RenaissanceRe Reports Net Income Available to Common Shareholders of $456.8 Million; Operating Income Available to Common Shareholders of $278.1 Million in the Second Quarter of 2021. Reports Strong Growth in Gross Premiums Written.

Rhea-AI Summary

RenaissanceRe Holdings Ltd. (NYSE: RNR) reported strong financial results for Q2 2021, with a net income of $456.8 million, translating to $9.35 per diluted share. Gross premiums written increased by 23.1% year-over-year, reaching $2.09 billion. The underwriting income was $329 million, and the combined ratio improved to 72.4%. Total net investment income was $80.9 million, but total investment results decreased by $265.8 million compared to Q2 2020. The company raised over $200 million in new capital and expects to redeem its Series E Preference Shares. The tangible book value per share grew 6.7%.

Positive

• Net income available to common shareholders increased to $456.8 million.
• Gross premiums written rose 23.1% year-over-year to $2.09 billion.
• Underwriting income reached $329 million with a combined ratio of 72.4%.
• Tangible book value per common share increased by 6.7%.
• Raised over $200 million in new capital during Q2 2021.

Negative

• Net investment income decreased by $8.4 million compared to the prior year.
• Total investment result fell by $265.8 million year-over-year, indicating poor performance in investments.
• Return on average common equity declined to 27.6% from 38.5% in the previous year.

RenaissanceRe Holdings Ltd. (NYSE: RNR) (“RenaissanceRe” or the “Company”) today announced its financial results for the three months ended June 30, 2021.

Net Income Available to Common Shareholders per Diluted Common Share: $9.35 Operating Income Available to Common Shareholders per Diluted Common Share*: $5.64
Underwriting Income $329.0M	Fee Income $46.2M	Net Investment Income $80.9M
Change in Book Value per Common Share: 6.3% Change in Tangible Book Value per Common Share Plus Change in Accum. Dividends*: 6.7%

*

Annualized Operating Return on Average Common Equity, Operating Income Available to Common Shareholders, Operating Income Available to Common Shareholders per Diluted Common Share and Change in Tangible Book Value per Common Share Plus Change in Accumulated Dividends are non-GAAP financial measures; see “Comments on Regulation G” for a reconciliation of non-GAAP financial measures.

Kevin J. O’Donnell, President and Chief Executive Officer, said, “We delivered a solid quarter for our shareholders, characterized by strong underwriting growth, high quality fee income and robust investment returns. Our Casualty and Specialty team extended its leadership by continuing to find opportunities to support our customers and our Property segment deployed capital in attractive business at the mid-year renewals. I am pleased with the continued execution of our strategy and resulting growth in tangible book value per share, and remain confident in our ability to provide superior shareholder returns over the long term.”

Consolidated Financial Results - Second Quarter

	Consolidated Highlights
		Three months ended June 30
	(in thousands, except per share amounts and percentages)	2021				2020
	Gross premiums written	$	2,094,158			$	1,701,872
	Underwriting income		328,976				217,137
	Combined ratio		72.4	%			78.5	%
	Net Income
	Available to common shareholders		456,818				575,845
	Available to common shareholders per diluted common share	$	9.35			$	12.63
	Operating income (1)
	Available to common shareholders		278,050				190,076
	Available to common shareholders per diluted common share	$	5.64			$	4.06
	Book value per common share	$	139.35			$	134.27
	Change in book value per share		6.3	%			14.6	%
	Tangible book value per common share plus accumulated dividends (1)	$	156.55			$	150.09
	Change in tangible book value per common share plus change in accumulated dividends (1)		6.7	%			16.6	%
	Return on average common equity - annualized		27.6	%			38.5	%
	Operating return on average common equity - annualized (1)		16.8	%			12.7	%

(1)

See “Comments on Regulation G” for a reconciliation of non-GAAP financial measures.

Three Drivers of Profit: Underwriting, Fee and Investment Income

Underwriting Results - Property Segment: Grew gross premiums written by 13.5%; combined ratio of 43.8%

	Property Segment
		Three months ended June 30								Q/Q Change
	(in thousands, except percentages)	2021				2020
	Gross premiums written	$	1,183,556			$	1,042,536			13.5	%
	Underwriting income	315,122				200,682
	Underwriting Ratios
	Net claims and claim expense ratio - current accident year	26.4		%		34.7		%		(8.3	) pts
	Net claims and claim expense ratio - prior accident years	(9.1		) %		(1.3		) %		(7.8	) pts
	Net claims and claim expense ratio - calendar year	17.3		%		33.4		%		(16.1	) pts
	Underwriting expense ratio	26.5		%		25.7		%		0.8	pts
	Combined ratio	43.8		%		59.1		%		(15.3	) pts

• Gross premiums written increased 13.5%, driven by:
  
  – Growth in the property catastrophe class of business of $49.5 million, or 7.0%, primarily driven by rate improvements, combined with increased shares on existing deals and new opportunities across underwriting platforms.
  
  – Growth in the other property class of business of $91.5 million, or 27.7%, principally driven by rate improvements, which contributed to growth in new and existing business written in the current and prior periods across underwriting platforms, notably within catastrophe exposed U.S. property excess and surplus lines.

• Ceded premiums written were $380.2 million, an increase of $41.8 million, or 12.4%. This increase was primarily driven by an increase in gross premiums written which were ceded to third-party investors in RenaissanceRe’s managed vehicles, principally RenaissanceRe Upsilon Fund Ltd.
  
