Table of Contents
2017 Annual Report
RenaissanceRe
Holdings Ltd.
Table of Contents
Financial Highlights | 1 | |||
Letter to Shareholders | 2 | |||
Message from the Chair | 8 | |||
Comments on Regulation G | 9 | |||
Form10-K | 11 | |||
Office Locations | Last Page | |||
Leadership Team | Last Page | |||
| Inside Back Cover |
|
Table of Contents
Financial Highlights for RenaissanceRe Holdings Ltd. and Subsidiaries
(In thousands of United States dollars, except per share amounts and percentages) | 2017 | 2016 | 2015 | |||||||
Gross premiums written | $ | 2,797,540 | 2,374,576 | 2,011,310 | ||||||
Net (loss) income (attributable) available to RenaissanceRe common shareholders | $ | (244,770 | ) | 480,581 | 408,811 | |||||
Operating (loss) income (attributable) available to RenaissanceRe common shareholders(1) | $ | (332,300 | ) | 342,253 | 474,389 | |||||
Total assets | $ | 15,226,131 | 12,352,082 | 11,555,287 | ||||||
Total shareholders’ equity | $ | 4,391,375 | 4,866,577 | 4,732,184 | ||||||
Per common share amounts | ||||||||||
Net (loss) income (attributable) available to RenaissanceRe common shareholders per common share – diluted | $ | (6.15 | ) | 11.43 | 9.28 | |||||
Operating (loss) income (attributable) available to RenaissanceRe common shareholders per common share – diluted (1) | $ | (8.35 | ) | 8.10 | 10.78 | |||||
Book value per common share | $ | 99.72 | 108.45 | 99.13 | ||||||
Tangible book value per common share(1) | $ | 93.23 | 101.87 | 92.54 | ||||||
Tangible book value per common share plus accumulated dividends(1) | $ | 111.23 | 118.59 | 108.02 | ||||||
Dividends per common share | $ | 1.28 | 1.24 | 1.20 | ||||||
Ratios | ||||||||||
Return on average common equity | % | (5.7 | ) | 11.0 | 9.8 | |||||
Operating return on average common equity(1) | % | (7.7 | ) | 7.9 | 11.3 | |||||
Net claims and claim expense ratio | % | 108.4 | 37.8 | 32.0 | ||||||
Underwriting expense ratio | % | 29.5 | 34.7 | 32.7 | ||||||
Combined ratio | % | 137.9 | 72.5 | 64.7 |
(1) Represents anon-GAAP financial measure, which is reconciled in the Comments on Regulation G on pages 9 and 10.
Financial Strength Ratings(1)
A.M. Best
| S&P
| Moody’s
| Fitch
| |||||||||||||
Renaissance Reinsurance Ltd.(2) | A+ | A+ | A1 | A+ | ||||||||||||
DaVinci Reinsurance Ltd.(2) | A | A+ | A3 | – | ||||||||||||
Renaissance Reinsurance U.S. Inc.(2) | A+ | A+ | – | – | ||||||||||||
RenaissanceRe Specialty U.S. Ltd.(2) | A+ | A+ | – | – | ||||||||||||
Renaissance Reinsurance of Europe Unlimited Company(2) | A+ | A+ | – | – | ||||||||||||
Top Layer Reinsurance Ltd.(2) | A+ | AA | – | – | ||||||||||||
RenaissanceRe Syndicate 1458 | – | – | – | – | ||||||||||||
Lloyd’s Overall Market Rating(3) | A | A+ | – | AA- | ||||||||||||
RenaissanceRe Holdings Ltd.(4) | Very Strong | Very Strong | – | – |
(1) | As of March 1, 2018. |
(2) | The A.M. Best, S&P, Moody’s and Fitch ratings for these companies set forth in the table above reflect the insurer’s financial strength rating and in addition the S&P ratings also reflect the insurer’s issuer credit rating. |
(3) | The A.M. Best, S&P and Fitch ratings for the Lloyd’s Overall Market Rating represent its financial strength rating. |
(4) | The A.M. Best rating for RenaissanceRe Holdings Ltd. refers to the Enterprise Risk Management (ERM) A.M. Best score within A.M. Best’s credit ratings methodology. The S&P rating for RenaissanceRe Holdings Ltd. represents the rating on its ERM practices. |
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By Kevin O’Donnell
President and Chief Executive Officer
While the value chain may change over time, the role we play quantifying risk and efficiently accumulating capital will always be needed, because it is essential to social well-being and economic prosperity.
Dear Shareholders,
RenaissanceRe was formed in 1993 to address an identified market need, with differentiated capabilities in underwriting, service, responsiveness, and a unique ability to match capital to risk. We started with a handful of underwriters in one office and an idea to transform the property catastrophe market.
Fast forward 25 years, we have grown and changed in many ways. We now write business from six offices over three continents. Although a recognized leader in property catastrophe since our founding, we have moved successfully into casualty and specialty, with approximately 50% of our gross premiums written now coming from this business. In many ways, however, we are still very much unchanged. We continue to differentiate ourselves on the same capabilities that we always have: technical knowledge, service, responsiveness, innovation, and an industry leading ability to match attractive risk to efficient capital.
This letter has two parts. Part I covers our performance in 2017, and the qualities and efforts that helped us achieve those results. Part II is more forward looking, and concentrates on the social value proposition of reinsurance.
I. Our Performance in 2017
Understanding and managing volatility is critical in the reinsurance business because, when catastrophic losses occur, our customers need to know we will be there to promptly pay their claims. In 2017, the insurance industry experienced record-breaking insured losses, which could exceed $140 billion. Our customers, however, had the benefit of our strong enterprise risk management, ratings and capital to ease their minds. I am very proud of the leadership our team demonstrated against this backdrop, paying our customers’ claims rapidly, executing ourgross-to-net strategy, and being a first call market for new business. This leadership, coupled with our distinctive value proposition and consistent strategy, allowed us to grow substantially in 2017. I remain confident that in 2018, these advantages will allow us to continue to grow our business while always remaining focused on maximizing shareholder value.
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RenaissanceRe Holdings Ltd. 2017 Annual Report
Financial Performance
In 2017, we reported a net loss attributable to RenaissanceRe common shareholders of $244.8 million and an operating loss attributable to RenaissanceRe common shareholders of $332.3 million. Our book value per common share decreased by 8.0% and our tangible book value per common share plus change in accumulated dividends decreased by 7.2%. For the full year, our return on average common equity was negative 5.7% and our operating return on average common equity was negative 7.7%.
In 2017, we repurchased about $190 million of our common shares prior to the catastrophe losses in the third quarter. Over the past three years, we consistently demonstrated good stewardship of our shareholders’ capital, returning over $900 million in share buybacks and common share dividends and paying over $2 billion in claims during the same time period.
We also continued to see the benefit of our long-term strategic decision to increase both underwriting and operating leverage. The choices we made, such as diversifying into casualty business, acquiring Platinum, aggressively implementing ourgross-to-net strategy and developing RenaissanceRe Syndicate 1458 at Lloyd’s allowed us to grow gross premiums written by 80% over the last 5 years, while only increasing shareholders’ equity by 25% during the same period and keeping operating and corporate expenses essentially flat.
Superior Customer Relationships
I have often said that our value proposition extends beyond price.
Our business requires us to provide a differentiated offering to customers. I believe that value was demonstrated again during the second half of 2017. We experienced three hurricanes — Harvey, Irma and Maria — along with the Mexico City Earthquake and the wildfires in California. As each of these major hurricanes developed, our underwriters, along with our team of scientists at WeatherPredict, closely monitored the storms, their potential for strengthening, and the most likely track they would take. Throughout this process, we reached out to our customers and brokers most likely to be affected.
After each major loss event, we made good on our promise to rapidly pay claims, which helps our customers and assists in the recovery process. The speed and skill of our people and systems in responding to these losses are testament to our focus on developing superior customer relationships and decades of experience in helping clients and communities manage through natural catastrophes.
Superior Risk Management
I am proud that we have built a portfolio able to withstand the challenges and maximize the opportunities presented by the 2017 markets. Tested by record-breaking natural catastrophes, ourgross-to-net strategy performed well in 2017 as our integrated system allowed us to access the most efficient capital available, whether our own, third-party or retrocessional. For the large loss events, we ceded overtwo-thirds of our gross losses to the retrocessional market, shared them with third parties or offset them with reinstatement premiums.
This year’s loss experience reminds us that ours is a volatile business. Vendor models alone are no substitute for good underwriting. That is why we combine commercially available models and third-party expertise with our own proprietary research and expectations about the frequency of losses and other factors to inform our independent view of risk. This approach helps us aspire to be the world’s best underwriter, which we believe results in superior shareholder value.
Ultimately, our shareholders and managed partner capital bear the financial burden of paying losses. So, I believe it will be helpful if I share with you how we evaluate our performance after a large event. First, we think of losses in two broad categories — risks that we knowingly accepted and those that we did not. Looking at the losses of 2017, earthquakes, wildfires, and hurricanes are the types of risk that we knowingly took. Then, after an occurrence, we analyze each account to determine if we were paid appropriately for each risk we assumed, which I believe we were.
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Letter to Shareholders (continued)
As an owner, how should you think about losses? This is a difficult question because much of the risk we take will only experience losses once every 25 to 50 years on average. So thinking about loss over a short period of time such as one year, similar to other industries, does not necessarily make sense. One needs to think about our performance over a longer time period encompassing multiple loss cycles. To put this in perspective, when we model risk, we generally do so over a40,000-year period.
Using models, we have a disciplined process to estimate over long periods how often certain events should occur. Taking many of these risks and combining them in a single portfolio gives us the ability to manage them and hopefully reduce theone-year andone-event volatility associated with these risks.
There are some differences between property and casualty business, however. For property, we know everything we can know at the time we write a deal. History and experience play little role. Our casualty business (including specialty), however, differs in that it exhibits much lower volatility, with a narrower dispersion between good and bad years, and much more frequent feedback. In casualty we can glean relevant information from both how the deal developed before we wrote it, and also from how the losses develop against expected reserves after we wrote it. This is a very different skill from underwriting property catastrophe, and I am proud of the talent and tools we have developed to become a leader in the casualty business, just as we are in property.
We derive multiple benefits from writing casualty business. Our value proposition to our customers is enhanced because we can provide them a greater range of protection and help them manage their volatility more broadly.
On the risk side, writing casualty benefits our portfolio in two ways. First, due to its diversifying nature, casualty business allows us to use our capital more efficiently, as we have been able to write this business without needing to add significant capital. Of course, over time the reserve pool associated with this risk will grow and become a driver of capital, but not just
yet. Second, casualty business brings float, which is money paid to us up front as premium that we hold for several years before returning it in the form of loss payments. However, much of the earnings from this business is only realized over time. This is beneficial because this asset leverage will eventually be a meaningful earner and should reduce volatility over the long term. With property, which does not benefit from significant float due to its short tail nature, investment income is not a significant driver of returns.
Superior Capital Management
We enjoyed a number of successes in 2017 with respect to capital management. For example, we raised in excess of $1 billion in our various managed vehicles, including $250 million of equity capital raised into DaVinci and $700 million in Upsilon. This capital raise from existing and new investors allowed us to replenish all of the capital lost in the third quarter catastrophe events and gave us and our customers confidence to trade forward the rest of the year.
At the end of 2017, we advanced two important transactions that affirm our innovative reputation in the reinsurance business. First, we entered into a joint venture in the life reinsurance space with Reinsurance Group of America (RGA) called Langhorne Re, which secured $780 million of equity capital commitments, including a minority investment by us. We are privileged to have RGA as a partner and believe that our combined strengths will serve Langhorne Re’s customers well. Third party capital is particularly suited for this type of risk, and we are delighted to bring our partnership skills and third party skills to this new pool of risks.
Second, we entered into an agreement to invest in Catalina Holdings (Bermuda) Ltd. (Catalina), a property and casualty runoff (re)insurance company. Our investment in Catalina should enhance the suite of solutions we can offer to our clients over time, while providing us the opportunity to team up on future transactions.
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II. Social Value Proposition of Reinsurance
In the past, I have written about the critical role that capital plays in the reinsurance business. This year, I thought it would be helpful to extend this analysis to the importance of capital to society overall and our part as a reinsurer in mediating the process of capital accumulation. I’ll explore how this relates to our efforts to close the insurance protection gap, our place in the insurance value chain, and the role of insuretech and information asymmetry.
As previously mentioned, RenaissanceRe brings a distinctive value proposition to our customers. There is another, equally important facet to this value proposition — the value we offer society, or what we think of as our “social value proposition”. Insurance is the transfer of an unknown future loss for a known present premium. In order to accept this risk, insurers must be able to accurately quantify potential losses and efficiently accumulate the appropriate amount of capital, not too much and not too little, in order to pay those losses. It is difficult to overstate how crucial the proper functioning of this mechanism is to the development of a flourishing economy.
Using natural catastrophe risk as an example (although this analysis applies to most types of insurance), societies have three choices for how they can prepare for potential future losses. First, they can decrease the size of the loss through mitigation. Second, they can useex-ante risk financing, including savings and insurance, topre-fund future losses. Finally, they can rely onex-post funding after a disaster, including loans, government bailouts, charity, or unintended self-insurance. Societies need sufficient capital to rebuild and recover after large natural disasters. Consequently, each society must make trade-offs between building better (mitigation), accumulating capital (saving) or waiting for a disaster to happen and then paying for it (borrowing).
In fact, there are ideal trade-offs between these three choices, which economists refer to as Pareto optimal, that maximize economic prosperity over the long term for a given allocation of resources. Too little mitigation, for example, would result in unacceptably high loss of life and property. Too much mitigation, on the other hand, would be unreasonably expensive and result in decreased economic prosperity.
