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RenaissanceRe's (RNR) Q3 Loss Wider Than Expected, Worsens Y/Y
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RenaissanceRe Holdings Ltd. (RNR - Free Report) incurred third-quarter 2020 operating loss per share of $2.64, comparing unfavorably with the Zacks Consensus Estimate of a loss of $2.03. The bottom line was also against the year-ago quarter’s earnings of 29 cents per share.
The company suffered an elevated expense level and lower net investment income.
Quarterly Operational Update
Total revenues of $1.1 billion improved 8.4% year over year on higher gross premiums written.
Gross premiums written increased 32.7% year over year to $1.1 billion owing to higher premiums at the Property as well as the Casualty and Specialty segments.
Net investment income of $83.5 million declined 25% year over year.
RenaissanceRe’s total expenses of $1.2 billion rose 34.8% year over year, primarily due to steep net claims and claim expenses, and acquisition costs plus corporate expenses . Underwriting loss of $206.1 million compared unfavorably with the year-ago quarter’s underwriting loss of $3.4 million.
Combined ratio of 120.6% in the third quarter compared unfavorably with the year-ago quarter’s 100.4%.
RenaissanceRe Holdings Ltd. Price, Consensus and EPS Surprise
Gross premiums written were $427.8, up 36.1% year over year in the third quarter.
Underwriting loss of $206.6 million compared unfavorably with an underwriting loss of $7.7 million in the third quarter of 2019.
Combined ratio of 140% expanded 3830 basis points (bps) year over year.
Casualty and Specialty Segment
Gross premiums written of $715.3 million were up 30.8% 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 the previous periods. However, the same was offset to some extent by the non-renewal of a portion of the business acquired in connection with the TMR buyout.
The segment’s underwriting income of $0.6 million was down 86.7% year over year in the third quarter.
Combined ratio of 99.9% in the third quarter was flat with the year-ago period.
Financial Position
As of Sep 30, 2020, total assets of RenaissanceRe were $30.9 billion, up 17.7% from the level at 2019 end.
The company had total debt of $1.1 billion as of Sep 30, 2020, down 17.9% from the level at 2019 end.
Cash and cash equivalents were $1.2 billion, down 6.6% from the figure at 2019 end.
Book value per share of $135.13 increased 12.1% from the number at 2019 end.
Annualized operating return on equity for the quarter under review was a negative 7.7%.
Of the insurance industry players, which already reported third-quarter results, earnings of Cincinnati Financial Corporation (CINF - Free Report) and First American Financial Corporation (FAF - Free Report) missed the respective Zacks Consensus Estimate while that of RLI Corp. (RLI - Free Report) beat the same.
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RenaissanceRe's (RNR) Q3 Loss Wider Than Expected, Worsens Y/Y
RenaissanceRe Holdings Ltd. (RNR - Free Report) incurred third-quarter 2020 operating loss per share of $2.64, comparing unfavorably with the Zacks Consensus Estimate of a loss of $2.03. The bottom line was also against the year-ago quarter’s earnings of 29 cents per share.
The company suffered an elevated expense level and lower net investment income.
Quarterly Operational Update
Total revenues of $1.1 billion improved 8.4% year over year on higher gross premiums written.
Gross premiums written increased 32.7% year over year to $1.1 billion owing to higher premiums at the Property as well as the Casualty and Specialty segments.
Net investment income of $83.5 million declined 25% year over year.
RenaissanceRe’s total expenses of $1.2 billion rose 34.8% year over year, primarily due to steep net claims and claim expenses, and acquisition costs plus corporate expenses
.
Underwriting loss of $206.1 million compared unfavorably with the year-ago quarter’s underwriting loss of $3.4 million.
Combined ratio of 120.6% in the third quarter compared unfavorably with the year-ago quarter’s 100.4%.
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 $427.8, up 36.1% year over year in the third quarter.
Underwriting loss of $206.6 million compared unfavorably with an underwriting loss of $7.7 million in the third quarter of 2019.
Combined ratio of 140% expanded 3830 basis points (bps) year over year.
Casualty and Specialty Segment
Gross premiums written of $715.3 million were up 30.8% 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 the previous periods. However, the same was offset to some extent by the non-renewal of a portion of the business acquired in connection with the TMR buyout.
The segment’s underwriting income of $0.6 million was down 86.7% year over year in the third quarter.
Combined ratio of 99.9% in the third quarter was flat with the year-ago period.
Financial Position
As of Sep 30, 2020, total assets of RenaissanceRe were $30.9 billion, up 17.7% from the level at 2019 end.
The company had total debt of $1.1 billion as of Sep 30, 2020, down 17.9% from the level at 2019 end.
Cash and cash equivalents were $1.2 billion, down 6.6% from the figure at 2019 end.
Book value per share of $135.13 increased 12.1% from the number at 2019 end.
Annualized operating return on equity for the quarter under review was a negative 7.7%.
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 already reported third-quarter results, earnings of Cincinnati Financial Corporation (CINF - Free Report) and First American Financial Corporation (FAF - Free Report) missed the respective Zacks Consensus Estimate while that of RLI Corp. (RLI - Free Report) beat the same.
Zacks’ 2020 Election Stock Report:
In addition to the companies you learned about above, we invite you to learn more about profiting from the upcoming presidential election. Trillions of dollars will shift into new market sectors after the votes are tallied, and investors could see significant gains. This report reveals specific stocks that could soar: 6 if Trump wins, 6 if Biden wins.
Check out the 2020 Election Stock Report >>