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RenaissanceRe (RNR) Q4 Loss Lower Than Expected, Worsens Y/Y

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RenaissanceRe Holdings Ltd. RNR incurred fourth-quarter 2020 operating loss per share of $1.59, narrower than the Zacks Consensus Estimate of a loss of $2.15. However, the bottom line was against the year-ago quarter’s earnings of 52 cents per share.

The company suffered an elevated expense level and lower net investment income. Moreover, its Casualty and Specialty segment delivered muted results.

RenaissanceRe Holdings Ltd. Price, Consensus and EPS Surprise

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 Operational Update

Total revenues of $1.3 billion improved 26.2% year over year on higher gross premiums written, and net realized and unrealized gains on investments.

Gross premiums written increased 3.3% year over year to $0.9 billion owing to higher premiums at the Property segments.

Net investment income of $81.7 million declined 27.1% year over year.

RenaissanceRe’s total expenses of $1.2 billion rose 13.6% year over year, primarily due to steep net claims and claim expenses, and acquisition costs plus corporate expenses. Underwriting loss of $151.6 million compared unfavorably with the year-ago quarter’s underwriting loss of $65.2 million.

Combined ratio of 114.7% in the fourth quarter compared unfavorably with the year-ago quarter’s 106.7%.

Quarterly Segment Update

Property Segment

Gross premiums written were $308.3, up 25.8% year over year in the fourth quarter.

Underwriting loss of $130 million compared unfavorably with an underwriting loss of $87.1 million in the fourth quarter of 2019.

Combined ratio of 125.6% expanded 700 basis points (bps) year over year.

Casualty and Specialty Segment

Gross premiums written of $627.2 million were down 5% from the prior-year quarter due to the non-renewal of certain business and changes in premium estimates.

The segment’s underwriting loss of $21.4 million came against the income of $20.8 million in the year-ago quarter.

Combined ratio of 104.1% in the fourth quarter expanded 820 basis points from the year-ago period.

Financial Position

As of Dec 31, 2020, total assets of RenaissanceRe were $30.8 billion, up 17.1% from the level at 2019 end.

The company had total debt of $1.1 billion as of Dec 31, 2020, down 17.9% from the level at 2019 end.

Cash and cash equivalents were $1.7 billion, up 25.9% from the figure at 2019 end.

Book value per share of $138.46 increased 14.9% from the number at 2019 end.

Annualized operating return on equity for the quarter under review was a negative 4.4%.

2020 Results

Full-year revenues of the company came in at $5.1 billion, up 23.1% year over year.

The company reported earnings per share of 12 cents for the year, comparing unfavourably with the 2019 reported figure of $9.01.

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 that have reported fourth-quarter results so far, The Travelers Companies, Inc. TRV, W.R. Berkley Corporation WRB and Brown & Brown, Inc. BRO beat on earnings.

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