Similarly, too little savings would result in insufficient resources to rebuild after a disaster, which would cause economic dislocation. Too much savings, however, would mean less capital is available for other social goods. Finally, there will always be uninsured loss, but borrowing after the fact to pay for natural disasters (which is what governments often do) results in permanent economic harm.
To provide an example, a homeowner should mitigate their house until it becomes cheaper to buy homeowner’s insurance, at which point they should buy insurance until it is more efficient to rely on borrowing. Insurance and reinsurance mediate thistrade-off between mitigation, saving and borrowing. Reinsurance is ultimately a means for society to quantify the potential impact of and accumulate sufficient capital for losses from future natural catastrophes, and is in fact the most efficient mechanism for doing so, achieving a Pareto optimal level of savings at the least economic cost due to its superior ability to diversify risk.
Insurance Protection Gap
In 2017, we saw many examples of the importance of preparing for natural catastrophes, and the consequences of failing to have sufficient resources after a large disaster. This difference between economic losses and insurance recoveries is known as the insurance protection gap and may approach $200 billion in 2017. We have seen this protection gap many times in recent years, for example in the lowtake-up rate for flood and earthquake insurance in the United States. Looking internationally, however, and especially at developing countries, the insurance protection gap can be even greater, with uninsured losses in countries such as Haiti running as high as 98% of economic losses over the last decade.
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Letter to Shareholders (continued)
At RenaissanceRe, we help close the insurance protection gap for natural catastrophe risk in many ways. We bring our ability to diversify risk and efficiently accumulate capital — our social value proposition — to public/private partnerships to help make risk transfer more affordable, and to ensure that capital is available to help families and businesses after a disaster.
For example, we have organized a series of Risk Mitigation Leadership Forums, focused on promoting improved understanding of, preparation for and recovery from natural disasters and other severe risks, hosting over 4,000 attendees. Relatedly, we are proud to be partnered with the Lloyd’s Disaster Risk Facility, which develops new solutions to help developing economies reduce underinsurance and improve their resilience against the economic impact of natural catastrophes. We are also a member of the Insurance Development Forum, a public/private partnership combining the insurance industry with international organizations such as the United Nations and the World Bank. Our efforts are contributing to an improved global understanding and quantification of disaster risk in developing countries, to support and enable decisions on its mitigation, adaption and transfer.
Our place in the insurance value chain
RenaissanceRe’s social value proposition means we occupy a critical link on the insurance value chain. While the value chain may change over time, the role we play quantifying risk and efficiently accumulating capital will always be needed, because it is essential to social well-being and economic prosperity.
Of course, insurance companies need to diversify risk and accumulate capital, but these are only two of the multitude of tasks they regularly perform. These tasks, however, are at the core of what reinsurers exist to do. Insurance companies are focused on many activities related to issuing a large number of small policies to consumers and businesses in one of the most highly regulated and closely scrutinized industries in the world. Consequently, it is often a competitive advantage for an insurer to concentrate on a limited number of lines of business in a restricted geographic area, and to be more focused on driving operating efficiencies. For example,
there are many insurers who only write residential policies in Florida. Unfortunately, this narrow scope limits their ability to both effectively quantify and diversify their risk.
Fortunately, quantifying and diversifying risk is the competitive advantage of reinsurers. Our value proposition derives from the fact we are more efficient than any other mechanism at accumulating the optimal level of capital to pay for natural catastrophe losses, while doing so in a way that maximizes economic prosperity over the long term. So while the insurance value chain will evolve over time, the need for the link we currently occupy will always exist, and we should always have a competitive advantage in fulfilling it.
Our market is always changing, and competitors on the insurance value chain come and go. As we become more differentiated, however, I believe our value proposition expands. Being aligned with our investors and partners has always been an important aspect of this value proposition. It is no different with our customers. They want to work with long-term reinsurance partners who bring them a broad range of property and casualty coverages, consistent exposure-based pricing, strong ratings and large line sizes. Our value proposition encompasses all these needs, but in an increasingly unique way that is strongly aligned with the customer, helping them to grow their business as opposed to competing against them for it.
Insuretech and Information Asymmetry
I am very excited by the possibilities evolving technology brings to our industry. In many ways, we were the first insuretech reinsurer, as we revolutionized how property catastrophe reinsurance was underwritten almost 25 years ago by harnessing newly available computational power to run the stochastic simulations necessary to model risk and construct portfolios. Since then, we have always been on the cutting edge of using technology to better quantify risk and efficiently allocate capital.
Going forward, maximizing shareholder value requires that we continually innovate. I addressed this topic more broadly in my letter last year, where I discussed the “Four Vectors of Influence”, and especially the need for increased efficiency
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and the transformative role of technology. One reason I am so excited is that I believe technology will eventually enable us to work directly with accumulators of risk — large, sophisticated organizations that will seek more efficient risk transfer products. So while I believe that technology will continue to make us better at what we do, just as it did 25 years ago, I do not believe it will replace what we do nor diminish the importance of our value proposition.
Another area where insuretech has the potential to improve our business is in reducing information asymmetry. Put simply, this is when the insured knows more about a risk than the insurer. Information asymmetry leads to imbalances in supply and demand, making insurance more expensive and increasing the size of the insurance protection gap. Big data, sensors, drones, smartphones, high-speed internet and other technologies will all play a role in reducing the amount of information asymmetry. Reinsurers should benefit the most from this technology, as we bear the ultimate risk in many cases and therefore derive the most utility from better understanding it.
I am equally excited about the potential for artificial intelligence, and the role algorithms will play in gleaning useful information from the mountain of big data available. There will be many possibilities to more directly assess risk rather than relying on proxies. A good example of this is insurers will be able to charge a driver based on their actual driving behavior, such as acceleration and deceleration rates. Being rated based on your skill at an activity due to observation of your actual behavior, likely by an app on your smart phone, will be imminently fairer than relying on readily available but potentially unrelated proxies, such as credit scores. While such data may correlate with driving behavior, it also may penalize some of the most fragile in our economy.
Expanding our Footprint
We expanded our footprint again in 2017, opening a new office in Zurich, Switzerland, a major hub for reinsurance. I have spoken before about the value of having a flexible platform, and our office in Switzerland further enhances our ability to transact with customers where and how they desire in a manner consistent with our focused growth philosophy.
Board Evolution
In 2017, we were proud to welcome Duncan P. Hennes and Dr. Valerie Rahmani to our Board of Directors. We also celebrated the accomplishments of outgoing members Ralph B. Levy and William F. Hagerty IV for their many years of distinguished service.
Ralph’s leadership and advice during his 10 years as a director helped RenaissanceRe to navigate through market cycles, important regulatory developments and organizational changes. Bill’s wise counsel during his tenure was invaluable during a pivotal period for the Company. We thank them for their contributions to RenaissanceRe’s success and look forward to working with Duncan and Val.
In Closing
Heading into our 25th year, I am confident in our strategy and optimistic about our prospects. For the industry, 2017 was a challenging year. But with challenges come opportunities. I believe our strong execution in the aftermath of the catastrophes coupled with our distinctive value proposition and well-capitalized balance sheets will enable us to continue to succeed in 2018.
Sincerely,
Kevin J. O’Donnell
President and Chief Executive Officer
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RenaissanceRe’s mission is to produce superior returns over time by being a trusted, long-term partner to our customers for assessing and managing risk, delivering responsive solutions, and keeping our promises. The importance of this mission to our customers and investors, and to the communities we serve resonates with extra clarity in high catastrophe years such as 2017. This year’s letter to you from our President and Chief Executive Officer, Kevin O’Donnell, highlights RenaissanceRe’s successful efforts to navigate the challenges and explore the new opportunities that periods like this present.
Periods of elevated industry loss also pose challenges for our Board of Directors as we fulfill our oversight obligations to review, test and support management’s efforts to execute its strategy and manage risk in the context of large catastrophes. The RenaissanceRe Board sees its fiduciary oversight in even a record setting loss year as part of a continuum from the past and extending into the future. Kevin’s letter and many of his prior communications to you summarize how management’s investments and preparation in prior years readied RenaissanceRe for 2017. These plans include the execution of ourgross-to-net strategy as a component of the Company’s commitment to efficient and prudent portfolio construction, and investments in and the deployment of new and enhanced models and risk management tools. In low loss years these efforts may have lower visibility, but management’s commitment to risk management across market and natural disaster cycles, and the Board’s oversight of those processes, are a constant at RenaissanceRe.
Concurrently with its efforts to address 2017’s challenges, the Company executed on exciting plans to build for the future, launching innovative new products and structures like our Langhorne Re joint venture, diversifying the coverages and services we offer clients worldwide and thereby expanding and strengthening our global platforms. Our Board believes these investments position RenaissanceRe exceptionally well to succeed amidst the challenges and potential changes in our industry, and continue to reflect a necessary balance between consistency and change at what we believe to be the best franchise in reinsurance. We are confident our strategy is well designed to produce both superior financial results and operational outcomes of which you will be proud.
It was also a year of change for our Board. In my 2017 letter I asked you join me in saluting the distinguished service of Ralph B. Levy, my predecessor asNon-Executive Chair. Later in the year we were honored to recognize the appointment
and confirmation of our fellow director William F. Hagerty IV to the position of U.S. Ambassador to Japan. Bill made important contributions to the Board and the Company. We appreciate his public service and continue to wish him all the best in this important role.
As their successors, we were delighted to announce the appointment of Duncan P. Hennes and Dr. Valerie Rahmani as independent directors. Duncan’s distinguished career in financial services includes CEO and otherC-suite positions at leading global firms and a history of helping companies navigate changes in markets, technology and customer preferences. Dr. Rahmani, most recently Chief Executive Officer of a privately held cybersecurity company, has more than 30 years of experience in the technology industry, including more than 25 years at a global technology giant across multiple global business segments. Duncan’s and Val’s wisdom, experience, judgment and collegiality have already made important contributions to our Board deliberations. Our commitment to reviewing our Board’s composition, experiences, and skills against RenaissanceRe’s strategic needs and external trends will continue, ensuring our collective ability to fulfill our oversight role effectively.
Finally, I would like to thank the shareholders and stakeholders who participated over the past year in our continual engagement process. We appreciate your investment in RenaissanceRe, and management’s engagement with you is prioritized by the Board. Your engagement supports our ongoing efforts to attract, retain and appropriately incent what our Board believes to be the best team in our industry, and to continue to build the confidence and support of our clients and investors.
Kevin’s letter demonstrates how RenaissanceRe’s unique capabilities position it both to succeed in high loss periods and to grow optimistically into an exciting future. We are proud to support the global RenaissancRe team and to oversee this exceptional franchise on your behalf.