• Net claims and claim expense ratio decreased 16.1 percentage points, driven by lower current accident year net losses due to the relatively low level of catastrophe activity in the period and higher prior accident year net favorable development in the second quarter of 2021, compared to the second quarter of 2020. This decrease in the net claims and claim expense ratio resulted in a lower combined ratio in the second quarter of 2021, compared to the second quarter of 2020.
  
• Underwriting income of $315.1 million, primarily driven by growth in net earned premiums as well as lower current accident year net incurred losses and higher prior accident year net favorable development.

Underwriting Results - Casualty and Specialty Segment: Grew gross premiums written by 38.1%

	Casualty and Specialty Segment
		Three months ended June 30								Q/Q Change
	(in thousands, except percentages)	2021				2020
	Gross premiums written	$	910,602			$	659,336			38.1	%
	Underwriting income	13,854				16,455
	Underwriting Ratios
	Net claims and claim expense ratio - current accident year	67.0		%		68.4		%		(1.4	) pts
	Net claims and claim expense ratio - prior accident years	(0.1)		%		(1.7)		%		1.6	pts
	Net claims and claim expense ratio - calendar year	66.9		%		66.7		%		0.2	pts
	Underwriting expense ratio	30.9		%		30.1		%		0.8	pts
	Combined ratio	97.8		%		96.8		%		1.0	pts

• Gross premiums written increased 38.1%, primarily driven by growth in the general casualty, professional liability and other specialty lines of business. This growth was principally driven by increases in new and existing business written in the current and prior periods, combined with rate improvements.
• Net claims and claim expense ratio was comparable to the second quarter of 2020, as the decrease in the current accident year net claims and claim expense ratio, which resulted from lower attritional losses, was offset by lower favorable prior accident year loss development in the second quarter of 2021.
• The underwriting expense ratio increased 0.8 percentage points driven by an increase in the net acquisition expense ratio, principally due to the effects of purchase accounting amortization related to the acquisition of TMR, which favorably impacted the ratio in the second quarter of 2020, partially offset by improved operating leverage in the second quarter of 2021.

Fee Income: Continued growth in management fee income related to increased capital under management

	Fee Income
		Three months ended June 30								Q/Q Change
	(in thousands, except percentages)	2021				2020
	Total management fee income	$	31,970			$	27,437			$	4,533
	Total performance fee income (1)	14,187				18,073				(3,886		)
	Total fee income	$	46,157			$	45,510			$	647

(1)

Performance fees are based on the performance of the individual vehicles or products, and may be negative in a particular period if, for example, large losses occur, which can potentially result in no performance fees or the reversal of previously accrued performance fees.

• Total fee income increased by $0.6 million due to higher management fees related to increased capital under management compared to the second quarter of 2020. This was partially offset by lower performance fee income, primarily driven by the decrease in profit commissions resulting from underwriting losses from Winter Storm Uri in the first quarter of 2021.

Investment Results: Performance primarily driven by net realized and unrealized gains in fixed maturity and equity trading portfolios

	Investment Results
		Three months ended June 30								Q/Q Change
	(in thousands, except percentages)	2021				2020
	Net investment income	$	80,925			$	89,305			$	(8,380)
	Net realized and unrealized gains on investments	191,018				448,390				(257,372)
	Total investment result	271,943				537,695				(265,752)
	Total investment return - annualized	5.2		%		11.8		%		(6.6)		pts

• Total investment result decreased $265.8 million due to lower net realized and unrealized gains on investments in the second quarter of 2021 compared to the second quarter of 2020. The investment result in the second quarter of 2020 was favorably impacted by the market recovery following the disruption in global financial markets associated with the COVID-19 pandemic.
  
  The total investment result in the second quarter of 2021 was primarily driven by net realized and unrealized gains on investments of $191.0 million, principally within fixed maturity and equity investments, including:

– Net realized and unrealized gains on fixed maturity investments, net of investments-related derivatives of $87.8 million, primarily as a result of decreasing yields on longer duration U.S. treasuries and a general decline in credit spreads.

– Net realized and unrealized gains on equity investments, net of investments-related derivatives of $65.6 million, principally from realized and unrealized gains in the Company’s strategic investment portfolio.

– Net realized and unrealized gains on other investments of $37.6 million, principally from fund investments as a result of fair value appreciation of the underlying investments.

• Managed fixed maturity and short-term investment weighted average yield to maturity was 1.0% and average duration was 3.0 years on total consolidated fixed maturity and short-term investments, at fair value of $17.8 billion at June 30, 2021.

Other Items of Note

• Net income attributable to redeemable noncontrolling interests was $113.5 million compared to $118.7 million in the second quarter of 2020, reflecting strong overall results across the Company’s consolidated joint ventures and managed funds in both periods.

• Income tax expense of $13.9 million compared to $29.9 million in the second quarter of 2020. The income tax expense in both periods was principally driven by net realized and unrealized gains on investments, primarily in the Company’s U.S.-based operations, with significantly higher gains in the second quarter of 2020.

• Raised capital totaling over $200 million in the second quarter of 2021 through RenaissanceRe Medici Fund Ltd. (“Medici”) and Upsilon RFO Re Ltd. (“Upsilon RFO”).

