- Completed acquisition of Validus Re from American International
Group, Inc. on November 1, 2023, accelerating the Company’s
strategy.
- Annualized return on average common equity of 11.5% and an
annualized operating return on average common equity of 25.0%,
which includes a dilutive effect of nearly 5 percentage points from
the capital raised in Q2 2023 to fund the Validus Acquisition.
- Overall combined ratio of 78.0%.
- Fee income of $64.6 million; up 150.9% from Q3 2022.
- Net investment income of $329.1 million; up 108.6% from Q3
2022.
RenaissanceRe Holdings Ltd. (NYSE: RNR) (“RenaissanceRe” or the
“Company”) today announced its financial results for the third
quarter of 2023.
Net Income Available to Common
Shareholders per Diluted Common Share: $3.80
Operating Income Available to
Common Shareholders per Diluted Common Share*: $8.33
Underwriting Income
$385.8M
Fee Income $64.6M
Net Investment Income
$329.1M
Change in Book Value per
Common Share: 2.8%
Change in Tangible Book Value
per Common Share Plus Change in Accum. Dividends*: 3.2%
*
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, “In 2023, we continued to
confidently execute our strategy and are pleased with the results
we are achieving and excited about the future of our company. On
November 1, 2023, we closed the acquisition of Validus Re, adding
risk expertise and scale in a favorable market and building a solid
foundation for the continued execution of our strategy. In
addition, we reported strong results for the third quarter,
delivering a 25.0% operating return on average common equity driven
by significant contributions from each of our Three Drivers of
Profit – underwriting, fee and investment income. As we approach
the January 1 renewals, we remain resolutely focused on executing
our strategy as a unified company, retaining the Validus portfolio
and capturing additional attractive growth opportunities that
support our customers and deliver value for our shareholders.”
Consolidated Financial
Results
Consolidated Highlights
Three months ended September
30,
(in thousands, except per share amounts
and percentages)
2023
2022
Gross premiums written
$
1,618,443
$
2,220,661
Net premiums written
1,421,260
1,821,711
Underwriting income (loss)
385,804
(683,114
)
Combined ratio
78.0
%
138.7
%
Net Income (Loss)
Available (attributable) to common
shareholders
193,988
(825,344
)
Available (attributable) to common
shareholders per diluted common share
$
3.80
$
(19.27
)
Operating Income (Loss) (1)
Available (attributable) to common
shareholders
422,303
(396,674
)
Available (attributable) to common
shareholders per diluted common share
$
8.33
$
(9.27
)
Book value per common share
$
133.63
$
94.55
Change in book value per share
2.8
%
(16.8
)%
Tangible book value per common share plus
accumulated dividends (1)
$
154.85
$
113.29
Change in book value per common share plus
change in accumulated dividends
3.1
%
(16.5
)%
Change in tangible book value per common
share plus change in accumulated dividends (1)
3.2
%
(17.4
)%
Return on average common equity -
annualized
11.5
%
(72.4
)%
Operating return on average common equity
- annualized (1)
25.0
%
(34.8
)%
(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 September 30, 2023
2023 Large Loss Events
(1)
(in thousands)
Net claims and claims expenses
incurred
$
(113,031
)
Assumed reinstatement premiums earned
9,259
Ceded reinstatement premiums earned
—
Earned (lost) profit commissions
6,050
Net negative impact on underwriting
result
(97,722
)
Redeemable noncontrolling interest
20,204
Net negative impact on net income (loss)
available (attributable) to RenaissanceRe common shareholders
$
(77,518
)
Net negative impact on the segment underwriting results and
consolidated combined ratio
Three months
ended September 30, 2023
2023 Large Loss Events
(1)
(in thousands, except percentages)
Net negative impact on Property segment
underwriting result
$
(97,722
)
Net negative impact on Casualty and
Specialty segment underwriting result
—
Net negative impact on underwriting
result
$
(97,722
)
Percentage point impact on consolidated
combined ratio
5.7
(1)
“2023 Large Loss Events” includes: (1) the
wildfires in Hawaii in August 2023 and Hurricane Idalia (“Q3 2023
Large Loss Events”); (2) a series of large, severe weather events
in Texas and other southern and central U.S. states in June 2023
(“Q2 2023 Large Loss Events”); (3) the earthquakes in southern and
central Turkey in February 2023, Cyclone Gabrielle, the flooding in
northern New Zealand in January and February 2023, and various wind
and thunderstorm events in both the Southern and Midwest U.S.
during March 2023 (“Q1 2023 Large Loss Events”) and (4) certain
aggregate loss contracts triggered during 2023.