Sincerely,
James L. Gibbons
Non-Executive Chair
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In addition to financial measures prepared in according with generally accepted accounting principles (“GAAP”) set forth in this Annual Report, the Company has included certainnon-GAAP financial measures within the meaning of Regulation G. The Company has consistently provided these financial measures in previous investor communications and the Company’s management believes that these measures 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 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 thesenon-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, and the associated income tax expense or benefit, and the exclusion of the write-down of a portion of the Company’s deferred tax asset as a result of the reduction in the U.S. corporate tax rate from 35% to 21% effective January 1, 2018 pursuant to the Tax Cuts and Jobs Act of 2017 (the “Tax Bill”). 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, equity investments trading and investments-related derivatives, the associated income tax expense or benefit of those fluctuations, and thenon-recurring impact of the write-down of a portion of the Company’s deferred tax assets as a result of the Tax Bill. 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 – annualized”. 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 - annualized to operating return on average common equity – annualized:
Year Ended December 31, | ||||||||||
(in thousands of United States dollars, except per share amounts and percentages) | 2017 | 2016 | 2015 | |||||||
Net income available to RenaissanceRe common shareholders | $(244,770 | ) | $480,581 | $408,811 | ||||||
Adjustment for net realized and unrealized (gains) losses on investments | (135,822 | ) | (141,328 | ) | 68,918 | |||||
Adjustment for deferred tax asset write-down (1) | 36,705 | - | - | |||||||
Adjustment for income tax expense (benefit) (2) | 11,587 | 3,000 | (3,340) | |||||||
Operating (loss) income (attributable) available to RenaissanceRe common shareholders | $(332,300) | $342,253 | $474,389 | |||||||
Net (loss) income (attributable) available to RenaissanceRe common shareholders per common share - diluted | $ (6.15 | ) | $ 11.43 | $ 9.28 | ||||||
Adjustment for net realized and unrealized (gains) losses on investments | (3.41 | ) | (3.40 | ) | 1.58 | |||||
Adjustment for deferred tax asset write-down (1) | 0.92 | - | - | |||||||
Adjustment for income tax expense (benefit) (2) | 0.29 | 0.07 | (0.08) | |||||||
Operating (loss) income (attributable) available to RenaissanceRe common shareholders per common share - diluted | $ (8.35 | ) | $ 8.10 | $ 10.78 | ||||||
Return on average common equity | (5.7 | %) | 11.0 | % | 9.8% | |||||
Adjustment for net realized and unrealized (gains) losses on investments | (3.2 | %) | (3.2 | %) | 1.6% | |||||
Adjustment for deferred tax asset write-down (1) | 0.9 | % | - | - | ||||||
Adjustment for income tax expense (benefit) (2) | 0.3 | % | 0.1 | % | (0.1%) | |||||
Operating return on average common equity | (7.7 | %) | 7.9 | % | 11.3% |
(1) | Adjustment for deferred tax asset write-down represents the write-down of a portion of the Company’s deferred tax asset as a result of the reduction in the U.S. corporate tax rate from 35% to 21% effective January 1, 2018 pursuant to the Tax Bill, which was enacted on December 22, 2017. |
(2) | Adjustment for income tax expense (benefit) represents the income tax expense (benefit) associated with the adjustment for net realized and unrealized gains (losses) on investments. The income tax impact is estimated by applying the statutory rates of applicable jurisdictions, after consideration of other relevant factors. |
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The Company has 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 per share. “Tangible book value per common share plus accumulated dividends” is defined as book value per common share excluding goodwill and intangible assets per share, plus 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, 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:
Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
| ||||||||||||
Book value per common share | $ 99.72 | $108.45 | $99.13 | |||||||||
Adjustment for goodwill and other intangibles (1)
| (6.49 | ) | (6.58 | ) | (6.59 | ) | ||||||
| ||||||||||||
Tangible book value per common share | 93.23 | 101.87 | 92.54 | |||||||||
Adjustment for accumulated dividends | 18.00 | 16.72 | 15.48 | |||||||||
| ||||||||||||
Tangible book value per common share plus accumulated dividends | $111.23 | $118.59 | $108.02 | |||||||||
| ||||||||||||
Change in book value per common share | (8.0 | %) | 9.4 | % | 10.0 | % | ||||||
Change in tangible book value per common share plus change in accumulated dividends | (7.2 | %) | 11.4 | % | 5.0 | % | ||||||
|
(1) | For 2017, 2016 and 2015, goodwill and other intangibles includes $16.7 million, $19.7 million and $23.2 million, respectively, of goodwill and other intangibles included in investments in other ventures, under equity method. |
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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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• | the frequency and severity of catastrophic and other events we cover; |
• | the effectiveness of our claims and claim expense reserving process; |
• | our ability to maintain our financial strength ratings; |
• | the effect of climate change on our business; |
• | collection on claimed retrocessional coverage, and new retrocessional reinsurance being available on acceptable terms and providing the coverage that we intended to obtain; |
• | the effects of United States (“U.S.”) tax reform legislation and possible future tax reform legislation and regulations, including changes to the tax treatment of our shareholders or investors in our joint ventures or other entities we manage; |
• | the effect of emerging claims and coverage issues; |
• | continued soft reinsurance underwriting market conditions; |
• | our reliance on a small and decreasing number of reinsurance brokers and other distribution services for the preponderance of our revenue; |
• | our exposure to credit loss from counterparties in the normal course of business; |
• | the effect of continued challenging economic conditions throughout the world; |
• | a contention by the Internal Revenue Service (the “IRS”) that Renaissance Reinsurance Ltd. (“Renaissance Reinsurance”), or any of our other Bermuda subsidiaries, is subject to taxation in the U.S.; |
• | our ability to retain our key senior officers and to attract or retain the executives and employees necessary to manage our business; |
• | the performance of our investment portfolio; |
• | losses we could face from terrorism, political unrest or war; |
• | the effect of cybersecurity risks, including technology breaches or failure, on our business; |
• | our ability to successfully implement our business strategies and initiatives; |
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• | our ability to determine the impairments taken on our investments; |
• | the effects of inflation; |
• | the ability of our ceding companies and delegated authority counterparties to accurately assess the risks they underwrite; |
• | the effect of operational risks, including system or human failures; |
• | our ability to effectively manage capital on behalf of investors in joint ventures or other entities we manage; |
• | foreign currency exchange rate fluctuations; |
• | our ability to raise capital if necessary; |
• | our ability to comply with covenants in our debt agreements; |
• | changes to the regulatory systems under which we operate, including as a result of increased global regulation of the insurance and reinsurance industry; |
• | changes in Bermuda laws and regulations and the political environment in Bermuda; |
• | our dependence on the ability of our operating subsidiaries to declare and pay dividends; |
• | the success of any of our strategic investments or acquisitions, including our ability to manage our operations as our product and geographical diversity increases; |
• | aspects of our corporate structure that may discourage third-party takeovers and other transactions; |
• | the cyclical nature of the reinsurance and insurance industries; |
• | adverse legislative developments that reduce the size of the private markets we serve or impede their future growth; |
• | consolidation of competitors, customers and insurance and reinsurance brokers; |
• | the effect on our business of the highly competitive nature of our industry, including the effect of new entrants to, competing products for and consolidation in the (re)insurance industry; |
• | other political, regulatory or industry initiatives adversely impacting us; |
• | increasing barriers to free trade and the free flow of capital; |
• | international restrictions on the writing of reinsurance by foreign companies and government intervention in the natural catastrophe market; |
• | the effect of Organisation for Economic Co-operation and Development (the “OECD”) or European Union (“EU”) measures to increase our taxes and reporting requirements; |
• | the effect of the vote by the U.K. to leave the EU; |
• | changes in regulatory regimes and accounting rules that may impact financial results irrespective of business operations; and |
• | our need to make many estimates and judgments in the preparation of our financial statements. |
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(in thousands) | |||||||||||||
Property | $ | 1,440,437 | $ | 1,111,263 | $ | 1,072,159 | |||||||
Casualty and Specialty | 1,357,110 | 1,263,313 | 939,241 | ||||||||||
Other category | (7 | ) | — | (90 | ) | ||||||||
Total gross premiums written | $ | 2,797,540 | $ | 2,374,576 | $ | 2,011,310 | |||||||
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Year ended December 31, 2017 | Property | Casualty and Specialty | Other | Total | |||||||||||||
(in thousands) | |||||||||||||||||
Excess of loss | $ | 1,192,980 | $ | 262,415 | $ | (7 | ) | $ | 1,455,388 | ||||||||
Proportional | 195,473 | 894,810 | — | 1,090,283 | |||||||||||||
Delegated authority | 51,984 | 199,885 | — | 251,869 | |||||||||||||
Total gross premiums written | $ | 1,440,437 | $ | 1,357,110 | $ | (7 | ) | $ | 2,797,540 | ||||||||
Year ended December 31, 2016 | |||||||||||||||||
Excess of loss | $ | 932,725 | $ | 218,816 | $ | — | $ | 1,151,541 | |||||||||
Proportional | 148,555 | 900,819 | — | 1,049,374 | |||||||||||||
Delegated authority | 29,983 | 143,678 | — | 173,661 | |||||||||||||
Total gross premiums written | $ | 1,111,263 | $ | 1,263,313 | $ | — | $ | 2,374,576 | |||||||||
Year ended December 31, 2015 | |||||||||||||||||
Excess of loss | $ | 919,986 | $ | 206,522 | $ | (90 | ) | $ | 1,126,418 | ||||||||
Proportional | 132,522 | 647,733 | — | 780,255 | |||||||||||||
Delegated authority | 19,651 | 84,986 | — | 104,637 | |||||||||||||
Total gross premiums written | $ | 1,072,159 | $ | 939,241 | $ | (90 | ) | $ | 2,011,310 | ||||||||
Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(in thousands) | |||||||||||||
Catastrophe | $ | 1,104,450 | $ | 884,361 | $ | 930,578 | |||||||
Other property | 335,987 | 226,902 | 141,581 | ||||||||||
Total Property segment gross premiums written | $ | 1,440,437 | $ | 1,111,263 | $ | 1,072,159 | |||||||
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(in thousands) | |||||||||||||
Professional liability (1) | $ | 452,310 | $ | 377,580 | $ | 287,591 | |||||||
General casualty (2) | 417,880 | 327,939 | 258,234 | ||||||||||
Financial lines (3) | 303,800 | 413,068 | 265,170 | ||||||||||
Other (4) | 183,120 | 144,726 | 128,246 | ||||||||||
Total Casualty and Specialty segment gross premiums written | $ | 1,357,110 | $ | 1,263,313 | $ | 939,241 | |||||||
(1) | Includes directors and officers, medical malpractice, and professional indemnity. |
(2) | Includes automobile liability, casualty clash, employer’s liability, umbrella or excess casualty, workers’ compensation and general liability. |
(3) | Includes financial guaranty, mortgage guaranty, political risk, surety and trade credit. |
(4) | Includes accident and health, agriculture, aviation, cyber, energy, marine, satellite and terrorism. Lines of business such as regional multi-line and whole account may have characteristics of various other classes of business, and are allocated accordingly. |
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2017 | 2016 | 2015 | ||||||||||||||||||||
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) | ||||||||||||||||||||||
Property Segment | ||||||||||||||||||||||
U.S. and Caribbean | $ | 954,269 | 34.1 | % | $ | 743,226 | 31.3 | % | $ | 671,887 | 33.4 | % | ||||||||||
Worldwide | 305,915 | 10.9 | % | 210,168 | 8.9 | % | 234,801 | 11.7 | % | |||||||||||||
Japan | 49,821 | 1.8 | % | 44,536 | 1.9 | % | 32,830 | 1.6 | % | |||||||||||||
Europe | 49,486 | 1.8 | % | 37,611 | 1.6 | % | 32,973 | 1.6 | % | |||||||||||||
Worldwide (excluding U.S.) (1) | 48,182 | 1.7 | % | 55,043 | 2.3 | % | 76,370 | 3.8 | % | |||||||||||||
Australia and New Zealand | 14,151 | 0.5 | % | 13,729 | 0.6 | % | 15,869 | 0.8 | % | |||||||||||||
Other | 18,613 | 0.7 | % | 6,950 | 0.3 | % | 7,429 | 0.4 | % | |||||||||||||
Total Property Segment | 1,440,437 | 51.5 | % | 1,111,263 | 46.9 | % | 1,072,159 | 53.3 | % | |||||||||||||
Casualty and Specialty Segment | ||||||||||||||||||||||
Worldwide | 686,253 | 24.5 | % | 581,972 | 24.5 | % | 320,452 | 15.9 | % | |||||||||||||
U.S. and Caribbean | 622,757 | 22.3 | % | 646,381 | 27.2 | % | 522,778 | 26.0 | % | |||||||||||||
