market standing and product volumes, estimates of net
negative impact and insured losses from loss events, and the
Validus Acquisition and its impact on the Company’s business, among
other things. These statements are subject to numerous factors that
could cause actual results to differ materially from those
addressed by such forward-looking statements, including the
following: the risk that the Validus Acquisition may not be
completed within the expected timeframe or at all; the risk that
regulatory agencies in certain jurisdictions may impose onerous
conditions following the Validus Acquisition; difficulties in
integrating the acquired business; risk that the due diligence
process that the Company undertook in connection with the Validus
Acquisition may not have revealed all facts that may be relevant in
connection with the Validus Acquisition; the Company’s ability to
manage the growth of the acquired business’ operations successfully
following the Validus Acquisition; that historical financial
statements of Validus Reinsurance Ltd. are not representative of
the future financial position, future results of operations or
future cash flows of Validus Reinsurance Ltd. following the Validus
Acquisition; risks from The Company’s increased debt obligations as
a result of the Validus Acquisition; the Company’s dilutive impact
on the Company’s shareholders from the issuance of common shares to
AIG in connection with the Validus Acquisition; the Company’s
exposure to natural and non-natural catastrophic events and
circumstances and the variance it may cause in the Company’s
financial results; the effect of climate change on the Company’s
business, including the trend towards increasingly frequent and
severe climate events; the effectiveness of the Company’s claims
and claim expense reserving process; the effect of emerging claims
and coverage issues; the performance of the Company’s investment
portfolio and financial market volatility; the effects of
inflation; the ability of the Company’s ceding companies and
delegated authority counterparties to accurately assess the risks
they underwrite; the Company’s ability to maintain its financial
strength ratings; the highly competitive nature of the Company’s
industry and its reliance on a small number of brokers; collection
on claimed retrocessional coverage, and new retrocessional
reinsurance being available on acceptable terms or at all; the
historically cyclical nature of the (re)insurance industries; the
Company’s ability to attract and retain key executives and
employees; the Company’s ability to successfully implement its
business strategies and initiatives; the Company’s exposure to
credit loss from counterparties; the Company’s need to make many
estimates and judgments in the preparation of its financial
statements; the Company’s ability to effectively manage capital on
behalf of investors in joint ventures or other entities it manages;
changes to the accounting rules and regulatory systems applicable
to the Company’s business, including changes in Bermuda and U.S.
laws and regulations; other political, regulatory or industry
initiatives adversely impacting the Company; the Company’s ability
to comply with covenants in its debt agreements; the effect of
adverse economic factors, including changes in prevailing interest
rates and recession or the perception that recession may occur; the
effect of cybersecurity risks, including technology breaches or
failure; a contention by the U.S. Internal Revenue Service that any
of the Company’s Bermuda subsidiaries are subject to taxation in
the U.S.; the effects of possible future tax reform legislation and
regulations in the jurisdictions in which the Company operates; the
Company’s ability to determine any impairments taken on its
investments; the Company’s ability to raise capital on acceptable
terms, including through debt instruments, the capital markets, and
third party investments in our joint ventures and managed funds;
the Company’s ability to comply with applicable sanctions and
foreign corrupt practices laws; the Company’s dependence on the
ability of its operating subsidiaries to declare and pay dividends;
and other factors affecting future results disclosed in
RenaissanceRe’s filings with the SEC, including its Annual Reports
on Form 10-K and Quarterly Reports on Form 10-Q.