Three Drivers of Profit:
Underwriting, Fee and Investment Income
Underwriting Results - Property
Segment: Combined ratio of 53.2% and underwriting income of $356.0
million
Property Segment
Three months ended September
30,
Q/Q Change
(in thousands, except percentages)
2023
2022
Gross premiums written
$
511,012
$
800,330
(36.1
)%
Net premiums written
444,872
696,520
(36.1
)%
Underwriting income (loss)
356,032
(722,599
)
Underwriting Ratios
Net claims and claim expense ratio -
current accident year
46.1
%
166.3
%
(120.2) pts
Net claims and claim expense ratio - prior
accident years
(19.0
)%
(2.9
)%
(16.1) pts
Net claims and claim expense ratio -
calendar year
27.1
%
163.4
%
(136.3) pts
Underwriting expense ratio
26.1
%
22.6
%
3.5 pts
Combined ratio
53.2
%
186.0
%
(132.8) pts
- Gross premiums written decreased by $289.3 million, or
36.1%, driven by:
– $230.5 million decrease in the catastrophe
class of business, driven by a $236.5 million reduction in gross
reinstatement premiums from lower weather-related large losses in
the third quarter of 2023.
– $58.8 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 decreased by $251.6 million, or
36.1%, driven by a $208.3 million reduction in net reinstatement
premiums from lower weather-related large losses in the third
quarter of 2023.
- Net claims and claim expense ratio - current accident
year improved by 120.2 percentage points due to a lower impact
from the 2023 Large Loss Events in the third quarter of 2023 than
the weather-related large losses in the third quarter of 2022. The
2023 Large Loss Events contributed 14.5 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 across the 2017 to 2022 accident
years, driven by better than expected loss emergence.
- Underwriting expense ratio increased 3.5 percentage
points, primarily due to the reduction in net reinstatement
premiums in the third quarter of 2023 as compared to the third
quarter of 2022.
- Combined Ratio improved by 132.8 percentage points,
primarily due to a lower level of current accident year net losses
combined with higher prior accident year net favorable
development.
Underwriting Results - Casualty and Specialty Segment:
Combined ratio of 97.0% and underwriting income of $29.8
million
Casualty and Specialty Segment
Three months ended September
30,
Q/Q Change
(in thousands, except percentages)
2023
2022
Gross premiums written
$
1,107,431
$
1,420,331
(22.0
)%
Net premiums written
976,388
1,125,191
(13.2
)%
Underwriting income (loss)
29,772
39,485
Underwriting Ratios
Net claims and claim expense ratio -
current accident year
67.2
%
65.0
%
2.2 pts
Net claims and claim expense ratio - prior
accident years
(1.4
)%
(0.8
)%
(0.6) pts
Net claims and claim expense ratio -
calendar year
65.8
%
64.2
%
1.6 pts
Underwriting expense ratio
31.2
%
31.5
%
(0.3) pts
Combined ratio
97.0
%
95.7
%
1.3 pts
- Gross premiums written decreased by $312.9 million, or
22.0%, driven by:
– a $226.7 million decrease in the credit
class of business, principally due to significant premium growth in
the third quarter of 2022 associated with opportunistic deals
written in the mortgage book of business, which do not renew
annually and earn over several years.
– the impact of positive adjustments to
premium estimates in the third quarter of 2022 for business
underwritten in prior years. Additionally, premium growth in the
other specialty class of business as compared to the third quarter
of 2022 was offset by a decrease in the casualty classes of
business, reflecting proactive cycle management.
- Net premiums written decreased 13.2%, consistent with
the changes in gross premiums written, and partially offset by an
overall reduction in our retrocessional purchases.
- Net claims and claim expense ratio - current accident
year increased by 2.2 percentage points compared to the third
quarter of 2022. Event losses on catastrophe exposed lines within
Specialty classes of business contributed approximately 3.0
percentage points to the current accident year net claims and claim
expense ratio in the third quarter of 2023.
- Net claims and claim expense ratio - prior accident
years reflects net favorable development driven by reported
losses generally coming in lower than expected on attritional net
claims and claim expenses, primarily from other specialty lines of
business.
- Underwriting expense ratio decreased 0.3 percentage
points, which consisted of a 1.3 percentage point decrease in the
net acquisition expense ratio, largely offset by a 1.0 percentage
point increase in the operating expense ratio.
