Le Lézard
Classified in: Business
Subjects: EARNINGS, Conference Call, Webcast

RenaissanceRe Reports $1.6 Billion of Quarterly Net Income Available to Common Shareholders and $623.1 Million of Quarterly Operating Income Available to Common Shareholders in Q4 2023.


RenaissanceRe Holdings Ltd. (NYSE: RNR) ("RenaissanceRe" or the "Company") today announced its financial results for the fourth quarter and full year 2023.

Fourth Quarter 2023

Net Income Available to Common Shareholders per Diluted Common Share: $30.43

Operating Income Available to Common Shareholders per Diluted Common Share*: $11.77

Underwriting Income

$541.0M

Fee Income

$70.8M

Net Investment Income

$377.0M

Change in Book Value per Common Share: 23.6%

Change in Tangible Book Value per Common Share Plus Change in Accum. Dividends*: 11.6%

*

 

Operating Return on Average Common Equity, Operating Income (Loss) Available (Attributable) to Common Shareholders, Operating Income (Loss) Available (Attributable) to Common Shareholders per Diluted Common Share, Change in Tangible Book Value per Common Share Plus Change in Accumulated Dividends and Adjusted Combined Ratio are non-GAAP financial measures; see "Comments on Non-GAAP Financial Measures" for a reconciliation of non-GAAP financial measures.

Kevin J. O'Donnell, President and Chief Executive Officer, said, "We finished a strong year with an exceptional quarter, reporting an annualized operating return on average common equity of 33%. We begin 2024 stronger than ever. The Validus acquisition and integration has exceeded our expectations and positions us to continue delivering exceptional shareholder value. At the January 1 renewal we were successful in retaining our combined portfolio at favorable terms. Our underwriting portfolio is now larger, more diverse, and more efficient with great rate adequacy, providing the platform for continuing strong performance across our Three Drivers of Profit."

Consolidated Financial Results - Fourth Quarter

Consolidated Highlights

 

 

 

Three months ended

December 31,

(in thousands, except per share amounts and percentages)

 

2023

 

 

 

2022

 

Gross premiums written

$

1,802,041

 

$

1,585,276

 

Net premiums written

 

1,587,047

 

 

1,345,616

 

Underwriting income (loss)

 

540,970

 

 

316,302

 

Combined ratio

 

76.0

%

 

80.5

%

Adjusted combined ratio (1)

 

73.6

%

 

80.6

%

 

 

 

Net Income (Loss)

 

 

Available (attributable) to common shareholders

 

1,576,682

 

 

448,092

 

Available (attributable) to common shareholders per diluted common share

$

30.43

 

$

10.27

 

Operating Income (Loss) (1)

 

 

Available (attributable) to common shareholders

 

623,110

 

 

322,135

 

Available (attributable) to common shareholders per diluted common share

$

11.77

 

$

7.33

 

Book value per common share

$

165.20

 

$

104.65

 

Change in book value per share

 

23.6

%

 

10.7

%

Tangible book value per common share plus accumulated dividends (1)

$

168.39

 

$

122.15

 

 

 

 

Change in book value per common share plus change in accumulated dividends

 

23.9

%

 

11.1

%

Change in tangible book value per common share plus change in accumulated dividends (1)

 

11.6

%

 

12.0

%

Return on average common equity - annualized

 

83.5

%

 

41.2

%

Operating return on average common equity - annualized (1)

 

33.0

%

 

29.6

%

 

(1) See "Comments on Non-GAAP Financial Measures" for a reconciliation of non-GAAP financial measures.

Acquisition of Validus

On November 1, 2023, the Company completed its acquisition (the "Validus Acquisition") of Validus Holdings, Ltd. ("Validus Holdings"), Validus Specialty, LLC ("Validus Specialty") and the renewal rights, records and customer relationships of the assumed treaty reinsurance business of Talbot Underwriting Limited from subsidiaries of American International Group, Inc., Validus Holdings, Validus Specialty, and their respective subsidiaries collectively are referred to herein as "Validus."

The operating activities of Validus from the acquisition date, November 1, 2023, through December 31, 2023 are included in the Company's consolidated statements of operations for the three months and year ended December 31, 2023. As such, the results of operations for the three months and year ended December 31, 2023 compared to the three months and year ended December 31, 2022, should be viewed in that context. In addition, the results of operations for three months and year ended December 31, 2023 may not be reflective of the ongoing business of the combined entities. At December 31, 2023, the Company's consolidated balance sheet reflects the combined entities.

Three Drivers of Profit: Underwriting, Fee and Investment Income - Fourth Quarter

Underwriting Results - Property Segment: Combined ratio of 43.1%; Underwriting income of $503.6 million

 

Property Segment

 

 

 

 

Three months ended

December 31,

 

Q/Q

Change

(in thousands, except percentages)

 

2023

 

 

 

2022

 

 

Gross premiums written

$

344,597

 

$

372,082

 

(7.4

)%

Net premiums written

 

357,953

 

 

372,998

 

(4.0

)%

Underwriting income (loss)

 

503,606

 

 

257,225

 

 

 

 

 

 

Underwriting Ratios

 

 

 

Net claims and claim expense ratio - current accident year

 

31.2

%

 

53.8

%

(22.6) pts

Net claims and claim expense ratio - prior accident years

 

(17.2

)%

 

(18.9

)%

1.7 pts

Net claims and claim expense ratio - calendar year

 

14.0

%

 

34.9

%

(20.9) pts

Underwriting expense ratio

 

29.1

%

 

27.7

%

1.4 pts

Combined ratio

 

43.1

%

 

62.6

%

(19.5) pts

Adjusted combined ratio (1)

 

41.7

%

 

62.2

%

(20.5) pts

 

(1) See "Comments on Non-GAAP Financial Measures" for a reconciliation of non-GAAP financial measures.

? an $86.6 million decrease in other property. The decrease in other property was primarily due to the non-renewal of certain catastrophe exposed quota share programs that did not meet the Company's return hurdles, partially offset by an increase related to Validus.

? a $59.1 million increase in catastrophe, driven by a $41.8 million increase in gross reinstatement premiums in the fourth quarter of 2023.

? a 2.5 percentage point increase in the operating expense ratio, due in part to higher performance based compensation expense in the fourth quarter of 2023; partially offset by

? a 1.1 percentage point decrease in the acquisition expense ratio, driven by changes in the mix of business as a result of continued relative growth in catastrophe, which has a lower acquisition expense ratio than other property, partially offset by the increase in acquisition expenses from purchase accounting adjustments relating to the Validus acquisition.

Underwriting Results - Casualty and Specialty Segment: Combined ratio of 97.3% and Adjusted combined ratio of 94.3%; Underwriting income of $37.4 million

Casualty and Specialty Segment

 

 

 

 

Three months ended

December 31,

 

Q/Q

Change

(in thousands, except percentages)

 

2023

 

 

 

2022

 

 

Gross premiums written

$

1,457,444

 

$

1,213,194

 

20.1

%

Net premiums written

 

1,229,094

 

 

972,618

 

26.4

%

Underwriting income (loss)

 

37,364

 

 

59,077

 

 

 

 

 

 

Underwriting Ratios

 

 

 

Net claims and claim expense ratio - current accident year

 

63.0

%

 

64.9

%

(1.9) pts

Net claims and claim expense ratio - prior accident years

 

(0.3

)%

 

(2.7

)%

2.4 pts

Net claims and claim expense ratio - calendar year

 

62.7

%

 

62.2

%

0.5 pts

Underwriting expense ratio

 

34.6

%

 

31.5

%

3.1 pts

Combined ratio

 

97.3

%

 

93.7

%

3.6 pts

Adjusted combined ratio (1)

 

94.3

%

 

94.0

%

0.3 pts

 

(1) See "Comments on Non-GAAP Financial Measures" for a reconciliation of non-GAAP financial measures.

? premium growth in the other specialty line of business of $189.4 million and the general casualty line of business of $175.4 million, primarily from Validus; partially offset by

? a decrease of $109.3 million in the professional liability line of business, reflecting proactive cycle management.

? a 1.9 percentage point increase in the acquisition expense ratio primarily due to the impact of the purchase accounting adjustments relating to the Validus Acquisition; and

? a 1.2 percentage point increase in the operating expense ratio, mainly due to a higher performance-based compensation expense as compared to the fourth quarter of 2022.

