RenaissanceRe Reports Q1 Net Income of $167.8M, Up From $151M in Q1 2014

Bermuda-based RenaissanceRe Holdings Ltd. reported net income available to RenaissanceRe common shareholders of $167.8 million, or $4.14 per diluted common share, in the first quarter of 2015, compared to $151.0 million, or $3.56, respectively, in the first quarter of 2014.

Operating income available to RenaissanceRe common shareholders was $126.1 million, or $3.10 per diluted common share, for the first quarter of 2015, compared to $136.1 million, or $3.20, respectively, in the first quarter of 2014.

Kevin J. O’Donnell, CEO, commented: “We reported a solid first quarter, generating $167.8 million of net income and an annualized operating ROE of 12.9 percent. Our results were driven by strong underwriting profits and investment performance.”

O’Donnell continued: “This has been a milestone quarter for RenaissanceRe as we closed on the [acquisition of Platinum Underwriters Holdings]. The integration has gone smoothly and we have received a very positive reception from our clients and brokers. Our ability to offer a broad suite of products and flexible capital options is stronger than ever.”

First Quarter Highlights

• The company generated underwriting income of $130.9 million and a combined ratio of 55.9 percent in the first quarter of 2015, compared to $151.3 million and 47.2 percent, respectively, in the first quarter of 2014. Underwriting income in the first quarter of 2015 was driven by a relatively light catastrophe loss quarter and $22.1 million of favorable development on prior accident years’ net claims and claims expenses, principally in the company’s Catastrophe Reinsurance and Specialty Reinsurance segments.
• Gross premiums written of $643.6 million decreased $61.7 million, or 8.7 percent, in the first quarter of 2015, compared to the first quarter of 2014, with the company’s Catastrophe Reinsurance and Specialty Reinsurance segments experiencing decreases of $78.5 million and $30.0 million, respectively, partially offset by a $46.9 million increase in the company’s Lloyd’s segment.
• The company’s total investment result, which principally includes the sum of net investment income and net realized and unrealized gains on investments, was $81.3 million in the first quarter of 2015, compared to $53.7 million in the first quarter of 2014. The total investment result was primarily driven by higher net realized gains in the company’s portfolio of fixed maturity investments and higher returns in the company’s portfolio of public equity investments during the first quarter of 2015, compared to the first quarter of 2014.

Catastrophe Reinsurance Segment

Gross premiums written in the Catastrophe Reinsurance segment were $389.2 million in the first quarter of 2015, a decrease of $78.5 million, or 16.8 percent, compared to the first quarter of 2014, primarily driven by the continued softening of market conditions, including reduced risk-adjusted pricing for the January renewals, and the company’s underwriting discipline given prevailing terms and conditions.

Managed catastrophe premiums decreased $72.9 million, or 14.7 percent, to $423.1 million in the first quarter of 2015, compared to $496.0 million in the first quarter of 2014.

The Catastrophe Reinsurance segment generated underwriting income of $108.2 million and a combined ratio of 24.8 percent in the first quarter of 2015, compared to $130.6 million and 20.7 percent in the first quarter of 2014, respectively. The $22.4 million decrease in underwriting income in the first quarter of 2015, compared to the first quarter of 2014, was driven by a $20.8 million decrease in net premiums earned, primarily due to lower gross premiums written during the preceding 12 months, and an $11.6 million increase in current accident year net claims and claim expenses driven by a number of winter storms in the U.S., partially offset by a $10.5 million increase in favorable development on prior accident years’ net claims and claim expenses.

Specialty Reinsurance Segment

Gross premiums written in the Specialty Reinsurance segment were $124.3 million in the first quarter of 2015, a decrease of $30.0 million, or 19.4 percent, compared to the first quarter of 2014, driven primarily by a decrease in certain credit related lines of business as a result of the non-renewal of a number of contracts during the first quarter of 2015, combined with continued underwriting discipline given prevailing terms and conditions, partially offset by increases in certain casualty lines of business. The company’s specialty reinsurance premiums are prone to significant volatility as this business can be influenced by a relatively small number of relatively large transactions.

The Specialty Reinsurance segment generated underwriting income of $21.3 million and a combined ratio of 77.5 percent in the first quarter of 2015, compared to $16.9 million and 75.7 percent in the first quarter of 2014, respectively.

Lloyd’s Segment

Gross premiums written in the Lloyd’s segment were $130.1 million in the first quarter of 2015, an increase of $46.9 million, or 56.3 percent, compared to the first quarter of 2014, primarily due to Syndicate 1458 continuing to grow organically in the Lloyd’s marketplace, notwithstanding challenging market conditions.

The Lloyd’s segment generated underwriting income of $1.7 million and a combined ratio of 97.0 percent in the first quarter of 2015, compared to $3.4 million and 93.5 percent, respectively, in the first quarter of 2014.

Source: RenaissanceRe Holdings Ltd.

Topics Catastrophe Trends Profit Loss Excess Surplus Underwriting Reinsurance Lloyd's