Fee Income: $64.6 million of fee income, up 150.9% from Q3
2022; increase in both management and performance fees
Fee Income
Three months ended September
30,
Q/Q Change
(in thousands)
2023
2022
Total management fee income
$
44,486
$
24,989
$
19,497
Total performance fee income (loss)
(1)
20,072
739
19,333
Total fee income
$
64,558
$
25,728
$
38,830
(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 $19.5 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 management
fees in DaVinci that were previously deferred as a result of the
weather-related large losses experienced in prior years, as
compared to the deferral of management fees in the third quarter of
2022, as a result of the weather-related large losses.
- Performance fee income increased $19.3 million, driven
by improved current year underwriting results, primarily in
DaVinci.
Investment Results: Total investment result improved $584.7
million; net investment income growth of 108.6%
Investment Results
Three months ended September
30,
Q/Q Change
(in thousands, except percentages)
2023
2022
Net investment income
$
329,108
$
157,793
$
171,315
Net realized and unrealized gains (losses)
on investments
(228,087
)
(641,500
)
413,413
Total investment result
$
101,021
$
(483,707
)
$
584,728
Net investment income return -
annualized
5.7
%
3.2
%
2.5 pts
Total investment return - annualized
2.0
%
(8.9
)%
10.9 pts
- Net investment income increased $171.3 million,
primarily driven by a combination of higher average invested assets
and higher yielding assets in the fixed maturity and short term
portfolios.
- Net realized and unrealized gains on investments
increased $413.4 million, principally driven by:
– Net realized and unrealized losses on fixed
maturity investments trading of $279.3 million, compared to net
realized and unrealized losses of $424.2 million in the third
quarter of 2022, primarily driven by interest rate increases in
each period, with generally lower increases in the current
period.
– Net realized and unrealized gains on
investment-related derivatives of $30.6 million, compared to net
realized and unrealized losses of $55.6 million in the third
quarter of 2022. Current quarter gains were driven by short
interest rate future positions benefiting from interest rate
increases, while long interest rate and equity futures were
negatively impacted by U.S. treasury rate increases and equity
market declines in the third quarter of 2022.
– Net realized and unrealized gains on
catastrophe bonds of $32.5 million, compared to net realized and
unrealized losses of $127.0 million in the third quarter of 2022.
These catastrophe bonds are primarily held in Medici, the majority
of which is owned by third party investors. Both the current and
comparative quarter reflected changes in risk spreads in the wider
catastrophe bond market.
- Total investments grew to $26.0 billion at September 30,
2023, from $22.2 billion at December 31, 2022, primarily driven by
the approximately $2.1 billion raised in the second quarter of 2023
in accordance with the Company’s financing plan for the Validus
Acquisition (as defined below). 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 6.3% and 2.1 years (December 31, 2022 - 5.7% and 2.5
years, respectively).
Other Items of Note
- Net income attributable to redeemable noncontrolling
interests of $213.7 million was primarily driven by:
– Strong underwriting results for DaVinci and
Vermeer;
– Strong net investment income driven by
higher interest rates and higher yielding assets 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, as
discussed above.
- Raised third-party capital of $16.3 million in the third
quarter of 2023 in Medici.
- Redemptions of third-party capital of $368.7 million
during the third quarter of 2023, including the return of $175.0
million of excess capital from Vermeer, and $122.3 million from
Upsilon Diversified Fund, as a result of the release of collateral
associated with prior years’ contracts.
- Corporate expenses increased by $6.8 million, primarily
driven by expenses incurred in support of integration planning
activities associated with the Validus Acquisition.
- Income tax expense of $9.3 million compared to $2.8
million in the third quarter of 2022. The increase in income tax
expense was primarily driven by increased operating income,
partially offset by investment losses, in the Company’s taxable
jurisdictions compared to the third quarter of 2022.
- On November 1, 2023, the Company completed its acquisition of
certain direct and indirect subsidiaries of American International
Group, Inc., including Validus Holdings, Ltd., Validus Specialty,
LLC, and Validus Reinsurance, Ltd. (the acquisitions, together with
the other transactions contemplated by the Stock Purchase
Agreement, the “Validus Acquisition”).
