Reinsurance News

RenRe posts $33mn net income despite Q3 cats hitting underwriting result

31st October 2018 - Author: Luke Gallin

Bermudian reinsurance company, RenaissanceRe Holdings Ltd. (RenRe), has reported net income of $32.7 million for the third-quarter of 2018 despite recording an underwriting loss and a combined ratio of 105.5%, as results were boosted in part by higher net investment income.

RenaissanceRe logoThe reinsurer’s net income of $32.7 million is an improvement from the net loss of $504.8 million recorded in the third-quarter of last year, however, the reinsurer did again record an underwriting loss in the period, of $29 million, and a combined ratio of 105.5%.

The firm notes that its net income and underwriting result were impacted by third-quarter catastrophe events of $151.9 million from typhoons Jebi, Mangkut and Trami, hurricane Florence, and the California wildfires. The Q3 cat events resulted in an underwriting loss of $178 million and added 34.4 percentage points to the combined ratio.

By segment, RenRe’s property business fell to an underwriting loss of $43.9 million and reported a combined ratio of 115%. This was primarily impacted by the Q3 cat events, which resulted in a net negative impact on the underwriting result within the segment of $177 million, and added 63.2 percentage points to the combined ratio.

At the same time, the property segment’s underwriting results were positively impacted by $52.9 million of underwriting income related to large, non-recurring reinsurance transactions.

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Somewhat offsetting the underwriting loss recorded in the property segment, RenRe’s casualty and specialty segment produced underwriting income of $14.9 million and a combined ratio of 93.8% in Q3 2018.

Also helping to offset some of the impacts of Q3 catastrophe losses and reduced premiums on the property side, was the firm’s total investment result, which improved to a gain of $94.3 million in Q3 2018, up by $12 million year-on-year, driven mainly by an increase in net investment income.

Overall, gross premiums written (GPW) fell by 2.3% in Q3 2018 when compared with the same period last year, driven by a decline in the property segment that was somewhat offset by an increase in the casualty segment.

However, as a result of the above mentioned  large, non-recurring reinsurance transactions, the firm’s net premiums earned and net income available to RenaissanceRe common shareholders increased by $54.2 million, and $41.9 million, respectively, in Q3 2018.

“Once again this quarter, our industry experienced multiple large catastrophic events around the world. It is a strong testament to our strategy that we were able to support our customers by promptly paying their claims while still recording positive net and operating income, as well as growth in tangible book value per share plus accumulated dividends.

“Our track record of sourcing large, one of a kind opportunities to provide bespoke solutions to key customers remains unparalleled in the industry. We remain confident in our strategy and our ability to deliver long-term shareholder value,” said Kevin O’Donnell, President and Chief Executive Officer (CEO) of RenaissanceRe.

At the same time as announcing its Q3 results, Bermudian reinsurance company RenaissanceRe has announced that it is to acquire Japanese holding company Tokio Marine’s reinsurance units, which include Tokio Millennium Re AG and Tokio Millennium Re (UK) Limited.

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