2014 Annual Report RenaissanceRe Holdings Ltd.
Contents
Financial Highlights 1
Letter to Shareholders 4
Message from the Chair 10
Board of Directors 11
Executive Committee 12
Comments on Regulation G 13
Form 10-K 15
Senior Officers Last Page
Board of Directors, Inside
Financial and Investor Information Back Cover
Credit Ratings
A.M. Best* S&P Moody’s ** Fitch
Renaissance Reinsurance (1) A+ AA- A1 A+
DaVinci (1) A AA- A3 –
RenaissanceRe Specialty Risks (1) A A+ – –RenaissanceRe Specialty U.S. (1) A – – –Renaissance Reinsurance of Europe (1) A+ AA- – –Top Layer Re (1) A+ AA – –RenaissanceRe Syndicate 1458 – – – –Lloyd’s Overall Market Rating (2) A A+ – AA-
RenaissanceRe (3) – Very Strong – –
(1) The A.M. Best, S&P, Moody’s and Fitch ratings for these companies reflect the insurer’s fiancial strength rating and in addition, the S&P ratings also reflect the insurer’s issuer credit rating.
(2) The A.M. Best, S&P and Fitch ratings for the Lloyd’s Overall Market Rating represent its financial strength rating. (3) The S&P rating for RenaissanceRe represents the rating on its Enterprise Risk Management practices.
* On November 25, 2014, following the announcement that RenaissanceRe and Platinum Underwriters Holdings, Ltd. entered into a merger agreement under which RenaissanceRe would acquire Platinum, A.M. Best affirmed its ratings of RenaissanceRe and RenaissanceRe’s operating subsidiaries and placed the ratings under review, with negative implications.
**On November 25, 2014, following the announcement that RenaissanceRe and Platinum entered into a merger agreement under which RenaissanceRe would acquire Platinum, Moody’s affirmed its ratings of RenaissanceRe and RenaissanceRe’s operating subsidiaries and changed its outlook to negative from stable.
Financial Highlights
Financial Highlights for RenaissanceRe Holdings Ltd. and Subsidiaries
(In thousands of United States dollars, except per share amounts and percentages) 2014 2013 2012
Gross premiums written $ 1,550,572 1,605,412 1,551,591
Net income available to RenaissanceRe common shareholders $ 510,337 665,676 566,014
Operating income available to RenaissanceRe common shareholders (1) $ 468,904 630,618 402,366
Total assets $ 8,203,550 8,179,131 7,928,628
Total shareholders’ equity $ 3,865,715 3,904,384 3,507,056
Per common share amounts
Net income available to RenaissanceRe common shareholders per common share – diluted $ 12.60 14.87 11.23
Operating income available to RenaissanceRe common shareholders
per common share – diluted (1) $ 11.56 14.08 7.93
Tangible book value per common share (1) $ 89.29 79.44 67.28
Dividends per common share $ 1.16 1.12 1.08
Operating ratios
Operating return on average common equity (1) % 13.7 19.4 12.6
Net claims and claim expense ratio % 18.6 15.4 30.4
Underwriting expense ratio % 31.6 28.4 27.4
Combined ratio % 50.2 43.8 57.8
(1) In this Annual Report, we refer to various non-GAAP measures, which are explained in the Comments on Regulation G on pages 13 and 14.
1
Tangible Book Value Per Common Share Plus Accumulated Dividends(1)
(US$)
125 2.56 3.93 6.38 8.07 9.54 10.25 11.59 13.79 18.55 24.49 33.33
100
75
50
25
0
93 94 95 96 97 98 99 00 01 02 03
1993–2013 2014
Tangible Book Value Per Common Share Tangible Book Value Per Common Share
Accumulated Dividends Accumulated Dividends
Gross Managed Premiums Written (1)
(US$ in millions)
2,000 1,213 1,490 1,624 1,669 1,586
1,600
1,200
800
400
0
10 11 12 13 14
2010–2013 2014
Managed Catastrophe Managed Catastrophe
Specialty Specialty
Lloyd’s Lloyd’s
Insurance
(1) In this Annual Report, we refer to various non-GAAP measures, which are explained in the Comments on Regulation G on pages 13 and 14.
2
34.67 29.80 40.42 47.94 44.65 58.61 70.43 69.37 79.28 92.56 103.57
04 05 06 07 08 09 10 11 12 13 14
Operating Return On Average Common Equity(1)
(%)
60 -13.3 37.9 27.0 7.4 27.6 16.5 -5.3 12.6 19.4 13.7
45
30
15
0
-15
05 06 07 08 09 10 11 12 13 14
(1) In this Annual Report, we refer to various non-GAAP measures, which are explained in the Comments on Regulation G on pages 13 and 14.
3
Letter to Shareholders
RenaissanceRe has evolved into a highly flexible partner, integrating our operating platform, product suite and capital structure in a way that allows us to provide industry-leading service and market-leading returns.
Kevin O’Donnell
President and Chief Executive Of?cer
Dear Shareholders,
In the business of managing risk, managing change is critical. It can determine a company’s long-term success or failure, as strengths of dynamic strategies and weaknesses of stagnant ones emerge over time.
2014 was a year when RenaissanceRe’s ability to read the market early, and lead the way in helping customers adjust to change, was brought into sharp focus. The tactical shifts we started to implement five years ago began to bear fruit as we continued to execute our strategic plan.
The “change” I am talking about is the steady but permanent shift we have witnessed in the reinsurance market for some years. We have seen unprecedented and rapid inflows of capital into the sector, changes in the needs and buying behavior of our clients, and increased prevalence of “non-aligned” underwriting.
However, there are many constants in how we manage our business. Our core operating philosophy of matching well-priced risk with the most ef?cient capital sources has been, and will continue to be, our north star through an evolving market. Managing multiple forms of capital has been core to our strategy for over 20 years, and so have underwriting judgment and risk management. But our
4
RenaissanceRe Holdings Ltd. 2014 Annual Report
Company is structured the way it is today because we have anticipated the dynamics of the market. RenaissanceRe has evolved into a highly flexible partner, integrating our operating platform, product suite and capital structure in a way that allows us to provide industry-leading service and market-leading returns. In 2014, we reinforced our position through several tactical and strategic actions.
Performance
In 2014, we generated net income of $510.3 million and an operating return on equity of 13.7%, increasing tangible book value per share, plus accumulated dividends, by 13.9%. Our combined ratio, the sum of our loss ratio and expense ratio, was 50.2% and we ended the year with over $4 billion of capital, not counting the capital we manage on behalf of private investors.
We continued to work diligently to expand both our assumed risk and capital activities. In November 2014, we announced the acquisition of Platinum Underwriters Holdings, Ltd. and the transaction closed on March 2, 2015. Through Platinum, we believe we will be able to serve a broader range of clients with a larger product suite and additional experienced underwriters. Platinum’s track record of underwriting discipline, excellent client service and the ability to adapt to changing market conditions was a natural fit with RenaissanceRe, and we have added meaningful new capabilities through the acquisition.
Matching risk with capital dynamically, we continued to calibrate our capital structure to best serve our clients and optimize returns to our shareholders. We bought back over $500 million of our common shares during 2014, and returned $300 million and $225 million to DaVinci shareholders during January 2014 and January 2015, respectively. We also renewed the Upsilon Fund to serve our clients with the collateralized reinsurance and retrocessional product. This was a market where it was important to pick our spots carefully. We withdrew capital from areas where we felt relative rewards were diminished and deployed capital where we were better rewarded. One of RenaissanceRe’s most important attributes is capital flexibility. This allows us to match capital to risk in real time and pursue new underwriting opportunities with the confidence that we can source the best form of capital to support them. In many ways, we made some of our most significant moves in 2014 to enhance risk-sourcing and capital management capabilities for the future.
A consistent approach
Consistency has been a hallmark of our Company through changing market conditions. In 2014, we remained true to our principles by ensuring that the risk we assumed was adequately priced on an individual basis but also resulted in a superior portfolio. We evaluate each risk on its economic merit before factoring in any benefit from diversification within a portfolio. It is worth remembering that some deals can appear to provide an adequate return when viewed in the context of an overall portfolio, but this measure alone is not enough to determine if a risk is good or bad. We have the benefit of seeing the majority of catastrophe risk placed annually, which gives us a window into our performance in every major market. Seeing all the available business, developing an ability to select the best business by forming a differentiated view of risk, and financing risk portfolios with efficient forms of capital are the fundamental building blocks of how RenaissanceRe outperforms the market.
It is also important to remain objective about risk. 2014 was the 9th consecutive year without a major hurricane hitting the U.S., an unprecedented stretch of time. Winning the lottery can result in a great retirement but I don’t know anyone who would characterize it as good retirement planning. Similarly, we don’t base our risk management on luck. We estimate that each year, the odds of a major hurricane hitting the U.S. is about 40%. 2014 was about ensuring that we could comfortably meet all potential obligations while providing the best service to our clients and shareholders over the long term, in the face of change.
The components of change
The market is clearly changing, in ways that are noticeable and others that are less obvious. I find it easiest to think of our industry, and characterize forces that are acting as agents of change, in terms of risk and capital.
Risk
Though price per unit of risk — and by extension, returns — have come under pressure, we believe long- term opportunities for disciplined and well-capitalized reinsurers remain attractive.
We continue to see reduced financial reward for taking catastrophe risk, caused in part by the abundance of the capital available to accept the risk. In the aggregate, the U.S. catastrophe market still produces an expected profit,
5
Letter to Shareholders (continued)
but in our traditional view of dividing the market into three broad categories: adequate, low and negative returns, the low-return category is increasing in relative size. Outside of the U.S., the negative-return category (that is, risk that is written at an expected loss) is growing.
In the casualty and specialty market, returns are declining as well. We have been impressed with insurers generally showing good underwriting discipline, but economics are declining largely due to increasing ceding commissions. It appears to us that some large reinsurance casualty underwriters are willing to accept the certainty of lower economics driven by rising expenses (ceding commissions paid to the cedant), because they feel comfortable that underlying rates are still adequate.
In addition, insurers worldwide are becoming more sophisticated about managing their own risk. This increased sophistication is a double-edged sword for the reinsurance market. More risk is retained in many instances, which means these companies seek less reinsurance support. On the positive side, insurers see value in stronger, smarter reinsurers who can offer an independent perspective on their risk. Our experience has been that sharing our view has led to stronger relationships. This, in turn, has created a dialogue that allows us to develop creative new products outside of our traditional property catastrophe offerings.
Many of the world’s biggest risks are still either retained or underinsured. Many of the world’s geographies have attractive long-term economic prospects, which will lead to more insurable risk coming to market. Our industry has ample capacity to address the threat of cyber risk, of flood, or of other underinsured perils. Throughout 2014, we worked with many clients to help them design cyber products and offered capital to support their efforts. More work needs to be done. The challenge with flood, along with other risks which have been housed in government insurance schemes, is that available coverage tends to be “one size fits all’ and not exposure-based. Underpricing leads to what amounts to a sizeable, hidden tax burden for all to cover the exposures of a relative few. I would rather see those needing the coverage pay the appropriate price, relying on the mechanisms and capabilities of the private insurance market. We will continue to work with our customers to accept emerging risk assuring that we, as their reinsurer, remain part of the solutions they develop for their customers. Moreover, RenaissanceRe is committed to working with all stakeholders to promote financial and physical resilience, and to enhance security for these perils.
Capital
Developments in capital have triggered some of the most fundamental and seismic shifts in the reinsurance industry in the last decade. The world has divided reinsurance capital into two major classes: “owned capital” and “third party capital”. Perhaps a more accurate way of thinking about capital is as being “aligned” or “non-aligned,” and the industry is still coming to terms with how to manage and work with non-aligned capital sources. We believe it is in investors’ best interest to have managers’ incentives aligned with their own. This should apply equally to the downside as well as the upside. We are seeing a growing number of “non-aligned” participants in today’s market.
To us, aligning interests with our investors is central to our stewardship of their capital. Our track record is one of treating investors as partners and looking out for their best interests, often through investing our own capital alongside our partners. By accepting capital continuously and allocating it to risk at market terms, other managers of capital are more like brokers that are paid a fee for simply following the market. Our approach of underwriting, selecting risk and constructing portfolios with “skin in the game” through a financial interest is a fundamentally different management approach.
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RenaissanceRe Holdings Ltd. 2014 Annual Report
“New” capital
Capital is entering the market for different reasons today than in prior years. The early third party capital that came to the market entered to accept predominantly property catastrophe risk. This capital was interested in the sector because the spreads were large and the returns uncorrelated to other asset classes. The profile of investors we are seeing now has changed. The vast majority of third party capital on our books in 2006 came from hedge funds; today we have almost no capital from hedge funds. Much of the capital we see now previously found adequate returns in more traditional classes, such as fixed income. Hedge funds are less interested currently because of lower absolute returns in the sector; pension funds are increasingly interested because the relative returns from insurance look very good compared to other alternatives.
However hedge funds have not left the market altogether, and have devised a new generation of companies by developing the “hedge fund reinsurer”. This model focuses on tax benefits and cost efficiency through an aggressive investment approach, which assumes that earning higher returns on its asset portfolio allows it to charge less per unit of risk.
Although we have been leaders in bringing new types and sources of third party capital to our customers, we believe that high-risk premium refiects the higher risk of exposing the assets to a greater probability of loss. As an organization driven by underwriting performance, we have not subscribed to a model that requires outsized investment returns to provide claims-paying security to our clients over the long term.
Our role as a reinsurer
Today, reinsurers have to think more creatively about accumulating, managing and tranching risk, and finding appropriate capital. Over twenty years ago, when our portfolio was focused primarily on excess of loss property catastrophe reinsurance, we wrote a largely regional book of business. This was an efficient way for us to construct better portfolios than the market because we could select the layers and customers that we thought best fit our portfolio. Now, buyers
Our track record is one of treating investors as partners and looking out for their best interests, often through investing our own capital alongside our partners.
are aggregating coverages and we need to build our portfolios differently to refiect this. This often requires us to provide broader coverages then we did in the past.
When we started, equity capital was the most efficient form to put against risk. Being smart about managing and diversifying risk against a single pool of capital was sufficient to generate superior results. A net portfolio could look very similar to a gross portfolio and produce adequate returns. After 1998, we improved efficiency by adding a more robust ceding strategy. By the late 1990s, we were managing third party capital and by 2001, both DaVinci and Top Layer Re were established reinsurers in the market.
In the current environment, it is significantly more complicated to select and structure capital efficiently for the types of risk that are available. Just as we need to diversify our risk, we need to diversify our capital.
Executing against change
We view our job as a reinsurer to respond to our clients’ needs, and one of the outcomes of a shifting landscape has been our clients’ desire to be served more broadly and more deeply. This shift actually began a number of years ago. The pace has accelerated steadily since.
7
Letter to Shareholders (continued)
For RenaissanceRe, our goal has always been the same: to meet our clients’ needs by matching well-structured risk with efficient capital.
We began to articulate the benefits of broadening our access and diversification in 2009, the year we opened our Lloyd’s syndicate and started to build out our specialty book. This is a message we have underlined in each letter to shareholders since. We have continued along a deliberate path to balance our portfolio with non-catastrophe business and have steadily added talent to our team. Our specialty franchise has evolved from being largely opportunistic and operating out of one platform in Bermuda, to writing out of three platforms in Bermuda, London and the U.S. In 2014, we increased our capital commitment to specialty and concentrated on developing the scale of our new platforms, driven — as always — by our clients’ needs, and also by the conviction of the importance of bringing more capital to bear in more ways than ever.
That said, our core strategic goal to maintain our leadership in catastrophe reinsurance remains unchanged. While we recognize that the market has changed rapidly, property catastrophe is still a good business. Our actions through 2014 served to enhance our fiexibility to manage both our access to risk and the capital we match against that risk. I believe this is the model that others will increasingly emulate.
Our added focus today, in line with our trajectory over the last five years, is to extend diversification and to increase scale. The benefit of diversification, as we know, is that it lowers our
cost of capital and improves risk-adjusted returns across our entire portfolio. Scale provides us with more access and more fiexibility in the allocation of risks to different pools of capital.
The acquisition of Platinum
It is in this context that, at the end of 2014, we announced an agreement to acquire Platinum. As I described above, we began to balance our portfolio more deliberately with non-catastrophe business a number of years ago. This acquisition accelerates the growth of our U.S. casualty and specialty platform, as well as increasing ef ciencies in our property portfolio. It broadens our client and broker base as well as improving operating leverage and capital efficiency. It benefits our clients and we expect it to be accretive to our shareholders.
Platinum is a well-run and disciplined underwriting organization, which we believe is a good fit for us from a cultural and integration perspective. Our risk management systems and underwriting approach are aligned. We know the company well, having participated in Platinum’s IPO in 2002. Through the due diligence we performed, we gained comfort that Platinum’s reduction in written premium from a peak of $1.7 billion to around $500 million was based on proactive underwriting decisions, keeping the best business and declining the worst to create a smaller but very desirable portfolio. With larger buyers looking to cede multiple lines to a smaller group of large reinsurers, we will benefit from the increased scale, new skills and new lines of business that Platinum brings. I believe that our combined technology, underwriting experience and capital management expertise will make RenaissanceRe stronger, establishing us more firmly than ever as a leader in our markets.
Mergers can provide long-term and permanent benefits but only at the right time and at the right terms. With the Platinum acquisition, I believe we are fulfilling both of those criteria and I am grateful to the many people who worked extremely hard to make it happen.
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RenaissanceRe Holdings Ltd. 2014 Annual Report
Thanks
I owe a deep debt of gratitude to the talented people who make up the RenaissanceRe team. The success of our Company ultimately comes from the dedication and professionalism of our entire employee base. I am grateful for the direction and expertise of our Board of Directors and the hard work of my Executive Committee.
At the end of the year, our Chief Administrative Of?cer, Peter Durhager, announced his departure from RenaissanceRe and Jeff Kelly took on the role of Chief Operating Officer, in addition to his role as Chief Financial Of?cer. I would like to thank Peter for his many contributions over his ten years with the Company. Jeff has significantly enhanced our ?nancial and strategic planning functions since joining in 2009. We look forward to his contributions in his expanded role.
During the year, Ross Curtis transitioned successfully from the Active Underwriter role in our Lloyd’s syndicate in London to the Group Chief Underwriting Officer role. From this seat, he will set our underwriting strategy and oversee all of our risk-taking initiatives. Bryan Dalton, a long-time RenaissanceRe employee with extensive underwriting experience, assumed the position of Active Underwriter. Both Bryan and Ross exemplify the depth of our internal talent and bring the expertise and leadership needed to steer RenaissanceRe through a rapidly evolving market.
Looking ahead
Going forward, we believe that customers — regardless of client segment — will want a reinsurer who makes a credible commitment to cover a wide range of their risks, over reasonably long time periods, at consistent, exposure-based prices. They will need a reinsurer who can provide large line sizes and excellent security, who can help them grow their business, and who works with them effectively to deliver solutions — reinsurance or capital-based.
Our challenge for 2015 and beyond will be to work with clients and brokers to develop new ways to match risk and capital, as their needs change. We will need to do so while remaining true to our culture and focused on leading the market through our superior relationships, superior risk selection and superior capital management.
2014 was a relatively benign year because all market participants — brokers, reinsurers, insurers — were profitable. As 2015 unfolds, the probability of all constituents repeating the feat will likely decrease as the market moves towards what I believe will be an increasingly competitive state. The pressure to be profitable will likely force more acquisitions, more consolidation and perhaps, ultimately, even rate increases. Opportunities will emerge, but they will need to be seized early. RenaissanceRe is ideally structured to respond quickly and efficiently. I am con?dent about our future.
In closing
All change has associated risk, but resisting change in an evolving world is a dangerous approach. For RenaissanceRe, our goal has always been the same: to meet our clients’ needs by matching well-structured risk with ef?cient capital. To achieve that, we adjust our tactics ahead of the market, while maintaining a core strategy that has served us well for more than twenty years. This, I believe, is what has allowed us to generate superior returns for our shareholders over time, and will drive our success in the future.
Sincerely,
Kevin J. O’Donnell
President and Chief Executive Of?cer
9
Message from the Chair
RenaissanceRe is well-positioned to continue to provide world- leading service to our clients and partners while generating long-term superior returns for our shareholders.
As Kevin described in his letter, 2014 was a year of signi?cant achievement for RenaissanceRe at a time of fundamental change in our sector. RenaissanceRe generated strong results in a highly competitive environment, continued to lead the market in structuring innovative capital and risk management solutions, and made important strategic progress through the successful and well-executed acquisition of Platinum. My fellow Directors and I commend both management and employee teams for their vision and their hard work.
On behalf of the Board, I would like to recognize the invaluable service of W. James MacGinnitie, who recently announced his retirement from the Board. Jim has served dutifully since 2000, bringing a breadth of business acumen, technical expertise and wisdom to the Board. In 2005, Jim assumed the role of our first non-executive Chair, and provided leadership and guidance at a critical time in the Company’s history. After his tenure as Chair, Jim continued to serve the Board and the Company, providing exceptional business and personal advice as RenaissanceRe met new strategic challenges and milestones. In addition, Jim provided vital support to me in the role. We all owe Jim a debt of gratitude.
I am also pleased, on behalf of the Board, to extend a warm welcome to William (“Bill”) F. Hagerty IV. Bill recently retired as Commissioner of Economic and Community Development and a member of the Cabinet of the State of Tennessee. Bill then rejoined Hagerty Peterson & Company, LLC, a private equity investment firm which he founded in 1996 and has since served as principal. Bill has served a number of public and private companies in senior executive leadership and board positions. Earlier in his career, from 1991-1993, Bill served in the White House as the Chief Economist of the President’s Council on Competitiveness. Bill’s distinguished business and government experience will be invaluable as we support management’s efforts to steer RenaissanceRe through a rapidly changing industry.
The Board of Directors is keenly focused on effective oversight of the Company’s strategic plan, as well as on fiduciary rigor. We are confident, from our ongoing assessment and evaluation of the team’s tactical plans and results, that RenaissanceRe is well-positioned to continue to provide world-leading service to our clients and partners while generating long-term superior returns for our shareholders. I would like to thank my colleagues on the Board for their insightful and dedicated service, the entire RenaissanceRe team for another excellent year, and you, our shareholders, for your ongoing support.
Sincerely,
Ralph B. Levy
Non-Executive Chair
10
Board of Directors
RenaissanceRe Holdings Ltd. 2014 Annual Report
Ralph B. Levy Kevin J. O’Donnell David C. Bushnell James L. Gibbons Brian G. J. Gray Jean D. Hamilton
Non-Executive Chair, President and Chief Retired Chief Chairman, Former Group Chief Private Investor,
RenaissanceRe Executive Of?cer, Administrative Of?cer, Harbour International Underwriting Of?cer, Independent
Holdings Ltd. RenaissanceRe Citigroup Inc. Trust Company Swiss Reinsurance Consultant
Holdings Ltd. Limited Company Ltd.
Henry Klehm III W. James Anthony Nicholas L. Edward J. Zore
Partner, MacGinnitie M. Santomero Trivisonno Retired Chairman
Jones Day Former Chairman, Former President, Retired Chairman and Chief
RenaissanceRe Federal Reserve and Chief Executive Of?cer,
Holdings Ltd., Bank of Philadelphia Executive Of?cer, The Northwestern
Independent ACNielsen Mutual Life Insurance
Consultant Corporation Company
11
Executive Committee
Kevin J. O’Donnell Jeffrey D. Kelly Ian D. Branagan Ross A. Curtis Aditya K. Dutt Todd R. Fonner
President and Chief Executive Vice President, Senior Vice President, Senior Vice President, Senior Vice President, Senior Vice President,
Executive Officer, Chief Operating Officer Group Chief Risk Officer, Group Chief RenaissanceRe Chief Investment
RenaissanceRe and Chief Financial Officer, RenaissanceRe Underwriting Of?cer, Holdings Ltd. Officer and Treasurer,
Holdings Ltd. RenaissanceRe Holdings Ltd. RenaissanceRe President, RenaissanceRe
Holdings Ltd. Holdings Ltd. Renaissance Holdings Ltd.
Underwriting
Managers, Ltd.
David E. Marra Justin D. O’Keefe Jonathan D. A. Stephen H. Mark A. Wilcox
Senior Vice President, Senior Vice President, Paradine Weinstein Senior Vice President,
Chief Underwriting Chief Underwriting Senior Vice President, Senior Vice President, Chief Accounting
Officer – Casualty Officer – Property, RenaissanceRe Group General Of?cer and
& Specialty, RenaissanceRe Holdings Ltd., Counsel, Corporate Corporate Controller,
RenaissanceRe Holdings Ltd. Principal Of?cer, Secretary and Chief RenaissanceRe
Holdings Ltd. Singapore Branch, Compliance Of?cer, Holdings Ltd.
Renaissance RenaissanceRe
Reinsurance Ltd. Holdings Ltd.
12
Comments on Regulation G
In addition to the generally accepted accounting principles (“GAAP”) financial measures set forth in this Annual Report, the Company has included certain non-GAAP financial measures in this Annual Report within the meaning of Regulation G. The Company has consistently provided these financial measurements in previous investor communications and the Company’s management believes that these measurements are important to investors and other interested persons, and that investors and such other persons benefit from having a consistent basis for comparison between years and for the comparison with other companies within the industry. These measures may not, however, be comparable to similarly titled measures used by companies outside of the insurance industry. Investors are cautioned not to place undue reliance on these non-GAAP measures in assessing the Company’s overall financial performance.
The Company uses “operating income (loss) available (attributable) to RenaissanceRe common shareholders” as a measure to evaluate the underlying fundamentals of its operations and believes it to be a useful measure of its corporate performance. “Operating income (loss) available (attributable) to RenaissanceRe common shareholders” as used herein differs from “net income (loss) available (attributable) to RenaissanceRe common shareholders,” which the Company believes is the most directly comparable GAAP measure, by the exclusion of net realized and unrealized gains and losses on investments from continuing and discontinued operations, net other-than-temporary impairments from continuing operations, the gain on sale of the Company’s ownership interest in ChannelRe Holdings Ltd. (“ChannelRe”), net unrealized losses on credit derivatives issued by entities included in investments in other ventures, under equity method and, commencing in 2013, also excludes net realized and unrealized gains and losses on investments-related derivatives. Prior to 2013, investments-related derivative net realized and unrealized gains and losses were included in net investment income and were also included in the calculation of operating income (loss) available (attributable) to RenaissanceRe common shareholders and related measures. The Company’s management believes that “operating income (loss) available (attributable) to RenaissanceRe common shareholders” is useful to investors because it more accurately measures and predicts the Company’s results of operations by removing the variability arising from fluctuations in the Company’s fixed maturity investment portfolio and equity investments portfolio, the gain associated with the sale of the Company’s ownership in ChannelRe and net unrealized losses on credit derivatives issued by entities included in investments in other ventures, under equity method. The Company also uses “operating income (loss) available (attributable) to RenaissanceRe common shareholders” to calculate “operating income (loss) available (attributable) to RenaissanceRe common shareholders per common share – diluted” and “operating return on average common equity”. The following is a reconciliation of: 1) net income (loss) available (attributable) to RenaissanceRe common shareholders to operating income (loss) available (attributable) to RenaissanceRe common shareholders; 2) net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – diluted to operating income (loss) available (attributable) to RenaissanceRe common shareholders per common share – diluted; and 3) return on average common equity to operating return on average common equity:
Year Ended December 31,
(in thousands of United States dollars, except per
share amounts and percentages) 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005
Net income (loss) available (attributable) to
RenaissanceRe common shareholders $510,337 $665,676 $566,014 $(92,235) $702,613 $838,858 $(13,280) $569,575 $761,635 $(281,413)
Adjustment for net realized and unrealized (gains)
losses on investments (41,433) (35,058) (163,991) (70,710) (151,213) (93,162) (10,700) (26,806) 34,464 6,962
Adjustment for net other-than-temporary impairments* - - 343 552 829 22,481 217,014 25,513 - -
Adjustment for gain on sale of ChannelRe - - - - (15,835) - - - - -
Adjustment for net unrealized losses on
credit derivatives issued by entities included in
investments in other ventures, under equity method - - - - - - - 167,171 - -
Operating income (loss) available (attributable) to
RenaissanceRe common shareholders $468,904 $630,618 $402,366 $(162,393) $536,394 $768,177 $193,034 $735,453 $796,099 $(274,451)
Net income (loss) available (attributable) to
RenaissanceRe common shareholders
per common share - diluted $ 12.60 $14.87 $11.23 $(1.84) $12.31 $13.40 $(0.21) $7.93 $10.57 $(3.99)
Adjustment for net realized and unrealized (gains)
losses on investments (1.04) (0.79) (3.31) (1.39) (2.72) (1.52) (0.17) (0.38) 0.48 0.10
Adjustment for net other-than-temporary impairments* - - 0.01 0.01 0.02 0.37 3.42 0.36 - -
Adjustment for gain on sale of ChannelRe - - - - (0.29) - - - - -
Adjustment for net unrealized losses
on credit derivatives issued by entities included in
investments in other ventures, under equity method - - - - - - - 2.33 - -
Operating income (loss) available (attributable) to
RenaissanceRe common shareholders
per common share - diluted $ 11.56 $14.08 $7.93 $(3.22) $9.32 $12.25 $3.04 $10.24 $11.05 $(3.89)
Return on average common equity 14.9% 20.5% 17.7% (3.0%) 21.7% 30.2% (0.5%) 20.9% 36.3% (13.6%)
Adjustment for net realized and unrealized
(gains) losses on investments (1.2%) (1.1%) (5.1%) (2.3%) (4.7%) (3.4%) (0.4%) (1.0%) 1.6% 0.3%
Adjustment for net other-than-temporary impairments* - - - - - 0.8% 8.3% 0.9% - -
Adjustment for gain on sale of ChannelRe - - - - (0.5%) - - - - -
Adjustment for net unrealized losses on credit
derivatives issued by entities included in investments
in other ventures, under equity method - - - - - - - 6.2% - -
Operating return on average common equity 13.7% 19.4% 12.6% (5.3%) 16.5% 27.6% 7.4% 27.0% 37.9% (13.3%)
*For the years ending December 31, 2006 and prior, the Company included net other-than-temporary impairments in net realized and unrealized (gains) losses on investments.
13
The Company has also included in this Annual Report “gross managed premiums written” and “managed catastrophe premiums.” “Gross managed premiums written” differs from gross premiums written, which the Company believes is the most directly comparable GAAP measure, due to the inclusion of premiums written on behalf of the Company’s joint venture, Top Layer Reinsurance Ltd. (“Top Layer Re”), which is accounted for under the equity method of accounting. “Managed catastrophe premiums” is defined as gross catastrophe premiums written by Renaissance Reinsurance Ltd. and its related joint ventures. “Managed catastrophe premiums” differs from total Catastrophe Reinsurance segment premiums, which the Company believes is the most directly comparable GAAP measure, due to the inclusion of catastrophe premiums written on behalf of the Company’s joint venture Top Layer Re, which is accounted for under the equity method of accounting and the inclusion of catastrophe premiums written on behalf of the Company’s Lloyd’s segment. The Company’s management believes “gross managed premiums written” and “managed catastrophe premiums” are useful to investors and other interested parties because they provide a measure of total catastrophe reinsurance premiums assumed by the Company through its consolidated subsidiaries and related joint ventures. The following is a reconciliation of 1) total Catastrophe Reinsurance segment premiums to managed catastrophe premiums and 2) gross premiums written to gross managed premiums written:
Year Ended December 31,
(in thousands of U.S. dollars) 2014 2013 2012 2011 2010
Total catastrophe unit premiums $ 933,969 $1,120,379 $ 1,182,207 $1,177,296 $994,233
Catastrophe premiums written on behalf of
our joint venture, Top Layer Re 42,556 63,721 72,648 55,483 47,546
Catastrophe premiums written in the Lloyd’s segment 55,366 37,869 36,888 27,943 14,724
Catastrophe premiums written by the Company in its
Catastrophe Reinsurance segment and ceded to Top Layer Re (7,355) - - - -
Catastrophe premiums assumed from the Other Category - - - - (9,481)
Total managed catastrophe premiums $1,024,536 $1,221,969 $ 1,291,743 $1,260,722 $1,047,022
Gross premiums written $1,550,572 $1,605,412 $ 1,551,591 $1,434,976 $1,165,295
Catastrophe premiums written on behalf of our
joint venture, Top Layer Re 42,556 63,721 72,648 55,483 47,546
Catastrophe premiums written by the Company in its
Catastrophe Reinsurance segment and ceded to Top Layer Re (7,355) - - - -
Gross managed premiums written $1,585,773 $1,669,133 $ 1,624,239 $1,490,459 $1,212,841
The Company has also included in this Annual Report “tangible book value per common share” and “tangible book value per common share plus accumulated dividends.” “Tangible book value per common share” is defined as book value per common share excluding goodwill and intangible assets; “tangible book value per common share plus accumulated dividends” is defined as book value per common share excluding goodwill and intangible assets, plus accumulated dividends. “Tangible book value per common share” differs from book value per common share, which the Company believes is the most directly comparable GAAP measure, due to the exclusion of goodwill and intangible assets per share. “Tangible book value per common share plus accumulated dividends” differs from book value per common share, which the Company believes is the most directly comparable GAAP measure, due to the exclusion of goodwill and intangible assets per share and the inclusion of accumulated dividends. The Company’s management believes “tangible book value per common share” and “tangible book value per common share plus accumulated dividends” are useful to investors because they provide a more accurate measure of the realizable value of shareholder returns, by excluding the impact of goodwill and intangible assets. The following is a reconciliation of book value per common share to tangible book value per common share and tangible book value per common share plus accumulated dividends:
At December 31,
2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004
Book value per common share $90.15 $80.29 $68.14 $59.27 $62.58 $51.68 $38.74 $41.03 $34.38 $24.52 $30.19
Adjustment for goodwill and other intangibles (1) (0.86) (0.85) (0.86) (0.82) (2.03) (1.95) (2.01) (0.09) (0.08) - -
Tangible book value per common share 89.29 79.44 67.28 58.45 60.55 49.73 36.73 40.94 34.30 24.52 30.19
Adjustment for accumulated dividends 14.28 13.12 12.00 10.92 9.88 8.88 7.92 7.00 6.12 5.28 4.48
Tangible book value per common share
plus accumulated dividends $103.57 $92.56 $79.28 $69.37 $70.43 $58.61 $44.65 $47.94 $40.42 $29.80 $34.67
(1) For 2014, 2013, 2012, 2011, 2010, 2009 and 2008, goodwill and other intangibles includes $ 25.3 million, $ 29.2 million, $30.4 million, $33.5 million, $38.1 million, $43.8 million and $49.8 million, respectively,
of goodwill and other intangibles included in investments in other ventures, under equity method. For 2010 and 2009, goodwill and other intangibles includes $57.0 million and $61.4 million, respectively, of goodwill and
other intangibles included in assets of discontinued operations held for sale.
