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RenaissanceRe's (RNR) Q4 Earnings Beat Estimates, Rise Y/Y

RenaissanceRe Holdings Ltd. RNR reported fourth-quarter 2021 operating earnings per share of $4.71, which surpassed the Zacks Consensus Estimate by 27%. The bottom line came against the prior-year quarter’s loss of $1.59 per share.

RNR gained from higher gross premiums at the Property, and Casualty and Specialty segments.

RenaissanceRe Holdings Ltd. Price, Consensus and EPS Surprise

RenaissanceRe Holdings Ltd. price-consensus-eps-surprise-chart | RenaissanceRe Holdings Ltd. Quote

Quarterly Operational Update

Total revenues of $1.39 billion dipped 0.1% year over year due to lower net investment income, net realized and unrealized losses on investments and foreign exchange losses.

Gross premiums written surged 40.4% year over year to $1.3 billion in the fourth quarter, courtesy of increased premiums at the Property, and Casualty and Specialty segments. Net investment income declined 1.5% year over year to $80.4 million in the quarter under review.

Total expenses of RenaissanceRe declined 10.4% year over year to $1.08 billion owing to lower net claims and claim expenses incurred plus lower operational costs and corporate expenses.

In the reported quarter, RNR delivered an underwriting income of $276.66 million against the year-ago quarter's underwriting loss of $151.65 million.

Combined ratio contracted 3530 basis points (bps) year over year to 79.4% in the fourth quarter.

Quarterly Segment Update

Property Segment

Gross premiums written rose 24.8% year over year to $384.6 million on the back of an uptick in other property class of business as a result of rate improvements in new and current businesses. However, the same was partially offset by a dip in property catastrophe class of business.

The segment incurred an underwriting income of $223.09 million, against  the year-ago quarter’s loss of $130.2 million.

Combined ratio contracted 6120 bps year over year to 64.4%.

Casualty and Specialty Segment

Gross premiums written soared 48% year over year to $928.3 million in the quarter under review. The improvement can be attributed to a hike in professional liability, rate increases and growth in new and existing business written, general casualty and other specialty lines of business.

The segment’s underwriting income was $53.5 million against the year-ago quarter’s underwriting loss of $21.4 million.

Combined ratio contracted 1160 bps year over year to 92.5%.

Financial Position (as of Dec 31, 2021)

RenaissanceRe exited the fourth quarter with cash and cash equivalents of $1.86 billion, which increased 7% from the 2020-end level.

Total assets of $33.9 billion increased 10.2% from the figure as of Dec 31, 2020.

RNR’s debt amounted to $1.1 billion, which inched up 2.8% from the level at 2020 end.

Book value per share amounted to $132.17, which declined 4.5% year over year.

Annualized operating return on average common equity was 14.2% in the quarter under review.

Share Repurchase Update

In the fourth quarter, RenaissanceRe bought back shares worth $326.9 million.

Full-Year Performance

RNR reported operating earnings of $1.72 for 2021, comparing favorably with 2020’s operating earnings of 12 cents per share.

For the year, total revenues reported were $5.2 billion, up 2% year over year.
Gross premiums and net premiums for the full year grew 34.9% and 45% year over year, respectively.

Zacks Rank

RenaissanceRe currently 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 Insurers

Of the insurance industry players that have reported fourth-quarter results so far, the bottom-line results of The Travelers Companies, Inc. TRV and Brown & Brown, Inc. BRO beat the Zacks Consensus Estimate.

Upcoming Release

A stock worth considering from the insurance space with the perfect mix of elements to surpass estimates in its upcoming quarterly release is as follows:

Unum Group UNM has an Earnings ESP of +0.31% and is Zacks #3 Ranked, currently.

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