• Raised gross proceeds of $500.0 million in July 2021 through the issuance of 20,000,000 Depositary Shares, each of which represents a 1/1,000th interest in a share of the Company’s 4.20% Series G Preference Shares, $1.00 par value and $25,000 liquidation preference per share (equivalent to $25.00 per Depositary Share). A portion of the proceeds from the issuance of the Series G Preference Shares will be used to redeem all of the outstanding 5.375% Series E Preference Shares, and the remaining net proceeds will be used for general corporate purposes.

• Announced the redemption of all 11,000,000 outstanding 5.375% Series E Preference Shares in July 2021. The 5.375% Series E Preference Shares are anticipated to be redeemed on August 11, 2021 for $275.0 million plus accrued and unpaid dividends thereon. Following the redemption, no 5.375% Series E Preference Shares will remain outstanding.

RenaissanceRe continues to monitor COVID-19 and expects that there may be significant industry losses

• RenaissanceRe continues to evaluate industry trends and potential exposure associated with the ongoing COVID-19 pandemic, and expects historically significant industry losses to emerge over time as the full impact of the pandemic and its effects on the global economy are realized. Net claims and claim expenses incurred associated with the COVID-19 pandemic were not significant in the second quarter of 2021.
• RenaissanceRe continues to actively monitor information received from or reported by clients, brokers, industry actuaries, regulators, courts, and others, and to assess that information in the context of its own portfolio. Loss estimates represent RenaissanceRe’s best estimate based on currently available information, and actual losses may vary materially from these estimates.

   

Conference Call Details and Additional Information

Non-GAAP Financial Measures and Additional Financial Information

This Press Release includes certain financial measures that are not calculated in accordance with generally accepted accounting principles in the U.S. (“GAAP”) including “operating income (loss) available (attributable) to RenaissanceRe common shareholders,” “operating income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted,” “operating return on average common equity - annualized,” “tangible book value per common share” and “tangible book value per common share plus accumulated dividends.” A reconciliation of such measures to the most comparable GAAP figures in accordance with Regulation G is presented in the attached supplemental financial data.

Please refer to the “Investors - Financial Reports - Financial Supplements” section of the Company’s website at www.renre.com for a copy of the Financial Supplement which includes additional information on the Company’s financial performance.

Conference Call Information

RenaissanceRe will host a conference call on Friday, July 23, 2021 at 10:00 a.m. ET to discuss this release. Live broadcast of the conference call will be available through the “Investors - Webcasts & Presentations” section of the Company’s website at www.renre.com.

About RenaissanceRe

RenaissanceRe is a global provider of reinsurance and insurance that specializes in matching well-structured risks with efficient sources of capital. The Company provides property, casualty and specialty reinsurance and certain insurance solutions to customers, principally through intermediaries. Established in 1993, RenaissanceRe has offices in Bermuda, Australia, Ireland, Singapore, Switzerland, the United Kingdom and the United States.

Cautionary Statement Regarding Forward-Looking Statements

Any forward-looking statements made in this Press Release reflect RenaissanceRe’s current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are subject to numerous factors that could cause actual results to differ materially from those set forth in or implied by such forward-looking statements, including the following: the uncertainty of the continuing and future impact of the COVID-19 pandemic, including measures taken in response thereto and the effect of legislative, regulatory and judicial influences on the Company’s financial performance and the Company’s ability to conduct its business; the frequency and severity of catastrophic and other events the Company covers; the effectiveness of the Company’s claims and claim expense reserving process; the effect of climate change on the Company’s business, including the trend towards increasingly frequent and severe climate events; the Company’s ability to maintain its financial strength ratings; the effect of emerging claims and coverage issues; collection on claimed retrocessional coverage, and new retrocessional reinsurance being available on acceptable terms and providing the coverage that the Company intended to obtain; the highly competitive nature of the Company’s industry, resulting in consolidation of competitors, customers and insurance and reinsurance brokers, and the Company’s reliance on a small and decreasing number of brokers for the preponderance of its revenue; the Company’s exposure to credit loss from counterparties in the normal course of business; the effect of continued challenging economic conditions throughout the world; the performance of the Company’s investment portfolio and financial market volatility; a contention by the U.S. Internal Revenue Service that Renaissance Reinsurance Ltd. or any of the Company’s other Bermuda subsidiaries is subject to taxation in the U.S.; the effects of U.S. tax reform legislation, Organization for Economic Co-operation and Development or European Union (“EU”) measures and possible future tax reform legislation and regulations, including changes to the tax treatment of the Company’s shareholders or investors in its joint ventures or other entities the Company manages; the effect of cybersecurity risks, including technology breaches or failure, on the Company’s business; the Company’s ability to successfully implement its business strategies and initiatives, and the success of any of the Company’s strategic investments or acquisitions, including its ability to manage its operations as its product and geographical diversity increases; the Company’s ability to retain its key senior officers and to attract or retain the executives and employees necessary to manage its business; the Company’s ability to effectively manage capital on behalf of investors in joint ventures or other entities it manages; foreign currency exchange rate fluctuations; soft reinsurance underwriting market conditions; changes in the method for determining the London Inter-bank Offered Rate (“LIBOR”) and the replacement of LIBOR; losses the Company could face from terrorism, political unrest or war; the Company’s ability to determine any impairments taken on its investments; the effects of inflation; the ability of the Company’s ceding companies and delegated authority counterparties to accurately assess the risks they underwrite; the effect of operational risks, including system or human failures; the Company’s ability to raise capital if necessary; the Company’s ability to comply with covenants in its debt agreements; changes to the accounting rules and regulatory systems applicable to the Company’s business, including changes in Bermuda laws or regulations or as a result of increased global regulation of the insurance and reinsurance industries; the Company’s dependence on the ability of its operating subsidiaries to declare and pay dividends; aspects of the Company’s corporate structure that may discourage third-party takeovers and other transactions; difficulties investors may have in serving process or enforcing judgments against the Company in the U.S.; the cyclical nature of the reinsurance and insurance industries; adverse legislative developments that reduce the size of the private markets the Company serves or impede their future growth and other political, regulatory or industry initiatives adversely impacting the Company; the Company’s ability to comply with applicable sanctions and foreign corrupt practices laws; international restrictions on the writing of reinsurance by foreign companies and government intervention in the natural catastrophe market; the Company’s need to make many estimates and judgments in the preparation of its financial statements; the effect of the exit by the United Kingdom from the EU; and other factors affecting future results disclosed in RenaissanceRe’s filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and prospectus supplement dated July 7, 2021.

