Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - RENAISSANCERE HOLDINGS LTD | d8k.htm |
| EX-99.2 - COPY OF THE COMPANY'S FINANCIAL SUPPLEMENT - RENAISSANCERE HOLDINGS LTD | dex992.htm |
Exhibit 99.1
RenaissanceRe Reports Net Income of $24.8 Million for the Second Quarter of 2011 or $0.48 Per Diluted Common
Share; Operating Loss of $10.2 Million or $0.21 Per Diluted Common Share
Net Negative Impact of $70.8 Million Related to the Large U.S. Tornadoes in the Second Quarter of 2011
Catastrophe Unit Gross Premiums Written Up 15% Excluding Reinstatement Premiums, and Managed Catastrophe
Premiums up 16%, Excluding Reinstatement Premiums
Pembroke, Bermuda, July 26, 2011 — RenaissanceRe Holdings Ltd. (NYSE: RNR) today reported net income available to RenaissanceRe common shareholders of $24.8 million or $0.48 per diluted common share in the second quarter of 2011, compared to $210.2 million or $3.66, respectively, in the second quarter of 2010. Operating loss attributable to RenaissanceRe common shareholders was $10.2 million or $0.21 per diluted common share for the second quarter of 2011, compared to operating income available to RenaissanceRe common shareholders of $139.9 million or $2.40 per diluted common share in the second quarter of 2010. The Company reported an annualized return on average common equity of 3.3% and an annualized operating return on average common equity of negative 1.4% in the second quarter of 2011, compared to positive 26.8% and positive 17.9%, respectively, in the second quarter of 2010. See Comments on Regulation G for a reconciliation of non-GAAP measures.
Book value per common share increased $0.29, or 0.5%, in the second quarter of 2011 to $57.30, compared to a 5.8% increase in the second quarter of 2010.
Mr. Neill A. Currie, CEO, commented: “Our results for the quarter were impacted by $70.8 million of net losses from the tornado activity in the U.S. As a result, we reported $24.8 million of net income, a $10.2 million operating loss and a 0.5% increase in book value per share in the quarter.”
Mr. Currie added: “At the same time, we had a successful June 1st renewal season and are pleased with our portfolio of risks, which reflects improving market conditions in our Reinsurance segment. Our strong balance sheet, high ratings and leadership position in property catastrophe reinsurance allowed us to increase our catastrophe premiums by over 15%.”
SECOND QUARTER 2011 HIGHLIGHTS (1)
| • | Gross premiums written increased $135.0 million, or 26.7%, to $641.6 million, primarily driven by improving market conditions in our core markets experienced during the June 2011 renewals and $22.5 million of reinstatement premiums written from the large U.S. tornadoes in the second quarter of 2011. Excluding the impact of $22.5 million of reinstatement premiums written in the second quarter of 2011, gross premiums written increased $112.5 million, or 22.2%. |
| • | Underwriting income of $9.7 million and a combined ratio of 95.5%, compared to $169.4 million and 20.2%, primarily impacted by the large U.S. tornadoes in the second quarter of 2011, as detailed in the table below, which had a net negative impact (2) of $70.8 million and added 51.8 percentage points to the combined ratio. |
1
| Three months ended June 30, 2011 |
||||
| (in thousands of U.S. dollars, except ratios) | Large U.S. Tornadoes |
|||
| Net claims and claim expenses incurred |
$ | (121,655 | ) | |
| Reinstatement premiums earned |
22,499 | |||
| Lost profit commissions |
(708 | ) | ||
| Net impact on underwriting result |
(99,864 | ) | ||
| Redeemable noncontrolling interest - DaVinciRe |
29,054 | |||
| Net negative impact |
$ | (70,810 | ) | |
| Percentage point impact on consolidated combined ratio |
51.8 | |||
| Net negative impact on Reinsurance segment underwriting result |
$ | (96,944 | ) | |
| Net negative impact on Lloyd's segment underwriting result |
(2,920 | ) | ||
| Net negative impact on underwriting result |
$ | (99,864 | ) | |
Underwriting Results by Segment (1)
Reinsurance Segment
Gross premiums written in the Reinsurance segment were $607.4 million, an increase of $110.9 million, or 22.3%. The increase is primarily due to a $93.7 million increase in the catastrophe unit as a result of the improving market conditions in our core markets experienced during the June 2011 renewals, combined with reinstatement premiums written from the large U.S. tornadoes in the second quarter of 2011. Excluding the impact of $22.4 million of reinstatement premiums written in the second quarter of 2011, the Reinsurance segment gross premiums written increased $88.5 million, or 17.8%, and managed catastrophe premiums written increased $80.9 million, or 15.7%.
The Reinsurance segment generated underwriting income of $12.9 million and a combined ratio of 93.5%, compared to $180.7 million and a combined ratio of 8.8%. Current accident year net claims and claim expenses in the Reinsurance segment of $162.4 million are comprised of $139.2 million and $23.2 million related to the catastrophe and specialty units, respectively. As detailed in the table below, the large U.S. tornadoes in the second quarter of 2011 had a net impact on the Reinsurance segment underwriting result of $96.9 million and added 55.5 percentage points to the Reinsurance segment’s combined ratio.
| Three months ended June 30, 2011 |
||||
| (in thousands of U.S. dollars, except ratios) | Large U.S. Tornadoes |
|||
| Net claims and claim expenses incurred |
$ | (118,655 | ) | |
| Reinstatement premiums earned |
22,419 | |||
| Lost profit commissions |
(708 | ) | ||
| Net impact on Reinsurance segment underwriting result |
$ | (96,944 | ) | |
| Net negative impact on catastrophe unit underwriting result |
$ | (96,944 | ) | |
| Net negative impact on specialty unit underwriting result |
— | |||
| Net impact on Reinsurance segment underwriting result |
$ | (96,944 | ) | |
| Percentage point impact on Reinsurance segment combined ratio |
55.5 | |||
The Reinsurance segment experienced $19.2 million of favorable development on prior year reserves, including $11.8 million in the catastrophe unit due to reductions in estimated ultimate losses on certain specific events, and $7.4 million in the specialty unit primarily due to better than expected claims emergence.