Europe | 9,752 | 0.3 | % | 5,541 | 0.2 | % | 936 | — | % | |||||||||||||
Worldwide (excluding U.S.) (1) | 10,104 | 0.4 | % | 13,840 | 0.6 | % | 87,597 | 4.4 | % | |||||||||||||
Australia and New Zealand | 4,141 | 0.1 | % | 5,073 | 0.2 | % | 1,627 | 0.1 | % | |||||||||||||
Other | 24,103 | 0.9 | % | 10,506 | 0.4 | % | 5,851 | 0.3 | % | |||||||||||||
Total Casualty and Specialty Segment | 1,357,110 | 48.5 | % | 1,263,313 | 53.1 | % | 939,241 | 46.7 | % | |||||||||||||
Other category | (7 | ) | — | % | — | — | % | (90 | ) | — | % | |||||||||||
Total gross premiums written | $ | 2,797,540 | 100.0 | % | $ | 2,374,576 | 100.0 | % | $ | 2,011,310 | 100.0 | % | ||||||||||
(1) | The category “Worldwide (excluding U.S.)” consists of contracts that cover more than one geographic region (other than the U.S.). |
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• | 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. |
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• | Assumed Risk. We define assumed risk as activities where we deliberately take risk against our capital base, including underwriting risks and other quantifiable risks such as credit risk and market 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 estimate the comparable expected returns on potential business opportunities and 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 our aggregate, consolidated risk profile. In part through the utilization of REMS© and our other systems and procedures, we analyze our in-force aggregate assumed risk portfolio on a daily basis. We believe this capability helps us to manage our aggregate exposures and to rigorously analyze and evaluate individual proposed transactions 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 consolidated financial position perspective. We also regularly assess, monitor and review our regulatory risk capital and related constraints. |
• | Business Environment Risk. We define business environment risk 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. This risk area also typically includes emerging risks. These risks are predominately extrinsic to us and our ability to alter or eliminate these risks is limited, so we focus our efforts on monitoring developments, assessing potential impacts of any changes, and investing in cost effective means to attempt to mitigate the consequences of and ensure compliance with any new requirements applicable to us. |
• | 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 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 and comply with the evolving requirements of business environment risk applicable to us. In light of the rapid evolution of our markets, business environment, and business initiatives, we seek to continually invest in the tools, processes and procedures we use to mitigate our exposure to operational risk on a cost-effective basis. As with assumed risk and business environment risk, operational risk presents intrinsic uncertainties, and we may fail to appropriately identify or mitigate applicable operational risk. |
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Year ended December 31, 2017 | Property | Casualty and Specialty | Total | |||||||
AON | 50.1 | % | 35.0 | % | 42.8 | % | ||||
Marsh | 24.8 | % | 22.7 | % | 23.8 | % | ||||
Willis Towers Watson | 7.1 | % | 12.5 | % | 9.8 | % | ||||
Total of largest brokers | 82.0 | % | 70.2 | % | 76.4 | % | ||||
All others | 18.0 | % | 29.8 | % | 23.6 | % | ||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | ||||
Year ended December 31, 2017 | Property | Casualty and Specialty | |||||
Number of brokers | 40 | 52 | |||||
Program submissions | 4,119 | 3,306 | |||||
Programs authorized | 1,387 | 1,144 | |||||
Programs authorized as a percentage of program submissions | 33.7 | % | 34.6 | % | |||
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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. |
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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 contract is considered bound, and the (re)insurer responsible for the risks of the contract, when both parties agree to the terms and conditions set forth in the contract. |
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. |
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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 issuing 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. |
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Generally Accepted Accounting Principles in the United States (“GAAP”) | Accounting principles as set forth in the statements of the Financial Accounting Standards Board (“FASB”) and related guidance, 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. Our investments in 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. |
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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 accordingly 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. |
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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 set of regulatory requirements that codify and harmonize the EU insurance and reinsurance regulation. Among other things, these requirements impact the amount of capital that EU insurance and reinsurance companies are required to hold. Solvency II came into effect on 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. |
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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. |
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• | 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; |
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• | 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. |
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Price Range of Common Shares | |||||||||
High | Low | ||||||||
2017 | |||||||||
Fourth Quarter | $ | 141.77 | $ | 123.86 | |||||
Third Quarter | 152.00 | 120.55 | |||||||
Second Quarter | 145.62 | 134.08 | |||||||
First Quarter | 150.74 | 134.62 | |||||||
2016 | |||||||||
Fourth Quarter | $ | 137.21 | $ | 117.36 | |||||
Third Quarter | 122.97 | 114.34 | |||||||
Second Quarter | 121.38 | 107.27 | |||||||
First Quarter | 120.59 | 107.47 | |||||||
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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 | $ | 467.3 | ||||||||||||||||||||||||
October 1 - 31, 2017 | — | $ | — | — | $ | — | — | $ | — | — | ||||||||||||||||
November 1 - 10, 2017 | 1,212 | $ | 139.70 | 1,212 | $ | 139.70 | — | $ | — | — | ||||||||||||||||
November 10, 2017 - renewal of authorized share repurchase program of $500.0 million | 32.7 | |||||||||||||||||||||||||
Dollar amount available to be repurchased | 500.0 | |||||||||||||||||||||||||
November 11 - 31, 2017 | — | $ | — | — | $ | — | — | $ | — | — | ||||||||||||||||
December 1 - 31, 2017 | 8,424 | $ | 125.59 | 8,424 | $ | 125.59 | — | $ | — | — | ||||||||||||||||
Total | 9,636 | $ | 127.36 | 9,636 | $ | 127.36 | — | $ | — | $ | 500.0 | |||||||||||||||
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Year ended December 31, | 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
(in thousands, except share and per share data and percentages) | |||||||||||||||||||||
Statements of Operations Data: | |||||||||||||||||||||
Gross premiums written | $ | 2,797,540 | $ | 2,374,576 | $ | 2,011,310 | $ | 1,550,572 | $ | 1,605,412 | |||||||||||
Net premiums written | 1,871,325 | 1,535,312 | 1,416,183 | 1,068,236 | 1,203,947 | ||||||||||||||||
Net premiums earned | 1,717,575 | 1,403,430 | 1,400,551 | 1,062,416 | 1,114,626 | ||||||||||||||||
Net investment income | 222,209 | 181,726 | 152,567 | 124,316 | 208,028 | ||||||||||||||||
Net realized and unrealized gains (losses) on investments | 135,822 | 141,328 | (68,918 | ) | 41,433 | 35,076 | |||||||||||||||
Net claims and claim expenses incurred | 1,861,428 | 530,831 | 448,238 | 197,947 | 171,287 | ||||||||||||||||
Acquisition expenses | 346,892 | 289,323 | 238,592 | 144,476 | 125,501 | ||||||||||||||||
Operational expenses | 160,778 | 197,749 | 219,112 | 190,639 | 191,105 | ||||||||||||||||
Underwriting (loss) income | (651,523 | ) | 385,527 | 494,609 | 529,354 | 626,733 | |||||||||||||||
Net (loss) income | (354,671 | ) | 630,048 | 542,242 | 686,256 | 841,768 | |||||||||||||||
Net (loss) income (attributable) available to RenaissanceRe common shareholders | (244,770 | ) | 480,581 | 408,811 | 510,337 | 665,676 | |||||||||||||||
Net (loss) income (attributable) available to RenaissanceRe common shareholders per common share – diluted | (6.15 | ) | 11.43 | 9.28 | 12.60 | 14.87 | |||||||||||||||
Dividends per common share | 1.28 | 1.24 | 1.20 | 1.16 | 1.12 | ||||||||||||||||
Weighted average common shares outstanding – diluted | 39,854 | 41,559 | 43,526 | 39,968 | 44,128 | ||||||||||||||||
Return on average common equity | (5.7 | )% | 11.0 | % | 9.8 | % | 14.9 | % | 20.5 | % | |||||||||||
Combined ratio | 137.9 | % | 72.5 | % | 64.7 | % | 50.2 | % | 43.8 | % | |||||||||||
At December 31, | 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Balance Sheet Data: | |||||||||||||||||||||
Total investments | $ | 9,503,439 | $ | 9,316,968 | $ | 8,999,068 | $ | 6,743,750 | $ | 6,821,712 | |||||||||||
Total assets | 15,226,131 | 12,352,082 | 11,555,287 | 8,202,307 | 8,177,651 | ||||||||||||||||
Reserve for claims and claim expenses | 5,080,408 | 2,848,294 | 2,767,045 | 1,412,510 | 1,563,730 | ||||||||||||||||
Unearned premiums | 1,477,609 | 1,231,573 | 889,102 | 512,386 | 477,888 | ||||||||||||||||
Debt | 989,623 | 948,663 | 960,495 | 248,279 | 247,950 | ||||||||||||||||
Capital leases | 26,387 | 26,073 | 26,463 | 26,817 | 27,138 | ||||||||||||||||
Preference shares | 400,000 | 400,000 | 400,000 | 400,000 | 400,000 | ||||||||||||||||
Total shareholders’ equity attributable to RenaissanceRe | 4,391,375 | 4,866,577 | 4,732,184 | 3,865,715 | 3,904,384 | ||||||||||||||||
Common shares outstanding | 40,024 | 41,187 | 43,701 | 38,442 | 43,646 | ||||||||||||||||
Book value per common share | $ | 99.72 | $ | 108.45 | $ | 99.13 | $ | 90.15 | $ | 80.29 | |||||||||||
Accumulated dividends | 18.00 | 16.72 | 15.48 | 14.28 | 13.12 | ||||||||||||||||
Book value per common share plus accumulated dividends | $ | 117.72 | $ | 125.17 | $ | 114.61 | $ | 104.43 | $ | 93.41 | |||||||||||
Change in book value per common share plus change in accumulated dividends | (6.9 | )% | 10.7 | % | 11.3 | % | 13.7 | % | 19.5 | % | |||||||||||
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At December 31, 2017 | Case Reserves | Additional Case Reserves | IBNR | Total | |||||||||||||
(in thousands) | |||||||||||||||||
Property | $ | 696,285 | $ | 896,522 | $ | 893,583 | $ | 2,486,390 | |||||||||
Casualty and Specialty | 689,962 | 124,923 | 1,760,607 | 2,575,492 | |||||||||||||
Other | 6,605 | — | 11,921 | 18,526 | |||||||||||||
Total | $ | 1,392,852 | $ | 1,021,445 | $ | 2,666,111 | $ | 5,080,408 | |||||||||
At December 31, 2016 | |||||||||||||||||
(in thousands) | |||||||||||||||||
Property | $ | 214,954 | $ | 186,308 | $ | 226,512 | $ | 627,774 | |||||||||
Casualty and Specialty | 591,705 | 105,419 | 1,498,002 | 2,195,126 | |||||||||||||
Other | 6,935 | — | 18,459 | 25,394 | |||||||||||||
Total | $ | 813,594 | $ | 291,727 | $ | 1,742,973 | $ | 2,848,294 | |||||||||
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(in thousands) | |||||||||||||
Net reserves as of January 1 | $ | 2,568,730 | $ | 2,632,519 | $ | 1,345,816 | |||||||
Net incurred related to: | |||||||||||||
Current year | 1,902,424 | 694,957 | 610,685 | ||||||||||
Prior years | (40,996 | ) | (164,126 | ) | (162,447 | ) | |||||||
Total net incurred | 1,861,428 | 530,831 | 448,238 | ||||||||||
Net paid related to: | |||||||||||||
Current year | 450,527 | 83,015 | 95,747 | ||||||||||
Prior years | 524,298 | 506,279 | 425,565 | ||||||||||
Total net paid | 974,825 | 589,294 | 521,312 | ||||||||||
Amounts acquired (1) | — | — | 1,394,117 | ||||||||||
Foreign exchange | 38,445 | (5,326 | ) | (34,340 | ) | ||||||||
Net reserves as of December 31 | 3,493,778 | 2,568,730 | 2,632,519 | ||||||||||
Reinsurance recoverable as of December 31 | 1,586,630 | 279,564 | 134,526 | ||||||||||
Gross reserves as of December 31 | $ | 5,080,408 | $ | 2,848,294 | $ | 2,767,045 | |||||||
(1) | Represents the fair value of Platinum's reserve for claims and claim expenses and reinsurance recoverable acquired at March 2, 2015. |
Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(in thousands) | (Favorable) adverse development | (Favorable) adverse development | (Favorable) adverse development | ||||||||||
Property | $ | (45,596 | ) | $ | (104,876 | ) | $ | (93,786 | ) | ||||
Casualty and Specialty | 6,183 | (58,140 | ) | (67,791 | ) | ||||||||
Other | (1,583 | ) | (1,110 | ) | (870 | ) | |||||||
Total favorable development of prior accident years net claims and claim expenses | $ | (40,996 | ) | $ | (164,126 | ) | $ | (162,447 | ) | ||||
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Incurred claims and claim expenses, net of reinsurance | ||||||||||||||||||||||||||||||||||||||||||
(in thousands) | For the year ended December 31, | |||||||||||||||||||||||||||||||||||||||||
Accident Year | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | ||||||||||||||||||||||||||||||||
2008 | $ | 852,500 | $ | 754,840 | $ | 754,393 | $ | 750,523 | $ | 716,537 | $ | 701,522 | $ | 692,225 | $ | 684,834 | $ | 683,757 | $ | 683,374 | ||||||||||||||||||||||
2009 | — | 224,928 | 169,191 | 149,830 | 143,232 | 138,899 | 139,676 | 138,948 | 139,167 | 138,732 | ||||||||||||||||||||||||||||||||
2010 | — | — | 632,510 | 584,878 | 550,608 | 555,419 | 576,079 | 580,084 | 590,023 | 592,679 | ||||||||||||||||||||||||||||||||