Fee Income: $70.8 million of fee income, up 133.2% from Q4 2022; increase in both management and performance fees

Fee Income

 

 

 

 

Three months ended

December 31,

 

Q/Q

Change

(in thousands)

2023

 

2022

 

Total management fee income

$

47,769

$

25,984

$

21,785

Total performance fee income (loss) (1)

 

23,014

 

4,363

 

18,651

Total fee income

$

70,783

$

30,347

$

40,436

(1)

 

Performance fees are based on the performance of the individual vehicles or products, and may be negative in a particular period if, for example, large losses occur, which can potentially result in no performance fees or the reversal of previously accrued performance fees.

? growth in the Company's joint ventures and managed funds, specifically DaVinciRe Holdings Ltd. ("DaVinci"), Fontana Holdings L.P. ("Fontana"), Vermeer Reinsurance Ltd. ("Vermeer") and RenaissanceRe Medici Fund Ltd. ("Medici").

? the recording of management fees in DaVinci that were previously deferred as a result of the weather-related large losses experienced in prior years, as compared to the deferral of management fees in the fourth quarter of 2022 due to weather-related large losses.

Investment Results: Total investment result improved $583.5 million; net investment income growth of 78.5%

Investment Results

 

 

 

 

Three months ended

December 31,

 

Q/Q

Change

(in thousands, except percentages)

 

2023

 

 

 

2022

 

 

Net investment income

$

376,962

 

$

211,237

 

$

165,725

Net realized and unrealized gains (losses) on investments

 

585,939

 

 

168,139

 

 

417,800

Total investment result

$

962,901

 

$

379,376

 

$

583,525

Net investment income return - annualized

 

5.7

%

 

4.1

%

1.6 pts

Total investment return - annualized

 

15.2

%

 

7.4

%

7.8 pts

 

 

 

 

? Net realized and unrealized gains on fixed maturity investments trading of $578.1 million, primarily driven by decreases in interest rates, compared to net realized and unrealized gains of $77.1 million in the fourth quarter of 2022 due to modest reductions in interest rates during the period;

? Net realized and unrealized gains on equity investments of $11.2 million, compared to net realized and unrealized gains of $59.6 million in the fourth quarter of 2022, following a reduction in the size of the equity investments portfolio during 2023; and

? Net realized and unrealized losses on investment-related derivatives of $46.0 million, compared to net realized and unrealized losses of $3.3 million in the fourth quarter of 2022. The current quarter losses were primarily driven by the negative impact of tightening credit spreads on credit default swaps that the Company uses to hedge credit risk.

Other Items of Note - Fourth Quarter

? strong underwriting results in DaVinci and Vermeer;

? strong net investment income driven by higher interest rates and higher yielding assets within the investment portfolios of the Company's joint ventures and managed funds; and

? net realized and unrealized gains on the investment portfolios of the Company's joint ventures and managed funds, driven by decreases in interest rates, as described above.

Consolidated Financial Results - Full Year
 

Consolidated Highlights

 

 

 

Year ended

December 31,

(in thousands, except per share amounts and percentages)

 

2023

 

 

 

2022

 

Gross premiums written

$

8,862,366

 

$

9,213,540

 

Net premiums written

 

7,467,813

 

 

7,196,160

 

Underwriting income (loss)

 

1,647,408

 

 

149,852

 

Combined ratio

 

77.9

%

 

97.7

%

Adjusted combined ratio (1)

 

77.1

%

 

97.5

%

 

 

 

Net Income (Loss)

 

 

Available (attributable) to common shareholders

$

2,525,757

 

$

(1,096,578

)

Available (attributable) to common shareholders per diluted common share

$

52.27

 

$

(25.50

)

Operating Income (Loss) (1)

 

 

Available (attributable) to common shareholders

$

1,824,910

 

$

322,791

 

Available (attributable) to common shareholders per diluted common share

$

37.54

 

$

7.47

 

Book value per common share

$

165.20

 

$

104.65

 

Change in book value per share

 

57.9

%

 

(20.8

)%

Tangible book value per common share plus accumulated dividends (1)

$

168.39

 

$

122.15

 

 

 

 

Change in book value per common share plus change in accumulated dividends

 

57.9

%

 

(20.8

)%

Change in tangible book value per common share plus change in accumulated dividends (1)

 

47.6

%

 

(20.8

)%

Return on average common equity

 

40.5

%

 

(22.0

)%

Operating return on average common equity (1)

 

29.3

%

 

6.4

%

 

(1) See "Comments on Non-GAAP Financial Measures" for a reconciliation of non-GAAP financial measures.

Net negative impact of the 2023 Large Loss Events

Net negative impact on underwriting result includes the sum of (1) net claims and claim expenses incurred, (2) assumed and ceded reinstatement premiums earned and (3) earned and lost profit commissions. Net negative impact on net income (loss) available (attributable) to RenaissanceRe common shareholders is the sum of (1) net negative impact on underwriting result and (2) redeemable noncontrolling interest, both before consideration of any related income tax benefit (expense).

The Company's estimates of net negative impact are based on a review of the Company's potential exposures, preliminary discussions with certain counterparties and actuarial modeling techniques. The Company's actual net negative impact, both individually and in the aggregate, may vary from these estimates, perhaps materially. Changes in these estimates will be recorded in the period in which they occur.

Meaningful uncertainty remains regarding the estimates and the nature and extent of the losses from these catastrophe events, driven by the magnitude and recent nature of each event, the geographic areas impacted by the events, relatively limited claims data received to date, the contingent nature of business interruption and other exposures, potential uncertainties relating to reinsurance recoveries and other factors inherent in loss estimation, among other things.

Net negative impact on the consolidated financial statements

 

 

Year ended December 31, 2023

2023 Large

Loss Events (1)

(in thousands)

 

Net claims and claims expenses incurred

$

(354,228

)

Assumed reinstatement premiums earned

 

46,534

 

Ceded reinstatement premiums earned

 

(62

)

Earned (lost) profit commissions

 

9,130

 

Net negative impact on underwriting result

 

(298,626

)

Redeemable noncontrolling interest

 

85,276

 

Net negative impact on net income (loss) available (attributable) to RenaissanceRe common shareholders

$

(213,350

)

 

 

Net negative impact on the segment underwriting results and consolidated combined ratio

 

 

Year ended December 31, 2023

2023 Large

Loss Events (1)

(in thousands, except percentages)

 

Net negative impact on Property segment underwriting result

$

(298,119

)

Net negative impact on Casualty and Specialty segment underwriting result

 

(507

)

Net negative impact on underwriting result

$

(298,626

)

Percentage point impact on consolidated combined ratio

 

4.1

 

 

 

(1)

 

"2023 Large Loss Events" includes:(1) Hurricane Otis and Storm Ciaran in October and November 2023 ("Q4 2023 Large Loss Events); (2) the wildfires in Hawaii in August 2023 and Hurricane Idalia ("Q3 2023 Large Loss Events"); (3) a series of large, severe weather events in Texas and other southern and central U.S. states in June 2023 ("Q2 2023 Large Loss Events"); (4) the earthquakes in southern and central Turkey in February 2023, Cyclone Gabrielle, the flooding in northern New Zealand in January and February 2023, and various wind and thunderstorm events in both the Southern and Midwest U.S. during March 2023 ("Q1 2023 Large Loss Events"); and (5) certain aggregate loss contracts triggered during 2023.

Three Drivers of Profit: Underwriting, Fee, and Investment Income - Full Year

Underwriting Results - Property Segment: Combined ratio of 53.4%; 10.5 percentage points from the 2023 Large Loss Events.

Property Segment

 

 

 

 

Year ended

December 31,

 

Y/Y

Change

(in thousands, except percentages)

 

2023

 

 

 

2022

 

 

Gross premiums written

$

3,562,414

 

$

3,734,241

 

(4.6

)%

Net premiums written

 

2,967,309

 

 

2,847,659

 

4.2

%

Underwriting income (loss)

 

1,439,327

 

 

(16,109

)

 

 

 

 

 

Underwriting Ratios

 

 

 

Net claims and claim expense ratio - current accident year

 

39.1

%

 

81.2

%

(42.1) pts

Net claims and claim expense ratio - prior accident years

 

(13.2

)%

 

(7.4

)%

(5.8) pts

Net claims and claim expense ratio - calendar year

 

25.9

%

 

73.8

%

(47.9) pts

Underwriting expense ratio

 

27.5

%

 

26.8

%

0.7 pts

Combined ratio

 

53.4

%

 

100.6

%

(47.2) pts

Adjusted combined ratio (1)

 

52.9

%

 

100.4

%

(47.5) pts

 

(1) See "Comments on Non-GAAP Financial Measures" for a reconciliation of non-GAAP financial measures.

