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RenaissanceRe's (RNR) Q2 Earnings Beat Estimates, Fall Y/Y

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RenaissanceRe Holdings Ltd. (RNR - Free Report) delivered second-quarter 2020 operating earnings per share of $4.06, beating the Zacks Consensus Estimate by 51.5% on the back of solid revenues. However, the bottom line declined 15.1% year over year.

Quarterly Operational Update

Total revenues of $1.5 billion improved 25% year over year on higher gross premiums written.

Gross premiums written increased 15.2% year over year to $1.7 billion owing to higher premiums at the Property as well as the Casualty and Specialty segments.

Net investment income of $89.3 million declined 24.7% year over year.

RenaissanceRe’s total expenses of $816.7 million rose 4.7% year over year, primarily due to steep net claims and claim expenses and acquisition costs.

Underwriting income of $217.1 million grew 27.1% year over year, aided by higher contribution from the Property segment.

Combined ratio of 78.5% in the second quarter compared favorably with the year-ago quarter’s 81.3%.

RenaissanceRe Holdings Ltd. Price, Consensus and EPS Surprise RenaissanceRe Holdings Ltd. Price, Consensus and EPS Surprise

RenaissanceRe Holdings Ltd. price-consensus-eps-surprise-chart | RenaissanceRe Holdings Ltd. Quote

Quarterly Segment Update

Property Segment

Gross premiums written were $1 billion, up 24.2% year over year in the second quarter.

Underwriting income of $200.6 million surged32.2% year over year, banking on a decrease in the underwriting expense ratio.

Combined ratio of 59.1% contracted 520 basis points (bps) year over year.

Casualty and Specialty Segment

Gross premiums written of $659.3 million were up 3.4% from the prior-year quarter. This upside is driven by growth in the current and new business opportunities within a few classes of business written in the present and previous periods.

The segment’s underwriting income of $16.5 million was down 13.2% year over year in the second quarter.

Combined ratio of 96.8% expanded 70 bps year over year.

Other Update

The company issued 6,325,000 of its common shares in an underwritten public offering at a public offering price of $166.00 per share on Jun 5, 2020.

It also raised $75 million through the issuance of 451,807 of its common shares at a price of $166.00 per share to State Farm Mutual Automobile Insurance Company.

Financial Position

As of Jun 30, 2020, total assets of RenaissanceRe were $30.5 billion, up 15.8% from the level at 2019 end.

The company had total debt of $1.1 billion as of Jun 30, 2020, down 18% from the level at 2019 end.

Cash and cash equivalents were $1.2 billion, down 14% from the figure at 2019 end.

Book value per share of $134.27 increased 11.4% from the number at 2019 end.

Annualized operating return on equity for the quarter under review was 12.7%.

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.

Of the insurance industry players, which have reported second-quarter results so far, earnings of Cincinnati Financial Corporation (CINF - Free Report) , First American Financial Corporation (FAF - Free Report) and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate.

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