RenaissanceRe Holdings Ltd.’s (RNR - Free Report) second-quarter 2018 operating earnings per share of $5.23 beat the Zacks Consensus Estimate of $2.71 by 73.4%. However, the bottom line skyrocketed 87.5% year over year.
RenaissanceRe Holdings Ltd. Price, Consensus and EPS Surprise
The quarter witnessed a strong performance across the business. Cost control and higher investment income added to the upside.
Quarterly Operational Update
RenaissanceRe’s second-quarter operating revenues of $502 million surpassed the Zacks Consensus Estimate of $467 million by 7.4% and improved 14.4% year over year.
Gross premiums written increased 18.1% year over year to $977.3 million, driven by higher premiums from the Property as well as Casualty and Specialty segments.
Net investment income is $71.4 million for the reported quarter, improved by 31.7% year over year.
RenaissanceRe’s total expenses were $329.2 million, down 22.4% year over year.
Underwriting income of $226.6 million more than doubled from the year-ago period. Combined ratio of 47.2% improved 2410 basis points (bps) from the prior-year quarter.
Quarterly Segment Update
Property Segment
Gross premiums written were $552.6 million, up 10.7% year over year. This improvement is attributable to higher written premiums in the catastrophe class of business as well as increase in premiums in other property class of business.
Underwriting income of $213.7 million doubled year over year. Combined ratio of (4.7%) compared favorably with 94.2% in the year-ago quarter.
Casualty and Specialty Segment
Gross premiums written were $424.7 million, up 29.5% year over year, driven by selective growth in general casualty, financial lines and other specialty classes of business.
Underwriting income of $13 million increased more than fourfold year over year. Combined ratio of 98.8% improved 430 bps from the year-earlier quarter. This upside was largely driven by 620 bps decrease in underwriting expenses ratio.
Financial Position
As of Jun 30, 2018, total assets of RenaissanceRe were $17 billion, up 11.8% from 2017-end level.
The company had total debt of $990.4 million as of Jun 30, 2018, up 0.1% from 2017-end level.
Cash and cash equivalents were $0.5 billion, down 59.7% from $1.4 billion as of Dec 31, 2017.
Book value per share of $104.56 improved 4.5% year over year.
Operating Return on equity expanded 100 basis points year over year to 20.3% in the quarter under review.
Zacks Rank
RenaissanceRe 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 P&C Insurers
Among other players from the same industry, having already reported first-quarter earnings so far, the bottom line of The Progressive Corporation (PGR - Free Report) and RLI Corp. (RLI - Free Report) outpaced the respective Zacks Consensus Estimate while The Travelers Companies, Inc.’s (TRV - Free Report) metric missed the same.
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RenaissanceRe Holdings Ltd.’s (RNR - Free Report) second-quarter 2018 operating earnings per share of $5.23 beat the Zacks Consensus Estimate of $2.71 by 73.4%. However, the bottom line skyrocketed 87.5% year over year.
RenaissanceRe Holdings Ltd. Price, Consensus and EPS Surprise
The quarter witnessed a strong performance across the business. Cost control and higher investment income added to the upside.
Quarterly Operational Update
RenaissanceRe’s second-quarter operating revenues of $502 million surpassed the Zacks Consensus Estimate of $467 million by 7.4% and improved 14.4% year over year.
Gross premiums written increased 18.1% year over year to $977.3 million, driven by higher premiums from the Property as well as Casualty and Specialty segments.
Net investment income is $71.4 million for the reported quarter, improved by 31.7% year over year.
RenaissanceRe’s total expenses were $329.2 million, down 22.4% year over year.
Underwriting income of $226.6 million more than doubled from the year-ago period. Combined ratio of 47.2% improved 2410 basis points (bps) from the prior-year quarter.
Quarterly Segment Update
Property Segment
Gross premiums written were $552.6 million, up 10.7% year over year. This improvement is attributable to higher written premiums in the catastrophe class of business as well as increase in premiums in other property class of business.
Underwriting income of $213.7 million doubled year over year. Combined ratio of (4.7%) compared favorably with 94.2% in the year-ago quarter.
Casualty and Specialty Segment
Gross premiums written were $424.7 million, up 29.5% year over year, driven by selective growth in general casualty, financial lines and other specialty classes of business.
Underwriting income of $13 million increased more than fourfold year over year. Combined ratio of 98.8% improved 430 bps from the year-earlier quarter. This upside was largely driven by 620 bps decrease in underwriting expenses ratio.
Financial Position
As of Jun 30, 2018, total assets of RenaissanceRe were $17 billion, up 11.8% from 2017-end level.
The company had total debt of $990.4 million as of Jun 30, 2018, up 0.1% from 2017-end level.
Cash and cash equivalents were $0.5 billion, down 59.7% from $1.4 billion as of Dec 31, 2017.
Book value per share of $104.56 improved 4.5% year over year.
Operating Return on equity expanded 100 basis points year over year to 20.3% in the quarter under review.
Zacks Rank
RenaissanceRe 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 P&C Insurers
Among other players from the same industry, having already reported first-quarter earnings so far, the bottom line of The Progressive Corporation (PGR - Free Report) and RLI Corp. (RLI - Free Report) outpaced the respective Zacks Consensus Estimate while The Travelers Companies, Inc.’s (TRV - Free Report) metric missed the same.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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