RenaissanceRe Holdings Ltd.
Summary Consolidated Statements of Operations
(in thousands of United States Dollars, except per share amounts and percentages)
(Unaudited)
	Three months ended								Six months ended
	June 30, 2021				June 30, 2020				June 30, 2021				June 30, 2020
Revenues
Gross premiums written	$	2,094,158			$	1,701,872			$	4,746,600			$	3,727,593
Net premiums written	$	1,512,292			$	1,180,803			$	3,336,375			$	2,450,611
Increase in unearned premiums		(319,502	)			(170,707	)			(989,749	)			(527,417	)
Net premiums earned		1,192,790				1,010,096				2,346,626				1,923,194
Net investment income		80,925				89,305				160,729				188,778
Net foreign exchange gains (losses)		3,234				(7,195	)			(19,554	)			(12,923	)
Equity in earnings of other ventures		8,732				9,041				3,174				13,605
Other income (loss)		586				(1,201	)			2,757				(5,637	)
Net realized and unrealized gains (losses) on investments		191,018				448,390				(154,545	)			337,683
Total revenues		1,477,285				1,548,436				2,339,187				2,444,700
Expenses
Net claims and claim expenses incurred		520,021				510,272				1,387,072				1,081,226
Acquisition expenses		285,590				233,610				552,824				444,214
Operational expenses		58,203				49,077				113,514				116,538
Corporate expenses		10,125				11,898				20,530				27,889
Interest expense		11,833				11,842				23,745				26,769
Total expenses		885,772				816,699				2,097,685				1,696,636
Income before taxes		591,513				731,737				241,502				748,064
Income tax (expense) benefit		(13,862	)			(29,875	)			5,654				(21,029	)
Net income		577,651				701,862				247,156				727,035
Net income attributable to redeemable noncontrolling interests		(113,544	)			(118,728	)			(66,694	)			(216,819	)
Net income available to RenaissanceRe		464,107				583,134				180,462				510,216
Dividends on preference shares		(7,289	)			(7,289	)			(14,578	)			(16,345	)
Net income available to RenaissanceRe common shareholders	$	456,818			$	575,845			$	165,884			$	493,871
Net income available to RenaissanceRe common shareholders per common share – basic	$	9.36			$	12.64			$	3.36			$	11.04
Net income available to RenaissanceRe common shareholders per common share – diluted	$	9.35			$	12.63			$	3.35			$	11.02
Operating income available to RenaissanceRe common shareholders per common share - diluted (1)	$	5.64			$	4.06			$	5.73			$	4.91
Average shares outstanding - basic		48,163				44,939				48,871				44,190
Average shares outstanding - diluted		48,226				45,003				48,940				44,253
Net claims and claim expense ratio		43.6	%			50.5	%			59.1	%			56.2	%
Underwriting expense ratio		28.8	%			28.0	%			28.4	%			29.2	%
Combined ratio		72.4	%			78.5	%			87.5	%			85.4	%
Return on average common equity - annualized		27.6	%			38.5	%			4.9	%			17.1	%
Operating return on average common equity - annualized (1)		16.8	%			12.7	%			8.4	%			7.8	%

(1)

See Comments on Regulation G for a reconciliation of non-GAAP financial measures.

