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RenaissanceRe (RNR) Q2 Earnings Top on Strong Property Results
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RenaissanceRe Holdings Ltd. (RNR - Free Report) reported second-quarter 2024 operating income of $12.41 per share, which outpaced the Zacks Consensus Estimate by 14.1%. The bottom line climbed nearly 40% year over year.
Total operating revenues of around $3 billion surged 41.8% year over year. The top line beat the consensus mark by 0.8%.
The quarterly results were driven by improved underwriting performance, enhanced net investment income and significant contributions from the Property segment. The Validus acquisition also played a crucial role, increasing average invested assets. These factors collectively propelled the company's financial performance despite elevated expenses.
RenaissanceRe Holdings Ltd. Price, Consensus and EPS Surprise
Gross premiums written improved 29.2% year over year to $3.4 billion but fell short of our estimate of $3.5 billion.
Net premiums earned were $2.54 billion, which soared 42.3% year over year. The metric surpassed the Zacks Consensus Estimate of $2.49 billion and our estimate of $2.36 billion.
Net investment income of $410.8 million rose 40.4% year over year, attributable to an increase in average invested assets, largely due to the Validus acquisition, and the inclusion of higher-yielding assets in the fixed maturity and short-term portfolios. The figure beat the consensus mark of $398.5 million and our estimate of $396.9 million.
Total expenses escalated 44% year over year to $2.1 billion, higher than our estimate of $1.9 billion. The year-over-year increase was due to higher net claims and claim expenses incurred coupled with increased acquisition and operational expenses.
RenaissanceRe generated an underwriting income of $479.3 million, which advanced 36.6% year over year in the second quarter. The combined ratio of 81.1% deteriorated 80 basis points (bps) year over year.
Book value per share was $179.87 as of Jun 30, 2024, which increased 38.4% year over year. Annualized operating return on average common equity deteriorated 90 bps year over year to 28.2%.
Segmental Update
Property Segment
The segment recorded gross premiums written of $1.75 billion in the second quarter, which grew 25% year over year on the back of favorable business renewal rates acquired in the Validus buyout and organic growth initiatives. However, the metric lagged our estimate of $1.77 billion. Net premiums earned advanced 29.3% year over year to $980.8 million, higher than the Zacks Consensus Estimate of $929.1 million and our estimate of $921.1 million.
Underwriting income was $451.7 million, which surged 60.7% year over year. The combined ratio of 53.9% improved 910 bps year over year.
Casualty and Specialty Segment
The unit’s gross premiums written rose 33.9% year over year to $1.67 billion but fell short of our estimate of $1.71 billion. The metric benefited from business renewals gained from the Validus acquisition and organic growth in legacy lines. Net premiums earned of $1.56 billion climbed 52% year over year, higher than the Zacks Consensus Estimate of $1.54 billion and our estimate of $1.44 billion.
Underwriting income of $27.6 million declined more than two-fold year over year. The combined ratio deteriorated 500 bps year over year to 98.2%.
Financial Position (as of Jun 30, 2024)
RenaissanceRe exited the second quarter with cash and cash equivalents of $1.6 billion, which slipped 13.3% from the 2023-end level. Total assets of $51.6 billion increased 5.2% from the figure at 2023 end.
Debt amounted to $2 billion, which inched up marginally from the figure as of Dec 31, 2023.
Total shareholders’ equity of $10.2 billion improved 7.7% from the 2023-end level.
Capital Deployment Update
RNR bought back common shares worth $108.5 million in the second quarter. It repurchased additional shares of $61.2 million between Jul 1 and Jul 22.
Management declared a quarterly dividend of 39 cents per share.
Zacks Rank
RenaissanceRe currently has a Zacks Rank #4 (Sell).
Of the insurance industry players that have reported second-quarter 2024 results so far, the bottom-line results of Chubb Limited (CB - Free Report) , W. R. Berkley Corporation (WRB - Free Report) and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate.
Chubb reported second-quarter core operating income of $5.38 per share, which outpaced the Zacks Consensus Estimate by 6.8%. The bottom line increased 9.3% year over year. Net premiums written improved 11.8% year over year to $13.4 billion. Net investment income was $1.5 billion, up 28.3% year over year. Revenues of $13.9 billion beat the consensus estimate by 1.2% and improved 3.2% year over year.