2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993
Book value per common share $29.61 $21.37 $16.14 $11.91 $10.17 $ 9.43 $8.89 $7.74 $6.33 $3.93 $2.56
Adjustment for goodwill and other intangibles - - (0.14) (0.17) (0.11) (0.23) - - - - -
Tangible book value per common share 29.61 21.37 16.00 11.74 10.06 9.20 8.89 7.74 6.33 3.93 2.56
Adjustment for accumulated dividends 3.72 3.12 2.55 2.05 1.53 1.05 0.65 0.33 0.05 - -
Tangible book value per common share plus
accumulated dividends $33.33 $24.49 $18.55 $13.79 $11.59 $10.25 $9.54 $8.07 $6.38 $3.93 $2.56
14
Bermuda | 98-014-1974 |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) |
Title of each class | Name of each exchange on which registered |
Common Shares, Par Value $1.00 per share | New York Stock Exchange, Inc. |
Series C 6.08% Preference Shares, Par Value $1.00 per share | New York Stock Exchange, Inc. |
Series E 5.375% Preference Shares, Par Value $1.00 per share | New York Stock Exchange, Inc. |
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• | we are exposed to significant losses from catastrophic events and other exposures that we cover, which we expect to cause significant volatility in our financial results from time to time; |
• | the inherent uncertainties in our reserving process, particularly in regards to large catastrophic events and longer tail casualty lines, the uncertainties of which we expect to increase as our product and geographical diversity increases; |
• | the frequency and severity of catastrophic and other events which we cover could exceed our estimates and cause losses greater than we expect; |
• | the risk of the lowering or loss of any of the financial strength, claims-paying or enterprise-wide risk management ratings of RenaissanceRe Holdings Ltd. (“RenaissanceRe”) or of one or more of our subsidiaries or joint ventures or changes in the policies or practices of the rating agencies; |
• | risks associated with appropriately modeling, pricing for, and contractually addressing new or potential factors in loss emergence, such as the trend toward potentially significant global warming and other aspects of climate change which have the potential to adversely affect our business, any of which could cause us to underestimate our exposures and potentially adversely impact our financial results; |
• | the risk we might be bound to policyholder obligations beyond our underwriting intent, or unable to enforce our own intent in respect of retrocessional arrangements, including in each case due to emerging claims and coverage issues; |
• | risks due to our increasing reliance on a small and decreasing number of reinsurance brokers and other distribution services for the preponderance of our revenue; |
• | risks relating to operating in a highly competitive environment, which we expect to continue to increase over time from new competition from traditional and non-traditional participants, particularly as capital markets products provide alternatives and replacements for more traditional reinsurance and insurance products, as new entrants or existing competitors attempt to replicate our business model, and as a result of consolidation in the (re)insurance industry; |
• | the risk that our customers may fail to make premium payments due to us, as well as the risk of failures of our reinsurers, brokers or other counterparties to honor their obligations to us, including in regards to large catastrophic events, and also including their obligations to make third party payments for which we might be liable; |
• | risks relating to deteriorating market conditions, including the risks of decreasing revenues, margins, capital efficiency and returns; |
• | a contention by the Internal Revenue Service that Renaissance Reinsurance Ltd. (“Renaissance Reinsurance”), or any of our other Bermuda subsidiaries, is subject to U.S. taxation; |
• | other risks relating to potential adverse tax developments, including potential changes to the taxation of inter-company or related party transactions, or potential changes to the tax treatment of investors in RenaissanceRe or our joint ventures or other entities we manage; |
• | risks relating to adverse legislative developments that could reduce the size of the private markets we serve, or impede their future growth, including proposals to shift United States (“U.S.”) catastrophe risks to federal mechanisms; similar proposals at the state level in the U.S., including the risk of legislation in Florida to expand the reinsurance coverage offered by the Florida Hurricane Catastrophe Fund (“FHCF”) and the insurance policies written by Citizens Property Insurance Corporation (“Citizens”), or failing to implement reforms to reduce such coverage; risks of adverse legislation in relation to U.S. flood insurance or the failure to implement reform legislation; and the risk that new legislation will be enacted in the international markets we serve which might reduce market opportunities in the private sector, weaken our customers or otherwise adversely impact us; |
• | risks associated with our investment portfolio, including the risk that our investment assets may fail to yield attractive or even positive results; and the risk that investment managers may breach our investment guidelines, or the inability of such guidelines to mitigate investment risks; |
• | risks associated with implementing our business strategies and initiatives, including risks related to strategic transactions, developing or enhancing the operations, controls and other infrastructure necessary in respect of our more recent, new or proposed initiatives, and the risk that we may fail to succeed in our business or financing plans for these initiatives; |
• | risks that certain of our new or potentially expanding business lines could have a significant negative impact on our financial results or cause significant volatility in our results for any particular period; |
• | risks associated with potential for loss of services of any one of our key senior officers, the risk that we fail to attract or retain the executives and employees necessary to manage our business, and difficulties associated with the transition of members of our senior management team for new or expanded roles necessary to execute our strategic and tactical plans; |
• | risks relating to the inability, or delay, in the claims-paying ability of Citizens, FHCF or of private market participants in Florida, particularly following a large windstorm or multiple smaller storms, which we believe would weaken or destabilize the Florida market and give rise to an unpredictable range of impacts which might be adverse to us, perhaps materially so; |
• | risks associated with the management of our operations as our product and geographical diversity increases, including the potential inability to allocate sufficient resources to our strategic and tactical plans or to address additional industry or regulatory developments and requirements; |
• | changes in economic conditions, including interest rate, currency, equity and credit conditions which could affect our investment portfolio or declines in our investment returns for other reasons which could reduce our profitability and hinder our ability to pay claims promptly in accordance with our strategy, which risks we believe are currently enhanced in light of the current macroeconomic uncertainty and the recent period of economic uncertainty, both globally, particularly in respect of Eurozone countries and companies, and in the U.S.; |
• | risks associated with highly subjective judgments, such as valuing our more illiquid assets, and determining the impairments taken on our investments, all of which impact our reported financial position and operating results; |
• | risks associated with our retrocessional reinsurance protection, including the risks that the coverages and protections we seek may become unavailable or only available on unfavorable terms, that the forms of retrocessional protection available in the market on acceptable terms may give rise to more risk in our net portfolio than we find desirable or that we correctly identify, or that we are otherwise unable to cede our own assumed risk to third parties; and the risk that providers of protection do not meet their obligations to us or do not do so on a timely basis; |
• | risks associated with inflation, which could cause loss costs to increase, and impact the performance of our investment portfolio, thereby adversely impacting our financial position or operating results; |
• | operational risks, including system or human failures, which risks could result in our incurring material losses; |
• | risks in connection with our management of capital on behalf of investors in joint ventures or other entities we manage, such as failing to comply with complex laws and regulations relating to the management of such capital or the potential rights of third party investors, which failure could result in our incurring significant liabilities, penalties or other losses; |
• | risks that we may require additional capital in the future, particularly after a catastrophic event or to support potential growth opportunities in our business, which may not be available or may be available only on unfavorable terms; |
• | risks relating to our potential failure to comply with covenants in our debt agreements, which failure could provide our lenders the right to accelerate our debt which would adversely impact us; |
• | the risk of potential challenges to the claim of exemption from insurance regulation of RenaissanceRe and certain of our subsidiaries in certain jurisdictions under certain current laws and the risk of increased global regulation of the insurance and reinsurance industry; |
• | risks relating to the inability of our operating subsidiaries to declare and pay dividends, which could cause us to be unable to pay dividends to our shareholders or to repay our indebtedness; |
• | the risk that there could be regulatory or legislative changes adversely impacting us, as a Bermuda-based company, relative to our competitors, or actions taken by multinational organizations having such an impact; |
• | risks arising out of possible changes in the distribution or placement of risks due to increased consolidation of customers or insurance and reinsurance brokers; |
• | risks relating to changes in regulatory regimes and/or accounting rules, which could result in significant changes to our financial results, including but not limited to, the European Union (“EU”) directive concerning capital adequacy, risk management and regulatory reporting for insurers; |
• | risks associated with the failure to complete the Merger (as defined in “Part I, Item 1. Business, Overview”) with Platinum Underwriters Holdings, Ltd. (“Platinum”), which could adversely impact our ability to realize the anticipated strategic benefits of the Merger; and |
• | risks that follow consummation of the Merger, including that our future financial performance may differ from projections, integration challenges and costs, and that we may require additional capital in the future, which may not be available on satisfactory terms as a result of the Merger. |
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
(in thousands) | |||||||||||||
Catastrophe Reinsurance | $ | 933,969 | $ | 1,120,379 | $ | 1,182,207 | |||||||
Specialty Reinsurance | 346,638 | 259,489 | 209,887 | ||||||||||
Lloyd’s | 269,656 | 226,532 | 159,987 | ||||||||||
Other category (1) | 309 | (988 | ) | (490 | ) | ||||||||
Total gross premiums written | $ | 1,550,572 | $ | 1,605,412 | $ | 1,551,591 | |||||||
2014 | 2013 | 2012 | ||||||||||||||||||||
Year ended December 31, | Gross Premiums Written | Percentage of Gross Premiums Written | Gross Premiums Written | Percentage of Gross Premiums Written | Gross Premiums Written | Percentage of Gross Premiums Written | ||||||||||||||||
(in thousands, except percentages) | ||||||||||||||||||||||
Catastrophe Reinsurance | ||||||||||||||||||||||
U.S. and Caribbean | $ | 573,696 | 37.0 | % | $ | 782,211 | 48.7 | % | $ | 857,740 | 55.3 | % | ||||||||||
Worldwide | 157,674 | 10.2 | % | 99,179 | 6.2 | % | 81,595 | 5.3 | % | |||||||||||||
Worldwide (excluding U.S.) (1) | 123,476 | 8.0 | % | 146,048 | 9.1 | % | 139,265 | 9.0 | % | |||||||||||||
Japan | 31,484 | 2.0 | % | 39,060 | 2.4 | % | 43,238 | 2.8 | % | |||||||||||||
Europe | 25,353 | 1.6 | % | 25,659 | 1.6 | % | 37,113 | 2.4 | % | |||||||||||||
Australia and New Zealand | 20,807 | 1.3 | % | 22,460 | 1.4 | % | 18,578 | 1.2 | % | |||||||||||||
Other | 1,479 | 0.1 | % | 5,762 | 0.4 | % | 4,678 | 0.3 | % | |||||||||||||
Total Catastrophe Reinsurance | 933,969 | 60.2 | % | 1,120,379 | 69.8 | % | 1,182,207 | 76.3 | % | |||||||||||||
Specialty Reinsurance | ||||||||||||||||||||||
U.S. and Caribbean | 169,045 | 10.9 | % | 91,203 | 5.7 | % | 69,070 | 4.4 | % | |||||||||||||
Worldwide | 161,329 | 10.4 | % | 151,879 | 9.5 | % | 96,081 | 6.2 | % | |||||||||||||
Australia and New Zealand | 6,898 | 0.5 | % | 12,068 | 0.7 | % | 28,307 | 1.8 | % | |||||||||||||
Worldwide (excluding U.S.) (1) | 7,506 | 0.5 | % | 1,661 | 0.1 | % | — | — | % | |||||||||||||
Europe | 460 | — | % | 2,612 | 0.2 | % | 16,429 | 1.1 | % | |||||||||||||
Other | 1,400 | 0.1 | % | 66 | — | % | — | — | % | |||||||||||||
Total Specialty Reinsurance | 346,638 | 22.4 | % | 259,489 | 16.2 | % | 209,887 | 13.5 | % | |||||||||||||
Lloyd’s | ||||||||||||||||||||||
U.S. and Caribbean | 120,066 | 7.7 | % | 88,535 | 5.5 | % | 57,332 | 3.7 | % | |||||||||||||
Worldwide | 118,190 | 7.6 | % | 104,249 | 6.5 | % | 75,132 | 4.8 | % | |||||||||||||
Worldwide (excluding U.S.) (1) | 13,655 | 0.9 | % | 8,071 | 0.5 | % | 6,064 | 0.4 | % | |||||||||||||
Europe | 7,609 | 0.5 | % | 14,763 | 0.9 | % | 14,456 | 0.9 | % | |||||||||||||
Australia and New Zealand | 2,907 | 0.2 | % | 2,948 | 0.2 | % | 2,152 | 0.1 | % | |||||||||||||
Other | 7,229 | 0.5 | % | 7,966 | 0.5 | % | 4,851 | 0.3 | % | |||||||||||||
Total Lloyd’s | 269,656 | 17.4 | % | 226,532 | 14.1 | % | 159,987 | 10.2 | % | |||||||||||||
Other category (2) | 309 | — | % | (988 | ) | (0.1 | )% | (490 | ) | — | % | |||||||||||
Total gross premiums written | $ | 1,550,572 | 100.0 | % | $ | 1,605,412 | 100.0 | % | $ | 1,551,591 | 100.0 | % | ||||||||||
(1) | The category “Worldwide (excluding U.S.)” consists of contracts that cover more than one geographic region (other than the U.S.). The exposure in this category for gross premiums written to date is predominantly from Europe and Japan. |
(2) | The Other category consists of contracts that are primarily exposed to U.S. risks and includes inter-segment gross premiums written of $0.3 million for the year ended December 31, 2014 (2013 - $(1.0) million, 2012 - $(0.5) million). |
• | simulate a range of potential outcomes that adequately represents the risk to an individual contract; |
• | analyze the incremental impact of an individual reinsurance contract on our overall portfolio; |
• | better assess the underlying exposures associated with assumed retrocessional business; |
• | price contracts within a short time frame; |
• | capture various classes of risk, including catastrophe and other insurance risks; |
• | assess risk across multiple entities (including our various joint ventures) and across different components of our capital structure; and |
• | provide consistent pricing information. |
• | the reputation of the proposed cedant and the likelihood of establishing a long-term relationship with the cedant; |
• | the geographic area in which the cedant does business and its market share; |
• | historical loss data for the cedant and, where available, for the industry as a whole in the relevant regions and lines of business, in order to compare the cedant’s historical catastrophe loss experience to industry averages; |
• | the cedant’s pricing strategies; and |
• | the perceived financial strength of the cedant and factors such as the cedant’s historical record of making premium payments in full and on a timely basis. |
(1) | Assumed Risk. We define assumed risk as activities where we deliberately take risk against the Company’s capital base, including underwriting risks and other quantifiable risks such as credit risk and interest rate risk as they relate to investments, ceded reinsurance credit risk and strategic investment risk, each of which can be analyzed in substantial part through quantitative tools and techniques. Of these, we believe underwriting risk to be the most material to us. In order to understand, monitor, quantify and proactively assess underwriting risk, we seek to develop and deploy appropriate tools to, among other things, estimate the comparable expected returns on potential business opportunities, and estimate the impact that such incremental business could have on our overall risk profile. We use the tools and methods described above in “Underwriting” to seek to achieve these objectives. Embedded within our consideration of assumed risk is our management of the Company’s aggregate, consolidated risk profile. In part through the utilization of REMS© and our other systems and procedures, we seek to analyze our in-force aggregate assumed risk portfolio on a daily basis. We believe this capability helps us to manage our aggregate exposures, as well as to rigorously analyze individual proposed transactions and evaluate them in the context of our in-force portfolio. This aggregation process captures line of business, segment and corporate risk profiles, calculates internal and external capital tests and explicitly models ceded reinsurance. Generally, additional data is added quarterly to our aggregate risk framework to reflect updated or new information or estimates relating to matters such as interest rate risk, credit risk, capital adequacy and liquidity. This information is used in day-to-day decision making for underwriting, investments and operations and is also reviewed quarterly from both a unit level and in respect of our consolidated financial position. We also regularly assess, monitor and review our regulatory risk capital and related constraints. |
(2) | Business Environment Risk. We define this as the risk of changes in the business, political or regulatory environment that could negatively impact our short term or long-term financial results or the markets in which we operate. Accordingly, these risks are predominately extrinsic to the Company and in general, our ability to alter or eliminate these risks is limited. Rather, our efforts focus on monitoring developments, assessing potential impacts of any such changes, and investing in cost effective means to attempt to mitigate the consequences of and ensure compliance with any new requirements applicable to us. |
(3) | Operational Risk. We are subject to a number of additional risks arising out of operational, regulatory, and other matters. We define operational risk to include the risk that we fail to create, manage, control or mitigate the people, processes, structures or functions required to execute our strategic and tactical plans and assemble an optimized portfolio of assumed risk, and to adjust to |
(4) | Reserve Risk. We define reserve risk as the risks related to our reserve for net claims and claim expenses, including the amount, both absolute and relative, of our outstanding reserve for net claims and claim expenses, and the impact of economic, social, legal and regulatory matters. Our reserve for net claims and claim expenses is subject to significant uncertainty as a result of these factors, and others. Although reserve risk can increase in both the absolute, and relative to its overall consideration in our ERM framework, and will increase after the Merger in light of the reserves we will assume, we attempt to employ robust resources, procedures and technology to identify, understand, quantify and manage these risks. Our reserve for net claims and claim expenses will continue to be subject to significant uncertainty and has the potential to develop adversely in future periods. |
At December 31, 2014 | Case Reserves | Additional Case Reserves | IBNR | Total | |||||||||||||
(in thousands) | |||||||||||||||||
Catastrophe Reinsurance | $ | 253,431 | $ | 150,825 | $ | 138,411 | $ | 542,667 | |||||||||
Specialty Reinsurance | 106,293 | 79,457 | 357,960 | 543,710 | |||||||||||||
Lloyd’s | 65,295 | 14,168 | 204,984 | 284,447 | |||||||||||||
Other | 5,212 | 2,354 | 34,120 | 41,686 | |||||||||||||
Total | $ | 430,231 | $ | 246,804 | $ | 735,475 | $ | 1,412,510 | |||||||||
At December 31, 2013 | |||||||||||||||||
(in thousands) | |||||||||||||||||
Catastrophe Reinsurance | $ | 430,166 | $ | 177,518 | $ | 173,303 | $ | 780,987 | |||||||||
Specialty Reinsurance | 113,188 | 81,251 | 311,829 | 506,268 | |||||||||||||
Lloyd’s | 45,355 | 14,265 | 158,747 | 218,367 | |||||||||||||
Other | 14,915 | 2,324 | 40,869 | 58,108 | |||||||||||||
Total | $ | 603,624 | $ | 275,358 | $ | 684,748 | $ | 1,563,730 | |||||||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
(in thousands) | |||||||||||||
Net reserves as of January 1 | $ | 1,462,705 | $ | 1,686,865 | $ | 1,588,325 | |||||||
Net incurred related to: | |||||||||||||
Current year | 341,745 | 315,241 | 483,180 | ||||||||||
Prior years | (143,798 | ) | (143,954 | ) | (157,969 | ) | |||||||
Total net incurred | 197,947 | 171,287 | 325,211 | ||||||||||
Net paid related to: | |||||||||||||
Current year | 39,830 | 32,212 | 84,056 | ||||||||||
Prior years | 275,006 | 363,235 | 142,615 | ||||||||||
Total net paid | 314,836 | 395,447 | 226,671 | ||||||||||
Total net reserves as of December 31 | 1,345,816 | 1,462,705 | 1,686,865 | ||||||||||
Reinsurance recoverable as of December 31 | 66,694 | 101,025 | 192,512 | ||||||||||
Total gross reserves as of December 31 | $ | 1,412,510 | $ | 1,563,730 | $ | 1,879,377 | |||||||
Year ended December 31, | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | |||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||||||
Gross reserve for claims and claim expenses | $ | 1,295.0 | $ | 2,381.4 | $ | 1,811.0 | $ | 1,717.2 | $ | 1,758.8 | $ | 1,344.4 | $ | 1,257.8 | $ | 1,992.3 | $ | 1,879.4 | $ | 1,563.7 | $ | 1,412.5 | ||||||||||||||||||||||||
Reserve for claims and claim expenses, net of reinsurance recoverable | $ | 1,099.2 | $ | 1,742.2 | $ | 1,591.3 | $ | 1,609.5 | $ | 1,565.2 | $ | 1,260.3 | $ | 1,156.1 | $ | 1,588.3 | $ | 1,686.9 | $ | 1,462.7 | $ | 1,345.8 | ||||||||||||||||||||||||
1 Year Later | 878.6 | 1,610.7 | 1,368.3 | 1,412.6 | 1,299.0 | 958.2 | 1,024.1 | 1,430.3 | 1,543.0 | 1,318.9 | — | |||||||||||||||||||||||||||||||||||
2 Years Later | 844.0 | 1,449.1 | 1,225.9 | 1,199.0 | 1,045.1 | 857.6 | 895.8 | 1,345.5 | 1,419.2 | — | — | |||||||||||||||||||||||||||||||||||
3 Years Later | 749.1 | 1,333.7 | 1,092.2 | 997.8 | 961.4 | 770.8 | 849.5 | 1,274.8 | — | — | — | |||||||||||||||||||||||||||||||||||
4 Years Later | 717.2 | 1,231.6 | 911.1 | 923.0 | 888.7 | 727.4 | 838.4 | — | — | — | — | |||||||||||||||||||||||||||||||||||
5 Years Later | 683.7 | 1,077.8 | 847.2 | 878.5 | 849.2 | 697.8 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
6 Years Later | 628.9 | 1,022.7 | 823.5 | 858.6 | 824.6 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
7 Years Later | 609.2 | 1,002.8 | 819.1 | 848.0 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
8 Years Later | 604.5 | 1,009.4 | 811.4 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
9 Years Later | 612.4 | 1,004.7 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
10 Years Later | 611.4 | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Cumulative redundancy on net reserves | $ | 487.8 | $ | 737.5 | $ | 779.9 | $ | 761.5 | $ | 740.6 | $ | 562.5 | $ | 317.7 | $ | 313.5 | $ | 267.7 | $ | 143.8 | $ | — | ||||||||||||||||||||||||
Cumulative Net Paid Losses | ||||||||||||||||||||||||||||||||||||||||||||||
1 Year Later | 302.8 | 354.8 | 247.6 | 337.1 | 191.5 | 182.8 | 129.7 | 142.6 | 363.2 | 275.0 | — | |||||||||||||||||||||||||||||||||||
2 Years Later | 370.8 | 548.4 | 435.8 | 469.5 | 369.1 | 301.5 | 301.5 | 484.5 | 605.5 | — | — | |||||||||||||||||||||||||||||||||||
3 Years Later | 395.7 | 712.6 | 529.5 | 553.0 | 471.6 | 420.6 | 379.3 | 667.9 | — | — | — | |||||||||||||||||||||||||||||||||||
4 Years Later | 446.8 | 782.9 | 569.4 | 605.7 | 585.8 | 456.2 | 437.6 | — | — | — | — | |||||||||||||||||||||||||||||||||||
5 Years Later | 472.7 | 812.0 | 594.2 | 690.4 | 615.3 | 487.8 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
6 Years Later | 482.7 | 833.1 | 656.1 | 703.2 | 641.2 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
7 Years Later | 492.2 | 879.1 | 668.7 | 724.7 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
8 Years Later | 527.6 | 890.9 | 676.5 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
9 Years Later | 533.9 | 893.2 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
10 Years Later | 532.3 | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Gross reserve for claims and claim expenses | $ | 1,295.0 | $ | 2,381.4 | $ | 1,811.0 | $ | 1,717.2 | $ | 1,758.8 | $ | 1,344.4 | $ | 1,257.8 | $ | 1,992.3 | $ | 1,879.4 | $ | 1,563.7 | $ | 1,412.5 | ||||||||||||||||||||||||
Reinsurance recoverable on unpaid losses | 195.8 | 639.2 | 219.7 | 107.7 | 193.6 | 84.1 | 101.7 | 404.0 | 192.5 | 101.0 | 66.7 | |||||||||||||||||||||||||||||||||||
Net reserve for claims and claim expenses | $ | 1,099.2 | $ | 1,742.2 | $ | 1,591.3 | $ | 1,609.5 | $ | 1,565.2 | $ | 1,260.3 | $ | 1,156.1 | $ | 1,588.3 | $ | 1,686.9 | $ | 1,462.7 | $ | 1,345.8 | ||||||||||||||||||||||||
Gross liability re-estimated | $ | 811.4 | $ | 1,618.0 | $ | 1,020.2 | $ | 917.0 | $ | 966.2 | $ | 745.8 | $ | 922.5 | $ | 1,675.0 | $ | 1,587.6 | $ | 1,406.1 | $ | — | ||||||||||||||||||||||||
Reinsurance recoverable on unpaid losses re-estimated | 200.0 | 613.3 | 208.8 | 69.0 | 141.6 | 48.0 | 84.2 | 400.2 | 168.4 | 87.3 | — | |||||||||||||||||||||||||||||||||||
Net liability re-estimated | $ | 611.4 | $ | 1,004.7 | $ | 811.4 | $ | 848.0 | $ | 824.6 | $ | 697.8 | $ | 838.3 | $ | 1,274.8 | $ | 1,419.2 | $ | 1,318.8 | $ | — | ||||||||||||||||||||||||
Cumulative redundancy on gross reserves | $ | 483.6 | $ | 763.4 | $ | 790.8 | $ | 800.2 | $ | 792.6 | $ | 598.6 | $ | 335.3 | $ | 317.3 | $ | 291.8 | $ | 157.6 | $ | — | ||||||||||||||||||||||||
At December 31, | 2014 | 2013 | |||||||||||||
(in thousands, except percentages) | |||||||||||||||
U.S. treasuries | $ | 1,671,471 | 24.8 | % | $ | 1,352,413 | 19.8 | % | |||||||
Agencies | 96,208 | 1.4 | % | 186,050 | 2.7 | % | |||||||||
Non-U.S. government (Sovereign debt) | 280,651 | 4.2 | % | 334,580 | 4.9 | % | |||||||||
Non-U.S. government-backed corporate | 146,467 | 2.2 | % | 237,479 | 3.5 | % | |||||||||
Corporate | 1,610,442 | 23.9 | % | 1,803,415 | 26.4 | % | |||||||||
Agency mortgage-backed | 316,620 | 4.7 | % | 341,908 | 5.0 | % | |||||||||
Non-agency mortgage-backed | 253,050 | 3.7 | % | 257,938 | 3.8 | % | |||||||||
Commercial mortgage-backed | 381,051 | 5.7 | % | 314,236 | 4.6 | % | |||||||||
Asset-backed | 27,610 | 0.4 | % | 15,258 | 0.2 | % | |||||||||
Total fixed maturity investments, at fair value | 4,783,570 | 71.0 | % | 4,843,277 | 70.9 | % | |||||||||
Short term investments, at fair value | 1,013,222 | 15.0 | % | 1,044,779 | 15.3 | % | |||||||||
Equity investments trading, at fair value | 322,098 | 4.8 | % | 254,776 | 3.7 | % | |||||||||
Other investments, at fair value | 504,147 | 7.5 | % | 573,264 | 8.5 | % | |||||||||
Total managed investment portfolio | 6,623,037 | 98.3 | % | 6,716,096 | 98.4 | % | |||||||||
Investments in other ventures, under equity method | 120,713 | 1.7 | % | 105,616 | 1.6 | % | |||||||||
Total investments | $ | 6,743,750 | 100.0 | % | $ | 6,821,712 | 100.0 | % | |||||||
Catastrophe Reinsurance | Specialty Reinsurance | ||||||||||||||||||
Year ended December 31, | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 | |||||||||||||
AON Benfield | 57.2 | % | 50.6 | % | 54.0 | % | 53.2 | % | 40.0 | % | 37.4 | % | |||||||
Marsh & McLennan Companies | 20.5 | % | 21.5 | % | 20.3 | % | 23.1 | % | 27.5 | % | 30.4 | % | |||||||
Willis Group | 11.2 | % | 14.9 | % | 8.6 | % | 14.0 | % | 25.4 | % | 26.6 | % | |||||||
Total of largest brokers | 88.9 | % | 87.0 | % | 82.9 | % | 90.3 | % | 92.9 | % | 94.4 | % | |||||||
All others | 11.1 | % | 13.0 | % | 17.1 | % | 9.7 | % | 7.1 | % | 5.6 | % | |||||||
Total percentage of segment gross premiums written | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||
Year ended December 31, 2014 | Catastrophe Reinsurance | Specialty Reinsurance | Lloyd’s | |||||||
Number of brokers | 13 | 15 | 49 | |||||||
Program submissions | 2,493 | 494 | 3,777 | |||||||
Programs authorized | 795 | 211 | 962 | |||||||
Programs authorized as a percentage of program submissions | 32 | % | 43 | % | 25 | % | ||||
• | Each Class 3A, Class 3B and Class 4 general business insurer is required to submit annual statutory financial statements as part of its statutory financial return no later than four months after the insurer’s financial year end (unless specifically extended). The annual statutory financial statements give detailed information and analyses regarding premiums, claims, reinsurance, reserves and investments. The statutory financial return includes, among other items: a report of the approved independent auditor on the statutory financial statements; a declaration of statutory ratios; a solvency certificate; the statutory financial statements themselves; the opinion of the approved loss reserve specialist; and details concerning ceded reinsurance. |
• | In addition to preparing statutory financial statements, all Class 3A, Class 3B and Class 4 insurers must prepare financial statements in respect of their insurance business in accordance with GAAP, International Financial Reporting Standards (“IFRS”) or other acceptable accounting standards. |
• | A general business insurer’s statutory assets must exceed its statutory liabilities by an amount, equal to or greater than the prescribed minimum solvency margin, which varies with the category of its registration and net premiums written and loss reserves posted (“Minimum Solvency Margin”). The Minimum Solvency Margin that must be maintained by a Class 4 insurer is the greater of (i) $100.0 million, or (ii) 50% of net premiums written (with a credit for reinsurance ceded not exceeding 25% of gross premiums) or (iii) 15% of net aggregate loss and loss expense provisions and other insurance reserves. The Minimum Solvency Margin for a Class 3A or Class 3B insurer is the greater of (i) $1.0 million, or (ii) 20% of the first $6.0 million of net premiums written; if in excess of $6.0 million, the figure is $1.2 million plus 15% of net premiums written in excess of $6.0 million, or (iii) 15% of net aggregate loss and loss expense provisions and other insurance reserves. |
• | In addition, each Class 3A, Class 3B and Class 4 insurer must maintain its capital at a level equal to its enhanced capital requirement (“ECR”) which is established by reference to the Bermuda Solvency Capital Requirement (“BSCR”) model. Alternatively, under the Insurance Act, insurers may, subject to the terms of the Insurance Act and to the BMA’s oversight, elect to utilize an approved internal capital model to determine regulatory capital. In either case, the ECR shall at all times equal or exceed the respective Class 3A, Class 3B and Class 4 insurer’s Minimum Solvency Margin and may be adjusted in circumstances where the BMA concludes that the insurer’s risk profile deviates significantly from the assumptions underlying its ECR or the insurer’s assessment of its risk management policies and practices used to calculate the ECR applicable to it. While not specifically referred to in the Insurance Act, the BMA has also established a target capital level (“TCL”) for each Class 3A, Class 3B and Class 4 insurer equal to 120% of the respective ECR. While a Class 3A, Class 3B and Class 4 insurer is not currently required to maintain its statutory capital and surplus at this level, the TCL serves as an early warning tool for the BMA and failure to maintain statutory capital at least equal to the TCL will likely result in increased BMA regulatory oversight. |
• | An insurer engaged in general business is required to maintain the value of its relevant assets at not less than 75% of the amount of its relevant liabilities (“Minimum Liquidity Ratio”). |
• | Class 3A, Class 3B and Class 4 insurers are prohibited from declaring or paying any dividends if in breach of the required Minimum Solvency Margin or Minimum Liquidity Ratio (the “Relevant Margins”) or if the declaration or payment of such dividend would cause the insurer to fail to meet the Relevant Margins. Further, Class 3B and Class 4 insurers are prohibited from declaring or paying in any financial year dividends of more than 25% of its total statutory capital and surplus (as shown on its previous financial year’s statutory balance sheet) unless it files (at least seven days before payment of such dividends) with the BMA an affidavit stating that it will continue to meet its Relevant Margins. Class 3A, Class 3B and Class 4 insurers must obtain the BMA’s prior approval for a reduction by 15% or more of the total statutory capital as set forth in its previous year’s financial statements. These restrictions on declaring or paying dividends and distributions under the Insurance Act are in addition to the solvency requirements under the Companies Act which apply to all Bermuda companies. |
• | Unlike other (re)insurers, SPIs are fully funded to meet their (re)insurance obligations and are not exposed to insolvency, therefore the application and supervision processes are streamlined to facilitate the transparent structure. Further, SPIs are currently not required to file annual loss reserve specialist opinions and the BMA has the discretion to modify such insurer’s accounting requirements under the Insurance Act. Like other (re)insurers, the principal representative of an SPI has a duty to inform the BMA in relation to solvency matters, where applicable. In December 2013, the BMA issued a notice in which it proposed to amend the statutory reporting requirements for SPIs. Under this notice, the BMA will likely require SPIs to submit additional schedules together with the existing statutory financial return. These enhanced filing requirements have not yet been finalized by the BMA. |
• | The BMA maintains supervision over the controllers (as defined herein) of all Bermuda registered insurers. Currently, the Insurance Act states that no person shall become a controller of any description of a registered insurer unless the BMA has been served notice in writing stating that the person intends to become such a controller. A controller includes the managing director and chief executive of the registered insurer or its parent company; a 10%, 20%, 33% or 50% shareholder controller; and any person in accordance with whose directions or instructions the directors of the registered insurer or of its parent company are accustomed to act. In addition, all Bermuda insurers are also required to give the BMA written notice of the fact that a person has become, or ceased to be, a controller or officer of the registered insurer within 45 days of becoming aware of such fact. An officer in relation to a registered insurer includes a director, secretary, chief executive or senior executive by whatever name called. |
• | All registered insurers are required to give the BMA 14 days’ notice of certain matters that are likely to be of material significance (each a “Material Change”) to the BMA in carrying out its supervisory function under the Insurance Act. |
• | All Bermuda insurers are required to comply with the BMA’s Insurance Code of Conduct which establishes duties, requirements and standards to be complied with to ensure each insurer implements sound corporate governance, risk management and internal controls. Failure to comply with these requirements will be a factor taken into account by the BMA in determining whether an insurer is conducting its business in a sound and prudent manner under the Insurance Act. |
• | Pursuant to the Insurance Act, the BMA acts as the group supervisor of the RenaissanceRe group of companies (the “RenaissanceRe Group”) and it has designated Renaissance Reinsurance to be the “designated insurer” in respect of the RenaissanceRe Group. The designated insurer is required to ensure that the RenaissanceRe Group complies with the provisions of the Insurance Act pertaining to groups and all related group solvency and group supervision rules (together, the “Group Rules”). Under the Group Rules, the RenaissanceRe Group is required to annually prepare and submit to the BMA group GAAP financial statements, group statutory financial statements, a group statutory financial return and a group capital and solvency return. Further, our Board of Directors has established solvency self assessment procedures for the RenaissanceRe Group that factor in all foreseeable material risks; Renaissance Reinsurance must ensure that the RenaissanceRe Group’s assets exceed the amount of the RenaissanceRe Group’s liabilities by the aggregate minimum margin of solvency of each qualifying member; and our Board of Directors has established and effectively implements corporate governance policies and procedures designed to ensure they support the overall organizational strategy of the RenaissanceRe Group. In addition, the RenaissanceRe Group is required to prepare and submit a quarterly financial return comprising unaudited consolidated group financial statements, a schedule of intra-group transactions and a schedule of risk concentrations. |
• | The BMA has certain powers of investigation and intervention relating to insurers and their holding companies, subsidiaries and other affiliates, which it may exercise in the interest of such insurer’s policyholders or if there is any risk of insolvency or of a breach of the Insurance Act or the insurer’s license conditions. |
• | Under the provisions of the Insurance Act, the BMA may, from time to time, conduct “on site” visits at the offices of insurers it regulates. Over the past several years, the BMA has conducted several “on site” reviews in respect of our Bermuda-domiciled operating insurers. No remedial actions were communicated to us as a result of any of the on-site reviews to date. |
• | The BMA may cancel an insurer’s registration on certain grounds specified in the Insurance Act. |
Accident year | Year of occurrence of a loss. Claim payments and reserves for claims and claim expenses are allocated to the year in which the loss occurred for losses occurring contracts and in the year the loss was reported for claims made contracts. |
Acquisition expenses | The aggregate expenses incurred by a company for acquiring new business, including commissions, underwriting expenses, premium taxes and administrative expenses. |
Additional case reserves | Additional case reserves represent management’s estimate of reserves for claims and claim expenses that are allocated to specific contracts, less paid and reported losses by the client. |
Attachment point | The dollar amount of loss (per occurrence or in the aggregate, as the case may be) above which excess of loss reinsurance becomes operative. |
Bordereau | A report providing premium or loss data with respect to identified specific risks. This report is periodically furnished to a reinsurer by the ceding insurers or reinsurers. |
Bound | A (re)insurance policy is considered bound, and the (re)insurer responsible for the risks of the policy, when both parties agree to the terms and conditions set forth in the policy. |
Broker | An intermediary who negotiates contracts of insurance or reinsurance, receiving a commission for placement and other services rendered, between (1) a policy holder and a primary insurer, on behalf of the insured party, (2) a primary insurer and reinsurer, on behalf of the primary insurer, or (3) a reinsurer and a retrocessionaire, on behalf of the reinsurer. |
Capacity | The percentage of surplus, or the dollar amount of exposure, that an insurer or reinsurer is willing or able to place at risk. Capacity may apply to a single risk, a program, a line of business or an entire book of business. Capacity may be constrained by legal restrictions, corporate restrictions or indirect restrictions. |
Case reserves | Loss reserves, established with respect to specific, individual reported claims. |
Casualty insurance or reinsurance | Insurance or reinsurance that is primarily concerned with the losses caused by injuries to third persons and their property (in other words, persons other than the policyholder) and the legal liability imposed on the insured resulting therefrom. Also referred to as liability insurance. |
Catastrophe | A severe loss, typically involving multiple claimants. Common perils include earthquakes, hurricanes, hailstorms, severe winter weather, floods, fires, tornadoes, explosions and other natural or man-made disasters. Catastrophe losses may also arise from acts of war, acts of terrorism and political instability. |
Catastrophe excess of loss reinsurance | A form of excess of loss reinsurance that, subject to a specified limit, indemnifies the ceding company for the amount of loss in excess of a specified retention with respect to an accumulation of losses resulting from a “catastrophe.” |
Catastrophe-linked securities; cat-linked securities | Cat-linked securities are generally privately placed fixed income securities where all or a portion of the repayment of the principal is linked to catastrophic events. This includes securities where the repayment is linked to the occurrence and/or size of, for example, one or more hurricanes or earthquakes, or insured industry losses associated with these catastrophic events. |
Cede; cedant; ceding company | When a party reinsures its liability with another, it “cedes” business and is referred to as the “cedant” or “ceding company.” |
Claim | Request by an insured or reinsured for indemnification by an insurance company or a reinsurance company for losses incurred from an insured peril or event. |
Claims made contracts | Contracts that cover claims for losses occurring during a specified period that are reported during the term of the contract. |
Claims and claim expense ratio, net | The ratio of net claims and claim expenses to net premiums earned determined in accordance with either statutory accounting principles or GAAP. |
