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RenaissanceRe's (RNR) Earnings Surpass in Q2, Decline Y/Y

Zacks Equity Research

RenaissanceRe Holdings Ltd. RNR delivered second-quarter 2019 operating earnings per share of $4.78, beating the Zacks Consensus Estimate by 33.5%. The result was backed by operational efficiency and higher revenues. However, the bottom line declined 8.6% year over year.

Quarterly Operational Update

RenaissanceRe’s second-quarter operating revenues of $1 billion surpassed the Zacks Consensus Estimate by 56%. The top line also skyrocketed nearly 104.8% year over year on the back of improved net premiums earned plus net foreign exchange gain and other income.

Gross premiums written surged 51.1% year over year to $977 million owing to higher premiums in the Property as well as the Casualty and Specialty segments.

Net investment income came in at $115 million, down 9.4% year over year.

RenaissanceRe’s total expenses were $780 million, having escalated 250% year over year, primarily due to higher Net claims and claim expenses incurred, acquisition expenses, operational expenses, corporate expenses and interest expenses.

Underwriting income of $170.8 million was 24.6% lower than the year-ago quarter’s income.

Combined ratio was 81.3% for the second quarter compared with the year-ago quarter’s tally of 47.2%.

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 were $839.2 million, up 51.9 % year over year, led by higher premiums written in catastrophe class of business.

Underwriting income of $151.7 million, down 29% year over year. Combined ratio was 64.3% against a negative 4.7% in the year-ago quarter.

Casualty and Specialty Segment

Gross premiums written were $637.7 million, up 50.1% from the prior-year quarter. This upside is driven by the buyouts in connection with TMR Group Entities and growth in the current and new business opportunities within a few classes of business.

The company incurred underwriting income of $19 million, up 46.2% year over year.

Combined ratio of 96.1% expanded 190 basis points year over year.

Business Update

The company’s takeover of Tokio Millennium Re AG, Tokio Millennium Re (UK) Limited and the subsidiaries of both impacted the second-quarter results.

Financial Position   

As of Jun 30, 2019, total assets of RenaissanceRe were $26 billion, up 39.7% from 2018-end level.

The company had total debt of $1.4 billion as of Jun 30, 2019, up nearly 40% from the level at 2018 end.

Cash and cash equivalents were $670.6 million, down 39.5% from the tally at 2018 end.

Book value per share of $119.17 rose 14.4% from the figure at 2018 end.

Return on equity for the quarter under review is 28.9%.

Zacks Rank

RenaissanceRe sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Peer Releases From Finance Sector

The Hartford Financial Services Group, Inc. HIG is set to report second-quarter earnings on Aug 1 and the consensus mark for the same stands at $1.11. The stock has a Zacks Rank #3.

Lincoln National Corporation’s LNC consensus mark for second-quarter earnings is pegged at $2.32. This Zacks #3 Ranked player is scheduled to release second-quarter earnings on Jul 31.

Alleghany Corporation Y is slated to announce second-quarter earnings on Aug 6. The Zacks Consensus Estimate for the same is pinned on $9. The stock carries a Zacks Rank of 3.

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