2011 | — | — | — | 1,286,890 | 1,221,811 | 1,170,141 | 1,118,651 | 1,098,124 | 1,066,200 | 1,063,035 | ||||||||||||||||||||||||||||||||
2012 | — | — | — | — | 438,548 | 345,168 | 312,216 | 294,400 | 276,236 | 265,058 | ||||||||||||||||||||||||||||||||
2013 | — | — | — | — | — | 230,355 | 200,105 | 177,533 | 155,384 | 143,823 | ||||||||||||||||||||||||||||||||
2014 | — | — | — | — | — | — | 184,076 | 155,335 | 147,610 | 143,419 | ||||||||||||||||||||||||||||||||
2015 | — | — | — | — | — | — | — | 227,093 | 196,094 | 177,296 | ||||||||||||||||||||||||||||||||
2016 | — | — | — | — | — | — | — | — | 254,595 | 256,759 | ||||||||||||||||||||||||||||||||
2017 | — | — | — | — | — | — | — | — | — | 1,345,006 | ||||||||||||||||||||||||||||||||
Total | $ | 4,809,181 | ||||||||||||||||||||||||||||||||||||||||
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(in thousands, except percentages) | Reserve for Claims and Claim Expenses at December 31, 2017 | $ Impact of Change Reserve for Claims and Claim Expenses at December 31, 2017 | % Impact of Change on Reserve for Claims and Claim Expenses at December 31, 2017 | % Impact of Change on Net Loss for the Year Ended December 31, 2017 | % Impact of Change on Shareholders’ Equity at December 31, 2017 | |||||||||||||
Higher | $ | 2,785,693 | $ | 299,303 | 5.9 | % | 84.4 | % | (6.8 | )% | ||||||||
Recorded | 2,486,390 | — | — | % | — | % | — | % | ||||||||||
Lower | 2,274,764 | (211,626 | ) | (4.2 | )% | (59.7 | )% | 4.8 | % | |||||||||
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Incurred claims and claim expenses, net of reinsurance | ||||||||||||||||||||||||||||||||||||||||||
(in thousands) | For the year ended December 31, | |||||||||||||||||||||||||||||||||||||||||
Accident Year | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | ||||||||||||||||||||||||||||||||
2008 | $ | 606,936 | $ | 666,976 | $ | 647,574 | $ | 632,855 | $ | 594,409 | $ | 586,726 | $ | 574,106 | $ | 571,349 | $ | 555,648 | $ | 557,742 | ||||||||||||||||||||||
2009 | — | 486,114 | 476,417 | 478,841 | 445,904 | 424,951 | 402,977 | 394,649 | 389,526 | 392,791 | ||||||||||||||||||||||||||||||||
2010 | — | — | 384,412 | 390,968 | 377,333 | 341,729 | 320,140 | 306,913 | 305,178 | 301,371 | ||||||||||||||||||||||||||||||||
2011 | — | — | — | 383,832 | 382,462 | 353,191 | 322,719 | 315,132 | 308,969 | 298,395 | ||||||||||||||||||||||||||||||||
2012 | — | — | — | — | 429,127 | 428,199 | 397,907 | 389,384 | 379,366 | 393,122 | ||||||||||||||||||||||||||||||||
2013 | — | — | — | — | — | 394,726 | 364,686 | 340,733 | 321,910 | 307,161 | ||||||||||||||||||||||||||||||||
2014 | — | — | — | — | — | — | 480,527 | 462,282 | 458,038 | 443,140 | ||||||||||||||||||||||||||||||||
2015 | — | — | — | — | — | — | — | 415,884 | 435,465 | 457,652 | ||||||||||||||||||||||||||||||||
2016 | — | — | — | — | — | — | — | — | 430,365 | 434,713 | ||||||||||||||||||||||||||||||||
2017 | — | — | — | — | — | — | — | — | — | 556,303 | ||||||||||||||||||||||||||||||||
Total | $ | 4,142,390 | ||||||||||||||||||||||||||||||||||||||||
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(in thousands,except percentages) | Estimated Loss Reporting Pattern | $ Impact of Change on Reserves for Claims and Claim Expenses at December 31, 2017 | % Impact of Change on Reserve for Claims and Claim Expenses at December 31, 2017 | % Impact of Change on Net Loss for the Year Ended December 31, 2017 | % Impact of Change on Shareholders’ Equity at December 31, 2017 | |||||||||||
Increase expected claims and claim expense ratio by 10% | Slower reporting | $ | 335,256 | 6.6 | % | 94.5 | % | (7.6 | )% | |||||||
Increase expected claims and claim expense ratio by 10% | Expected reporting | 176,061 | 3.5 | % | 49.6 | % | (4.0 | )% | ||||||||
Increase expected claims and claim expense ratio by 10% | Faster reporting | 21,635 | 0.4 | % | 6.1 | % | (0.5 | )% | ||||||||
Expected claims and claim expense ratio | Slower reporting | 144,723 | 2.8 | % | 40.8 | % | (3.3 | )% | ||||||||
Expected claims and claim expense ratio | Expected reporting | — | — | % | — | % | — | % | ||||||||
Expected claims and claim expense ratio | Faster reporting | (140,387 | ) | (2.8 | )% | (39.6 | )% | 3.2 | % | |||||||
Decrease expected claims and claim expense ratio by 10% | Slower reporting | (45,810 | ) | (0.9 | )% | (12.9 | )% | 1.0 | % | |||||||
Decrease expected claims and claim expense ratio by 10% | Expected reporting | (176,061 | ) | (3.5 | )% | (49.6 | )% | 4.0 | % | |||||||
Decrease expected claims and claim expense ratio by 10% | Faster reporting | (302,409 | ) | (6.0 | )% | (85.3 | )% | 6.9 | % | |||||||
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(in thousands, except per share amounts and percentages) | |||||||||||||
Statements of operations highlights | |||||||||||||
Gross premiums written | $ | 2,797,540 | $ | 2,374,576 | $ | 2,011,310 | |||||||
Net premiums written | $ | 1,871,325 | $ | 1,535,312 | $ | 1,416,183 | |||||||
Net premiums earned | $ | 1,717,575 | $ | 1,403,430 | $ | 1,400,551 | |||||||
Net claims and claim expenses incurred | 1,861,428 | 530,831 | 448,238 | ||||||||||
Acquisition expenses | 346,892 | 289,323 | 238,592 | ||||||||||
Operational expenses | 160,778 | 197,749 | 219,112 | ||||||||||
Underwriting (loss) income | $ | (651,523 | ) | $ | 385,527 | $ | 494,609 | ||||||
Net investment income | $ | 222,209 | $ | 181,726 | $ | 152,567 | |||||||
Net realized and unrealized gains (losses) on investments | 135,822 | 141,328 | (68,918 | ) | |||||||||
Change in net unrealized gains on fixed maturity investments available for sale | — | (1,870 | ) | (1,243 | ) | ||||||||
Total investment result | $ | 358,031 | $ | 321,184 | $ | 82,406 | |||||||
Net (loss) income | $ | (354,671 | ) | $ | 630,048 | $ | 542,242 | ||||||
Net (loss) income (attributable) available to RenaissanceRe common shareholders | $ | (244,770 | ) | $ | 480,581 | $ | 408,811 | ||||||
Net (loss) income (attributable) available to RenaissanceRe common shareholders per common share – diluted | $ | (6.15 | ) | $ | 11.43 | $ | 9.28 | ||||||
Dividends per common share | $ | 1.28 | $ | 1.24 | $ | 1.20 | |||||||
Key ratios | |||||||||||||
Net claims and claim expense ratio – current accident year | 110.8 | % | 49.5 | % | 43.6 | % | |||||||
Net claims and claim expense ratio – prior accident years | (2.4 | )% | (11.7 | )% | (11.6 | )% | |||||||
Net claims and claim expense ratio – calendar year | 108.4 | % | 37.8 | % | 32.0 | % | |||||||
Underwriting expense ratio | 29.5 | % | 34.7 | % | 32.7 | % | |||||||
Combined ratio | 137.9 | % | 72.5 | % | 64.7 | % | |||||||
Return on average common equity | (5.7 | )% | 11.0 | % | 9.8 | % | |||||||
Book value | December 31, 2017 | December 31, 2016 | December 31, 2015 | ||||||||||
Book value per common share | $ | 99.72 | $ | 108.45 | $ | 99.13 | |||||||
Accumulated dividends per common share | 18.00 | 16.72 | 15.48 | ||||||||||
Book value per common share plus accumulated dividends | $ | 117.72 | $ | 125.17 | $ | 114.61 | |||||||
Change in book value per common share plus change in accumulated dividends | (6.9 | )% | 10.7 | % | 11.3 | % | |||||||
Balance sheet highlights | December 31, 2017 | December 31, 2016 | December 31, 2015 | ||||||||||
Total assets | $ | 15,226,131 | $ | 12,352,082 | $ | 11,555,287 | |||||||
Total shareholders’ equity attributable to RenaissanceRe | $ | 4,391,375 | $ | 4,866,577 | $ | 4,732,184 | |||||||
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• | Underwriting Loss - Primarily as a result of Q3 2017 Catastrophe Events”), the Q4 2017 California Wildfires and the 2017 Aggregate Losses, we incurred an underwriting loss of $651.5 million and a combined ratio of 137.9% in 2017, compared to generating underwriting income of $385.5 million and a combined ratio of 72.5%, respectively, in 2016. Our underwriting loss in 2017 was comprised of an underwriting loss of $574.9 million in our Property segment, and an underwriting loss of $78.2 million in our Casualty and Specialty segment. |
• | Income Tax Expense - we recognized $26.5 million of income tax expense in 2017, compared to $0.3 million in 2016, representing a $26.1 million increase in income tax expense. The increase in income tax expense was principally driven by a write-down of a portion of our deferred tax asset during the fourth quarter of 2017 of $36.7 million as a result of the reduction in the U.S. corporate tax rate from 35% to 21% effective January 1, 2018 pursuant to the Tax Bill, which was enacted on December 22, 2017. Partially offsetting this income tax expense was an income tax benefit associated with pre-tax GAAP losses in our U.S.-based operations primarily due to underwriting losses associated with the Q3 2017 Catastrophe Events, Q4 2017 California Wildfires and 2017 Aggregate Losses in 2017, compared to pre-tax GAAP income in our U.S.-based operations in 2016; partially offset by |
• | Net Loss Attributable to Redeemable Noncontrolling Interests - our net loss attributable to redeemable noncontrolling interests was $132.3 million in 2017, compared to net income attributable to redeemable noncontrolling interests of $127.1 million in 2016. The decrease was principally due to significant underwriting losses associated with the Q3 2017 Catastrophe Events, Q4 2017 California Wildfires and 2017 Aggregate Losses incurred by DaVinciRe, and a decrease in our ownership in DaVinciRe to 22.1% at December 31, 2017, compared to 24.0% at December 31, 2016; and |
• | Investment Results - our total investment result, 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, was $358.0 million in 2017, compared to $321.2 million in 2016, an increase of $36.8 million. Our fixed maturity investment portfolio generated higher net investment income during 2017, compared to 2016, principally driven by higher average invested assets and the impact of interest rate increases during the current year. In addition, the Company’s portfolio of other investments experienced higher returns during 2017, compared to 2016, principally driven by its private equity investments. We also experienced a $24.2 million increase in net realized and unrealized gains on equity investments trading driven by positive returns in the global equity markets, combined with the strong performance of a number of our equity positions. |
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• | Higher Investment Results - our total investment result of $321.2 million in 2016, which includes the sum of net investment income, net realized and unrealized gains (losses) on investments, and the change in net unrealized gains on fixed maturity investments available for sale, increased $238.8 million from $82.4 million in 2015. Impacting the total investment result in 2016 were: (i) net unrealized gains in our portfolio of fixed maturity investments trading, principally the result of significant credit spread tightening in 2016, compared to marginal credit spread widening during 2015; (ii) net investment income in our portfolio of fixed maturity investments, driven by an increase in average invested assets; and (iii) net realized and unrealized gains on equity investments trading as a result of the strong performance of a number of our equity positions during the year. Partially offsetting these items were net realized and unrealized losses on certain investment-related derivatives due to changes in the yield curve that occurred during the year; partially offset by |
• | Lower Underwriting Income - we generated underwriting income of $385.5 million and a combined ratio of 72.5% in 2016, compared to $494.6 million and 64.7%, respectively, in 2015, a decrease of $109.1 million and an increase of 7.8 percentage points, respectively. The increase in the combined ratio in 2016, compared to 2015, was primarily driven by higher net claims and claim expenses and an increase in underwriting expenses adding 5.8 and 2.0 percentage points, respectively, to the combined ratio. Included in net claims and claim expenses in 2016 was an aggregate of $122.6 million associated with a wildfire originating near Fort McMurray, Alberta (the “Fort McMurray Wildfire”), a number of weather-related events in Texas (the “2016 Texas Events”) and Hurricane Matthew. The net negative impact of these events on our consolidated underwriting result was $102.9 million, and these events added 7.9 percentage points to our consolidated combined ratio. See below for additional information related to the Fort McMurray Wildfire, the 2016 Texas Events and Hurricane Matthew; |
• | Higher Income Tax Expense - we recognized $0.3 million of income tax expense in 2016, compared to an income tax benefit of $45.9 million in 2015, representing a $46.2 million change in income tax expense, primarily due to a decrease in our U.S.-based deferred tax asset valuation allowance from $48.5 million to $1.0 million in 2015, as a result of expected profits in our U.S.-based operations due principally to the acquisition of Platinum; and |
• | Higher Net Income Attributable to Redeemable Noncontrolling Interests - our net income attributable to redeemable noncontrolling interests was $127.1 million in 2016, compared to $111.1 million in 2015, principally due to an increase in the profitability of DaVinciRe. Our ownership in DaVinciRe was 24.0% at December 31, 2016, compared to 26.3% at December 31, 2015. |
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Year ended December 31, 2017 | Q3 2017 Catastrophe Events | Q4 2017 California Wildfires | 2017 Aggregate Losses | Total | |||||||||||||
(in thousands, except percentages) | |||||||||||||||||
Net claims and claim expenses incurred | $ | (820,608 | ) | $ | (167,749 | ) | $ | (177,938 | ) | $ | (1,166,295 | ) | |||||