Property and casualty (P&C) underwriting income was $1.4 billion, down 0.5% year over year. Global P&C underwriting income, excluding agriculture, was $1.38 billion, up 3.4%. Chubb incurred a pre-tax P&C catastrophe loss, net of reinsurance and reinstatement premiums, of $580 million, which was wider than the year-ago catastrophe loss of $400 million. The P&C combined ratio deteriorated 140 bps on a year-over-year basis to 86.8%. The North America Commercial P&C Insurance unit’s net premiums written increased 6.7% year over year to $5.5 billion.
W.R. Berkley’s second-quarter operating income of $1.04 per share beat the Zacks Consensus Estimate of 91 cents by 13%. The bottom line improved 36.8% year over year. W.R. Berkley’s net premiums written were a record $3.1 billion, up 11.2% year over year. The figure was higher than our estimate of $2.8 billion. Operating revenues were $3.4 billion, up 14.8% year over year. The top line beat the consensus estimate by 0.3%. Net investment income surged 51.8% to a record $372.1 million.
Catastrophe losses of $89.7 million were wider than $53.5 million incurred in the year-ago quarter. The consolidated combined ratio (a measure of underwriting profitability) deteriorated 150 bps year over year to 91.1%. Net premiums written at the Insurance segment increased 12.2% year over year to $2.8 billion. The combined ratio deteriorated 150 bps to 92.4. Net premiums written in the Reinsurance & Monoline Excess segment increased 3.5% year over year to $316.3 million.
RLI reported second-quarter operating earnings of $1.72 per share, which beat the Zacks Consensus Estimate by 27.4%. The bottom line improved 48.3% year over year. Operating revenues were $413 million, up 17.6% year over year, driven by 17.6% higher net premiums earned and 18% higher net investment income. The top line beat the consensus estimate of $403 million. Gross premiums written increased 11% year over year to $563.4 million. This uptick can be attributed to the solid performance of the Casualty (up 14.1%), Property (up 6.4%) and Surety segments (up 16.5%). Our estimate was $664 million.
Net investment income increased 18% year over year to $34 million. Our estimate was $39.1 million. Underwriting income increased 70% year over year to $70 million. The combined ratio improved 570 bps year over year to 81.5. Net premiums written in the General Insurance segment amounted to $5.8 billion in the second quarter, which grew 2.6% year over year. Underwriting income increased 1.1% year over year to $642 million. The unit’s combined ratio of 89.1% improved 80 bps year over year.
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RenaissanceRe (RNR) Q2 Earnings Top on Strong Property Results
RenaissanceRe Holdings Ltd. (RNR - Free Report) reported second-quarter 2024 operating income of $12.41 per share, which outpaced the Zacks Consensus Estimate by 14.1%. The bottom line climbed nearly 40% year over year.
Total operating revenues of around $3 billion surged 41.8% year over year. The top line beat the consensus mark by 0.8%.
The quarterly results were driven by improved underwriting performance, enhanced net investment income and significant contributions from the Property segment. The Validus acquisition also played a crucial role, increasing average invested assets. These factors collectively propelled the company's financial performance despite elevated expenses.
RenaissanceRe Holdings Ltd. Price, Consensus and EPS Surprise
RenaissanceRe Holdings Ltd. price-consensus-eps-surprise-chart | RenaissanceRe Holdings Ltd. Quote
Quarterly Operational Update
Gross premiums written improved 29.2% year over year to $3.4 billion but fell short of our estimate of $3.5 billion.
Net premiums earned were $2.54 billion, which soared 42.3% year over year. The metric surpassed the Zacks Consensus Estimate of $2.49 billion and our estimate of $2.36 billion.
Net investment income of $410.8 million rose 40.4% year over year, attributable to an increase in average invested assets, largely due to the Validus acquisition, and the inclusion of higher-yielding assets in the fixed maturity and short-term portfolios. The figure beat the consensus mark of $398.5 million and our estimate of $396.9 million.
Total expenses escalated 44% year over year to $2.1 billion, higher than our estimate of $1.9 billion. The year-over-year increase was due to higher net claims and claim expenses incurred coupled with increased acquisition and operational expenses.
RenaissanceRe generated an underwriting income of $479.3 million, which advanced 36.6% year over year in the second quarter. The combined ratio of 81.1% deteriorated 80 basis points (bps) year over year.
Book value per share was $179.87 as of Jun 30, 2024, which increased 38.4% year over year. Annualized operating return on average common equity deteriorated 90 bps year over year to 28.2%.
Segmental Update
Property Segment
The segment recorded gross premiums written of $1.75 billion in the second quarter, which grew 25% year over year on the back of favorable business renewal rates acquired in the Validus buyout and organic growth initiatives. However, the metric lagged our estimate of $1.77 billion. Net premiums earned advanced 29.3% year over year to $980.8 million, higher than the Zacks Consensus Estimate of $929.1 million and our estimate of $921.1 million.
