Bermuda domiciled reinsurer RenaissanceRe Holdings Ltd. (RenRe) has reported an improved net income of $575.8 million in the second quarter of 2020, while also disclosing a further capital raise of $250 million through its managed joint ventures and third-party capital vehicles.
Net income increased from $367.9 million in Q2 2019, although operating income decreased slightly from $198.8 million last year to $190.1 million.
Underwriting income also improved to $217.1 million and a combined ratio of 78.5% in Q2 2020, compared to underwriting income of $170.8 million and a combined ratio of 81.3% in the same period last year.
RenRe’s property segment generated underwriting income of $200.6 million and had a combined ratio of 59.1%, while its casualty and specialty segment generated underwriting income of $16.5 million and had a combined ratio of 96.8%.
Additionally, the reinsurer revealed that it had raised over $250.0 million of gross capital in Q2 through vehicles including Upsilon RFO Re Ltd., Vermeer Reinsurance Ltd. and RenaissanceRe Medici Fund Ltd.
This follows on from a previously announced capital raise that saw RenRe secure $1.1 billion through the issuance of 6,325,000 common shares in an underwritten public offering and the issuance of 451,807 shares to existing stockholder State Farm Mutual Automobile Insurance Company existing in a private placement.
RenRe explained that it intends to use the net proceeds from these offerings for general corporate purposes, which may include expanding existing business lines, entering new business lines, forming new joint ventures, or acquiring books of business from other companies.
In other points of note from RenRe’s Q2 results, gross premiums written increased by $225.0 million, or 15.2%, to $1.7 billion, driven by an increase of $203.3 million in the property segment and an increase of $21.6 million in the casualty and specialty segment.
Furthermore, total investment result was a gain of $537.7 million in the second quarter of 2020, generating an annualized total investment return of 11.8%, compared to a gain of $309.8 million and an annualized total investment return of 8.0% in the second quarter of 2019.
“I am proud of our team’s performance in the second quarter, where we delivered strong financial results and accomplished several strategic goals,” said Kevin J. O’Donnell, President and Chief Executive Officer of RenaissanceRe.
“We demonstrated market leadership in both our Property and Casualty and Specialty segments, constructing a larger and more efficient portfolio through disciplined and focused underwriting,” he continued.
“While COVID-19 continues to present unprecedented economic and societal challenges, we feel confident with our portfolio and raised over $1 billion of new common equity in anticipation of future opportunities that we believe will deliver long-term value for our shareholders.”