RenaissanceRe Holdings Ltd.
Summary Consolidated Balance Sheets
(in thousands of United States Dollars, except per share amounts)
	June 30, 2021				December 31, 2020
Assets	(Unaudited)				(Audited)
Fixed maturity investments trading, at fair value	$	13,418,389			$	13,506,503
Short term investments, at fair value		4,392,652				4,993,735
Equity investments trading, at fair value		577,090				702,617
Other investments, at fair value		1,585,036				1,256,948
Investments in other ventures, under equity method		91,938				98,373
Total investments		20,065,105				20,558,176
Cash and cash equivalents		1,789,756				1,736,813
Premiums receivable		4,481,492				2,894,631
Prepaid reinsurance premiums		1,361,041				823,582
Reinsurance recoverable		3,187,638				2,926,010
Accrued investment income		56,804				66,743
Deferred acquisition costs and value of business acquired		883,926				633,521
Receivable for investments sold		457,458				568,293
Other assets		196,959				363,170
Goodwill and other intangible assets		246,576				249,641
Total assets	$	32,726,755			$	30,820,580
Liabilities, Noncontrolling Interests and Shareholders’ Equity
Liabilities
Reserve for claims and claim expenses	$	10,944,742			$	10,381,138
Unearned premiums		4,284,260				2,763,599
Debt		1,137,304				1,136,265
Reinsurance balances payable		4,489,841				3,488,352
Payable for investments purchased		795,185				1,132,538
Other liabilities		201,398				970,121
Total liabilities		21,852,730				19,872,013
Redeemable noncontrolling interests		3,656,419				3,388,319
Shareholders’ Equity
Preference shares		525,000				525,000
Common shares		48,026				50,811
Additional paid-in capital		1,153,881				1,623,206
Accumulated other comprehensive loss		(14,061	)			(12,642	)
Retained earnings		5,504,760				5,373,873
Total shareholders’ equity attributable to RenaissanceRe		7,217,606				7,560,248
Total liabilities, noncontrolling interests and shareholders’ equity	$	32,726,755			$	30,820,580
Book value per common share	$	139.35			$	138.46

RenaissanceRe Holdings Ltd.
Supplemental Financial Data - Segment Information
(in thousands of United States Dollars, except percentages)
(Unaudited)
	Three months ended June 30, 2021
	Property				Casualty and Specialty				Other				Total
Gross premiums written	$	1,183,556			$	910,602			$	—			$	2,094,158
Net premiums written	$	803,335			$	708,957			$	—			$	1,512,292
Net premiums earned	$	560,397			$	632,393			$	—			$	1,192,790
Net claims and claim expenses incurred		97,150				422,871				—				520,021
Acquisition expenses		109,238				176,352				—				285,590
Operational expenses		38,887				19,316				—				58,203
Underwriting income	$	315,122			$	13,854			$	—				328,976
Net investment income										80,925				80,925
Net foreign exchange gains										3,234				3,234
Equity in earnings of other ventures										8,732				8,732
Other income										586				586
Net realized and unrealized gains on investments										191,018				191,018
Corporate expenses										(10,125	)			(10,125	)
Interest expense										(11,833	)			(11,833	)
Income before taxes and redeemable noncontrolling interests														591,513
Income tax expense										(13,862	)			(13,862	)
Net income attributable to redeemable noncontrolling interests										(113,544	)			(113,544	)
Dividends on preference shares										(7,289	)			(7,289	)
Net income available to RenaissanceRe common shareholders													$	456,818
Net claims and claim expenses incurred – current accident year	$	148,133			$	423,917			$	—			$	572,050
Net claims and claim expenses incurred – prior accident years		(50,983	)			(1,046	)			—				(52,029	)
Net claims and claim expenses incurred – total	$	97,150			$	422,871			$	—			$	520,021
Net claims and claim expense ratio – current accident year		26.4	%			67.0	%							48.0	%
Net claims and claim expense ratio – prior accident years		(9.1	)%			(0.1	)%							(4.4	)%
Net claims and claim expense ratio – calendar year		17.3	%			66.9	%							43.6	%
Underwriting expense ratio		26.5	%			30.9	%							28.8	%
Combined ratio		43.8	%			97.8	%							72.4	%
	Three months ended June 30, 2020
	Property				Casualty and Specialty				Other				Total
Gross premiums written	$	1,042,536			$	659,336			$	—			$	1,701,872
Net premiums written	$	704,138			$	476,665			$	—			$	1,180,803
Net premiums earned	$	491,116			$	518,980			$	—			$	1,010,096
Net claims and claim expenses incurred		164,006				346,266				—				510,272
Acquisition expenses		94,773				138,837				—				233,610
Operational expenses		31,655				17,422				—				49,077
Underwriting income	$	200,682			$	16,455			$	—				217,137
Net investment income										89,305				89,305
Net foreign exchange losses										(7,195	)			(7,195	)
Equity in earnings of other ventures										9,041				9,041
Other loss										(1,201	)			(1,201	)
Net realized and unrealized gains on investments										448,390				448,390
Corporate expenses										(11,898	)			(11,898	)
Interest expense										(11,842	)			(11,842	)
Income before taxes and redeemable noncontrolling interests														731,737
Income tax expense										(29,875	)			(29,875	)
Net income attributable to redeemable noncontrolling interests										(118,728	)			(118,728	)
Dividends on preference shares										(7,289	)			(7,289	)
Net income available to RenaissanceRe common shareholders													$	575,845
Net claims and claim expenses incurred – current accident year	$	170,614			$	355,064			$	—			$	525,678
Net claims and claim expenses incurred – prior accident years		(6,608	)			(8,798	)			—				(15,406	)
Net claims and claim expenses incurred – total	$	164,006			$	346,266			$	—			$	510,272
Net claims and claim expense ratio – current accident year		34.7	%			68.4	%							52.0	%
Net claims and claim expense ratio – prior accident years		(1.3	)%			(1.7	)%							(1.5	)%
Net claims and claim expense ratio – calendar year		33.4	%			66.7	%							50.5	%
Underwriting expense ratio		25.7	%			30.1	%							28.0	%
Combined ratio		59.1	%			96.8	%							78.5	%