Reinstatement premiums earned | 166,609 | 12,065 | 1,500 | 180,174 | |||||||||||||
Ceded reinstatement premiums earned | (34,455 | ) | (565 | ) | — | (35,020 | ) | ||||||||||
Earned profit commissions | 22,378 | 1,865 | 7,701 | 31,944 | |||||||||||||
Net negative impact on underwriting result | (666,076 | ) | (154,384 | ) | (168,737 | ) | (989,197 | ) | |||||||||
Redeemable noncontrolling interest - DaVinciRe | 161,735 | 50,367 | 56,850 | 268,952 | |||||||||||||
Net negative impact | $ | (504,341 | ) | $ | (104,017 | ) | $ | (111,887 | ) | $ | (720,245 | ) | |||||
Percentage point impact on consolidated combined ratio | 38.8 | 8.8 | 9.8 | 59.4 | |||||||||||||
Net negative impact on Property segment underwriting result | $ | (636,641 | ) | $ | (154,384 | ) | $ | (168,737 | ) | $ | (959,762 | ) | |||||
Net negative impact on Casualty and Specialty segment underwriting result | (29,435 | ) | — | — | (29,435 | ) | |||||||||||
Net negative impact on underwriting result | $ | (666,076 | ) | $ | (154,384 | ) | $ | (168,737 | ) | $ | (989,197 | ) | |||||
Year ended December 31, 2016 | Fort McMurray Wildfire | 2016 Texas Events | Hurricane Matthew | Total | |||||||||||||
(in thousands, except percentages) | |||||||||||||||||
Net claims and claim expenses incurred | $ | (23,961 | ) | $ | (38,502 | ) | $ | (60,117 | ) | $ | (122,580 | ) | |||||
Assumed reinstatement premiums earned | 5,143 | 6,891 | 9,945 | 21,979 | |||||||||||||
Lost profit commissions | (330 | ) | (1,172 | ) | (824 | ) | (2,326 | ) | |||||||||
Net negative impact on underwriting result | (19,148 | ) | (32,783 | ) | (50,996 | ) | (102,927 | ) | |||||||||
Redeemable noncontrolling interest - DaVinciRe | 3,404 | 5,675 | 6,519 | 15,598 | |||||||||||||
Net negative impact | $ | (15,744 | ) | $ | (27,108 | ) | $ | (44,477 | ) | $ | (87,329 | ) | |||||
Percentage point impact on consolidated combined ratio | 1.4 | 2.5 | 3.8 | 7.9 | |||||||||||||
Net negative impact on Property segment underwriting result | $ | (18,956 | ) | $ | (32,783 | ) | $ | (49,271 | ) | $ | (101,010 | ) | |||||
Net negative impact on Casualty and Specialty segment underwriting result | (192 | ) | — | (1,725 | ) | (1,917 | ) | ||||||||||
Net negative impact on underwriting result | $ | (19,148 | ) | $ | (32,783 | ) | $ | (50,996 | ) | $ | (102,927 | ) | |||||
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(in thousands, except percentages) | |||||||||||||
Gross premiums written | $ | 1,440,437 | $ | 1,111,263 | $ | 1,072,159 | |||||||
Net premiums written | $ | 978,014 | $ | 725,321 | $ | 726,145 | |||||||
Net premiums earned | $ | 931,070 | $ | 720,951 | $ | 805,985 | |||||||
Net claims and claim expenses incurred | 1,297,985 | 151,545 | 128,290 | ||||||||||
Acquisition expenses | 113,816 | 97,594 | 94,249 | ||||||||||
Operational expenses | 94,194 | 108,642 | 118,666 | ||||||||||
Underwriting (loss) income | $ | (574,925 | ) | $ | 363,170 | $ | 464,780 | ||||||
Net claims and claim expenses incurred – current accident year | $ | 1,343,581 | $ | 256,421 | $ | 222,076 | |||||||
Net claims and claim expenses incurred – prior accident years | (45,596 | ) | (104,876 | ) | (93,786 | ) | |||||||
Net claims and claim expenses incurred – total | $ | 1,297,985 | $ | 151,545 | $ | 128,290 | |||||||
Net claims and claim expense ratio – current accident year | 144.3 | % | 35.6 | % | 27.6 | % | |||||||
Net claims and claim expense ratio – prior accident years | (4.9 | )% | (14.6 | )% | (11.7 | )% | |||||||
Net claims and claim expense ratio – calendar year | 139.4 | % | 21.0 | % | 15.9 | % | |||||||
Underwriting expense ratio | 22.3 | % | 28.6 | % | 26.4 | % | |||||||
Combined ratio | 161.7 | % | 49.6 | % | 42.3 | % | |||||||
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(in thousands) | |||||||||||||
Ceded premiums written - Property | $ | 462,423 | $ | 385,942 | $ | 346,014 | |||||||
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(in thousands) | |||||||||||||
Profit commissions and fees | $ | 88,789 | $ | 68,346 | $ | 61,923 | |||||||
Decrease in underwriting expense ratio | 9.5 | % | 9.5 | % | 7.7 | % | |||||||
Net impact of profit commissions and fees | $ | 69,364 | $ | 112,227 | $ | 106,722 | |||||||
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(in thousands, except percentages) | |||||||||||||
Gross premiums written | $ | 1,357,110 | $ | 1,263,313 | $ | 939,241 | |||||||
Net premiums written | $ | 893,307 | $ | 809,848 | $ | 690,086 | |||||||
Net premiums earned | $ | 786,501 | $ | 682,337 | $ | 594,614 | |||||||
Net claims and claim expenses incurred | 565,026 | 380,396 | 320,818 | ||||||||||
Acquisition expenses | 233,077 | 191,729 | 144,095 | ||||||||||
Operational expenses | 66,548 | 88,984 | 100,180 | ||||||||||
Underwriting (loss) income | $ | (78,150 | ) | $ | 21,228 | $ | 29,521 | ||||||
Net claims and claim expenses incurred – current accident year | $ | 558,843 | $ | 438,536 | $ | 388,609 | |||||||
Net claims and claim expenses incurred – prior accident years | 6,183 | (58,140 | ) | (67,791 | ) | ||||||||
Net claims and claim expenses incurred – total | $ | 565,026 | $ | 380,396 | $ | 320,818 | |||||||
Net claims and claim expense ratio – current accident year | 71.1 | % | 64.3 | % | 65.4 | % | |||||||
Net claims and claim expense ratio – prior accident years | 0.7 | % | (8.6 | )% | (11.4 | )% | |||||||
Net claims and claim expense ratio – calendar year | 71.8 | % | 55.7 | % | 54.0 | % | |||||||
Underwriting expense ratio | 38.1 | % | 41.2 | % | 41.0 | % | |||||||
Combined ratio | 109.9 | % | 96.9 | % | 95.0 | % | |||||||
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(in thousands) | |||||||||||||
Ceded premiums written - Casualty and Specialty | $ | 463,803 | $ | 453,465 | $ | 249,155 | |||||||
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(in thousands, except percentages) | |||||||||||||
Profit commissions and fees | $ | 26,439 | $ | 31,950 | $ | 8,726 | |||||||
Decrease in underwriting expense ratio | 3.4 | % | 4.7 | % | 1.5 | % | |||||||
Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(in thousands) | |||||||||||||
Fixed maturity investments | $ | 179,624 | $ | 160,661 | $ | 134,800 | |||||||
Short term investments | 11,082 | 5,127 | 1,227 | ||||||||||
Equity investments trading | 3,628 | 4,235 | 8,346 | ||||||||||
Other investments | |||||||||||||
Private equity investments | 33,999 | 6,155 | 9,455 | ||||||||||
Other | 8,067 | 20,181 | 12,472 | ||||||||||
Cash and cash equivalents | 1,196 | 788 | 467 | ||||||||||
237,596 | 197,147 | 166,767 | |||||||||||
Investment expenses | (15,387 | ) | (15,421 | ) | (14,200 | ) | |||||||
Net investment income | $ | 222,209 | $ | 181,726 | $ | 152,567 | |||||||
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(in thousands) | |||||||||||||
Gross realized gains | $ | 49,121 | $ | 72,739 | $ | 50,488 | |||||||
Gross realized losses | (38,832 | ) | (38,315 | ) | (53,630 | ) | |||||||
Net realized gains (losses) on fixed maturity investments | 10,289 | 34,424 | (3,142 | ) | |||||||||
Net unrealized gains (losses) on fixed maturity investments trading | 8,479 | 26,954 | (64,908 | ) | |||||||||
Net realized and unrealized (losses) gains on investments-related derivatives | (2,490 | ) | (15,414 | ) | 5,443 | ||||||||
Net realized gains on equity investments trading | 80,027 | 14,190 | 16,348 | ||||||||||
Net unrealized gains (losses) on equity investments trading | 39,517 | 81,174 | (22,659 | ) | |||||||||
Net realized and unrealized gains (losses) on investments | $ | 135,822 | $ | 141,328 | $ | (68,918 | ) | ||||||
• | net realized and unrealized gains on equity investments trading of $119.5 million in 2017, compared to $95.4 million in 2016, an improvement of $24.2 million, principally driven by positive returns in the global equity markets, combined with the strong performance of a number of our equity positions in 2017; |
• | net realized and unrealized gains on our fixed maturity investments trading of $18.8 million in 2017, compared to $61.4 million in 2016. The $42.6 million decrease was principally the result of lower unrealized gains driven by an upward shift of the front end of the yield curve in 2017, compared to 2016 which experienced a more modest upward shift in the yield curve; and |
• | net realized and unrealized losses on certain investments-related derivatives of $2.5 million in 2017, compared to losses of $15.4 million in 2016, an improvement of $12.9 million, primarily due to the yield curve movements noted above. |
• | net realized and unrealized gains on our fixed maturity investments trading of $61.4 million in 2016, compared to losses of $68.1 million in 2015, which was positively impacted by a significant credit spread tightening during 2016, partially offset by $15.4 million net realized and unrealized losses on certain investments-related derivatives primarily driven by changes in the yield curve that occurred during 2016; and |
• | net realized and unrealized gains on equity investments trading of $95.4 million in 2016, compared to net realized and unrealized losses of $6.3 million in 2015, an improvement of $101.7 million, principally driven by the strong performance of a number of our larger equity positions in 2016. |
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(in thousands) | |||||||||||||
Total foreign exchange gains (losses) | $ | 10,628 | $ | (13,788 | ) | $ | (3,051 | ) | |||||
Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(in thousands) | |||||||||||||
Top Layer Re | $ | 9,851 | $ | (8,576 | ) | $ | 8,026 | ||||||
Tower Hill Companies | (1,647 | ) | 10,379 | 13,116 | |||||||||
Other | (174 | ) | (840 | ) | (661 | ) | |||||||
Total equity in earnings of other ventures | $ | 8,030 | $ | 963 | $ | 20,481 | |||||||
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(in thousands) | |||||||||||||
Assumed and ceded reinsurance contracts accounted for as derivatives and deposits | $ | 8,655 | $ | 14,246 | $ | 12,534 | |||||||
Other | 760 | (68 | ) | 938 | |||||||||
Total other income | $ | 9,415 | $ | 14,178 | $ | 13,472 | |||||||
Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(in thousands) | |||||||||||||
Total corporate expenses | $ | 18,572 | $ | 37,402 | $ | 76,514 | |||||||
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(in thousands) | |||||||||||||
Interest expense | |||||||||||||
$250.0 million Series B 7.50% Senior Notes due 2017 | $ | 7,813 | $ | 18,750 | $ | 15,625 | |||||||
$250.0 million 5.75% Senior Notes due 2020 | 14,375 | 14,375 | 14,375 | ||||||||||
$300.0 million 3.700% Senior Notes due 2025 | 11,100 | 11,100 | 8,586 | ||||||||||
$300.0 million 3.450% Senior Notes due 2027 | 5,482 | — | — | ||||||||||
$150.0 million 4.750% Senior Notes due 2025 (DaVinciRe) | 7,125 | 7,125 | 4,774 | ||||||||||
Other | (1,702 | ) | (9,206 | ) | (7,090 | ) | |||||||
Total interest expense | 44,193 | 42,144 | 36,270 | ||||||||||
Preferred share dividends | |||||||||||||
$125.0 million 6.08% Series C Preference Shares | 7,600 | 7,600 | 7,600 | ||||||||||
$275.0 million 5.375% Series E Preference Shares | 14,781 | 14,781 | 14,781 | ||||||||||
Total preferred share dividends | 22,381 | 22,381 | 22,381 | ||||||||||
Total interest expense and preferred share dividends | $ | 66,574 | $ | 64,525 | $ | 58,651 | |||||||
• | additional interest expense due to the June 29, 2017 issuance of $300.0 million of 3.450% Senior Notes due 2027, resulting in seven months of interest expense in 2017, compared to none in 2016; partially offset by |
• | lower interest expense due to the June 1, 2017 repayment in full at maturity of $250.0 million of Series B 7.50% Senior Notes due 2017 assumed in connection with the acquisition of Platinum, resulting in five months of interest expense incurred during 2017, compared to a full year of interest expense incurred in 2016; and |
• | lower amortization of net fair value adjustments of $5.4 million, included in the other category in the table above, which reduced our interest expense and were recognized in connection with the acquisition of Platinum and its $250.0 million Series B 7.50% Notes due June 1, 2017. See “Note 3. Acquisition of Platinum in our Notes to the Consolidated Financial Statements” for additional information with respect to the acquisition of Platinum and the related fair value adjustments. |
• | a full year of interest expense on the $250 million of Series B 7.50% Senior Notes due 2017 assumed in connection with the acquisition of Platinum on March 2, 2015, $300 million of our 3.700% Senior Notes due 2025 issued on March 24, 2015 and $150 million of DaVinciRe’s 4.750% Senior Notes due 2025 issued on May 4, 2015; partially offset by |
• | amortization of net fair value adjustments of $12.8 million, included in the other category in the table above, which reduced our interest expense and were recognized in connection with the acquisition of Platinum and its $250.0 million Series B 7.50% Notes due June 1, 2017. See “Note 3. Acquisition of Platinum in our Notes to the Consolidated Financial Statements” for additional information with respect to the acquisition of Platinum and the related fair value adjustments. |
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(in thousands) | |||||||||||||
Income tax (expense) benefit | $ | (26,487 | ) | $ | (340 | ) | $ | 45,866 | |||||
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(in thousands) | |||||||||||||
Net loss (income) attributable to redeemable noncontrolling interests | $ | 132,282 | $ | (127,086 | ) | $ | (111,050 | ) | |||||
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(in thousands) | |||||||||||||
Net cash provided by operating activities | $ | 1,045,787 | $ | 484,772 | $ | 424,985 | |||||||