Claim reserves | Liabilities established by insurers and reinsurers to reflect the estimated costs of claim payments and the related expenses that the insurer or reinsurer will ultimately be required to pay in respect of insurance or reinsurance policies it has issued. Claims reserves consist of case reserves, established with respect to individual reported claims, additional case reserves and “IBNR” reserves. For reinsurers, loss expense reserves are generally not significant because substantially all of the loss expenses associated with particular claims are incurred by the primary insurer and reported to reinsurers as losses. |
Combined ratio | The combined ratio is the sum of the net claims and claim expense ratio and the underwriting expense ratio. A combined ratio below 100% generally indicates profitable underwriting prior to the consideration of investment income. A combined ratio over 100% generally indicates unprofitable underwriting prior to the consideration of investment income. |
Decadal | Refers to events occurring over a 10-year period, such as an oscillation whose period is roughly 10 years. |
Delegated authority | A contractual arrangement between an insurer or reinsurer and an agent whereby the agent is authorized to bind insurance or reinsurance on behalf of the insurer or reinsurer. The authority is normally limited to a particular class or classes of business and a particular territory. The exercise of the authority to bind insurance or reinsurance is normally subject to underwriting guidelines and other restrictions such as maximum premium income. Under the delegated authority the agent is responsible for the issuing of policy documentation, the collection of premium and may also be responsible for the settlement of claims. |
Excess and surplus lines reinsurance | Any type of coverage that cannot be placed with an insurer admitted to do business in a certain jurisdiction. Risks placed in excess and surplus lines markets are often substandard in respect to adverse loss experience, unusual, or unable to be placed in conventional markets due to a shortage of capacity. |
Excess of loss | Reinsurance or insurance that indemnifies the reinsured or insured against all or a specified portion of losses on underlying insurance policies in excess of a specified amount, which is called a “level” or “retention.” Also known as non-proportional reinsurance. Excess of loss reinsurance is written in layers. A reinsurer or group of reinsurers accepts a layer of coverage up to a specified amount. The total coverage purchased by the cedant is referred to as a “program” and will typically be placed with predetermined reinsurers in pre-negotiated layers. Any liability exceeding the outer limit of the program reverts to the ceding company, which also bears the credit risk of a reinsurer’s insolvency. |
Exclusions | Those risks, perils, or classes of insurance with respect to which the reinsurer will not pay loss or provide reinsurance, notwithstanding the other terms and conditions of reinsurance. |
Expense override | An amount paid to a ceding company in addition to the acquisition cost to compensate for overhead expenses. |
Frequency | The number of claims occurring during a given coverage period. |
Funds at Lloyd’s | Funds of an approved form that are lodged and held in trust at Lloyd’s as security for a member’s underwriting activities. They comprise the members’ deposit, personal reserve fund and special reserve fund and may be drawn down in the event that the member’s syndicate level premium trust funds are insufficient to cover its liabilities. The amount of the deposit is related to the member’s premium income limit and also the nature of the underwriting account. |
Generally Accepted Accounting Principles in the United States (“GAAP”) | Accounting principles as set forth in opinions of the Accounting Principles Board of the American Institute of Certified Public Accountants and/or statements of the Financial Accounting Standards Board (“FASB”) and/or their respective successors and which are applicable in the circumstances as of the date in question. |
Gross premiums written | Total premiums for insurance written and assumed reinsurance during a given period. |
Incurred but not reported (“IBNR”) | Reserves for estimated losses that have been incurred by insureds and reinsureds but not yet reported to the insurer or reinsurer, including unknown future developments on losses that are known to the insurer or reinsurer. |
Insurance-linked securities | Financial instruments whose values are driven by (re)insurance loss events. For the Company, insurance-linked securities are generally linked to property losses due to natural catastrophes. |
International Financial Reporting Standards (“IFRS”) | Accounting principles, standards and interpretations as set forth in opinions of the International Accounting Standards Board which are applicable in the circumstances as of the date in question. |
Layer | The interval between the retention or attachment point and the maximum limit of indemnity for which a reinsurer is responsible. |
Line | The amount of excess of loss reinsurance protection provided to an insurer or another reinsurer, often referred to as limit. |
Line of business | The general classification of insurance written by insurers and reinsurers, e.g., fire, allied lines, homeowners and surety, among others. |
Lloyd’s | Depending on the context, this term may refer to (a) the society of individual and corporate underwriting members that insure and reinsure risks as members of one or more syndicates (i.e., Lloyd’s is not an insurance company); (b) the underwriting room in the Lloyd’s building in which managing agents underwrite insurance and reinsurance on behalf of their syndicate members (in this sense Lloyd’s should be understood as a market place); or (c) the Corporation of Lloyd’s which regulates and provides support services to the Lloyd’s market. |
Loss; losses | An occurrence that is the basis for submission and/or payment of a claim. Whether losses are covered, limited or excluded from coverage is dependent on the terms of the policy. |
Loss reserve | For an individual loss, an estimate of the amount the insurer expects to pay for the reported claim. For total losses, estimates of expected payments for reported and unreported claims. These may include amounts for claims expenses. |
Managing agent | An underwriting agent which has permission from Lloyd’s to manage a syndicate and carry on underwriting and other functions for a member. |
Net claims and claim expenses | The expenses of settling claims, net of recoveries, including legal and other fees and the portion of general expenses allocated to claim settlement costs (also known as claim adjustment expenses or loss adjustment expenses) plus losses incurred with respect to net claims. |
Net claims and claim expense ratio | Net claims and claim expenses incurred expressed as a percentage of net earned premiums. |
Net premiums earned | The portion of net premiums written during or prior to a given period that was actually recognized as income during such period. |
Net premiums written | Gross premiums written for a given period less premiums ceded to reinsurers and retrocessionaires during such period. |
Non-proportional reinsurance | See “Excess of loss.” |
Perils | This term refers to the causes of possible loss in the property field, such as fire, windstorm, collision, hail, etc. In the casualty field, the term “hazard” is more frequently used. |
Profit commission | A provision found in some reinsurance agreements that provides for profit sharing. Parties agree to a formula for calculating profit, an allowance for the reinsurer’s expenses, and the cedant’s share of such profit after expenses. |
Property insurance or reinsurance | Insurance or reinsurance that provides coverage to a person with an insurable interest in tangible property for that person’s property loss, damage or loss of use. |
Property per risk | Reinsurance on a treaty basis of individual property risks insured by a ceding company. |
Proportional reinsurance | A generic term describing all forms of reinsurance in which the reinsurer shares a proportional part of the original premiums and losses of the reinsured. (Also known as pro rata reinsurance, quota share reinsurance or participating reinsurance.) In proportional reinsurance, the reinsurer generally pays the ceding company a ceding commission. The ceding commission generally is based on the ceding company’s cost of acquiring the business being reinsured (including commissions, premium taxes, assessments and miscellaneous administrative expense) and also may include a profit factor. See also “Quota Share Reinsurance”. |
Quota share reinsurance | A form of proportional reinsurance in which the reinsurer assumes an agreed percentage of each insurance policy being reinsured and shares all premiums and losses according with the reinsured. See also “Proportional Reinsurance”. |
Reinstatement premium | The premium charged for the restoration of the reinsurance limit of a catastrophe contract to its full amount after payment by the reinsurer of losses as a result of an occurrence. |
Reinsurance | An arrangement in which an insurance company, the reinsurer, agrees to indemnify another insurance or reinsurance company, the ceding company, against all or a portion of the insurance or reinsurance risks underwritten by the ceding company under one or more policies. Reinsurance can provide a ceding company with several benefits, including a reduction in net liability on insurances and catastrophe protection from large or multiple losses. Reinsurance also provides a ceding company with additional underwriting capacity by permitting it to accept larger risks and write more business than would be possible without an equivalent increase in capital and surplus, and facilitates the maintenance of acceptable financial ratios by the ceding company. Reinsurance does not legally discharge the primary insurer from its liability with respect to its obligations to the insured. |
Reinsurance to Close | Also referred to as a RITC, it is a contract to transfer the responsibility for discharging all the liabilities that attach to one year of account of a syndicate into a later year of account of the same or different syndicate in return for a premium. |
Retention | The amount or portion of risk that an insurer retains for its own account. Losses in excess of the retention level are paid by the reinsurer. In proportional treaties, the retention may be a percentage of the original policy’s limit. In excess of loss business, the retention is a dollar amount of loss, a loss ratio or a percentage. |
Retrocedant | A reinsurer who cedes all or a portion of its assumed insurance to another reinsurer. |
Retrocessional reinsurance; Retrocessionaire | A transaction whereby a reinsurer cedes to another reinsurer, the retrocessionaire, all or part of the reinsurance that the first reinsurer has assumed. Retrocessional reinsurance does not legally discharge the ceding reinsurer from its liability with respect to its obligations to the reinsured. Reinsurance companies cede risks to retrocessionaires for reasons similar to those that cause primary insurers to purchase reinsurance: to reduce net liability on insurances, to protect against catastrophic losses, to stabilize financial ratios and to obtain additional underwriting capacity. |
Risks | A term used to denote the physical units of property at risk or the object of insurance protection that are not perils or hazards. Also defined as chance of loss or uncertainty of loss. |
Risks attaching contracts | Contracts that cover claims that arise on underlying insurance policies that incept during the term of the reinsurance contract. |
Solvency II | A proposed set of regulatory requirements that would codify and harmonize the EU insurance and reinsurance regulation. Among other things, these requirements would impact the amount of capital that EU insurance and reinsurance companies would be required to hold. Solvency II was scheduled to come into effect on January 1, 2014, however this is expected to be delayed until at least January 1, 2016. |
Specialty lines | Lines of insurance and reinsurance that provide coverage for risks that are often unusual or difficult to place and do not fit the underwriting criteria of standard commercial products carriers. |
Statutory accounting principles | Recording transactions and preparing financial statements in accordance with the rules and procedures prescribed or permitted by Bermuda, U.S. state insurance regulatory authorities including the NAIC and/or in accordance with Lloyd’s specific principles, all of which generally reflect a liquidating, rather than going concern, concept of accounting. |
Stop loss | A form of reinsurance under which the reinsurer pays some or all of a cedant’s aggregate retained losses in excess of a predetermined dollar amount or in excess of a percentage of premium. |
Submission | An unprocessed application for (i) insurance coverage forwarded to a primary insurer by a prospective policyholder or by a broker on behalf of such prospective policyholder, (ii) reinsurance coverage forwarded to a reinsurer by a prospective ceding insurer or by a broker or intermediary on behalf of such prospective ceding insurer or (iii) retrocessional coverage forwarded to a retrocessionaire by a prospective ceding reinsurer or by a broker or intermediary on behalf of such prospective ceding reinsurer. |
Syndicate | A member or group of members underwriting (re)insurance business at Lloyd’s through the agency of a managing agent or substitute agent to which a syndicate number is assigned. |
Treaty | A reinsurance agreement covering a book or class of business that is automatically accepted on a bulk basis by a reinsurer. A treaty contains common contract terms along with a specific risk definition, data on limit and retention, and provisions for premium and duration. |
Underwriting | The insurer’s or reinsurer’s process of reviewing applications submitted for insurance coverage, deciding whether to accept all or part of the coverage requested and determining the applicable premiums. |
Underwriting capacity | The maximum amount that an insurance company can underwrite. The limit is generally determined by a company’s retained earnings and investment capital. Reinsurance serves to increase a company’s underwriting capacity by reducing its exposure from particular risks. |
Underwriting expense ratio | The ratio of the sum of the acquisition expenses and operational expenses to net premiums earned. |
Underwriting expenses | The aggregate of policy acquisition costs, including commissions, and the portion of administrative, general and other expenses attributable to underwriting operations. |
Unearned premium | The portion of premiums written representing the unexpired portions of the policies or contracts that the insurer or reinsurer has on its books as of a certain date. |
• | a classified Board, whose size is fixed and whose members may be removed by the shareholders only for cause upon a 66 2/3% vote; |
• | restrictions on the ability of shareholders to nominate persons to serve as directors, submit resolutions to a shareholder vote and requisition special general meetings; |
• | a large number of authorized but unissued shares which may be issued by the Board without further shareholder action; and |
• | a 66 2/3% shareholder vote to amend, repeal or adopt any provision inconsistent with several provisions of the Bye-Laws. |
• | provide insurance and reinsurance capacity in markets and to consumers that we target, such as the legislation enacted in Florida in 2007 or the proposed federal legislation described above; |
• | expand the scope of coverage under existing policies for perils such as hurricanes or earthquakes or for a pandemic disease outbreak; |
• | increasingly mandate the terms of insurance and reinsurance policies; |
• | expand the proposed scope of the FIO or establish a new federal insurance regulator; |
• | revise laws, regulations, or contracts under which we operate; |
• | disproportionately benefit the companies of one country over those of another; or |
• | repeal or diminish the insurance company antitrust exemption from the McCarran Ferguson Act. |
• | delays in the integration of management teams, strategies, operations, products and services; |
• | diversion of the attention of management as a result of the Merger; |
• | differences in business backgrounds, corporate cultures and management philosophies that may delay successful integration; |
• | the inability to retain key employees; |
• | the inability to establish and maintain integrated risk management systems, underwriting methodologies and controls, which could give rise to excess accumulation or aggregation of risks, underreporting or underrepresentation of exposures or other adverse consequences; |
• | the inability to create and enforce uniform financial, compliance and operating controls, procedures, policies and information systems; |
• | complexities associated with managing Platinum’s operating units as a component of RenaissanceRe, including the challenge of integrating complex systems, technology, networks and other assets of Platinum into those of RenaissanceRe in a seamless manner that minimizes any adverse impact on customers, brokers, employees and other constituencies; |
• | potential unknown liabilities and unforeseen increased expenses or delays associated with the Merger, including one-time cash costs to integrate Platinum beyond current estimates; and |
• | the disruption of, or the loss of momentum in, the combined company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies. |
• | the unsuccessful integration of Platinum into RenaissanceRe; |
• | the failure of RenaissanceRe to achieve the anticipated benefits of the Merger, including financial results, as rapidly as or to the extent anticipated; |
• | decreases in RenaissanceRe’s financial results before or after the closing of the Merger; |
• | as described below, any failure to maintain RenaissanceRe’s financial strength, claims-paying and enterprise-wide risk management ratings as a result of the Merger; or |
• | general market or economic conditions unrelated to RenaissanceRe’s performance. |
Price Range of Common Shares | |||||||||
High | Low | ||||||||
2014 | |||||||||
First Quarter | $ | 98.00 | $ | 89.64 | |||||
Second Quarter | 107.51 | 95.90 | |||||||
Third Quarter | 108.99 | 95.93 | |||||||
Fourth Quarter | 103.57 | 94.24 | |||||||
2013 | |||||||||
First Quarter | $ | 92.23 | $ | 79.83 | |||||
Second Quarter | 95.00 | 82.50 | |||||||
Third Quarter | 90.68 | 83.19 | |||||||
Fourth Quarter | 97.53 | 89.90 | |||||||
Total shares purchased | Other shares purchased | Shares purchased under repurchase program | Dollar amount still available under repurchase program | |||||||||||||||||||||||
Shares purchased | Average price per share | Shares purchased | Average price per share | Shares purchased | Average price per share | |||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
Beginning dollar amount available to be repurchased | $ | 365.3 | ||||||||||||||||||||||||
October 1 - 31, 2014 | 358,419 | $ | 99.54 | — | $ | — | 358,419 | $ | 99.54 | (35.7 | ) | |||||||||||||||
November 1 - 13, 2014 | 171 | $ | 102.06 | 171 | $ | 102.06 | — | $ | — | — | ||||||||||||||||
November 13, 2014 - renewal of authorized share repurchase program of $500.0 million | 170.4 | |||||||||||||||||||||||||
Dollar amount available to be repurchased | 500.0 | |||||||||||||||||||||||||
November 14 - 30, 2014 | 4,781 | $ | 101.09 | 4,781 | $ | 101.09 | — | $ | — | — | ||||||||||||||||
December 1 - 31, 2014 | — | $ | — | — | $ | — | — | $ | — | — | ||||||||||||||||
Total | 363,371 | $ | 99.56 | 4,952 | $ | 101.12 | 358,419 | $ | 99.54 | $ | 500.0 | |||||||||||||||
Year ended December 31, | 2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||
(in thousands, except share and per share data and percentages) | |||||||||||||||||||||
Statements of Operations Data: | |||||||||||||||||||||
Gross premiums written | $ | 1,550,572 | $ | 1,605,412 | $ | 1,551,591 | $ | 1,434,976 | $ | 1,165,295 | |||||||||||
Net premiums written | 1,068,236 | 1,203,947 | 1,102,657 | 1,012,773 | 848,965 | ||||||||||||||||
Net premiums earned | 1,062,416 | 1,114,626 | 1,069,355 | 951,049 | 864,921 | ||||||||||||||||
Net investment income | 124,316 | 208,028 | 165,725 | 146,871 | 212,081 | ||||||||||||||||
Net realized and unrealized gains on investments | 41,433 | 35,076 | 163,121 | 43,956 | 136,318 | ||||||||||||||||
Net other-than-temporary impairments | — | — | (343 | ) | (552 | ) | (829 | ) | |||||||||||||
Net claims and claim expenses incurred | 197,947 | 171,287 | 325,211 | 861,179 | 129,345 | ||||||||||||||||
Acquisition expenses | 144,476 | 125,501 | 113,542 | 97,376 | 94,961 | ||||||||||||||||
Operational expenses | 190,639 | 191,105 | 179,151 | 169,661 | 166,042 | ||||||||||||||||
Underwriting income (loss) | 529,354 | 626,733 | 451,451 | (177,167 | ) | 474,573 | |||||||||||||||
Income (loss) from continuing operations | 686,256 | 839,346 | 765,425 | (38,833 | ) | 798,482 | |||||||||||||||
Income (loss) from discontinued operations | — | 2,422 | (16,476 | ) | (51,559 | ) | 62,670 | ||||||||||||||
Net income (loss) | 686,256 | 841,768 | 748,949 | (90,392 | ) | 861,152 | |||||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | 510,337 | 665,676 | 566,014 | (92,235 | ) | 702,613 | |||||||||||||||
Income (loss) from continuing operations available (attributable) to RenaissanceRe common shareholders per common share – diluted | 12.60 | 14.82 | 11.56 | (0.82 | ) | 11.18 | |||||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – diluted | 12.60 | 14.87 | 11.23 | (1.84 | ) | 12.31 | |||||||||||||||
Dividends per common share | 1.16 | 1.12 | 1.08 | 1.04 | 1.00 | ||||||||||||||||
Weighted average common shares outstanding – diluted | 39,968 | 44,128 | 49,603 | 50,747 | 55,641 | ||||||||||||||||
Return on average common equity | 14.9 | % | 20.5 | % | 17.7 | % | (3.0 | )% | 21.7 | % | |||||||||||
Combined ratio | 50.2 | % | 43.8 | % | 57.8 | % | 118.6 | % | 45.1 | % | |||||||||||
At December 31, | 2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||
Balance Sheet Data: | |||||||||||||||||||||
Total investments | $ | 6,743,750 | $ | 6,821,712 | $ | 6,355,394 | $ | 6,202,001 | $ | 6,100,212 | |||||||||||
Total assets | 8,203,550 | 8,179,131 | 7,928,628 | 7,744,912 | 8,138,278 | ||||||||||||||||
Reserve for claims and claim expenses | 1,412,510 | 1,563,730 | 1,879,377 | 1,992,354 | 1,257,843 | ||||||||||||||||
Unearned premiums | 512,386 | 477,888 | 399,517 | 347,655 | 286,183 | ||||||||||||||||
Debt | 249,522 | 249,430 | 349,339 | 349,247 | 549,155 | ||||||||||||||||
Capital leases | 26,817 | 27,138 | 27,428 | 25,366 | 25,706 | ||||||||||||||||
Preferred shares | 400,000 | 400,000 | 400,000 | 550,000 | 550,000 | ||||||||||||||||
Total shareholders’ equity attributable to RenaissanceRe | 3,865,715 | 3,904,384 | 3,503,065 | 3,605,193 | 3,936,325 | ||||||||||||||||
Common shares outstanding | 38,442 | 43,646 | 45,542 | 51,543 | 54,110 | ||||||||||||||||
Book value per common share | $ | 90.15 | $ | 80.29 | $ | 68.14 | $ | 59.27 | $ | 62.58 | |||||||||||
Accumulated dividends | 14.28 | 13.12 | 12.00 | 10.92 | 9.88 | ||||||||||||||||
Book value per common share plus accumulated dividends | $ | 104.43 | $ | 93.41 | $ | 80.14 | $ | 70.19 | $ | 72.46 | |||||||||||
Change in book value per common share plus change in accumulated dividends | 13.7 | % | 19.5 | % | 16.8 | % | (3.6 | )% | 23.0 | % | |||||||||||
At December 31, 2014 | Case Reserves | Additional Case Reserves | IBNR | Total | |||||||||||||
(in thousands) | |||||||||||||||||
Catastrophe Reinsurance | $ | 253,431 | $ | 150,825 | $ | 138,411 | $ | 542,667 | |||||||||
Specialty Reinsurance | 106,293 | 79,457 | 357,960 | 543,710 | |||||||||||||
Lloyd’s | 65,295 | 14,168 | 204,984 | 284,447 | |||||||||||||
Other | 5,212 | 2,354 | 34,120 | 41,686 | |||||||||||||
Total | $ | 430,231 | $ | 246,804 | $ | 735,475 | $ | 1,412,510 | |||||||||
At December 31, 2013 | |||||||||||||||||
(in thousands) | |||||||||||||||||
Catastrophe Reinsurance | $ | 430,166 | $ | 177,518 | $ | 173,303 | $ | 780,987 | |||||||||
Specialty Reinsurance | 113,188 | 81,251 | 311,829 | 506,268 | |||||||||||||
Lloyd’s | 45,355 | 14,265 | 158,747 | 218,367 | |||||||||||||
Other | 14,915 | 2,324 | 40,869 | 58,108 | |||||||||||||
Total | $ | 603,624 | $ | 275,358 | $ | 684,748 | $ | 1,563,730 | |||||||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
(in thousands) | |||||||||||||
Net reserves as of January 1 | $ | 1,462,705 | $ | 1,686,865 | $ | 1,588,325 | |||||||
Net incurred related to: | |||||||||||||
Current year | 341,745 | 315,241 | 483,180 | ||||||||||
Prior years | (143,798 | ) | (143,954 | ) | (157,969 | ) | |||||||
Total net incurred | 197,947 | 171,287 | 325,211 | ||||||||||
Net paid related to: | |||||||||||||
Current year | 39,830 | 32,212 | 84,056 | ||||||||||
Prior years | 275,006 | 363,235 | 142,615 | ||||||||||
Total net paid | 314,836 | 395,447 | 226,671 | ||||||||||
Net reserves as of December 31 | 1,345,816 | 1,462,705 | 1,686,865 | ||||||||||
Reinsurance recoverable as of December 31 | 66,694 | 101,025 | 192,512 | ||||||||||
Gross reserves as of December 31 | $ | 1,412,510 | $ | 1,563,730 | $ | 1,879,377 | |||||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
(in thousands) | |||||||||||||
Catastrophe | $ | (65,511 | ) | $ | (102,037 | ) | $ | (110,568 | ) | ||||
Specialty | (55,909 | ) | (34,111 | ) | (34,146 | ) | |||||||
Lloyd’s | (16,241 | ) | (8,256 | ) | (16,202 | ) | |||||||
Other | (6,137 | ) | 450 | 2,947 | |||||||||
Total favorable development of prior accident years net claims and claim expenses | $ | (143,798 | ) | $ | (143,954 | ) | $ | (157,969 | ) | ||||
Year ended December 31, 2014 | Catastrophe Reinsurance Segment | ||||
(in thousands) | |||||
Catastrophe net claims and claim expenses | |||||
Large catastrophe events | |||||
Storm Sandy (2012) | $ | (20,104 | ) | ||
April and May U.S. Tornadoes (2011) | (13,939 | ) | |||
Thailand Floods (2011) | (9,254 | ) | |||
Hurricanes Gustav and Ike (2008) | (6,647 | ) | |||
Hurricane Irene (2011) | (4,506 | ) | |||
Windstorm Kyrill (2007) | (3,615 | ) | |||
Tohoku Earthquake and Tsunami (2011) | (3,489 | ) | |||
New Zealand Earthquake (2010) | 24,692 | ||||
Other | (10,644 | ) | |||
Total large catastrophe events | (47,506 | ) | |||
Small catastrophe events | |||||
European Floods (2013) | (7,552 | ) | |||
U.S. PCS 24 Wind and Thunderstorm (2013) | (6,712 | ) | |||
U.S. PCS 70 and 73 Wind and Thunderstorm (2012) | 13,362 | ||||
Other | (17,103 | ) | |||
Total small catastrophe events | (18,005 | ) | |||
Total favorable development of prior accident years net claims and claim expenses | $ | (65,511 | ) | ||
Year ended December 31, 2013 | Catastrophe Reinsurance Segment | ||||
(in thousands) | |||||
Catastrophe net claims and claim expenses | |||||
Large catastrophe events | |||||
Storm Sandy (2012) | $ | (44,460 | ) | ||
Tohoku Earthquake and Tsunami (2011) | (18,033 | ) | |||
Hurricanes Gustav and Ike (2008) | (16,261 | ) | |||
New Zealand Earthquake (2011) | (10,944 | ) | |||
Windstorm Kyrill (2007) | (8,244 | ) | |||
Hurricane Isaac (2012) | 2,610 | ||||
New Zealand Earthquake (2010) | 11,040 | ||||
Other | (776 | ) | |||
Total large catastrophe events | (85,068 | ) | |||
Small catastrophe events | |||||
U.S. PCS 83 Wind and Thunderstorm (2012) | (3,500 | ) | |||
U.S. PCS 76 Wind and Thunderstorm (2012) | (300 | ) | |||
U.S. PCS 70 Wind and Thunderstorm (2012) | 8,225 | ||||
Other | (21,394 | ) | |||
Total small catastrophe events | (16,969 | ) | |||
Total favorable development of prior accident years net claims and claim expenses | $ | (102,037 | ) | ||
Year ended December 31, 2012 | Catastrophe Reinsurance Segment | ||||
(in thousands) | |||||
Catastrophe net claims and claim expenses | |||||
Large catastrophe events | |||||
Chile Earthquake (2010) | $ | (24,575 | ) | ||
Hurricanes Gustav and Ike (2008) | (17,541 | ) | |||
U.K. Floods (2007) | (17,271 | ) | |||
Hurricanes Katrina, Rita and Wilma (2005) | (6,420 | ) | |||
Hurricane Irene (2011) | (4,630 | ) | |||
Thailand Floods (2011) | (3,933 | ) | |||
Tohoku Earthquake and Tsunami (2011) | (3,896 | ) | |||
Windstorm Kyrill (2007) | (3,417 | ) | |||
New Zealand Earthquake (2010) | 3,570 | ||||
New Zealand Earthquake (2011) | 17,912 | ||||
Other | (2,542 | ) | |||
Total large catastrophe events | (62,743 | ) | |||
Small catastrophe events | |||||
Danish Floods (2011) | (5,000 | ) | |||
U.S. PCS 63 Winter Storm (2011) | (5,000 | ) | |||
U.S. PCS 42 Winter Storm (2011) | (2,560 | ) | |||
U.S. PCS 53 Winter Storm (2011) | (2,558 | ) | |||
Other | (32,707 | ) | |||
Total small catastrophe events | (47,825 | ) | |||
Total favorable development of prior accident years claims and claim expenses | $ | (110,568 | ) | ||
(in thousands, except percentages) | Re-estimated Claims and Claim Expenses as of December 31, | Cumulative Favorable (Adverse) Development | % Decrease (Increase) from Initial Ultimate | Claims and Claim Expense Reserves as of December 31, 2014 | % of Claims and Claim Expenses Unpaid as of December 31, 2014 | |||||||||||||||||||||||||||
Accident Year | Initial Estimate of Accident Year Claims and Claim Expenses | 2012 | 2013 | 2014 | ||||||||||||||||||||||||||||
1994 | $ | 100,816 | $ | 137,130 | $ | 137,093 | $ | 137,074 | $ | (36,258 | ) | (36.0 | )% | $ | 186 | 0.1 | % | |||||||||||||||
1995 | 72,561 | 61,345 | 61,404 | 61,394 | 11,167 | 15.4 | % | 5 | — | % | ||||||||||||||||||||||
1996 | 67,671 | 45,219 | 45,217 | 45,206 | 22,465 | 33.2 | % | — | — | % | ||||||||||||||||||||||
1997 | 43,050 | 9,041 | 9,041 | 9,039 | 34,011 | 79.0 | % | 3 | — | % | ||||||||||||||||||||||
1998 | 129,171 | 152,038 | 152,016 | 151,818 | (22,647 | ) | (17.5 | )% | 322 | 0.2 | % | |||||||||||||||||||||
1999 | 267,981 | 197,849 | 197,703 | 197,692 | 70,289 | 26.2 | % | 204 | 0.1 | % | ||||||||||||||||||||||
2000 | 54,600 | 17,787 | 17,747 | 17,767 | 36,833 | 67.5 | % | 24 | 0.1 | % | ||||||||||||||||||||||
2001 | 257,285 | 201,140 | 200,558 | 198,556 | 58,729 | 22.8 | % | 4,984 | 2.5 | % | ||||||||||||||||||||||
2002 | 155,573 | 65,118 | 65,008 | 64,867 | 90,706 | 58.3 | % | 20 | — | % | ||||||||||||||||||||||
2003 | 126,312 | 67,608 | 67,398 | 68,449 | 57,863 | 45.8 | % | 1,029 | 1.5 | % | ||||||||||||||||||||||
2004 | 762,392 | 815,915 | 814,704 | 814,742 | (52,350 | ) | (6.9 | )% | 168 | — | % | |||||||||||||||||||||
2005 | 1,473,974 | 1,263,198 | 1,260,825 | 1,260,219 | 213,755 | 14.5 | % | 830 | 0.1 | % | ||||||||||||||||||||||
2006 | 121,754 | 58,392 | 57,456 | 56,536 | 65,218 | 53.6 | % | 253 | 0.4 | % | ||||||||||||||||||||||
2007 | 245,892 | 116,568 | 107,872 | 102,824 | 143,068 | 58.2 | % | 3,570 | 3.5 | % | ||||||||||||||||||||||
2008 | 599,481 | 455,909 | 436,055 | 426,337 | 173,144 | 28.9 | % | 6,834 | 1.6 | % | ||||||||||||||||||||||
2009 | 90,800 | 42,288 | 40,905 | 39,728 | 51,072 | 56.2 | % | 1,249 | 3.1 | % | ||||||||||||||||||||||
2010 | 385,207 | 321,522 | 332,845 | 361,340 | 23,867 | 6.2 | % | 143,486 | 39.7 | % | ||||||||||||||||||||||
2011 | 1,243,138 | 1,246,752 | 1,218,178 | 1,175,774 | 67,364 | 5.4 | % | 172,937 | 14.7 | % | ||||||||||||||||||||||
2012 | 345,776 | 345,776 | 284,279 | 262,639 | 83,137 | 24.0 | % | 96,043 | 36.6 | % | ||||||||||||||||||||||
2013 | 133,187 | — | 133,187 | 107,602 | 25,585 | 19.2 | % | 52,484 | 48.8 | % | ||||||||||||||||||||||
2014 | 89,034 | — | — | 89,034 | — | — | % | 58,036 | 65.2 | % | ||||||||||||||||||||||
$ | 6,765,655 | $ | 5,620,595 | $ | 5,639,491 | $ | 5,648,637 | $ | 1,117,018 | 16.7 | % | $ | 542,667 | 9.6 | % | |||||||||||||||||
(in thousands, except percentages) | Ultimate Claims and Claim Expenses at December 31, 2014 | $ Impact of Change on Ultimate Claims and Claim Expenses at December 31, 2014 | % Impact of Change on Reserve for Claims and Claim Expenses at December 31, 2014 | % Impact of Change on Net Income for the Year Ended December 31, 2014 | % Impact of Change on Shareholders’ Equity at December 31, 2014 | |||||||||||||
Higher | $ | 5,909,691 | $ | 261,054 | 18.5 | % | (38.0 | )% | (6.8 | )% | ||||||||
Recorded | 5,648,637 | — | — | % | — | % | — | % | ||||||||||
Lower | $ | 5,387,583 | $ | (261,054 | ) | (18.5 | )% | 38.0 | % | 6.8 | % | |||||||
Year ended December 31, 2014 | Specialty Reinsurance Segment | ||||
(in thousands) | |||||
Catastrophe net claims and claim expenses | |||||
Large catastrophe events | |||||
LIBOR (2011 and 2012) | $ | (10,500 | ) | ||
Thailand Floods (2011) | (2,500 | ) | |||
Tohoku Earthquake and Tsunami (2011) | (1,642 | ) | |||
Subprime (2007) | 5,049 | ||||
Other | (1,826 | ) | |||
Total large catastrophe events | (11,419 | ) | |||
Total catastrophe net claims and claim expenses | $ | (11,419 | ) | ||
Attritional net claims and claim expenses | |||||
Bornhuetter-Ferguson actuarial method - actual reported claims less than expected claims | $ | (44,490 | ) | ||
Total attritional net claims and claim expenses | $ | (44,490 | ) | ||
Total favorable development of prior accident years net claims and claim expenses | $ | (55,909 | ) | ||
Year ended December 31, 2013 | Specialty Reinsurance Segment | ||||
(in thousands) | |||||
Catastrophe net claims and claim expenses | |||||
Large catastrophe events | |||||
Tohoku Earthquake and Tsunami (2011) | $ | (1,000 | ) | ||
New Zealand Earthquake (2010) | 300 | ||||
Other | (1,763 | ) | |||
Total large catastrophe events | (2,463 | ) | |||
Total catastrophe net claims and claim expenses | $ | (2,463 | ) | ||
Attritional net claims and claim expenses | |||||
Bornhuetter-Ferguson actuarial method - actual reported claims less than expected claims | $ | (21,216 | ) | ||
Actuarial assumption changes | (10,432 | ) | |||
Total attritional net claims and claim expenses | $ | (31,648 | ) | ||
Total favorable development of prior accident years net claims and claim expenses | $ | (34,111 | ) | ||
Year ended December 31, 2012 | Specialty Reinsurance Segment | ||||
(in thousands) | |||||
Catastrophe net claims and claim expenses | |||||
Large catastrophe events | |||||
Hurricanes Katrina, Rita and Wilma (2005) | $ | (3,000 | ) | ||
Total catastrophe net claims and claim expenses | $ | (3,000 | ) | ||
Attritional net claims and claim expenses | |||||
Bornhuetter-Ferguson actuarial method - actual reported claims less than expected claims | $ | (16,747 | ) | ||
Actuarial assumption changes | (14,399 | ) | |||
Total attritional net claims and claim expenses | $ | (31,146 | ) | ||
Total favorable development of prior accident years net claims and claim expenses | $ | (34,146 | ) | ||
Estimated Ultimate Claims and Claim Expenses Ratio | ||||||||||
Underwriting Year | Initial Estimate | Re-estimate at | ||||||||
December 31, 2012 | December 31, 2013 | December 31, 2014 | ||||||||
2002 | 77.2% | 19.6% | 19.7% | 19.6% | ||||||
2003 | 76.8% | 25.3% | 25.4% | 25.4% | ||||||
2004 | 78.2% | 37.2% | 36.8% | 37.3% | ||||||
2005 | 78.2% | 28.1% | 28.3% | 27.3% | ||||||
2006 | 76.6% | 29.3% | 26.3% | 23.6% | ||||||
2007 | 62.9% | 56.1% | 55.8% | 57.7% | ||||||
2008 | 57.9% | 64.5% | 64.1% | 62.1% | ||||||
2009 | 55.4% | 34.2% | 29.5% | 27.1% | ||||||
2010 | 56.5% | 61.3% | 57.4% | 51.7% | ||||||
2011 | 58.7% | 59.9% | 49.2% | 38.2% | ||||||
2012 | 56.3% | 82.6% | 59.8% | 48.4% | ||||||
2013 | 57.6% | — | 59.7% | 56.6% | ||||||
2014 | 57.1% | — | — | 57.1% | ||||||
(in thousands,except percentages) | Estimated Loss Reporting Pattern | $ Impact of Change on Reserves for Claims and Claim Expenses at December 31, 2014 | % Impact of Change on Reserve for Claims and Claim Expenses at December 31, 2014 | % Impact of Change on Net Income for the Year Ended December 31, 2014 | % Impact of Change on Shareholders’ Equity at December 31, 2014 | |||||||||||
Increase expected claims and claim expense ratio by 25% | Slower reporting | $ | 212,732 | 15.1 | % | (31.0 | )% | (5.5 | )% | |||||||
Increase expected claims and claim expense ratio by 25% | Expected reporting | 89,490 | 6.3 | % | (13.0 | )% | (2.3 | )% | ||||||||
Increase expected claims and claim expense ratio by 25% | Faster reporting | (20,486 | ) | (1.5 | )% | 3.0 | % | 0.5 | % | |||||||
Expected claims and claim expense ratio | Slower reporting | 98,593 | 7.0 | % | (14.4 | )% | (2.6 | )% | ||||||||
Expected claims and claim expense ratio | Expected reporting | — | — | % | — | % | — | % | ||||||||
Expected claims and claim expense ratio | Faster reporting | (87,981 | ) | (6.2 | )% | 12.8 | % | 2.3 | % | |||||||
Decrease expected claims and claim expense ratio by 25% | Slower reporting | (15,545 | ) | (1.1 | )% | 2.3 | % | 0.4 | % | |||||||
Decrease expected claims and claim expense ratio by 25% | Expected reporting | (89,490 | ) | (6.3 | )% | 13.0 | % | 2.3 | % | |||||||
Decrease expected claims and claim expense ratio by 25% | Faster reporting | (155,476 | ) | (11.0 | )% | 22.7 | % | 4.0 | % | |||||||
Year ended December 31, 2014 | Lloyd’s Segment | ||||
(in thousands) | |||||
Catastrophe net claims and claim expenses | |||||
Large catastrophe events | |||||
Storm Sandy (2012) | $ | (4,128 | ) | ||
LIBOR (2011 and 2012) | (1,250 | ) | |||
Other | (1,234 | ) | |||
Total large catastrophe events | (6,612 | ) | |||
Small catastrophe events | |||||
Other | (2,687 | ) | |||
Total small catastrophe events | (2,687 | ) | |||
Total catastrophe net claims and claim expenses | $ | (9,299 | ) | ||
Attritional net claims and claim expenses | |||||
Bornhuetter-Ferguson actuarial method - actual reported claims less than expected claims | $ | (6,942 | ) | ||
Total attritional net claims and claim expenses | $ | (6,942 | ) | ||
Total favorable development of prior accident years net claims and claim expenses | $ | (16,241 | ) | ||
Year ended December 31, 2013 | Lloyd’s Segment | ||||
(in thousands) | |||||
Catastrophe net claims and claim expenses | |||||
Large catastrophe events | |||||
Storm Sandy (2012) | $ | (3,825 | ) | ||
Other | (1,442 | ) | |||
Total large catastrophe events | (5,267 | ) | |||
Total catastrophe net claims and claim expenses | $ | (5,267 | ) | ||
Attritional net claims and claim expenses | |||||
Bornhuetter-Ferguson actuarial method - actual reported claims less than expected claims | $ | (3,263 | ) | ||
Actuarial assumption changes | 274 | ||||
Total attritional net claims and claim expenses | $ | (2,989 | ) | ||
Total favorable development of prior accident years net claims and claim expenses | $ | (8,256 | ) | ||
Year ended December 31, 2012 | Lloyd’s Segment | ||||
(in thousands) | |||||
Catastrophe net claims and claim expenses | |||||
Large catastrophe events | |||||
Thailand Floods (2011) | $ | (5,500 | ) | ||
Hurricane Irene (2011) | (2,500 | ) | |||
Other | (1,476 | ) | |||
Total large catastrophe events | (9,476 | ) | |||
Total catastrophe net claims and claim expenses | $ | (9,476 | ) | ||
Attritional net claims and claim expenses | |||||
Bornhuetter-Ferguson actuarial method - actual reported claims less than expected claims | $ | (8,011 | ) | ||
Actuarial assumption changes | 1,285 | ||||
Total attritional net claims and claim expenses | $ | (6,726 | ) | ||
Total favorable development of prior accident years net claims and claim expenses | $ | (16,202 | ) | ||
(in thousands, except percentages) | ||||||||||||||||||||||||||||||||
Accident Year | Initial Estimate of Accident Year Claims and Claim Expenses | Re-estimated Claims and Claim Expenses as of December 31, | Cumulative Favorable (Adverse) Development | % Decrease (Increase) from Initial Ultimate | Claims and Claim Expense Reserves at December 31, 2014 | % of Claims and Claim Expenses Unpaid at December 31, 2014 | ||||||||||||||||||||||||||
2012 | 2013 | 2014 | ||||||||||||||||||||||||||||||
2010 | $ | 5,277 | $ | 6,310 | $ | 6,018 | $ | 5,162 | $ | 115 | 2.2 | % | $ | 3,725 | 72.2 | % | ||||||||||||||||
2011 | 30,121 | 24,037 | 23,565 | 23,440 | 6,681 | 22.2 | % | 1,438 | 6.1 | % | ||||||||||||||||||||||
2012 | 10,957 | 10,957 | 8,770 | 5,980 | 4,977 | 45.4 | % | 3,129 | 52.3 | % | ||||||||||||||||||||||
2013 | 5,977 | — | 5,977 | 3,273 | 2,704 | 45.2 | % | 2,789 | 85.2 | % | ||||||||||||||||||||||
2014 | 943 | — | — | 943 | — | — | % | 524 | 55.6 | % | ||||||||||||||||||||||
$ | 53,275 | $ | 41,304 | $ | 44,330 | $ | 38,798 | $ | 14,477 | 27.7 | % | $ | 11,605 | 29.9 | % | |||||||||||||||||
Estimated Ultimate Claims and Claim Expenses Ratio | |||||||||||
Underwriting Year | Initial Estimate | Re-estimate at | |||||||||
December 31, 2012 | December 31, 2013 | December 31, 2014 | |||||||||
2010 | 63.3% | 53.5% | 50.2% | 50.5 | % | ||||||
2011 | 66.0% | 60.6% | 55.1% | 52.6 | % | ||||||
2012 | 58.4% | 87.4% | 69.5% | 64.3 | % | ||||||
2013 | 60.6% | — | 67.9% | 62.2 | % | ||||||
2014 | 60.6% | — | — | 79.8 | % | ||||||
(in thousands, except percentages) | Ultimate Claims and Claim Expenses at December 31, 2014 | $ Impact of Change on Ultimate Claims and Claim Expenses at December 31, 2014 | % Impact of Change on Reserve for Claims and Claim Expenses at December 31, 2014 | % Impact of Change on Net Income for the Year Ended December 31, 2014 | % Impact of Change on Shareholders’ Equity at December 31, 2014 | |||||||||||||
Higher | $ | 44,294 | $ | 5,496 | 0.4 | % | (0.8 | )% | (0.1 | )% | ||||||||
Recorded | 38,798 | — | — | % | — | % | — | % | ||||||||||
Lower | $ | 33,302 | $ | (5,496 | ) | (0.4 | )% | 0.8 | % | 0.1 | % | |||||||
(in thousands,except percentages) | Estimated Loss Reporting Pattern | $ Impact of Change on Reserves for Claims and Claim Expenses at December 31, 2014 | % Impact of Change on Reserves for Claims and Claim Expenses at December 31, 2014 | % Impact of Change on Net Income for the Year Ended December 31, 2014 | % Impact of Change on Shareholders’ Equity at December 31, 2014 | |||||||||||
Increase expected claims and claim expense ratio by 25% | Slower reporting | $ | 125,167 | 8.9 | % | (18.2 | )% | (3.2 | )% | |||||||
Increase expected claims and claim expense ratio by 25% | Expected reporting | 51,863 | 3.7 | % | (7.6 | )% | (1.3 | )% | ||||||||
Increase expected claims and claim expense ratio by 25% | Faster reporting | (20,084 | ) | (1.4 | )% | 2.9 | % | 0.5 | % | |||||||
Expected claims and claim expense ratio | Slower reporting | 58,644 | 4.2 | % | (8.5 | )% | (1.5 | )% | ||||||||
Expected claims and claim expense ratio | Expected reporting | — | — | % | — | % | — | % | ||||||||
