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RenaissanceRe Holdings Ltd. Reports Operating Results (10-Q)

July 28, 2010 | About:
10qk

10qk

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RenaissanceRe Holdings Ltd. (RNR) filed Quarterly Report for the period ended 2010-06-30.

Renaissancere Holdings Ltd. has a market cap of $3.28 billion; its shares were traded at around $56.58 with a P/E ratio of 4.5 and P/S ratio of 1.9. The dividend yield of Renaissancere Holdings Ltd. stocks is 1.8%.RNR is in the portfolios of Glenn Greenberg of Brave Warrior Capital, Inc., Richard Pzena of Pzena Investment Management LLC, Arnold Schneider of Schneider Capital Management, Paul Tudor Jones of The Tudor Group, David Dreman of Dreman Value Management, Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates, Jeremy Grantham of GMO LLC, Chris Davis of Davis Selected Advisers.

Highlight of Business Operations:

Net income available to RenaissanceRe common shareholders was $210.2 million in the second quarter of 2010, compared to $271.2 million in the second quarter of 2009. Net income available to RenaissanceRe common shareholders per fully diluted common share was $3.66 for the second quarter of 2010, compared to $4.32 in the second quarter of 2009. The $60.9 million decrease in our net income available to RenaissanceRe common shareholders was primarily due to:

Book value per common share increased $3.10 to $56.96 at June 30, 2010, compared to $53.86 at March 31, 2010. Book value per common share plus accumulated dividends increased $3.35 to $66.34 at June 30, 2010, compared to $62.99 at March 31, 2010. The 5.8% growth in book value per common share was driven by our net income available to RenaissanceRe common shareholders of $210.2 million, less $13.9 million of common dividends and an $8.6 million decrease in accumulated other comprehensive income. During the second quarter of 2010, we repurchased 3.7 million common shares in open market transactions at an aggregate cost of $207.6 million and at an average share price of $56.10.

In the second quarter of 2010, we generated $188.5 million of underwriting income, compared to $213.6 million in the second quarter of 2009. The decrease in underwriting income was driven primarily by a $53.3 million decrease in net premiums earned, and partially offset by a $12.6 million decrease in acquisition costs and a $19.2 million decrease in net claims and claim expenses. We generated a net claims and claim expense ratio of 14.6%, an underwriting expense ratio of 27.7% and a combined ratio of 42.3%, in the second quarter of 2010, compared to a net claims and claim expense ratio, an underwriting expense ratio and a combined ratio of 17.6%, 26.2% and 43.8%, respectively, in the second quarter of 2009.

Gross premiums written decreased $13.7 million, or 1.6%, to $841.5 million in the second quarter of 2010, compared to $855.2 million in the second quarter of 2009. Our catastrophe reinsurance gross premiums written decreased $69.5 million principally reflecting the deterioration of attractive market conditions on a risk-adjusted basis in our core markets combined with the nonrenewal of Timicuan Reinsurance II Ltd. (Tim Re II), a fully-collateralized property catastrophe joint venture for the 2009 underwriting year that generated $41.8 million of gross premiums written in the second quarter of 2009. Our specialty reinsurance premiums increased $10.3 million, to $7.0 million in the second quarter of 2010, compared to $(3.4) million in the second quarter of 2009. The increase

in our specialty reinsurance premiums is primarily due to the negative impact during the second quarter of 2009 related to the non-renewal and portfolio transfer out of a catastrophe exposed homeowners personal lines property quota share contract, representing $24.2 million of negative gross premiums written in the second quarter of 2009. Excluding the impact of this transaction in the second quarter of 2009 our specialty premiums decreased $13.9 million, or 66.5%, in the second quarter of 2010 compared to the second quarter of 2009. This decrease was due to reductions in several lines of business as a result of softening market conditions combined with the timing of a political risk trade credit contract which incepted in the second quarter of 2009 and renewed in the first quarter of 2010. Our newly formed Lloyds unit generated $34.8 million of premium in the second quarter of 2010. Gross premiums written in our Insurance segment increased $32.5 million, or 10.9%, to $331.2 million in the second quarter of 2010, compared to $298.7 million in the second quarter of 2009, primarily due to growth in our crop insurance gross premiums written during the second quarter of 2010. Crop insurance gross premiums written increased $38.8 million, or 16.5%, to $273.8 million in the second quarter of 2010, compared to $235.0 million in the second quarter of 2009, driven by new business resulting from our growth in overall market share.

Net premiums written decreased $78.8 million in the second quarter of 2010 to $552.6 million from $631.4 million in the second quarter of 2009, primarily due to the decrease in gross premiums written noted above and a $65.1 million increase in ceded premiums written in the second quarter of 2010, compared to the second quarter of 2009. The increase in ceded premiums written was principally driven by our Insurance segment, where we ceded additional premium in our multi-peril crop insurance line of business to the Federal Crop Insurance Corporation (FCIC) and our crop hail insurance lines of business to third parties. Net premiums earned decreased $53.3 million to $326.5 million in the second quarter of 2010, compared to $379.8 million in the second quarter of 2009.

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