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RenaissanceRe's (RNR) Q2 Earnings Beat Mark, Improve Y/Y

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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.

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 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.