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 Thursday, November
2, 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, Canada, 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 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; difficulties in integrating the acquired
business from the Validus Acquisition; 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; 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; 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 the Company’s 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
Nine months ended
September 30,
2023
September 30,
2022
September 30,
2023
September 30,
2022
Revenues
Gross premiums written
$
1,618,443
$
2,220,661
$
7,060,325
$
7,628,264
Net premiums written
$
1,421,260
$
1,821,711
$
5,880,766
$
5,850,544
Decrease (increase) in unearned
premiums
334,616
(54,690
)
(659,078
)
(1,140,715
)
Net premiums earned
1,755,876
1,767,021
5,221,688
4,709,829
Net investment income
329,108
157,793
876,148
348,695
Net foreign exchange gains (losses)
(25,886
)
(1,383
)
(53,877
)
(67,690
)
Equity in earnings (losses) of other
ventures
10,842
1,739
28,072
2,732
Other income (loss)
(5,866
)
2,834
(6,296
)
4,950
Net realized and unrealized gains (losses)
on investments
(228,087
)
(641,500
)
(171,417
)
(1,968,624
)
Total revenues
1,835,987
1,286,504
5,894,318
3,029,892
Expenses
Net claims and claim expenses incurred
861,576
1,967,931
2,593,987
3,515,903
Acquisition expenses
425,745
417,644
1,280,547
1,155,389
Operational expenses
82,751
64,560
240,716
204,987
Corporate expenses
17,143
10,384
53,357
35,238
Interest expense
22,951
12,101
49,980
35,951
Total expenses
1,410,166
2,472,620
4,218,587
4,947,468
Income (loss) before taxes
425,821
(1,186,116
)
1,675,731
(1,917,576
)
Income tax benefit (expense)
(9,295
)
(2,814
)
(44,139
)
64,427
Net income (loss)
416,526
(1,188,930
)
1,631,592
(1,853,149
)
Net (income) loss attributable to
redeemable noncontrolling interests
(213,695
)
372,429
(655,986
)
335,010
Net income (loss) attributable to
RenaissanceRe
202,831
(816,501
)
975,606
(1,518,139
)
Dividends on preference shares
(8,843
)
(8,843
)
(26,531
)
(26,531
)
Net income (loss) available
(attributable) to RenaissanceRe common shareholders
$
193,988
$
(825,344
)
$
949,075
$
(1,544,670
)
Net income (loss) available (attributable)
to RenaissanceRe common shareholders per common share – basic
$
3.81
$
(19.27
)
$
20.17
$
(35.84
)
Net income (loss) available (attributable)
to RenaissanceRe common shareholders per common share – diluted
$
3.80
$
(19.27
)
$
20.13
$
(35.84
)
Operating (loss) income (attributable)
available to RenaissanceRe common shareholders per common share -
diluted (1)
$
8.33
$
(9.27
)
$
25.32
$
(0.16
)
Average shares outstanding - basic
50,261
42,837
46,345
43,121
Average shares outstanding - diluted
50,358
42,837
46,451
43,121
Net claims and claim expense ratio
49.1
%
111.4
%
49.7
%
74.7
%
Underwriting expense ratio
28.9
%
27.3
%
29.1
%
28.9
%
Combined ratio
78.0
%
138.7
%
78.8
%
103.6
%
Return on average common equity -
annualized
11.5
%
(72.4
)%
22.1
%
(40.5
)%
Operating return on average common equity
- annualized (1)
25.0
%
(34.8
)%
27.7
%
(0.2
)%
(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)
September 30,
2023
December 31,
2022
Assets
Fixed maturity investments trading, at
fair value
$
16,083,046
$
14,351,402
Short term investments, at fair value
6,519,207
4,669,272
Equity investments, at fair value
95,342
625,058
Other investments, at fair value
3,167,941
2,494,954
Investments in other ventures, under
equity method
101,103
79,750
Total investments
25,966,639
22,220,436
Cash and cash equivalents
1,195,884
1,194,339
Premiums receivable
5,928,809
5,139,471
Prepaid reinsurance premiums
1,028,916
1,021,412
Reinsurance recoverable
4,253,259
4,710,925
Accrued investment income
153,573
121,501
Deferred acquisition costs
1,267,088
1,171,738
Receivable for investments sold
480,727
350,526
Other assets
334,284
384,702
Goodwill and other intangible assets
233,897
237,828
Total assets
$
40,843,076
$
36,552,878
Liabilities, Noncontrolling Interests
and Shareholders’ Equity
Liabilities
Reserve for claims and claim expenses
$
15,955,165
$
15,892,573
Unearned premiums
5,222,496
4,559,107
Debt
1,882,893
1,170,442
Reinsurance balances payable
3,323,606
3,928,281
Payable for investments purchased
811,578
493,776
Other liabilities
396,487
648,036
Total liabilities
27,592,225
26,692,215
Redeemable noncontrolling interests
5,662,234
4,535,389
Shareholders’ Equity
Preference shares
750,000
750,000
Common shares
51,174
43,718
Additional paid-in capital
1,836,742
475,647
Accumulated other comprehensive income
(loss)
(14,506
)
(15,462
)
Retained earnings
4,965,207
4,071,371
Total shareholders’ equity attributable
to RenaissanceRe
7,588,617
5,325,274
Total liabilities, noncontrolling
interests and shareholders’ equity
$
40,843,076
$
36,552,878
Book value per common share
$
133.63
$
104.65
RenaissanceRe Holdings
Ltd.
