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RenaissanceRe (RNR) Q4 Earnings Beat Estimates, Fall Y/Y
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RenaissanceRe Holdings Ltd.’s (RNR - Free Report) fourth-quarter 2016 operating earnings per share of $2.29 surpassed the Zacks Consensus Estimate of $1.42 by 61.3%. However, the bottom line dipped 4.9% year over year due to lower revenues.
For 2016, the company reported operating earnings per share of $8.03, down 35% year over year.
RenaissanceRe’s fourth-quarter operating revenues of $404.4 million dropped 2.8% year over year due to lower net premiums earned and other income.
For 2016, operating revenues were nearly $1.6 billion, up 2% from the prior year. A 19% increase in net investment income primarily drove the upside.
Quarterly Operational Update:
Gross premiums written of $323.1 million decreased 3.9% year over year due to a 7.4% drop in the premiums of Casualty and Specialty segment.
Net investment income of $47.3 million in the fourth quarter grew 3% from the prior-year quarter. The recent hike in interest rates is expected to have supported this improvement.
RenaissanceRe witnessed an 11% year-over-year increase in total expenses to $270.4 million. This was mainly due to higher net claims and claim expenses and acquisition expenses. However, the company has exercised better control on operating expenses as evidenced by the 22% year-over-year decline in costs.
The company generated underwriting income decreased 25.7% year over year to $103.9 million. The combined ratio of 70.5% in the fourth quarter increased 920 basis points from the last-year quarter. The deterioration in underwriting income and combined ratio stemmed from the increase in net claims and claim expenses, and underwriting expenses.
Net negative impact of Hurricane Matthew on the company’s fourth-quarter underwriting results amounted to a loss of $0.05 million.
Quarterly Segment Update:
Property Segment: Gross premiums written were $52.4 million, up 19.4% year over year. Underwriting income dipped 4.1% year over year to $100.5 million.
Casualty and Specialty Segment: Gross premiums written were $270.6 million, down 7.4% from the prior-year quarter. Underwriting income of $3 million compared favorably with an underwriting loss of $6.9 million in the prior-year quarter.
RenaissanceRe Holdings Ltd. Price, Consensus and EPS Surprise
As of Dec 31, 2016, total asset of RenaissanceRe was $12.3 billion, up 6.9% year over year.
The company had total debt of $948.7 million as of Dec 31, 2016, reflecting nearly 1.2% decrease from $960.5 at year-end 2015.
At the end of 2016, cash and cash equivalents were $421 million, down 16.8% from Dec 31, 2015.
As of Dec 31, 2016, shareholders’ equity totaled $4.9 billion, up 2.1% from year-end 2015.
RenaissanceRe reported annualized operating return on average common equity of 8% in the fourth quarter as against 10.7% in the last-year quarter. The metric was down 270 bps year over year.
For 2016, the company reported return on average common equity of 11.0% and operating return on average common equity of 7.8% compared with a respective 9.8% and 11.4% in 2015.
Share Repurchase
In 2016, RenaissanceRe repurchased approximately 2.7 million common shares at an aggregate cost of $309.4 million and at an average share price of $112.87.
Among the other players from the insurance industry that have reported their fourth-quarter earnings so far, the bottom line at Brown & Brown Inc. (BRO - Free Report) , MGIC Investment Corporation (MTG - Free Report) and The Travelers Companies, Inc. (TRV - Free Report) beat their respective Zacks Consensus Estimate.
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RenaissanceRe (RNR) Q4 Earnings Beat Estimates, Fall Y/Y
RenaissanceRe Holdings Ltd.’s (RNR - Free Report) fourth-quarter 2016 operating earnings per share of $2.29 surpassed the Zacks Consensus Estimate of $1.42 by 61.3%. However, the bottom line dipped 4.9% year over year due to lower revenues.
For 2016, the company reported operating earnings per share of $8.03, down 35% year over year.
RenaissanceRe’s fourth-quarter operating revenues of $404.4 million dropped 2.8% year over year due to lower net premiums earned and other income.
For 2016, operating revenues were nearly $1.6 billion, up 2% from the prior year. A 19% increase in net investment income primarily drove the upside.
Quarterly Operational Update:
Gross premiums written of $323.1 million decreased 3.9% year over year due to a 7.4% drop in the premiums of Casualty and Specialty segment.
Net investment income of $47.3 million in the fourth quarter grew 3% from the prior-year quarter. The recent hike in interest rates is expected to have supported this improvement.
RenaissanceRe witnessed an 11% year-over-year increase in total expenses to $270.4 million. This was mainly due to higher net claims and claim expenses and acquisition expenses. However, the company has exercised better control on operating expenses as evidenced by the 22% year-over-year decline in costs.
The company generated underwriting income decreased 25.7% year over year to $103.9 million. The combined ratio of 70.5% in the fourth quarter increased 920 basis points from the last-year quarter. The deterioration in underwriting income and combined ratio stemmed from the increase in net claims and claim expenses, and underwriting expenses.
Net negative impact of Hurricane Matthew on the company’s fourth-quarter underwriting results amounted to a loss of $0.05 million.
Quarterly Segment Update:
Property Segment: Gross premiums written were $52.4 million, up 19.4% year over year. Underwriting income dipped 4.1% year over year to $100.5 million.
Casualty and Specialty Segment: Gross premiums written were $270.6 million, down 7.4% from the prior-year quarter. Underwriting income of $3 million compared favorably with an underwriting loss of $6.9 million in the prior-year quarter.
RenaissanceRe Holdings Ltd. Price, Consensus and EPS Surprise
RenaissanceRe Holdings Ltd. Price, Consensus and EPS Surprise | RenaissanceRe Holdings Ltd. Quote
Financial Position
As of Dec 31, 2016, total asset of RenaissanceRe was $12.3 billion, up 6.9% year over year.
The company had total debt of $948.7 million as of Dec 31, 2016, reflecting nearly 1.2% decrease from $960.5 at year-end 2015.
At the end of 2016, cash and cash equivalents were $421 million, down 16.8% from Dec 31, 2015.
As of Dec 31, 2016, shareholders’ equity totaled $4.9 billion, up 2.1% from year-end 2015.
RenaissanceRe reported annualized operating return on average common equity of 8% in the fourth quarter as against 10.7% in the last-year quarter. The metric was down 270 bps year over year.
For 2016, the company reported return on average common equity of 11.0% and operating return on average common equity of 7.8% compared with a respective 9.8% and 11.4% in 2015.
Share Repurchase
In 2016, RenaissanceRe repurchased approximately 2.7 million common shares at an aggregate cost of $309.4 million and at an average share price of $112.87.
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 the other players from the insurance industry that have reported their fourth-quarter earnings so far, the bottom line at Brown & Brown Inc. (BRO - Free Report) , MGIC Investment Corporation (MTG - Free Report) and The Travelers Companies, Inc. (TRV - Free Report) beat their respective Zacks Consensus Estimate.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>