RenaissanceRe Reports Q3 Net Income of $67.8 Million

November 5, 2014

RenaissanceRe Holdings Ltd. reported net income available to common shareholders of $67.8 million, or $1.70 per diluted common share, in the third quarter of 2014, compared to $179.7 million, or $4.01, respectively, in the third quarter of 2013.

Operating income available to common shareholders was $98.9 million, or $2.49 per diluted common share, for the third quarter of 2014, compared to $151.3 million or $3.36, respectively, in the third quarter of 2013.

The company reported an annualized return on average common equity of 8.0 percent and an annualized operating return on average common equity of 11.7 percent in the third quarter of 2014, compared to 22.2 percent and 18.7 percent, respectively, in the third quarter of 2013.

Book value per common share increased $0.99, or 1.2 percent, in the third quarter of 2014 to $85.78, compared to a 4.5 percent increase in the third quarter of 2013. Tangible book value per common share plus accumulated dividends increased 1.5 percent in the third quarter of 2014, compared to a 4.9 percent increase in the third quarter of 2013.

Kevin J. O’Donnell, CEO, commented: “For the third quarter we generated an annualized operating ROE of 11.7 percent and 1.5 percent growth in tangible book value per share, plus accumulated dividends. Our results reflect our actions to reduce risk and optimize risk-adjusted returns in a difficult market.”

O’Donnell continued: “In a market that looks set to remain challenging absent a major event, we will continue to provide the capacity, flexibility and scope our clients and partners seek. At the same time, we will maintain the same discipline and focus they have come to appreciate. The investments we have made over the years to develop the platforms and the breadth of products sought by our clients positions us particularly well in this environment.”

Other third quarter highlights include:

  • The company generated underwriting income of $104.8 million and a combined ratio of 59.5 percent in the third quarter of 2014, compared to $151.4 million and 48.6 percent, respectively, in the third quarter of 2013. The $46.6 million decrease in underwriting income was driven by a $35.7 million decrease in net premiums earned, primarily as a result of reduced gross premiums written during the first nine months of 2014, and an $8.7 million increase in net claims and claim expenses.
  • Gross premiums written of $201.0 million increased $18.3 million, or 10.0 percent, in the third quarter of 2014, compared to the third quarter of 2013, with the increase principally driven by the company’s Lloyd’s and specialty reinsurance segments, which experienced an increase of $23.9 million, or 59.8 percent, and $8.7 million, or 14.5 percent, respectively.Offsetting the increases in the company’s Lloyd’s and specialty reinsurance segments’ gross premiums written, was a decrease of $14.3 million, or 17.3 percent, in the company’s catastrophe reinsurance segment.
  • The total investment result in the third quarter of 2014 was negative $6.5 million, which includes the sum of net investment income, net realized and unrealized gains on investments and the change in net unrealized gains on fixed maturity investments available for sale, compared to positive $88.2 million in the third quarter of 2013.The negative total investment result was primarily driven by rising interest rates and widening credit spreads in the company’s fixed maturity investment portfolio which resulted in net unrealized losses, combined with lower returns in the company’s portfolio of private equity investments, principally driven by weaker returns in the public equity markets during the third quarter of 2014, compared to the third quarter of 2013, partially offset by higher average invested assets during the third quarter of 2014, compared to the third quarter of 2013.
  • Net income attributable to non-controlling interests in the third quarter of 2014 was $30.5 million and decreased from $44.3 million in the third quarter of 2013, principally due to a decrease in the profitability of DaVinciRe Holdings Ltd., partially offset by a decrease in the company’s ownership in DaVinciRe to 23.4 percent at September 30, 2014, compared to 32.9 percent at September 30, 2013.
  • During the third quarter of 2014, the company repurchased an aggregate of 1.6 million common shares in open market transactions at an aggregate cost of $164.0 million and at an average share price of $100.44.

Source: RenaissanceRe Holdings

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