Supplemental Financial Data -
Segment Information
(in thousands of United States
Dollars, except percentages)
(Unaudited)
Three months ended September
30, 2023
Property
Casualty and Specialty
Other
Total
Gross premiums written
$
511,012
$
1,107,431
$
—
$
1,618,443
Net premiums written
$
444,872
$
976,388
$
—
$
1,421,260
Net premiums earned
$
760,365
$
995,511
$
—
$
1,755,876
Net claims and claim expenses incurred
206,361
655,215
—
861,576
Acquisition expenses
143,348
282,397
—
425,745
Operational expenses
54,624
28,127
—
82,751
Underwriting income (loss)
$
356,032
$
29,772
$
—
385,804
Net investment income
329,108
329,108
Net foreign exchange gains (losses)
(25,886
)
(25,886
)
Equity in earnings of other ventures
10,842
10,842
Other income (loss)
(5,866
)
(5,866
)
Net realized and unrealized gains (losses)
on investments
(228,087
)
(228,087
)
Corporate expenses
(17,143
)
(17,143
)
Interest expense
(22,951
)
(22,951
)
Income (loss) before taxes and redeemable
noncontrolling interests
425,821
Income tax benefit (expense)
(9,295
)
(9,295
)
Net (income) loss attributable to
redeemable noncontrolling interests
(213,695
)
(213,695
)
Dividends on preference shares
(8,843
)
(8,843
)
Net income (loss) available (attributable)
to RenaissanceRe common shareholders
$
193,988
Net claims and claim expenses incurred –
current accident year
$
350,238
$
669,285
$
—
$
1,019,523
Net claims and claim expenses incurred –
prior accident years
(143,877
)
(14,070
)
—
(157,947
)
Net claims and claim expenses incurred –
total
$
206,361
$
655,215
$
—
$
861,576
Net claims and claim expense ratio –
current accident year
46.1
%
67.2
%
58.1
%
Net claims and claim expense ratio – prior
accident years
(19.0
)%
(1.4
)%
(9.0
)%
Net claims and claim expense ratio –
calendar year
27.1
%
65.8
%
49.1
%
Underwriting expense ratio
26.1
%
31.2
%
28.9
%
Combined ratio
53.2
%
97.0
%
78.0
%
Three months ended September
30, 2022
Property
Casualty and Specialty
Other
Total
Gross premiums written
$
800,330
$
1,420,331
$
—
$
2,220,661
Net premiums written
$
696,520
$
1,125,191
$
—
$
1,821,711
Net premiums earned
$
839,817
$
927,204
$
—
$
1,767,021
Net claims and claim expenses incurred
1,372,583
595,348
—
1,967,931
Acquisition expenses
141,675
275,969
—
417,644
Operational expenses
48,158
16,402
—
64,560
Underwriting income (loss)
$
(722,599
)
$
39,485
$
—
(683,114
)
Net investment income
157,793
157,793
Net foreign exchange gains (losses)
(1,383
)
(1,383
)
Equity in earnings of other ventures
1,739
1,739
Other income (loss)
2,834
2,834
Net realized and unrealized gains (losses)
on investments
(641,500
)
(641,500
)
Corporate expenses
(10,384
)
(10,384
)
Interest expense
(12,101
)
(12,101
)
Income (loss) before taxes and redeemable
noncontrolling interests
(1,186,116
)
Income tax benefit (expense)
(2,814
)
(2,814
)
Net (income) loss attributable to
redeemable noncontrolling interests
372,429
372,429
Dividends on preference shares
(8,843
)
(8,843
)
Net income (loss) available (attributable)
to RenaissanceRe common shareholders
$
(825,344
)
Net claims and claim expenses incurred –
current accident year
$
1,396,842
$
602,995
$
—
$
1,999,837
Net claims and claim expenses incurred –
prior accident years
(24,259
)
(7,647
)
—
(31,906
)
Net claims and claim expenses incurred –
total
$
1,372,583
$
595,348
$
—
$
1,967,931
Net claims and claim expense ratio –
current accident year
166.3
%
65.0
%
113.2
%
Net claims and claim expense ratio – prior
accident years
(2.9
)%
(0.8
)%
(1.8
)%
Net claims and claim expense ratio –
calendar year
163.4
%
64.2
%
111.4
%
Underwriting expense ratio
22.6
%
31.5
%
27.3
%
Combined ratio
186.0
%
95.7
%
138.7
%
RenaissanceRe Holdings
Ltd.