Expected claims and claim expense ratio | Faster reporting | (57,557 | ) | (4.1 | )% | 8.4 | % | 1.5 | % | |||||||
Decrease expected claims and claim expense ratio by 25% | Slower reporting | (7,880 | ) | (0.6 | )% | 1.1 | % | 0.2 | % | |||||||
Decrease expected claims and claim expense ratio by 25% | Expected reporting | (51,863 | ) | (3.7 | )% | 7.6 | % | 1.3 | % | |||||||
Decrease expected claims and claim expense ratio by 25% | Faster reporting | (95,031 | ) | (6.7 | )% | 13.8 | % | 2.5 | % | |||||||
At December 31, | 2014 | 2013 | 2012 | ||||||||||
(in thousands) | |||||||||||||
Attritional claims and claim expenses | $ | (6,137 | ) | $ | 2,179 | $ | (3,265 | ) | |||||
Catastrophe events | — | (1,729 | ) | (1,171 | ) | ||||||||
Loss portfolio transfer | — | — | 7,383 | ||||||||||
Total (favorable) adverse development of prior accident years net claims and claim expenses | $ | (6,137 | ) | $ | 450 | $ | 2,947 | ||||||
• | Fair values determined by Level 1 inputs utilize unadjusted quoted prices obtained from active markets for identical assets or liabilities for which we have access. The fair value is determined by multiplying the quoted price by the quantity held by us; |
• | Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals, broker quotes and certain pricing indices; and |
• | Level 3 inputs are based all or in part on significant unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In these cases, significant management assumptions can be used to establish management’s best estimate of the assumptions used by other market participants in determining the fair value of the asset or liability. |
At December 31, 2014 | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
(in thousands) | |||||||||||||||||
Fixed maturity investments | |||||||||||||||||
U.S. treasuries | $ | 1,671,471 | $ | 1,671,471 | $ | — | $ | — | |||||||||
Agencies | 96,208 | — | 96,208 | — | |||||||||||||
Non-U.S. government (Sovereign debt) | 280,651 | — | 280,651 | — | |||||||||||||
Non-U.S. government-backed corporate | 146,467 | — | 146,467 | — | |||||||||||||
Corporate | 1,610,442 | — | 1,594,782 | 15,660 | |||||||||||||
Agency mortgage-backed | 316,620 | — | 316,620 | — | |||||||||||||
Non-agency mortgage-backed | 253,050 | — | 253,050 | — | |||||||||||||
Commercial mortgage-backed | 381,051 | — | 381,051 | — | |||||||||||||
Asset-backed | 27,610 | — | 27,610 | — | |||||||||||||
Total fixed maturity investments | 4,783,570 | 1,671,471 | 3,096,439 | 15,660 | |||||||||||||
Short term investments | 1,013,222 | — | 1,013,222 | — | |||||||||||||
Equity investments trading | 322,098 | 322,098 | — | — | |||||||||||||
Other investments | |||||||||||||||||
Private equity partnerships | 281,932 | — | — | 281,932 | |||||||||||||
Senior secured bank loan fund | 19,316 | — | — | 19,316 | |||||||||||||
Catastrophe bonds | 200,329 | — | 200,329 | — | |||||||||||||
Hedge funds | 2,570 | — | — | 2,570 | |||||||||||||
Total other investments | 504,147 | — | 200,329 | 303,818 | |||||||||||||
Other assets and (liabilities) | |||||||||||||||||
Assumed and ceded (re)insurance contracts | (8,744 | ) | — | — | (8,744 | ) | |||||||||||
Derivatives (1) | 6,345 | (569 | ) | 7,104 | (190 | ) | |||||||||||
Other | (11,509 | ) | — | (11,509 | ) | — | |||||||||||
Total other assets and (liabilities) | (13,908 | ) | (569 | ) | (4,405 | ) | (8,934 | ) | |||||||||
$ | 6,609,129 | $ | 1,993,000 | $ | 4,305,585 | $ | 310,544 | ||||||||||
(1) | See "Note 19. Derivative Instruments in our Notes to Consolidated Financial Statements” for additional information related to the fair value by type of contract, of derivatives entered into by us. |
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
(in thousands, except per share amounts and percentages) | |||||||||||||
Statements of operations highlights | |||||||||||||
Gross premiums written | $ | 1,550,572 | $ | 1,605,412 | $ | 1,551,591 | |||||||
Net premiums written | 1,068,236 | 1,203,947 | 1,102,657 | ||||||||||
Net premiums earned | 1,062,416 | 1,114,626 | 1,069,355 | ||||||||||
Net claims and claim expenses incurred | 197,947 | 171,287 | 325,211 | ||||||||||
Underwriting income | 529,354 | 626,733 | 451,451 | ||||||||||
Net investment income | 124,316 | 208,028 | 165,725 | ||||||||||
Net realized and unrealized gains on investments | 41,433 | 35,076 | 163,121 | ||||||||||
Income from continuing operations | 686,256 | 839,346 | 765,425 | ||||||||||
Income (loss) from discontinued operations | — | 2,422 | (16,476 | ) | |||||||||
Net income | 686,256 | 841,768 | 748,949 | ||||||||||
Net income available to RenaissanceRe common shareholders | 510,337 | 665,676 | 566,014 | ||||||||||
Income from continuing operations available to RenaissanceRe common shareholders per common share – diluted | $ | 12.60 | $ | 14.82 | $ | 11.56 | |||||||
Income (loss) from discontinued operations per common share – diluted | — | 0.05 | (0.33 | ) | |||||||||
Net income available to RenaissanceRe common shareholders per common share – diluted | $ | 12.60 | $ | 14.87 | $ | 11.23 | |||||||
Dividends per common share | $ | 1.16 | $ | 1.12 | $ | 1.08 | |||||||
Key ratios | |||||||||||||
Net claims and claim expense ratio – current accident year | 32.2 | % | 28.3 | % | 45.2 | % | |||||||
Net claims and claim expense ratio – prior accident years | (13.6 | )% | (12.9 | )% | (14.8 | )% | |||||||
Net claims and claim expense ratio – calendar year | 18.6 | % | 15.4 | % | 30.4 | % | |||||||
Underwriting expense ratio | 31.6 | % | 28.4 | % | 27.4 | % | |||||||
Combined ratio | 50.2 | % | 43.8 | % | 57.8 | % | |||||||
Return on average common equity | 14.9 | % | 20.5 | % | 17.7 | % | |||||||
Book value | December 31, 2014 | December 31, 2013 | December 31, 2012 | ||||||||||
Book value per common share | $ | 90.15 | $ | 80.29 | $ | 68.14 | |||||||
Accumulated dividends per common share | 14.28 | 13.12 | 12.00 | ||||||||||
Book value per common share plus accumulated dividends | $ | 104.43 | $ | 93.41 | $ | 80.14 | |||||||
Change in book value per common share plus change in accumulated dividends | 13.7 | % | 19.5 | % | 16.8 | % | |||||||
Balance sheet highlights | December 31, 2014 | December 31, 2013 | December 31, 2012 | ||||||||||
Total assets | $ | 8,203,550 | $ | 8,179,131 | $ | 7,928,628 | |||||||
Total shareholders’ equity attributable to RenaissanceRe | $ | 3,865,715 | $ | 3,904,384 | $ | 3,503,065 | |||||||
• | Lower Underwriting Results - our underwriting income of $529.4 million in 2014 decreased $97.4 million from $626.7 million in 2013. The decrease in underwriting income was primarily driven by a $52.2 million decrease in net premiums earned due to a combination of lower gross premiums written during the preceding twelve months and an increase in ceded premiums written principally within our Catastrophe Reinsurance segment, a $19.0 million increase in acquisition expenses principally within our Specialty Reinsurance segment, and a $26.5 million increase in current accident year net claims and claim expenses. The increase in acquisition expenses and current accident year net claims and claim expenses was principally driven by the growth in our Specialty Reinsurance and Lloyd’s segments; |
• | Lower Gross Premiums Written - our gross premiums written of $1,550.6 million decreased $54.8 million, or 3.4%, in 2014, compared to 2013, with the decrease principally driven by our Catastrophe segment which experienced a decrease of $186.4 million or 16.6%, partially offset by increases in our Specialty Reinsurance and Lloyd’s segments’ gross premiums written of $87.1 million or 33.6%, and $43.1 million or 19.0%, respectively; and |
• | Lower Total Investment Result - our total investment result was $164.9 million in 2014, which includes the sum of net investment income, net realized and unrealized gains on investments, and the change in net unrealized gains on fixed maturity investments available for sale, compared to $235.1 million in 2013. The decrease in total investment result was primarily driven by our investment in Essent Group Ltd. (“Essent”), which resulted in $6.7 million of net realized and unrealized gains in 2014, compared to $92.4 million of net unrealized gains in 2013, a decrease of $85.7 million. |
• | Improved Underwriting Results - our underwriting income of $626.7 million in 2013 increased $175.3 million from $451.5 million in 2012 and was positively impacted by a decrease in net claims and claim expenses of $153.9 million, principally due to lower insured losses in respect of large events. Included in underwriting income for 2013 was $22.9 million and $12.7 million of underwriting losses related to the May 2013 U.S. Tornadoes and the European Floods. In comparison, Storm Sandy and Hurricane Isaac resulted in $149.1 million and $26.3 million of underwriting losses in 2012, respectively. Favorable development on prior accident years was $144.0 million in 2013, compared to $158.0 million in 2012, primarily driven by the Catastrophe Reinsurance segment, as discussed further below; partially offset by |
• | Lower Total Investment Result - our total investment result of $235.1 million in 2013, which includes the sum of net investment income of $208.0 million, net realized and unrealized gains on investments of $35.1 million, net other-than-temporary impairments of $Nil and the decrease in net unrealized gains on fixed maturity investments available for sale of $8.0 million, decreased by $94.0 million in 2013, from |
• | Net Income Attributable to Noncontrolling Interests - our net income attributable to noncontrolling interests was $151.1 million in 2013, compared to $148.0 million in 2012, an increase of $3.1 million and was primarily due to our noncontrolling economic ownership percentage in DaVinciRe decreasing to 27.3% at December 31, 2013, compared to 30.8% at December 31, 2012, resulting in an increase in the portion of DaVinciRe’s net income attributable to noncontrolling interests. |
Twelve months ended December 31, 2013 | May 2013 U.S. Tornadoes | European Floods | Total | ||||||||||
(in thousands, except percentages) | |||||||||||||
Net claims and claim expenses incurred | $ | (26,245 | ) | $ | (15,145 | ) | $ | (41,390 | ) | ||||
Reinstatement premiums earned | 2,969 | 2,098 | 5,067 | ||||||||||
Profit commissions | 391 | 388 | 779 | ||||||||||
Net negative impact on underwriting result | $ | (22,885 | ) | $ | (12,659 | ) | (35,544 | ) | |||||
Redeemable noncontrolling interest | 4,001 | 2,230 | 6,231 | ||||||||||
Net negative impact | $ | (18,884 | ) | $ | (10,429 | ) | $ | (29,313 | ) | ||||
Percentage point impact on consolidated combined ratio | 2.2 | 1.3 | 3.5 | ||||||||||
Net negative impact on Catastrophe Reinsurance segment underwriting result | $ | (21,903 | ) | $ | (10,742 | ) | $ | (32,645 | ) | ||||
Net negative impact on Lloyd’s segment underwriting result | (982 | ) | (1,917 | ) | (2,899 | ) | |||||||
Net negative impact on underwriting result | $ | (22,885 | ) | $ | (12,659 | ) | $ | (35,544 | ) | ||||
Twelve months ended December 31, 2013 | Storm Sandy | ||||
(in thousands, except percentages) | |||||
Net claims and claim expenses incurred | $ | 48,285 | |||
Reinstatement premiums earned | (12,894 | ) | |||
Ceded reinstatement premiums earned | 341 | ||||
Profit commissions | 657 | ||||
Net positive impact on underwriting result | 36,389 | ||||
Redeemable noncontrolling interest | (5,706 | ) | |||
Net positive impact | $ | 30,683 | |||
Percentage point impact on consolidated combined ratio | (3.8 | ) | |||
Net positive impact on Catastrophe Reinsurance segment underwriting result | $ | 32,805 | |||
Net positive impact on Specialty Reinsurance segment underwriting result | 28 | ||||
Net positive impact on Lloyd’s segment underwriting result | 3,556 | ||||
Net positive impact on underwriting result | $ | 36,389 | |||
Year ended December 31, 2012 | Hurricane Isaac | Storm Sandy | Total | ||||||||||
(in thousands, except percentages) | |||||||||||||
Net claims and claim expenses incurred | $ | (33,185 | ) | $ | (187,944 | ) | $ | (221,129 | ) | ||||
Reinstatement premiums earned | 8,863 | 37,437 | 46,300 | ||||||||||
Ceded reinstatement premiums earned | — | (385 | ) | (385 | ) | ||||||||
Profit commissions | (2,016 | ) | 1,771 | (245 | ) | ||||||||
Net negative impact on underwriting result | (26,338 | ) | (149,121 | ) | (175,459 | ) | |||||||
Redeemable noncontrolling interest - DaVinciRe | 8,925 | 22,160 | 31,085 | ||||||||||
Net negative impact | $ | (17,413 | ) | $ | (126,961 | ) | $ | (144,374 | ) | ||||
Percentage point impact on consolidated combined ratio | 2.8 | 16.0 | 19.0 | ||||||||||
Net negative impact on Catastrophe Reinsurance segment underwriting result | $ | (25,857 | ) | $ | (121,061 | ) | $ | (146,918 | ) | ||||
Net negative impact on Specialty Reinsurance segment underwriting result | — | (11,000 | ) | (11,000 | ) | ||||||||
Net negative impact on Lloyd’s segment underwriting result | (481 | ) | (17,060 | ) | (17,541 | ) | |||||||
Net negative impact on underwriting result | $ | (26,338 | ) | $ | (149,121 | ) | $ | (175,459 | ) | ||||
Catastrophe Reinsurance Segment Overview | |||||||||||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
(in thousands, except percentages) | |||||||||||||
Catastrophe Reinsurance gross premiums written | |||||||||||||
Renaissance | $ | 622,934 | $ | 729,887 | $ | 733,963 | |||||||
DaVinci | 311,035 | 390,492 | 448,244 | ||||||||||
Total Catastrophe Reinsurance gross premiums written | $ | 933,969 | $ | 1,120,379 | $ | 1,182,207 | |||||||
Net premiums written | $ | 541,608 | $ | 753,078 | $ | 766,035 | |||||||
Net premiums earned | $ | 590,845 | $ | 723,705 | $ | 781,738 | |||||||
Net claims and claim expenses incurred | 1,757 | 7,908 | 165,209 | ||||||||||
Acquisition expenses | 43,161 | 49,161 | 66,665 | ||||||||||
Operational expenses | 95,851 | 108,130 | 103,811 | ||||||||||
Underwriting income | $ | 450,076 | $ | 558,506 | $ | 446,053 | |||||||
Net claims and claim expenses incurred – current accident year | $ | 67,268 | $ | 109,945 | $ | 275,777 | |||||||
Net claims and claim expenses incurred – prior accident years | (65,511 | ) | (102,037 | ) | (110,568 | ) | |||||||
Net claims and claim expenses incurred – total | $ | 1,757 | $ | 7,908 | $ | 165,209 | |||||||
Net claims and claim expense ratio – current accident year | 11.4 | % | 15.2 | % | 35.3 | % | |||||||
Net claims and claim expense ratio – prior accident years | (11.1 | )% | (14.1 | )% | (14.2 | )% | |||||||
Net claims and claim expense ratio – calendar year | 0.3 | % | 1.1 | % | 21.1 | % | |||||||
Underwriting expense ratio | 23.5 | % | 21.7 | % | 21.8 | % | |||||||
Combined ratio | 23.8 | % | 22.8 | % | 42.9 | % | |||||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
(in thousands) | |||||||||||||
Ceded premiums written - Catastrophe Reinsurance segment | $ | 392,361 | $ | 367,301 | $ | 416,172 | |||||||
Year ended December 31, 2013 | Storm Sandy | ||||
(in thousands, except percentages) | |||||
Net claims and claim expenses incurred | $ | 44,460 | |||
Reinstatement premiums earned | (12,653 | ) | |||
Ceded reinstatement premiums earned | 341 | ||||
Profit commissions | 657 | ||||
Net positive impact on Catastrophe Reinsurance segment underwriting result | $ | 32,805 | |||
Percentage point impact on Catastrophe Reinsurance segment combined ratio | (6.8 | ) | |||
Specialty Reinsurance Segment Overview | |||||||||||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
(in thousands, except percentages) | |||||||||||||
Specialty Reinsurance gross premiums written | |||||||||||||
Renaissance | $ | 344,591 | $ | 256,354 | $ | 207,387 | |||||||
DaVinci | 2,047 | 3,135 | 2,500 | ||||||||||
Total Specialty Reinsurance gross premiums written | $ | 346,638 | $ | 259,489 | $ | 209,887 | |||||||
Net premiums written | $ | 295,855 | $ | 248,562 | $ | 201,552 | |||||||
Net premiums earned | $ | 253,537 | $ | 214,306 | $ | 164,685 | |||||||
Net claims and claim expenses incurred | 88,502 | 67,236 | 76,813 | ||||||||||
Acquisition expenses | 60,936 | 41,538 | 23,826 | ||||||||||
Operational expenses | 43,370 | 31,780 | 29,124 | ||||||||||
Underwriting income | $ | 60,729 | $ | 73,752 | $ | 34,922 | |||||||
Net claims and claim expenses incurred – current accident year | $ | 144,411 | $ | 101,347 | $ | 110,959 | |||||||
Net claims and claim expenses incurred – prior accident years | (55,909 | ) | (34,111 | ) | (34,146 | ) | |||||||
Net claims and claim expenses incurred – total | $ | 88,502 | $ | 67,236 | $ | 76,813 | |||||||
Net claims and claim expense ratio – current accident year | 57.0 | % | 47.3 | % | 67.4 | % | |||||||
Net claims and claim expense ratio – prior accident years | (22.1 | )% | (15.9 | )% | (20.8 | )% | |||||||
Net claims and claim expense ratio – calendar year | 34.9 | % | 31.4 | % | 46.6 | % | |||||||
Underwriting expense ratio | 41.1 | % | 34.2 | % | 32.2 | % | |||||||
Combined ratio | 76.0 | % | 65.6 | % | 78.8 | % | |||||||
Lloyd’s Segment Overview | |||||||||||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
(in thousands, except percentages) | |||||||||||||
Lloyd’s gross premiums written | |||||||||||||
Specialty | $ | 214,290 | $ | 188,663 | $ | 123,099 | |||||||
Catastrophe | 55,366 | 37,869 | 36,888 | ||||||||||
Total Lloyd’s gross premiums written | $ | 269,656 | $ | 226,532 | $ | 159,987 | |||||||
Net premiums written | $ | 230,429 | $ | 201,697 | $ | 135,131 | |||||||
Net premiums earned | $ | 217,666 | $ | 176,029 | $ | 122,968 | |||||||
Net claims and claim expenses incurred | 113,825 | 95,693 | 80,242 | ||||||||||
Acquisition expenses | 46,927 | 34,823 | 22,864 | ||||||||||
Operational expenses | 51,115 | 50,540 | 45,680 | ||||||||||
Underwriting income (loss) | $ | 5,799 | $ | (5,027 | ) | $ | (25,818 | ) | |||||
Net claims and claim expenses incurred – current accident year | $ | 130,066 | $ | 103,949 | $ | 96,444 | |||||||
Net claims and claim expenses incurred – prior accident years | (16,241 | ) | (8,256 | ) | (16,202 | ) | |||||||
Net claims and claim expenses incurred – total | $ | 113,825 | $ | 95,693 | $ | 80,242 | |||||||
Net claims and claim expense ratio – current accident year | 59.8 | % | 59.1 | % | 78.4 | % | |||||||
Net claims and claim expense ratio – prior accident years | (7.5 | )% | (4.7 | )% | (13.1 | )% | |||||||
Net claims and claim expense ratio – calendar year | 52.3 | % | 54.4 | % | 65.3 | % | |||||||
Underwriting expense ratio | 45.0 | % | 48.5 | % | 55.7 | % | |||||||
Combined ratio | 97.3 | % | 102.9 | % | 121.0 | % | |||||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
(in thousands) | |||||||||||||
Underwriting income (loss) | $ | 12,750 | $ | (498 | ) | $ | (3,706 | ) | |||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
(in thousands) | |||||||||||||
Fixed maturity investments | $ | 100,855 | $ | 95,907 | $ | 103,330 | |||||||
Short term investments | 944 | 1,698 | 1,007 | ||||||||||
Equity investments trading | 3,450 | 2,295 | 1,086 | ||||||||||
Other investments | |||||||||||||
Hedge funds and private equity investments | 18,867 | 45,810 | 36,635 | ||||||||||
Other | 11,144 | 73,692 | 35,196 | ||||||||||
Cash and cash equivalents | 395 | 191 | 277 | ||||||||||
135,655 | 219,593 | 177,531 | |||||||||||
Investment expenses | (11,339 | ) | (11,565 | ) | (11,806 | ) | |||||||
Net investment income | $ | 124,316 | $ | 208,028 | $ | 165,725 | |||||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
(in thousands) | |||||||||||||
Gross realized gains | $ | 45,568 | $ | 72,492 | $ | 97,787 | |||||||
Gross realized losses | (14,868 | ) | (50,206 | ) | (16,705 | ) | |||||||
Net realized gains on fixed maturity investments | 30,700 | 22,286 | 81,082 | ||||||||||
Net unrealized (losses) gains on fixed maturity investments trading | 19,680 | (87,827 | ) | 75,279 | |||||||||
Net realized and unrealized gains (losses) on investments-related derivatives | (30,931 | ) | 31,058 | (866 | ) | ||||||||
Net realized gains on equity investments trading | 10,908 | 26,650 | — | ||||||||||
Net unrealized gains on equity investments trading | 11,076 | 42,909 | 7,626 | ||||||||||
Net realized and unrealized gains on investments | $ | 41,433 | $ | 35,076 | $ | 163,121 | |||||||
Total other-than-temporary impairments | — | — | (395 | ) | |||||||||
Portion recognized in other comprehensive income, before taxes | — | — | 52 | ||||||||||
Net other-than-temporary impairments | $ | — | $ | — | $ | (343 | ) | ||||||
• | net unrealized gains on our fixed maturity investments trading improved $107.5 million, to $19.7 million in 2014, from net unrealized losses of $87.8 million in 2013, and was positively impacted by a reshaping of the yield curve which experienced decreasing rates in longer dated maturities, as compared to short and intermediate term maturities during 2014, compared to the significant steepening of the yield curve that occurred in 2013. This was partially offset by a decrease of $62.0 million in net realized and unrealized losses on investments-related derivatives, to a loss of $30.9 million in 2014, from a gain of $31.1 million in 2013, which was conversely impacted by the factors noted above in 2014, compared to 2013; and |
• | a decrease in net unrealized gains on equity investments trading of $31.8 million, and a decrease in net realized gains on equity investments trading of $15.7 million in 2014, compared to 2013, principally driven by weaker returns in the public equity markets during 2014, compared to 2013. Also impacting net unrealized and realized gains on investments was our investment in Essent, which resulted in net realized and unrealized gains of $6.7 million during 2014, compared to $35.5 million of unrealized gains during 2013. |
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
(in thousands) | |||||||||||||
Tower Hill Companies | $ | 18,376 | $ | 10,270 | $ | 4,965 | |||||||
Top Layer Re | 10,411 | 13,836 | 20,792 | ||||||||||
Other | (2,712 | ) | (912 | ) | (2,519 | ) | |||||||
Total equity in earnings of other ventures | $ | 26,075 | $ | 23,194 | $ | 23,238 | |||||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
(in thousands) | |||||||||||||
Assumed and ceded reinsurance contracts accounted for as derivatives and deposits | $ | 1,321 | $ | (2,517 | ) | $ | (4,648 | ) | |||||
Other | (1,744 | ) | 158 | 2,528 | |||||||||
Total other loss | $ | (423 | ) | $ | (2,359 | ) | $ | (2,120 | ) | ||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
(in thousands) | |||||||||||||
Total corporate expenses | $ | 22,987 | $ | 33,622 | $ | 16,456 | |||||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
(in thousands) | |||||||||||||
Interest expense | |||||||||||||
$250 million 5.75% Senior Notes | $ | 14,375 | $ | 14,375 | $ | 14,375 | |||||||
$100 million 5.875% Senior Notes | — | — | 5,875 | ||||||||||
Other | 2,789 | 3,554 | 2,847 | ||||||||||
Total interest expense | 17,164 | 17,929 | 23,097 | ||||||||||
Preferred share dividends | |||||||||||||
$125 million 6.08% Series C Preference Shares (1) | 7,600 | 11,317 | 15,200 | ||||||||||
$150 million 6.60% Series D Preference Shares (1) | — | 13,631 | 19,698 | ||||||||||
$275 million 5.375% Series E Preference Shares (1) | 14,781 | 8,786 | — | ||||||||||
Total preferred share dividends | 22,381 | 24,948 | 34,895 | ||||||||||
Total interest expense and preferred share dividends | $ | 39,545 | $ | 42,877 | $ | 57,992 | |||||||
(1) | During May 2013, we raised $275.0 million through the issuance of 11 million Series E Preference Shares, and subsequently redeemed the remaining 6 million Series D Preference Shares for $150.0 million and 5 million Series C Preference Shares for $125.0 million, or a total of $275.0 million. See “Capital Resources” for additional information. |
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
(in thousands) | |||||||||||||
Income tax expense | $ | (608 | ) | $ | (1,692 | ) | $ | (1,413 | ) | ||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
(in thousands) | |||||||||||||
Net income attributable to noncontrolling interests | $ | (153,538 | ) | $ | (151,144 | ) | $ | (148,040 | ) | ||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
(in thousands) | |||||||||||||
REAL | $ | — | $ | 2,422 | $ | (18,763 | ) | ||||||
U.S.-based insurance operations | — | — | 2,287 | ||||||||||
Income (loss) from discontinued operations | $ | — | $ | 2,422 | $ | (16,476 | ) | ||||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
(in thousands) | |||||||||||||
Net cash provided by operating activities | $ | 660,657 | $ | 795,721 | $ | 716,929 | |||||||
Net cash provided by (used in) investing activities | 141,653 | (315,515 | ) | (71,677 | ) | ||||||||
Net cash used in financing activities | (694,678 | ) | (398,955 | ) | (538,570 | ) | |||||||
Effect of exchange rate changes on foreign currency cash | 9,920 | 1,423 | 1,692 | ||||||||||
Net increase in cash and cash equivalents | 117,552 | 82,674 | 108,374 | ||||||||||
Net decrease in cash and cash equivalents of discontinued operations | — | 21,213 | 13,946 | ||||||||||
Cash and cash equivalents, beginning of period | 408,032 | 304,145 | 181,825 | ||||||||||
Cash and cash equivalents, end of period | $ | 525,584 | $ | 408,032 | $ | 304,145 | |||||||
• | a $161.6 million increase in reinsurance balances payable due to the increase and timing of our premiums ceded; |
• | an increase in unearned premiums of $34.5 million due to the timing of our gross premiums written; |
• | a decrease in premiums receivable of $34.1 million due to the decrease in gross premiums written and a decrease in reinsurance balances recoverable of $34.3 million driven principally by cash receipts of certain recoverables; |
• | a decrease in net claims and claim expenses of $151.2 million as a result of $379.8 million in paid claims offset by $228.6 million of net incurred claims and claim expenses; |
• | an increase of $28.7 million in our prepaid reinsurance premiums due to the increase and timing of our gross premiums ceded; and |
• | an increase in deferred acquisition costs of $28.4 million, due to the relative increase in the percentage of quota share reinsurance, compared to excess of loss reinsurance, as a percentage of total gross premiums written within the Specialty Reinsurance segment, as quota share reinsurance typically carries a higher acquisition expense ratio, compared to excess of loss reinsurance. |
At December 31, | 2014 | 2013 | Change | ||||||||||
(in thousands) | |||||||||||||
Common shareholders’ equity | $ | 3,465,715 | $ | 3,504,384 | $ | (38,669 | ) | ||||||
Preference shares | 400,000 | 400,000 | — | ||||||||||
Total shareholders’ equity attributable to RenaissanceRe | 3,865,715 | 3,904,384 | (38,669 | ) | |||||||||
5.75% Senior Notes due 2020 | 249,522 | 249,430 | 92 | ||||||||||
RenaissanceRe revolving credit facility – borrowed | — | — | — | ||||||||||
RenaissanceRe revolving credit facility – unborrowed | 250,000 | 250,000 | — | ||||||||||
Total capital resources | $ | 4,365,237 | $ | 4,403,814 | $ | (38,577 | ) | ||||||
A.M. Best | S&P | Moody’s | Fitch | ||||||
Renaissance Reinsurance (1) | A+ | AA- | A1 | A+ | |||||
DaVinci (1) | A | AA- | A3 | — | |||||
RenaissanceRe Specialty Risks (1) | A | A+ | — | — | |||||
RenaissanceRe Specialty U.S. (1) | A | — | — | — | |||||
ROE (1) | A+ | AA- | — | — | |||||
Top Layer Re (1) | A+ | AA | — | — | |||||
Syndicate 1458 | — | — | — | — | |||||
Lloyd’s Overall Market Rating (2) | A | A+ | — | AA- | |||||
RenaissanceRe (3) | — | Very Strong | — | — | |||||
(1) | The A.M. Best, S&P, Moody's and Fitch ratings for these companies reflect the insurer's financial strength rating and in addition, the S&P ratings also reflect the insurer's issuer credit rating. |
(2) | The A.M. Best, S&P and Fitch ratings for the Lloyd’s Overall Market Rating represent its financial strength rating. |
(3) | The S&P rating for RenaissanceRe represents rating on its Enterprise Risk Management practices. |
At December 31, 2014 | Case Reserves | Additional Case Reserves | IBNR | Total | |||||||||||||
(in thousands) | |||||||||||||||||
Catastrophe Reinsurance | $ | 253,431 | $ | 150,825 | $ | 138,411 | $ | 542,667 | |||||||||
Specialty Reinsurance | 106,293 | 79,457 | 357,960 | 543,710 | |||||||||||||
Lloyd’s | 65,295 | 14,168 | 204,984 | 284,447 | |||||||||||||
Other | 5,212 | 2,354 | 34,120 | 41,686 | |||||||||||||
Total | $ | 430,231 | $ | 246,804 | $ | 735,475 | $ | 1,412,510 | |||||||||
At December 31, 2013 | |||||||||||||||||
(in thousands) | |||||||||||||||||
Catastrophe Reinsurance | $ | 430,166 | $ | 177,518 | $ | 173,303 | $ | 780,987 | |||||||||
Specialty Reinsurance | 113,188 | 81,251 | 311,829 | 506,268 | |||||||||||||
Lloyd’s | 45,355 | 14,265 | 158,747 | 218,367 | |||||||||||||
Other | 14,915 | 2,324 | 40,869 | 58,108 | |||||||||||||
Total | $ | 603,624 | $ | 275,358 | $ | 684,748 | $ | 1,563,730 | |||||||||
At December 31, | 2014 | 2013 | |||||||||||||
(in thousands, except percentages) | |||||||||||||||
U.S. treasuries | $ | 1,671,471 | 24.8 | % | $ | 1,352,413 | 19.8 | % | |||||||
Agencies | 96,208 | 1.4 | % | 186,050 | 2.7 | % | |||||||||
Non-U.S. government (Sovereign debt) | 280,651 | 4.2 | % | 334,580 | 4.9 | % | |||||||||
Non-U.S. government-backed corporate | 146,467 | 2.2 | % | 237,479 | 3.5 | % | |||||||||
Corporate | 1,610,442 | 23.9 | % | 1,803,415 | 26.4 | % | |||||||||
Agency mortgage-backed | 316,620 | 4.7 | % | 341,908 | 5.0 | % | |||||||||
Non-agency mortgage-backed | 253,050 | 3.7 | % | 257,938 | 3.8 | % | |||||||||
Commercial mortgage-backed | 381,051 | 5.7 | % | 314,236 | 4.6 | % | |||||||||
Asset-backed | 27,610 | 0.4 | % | 15,258 | 0.2 | % | |||||||||
Total fixed maturity investments, at fair value | 4,783,570 | 71.0 | % | 4,843,277 | 70.9 | % | |||||||||
Short term investments, at fair value | 1,013,222 | 15.0 | % | 1,044,779 | 15.3 | % | |||||||||
Equity investments trading, at fair value | 322,098 | 4.8 | % | 254,776 | 3.7 | % | |||||||||
Other investments, at fair value | 504,147 | 7.5 | % | 573,264 | 8.5 | % | |||||||||
Total managed investment portfolio | 6,623,037 | 98.3 | % | 6,716,096 | 98.4 | % | |||||||||
Investments in other ventures, under equity method | 120,713 | 1.7 | % | 105,616 | 1.6 | % | |||||||||
Total investments | $ | 6,743,750 | 100.0 | % | $ | 6,821,712 | 100.0 | % | |||||||
Credit Rating (1) | |||||||||||||||||||||||||||||||||||||||
December 31, 2014 | Amortized Cost | Fair Value | % of Total Investment Portfolio | Weighted Average Effective Yield | AAA | AA | A | BBB | Non- Investment Grade | Not Rated | |||||||||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||||||||||||||||
Short term investments | $ | 1,013,222 | $ | 1,013,222 | 15.0 | % | 0.1 | % | $ | 988,449 | $ | 22,187 | $ | 2,083 | $ | — | $ | 503 | $ | — | |||||||||||||||||||
100.0 | % | 97.6 | % | 2.2 | % | 0.2 | % | — | % | — | % | — | % | ||||||||||||||||||||||||||
Fixed maturity investments | |||||||||||||||||||||||||||||||||||||||
U.S. treasuries | 1,672,441 | 1,671,471 | 24.8 | % | 1.0 | % | — | 1,671,471 | — | — | — | — | |||||||||||||||||||||||||||
Agencies | |||||||||||||||||||||||||||||||||||||||
Fannie Mae and Freddie Mac | 90,009 | 89,919 | 1.3 | % | 1.1 | % | — | 89,919 | — | — | — | — | |||||||||||||||||||||||||||
Other agencies | 6,262 | 6,289 | 0.1 | % | 1.6 | % | — | 3,511 | 2,778 | — | — | — | |||||||||||||||||||||||||||
Total agencies | 96,271 | 96,208 | 1.4 | % | 1.2 | % | — | 93,430 | 2,778 | — | — | — | |||||||||||||||||||||||||||
Non-U.S. government (Sovereign debt) | 287,856 | 280,651 | 4.2 | % | 1.1 | % | 124,381 | 127,162 | 16,925 | 12,183 | — | — | |||||||||||||||||||||||||||
Non-U.S. government-backed corporate | 146,691 | 146,467 | 2.2 | % | 1.1 | % | 94,871 | 44,477 | 6,518 | 601 | — | — | |||||||||||||||||||||||||||
Corporate | 1,611,172 | 1,610,442 | 23.9 | % | 3.2 | % | 26,536 | 151,571 | 663,933 | 398,871 | 353,664 | 15,867 | |||||||||||||||||||||||||||
Mortgage-backed | |||||||||||||||||||||||||||||||||||||||
Residential mortgage-backed | |||||||||||||||||||||||||||||||||||||||
Agency securities | 315,911 | 316,620 | 4.7 | % | 2.3 | % | — | 316,620 | — | — | — | — | |||||||||||||||||||||||||||
Non-agency securities - Alt A | 139,765 | 149,754 | 2.2 | % | 4.3 | % | 5,532 | 18,800 | 16,155 | 10,797 | 82,692 | 15,778 | |||||||||||||||||||||||||||
Non-agency securities - Prime | 98,126 | 103,296 | 1.5 | % | 3.4 | % | 7,562 | 4,325 | 6,590 | 8,989 | 68,722 | 7,108 | |||||||||||||||||||||||||||
Total residential mortgage-backed | 553,802 | 569,670 | 8.4 | % | 3.0 | % | 13,094 | 339,745 | 22,745 | 19,786 | 151,414 | 22,886 | |||||||||||||||||||||||||||
Commercial mortgage-backed | 377,792 | 381,051 | 5.7 | % | 2.1 | % | 276,476 | 78,319 | 13,565 | 12,691 | — | — | |||||||||||||||||||||||||||
Total mortgage-backed | 931,594 | 950,721 | 14.1 | % | 2.6 | % | 289,570 | 418,064 | 36,310 | 32,477 | 151,414 | 22,886 | |||||||||||||||||||||||||||
Asset-backed | |||||||||||||||||||||||||||||||||||||||
Auto loans | 10,423 | 10,380 | 0.2 | % | 1.0 | % | 10,380 | — | — | — | — | — | |||||||||||||||||||||||||||
Credit cards | 9,479 | 9,686 | 0.1 | % | 2.0 | % | 9,686 | — | — | — | — | — | |||||||||||||||||||||||||||
Student loans | 624 | 585 | — | % | 1.2 | % | — | 585 | — | — | — | — | |||||||||||||||||||||||||||
Other | 6,834 | 6,959 | 0.1 | % | 1.8 | % | 5,784 | — | 1,175 | — | — | — | |||||||||||||||||||||||||||
Total asset-backed | 27,360 | 27,610 | 0.4 | % | 1.5 | % | 25,850 | 585 | 1,175 | — | — | — | |||||||||||||||||||||||||||
Total securitized assets | 958,954 | 978,331 | 14.5 | % | 2.6 | % | 315,420 | 418,649 | 37,485 | 32,477 | 151,414 | 22,886 | |||||||||||||||||||||||||||
Total fixed maturity investments | 4,773,385 | 4,783,570 | 71.0 | % | 2.1 | % | 561,208 | 2,506,760 | 727,639 | 444,132 | 505,078 | 38,753 | |||||||||||||||||||||||||||
100.0 | % | 11.7 | % | 52.4 | % | 15.2 | % | 9.3 | % | 10.6 | % | 0.8 | % | ||||||||||||||||||||||||||
Equity investments trading | 322,098 | 4.8 | % | — | — | — | — | — | 322,098 | ||||||||||||||||||||||||||||||
100.0 | % | — | % | — | % | — | % | — | % | — | % | 100.0 | % | ||||||||||||||||||||||||||
Other investments | |||||||||||||||||||||||||||||||||||||||
Private equity partnerships | 281,932 | 4.2 | % | — | — | — | — | — | 281,932 | ||||||||||||||||||||||||||||||
Catastrophe bonds | 200,329 | 3.0 | % | — | — | — | — | 200,329 | — | ||||||||||||||||||||||||||||||
Senior secured bank loan fund | 19,316 | 0.3 | % | — | — | — | — | — | 19,316 | ||||||||||||||||||||||||||||||
Non-U.S. fixed income funds | — | — | % | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Hedge funds | 2,570 | — | % | — | — | — | — | — | 2,570 | ||||||||||||||||||||||||||||||
Miscellaneous other investment | — | — | % | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Total other investments | 504,147 | 7.5 | % | — | — | — | — | 200,329 | 303,818 | ||||||||||||||||||||||||||||||
100.0 | % | — | % | — | % | — | % | — | % | 39.7 | % | 60.3 | % | ||||||||||||||||||||||||||
Investments in other ventures | 120,713 | 1.7 | % | — | — | — | — | — | 120,713 | ||||||||||||||||||||||||||||||
100.0 | % | — | % | — | % | — | % | — | % | — | % | 100.0 | % | ||||||||||||||||||||||||||
Total investment portfolio | $ | 6,743,750 | 100.0 | % | $ | 1,549,657 | $ | 2,528,947 | $ | 729,722 | $ | 444,132 | $ | 705,910 | $ | 785,382 | |||||||||||||||||||||||
100.0 | % | 23.0 | % | 37.5 | % | 10.8 | % | 6.6 | % | 10.5 | % | 11.6 | % | ||||||||||||||||||||||||||
(1) | The credit ratings included in this table are those assigned by S&P. When ratings provided by S&P were not available, ratings from other nationally recognized rating agencies were used. We have grouped short term investments with an A-1+ and A-1 short term issue credit rating as AAA, short term investments with A-2 short term issue credit rating as AA and short term investments with an A-3 short term issue credit rating as A. |
• | Changes in the overall interest rate environment can expose us to “prepayment risk” on our mortgage-backed investments. When interest rates decline, consumers will generally make prepayments on their mortgages and, as a result, our investments in mortgage-backed securities will be repaid to us more quickly than we might have originally anticipated. When we receive these prepayments, our opportunities to reinvest these proceeds back into the investment markets will likely be at reduced interest rates. Conversely, when interest rates increase, consumers will generally make fewer prepayments on their mortgages and, as a result, our investments in mortgage-backed securities will be repaid to us less quickly than we might have originally anticipated. This will increase the duration of our portfolio, which is disadvantageous to us in a rising interest rate environment. |
• | Our investments in mortgage-backed securities are also subject to default risk. This risk is due in part to defaults on the underlying securitized mortgages, which would decrease the market value of the investment and be disadvantageous to us. Similar risks apply to other asset-backed securities in which we may invest from time to time. |
• | Our investments in debt securities of other corporations are exposed to losses from insolvencies of these corporations, and our investment portfolio can also deteriorate based on reduced credit quality of these corporations. We are also exposed to the impact of widening credit spreads even if specific securities are not downgraded. |
• | Our investments in asset-backed securities are subject to prepayment risks, as noted above, and to the structural risks of these securities. The structural risks primarily emanate from the priority of each security in the issuer’s overall capital structure. We are also exposed to the impact of widening credit spreads. |
• | Within our other investments category, we have funds that invest in non-investment grade fixed income securities as well as securities denominated in foreign currencies. These investments expose us to losses from insolvencies and other credit-related issues. We are also exposed to fluctuations in foreign exchange rates that may result in realized losses to us if our exposures are not hedged or if our hedging strategies are not effective and also to widening of credit spreads. |
At December 31, | 2014 | 2013 | |||||||||||||
(in thousands, except percentages) | |||||||||||||||
Due in less than one year | $ | 151,803 | 3.2 | % | $ | 160,760 | 3.3 | % | |||||||
Due after one through five years | 2,969,828 | 62.1 | % | 3,118,799 | 64.4 | % | |||||||||
Due after five through ten years | 537,636 | 11.2 | % | 551,007 | 11.4 | % | |||||||||
Due after ten years | 145,972 | 3.0 | % | 83,371 | 1.7 | % | |||||||||
Mortgage-backed | 950,721 | 19.9 | % | 914,082 | 18.9 | % | |||||||||
Asset-backed | 27,610 | 0.6 | % | 15,258 | 0.3 | % | |||||||||
Total fixed maturity investments, at fair value | $ | 4,783,570 | 100.0 | % | $ | 4,843,277 | 100.0 | % | |||||||
At December 31, 2014 | |||||||||||||
(in thousands) | |||||||||||||
Issuer | Total | Short term investments | Fixed maturity investments | ||||||||||
Bank of America Corp. | $ | 58,968 | $ | — | $ | 58,968 | |||||||
Goldman Sachs Group Inc. | 52,923 | — | 52,923 | ||||||||||
JP Morgan Chase & Co. | 52,773 | — | 52,773 | ||||||||||
Morgan Stanley | 33,133 | — | 33,133 | ||||||||||
Citigroup Inc. | 31,317 | — | 31,317 | ||||||||||
HSBC Holdings PLC | 28,992 | — | 28,992 | ||||||||||
Verizon Communications Inc. | 26,186 | — | 26,186 | ||||||||||
Ford Motor Co. | 22,886 | — | 22,886 | ||||||||||
General Electric Company | 18,706 | — | 18,706 | ||||||||||
Wells Fargo & Co. | 17,797 | — | 17,797 | ||||||||||
Total (1) | $ | 343,681 | $ | — | $ | 343,681 | |||||||
(1) | Excludes non-U.S. government-backed corporate fixed maturity investments, reverse repurchase agreements and commercial paper, at fair value. |
At December 31, | 2014 | 2013 | Change | ||||||||||
(in thousands) | |||||||||||||
Financials | $ | 222,190 | $ | 152,905 | $ | 69,285 | |||||||
Communications and technology | 31,376 | 4,300 | 27,076 | ||||||||||
Industrial, utilities and energy | 28,859 | 25,350 | 3,509 | ||||||||||
Consumer | 19,522 | 44,115 | (24,593 | ) | |||||||||
Healthcare | 16,582 | 15,340 | 1,242 | ||||||||||
Basic materials | 3,569 | 12,766 | (9,197 | ) | |||||||||
Total | $ | 322,098 | $ | 254,776 | $ | 67,322 | |||||||
At December 31, | 2014 | 2013 | Change | ||||||||||
(in thousands) | |||||||||||||
Private equity partnerships | $ | 281,932 | $ | 322,391 | $ | (40,459 | ) | ||||||
Catastrophe bonds | 200,329 | 229,016 | (28,687 | ) | |||||||||
Senior secured bank loan funds | 19,316 | 18,048 | 1,268 | ||||||||||
Hedge funds | 2,570 | 3,809 | (1,239 | ) | |||||||||
Total other investments | $ | 504,147 | $ | 573,264 | $ | (69,117 | ) | ||||||
At December 31, 2014 | Fair Value | Unfunded Commitments | Redemption Frequency | Redemption Notice Period (Minimum Days) | Redemption Notice Period (Maximum Days) | ||||||||||
(in thousands) | |||||||||||||||
Private equity partnerships | $ | 281,932 | $ | 77,712 | See below | See below | See below | ||||||||
Senior secured bank loan fund | 19,316 | 6,301 | See below | See below | See below | ||||||||||
Hedge funds | 2,570 | — | See below | See below | See below | ||||||||||
Total other investments measured using net asset valuations | $ | 303,818 | $ | 84,013 | |||||||||||
At December 31, | 2014 | 2013 | |||||||||||||||||||||
(in thousands, except percentages) | Investment | Ownership % | Carrying Value | Investment | Ownership % | Carrying Value | |||||||||||||||||
THIG | $ | 50,000 | 25.0 | % | $ | 20,811 | $ | 50,000 | 25.0 | % | $ | 25,107 | |||||||||||
Tower Hill | 10,000 | 30.3 | % | 18,991 | 10,000 | 29.4 | % | 14,506 | |||||||||||||||
Tower Hill Re | 4,250 | 25.0 | % | 5,162 | — | — | % | — | |||||||||||||||
Tower Hill Signature | 500 | 25.0 | % | 5,692 | 500 | 25.0 | % | 2,515 | |||||||||||||||
Total Tower Hill Companies | 64,750 | 50,656 | 60,500 | 42,128 | |||||||||||||||||||
Top Layer Re | 65,375 | 50.0 | % | 60,911 | 65,375 | 50.0 | % | 50,500 | |||||||||||||||
Angus | 10,507 | 40.4 | % | 8,072 | 10,507 | 42.5 | % | 9,180 | |||||||||||||||
Other | 3,000 | 22.0 | % | 1,074 | 3,000 | 22.0 | % | 3,808 | |||||||||||||||
Total investments in other ventures, under equity method | $ | 143,632 | $ | 120,713 | $ | 139,382 | $ | 105,616 | |||||||||||||||
At December 31, 2014 | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | ||||||||||||||||
(in thousands) | |||||||||||||||||||||
Long term debt obligations (1) | |||||||||||||||||||||
