We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. By pressing "Accept All" or closing out of this banner, you accept our Privacy Policy and Terms of Service, revised from time to time, and you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties. You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
RenaissanceRe (RNR) Q2 Earnings Top on Strong Property Results
Read MoreHide Full Article
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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
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.