RenaissanceRe Reports Net Income Of $128M
RenaissanceRe Holdings Ltd. reported net income available to RenaissanceRe common shareholders of $128.0 million, or $2.95 per diluted common share, in the first quarter of 2016, compared to $167.8 million, or $4.14 per diluted common share, respectively, in the first quarter of 2015.
Operating income available to RenaissanceRe common shareholders was $66.3 million, or $1.51 per diluted common share, in the first quarter of 2016, compared to $126.1 million, or $3.10 per diluted common share, respectively, in the first quarter of 2015.
The Company reported an annualized return on average common equity of 11.8% and an annualized operating return on average common equity of 6.1% in the first quarter of 2016, compared to 17.1% and 12.9%, respectively, in the first quarter of 2015.
Book value per common share increased $2.06, or 2.1%, in the first quarter of 2016 to $101.19, compared to a 5.6% increase in the first quarter of 2015. Tangible book value per common share plus accumulated dividends increased $2.37, or 2.6%, in the first quarter of 2016 to $110.39, compared to a 0.5% decrease in the first quarter of 2015.
Kevin J. O’Donnell, CEO, commented: “We reported $128.0 million of net income, an annualized ROE of 11.8% and an annualized operating ROE of 6.1%. The risk markets around the world are currently challenging and volatile.
“This volatility benefited our net income during the first quarter with mark to market investment gains. In addition, while we benefited from low catastrophe loss activity in our Catastrophe Reinsurance segment, we also experienced an unusually large aggregation of event-specific loss activity within our Specialty Reinsurance segment.”
Mr. O’Donnell continued: ”The market remains difficult and we continue to see reductions to rates. With this backdrop, we will continue to exercise the same level of underwriting discipline as we have in the past, focusing on superior execution and helping our clients pursue opportunities and addressing their needs.”
First Quarter 2016 Highlights
- Gross premiums written of $862.1 million increased $218.6 million, or 34.0%, in the first quarter of 2016, compared to the first quarter of 2015, with the Company’s Specialty Reinsurance and Lloyd’s segments experiencing increases of $244.7 million, or 196.9%, and $2.6 million, or 2.0%, respectively, in the first quarter of 2016, offset in part by a decrease of $28.8 million, or 7.4%, in the Company’s Catastrophe Reinsurance segment. Impacting gross premiums written in the first quarter of 2016 was the inclusion of gross premiums written associated with entities acquired in connection with the Company’s acquisition of Platinum Underwriters Holdings, Ltd.["Platinum"], for the period from January 1, 2016 through March 31, 2016, compared to the first quarter of 2015, which included gross premiums written from the acquired entities for the period from March 2, 2015 [the date of acquisition] through March 31, 2015.
- The Company generated underwriting income of $105.2 million and a combined ratio of 70.3% in the first quarter of 2016, compared to $130.9 million and 55.9%, respectively, in the first quarter of 2015. The increase in the combined ratio in the first quarter of 2016, compared to the first quarter of 2015, was primarily driven by an increase in net claims and claim expenses and acquisition expenses, adding 9.9 and 4.5 percentage points, respectively, to the combined ratio, principally driven by the Company’s Specialty Reinsurance segment.
- The Company’s total investment result, which includes the sum of net investment income and net realized and unrealized gains on investments, was $90.2 million in the first quarter of 2016, compared to $81.3 million in the first quarter of 2015, an increase of $9.0 million. The total investment result during the first quarter of 2016 was primarily driven by net unrealized gains in the Company’s portfolio of fixed maturity investments trading, principally the result of a decrease in U.S. treasury yields and a flattening of the yield curve during the quarter, combined with an increase in net investment income in the Company’s portfolio of fixed maturity investments, driven by an increase in average invested assets. Partially offsetting these items were net realized and unrealized losses in the Company’s portfolios of equity investments trading and private equity investments, and net realized and unrealized losses on investments-related derivatives due to the flattening of the yield curve, noted above.
- During the first quarter of 2016, the Company repurchased an aggregate of 769 thousand common shares in open market transactions at an aggregate cost of $85.2 million and at an average share price of $110.72.