5.75% Senior Notes | $ | 324,789 | $ | 14,375 | $ | 28,750 | $ | 28,750 | $ | 252,914 | |||||||||||
Private equity and investment commitments (2) | 84,012 | 84,012 | — | — | — | ||||||||||||||||
Operating lease obligations | 17,371 | 6,184 | 7,555 | 3,490 | 142 | ||||||||||||||||
Capital lease obligations | 37,046 | 3,017 | 5,434 | 5,162 | 23,433 | ||||||||||||||||
Payable for investments purchased | 203,021 | 203,021 | — | — | — | ||||||||||||||||
Reserve for claims and claim expenses (3) | 1,412,510 | 449,956 | 371,309 | 224,848 | 366,397 | ||||||||||||||||
Total contractual obligations | $ | 2,078,749 | $ | 760,565 | $ | 413,048 | $ | 262,250 | $ | 642,886 | |||||||||||
(1) | Includes contractual interest payments. If the closing of the acquisition of Platinum occurs, our aggregate indebtedness will increase by $550.0 million, consisting of $250.0 million of publicly traded notes currently outstanding at Platinum, which will remain outstanding following the close of the Merger, and $300.0 million of short term alternative financing used to fund part of the cash component of the aggregate consideration for the Merger. If the closing of the acquisition of Platinum occurs, we intend to issue $300.0 million of debt to replace the short term alternative financing used to fund part of the cash consideration to be paid by RenaissanceRe. For more details on our indebtedness, see “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Capital Resources.” Although, there can be no assurance that RenaissanceRe will be able to secure adequate sources of financing on favorable terms, it is anticipated the debt noted above will come due in the more than five years category. |
(2) | The private equity and investment commitments do not have a defined contractual commitment date and we have therefore included them in the less than one year category. |
(3) | We caution the reader that the information provided above related to estimated future payment dates of our reserves for claims and claim expenses is not prepared or utilized for internal purposes and that we currently do not estimate the future payment dates of claims and claim expenses. Because of the nature of the coverages that we provide, the amount and timing of the cash flows associated with our policy liabilities will fluctuate, perhaps significantly, and therefore are highly uncertain. We have based our estimates of future claim payments upon benchmark industry payment patterns, drawing upon available relevant sources of loss and allocated loss adjustment expense development data. These benchmarks are revised periodically as new trends emerge. We believe that it is likely that this benchmark data will not be predictive of our future claim payments and that material fluctuations can occur due to the nature of the losses which we insure and the coverages which we provide. If the closing of the Merger with Platinum occurs, our aggregate reserves for claims and claim expenses will increase significantly as we will consolidate Platinum’s reserve for claims and claim expenses as of the closing date of the Merger. At December 31, 2014, Platinum had $1.4 billion in reserves for claims and claim expenses. |
Interest Rate Shift in Basis Points | |||||||||||||||||||||
At December 31, 2014 | -100 | -50 | Base | 50 | 100 | ||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||
Fair value of fixed maturity and short term investments | $ | 5,949,710 | $ | 5,872,782 | $ | 5,796,792 | $ | 5,721,739 | $ | 5,647,625 | |||||||||||
Net increase (decrease) in fair value | $ | 152,918 | $ | 75,990 | $ | — | $ | (75,053 | ) | $ | (149,167 | ) | |||||||||
Percentage change in fair value | 2.6 | % | 1.3 | % | — | % | (1.3 | )% | (2.6 | )% | |||||||||||
Interest Rate Shift in Basis Points | |||||||||||||||||||||
At December 31, 2013 | -100 | -50 | Base | 50 | 100 | ||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||
Fair value of fixed maturity and short term investments | $ | 6,043,858 | $ | 5,965,533 | $ | 5,888,056 | $ | 5,811,425 | $ | 5,735,642 | |||||||||||
Net increase (decrease) in fair value | $ | 155,802 | $ | 77,477 | $ | — | $ | (76,631 | ) | $ | (152,414 | ) | |||||||||
Percentage change in fair value | 2.6 | % | 1.3 | % | — | % | (1.3 | )% | (2.6 | )% | |||||||||||
At December 31, 2014 | AUD | CAD | EUR | GBP | JPY | NZD | Other | Total | |||||||||||||||||||||||||
(in thousands, except for percentages) | |||||||||||||||||||||||||||||||||
Net assets denominated in foreign currencies | $ | 25,891 | $ | 22,497 | $ | 14,321 | $ | 93,304 | $ | 11,494 | $ | (68,436 | ) | $ | 742 | $ | 99,813 | ||||||||||||||||
Net foreign currency derivatives notional amounts | (32,063 | ) | (15,612 | ) | (5,418 | ) | (82,083 | ) | (15,740 | ) | 65,973 | (6,112 | ) | (91,055 | ) | ||||||||||||||||||
Total net foreign currency exposure | $ | (6,172 | ) | $ | 6,885 | $ | 8,903 | $ | 11,221 | $ | (4,246 | ) | $ | (2,463 | ) | $ | (5,370 | ) | $ | 8,758 | |||||||||||||
Net foreign currency exposure as a percentage of total shareholders’ equity attributable to RenaissanceRe | (0.2 | )% | 0.2 | % | 0.2 | % | 0.3 | % | (0.1 | )% | (0.1 | )% | (0.1 | )% | 0.2 | % | |||||||||||||||||
Impact of a hypothetical 10% change in total net foreign currency exposure | $ | 617 | $ | (689 | ) | $ | (890 | ) | $ | (1,122 | ) | $ | 425 | $ | 246 | $ | 537 | $ | (876 | ) | |||||||||||||
At December 31, 2013 | AUD | CAD | EUR | GBP | JPY | NZD | Other | Total | |||||||||||||||||||||||||
(in thousands, except for percentages) | |||||||||||||||||||||||||||||||||
Net assets denominated in foreign currencies | $ | 29,472 | $ | 13,374 | $ | (13,983 | ) | $ | 76,362 | $ | 17 | $ | (97,448 | ) | $ | 2,651 | $ | 10,445 | |||||||||||||||
Net foreign currency derivatives notional amounts | (38,210 | ) | (10,134 | ) | 20,276 | (61,368 | ) | (3,742 | ) | 99,885 | (2,287 | ) | 4,420 | ||||||||||||||||||||
Total net foreign currency exposure | $ | (8,738 | ) | $ | 3,240 | $ | 6,293 | $ | 14,994 | $ | (3,725 | ) | $ | 2,437 | $ | 364 | $ | 14,865 | |||||||||||||||
Net foreign currency exposure as a percentage of total shareholders’ equity attributable to RenaissanceRe | (0.2 | )% | 0.1 | % | 0.2 | % | 0.4 | % | (0.1 | )% | 0.1 | % | — | % | 0.4 | % | |||||||||||||||||
Impact of a hypothetical 10% change in total net foreign currency exposure | $ | 874 | $ | (324 | ) | $ | (629 | ) | $ | (1,499 | ) | $ | 373 | $ | (244 | ) | $ | (36 | ) | $ | (1,487 | ) | |||||||||||
At December 31, | 2014 | 2013 | |||||
AAA | 26.7 | % | 28.4 | % | |||
AA | 43.6 | % | 41.2 | % | |||
A | 12.6 | % | 14.2 | % | |||
BBB | 7.7 | % | 6.5 | % | |||
Non-investment grade | 8.7 | % | 8.9 | % | |||
Not rated | 0.7 | % | 0.8 | % | |||
Total | 100.0 | % | 100.0 | % | |||
Credit Spread Shift in Basis Points | |||||||||||||||||||||
At December 31, 2014 | -100 | -50 | Base | 50 | 100 | ||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||
Fair value of fixed income and short term investments | $ | 5,911,396 | $ | 5,854,094 | $ | 5,796,792 | $ | 5,739,490 | $ | 5,682,188 | |||||||||||
Net increase (decrease) in fair value | $ | 114,604 | $ | 57,302 | $ | — | $ | (57,302 | ) | $ | (114,604 | ) | |||||||||
Percentage change in fair value | 2.0 | % | 1.0 | % | — | % | (1.0 | )% | (2.0 | )% | |||||||||||
Credit Spread Shift in Basis Points | |||||||||||||||||||||
At December 31, 2013 | -100 | -50 | Base | 50 | 100 | ||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||
Fair value of fixed income and short term investments | $ | 6,013,968 | $ | 5,951,010 | $ | 5,888,056 | $ | 5,825,099 | $ | 5,762,144 | |||||||||||
Net increase (decrease) in fair value | $ | 125,912 | $ | 62,954 | $ | — | $ | (62,957 | ) | $ | (125,912 | ) | |||||||||
Percentage change in fair value | 2.1 | % | 1.1 | % | — | % | (1.1 | )% | (2.1 | )% | |||||||||||
At December 31, | 2014 | 2013 | |||||||
(in thousands, except for percentages) | |||||||||
Equity investments trading, at fair value | $ | 322,098 | $ | 254,776 | |||||
Private equity investments, at fair value | 281,932 | 322,391 | |||||||
Hedge funds, at fair value | 2,570 | 3,809 | |||||||
Investments in other ventures, under equity method | 120,713 | 105,616 | |||||||
Total carrying value of investments exposed to equity price risk | $ | 727,313 | $ | 686,592 | |||||
Impact of a hypothetical 10% increase in the carrying value of investments exposed to equity price risk | $ | 72,731 | $ | 68,659 | |||||
Impact of a hypothetical 10% decrease in the carrying value of investments exposed to equity price risk | $ | (72,731 | ) | $ | (68,659 | ) | |||
(a) | Financial Statements, Financial Statement Schedules and Exhibits. |
1 | Financial Statements |
2 | Financial Statement Schedules |
3 | Exhibits |
2.1 | Agreement and Plan of Merger, dated as of November 23, 2014, by and among RenaissanceRe Holdings Ltd., Port Holdings Ltd. and Platinum Underwriters Holdings, Ltd., including the exhibits thereto. (37) |
3.1 | Memorandum of Association. (1) |
3.2 | Amended and Restated Bye-Laws. (2) |
3.3 | Memorandum of Increase in Share Capital of RenaissanceRe Holdings Ltd. (3) |
3.4 | Specimen Common Share certificate. (1) |
4.1 | Certificate of Designation, Preferences and Rights of 6.08% Series C Preference Shares. (4) |
4.2 | Certificate of Designation, Preferences and Rights of 5.375% Series E Preference Shares. (5) |
4.2(a) | Form of Stock Certificate Evidencing the 5.375% Series E Preference Shares. (5) |
4.3 | Senior Indenture, dated as of March 17, 2010, among RenRe North America Holdings Inc., as Issuer, RenaissanceRe Holdings Ltd., as Guarantor, and Deutsche Bank Trust Companies America, as Trustee. (6) |
4.3(a) | First Supplemental Indenture, dated as of March 17, 2010, among RenRe North America Holdings Inc., as Insurer, RenaissanceRe Holdings Ltd., as Guarantor, and Deutsche Bank Trust Companies America, as Trustee. (6) |
4.3(b) | Senior Debt Securities Guarantee Agreement, dated as of March 17, 2010, between RenaissanceRe Holdings Ltd., as Guarantor, and Deutsche Bank Trust Companies America, as Guarantee Trustee. (6) |
4.3(c) | Waiver Agreement, dated as of January 21, 2011, by and among RenRe North America Holdings Inc., RenaissanceRe Holdings Ltd. and Deutsche Bank Trust Company Americas, as Trustee. (7) |
4.4 | Credit Agreement, dated as of May 17, 2012, by and among RenaissanceRe Holdings Ltd., various banks and financial institutions parties thereto, Wells Fargo Bank, National Association, as Fronting Bank, LC Administrator and Administrative Agent for the Lenders, Citibank, N.A., as Syndication Agent, and Wells Fargo Securities, LLC and Citigroup Global Markets Inc., as Joint Lead Arrangers and Joint Lead Bookrunners (8). |
4.4(a) | First Amendment and Joinder to Credit Agreement, dated as of May 23, 2013, by and among RenaissanceRe Holdings Ltd., Wells Fargo Bank, National Association, as Fronting Bank, LC Administrator and Administrative Agent for the Lenders, and various banks and financial institutions parties thereto. (9) |
4.5 | Master Reimbursement Agreement, dated as of April 29, 2009, by and between Renaissance Reinsurance Ltd. and Citibank Europe PLC. (10) |
4.5(a) | Second Amended and Restated Pledge Agreement, dated as of November 24, 2014, by and between Renaissance Reinsurance Ltd. and Citibank Europe PLC. |
4.6 | Fourth Amended and Restated Reimbursement Agreement, dated as of May 17, 2012, by and among RenaissanceRe Holdings Ltd., Renaissance Reinsurance Ltd. Renaissance Reinsurance of Europe, Glencoe Insurance Ltd., DaVinci Reinsurance Ltd., the banks and financial institutions parties thereto, Wells Fargo Bank, National Association, as issuing bank, administrative agent and collateral agent for the lenders, and certain other agents. (8) |
4.7 | Standby Letter of Credit Agreement, dated as of December 23, 2014, by and among RenaissanceRe Holdings Ltd., Renaissance Reinsurance Ltd., RenaissanceRe Specialty Risks Ltd., DaVinci Reinsurance Ltd. and Wells Fargo Bank, National Association. (38) |
4.8 | Facility Letter, dated September 17, 2010, from Citibank Europe plc to Renaissance Reinsurance Ltd., DaVinci Reinsurance Ltd. and Glencoe Insurance Ltd. (11) |
4.8(a) | Amendment to Facility Letter, dated October 1, 2013, by and among Citibank Europe plc, Renaissance Reinsurance Ltd., DaVinci Reinsurance Ltd., RenaissanceRe Specialty Risks Ltd., Renaissance Reinsurance of Europe and RenaissanceRe Specialty U.S. Ltd. (12) |
4.8(b) | Insurance Letters of Credit - Master Agreement, dated September 17, 2010, between Renaissance Reinsurance Ltd. and Citibank Europe plc. DaVinci Reinsurance Ltd., Glencoe Insurance Ltd., Renaissance Reinsurance of Europe and Renaissance Specialty U.S. Ltd. have each entered into an agreement with Citibank Europe plc that is identical to the foregoing agreement, except with respect to party names and dates. (11) |
4.9 | Master Reimbursement Agreement, dated as of November 24, 2014, by and between RenaissanceRe Specialty Risks Ltd. and Citibank Europe PLC. |
4.9(a) | Pledge Agreement, dated as of November 24, 2014 by and among RenaissanceRe Specialty Risks Ltd. and Citibank Europe PLC. |
10.1 | Further Amended and Restated Employment Agreement, dated as of May 15, 2013, by and between RenaissanceRe Holdings Ltd. and Kevin J. O'Donnell. (13) |
10.2 | Form of the Amended and Restated Employment Agreement for Named Executive Officers (other than our Chief Executive Officer). (14) |
10.3 | Further Amended and Restated Employment Agreement, dated as of October 23, 2013, by and between RenaissanceRe Holdings Ltd. and Jeffrey D. Kelly. (15) |
10.4 | Transition and Services Agreement, dated as of May 15, 2013, between RenaissanceRe Holdings Ltd. and Neill A. Currie. (13) |
10.5 | Further Amended and Restated Employment Agreement, dated as of February 19, 2009, between RenaissanceRe Holdings Ltd. and Neill A. Currie. (16) |
10.5(a) | Amendment No. 1 to the Further Amended and Restated Employment Agreement, dated January 8, 2010, by and among RenaissanceRe Holdings Ltd. and Neill A. Currie. (17) |
10.5(b) | Amendment No. 2 to Further Amended and Restated Employment Agreement by and between RenaissanceRe Holdings Ltd. and Neill A. Currie, dated February 19, 2013. (18) |
10.5(c) | Amendment No. 3 to Further Amended and Restated Employment Agreement by and between RenaissanceRe Holdings Ltd. and Neill A. Currie, dated April 5, 2013. (14) |
10.6 | RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (21) |
10.6(a) | Amendment No. 1 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (21) |
10.6(b) | Amendment No. 2 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (21) |
10.6(c) | Amendment No. 3 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (10) |
10.6(d) | Amendment No. 4 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (19) |
10.6(e) | Amendment No. 5 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (23) |
10.6(f) | Amendment No. 6 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (15) |
10.6(g) | UK Schedule to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (10) |
10.6(h) | UK Sub-Plan to the RenaissanceRe Holdings 2001 Stock Incentive Plan. (10) |
10.6(i) | Form of Option Grant Notice and Agreement pursuant to which option grants are made under the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (25) |
10.6(j) | Form of Restricted Stock Grant Notice and Agreement pursuant to which Restricted Stock grants are made under the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (25) |
10.7 | RenaissanceRe Holdings Ltd. 2004 Stock Option Incentive Plan. (26) |
10.7(a) | Amendment No. 1 to the RenaissanceRe Holdings Ltd. 2004 Stock Option Incentive Plan. (27) |
10.7(b) | Form of Option Agreement pursuant to which option grants are made under the RenaissanceRe Holdings 2004 Stock Option Incentive Plan to executive officers. (26) |
10.8 | RenaissanceRe Holdings Ltd. 2010 Restricted Stock Unit Plan. (20) |
10.8(a) | Form of Restricted Stock Unit Agreement, pursuant to which restricted stock unit grants are made under the RenaissanceRe Holdings Ltd. 2010 Restricted Stock Unit Plan. (20) |
10.9 | RenaissanceRe Holdings Ltd. 2010 Performance-Based Equity Incentive Plan. (19) |
10.9(a) | Amendment No. 1 to the RenaissanceRe Holdings Ltd. 2010 Performance-Based Equity Incentive Plan. |
10.9(b) | Form of Letter Agreement with the Named Executive Officers Regarding Performance Share Awards. (24) |
10.9(c) | Form of Letter Agreement with Neill A. Currie Regarding Performance Share Awards. (24) |
10.9(d) | Form of Performance-Based Restricted Stock Grant Notice and Agreement pursuant to which performance-based restricted stock awards are made under the RenaissanceRe Holdings Ltd. 2010 Performance-Based Equity Incentive Plan. |
10.9(e) | Performance-Based Restricted Stock Grant Notice and Agreement under the RenaissanceRe Holdings Ltd. 2010 Performance-Based Equity Incentive Plan, dated June 9, 2010, between RenaissanceRe Holdings Ltd. and Neill A. Currie. (28) |
10.10 | Form of Tax Reimbursement Waiver Letter with the Named Executive Officers. (29) |
10.11 | Form of Agreement Regarding Use of Aircraft Interest by and between RenaissanceRe Holdings Ltd. and Certain Executive Officers of RenaissanceRe Holdings Ltd. (18) |
10.12 | Form of Director Retention Agreement, dated as of November 8, 2002, entered into by each of the non-employee directors of RenaissanceRe Holdings Ltd. (30) |
10.13 | Amended and Restated RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (31) |
10.13(a) | Amendment No. 1 to the RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (32) |
10.13(b) | Amendment No. 2 to the RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (33) |
10.13(c) | Amendment No. 3 to the RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (34) |
10.13(d) | Form of Restricted Stock Grant Agreement pursuant to which option grants are made under the RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (35) |
10.13(e) | Form of Option Grant Agreement pursuant to which option grants are made under the RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (35) |
10.14 | Stock Purchase Agreement, dated as of November 18, 2010, by and between RenRe North America Holdings Inc., and QBE Holdings Inc. (36) |
10.15 | Separation, Consulting, and Release Agreement by and between RenaissanceRe Holdings Ltd. and Peter C. Durhager, dated November 13, 2014. (39) |
21.1 | List of Subsidiaries of the Registrant. |
23.1 | Consent of Ernst & Young Ltd. |
31.1 | Certification of Kevin J. O’Donnell, Chief Executive Officer of RenaissanceRe Holdings Ltd., pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended. |
31.2 | Certification of Jeffrey D. Kelly, Chief Financial Officer of RenaissanceRe Holdings Ltd., pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended. |
32.1 | Certification of Kevin J. O’Donnell, Chief Executive Officer of RenaissanceRe Holdings Ltd., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2 | Certification of Jeffrey D. Kelly, Chief Financial Officer of RenaissanceRe Holdings Ltd., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
(1) | Incorporated by reference to the Registration Statement on Form S-1 of RenaissanceRe Holdings Ltd. (Registration No. 33-70008) which was declared effective by the SEC on July 26, 1995. |
(2) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended June 30, 2002, filed with the SEC on August 14, 2002. |
(3) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended March 31, 1998, filed with the SEC on May 14, 1998 (SEC File Number 000-26512). |
(4) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on March 18, 2004. |
(5) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on May 28, 2013. |
(6) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on March 18, 2010. |
(7) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on January 24, 2011. |
(8) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on May 22, 2012. |
(9) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on May 24, 2013. |
(10) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended March 31, 2009, filed with the SEC on May 1, 2009. |
(11) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K , filed with the SEC on September 23, 2010. |
(12) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on October 4, 2013. |
(13) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on May 16, 2013. |
(14) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on April 11, 2013. |
(15) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended September 30, 2013, filed with the SEC on November 6, 2013. |
(16) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on February 25, 2009. |
(17) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on January 14, 2010. |
(18) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Annual Report on Form 10-K for the year ended December 31, 2012, filed with the SEC on February 22, 2013. |
(19) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Definitive Proxy Statement filed with the Commission on April 8, 2010. |
(20) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Annual Report on Form 10-K for the year ended December 31, 2009, filed with the SEC on February 19, 2010. |
(21) | Incorporated by reference to Exhibit 99.2 to the Registration Statement on Form S-8 (Registration No. 333-90758) dated June 19, 2002. |
(22) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended March 31, 2007, filed with the SEC on May 2, 2007. |
(23) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on August 13, 2010. |
(24) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q, filed with the SEC on April 29, 2010. |
(25) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended September 30, 2004, filed with the SEC on November 9, 2004. |
(26) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on September 2, 2004. |
(27) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Annual Report on Form 10-K for the year ended December 31, 2004, filed with the SEC on March 31, 2005 (SEC File Number 001-14428). |
(28) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on June 11, 2010. |
(29) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Annual Report on Form 10-K for the year ended December 31, 2011, filed with the SEC on February 23, 2012. |
(30) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Annual Report on Form 10-K for the year ended December 31, 2002, filed with the SEC on March 31, 2003 (SEC File Number 001-14428). |
(31) | Incorporated by reference to Exhibit 99.1 to the Registration Statement on Form S-8 (Registration No. 333-90758) dated June 19, 2002. |
(32) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended March 31, 2007, filed with the SEC on May 2, 2007. |
(33) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended September 30, 2008, filed with the SEC on October 30, 2008. |
(34) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Annual Report on Form 10-K for the year ended December 31, 2008, filed with the SEC on February 20, 2009. |
(35) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on February 27, 2006. |
(36) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on November 18, 2010. |
(37) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on November 24, 2014. |
(38) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on December 30, 2014. |
(39) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on November 26, 2014. |
/s/ Kevin J. O’Donnell | ||||||
Kevin J. O’Donnell | ||||||
Chief Executive Officer, President and Director | ||||||
Signature | Title | Date | ||||
/s/ Kevin J. O’Donnell | Chief Executive Officer, President and Director | February 19, 2015 | ||||
Kevin J. O’Donnell | ||||||
/s/ Jeffrey D. Kelly | Executive Vice President, Chief Operating Officer and Chief Financial Officer | February 19, 2015 | ||||
Jeffrey D. Kelly | ||||||
/s/ Mark A. Wilcox | Senior Vice President, Chief Accounting Officer and Corporate Controller | February 19, 2015 | ||||
Mark A. Wilcox | ||||||
/s/ Ralph B. Levy | Chair of the Board of Directors | February 19, 2015 | ||||
Ralph B. Levy | ||||||
/s/ David C. Bushnell | Director | February 19, 2015 | ||||
David C. Bushnell | ||||||
/s/ James L. Gibbons | Director | February 19, 2015 | ||||
James L. Gibbons | ||||||
/s/ Brian G. J. Gray | Director | February 19, 2015 | ||||
Brian G. J. Gray | ||||||
/s/ Jean D. Hamilton | Director | February 19, 2015 | ||||
Jean D. Hamilton | ||||||
/s/ Henry Klehm, III | Director | February 19, 2015 | ||||
Henry Klehm, III | ||||||
/s/ W. James MacGinnitie | Director | February 19, 2015 | ||||
W. James MacGinnitie | ||||||
/s/ Anthony M. Santomero | Director | February 19, 2015 | ||||
Anthony M. Santomero | ||||||
/s/ Nicholas L. Trivisonno | Director | February 19, 2015 | ||||
Nicholas L. Trivisonno | ||||||
/s/ Edward J. Zore | Director | February 19, 2015 | ||||
Edward J. Zore |
Page | |
December 31, 2014 | December 31, 2013 | ||||||
Assets | |||||||
Fixed maturity investments trading, at fair value (Amortized cost $4,749,613 and $4,781,712 at December 31, 2014 and December 31, 2013, respectively) (Notes 5 and 6) | $ | 4,756,685 | $ | 4,809,036 | |||
Fixed maturity investments available for sale, at fair value (Amortized cost $23,772 and $30,273 at December 31, 2014 and December 31, 2013, respectively) (Notes 5 and 6) | 26,885 | 34,241 | |||||
Short term investments, at fair value (Notes 5 and 6) | 1,013,222 | 1,044,779 | |||||
Equity investments trading, at fair value (Notes 5 and 6) | 322,098 | 254,776 | |||||
Other investments, at fair value (Notes 5 and 6) | 504,147 | 573,264 | |||||
Investments in other ventures, under equity method (Note 5) | 120,713 | 105,616 | |||||
Total investments | 6,743,750 | 6,821,712 | |||||
Cash and cash equivalents | 525,584 | 408,032 | |||||
Premiums receivable | 440,007 | 474,087 | |||||
Prepaid reinsurance premiums (Note 7) | 94,810 | 66,132 | |||||
Reinsurance recoverable (Notes 7 and 8) | 66,694 | 101,025 | |||||
Accrued investment income | 26,509 | 34,065 | |||||
Deferred acquisition costs | 110,059 | 81,684 | |||||
Receivable for investments sold | 52,390 | 75,845 | |||||
Other assets | 135,845 | 108,438 | |||||
Goodwill and other intangible assets (Note 4) | 7,902 | 8,111 | |||||
Total assets | $ | 8,203,550 | $ | 8,179,131 | |||
Liabilities, Noncontrolling Interests and Shareholders’ Equity | |||||||
Liabilities | |||||||
Reserve for claims and claim expenses (Note 8) | $ | 1,412,510 | $ | 1,563,730 | |||
Unearned premiums | 512,386 | 477,888 | |||||
Debt (Note 9) | 249,522 | 249,430 | |||||
Reinsurance balances payable | 454,580 | 293,022 | |||||
Payable for investments purchased | 203,021 | 193,221 | |||||
Other liabilities | 374,108 | 397,596 | |||||
Total liabilities | 3,206,127 | 3,174,887 | |||||
Commitments and Contingencies (Note 20) | |||||||
Redeemable noncontrolling interests (Note 10) | 1,131,708 | 1,099,860 | |||||
Shareholders’ Equity (Note 12) | |||||||
Preference shares: $1.00 par value – 16,000,000 shares issued and outstanding at December 31, 2014 (December 31, 2013 – 16,000,000) | 400,000 | 400,000 | |||||
Common shares: $1.00 par value – 38,441,972 shares issued and outstanding at December 31, 2014 (December 31, 2013 – 43,646,436) | 38,442 | 43,646 | |||||
Accumulated other comprehensive income | 3,416 | 4,131 | |||||
Retained earnings | 3,423,857 | 3,456,607 | |||||
Total shareholders’ equity | 3,865,715 | 3,904,384 | |||||
Total liabilities, noncontrolling interests and shareholders’ equity | $ | 8,203,550 | $ | 8,179,131 |
2014 | 2013 | 2012 | |||||||||
Revenues | |||||||||||
Gross premiums written | $ | 1,550,572 | $ | 1,605,412 | $ | 1,551,591 | |||||
Net premiums written (Note 7) | $ | 1,068,236 | $ | 1,203,947 | $ | 1,102,657 | |||||
Increase in unearned premiums | (5,820 | ) | (89,321 | ) | (33,302 | ) | |||||
Net premiums earned (Note 7) | 1,062,416 | 1,114,626 | 1,069,355 | ||||||||
Net investment income (Note 5) | 124,316 | 208,028 | 165,725 | ||||||||
Net foreign exchange gains | 6,260 | 1,917 | 5,319 | ||||||||
Equity in earnings of other ventures (Note 5) | 26,075 | 23,194 | 23,238 | ||||||||
Other loss | (423 | ) | (2,359 | ) | (2,120 | ) | |||||
Net realized and unrealized gains on investments (Note 5) | 41,433 | 35,076 | 163,121 | ||||||||
Total other-than-temporary impairments | — | — | (395 | ) | |||||||
Portion recognized in other comprehensive income (loss), before taxes | — | — | 52 | ||||||||
Net other-than-temporary impairments (Note 5) | — | — | (343 | ) | |||||||
Total revenues | 1,260,077 | 1,380,482 | 1,424,295 | ||||||||
Expenses | |||||||||||
Net claims and claim expenses incurred (Notes 7 and 8) | 197,947 | 171,287 | 325,211 | ||||||||
Acquisition expenses | 144,476 | 125,501 | 113,542 | ||||||||
Operational expenses | 190,639 | 191,105 | 179,151 | ||||||||
Corporate expenses | 22,987 | 33,622 | 16,456 | ||||||||
Interest expense (Note 9) | 17,164 | 17,929 | 23,097 | ||||||||
Total expenses | 573,213 | 539,444 | 657,457 | ||||||||
Income from continuing operations before taxes | 686,864 | 841,038 | 766,838 | ||||||||
Income tax expense (Note 15) | (608 | ) | (1,692 | ) | (1,413 | ) | |||||
Income from continuing operations | 686,256 | 839,346 | 765,425 | ||||||||
Income (loss) from discontinued operations (Note 3) | — | 2,422 | (16,476 | ) | |||||||
Net income | 686,256 | 841,768 | 748,949 | ||||||||
Net income attributable to noncontrolling interests (Note 10) | (153,538 | ) | (151,144 | ) | (148,040 | ) | |||||
Net income attributable to RenaissanceRe | 532,718 | 690,624 | 600,909 | ||||||||
Dividends on preference shares (Note 12) | (22,381 | ) | (24,948 | ) | (34,895 | ) | |||||
Net income available to RenaissanceRe common shareholders | $ | 510,337 | $ | 665,676 | $ | 566,014 | |||||
Income from continuing operations available to RenaissanceRe common shareholders per common share – basic | $ | 12.77 | $ | 15.08 | $ | 11.74 | |||||
Income (loss) from discontinued operations available (attributable) to RenaissanceRe common shareholders per common share – basic | — | 0.06 | (0.34 | ) | |||||||
Net income available to RenaissanceRe common shareholders per common share – basic (Note 13) | $ | 12.77 | $ | 15.14 | $ | 11.40 | |||||
Income from continuing operations available to RenaissanceRe common shareholders per common share – diluted | $ | 12.60 | $ | 14.82 | $ | 11.56 | |||||
Income (loss) from discontinued operations available (attributable) to RenaissanceRe common shareholders per common share – diluted | — | 0.05 | (0.33 | ) | |||||||
Net income available to RenaissanceRe common shareholders per common share – diluted (Note 13) | $ | 12.60 | $ | 14.87 | $ | 11.23 | |||||
Dividends per common share (Note 12) | $ | 1.16 | $ | 1.12 | $ | 1.08 |
2014 | 2013 | 2012 | |||||||||
Comprehensive income | |||||||||||
Net income | $ | 686,256 | $ | 841,768 | $ | 748,949 | |||||
Change in net unrealized gains on investments | (715 | ) | (9,491 | ) | 1,914 | ||||||
Portion of other-than-temporary impairments recognized in other comprehensive income, before taxes | — | — | (52 | ) | |||||||
Comprehensive income | 685,541 | 832,277 | 750,811 | ||||||||
Net income attributable to noncontrolling interests | (153,538 | ) | (151,144 | ) | (148,040 | ) | |||||
Comprehensive income attributable to noncontrolling interests | (153,538 | ) | (151,144 | ) | (148,040 | ) | |||||
Comprehensive income attributable to RenaissanceRe | $ | 532,003 | $ | 681,133 | $ | 602,771 | |||||
Disclosure regarding net unrealized gains | |||||||||||
Total net realized and unrealized holding (losses) gains on investments and net other-than-temporary impairments | $ | (715 | ) | $ | (1,943 | ) | $ | 5,100 | |||
Net realized gains on fixed maturity investments available for sale | — | (7,548 | ) | (3,529 | ) | ||||||
Net other-than-temporary impairments recognized in earnings | — | — | 343 | ||||||||
Change in net unrealized gains on investments | $ | (715 | ) | $ | (9,491 | ) | $ | 1,914 |
2014 | 2013 | 2012 | |||||||||
Preference shares | |||||||||||
Balance – January 1 | $ | 400,000 | $ | 400,000 | $ | 550,000 | |||||
Issuance of shares | — | 275,000 | — | ||||||||
Repurchase of shares | — | (275,000 | ) | (150,000 | ) | ||||||
Balance – December 31 | 400,000 | 400,000 | 400,000 | ||||||||
Common shares | |||||||||||
Balance – January 1 | 43,646 | 45,542 | 51,543 | ||||||||
Repurchase of shares | (5,355 | ) | (2,451 | ) | (6,399 | ) | |||||
Exercise of options and issuance of restricted stock awards (Notes 12 and 17) | 151 | 555 | 398 | ||||||||
Balance – December 31 | 38,442 | 43,646 | 45,542 | ||||||||
Additional paid-in capital | |||||||||||
Balance – January 1 | — | — | — | ||||||||
Repurchase of shares | (11,702 | ) | (1,702 | ) | (27,376 | ) | |||||
Offering expenses | — | (9,144 | ) | — | |||||||
Change in redeemable noncontrolling interest | 1,274 | 318 | 9,091 | ||||||||
Exercise of options and issuance of restricted stock awards (Notes 12 and 17) | 10,428 | 10,528 | 18,285 | ||||||||
Balance – December 31 | — | — | — | ||||||||
Accumulated other comprehensive income | |||||||||||
Balance – January 1 | 4,131 | 13,622 | 11,760 | ||||||||
Change in net unrealized gains on investments | (715 | ) | (9,491 | ) | 1,914 | ||||||
Portion of other-than-temporary impairments recognized in other comprehensive income | — | — | (52 | ) | |||||||
Balance – December 31 | 3,416 | 4,131 | 13,622 | ||||||||
Retained earnings | |||||||||||
Balance – January 1 | 3,456,607 | 3,043,901 | 2,991,890 | ||||||||
Net income | 686,256 | 841,768 | 748,949 | ||||||||
Net income attributable to noncontrolling interests (Note 10) | (153,538 | ) | (151,144 | ) | (148,040 | ) | |||||
Repurchase of shares | (497,175 | ) | (203,703 | ) | (460,647 | ) | |||||
Dividends on common shares | (45,912 | ) | (49,267 | ) | (53,356 | ) | |||||
Dividends on preference shares | (22,381 | ) | (24,948 | ) | (34,895 | ) | |||||
Balance – December 31 | 3,423,857 | 3,456,607 | 3,043,901 | ||||||||
Noncontrolling interest (Note 10) | — | — | 3,991 | ||||||||
Total shareholders’ equity | $ | 3,865,715 | $ | 3,904,384 | $ | 3,507,056 |
2014 | 2013 | 2012 | |||||||||
Cash flows provided by operating activities | |||||||||||
Net income | $ | 686,256 | $ | 841,768 | $ | 748,949 | |||||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||||||
Amortization, accretion and depreciation | 47,771 | 51,596 | 59,695 | ||||||||
Equity in undistributed earnings of other ventures | (19,990 | ) | (15,450 | ) | (19,316 | ) | |||||
Net realized and unrealized gains on investments | (41,433 | ) | (35,058 | ) | (163,121 | ) | |||||
Net other-than-temporary impairments | — | — | 343 | ||||||||
Net unrealized losses (gains) included in net investment income | 1,393 | (75,789 | ) | (38,207 | ) | ||||||
Net unrealized losses (gains) included in other loss | 1,612 | 12,782 | (330 | ) | |||||||
Change in: | |||||||||||
Premiums receivable | 34,080 | 17,278 | (19,487 | ) | |||||||
Prepaid reinsurance premiums | (28,678 | ) | 10,950 | (18,560 | ) | ||||||
Reinsurance recoverable | 34,331 | 91,487 | 211,517 | ||||||||
Deferred acquisition costs | (28,375 | ) | (29,062 | ) | (8,901 | ) | |||||
Reserve for claims and claim expenses | (151,220 | ) | (315,647 | ) | (112,977 | ) | |||||
Unearned premiums | 34,498 | 78,371 | 51,862 | ||||||||
Reinsurance balances payable | 161,558 | 2,603 | 33,536 | ||||||||
Other | (71,146 | ) | 159,892 | (8,074 | ) | ||||||
Net cash provided by operating activities | 660,657 | 795,721 | 716,929 | ||||||||
Cash flows provided by (used in) investing activities | |||||||||||
Proceeds from sales and maturities of fixed maturity investments trading | 7,682,573 | 8,251,405 | 8,192,867 | ||||||||
Purchases of fixed maturity investments trading | (7,639,178 | ) | (8,466,467 | ) | (8,536,238 | ) | |||||
Proceeds from sales and maturities of fixed maturity investments available for sale | 7,088 | 45,178 | 65,168 | ||||||||
Net purchases of equity investments trading | (20,003 | ) | (33,055 | ) | — | ||||||
Net sales (purchases) of short term investments | 45,023 | (246,971 | ) | 68,777 | |||||||
Net sales of other investments | 59,120 | 76,214 | 150,828 | ||||||||
Net sales (purchases) of investments in other ventures | 1,030 | (4,000 | ) | — | |||||||
Net sales (purchases) of other assets | 6,000 | 2,181 | (4,079 | ) | |||||||
Net proceeds (payments) related to sale of discontinued operations | — | 60,000 | (9,000 | ) | |||||||
Net cash provided by (used in) investing activities | 141,653 | (315,515 | ) | (71,677 | ) | ||||||
Cash flows used in financing activities | |||||||||||
Dividends paid – RenaissanceRe common shares | (45,912 | ) | (49,267 | ) | (53,356 | ) | |||||
Dividends paid – preference shares | (22,381 | ) | (24,948 | ) | (34,895 | ) | |||||
RenaissanceRe common share repurchases | (514,678 | ) | (207,410 | ) | (463,309 | ) | |||||
Net repayment of debt | — | (102,436 | ) | (1,937 | ) | ||||||
Redemption of 6.08% Series C preference shares | — | (125,000 | ) | — | |||||||
Redemption of 6.60% Series D preference shares | — | (150,000 | ) | (150,000 | ) | ||||||
Issuance of 5.375% Series E preference shares, net of expenses | — | 265,856 | — | ||||||||
Net third party redeemable noncontrolling interest share transactions | (111,707 | ) | (5,750 | ) | 164,927 | ||||||
Net cash used in financing activities | (694,678 | ) | (398,955 | ) | (538,570 | ) | |||||
Effect of exchange rate changes on foreign currency cash | 9,920 | 1,423 | 1,692 | ||||||||
Net increase in cash and cash equivalents | 117,552 | 82,674 | 108,374 | ||||||||
Net decrease in cash and cash equivalents of discontinued operations | — | 21,213 | 13,946 | ||||||||
Cash and cash equivalents, beginning of year | 408,032 | 304,145 | 181,825 | ||||||||
Cash and cash equivalents, end of year | $ | 525,584 | $ | 408,032 | $ | 304,145 |
• | Renaissance Reinsurance Ltd. (“Renaissance Reinsurance”), the Company’s principal reinsurance subsidiary, provides property catastrophe and specialty reinsurance coverages to insurers and reinsurers on a worldwide basis. |
• | The Company also manages property catastrophe and specialty reinsurance business written on behalf of joint ventures, which principally include Top Layer Reinsurance Ltd. (“Top Layer Re”), recorded under the equity method of accounting, and DaVinci Reinsurance Ltd. (“DaVinci”). Because the Company owns a noncontrolling equity interest in, but controls a majority of the outstanding voting power of DaVinci’s parent, DaVinciRe Holdings Ltd. (“DaVinciRe”), the results of DaVinci and DaVinciRe are consolidated in the Company’s financial statements. Redeemable noncontrolling interest – DaVinciRe represents the interests of external parties with respect to the net income and shareholders’ equity of DaVinciRe. Renaissance Underwriting Managers, Ltd. (“RUM”), a wholly owned subsidiary, acts as exclusive underwriting manager for these joint ventures in return for fee-based income and profit participation. |
• | RenaissanceRe Syndicate 1458 (“Syndicate 1458”) is the Company’s Lloyd’s syndicate. RenaissanceRe Corporate Capital (UK) Limited (“RenaissanceRe CCL”), a wholly owned subsidiary of RenaissanceRe, is Syndicate 1458’s sole corporate member and RenaissanceRe Syndicate Management Ltd. (“RSML”), a wholly owned subsidiary of RenaissanceRe, is the managing agent for Syndicate 1458. |
• | RenaissanceRe Specialty Risks Ltd. (“RenaissanceRe Specialty Risks”), is a Bermuda-domiciled excess and surplus lines insurance company that is listed on the National Association of Insurance Commissioners’ International Insurance Department’s Quarterly List of Alien Insurers as an eligible surplus lines insurer. RenaissanceRe Underwriting Managers U.S. LLC, a specialty reinsurance agency domiciled in Connecticut, provides specialty treaty reinsurance solutions on both a quota share and excess of loss basis; and writes business on behalf of RenaissanceRe Specialty U.S. Ltd. (“RenaissanceRe Specialty U.S.”), a Bermuda-domiciled reinsurer launched in June 2013 which operates subject to U.S. federal income tax, and Syndicate 1458. |
• | Effective January 1, 2013, the Company formed and launched a managed joint venture, Upsilon Reinsurance II Ltd. (“Upsilon Re II”), a Bermuda domiciled special purpose insurer (“SPI”), to provide additional capacity to the worldwide aggregate and per-occurrence primary and retrocessional property catastrophe excess of loss market. Effective December 11, 2013, Upsilon Re II was renamed Upsilon Reinsurance Fund Opportunities Ltd. (“Upsilon RFO”). Upsilon RFO is considered a variable interest entity (“VIE”) and the Company is considered the primary beneficiary. As a result, Upsilon RFO is consolidated by the Company and all significant inter-company transactions have been eliminated. |
• | Effective November 13, 2014, the Company incorporated RenaissanceRe Upsilon Fund Ltd. (“Upsilon Fund”), an exempted Bermuda limited segregated accounts company. Upsilon Fund was formed to provide a fund structure through which third party investors can invest in reinsurance risk managed by the Company. As a segregated accounts company, Upsilon Fund is permitted to establish segregated accounts to invest in and hold identified pools of assets and liabilities. Each pool of assets and liabilities in each segregated account is ring-fenced from any claims from the creditors of Upsilon Fund’s general account and from the creditors of other segregated accounts within Upsilon Fund. Third party investors purchase redeemable, non voting preference shares linked to specific |
• | RenaissanceRe Medici Fund Ltd. (“Medici”) is an exempted fund, incorporated under the laws of Bermuda. Medici’s objective is to seek to invest substantially all of its assets in various insurance-based investment instruments that have returns primarily tied to property catastrophe risk. Third-party investors have subscribed for a portion of the participating, non-voting common shares of Medici. Because the Company owns a noncontrolling equity interest in, but controls a majority of the outstanding voting power of Medici’s parent, RenaissanceRe Fund Holdings Ltd. (“Fund Holdings”), the results of Medici and Fund Holdings are consolidated in the Company’s financial statements. Redeemable noncontrolling interest - Medici represents the interests of external parties with respect to the net income and shareholders’ equity of Medici. |