2
Lloyd’s Segment
Gross premiums written in the Lloyd’s segment decreased $0.7 million, or 2.1%, to $34.1 million. The Lloyd’s segment incurred an underwriting loss of $3.3 million and a combined ratio of 119.3%, compared to generating underwriting income of $0.8 million and a combined ratio of 95.5%. Net claims and claim expenses include $3.0 million related to the large U.S. tornadoes in the second quarter of 2011.
Investments (1)
Total investment result, which includes net investment income, net realized and unrealized gains on investments, net other-than-temporary impairments and the change in net unrealized gains on fixed maturity investments available for sale, decreased $19.5 million, to $66.5 million, primarily due to the lower total returns on the fixed maturity investments portfolio, and partially offset by improved returns on certain non-investment grade allocations included in other investments. The weighted average effective yield on the fixed maturity and short term investment portfolio was 2.4% at June 30, 2011, compared to 2.1% at March 31, 2011.
Other Items (1)
| • | On June 1, 2011, DaVinciRe Holdings Ltd. completed an equity raise of $100.0 million from new and existing shareholders. The capital raised is being used to support the ongoing underwriting activities of DaVinci, which primarily writes property catastrophe reinsurance and certain classes of specialty reinsurance. As a result of the equity raise, the Company’s ownership in DaVinciRe decreased to 42.8% effective June 1, 2011, compared to 44.0% at January 1, 2011. |
3
This Press Release includes certain non-GAAP financial measures including “operating (loss) income (attributable) available to RenaissanceRe common shareholders”, “operating (loss) income (attributable) available to RenaissanceRe common shareholders per common share – diluted”, “operating return on average common equity – annualized” and “managed catastrophe premiums”. A reconciliation of such measures to the most comparable GAAP figures in accordance with Regulation G is presented in the attached supplemental financial data.
Please refer to the “Investor Information – Financial Reports – Financial Supplements” section of the Company’s website at www.renre.com for a copy of the Financial Supplement which includes additional information on the Company’s financial performance.
RenaissanceRe Holdings Ltd. will host a conference call on Wednesday, July 27, 2011 at 9:30 a.m. (ET) to discuss this release. Live broadcast of the conference call will be available through the “Investor Information – Company Webcasts” section of RenaissanceRe’s website at www.renre.com.
RenaissanceRe Holdings Ltd. is a global provider of reinsurance and insurance. The Company’s business consists of three segments: (1) Reinsurance, which includes catastrophe reinsurance, specialty reinsurance and certain property catastrophe and specialty joint ventures managed by the Company’s ventures unit, (2) Lloyd’s, which includes reinsurance and insurance business written through Syndicate 1458, and (3) Insurance, which principally includes the Company’s Bermuda-based insurance operations.
Cautionary Statement under “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995: Statements made in this earnings release contain information about the Company’s future business prospects. These statements may be considered “forward-looking.” These statements are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by such forward-looking statements. For further information regarding cautionary statements and factors affecting future results, please refer to RenaissanceRe Holdings Ltd.’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2010 and its Quarterly Reports on Form 10-Q.
| (1) | All comparisons are with the second quarter of 2010 unless specifically stated. |
| (2) | Net negative impact includes the sum of estimates of net claims and claim expenses incurred, earned reinstatement premiums assumed and ceded, lost profit commissions and redeemable noncontrolling interest – DaVinciRe. The Company’s estimates are based on a review of its potential exposures, preliminary discussions with certain counterparties and catastrophe modeling techniques. Given the magnitude and recent occurrence of these events, delays in receiving claims data, potential uncertainties relating to reinsurance recoveries and other uncertainties inherent in loss estimation, meaningful uncertainty remains regarding losses from these events. Accordingly, the Company’s actual net negative impact from these events will vary from these preliminary estimates, perhaps materially so. Changes in these estimates will be recorded in the period in which they occur. |
| INVESTOR CONTACT: | MEDIA CONTACT: | |
| Rohan Pai | Peter Hill or Dawn Dover | |
| Director of Investor Relations | Kekst and Company | |
| RenaissanceRe Holdings Ltd. | (212) 521-4800 | |
| (441) 295-4513 |
4
RenaissanceRe Holdings Ltd. and Subsidiaries