Supplemental Financial Data -
Segment Information
(in thousands of United States
Dollars, except percentages)
(Unaudited)
Nine months ended September
30, 2023
Property
Casualty and Specialty
Other
Total
Gross premiums written
$
3,217,817
$
3,842,508
$
—
$
7,060,325
Net premiums written
$
2,609,356
$
3,271,410
$
—
$
5,880,766
Net premiums earned
$
2,206,471
$
3,015,217
$
—
$
5,221,688
Net claims and claim expenses incurred
675,963
1,918,024
—
2,593,987
Acquisition expenses
429,273
851,274
—
1,280,547
Operational expenses
165,514
75,202
—
240,716
Underwriting income (loss)
$
935,721
$
170,717
$
—
1,106,438
Net investment income
876,148
876,148
Net foreign exchange gains (losses)
(53,877
)
(53,877
)
Equity in earnings of other ventures
28,072
28,072
Other income (loss)
(6,296
)
(6,296
)
Net realized and unrealized gains (losses)
on investments
(171,417
)
(171,417
)
Corporate expenses
(53,357
)
(53,357
)
Interest expense
(49,980
)
(49,980
)
Income (loss) before taxes and redeemable
noncontrolling interests
1,675,731
Income tax benefit (expense)
(44,139
)
(44,139
)
Net (income) loss attributable to
redeemable noncontrolling interests
(655,986
)
(655,986
)
Dividends on preference shares
(26,531
)
(26,531
)
Net income (loss) available (attributable)
to RenaissanceRe common shareholders
$
949,075
Net claims and claim expenses incurred –
current accident year
$
933,172
$
1,955,612
$
—
$
2,888,784
Net claims and claim expenses incurred –
prior accident years
(257,209
)
(37,588
)
—
(294,797
)
Net claims and claim expenses incurred –
total
$
675,963
$
1,918,024
$
—
$
2,593,987
Net claims and claim expense ratio –
current accident year
42.3
%
64.9
%
55.3
%
Net claims and claim expense ratio – prior
accident years
(11.7
)%
(1.3
)%
(5.6
)%
Net claims and claim expense ratio –
calendar year
30.6
%
63.6
%
49.7
%
Underwriting expense ratio
27.0
%
30.7
%
29.1
%
Combined ratio
57.6
%
94.3
%
78.8
%
Nine months ended September
30, 2022
Property
Casualty and Specialty
Other
Total
Gross premiums written
$
3,362,159
$
4,266,105
$
—
$
7,628,264
Net premiums written
$
2,474,661
$
3,375,883
$
—
$
5,850,544
Net premiums earned
$
2,081,989
$
2,627,840
$
—
$
4,709,829
Net claims and claim expenses incurred
1,804,268
1,711,635
—
3,515,903
Acquisition expenses
406,338
749,051
—
1,155,389
Operational expenses
144,717
60,270
—
204,987
Underwriting income (loss)
$
(273,334
)
$
106,884
$
—
(166,450
)
Net investment income
348,695
348,695
Net foreign exchange gains (losses)
(67,690
)
(67,690
)
Equity in earnings of other ventures
2,732
2,732
Other income (loss)
4,950
4,950
Net realized and unrealized gains (losses)
on investments
(1,968,624
)
(1,968,624
)
Corporate expenses
(35,238
)
(35,238
)
Interest expense
(35,951
)
(35,951
)
Income (loss) before taxes and redeemable
noncontrolling interests
(1,917,576
)
Income tax benefit (expense)
64,427
64,427
Net (income) loss attributable to
redeemable noncontrolling interests
335,010
335,010
Dividends on preference shares
(26,531
)
(26,531
)
Net income (loss) available (attributable)
to RenaissanceRe common shareholders
$
(1,544,670
)
Net claims and claim expenses incurred –
current accident year
$
1,880,337
$
1,728,262
$
—
$
3,608,599
Net claims and claim expenses incurred –
prior accident years
(76,069
)
(16,627
)
—
(92,696
)
Net claims and claim expenses incurred –
total
$
1,804,268
$
1,711,635
$
—
$
3,515,903
Net claims and claim expense ratio –
current accident year
90.3
%
65.8
%
76.6
%
Net claims and claim expense ratio – prior
accident years
(3.6
)%
(0.7
)%
(1.9
)%
Net claims and claim expense ratio –
calendar year
86.7
%
65.1
%
74.7
%
Underwriting expense ratio
26.4
%
30.8
%
28.9
%
Combined ratio
113.1
%
95.9
%
103.6
%
RenaissanceRe Holdings
Ltd.
