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RenaissanceRe's (RNR) Q1 Earnings Miss, Revenues Down Y/Y

RenaissanceRe Holdings Ltd. RNR reported first-quarter 2021 operating income per share of 9 cents, which missed the Zacks Consensus Estimate by 87.8%. Further, the bottom line declined more than eight-fold from the prior-year quarter.

The company’s results were hurt by escalating costs and reduced net investment income. Nevertheless, the downside was partly mitigated by higher gross written premiums written across the company’s Property as well as Casualty and Specialty segments.

Quarterly Operational Update

Total revenues plunged 3.8% year over year to $861.9 million in the first quarter attributable to higher gross premiums written.

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Gross premiums written improved 30.9% year over year to $2.7 billion owing to uptick in premiums at the Property and, Casualty and Specialty segments.

In the quarter, net investment income declined 19.8% year over year to $79.8 million.

Total expenses of RenaissanceRe increased 37.7% year over year to $1.2 billion primarily due to steep rise in net claims and claim expenses incurred and higher acquisition costs.

In the quarter under review, underwriting loss came in at $35.8 million, which compared unfavorably with the prior-year quarter’s underwriting income of $64.1 million. Combined ratio deteriorated 1010 basis points (bps) to 103.1% in the first quarter.

RenaissanceRe Holdings Ltd. Price, Consensus and EPS Surprise

RenaissanceRe Holdings Ltd. Price, Consensus and EPS Surprise
RenaissanceRe Holdings Ltd. Price, Consensus and EPS Surprise

RenaissanceRe Holdings Ltd. price-consensus-eps-surprise-chart | RenaissanceRe Holdings Ltd. Quote

Quarterly Segment Update

Property Segment

Gross premiums written climbed 32.5% year over year to $1.6 billion in the quarter under review, courtesy of rate increases and $90.1 million of reinstatement premiums stemming from Winter Storm Uri.

Underwriting loss of $41.8 million compared unfavorably with the prior-year quarter’s underwriting income of $147.2 million. This was mainly due to the net negative impact that Winter Storm Uri had on the segment’s underwriting results.

Combined ratio deteriorated 4180 bps year over year to of 106.9% in the first quarter.

Casualty and Specialty Segment

Gross premiums written advanced 28.6% year over year of $1 billion in the quarter attributable to rate increases and increase in new and existing casualty business written during the current and previous periods.

The segment’s underwriting income amounted to $6 million compared with the prior-year quarter’s underwriting loss of $83.2 million.

Combined ratio improved 1800 bps year over year to 98.9% in first quarter.

Financial Position

As of Mar 31, 2021, RenaissanceRe’s total assets totaled $32.2 billion, which improved 4.6% from 2020-end level.

At the end of the first quarter, cash and cash equivalents dropped 25.9% from the figure at 2020 end to $1.3 billion.

The company had debt of $1.1 billion as of Mar 31, 2021, which remained unchanged from the 2020-end level.

Book value per share came in at $131.15, which climbed 12% year over year.

Annualized operating return on average common equity came in at 0.3% in the quarter under review, down 230 bps year over year.

Share Repurchase Update

In the quarter, the company bought back shares worth $171.6 million.

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 first-quarter results so far, the bottom line of W. R. Berkley Corporation WRB, The Travelers Companies, Inc. TRV and RLI Corp. RLI beat the Zacks Consensus Estimate.

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