Summary Consolidated Statements of Operations
(in thousands of United States Dollars, except per share amounts)
(Unaudited)
| Three months ended | Six months ended | |||||||||||||||
| June 30, 2011 |
June 30, 2010 |
June 30, 2011 |
June 30, 2010 |
|||||||||||||
| Revenues |
||||||||||||||||
| Gross premiums written |
$ | 641,563 | $ | 506,540 | $ | 1,252,068 | $ | 1,022,551 | ||||||||
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| Net premiums written |
$ | 427,995 | $ | 329,334 | $ | 880,570 | $ | 736,493 | ||||||||
| Increase in unearned premiums |
(210,820 | ) | (117,163 | ) | (357,854 | ) | (273,669 | ) | ||||||||
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| Net premiums earned |
217,175 | 212,171 | 522,716 | 462,824 | ||||||||||||
| Net investment income |
33,328 | 26,173 | 93,609 | 91,882 | ||||||||||||
| Net foreign exchange losses |
(4,521 | ) | (609 | ) | (3,861 | ) | (11,951 | ) | ||||||||
| Equity in earnings (losses) of other ventures |
5,128 | 3,160 | (18,625 | ) | 5,316 | |||||||||||
| Other (loss) income |
(5,167 | ) | (3,742 | ) | 44,978 | (9,933 | ) | |||||||||
| Net realized and unrealized gains on investments |
34,979 | 70,051 | 29,765 | 118,251 | ||||||||||||
| Total other-than-temporary impairments |
— | (798 | ) | — | (831 | ) | ||||||||||
| Portion recognized in other comprehensive income, before taxes |
— | 2 | — | 2 | ||||||||||||
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| Net other-than-temporary impairments |
— | (796 | ) | — | (829 | ) | ||||||||||
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| Total revenues |
280,922 | 306,408 | 668,582 | 655,560 | ||||||||||||
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| Expenses |
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| Net claims and claim expenses incurred |
151,261 | (18,803 | ) | 779,798 | 78,537 | |||||||||||
| Acquisition expenses |
13,883 | 23,580 | 46,218 | 50,015 | ||||||||||||
| Operational expenses |
42,299 | 38,040 | 84,129 | 83,190 | ||||||||||||
| Corporate expenses |
4,011 | 4,493 | 6,075 | 9,802 | ||||||||||||
| Interest expense |
5,730 | 6,206 | 11,925 | 9,362 | ||||||||||||
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| Total expenses |
217,184 | 53,516 | 928,145 | 230,906 | ||||||||||||
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| Income (loss) from continuing operations before taxes |
63,738 | 252,892 | (259,563 | ) | 424,654 | |||||||||||
| Income tax benefit |
1,773 | 958 | 1,825 | 3,921 | ||||||||||||
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| Income (loss) from continuing operations |
65,511 | 253,850 | (257,738 | ) | 428,575 | |||||||||||
| (Loss) income from discontinued operations |
(10,094 | ) | 18,881 | (11,620 | ) | 30,328 | ||||||||||
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| Net income (loss) |
55,417 | 272,731 | (269,358 | ) | 458,903 | |||||||||||
| Net (income) loss attributable to noncontrolling interests |
(21,903 | ) | (51,915 | ) | 63,589 | (62,465 | ) | |||||||||
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| Net income (loss) attributable to RenaissanceRe |
33,514 | 220,816 | (205,769 | ) | 396,438 | |||||||||||
| Dividends on preference shares |
(8,750 | ) | (10,575 | ) | (17,500 | ) | (21,150 | ) | ||||||||
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| Net income (loss) available (attributable) to RenaissanceRe common shareholders |
$ | 24,764 | $ | 210,241 | $ | (223,269 | ) | $ | 375,288 | |||||||
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| Operating (loss) income (attributable) available to RenaissanceRe common shareholders per common share - diluted (1) |
$ | (0.21 | ) | $ | 2.40 | $ | (4.97 | ) | $ | 4.30 | ||||||
| Income (loss) from continuing operations available (attributable) to RenaissanceRe common shareholders per common share - basic |
$ | 0.68 | $ | 3.35 | $ | (4.16 | ) | $ | 5.89 | |||||||
| (Loss) income from discontinued operations (attributable) available to RenaissanceRe common shareholders per common share - basic |
(0.20 | ) | 0.34 | (0.23 | ) | 0.53 | ||||||||||
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| Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share - basic |
$ | 0.48 | $ | 3.69 | $ | (4.39 | ) | $ | 6.42 | |||||||
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| Income (loss) from continuing operations available (attributable) to RenaissanceRe common shareholders per common share - diluted (2) |
$ | 0.68 | $ | 3.32 | $ | (4.16 | ) | $ | 5.84 | |||||||
| (Loss) income from discontinued operations (attributable) available to RenaissanceRe common shareholders per common share - diluted (2) |
(0.20 | ) | 0.34 | (0.23 | ) | 0.53 | ||||||||||
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| Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted (2) |
$ | 0.48 | $ | 3.66 | $ | (4.39 | ) | $ | 6.37 | |||||||
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| Average shares outstanding - basic |
