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RenaissanceRe (RNR) Q3 Earnings, Revenues Lag Estimates
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RenaissanceRe Holdings Ltd.’s (RNR - Free Report) third-quarter 2016 operating earnings per share of $2.09 missed the Zacks Consensus Estimate of $2.31 by 9.5%. The bottom line also plunged 19% year over year, mainly due to a rise in total expenses.
Operational Update:
RenaissanceRe’s operating revenues of $400 million inched up 1.8% year over year. The upside was mainly driven by higher net investment income. The top line also missed the Zacks Consensus Estimate of $434 million by 7.8%.
Gross premiums written of $430.2 million jumped 16.4% year over year on the back of increased premiums in Specialty Reinsurance and Lloyd’s segments.
RenaissanceRe reported total investment incomeof $111.2 million in the third quarter, which compared favorably with a loss of $13.0 million in the last-year quarter. The improvement was supported by net unrealized gains on equity investments as well as net realized gains on the company’s fixed maturity investment portfolio.
During the quarter, RenaissanceRe witnessed a 2% year-over-year increase in total expenses to $255 million. This was mainly due to lhigher net claims and claim expenses, corporate expenses and acquisition expenses. However, the company has shown a better control on operating expenses as evidenced by a year-over-year decline of 26% in costs.
Underwriting income decreased roughly 13% year over year to $112.9 million owing to higher net claims and claim expenses and underwriting expenses due to more catastrophe events. Combined ratio increased 320 basis points (bps) to 67.4%.
Segment Update
Catastrophe Reinsurance: Gross premiums written were $67.4 million, down 17.4% year over year. Underwriting income dipped 3% year over year to $96 million.
Specialty Reinsurance: Gross premiums written were $274 million, up 26.2% from the prior-year quarter. Underwriting income plunged 97% year over year to $1.3 million.
Lloyd’s: Gross premiums written were up 24% from the year-ago quarter to $91.9 million. The segment reported an underwriting income of $15.6 million, which compared favorably with a loss of nearly $7 million incurred in the last-year quarter.
As of Sep 30, 2016, total asset of RenaissanceRe was $12.6 billion, up 9.6% year over year from $11.5 billion as of Dec 31, 2015. The company had a total debt burden of $951.6 million as of Sep 30, 2016, reflecting nearly 1% decrease from $960.5 million at year-end 2015.
Cash and cash equivalents came in at $493 million as of Sep 30, 2016, down 2.8% from $506.9 million as of Dec 31, 2015. Shareholders’ equity at RenaissanceRe totaled $4.8 billion at the end of the quarter, up 2.1% from $4.7 billion at the end of 2015.
RenaissanceRe reported an annualized operating return on average common equity of 8% in the third quarter as against 10.7% in the last-year quarter, down 270 bps year over year.
Tangible book value per common share plus accumulated dividends of $116.82 increased 3.9% in the third quarter compared with a 1.3% increase in the prior-year quarter.
Share Repurchase and Dividend Payment
During the third quarter, RenaissanceRe spent nearly $37.2 million to buy back 0.3 million common shares in open market transactions.
During the first nine months of 2016, RenaissanceRe returned almost $350 million of capital to its shareholders through share repurchases and dividends payment.
Among the other insurers that have reported their third-quarter earnings so far, the bottom line at Progressive Corp.(PGR - Free Report) and The Travelers Companies Inc.. (TRV - Free Report) beat their respective Zacks Consensus Estimate, while earnings at RLI Corp. (RLI - Free Report) missed the same.
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RenaissanceRe (RNR) Q3 Earnings, Revenues Lag Estimates
RenaissanceRe Holdings Ltd.’s (RNR - Free Report) third-quarter 2016 operating earnings per share of $2.09 missed the Zacks Consensus Estimate of $2.31 by 9.5%. The bottom line also plunged 19% year over year, mainly due to a rise in total expenses.
Operational Update:
RenaissanceRe’s operating revenues of $400 million inched up 1.8% year over year. The upside was mainly driven by higher net investment income. The top line also missed the Zacks Consensus Estimate of $434 million by 7.8%.
Gross premiums written of $430.2 million jumped 16.4% year over year on the back of increased premiums in Specialty Reinsurance and Lloyd’s segments.
RenaissanceRe reported total investment incomeof $111.2 million in the third quarter, which compared favorably with a loss of $13.0 million in the last-year quarter. The improvement was supported by net unrealized gains on equity investments as well as net realized gains on the company’s fixed maturity investment portfolio.
During the quarter, RenaissanceRe witnessed a 2% year-over-year increase in total expenses to $255 million. This was mainly due to lhigher net claims and claim expenses, corporate expenses and acquisition expenses. However, the company has shown a better control on operating expenses as evidenced by a year-over-year decline of 26% in costs.
Underwriting income decreased roughly 13% year over year to $112.9 million owing to higher net claims and claim expenses and underwriting expenses due to more catastrophe events. Combined ratio increased 320 basis points (bps) to 67.4%.
Segment Update
Catastrophe Reinsurance: Gross premiums written were $67.4 million, down 17.4% year over year. Underwriting income dipped 3% year over year to $96 million.
Specialty Reinsurance: Gross premiums written were $274 million, up 26.2% from the prior-year quarter. Underwriting income plunged 97% year over year to $1.3 million.
Lloyd’s: Gross premiums written were up 24% from the year-ago quarter to $91.9 million. The segment reported an underwriting income of $15.6 million, which compared favorably with a loss of nearly $7 million incurred in the last-year quarter.
RENAISSANCERE Price, Consensus and EPS Surprise
RENAISSANCERE Price, Consensus and EPS Surprise | RENAISSANCERE Quote
Financial Position
As of Sep 30, 2016, total asset of RenaissanceRe was $12.6 billion, up 9.6% year over year from $11.5 billion as of Dec 31, 2015. The company had a total debt burden of $951.6 million as of Sep 30, 2016, reflecting nearly 1% decrease from $960.5 million at year-end 2015.
Cash and cash equivalents came in at $493 million as of Sep 30, 2016, down 2.8% from $506.9 million as of Dec 31, 2015. Shareholders’ equity at RenaissanceRe totaled $4.8 billion at the end of the quarter, up 2.1% from $4.7 billion at the end of 2015.
RenaissanceRe reported an annualized operating return on average common equity of 8% in the third quarter as against 10.7% in the last-year quarter, down 270 bps year over year.
Tangible book value per common share plus accumulated dividends of $116.82 increased 3.9% in the third quarter compared with a 1.3% increase in the prior-year quarter.
Share Repurchase and Dividend Payment
During the third quarter, RenaissanceRe spent nearly $37.2 million to buy back 0.3 million common shares in open market transactions.
During the first nine months of 2016, RenaissanceRe returned almost $350 million of capital to its shareholders through share repurchases and dividends payment.
Zacks Rank
RenaissanceRe currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Among the other insurers that have reported their third-quarter earnings so far, the bottom line at Progressive Corp.(PGR - Free Report) and The Travelers Companies Inc.. (TRV - Free Report) beat their respective Zacks Consensus Estimate, while earnings at RLI Corp. (RLI - Free Report) missed the same.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>