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, 2023
June 30, 2022
June 30, 2023
June 30, 2022
Revenues
Gross premiums written
$
2,651,621
$
2,464,639
$
5,441,882
$
5,407,603
Net premiums written
$
2,195,803
$
1,863,616
$
4,459,506
$
4,028,833
Decrease (increase) in unearned
premiums
(410,541
)
(407,233
)
(993,694
)
(1,086,025
)
Net premiums earned
1,785,262
1,456,383
3,465,812
2,942,808
Net investment income
292,662
107,211
547,040
190,902
Net foreign exchange gains (losses)
(13,488
)
(50,821
)
(27,991
)
(66,307
)
Equity in earnings (losses) of other
ventures
7,700
7,383
17,230
993
Other income (loss)
3,876
923
(430
)
2,116
Net realized and unrealized gains (losses)
on investments
(222,781
)
(654,107
)
56,670
(1,327,124
)
Total revenues
1,853,231
866,972
4,058,331
1,743,388
Expenses
Net claims and claim expenses incurred
931,211
706,239
1,732,411
1,547,972
Acquisition expenses
422,545
361,238
854,802
737,745
Operational expenses
80,491
72,520
157,965
140,427
Corporate expenses
23,371
12,352
36,214
24,854
Interest expense
14,895
11,895
27,029
23,850
Total expenses
1,472,513
1,164,244
2,808,421
2,474,848
Income (loss) before taxes
380,718
(297,272
)
1,249,910
(731,460
)
Income tax benefit (expense)
(5,942
)
30,534
(34,844
)
67,241
Net income (loss)
374,776
(266,738
)
1,215,066
(664,219
)
Net (income) loss attributable to
redeemable noncontrolling interests
(174,907
)
(49,331
)
(442,291
)
(37,419
)
Net income (loss) attributable to
RenaissanceRe
199,869
(316,069
)
772,775
(701,638
)
Dividends on preference shares
(8,844
)
(8,844
)
(17,688
)
(17,688
)
Net income (loss) available
(attributable) to RenaissanceRe common shareholders
$
191,025
$
(324,913
)
$
755,087
$
(719,326
)
Net income (loss) available (attributable)
to RenaissanceRe common shareholders per common share – basic
$
4.10
$
(7.53
)
$
16.75
$
(16.64
)
Net income (loss) available (attributable)
to RenaissanceRe common shareholders per common share – diluted
$
4.09
$
(7.53
)
$
16.71
$
(16.64
)
Operating (loss) income (attributable)
available to RenaissanceRe common shareholders per common share -
diluted (1)
$
8.79
$
5.51
$
16.98
$
8.99
Average shares outstanding - basic
45,898
43,170
44,387
43,264
Average shares outstanding - diluted
45,990
43,170
44,498
43,264
Net claims and claim expense ratio
52.2
%
48.5
%
50.0
%
52.6
%
Underwriting expense ratio
28.1
%
29.8
%
29.2
%
29.8
%
Combined ratio
80.3
%
78.3
%
79.2
%
82.4
%
Return on average common equity -
annualized
13.5
%
(25.1
)%
28.9
%
(26.6
)%
Operating return on average common equity
- annualized (1)
28.8
%
18.4
%
29.4
%
14.4
%
(1)
See Comments on Non-GAAP
Financial Measures 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, 2023
December 31,
2022
Assets
(Unaudited)
(Audited)
Fixed maturity investments trading, at
fair value
$
15,888,564
$
14,351,402
Short term investments, at fair value
6,373,969
4,669,272
Equity investments, at fair value
93,058
625,058
Other investments, at fair value
3,091,686
2,494,954
Investments in other ventures, under
equity method
89,505
79,750
Total investments
25,536,782
22,220,436
Cash and cash equivalents
943,935
1,194,339
Premiums receivable
6,490,886
5,139,471
Prepaid reinsurance premiums
1,187,177
1,021,412
Reinsurance recoverable
4,689,351
4,710,925
Accrued investment income
147,824
121,501
Deferred acquisition costs
1,300,992
1,171,738
Receivable for investments sold
508,887
350,526
Other assets
358,863
384,702
Goodwill and other intangible assets
235,218
237,828
Total assets
$
41,399,915
$
36,552,878
Liabilities, Noncontrolling Interests
and Shareholders’ Equity
Liabilities
Reserve for claims and claim expenses
$
16,138,128
$
15,892,573
Unearned premiums
5,717,302
4,559,107
Debt
1,882,101
1,170,442
Reinsurance balances payable
3,780,410
3,928,281
Payable for investments purchased
547,974
493,776
Other liabilities
254,925
648,036
Total liabilities
28,320,840
26,692,215
Redeemable noncontrolling interests
5,676,262
4,535,389
Shareholders’ Equity
Preference shares
750,000
750,000
Common shares
51,182
43,718
Additional paid-in capital
1,825,215
475,647
Accumulated other comprehensive income
(loss)
(14,050
)
(15,462
)
Retained earnings
4,790,466
4,071,371
Total shareholders’ equity attributable
to RenaissanceRe
7,402,813
5,325,274
Total liabilities, noncontrolling
interests and shareholders’ equity
$
41,399,915
$
36,552,878
Book value per common share
$
129.98
$
104.65
RenaissanceRe Holdings
Ltd.