• | On August 30, 2013, the Company entered into a purchase agreement with a subsidiary of Munich-American Holding Corporation (together with applicable affiliates, “Munich”) to sell its U.S.-based weather and weather-related energy risk management unit, which included RenRe Commodity Advisors LLC (“RRCA”), Renaissance Trading Ltd. (“Renaissance Trading”) and RenRe Energy Advisors Ltd. (collectively referred to as “REAL”). REAL offered certain derivative-based risk management products primarily to address weather and energy risk and engaged in hedging and trading activities related to those transactions. On October 1, 2013, the Company closed the sale of REAL to Munich. In the third quarter of 2013, the Company classified the assets and liabilities associated with this transaction as held for sale. The financial results for these operations have been presented in the Company’s consolidated financial statements as “discontinued operations” for all periods presented. Refer to “Note 3. Discontinued Operations”, for more information. |
• | On November 24, 2014, the Company announced that RenaissanceRe and Platinum Underwriters Holdings, Ltd. (“Platinum”) entered into a definitive merger agreement (the “Merger Agreement”) under which RenaissanceRe will acquire Platinum (the “Merger”). The agreement has been unanimously approved by both companies’ Board of Directors and, if approved by Platinum shareholders, the transaction is expected to close on March 2, 2015. The aggregate consideration for the transaction is expected to be approximately $1.9 billion. The Company will account for the acquisition of Platinum under the acquisition method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805 Business Combinations, under which the total consideration paid will be allocated among acquired assets and assumed liabilities based on the fair values of the assets acquired and liabilities assumed. The Company anticipates that the purchase price paid will exceed the fair value of the net assets acquired, perhaps significantly so, and the excess will be accounted for as goodwill. Intangible assets with definite lives will be amortized over their estimated useful lives. Goodwill resulting from the acquisition of Platinum will not be amortized but instead will be tested for impairment at least annually (more frequently if certain indicators are present). There can be no assurance that the Merger will occur. Refer to “Note 20. Commitments, Contingencies and Other Items”, for more information with respect to the Merger. |
Year ended December 31, 2013 | REAL | ||||
Revenues | |||||
Net investment income | $ | 1,150 | |||
Net foreign exchange gains | 849 | ||||
Other income | 701 | ||||
Net realized and unrealized losses on investments | (18 | ) | |||
Total revenues | 2,682 | ||||
Expenses | |||||
Operational expenses | 89 | ||||
Corporate expenses | 104 | ||||
Total expenses | 193 | ||||
Income before taxes | 2,489 | ||||
Income tax expense | (67 | ) | |||
Income from discontinued operations | $ | 2,422 | |||
Year ended December 31, 2012 | REAL | U.S.-based insurance operations | Total | ||||||||||
Revenues | |||||||||||||
Net investment income | $ | 2,517 | $ | — | $ | 2,517 | |||||||
Net foreign exchange losses | (96 | ) | — | (96 | ) | ||||||||
Other (loss) income | (20,785 | ) | 2,730 | (18,055 | ) | ||||||||
Net realized and unrealized gains on investments | 3 | — | 3 | ||||||||||
Total revenues | (18,361 | ) | 2,730 | (15,631 | ) | ||||||||
Expenses | |||||||||||||
Operational expenses | 150 | 436 | 586 | ||||||||||
Corporate expenses | 236 | — | 236 | ||||||||||
Total expenses | 386 | 436 | 822 | ||||||||||
(Loss) income before taxes | (18,747 | ) | 2,294 | (16,453 | ) | ||||||||
Income tax expense | (16 | ) | (7 | ) | (23 | ) | |||||||
(Loss) income from discontinued operations | $ | (18,763 | ) | $ | 2,287 | $ | (16,476 | ) | |||||
Goodwill and other intangible assets | |||||||||||||
Goodwill | Other intangible assets | Total | |||||||||||
Balance as of December 31, 2012 | |||||||||||||
Gross amount | $ | 8,160 | $ | 12,999 | $ | 21,159 | |||||||
Accumulated impairment losses and amortization | (2,299 | ) | (10,374 | ) | (12,673 | ) | |||||||
5,861 | 2,625 | 8,486 | |||||||||||
Amortization | — | (375 | ) | (375 | ) | ||||||||
Balance as of December 31, 2013 | |||||||||||||
Gross amount | 8,160 | 12,999 | 21,159 | ||||||||||
Accumulated impairment losses and amortization | (2,299 | ) | (10,749 | ) | (13,048 | ) | |||||||
5,861 | 2,250 | 8,111 | |||||||||||
Amortization | — | (209 | ) | (209 | ) | ||||||||
Balance as of December 31, 2014 | |||||||||||||
Gross amount | 8,160 | 12,999 | 21,159 | ||||||||||
Accumulated impairment losses and amortization | (2,299 | ) | (10,958 | ) | (13,257 | ) | |||||||
$ | 5,861 | $ | 2,041 | $ | 7,902 | ||||||||
Goodwill and other intangible assets included in investments in other ventures, under equity method | |||||||||||||
Goodwill | Other intangible assets | Total | |||||||||||
Balance as of December 31, 2012 | |||||||||||||
Gross amount | $ | 10,840 | $ | 44,323 | $ | 55,163 | |||||||
Accumulated impairment losses and amortization | — | (24,769 | ) | (24,769 | ) | ||||||||
10,840 | 19,554 | 30,394 | |||||||||||
Acquired during the year | 1,705 | 1,155 | 2,860 | ||||||||||
Amortization | — | (4,042 | ) | (4,042 | ) | ||||||||
Balance as of December 31, 2013 | |||||||||||||
Gross amount | 12,545 | 45,478 | 58,023 | ||||||||||
Accumulated impairment losses and amortization | — | (28,811 | ) | (28,811 | ) | ||||||||
12,545 | 16,667 | 29,212 | |||||||||||
Adjustments to gross amount | (227 | ) | (78 | ) | (305 | ) | |||||||
Amortization | — | (3,655 | ) | (3,655 | ) | ||||||||
Balance as of December 31, 2014 | |||||||||||||
Gross amount | 12,318 | 45,400 | 57,718 | ||||||||||
Accumulated impairment losses and amortization | — | (32,466 | ) | (32,466 | ) | ||||||||
$ | 12,318 | $ | 12,934 | $ | 25,252 | ||||||||
Other intangible assets | |||||||||||||
At December 31, 2014 | Gross carrying value | Accumulated amortization and impairment losses | Total | ||||||||||
Customer relationships and customer lists | $ | 40,562 | $ | (28,057 | ) | $ | 12,505 | ||||||
Lloyd’s managing agency license | 1,867 | — | 1,867 | ||||||||||
Trademarks and trade names | 610 | (159 | ) | 451 | |||||||||
Covenants not-to-compete | 2,130 | (1,978 | ) | 152 | |||||||||
Software | 8,730 | (8,730 | ) | — | |||||||||
Patents and intellectual property | 4,500 | (4,500 | ) | — | |||||||||
$ | 58,399 | $ | (43,424 | ) | $ | 14,975 | |||||||
Other intangible assets | |||||||||||||
At December 31, 2013 | Gross carrying value | Accumulated amortization and impairment losses | Total | ||||||||||
Customer relationships and customer lists | $ | 40,640 | $ | (24,522 | ) | $ | 16,118 | ||||||
Lloyd’s managing agency license | 1,867 | — | 1,867 | ||||||||||
Covenants not-to-compete | 2,130 | (1,674 | ) | 456 | |||||||||
Trademarks and trade names | 610 | (134 | ) | 476 | |||||||||
Software | 8,730 | (8,730 | ) | — | |||||||||
Patents and intellectual property | 4,500 | (4,500 | ) | — | |||||||||
$ | 58,477 | $ | (39,560 | ) | $ | 18,917 | |||||||
Other intangibles | Other intangible assets included in investments in other ventures, under equity method | Total | |||||||||||
2015 | $ | 174 | $ | 2,991 | $ | 3,165 | |||||||
2016 | — | 2,292 | 2,292 | ||||||||||
2017 | — | 1,914 | 1,914 | ||||||||||
2018 | — | 1,484 | 1,484 | ||||||||||
2019 | — | 1,041 | 1,041 | ||||||||||
2020 and thereafter | — | 3,212 | 3,212 | ||||||||||
Total remaining amortization expense | $ | 174 | $ | 12,934 | $ | 13,108 | |||||||
Indefinite lived | 1,867 | — | 1,867 | ||||||||||
Total | $ | 2,041 | $ | 12,934 | $ | 14,975 | |||||||
December 31, 2014 | December 31, 2013 | ||||||||
U.S. treasuries | $ | 1,671,471 | $ | 1,352,413 | |||||
Agencies | 96,208 | 186,050 | |||||||
Non-U.S. government (Sovereign debt) | 280,651 | 334,580 | |||||||
Non-U.S. government-backed corporate | 146,467 | 237,479 | |||||||
Corporate | 1,610,442 | 1,803,415 | |||||||
Agency mortgage-backed | 312,333 | 336,661 | |||||||
Non-agency mortgage-backed | 241,590 | 243,795 | |||||||
Commercial mortgage-backed | 373,117 | 303,214 | |||||||
Asset-backed | 24,406 | 11,429 | |||||||
Total fixed maturity investments trading | $ | 4,756,685 | $ | 4,809,036 | |||||
Included in Accumulated Other Comprehensive Income | |||||||||||||||||||||
At December 31, 2014 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Non-Credit Other-Than- Temporary Impairments (1) | ||||||||||||||||
Agency mortgage-backed | $ | 3,928 | $ | 359 | $ | — | $ | 4,287 | $ | — | |||||||||||
Non-agency mortgage-backed | 9,478 | 1,985 | (3 | ) | 11,460 | 656 | |||||||||||||||
Commercial mortgage-backed | 7,291 | 643 | — | 7,934 | — | ||||||||||||||||
Asset-backed | 3,075 | 129 | — | 3,204 | — | ||||||||||||||||
Total fixed maturity investments available for sale | $ | 23,772 | $ | 3,116 | $ | (3 | ) | $ | 26,885 | $ | 656 | ||||||||||
Included in Accumulated Other Comprehensive Income | |||||||||||||||||||||
At December 31, 2013 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Non-Credit Other-Than- Temporary Impairments (1) | ||||||||||||||||
Agency mortgage-backed | $ | 4,880 | $ | 378 | $ | (11 | ) | $ | 5,247 | $ | — | ||||||||||
Non-agency mortgage-backed | 11,735 | 2,414 | (6 | ) | 14,143 | (742 | ) | ||||||||||||||
Commercial mortgage-backed | 10,052 | 970 | — | 11,022 | — | ||||||||||||||||
Asset-backed | 3,606 | 223 | — | 3,829 | — | ||||||||||||||||
Total fixed maturity investments available for sale | $ | 30,273 | $ | 3,985 | $ | (17 | ) | $ | 34,241 | $ | (742 | ) | |||||||||
(1) | Represents the non-credit component of other-than-temporary impairments recognized in accumulated other comprehensive income adjusted for subsequent sales of securities. It does not include the change in fair value subsequent to the impairment measurement date. |
Trading | Available for Sale | Total Fixed Maturity Investments | |||||||||||||||||||||||
At December 31, 2014 | Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||||||||
Due in less than one year | $ | 153,250 | $ | 151,803 | $ | — | $ | — | $ | 153,250 | $ | 151,803 | |||||||||||||
Due after one through five years | 2,976,602 | 2,969,828 | — | — | 2,976,602 | 2,969,828 | |||||||||||||||||||
Due after five through ten years | 544,285 | 537,636 | — | — | 544,285 | 537,636 | |||||||||||||||||||
Due after ten years | 140,294 | 145,972 | — | — | 140,294 | 145,972 | |||||||||||||||||||
Mortgage-backed | 910,897 | 927,040 | 20,697 | 23,681 | 931,594 | 950,721 | |||||||||||||||||||
Asset-backed | 24,285 | 24,406 | 3,075 | 3,204 | 27,360 | 27,610 | |||||||||||||||||||
Total | $ | 4,749,613 | $ | 4,756,685 | $ | 23,772 | $ | 26,885 | $ | 4,773,385 | $ | 4,783,570 | |||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||
Financials | $ | 222,190 | $ | 152,905 | |||||
Communications and technology | 31,376 | 4,300 | |||||||
Industrial, utilities and energy | 28,859 | 25,350 | |||||||
Consumer | 19,522 | 44,115 | |||||||
Healthcare | 16,582 | 15,340 | |||||||
Basic materials | 3,569 | 12,766 | |||||||
Total | $ | 322,098 | $ | 254,776 | |||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
Fixed maturity investments | $ | 100,855 | $ | 95,907 | $ | 103,330 | |||||||
Short term investments | 944 | 1,698 | 1,007 | ||||||||||
Equity investments | 3,450 | 2,295 | 1,086 | ||||||||||
Other investments | |||||||||||||
Hedge funds and private equity investments | 18,867 | 45,810 | 36,635 | ||||||||||
Other | 11,144 | 73,692 | 35,196 | ||||||||||
Cash and cash equivalents | 395 | 191 | 277 | ||||||||||
135,655 | 219,593 | 177,531 | |||||||||||
Investment expenses | (11,339 | ) | (11,565 | ) | (11,806 | ) | |||||||
Net investment income | $ | 124,316 | $ | 208,028 | $ | 165,725 | |||||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
Gross realized gains | $ | 45,568 | $ | 72,492 | $ | 97,787 | |||||||
Gross realized losses | (14,868 | ) | (50,206 | ) | (16,705 | ) | |||||||
Net realized gains on fixed maturity investments | 30,700 | 22,286 | 81,082 | ||||||||||
Net unrealized gains (losses) on fixed maturity investments trading | 19,680 | (87,827 | ) | 75,279 | |||||||||
Net realized and unrealized (losses) gains on investments-related derivatives | (30,931 | ) | 31,058 | (866 | ) | ||||||||
Net realized gains on equity investments trading | 10,908 | 26,650 | — | ||||||||||
Net unrealized gains on equity investments trading | 11,076 | 42,909 | 7,626 | ||||||||||
Net realized and unrealized gains on investments | $ | 41,433 | $ | 35,076 | $ | 163,121 | |||||||
Total other-than-temporary impairments | $ | — | $ | — | $ | (395 | ) | ||||||
Portion recognized in other comprehensive income, before taxes | — | — | 52 | ||||||||||
Net other-than-temporary impairments | $ | — | $ | — | $ | (343 | ) | ||||||
Year ended December 31, 2014 | |||||||||||||
Investments in other ventures | Fixed maturity investments available for sale | Total | |||||||||||
Beginning balance | $ | 163 | $ | 3,968 | $ | 4,131 | |||||||
Other comprehensive income (loss) before reclassifications | 140 | (855 | ) | (715 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive income by statement of operations line item: | |||||||||||||
Realized gains reclassified from accumulated other comprehensive income to net realized and unrealized gains (losses) on investments | — | — | — | ||||||||||
Net current-period other comprehensive income (loss) | 140 | (855 | ) | (715 | ) | ||||||||
Ending balance | $ | 303 | $ | 3,113 | $ | 3,416 | |||||||
Year ended December 31, 2013 | |||||||||||||
Investments in other ventures | Fixed maturity investments available for sale | Total | |||||||||||
Beginning balance | $ | 1,625 | $ | 11,997 | $ | 13,622 | |||||||
Other comprehensive loss before reclassifications | (1,462 | ) | (481 | ) | (1,943 | ) | |||||||
Amounts reclassified from accumulated other comprehensive income by statement of operations line item: | |||||||||||||
Realized gains reclassified from accumulated other comprehensive income to net realized and unrealized gains (losses) on investments | — | (7,548 | ) | (7,548 | ) | ||||||||
Net current-period other comprehensive loss | (1,462 | ) | (8,029 | ) | (9,491 | ) | |||||||
Ending balance | $ | 163 | $ | 3,968 | $ | 4,131 | |||||||
Less than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||||
At December 31, 2014 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||
Non-agency mortgage-backed | $ | — | $ | — | $ | 69 | $ | (3 | ) | $ | 69 | $ | (3 | ) | |||||||||||
Total | $ | — | $ | — | $ | 69 | $ | (3 | ) | $ | 69 | $ | (3 | ) | |||||||||||
Less than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||||
At December 31, 2013 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||
Agency mortgage-backed | $ | 726 | $ | (11 | ) | $ | — | $ | — | $ | 726 | $ | (11 | ) | |||||||||||
Non-agency mortgage-backed | — | — | 89 | (6 | ) | 89 | (6 | ) | |||||||||||||||||
Commercial mortgage-backed | 39 | — | — | — | 39 | — | |||||||||||||||||||
Total | $ | 765 | $ | (11 | ) | $ | 89 | $ | (6 | ) | $ | 854 | $ | (17 | ) | ||||||||||
2014 | 2013 | ||||||||
Balance – January 1 | $ | 561 | $ | 838 | |||||
Additions: | |||||||||
Amount related to credit loss for which an other-than-temporary impairment was not previously recognized | — | — | |||||||
Amount related to credit loss for which an other-than-temporary impairment was previously recognized | — | — | |||||||
Reductions: | |||||||||
Securities sold during the period | (63 | ) | (277 | ) | |||||
Securities for which the amount previously recognized in other comprehensive income was recognized in earnings, because the Company intends to sell the security or is more likely than not the Company will be required to sell the security | — | — | |||||||
Increases in cash flows expected to be collected that are recognized over the remaining life of the security | — | — | |||||||
Balance – December 31 | $ | 498 | $ | 561 | |||||
At December 31, | 2014 | 2013 | |||||||
Private equity partnerships | $ | 281,932 | $ | 322,391 | |||||
Catastrophe bonds | 200,329 | 229,016 | |||||||
Senior secured bank loan funds | 19,316 | 18,048 | |||||||
Hedge funds | 2,570 | 3,809 | |||||||
Total other investments | $ | 504,147 | $ | 573,264 | |||||
2014 | 2013 | ||||||||||||||||||||||
At December 31, | Investment | Ownership % | Carrying Value | Investment | Ownership % | Carrying Value | |||||||||||||||||
THIG | $ | 50,000 | 25.0 | % | $ | 20,811 | $ | 50,000 | 25.0 | % | $ | 25,107 | |||||||||||
Tower Hill | 10,000 | 30.3 | % | 18,991 | 10,000 | 29.4 | % | 14,506 | |||||||||||||||
Tower Hill Re | 4,250 | 25.0 | % | 5,162 | — | — | % | — | |||||||||||||||
Tower Hill Signature | 500 | 25.0 | % | 5,692 | 500 | 25.0 | % | 2,515 | |||||||||||||||
Total Tower Hill Companies | 64,750 | 50,656 | 60,500 | 42,128 | |||||||||||||||||||
Top Layer Re | 65,375 | 50.0 | % | 60,911 | 65,375 | 50.0 | % | 50,500 | |||||||||||||||
Angus | 10,507 | 40.4 | % | 8,072 | 10,507 | 42.5 | % | 9,180 | |||||||||||||||
Other | 3,000 | 22.0 | % | 1,074 | 3,000 | 22.0 | % | 3,808 | |||||||||||||||
Total investments in other ventures, under equity method | $ | 143,632 | $ | 120,713 | $ | 139,382 | $ | 105,616 | |||||||||||||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
Tower Hill Companies | $ | 18,376 | $ | 10,270 | $ | 4,965 | |||||||
Top Layer Re | 10,411 | 13,836 | 20,792 | ||||||||||
Angus | (1,402 | ) | (858 | ) | (2,519 | ) | |||||||
Other | (1,310 | ) | (54 | ) | — | ||||||||
Total equity in earnings of other ventures | $ | 26,075 | $ | 23,194 | $ | 23,238 | |||||||
• | Fair values determined by Level 1 inputs utilize unadjusted quoted prices obtained from active markets for identical assets or liabilities for which the Company has access. The fair value is determined by multiplying the quoted price by the quantity held by the Company; |
• | Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals, broker quotes and certain pricing indices; and |
• | Level 3 inputs are based all or in part on significant unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In these cases, significant management assumptions can be used to establish management’s best estimate of the assumptions used by other market participants in determining the fair value of the asset or liability. |
At December 31, 2014 | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Fixed maturity investments | |||||||||||||||||
U.S. treasuries | $ | 1,671,471 | $ | 1,671,471 | $ | — | $ | — | |||||||||
Agencies | 96,208 | — | 96,208 | — | |||||||||||||
Non-U.S. government (Sovereign debt) | 280,651 | — | 280,651 | — | |||||||||||||
Non-U.S. government-backed corporate | 146,467 | — | 146,467 | — | |||||||||||||
Corporate | 1,610,442 | — | 1,594,782 | 15,660 | |||||||||||||
Agency mortgage-backed | 316,620 | — | 316,620 | — | |||||||||||||
Non-agency mortgage-backed | 253,050 | — | 253,050 | — | |||||||||||||
Commercial mortgage-backed | 381,051 | — | 381,051 | — | |||||||||||||
Asset-backed | 27,610 | — | 27,610 | — | |||||||||||||
Total fixed maturity investments | 4,783,570 | 1,671,471 | 3,096,439 | 15,660 | |||||||||||||
Short term investments | 1,013,222 | — | 1,013,222 | — | |||||||||||||
Equity investments trading | 322,098 | 322,098 | — | — | |||||||||||||
Other investments | |||||||||||||||||
Private equity partnerships | 281,932 | — | — | 281,932 | |||||||||||||
Catastrophe bonds | 200,329 | — | 200,329 | — | |||||||||||||
Senior secured bank loan fund | 19,316 | — | — | 19,316 | |||||||||||||
Hedge funds | 2,570 | — | — | 2,570 | |||||||||||||
Total other investments | 504,147 | — | 200,329 | 303,818 | |||||||||||||
Other assets and (liabilities) | |||||||||||||||||
Assumed and ceded (re)insurance contracts | (8,744 | ) | — | — | (8,744 | ) | |||||||||||
Derivatives (1) | 6,345 | (569 | ) | 7,104 | (190 | ) | |||||||||||
Other | (11,509 | ) | — | (11,509 | ) | — | |||||||||||
Total other assets and (liabilities) | (13,908 | ) | (569 | ) | (4,405 | ) | (8,934 | ) | |||||||||
$ | 6,609,129 | $ | 1,993,000 | $ | 4,305,585 | $ | 310,544 | ||||||||||
(1) | See “Note 19. Derivative Instruments” for additional information related to the fair value by type of contract, of derivatives entered into by the Company. |
At December 31, 2013 | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Fixed maturity investments | |||||||||||||||||
U.S. treasuries | $ | 1,352,413 | $ | 1,352,413 | $ | — | $ | — | |||||||||
Agencies | 186,050 | — | 186,050 | — | |||||||||||||
Non-U.S. government (Sovereign debt) | 334,580 | — | 334,580 | — | |||||||||||||
Non-U.S. government-backed corporate | 237,479 | — | 237,479 | — | |||||||||||||
Corporate | 1,803,415 | — | 1,775,835 | 27,580 | |||||||||||||
Agency mortgage-backed | 341,908 | — | 341,908 | — | |||||||||||||
Non-agency mortgage-backed | 257,938 | — | 257,938 | — | |||||||||||||
Commercial mortgage-backed | 314,236 | — | 314,236 | — | |||||||||||||
Asset-backed | 15,258 | — | 15,258 | — | |||||||||||||
Total fixed maturity investments | 4,843,277 | 1,352,413 | 3,463,284 | 27,580 | |||||||||||||
Short term investments | 1,044,779 | — | 1,044,779 | — | |||||||||||||
Equity investments trading | 254,776 | 254,776 | — | — | |||||||||||||
Other investments | |||||||||||||||||
Private equity partnerships | 322,391 | — | — | 322,391 | |||||||||||||
Catastrophe bonds | 229,016 | — | 229,016 | — | |||||||||||||
Senior secured bank loan funds | 18,048 | — | — | 18,048 | |||||||||||||
Hedge funds | 3,809 | — | — | 3,809 | |||||||||||||
Total other investments | 573,264 | — | 229,016 | 344,248 | |||||||||||||
Other assets and (liabilities) | |||||||||||||||||
Derivatives (1) | 4,758 | 823 | 6,425 | (2,490 | ) | ||||||||||||
Other | (12,991 | ) | — | (12,991 | ) | — | |||||||||||
Total other assets and (liabilities) | (8,233 | ) | 823 | (6,566 | ) | (2,490 | ) | ||||||||||
$ | 6,707,863 | $ | 1,608,012 | $ | 4,730,513 | $ | 369,338 | ||||||||||
December 31, 2014 | Fair Value (Level 3) | Valuation Technique | Unobservable (U) and Observable (O) Inputs | Low | High | Weighted Average or Actual | |||||||||||||||
Fixed maturity investments | |||||||||||||||||||||
Corporate | $ | 15,660 | Discounted cash flow (“DCF”) | Credit spread (U) | n/a | n/a | 0.8 | % | |||||||||||||
Liquidity discount (U) | n/a | n/a | 1.0 | % | |||||||||||||||||
Risk-free rate (O) | n/a | n/a | 0.5 | % | |||||||||||||||||
Dividend rate (O) | n/a | n/a | 6.5 | % | |||||||||||||||||
Total fixed maturity investments | 15,660 | ||||||||||||||||||||
Other investments | |||||||||||||||||||||
Private equity partnerships | 281,932 | Net asset valuation | Estimated performance (U) | (42.1 | )% | 17.0 | % | 0.1 | % | ||||||||||||
Senior secured bank loan fund | 19,316 | Net asset valuation | Estimated performance (U) | n/a | n/a | 0.8 | % | ||||||||||||||
Hedge funds | 2,570 | Net asset valuation | Estimated performance (U) | 0.0 | % | 0.0 | % | 0.0 | % | ||||||||||||
Total other investments | 303,818 | ||||||||||||||||||||
Other assets and (liabilities) | |||||||||||||||||||||
Assumed and ceded (re)insurance contracts | (8,744 | ) | Internal valuation model | Net undiscounted cash flows (U) | $ | 160 | $ | 8,006 | $ | 2,528 | |||||||||||
Contract period (O) | 549 | 1,100 | 832 | ||||||||||||||||||
Discount rate (U) | n/a | n/a | 1.1 | % | |||||||||||||||||
Weather contract | (190 | ) | Internal valuation model | See below | n/a | n/a | See below | ||||||||||||||
Total other assets and (liabilities) | (8,934 | ) | |||||||||||||||||||
$ | 310,544 | ||||||||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | |||||||||||||||||
Fixed maturity investments trading | Other investments | Other assets and (liabilities) | Total | ||||||||||||||
Balance - January 1, 2013 | $ | 27,792 | $ | 381,067 | $ | 21,513 | $ | 430,372 | |||||||||
Total unrealized gains (losses) | |||||||||||||||||
Included in net investment income | 2,288 | 80,113 | (1,331 | ) | 81,070 | ||||||||||||
Included in other loss | — | — | (625 | ) | (625 | ) | |||||||||||
Total realized (losses) gains | |||||||||||||||||
Included in net investment income | — | (4,114 | ) | — | (4,114 | ) | |||||||||||
Included in other loss | — | — | (2,083 | ) | (2,083 | ) | |||||||||||
Total foreign exchange losses | — | 1,352 | — | 1,352 | |||||||||||||
Purchases | — | 48,287 | (1,722 | ) | 46,565 | ||||||||||||
Settlements | (2,500 | ) | (95,144 | ) | — | (97,644 | ) | ||||||||||
Reclassified from other assets to other investments | — | 18,242 | (18,242 | ) | — | ||||||||||||
Net transfers out of Level 3 | — | (85,555 | ) | — | (85,555 | ) | |||||||||||
Balance - December 31, 2013 | $ | 27,580 | $ | 344,248 | $ | (2,490 | ) | $ | 369,338 | ||||||||
Change in unrealized gains for the period included in earnings for assets held at the end of the period included in net investment income | $ | 2,288 | $ | 78,903 | $ | (1,331 | ) | $ | 79,860 | ||||||||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | |||||||||||||||||
Fixed maturity investments trading | Other investments | Other assets and (liabilities) | Total | ||||||||||||||
Balance - January 1, 2014 | $ | 27,580 | $ | 344,248 | $ | (2,490 | ) | $ | 369,338 | ||||||||
Total unrealized gains (losses) | |||||||||||||||||
Included in net investment income | 12,724 | 1,045 | 1,455 | 15,224 | |||||||||||||
Total realized losses | |||||||||||||||||
Included in other loss | — | — | 1,262 | 1,262 | |||||||||||||
Total foreign exchange gains | — | (3,279 | ) | (21 | ) | (3,300 | ) | ||||||||||
Purchases | — | 43,130 | (9,140 | ) | 33,990 | ||||||||||||
Settlements | — | (81,326 | ) | — | (81,326 | ) | |||||||||||
Net transfers out of Level 3 | (24,644 | ) | — | — | (24,644 | ) | |||||||||||
Balance - December 31, 2014 | $ | 15,660 | $ | 303,818 | $ | (8,934 | ) | $ | 310,544 | ||||||||
Change in unrealized gains for the period included in earnings for assets held at the end of the period included in net investment income | $ | (66 | ) | $ | 1,045 | $ | 1,455 | $ | 2,434 | ||||||||
2014 | 2013 | ||||||||
Other investments | $ | 504,147 | $ | 573,264 | |||||
Other assets (liabilities) | $ | (8,744 | ) | $ | — | ||||
At December 31, 2014 | Fair Value | Unfunded Commitments | Redemption Frequency | Redemption Notice Period (Minimum Days) | Redemption Notice Period (Maximum Days) | ||||||||||
Private equity partnerships | $ | 281,932 | $ | 77,712 | See below | See below | See below | ||||||||
Senior secured bank loan fund | 19,316 | 6,301 | See below | See below | See below | ||||||||||
Hedge funds | 2,570 | — | See below | See below | See below | ||||||||||
Total other investments measured using net asset valuations | $ | 303,818 | $ | 84,013 | |||||||||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
Premiums written | |||||||||||||
Direct | $ | 76,511 | $ | 54,334 | $ | 36,367 | |||||||
Assumed | 1,474,061 | 1,551,078 | 1,515,224 | ||||||||||
Ceded | (482,336 | ) | (401,465 | ) | (448,934 | ) | |||||||
Net premiums written | $ | 1,068,236 | $ | 1,203,947 | $ | 1,102,657 | |||||||
Premiums earned | |||||||||||||
Direct | $ | 66,027 | $ | 44,530 | $ | 34,028 | |||||||
Assumed | 1,450,047 | 1,482,511 | 1,465,701 | ||||||||||
Ceded | (453,658 | ) | (412,415 | ) | (430,374 | ) | |||||||
Net premiums earned | $ | 1,062,416 | $ | 1,114,626 | $ | 1,069,355 | |||||||
Claims and claim expenses | |||||||||||||
Gross claims and claim expenses incurred | $ | 228,581 | $ | 185,139 | $ | 403,491 | |||||||
Claims and claim expenses recovered | (30,634 | ) | (13,852 | ) | (78,280 | ) | |||||||
Net claims and claim expenses incurred | $ | 197,947 | $ | 171,287 | $ | 325,211 | |||||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
Net reserves as of January 1 | $ | 1,462,705 | $ | 1,686,865 | $ | 1,588,325 | |||||||
Net incurred related to: | |||||||||||||
Current year | 341,745 | 315,241 | 483,180 | ||||||||||
Prior years | (143,798 | ) | (143,954 | ) | (157,969 | ) | |||||||
Total net incurred | 197,947 | 171,287 | 325,211 | ||||||||||
Net paid related to: | |||||||||||||
Current year | 39,830 | 32,212 | 84,056 | ||||||||||
Prior years | 275,006 | 363,235 | 142,615 | ||||||||||
Total net paid | 314,836 | 395,447 | 226,671 | ||||||||||
Net reserves as of December 31 | 1,345,816 | 1,462,705 | 1,686,865 | ||||||||||
Reinsurance recoverable as of December 31 | 66,694 | 101,025 | 192,512 | ||||||||||
Gross reserves as of December 31 | $ | 1,412,510 | $ | 1,563,730 | $ | 1,879,377 | |||||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
Catastrophe Reinsurance | $ | (65,511 | ) | $ | (102,037 | ) | $ | (110,568 | ) | ||||
Specialty Reinsurance | (55,909 | ) | (34,111 | ) | (34,146 | ) | |||||||
Lloyd’s | (16,241 | ) | (8,256 | ) | (16,202 | ) | |||||||
Other | (6,137 | ) | 450 | 2,947 | |||||||||
Total favorable development of prior accident years net claims and claim expenses | $ | (143,798 | ) | $ | (143,954 | ) | $ | (157,969 | ) | ||||
Year ended December 31, 2014 | Catastrophe Reinsurance Segment | Specialty Reinsurance Segment | Lloyd's Segment | Other | Total | ||||||||||||||||
Catastrophe net claims and claim expenses | |||||||||||||||||||||
Large catastrophe events | |||||||||||||||||||||
Storm Sandy (2012) | $ | (20,104 | ) | $ | — | $ | (4,128 | ) | $ | — | $ | (24,232 | ) | ||||||||
April and May U.S. Tornadoes (2011) | (13,939 | ) | — | — | — | (13,939 | ) | ||||||||||||||
Thailand Floods (2011) | (9,254 | ) | (2,500 | ) | — | — | (11,754 | ) | |||||||||||||
LIBOR (2011 and 2012) | — | (10,500 | ) | (1,250 | ) | — | (11,750 | ) | |||||||||||||
Hurricanes Gustav and Ike (2008) | (6,647 | ) | — | — | — | (6,647 | ) | ||||||||||||||
Tohoku Earthquake and Tsunami (2011) | (3,489 | ) | (1,642 | ) | — | — | (5,131 | ) | |||||||||||||
Hurricane Irene (2011) | (4,506 | ) | — | — | — | (4,506 | ) | ||||||||||||||
Windstorm Kyrill (2007) | (3,615 | ) | — | — | — | (3,615 | ) | ||||||||||||||
Subprime (2007) | — | 5,049 | — | — | 5,049 | ||||||||||||||||
New Zealand Earthquake (2010) | 24,692 | — | — | — | 24,692 | ||||||||||||||||
Other | (10,644 | ) | (1,826 | ) | (1,234 | ) | — | (13,704 | ) | ||||||||||||
Total large catastrophe events | (47,506 | ) | (11,419 | ) | (6,612 | ) | — | (65,537 | ) | ||||||||||||
Small catastrophe events | |||||||||||||||||||||
European Floods (2013) | (7,552 | ) | — | — | — | (7,552 | ) | ||||||||||||||
U.S. PCS 24 Wind and Thunderstorm (2013) | (6,712 | ) | — | — | — | (6,712 | ) | ||||||||||||||
U.S. PCS 70 and 73 Wind and Thunderstorm (2012) | 13,362 | — | — | — | 13,362 | ||||||||||||||||
Other | (17,103 | ) | — | (2,687 | ) | (6,137 | ) | (25,927 | ) | ||||||||||||
Total small catastrophe events | (18,005 | ) | — | (2,687 | ) | (6,137 | ) | (26,829 | ) | ||||||||||||
Total catastrophe net claims and claim expenses | $ | (65,511 | ) | $ | (11,419 | ) | $ | (9,299 | ) | $ | (6,137 | ) | $ | (92,366 | ) | ||||||
Attritional net claims and claim expenses | |||||||||||||||||||||
Bornhuetter-Ferguson actuarial method - actual reported claims less than expected claims | $ | — | $ | (44,490 | ) | $ | (6,942 | ) | $ | — | $ | (51,432 | ) | ||||||||
Total attritional net claims and claim expenses | $ | — | $ | (44,490 | ) | $ | (6,942 | ) | $ | — | $ | (51,432 | ) | ||||||||
Total favorable development of prior accident years net claims and claim expenses | $ | (65,511 | ) | $ | (55,909 | ) | $ | (16,241 | ) | $ | (6,137 | ) | $ | (143,798 | ) | ||||||
Year ended December 31, 2013 | Catastrophe Reinsurance Segment | Specialty Reinsurance Segment | Lloyd's Segment | Other | Total | ||||||||||||||||
Catastrophe net claims and claim expenses | |||||||||||||||||||||
Large catastrophe events | |||||||||||||||||||||
Storm Sandy (2012) | $ | (44,460 | ) | $ | — | $ | (3,825 | ) | $ | — | $ | (48,285 | ) | ||||||||
Tohoku Earthquake and Tsunami (2011) | (18,033 | ) | (1,000 | ) | — | — | (19,033 | ) | |||||||||||||
Hurricanes Gustav and Ike (2008) | (16,261 | ) | — | — | (404 | ) | (16,665 | ) | |||||||||||||
New Zealand Earthquake (2011) | (10,944 | ) | — | — | — | (10,944 | ) | ||||||||||||||
Windstorm Kyrill (2007) | (8,244 | ) | — | — | — | (8,244 | ) | ||||||||||||||
Hurricane Isaac (2012) | 2,610 | — | — | — | 2,610 | ||||||||||||||||
New Zealand Earthquake (2010) | 11,040 | 300 | — | — | 11,340 | ||||||||||||||||
Other | (776 | ) | (1,763 | ) | (1,442 | ) | (1,325 | ) | (5,306 | ) | |||||||||||
Total large catastrophe events | (85,068 | ) | (2,463 | ) | (5,267 | ) | (1,729 | ) | (94,527 | ) | |||||||||||
Small catastrophe events | |||||||||||||||||||||
U.S. PCS 83 Wind and Thunderstorm (2012) | (3,500 | ) | — | — | — | (3,500 | ) | ||||||||||||||
U.S. PCS 76 Wind and Thunderstorm (2012) | (300 | ) | — | — | — | (300 | ) | ||||||||||||||
U.S. PCS 70 Wind and Thunderstorm (2012) | 8,225 | — | — | — | 8,225 | ||||||||||||||||
Other | (21,394 | ) | — | — | — | (21,394 | ) | ||||||||||||||
Total small catastrophe events | (16,969 | ) | — | — | — | (16,969 | ) | ||||||||||||||
Total catastrophe net claims and claim expenses | $ | (102,037 | ) | $ | (2,463 | ) | $ | (5,267 | ) | $ | (1,729 | ) | $ | (111,496 | ) | ||||||
Attritional net claims and claim expenses | |||||||||||||||||||||
Bornhuetter-Ferguson actuarial method - actual reported claims less than expected claims | $ | — | $ | (21,216 | ) | $ | (3,263 | ) | $ | 2,179 | $ | (22,300 | ) | ||||||||
Actuarial assumption changes | — | (10,432 | ) | 274 | — | (10,158 | ) | ||||||||||||||
Total attritional net claims and claim expenses | $ | — | $ | (31,648 | ) | $ | (2,989 | ) | $ | 2,179 | $ | (32,458 | ) | ||||||||
Total favorable development of prior accident years net claims and claim expenses | $ | (102,037 | ) | $ | (34,111 | ) | $ | (8,256 | ) | $ | 450 | $ | (143,954 | ) | |||||||
Year ended December 31, 2012 | Catastrophe Reinsurance Segment | Specialty Reinsurance Segment | Lloyd’s Segment | Other | Total | ||||||||||||||||
Catastrophe net claims and claim expenses | |||||||||||||||||||||
Large catastrophe events | |||||||||||||||||||||
Chile Earthquake (2010) | $ | (24,575 | ) | $ | — | $ | — | $ | — | $ | (24,575 | ) | |||||||||
Hurricanes Gustav and Ike (2008) | (17,541 | ) | — | — | (2,926 | ) | (20,467 | ) | |||||||||||||
U.K. Floods (2007) | (17,271 | ) | — | — | — | (17,271 | ) | ||||||||||||||
Hurricanes Katrina, Rita and Wilma (2005) | (6,420 | ) | (3,000 | ) | — | 1,690 | (7,730 | ) | |||||||||||||
Hurricane Irene (2011) | (4,630 | ) | — | (2,500 | ) | — | (7,130 | ) | |||||||||||||
Thailand Floods (2011) | (3,933 | ) | — | (5,500 | ) | — | (9,433 | ) | |||||||||||||
Tohoku Earthquake and Tsunami (2011) | (3,896 | ) | — | — | — | (3,896 | ) | ||||||||||||||
Windstorm Kyrill (2007) | (3,417 | ) | — | — | — | (3,417 | ) | ||||||||||||||
New Zealand Earthquake (2010) | 3,570 | — | — | — | 3,570 | ||||||||||||||||
New Zealand Earthquake (2011) | 17,912 | — | — | — | 17,912 | ||||||||||||||||
Other | (2,542 | ) | — | (1,476 | ) | 65 | (3,953 | ) | |||||||||||||
Total large catastrophe events | (62,743 | ) | (3,000 | ) | (9,476 | ) | (1,171 | ) | (76,390 | ) | |||||||||||
Small catastrophe events | |||||||||||||||||||||
Danish Floods (2011) | (5,000 | ) | — | — | — | (5,000 | ) | ||||||||||||||
U.S. PCS 63 Winter Storm (2011) | (5,000 | ) | — | — | — | (5,000 | ) | ||||||||||||||
U.S. PCS 42 Winter Storm (2011) | (2,560 | ) | — | — | — | (2,560 | ) | ||||||||||||||
U.S. PCS 53 Winter Storm (2011) | (2,558 | ) | — | — | — | (2,558 | ) | ||||||||||||||
Other | (32,707 | ) | — | — | — | (32,707 | ) | ||||||||||||||
Total small catastrophe events | (47,825 | ) | — | — | — | (47,825 | ) | ||||||||||||||
Total catastrophe net claims and claim expenses | $ | (110,568 | ) | $ | (3,000 | ) | $ | (9,476 | ) | $ | (1,171 | ) | $ | (124,215 | ) | ||||||
Attritional net claims and claim expenses | |||||||||||||||||||||
Bornhuetter-Ferguson actuarial method - actual reported claims less than expected claims | $ | — | $ | (16,747 | ) | $ | (8,011 | ) | $ | 4,118 | $ | (20,640 | ) | ||||||||
Actuarial assumption changes | — | (14,399 | ) | 1,285 | — | (13,114 | ) | ||||||||||||||
Total attritional net claims and claim expenses | $ | — | $ | (31,146 | ) | $ | (6,726 | ) | $ | 4,118 | $ | (33,754 | ) | ||||||||
Total favorable development of prior accident years net claims and claim expenses | $ | (110,568 | ) | $ | (34,146 | ) | $ | (16,202 | ) | $ | 2,947 | $ | (157,969 | ) | |||||||
2015 | $ | — | |||
2016 | — | ||||
2017 | — | ||||
2018 | — | ||||
2019 | — | ||||
After 2019 | 250,000 | ||||
Unamortized debt issuance expenses | (478 | ) | |||
$ | 249,522 | ||||
2014 | 2013 | ||||||||
Redeemable noncontrolling interest - DaVinciRe | $ | 1,037,306 | $ | 1,063,368 | |||||
Redeemable noncontrolling interest - Medici | 94,402 | 36,492 | |||||||
Redeemable noncontrolling interest | $ | 1,131,708 | $ | 1,099,860 | |||||
Noncontrolling interest - Angus Fund | $ | — | $ | — | |||||
2014 | 2013 | 2012 | |||||||||||
Redeemable noncontrolling interest - DaVinciRe | $ | 149,817 | $ | 150,581 | $ | 147,499 | |||||||
Redeemable noncontrolling interest - Medici | 3,721 | 617 | — | ||||||||||
Noncontrolling interest - Angus Fund | — | (54 | ) | 541 | |||||||||
Net income (loss) attributable to noncontrolling interests | $ | 153,538 | $ | 151,144 | $ | 148,040 | |||||||
2014 | 2013 | ||||||||
Balance – January 1 | $ | 1,063,368 | $ | 968,259 | |||||
Redemption of shares from redeemable noncontrolling interest | (224,455 | ) | (209,356 | ) | |||||
Sale of shares to redeemable noncontrolling interest | 48,576 | 153,884 | |||||||
Comprehensive income: | |||||||||
Net income attributable to redeemable noncontrolling interest | 149,817 | 150,581 | |||||||
Balance – December 31 | $ | 1,037,306 | $ | 1,063,368 | |||||
2014 | 2013 | ||||||||
Balance – January 1 | $ | 36,492 | $ | — | |||||
Redemption of shares from redeemable noncontrolling interest | (3,075 | ) | (1,325 | ) | |||||
Sale of shares to redeemable noncontrolling interest | 57,264 | 37,200 | |||||||
Net income attributable to redeemable noncontrolling interest | 3,721 | 617 | |||||||
Balance – December 31 | $ | 94,402 | $ | 36,492 | |||||
2014 | 2013 | ||||||||
Balance – January 1 | $ | — | $ | 3,991 | |||||
Adjustment of ownership interest | — | (3,709 | ) | ||||||
Net loss attributable to noncontrolling interest | — | (54 | ) | ||||||
Dividends on common shares | — | (228 | ) | ||||||
Balance – December 31 | $ | — | $ | — | |||||
Year ended December 31, | 2014 | 2013 | 2012 | |||||||
(thousands of shares) | ||||||||||
Issued and outstanding shares – January 1 | 43,646 | 45,542 | 51,543 | |||||||
Repurchase of shares | (5,355 | ) | (2,451 | ) | (6,399 | ) | ||||
Exercise of options and issuance of restricted stock awards | 151 | 555 | 398 | |||||||
Issued and outstanding shares – December 31 | 38,442 | 43,646 | 45,542 | |||||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
(thousands of shares) | |||||||||||||
Numerator: | |||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 510,337 | $ | 665,676 | $ | 566,014 | |||||||
Amount allocated to participating common shareholders (1) | (6,760 | ) | (9,520 | ) | (8,973 | ) | |||||||
Net income allocated to RenaissanceRe common shareholders | $ | 503,577 | $ | 656,156 | $ | 557,041 | |||||||
Denominator: | |||||||||||||
Denominator for basic income per RenaissanceRe common share - weighted average common shares | 39,425 | 43,349 | 48,873 | ||||||||||
Per common share equivalents of employee stock options and restricted shares | 543 | 779 | 730 | ||||||||||
Denominator for diluted income per RenaissanceRe common share - adjusted weighted average common shares and assumed conversions | 39,968 | 44,128 | 49,603 | ||||||||||
Basic income per RenaissanceRe common share | $ | 12.77 | $ | 15.14 | $ | 11.40 | |||||||
Diluted income per RenaissanceRe common share | $ | 12.60 | $ | 14.87 | $ | 11.23 | |||||||
(1) | Represents earnings attributable to holders of unvested restricted shares issued under the Company’s 2001 Stock Incentive Plan and the Non-Employee Director Stock Incentive Plan. |
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
Domestic | |||||||||||||
Bermuda | $ | 701,476 | $ | 873,103 | $ | 795,378 | |||||||
Foreign | |||||||||||||
United Kingdom | (3,166 | ) | (12,678 | ) | (15,404 | ) | |||||||
U.S. | (10,977 | ) | (20,019 | ) | (16,467 | ) | |||||||
Ireland | 1,549 | 1,855 | 3,318 | ||||||||||
Singapore | (2,018 | ) | (1,223 | ) | 13 | ||||||||
Income from continuing operations before taxes | $ | 686,864 | $ | 841,038 | $ | 766,838 | |||||||
Year ended December 31, 2014 | Current | Deferred | Total | ||||||||||
Total income tax (expense) benefit | $ | (699 | ) | $ | 91 | $ | (608 | ) | |||||
Year ended December 31, 2013 | |||||||||||||
Total income tax (expense) benefit | $ | (2,005 | ) | $ | 313 | $ | (1,692 | ) | |||||
Year ended December 31, 2012 | |||||||||||||
Total income tax (expense) benefit | $ | (1,667 | ) | $ | 254 | $ | (1,413 | ) | |||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
Expected income tax benefit | $ | 4,725 | $ | 9,930 | $ | 8,889 | |||||||
Change in valuation allowance | (5,554 | ) | (8,574 | ) | (6,212 | ) | |||||||
Other | 221 | (3,048 | ) | (4,090 | ) | ||||||||
Income tax expense | $ | (608 | ) | $ | (1,692 | ) | $ | (1,413 | ) | ||||
At December 31, | 2014 | 2013 | |||||||
Deferred tax assets | |||||||||
Tax loss and credit carryforwards | $ | 37,933 | $ | 34,429 | |||||
Deferred interest expense | 17,066 | 12,608 | |||||||
Accrued expenses | 3,413 | 1,096 | |||||||
Amortization and depreciation | 1,686 | 1,730 | |||||||
Deferred underwriting results | 1,586 | 1,873 | |||||||
Investments | 290 | 4,694 | |||||||
61,974 | 56,430 | ||||||||
Deferred tax liabilities | |||||||||
Amortization and depreciation | (54 | ) | (155 | ) | |||||
(54 | ) | (155 | ) | ||||||
Net deferred tax asset before valuation allowance | 61,920 | 56,275 | |||||||
Valuation allowance | (61,660 | ) | (56,106 | ) | |||||
Net deferred tax asset (liability) | $ | 260 | $ | 169 | |||||
Twelve months ended December 31, 2014 | Catastrophe Reinsurance | Specialty Reinsurance | Lloyd’s | Other | Total | ||||||||||||||||
Gross premiums written (1) | $ | 933,969 | $ | 346,638 | $ | 269,656 | $ | 309 | $ | 1,550,572 | |||||||||||
Net premiums written | $ | 541,608 | $ | 295,855 | $ | 230,429 | $ | 344 | $ | 1,068,236 | |||||||||||
Net premiums earned | $ | 590,845 | $ | 253,537 | $ | 217,666 | $ | 368 | $ | 1,062,416 | |||||||||||
Net claims and claim expenses incurred | 1,757 | 88,502 | 113,825 | (6,137 | ) | 197,947 | |||||||||||||||
Acquisition expenses | 43,161 | 60,936 | 46,927 | (6,548 | ) | 144,476 | |||||||||||||||
Operational expenses | 95,851 | 43,370 | 51,115 | 303 | 190,639 | ||||||||||||||||
Underwriting income | $ | 450,076 | $ | 60,729 | $ | 5,799 | $ | 12,750 | 529,354 | ||||||||||||
Net investment income | 124,316 | 124,316 | |||||||||||||||||||