? a decrease in other property of $241.4 million, or 14.6%, principally due to the non-renewal of certain catastrophe exposed quota share programs that did not meet the Company's return hurdles; partially offset by

? an increase in catastrophe gross premiums written of $69.6 million, or 3.3%, driven by an increase of $552.8 million in gross premiums written as a result of rate improvements during the year, largely offset by a decrease of $268.4 million in gross premiums written due to the non-renewal of deals written in Upsilon RFO, and a decrease of $214.8 million in gross reinstatement premiums.

? a reduction in ceded reinstatement premiums of $75.5 million, as well as a reduction of $237.4 million in premiums ceded to Upsilon RFO following a reduction in the size of Upsilon Diversified; partially offset by

? an increase in overall ceded premiums written due to higher levels of retrocessional purchases by the Company.

? 2023 Large Loss Events contributed 11.0 percentage points to the current accident year net claims and claim expense ratio, while weather-related large losses contributed 48.0 percentage points in 2022.

Casualty and Specialty Segment: Net premiums written increased by 3.5%; Combined ratio of 95.2% and Adjusted combined ratio of 94.2%

Casualty and Specialty Segment

 

 

 

 

Year ended

December 31,

 

Y/Y

Change

(in thousands, except percentages)

 

2023

 

 

 

2022

 

 

Gross premiums written

$

5,299,952

 

$

5,479,299

 

(3.3

)%

Net premiums written

 

4,500,504

 

 

4,348,501

 

3.5

%

Underwriting income (loss)

 

208,081

 

 

165,961

 

 

 

 

 

 

Underwriting Ratios

 

 

 

Net claims and claim expense ratio - current accident year

 

64.3

%

 

65.5

%

(1.2) pts

Net claims and claim expense ratio - prior accident years

 

(1.0

)%

 

(1.1

)%

0.1 pts

Net claims and claim expense ratio - calendar year

 

63.3

%

 

64.4

%

(1.1) pts

Underwriting expense ratio

 

31.9

%

 

30.9

%

1.0 pts

Combined ratio

 

95.2

%

 

95.3

%

(0.1) pts

Adjusted combined ratio (1)

 

94.2

%

 

95.3

%

(1.1) pts

 
(1) See "Comments on Non-GAAP Financial Measures" for a reconciliation of non-GAAP financial measures.

? a $292.9 million decrease in the credit class of business, principally due to significant premium growth in 2022 associated with opportunistic deals written in the mortgage book of business, which do not renew annually and earn over several years; and

? a $516.2 million decrease in the professional liability line of business, reflecting proactive cycle management, partially offset by

? a $460.2 million increase in the other specialty class of business, and a $169.5 million increase in the general casualty class of business, which together were significantly impacted by Validus.

? Gross premiums written in 2022 was also impacted by significant positive adjustments to premium estimates for business underwritten in prior years.

Fee Income: $236.8 million of fee income; up 99.5% from 2022; increase in both management and performance fees

Fee Income

 

 

 

 

Year ended

December 31,

 

Y/Y

Change

(in thousands, except percentages)

2023

 

2022

 

Total management fee income

$

176,599

$

108,902

$

67,697

Total performance fee income (loss) (1)

 

60,195

 

9,777

 

50,418

Total fee income

$

236,794

$

118,679

$

118,115

(1)

 

Performance fees are based on the performance of the individual vehicles or products, and may be negative in a particular period if, for example, large losses occur, which can potentially result in no performance fees or the reversal of previously accrued performance fees.

Investment Results: Total investment result improved $2.9 billion; net investment income growth of 123.8%

Investment Results

 

 

 

 

Year ended

December 31,

 

Y/Y

Change

(in thousands, except percentages)

 

2023

 

 

 

2022

 

 

Net investment income

$

1,253,110

 

$

559,932

 

$

693,178

Net realized and unrealized gains (losses) on investments

 

414,522

 

 

(1,800,485

)

 

2,215,007

Total investment result

$

1,667,632

 

$

(1,240,553

)

$

2,908,185

Net investment income return

 

5.3

%

 

2.7

%

2.6 pts

Total investment return

 

6.9

%

 

(5.7

)%

12.6 pts

? a combination of higher yielding assets in the fixed maturity and short term portfolios; and

? higher average invested assets resulting from the equity and debt offerings in the second quarter of 2023, as well the Validus Acquisition in the fourth quarter of 2023.

? Net realized and unrealized gains on fixed maturity investments trading of $292.1 million in 2023 primarily due to modest interest rate movements through the year, compared to net realized and unrealized losses of $1.4 billion in 2022, primarily due to increasing yields on U.S. treasuries;

? Net realized and unrealized gains on equity investments of $45.8 million in 2023, which was primarily due to a combination of a reduced allocation to equity investments, and a higher equity market price environment, compared to net realized and unrealized losses of $123.8 million in 2022, which was the result of a generally lower equity market price environment; and

? Net realized and unrealized gains on catastrophe bonds of $101.9 million in 2023, compared to net realized and unrealized losses of $130.3 million in 2022. These catastrophe bonds are primarily held in Medici, the majority of which is owned by third party investors. Both years' performance also reflected changes in risk spreads in the wider catastrophe bond market.

Other Items of Note - Full Year and Subsequent Events

? strong underwriting results for DaVinci and Vermeer;

? strong net investment income driven by higher interest rates and higher yielding assets within the investment portfolios of the Company's joint ventures and managed funds; and

? net realized and unrealized gains on the investment portfolios of the Company's joint ventures and managed funds, driven by decreases in interest rates, as described above.

? net realized and unrealized gains on catastrophe bonds recorded during the year in Medici, as discussed above.

Conference Call Details and Additional Information

Non-GAAP Financial Measures and Additional Financial Information

This Press Release includes certain financial measures that are not calculated in accordance with generally accepted accounting principles in the U.S. ("GAAP") including "operating income (loss) available (attributable) to RenaissanceRe common shareholders," "operating income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted," "operating return on average common equity - annualized," "tangible book value per common share," "tangible book value per common share plus accumulated dividends" and "adjusted combined ratio." A reconciliation of such measures to the most comparable GAAP figures in accordance with Regulation G is presented in the attached supplemental financial data.

Please refer to the "Investors - Financial Reports - Financial Supplements" section of the Company's website at www.renre.com for a copy of the Financial Supplement which includes additional information on the Company's financial performance.

Conference Call Information

RenaissanceRe will host a conference call on Wednesday, January 31, 2024 at 11:00 a.m. ET to discuss this release. Live broadcast of the conference call will be available through the "Investors - Webcasts & Presentations" section of the Company's website at www.renre.com.

About RenaissanceRe

RenaissanceRe is a global provider of reinsurance and insurance that specializes in matching desirable risk with efficient capital. The Company provides property, casualty and specialty reinsurance and certain insurance solutions to customers, principally through intermediaries. Established in 1993, RenaissanceRe has offices in Bermuda, Australia, Canada, Ireland, Singapore, Switzerland, the United Kingdom and the United States.

Cautionary Statement Regarding Forward-Looking Statements

Any forward-looking statements made in this Press Release reflect RenaissanceRe's current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company may also make forward-looking statements with respect to its business and industry, such as those relating to its strategy and management objectives, plans and expectations regarding its response and ability to adapt to changing economic conditions, market standing and product volumes, estimates of net negative impact and insured losses from loss events, and the Validus Acquisition and its impact on the Company's business, among other things. These statements are subject to numerous factors that could cause actual results to differ materially from those addressed by such forward-looking statements, including the following: the Company's exposure to natural and non-natural catastrophic events and circumstances and the variance it may cause in the Company's financial results; the effect of climate change on the Company's business, including the trend towards increasingly frequent and severe climate events; the effectiveness of the Company's claims and claim expense reserving process; the effect of emerging claims and coverage issues; the performance of the Company's investment portfolio and financial market volatility; the effects of inflation; the ability of the Company's ceding companies and delegated authority counterparties to accurately assess the risks they underwrite; the Company's ability to maintain its financial strength ratings; the Company's reliance on a small number of brokers; the highly competitive nature of the Company's industry; the historically cyclical nature of the (re)insurance industries; collection on claimed retrocessional coverage, and new retrocessional reinsurance being available on acceptable terms or at all; the Company's ability to attract and retain key executives and employees; the Company's ability to successfully implement its business strategies and initiatives; difficulties in integrating Validus; the Company's exposure to credit loss from counterparties; the Company's need to make many estimates and judgments in the preparation of its financial statements; the Company's exposure to risks associated with its management of capital on behalf of investors in joint ventures or other entities it manages; changes to the accounting rules and regulatory systems applicable to the Company's business, including changes in Bermuda and U.S. laws and regulations; the effect of current or future macroeconomic or geopolitical events or trends, including the ongoing conflicts between Russia and Ukraine, and Israel and Hamas; other political, regulatory or industry initiatives adversely impacting the Company; the Company's ability to comply with covenants in its debt agreements; the effect of adverse economic factors, including changes in prevailing interest rates; the impact of cybersecurity risks, including technology breaches or failure; a contention by the U.S. Internal Revenue Service that any of the Company's Bermuda subsidiaries are subject to taxation in the U.S.; the effects of new or possible future tax reform legislation and regulations in the jurisdictions in which the Company operates, including recent changes in Bermuda tax law; the Company's ability to determine any impairments taken on its investments; the Company's ability to raise capital on acceptable terms, including through debt instruments, the capital markets, and third party investments in the Company's joint ventures and managed fund partners; the Company's ability to comply with applicable sanctions and foreign corrupt practices laws; the Company's dependence on capital distributions from its subsidiaries; and other factors affecting future results disclosed in RenaissanceRe's filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.