RenaissanceRe Holdings Ltd.
Supplemental Financial Data - Segment Information
(in thousands of United States Dollars, except percentages)
(Unaudited)
	Six months ended June 30, 2021
	Property				Casualty and Specialty				Other				Total
Gross premiums written	$	2,800,375			$	1,946,225			$	—			$	4,746,600
Net premiums written	$	1,811,795			$	1,524,580			$	—			$	3,336,375
Net premiums earned	$	1,165,563			$	1,181,063			$	—			$	2,346,626
Net claims and claim expenses incurred		595,982				791,090				—				1,387,072
Acquisition expenses		221,992				330,832				—				552,824
Operational expenses		74,262				39,252				—				113,514
Underwriting income	$	273,327			$	19,889			$	—				293,216
Net investment income										160,729				160,729
Net foreign exchange losses										(19,554	)			(19,554	)
Equity in earnings of other ventures										3,174				3,174
Other income										2,757				2,757
Net realized and unrealized losses on investments										(154,545	)			(154,545	)
Corporate expenses										(20,530	)			(20,530	)
Interest expense										(23,745	)			(23,745	)
Income before taxes and redeemable noncontrolling interests														241,502
Income tax benefit										5,654				5,654
Net income attributable to redeemable noncontrolling interests										(66,694	)			(66,694	)
Dividends on preference shares										(14,578	)			(14,578	)
Net income available to RenaissanceRe common shareholders													$	165,884
Net claims and claim expenses incurred – current accident year	$	652,127			$	796,006			$	—			$	1,448,133
Net claims and claim expenses incurred – prior accident years		(56,145	)			(4,916	)			—				(61,061	)
Net claims and claim expenses incurred – total	$	595,982			$	791,090			$	—			$	1,387,072
Net claims and claim expense ratio – current accident year		55.9	%			67.4	%							61.7	%
Net claims and claim expense ratio – prior accident years		(4.8	)%			(0.4	)%							(2.6	)%
Net claims and claim expense ratio – calendar year		51.1	%			67.0	%							59.1	%
Underwriting expense ratio		25.4	%			31.3	%							28.4	%
Combined ratio		76.5	%			98.3	%							87.5	%
	Six months ended June 30, 2020
	Property				Casualty and Specialty				Other				Total
Gross premiums written	$	2,263,062			$	1,464,531			$	—			$	3,727,593
Net premiums written	$	1,378,719			$	1,071,892			$	—			$	2,450,611
Net premiums earned	$	912,451			$	1,010,743			$	—			$	1,923,194
Net claims and claim expenses incurred		308,751				772,475				—				1,081,226
Acquisition expenses		180,124				264,090				—				444,214
Operational expenses		75,662				40,876				—				116,538
Underwriting income (loss)	$	347,914			$	(66,698	)		$	—				281,216
Net investment income										188,778				188,778
Net foreign exchange losses										(12,923	)			(12,923	)
Equity in earnings of other ventures										13,605				13,605
Other loss										(5,637	)			(5,637	)
Net realized and unrealized gains on investments										337,683				337,683
Corporate expenses										(27,889	)			(27,889	)
Interest expense										(26,769	)			(26,769	)
Income before taxes and redeemable noncontrolling interests														748,064
Income tax expense										(21,029	)			(21,029	)
Net income attributable to redeemable noncontrolling interests										(216,819	)			(216,819	)
Dividends on preference shares										(16,345	)			(16,345	)
Net income available to RenaissanceRe common shareholders													$	493,871
Net claims and claim expenses incurred – current accident year	$	301,458			$	781,274			$	—			$	1,082,732
Net claims and claim expenses incurred – prior accident years		7,293				(8,799	)			—				(1,506	)
Net claims and claim expenses incurred – total	$	308,751			$	772,475			$	—			$	1,081,226
Net claims and claim expense ratio – current accident year		33.0	%			77.3	%							56.3	%
Net claims and claim expense ratio – prior accident years		0.8	%			(0.9	)%							(0.1	)%
Net claims and claim expense ratio – calendar year		33.8	%			76.4	%							56.2	%
Underwriting expense ratio		28.1	%			30.2	%							29.2	%
Combined ratio		61.9	%			106.6	%							85.4	%

RenaissanceRe Holdings Ltd.
Supplemental Financial Data - Gross Premiums Written
(in thousands of United States Dollars)
(Unaudited)
	Three months ended								Six months ended
	June 30, 2021				June 30, 2020				June 30, 2021				June 30, 2020
Property Segment
Catastrophe	$	761,323			$	711,786			$	1,892,448			$	1,647,976
Other property	422,233				330,750				907,927				615,086
Property segment gross premiums written	$	1,183,556			$	1,042,536			$	2,800,375			$	2,263,062
Casualty and Specialty Segment
General casualty (1)	$	286,686			$	206,666			$	629,856			$	453,333
Professional liability (2)	306,387				222,737				620,759				453,224
Financial lines (3)	86,175				101,635				230,561				248,714
Other (4)	231,354				128,298				465,049				309,260
Casualty and Specialty segment gross premiums written	$	910,602			$	659,336			$	1,946,225			$	1,464,531

(1)		Includes automobile liability, casualty clash, employer’s liability, umbrella or excess casualty, workers’ compensation and general liability.
(2)		Includes directors and officers, medical malpractice, and professional indemnity.
(3)		Includes financial guaranty, mortgage guaranty, political risk, surety and trade credit.
(4)		Includes accident and health, agriculture, aviation, cyber, energy, marine, satellite and terrorism. Lines of business such as regional multi-line and whole account may have characteristics of various other classes of business, and are allocated accordingly.

