RenaissanceRe Holdings Ltd.’s (NYSE:RNR) first-quarter 2018 operating earnings per share of $3.40 beat the Zacks Consensus Estimate of $2.71 by 25.5%. However, the bottom line skyrocketed 161.5% year over year.
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The quarter under review witnessed low level of catastrophes, sturdy premium growth, prior-year favorable development and an improved operating efficiency.
Including adjusted loss on investments and income tax benefits, the company incurred net income of $1.42 per share in the first quarter compared with the same of $2.25 in the year-ago quarter.
Quarterly Operational Update
RenaissanceRe’s first-quarter operating revenues of $415 million missed the Zacks Consensus Estimate of $445 million and declined 1.66% year over year.
Gross premiums written increased 25.8% year over year to $1.2 billion, driven by higher premiums from the Property as well as Casualty and Specialty segments.
Net investment income is $56.5 million for the reported quarter, improved by nearly 4% year-over-year.
RenaissanceRe’s total expenses were $329.2 million, down 3% year over year.
Underwriting income of $129.6 million increased 205.7% from the year-ago quarter.
Combined ratio of 70.6% improved 1780 basis points (bps) from the year-ago quarter.
Quarterly Segment Update
Property Segment
Gross premiums written were $707 million, up 35.8% year over year. This improvement is attributable to higher written premiums in the catastrophe class of business as well as an increase in ceded premiums.
Underwriting income of $127.2 million improved 39.2% from the prior-year quarter.
Combined ratio of 43.5% improved 760 bps from 51.1% in the year-ago quarter.
Casualty and Specialty Segment
Gross premiums written were $452.7 million, up 12.7% from the prior-year quarter of $401.6 million, driven by selective growth from new and existing business wherein the company found attractive risk-return attributes.
Underwriting income of $2.6 million rebounded from the year-ago quarter underwriting loss of $49.3 million.
Combined ratio of 98.8% improved 2870 bps from the year-ago quarter. This upside was particularly driven by a 20.8 percentage point decrease in the Casualty and Specialty segment net claims and claim expenses ratio.
Financial Position
As of Mar 31, 2018, total assets of RenaissanceRe were $15.9 billion, up 4.6% from 2017-end level.
The company had total debt of $989.9 million as of Mar 31 2018, almost flat with 2017-end level.
Cash and cash equivalents were $0.6 billion, down 52.4% from $1.4 billion as of Dec 31, 2017.
Book value per share is $100.29 improved 0.6% year-over-year.
Return on equity expanded 870 basis points to 13.5% from the 2017-end level of 4.8%.
Zacks Rank
RenaissanceRe carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other P&C Insurers
Among other players from the same industry, which have already reported first-quarter earnings, the bottom line of The Progressive Corporation (NYSE:PGR) and RLI Corp. (NYSE:RLI) outpaced the respective Zacks Consensus Estimate while that of The Travelers Companies, Inc. (NYSE:TRV) missed the same.
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RLI Corp. (RLI): Free Stock Analysis Report
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The Progressive Corporation (PGR): Free Stock Analysis Report
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