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RenaissanceRe (RNR) Q2 Earnings Beat Estimates, Rise Y/Y

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RenaissanceRe Holdings Ltd.’s (RNR - Free Report) second-quarter 2017 operating earnings per share of $2.79 surpassed the Zacks Consensus Estimate by 19.7%. The bottom line also grew 80% year over year. The upside is primarily attributable to an increase in the company’s revenues as well as a drop in expenses.

RenaissanceRe’s second-quarter operating revenues of $439 million increased 7.5% year over year due to higher premiums and net investment income.

Quarterly Operational Update:

Gross premiums written increased 9% year over year to $827.4 million.

Net investment income of $54.2 million grew 0.07% from the prior-year quarter. The upside was driven by strong returns in the company’s equity investments trading and private equity portfolios. It was also backed by positive returns in its fixed maturity investments trading portfolio, principally driven by the tightening of credit spreads across a number of sectors in its portfolio and higher average invested assets.

RenaissanceRe witnessed a year-over-year decline of 5.6% in total expenses to $287.3 million. This was mainly due to lower net claims and claim expenses, acquisition-related costs, operational expenses as well as corporate expenses.

Quarterly Segment Update

Property Segment: Gross premiums written were $499.3 million, up 1.1% year over year. Underwriting income increased 94.5% year over year to $106.6 million. Combined ratio of 44.5% improved 2680 basis points (bps) year over year.

Casualty and Specialty Segment: Gross premiums written were $328.1 million, up 23.7% from the prior-year quarter. The company generated underwriting income of $2.8 million, down 66.7% from the prior-year quarter. Combined ratio of 985% deteriorated 400 bps year over year

RenaissanceRe Holdings Ltd. Price, Consensus and EPS Surprise

Financial Position    

As of Jun 30, 2017, total assets of RenaissanceRe were $13.7 billion, up 11% year over year.

The company had total debt of $988.9 million as of Jun 30, 2017, up 4.2% from year-end 2016.

Cash and cash equivalents were $623 million, up 48% from 2016 end.

Share Repurchase

RenaissanceRe repurchased 501 thousand common shares in open market transactions at an aggregate cost of $69.7 million and an average price of $139.00 per common share.

Tangible book value per common share plus accumulated dividends increased 3.9% in the second quarter to $123.88 compared with a 2.8% increase in the prior-year quarter.

Zacks Rank

RenaissanceRe currently carries a Zacks Rank #3 (Hold). 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 same space that have reported second-quarter earnings so far, the bottom line at The Progressive Corporation (PGR - Free Report) and The Travelers Companies, Inc. (TRV - Free Report) missed their respective Zacks Consensus Estimate while RLI Corp. (RLI - Free Report) beat the same.

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