RenRe endures tough conditions to produce strong quarter


RenaissanceRe Holdings Ltd. has reported an impressive set of quarterly results despite recent tough market conditions.

The company delivered net income of $120.8 million in the second quarter of 2014, compared to $26.8 million in the second quarter of 2013. Operating income available to RenRe common shareholders was $93.6 million for Q2, compared to $96.4 million in the prior year quarter.

Additionally, the company generated underwriting income of $99.7 million and a combined ratio of 61.7 percent in the second quarter of 2014, compared to$113.4 million and 61.2 percent in the second quarter of 2013, respectively. The $13.7 million decrease in underwriting income was principally driven by a $31.5 million decrease in net premiums earned, primarily as a result of reduced gross premiums written, as discussed below, and partially offset by a $22.6 million decrease in net claims and claim expenses.

RenRe’s GPW of $511.5 million decreased $191.7 million, or 27.3 percent, in the second quarter of 2014, compared to the prior year quarter, with the decrease principally driven by the company's catastrophe reinsurance segment, which experienced a decrease of $188.8 million, or 32.7 percent, driven by the continued softening of market conditions, including reduced risk-adjusted pricing for the second quarter renewals.

Net income attributable to non-controlling interests in the second quarter of 2014 was $36.1 million, a significant increase from $14.0 million in the second quarter of 2013, principally due to a boost in the profitability of DaVinciRe Holdings Ltd. ("DaVinciRe"), as well as a decrease in the company's ownership in DaVinciRe to 26.5 percent at June 30th, 2014, compared to 32.9 percent at June 30th, 2013.

Kevin J. O'Donnell, CEO, comments: "In the second quarter, we generated $120.8 million of net income, an annualized operating ROE of 11 percent and 3.5 percent growth in tangible book value per share, plus accumulated dividends. Our team executed well in tough market conditions and I am pleased with the book of business we constructed."

O'Donnell continues: "We believe that over the long-term the proper assessment of risk and disciplined underwriting will continue to be key differentiators in our industry. Our strategy of matching well-structured risk with efficient capital across cycles has been the basis for our success for over two decades. We intend to continue this strategy going forward, providing customers and capital providers with a suite of innovative and flexible solutions along with industry-leading underwriting expertise and customer service."

Renaissance Re, Q2, results, Kevin J. O'Donnell

Bermuda Re