RenaissanceRe Holdings Ltd.

Summary Consolidated Statements of Operations

(in thousands of United States Dollars, except per share amounts and percentages)

(Unaudited)

 

Three months ended

 

Year ended

 

December 31,

2023

 

December 31,

2022

 

December 31,

2023

 

December 31,

2022

Revenues

 

 

 

 

 

 

 

Gross premiums written

$

1,802,041

 

 

$

1,585,276

 

 

$

8,862,366

 

 

$

9,213,540

 

Net premiums written

$

1,587,047

 

 

$

1,345,616

 

 

$

7,467,813

 

 

$

7,196,160

 

Decrease (increase) in unearned premiums

 

662,398

 

 

 

278,544

 

 

 

3,320

 

 

 

(862,171

)

Net premiums earned

 

2,249,445

 

 

 

1,624,160

 

 

 

7,471,133

 

 

 

6,333,989

 

Net investment income

 

376,962

 

 

 

211,237

 

 

 

1,253,110

 

 

 

559,932

 

Net foreign exchange gains (losses)

 

12,398

 

 

 

10,781

 

 

 

(41,479

)

 

 

(56,909

)

Equity in earnings (losses) of other ventures

 

15,402

 

 

 

8,517

 

 

 

43,474

 

 

 

11,249

 

Other income (loss)

 

144

 

 

 

7,686

 

 

 

(6,152

)

 

 

12,636

 

Net realized and unrealized gains (losses) on investments

 

585,939

 

 

 

168,139

 

 

 

414,522

 

 

 

(1,800,485

)

Total revenues

 

3,240,290

 

 

 

2,030,520

 

 

 

9,134,608

 

 

 

5,060,412

 

Expenses

 

 

 

 

 

 

 

Net claims and claim expenses incurred

 

979,522

 

 

 

822,937

 

 

 

3,573,509

 

 

 

4,338,840

 

Acquisition expenses

 

594,487

 

 

 

413,217

 

 

 

1,875,034

 

 

 

1,568,606

 

Operational expenses

 

134,466

 

 

 

71,704

 

 

 

375,182

 

 

 

276,691

 

Corporate expenses

 

74,285

 

 

 

11,537

 

 

 

127,642

 

 

 

46,775

 

Interest expense

 

23,201

 

 

 

12,384

 

 

 

73,181

 

 

 

48,335

 

Total expenses

 

1,805,961

 

 

 

1,331,779

 

 

 

6,024,548

 

 

 

6,279,247

 

Income (loss) before taxes

 

1,434,329

 

 

 

698,741

 

 

 

3,110,060

 

 

 

(1,218,835

)

Income tax benefit (expense)

 

554,206

 

 

 

(5,408

)

 

 

510,067

 

 

 

59,019

 

Net income (loss)

 

1,988,535

 

 

 

693,333

 

 

 

3,620,127

 

 

 

(1,159,816

)

Net (income) loss attributable to redeemable noncontrolling interests

 

(403,009

)

 

 

(236,397

)

 

 

(1,058,995

)

 

 

98,613

 

Net income (loss) attributable to RenaissanceRe

 

1,585,526

 

 

 

456,936

 

 

 

2,561,132

 

 

 

(1,061,203

)

Dividends on preference shares

 

(8,844

)

 

 

(8,844

)

 

 

(35,375

)

 

 

(35,375

)

Net income (loss) available (attributable) to RenaissanceRe common shareholders

$

1,576,682

 

 

$

448,092

 

 

$

2,525,757

 

 

$

(1,096,578

)

 

 

 

 

 

 

 

 

Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share ? basic

$

30.51

 

 

$

10.30

 

 

$

52.40

 

 

$

(25.50

)

Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share ? diluted

$

30.43

 

 

$

10.27

 

 

$

52.27

 

 

$

(25.50

)

Operating (loss) income (attributable) available to RenaissanceRe common shareholders per common share - diluted (1)

$

11.77

 

 

$

7.33

 

 

$

37.54

 

 

$

7.47

 

 

 

 

 

 

 

 

 

Average shares outstanding - basic

 

50,937

 

 

 

42,795

 

 

 

47,493

 

 

 

43,040

 

Average shares outstanding - diluted

 

51,072

 

 

 

42,914

 

 

 

47,607

 

 

 

43,040

 

 

 

 

 

 

 

 

 

Net claims and claim expense ratio

 

43.5

%

 

 

50.7

%

 

 

47.8

%

 

 

68.5

%

Underwriting expense ratio

 

32.5

%

 

 

29.8

%

 

 

30.1

%

 

 

29.2

%

Combined ratio

 

76.0

%

 

 

80.5

%

 

 

77.9

%

 

 

97.7

%

 

 

 

 

 

 

 

 

Return on average common equity - annualized

 

83.5

%

 

 

41.2

%

 

 

40.5

%

 

 

(22.0

)%

Operating return on average common equity - annualized (1)

 

33.0

%

 

 

29.6

%

 

 

29.3

%

 

 

6.4

%

 
(1) See Comments on Non-GAAP Financial Measures for a reconciliation of non-GAAP financial measures.

RenaissanceRe Holdings Ltd.

Summary Consolidated Balance Sheets

(in thousands of United States Dollars, except per share amounts)

 

 

 

 

 

December 31,

2023

 

December 31,

2022

Assets

 

 

 

Fixed maturity investments trading, at fair value

$

20,877,108

 

 

$

14,351,402

 

Short term investments, at fair value

 

4,604,079

 

 

 

4,669,272

 

Equity investments, at fair value

 

106,766

 

 

 

625,058

 

Other investments, at fair value

 

3,515,566

 

 

 

2,494,954

 

Investments in other ventures, under equity method

 

112,624

 

 

 

79,750

 

Total investments

 

29,216,143

 

 

 

22,220,436

 

Cash and cash equivalents

 

1,877,518

 

 

 

1,194,339

 

Premiums receivable

 

7,280,682

 

 

 

5,139,471

 

Prepaid reinsurance premiums

 

924,777

 

 

 

1,021,412

 

Reinsurance recoverable

 

5,344,286

 

 

 

4,710,925

 

Accrued investment income

 

205,713

 

 

 

121,501

 

Deferred acquisition costs and value of business acquired

 

1,751,437

 

 

 

1,171,738

 

Deferred tax asset

 

685,040

 

 

 

123,153

 

Receivable for investments sold

 

622,197

 

 

 

350,526

 

Other assets

 

323,960

 

 

 

261,549

 

Goodwill and other intangible assets

 

775,352

 

 

 

237,828

 

Total assets

$

49,007,105

 

 

$

36,552,878

 

Liabilities, Noncontrolling Interests and Shareholders' Equity

 

 

 

Liabilities

 

 

 

Reserve for claims and claim expenses

$

20,486,869

 

 

$

15,892,573

 

Unearned premiums

 

6,136,135

 

 

 

4,559,107

 

Debt

 

1,958,655

 

 

 

1,170,442

 

Reinsurance balances payable

 

3,186,174

 

 

 

3,928,281

 

Payable for investments purchased

 

661,611

 

 

 

493,776

 

Other liabilities

 

1,021,872

 

 

 

648,036

 

Total liabilities

 

33,451,316

 

 

 

26,692,215

 

Redeemable noncontrolling interests

 

6,100,831

 

 

 

4,535,389

 

Shareholders' Equity

 

 

 

Preference shares

 

750,000

 

 

 

750,000

 

Common shares

 

52,694

 

 

 

43,718

 

Additional paid-in capital

 

2,144,459

 

 

 

475,647

 

Accumulated other comprehensive income (loss)

 

(14,211

)

 

 

(15,462

)

Retained earnings

 

6,522,016

 

 

 

4,071,371

 

Total shareholders' equity attributable to RenaissanceRe

 

9,454,958

 

 

 

5,325,274

 

Total liabilities, noncontrolling interests and shareholders' equity

$

49,007,105

 

 

$

36,552,878

 

 

 

 

 

Book value per common share

$

165.20

 

 

$

104.65

 

RenaissanceRe Holdings Ltd.

