US storms hit RenaissanceRe earnings
Stormy weather helped push down second-quarter profits for reinsurance firm RenaissanceRe, the firm reported yesterday.
Profits for the period fell $55.6 million year on year from $120.8 million to $73.2 million.
Operating income for the firm totalled $99.9 million for the second quarter, compared to $93.6 million for the second quarter of 2014. Operating earnings per share were $2.18, short of the $2.23 consensus forecast of analysts tracked by Yahoo Finance.
The firm reported that the catastrophe reinsurance segment generated underwriting income of $65.9 million in the second quarter compared to $82.4 million in the same period of 2014.
The report said: “The $16.5 million decrease ... was driven by a $28.9 million increase in current accident net year claims and claim expenses, primarily due to a number of weather events in the US, partially offset by a $10.2 million increase in favourable development on prior accident years net claims and claim expenses.”
Gross premiums in the specialty reinsurance sector jumped by more than $108.5 million to $160 million year on year — a 210.4 per cent increase.
RenaissanceRe said the increase was driven by “increases across substantially all lines of business, most notably certain casualty and property other lines of business, principally due to the acquisition of Platinum Underwriters Holdings Ltd on March 2, 2015”.
The report added: “The company’s specialty reinsurance premiums are prone to significant volatility as this business can be influenced by a relatively small number of relatively large transactions.”
Gross premiums written in the Lloyd’s of London segment were $116.6 million in the second quarter, an increase of $44.7 million (62.2 per cent) compared to same period last year.
RenaissanceRe chief executive officer Kevin O’Donnell said: “I am pleased to report $99.9 million of operating income, an operating return on equity of 9.1 per cent and 1.9 per cent growth in tangible book value per share plus accumulated dividends for the quarter.
“Each of our segments executed well during the quarter and we expanded our underwriting capabilities to support our clients, despite the competitive market conditions.”
Mr O’Donnell added: “Our integration of Platinum has gone well. We are operating as one company with a consistent and united approach to the market.
“We remain committed to our goal of generating superior returns for our shareholders and third party capital providers over the long term by continuing to be market leaders in matching desirable risk with efficient capital.”