50,493 | 55,538 | 50,994 | 56,972 | ||||||||||||
| Average shares outstanding - diluted (2) |
51,050 | 56,044 | 50,994 | 57,465 | ||||||||||||
| Net claims and claim expense ratio |
69.6 | % | (8.9 | %) | 149.2 | % | 17.0 | % | ||||||||
| Expense ratio |
25.9 | % | 29.1 | % | 24.9 | % | 28.8 | % | ||||||||
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| Combined ratio |
95.5 | % | 20.2 | % | 174.1 | % | 45.8 | % | ||||||||
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| Operating return on average common equity - annualized (1) |
(1.4 | %) | 17.9 | % | (16.3 | %) | 16.3 | % | ||||||||
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| (1) | See Comments on Regulation G for a reconciliation of non-GAAP financial measures. |
| (2) | Earnings per share calculations use average common shares outstanding - basic, when in a net loss position, as required by FASB ASC Topic Earnings per Share. |
5
RenaissanceRe Holdings Ltd. and Subsidiaries
Summary Consolidated Balance Sheets
(in thousands of United States Dollars, except per share amounts)
| At | ||||||||
| June 30, 2011 |
December 31, 2010 |
|||||||
| Assets |
||||||||
| Fixed maturity investments trading, at fair value |
$ | 3,864,205 | $ | 3,871,780 | ||||
| Fixed maturity investments available for sale, at fair value |
202,769 | 244,917 | ||||||
| Total fixed maturity investments, at fair value |
4,066,974 | 4,116,697 | ||||||
| Short term investments, at fair value |
774,421 | 1,110,364 | ||||||
| Equity investments trading, at fair value |
32,252 | — | ||||||
| Other investments, at fair value |
839,643 | 787,548 | ||||||
| Investments in other ventures, under equity method |
82,197 | 85,603 | ||||||
| Total investments |
5,795,487 | 6,100,212 | ||||||
| Cash and cash equivalents |
237,737 | 277,738 | ||||||
| Premiums receivable |
933,519 | 322,080 | ||||||
| Prepaid reinsurance premiums |
245,676 | 60,643 | ||||||
| Reinsurance recoverable |
333,245 | 101,711 | ||||||
| Accrued investment income |
36,266 | 34,560 | ||||||
| Deferred acquisition costs |
90,858 | 35,648 | ||||||
| Receivable for investments sold |
257,075 | 99,226 | ||||||
| Other secured assets |
— | 14,250 | ||||||
| Other assets |
219,226 | 205,373 | ||||||
| Goodwill and other intangibles |
14,383 | 14,690 | ||||||
| Assets of discontinued operations held for sale |
2,868 | 872,147 | ||||||
| Total assets |
$ | 8,166,340 | $ | 8,138,278 | ||||
| Liabilities, Noncontrolling Interests and Shareholders’ Equity |
||||||||
| Liabilities |
||||||||
| Reserve for claims and claim expenses |
$ | 2,170,728 | $ | 1,257,843 | ||||
| Unearned premiums |
830,939 | 286,183 | ||||||
| Debt |
349,201 | 549,155 | ||||||
| Reinsurance balances payable |
403,152 | 318,024 | ||||||
| Payable for investments purchased |
102,545 | 195,383 | ||||||
| Other secured liabilities |
— | 14,000 | ||||||
| Other liabilities |
152,853 | 222,310 | ||||||
| Liabilities of discontinued operations held for sale |
10,220 | 598,511 | ||||||
| Total liabilities |
4,019,638 | 3,441,409 | ||||||
| Redeemable noncontrolling interest - DaVinciRe |
628,001 | 757,655 | ||||||
| Shareholders’ Equity |
||||||||
| Preference shares |
550,000 | 550,000 | ||||||
| Common shares |
51,753 | 54,110 | ||||||
| Additional paid-in capital |
5,768 | — | ||||||
| Accumulated other comprehensive income |
18,031 | 19,823 | ||||||
| Retained earnings |
2,889,719 | 3,312,392 | ||||||
| Total shareholders’ equity attributable to RenaissanceRe |
3,515,271 | 3,936,325 | ||||||
| Noncontrolling interest |
3,430 | 2,889 | ||||||
| Total shareholders’ equity |
3,518,701 | 3,939,214 | ||||||
| Total liabilities, noncontrolling interests and shareholders’ equity |
$ | 8,166,340 | $ | 8,138,278 | ||||
| Book value per common share |
$ | 57.30 | $ | 62.58 | ||||
6
RenaissanceRe Holdings Ltd. and Subsidiaries
Supplemental Financial Data - Segment Information
(in thousands of United States Dollars) (Unaudited)
| Three months ended June 30, 2011 | ||||||||||||||||||||||||
| Reinsurance | Lloyd’s | Insurance | Eliminations | Other | Total | |||||||||||||||||||
| Gross premiums written |
$ | 607,404 | $ | 34,126 | $ | 33 | $ | — | $ | — | $ | 641,563 | ||||||||||||
| Net premiums written |
$ | 395,856 | $ | 32,084 | $ | 55 | — | $ | 427,995 | |||||||||||||||
| Net premiums earned |
$ | 199,461 | $ | 17,233 | $ | 481 | — | $ | 217,175 | |||||||||||||||
| Net claims and claim expenses incurred |
143,219 | 8,619 | (577 | ) | — | 151,261 | ||||||||||||||||||
| Acquisition expenses |
10,431 | 3,305 | 147 | — | 13,883 | |||||||||||||||||||
| Operational expenses |
32,901 | 8,635 | 763 | — | 42,299 | |||||||||||||||||||
| Underwriting income (loss) |
$ | 12,910 | $ | (3,326 | ) | $ | 148 | — | 9,732 | |||||||||||||||
| Net investment income |
33,328 | 33,328 | ||||||||||||||||||||||
| Net foreign exchange losses |
(4,521 | ) | (4,521 | ) | ||||||||||||||||||||
| Equity in earnings of other ventures |
5,128 | 5,128 | ||||||||||||||||||||||