Supplemental Financial Data - Segment Information

(in thousands of United States Dollars, except percentages)

(Unaudited)

 

Three months ended December 31, 2023

 

Property

 

Casualty and

Specialty

 

Other

 

Total

Gross premiums written

$

344,597

 

 

$

1,457,444

 

 

$

?

 

 

$

1,802,041

 

Net premiums written

$

357,953

 

 

$

1,229,094

 

 

$

?

 

 

$

1,587,047

 

Net premiums earned

$

884,321

 

 

$

1,365,124

 

 

$

?

 

 

$

2,249,445

 

Net claims and claim expenses incurred

 

123,942

 

 

 

855,580

 

 

 

?

 

 

 

979,522

 

Acquisition expenses

 

170,854

 

 

 

423,633

 

 

 

?

 

 

 

594,487

 

Operational expenses

 

85,919

 

 

 

48,547

 

 

 

?

 

 

 

134,466

 

Underwriting income (loss)

$

503,606

 

 

$

37,364

 

 

$

?

 

 

 

540,970

 

Net investment income

 

 

 

 

 

376,962

 

 

 

376,962

 

Net foreign exchange gains (losses)

 

 

 

 

 

12,398

 

 

 

12,398

 

Equity in earnings of other ventures

 

 

 

 

 

15,402

 

 

 

15,402

 

Other income (loss)

 

 

 

 

 

144

 

 

 

144

 

Net realized and unrealized gains (losses) on investments

 

 

 

 

 

585,939

 

 

 

585,939

 

Corporate expenses

 

 

 

 

 

(74,285

)

 

 

(74,285

)

Interest expense

 

 

 

 

 

(23,201

)

 

 

(23,201

)

Income (loss) before taxes and redeemable noncontrolling interests

 

 

 

 

 

 

 

1,434,329

 

Income tax benefit (expense)

 

 

 

 

 

554,206

 

 

 

554,206

 

Net (income) loss attributable to redeemable noncontrolling interests

 

 

 

 

 

(403,009

)

 

 

(403,009

)

Dividends on preference shares

 

 

 

 

 

(8,844

)

 

 

(8,844

)

Net income (loss) available (attributable) to RenaissanceRe common shareholders

 

 

 

 

 

 

$

1,576,682

 

 

 

 

 

 

 

 

 

Net claims and claim expenses incurred ? current accident year

$

275,638

 

 

$

859,694

 

 

$

?

 

 

$

1,135,332

 

Net claims and claim expenses incurred ? prior accident years

 

(151,696

)

 

 

(4,114

)

 

 

?

 

 

 

(155,810

)

Net claims and claim expenses incurred ? total

$

123,942

 

 

$

855,580

 

 

$

?

 

 

$

979,522

 

 

 

 

 

 

 

 

 

Net claims and claim expense ratio ? current accident year

 

31.2

%

 

 

63.0

%

 

 

 

 

50.5

%

Net claims and claim expense ratio ? prior accident years

 

(17.2

)%

 

 

(0.3

)%

 

 

 

 

(7.0

)%

Net claims and claim expense ratio ? calendar year

 

14.0

%

 

 

62.7

%

 

 

 

 

43.5

%

Underwriting expense ratio

 

29.1

%

 

 

34.6

%

 

 

 

 

32.5

%

Combined ratio

 

43.1

%

 

 

97.3

%

 

 

 

 

76.0

%

 

 

 

 

 

 

 

 

 

Three months ended December 31, 2022

 

Property

 

Casualty and

Specialty

 

Other

 

Total

Gross premiums written

$

372,082

 

 

$

1,213,194

 

 

$

?

 

 

$

1,585,276

 

Net premiums written

$

372,998

 

 

$

972,618

 

 

$

?

 

 

$

1,345,616

 

Net premiums earned

$

688,238

 

 

$

935,922

 

 

$

?

 

 

$

1,624,160

 

Net claims and claim expenses incurred

 

240,503

 

 

 

582,434

 

 

 

?

 

 

 

822,937

 

Acquisition expenses

 

140,872

 

 

 

272,345

 

 

 

?

 

 

 

413,217

 

Operational expenses

 

49,638

 

 

 

22,066

 

 

 

?

 

 

 

71,704

 

Underwriting income (loss)

$

257,225

 

 

$

59,077

 

 

$

?

 

 

 

316,302

 

Net investment income

 

 

 

 

 

211,237

 

 

 

211,237

 

Net foreign exchange gains (losses)

 

 

 

 

 

10,781

 

 

 

10,781

 

Equity in earnings of other ventures

 

 

 

 

 

8,517

 

 

 

8,517

 

Other income (loss)

 

 

 

 

 

7,686

 

 

 

7,686

 

Net realized and unrealized gains (losses) on investments

 

 

 

 

 

168,139

 

 

 

168,139

 

Corporate expenses

 

 

 

 

 

(11,537

)

 

 

(11,537

)

Interest expense

 

 

 

 

 

(12,384

)

 

 

(12,384

)

Income (loss) before taxes and redeemable noncontrolling interests

 

 

 

 

 

 

 

698,741

 

Income tax benefit (expense)

 

 

 

 

 

(5,408

)

 

 

(5,408

)

Net (income) loss attributable to redeemable noncontrolling interests

 

 

 

 

 

(236,397

)

 

 

(236,397

)

Dividends on preference shares

 

 

 

 

 

(8,844

)

 

 

(8,844

)

Net income (loss) available (attributable) to RenaissanceRe common shareholders

 

 

 

 

 

 

$

448,092

 

 

 

 

 

 

 

 

 

Net claims and claim expenses incurred ? current accident year

$

370,175

 

 

$

607,648

 

 

$

?

 

 

$

977,823

 

Net claims and claim expenses incurred ? prior accident years

 

(129,672

)

 

 

(25,214

)

 

 

?

 

 

 

(154,886

)

Net claims and claim expenses incurred ? total

$

240,503

 

 

$

582,434

 

 

$

?

 

 

$

822,937

 

 

 

 

 

 

 

 

 

Net claims and claim expense ratio ? current accident year

 

53.8

%

 

 

64.9

%

 

 

 

 

60.2

%

Net claims and claim expense ratio ? prior accident years

 

(18.9

)%

 

 

(2.7

)%

 

 

 

 

(9.5

)%

Net claims and claim expense ratio ? calendar year

 

34.9

%

 

 

62.2

%

 

 

 

 

50.7

%

Underwriting expense ratio

 

27.7

%

 

 

31.5

%

 

 

 

 

29.8

%

Combined ratio

 

62.6

%

 

 

93.7

%

 

 

 

 

80.5

%

RenaissanceRe Holdings Ltd.

Supplemental Financial Data - Segment Information

(in thousands of United States Dollars, except percentages)

(Unaudited)

 

Year ended December 31, 2023

 

Property

 

Casualty and

Specialty

 

Other

 

Total

Gross premiums written

$

3,562,414

 

 

$

5,299,952

 

 

$

?

 

 

$

8,862,366

 

Net premiums written

$

2,967,309

 

 

$

4,500,504

 

 

$

?

 

 

$

7,467,813

 

Net premiums earned

$

3,090,792

 

 

$

4,380,341

 

 

$

?

 

 

$

7,471,133

 

Net claims and claim expenses incurred

 

799,905

 

 

 

2,773,604

 

 

 

?

 

 

 

3,573,509

 

Acquisition expenses

 

600,127

 

 

 

1,274,907

 

 

 

?

 

 

 

1,875,034

 

Operational expenses

 

251,433

 

 

 

123,749

 

 

 

?

 

 

 

375,182

 

Underwriting income (loss)

$

1,439,327

 

 

$

208,081

 

 

$

?