Supplemental Financial Data -
Segment Information
(in thousands of United States
Dollars, except percentages)
(Unaudited)
Three months ended June 30,
2023
Property
Casualty and Specialty
Other
Total
Gross premiums written
$
1,402,606
$
1,249,015
$
—
$
2,651,621
Net premiums written
$
1,144,655
$
1,051,148
$
—
$
2,195,803
Net premiums earned
$
758,686
$
1,026,576
$
—
$
1,785,262
Net claims and claim expenses incurred
281,993
649,218
—
931,211
Acquisition expenses
140,606
281,939
—
422,545
Operational expenses
55,077
25,414
—
80,491
Underwriting income (loss)
$
281,010
$
70,005
$
—
351,015
Net investment income
292,662
292,662
Net foreign exchange gains (losses)
(13,488
)
(13,488
)
Equity in earnings of other ventures
7,700
7,700
Other income (loss)
3,876
3,876
Net realized and unrealized gains (losses)
on investments
(222,781
)
(222,781
)
Corporate expenses
(23,371
)
(23,371
)
Interest expense
(14,895
)
(14,895
)
Income (loss) before taxes and redeemable
noncontrolling interests
380,718
Income tax benefit (expense)
(5,942
)
(5,942
)
Net (income) loss attributable to
redeemable noncontrolling interests
(174,907
)
(174,907
)
Dividends on preference shares
(8,844
)
(8,844
)
Net income (loss) available (attributable)
to RenaissanceRe common shareholders
$
191,025
Net claims and claim expenses incurred –
current accident year
$
313,632
$
649,677
$
—
$
963,309
Net claims and claim expenses incurred –
prior accident years
(31,639
)
(459
)
—
(32,098
)
Net claims and claim expenses incurred –
total
$
281,993
$
649,218
$
—
$
931,211
Net claims and claim expense ratio –
current accident year
41.3
%
63.3
%
54.0
%
Net claims and claim expense ratio – prior
accident years
(4.1
)%
(0.1
)%
(1.8
)%
Net claims and claim expense ratio –
calendar year
37.2
%
63.2
%
52.2
%
Underwriting expense ratio
25.8
%
30.0
%
28.1
%
Combined ratio
63.0
%
93.2
%
80.3
%
Three months ended June 30,
2022
Property
Casualty and Specialty
Other
Total
Gross premiums written
$
1,218,321
$
1,246,318
$
—
$
2,464,639
Net premiums written
$
887,975
$
975,641
$
—
$
1,863,616
Net premiums earned
$
623,581
$
832,802
$
—
$
1,456,383
Net claims and claim expenses incurred
171,924
534,315
—
706,239
Acquisition expenses
137,567
223,671
—
361,238
Operational expenses
49,627
22,893
—
72,520
Underwriting income (loss)
$
264,463
$
51,923
$
—
316,386
Net investment income
107,211
107,211
Net foreign exchange gains (losses)
(50,821
)
(50,821
)
Equity in earnings of other ventures
7,383
7,383
Other income (loss)
923
923
Net realized and unrealized gains (losses)
on investments
(654,107
)
(654,107
)
Corporate expenses
(12,352
)
(12,352
)
Interest expense
(11,895
)
(11,895
)
Income (loss) before taxes and redeemable
noncontrolling interests
(297,272
)
Income tax benefit (expense)
30,534
30,534
Net (income) loss attributable to
redeemable noncontrolling interests
(49,331
)
(49,331
)
Dividends on preference shares
(8,844
)
(8,844
)
Net income (loss) available (attributable)
to RenaissanceRe common shareholders
$
(324,913
)
Net claims and claim expenses incurred –
current accident year
$
206,976
$
542,220
$
—
$
749,196
Net claims and claim expenses incurred –
prior accident years
(35,052
)
(7,905
)
—
(42,957
)
Net claims and claim expenses incurred –