Underwriting income was $451.7 million, which surged 60.7% year over year. The combined ratio of 53.9% improved 910 bps year over year.
Casualty and Specialty Segment
The unit’s gross premiums written rose 33.9% year over year to $1.67 billion but fell short of our estimate of $1.71 billion. The metric benefited from business renewals gained from the Validus acquisition and organic growth in legacy lines. Net premiums earned of $1.56 billion climbed 52% year over year, higher than the Zacks Consensus Estimate of $1.54 billion and our estimate of $1.44 billion.
Underwriting income of $27.6 million declined more than two-fold year over year. The combined ratio deteriorated 500 bps year over year to 98.2%.
Financial Position (as of Jun 30, 2024)
RenaissanceRe exited the second quarter with cash and cash equivalents of $1.6 billion, which slipped 13.3% from the 2023-end level. Total assets of $51.6 billion increased 5.2% from the figure at 2023 end.
Debt amounted to $2 billion, which inched up marginally from the figure as of Dec 31, 2023.
Total shareholders’ equity of $10.2 billion improved 7.7% from the 2023-end level.
Capital Deployment Update
RNR bought back common shares worth $108.5 million in the second quarter. It repurchased additional shares of $61.2 million between Jul 1 and Jul 22.
Management declared a quarterly dividend of 39 cents per share.
Zacks Rank
RenaissanceRe currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Of the insurance industry players that have reported second-quarter 2024 results so far, the bottom-line results of Chubb Limited (CB - Free Report) , W. R. Berkley Corporation (WRB - Free Report) and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate.
Chubb reported second-quarter core operating income of $5.38 per share, which outpaced the Zacks Consensus Estimate by 6.8%. The bottom line increased 9.3% year over year. Net premiums written improved 11.8% year over year to $13.4 billion. Net investment income was $1.5 billion, up 28.3% year over year. Revenues of $13.9 billion beat the consensus estimate by 1.2% and improved 3.2% year over year.
Property and casualty (P&C) underwriting income was $1.4 billion, down 0.5% year over year. Global P&C underwriting income, excluding agriculture, was $1.38 billion, up 3.4%. Chubb incurred a pre-tax P&C catastrophe loss, net of reinsurance and reinstatement premiums, of $580 million, which was wider than the year-ago catastrophe loss of $400 million. The P&C combined ratio deteriorated 140 bps on a year-over-year basis to 86.8%. The North America Commercial P&C Insurance unit’s net premiums written increased 6.7% year over year to $5.5 billion.
W.R. Berkley’s second-quarter operating income of $1.04 per share beat the Zacks Consensus Estimate of 91 cents by 13%. The bottom line improved 36.8% year over year. W.R. Berkley’s net premiums written were a record $3.1 billion, up 11.2% year over year. The figure was higher than our estimate of $2.8 billion. Operating revenues were $3.4 billion, up 14.8% year over year. The top line beat the consensus estimate by 0.3%. Net investment income surged 51.8% to a record $372.1 million.
Catastrophe losses of $89.7 million were wider than $53.5 million incurred in the year-ago quarter. The consolidated combined ratio (a measure of underwriting profitability) deteriorated 150 bps year over year to 91.1%. Net premiums written at the Insurance segment increased 12.2% year over year to $2.8 billion. The combined ratio deteriorated 150 bps to 92.4. Net premiums written in the Reinsurance & Monoline Excess segment increased 3.5% year over year to $316.3 million.
RLI reported second-quarter operating earnings of $1.72 per share, which beat the Zacks Consensus Estimate by 27.4%. The bottom line improved 48.3% year over year. Operating revenues were $413 million, up 17.6% year over year, driven by 17.6% higher net premiums earned and 18% higher net investment income. The top line beat the consensus estimate of $403 million. Gross premiums written increased 11% year over year to $563.4 million. This uptick can be attributed to the solid performance of the Casualty (up 14.1%), Property (up 6.4%) and Surety segments (up 16.5%). Our estimate was $664 million.
Net investment income increased 18% year over year to $34 million. Our estimate was $39.1 million. Underwriting income increased 70% year over year to $70 million. The combined ratio improved 570 bps year over year to 81.5. Net premiums written in the General Insurance segment amounted to $5.8 billion in the second quarter, which grew 2.6% year over year. Underwriting income increased 1.1% year over year to $642 million. The unit’s combined ratio of 89.1% improved 80 bps year over year.