Net cash used in investing activities | (142,434 | ) | (164,532 | ) | (339,039 | ) | |||||||
Net cash provided by (used in) financing activities | 28,860 | (401,331 | ) | (93,913 | ) | ||||||||
Effect of exchange rate changes on foreign currency cash | 8,222 | (4,637 | ) | (10,732 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents | 940,435 | (85,728 | ) | (18,699 | ) | ||||||||
Cash and cash equivalents, beginning of period | 421,157 | 506,885 | 525,584 | ||||||||||
Cash and cash equivalents, end of period | $ | 1,361,592 | $ | 421,157 | $ | 506,885 | |||||||
• | an increase in our reserve for claims and claim expenses of $2.2 billion as a result of claims and claims expenses incurred of $3.4 billion, partially offset by claims payments of $1.2 billion, each largely driven by the Q3 2017 Catastrophe Events, Q4 2017 California Wildfires and 2017 Aggregate Losses; |
• | a corresponding increase of $1.3 billion in our reinsurance recoverable given the increase in net claims and claim expenses noted above and recoverables associated with the Q3 2017 Catastrophe Events, Q4 2017 California Wildfires and 2017 Aggregate Losses; |
• | an increase in other operating cash flows of $538.1 million primarily reflecting $602.4 million of subscriptions received in advance of the issuance of Upsilon RFO’s non-voting preference shares effective January 1, 2018, which were recorded in other liabilities at December 31, 2017. See “Note 11. Variable Interest Entities” for additional information related to Upsilon RFO and “Note 23. Subsequent Events” for additional information related to Upsilon RFO’s non-voting preference shares subsequent to December 31, 2017; |
• | an increase in unearned premiums of $246.0 million due to the timing of renewals and a $315.1 million increase in reinsurance balances payable due to the timing of payments of our premiums ceded; |
• | decreases in premiums receivable and deferred acquisition costs of $317.3 million and $91.2 million, respectively, due to the timing of payments of our gross premiums written and amortization of of deferred acquisition costs, respectively; and |
• | an decrease of $92.3 million in our prepaid reinsurance premiums due to ceded premiums written associated renewals in 2017. |
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• | net inflows of $295.9 million associated with the issuance of $300.0 million of our 3.450% Senior Notes due July 1, 2027, net of underwriting discount; |
• | net inflows of $260.5 million related to net capital contributions from third-party shareholders, principally in DaVinciRe and Medici; partially offset by |
• | the repayment in full at maturity of the aggregate principal amount of $250.0 million of our Series B 7.50% Senior Notes due 2017 assumed in connection with the acquisition of Platinum and originally issued by Platinum Underwriters Finance, Inc.; |
• | the settlement of $188.6 million of common share repurchases; and |
• | dividends paid on our common and preferred shares of $51.4 million and $22.4 million, respectively. |
• | an increase in unearned premiums of $342.5 million due to an increase in our gross premiums written; and |
• | a $150.0 million increase in reinsurance balances payable due to the increase in gross premiums ceded and the timing of our payments of gross premiums ceded; |
• | a decrease in our reserve for claims and claim expenses of $81.2 million as a result of claims payments of $623.8 million, partially offset by claims and claims expenses incurred of $710.7 million; |
• | a $210.6 million decrease in prepaid reinsurance premiums due to the timing of our payments of gross premiums ceded; |
• | an increase in premiums receivable and deferred acquisition costs of $209.3 million and $135.9 million, respectively, due to the increase in our gross premiums written; and |
• | a $145.0 million increase in reinsurance recoverable. |
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At December 31, 2017 | At December 31, 2016 | Change | |||||||||||
(in thousands) | |||||||||||||
Common shareholders’ equity | $ | 3,991,375 | $ | 4,466,577 | $ | (475,202 | ) | ||||||
Preference shares | 400,000 | 400,000 | — | ||||||||||
Total shareholders’ equity attributable to RenaissanceRe | 4,391,375 | 4,866,577 | (475,202 | ) | |||||||||
3.450% Senior Notes due 2027 | 295,303 | — | 295,303 | ||||||||||
3.700% Senior Notes due 2025 | 297,318 | 296,948 | 370 | ||||||||||
5.75% Senior Notes due 2020 | 249,272 | 248,941 | 331 | ||||||||||
Series B 7.50% Senior Notes due 2017 | — | 255,352 | (255,352 | ) | |||||||||
4.750% Senior Notes due 2025 (DaVinciRe) | 147,730 | 147,422 | 308 | ||||||||||
RenaissanceRe revolving credit facility – unborrowed | 250,000 | 250,000 | — | ||||||||||
Total debt | 1,239,623 | 1,198,663 | 40,960 | ||||||||||
Total shareholders’ equity attributable to RenaissanceRe and debt | $ | 5,630,998 | $ | 6,065,240 | $ | (434,242 | ) | ||||||
(1) | RenaissanceRe owns a noncontrolling economic interest in its joint venture DaVinciRe. Because RenaissanceRe controls a majority of DaVinciRe’s outstanding voting rights, the consolidated financial statements of DaVinciRe are included in the consolidated financial statements of RenaissanceRe. However, RenaissanceRe does not guarantee or provide credit support for DaVinciRe and RenaissanceRe’s financial exposure to DaVinciRe is limited to its investment in DaVinciRe’s shares and counterparty credit risk arising from reinsurance transactions. |
• | our comprehensive loss attributable to RenaissanceRe of $223.3 million; |
• | our repurchase of 1.3 million shares in open market transactions at an aggregate cost of $188.6 million, and an average price of $142.67 per common share; and |
• | $51.4 million and $22.4 million of dividends on our common and preference shares, respectively. |
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At December 31, 2017 | Issued or Drawn | ||||
(in thousands) | |||||
RenaissanceRe Revolving Credit Facility | $ | — | |||
Uncommitted Standby Letter of Credit Facility with Wells Fargo | 106,794 | ||||
Uncommitted Standby Letter of Credit Facility with NAB | 3,785 | ||||
Bilateral Letter of Credit Facility with Citibank Europe | 197,278 | ||||
Renaissance Reinsurance FAL Facility | 180,000 | ||||
Total credit facilities in U.S. dollars | $ | 487,857 | |||
Specialty Risks FAL Facility | 10,000 | ||||
Total credit facilities in British Pounds | £ | 10,000 | |||
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A.M. Best | S&P | Moody’s | Fitch | ||||||
Renaissance Reinsurance (1) | A+ | AA- | A1 | A+ | |||||
DaVinci (1) | A | AA- | A3 | — | |||||
Renaissance Reinsurance U.S. (1) | A | AA- | — | — | |||||
RenaissanceRe Specialty U.S. (1) | A | AA- | — | — | |||||
Renaissance Reinsurance of Europe (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 set forth in the table above 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. |
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At December 31, | 2017 | 2016 | Change | ||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||
U.S. treasuries | $ | 3,168,763 | 33.3 | % | $ | 2,617,894 | 28.1 | % | $ | 550,869 | |||||||||
Agencies | 47,646 | 0.5 | % | 90,972 | 1.0 | % | (43,326 | ) | |||||||||||
Municipal | 509,802 | 5.4 | % | 519,069 | 5.6 | % | (9,267 | ) | |||||||||||
Non-U.S. government (Sovereign debt) | 287,660 | 3.0 | % | 333,224 | 3.6 | % | (45,564 | ) | |||||||||||
Non-U.S. government-backed corporate | 163,651 | 1.7 | % | 133,300 | 1.4 | % | 30,351 | ||||||||||||
Corporate | 2,063,459 | 21.7 | % | 1,877,243 | 20.2 | % | 186,216 | ||||||||||||
Agency mortgage-backed | 500,456 | 5.3 | % | 462,493 | 5.0 | % | 37,963 | ||||||||||||
Non-agency mortgage-backed | 300,331 | 3.1 | % | 258,944 | 2.7 | % | 41,387 | ||||||||||||
Commercial mortgage-backed | 202,062 | 2.1 | % | 409,747 | 4.4 | % | (207,685 | ) | |||||||||||
Asset-backed | 182,725 | 2.0 | % | 188,358 | 2.0 | % | (5,633 | ) | |||||||||||
Total fixed maturity investments, at fair value | 7,426,555 | 78.1 | % | 6,891,244 | 74.0 | % | 535,311 | ||||||||||||
Short term investments, at fair value | 991,863 | 10.4 | % | 1,368,379 | 14.7 | % | (376,516 | ) | |||||||||||
Equity investments trading, at fair value | 388,254 | 4.1 | % | 383,313 | 4.1 | % | 4,941 | ||||||||||||
Other investments, at fair value | 594,793 | 6.3 | % | 549,805 | 5.9 | % | 44,988 | ||||||||||||
Total managed investment portfolio | 9,401,465 | 98.9 | % | 9,192,741 | 98.7 | % | 208,724 | ||||||||||||
Investments in other ventures, under equity method | 101,974 | 1.1 | % | 124,227 | 1.3 | % | (22,253 | ) | |||||||||||
Total investments | $ | 9,503,439 | 100.0 | % | $ | 9,316,968 | 100.0 | % | $ | 186,471 | |||||||||
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Credit Rating (1) | |||||||||||||||||||||||||||||||||||||||
December 31, 2017 | 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 | $ | 991,863 | $ | 991,863 | 10.4 | % | 1.4 | % | $ | 959,836 | $ | 28,927 | $ | 1,397 | $ | 506 | $ | — | $ | 1,197 | |||||||||||||||||||
100.0 | % | 96.8 | % | 2.9 | % | 0.1 | % | 0.1 | % | — | % | 0.1 | % | ||||||||||||||||||||||||||
Fixed maturity investments | |||||||||||||||||||||||||||||||||||||||
U.S. treasuries | 3,195,767 | 3,168,763 | 33.3 | % | 1.9 | % | — | 3,168,763 | — | — | — | — | |||||||||||||||||||||||||||
Agencies | 48,151 | 47,646 | 0.5 | % | 2.1 | % | — | 47,646 | — | — | — | — | |||||||||||||||||||||||||||
Municipal | 506,486 | 509,802 | 5.4 | % | 2.2 | % | 99,978 | 245,250 | 125,630 | 38,944 | — | — | |||||||||||||||||||||||||||
Non-U.S. government (Sovereign debt) | 287,641 | 287,660 | 3.0 | % | 2.0 | % | 208,289 | 52,316 | 26,348 | 707 | — | — | |||||||||||||||||||||||||||
Non-U.S. government-backed corporate | 164,312 | 163,651 | 1.7 | % | 2.3 | % | 41,346 | 89,901 | 28,940 | 1,484 | 1,980 | — | |||||||||||||||||||||||||||
Corporate | 2,057,219 | 2,063,459 | 21.7 | % | 3.8 | % | 59,272 | 163,006 | 624,074 | 464,626 | 723,167 | 29,314 | |||||||||||||||||||||||||||
Agency mortgage-backed | 507,250 | 500,456 | 5.3 | % | 3.0 | % | — | 500,456 | — | — | — | — | |||||||||||||||||||||||||||
Non-agency mortgage-backed | 283,303 | 300,331 | 3.1 | % | 3.7 | % | 13,045 | 12,295 | 6,286 | 14,528 | 235,732 | 18,445 | |||||||||||||||||||||||||||
Commercial mortgage-backed | 202,452 | 202,062 | 2.1 | % | 2.9 | % | 163,687 | 37,812 | 231 | 332 | — | — | |||||||||||||||||||||||||||
Asset-backed | 182,289 | 182,725 | 2.0 | % | 2.8 | % | 154,205 | 24,096 | 2,444 | 1,980 | — | — | |||||||||||||||||||||||||||
Total fixed maturity investments | 7,434,870 | 7,426,555 | 78.1 | % | 2.7 | % | 739,822 | 4,341,541 | 813,953 | 522,601 | 960,879 | 47,759 | |||||||||||||||||||||||||||
100.0 | % | 10.0 | % | 58.5 | % | 11.0 | % | 7.0 | % | 12.9 | % | 0.6 | % | ||||||||||||||||||||||||||
Equity investments trading | 388,254 | 4.1 | % | — | — | — | — | — | 388,254 | ||||||||||||||||||||||||||||||
100.0 | % | — | % | — | % | — | % | — | % | — | % | 100.0 | % | ||||||||||||||||||||||||||
Other investments | |||||||||||||||||||||||||||||||||||||||
Catastrophe bonds | 380,475 | 4.0 | % | — | — | — | — | 380,475 | — | ||||||||||||||||||||||||||||||
Private equity partnerships | 196,220 | 2.1 | % | — | — | — | — | — | 196,220 | ||||||||||||||||||||||||||||||
Senior secured bank loan funds | 17,574 | 0.2 | % | — | — | — | — | — | 17,574 | ||||||||||||||||||||||||||||||
Hedge funds | 524 | — | % | — | — | — | — | — | 524 | ||||||||||||||||||||||||||||||
Total other investments | 594,793 | 6.3 | % | — | — | — | — | 380,475 | 214,318 | ||||||||||||||||||||||||||||||
100.0 | % | — | % | — | % | — | % | — | % | 64.0 | % | 36.0 | % | ||||||||||||||||||||||||||
Investments in other ventures | 101,974 | 1.1 | % | — | — | — | — | — | 101,974 | ||||||||||||||||||||||||||||||
100.0 | % | — | % | — | % | — | % | — | % | — | % | 100.0 | % | ||||||||||||||||||||||||||
Total investment portfolio | $ | 9,503,439 | 100.0 | % | $ | 1,699,658 | $ | 4,370,468 | $ | 815,350 | $ | 523,107 | $ | 1,341,354 | $ | 753,502 | |||||||||||||||||||||||
100.0 | % | 17.9 | % | 46.0 | % | 8.6 | % | 5.5 | % | 14.1 | % | 7.9 | % | ||||||||||||||||||||||||||
(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. The Company has grouped short term investments with an A-1+ and A-1 short term issue credit rating as AAA, short term investments with an A-2 short term issue credit rating as AA and short term investments with an A-3 short term issue credit rating as A. |
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• | 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 certain tax-exempt municipal fixed income securities are subject to the risk that the U.S. Government could limit or materially alter the current tax exemption on these securities and future new issuances. While the potential reduction or loss of such tax exemption would likely lead to increased yields on newly issued municipal fixed income securities in the long term, we would also expect to see a decrease in the fair value of our municipal fixed income securities portfolio in the short term. |
• | 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 fair 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 and also to widening of credit spreads. 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. |
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At December 31, 2017 | |||||||||||||
(in thousands) | |||||||||||||
Issuer | Total | Short term investments | Fixed maturity investments | ||||||||||
Goldman Sachs Group Inc. | $ | 43,870 | $ | — | $ | 43,870 | |||||||
JP Morgan Chase & Co. | 35,359 | — | 35,359 | ||||||||||
Morgan Stanley | 34,820 | — | 34,820 | ||||||||||
Bank of America Corp. | 31,445 | — | 31,445 | ||||||||||
Wells Fargo & Co. | 27,715 | — | 27,715 | ||||||||||