RenaissanceRe Holdings Ltd.
Supplemental Financial Data - Total Investment Result
(in thousands of United States Dollars, except percentages)
(Unaudited)
	Three months ended								Six months ended
	June 30, 2021				June 30, 2020				June 30, 2021				June 30, 2020
Fixed maturity investments trading	$	59,510			$	69,943			$	122,443			$	143,281
Short term investments		782				6,049				1,355				18,141
Equity investments trading		1,626				1,666				3,117				3,217
Other investments
Catastrophe bonds		16,681				13,519				31,149				27,658
Other		9,339				1,107				13,140				2,736
Cash and cash equivalents		159				837				261				2,341
		88,097				93,121				171,465				197,374
Investment expenses		(7,172	)			(3,816	)			(10,736	)			(8,596	)
Net investment income		80,925				89,305				160,729				188,778
Net realized and unrealized gains (losses) on:
Fixed maturity investments trading, net of investments-related derivatives (1)		87,847				322,711				(173,912	)			423,932
Equity investments trading, net of investments-related derivatives (1)		65,566				113,506				(2,356	)			(38,376	)
Other investments
Catastrophe bonds		2				4,452				(19,081	)			(9,900	)
Other		37,603				7,721				40,804				(37,973	)
Net realized and unrealized gains (losses) on investments		191,018				448,390				(154,545	)			337,683
Total investment result	$	271,943			$	537,695			$	6,184			$	526,461
Total investment return - annualized		5.2	%			11.8	%			0.1	%			5.8	%

(1)

Net realized and unrealized gains (losses) on fixed maturity investments trading includes the impacts of interest rate futures, interest rate swaps, credit default swaps and total return swaps. Net realized and unrealized gains (losses) on equity investments trading includes the impact of equity futures.

Comments on Regulation G

In addition to the GAAP financial measures set forth in this Press Release, the Company has included certain non-GAAP financial measures within the meaning of Regulation G. The Company has provided these financial measures in previous investor communications and the Company’s management believes that these measures are important to investors and other interested persons, and that investors and such other persons benefit from having a consistent basis for comparison between quarters and for comparison with other companies within the industry. These measures may not, however, be comparable to similarly titled measures used by companies outside of the insurance industry. Investors are cautioned not to place undue reliance on these non-GAAP measures in assessing the Company’s overall financial performance.

Operating Income (Loss) Available (Attributable) to RenaissanceRe Common Shareholders and Operating Return on Average Common Equity - Annualized

The Company uses “operating income (loss) available (attributable) to RenaissanceRe common shareholders” as a measure to evaluate the underlying fundamentals of its operations and believes it to be a useful measure of its corporate performance. “Operating income (loss) available (attributable) to RenaissanceRe common shareholders” as used herein differs from “net income (loss) attributable to RenaissanceRe common shareholders,” which the Company believes is the most directly comparable GAAP measure, by the exclusion of net realized and unrealized gains and losses on investments, excluding other investments - catastrophe bonds, net foreign exchange gains and losses, corporate expenses associated with the acquisition of TMR and the subsequent sale of RenaissanceRe (UK) Limited (“RenaissanceRe UK”), the income tax expense or benefit associated with these adjustments and the portion of these adjustments attributable to the Company's redeemable noncontrolling interests. The Company’s management believes that “operating income (loss) available (attributable) to RenaissanceRe common shareholders” is useful to investors because it more accurately measures and predicts the Company’s results of operations by removing the variability arising from: fluctuations in the fair value of the Company’s fixed maturity investment portfolio, equity investments trading, other investments (excluding catastrophe bonds) and investments-related derivatives; fluctuations in foreign exchange rates; corporate expenses associated with the acquisition of TMR and the subsequent sale of RenaissanceRe UK; the associated income tax expense or benefit of these adjustments; and the portion of these adjustments attributable to the Company's redeemable noncontrolling interests. The Company also uses “operating income (loss) available (attributable) to RenaissanceRe common shareholders” to calculate “operating income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted” and “operating return on average common equity - annualized.” The following table is a reconciliation of: (1) net income (loss) attributable to RenaissanceRe common shareholders to “operating income (loss) available (attributable) to RenaissanceRe common shareholders”; (2) net income (loss) attributable to RenaissanceRe common shareholders per common share - diluted to “operating income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted”; and (3) return on average common equity - annualized to “operating return on average common equity - annualized.” Comparative information for all prior periods has been updated to conform to the current methodology and presentation.

