Bermuda-based RenaissanceRe Holdings Ltd reported net income available to common shareholders of $41.7 million or $0.87 per diluted common share in the fourth quarter of 2012, compared to $81.8 million or $1.58 per diluted common share in the fourth quarter of 2011.
Operating income was $31.0 million or $0.65 per diluted common share for the fourth quarter of 2012, compared to $58.0 million and $1.11, respectively, in the fourth quarter of 2011.
For the year ended December 31, 2012, RenRe reported net income available to common shareholders of $566.0 million or $11.23 per diluted common share, compared to a net loss of $92.2 million or $1.84 per diluted common share in 2011.
Operating income was $402.4 million or $7.93 per diluted common share for 2012, compared to an operating loss of $162.4 million or $3.22 per diluted common share in 2011. The combined ratio dropped to 57.8 percent in 2012, compared to 118.6 percent for 2011.
The Company reported an annualized return on average common equity of 5.2 percent and an annualized operating return on average common equity of 3.9 percent in the fourth quarter of 2012, compared to 10.8 percent and 7.7 percent, respectively, in the fourth quarter of 2011.
Book value per common share decreased $0.06, or 0.1 percent, in the fourth quarter of 2012 to $68.14, compared to a 2.4 percent increase in the fourth quarter of 2011. Tangible book value per common share plus accumulated dividends increased $0.20, or 0.3 percent, in the fourth quarter of 2012 to $79.28, compared to a 3.1 percent increase in the fourth quarter of 2011.
During the fourth quarter of 2012, the Company repurchased 2.8 million common shares in open market transactions and a privately negotiated transaction at an aggregate cost of $222.5 million and at an average share price of $80.03.
For the full year RenRe reported a return on average common equity of 17.7 percent and an operating return on average common equity of 12.6 percent in 2012, compared to negative 3.0 percent and negative 5.3 percent, respectively, in 2011.
Book value per common share increased $8.87, or 15.0 percent, in 2012 to $68.14, compared to a 5.3 percent decrease in the 2011. Tangible book value per common share plus accumulated dividends increased $9.91, or 17.0 percent, in 2012 to $79.28, compared to a 1.8 percent decrease in 2011.
During 2012, the Company repurchased 6.4 million common shares in open market transactions and a privately negotiated transaction at an aggregate cost of $494.4 million and at an average share price of $77.26.
CEO Neill A. Currie commented: “I am pleased to report $41.7 million of net income in the fourth quarter, despite incurring $127.0 million of net negative impact from Sandy. For the year, we generated $566.0 million of net income, a 12.6 percent operating ROE and 17.0 percent growth in tangible book value per share excluding dividends.”
“Our performance in 2012 reflected the value of our “Three Superiors” – superior customer relationships, superior risk selection and superior capital management. As we enter our twentieth year of operation, we remain focused on perpetuating these strengths along with the discipline that has served our clients, joint venture partners and shareholders so well over the long-term.”
The report also noted the following Q4 highlights:
— Underwriting income of $4.3 million and a combined ratio of 98.5 percent, compared to $127.1 million and 36.2 percent, respectively. These results were primarily driven by storm Sandy which negatively impacted the Company’s underwriting results by $127.0 million and added 60.7 percentage points to the combined ratio.
— Total investment income of $50.3 million, which includes the sum of net investment income, net realized and unrealized gains on investments and net other-than-temporary impairments, compared to $76.8 million. The decrease was driven by lower total returns in the Company’s fixed maturity investment portfolio as a result of lower investment yields across most sectors during the quarter compared to the prior year, combined with weaker returns in the Company’s portfolio of other investments, principally as a result of lower returns for the Company’s private equity investments.
— Equity in earnings from other ventures of $6.6 million, improved $29.3 million from a loss of $22.7 million, primarily driven by equity in earnings in Top Layer Re of $6.0 million, compared to a loss of $22.6 million, due to the absence of losses during the quarter compared to net losses related to the Tohoku earthquake in the comparative quarter.
— Net income attributable to redeemable non-controlling interests of $9.7 million decreased from $25.4 million, primarily impacted by a decrease in profitability of DaVinciRe as a result of storm Sandy and partially offset by a decrease in the Company’s ownership percentage in DaVinciRe from 42.8 percent at December 31, 2011 to 30.8 percent at December 31, 2012.
Source: RenaissanceRe
Topics Profit Loss
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