total
$
171,924
$
534,315
$
—
$
706,239
Net claims and claim expense ratio –
current accident year
33.2
%
65.1
%
51.4
%
Net claims and claim expense ratio – prior
accident years
(5.6
)%
(0.9
)%
(2.9
)%
Net claims and claim expense ratio –
calendar year
27.6
%
64.2
%
48.5
%
Underwriting expense ratio
30.0
%
29.6
%
29.8
%
Combined ratio
57.6
%
93.8
%
78.3
%
RenaissanceRe Holdings
Ltd.
Supplemental Financial Data -
Segment Information
(in thousands of United States
Dollars, except percentages)
(Unaudited)
Six months ended June 30,
2023
Property
Casualty and Specialty
Other
Total
Gross premiums written
$
2,706,805
$
2,735,077
$
—
$
5,441,882
Net premiums written
$
2,164,484
$
2,295,022
$
—
$
4,459,506
Net premiums earned
$
1,446,106
$
2,019,706
$
—
$
3,465,812
Net claims and claim expenses incurred
469,602
1,262,809
—
1,732,411
Acquisition expenses
285,925
568,877
—
854,802
Operational expenses
110,890
47,075
—
157,965
Underwriting income (loss)
$
579,689
$
140,945
$
—
720,634
Net investment income
547,040
547,040
Net foreign exchange gains (losses)
(27,991
)
(27,991
)
Equity in earnings of other ventures
17,230
17,230
Other income (loss)
(430
)
(430
)
Net realized and unrealized gains (losses)
on investments
56,670
56,670
Corporate expenses
(36,214
)
(36,214
)
Interest expense
(27,029
)
(27,029
)
Income (loss) before taxes and redeemable
noncontrolling interests
1,249,910
Income tax benefit (expense)
(34,844
)
(34,844
)
Net (income) loss attributable to
redeemable noncontrolling interests
(442,291
)
(442,291
)
Dividends on preference shares
(17,688
)
(17,688
)
Net income (loss) available (attributable)
to RenaissanceRe common shareholders
$
755,087
Net claims and claim expenses incurred –
current accident year
$
582,934
$
1,286,327
$
—
$
1,869,261
Net claims and claim expenses incurred –
prior accident years
(113,332
)
(23,518
)
—
(136,850
)
Net claims and claim expenses incurred –
total
$
469,602
$
1,262,809
$
—
$
1,732,411
Net claims and claim expense ratio –
current accident year
40.3
%
63.7
%
53.9
%
Net claims and claim expense ratio – prior
accident years
(7.8
)%
(1.2
)%
(3.9
)%
Net claims and claim expense ratio –
calendar year
32.5
%
62.5
%
50.0
%
Underwriting expense ratio
27.4
%
30.5
%
29.2
%
Combined ratio
59.9
%
93.0
%
79.2
%
Six months ended June 30,
2022
Property
Casualty and Specialty
Other
Total
Gross premiums written
$
2,561,829
$
2,845,774
$
—
$
5,407,603
Net premiums written
$
1,778,141
$
2,250,692
$
—
$
4,028,833
Net premiums earned
$
1,242,172
$
1,700,636
$
—
$
2,942,808
Net claims and claim expenses incurred
431,685
1,116,287
—
1,547,972
Acquisition expenses
264,663
473,082
—
737,745
Operational expenses
96,559
43,868
—
140,427
Underwriting income (loss)
$
449,265
$
67,399
$
—
516,664
Net investment income
190,902
190,902
Net foreign exchange gains (losses)
(66,307
)
(66,307
)
Equity in earnings of other ventures
993
993
Other income (loss)
2,116
2,116
Net realized and unrealized gains (losses)
on investments
(1,327,124
)
(1,327,124
)
Corporate expenses
(24,854
)
(24,854
)
Interest expense
(23,850
)
(23,850
)
Income (loss) before taxes and redeemable
noncontrolling interests
(731,460
)
Income tax benefit (expense)
67,241
67,241
Net (income) loss attributable to
