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RenaissanceRe (RNR) Q3 Loss Wider Than Expected on Cat Loss
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RenaissanceRe Holdings Ltd.’s (RNR - Free Report) incurred adjusted loss of $13.81 per share in the third quarter of 2017, which was wider than the Zacks Consensus Estimate of a loss of $12.25. It also compares unfavorably with earnings of $2.09 reported in the last-year quarter.
The company’s third-quarter results were severely affected by hurricanes Harvey, Irma and Maria, the Mexico City earthquake and certain losses associated with aggregate loss contracts.
However, RenaissanceRe’s third-quarter operating revenues of $591 million surpassed the Zacks Consensus Estimate of $424 million and increased 47.7% year over year due to higher premiums.
Quarterly Operational Update
Gross premiums written increased 48.8% year over year to $640.3 million driven by reinstatement premiums written related to the third-quarter large loss events.
Net investment income of $40.2 million declined 21.6% from the prior-year quarter. The overall downside in the company’s investment results stemmed from unrealized losses in catastrophe bond portfolio, impacted severely by the catastrophic events during the quarter.
RenaissanceRe’s total expenses came at $1.3 billion, substantially up from $255.7 million incurred in the year-ago quarter. This was mainly due to higher net claims and claim expenses.
Quarterly Segment Update
Property Segment
Gross premiums written were $325.4 million (including the impact of $164.7 million of reinstatement premiums written in the Property segment associated with the third-quarter large loss events), up 171.4% year over year.
The segment incurred an underwriting loss of $750.2 million against an underwriting income of $103.2 million in the year-ago quarter.
Combined ratio of 322.7% deteriorated from 40.2% in the previous-year quarter.
Casualty and Specialty Segment
Gross premiums written were $314.9 million, up 1.5% from the prior-year quarter driven by selective growth in new and existing business within certain casualty lines.
The company incurred an underwriting loss of $43.1 million against an underwriting income of $8.9 million in the prior-year quarter.
Combined ratio of 120.4% deteriorated from 94.9% in the third quarter of 2016.
RenaissanceRe Holdings Ltd. Price, Consensus and EPS Surprise
As of Sep 30, 2017, total assets of RenaissanceRe were $15 billion, up 25% year over year.
The company had total debt of $989.2 million as of Sep 30, 2017, up 4.2% from year-end 2016.
Cash and cash equivalents were $581.6 million, up 38% from 2016 end.
Share Repurchase
During the third quarter, RenaissanceRe repurchased 0.27 million common shares at an aggregate cost of $38.9 million and an average price of $144.01 per share.
Tangible book value per common share plus accumulated dividends decreased 12% to $111.13 in the quarter versus a 3.9% increase in the prior-year quarter.
Zacks Rank
RenaissanceRe currently carries a Zacks Rank #4 (Sell).
Among other insurers that have reported their third-quarter earnings so far, Brown & Brown, Inc. (BRO - Free Report) , RLI Corp. (RLI - Free Report) and The Progressive Corporation (PGR - Free Report) beat their respective Zacks Consensus Estimate.
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RenaissanceRe (RNR) Q3 Loss Wider Than Expected on Cat Loss
RenaissanceRe Holdings Ltd.’s (RNR - Free Report) incurred adjusted loss of $13.81 per share in the third quarter of 2017, which was wider than the Zacks Consensus Estimate of a loss of $12.25. It also compares unfavorably with earnings of $2.09 reported in the last-year quarter.
The company’s third-quarter results were severely affected by hurricanes Harvey, Irma and Maria, the Mexico City earthquake and certain losses associated with aggregate loss contracts.
However, RenaissanceRe’s third-quarter operating revenues of $591 million surpassed the Zacks Consensus Estimate of $424 million and increased 47.7% year over year due to higher premiums.
Quarterly Operational Update
Gross premiums written increased 48.8% year over year to $640.3 million driven by reinstatement premiums written related to the third-quarter large loss events.
Net investment income of $40.2 million declined 21.6% from the prior-year quarter. The overall downside in the company’s investment results stemmed from unrealized losses in catastrophe bond portfolio, impacted severely by the catastrophic events during the quarter.
RenaissanceRe’s total expenses came at $1.3 billion, substantially up from $255.7 million incurred in the year-ago quarter. This was mainly due to higher net claims and claim expenses.
Quarterly Segment Update
Property Segment
Gross premiums written were $325.4 million (including the impact of $164.7 million of reinstatement premiums written in the Property segment associated with the third-quarter large loss events), up 171.4% year over year.
The segment incurred an underwriting loss of $750.2 million against an underwriting income of $103.2 million in the year-ago quarter.
Combined ratio of 322.7% deteriorated from 40.2% in the previous-year quarter.
Casualty and Specialty Segment
Gross premiums written were $314.9 million, up 1.5% from the prior-year quarter driven by selective growth in new and existing business within certain casualty lines.
The company incurred an underwriting loss of $43.1 million against an underwriting income of $8.9 million in the prior-year quarter.
Combined ratio of 120.4% deteriorated from 94.9% in the third quarter of 2016.
RenaissanceRe Holdings Ltd. Price, Consensus and EPS Surprise
RenaissanceRe Holdings Ltd. Price, Consensus and EPS Surprise | RenaissanceRe Holdings Ltd. Quote
Financial Position
As of Sep 30, 2017, total assets of RenaissanceRe were $15 billion, up 25% year over year.
The company had total debt of $989.2 million as of Sep 30, 2017, up 4.2% from year-end 2016.
Cash and cash equivalents were $581.6 million, up 38% from 2016 end.
Share Repurchase
During the third quarter, RenaissanceRe repurchased 0.27 million common shares at an aggregate cost of $38.9 million and an average price of $144.01 per share.
Tangible book value per common share plus accumulated dividends decreased 12% to $111.13 in the quarter versus a 3.9% increase in the prior-year quarter.
Zacks Rank
RenaissanceRe currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Among other insurers that have reported their third-quarter earnings so far, Brown & Brown, Inc. (BRO - Free Report) , RLI Corp. (RLI - Free Report) and The Progressive Corporation (PGR - Free Report) beat their respective Zacks Consensus Estimate.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>