| Other loss |
(5,167 | ) | (5,167 | ) | ||||||||||||||||||||
| Net realized and unrealized gains on investments |
34,979 | 34,979 | ||||||||||||||||||||||
| Corporate expenses |
(4,011 | ) | (4,011 | ) | ||||||||||||||||||||
| Interest expense |
(5,730 | ) | (5,730 | ) | ||||||||||||||||||||
| Income from continuing operations before taxes |
63,738 | |||||||||||||||||||||||
| Income tax benefit |
1,773 | 1,773 | ||||||||||||||||||||||
| Loss from discontinued operations |
(10,094 | ) | (10,094 | ) | ||||||||||||||||||||
| Net income attributable to noncontrolling interests |
(21,903 | ) | (21,903 | ) | ||||||||||||||||||||
| Dividends on preference shares |
(8,750 | ) | (8,750 | ) | ||||||||||||||||||||
| Net income available to RenaissanceRe common shareholders |
$ | 24,764 | ||||||||||||||||||||||
| Net claims and claim expenses incurred - current accident year |
$ | 162,398 | $ | 9,612 | $ | (78 | ) | $ | 171,932 | |||||||||||||||
| Net claims and claim expenses incurred - prior accident years |
(19,179 | ) | (993 | ) | (499 | ) | (20,671 | ) | ||||||||||||||||
| Net claims and claim expenses incurred - total |
$ | 143,219 | $ | 8,619 | $ | (577 | ) | $ | 151,261 | |||||||||||||||
| Net claims and claim expense ratio - current accident year |
81.4 | % | 55.8 | % | (16.2 | %) | 79.2 | % | ||||||||||||||||
| Net claims and claim expense ratio - prior accident years |
(9.6 | %) | (5.8 | %) | (103.8 | %) | (9.6 | %) | ||||||||||||||||
| Net claims and claim expense ratio - calendar year |
71.8 | % | 50.0 | % | (120.0 | %) | 69.6 | % | ||||||||||||||||
| Underwriting expense ratio |
21.7 | % | 69.3 | % | 189.2 | % | 25.9 | % | ||||||||||||||||
| Combined ratio |
93.5 | % | 119.3 | % | 69.2 | % | 95.5 | % | ||||||||||||||||
| Three months ended June 30, 2010 | ||||||||||||||||||||||||
| Reinsurance | Lloyd’s | Insurance | Eliminations (1) | Other | Total | |||||||||||||||||||
| Gross premiums written |
$ | 496,517 | $ | 34,841 | $ | (3,742 | ) | $ | (21,076 | ) | $ | — | $ | 506,540 | ||||||||||
| Net premiums written |
$ | 319,000 | $ | 32,330 | $ | (21,996 | ) | — | $ | 329,334 | ||||||||||||||
| Net premiums earned |
$ | 198,223 | $ | 16,630 | $ | (2,682 | ) | — | $ | 212,171 | ||||||||||||||
| Net claims and claim expenses incurred |
(30,332 | ) | 7,752 | 3,777 | — | (18,803 | ) | |||||||||||||||||
| Acquisition expenses |
17,941 | 3,172 | 2,467 | — | 23,580 | |||||||||||||||||||
| Operational expenses |
29,869 | 4,953 | 3,218 | — | 38,040 | |||||||||||||||||||
| Underwriting income (loss) |
$ | 180,745 | $ | 753 | $ | (12,144 | ) | — | 169,354 | |||||||||||||||
| Net investment income |
26,173 | 26,173 | ||||||||||||||||||||||
| Net foreign exchange losses |
(609 | ) | (609 | ) | ||||||||||||||||||||
| Equity in earnings of other ventures |
3,160 | 3,160 | ||||||||||||||||||||||
| Other loss |
(3,742 | ) | (3,742 | ) | ||||||||||||||||||||
| Net realized and unrealized gains on fixed maturity investments |
70,051 | 70,051 | ||||||||||||||||||||||
| Net other-than-temporary impairments |
(796 | ) | (796 | ) | ||||||||||||||||||||
| Corporate expenses |
(4,493 | ) | (4,493 | ) | ||||||||||||||||||||
| Interest expense |
(6,206 | ) | (6,206 | ) | ||||||||||||||||||||
| Income from continuing operations before taxes |
252,892 | |||||||||||||||||||||||
| Income tax benefit |
958 | 958 | ||||||||||||||||||||||
| Income from discontinued operations |
18,881 | 18,881 | ||||||||||||||||||||||
| Net income attributable to redeemable |
|
(51,915 | ) | (51,915 | ) | |||||||||||||||||||
| Dividends on preference shares |
(10,575 | ) | (10,575 | ) | ||||||||||||||||||||
| Net income available to RenaissanceRe common shareholders |
$ | 210,241 | ||||||||||||||||||||||
| Net claims and claim expenses incurred - current accident year |
$ | 50,994 | $ | 7,814 | $ | 2,627 | $ | 61,435 | ||||||||||||||||
| Net claims and claim expenses incurred - prior accident years |
(81,326 | ) | (62 | ) | 1,150 | (80,238 | ) | |||||||||||||||||
| Net claims and claim expenses incurred - total |
$ | (30,332 | ) | $ | 7,752 | $ | 3,777 | $ | (18,803 | ) | ||||||||||||||
| Net claims and claim expense ratio - current accident year |
25.7 | % | 47.0 | % | NMF | 29.0 | % | |||||||||||||||||
| Net claims and claim expense ratio - prior accident years |
(41.0 | %) | (0.4 | %) | NMF | (37.9 | %) | |||||||||||||||||
| Net claims and claim expense ratio - calendar year |
(15.3 | %) | 46.6 | % | NMF | (8.9 | %) | |||||||||||||||||
| Underwriting expense ratio |
24.1 | % | 48.9 | % | NMF | 29.1 | % | |||||||||||||||||
| Combined ratio |
8.8 | % | 95.5 | % | NMF | 20.2 | % | |||||||||||||||||
| (1) | Represents $21.0 million and $0.1 million of gross premiums ceded from the Insurance segment to the Lloyd’s segment and from the Insurance segment to the Reinsurance segment, respectively. |
NMF - Not a meaningful figure.
7
RenaissanceRe Holdings Ltd. and Subsidiaries
Supplemental Financial Data - Segment Information (cont’d.)