	Three months ended								Six months ended
(in thousands of United States Dollars, except per share amounts and percentages)	June 30, 2021				June 30, 2020				June 30, 2021				June 30, 2020
Net income available to RenaissanceRe common shareholders	$	456,818			$	575,845			$	165,884			$	493,871
Adjustment for net realized and unrealized (gains) losses on investments, excluding other investments - catastrophe bonds		(191,016	)			(443,938	)			135,464				(347,583	)
Adjustment for net foreign exchange (gains) losses		(3,234	)			7,195				19,554				12,923
Adjustment for corporate expenses associated with the acquisition of TMR and the subsequent sale of RenaissanceRe UK		—				2,279				135				6,702
Adjustment for income tax expense (benefit) (1)		11,786				21,223				(8,179	)			17,082
Adjustment for net income (loss) available (attributable) to redeemable noncontrolling interests (2)		3,696				27,472				(30,413	)			40,491
Operating income available to RenaissanceRe common shareholders	$	278,050			$	190,076			$	282,445			$	223,486
Net income available to RenaissanceRe common shareholders per common share - diluted	$	9.35			$	12.63			$	3.35			$	11.02
Adjustment for net realized and unrealized (gains) losses on investments, excluding other investments - catastrophe bonds		(3.96	)			(9.86	)			2.77				(7.85	)
Adjustment for net foreign exchange (gains) losses		(0.07	)			0.16				0.40				0.29
Adjustment for corporate expenses associated with the acquisition of TMR and the subsequent sale of RenaissanceRe UK		—				0.05				—				0.15
Adjustment for income tax expense (benefit) (1)		0.24				0.47				(0.17	)			0.39
Adjustment for net income (loss) available (attributable) to redeemable noncontrolling interests (2)		0.08				0.61				(0.62	)			0.91
Operating income available to RenaissanceRe common shareholders per common share - diluted	$	5.64			$	4.06			$	5.73			$	4.91
Return on average common equity - annualized		27.6	%			38.5	%			4.9	%			17.1	%
Adjustment for net realized and unrealized (gains) losses on investments, excluding other investments - catastrophe bonds		(11.5	)%			(29.7	)%			4.0	%			(11.9	)%
Adjustment for net foreign exchange (gains) losses		(0.2	)%			0.5	%			0.6	%			0.4	%
Adjustment for corporate expenses associated with the acquisition of TMR and the subsequent sale of RenaissanceRe UK		—	%			0.2	%			—	%			0.2	%
Adjustment for income tax expense (benefit) (1)		0.7	%			1.4	%			(0.2	)%			0.6	%
Adjustment for net income (loss) available (attributable) to redeemable noncontrolling interests (2)		0.2	%			1.8	%			(0.9	)%			1.4	%
Operating return on average common equity - annualized		16.8	%			12.7	%			8.4	%			7.8	%

(1)		Adjustment for income tax expense (benefit) represents the income tax (expense) benefit associated with the adjustments to net income available to RenaissanceRe common shareholders. The income tax impact is estimated by applying the statutory rates of applicable jurisdictions, after consideration of other relevant factors.
(2)		Represents the portion of these adjustments that are attributable to the Company's redeemable noncontrolling interests, including the income tax impact of those adjustments.

Tangible Book Value Per Common Share and Tangible Book Value Per Common Share Plus Accumulated Dividends

The Company has included in this Press Release “tangible book value per common share” and “tangible book value per common share plus accumulated dividends.” “Tangible book value per common share” is defined as book value per common share excluding goodwill and intangible assets per share. “Tangible book value per common share plus accumulated dividends” is defined as book value per common share excluding goodwill and intangible assets per share, plus accumulated dividends. The Company’s management believes “tangible book value per common share” and “tangible book value per common share plus accumulated dividends” are useful to investors because they provide a more accurate measure of the realizable value of shareholder returns, excluding the impact of goodwill and intangible assets. The following table is a reconciliation of book value per common share to “tangible book value per common share” and “tangible book value per common share plus accumulated dividends.”

	June 30, 2021				March 31, 2021				December 31, 2020				September 30, 2020				June 30, 2020
Book value per common share	$	139.35			$	131.15			$	138.46			$	135.13			$	134.27
Adjustment for goodwill and other intangibles (1)		(5.60	)			(5.42	)			(5.37	)			(5.53	)			(5.56	)
Tangible book value per common share		133.75				125.73				133.09				129.60				128.71
Adjustment for accumulated dividends		22.80				22.44				22.08				21.73				21.38
Tangible book value per common share plus accumulated dividends	$	156.55			$	148.17			$	155.17			$	151.33			$	150.09
Quarterly change in book value per common share		6.3	%			(5.3	)%			2.5	%			0.6	%			14.6	%
Quarterly change in tangible book value per common share plus change in accumulated dividends		6.7	%			(5.3	)%			3.0	%			1.0	%			16.6	%
Year to date change in book value per common share		0.6	%			(5.3	)%			14.9	%			12.1	%			11.4	%
Year to date change in tangible book value per common share plus change in accumulated dividends		1.0	%			(5.3	)%			17.9	%			14.6	%			13.5	%

(1)

At June 30, 2021, March 31, 2021, December 31, 2020, September 30, 2020, and June 30, 2020, goodwill and other intangibles included $22.4 million, $22.7 million, $23.0 million, $23.2 million, and $23.5 million, respectively, of goodwill and other intangibles included in investments in other ventures, under equity method.

 

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FAQ

What were the net income figures for RenaissanceRe in Q2 2021?

RenaissanceRe reported a net income of $456.8 million for Q2 2021, equating to $9.35 per diluted share.

How much did gross premiums written increase in Q2 2021 for RNR?

Gross premiums written increased by 23.1% year-over-year, totaling $2.09 billion.

What was the underwriting income for RenaissanceRe in Q2 2021?

The underwriting income for RenaissanceRe in Q2 2021 was $329 million.

What changes occurred in the company's tangible book value per share?

The tangible book value per share grew by 6.7% in Q2 2021.

What are the expectations regarding COVID-19's impact on RenaissanceRe?

RenaissanceRe continues to monitor COVID-19, expecting significant industry losses over time.