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Lack of hurricanes boosts RenRe profits

RenRe CEO Kevin O'Donnell

A lack of hurricanes hitting the US boosted profits at reinsurance firm RenaissanceRe in the third quarter of the year.

The firm recorded profits of $75.5 million — equal to $1.68 per share — up $7.7 million on the $67.8 million logged for the same period last year.

RenRe CEO Kevin O’Donnell said: “Our results benefited from the lack of land-falling US hurricanes and favourable reserve development, offset in part by mark-to-market investment losses.”

The firm reported operating income of $116.7 million — equivalent to $2.58 a share, well above analyst predictions of $1.92 a share.

That compared to a figure of $98.9 million for the third quarter of 2014 and $2.49 a share for the third quarter of 2014.

Mr O’Donnell said he was pleased with an annualised operating return on equity of 10.7 per cent and 1.3 per cent growth in tangible book value per share, plus accumulated dividends on the quarter.

He added: “Our strategy of matching desirable risk with efficient capital within an integrated system continues to serve us well.

“We are a stronger company following the acquisition and integration of Platinum.

“We remain committed to generating superior returns for our shareholders and third party capital providers over the long term and look forward to meeting our customers’ needs during the upcoming renewal period.”

The firm recorded gross premiums written of $369.6 million for the quarter — a massive 83.9 per cent jump of $168.7 million on the third quarter of last year.

The company’s specialty reinsurance, catastrophe insurance and Lloyd’s segments experiencing increases of $145.5 million (211.2 per cent, driven by the Platinum acquisition), $13.4 million (19.7 per cent) and 9.7 million (15.2 per cent) respectively.

The total investment result — including the sum of net investment income and net realised losses and gains — was a loss of $13 million for the third quarter, compared to a loss of $6.5 million for the same period of 2014.

RenRe said the investment result was “primarily driven by net realised and unrealised losses in our portfolio of equity investments trading and other investments as a result of the broad downturn in the equity markets during the quarter and net realised and unrealised losses on investments-related derivatives due to the decreasing interest rate environment”.