(in thousands of United States Dollars) (Unaudited)
| Six months ended June 30, 2011 | ||||||||||||||||||||||||
| Reinsurance | Lloyd’s | Insurance | Eliminations (1) | Other | Total | |||||||||||||||||||
| Gross premiums written |
$ | 1,181,086 | $ | 70,746 | $ | 313 | $ | (77 | ) | $ | — | $ | 1,252,068 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net premiums written |
$ | 819,422 | $ | 60,821 | $ | 327 | — | $ | 880,570 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net premiums earned |
$ | 488,890 | $ | 32,907 | $ | 919 | — | $ | 522,716 | |||||||||||||||
| Net claims and claim expenses incurred |
738,623 | 39,142 | 2,033 | — | 779,798 | |||||||||||||||||||
| Acquisition expenses |
40,223 | 5,766 | 229 | — | 46,218 | |||||||||||||||||||
| Operational expenses |
65,264 | 17,607 | 1,258 | — | 84,129 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Underwriting loss |
$ | (355,220 | ) | $ | (29,608 | ) | $ | (2,601 | ) | — | (387,429 | ) | ||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||
| Net investment income |
93,609 | 93,609 | ||||||||||||||||||||||
| Net foreign exchange losses |
(3,861 | ) | (3,861 | ) | ||||||||||||||||||||
| Equity in losses of other ventures |
(18,625 | ) | (18,625 | ) | ||||||||||||||||||||
| Other income |
44,978 | 44,978 | ||||||||||||||||||||||
| Net realized and unrealized gains on investments |
29,765 | 29,765 | ||||||||||||||||||||||
| Corporate expenses |
(6,075 | ) | (6,075 | ) | ||||||||||||||||||||
| Interest expense |
(11,925 | ) | (11,925 | ) | ||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Loss from continuing operations |
(259,563 | ) | ||||||||||||||||||||||
| Income tax benefit |
1,825 | 1,825 | ||||||||||||||||||||||
| Loss from discontinued operations |
(11,620 | ) | (11,620 | ) | ||||||||||||||||||||
| Net loss attributable to noncontrolling interests |
63,589 | 63,589 | ||||||||||||||||||||||
| Dividends on preference shares |
(17,500 | ) | (17,500 | ) | ||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Net loss attributable to RenaissanceRe common shareholders |
$ | (223,269 | ) | |||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Net claims and claim expenses incurred |
$ | 829,760 | $ | 38,938 | $ | (69 | ) | $ | 868,629 | |||||||||||||||
| Net claims and claim expenses incurred |
(91,137 | ) | 204 | 2,102 | (88,831 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net claims and claim expenses incurred |
$ | 738,623 | $ | 39,142 | $ | 2,033 | $ | 779,798 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net claims and claim expense ratio - |
169.7 | % | 118.3 | % | (7.5 | %) | 166.2 | % | ||||||||||||||||
| Net claims and claim expense ratio - |
(18.6 | %) | 0.6 | % | 228.7 | % | (17.0 | %) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net claims and claim expense ratio - |
151.1 | % | 118.9 | % | 221.2 | % | 149.2 | % | ||||||||||||||||
| Underwriting expense ratio |
21.6 | % | 71.1 | % | 161.8 | % | 24.9 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Combined ratio |
172.7 | % | 190.0 | % | 383.0 | % | 174.1 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| (1) | Represents $0.1 million of gross premiums ceded from the Reinsurance segment to the Lloyd’s segment. |
| Six months ended June 30, 2010 | ||||||||||||||||||||||||
| Reinsurance | Lloyd’s | Insurance | Eliminations (1) | Other | Total | |||||||||||||||||||
| Gross premiums written |
$ | 995,102 | $ | 48,865 | $ | 685 | $ | (22,101 | ) | $ | — | $ | 1,022,551 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net premiums written |
$ | 707,658 | $ | 45,981 | $ | (17,146 | ) | — | $ | 736,493 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net premiums earned |
$ | 441,292 | $ | 23,601 | $ | (2,069 | ) | — | $ | 462,824 | ||||||||||||||
| Net claims and claim expenses |
68,615 | 10,339 | (417 | ) | — | 78,537 | ||||||||||||||||||
| Acquisition expenses |
40,600 | 4,331 | 5,084 | — | 50,015 | |||||||||||||||||||
| Operational expenses |
63,886 | 11,087 | 8,217 | — | 83,190 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Underwriting income (loss) |
$ | 268,191 | $ | (2,156 | ) | $ | (14,953 | ) | — | 251,082 | ||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||
| Net investment income |
91,882 | 91,882 | ||||||||||||||||||||||
| Net foreign exchange losses |
(11,951 | ) | (11,951 | ) | ||||||||||||||||||||
| Equity in earnings of other ventures |
5,316 | 5,316 | ||||||||||||||||||||||
| Other loss |
(9,933 | ) | (9,933 | ) | ||||||||||||||||||||
| Net realized and unrealized gains on |
118,251 | 118,251 | ||||||||||||||||||||||
| Net other-than-temporary impairments |
(829 | ) | (829 | ) | ||||||||||||||||||||
| Corporate expenses |
(9,802 | ) | (9,802 | ) | ||||||||||||||||||||
| Interest expense |
(9,362 | ) | (9,362 | ) | ||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Income from continuing operations before taxes |
424,654 | |||||||||||||||||||||||
| Income tax benefit |
3,921 | 3,921 | ||||||||||||||||||||||
| Income from discontinued operations |
30,328 | 30,328 | ||||||||||||||||||||||
| Net income attributable to redeemable |
|
(62,465 | ) | (62,465 | ) | |||||||||||||||||||
| Dividends on preference shares |
(21,150 | ) | (21,150 | ) | ||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Net income available to |
$ | 375,288 | ||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Net claims and claim expenses |
$ | 255,059 | $ | 10,500 | $ | 5,486 | $ | 271,045 | ||||||||||||||||
| Net claims and claim expenses |
(186,444 | ) | (161 | ) | (5,903 | ) | (192,508 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net claims and claim expenses |
$ | 68,615 | $ | 10,339 | $ | (417 | ) | $ | 78,537 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net claims and claim expense ratio - |
57.8 | % | 44.5 | % | NMF | 58.6 | % | |||||||||||||||||
| Net claims and claim expense ratio - |
(42.3 | %) | (0.7 | %) | NMF | (41.6 | %) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net claims and claim expense ratio - |
15.5 | % | 43.8 | % | NMF | 17.0 | % | |||||||||||||||||
| Underwriting expense ratio |
23.7 | % | 65.3 | % | NMF | 28.8 | % | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Combined ratio |
39.2 | % | 109.1 | % | NMF | 45.8 | % | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| (1) | Represents $21.6 million, $0.2 million and $0.2 million of gross premiums ceded from the Insurance segment to the Lloyd’s segment, from the Insurance segment to the Reinsurance segment and from the Reinsurance segment to Lloyd’s segment, respectively. |
NMF - Not a meaningful figure.