 

 

 

1,647,408

 

Net investment income

 

 

 

 

 

1,253,110

 

 

 

1,253,110

 

Net foreign exchange gains (losses)

 

 

 

 

 

(41,479

)

 

 

(41,479

)

Equity in earnings of other ventures

 

 

 

 

 

43,474

 

 

 

43,474

 

Other income (loss)

 

 

 

 

 

(6,152

)

 

 

(6,152

)

Net realized and unrealized gains (losses) on investments

 

 

 

 

 

414,522

 

 

 

414,522

 

Corporate expenses

 

 

 

 

 

(127,642

)

 

 

(127,642

)

Interest expense

 

 

 

 

 

(73,181

)

 

 

(73,181

)

Income (loss) before taxes and redeemable noncontrolling interests

 

 

 

 

 

 

 

3,110,060

 

Income tax benefit (expense)

 

 

 

 

 

510,067

 

 

 

510,067

 

Net (income) loss attributable to redeemable noncontrolling interests

 

 

 

 

 

(1,058,995

)

 

 

(1,058,995

)

Dividends on preference shares

 

 

 

 

 

(35,375

)

 

 

(35,375

)

Net income (loss) available (attributable) to RenaissanceRe common shareholders

 

 

 

 

 

 

$

2,525,757

 

 

 

 

 

 

 

 

 

Net claims and claim expenses incurred ? current accident year

$

1,208,810

 

 

$

2,815,306

 

 

$

?

 

 

$

4,024,116

 

Net claims and claim expenses incurred ? prior accident years

 

(408,905

)

 

 

(41,702

)

 

 

?

 

 

 

(450,607

)

Net claims and claim expenses incurred ? total

$

799,905

 

 

$

2,773,604

 

 

$

?

 

 

$

3,573,509

 

 

 

 

 

 

 

 

 

Net claims and claim expense ratio ? current accident year

 

39.1

%

 

 

64.3

%

 

 

 

 

53.9

%

Net claims and claim expense ratio ? prior accident years

 

(13.2

)%

 

 

(1.0

)%

 

 

 

 

(6.1

)%

Net claims and claim expense ratio ? calendar year

 

25.9

%

 

 

63.3

%

 

 

 

 

47.8

%

Underwriting expense ratio

 

27.5

%

 

 

31.9

%

 

 

 

 

30.1

%

Combined ratio

 

53.4

%

 

 

95.2

%

 

 

 

 

77.9

%

 

 

 

 

 

 

 

 

 

Year ended December 31, 2022

 

Property

 

Casualty and

Specialty

 

Other

 

Total

Gross premiums written

$

3,734,241

 

 

$

5,479,299

 

 

$

?

 

 

$

9,213,540

 

Net premiums written

$

2,847,659

 

 

$

4,348,501

 

 

$

?

 

 

$

7,196,160

 

Net premiums earned

$

2,770,227

 

 

$

3,563,762

 

 

$

?

 

 

$

6,333,989

 

Net claims and claim expenses incurred

 

2,044,771

 

 

 

2,294,069

 

 

 

?

 

 

 

4,338,840

 

Acquisition expenses

 

547,210

 

 

 

1,021,396

 

 

 

?

 

 

 

1,568,606

 

Operational expenses

 

194,355

 

 

 

82,336

 

 

 

?

 

 

 

276,691

 

Underwriting income (loss)

$

(16,109

)

 

$

165,961

 

 

$

?

 

 

 

149,852

 

Net investment income

 

 

 

 

 

559,932

 

 

 

559,932

 

Net foreign exchange gains (losses)

 

 

 

 

 

(56,909

)

 

 

(56,909

)

Equity in earnings of other ventures

 

 

 

 

 

11,249

 

 

 

11,249

 

Other income (loss)

 

 

 

 

 

12,636

 

 

 

12,636

 

Net realized and unrealized gains (losses) on investments

 

 

 

 

 

(1,800,485

)

 

 

(1,800,485

)

Corporate expenses

 

 

 

 

 

(46,775

)

 

 

(46,775

)

Interest expense

 

 

 

 

 

(48,335

)

 

 

(48,335

)

Income (loss) before taxes and redeemable noncontrolling interests

 

 

 

 

 

 

 

(1,218,835

)

Income tax benefit (expense)

 

 

 

 

 

59,019

 

 

 

59,019

 

Net (income) loss attributable to redeemable noncontrolling interests

 

 

 

 

 

98,613

 

 

 

98,613

 

Dividends on preference shares

 

 

 

 

 

(35,375

)

 

 

(35,375

)

Net income (loss) available (attributable) to RenaissanceRe common shareholders

 

 

 

 

 

 

$

(1,096,578

)

 

 

 

 

 

 

 

 

Net claims and claim expenses incurred ? current accident year

$

2,250,512

 

 

$

2,335,910

 

 

$

?

 

 

$

4,586,422

 

Net claims and claim expenses incurred ? prior accident years

 

(205,741

)

 

 

(41,841

)

 

 

?

 

 

 

(247,582

)

Net claims and claim expenses incurred ? total

$

2,044,771

 

 

$

2,294,069

 

 

$

?

 

 

$

4,338,840

 

 

 

 

 

 

 

 

 

Net claims and claim expense ratio ? current accident year

 

81.2

%

 

 

65.5

%

 

 

 

 

72.4

%

Net claims and claim expense ratio ? prior accident years

 

(7.4

)%

 

 

(1.1

)%

 

 

 

 

(3.9

)%

Net claims and claim expense ratio ? calendar year

 

73.8

%

 

 

64.4

%

 

 

 

 

68.5

%

Underwriting expense ratio

 

26.8

%

 

 

30.9

%

 

 

 

 

29.2

%

Combined ratio

 

100.6

%

 

 

95.3

%

 

 

 

 

97.7

%

RenaissanceRe Holdings Ltd.

Supplemental Financial Data - Gross Premiums Written

(in thousands of United States Dollars)

(Unaudited)

 

 

 

 

 

Three months ended

 

Year ended

 

December 31,

2023

 

December 31,

2022

 

December 31,

2023

 

December 31,

2022

Property Segment

 

 

 

 

 

 

 

Catastrophe

$

55,068

 

$

(4,019

)

 

$

2,146,323

 

$

2,076,752

Other property

 

289,529

 

 

376,101

 

 

 

1,416,091

 

 

1,657,489

Property segment gross premiums written

$

344,597

 

$

372,082

 

 

$

3,562,414

 

$

3,734,241

 

 

 

 

 

 

 

 

Casualty and Specialty Segment

 

 

 

 

 

 

 

General casualty (1)

$

535,311

 

$

359,901

 

 

$

1,730,102

 

$

1,560,594

Professional liability (2)

 

240,597

 

 

349,925

 

 

 

1,212,393

 

 

1,728,570

Credit (3)

 

206,476

 

 

217,736

 

 

 

769,321

 

 

1,062,183

Other specialty (4)

 

475,060

 

 

285,632

 

 

 

1,588,136

 

 

1,127,952

Casualty and Specialty segment gross premiums written

$

1,457,444

 

$

1,213,194

 

 

$

5,299,952

 

$

5,479,299

(1)

 

Includes automobile liability, casualty clash, employer's liability, umbrella or excess casualty, workers' compensation and general liability.

(2)

 

Includes directors and officers, medical malpractice, professional indemnity and transactional liability.

(3)

 

Includes financial guaranty, mortgage guaranty, political risk, surety and trade credit.

(4)

 

Includes accident and health, agriculture, aviation, cyber, energy, marine, satellite and terrorism. Lines of business such as regional multi-line and whole account may have characteristics of various other classes of business, and are allocated accordingly.

RenaissanceRe Holdings Ltd.

Supplemental Financial Data - Total Investment Result

(in thousands of United States Dollars, except percentages)

(Unaudited)

 

 

 

 

 

 

 

 

 

Three months ended

 

Year ended

 

December 31,

2023

 

December 31,

2022

 

December 31,

2023

 

December 31,

2022

Fixed maturity investments trading

$

230,437

 

 

$

136,019

 

 

$

744,457

 

 

$

382,165

 

Short term investments

 

63,400

 

 

 

23,908

 

 

 

213,303

 

 

 

41,042

 

Equity investments

 

586

 

 

 

7,474

 

 

 

7,261

 

 

 

20,864

 

Other investments

 

 

 

 

 

 

 

Catastrophe bonds

 

57,636

 

 

 

31,441

 

 

 

200,572

 

 

 

94,784

 

Other

 

21,874

 

 

 

13,793

 

 

 

87,296

 

 

 

37,497

 

Cash and cash equivalents

 

10,114

 

 

 

3,947

 

 

 

23,123

 

 

 

5,197

 

 

 

384,047

 

 

 

216,582

 

 

 

1,276,012

 

 

 

581,549

 

Investment expenses

 

(7,085

)

 

 

(5,345

)

 

 

(22,902

)

 

 

(21,617

)

Net investment income

$

376,962

 

 

$

211,237

 

 

 

1,253,110

 

 

 

559,932

 

 

 

 

 