redeemable noncontrolling interests
(37,419
)
(37,419
)
Dividends on preference shares
(17,688
)
(17,688
)
Net income (loss) available (attributable)
to RenaissanceRe common shareholders
$
(719,326
)
Net claims and claim expenses incurred –
current accident year
$
483,495
$
1,125,267
$
—
$
1,608,762
Net claims and claim expenses incurred –
prior accident years
(51,810
)
(8,980
)
—
(60,790
)
Net claims and claim expenses incurred –
total
$
431,685
$
1,116,287
$
—
$
1,547,972
Net claims and claim expense ratio –
current accident year
38.9
%
66.2
%
54.7
%
Net claims and claim expense ratio – prior
accident years
(4.1
)%
(0.6
)%
(2.1
)%
Net claims and claim expense ratio –
calendar year
34.8
%
65.6
%
52.6
%
Underwriting expense ratio
29.0
%
30.4
%
29.8
%
Combined ratio
63.8
%
96.0
%
82.4
%
RenaissanceRe Holdings
Ltd.
Supplemental Financial Data -
Gross Premiums Written
(in thousands of United States
Dollars)
(Unaudited)
Three months ended
Six months ended
June 30, 2023
June 30, 2022
June 30, 2023
June 30, 2022
Property
Segment
Catastrophe
$
1,001,839
$
803,333
$
1,930,434
$
1,689,424
Other property
400,767
414,988
776,371
872,405
Property segment gross premiums
written
$
1,402,606
$
1,218,321
$
2,706,805
$
2,561,829
Casualty and
Specialty Segment
General casualty (1)
$
375,945
$
322,733
$
843,837
$
802,875
Professional liability (2)
308,284
448,801
690,537
998,520
Credit (3)
191,985
219,480
423,661
478,584
Other specialty (4)
372,801
255,304
777,042
565,795
Casualty and Specialty segment gross
premiums written
$
1,249,015
$
1,246,318
$
2,735,077
$
2,845,774
(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, 2023
June 30, 2022
June 30, 2023
June 30, 2022
Fixed maturity investments trading
$
169,739
$
76,547
$
325,239
$
138,964
Short term investments
50,231
4,397
83,181
5,533
Equity investments
2,766
4,516
6,165
7,270
Other investments
Catastrophe bonds
49,522
20,235
88,353
37,595
Other
20,820
6,894
45,391
12,446
Cash and cash equivalents
4,585
(95
)
8,849
(136
)
297,663
112,494
557,178
201,672
Investment expenses
(5,001
)
(5,283
)
(10,138
)
(10,770
)
Net investment income
$
292,662
$
107,211
547,040
190,902
Net investment income return -
annualized
5.3
%
2.1
%
5.1
%
1.8
%
Net realized gains (losses) on fixed
maturity investments trading
$
(74,212
)
$
(287,154
)
$
(178,977
)
$
(408,306
)
Net unrealized gains (losses) on fixed
maturity investments trading
(139,793
)
(149,820
)
172,233
(613,997
)
Net realized and unrealized gains (losses)
on fixed maturity investments trading
(214,005
)
(436,974
)
(6,744
)
(1,022,303
)
Net realized and unrealized gains (losses)
on investments-related derivatives
(65,051
)
(66,078
)
(52,889
)
(106,366
)
Net realized gains (losses) on equity
investments
(18,755
)
35,592
(27,493
)
35,572
Net unrealized gains (losses) on equity
investments
20,627
(127,104
)
59,778
(175,773
)
Net realized and unrealized gains (losses)
on equity investments
1,872
(91,512
)
32,285
(140,201
)
Net realized and unrealized gains (losses)
on other investments - catastrophe bonds
38,186
(24,660
)
62,312
(32,921
)
Net realized and unrealized gains (losses)
on other investments - other
16,217
(34,883
)
21,706
(25,333
)
Net realized and unrealized gains
(losses) on investments
