RenaissanceRe Holdings Ltd. (RNR - Free Report) reported second-quarter 2021 operating income per share of $5.64, which beat the Zacks Consensus Estimate by 16.3%. Further, the bottom line improved 38.9% year over year. Results were driven by higher gross premiums written across the company’s Property as well as Casualty and Specialty segments.
Quarterly Operational Update
Total revenues decreased 4.6% year over year to $1.4 billion in the second quarter due to lower investment income, and net realized and unrealized gains (losses) on investments.Gross premiums written improved 23.1% year over year to $2.1 billion owing to uptick in premiums at the Property, and Casualty and Specialty segments. In the quarter, net investment income declined 9.4% year over year to $80.9 million.
Total expenses of RenaissanceRe increased 8.5% year over year to $885.7 million, primarily due to a steep rise in net claims and claim expenses incurred, higher operational costs and higher acquisition costs.
In the quarter under review, underwriting income came in at $328.9 million, up 51.5% year over year. Combined ratio contracted 610 basis points (bps) to 72.4% in the second quarter.
Quarterly Segment UpdateProperty Segment
Gross premiums written climbed 13.5% year over year to $1.18 billion in the quarter under review, courtesy of growth in the property catastrophe classic of business.Underwriting income of $315.1 million surged 57% year over year. This was mainly on the back of net earned premiums along with lower current accident year net incurred losses and better prior accident year net favorable development.
Combined ratio contracted 1530 bps year over year to 43.8% in the second quarter.
Casualty and Specialty Segment
Gross premiums written advanced 38.1% year over year to $910.6 million in the quarter, attributable to rate hikes and an increase in new and existing business written during the current and previous periods. The rise can be attributed to overall growth in the general casualty, professional liability and other specialty lines of business.The segment’s underwriting income amounted to $13.8 million, down 15.8% year over year.
Combined ratio expanded 100 bps year over year to 97.8% in the second quarter.
Financial Position (as of Jun 30, 2021)
RenaissanceRe’s total assets worth $32.7 billion improved 6.2% from the 2020-end level.At the end of the second quarter, cash and cash equivalents inched up 3% from the figure at 2020 end to $1.78 billion.
The company had $1.1 billion debt, which increased 0.1% from the 2020-end level.
Book value per share came in at $139.35, which climbed 0.6% year over year.
Annualized operating return on average common equity came in at 16.8% in the quarter under review, up 410 bps year over year.
Share Repurchase Update
In the quarter, the company bought back shares worth $309 million.
Zacks Rank
RenaissanceRe currently has 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 insurance industry players, which have reported second-quarter earnings so far, the bottom-line results of The Progressive Corp. (PGR - Free Report) , RLI Corp. (RLI - Free Report) and The Travelers Companies, Inc. (TRV - Free Report) beat the respective Zacks Consensus Estimate.
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RenaissanceRe Holdings Ltd. (RNR - Free Report) reported second-quarter 2021 operating income per share of $5.64, which beat the Zacks Consensus Estimate by 16.3%. Further, the bottom line improved 38.9% year over year. Results were driven by higher gross premiums written across the company’s Property as well as Casualty and Specialty segments.
Quarterly Operational Update
Total revenues decreased 4.6% year over year to $1.4 billion in the second quarter due to lower investment income, and net realized and unrealized gains (losses) on investments.
Gross premiums written improved 23.1% year over year to $2.1 billion owing to uptick in premiums at the Property, and Casualty and Specialty segments. In the quarter, net investment income declined 9.4% year over year to $80.9 million.
Total expenses of RenaissanceRe increased 8.5% year over year to $885.7 million, primarily due to a steep rise in net claims and claim expenses incurred, higher operational costs and higher acquisition costs.
In the quarter under review, underwriting income came in at $328.9 million, up 51.5% year over year. Combined ratio contracted 610 basis points (bps) to 72.4% in the second quarter.
Quarterly Segment Update
Property Segment
Gross premiums written climbed 13.5% year over year to $1.18 billion in the quarter under review, courtesy of growth in the property catastrophe classic of business.
Underwriting income of $315.1 million surged 57% year over year. This was mainly on the back of net earned premiums along with lower current accident year net incurred losses and better prior accident year net favorable development.
Combined ratio contracted 1530 bps year over year to 43.8% in the second quarter.
Casualty and Specialty Segment
Gross premiums written advanced 38.1% year over year to $910.6 million in the quarter, attributable to rate hikes and an increase in new and existing business written during the current and previous periods. The rise can be attributed to overall growth in the general casualty, professional liability and other specialty lines of business.
The segment’s underwriting income amounted to $13.8 million, down 15.8% year over year.
Combined ratio expanded 100 bps year over year to 97.8% in the second quarter.
Financial Position (as of Jun 30, 2021)
RenaissanceRe’s total assets worth $32.7 billion improved 6.2% from the 2020-end level.
At the end of the second quarter, cash and cash equivalents inched up 3% from the figure at 2020 end to $1.78 billion.
The company had $1.1 billion debt, which increased 0.1% from the 2020-end level.
Book value per share came in at $139.35, which climbed 0.6% year over year.
Annualized operating return on average common equity came in at 16.8% in the quarter under review, up 410 bps year over year.
Share Repurchase Update
In the quarter, the company bought back shares worth $309 million.
Zacks Rank
RenaissanceRe currently has 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 insurance industry players, which have reported second-quarter earnings so far, the bottom-line results of The Progressive Corp. (PGR - Free Report) , RLI Corp. (RLI - Free Report) and The Travelers Companies, Inc. (TRV - Free Report) beat the respective Zacks Consensus Estimate.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>
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