Supplemental Financial Data -
Gross Premiums Written
(in thousands of United States
Dollars)
(Unaudited)
Three months ended
Nine months ended
September 30,
2023
September 30,
2022
September 30,
2023
September 30,
2022
Property Segment
Catastrophe
$
160,821
$
391,347
$
2,091,255
$
2,080,771
Other property
350,191
408,983
1,126,562
1,281,388
Property segment gross premiums
written
$
511,012
$
800,330
$
3,217,817
$
3,362,159
Casualty and Specialty Segment
General casualty (1)
$
350,954
$
397,818
$
1,194,791
$
1,200,693
Professional liability (2)
281,259
380,125
971,796
1,378,645
Credit (3)
139,184
365,863
562,845
844,447
Other specialty (4)
336,034
276,525
1,113,076
842,320
Casualty and Specialty segment gross
premiums written
$
1,107,431
$
1,420,331
$
3,842,508
$
4,266,105
(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
Nine months ended
September 30,
2023
September 30,
2022
September 30,
2023
September 30,
2022
Fixed maturity investments trading
$
188,781
$
107,182
$
514,020
$
246,146
Short term investments
66,722
11,601
149,903
17,134
Equity investments
510
6,120
6,675
13,390
Other investments
Catastrophe bonds
54,583
25,748
142,936
63,343
Other
20,031
11,258
65,422
23,704
Cash and cash equivalents
4,160
1,386
13,009
1,250
334,787
163,295
891,965
364,967
Investment expenses
(5,679
)
(5,502
)
(15,817
)
(16,272
)
Net investment income
$
329,108
$
157,793
876,148
348,695
Net investment income return -
annualized
5.7
%
3.2
%
5.1
%
2.3
%
Net realized gains (losses) on fixed
maturity investments trading
$
(121,112
)
$
(213,493
)
$
(300,089
)
$
(621,799
)
Net unrealized gains (losses) on fixed
maturity investments trading
(158,226
)
(210,665
)
14,007
(824,662
)
Net realized and unrealized gains (losses)
on fixed maturity investments trading
(279,338
)
(424,158
)
(286,082
)
(1,446,461
)
Net realized and unrealized gains (losses)
on investment-related derivatives
30,594
(55,580
)
(22,295
)
(161,946
)
Net realized gains (losses) on equity
investments
(10
)
3,066
(27,503
)
38,638
Net unrealized gains (losses) on equity
investments
2,261
(46,301
)
62,039
(222,074
)
Net realized and unrealized gains (losses)
on equity investments
2,251
(43,235
)
34,536
(183,436
)
Net realized and unrealized gains (losses)
on other investments - catastrophe bonds
32,474
(126,992
)
94,786
(159,913
)
Net realized and unrealized gains (losses)
on other investments - other
(14,068
)
8,465
7,638
(16,868
)
Net realized and unrealized gains
(losses) on investments
(228,087
)
(641,500
)
(171,417
)
(1,968,624
)
Total investment result
$
101,021
$
(483,707
)
$
704,731
$
(1,619,929
)
Total investment return -
annualized
2.0
%
(8.9
)%
4.2
%
(10.1
)%
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 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
Nine months ended
(in thousands of United States Dollars,
except per share amounts and percentages)
September 30,
2023
September 30,
2022
September 30,
2023
September 30,
2022
Net income (loss) available (attributable)
to RenaissanceRe common shareholders
$
193,988
$
(825,344
)
$
949,075
$
(1,544,670
)
Adjustment for net realized and unrealized
losses (gains) on investments, excluding other investments -
catastrophe bonds
260,561
514,508
266,203
1,808,711
Adjustment for net foreign exchange losses
(gains)
25,886
1,383
53,877
67,690
Adjustment for corporate expenses
associated with the acquisition of Validus
3,373
—
14,714
—
Adjustment for income tax expense