(222,781
)
(654,107
)
56,670
(1,327,124
)
Total investment result
$
69,881
$
(546,896
)
$
603,710
$
(1,136,222
)
Total investment return -
annualized
1.6
%
(10.1
)%
5.5
%
(10.5
)%
Comments on Non-GAAP Financial
Measures
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 certain of these financial measures in previous investor
communications and the Company’s management believes that such
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 or outside the industry. These measures
may not, however, be comparable to similarly titled measures used
by companies within or 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)
available (attributable) to RenaissanceRe common shareholders,”
which the Company believes is the most directly comparable GAAP
measure, by the exclusion of (1) net realized and unrealized gains
and losses on investments, excluding other investments -
catastrophe bonds, (2) net foreign exchange gains and losses, (3)
corporate expenses associated with the pending acquisition of
Validus, (4) the income tax expense or benefit associated with
these adjustments and (5) 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 Company’s
management believes that “operating income (loss) available
(attributable) to RenaissanceRe common shareholders,” “operating
income (loss) available (attributable) to RenaissanceRe common
shareholders per common share - diluted” and “operating return on
average common equity - annualized” are useful to investors because
they more accurately measure and predict the Company’s results of
operations by removing the variability arising from the listed
adjustments. The following table is a reconciliation of: (1) net
income (loss) available (attributable) to RenaissanceRe common
shareholders to “operating income (loss) available (attributable)
to RenaissanceRe common shareholders”; (2) net income (loss)
available (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.”
Three months ended
Six months ended
(in thousands of United States Dollars,
except per share amounts and percentages)
June 30, 2023
June 30, 2022
June 30, 2023
June 30, 2022
Net income (loss) available (attributable)
to RenaissanceRe common shareholders
$
191,025
$
(324,913
)
$
755,087
$
(719,326
)
Adjustment for net realized and unrealized
losses (gains) on investments, excluding other investments -
catastrophe bonds
260,967
629,447
5,642
1,294,203
Adjustment for net foreign exchange losses
(gains)
13,488
50,821
27,991
66,307
Adjustment for corporate expenses
associated with the pending acquisition of Validus
11,341
—
11,341
—
Adjustment for income tax expense
(benefit) (1)
(10,235
)
(42,726
)
1,087
(84,600
)
Adjustment for net income (loss)
attributable to redeemable noncontrolling interests (2)
(59,151
)
(74,497
)
(33,705
)
(166,507
)
Operating income (loss) available
(attributable) to RenaissanceRe common shareholders
$
407,435
$
238,132
$
767,443
$
390,077
Net income (loss) available (attributable)
to RenaissanceRe common shareholders per common share - diluted
$
4.09
$
(7.53
)
$
16.71
$
(16.64
)
Adjustment for net realized and unrealized
losses (gains) on investments, excluding other investments -
catastrophe bonds
5.67
14.58
0.13
29.91
Adjustment for net foreign exchange losses