Net foreign exchange gains | 6,260 | 6,260 | |||||||||||||||||||
Equity in earnings of other ventures | 26,075 | 26,075 | |||||||||||||||||||
Other loss | (423 | ) | (423 | ) | |||||||||||||||||
Net realized and unrealized gains on investments | 41,433 | 41,433 | |||||||||||||||||||
Corporate expenses | (22,987 | ) | (22,987 | ) | |||||||||||||||||
Interest expense | (17,164 | ) | (17,164 | ) | |||||||||||||||||
Income before taxes and noncontrolling interests | 686,864 | ||||||||||||||||||||
Income tax expense | (608 | ) | (608 | ) | |||||||||||||||||
Net income attributable to noncontrolling interests | (153,538 | ) | (153,538 | ) | |||||||||||||||||
Dividends on preference shares | (22,381 | ) | (22,381 | ) | |||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 510,337 | |||||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 67,268 | $ | 144,411 | $ | 130,066 | $ | — | $ | 341,745 | |||||||||||
Net claims and claim expenses incurred – prior accident years | (65,511 | ) | (55,909 | ) | (16,241 | ) | (6,137 | ) | (143,798 | ) | |||||||||||
Net claims and claim expenses incurred – total | $ | 1,757 | $ | 88,502 | $ | 113,825 | $ | (6,137 | ) | $ | 197,947 | ||||||||||
Net claims and claim expense ratio – current accident year | 11.4 | % | 57.0 | % | 59.8 | % | — | % | 32.2 | % | |||||||||||
Net claims and claim expense ratio – prior accident years | (11.1 | )% | (22.1 | )% | (7.5 | )% | (1,667.7 | )% | (13.6 | )% | |||||||||||
Net claims and claim expense ratio – calendar year | 0.3 | % | 34.9 | % | 52.3 | % | (1,667.7 | )% | 18.6 | % | |||||||||||
Underwriting expense ratio | 23.5 | % | 41.1 | % | 45.0 | % | (1,697.0 | )% | 31.6 | % | |||||||||||
Combined ratio | 23.8 | % | 76.0 | % | 97.3 | % | (3,364.7 | )% | 50.2 | % | |||||||||||
Twelve months ended December 31, 2013 | Catastrophe Reinsurance | Specialty Reinsurance | Lloyd’s | Other | Total | ||||||||||||||||
Gross premiums written (1) | $ | 1,120,379 | $ | 259,489 | $ | 226,532 | $ | (988 | ) | $ | 1,605,412 | ||||||||||
Net premiums written | $ | 753,078 | $ | 248,562 | $ | 201,697 | $ | 610 | $ | 1,203,947 | |||||||||||
Net premiums earned | $ | 723,705 | $ | 214,306 | $ | 176,029 | $ | 586 | $ | 1,114,626 | |||||||||||
Net claims and claim expenses incurred | 7,908 | 67,236 | 95,693 | 450 | 171,287 | ||||||||||||||||
Acquisition expenses | 49,161 | 41,538 | 34,823 | (21 | ) | 125,501 | |||||||||||||||
Operational expenses | 108,130 | 31,780 | 50,540 | 655 | 191,105 | ||||||||||||||||
Underwriting income (loss) | $ | 558,506 | $ | 73,752 | $ | (5,027 | ) | $ | (498 | ) | 626,733 | ||||||||||
Net investment income | 208,028 | 208,028 | |||||||||||||||||||
Net foreign exchange gains | 1,917 | 1,917 | |||||||||||||||||||
Equity in earnings of other ventures | 23,194 | 23,194 | |||||||||||||||||||
Other loss | (2,359 | ) | (2,359 | ) | |||||||||||||||||
Net realized and unrealized gains on investments | 35,076 | 35,076 | |||||||||||||||||||
Corporate expenses | (33,622 | ) | (33,622 | ) | |||||||||||||||||
Interest expense | (17,929 | ) | (17,929 | ) | |||||||||||||||||
Income from continuing operations before taxes and noncontrolling interests | 841,038 | ||||||||||||||||||||
Income tax expense | (1,692 | ) | (1,692 | ) | |||||||||||||||||
Income from discontinued operations | 2,422 | 2,422 | |||||||||||||||||||
Net income attributable to noncontrolling interests | (151,144 | ) | (151,144 | ) | |||||||||||||||||
Dividends on preference shares | (24,948 | ) | (24,948 | ) | |||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 665,676 | |||||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 109,945 | $ | 101,347 | $ | 103,949 | $ | — | $ | 315,241 | |||||||||||
Net claims and claim expenses incurred – prior accident years | (102,037 | ) | (34,111 | ) | (8,256 | ) | 450 | (143,954 | ) | ||||||||||||
Net claims and claim expenses incurred – total | $ | 7,908 | $ | 67,236 | $ | 95,693 | $ | 450 | $ | 171,287 | |||||||||||
Net claims and claim expense ratio – current accident year | 15.2 | % | 47.3 | % | 59.1 | % | — | % | 28.3 | % | |||||||||||
Net claims and claim expense ratio – prior accident years | (14.1 | )% | (15.9 | )% | (4.7 | )% | 76.8 | % | (12.9 | )% | |||||||||||
Net claims and claim expense ratio – calendar year | 1.1 | % | 31.4 | % | 54.4 | % | 76.8 | % | 15.4 | % | |||||||||||
Underwriting expense ratio | 21.7 | % | 34.2 | % | 48.5 | % | 108.2 | % | 28.4 | % | |||||||||||
Combined ratio | 22.8 | % | 65.6 | % | 102.9 | % | 185.0 | % | 43.8 | % | |||||||||||
Year ended December 31, 2012 | Catastrophe Reinsurance | Specialty Reinsurance | Lloyd’s | Other | Total | ||||||||||||||||
Gross premiums written (1) | $ | 1,182,207 | $ | 209,887 | $ | 159,987 | $ | (490 | ) | $ | 1,551,591 | ||||||||||
Net premiums written | $ | 766,035 | $ | 201,552 | $ | 135,131 | $ | (61 | ) | $ | 1,102,657 | ||||||||||
Net premiums earned | $ | 781,738 | $ | 164,685 | $ | 122,968 | $ | (36 | ) | $ | 1,069,355 | ||||||||||
Net claims and claim expenses incurred | 165,209 | 76,813 | 80,242 | 2,947 | 325,211 | ||||||||||||||||
Acquisition expenses | 66,665 | 23,826 | 22,864 | 187 | 113,542 | ||||||||||||||||
Operational expenses | 103,811 | 29,124 | 45,680 | 536 | 179,151 | ||||||||||||||||
Underwriting income (loss) | $ | 446,053 | $ | 34,922 | $ | (25,818 | ) | $ | (3,706 | ) | 451,451 | ||||||||||
Net investment income | 165,725 | 165,725 | |||||||||||||||||||
Net foreign exchange gains | 5,319 | 5,319 | |||||||||||||||||||
Equity in earnings of other ventures | 23,238 | 23,238 | |||||||||||||||||||
Other loss | (2,120 | ) | (2,120 | ) | |||||||||||||||||
Net realized and unrealized gains on investments | 163,121 | 163,121 | |||||||||||||||||||
Net other-than-temporary impairments | (343 | ) | (343 | ) | |||||||||||||||||
Corporate expenses | (16,456 | ) | (16,456 | ) | |||||||||||||||||
Interest expense | (23,097 | ) | (23,097 | ) | |||||||||||||||||
Income from continuing operations before taxes | 766,838 | ||||||||||||||||||||
Income tax expense | (1,413 | ) | (1,413 | ) | |||||||||||||||||
Loss from discontinued operations | (16,476 | ) | (16,476 | ) | |||||||||||||||||
Net income attributable to noncontrolling interests | (148,040 | ) | (148,040 | ) | |||||||||||||||||
Dividends on preference shares | (34,895 | ) | (34,895 | ) | |||||||||||||||||
Net income attributable to RenaissanceRe common shareholders | $ | 566,014 | |||||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 275,777 | $ | 110,959 | $ | 96,444 | $ | — | $ | 483,180 | |||||||||||
Net claims and claim expenses incurred – prior accident years | (110,568 | ) | (34,146 | ) | (16,202 | ) | 2,947 | (157,969 | ) | ||||||||||||
Net claims and claim expenses incurred – total | $ | 165,209 | $ | 76,813 | $ | 80,242 | $ | 2,947 | $ | 325,211 | |||||||||||
Net claims and claim expense ratio – current accident year | 35.3 | % | 67.4 | % | 78.4 | % | — | % | 45.2 | % | |||||||||||
Net claims and claim expense ratio – prior accident years | (14.2 | )% | (20.8 | )% | (13.1 | )% | (8,186.1 | )% | (14.8 | )% | |||||||||||
Net claims and claim expense ratio – calendar year | 21.1 | % | 46.6 | % | 65.3 | % | (8,186.1 | )% | 30.4 | % | |||||||||||
Underwriting expense ratio | 21.8 | % | 32.2 | % | 55.7 | % | (2,008.3 | )% | 27.4 | % | |||||||||||
Combined ratio | 42.9 | % | 78.8 | % | 121.0 | % | (10,194.4 | )% | 57.8 | % | |||||||||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||
Catastrophe Reinsurance | |||||||||||||
U.S. and Caribbean | $ | 573,696 | $ | 782,211 | $ | 857,740 | |||||||
Worldwide | 157,674 | 99,179 | 81,595 | ||||||||||
Worldwide (excluding U.S.) (1) | 123,476 | 146,048 | 139,265 | ||||||||||
Japan | 31,484 | 39,060 | 43,238 | ||||||||||
Europe | 25,353 | 25,659 | 37,113 | ||||||||||
Australia and New Zealand | 20,807 | 22,460 | 18,578 | ||||||||||
Other | 1,479 | 5,762 | 4,678 | ||||||||||
Total Catastrophe Reinsurance | 933,969 | 1,120,379 | 1,182,207 | ||||||||||
Specialty Reinsurance | |||||||||||||
U.S. and Caribbean | 169,045 | 91,203 | 69,070 | ||||||||||
Worldwide | 161,329 | 151,879 | 96,081 | ||||||||||
Australia and New Zealand | 6,898 | 12,068 | 28,307 | ||||||||||
Worldwide (excluding U.S.) (1) | 7,506 | 1,661 | — | ||||||||||
Europe | 460 | 2,612 | 16,429 | ||||||||||
Other | 1,400 | 66 | — | ||||||||||
Total Specialty Reinsurance | 346,638 | 259,489 | 209,887 | ||||||||||
Lloyd’s | |||||||||||||
U.S. and Caribbean | 120,066 | 88,535 | 57,332 | ||||||||||
Worldwide | 118,190 | 104,249 | 75,132 | ||||||||||
Worldwide (excluding U.S.) (1) | 13,655 | 8,071 | 6,064 | ||||||||||
Europe | 7,609 | 14,763 | 14,456 | ||||||||||
Australia and New Zealand | 2,907 | 2,948 | 2,152 | ||||||||||
Other | 7,229 | 7,966 | 4,851 | ||||||||||
Total Lloyd’s | 269,656 | 226,532 | 159,987 | ||||||||||
Other category (2) | 309 | (988 | ) | (490 | ) | ||||||||
Total gross premiums written | $ | 1,550,572 | $ | 1,605,412 | $ | 1,551,591 | |||||||
(1) | The category “Worldwide (excluding U.S.)” consists of contracts that cover more than one geographic region (other than the U.S.). The exposure in this category for gross premiums written to date is predominantly from Europe and Japan. |
(2) | The Other category consists of contracts that are primarily exposed to U.S. risks and includes inter-segment gross premiums written of $0.3 million for the year ended December 31, 2014 (2013 - $(1.0) million, 2012 - $(0.5) million). |
Performance Shares | |||||
Year ended December 31, | 2014 | 2013 | |||
Expected volatility (1) | 14.5% - 18.6% | 19.0% - 19.6% | |||
Expected term (in years) | n/a | n/a | |||
Expected dividend yield | n/a | n/a | |||
Risk-free interest rate (1) | 0.08% - 1.65% | 0.09% - 1.39% | |||
(1) | The expected volatility and risk-free interest rate applied are specific to each tranche of Performance Shares. |
Weighted options outstanding | Weighted average exercise price | Weighted average remaining contractual life | Aggregate intrinsic value | Range of exercise prices | |||||||||||||
Balance, December 31, 2011 | 1,973,307 | $ | 47.33 | 4.6 | $ | 53,363 | $37.51 - $59.66 | ||||||||||
Options granted | — | — | — | ||||||||||||||
Options forfeited | — | — | |||||||||||||||
Options expired | — | — | |||||||||||||||
Options exercised | (240,668 | ) | 45.30 | $ | 7,910 | ||||||||||||
Balance, December 31, 2012 | 1,732,639 | $ | 47.61 | 3.7 | $ | 58,305 | $37.51 - $59.66 | ||||||||||
Options granted | — | — | — | ||||||||||||||
Options forfeited | — | — | |||||||||||||||
Options expired | — | — | |||||||||||||||
Options exercised | (904,547 | ) | 46.55 | $ | 36,800 | ||||||||||||
Balance, December 31, 2013 | 828,092 | $ | 48.77 | 2.9 | $ | 40,221 | $37.51 - $59.66 | ||||||||||
Options granted | — | — | — | ||||||||||||||
Options forfeited | — | — | |||||||||||||||
Options expired | — | — | |||||||||||||||
Options exercised | (60,262 | ) | $ | 49.52 | $ | 2,900 | |||||||||||
Balance, December 31, 2014 | 767,830 | $ | 48.71 | 2.0 | $ | 37,246 | $37.51 - $59.66 | ||||||||||
Total options exercisable at December 31, 2014 | 767,830 | $ | 48.71 | 2.0 | $ | 37,246 | $37.51 - $59.66 | ||||||||||
Weighted options outstanding | Weighted average exercise price | Weighted average remaining contractual life | Aggregate intrinsic value | Range of exercise prices | ||||||||||||||
Balance, December 31, 2011 | 1,192,000 | $ | 73.94 | $ | — | $73.06 - $74.24 | ||||||||||||
Options granted | — | — | ||||||||||||||||
Options forfeited | — | — | ||||||||||||||||
Options expired | — | — | ||||||||||||||||
Options exercised | (350,000 | ) | 74.24 | 1,250 | ||||||||||||||
Balance, December 31, 2012 | 842,000 | $ | 73.82 | $ | 6,265 | $73.06 - $74.24 | ||||||||||||
Options granted | — | — | ||||||||||||||||
Options forfeited | — | — | ||||||||||||||||
Options expired | — | — | ||||||||||||||||
Options exercised | (270,000 | ) | 74.24 | 4,921 | ||||||||||||||
Balance, December 31, 2013 | 572,000 | $ | 73.62 | $ | 13,567 | $73.06 - $74.24 | ||||||||||||
Options granted | — | — | ||||||||||||||||
Options forfeited | — | — | ||||||||||||||||
Options expired | — | — | ||||||||||||||||
Options exercised | (572,000 | ) | 73.62 | 13,414 | ||||||||||||||
Balance, December 31, 2014 | — | $ | — | 0.0 | $ | — | $ | — | ||||||||||
Total options exercisable at December 31, 2014 | — | $ | — | 0.0 | $ | — | $ | — | ||||||||||
Cash Settled Restricted Stock Unit Plan | Performance Shares (1) | ||||||||||
Number of shares | Number of shares | Weighted average grant-date fair value | |||||||||
Nonvested at December 31, 2011 | 422,973 | 289,867 | $ | 30.06 | |||||||
Awards granted | 225,105 | 144,635 | $ | 28.17 | |||||||
Awards vested | (128,401 | ) | (70,843 | ) | |||||||
Awards forfeited | (26,121 | ) | (4,139 | ) | |||||||
Nonvested at December 31, 2012 | 493,556 | 359,520 | $ | 29.46 | |||||||
Awards granted | 149,760 | 134,358 | $ | 33.46 | |||||||
Awards vested | (176,265 | ) | (24,606 | ) | |||||||
Awards forfeited | (72,906 | ) | (109,729 | ) | |||||||
Nonvested at December 31, 2013 | 394,145 | 359,543 | $ | 30.55 | |||||||
Awards granted | 119,382 | 102,668 | $ | 46.45 | |||||||
Awards vested | (159,094 | ) | — | ||||||||
Awards forfeited | (16,110 | ) | (213,639 | ) | |||||||
Nonvested at December 31, 2014 | 338,323 | 248,572 | $ | 39.62 | |||||||
Employee restricted stock | Non-employee director restricted stock | Total restricted stock | ||||||||||||||||||||
Number of shares | Weighted average grant date fair value | Number of shares | Weighted average grant date fair value | Number of shares | Weighted average grant date fair value | |||||||||||||||||
Nonvested at December 31, 2011 | 764,761 | $ | 53.68 | 39,585 | $ | 58.43 | 804,346 | $ | 53.91 | |||||||||||||
Awards granted | 226,827 | 72.46 | 16,874 | 71.69 | 243,701 | 72.40 | ||||||||||||||||
Awards vested | (337,683 | ) | 51.06 | (20,536 | ) | 54.62 | (358,219 | ) | 51.26 | |||||||||||||
Awards forfeited | (7,157 | ) | 53.90 | — | — | (7,157 | ) | 53.90 | ||||||||||||||
Nonvested at December 31, 2012 | 646,748 | $ | 61.63 | 35,923 | $ | 66.83 | 682,671 | $ | 61.90 | |||||||||||||
Awards granted | 241,071 | 87.85 | 17,162 | 87.40 | 258,233 | 87.82 | ||||||||||||||||
Awards vested | (311,334 | ) | 55.63 | (21,599 | ) | 66.06 | (332,933 | ) | 56.31 | |||||||||||||
Awards forfeited | (6,993 | ) | 58.14 | — | — | (6,993 | ) | 58.14 | ||||||||||||||
Nonvested at December 31, 2013 | 569,492 | $ | 76.11 | 31,486 | $ | 78.57 | 600,978 | $ | 76.24 | |||||||||||||
Awards granted | 215,054 | 95.79 | 14,455 | 95.06 | 229,509 | 95.74 | ||||||||||||||||
Awards vested | (332,725 | ) | 73.74 | (15,886 | ) | 74.96 | (348,611 | ) | 73.79 | |||||||||||||
Awards forfeited | (99 | ) | 55.80 | — | — | (99 | ) | 55.80 | ||||||||||||||
Nonvested at December 31, 2014 | 451,722 | $ | 87.29 | 30,055 | $ | 88.41 | 481,777 | $ | 87.36 | |||||||||||||
Bermuda | U.K. (1) (2) | ||||||||||||||||
At December 31, | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Actual statutory capital and surplus | $ | 3,375,317 | $ | 3,194,446 | $ | 409,046 | $ | 380,336 | |||||||||
Required statutory capital and surplus | 479,346 | 562,126 | 409,046 | 380,336 | |||||||||||||
Restricted net assets | 1,018,878 | 887,083 | — | — | |||||||||||||
(1) | With respect to actual and required statutory capital and surplus, and as described below, underwriting capacity of a member of Lloyd’s must be supported by providing a deposit in the form of cash, securities or letters of credit, which are referred to as Funds at Lloyd’s (“FAL”). FAL is determined by Lloyd’s and is based on Syndicate 1458’s solvency and capital requirements as calculated through its internal model. |
(2) | Syndicate 1458 is capitalized by its FAL, with the related assets not held on its balance sheet. As such, restricted net assets is not applicable to Syndicate 1458; however, the Company can make an application to obtain approval from Lloyd’s to have funds released to RenaissanceRe from Syndicate 1458, subject to passing a Lloyd’s release test. |
Statutory Net Income (Loss) | |||||||||
Bermuda | U.K. | ||||||||
Year ended December 31, 2014 | $ | 623,931 | $ | 24,433 | |||||
Year ended December 31, 2013 | 712,820 | 7,745 | |||||||
Year ended December 31, 2012 | 693,887 | (10,967 | ) | ||||||
Derivative Assets | |||||||||||||||||||||||
At December 31, 2014 | Gross Amounts of Recognized Assets | Gross Amounts Offset in the Balance Sheet | Net Amounts of Assets Presented in the Balance Sheet | Balance Sheet Location | Collateral | Net Amount | |||||||||||||||||
Interest rate futures | $ | 468 | 468 | $ | — | Other assets | $ | — | $ | — | |||||||||||||
Foreign currency forward contracts (1) | 5,740 | 1,737 | 4,003 | Other assets | — | 4,003 | |||||||||||||||||
Foreign currency forward contracts (2) | 3,959 | 648 | 3,311 | Other assets | — | 3,311 | |||||||||||||||||
Credit default swaps | 468 | 88 | 380 | Other assets | 310 | 70 | |||||||||||||||||
Total | $ | 10,635 | $ | 2,941 | $ | 7,694 | $ | 310 | $ | 7,384 | |||||||||||||
Derivative Liabilities | |||||||||||||||||||||||
At December 31, 2014 | Gross Amounts of Recognized Liabilities | Gross Amounts Offset in the Balance Sheet | Net Amounts of Liabilities Presented in the Balance Sheet | Balance Sheet Location | Collateral Pledged | Net Amount | |||||||||||||||||
Interest rate futures | $ | 1,037 | 468 | $ | 569 | Other liabilities | $ | 569 | $ | — | |||||||||||||
Foreign currency forward contracts (1) | 1,319 | 967 | 352 | Other liabilities | — | 352 | |||||||||||||||||
Foreign currency forward contracts (2) | 724 | 649 | 75 | Other liabilities | — | 75 | |||||||||||||||||
Credit default swaps | 251 | 88 | 163 | Other liabilities | — | 163 | |||||||||||||||||
Weather contract | 190 | — | 190 | Other liabilities | 190 | — | |||||||||||||||||
Total | $ | 3,521 | $ | 2,172 | $ | 1,349 | $ | 759 | $ | 590 | |||||||||||||
(1) | Contracts used to manage foreign currency risks in underwriting and non-investment operations. |
(2) | Contracts used to manage foreign currency risks in investment operations. |
Derivative Assets | |||||||||||||||||||||||
At December 31, 2013 | Gross Amounts of Recognized Assets | Gross Amounts Offset in the Balance Sheet | Net Amounts of Assets Presented in the Balance Sheet | Balance Sheet Location | Collateral | Net Amount | |||||||||||||||||
Interest rate futures | $ | 897 | 62 | $ | 835 | Other assets | $ | — | $ | 835 | |||||||||||||
Foreign currency forward contracts (1) | 9,612 | 1,179 | 8,433 | Other assets | — | 8,433 | |||||||||||||||||
Foreign currency forward contracts (2) | 1,013 | 338 | 675 | Other assets | — | 675 | |||||||||||||||||
Credit default swaps | 806 | 82 | 724 | Other assets | 310 | 414 | |||||||||||||||||
Total | $ | 12,328 | $ | 1,661 | $ | 10,667 | $ | 310 | $ | 10,357 | |||||||||||||
Derivative Liabilities | |||||||||||||||||||||||
At December 31, 2013 | Gross Amounts of Recognized Liabilities | Gross Amounts Offset in the Balance Sheet | Net Amounts of Liabilities Presented in the Balance Sheet | Balance Sheet Location | Collateral Pledged | Net Amount | |||||||||||||||||
Interest rate futures | $ | 74 | 62 | $ | 12 | Other liabilities | $ | 12 | $ | — | |||||||||||||
Foreign currency forward contracts (1) | 2,204 | 28 | 2,176 | Other liabilities | — | 2,176 | |||||||||||||||||
Foreign currency forward contracts (2) | 1,557 | 338 | 1,219 | Other liabilities | — | 1,219 | |||||||||||||||||
Credit default swaps | 94 | 82 | 12 | Other liabilities | — | 12 | |||||||||||||||||
Weather contract | 2,490 | — | 2,490 | Other liabilities | 2,490 | — | |||||||||||||||||
Total | $ | 6,419 | $ | 510 | $ | 5,909 | $ | 2,502 | $ | 3,407 | |||||||||||||
(1) | Contracts used to manage foreign currency risks in underwriting and non-investment operations. |
(2) | Contracts used to manage foreign currency risks in investment operations. |
Location of gain (loss) recognized on derivatives | Amount of gain (loss) recognized on derivatives | ||||||||||||||
Year ended December 31, | 2014 | 2013 | 2012 | ||||||||||||
Interest rate futures | Net realized and unrealized gains on investments | $ | (32,713 | ) | $ | 29,695 | $ | (1,746 | ) | ||||||
Foreign currency forward contracts (1) | Net foreign exchange gains | 4,457 | 889 | 13,804 | |||||||||||
Foreign currency forward contracts (2) | Net foreign exchange gains | 12,623 | (3,015 | ) | (3,445 | ) | |||||||||
Credit default swaps | Net realized and unrealized gains on investments | 328 | 1,363 | 1,074 | |||||||||||
Weather contract | Net realized and unrealized gains on investments | 1,454 | (1,331 | ) | — | ||||||||||
Total | $ | (13,851 | ) | $ | 27,601 | $ | 9,687 | ||||||||
(1) | Contracts used to manage foreign currency risks in underwriting and non-investment operations. |
(2) | Contracts used to manage foreign currency risks in investment operations. |
Minimum lease payments | |||||
2015 | $ | 6,184 | |||
2016 | 5,234 | ||||
2017 | 2,321 | ||||
2018 | 2,035 | ||||
2019 | 1,455 | ||||
After 2019 | 142 | ||||
Future minimum lease payments under existing operating leases | $ | 17,371 | |||
Minimum lease payments | |||||
2015 | $ | 3,017 | |||
2016 | 3,017 | ||||
2017 | 2,417 | ||||
2018 | 2,501 | ||||
2019 | 2,661 | ||||
After 2019 | 23,433 | ||||
Future minimum lease payments under existing capital leases | $ | 37,046 | |||
Quarter Ended March 31, | Quarter Ended June 30, | Quarter Ended September 30, | Quarter Ended December 31, | ||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||||||
Gross premiums written | $ | 705,260 | $ | 635,418 | $ | 511,540 | $ | 703,223 | $ | 200,992 | $ | 182,649 | $ | 132,780 | $ | 84,122 | |||||||||||||||||
Net premiums written | $ | 450,347 | $ | 436,813 | $ | 346,407 | $ | 559,109 | $ | 159,713 | $ | 127,241 | $ | 111,769 | $ | 80,784 | |||||||||||||||||
(Increase) decrease in unearned premiums | (163,813 | ) | (165,558 | ) | (85,991 | ) | (267,220 | ) | 99,266 | 167,476 | 144,718 | 175,981 | |||||||||||||||||||||
Net premiums earned | 286,534 | 271,255 | 260,416 | 291,889 | 258,979 | 294,717 | 256,487 | 256,765 | |||||||||||||||||||||||||
Net investment income | 38,948 | 43,202 | 34,541 | 26,163 | 24,941 | 59,931 | 25,886 | 78,732 | |||||||||||||||||||||||||
Net foreign exchange (losses) gains | (1,061 | ) | 614 | 2,392 | (932 | ) | 5,036 | 488 | (107 | ) | 1,747 | ||||||||||||||||||||||
Equity in earnings of other ventures | 4,199 | 5,835 | 7,232 | 3,772 | 9,806 | 7,313 | 4,838 | 6,274 | |||||||||||||||||||||||||
Other income (loss) | 62 | (1,709 | ) | (535 | ) | (1,128 | ) | (1,169 | ) | 651 | 1,219 | (173 | ) | ||||||||||||||||||||
Net realized and unrealized gains (losses) on investments | 14,927 | 14,269 | 27,128 | (69,529 | ) | (31,097 | ) | 28,472 | 30,475 | 61,864 | |||||||||||||||||||||||
Total revenues | 343,609 | 333,466 | 331,174 | 250,235 | 266,496 | 391,572 | 318,798 | 405,209 | |||||||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||||||||
Net claims and claim expenses incurred | 58,915 | 27,251 | 81,388 | 103,962 | 69,647 | 60,928 | (12,003 | ) | (20,854 | ) | |||||||||||||||||||||||
Acquisition costs | 33,700 | 25,009 | 33,477 | 31,767 | 37,550 | 37,699 | 39,749 | 31,026 | |||||||||||||||||||||||||
Operational expenses | 42,624 | 45,986 | 45,841 | 42,789 | 46,972 | 44,672 | 55,202 | 57,658 | |||||||||||||||||||||||||
Corporate expenses | 4,545 | 4,482 | 3,954 | 21,529 | 3,905 | 4,307 | 10,583 | 3,304 | |||||||||||||||||||||||||
Interest expense | 4,293 | 5,034 | 4,292 | 4,300 | 4,290 | 4,298 | 4,289 | 4,297 | |||||||||||||||||||||||||
Total expenses | 144,077 | 107,762 | 168,952 | 204,347 | 162,364 | 151,904 | 97,820 | 75,431 | |||||||||||||||||||||||||
Income from continuing operations before taxes | 199,532 | 225,704 | 162,222 | 45,888 | 104,132 | 239,668 | 220,978 | 329,778 | |||||||||||||||||||||||||
Income tax (expense) benefit | (166 | ) | (122 | ) | 204 | (11 | ) | (245 | ) | (223 | ) | (401 | ) | (1,336 | ) | ||||||||||||||||||
Income from continuing operations | 199,366 | 225,582 | 162,426 | 45,877 | 103,887 | 239,445 | 220,577 | 328,442 | |||||||||||||||||||||||||
Income (loss) from discontinued operations | — | 9,774 | — | 2,427 | — | (9,779 | ) | — | — | ||||||||||||||||||||||||
Net income | 199,366 | 235,356 | 162,426 | 48,304 | 103,887 | 229,666 | 220,577 | 328,442 | |||||||||||||||||||||||||
Net income attributable to noncontrolling interests | (42,768 | ) | (38,607 | ) | (36,078 | ) | (14,015 | ) | (30,477 | ) | (44,331 | ) | (44,215 | ) | (54,191 | ) | |||||||||||||||||
Net income available to RenaissanceRe | 156,598 | 196,749 | 126,348 | 34,289 | 73,410 | 185,335 | 176,362 | 274,251 | |||||||||||||||||||||||||
Dividends on preference shares | (5,595 | ) | (6,275 | ) | (5,596 | ) | (7,483 | ) | (5,595 | ) | (5,595 | ) | (5,595 | ) | (5,595 | ) | |||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 151,003 | $ | 190,474 | $ | 120,752 | $ | 26,806 | $ | 67,815 | $ | 179,740 | $ | 170,767 | $ | 268,656 | |||||||||||||||||
Income from continuing operations available to RenaissanceRe common shareholders per common share – basic | $ | 3.61 | $ | 4.10 | $ | 3.00 | $ | 0.55 | $ | 1.72 | $ | 4.32 | $ | 4.46 | $ | 6.14 | |||||||||||||||||
Income (loss) from discontinued operations available (attributable) to RenaissanceRe common shareholders per common share – basic | — | 0.22 | — | 0.06 | — | (0.23 | ) | — | — | ||||||||||||||||||||||||
Net income available to RenaissanceRe common shareholders per common share – basic | $ | 3.61 | $ | 4.32 | $ | 3.00 | $ | 0.61 | $ | 1.72 | $ | 4.09 | $ | 4.46 | $ | 6.14 | |||||||||||||||||
Income from continuing operations available to RenaissanceRe common shareholders per common share – diluted | $ | 3.56 | $ | 4.01 | $ | 2.95 | $ | 0.55 | $ | 1.70 | $ | 4.23 | $ | 4.42 | $ | 6.05 | |||||||||||||||||
Income (loss) from discontinued operations available (attributable) to RenaissanceRe common shareholders per common share – diluted | — | 0.22 | — | 0.05 | — | (0.22 | ) | — | — | ||||||||||||||||||||||||
Net income available to RenaissanceRe common shareholders per common share – diluted | $ | 3.56 | $ | 4.23 | $ | 2.95 | $ | 0.60 | $ | 1.70 | $ | 4.01 | $ | 4.42 | $ | 6.05 | |||||||||||||||||
Average shares outstanding – basic | 41,238 | 43,461 | 39,736 | 43,372 | 38,975 | 43,330 | 37,752 | 43,160 | |||||||||||||||||||||||||
Average shares outstanding – diluted | 41,903 | 44,290 | 40,395 | 44,243 | 39,433 | 44,135 | 38,145 | 43,769 | |||||||||||||||||||||||||
Condensed Consolidating Balance Sheet at December 31, 2014 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | ||||||||||||||
Assets | |||||||||||||||||||
Total investments | $ | 137,006 | $ | 88,150 | $ | 6,518,594 | $ | — | $ | 6,743,750 | |||||||||
Cash and cash equivalents | 5,986 | 1,033 | 518,565 | — | 525,584 | ||||||||||||||
Investments in subsidiaries | 3,509,974 | 71,796 | — | (3,581,770 | ) | — | |||||||||||||
Due from subsidiaries and affiliates | 126,548 | 23 | — | (126,571 | ) | — | |||||||||||||
Premiums receivable | — | — | 440,007 | — | 440,007 | ||||||||||||||
Prepaid reinsurance premiums | — | — | 94,810 | — | 94,810 | ||||||||||||||
Reinsurance recoverable | — | — | 66,694 | — | 66,694 | ||||||||||||||
Accrued investment income | — | 121 | 26,388 | — | 26,509 | ||||||||||||||
Deferred acquisition costs | — | — | 110,059 | — | 110,059 | ||||||||||||||
Receivable for investments sold | 10 | — | 52,380 | — | 52,390 | ||||||||||||||
Other assets | 112,400 | 1,242 | 131,563 | (101,458 | ) | 143,747 | |||||||||||||
Total assets | $ | 3,891,924 | $ | 162,365 | $ | 7,959,060 | $ | (3,809,799 | ) | $ | 8,203,550 | ||||||||
Liabilities, Noncontrolling Interests and Shareholders’ Equity | |||||||||||||||||||
Liabilities | |||||||||||||||||||
Reserve for claims and claim expenses | $ | — | $ | — | $ | 1,412,510 | $ | — | $ | 1,412,510 | |||||||||
Unearned premiums | — | — | 512,386 | — | 512,386 | ||||||||||||||
Debt | — | 249,522 | — | — | 249,522 | ||||||||||||||
Amounts due to subsidiaries and affiliates | 6,000 | 233 | — | (6,233 | ) | — | |||||||||||||
Reinsurance balances payable | — | — | 454,580 | — | 454,580 | ||||||||||||||
Payable for investments purchased | — | — | 203,021 | — | 203,021 | ||||||||||||||
Other liabilities | 20,209 | 4,013 | 351,344 | (1,458 | ) | 374,108 | |||||||||||||
Total liabilities | 26,209 | 253,768 | 2,933,841 | (7,691 | ) | 3,206,127 | |||||||||||||
Redeemable noncontrolling interests | — | — | 1,131,708 | — | 1,131,708 | ||||||||||||||
Shareholders’ Equity | |||||||||||||||||||
Total shareholders’ equity | 3,865,715 | (91,403 | ) | 3,893,511 | (3,802,108 | ) | 3,865,715 | ||||||||||||
Total liabilities, noncontrolling interests and shareholders’ equity | $ | 3,891,924 | $ | 162,365 | $ | 7,959,060 | $ | (3,809,799 | ) | $ | 8,203,550 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments. |
Condensed Consolidating Balance Sheet at December 31, 2013 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | ||||||||||||||
Assets | |||||||||||||||||||
Total investments | $ | 210,719 | $ | 98,784 | $ | 6,512,209 | $ | — | $ | 6,821,712 | |||||||||
Cash and cash equivalents | 8,796 | 4,027 | 395,209 | — | 408,032 | ||||||||||||||
Investments in subsidiaries | 3,294,729 | 74,718 | — | (3,369,447 | ) | — | |||||||||||||
Due from subsidiaries and affiliates | 296,752 | — | — | (296,752 | ) | — | |||||||||||||
Premiums receivable | — | — | 474,087 | — | 474,087 | ||||||||||||||
Prepaid reinsurance premiums | — | — | 66,132 | — | 66,132 | ||||||||||||||
Reinsurance recoverable | — | — | 101,025 | — | 101,025 | ||||||||||||||
Accrued investment income | — | 110 | 33,955 | — | 34,065 | ||||||||||||||
Deferred acquisition costs | — | — | 81,684 | — | 81,684 | ||||||||||||||
Receivable for investments sold | 14 | — | 75,831 | — | 75,845 | ||||||||||||||
Other assets | 112,234 | 1,481 | 102,834 | (100,000 | ) | 116,549 | |||||||||||||
Total assets | $ | 3,923,244 | $ | 179,120 | $ | 7,842,966 | $ | (3,766,199 | ) | $ | 8,179,131 | ||||||||
Liabilities, Redeemable Noncontrolling Interest and Shareholders’ Equity | |||||||||||||||||||
Liabilities | |||||||||||||||||||
Reserve for claims and claim expenses | $ | — | $ | — | $ | 1,563,730 | $ | — | $ | 1,563,730 | |||||||||
Unearned premiums | — | — | 477,888 | — | 477,888 | ||||||||||||||
Debt | — | 249,430 | — | — | 249,430 | ||||||||||||||
Amounts due to subsidiaries and affiliates | — | 3,173 | — | (3,173 | ) | — | |||||||||||||
Reinsurance balances payable | — | — | 293,022 | — | 293,022 | ||||||||||||||
Payable for investments purchased | — | — | 193,221 | — | 193,221 | ||||||||||||||
Other liabilities | 18,860 | 6,953 | 371,783 | — | 397,596 | ||||||||||||||
Total liabilities | 18,860 | 259,556 | 2,899,644 | (3,173 | ) | 3,174,887 | |||||||||||||
Redeemable noncontrolling interest | — | — | 1,099,860 | — | 1,099,860 | ||||||||||||||
Shareholders’ Equity | |||||||||||||||||||
Total shareholders’ equity | 3,904,384 | (80,436 | ) | 3,843,462 | (3,763,026 | ) | 3,904,384 | ||||||||||||
Total liabilities, redeemable noncontrolling interest and shareholders’ equity | $ | 3,923,244 | $ | 179,120 | $ | 7,842,966 | $ | (3,766,199 | ) | $ | 8,179,131 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments. |
Condensed Consolidating Statement of Operations for the year ended December 31, 2014 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | ||||||||||||||
Revenues | |||||||||||||||||||
Net premiums earned | $ | — | $ | — | $ | 1,062,416 | $ | — | $ | 1,062,416 | |||||||||
Net investment income | 2,706 | 1,765 | 123,582 | (3,737 | ) | 124,316 | |||||||||||||
Net foreign exchange (losses) gains | (13 | ) | — | 6,273 | — | 6,260 | |||||||||||||
Equity in earnings of other ventures | — | — | 26,075 | — | 26,075 | ||||||||||||||
Other loss | — | (7 | ) | (416 | ) | — | (423 | ) | |||||||||||
Net realized and unrealized gains on investments | 83 | 9,069 | 32,281 | — | 41,433 | ||||||||||||||
Total revenues | 2,776 | 10,827 | 1,250,211 | (3,737 | ) | 1,260,077 | |||||||||||||
Expenses | |||||||||||||||||||
Net claims and claim expenses incurred | — | — | 197,947 | — | 197,947 | ||||||||||||||
Acquisition expenses | — | — | 144,476 | — | 144,476 | ||||||||||||||
Operational expenses | (4,890 | ) | 7,004 | 188,857 | (332 | ) | 190,639 | ||||||||||||
Corporate expenses | 20,787 | 238 | 1,962 | — | 22,987 | ||||||||||||||
Interest expense | — | 14,467 | 2,697 | — | 17,164 | ||||||||||||||
Total expenses | 15,897 | 21,709 | 535,939 | (332 | ) | 573,213 | |||||||||||||
(Loss) income before equity in net income of subsidiaries and taxes | (13,121 | ) | (10,882 | ) | 714,272 | (3,405 | ) | 686,864 | |||||||||||
Equity in net income (loss) of subsidiaries | 545,839 | (4,343 | ) | — | (541,496 | ) | — | ||||||||||||
Income (loss) before taxes and noncontrolling interest | 532,718 | (15,225 | ) | 714,272 | (544,901 | ) | 686,864 | ||||||||||||
Income tax benefit (expense) | — | 4,064 | (4,672 | ) | — | (608 | ) | ||||||||||||
Net income (loss) | 532,718 | (11,161 | ) | 709,600 | (544,901 | ) | 686,256 | ||||||||||||
Net income attributable to noncontrolling interests | — | — | (153,538 | ) | — | (153,538 | ) | ||||||||||||
Net income (loss) attributable to RenaissanceRe | 532,718 | (11,161 | ) | 556,062 | (544,901 | ) | 532,718 | ||||||||||||
Dividends on preference shares | (22,381 | ) | — | — | — | (22,381 | ) | ||||||||||||
Net income (loss) attributable to RenaissanceRe common shareholders | $ | 510,337 | $ | (11,161 | ) | $ | 556,062 | $ | (544,901 | ) | $ | 510,337 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments. |
Condensed Consolidating Statement of Comprehensive Income (Loss) for the year ended December 31, 2014 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | ||||||||||||||
Comprehensive income (loss) | |||||||||||||||||||
Net income (loss) | $ | 532,718 | $ | (11,161 | ) | $ | 709,600 | $ | (544,901 | ) | $ | 686,256 | |||||||
Change in net unrealized gains on investments | — | — | (715 | ) | — | (715 | ) | ||||||||||||
Comprehensive income (loss) | 532,718 | (11,161 | ) | 708,885 | (544,901 | ) | 685,541 | ||||||||||||
Net income attributable to noncontrolling interests | — | — | (153,538 | ) | — | (153,538 | ) | ||||||||||||
Comprehensive income attributable to noncontrolling interests | — | — | (153,538 | ) | — | (153,538 | ) | ||||||||||||
Comprehensive income (loss) attributable to RenaissanceRe | $ | 532,718 | $ | (11,161 | ) | $ | 555,347 | $ | (544,901 | ) | $ | 532,003 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments. |
Condensed Consolidating Statement of Operations for the year ended December 31, 2013 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | ||||||||||||||
Revenues | |||||||||||||||||||
Net premiums earned | $ | — | $ | — | $ | 1,114,626 | $ | — | $ | 1,114,626 | |||||||||
Net investment income | 4,213 | 488 | 209,105 | (5,778 | ) | 208,028 | |||||||||||||
Net foreign exchange (losses) gains | (7 | ) | (2 | ) | 1,926 | — | 1,917 | ||||||||||||
Equity in earnings of other ventures | — | — | 23,194 | — | 23,194 | ||||||||||||||
Other income (loss) | 106 | 125 | (2,590 | ) | — | (2,359 | ) | ||||||||||||
Net realized and unrealized (losses) gains on investments | (483 | ) | 1,196 | 34,363 | — | 35,076 | |||||||||||||
Total revenues | 3,829 | 1,807 | 1,380,624 | (5,778 | ) | 1,380,482 | |||||||||||||
Expenses | |||||||||||||||||||
Net claims and claim expenses incurred | — | — | 171,287 | — | 171,287 | ||||||||||||||
Acquisition expenses | — | — | 125,501 | — | 125,501 | ||||||||||||||
Operational expenses | (4,962 | ) | 7,566 | 189,117 | (616 | ) | 191,105 | ||||||||||||
Corporate expenses | 31,264 | 338 | 2,020 | — | 33,622 | ||||||||||||||
Interest expense | 734 | 14,467 | 2,728 | — | 17,929 | ||||||||||||||
Total expenses | 27,036 | 22,371 | 490,653 | (616 | ) | 539,444 | |||||||||||||
Loss (income) before equity in net loss of subsidiaries and taxes | (23,207 | ) | (20,564 | ) | 889,971 | (5,162 | ) | 841,038 | |||||||||||
Equity in net income of subsidiaries | 713,831 | 2,142 | — | (715,973 | ) | — | |||||||||||||
Income (loss) from continuing operations before taxes | 690,624 | (18,422 | ) | 889,971 | (721,135 | ) | 841,038 | ||||||||||||
Income tax expense | — | (1,558 | ) | (134 | ) | — | (1,692 | ) | |||||||||||
Income (loss) from continuing operations | 690,624 | (19,980 | ) | 889,837 | (721,135 | ) | 839,346 | ||||||||||||
Income from discontinued operations | — | 2,422 | — | — | 2,422 | ||||||||||||||
Net income (loss) | 690,624 | (17,558 | ) | 889,837 | (721,135 | ) | 841,768 | ||||||||||||
Net income attributable to noncontrolling interest | — | — | (151,144 | ) | — | (151,144 | ) | ||||||||||||
Net income (loss) attributable to RenaissanceRe | 690,624 | (17,558 | ) | 738,693 | (721,135 | ) | 690,624 | ||||||||||||
Dividends on preference shares | (24,948 | ) | — | — | — | (24,948 | ) | ||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | $ | 665,676 | $ | (17,558 | ) | $ | 738,693 | $ | (721,135 | ) | $ | 665,676 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments. |
Condensed Consolidating Statement of Comprehensive Income (Loss) for the year ended December 31, 2013 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | ||||||||||||||
Comprehensive income (loss) | |||||||||||||||||||
Net income (loss) | $ | 690,624 | $ | (17,558 | ) | $ | 889,837 | $ | (721,135 | ) | $ | 841,768 | |||||||
Change in net unrealized gains on investments | — | — | (9,491 | ) | — | (9,491 | ) | ||||||||||||
Comprehensive income (loss) | 690,624 | (17,558 | ) | 880,346 | (721,135 | ) | 832,277 | ||||||||||||
Net income attributable to noncontrolling interests | — | — | (151,144 | ) | — | (151,144 | ) | ||||||||||||
Comprehensive income attributable to noncontrolling interests | — | — | (151,144 | ) | — | (151,144 | ) | ||||||||||||
Comprehensive income (loss) available (attributable) to RenaissanceRe | $ | 690,624 | $ | (17,558 | ) | $ | 729,202 | $ | (721,135 | ) | $ | 681,133 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments. |
Condensed Consolidating Statement of Operations for the year ended December 31, 2012 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | ||||||||||||||
Revenues | |||||||||||||||||||
Net premiums earned | $ | — | $ | — | $ | 1,069,355 | $ | — | $ | 1,069,355 | |||||||||
Net investment income | 14,195 | 619 | 150,911 | — | 165,725 | ||||||||||||||
Net foreign exchange gains | 33 | — | 5,286 | — | 5,319 | ||||||||||||||
Equity in earnings of other ventures | — | — | 23,238 | — | 23,238 | ||||||||||||||
Other income (loss) | 2,822 | — | (4,942 | ) | — | (2,120 | ) | ||||||||||||
Net realized and unrealized gains on investments | 14,862 | 1,556 | 146,703 | — | 163,121 | ||||||||||||||
Net other-than-temporary impairments | — | — | (343 | ) | — | (343 | ) | ||||||||||||
Total revenues | 31,912 | 2,175 | 1,390,208 | — | 1,424,295 | ||||||||||||||
Expenses | |||||||||||||||||||
Net claims and claim expenses incurred | — | — | 325,211 | — | 325,211 | ||||||||||||||
Acquisition expenses | — | — | 113,542 | — | 113,542 | ||||||||||||||
Operational expenses | (5,103 | ) | 7,013 | 177,241 | — | 179,151 | |||||||||||||
Corporate expenses | 14,282 | 273 | 1,901 | — | 16,456 | ||||||||||||||
Interest expense | 5,875 | 14,467 | 2,755 | — | 23,097 | ||||||||||||||
Total expenses | 15,054 | 21,753 | 620,650 | — | 657,457 | ||||||||||||||
Income (loss) before equity in net loss of subsidiaries and taxes | 16,858 | (19,578 | ) | 769,558 | — | 766,838 | |||||||||||||
Equity in net earnings of subsidiaries | 584,051 | 1,860 | — | (585,911 | ) | — | |||||||||||||
Income (loss) from continuing operations before taxes | 600,909 | (17,718 | ) | 769,558 | (585,911 | ) | 766,838 | ||||||||||||
Income tax expense | — | (499 | ) | (914 | ) | — | (1,413 | ) | |||||||||||
Income (loss) from continuing operations | 600,909 | (18,217 | ) | 768,644 | (585,911 | ) | 765,425 | ||||||||||||
Loss from discontinued operations | — | (16,476 | ) | — | — | (16,476 | ) | ||||||||||||
Net income (loss) | 600,909 | (34,693 | ) | 768,644 | (585,911 | ) | 748,949 | ||||||||||||
Net income attributable to noncontrolling interest | — | — | (148,040 | ) | — | (148,040 | ) | ||||||||||||
Net income (loss) attributable to RenaissanceRe | 600,909 | (34,693 | ) | 620,604 | (585,911 | ) | 600,909 | ||||||||||||
Dividends on preference shares | (34,895 | ) | — | — | — | (34,895 | ) | ||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | $ | 566,014 | $ | (34,693 | ) | $ | 620,604 | $ | (585,911 | ) | $ | 566,014 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments. |
Condensed Consolidating Statement of Comprehensive Income (Loss) for the year ended December 31, 2012 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | ||||||||||||||
Comprehensive income (loss) | |||||||||||||||||||
Net income (loss) | $ | 600,909 | $ | (34,693 | ) | $ | 768,644 | $ | (585,911 | ) | $ | 748,949 | |||||||
Change in net unrealized gains on investments | — | — | 1,914 | — | 1,914 | ||||||||||||||
Portion of other-than-temporary impairments recognized in other comprehensive loss | — | — | (52 | ) | — | (52 | ) | ||||||||||||
Comprehensive income (loss) | 600,909 | (34,693 | ) | 770,506 | (585,911 | ) | 750,811 | ||||||||||||
Net income attributable to noncontrolling interests | — | — | (148,040 | ) | — | (148,040 | ) | ||||||||||||
Comprehensive income attributable to noncontrolling interests | — | — | (148,040 | ) | — | (148,040 | ) | ||||||||||||
Comprehensive income (loss) attributable to RenaissanceRe | $ | 600,909 | $ | (34,693 | ) | $ | 622,466 | $ | (585,911 | ) | $ | 602,771 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments. |
Condensed Consolidating Statement of Cash Flows for the year ended December 31, 2014 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | RenaissanceRe Consolidated | |||||||||||
Cash flows provided by (used in) operating activities | |||||||||||||||
Net cash provided by (used in) operating activities | $ | 429 | $ | (18,114 | ) | $ | 678,342 | $ | 660,657 | ||||||
Cash flows provided by (used in) investing activities | |||||||||||||||
Proceeds from sales and maturities of fixed maturity investments trading | 88,273 | 20,487 | 7,573,813 | 7,682,573 | |||||||||||
Purchases of fixed maturity investments trading | (88,341 | ) | (14,969 | ) | (7,535,868 | ) | (7,639,178 | ) | |||||||
Proceeds from sales and maturities of fixed maturity investments available for sale | — | — | 7,088 | 7,088 | |||||||||||
Net sales (purchases) of equity investments trading | — | 13,761 | (33,764 | ) | (20,003 | ) | |||||||||
Net sales (purchases) of short term investments | 73,717 | 225 | (28,919 | ) | 45,023 | ||||||||||