(benefit) (1)
(10,048
)
7,269
(8,961
)
(77,331
)
Adjustment for net income (loss)
attributable to redeemable noncontrolling interests (2)
(51,457
)
(94,490
)
(85,162
)
(260,997
)
Operating income (loss) available
(attributable) to RenaissanceRe common shareholders
$
422,303
$
(396,674
)
$
1,189,746
$
(6,597
)
Net income (loss) available (attributable)
to RenaissanceRe common shareholders per common share - diluted
$
3.80
$
(19.27
)
$
20.13
$
(35.84
)
Adjustment for net realized and unrealized
losses (gains) on investments, excluding other investments -
catastrophe bonds
5.17
12.01
5.73
41.95
Adjustment for net foreign exchange losses
(gains)
0.51
0.03
1.16
1.57
Adjustment for corporate expenses
associated with the acquisition of Validus
0.07
—
0.32
—
Adjustment for income tax expense
(benefit) (1)
(0.20
)
0.17
(0.19
)
(1.79
)
Adjustment for net income (loss)
attributable to redeemable noncontrolling interests (2)
(1.02
)
(2.21
)
(1.83
)
(6.05
)
Operating income (loss) available
(attributable) to RenaissanceRe common shareholders per common
share - diluted
$
8.33
$
(9.27
)
$
25.32
$
(0.16
)
Return on average common equity -
annualized
11.5
%
(72.4
)%
22.1
%
(40.5
)%
Adjustment for net realized and unrealized
losses (gains) on investments, excluding other investments -
catastrophe bonds
15.5
%
45.2
%
6.2
%
47.3
%
Adjustment for net foreign exchange losses
(gains)
1.5
%
0.1
%
1.3
%
1.8
%
Adjustment for corporate expenses
associated with the acquisition of Validus
0.2
%
—
%
0.3
%
—
%
Adjustment for income tax expense
(benefit) (1)
(0.6
)%
0.6
%
(0.2
)%
(2.0
)%
Adjustment for net income (loss)
attributable to redeemable noncontrolling interests (2)
(3.1
)%
(8.3
)%
(2.0
)%
(6.8
)%
Operating return on average common equity
- annualized
25.0
%
(34.8
)%
27.7
%
(0.2
)%
(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.”
September 30,
2023
June 30, 2023
March 31, 2023
December 31,
2022
September 30,
2022
Book value per common share
$
133.63
$
129.98
$
116.44
$
104.65
$
94.55
Adjustment for goodwill and other
intangibles (1)
(4.92
)
(4.95
)
(5.78
)
(5.84
)
(5.89
)
Tangible book value per common share
128.71
125.03
110.66
98.81
88.66
Adjustment for accumulated dividends
26.14
25.76
25.38
25.00
24.63
Tangible book value per common share plus
accumulated dividends
$
154.85
$
150.79
$
136.04
$
123.81
$
113.29
Quarterly change in book value per common
share
2.8
%
11.6
%
11.3
%
10.7
%
(16.8
)%
Quarterly change in book value per common
share plus change in accumulated dividends
3.1
%
12.0
%
11.6
%
11.1
%
(16.5
)%
Quarterly change in tangible book value
per common share plus change in accumulated dividends
3.2
%
13.3
%
12.4
%
11.9
%
(17.4
)%
Year to date change in book value per
common share
27.7
%
24.2
%
11.3
%
(20.8
)%
(28.5
)%
Year to date change in book value per
common share plus change in accumulated dividends
28.8
%
24.9
%
11.6
%
(19.7
)%
(27.6
)%
Year to date change in tangible book value
per common share plus change in accumulated dividends
31.4
%
27.3
%
12.4
%
(20.6
)%
(28.9
)%
(1)
At September 30, 2023, June 30, 2023,
March 31, 2023, December 31, 2022 and September 30, 2022, the
adjustment for goodwill and other intangibles included $18.2
million, $18.3 million, $17.5 million, $17.8 million and $18.0
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/20231101074709/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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