(gains)
0.29
1.18
0.63
1.53
Adjustment for corporate expenses
associated with the pending acquisition of Validus
0.25
—
0.25
—
Adjustment for income tax expense
(benefit) (1)
(0.22
)
(0.99
)
0.02
(1.96
)
Adjustment for net income (loss)
attributable to redeemable noncontrolling interests (2)
(1.29
)
(1.73
)
(0.76
)
(3.85
)
Operating income (loss) available
(attributable) to RenaissanceRe common shareholders per common
share - diluted
$
8.79
$
5.51
$
16.98
$
8.99
Return on average common equity -
annualized
13.5
%
(25.1
)%
28.9
%
(26.6
)%
Adjustment for net realized and unrealized
losses (gains) on investments, excluding other investments -
catastrophe bonds
18.4
%
48.7
%
0.3
%
47.8
%
Adjustment for net foreign exchange losses
(gains)
1.0
%
3.9
%
1.1
%
2.5
%
Adjustment for corporate expenses
associated with the pending acquisition of Validus
0.8
%
—
%
0.4
%
—
%
Adjustment for income tax expense
(benefit) (1)
(0.7
)%
(3.3
)%
—
%
(3.1
)%
Adjustment for net income (loss)
attributable to redeemable noncontrolling interests (2)
(4.2
)%
(5.8
)%
(1.3
)%
(6.2
)%
Operating return on average common equity
- annualized
28.8
%
18.4
%
29.4
%
14.4
%
(1)
Represents the income tax
(expense) benefit associated with the adjustments to net income
(loss) available (attributable) 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 the
adjustments above 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, 2023
March 31, 2023
December 31,
2022
September 30,
2022
June 30, 2022
Book value per common share
$
129.98
$
116.44
$
104.65
$
94.55
$
113.69
Adjustment for goodwill and other
intangibles (1)
(4.95
)
(5.78
)
(5.84
)
(5.89
)
(5.90
)
Tangible book value per common share
125.03
110.66
98.81
88.66
107.79
Adjustment for accumulated dividends
25.76
25.38
25.00
24.63
24.26
Tangible book value per common share plus
accumulated dividends
$
150.79
$
136.04
$
123.81
$
113.29
$
132.05
Quarterly change in book value per common
share
11.6
%
11.3
%
10.7
%
(16.8
)%
(6.4
)%
Quarterly change in book value per common
share plus change in accumulated dividends
12.0
%
11.6
%
11.1
%
(16.5
)%
(6.1
)%
Quarterly change in tangible book value
per common share plus change in accumulated dividends
13.3
%
12.4
%
11.9
%
(17.4
)%
(6.4
)%
Year to date change in book value per
common share
24.2
%
11.3
%
(20.8
)%
(28.5
)%
(14.0
)%
Year to date change in book value per
common share plus change in accumulated dividends
24.9
%
11.6
%
(19.7
)%
(27.6
)%
(13.4
)%
Year to date change in tangible book value
per common share plus change in accumulated dividends
27.3
%
12.4
%
(20.6
)%
(28.9
)%
(14.0
)%
(1)
At June 30, 2023, March 31, 2023,
December 31, 2022, September 30, 2022 and June 30, 2022, the
adjustment for goodwill and other intangibles included $18.3
million, $17.5 million, $17.8 million, $18.0 million and $18.3
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/20230725235185/en/
INVESTOR CONTACT: RenaissanceRe Holdings Ltd. Keith McCue
Senior Vice President, Finance & Investor Relations (441)
239-4830
MEDIA CONTACT: RenaissanceRe Holdings Ltd. Hayden Kenny
Vice President, Investor Relations & Communications (441)
239-4946 or Kekst CNC Nicholas Capuano 917-842-7859
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