8
RenaissanceRe Holdings Ltd. and Subsidiaries
Supplemental Financial Data - Gross Premiums Written and Managed Premiums Analysis
(in thousands of United States Dollars)
(Unaudited)
| Three months ended | Six months ended | |||||||||||||||
| June 30, 2011 |
June 30, 2010 |
June 30, 2011 |
June 30, 2010 |
|||||||||||||
| Reinsurance Segment |
||||||||||||||||
| Renaissance catastrophe premiums |
$ | 366,929 | $ | 302,625 | $ | 678,571 | $ | 570,919 | ||||||||
| Renaissance specialty premiums |
23,066 | 7,389 | 97,461 | 79,838 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Renaissance premiums |
389,995 | 310,014 | 776,032 | 650,757 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| DaVinci catastrophe premiums |
216,317 | 186,917 | 403,353 | 342,743 | ||||||||||||
| DaVinci specialty premiums |
1,092 | (414 | ) | 1,701 | 1,602 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total DaVinci premiums |
217,409 | 186,503 | 405,054 | 344,345 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total catastrophe unit premiums |
583,246 | 489,542 | 1,081,924 | 913,662 | ||||||||||||
| Total specialty unit premiums |
24,158 | 6,975 | 99,162 | 81,440 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Reinsurance segment gross premiums written |
$ | 607,404 | $ | 496,517 | $ | 1,181,086 | $ | 995,102 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Lloyd’s Segment |
||||||||||||||||
| Specialty |
$ | 17,546 | $ | 6,508 | $ | 46,781 | $ | 14,230 | ||||||||
| Catastrophe |
16,580 | 7,324 | 23,965 | 12,993 | ||||||||||||
| Insurance |
— | 21,009 | — | 21,642 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Lloyd’s segment gross premiums written |
$ | 34,126 | $ | 34,841 | $ | 70,746 | $ | 48,865 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Insurance Segment |
||||||||||||||||
| Commercial property |
$ | 33 | $ | 20 | $ | 313 | $ | 1,117 | ||||||||
| Personal lines property |
— | (3,762 | ) | — | (432 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Insurance segment gross premiums written |
$ | 33 | $ | (3,742 | ) | $ | 313 | $ | 685 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Three months ended | Six months ended | |||||||||||||||
| Managed Premiums (1) |
June 30, 2011 |
June 30, 2010 |
June 30, 2011 |
June 30, 2010 |
||||||||||||
| Total catastrophe unit gross premiums written |
$ | 583,246 | $ | 489,542 | $ | 1,081,924 | $ | 913,662 | ||||||||
| Catastrophe premiums written on behalf of our joint venture, Top Layer Re (2) |
19,079 | 18,793 | 41,607 | 44,979 | ||||||||||||
| Catastrophe premiums written in the Lloyd’s segment |
16,580 | 7,324 | 23,965 | 12,993 | ||||||||||||
| Catastrophe premiums assumed from the Insurance segment |
— | (67 | ) | — | (242 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total managed catastrophe premiums (1) |
$ | 618,905 | $ | 515,592 | $ | 1,147,496 | $ | 971,392 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (1) | See Comments on Regulation G for a reconciliation of non-GAAP financial measures. |
| (2) | Top Layer Re is accounted for under the equity method of accounting. |
9
RenaissanceRe Holdings Ltd. and Subsidiaries
Supplemental Financial Data - Total Investment Result
(in thousands of United States Dollars)
(Unaudited)
| Three months ended | Six months ended | |||||||||||||||
| June 30, 2011 |
June 30, 2010 |
June 30, 2011 |
June 30, 2010 |
|||||||||||||
| Fixed maturity investments |
$ | 24,426 | $ | 28,014 | $ | 52,339 | $ | 56,889 | ||||||||
| Short term investments |
433 | 682 | 1,028 | 1,168 | ||||||||||||
| Equity investments trading |
112 | — | 126 | — | ||||||||||||
| Other investments |
||||||||||||||||
| Hedge funds and private equity investments |
8,230 | 8,188 | 31,737 | 25,724 | ||||||||||||
| Other |
2,838 | (8,184 | ) | 13,665 | 13,034 | |||||||||||
| Cash and cash equivalents |
45 | 22 | 86 | 83 | ||||||||||||
| 36,084 | 28,722 | 98,981 | 96,898 | |||||||||||||
| Investment expenses |
(2,756 | ) | (2,549 | ) | (5,372 | ) | (5,016 | ) | ||||||||
| Net investment income |
33,328 | 26,173 | 93,609 | 91,882 | ||||||||||||
| Gross realized gains |
15,430 | 28,753 | 25,992 | 77,601 | ||||||||||||
| Gross realized losses |
(4,156 | ) | (5,962 | ) | (16,773 | ) | (11,132 | ) | ||||||||
| Net realized gains on fixed maturity investments |
11,274 | 22,791 | 9,219 | 66,469 | ||||||||||||
| Net unrealized gains on fixed maturity investments trading |
24,728 | 47,260 | 20,970 | 51,782 | ||||||||||||
| Net unrealized losses on equity investments trading |
(1,023 | ) | — | (424 | ) | — | ||||||||||
| Net realized and unrealized gains on investments |
34,979 | 70,051 | 29,765 | 118,251 | ||||||||||||
| Total other-than-temporary impairments |
— | (798 | ) | — | (831 | ) | ||||||||||
| Portion recognized in other comprehensive income, before taxes |
— | 2 | — | 2 | ||||||||||||
| Net other-than-temporary impairments |
— | (796 | ) | — | (829 | ) | ||||||||||
| Change in net unrealized gains on fixed maturity investment available for sale |
(1,763 | ) | (9,414 | ) | (1,511 | ) | (18,055 | ) | ||||||||
| Total investment result |
$ | 66,544 | $ | 86,014 | $ | 121,863 | $ | 191,249 | ||||||||
Comments on Regulation G
In addition to the GAAP financial measures set forth in this Press Release, the Company has included certain non-GAAP financial measures in this Press Release within the meaning of Regulation G. The Company has provided these financial measurements in previous investor communications and the Company’s management believes that these measurements are important to investors and other interested persons, and that investors and such other persons benefit from having a consistent basis for comparison between quarters and for the comparison with other companies within the industry. These measures may not, however, be comparable to similarly titled measures used by companies outside of the insurance industry. Investors are cautioned not to place undue reliance on these non-GAAP measures in assessing the Company’s overall financial performance.
