RenaissanceRe's (RNR) Q3 Earnings Miss Estimates, Tumble Y/Y
RenaissanceRe Holdings Ltd. RNR delivered third-quarter 2019 operating earnings per share of 29 cents per share, missing the Zacks Consensus Estimate by 54% due to catastrophe loss, high expenses and underwriting loss. Moreover, the bottom line declined 44.2% year over year.
Quarterly Operational Update
RenaissanceRe’s third-quarter operating revenues of $1 billion soared nearly 67% year over year on the back of improved net premiums earned plus net realized and unrealized gains on investment.
Gross premiums written surged 37.6% year over year to $861.1 million owing to higher premiums at the Property as well as the Casualty and Specialty segments.
Net investment income of $113.8 million rose 41.1% year over year.
RenaissanceRe’s total expenses were $939.5 million, having escalated 62.1% year over year, primarily due to higher Net claims and claim expenses incurred, acquisition expenses, operational expenses and corporate expenses.
Underwriting loss of $3.4 million was narrower than the year-earlier quarterly loss of $29 million. The company’s underwriting results were negatively impacted by third-quarter catastrophe events.
Combined ratio was 100.4% in the third quarter compared with the year-ago quarter’s 105.5%.
RenaissanceRe Holdings Ltd. Price, Consensus and EPS Surprise
Quarterly Segment Update
Gross premiums written were $314.4 million, up 4.3% year over year in the third quarter.
Underwriting loss of $7.7 million was reported in the third quarter, narrower than the year-ago loss of $43.9 million. Combined ratio of 101.7% contracted 1330 basis points (bps) year over year.
Casualty and Specialty Segment
Gross premiums written were $546.7 million, up 68.6% 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 segment’s underwriting income of $4.5 million plunged 69.8% year over year.
Combined ratio of 99% expanded 520 basis points year over year.
As of Sep 30, 2019, total assets of RenaissanceRe were $25.6 billion, up 37.3% from the level at 2018 end.
The company had total debt of $1.4 billion as of Sep 30, 2019, up nearly 39.6% from the level at 2018 end.
Cash and cash equivalents were $871.2 million, down 21.4% from the figure at 2018 end.
Book value per share of $120.07 rose 15.3% from the number at 2018 end.
Annualized Return on equity for the quarter under review was 2.8%.
RenaissanceRe 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
Among other players from the insurance industry having reported third-quarter earnings so far, the bottom-line results of The Progressive Corporation PGR, MGIC Investment Corporation MTG and RLI Corp. RLI outpaced the respective Zacks Consensus Estimate.
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