Yahoo Finance RenaissanceRe (RNR) Q1 Earnings Beat on Solid Property Segment
RenaissanceRe Holdings Ltd. RNR reported first-quarter 2024 operating income of $12.18 per share, which beat the Zacks Consensus Estimate by 23.5%. The bottom line increased 49.3% year over year.
Total operating revenues increased 46.8% year over year to $2.83 billion in the first quarter. The top line outpaced the consensus mark by 6%.
Strong quarterly results were supported by improved underwriting, improved net investment income and solid contributions from the property segment, providing an impetus to its quarterly performance. An elevated expense level might have acted as a partial offset to its first-quarter results.
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 of $4 billion increased 43% year over year in the first quarter. However, the metric lagged our estimate by 11.3%.
Net premiums earned improved 45.4% year over year to $2.4 billion. The figure surpassed our estimate by 18.8%.
The net investment income of RenaissanceRe amounted to $390.8 million, which increased 53.6% year over year in the quarter under review, mainly on the back of higher average invested assets due to the Validus acquisition and improved yields from its fixed maturity and short-term portfolios.
Total expenses increased 47.1% year over year to $2 billion due to increased acquisition and operational expenses.
RNR reported an underwriting income of $541 million, which surged 46.3% year over year. The combined ratio improved 10 points (bps) year over year to 77.9% in the first quarter.
Book value per share came in at $170.92 as of Mar 31, 2024, which increased 46.8% year over year. Annualized operating return on average common equity of 28.7% deteriorated 130 bps year over year.
Segmental Update
Property Segment
The segment’s gross premiums written amounted to $1.9 billion, which rose 44.9% year over year in the first quarter due to an increase in other property and catastrophe, reflecting business renewal. Net premiums earned improved 36.2% year over year to $936.1 million, higher than our estimate of $807.6 million.
Underwriting income of $534.4 million improved 78.9% year over year. The combined ratio improved 1370 bps year over year to 42.9%.
Casualty and Specialty Segment
Gross premiums written of $2.1 billion improved 41.4% year over year in the quarter under review. The metric was supported by renewals of business gained from the Validus acquisition and growing other specialty class of business. Net premiums earned increased 51.8% year over year to $1.5 billion.
The segment recorded an underwriting income of $6.3 million, which deteriorated by a huge margin from $70.9 million recorded a year ago. The combined ratio of 99.6% deteriorated 670 bps year over year.
Financial Position (as of Mar 31, 2024)
RenaissanceRe exited the first quarter with cash and cash equivalents of $1.6 billion lower than $1.9 billion at 2023-end. Total assets increased to $50.9 billion from $49 billion at 2023-end.
Debt amounted to $1.9 billion, which decreased from $2 billion at 2023-end.
Total shareholders’ equity of $9.8 billion rose from $9.5 billion in 2023-end.
Dividend Hiked
The board of directors hiked the quarterly dividend by 2.6% to 39 cents per share.
Zacks Rank
RenaissanceRe currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Of the insurance industry players that have reported first-quarter 2024 results so far, the bottom-line results of Chubb Limited CB, RLI Corp. RLI and W. R. Berkley Corporation WRB beat the respective Zacks Consensus Estimate.
Chubb reported first-quarter 2024 core operating income of $5.41 per share, which outpaced the Zacks Consensus Estimate by 2.3%. The bottom line increased 22.7% year over year. Net premiums written improved 14.1% year over year to $12.2 billion in the quarter. Net investment income of CB was $1.4 billion, up 25.7% year over year.
Property and Casualty (P&C) underwriting income was $1.4 billion, up 16.7% year over year. Global P&C underwriting income, excluding Agriculture, was $1.3 billion, up 10.9%. The P&C combined ratio improved 30 bps on a year-over-year basis to 86%. The North America Commercial P&C Insurance segment’s net premiums written increased 9.4% year over year to $4.7 billion while the Overseas General Insurance unit generated net premiums written of $3.8 billion (up 17.5% year over year).
RLI’s first-quarter 2024 operating earnings of $1.89 per share beat the Zacks Consensus Estimate, as well as the year-ago number by 16%. Operating revenues for the reported quarter were $394 million, up 17.6% year over year, driven by 17% higher net premiums earned and 21.3% higher net investment income. The top line, however, missed the consensus estimate by 0.1%. Gross premiums written of RLI increased 13% year over year to $468 million.
Net investment income increased 21% year over year to $32.8 million. The investment portfolio’s total return was 1.8% in the quarter. Underwriting income of $77.7 million increased 16%. The combined ratio deteriorated 60 bps year over year to 78.5.
W.R. Berkley reported first-quarter 2024 operating income of $1.56 per share, which beat the Zacks Consensus Estimate of $1.46 by 6.9%. The bottom line improved 56% year over year. Its net premiums written were a record $2.9 billion, up 10.7% year over year. Operating revenues were $3.2 billion, up 11.6% year over year. The top line beat the consensus estimate by 0.2%.
WRB’s net investment income surged 43.2% to a record $319.8 million, driven by a 63.2% increase in the core portfolio. Pre-tax underwriting income increased 31.8% to $309 million. The consolidated combined ratio (a measure of underwriting profitability) improved 180 bps year over year to 88.8. Net premiums in the Insurance segment increased 11.9% year over year to $2.4 billion in the quarter, while net premiums written in the Reinsurance & Monoline Excess segment increased 4.2% year over year to $405.6 million.
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