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Why Is RenaissanceRe (RNR) Down 6.3% Since Last Earnings Report?
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A month has gone by since the last earnings report for RenaissanceRe (RNR - Free Report) . Shares have lost about 6.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is RenaissanceRe due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
RenaissanceRe reported fourth-quarter 2021 operating earnings per share of $4.71, which surpassed the Zacks Consensus Estimate by 27%. The bottom line came against the prior-year quarter’s loss of $1.59 per share.
RNR gained from higher gross premiums at the Property, and Casualty and Specialty segments.
Quarterly Operational Update
Total revenues of $1.39 billion dipped 0.1% year over year due to lower net investment income, net realized and unrealized losses on investments and foreign exchange losses.
Gross premiums written surged 40.4% year over year to $1.3 billion in the fourth quarter, courtesy of increased premiums at the Property, and Casualty and Specialty segments. Net investment income declined 1.5% year over year to $80.4 million in the quarter under review.
Total expenses of RenaissanceRe declined 10.4% year over year to $1.08 billion owing to lower net claims and claim expenses incurred plus lower operational costs and corporate expenses.
In the reported quarter, RNR delivered an underwriting income of $276.66 million against the year-ago quarter's underwriting loss of $151.65 million. Combined ratio contracted 3530 basis points (bps) year over year to 79.4% in the fourth quarter.
Quarterly Segment Update
Property Segment
Gross premiums written rose 24.8% year over year to $384.6 million on the back of an uptick in other property class of business as a result of rate improvements in new and current businesses. However, the same was partially offset by a dip in property catastrophe class of business.
The segment incurred an underwriting income of $223.09 million, against the year-ago quarter’s loss of $130.2 million. Combined ratio contracted 6120 bps year over year to 64.4%.
Casualty and Specialty Segment
Gross premiums written soared 48% year over year to $928.3 million in the quarter under review. The improvement can be attributed to a hike in professional liability, rate increases and growth in new and existing business written, general casualty and other specialty lines of business.
The segment’s underwriting income was $53.5 million against the year-ago quarter’s underwriting loss of $21.4 million. Combined ratio contracted 1160 bps year over year to 92.5%.
Financial Position (as of Dec 31, 2021)
RenaissanceRe exited the fourth quarter with cash and cash equivalents of $1.86 billion, which increased 7% from the 2020-end level. Total assets of $33.9 billion increased 10.2% from the figure as of Dec 31, 2020.
RNR’s debt amounted to $1.1 billion, which inched up 2.8% from the level at 2020 end.
Book value per share amounted to $132.17, which declined 4.5% year over year.
Annualized operating return on average common equity was 14.2% in the quarter under review.
Share Repurchase Update
In the fourth quarter, RenaissanceRe bought back shares worth $326.9 million.
Full-Year Performance
RNR reported operating earnings of $1.72 for 2021, comparing favorably with 2020’s operating earnings of 12 cents per share. For the year, total revenues reported were $5.2 billion, up 2% year over year. Gross premiums and net premiums for the full year grew 34.9% and 45% year over year, respectively.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
The consensus estimate has shifted -6.22% due to these changes.
VGM Scores
At this time, RenaissanceRe has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
RenaissanceRe has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is RenaissanceRe (RNR) Down 6.3% Since Last Earnings Report?
A month has gone by since the last earnings report for RenaissanceRe (RNR - Free Report) . Shares have lost about 6.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is RenaissanceRe due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
RenaissanceRe's Q4 Earnings Beat Estimates, Rise Y/Y
RenaissanceRe reported fourth-quarter 2021 operating earnings per share of $4.71, which surpassed the Zacks Consensus Estimate by 27%. The bottom line came against the prior-year quarter’s loss of $1.59 per share.
RNR gained from higher gross premiums at the Property, and Casualty and Specialty segments.
Quarterly Operational Update
Total revenues of $1.39 billion dipped 0.1% year over year due to lower net investment income, net realized and unrealized losses on investments and foreign exchange losses.
Gross premiums written surged 40.4% year over year to $1.3 billion in the fourth quarter, courtesy of increased premiums at the Property, and Casualty and Specialty segments. Net investment income declined 1.5% year over year to $80.4 million in the quarter under review.
Total expenses of RenaissanceRe declined 10.4% year over year to $1.08 billion owing to lower net claims and claim expenses incurred plus lower operational costs and corporate expenses.
In the reported quarter, RNR delivered an underwriting income of $276.66 million against the year-ago quarter's underwriting loss of $151.65 million. Combined ratio contracted 3530 basis points (bps) year over year to 79.4% in the fourth quarter.
Quarterly Segment Update
Property Segment
Gross premiums written rose 24.8% year over year to $384.6 million on the back of an uptick in other property class of business as a result of rate improvements in new and current businesses. However, the same was partially offset by a dip in property catastrophe class of business.
The segment incurred an underwriting income of $223.09 million, against the year-ago quarter’s loss of $130.2 million. Combined ratio contracted 6120 bps year over year to 64.4%.
Casualty and Specialty Segment
Gross premiums written soared 48% year over year to $928.3 million in the quarter under review. The improvement can be attributed to a hike in professional liability, rate increases and growth in new and existing business written, general casualty and other specialty lines of business.
The segment’s underwriting income was $53.5 million against the year-ago quarter’s underwriting loss of $21.4 million. Combined ratio contracted 1160 bps year over year to 92.5%.
Financial Position (as of Dec 31, 2021)
RenaissanceRe exited the fourth quarter with cash and cash equivalents of $1.86 billion, which increased 7% from the 2020-end level. Total assets of $33.9 billion increased 10.2% from the figure as of Dec 31, 2020.
RNR’s debt amounted to $1.1 billion, which inched up 2.8% from the level at 2020 end.
Book value per share amounted to $132.17, which declined 4.5% year over year.
Annualized operating return on average common equity was 14.2% in the quarter under review.
Share Repurchase Update
In the fourth quarter, RenaissanceRe bought back shares worth $326.9 million.
Full-Year Performance
RNR reported operating earnings of $1.72 for 2021, comparing favorably with 2020’s operating earnings of 12 cents per share. For the year, total revenues reported were $5.2 billion, up 2% year over year. Gross premiums and net premiums for the full year grew 34.9% and 45% year over year, respectively.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
The consensus estimate has shifted -6.22% due to these changes.
VGM Scores
At this time, RenaissanceRe has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
RenaissanceRe has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.