 

 

 

 

Net investment income return - annualized

 

5.7

%

 

 

4.1

%

 

 

5.3

%

 

 

2.7

%

 

 

 

 

 

 

 

 

Net realized gains (losses) on fixed maturity investments trading

$

(92,952

)

 

$

(110,762

)

 

$

(393,041

)

 

$

(732,561

)

Net unrealized gains (losses) on fixed maturity investments trading

 

671,088

 

 

 

187,900

 

 

 

685,095

 

 

 

(636,762

)

Net realized and unrealized gains (losses) on fixed maturity investments trading

 

578,136

 

 

 

77,138

 

 

 

292,054

 

 

 

(1,369,323

)

Net realized and unrealized gains (losses) on investment-related derivatives

 

(45,977

)

 

 

(3,347

)

 

 

(68,272

)

 

 

(165,293

)

Net realized gains (losses) on equity investments

 

11

 

 

 

4,397

 

 

 

(27,492

)

 

 

43,035

 

Net unrealized gains (losses) on equity investments

 

11,204

 

 

 

55,251

 

 

 

73,243

 

 

 

(166,823

)

Net realized and unrealized gains (losses) on equity investments

 

11,215

 

 

 

59,648

 

 

 

45,751

 

 

 

(123,788

)

Net realized and unrealized gains (losses) on other investments - catastrophe bonds

 

7,111

 

 

 

29,578

 

 

 

101,897

 

 

 

(130,335

)

Net realized and unrealized gains (losses) on other investments - other

 

35,454

 

 

 

5,122

 

 

 

43,092

 

 

 

(11,746

)

Net realized and unrealized gains (losses) on investments

 

585,939

 

 

 

168,139

 

 

 

414,522

 

 

 

(1,800,485

)

Total investment result

$

962,901

 

 

$

379,376

 

 

$

1,667,632

 

 

$

(1,240,553

)

 

 

 

 

 

 

 

 

Total investment return - annualized

 

15.2

%

 

 

7.4

%

 

 

6.9

%

 

 

(5.7

)%

Comments on Non-GAAP Financial Measures

In addition to the GAAP financial measures set forth in this Press Release, the Company has included certain non-GAAP financial measures within the meaning of Regulation G. The Company has provided certain of these financial measures in previous investor communications and the Company's management believes that such measures are important to investors and other interested persons, and that investors and such other persons benefit from having a consistent basis for comparison between quarters and for comparison with other companies within or outside the industry. These measures may not, however, be comparable to similarly titled measures used by companies within or outside of the insurance industry. Investors are cautioned not to place undue reliance on these non-GAAP measures in assessing the Company's overall financial performance.

Operating Income (Loss) Available (Attributable) to RenaissanceRe Common Shareholders and Operating Return on Average Common Equity - Annualized

The Company uses "operating income (loss) available (attributable) to RenaissanceRe common shareholders" as a measure to evaluate the underlying fundamentals of its operations and believes it to be a useful measure of its corporate performance. "Operating income (loss) available (attributable) to RenaissanceRe common shareholders" as used herein differs from "net income (loss) available (attributable) to RenaissanceRe common shareholders," which the Company believes is the most directly comparable GAAP measure, by the exclusion of (1) net realized and unrealized gains and losses on investments, excluding other investments - catastrophe bonds, (2) net foreign exchange gains and losses, (3) corporate expenses associated with acquisitions and dispositions, (4) acquisition related purchase accounting adjustments, (5) the Bermuda net deferred tax asset, (6) the income tax expense or benefit associated with these adjustments, and (7) the portion of these adjustments attributable to the Company's redeemable noncontrolling interests. The Company updated it's calculation of "operating income (loss) available (attributable) to RenaissanceRe common shareholders" to exclude "acquisition related purchase accounting adjustments" because it believes that excluding the impact of acquisition related accounting adjustments provides more comparability and a more accurate measure of the Company's results of operations. The Company also uses "operating income (loss) available (attributable) to RenaissanceRe common shareholders" to calculate "operating income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted" and "operating return on average common equity - annualized."

The Company's management believes that "operating income (loss) available (attributable) to RenaissanceRe common shareholders," "operating income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted" and "operating return on average common equity - annualized" are useful to management and investors because they provide for better comparability and more accurately measures the Company's results of operations and removes variability.

The following table is a reconciliation of: (1) net income (loss) available (attributable) to RenaissanceRe common shareholders to "operating income (loss) available (attributable) to RenaissanceRe common shareholders"; (2) net income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted to "operating income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted"; and (3) return on average common equity - annualized to "operating return on average common equity - annualized." Comparative information for the prior periods presented have been updated to conform to the current methodology and presentation.

 

Three months ended

 

Year ended

(in thousands of United States Dollars, except per share amounts and percentages)

December 31,

2023

 

December 31,

2022

 

December 31,

2023

 

December 31,

2022

Net income (loss) available (attributable) to RenaissanceRe common shareholders

$

1,576,682

 

 

$

448,092

 

 

$

2,525,757

 

 

$

(1,096,578

)

Adjustment for:

 

 

 

 

 

 

 

Net realized and unrealized losses (gains) on investments, excluding other investments - catastrophe bonds

 

(578,828

)

 

 

(138,561

)

 

 

(312,625

)

 

 

1,670,150

 

Net foreign exchange losses (gains)

 

(12,398

)

 

 

(10,781

)

 

 

41,479

 

 

 

56,909

 

Corporate expenses associated with acquisitions and dispositions

 

61,666

 

 

 

?

 

 

 

76,380

 

 

 

?

 

Acquisition related purchase accounting adjustments (1)

 

52,812

 

 

 

(18

)

 

 

64,866

 

 

 

7,235

 

Bermuda net deferred tax asset (2)

 

(593,765

)

 

 

?

 

 

 

(593,765

)

 

 

?

 

Income tax expense (benefit) (3)

 

12,250

 

 

 

(5,818

)

 

 

3,289

 

 

 

(83,149

)

Net income (loss) attributable to redeemable noncontrolling interests (4)

 

104,691

 

 

 

29,221

 

 

 

19,529

 

 

 

(231,776

)

Operating income (loss) available (attributable) to RenaissanceRe common shareholders

$

623,110

 

 

$

322,135

 

 

$

1,824,910

 

 

$

322,791

 

 

 

 

 

 

 

 

 

Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted

$

30.43

 

 

$

10.27

 

 

$

52.27

 

 

$

(25.50

)

Adjustment for:

 

 

 

 

 

 

 

Net realized and unrealized losses (gains) on investments, excluding other investments - catastrophe bonds

 

(11.33

)

 

 

(3.23

)

 

 

(6.57

)

 

 

38.80

 

Net foreign exchange losses (gains)

 

(0.24

)

 

 

(0.25

)

 

 

0.87

 

 

 

1.32

 

Corporate expenses associated with acquisitions and dispositions

 

1.21

 

 

 

?

 

 

 

1.60

 

 

 

?

 

Acquisition related purchase accounting adjustments (1)

 

1.04

 

 

 

?

 

 

 

1.36

 

 

 

0.17

 

Bermuda net deferred tax asset (2)

 

(11.63

)

 

 

?

 

 

 

(12.47

)

 

 

?

 

Income tax expense (benefit) (3)

 

0.24

 

 

 

(0.14

)

 

 

0.07

 

 

 

(1.93

)

Net income (loss) attributable to redeemable noncontrolling interests (4)

 

2.05

 

 

 

0.68

 

 

 

0.41

 

 

 

(5.39

)

Operating income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted

$

11.77

 

 

$

7.33

 

 

$

37.54

 

 

$

7.47

 

 

 

 

 

 

 

 

 

Return on average common equity - annualized

 

83.5

%

 

 

41.2

%

 

 

40.5

%

 

 

(22.0

)%

Adjustment for:

 

 

 

 

 

 

 

Net realized and unrealized losses (gains) on investments, excluding other investments - catastrophe bonds

 

(30.6

)%

 

 

(12.8

)%

 

 

(5.0

)%

 

 

33.5

%

Net foreign exchange losses (gains)

 

(0.7

)%

 

 

(1.0

)%

 

 

0.7

%

 

 

1.1

%

Corporate expenses associated with acquisitions and dispositions

 

3.3

%

 

 

?

%

 

 

1.2

%

 

 

?

%

Acquisition related purchase accounting adjustments (1)

 

2.8

%

 

 

?

%

 

 

1.0

%

 

 

0.1

%

Bermuda net deferred tax asset (2)

 

(31.4

)%

 

 

?

%

 

 

(9.5

)%

 

 

?