The Company uses “operating (loss) income (attributable) available 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 (loss) income (attributable) available 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 net realized and unrealized gains and losses on investments from continuing and discontinued operations and net other-than-temporary impairments from continuing and discontinued operations. The Company’s management believes that “operating (loss) income (attributable) available to RenaissanceRe common shareholders” is useful to investors because it more accurately measures and predicts the Company’s results of operations by removing the variability arising from fluctuations in the Company’s fixed maturity investment portfolio and equity investments trading. The Company also uses “operating (loss) income (attributable) available to RenaissanceRe common shareholders” to calculate “operating (loss) income (attributable) available to RenaissanceRe common shareholders per common share – diluted” and “operating return on average common equity – annualized”. The following is a reconciliation of: 1) net income (loss) available (attributable) to RenaissanceRe common shareholders to operating (loss) income (attributable) available to RenaissanceRe common shareholders; 2) net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – diluted to operating (loss)
10
income (attributable) available to RenaissanceRe common shareholders per common share – diluted; and 3) return on average common equity – annualized to operating return on average common equity – annualized:
| Three months ended | Six months ended | |||||||||||||||
| (in thousands of United States dollars, except for per share amounts) | June 30, 2011 |
June 30, 2010 |
June 30, 2011 |
June 30, 2010 |
||||||||||||
| Net income (loss) available (attributable) to RenaissanceRe common shareholders |
$ | 24,764 | $ | 210,241 | $ | (223,269 | ) | $ | 375,288 | |||||||
| Adjustment for net realized and unrealized (gains) losses on investments of continuing operations |
(34,979 | ) | (70,051 | ) | (29,765 | ) | (118,251 | ) | ||||||||
| Adjustment for net other-than-temporary impairments of continuing operations |
— | 796 | — | 829 | ||||||||||||
| Adjustment for net realized and unrealized gains on fixed maturity investments and net other-than-temporary impairments of discontinued operations |
— | (1,055 | ) | (42 | ) | (1,453 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating (loss) income (attributable) available to RenaissanceRe common shareholders |
$ | (10,215 | ) | $ | 139,931 | $ | (253,076 | ) | $ | 256,413 | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted |
$ | 0.48 | $ | 3.66 | $ | (4.39 | ) | $ | 6.37 | |||||||
| Adjustment for net realized and unrealized (gains) losses on investments of continuing operations |
(0.69 | ) | (1.26 | ) | (0.58 | ) | (2.07 | ) | ||||||||
| Adjustment for net other-than-temporary impairments of continuing operations |
— | 0.02 | — | 0.02 | ||||||||||||
| Adjustment for net realized and unrealized gains on fixed maturity investments and net other-than-temporary impairments of discontinued operations |
— | (0.02 | ) | — | (0.02 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating (loss) income (attributable) available to RenaissanceRe common shareholders per common share - diluted |
$ | (0.21 | ) | $ | 2.40 | $ | (4.97 | ) | $ | 4.30 | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Return on average common equity - annualized |
3.3 | % | 26.8 | % | (14.4 | %) | 23.8 | % | ||||||||
| Adjustment for net realized and unrealized (gains) losses on investments of continuing operations |
(4.7 | %) | (8.9 | %) | (1.9 | %) | (7.5 | %) | ||||||||
| Adjustment for net other-than-temporary impairments of continuing operations |
— | 0.1 | % | — | 0.1 | % | ||||||||||
| Adjustment for net realized and unrealized gains on fixed maturity investments and net other-than-temporary impairments of discontinued operations |
— | (0.1 | %) | — | (0.1 | %) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating return on average common equity - annualized |
(1.4 | %) | 17.9 | % | (16.3 | %) | 16.3 | % | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
The Company has also included in this Press Release “managed catastrophe premiums”. “Managed catastrophe premiums” is defined as gross catastrophe premiums written by Renaissance Reinsurance and its related joint ventures, excluding catastrophe premiums assumed from the Company’s Insurance segment. “Managed catastrophe premiums” differs from total catastrophe unit gross premiums written, which the Company believes is the most directly comparable GAAP measure, due to the inclusion of catastrophe premiums written on behalf of the Company’s joint venture Top Layer Re, which is accounted for under the equity method of accounting, the inclusion of catastrophe premiums written on behalf of the Company’s Lloyd’s segment, and the exclusion of catastrophe premiums assumed from the Company’s Insurance segment. The Company’s management believes “managed catastrophe premiums” is useful to investors and other interested parties because it provides a measure of total catastrophe premiums, as applicable, assumed by the Company through its consolidated subsidiaries and related joint ventures, excluding catastrophe premiums assumed from the Company's Insurance segment.
11