Net sales of other investments | — | — | 59,120 | 59,120 | |||||||||||
Net sales of investments in other ventures | — | — | 1,030 | 1,030 | |||||||||||
Net sales of other assets | — | — | 6,000 | 6,000 | |||||||||||
Dividends and return of capital from subsidiaries | 1,259,224 | 11,204 | (1,270,428 | ) | — | ||||||||||
Contributions to subsidiaries | (759,456 | ) | (12,625 | ) | 772,081 | — | |||||||||
Due to (from) subsidiary | 6,315 | (2,963 | ) | (3,352 | ) | — | |||||||||
Net cash provided by (used in) investing activities | 579,732 | 15,120 | (453,199 | ) | 141,653 | ||||||||||
Cash flows used in financing activities | |||||||||||||||
Dividends paid – RenaissanceRe common shares | (45,912 | ) | — | — | (45,912 | ) | |||||||||
Dividends paid – preference shares | (22,381 | ) | — | — | (22,381 | ) | |||||||||
RenaissanceRe common share repurchases | (514,678 | ) | — | — | (514,678 | ) | |||||||||
Net third party redeemable noncontrolling interest share transactions | — | — | (111,707 | ) | (111,707 | ) | |||||||||
Net cash used in financing activities | (582,971 | ) | — | (111,707 | ) | (694,678 | ) | ||||||||
Effect of exchange rate changes on foreign currency cash | — | — | 9,920 | 9,920 | |||||||||||
Net (decrease) increase in cash and cash equivalents | (2,810 | ) | (2,994 | ) | 123,356 | 117,552 | |||||||||
Cash and cash equivalents, beginning of period | 8,796 | 4,027 | 395,209 | 408,032 | |||||||||||
Cash and cash equivalents, end of period | $ | 5,986 | $ | 1,033 | $ | 518,565 | $ | 525,584 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
Condensed Consolidating Statement of Cash Flows for the year ended December 31, 2013 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | RenaissanceRe Consolidated | |||||||||||
Cash flows (used in) provided by operating activities | |||||||||||||||
Net cash (used in) provided by operating activities | $ | (37,966 | ) | $ | (7,583 | ) | $ | 841,270 | $ | 795,721 | |||||
Cash flows provided by (used in) investing activities | |||||||||||||||
Proceeds from sales and maturities of fixed maturity investments trading | 880,749 | 185,143 | 7,185,513 | 8,251,405 | |||||||||||
Purchases of fixed maturity investments trading | (491,768 | ) | (160,422 | ) | (7,814,277 | ) | (8,466,467 | ) | |||||||
Proceeds from sales and maturities of fixed maturity investments available for sale | — | — | 45,178 | 45,178 | |||||||||||
Net (purchases) sales of equity investments trading | — | (81,437 | ) | 48,382 | (33,055 | ) | |||||||||
Net sales (purchases) of short term investments | 21,217 | 9,399 | (277,587 | ) | (246,971 | ) | |||||||||
Net sales of other investments | — | — | 76,214 | 76,214 | |||||||||||
Net purchases of investments in other ventures | — | — | (4,000 | ) | (4,000 | ) | |||||||||
Net sales of other assets | — | — | 2,181 | 2,181 | |||||||||||
Dividends and return of capital from subsidiaries | 504,241 | 83,593 | (587,834 | ) | — | ||||||||||
Contributions to subsidiaries | (500,652 | ) | (38,117 | ) | 538,769 | — | |||||||||
Due to (from) subsidiaries | 17,446 | (3,761 | ) | (13,685 | ) | — | |||||||||
Net proceeds related to sale of discontinued operations | — | — | 60,000 | 60,000 | |||||||||||
Net cash provided by (used in) investing activities | 431,233 | (5,602 | ) | (741,146 | ) | (315,515 | ) | ||||||||
Cash flows (used in) provided by financing activities | |||||||||||||||
Dividends paid – RenaissanceRe common shares | (49,267 | ) | — | — | (49,267 | ) | |||||||||
Dividends paid – preference shares | (24,948 | ) | — | — | (24,948 | ) | |||||||||
RenaissanceRe common share repurchases | (207,410 | ) | — | — | (207,410 | ) | |||||||||
Net repayment of debt | (100,000 | ) | — | (2,436 | ) | (102,436 | ) | ||||||||
Redemption 6.08% Series C preference shares | (125,000 | ) | — | — | (125,000 | ) | |||||||||
Redemption 6.60% Series D preference shares | (150,000 | ) | — | — | (150,000 | ) | |||||||||
Issuance of 5.375% Series E preference shares, net of expenses | 265,856 | — | — | 265,856 | |||||||||||
Contribution of capital from parent | — | 15,684 | (15,684 | ) | — | ||||||||||
Net third party redeemable noncontrolling interest share transactions | — | — | (5,750 | ) | (5,750 | ) | |||||||||
Net cash (used in) provided by financing activities | (390,769 | ) | 15,684 | (23,870 | ) | (398,955 | ) | ||||||||
Effect of exchange rate changes on foreign currency cash | — | — | 1,423 | 1,423 | |||||||||||
Net increase in cash and cash equivalents | 2,498 | 2,499 | 77,677 | 82,674 | |||||||||||
Net decrease in cash and cash equivalents of discontinued operations | — | — | 21,213 | 21,213 | |||||||||||
Cash and cash equivalents, beginning of period | 6,298 | 1,528 | 296,319 | 304,145 | |||||||||||
Cash and cash equivalents, end of period | $ | 8,796 | $ | 4,027 | $ | 395,209 | $ | 408,032 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
Condensed Consolidating Statement of Cash Flows for the year ended December 31, 2012 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | RenaissanceRe Consolidated | |||||||||||
Cash flows provided by (used in) operating activities | |||||||||||||||
Net cash provided by (used in) operating activities | $ | 128,567 | $ | (10,376 | ) | $ | 598,738 | $ | 716,929 | ||||||
Cash flows provided by (used in) investing activities | |||||||||||||||
Proceeds from sales and maturities of fixed maturity investments trading | 744,211 | 140,626 | 7,308,030 | 8,192,867 | |||||||||||
Purchases of fixed maturity investments trading | (692,783 | ) | (73,800 | ) | (7,769,655 | ) | (8,536,238 | ) | |||||||
Proceeds from sales and maturities of fixed maturity investments available for sale | — | — | 65,168 | 65,168 | |||||||||||
Net (purchases) sales of short term investments | (80,485 | ) | (10,624 | ) | 159,886 | 68,777 | |||||||||
Net sales of other investments | — | — | 150,828 | 150,828 | |||||||||||
Net purchases of other assets | — | — | (4,079 | ) | (4,079 | ) | |||||||||
Dividends and return of capital from subsidiaries | 979,311 | 9,541 | (988,852 | ) | — | ||||||||||
Contributions to subsidiaries | (366,210 | ) | (50,000 | ) | 416,210 | — | |||||||||
Due (from) to subsidiary | (15,359 | ) | 241 | 15,118 | — | ||||||||||
Net payments related to sale of discontinued operations | — | (9,000 | ) | — | (9,000 | ) | |||||||||
Net cash provided by (used in) investing activities | 568,685 | 6,984 | (647,346 | ) | (71,677 | ) | |||||||||
Cash flows (used in) provided by financing activities | |||||||||||||||
Dividends paid – RenaissanceRe common shares | (53,356 | ) | — | — | (53,356 | ) | |||||||||
Dividends paid – preference shares | (34,895 | ) | — | — | (34,895 | ) | |||||||||
RenaissanceRe common share repurchases | (463,309 | ) | — | — | (463,309 | ) | |||||||||
Net repayment of debt | — | — | (1,937 | ) | (1,937 | ) | |||||||||
Redemption of 6.60% Series D preference shares | (150,000 | ) | — | — | (150,000 | ) | |||||||||
Third party DaVinciRe share repurchases | — | — | 164,927 | 164,927 | |||||||||||
Net cash (used in) provided by financing activities | (701,560 | ) | — | 162,990 | (538,570 | ) | |||||||||
Effect of exchange rate changes on foreign currency cash | — | — | 1,692 | 1,692 | |||||||||||
Net (decrease) increase in cash and cash equivalents | (4,308 | ) | (3,392 | ) | 116,074 | 108,374 | |||||||||
Net decrease in cash and cash equivalents of discontinued operations | — | — | 13,946 | 13,946 | |||||||||||
Cash and cash equivalents, beginning of year | 10,606 | 4,920 | 166,299 | 181,825 | |||||||||||
Cash and cash equivalents, end of year | $ | 6,298 | $ | 1,528 | $ | 296,319 | $ | 304,145 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
Page | |||
I | |||
II | |||
III | |||
IV | |||
VI |
December 31, 2014 | |||||||||||
Amortized Cost | Market Value | Amount at which shown in the Balance Sheet | |||||||||
Type of investment: | |||||||||||
Fixed maturity investments | |||||||||||
U.S. treasuries | $ | 1,672,441 | $ | 1,671,471 | $ | 1,671,471 | |||||
Agencies | 96,271 | 96,208 | 96,208 | ||||||||
Non-U.S. government (Sovereign debt) | 287,856 | 280,651 | 280,651 | ||||||||
Non-U.S. government-backed corporate | 146,691 | 146,467 | 146,467 | ||||||||
Corporate | 1,611,172 | 1,610,442 | 1,610,442 | ||||||||
Agency mortgage-backed | 315,911 | 316,620 | 316,620 | ||||||||
Non-agency mortgage-backed | 237,891 | 253,050 | 253,050 | ||||||||
Commercial mortgage-backed | 377,792 | 381,051 | 381,051 | ||||||||
Asset-backed | 27,360 | 27,610 | 27,610 | ||||||||
Total fixed maturity investments | $ | 4,773,385 | 4,783,570 | 4,783,570 | |||||||
Short term investments | 1,013,222 | 1,013,222 | |||||||||
Equity investments | 322,098 | 322,098 | |||||||||
Other investments | 504,147 | 504,147 | |||||||||
Investments in other ventures, under equity method | 120,713 | 120,713 | |||||||||
Total investments | $ | 6,743,750 | $ | 6,743,750 |
At December 31, | |||||||
2014 | 2013 | ||||||
Assets | |||||||
Short term investments, at fair value | $ | 137,006 | $ | 210,719 | |||
Cash and cash equivalents | 5,986 | 8,796 | |||||
Investments in subsidiaries | 3,509,974 | 3,294,729 | |||||
Due from subsidiaries | 10,164 | 16,479 | |||||
Dividends due from subsidiaries | 116,384 | 280,273 | |||||
Receivable for investments sold | 10 | 14 | |||||
Other assets | 112,400 | 112,234 | |||||
Total Assets | $ | 3,891,924 | $ | 3,923,244 | |||
Liabilities and Shareholders’ Equity | |||||||
Liabilities | |||||||
Contributions due to subsidiaries | $ | 6,000 | $ | — | |||
Other liabilities | 20,209 | 18,860 | |||||
Total Liabilities | 26,209 | 18,860 | |||||
Shareholders’ Equity | |||||||
Preference shares: $1.00 par value – 16,000,000 shares issued and outstanding at December 31, 2014 (December 31, 2013 – 16,000,000) | 400,000 | 400,000 | |||||
Common shares: $1.00 par value – 38,441,972 shares issued and outstanding at December 31, 2014 (December 31, 2013 – 43,646,436) | 38,442 | 43,646 | |||||
Accumulated other comprehensive income | 3,416 | 4,131 | |||||
Retained earnings | 3,423,857 | 3,456,607 | |||||
Total Shareholders’ Equity | 3,865,715 | 3,904,384 | |||||
Total Liabilities and Shareholders’ Equity | $ | 3,891,924 | $ | 3,923,244 |
Year ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Revenues | |||||||||||
Net investment income | $ | 2,706 | $ | 4,213 | $ | 14,195 | |||||
Net foreign exchange gains (losses) | (13 | ) | (7 | ) | 33 | ||||||
Other income | — | 106 | 2,822 | ||||||||
Net realized and unrealized gains (losses) on investments | 83 | (483 | ) | 14,862 | |||||||
Total revenues | 2,776 | 3,829 | 31,912 | ||||||||
Expenses | |||||||||||
Interest expense | — | 734 | 5,875 | ||||||||
Operational expenses | (4,890 | ) | (4,962 | ) | (5,103 | ) | |||||
Corporate expenses | 20,787 | 31,264 | 14,282 | ||||||||
Total expenses | 15,897 | 27,036 | 15,054 | ||||||||
(Loss) income before equity in net income of subsidiaries and taxes | (13,121 | ) | (23,207 | ) | 16,858 | ||||||
Equity in net income of subsidiaries | 545,839 | 713,831 | 584,051 | ||||||||
Net income | 532,718 | 690,624 | 600,909 | ||||||||
Dividends on preference shares | (22,381 | ) | (24,948 | ) | (34,895 | ) | |||||
Net income available to RenaissanceRe common shareholders | $ | 510,337 | $ | 665,676 | $ | 566,014 |
Year ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Comprehensive income | |||||||||||
Net income | $ | 532,718 | $ | 690,624 | $ | 600,909 | |||||
Comprehensive income attributable to RenaissanceRe | $ | 532,718 | $ | 690,624 | $ | 600,909 |
Year ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Cash flows (used in) provided by operating activities: | |||||||||||
Net income | $ | 532,718 | $ | 690,624 | $ | 600,909 | |||||
Less: equity in net income of subsidiaries | (545,839 | ) | (713,831 | ) | (584,051 | ) | |||||
(13,121 | ) | (23,207 | ) | 16,858 | |||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities | |||||||||||
Net unrealized losses included in net investment income | — | — | 348 | ||||||||
Net unrealized gains included in other loss | — | (20 | ) | (193 | ) | ||||||
Net realized and unrealized (gains) losses on investments | (83 | ) | 483 | (14,862 | ) | ||||||
Other | 13,633 | (15,222 | ) | 126,416 | |||||||
Net cash provided by (used in) operating activities | 429 | (37,966 | ) | 128,567 | |||||||
Cash flows provided by investing activities: | |||||||||||
Proceeds from maturities and sales of fixed maturity investments trading | 88,273 | 880,749 | 744,211 | ||||||||
Purchases of fixed maturity investments trading | (88,341 | ) | (491,768 | ) | (692,783 | ) | |||||
Net sales (purchases) of short term investments | 73,717 | 21,217 | (80,485 | ) | |||||||
Dividends and return of capital from subsidiaries | 1,259,224 | 504,241 | 979,311 | ||||||||
Contributions to subsidiaries | (759,456 | ) | (500,652 | ) | (366,210 | ) | |||||
Due to (from) subsidiary | 6,315 | 17,446 | (15,359 | ) | |||||||
Net cash provided by investing activities | 579,732 | 431,233 | 568,685 | ||||||||
Cash flows used in financing activities: | |||||||||||
Dividends paid – RenaissanceRe common shares | (45,912 | ) | (49,267 | ) | (53,356 | ) | |||||
Dividends paid – preference shares | (22,381 | ) | (24,948 | ) | (34,895 | ) | |||||
RenaissanceRe common share repurchases | (514,678 | ) | (207,410 | ) | (463,309 | ) | |||||
Redemption of 6.08% Series C preference shares | — | (125,000 | ) | — | |||||||
Redemption of 6.60% Series D preference shares | — | (150,000 | ) | (150,000 | ) | ||||||
Issuance of 5.375% Series E preference share, net of expenses | — | 265,856 | — | ||||||||
Net repayment of debt | — | (100,000 | ) | — | |||||||
Net cash used in financing activities | (582,971 | ) | (390,769 | ) | (701,560 | ) | |||||
Net (decrease) increase in cash and cash equivalents | (2,810 | ) | 2,498 | (4,308 | ) | ||||||
Cash and cash equivalents, beginning of year | 8,796 | 6,298 | 10,606 | ||||||||
Cash and cash equivalents, end of year | $ | 5,986 | $ | 8,796 | $ | 6,298 |
December 31, 2014 | Year ended December 31, 2014 | ||||||||||||||||||||||||||||||||||
Deferred Policy Acquisition Costs | Future Policy Benefits, Losses, Claims and Loss Expenses | Unearned Premiums | Premium Revenue | Net Investment Income | Benefits, Claims, Losses and Settlement Expenses | Amortization of Deferred Policy Acquisition Costs | Other Operating Expenses | Net Written Premiums | |||||||||||||||||||||||||||
Catastrophe Reinsurance | $ | 28,057 | $ | 542,667 | $ | 222,864 | $ | 590,845 | $ | — | $ | 1,757 | $ | 43,161 | $ | 95,851 | $ | 541,608 | |||||||||||||||||
Specialty Reinsurance | 58,758 | 543,710 | 184,054 | 253,537 | — | 88,502 | 60,936 | 43,370 | 295,855 | ||||||||||||||||||||||||||
Lloyd’s | 23,244 | 284,447 | 105,468 | 217,666 | — | 113,825 | 46,927 | 51,115 | 230,429 | ||||||||||||||||||||||||||
Other | — | 41,686 | — | 368 | 124,316 | (6,137 | ) | (6,548 | ) | 303 | 344 | ||||||||||||||||||||||||
Total | $ | 110,059 | $ | 1,412,510 | $ | 512,386 | $ | 1,062,416 | $ | 124,316 | $ | 197,947 | $ | 144,476 | $ | 190,639 | $ | 1,068,236 | |||||||||||||||||
December 31, 2013 | Year ended December 31, 2013 | ||||||||||||||||||||||||||||||||||
Deferred Policy Acquisition Costs | Future Policy Benefits, Losses, Claims and Loss Expenses | Unearned Premiums | Premium Revenue | Net Investment Income | Benefits, Claims, Losses and Settlement Expenses | Amortization of Deferred Policy Acquisition Costs | Other Operating Expenses | Net Written Premiums | |||||||||||||||||||||||||||
Catastrophe Reinsurance | $ | 37,889 | $ | 780,987 | $ | 279,465 | $ | 723,705 | $ | — | $ | 7,908 | $ | 49,161 | $ | 108,130 | $ | 753,078 | |||||||||||||||||
Specialty Reinsurance | 26,727 | 506,268 | 115,278 | 214,306 | — | 67,236 | 41,538 | 31,780 | 248,562 | ||||||||||||||||||||||||||
Lloyd’s | 17,068 | 218,367 | 83,145 | 176,029 | — | 95,693 | 34,823 | 50,540 | 201,697 | ||||||||||||||||||||||||||
Other | — | 58,108 | — | 586 | 208,028 | 450 | (21 | ) | 655 | 610 | |||||||||||||||||||||||||
Total | $ | 81,684 | $ | 1,563,730 | $ | 477,888 | $ | 1,114,626 | $ | 208,028 | $ | 171,287 | $ | 125,501 | $ | 191,105 | $ | 1,203,947 | |||||||||||||||||
December 31, 2012 | Year ended December 31, 2012 | ||||||||||||||||||||||||||||||||||
Deferred Policy Acquisition Costs | Future Policy Benefits, Losses, Claims and Loss Expenses | Unearned Premiums | Premium Revenue | Net Investment Income | Benefits, Claims, Losses and Settlement Expenses | Amortization of Deferred Policy Acquisition Costs | Other Operating Expenses | Net Written Premiums | |||||||||||||||||||||||||||
Catastrophe Reinsurance | $ | 28,306 | $ | 1,184,258 | $ | 261,456 | $ | 781,738 | $ | — | $ | 165,209 | $ | 66,665 | $ | 103,811 | $ | 766,035 | |||||||||||||||||
Specialty Reinsurance | 15,010 | 478,313 | 84,058 | 164,685 | — | 76,813 | 23,826 | 29,124 | 201,552 | ||||||||||||||||||||||||||
Lloyd’s | 9,306 | 149,470 | 54,003 | 122,968 | — | 80,242 | 22,864 | 45,680 | 135,131 | ||||||||||||||||||||||||||
Other | — | 67,336 | — | (36 | ) | 165,725 | 2,947 | 187 | 536 | (61 | ) | ||||||||||||||||||||||||
Total | $ | 52,622 | $ | 1,879,377 | $ | 399,517 | $ | 1,069,355 | $ | 165,725 | $ | 325,211 | $ | 113,542 | $ | 179,151 | $ | 1,102,657 |
Gross Amounts | Ceded to Other Companies | Assumed From Other Companies | Net Amount | Percentage of Amount Assumed to Net | ||||||||||||||
Year ended December 31, 2014 | ||||||||||||||||||
Property and liability premiums earned | $ | 66,027 | $ | 453,658 | $ | 1,450,047 | $ | 1,062,416 | 136 | % | ||||||||
Year ended December 31, 2013 | ||||||||||||||||||
Property and liability premiums earned | $ | 44,530 | $ | 412,415 | $ | 1,482,511 | $ | 1,114,626 | 133 | % | ||||||||
Year ended December 31, 2012 | ||||||||||||||||||
Property and liability premiums earned | $ | 34,028 | $ | 430,374 | $ | 1,465,701 | $ | 1,069,355 | 137 | % |
Affiliation with Registrant | Deferred Policy Acquisition Costs | Reserves for Unpaid Claims and Claim Adjustment Expenses | Discount, if any, Deducted | Unearned Premiums | Earned Premiums | Net Investment Income | |||||||||||||||||
Consolidated Subsidiaries | |||||||||||||||||||||||
Year ended December 31, 2014 | $ | 110,059 | $ | 1,412,510 | $ | — | $ | 512,386 | $ | 1,062,416 | $ | 124,316 | |||||||||||
Year ended December 31, 2013 | $ | 81,684 | $ | 1,563,730 | $ | — | $ | 477,888 | $ | 1,114,626 | $ | 208,028 | |||||||||||
Year ended December 31, 2012 | $ | 52,622 | $ | 1,879,377 | $ | — | $ | 399,517 | $ | 1,069,355 | $ | 165,725 | |||||||||||
Claims and Claim Adjustment Expenses Incurred Related to | Amortization of Deferred Policy Acquisition Costs | Paid Claims and Claim Adjustment Expenses | Net Premiums Written | ||||||||||||||||||||
Affiliation with Registrant | Current Year | Prior Year | |||||||||||||||||||||
Consolidated Subsidiaries | |||||||||||||||||||||||
Year ended December 31, 2014 | $ | 341,745 | $ | (143,798 | ) | $ | 144,476 | $ | 314,836 | $ | 1,068,236 | ||||||||||||
Year ended December 31, 2013 | $ | 315,241 | $ | (143,954 | ) | $ | 125,501 | $ | 395,447 | $ | 1,203,947 | ||||||||||||
Year ended December 31, 2012 | $ | 483,180 | $ | (157,969 | ) | $ | 113,542 | $ | 226,671 | $ | 1,102,657 |
(a) | Financial Statements, Financial Statement Schedules and Exhibits. |
1 | Financial Statements |
2 | Financial Statement Schedules |
3 | Exhibits |
2.1 | Agreement and Plan of Merger, dated as of November 23, 2014, by and among RenaissanceRe Holdings Ltd., Port Holdings Ltd. and Platinum Underwriters Holdings, Ltd., including the exhibits thereto. (37) |
3.1 | Memorandum of Association. (1) |
3.2 | Amended and Restated Bye-Laws. (2) |
3.3 | Memorandum of Increase in Share Capital of RenaissanceRe Holdings Ltd. (3) |
3.4 | Specimen Common Share certificate. (1) |
4.1 | Certificate of Designation, Preferences and Rights of 6.08% Series C Preference Shares. (4) |
4.2 | Certificate of Designation, Preferences and Rights of 5.375% Series E Preference Shares. (5) |
4.2(a) | Form of Stock Certificate Evidencing the 5.375% Series E Preference Shares. (5) |
4.3 | Senior Indenture, dated as of March 17, 2010, among RenRe North America Holdings Inc., as Issuer, RenaissanceRe Holdings Ltd., as Guarantor, and Deutsche Bank Trust Companies America, as Trustee. (6) |
4.3(a) | First Supplemental Indenture, dated as of March 17, 2010, among RenRe North America Holdings Inc., as Insurer, RenaissanceRe Holdings Ltd., as Guarantor, and Deutsche Bank Trust Companies America, as Trustee. (6) |
4.3(b) | Senior Debt Securities Guarantee Agreement, dated as of March 17, 2010, between RenaissanceRe Holdings Ltd., as Guarantor, and Deutsche Bank Trust Companies America, as Guarantee Trustee. (6) |
4.3(c) | Waiver Agreement, dated as of January 21, 2011, by and among RenRe North America Holdings Inc., RenaissanceRe Holdings Ltd. and Deutsche Bank Trust Company Americas, as Trustee. (7) |
4.4 | Credit Agreement, dated as of May 17, 2012, by and among RenaissanceRe Holdings Ltd., various banks and financial institutions parties thereto, Wells Fargo Bank, National Association, as Fronting Bank, LC Administrator and Administrative Agent for the Lenders, Citibank, N.A., as Syndication Agent, and Wells Fargo Securities, LLC and Citigroup Global Markets Inc., as Joint Lead Arrangers and Joint Lead Bookrunners (8). |
4.4(a) | First Amendment and Joinder to Credit Agreement, dated as of May 23, 2013, by and among RenaissanceRe Holdings Ltd., Wells Fargo Bank, National Association, as Fronting Bank, LC Administrator and Administrative Agent for the Lenders, and various banks and financial institutions parties thereto. (9) |
4.5 | Master Reimbursement Agreement, dated as of April 29, 2009, by and between Renaissance Reinsurance Ltd. and Citibank Europe PLC. (10) |
4.5(a) | Second Amended and Restated Pledge Agreement, dated as of November 24, 2014, by and between Renaissance Reinsurance Ltd. and Citibank Europe PLC. |
4.6 | Fourth Amended and Restated Reimbursement Agreement, dated as of May 17, 2012, by and among RenaissanceRe Holdings Ltd., Renaissance Reinsurance Ltd. Renaissance Reinsurance of Europe, Glencoe Insurance Ltd., DaVinci Reinsurance Ltd., the banks and financial institutions parties thereto, Wells Fargo Bank, National Association, as issuing bank, administrative agent and collateral agent for the lenders, and certain other agents. (8) |
4.7 | Standby Letter of Credit Agreement, dated as of December 23, 2014, by and among RenaissanceRe Holdings Ltd., Renaissance Reinsurance Ltd., RenaissanceRe Specialty Risks Ltd., DaVinci Reinsurance Ltd. and Wells Fargo Bank, National Association. (38) |
4.8 | Facility Letter, dated September 17, 2010, from Citibank Europe plc to Renaissance Reinsurance Ltd., DaVinci Reinsurance Ltd. and Glencoe Insurance Ltd. (11) |
4.8(a) | Amendment to Facility Letter, dated October 1, 2013, by and among Citibank Europe plc, Renaissance Reinsurance Ltd., DaVinci Reinsurance Ltd., RenaissanceRe Specialty Risks Ltd., Renaissance Reinsurance of Europe and RenaissanceRe Specialty U.S. Ltd. (12) |
4.8(b) | Insurance Letters of Credit - Master Agreement, dated September 17, 2010, between Renaissance Reinsurance Ltd. and Citibank Europe plc. DaVinci Reinsurance Ltd., Glencoe Insurance Ltd., Renaissance Reinsurance of Europe and Renaissance Specialty U.S. Ltd. have each entered into an agreement with Citibank Europe plc that is identical to the foregoing agreement, except with respect to party names and dates. (11) |
4.9 | Master Reimbursement Agreement, dated as of November 24, 2014, by and between RenaissanceRe Specialty Risks Ltd. and Citibank Europe PLC. |
4.9(a) | Pledge Agreement, dated as of November 24, 2014 by and among RenaissanceRe Specialty Risks Ltd. and Citibank Europe PLC. |
10.1 | Further Amended and Restated Employment Agreement, dated as of May 15, 2013, by and between RenaissanceRe Holdings Ltd. and Kevin J. O'Donnell. (13) |
10.2 | Form of the Amended and Restated Employment Agreement for Named Executive Officers (other than our Chief Executive Officer). (14) |
10.3 | Further Amended and Restated Employment Agreement, dated as of October 23, 2013, by and between RenaissanceRe Holdings Ltd. and Jeffrey D. Kelly. (15) |
10.4 | Transition and Services Agreement, dated as of May 15, 2013, between RenaissanceRe Holdings Ltd. and Neill A. Currie. (13) |
10.5 | Further Amended and Restated Employment Agreement, dated as of February 19, 2009, between RenaissanceRe Holdings Ltd. and Neill A. Currie. (16) |
10.5(a) | Amendment No. 1 to the Further Amended and Restated Employment Agreement, dated January 8, 2010, by and among RenaissanceRe Holdings Ltd. and Neill A. Currie. (17) |
10.5(b) | Amendment No. 2 to Further Amended and Restated Employment Agreement by and between RenaissanceRe Holdings Ltd. and Neill A. Currie, dated February 19, 2013. (18) |
10.5(c) | Amendment No. 3 to Further Amended and Restated Employment Agreement by and between RenaissanceRe Holdings Ltd. and Neill A. Currie, dated April 5, 2013. (14) |
10.6 | RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (21) |
10.6(a) | Amendment No. 1 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (21) |
10.6(b) | Amendment No. 2 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (21) |
10.6(c) | Amendment No. 3 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (10) |
10.6(d) | Amendment No. 4 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (19) |
10.6(e) | Amendment No. 5 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (23) |
10.6(f) | Amendment No. 6 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (15) |
10.6(g) | UK Schedule to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (10) |
10.6(h) | UK Sub-Plan to the RenaissanceRe Holdings 2001 Stock Incentive Plan. (10) |
10.6(i) | Form of Option Grant Notice and Agreement pursuant to which option grants are made under the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (25) |
10.6(j) | Form of Restricted Stock Grant Notice and Agreement pursuant to which Restricted Stock grants are made under the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (25) |
10.7 | RenaissanceRe Holdings Ltd. 2004 Stock Option Incentive Plan. (26) |
10.7(a) | Amendment No. 1 to the RenaissanceRe Holdings Ltd. 2004 Stock Option Incentive Plan. (27) |
10.7(b) | Form of Option Agreement pursuant to which option grants are made under the RenaissanceRe Holdings 2004 Stock Option Incentive Plan to executive officers. (26) |
10.8 | RenaissanceRe Holdings Ltd. 2010 Restricted Stock Unit Plan. (20) |
10.8(a) | Form of Restricted Stock Unit Agreement, pursuant to which restricted stock unit grants are made under the RenaissanceRe Holdings Ltd. 2010 Restricted Stock Unit Plan. (20) |
10.9 | RenaissanceRe Holdings Ltd. 2010 Performance-Based Equity Incentive Plan. (19) |
10.9(a) | Amendment No. 1 to the RenaissanceRe Holdings Ltd. 2010 Performance-Based Equity Incentive Plan. |
10.9(b) | Form of Letter Agreement with the Named Executive Officers Regarding Performance Share Awards. (24) |
10.9(c) | Form of Letter Agreement with Neill A. Currie Regarding Performance Share Awards. (24) |
10.9(d) | Form of Performance-Based Restricted Stock Grant Notice and Agreement pursuant to which performance-based restricted stock awards are made under the RenaissanceRe Holdings Ltd. 2010 Performance-Based Equity Incentive Plan. |
10.9(e) | Performance-Based Restricted Stock Grant Notice and Agreement under the RenaissanceRe Holdings Ltd. 2010 Performance-Based Equity Incentive Plan, dated June 9, 2010, between RenaissanceRe Holdings Ltd. and Neill A. Currie. (28) |
10.10 | Form of Tax Reimbursement Waiver Letter with the Named Executive Officers. (29) |
10.11 | Form of Agreement Regarding Use of Aircraft Interest by and between RenaissanceRe Holdings Ltd. and Certain Executive Officers of RenaissanceRe Holdings Ltd. (18) |
10.12 | Form of Director Retention Agreement, dated as of November 8, 2002, entered into by each of the non-employee directors of RenaissanceRe Holdings Ltd. (30) |
10.13 | Amended and Restated RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (31) |
10.13(a) | Amendment No. 1 to the RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (32) |
10.13(b) | Amendment No. 2 to the RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (33) |
10.13(c) | Amendment No. 3 to the RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (34) |
10.13(d) | Form of Restricted Stock Grant Agreement pursuant to which option grants are made under the RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (35) |
10.13(e) | Form of Option Grant Agreement pursuant to which option grants are made under the RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (35) |
10.14 | Stock Purchase Agreement, dated as of November 18, 2010, by and between RenRe North America Holdings Inc., and QBE Holdings Inc. (36) |
10.15 | Separation, Consulting, and Release Agreement by and between RenaissanceRe Holdings Ltd. and Peter C. Durhager, dated November 13, 2014. (39) |
21.1 | List of Subsidiaries of the Registrant. |
23.1 | Consent of Ernst & Young Ltd. |
31.1 | Certification of Kevin J. O’Donnell, Chief Executive Officer of RenaissanceRe Holdings Ltd., pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended. |
31.2 | Certification of Jeffrey D. Kelly, Chief Financial Officer of RenaissanceRe Holdings Ltd., pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended. |
32.1 | Certification of Kevin J. O’Donnell, Chief Executive Officer of RenaissanceRe Holdings Ltd., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2 | Certification of Jeffrey D. Kelly, Chief Financial Officer of RenaissanceRe Holdings Ltd., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
(1) | Incorporated by reference to the Registration Statement on Form S-1 of RenaissanceRe Holdings Ltd. (Registration No. 33-70008) which was declared effective by the SEC on July 26, 1995. |
(2) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended June 30, 2002, filed with the SEC on August 14, 2002. |
(3) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended March 31, 1998, filed with the SEC on May 14, 1998 (SEC File Number 000-26512). |
(4) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on March 18, 2004. |
(5) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on May 28, 2013. |
(6) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on March 18, 2010. |
(7) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on January 24, 2011. |
(8) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on May 22, 2012. |
(9) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on May 24, 2013. |
(10) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended March 31, 2009, filed with the SEC on May 1, 2009. |
(11) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K , filed with the SEC on September 23, 2010. |
(12) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on October 4, 2013. |
(13) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on May 16, 2013. |
(14) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on April 11, 2013. |
(15) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended September 30, 2013, filed with the SEC on November 6, 2013. |
(16) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on February 25, 2009. |
(17) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on January 14, 2010. |
(18) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Annual Report on Form 10-K for the year ended December 31, 2012, filed with the SEC on February 22, 2013. |
(19) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Definitive Proxy Statement filed with the Commission on April 8, 2010. |
(20) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Annual Report on Form 10-K for the year ended December 31, 2009, filed with the SEC on February 19, 2010. |
(21) | Incorporated by reference to Exhibit 99.2 to the Registration Statement on Form S-8 (Registration No. 333-90758) dated June 19, 2002. |
(22) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended March 31, 2007, filed with the SEC on May 2, 2007. |
(23) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on August 13, 2010. |
(24) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q, filed with the SEC on April 29, 2010. |
(25) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended September 30, 2004, filed with the SEC on November 9, 2004. |
(26) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on September 2, 2004. |
(27) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Annual Report on Form 10-K for the year ended December 31, 2004, filed with the SEC on March 31, 2005 (SEC File Number 001-14428). |
(28) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on June 11, 2010. |
(29) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Annual Report on Form 10-K for the year ended December 31, 2011, filed with the SEC on February 23, 2012. |
(30) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Annual Report on Form 10-K for the year ended December 31, 2002, filed with the SEC on March 31, 2003 (SEC File Number 001-14428). |
(31) | Incorporated by reference to Exhibit 99.1 to the Registration Statement on Form S-8 (Registration No. 333-90758) dated June 19, 2002. |
(32) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended March 31, 2007, filed with the SEC on May 2, 2007. |
(33) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended September 30, 2008, filed with the SEC on October 30, 2008. |
(34) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Annual Report on Form 10-K for the year ended December 31, 2008, filed with the SEC on February 20, 2009. |
(35) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on February 27, 2006. |
(36) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on November 18, 2010. |
(37) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on November 24, 2014. |
(38) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on December 30, 2014. |
(39) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on November 26, 2014. |
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Senior Officers
RenaissanceRe Holdings Ltd. and Subsidiaries
Bermuda
O’Donnell, Kevin J. Weinstein, Stephen H. Cahill, Jay W. Komposch, Caroline M.
President and Senior Vice President, Vice President, Vice President,
Chief Executive Of?cer, Group General Counsel, RenaissanceRe Underwriting RenaissanceRe Services Ltd.
RenaissanceRe Holdings Ltd. Corporate Secretary and Management Ltd.
Chief Compliance Of?cer, Manson, Jeffrey H.
Kelly, Jeffrey D. RenaissanceRe Holdings Ltd. Carr, Cathal J. Vice President,
Executive Vice President, Vice President, RenaissanceRe Underwriting
Chief Operating Of?cer and Wilcox, Mark A. RenaissanceRe Underwriting Management Ltd.
Chief Financial Of?cer, Senior Vice President, Management Ltd.
RenaissanceRe Holdings Ltd. Chief Accounting Of?cer and McCue, Keith A.
Corporate Controller, Chaves, Natalie C. Vice President,
Curtis, Ross A. RenaissanceRe Holdings Ltd. Vice President, RenaissanceRe Services Ltd.
Senior Vice President, RenaissanceRe Services Ltd.
Group Chief Underwriting Of?cer, Doak, Michael J. Mitchell, James A.
RenaissanceRe Holdings Ltd. Senior Vice President, Dean, Leah J. Vice President,
RenaissanceRe Ventures Ltd. Vice President, RenaissanceRe Underwriting
Dutt, Aditya K. RenaissanceRe Services Ltd. Management Ltd.
Senior Vice President, James, Helen L.
RenaissanceRe Holdings Ltd., Senior Vice President, Flynn, Bryan E. Morgenstern, Kai H.
President, RenaissanceRe Ventures Ltd. Vice President, Vice President,
Renaissance Underwriting RenaissanceRe Underwriting Managing Director,
Managers, Ltd. Moore, Sean M. Management Ltd. RenaissanceRe Ventures Ltd.
Senior Vice President,
Fonner, Todd R. Chief Risk Officer – Bermuda Fraser, Jamie C. Muirhead, Peter J.
Senior Vice President, RenaissanceRe Services Ltd. Vice President, Vice President,
Chief Investment Of?cer and Head of Internal Audit, RenaissanceRe Underwriting
Treasurer, Roberts, Rebecca J. RenaissanceRe Holdings Ltd. Management Ltd.
RenaissanceRe Holdings Ltd. Senior Vice President,
RenaissanceRe Underwriting Freisenbruch, Justin W. Smith, Josephine A.
O’Keefe, Justin D. Management Ltd. Vice President, Vice President,
Senior Vice President, RenaissanceRe Underwriting RenaissanceRe Services Ltd.
Chief Underwriting Of?cer A’Zary, Angela H. Management Ltd.
– Property, Vice President, Gunther, Keil A. Walker, Blythe W.
RenaissanceRe Holdings Ltd. RenaissanceRe Services Ltd. Vice President,
Vice President, RenaissanceRe Services Ltd.
Bonanno, Laura RenaissanceRe Services Ltd.
Vice President,
RenaissanceRe Services Ltd.
Ireland
Brosnan, Sean G.
Managing Director, Investments, Renaissance Services of Europe Limited
De Vere, Gerard
Vice President, Renaissance Services of Europe Limited
Finnan, Orla M.
Vice President, Renaissance Services of Europe Limited
Singapore
Paradine, Jonathan D. A.
Senior Vice President, RenaissanceRe Holdings Ltd., Principal Of?cer, Singapore Branch, Renaissance Reinsurance Ltd.
United States
Marra, David E.
Senior Vice President, RenaissanceRe Holdings Ltd. President, RenaissanceRe Underwriting Managers U.S. LLC
Tillman, Craig W.
President,
WeatherPredict Consulting Inc.
United Kingdom
Branagan, Ian D. Fox, Kim T. Burr, Stephen D.
Senior Vice President, Chief Operating Of?cer, Senior Specialty Actuary,
Group Chief Risk Of?cer, RenaissanceRe Syndicate RenaissanceRe Syndicate
RenaissanceRe Holdings Ltd. Management Limited Management Limited
Dalton, Bryan M. Heatherly, David A. Cruttenden, Edward J.
Senior Vice President, Underwriter,
Executive Director,
RenaissanceRe Holdings Ltd., RenaissanceRe Syndicate
RenaissanceRe Syndicate
Active Underwriter, Management Limited
RenaissanceRe Syndicate Management Limited
Management Limited Mann, James W. Lang, Robin J.
Executive Director, Vice President,
Murphy, Richard J. RenaissanceRe Syndicate
RenaissanceRe Syndicate
Chief Executive Of?cer, Management Limited
RenaissanceRe Syndicate Management Limited
Management Limited Brennan, Hugh R. Oakley, Ian R.
Finance Director, Underwriter,
McMenamin, Conor S. RenaissanceRe Syndicate
RenaissanceRe Syndicate
Senior Vice President, Management Limited
Chief Risk Of?cer Management Limited
of European Operations, Shepherd, Alex H.
RenaissanceRe Syndicate Underwriter,
Management Limited RenaissanceRe Syndicate
Management Limited
Amen, Marc S. Everdell, Joshua W. Rowe, Dail G.
Vice President, Vice President, Senior Scientist,
RenaissanceRe Underwriting RenaissanceRe Underwriting WeatherPredict Consulting Inc.
Managers U.S. LLC Managers U.S. LLC Williford, Eric C.
Bachiochi, David R. Regan, Michael E. Senior Scientist,
Senior Scientist, Vice President, WeatherPredict Consulting Inc.
WeatherPredict Consulting Inc. Global Tax Director,
RenRe North America
Cohen, Michael N. Employee Services Inc.
Regulatory and Government Affairs,
Vice President,
RenRe North America Employee
Services Inc.
Board of Directors
RenaissanceRe Holdings Ltd.
Ralph B. Levy
Non-Executive Chair, RenaissanceRe Holdings Ltd.
Kevin J. O’Donnell
President and Chief Executive Of?cer, RenaissanceRe Holdings Ltd.
David C. Bushnell
Retired Chief Administrative Of?cer, Citigroup Inc.
James L. Gibbons
Chairman, Harbour International Trust Company Limited
Brian G. J. Gray
Former Group Chief Underwriting Of?cer, Swiss Reinsurance Company Ltd.
Jean D. Hamilton
Private Investor, Independent Consultant
William F. Hagerty IV*
Managing Director, Hagerty Peterson and Company, LLC
Henry Klehm III
Partner, Jones Day
W. James MacGinnitie*
Former Chairman, RenaissanceRe Holdings Ltd., Independent Consultant
Anthony M. Santomero
Former President, Federal Reserve Bank of Philadelphia
Nicholas L. Trivisonno
Retired Chairman and Chief Executive Of?cer, ACNielsen Corporation
Edward J. Zore
Retired Chairman and Chief Executive Of?cer, The Northwestern Mutual Life Insurance Company
Mr. MacGinnitie will retire from the Board and Mr. Hagerty is nominated to fill the vacancy created by the retirement of Mr. MacGinnitie, each to occur in conjunction with the Company’s Annual General Meeting of Shareholders in May 2015.
Financial and Investor Information
RenaissanceRe Holdings Ltd. and Subsidiaries
General Information About the Company
For the Company’s Annual Report, press releases, Forms 10-K and 10-Q or other filings, please visit our website: www.renre.com
Or Contact:
Kekst and Company, 437 Madison Avenue, 19th Floor, New York, NY 10022 Tel: +1 212 521 4800
Investor Inquiries Should be Directed to:
Investor Relations, RenaissanceRe Holdings Ltd.
Tel: +1 441 295 4513 E-mail: investorrelations@renre.com
Additional Requests Can be Directed to:
The Corporate Secretary, RenaissanceRe Holdings Ltd. Tel: +1 441 295 4513 E-mail: secretary@renre.com
Stock Information
The Company’s stock is listed on The New York Stock Exchange under the symbol ‘RNR’.
The following table sets forth, for the period indicated, the high and low closing prices per share of our common shares as reported in composite New York Stock Exchange trading.
Price Range of Common Shares
2014 2013
Period High Low High Low
1st Quarter $98.00 $89.64 $92.23 $79.83
2nd Quarter 107.51 95.90 95.00 82.50
3rd Quarter 108.99 95.93 90.68 83.19
4th Quarter 103.57 94.24 97.53 89.90
Certi?cations
The Chief Executive Of?cer and Chief Financial Of?cer have certi?ed in writing to the Securities and Exchange Commission (the “SEC”) as to the integrity of the Company’s financial statements included in this Annual Report and in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 filed with the SEC and as to the effectiveness of the Company’s disclosure controls and procedures and internal control over ?nancial reporting.
The certi?cations are ?led as Exhibits 31.1, 31.2, 32.1 and 32.2 to our Form 10-K. Our Chief Executive Of?cer has certi?ed to the New York Stock Exchange in 2014 that he was not aware of any violation by the Company of the New York Stock Exchange corporate governance listing standards.
Independent Registered Public Accounting Firm
Ernst & Young Ltd., Hamilton, Bermuda
Registrar and Transfer Agent
Computershare Inc. 480 Washington Boulevard Jersey City, NJ 07310
Tel: +1 866 245 5019 or +1 201 680 6578 www.computershare.com
All stocks used in this report are FSC certi?ed. The narrative stock contains 10% recycled ?ber with chlorine free (TCF/ECF) pulp using timber from managed forests. The ?nancial stock contains 30% post consumer waste.
Printed at a zero-discharge facility using soy-based inks. Please recycle this publication.
RenaissanceRe Holdings Ltd.
Renaissance House
12 Crow Lane Pembroke HM 19 Bermuda
Tel: +1 441 295 4513 Fax: +1 441 295 4327 www.renre.com