%

Income tax expense (benefit) (3)

 

0.6

%

 

 

(0.5

)%

 

 

0.1

%

 

 

(1.7

)%

Net income (loss) attributable to redeemable noncontrolling interests (4)

 

5.5

%

 

 

2.7

%

 

 

0.3

%

 

 

(4.6

)%

Operating return on average common equity - annualized

 

33.0

%

 

 

29.6

%

 

 

29.3

%

 

 

6.4

%

(1)

 

Represents the purchase accounting adjustments related to the amortization of acquisition related intangible assets, amortization (accretion) of VOBA and acquisition costs, and the fair value adjustments to the net reserves for claims and claim expenses for the three months ended December 31, 2023 for the acquisitions of Validus $48.8 million (2022 - $Nil); and TMR and Platinum $4.0 million (2022 - $(18.0) thousand) and for the year ended December 31, 2023 for the acquisitions of Validus $48.8 million (2022 - $Nil); and TMR and Platinum $16.1 million (2022 - $7.2 million).

(2)

 

Represents the net deferred tax benefit resulting from the recognition of deferred tax assets net of deferred tax liabilities in connection with a 15% Bermuda corporate income tax rate, pursuant to the Corporate Income Tax Act 2023, enacted on December 27, 2023.

(3)

 

Represents the income tax (expense) benefit associated with the adjustments to net income (loss) available (attributable) to RenaissanceRe common shareholders. The income tax impact is estimated by applying the statutory rates of applicable jurisdictions, after consideration of other relevant factors.

(4)

 

Represents the portion of the adjustments above that are attributable to the Company's redeemable noncontrolling interests, including the income tax impact of those adjustments.

Tangible Book Value Per Common Share and Tangible Book Value Per Common Share Plus Accumulated Dividends

The Company has included in this Press Release "tangible book value per common share" and "tangible book value per common share plus accumulated dividends." "Tangible book value per common share" is defined as book value per common share excluding per share amounts for (1) acquisition related goodwill and other intangible assets, (2) acquisition related purchase accounting adjustments, and (3) other goodwill and intangible assets. "Tangible book value per common share plus accumulated dividends" is defined as book value per common share excluding per share amounts for (1) acquisition related goodwill and other intangible assets, (2) acquisition related purchase accounting adjustments, and (3) other goodwill and intangible assets, plus accumulated dividends. The Company updated its calculation of "tangible book value per common share" to exclude "acquisition related purchase accounting adjustments" because it believes that excluding the impact of acquisition related purchase accounting adjustments provides more comparability and a more accurate measure of the Company's realizable returns.

The Company's management believes "tangible book value per common share" and "tangible book value per common share plus accumulated dividends" are useful to investors because they provide a more accurate measure of the realizable value of shareholder returns, excluding the impact of goodwill and intangible assets and acquisition related purchase accounting adjustments. The following table is a reconciliation of book value per common share to "tangible book value per common share" and "tangible book value per common share plus accumulated dividends." Comparative information for the prior periods presented have been updated to conform to the current methodology and presentation.

 

December 31,

2023

 

December 31,

2022

Book value per common share

$

165.20

 

 

$

104.65

 

Adjustment for:

 

 

 

Acquisition related goodwill and other intangible assets (1)

 

(14.71

)

 

 

(5.44

)

Other goodwill and intangible assets (2)

 

(0.35

)

 

 

(0.40

)

Acquisition related purchase accounting adjustments (3)

 

(8.27

)

 

 

(1.66

)

Tangible book value per common share

 

141.87

 

 

 

97.15

 

Adjustment for accumulated dividends

 

26.52

 

 

 

25.00

 

Tangible book value per common share plus accumulated dividends

$

168.39

 

 

$

122.15

 

 

 

 

 

Quarterly change in book value per common share

 

23.6

%

 

 

10.7

%

Quarterly change in book value per common share plus change in accumulated dividends

 

23.9

%

 

 

11.1

%

Quarterly change in tangible book value per common share plus change in accumulated dividends

 

11.6

%

 

 

12.0

%

Year to date change in book value per common share

 

57.9

%

 

 

(20.8

)%

Year to date change in book value per common share plus change in accumulated dividends

 

59.3

%

 

 

(19.7

)%

Year to date change in tangible book value per common share plus change in accumulated dividends

 

47.6

%

 

 

(20.8

)%

(1)

 

Represents the acquired goodwill and other intangible assets at December 31, 2023 for the acquisitions of Validus $542.7 million (2022 - $Nil), TMR $27.2 million (2022 - $28.3 million) and Platinum $205.5 million (2022 - $209.6 million).

(2)

 

At December 31, 2023, the adjustment for goodwill and other intangibles included $18.1 million (2022 - $17.8 million) of goodwill and other intangibles included in investments in other ventures, under equity method. Previously reported "adjustment for goodwill and other intangibles" has been bifurcated into "acquisition related goodwill and other intangible assets" and "other goodwill and intangible assets."

(3)

 

Represents the purchase accounting adjustments related to the unamortized VOBA and acquisition costs, and the fair value adjustments to reserves at December 31, 2023 for the acquisitions of Validus $374.4 million (2022 - $Nil), TMR $62.2 million (2022 - $73.4 million) and Platinum $(0.8) million (2022 - $(1.0) million).

Adjusted Combined Ratio

The Company has included in this Press Release "adjusted combined ratio. "Adjusted combined ratio" is defined as the combined ratio adjusted for the impact of acquisition related purchase accounting, which includes the amortization of acquisition related intangible assets, purchase accounting adjustments related to the amortization (accretion) of VOBA and acquisition costs, and the fair value adjustments to the net reserve for claims and claim expenses for the acquisitions of Validus, TMR and Platinum. The combined ratio is calculated as the sum of (1) net claims and claim expenses incurred, (2) acquisition expenses, and (3) operational expenses; divided by net premiums earned. The acquisition related purchase accounting adjustments impact net claims and claim expenses incurred and acquisition expenses. The Company's management believes "adjusted combined ratio" is useful to management and investors because it provides for better comparability and more accurately measures the Company's underlying underwriting performance. The following table is a reconciliation of combined ratio to "adjusted combined ratio."

 

Three months ended December 31, 2023

 

Catastrophe

 

Other

Property

 

Property

 

Casualty

and

Specialty

 

Total

Combined ratio

17.8

%

 

79.9

%

 

43.1

%

 

97.3

%

 

76.0

%

Adjustment for acquisition related purchase accounting adjustments (1)

(2.0

)%

 

(0.5

)%

 

(1.4

)%

 

(3.0

)%

 

(2.4

)%

Adjusted combined ratio

15.8

%

 

79.4

%

 

41.7

%

 

94.3

%

 

73.6

%

 

 

 

 

 

 

 

 

 

 

 

Three months ended December 31, 2022

 

Catastrophe

 

Other

Property

 

Property

 

Casualty

and

Specialty

 

Total

Combined ratio

25.2

%

 

90.8

%

 

62.6

%

 

93.7

%

 

80.5

%

Adjustment for acquisition related purchase accounting adjustments (1)

(1.0

)%

 

?

%

 

(0.4

)%

 

0.3

%

 

0.1

%

Adjusted combined ratio

24.2

%

 

90.8

%

 

62.2

%

 

94.0

%

 

80.6

%

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 2023

 

Catastrophe

 

Other

Property

 

Property

 

Casualty

and

Specialty

 

Total

Combined ratio

29.8

%

 

82.6

%

 

53.4

%

 

95.2

%

 

77.9

%

Adjustment for acquisition related purchase accounting adjustments (1)

(0.7

)%

 

(0.2

)%

 

(0.5

)%

 

(1.0

)%

 

(0.8

)%

Adjusted combined ratio

29.1

%

 

82.4

%

 

52.9

%

 

94.2

%

 

77.1

%

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 2022

 

Catastrophe

 

Other

Property

 

Property

 

Casualty

and

Specialty

 

Total

Combined ratio

88.3

%

 

112.4

%

 

100.6

%

 

95.3

%

 

97.7

%

Adjustment for acquisition related purchase accounting adjustments (1)

(0.4

)%

 

?

%

 

(0.2

)%

 

?

%

 

(0.2

)%

Adjusted combined ratio

87.9

%

 

112.4

%

 

100.4

%

 

95.3

%

 

97.5

%

(1)

 

Adjustment for acquisition related purchase accounting includes the amortization of the acquisition related intangible assets and purchase accounting adjustments related to the net amortization (accretion) of VOBA and acquisition costs, and the fair value adjustments to the net reserve for claims and claim expenses for the acquisitions of Validus, TMR and Platinum.

 


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