RenaissanceRe Holdings Ltd. (RNR - Free Report) delivered third-quarter 2019 operating earnings per share of 29 cents per share, missing the Zacks Consensus Estimate by 54% due to catastrophe loss, high expenses and underwriting loss. Moreover, the bottom line declined 44.2% year over year.
Quarterly Operational Update
RenaissanceRe’s third-quarter operating revenues of $1 billion soared nearly 67% year over year on the back of improved net premiums earned plus net realized and unrealized gains on investment.
Gross premiums written surged 37.6% year over year to $861.1 million owing to higher premiums at the Property as well as the Casualty and Specialty segments.
Net investment income of $113.8 million rose 41.1% year over year.
RenaissanceRe’s total expenses were $939.5 million, having escalated 62.1% year over year, primarily due to higher Net claims and claim expenses incurred, acquisition expenses, operational expenses and corporate expenses.
Underwriting loss of $3.4 million was narrower than the year-earlier quarterly loss of $29 million. The company’s underwriting results were negatively impacted by third-quarter catastrophe events.
Combined ratio was 100.4% in the third quarter compared with the year-ago quarter’s 105.5%.
Quarterly Segment UpdateProperty Segment
Gross premiums written were $314.4 million, up 4.3% year over year in the third quarter.
Underwriting loss of $7.7 million was reported in the third quarter, narrower than the year-ago loss of $43.9 million. Combined ratio of 101.7% contracted 1330 basis points (bps) year over year.
Casualty and Specialty Segment
Gross premiums written were $546.7 million, up 68.6% from the prior-year quarter. This upside is driven by the buyouts in connection with TMR Group Entities and growth in the current and new business opportunities within a few classes of business.
The segment’s underwriting income of $4.5 million plunged 69.8% year over year.
Combined ratio of 99% expanded 520 basis points year over year.
Financial Position
As of Sep 30, 2019, total assets of RenaissanceRe were $25.6 billion, up 37.3% from the level at 2018 end.
The company had total debt of $1.4 billion as of Sep 30, 2019, up nearly 39.6% from the level at 2018 end.
Cash and cash equivalents were $871.2 million, down 21.4% from the figure at 2018 end.
Book value per share of $120.07 rose 15.3% from the number at 2018 end.
Annualized Return on equity for the quarter under review was 2.8%.
Zacks Rank
RenaissanceRe 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 players from the insurance industry having reported third-quarter earnings so far, the bottom-line results of The Progressive Corporation (PGR - Free Report) , MGIC Investment Corporation (MTG - Free Report) and RLI Corp. (RLI - Free Report) outpaced the respective Zacks Consensus Estimate.
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RenaissanceRe Holdings Ltd. (RNR - Free Report) delivered third-quarter 2019 operating earnings per share of 29 cents per share, missing the Zacks Consensus Estimate by 54% due to catastrophe loss, high expenses and underwriting loss. Moreover, the bottom line declined 44.2% year over year.
Quarterly Operational Update
RenaissanceRe’s third-quarter operating revenues of $1 billion soared nearly 67% year over year on the back of improved net premiums earned plus net realized and unrealized gains on investment.
Gross premiums written surged 37.6% year over year to $861.1 million owing to higher premiums at the Property as well as the Casualty and Specialty segments.
Net investment income of $113.8 million rose 41.1% year over year.
RenaissanceRe’s total expenses were $939.5 million, having escalated 62.1% year over year, primarily due to higher Net claims and claim expenses incurred, acquisition expenses, operational expenses and corporate expenses.
Underwriting loss of $3.4 million was narrower than the year-earlier quarterly loss of $29 million. The company’s underwriting results were negatively impacted by third-quarter catastrophe events.
Combined ratio was 100.4% in the third quarter compared with the year-ago quarter’s 105.5%.
Quarterly Segment Update
Property Segment
Gross premiums written were $314.4 million, up 4.3% year over year in the third quarter.
Underwriting loss of $7.7 million was reported in the third quarter, narrower than the year-ago loss of $43.9 million. Combined ratio of 101.7% contracted 1330 basis points (bps) year over year.
Casualty and Specialty Segment
Gross premiums written were $546.7 million, up 68.6% from the prior-year quarter. This upside is driven by the buyouts in connection with TMR Group Entities and growth in the current and new business opportunities within a few classes of business.
The segment’s underwriting income of $4.5 million plunged 69.8% year over year.
Combined ratio of 99% expanded 520 basis points year over year.
Financial Position
As of Sep 30, 2019, total assets of RenaissanceRe were $25.6 billion, up 37.3% from the level at 2018 end.
The company had total debt of $1.4 billion as of Sep 30, 2019, up nearly 39.6% from the level at 2018 end.
Cash and cash equivalents were $871.2 million, down 21.4% from the figure at 2018 end.
Book value per share of $120.07 rose 15.3% from the number at 2018 end.
Annualized Return on equity for the quarter under review was 2.8%.
Zacks Rank
RenaissanceRe 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 players from the insurance industry having reported third-quarter earnings so far, the bottom-line results of The Progressive Corporation (PGR - Free Report) , MGIC Investment Corporation (MTG - Free Report) and RLI Corp. (RLI - Free Report) outpaced the respective Zacks Consensus Estimate.
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Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
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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.
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