HSBC Holdings PLC | 24,312 | — | 24,312 | ||||||||||
Citigroup Inc. | 22,070 | — | 22,070 | ||||||||||
UBS Group AG | 21,529 | — | 21,529 | ||||||||||
The Bank of Nova Scotia | 18,281 | — | 18,281 | ||||||||||
Fifth Third Bancorp | 17,709 | — | 17,709 | ||||||||||
Total (1) | $ | 277,110 | $ | — | $ | 277,110 | |||||||
(1) | Excludes non-U.S. government-backed corporate fixed maturity investments, reverse repurchase agreements and commercial paper, at fair value. |
At December 31, | 2017 | 2016 | Change | ||||||||||
(in thousands) | |||||||||||||
Financials | $ | 253,543 | $ | 275,065 | $ | (21,522 | ) | ||||||
Communications and technology | 49,526 | 36,770 | 12,756 | ||||||||||
Industrial, utilities and energy | 34,325 | 30,303 | 4,022 | ||||||||||
Consumer | 24,779 | 20,501 | 4,278 | ||||||||||
Healthcare | 21,364 | 17,245 | 4,119 | ||||||||||
Basic materials | 4,717 | 3,429 | 1,288 | ||||||||||
Total | $ | 388,254 | $ | 383,313 | $ | 4,941 | |||||||
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At December 31, | 2017 | 2016 | Change | ||||||||||
(in thousands) | |||||||||||||
Catastrophe bonds | $ | 380,475 | $ | 335,209 | $ | 45,266 | |||||||
Private equity partnerships | 196,220 | 191,061 | 5,159 | ||||||||||
Senior secured bank loan funds | 17,574 | 22,040 | (4,466 | ) | |||||||||
Hedge funds | 524 | 1,495 | (971 | ) | |||||||||
Total other investments | $ | 594,793 | $ | 549,805 | $ | 44,988 | |||||||
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At December 31, | 2017 | 2016 | |||||||||||||||||||||
(in thousands, except percentages) | Investment | Ownership % | Carrying Value | Investment | Ownership % | Carrying Value | |||||||||||||||||
THIG | $ | 50,000 | 25.0 | % | $ | 20,856 | $ | 50,000 | 25.0 | % | $ | 19,286 | |||||||||||
Tower Hill | 10,000 | 33.3 | % | 14,917 | 10,000 | 32.3 | % | 21,590 | |||||||||||||||
Tower Hill Re | 4,250 | 25.0 | % | — | 4,250 | 25.0 | % | 2,903 | |||||||||||||||
Tower Hill Signature | 500 | 25.0 | % | 6,394 | 500 | 25.0 | % | 9,085 | |||||||||||||||
Total Tower Hill Companies | 64,750 | 42,167 | 64,750 | 52,864 | |||||||||||||||||||
Top Layer Re | 65,375 | 50.0 | % | 50,211 | 65,375 | 50.0 | % | 60,360 | |||||||||||||||
Other | 13,650 | 40.4 | % | 9,596 | 23,923 | 41.8 | % | 11,003 | |||||||||||||||
Total investments in other ventures, under equity method | $ | 143,775 | $ | 101,974 | $ | 154,048 | $ | 124,227 | |||||||||||||||
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At December 31, 2017 | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | ||||||||||||||||
(in thousands) | |||||||||||||||||||||
Long term debt obligations (1) | |||||||||||||||||||||
3.450% Senior Notes due 2027 | $ | 398,315 | $ | 10,350 | $ | 20,700 | $ | 20,700 | $ | 346,565 | |||||||||||
3.700% Senior Notes due 2025 | 380,464 | 11,100 | 22,200 | 22,200 | 324,964 | ||||||||||||||||
5.75% Senior Notes due 2020 | 281,668 | 14,375 | 267,293 | — | — | ||||||||||||||||
4.750% Senior Notes due 2025 (DaVinciRe) | 202,839 | 7,125 | 14,250 | 14,250 | 167,214 | ||||||||||||||||
Total long term debt obligations | 1,263,286 | 42,950 | 324,443 | 57,150 | 838,743 | ||||||||||||||||
Private equity and investment commitments (2) | 429,933 | 429,933 | — | — | — | ||||||||||||||||
Operating lease obligations | 30,805 | 7,604 | 12,186 | 9,174 | 1,841 | ||||||||||||||||
Capital lease obligations | 32,109 | 3,150 | 6,667 | 6,672 | 15,620 | ||||||||||||||||
Payable for investments purchased | 208,749 | 208,749 | — | — | — | ||||||||||||||||
Reserve for claims and claim expenses (3) | 5,080,408 | 1,275,182 | 1,834,027 | 843,347 | 1,127,852 | ||||||||||||||||
Total contractual obligations | $ | 7,045,290 | $ | 1,967,568 | $ | 2,177,323 | $ | 916,343 | $ | 1,984,056 | |||||||||||
(1) | Includes contractual interest payments. |
(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) | Because of the nature of the coverages 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 on available relevant sources of loss and allocated loss adjustment expense development data and benchmark industry payment patterns. 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. |
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Interest Rate Shift in Basis Points | |||||||||||||||||||||
At December 31, 2017 | -100 | -50 | Base | 50 | 100 | ||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||
Fair value of fixed maturity and short term investments | $ | 8,630,509 | $ | 8,524,138 | $ | 8,418,418 | $ | 8,313,350 | $ | 8,208,934 | |||||||||||
Net increase (decrease) in fair value | $ | 212,091 | $ | 105,720 | $ | — | $ | (105,068 | ) | $ | (209,484 | ) | |||||||||
Percentage change in fair value | 2.5 | % | 1.3 | % | — | % | (1.2 | )% | (2.5 | )% | |||||||||||
Interest Rate Shift in Basis Points | |||||||||||||||||||||
At December 31, 2016 | -100 | -50 | Base | 50 | 100 | ||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||
Fair value of fixed maturity and short term investments | $ | 8,468,836 | $ | 8,363,659 | $ | 8,259,623 | $ | 8,156,725 | $ | 8,054,968 | |||||||||||
Net increase (decrease) in fair value | $ | 209,213 | $ | 104,036 | $ | — | $ | (102,898 | ) | $ | (204,655 | ) | |||||||||
Percentage change in fair value | 2.5 | % | 1.3 | % | — | % | (1.2 | )% | (2.5 | )% | |||||||||||
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At December 31, 2017 | AUD | CAD | EUR | GBP | JPY | NZD | Other | Total | |||||||||||||||||||||||||
(in thousands, except for percentages) | |||||||||||||||||||||||||||||||||
Net assets denominated in foreign currencies | $ | (5,519 | ) | $ | 50,546 | $ | (62,778 | ) | $ | (61,928 | ) | $ | (16,762 | ) | $ | (24,114 | ) | $ | (8,266 | ) | $ | (128,821 | ) | ||||||||||
Net foreign currency derivatives notional amounts | (1,577 | ) | (32,792 | ) | 94,981 | 75,226 | 24,468 | 22,749 | (382 | ) | 182,673 | ||||||||||||||||||||||
Total net foreign currency exposure | $ | (7,096 | ) | $ | 17,754 | $ | 32,203 | $ | 13,298 | $ | 7,706 | $ | (1,365 | ) | $ | (8,648 | ) | $ | 53,852 | ||||||||||||||
Net foreign currency exposure as a percentage of total shareholders’ equity attributable to RenaissanceRe | (0.2 | )% | 0.4 | % | 0.7 | % | 0.3 | % | 0.2 | % | — | % | (0.2 | )% | 1.2 | % | |||||||||||||||||
Impact of a hypothetical 10% change in total net foreign currency exposure | $ | 710 | $ | (1,775 | ) | $ | (3,220 | ) | $ | (1,330 | ) | $ | (771 | ) | $ | 137 | $ | 865 | $ | (5,385 | ) | ||||||||||||
At December 31, 2016 | AUD | CAD | EUR | GBP | JPY | NZD | Other | Total | |||||||||||||||||||||||||
(in thousands, except for percentages) | |||||||||||||||||||||||||||||||||
Net assets denominated in foreign currencies | $ | 1,049 | $ | 42,164 | $ | (39,844 | ) | $ | 18,424 | $ | (14,248 | ) | $ | (23,723 | ) | $ | (6,989 | ) | $ | (23,167 | ) | ||||||||||||
Net foreign currency derivatives notional amounts | (465 | ) | (34,877 | ) | 67,662 | (16,636 | ) | 26,200 | 22,668 | (2,232 | ) | 62,320 | |||||||||||||||||||||
Total net foreign currency exposure | $ | 584 | $ | 7,287 | $ | 27,818 | $ | 1,788 | $ | 11,952 | $ | (1,055 | ) | $ | (9,221 | ) | $ | 39,153 | |||||||||||||||
Net foreign currency exposure as a percentage of total shareholders’ equity attributable to RenaissanceRe | — | % | 0.1 | % | 0.6 | % | — | % | 0.2 | % | — | % | (0.2 | )% | 0.8 | % | |||||||||||||||||
Impact of a hypothetical 10% change in total net foreign currency exposure | $ | (58 | ) | $ | (729 | ) | $ | (2,782 | ) | $ | (179 | ) | $ | (1,195 | ) | $ | 106 | $ | 922 | $ | (3,915 | ) | |||||||||||
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At December 31, | 2017 | 2016 | |||||
AAA | 20.2 | % | 29.0 | % | |||
AA | 51.9 | % | 45.8 | % | |||
A | 9.7 | % | 7.8 | % | |||
BBB | 6.2 | % | 6.9 | % | |||
Non-investment grade | 11.4 | % | 10.1 | % | |||
Not rated | 0.6 | % | 0.4 | % | |||
Total | 100.0 | % | 100.0 | % | |||
Credit Spread Shift in Basis Points | |||||||||||||||||||||
At December 31, 2017 | -100 | -50 | Base | 50 | 100 | ||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||
Fair value of fixed income and short term investments | $ | 8,511,410 | $ | 8,476,539 | $ | 8,418,418 | $ | 8,344,261 | $ | 8,270,104 | |||||||||||
Net increase (decrease) in fair value | $ | 92,992 | $ | 58,121 | $ | — | $ | (74,157 | ) | $ | (148,314 | ) | |||||||||
Percentage change in fair value | 1.1 | % | 0.7 | % | — | % | (0.9 | )% | (1.8 | )% | |||||||||||
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Credit Spread Shift in Basis Points | |||||||||||||||||||||
At December 31, 2016 | -100 | -50 | Base | 50 | 100 | ||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||
Fair value of fixed income and short term investments | $ | 8,415,929 | $ | 8,337,776 | $ | 8,259,623 | $ | 8,181,470 | $ | 8,103,317 | |||||||||||
Net increase (decrease) in fair value | $ | 156,306 | $ | 78,153 | $ | — | $ | (78,153 | ) | $ | (156,306 | ) | |||||||||
Percentage change in fair value | 1.9 | % | 0.9 | % | — | % | (0.9 | )% | (1.9 | )% | |||||||||||
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At December 31, | 2017 | 2016 | |||||||
(in thousands, except for percentages) | |||||||||
Equity investments trading, at fair value | $ | 388,254 | $ | 383,313 | |||||
Private equity investments, at fair value | 196,220 | 191,061 | |||||||
Investments in other ventures, under equity method | 101,974 | 124,227 | |||||||
Hedge funds, at fair value | 524 | 1,495 | |||||||
Total carrying value of investments exposed to equity price risk | $ | 686,972 | $ | 700,096 | |||||
Impact of a hypothetical 10% increase in the carrying value of investments exposed to equity price risk | $ | 68,697 | $ | 70,010 | |||||
Impact of a hypothetical 10% decrease in the carrying value of investments exposed to equity price risk | $ | (68,697 | ) | $ | (70,010 | ) | |||
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Number | Description |
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. (23) |
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 issuer, 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) |
4.3(d) | Second Supplemental Indenture, dated as of July 3, 2015, among RenRe North America Holdings, Inc., as issuer, RenaissanceRe Holdings Ltd., as guarantor, RenaissanceRe Finance Inc., as co-obligor, and Deutsche Bank Trust Companies America, as trustee. (29) |
4.4 | Indenture, dated as of May 26, 2005, among Platinum Underwriters Finance, Inc., as issuer, Platinum Underwriters Holdings, Ltd., as guarantor, and JPMorgan Chase Bank, N.A., as trustee. (32) |
4.4(a) | Second Supplemental Indenture, dated as of November 2, 2005, among Platinum Underwriters Finance, Inc., as issuer, Platinum Underwriters Holdings, Ltd., as guarantor, and JPMorgan Chase Bank, N.A., as trustee. (33) |
4.4(b) | Third Supplemental Indenture, dated as of March 3, 2015, among Platinum Underwriters Finance, Inc., as issuer, Platinum Underwriters Holdings, Ltd., as guarantor, RenaissanceRe Holdings Ltd., as parent guarantor, and The Bank of New York Mellon Trust Company (as successor in interest to JPMorgan Chase Bank, N.A.), as trustee. (26) |
4.4(c) | Fourth Supplemental Indenture, dated as of July 1, 2015, among Platinum Underwriters Finance, Inc., as issuer, Platinum Underwriters Holdings, Ltd., as guarantor, RenaissanceRe Holdings Ltd., as parent guarantor, and The Bank of New York Mellon Trust Company (as successor in interest to JPMorgan Chase Bank, N.A.), as trustee. (29) |
4.4(d) | Guarantee, dated as of March 3, 2015, executed by RenaissanceRe for the benefit of the holders of Platinum Underwriters Finance, Inc.’s Series B 7.50% Notes due June 1, 2017. (26) |
4.4(e) | Exchange and Registration Rights Agreement, dated as of May 26, 2005, among Platinum Underwriters Holdings, Ltd., Platinum Underwriters Finance, Inc. and Goldman, Sachs & Co. (32) |
4.5 | Senior Indenture, dated as of March 24, 2015, among RenaissanceRe Finance Inc., as issuer, RenaissanceRe Holdings Ltd., as guarantor, and Deutsche Bank Trust Company Americas, as trustee. (27) |
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4.5(a) | First Supplemental Indenture, dated as of March 24, 2015, among RenaissanceRe Finance Inc., as issuer, RenaissanceRe Holdings Ltd., as guarantor, and Deutsche Bank Trust Company Americas, as trustee. (27) |
4.5(b) | Senior Debt Securities Guarantee Agreement, dated as of March 24, 2015, between RenaissanceRe Holdings Ltd., as guarantor, and Deutsche Bank Trust Company Americas, as guarantee trustee. (27) |
4.6 | Senior Indenture, dated as of June 29, 2017, among RenaissanceRe Finance Inc., as issuer, RenaissanceRe Holdings Ltd., as guarantor, and Deutsche Bank Trust Company Americas, as trustee. (45) |
4.6(a) | First Supplemental Indenture, dated as of June 29, 2017, among RenaissanceRe Finance Inc., as issuer, RenaissanceRe Holdings Ltd., as guarantor, and Deutsche Bank Trust Company Americas, as trustee. (45) |
4.6(b) | Senior Debt Securities Guarantee Agreement, dated as of June 29, 2017, between RenaissanceRe Holdings Ltd., as guarantor, and Deutsche Bank Trust Company Americas, as guarantee trustee. (45) |
10.1* | Further Amended and Restated Employment Agreement, dated as of July 22, 2016, by and between RenaissanceRe Holdings Ltd. and Kevin J. O’Donnell. (38) |
10.2* | Legacy Form of Further Amended and Restated Employment Agreement for Named Executive Officers (other than our Chief Executive Officer). (38)** |
10.3* | Form of Employment Agreement for Named Executive Officers (other than our Chief Executive Officer). (38)*** |
10.4* | Letter agreement, dated July 6, 2016, between Ian Branagan and RenaissanceRe Holdings Ltd. regarding secondment to the U.K. (38) |
10.5* | Letter agreement, dated April 11, 2013, between Ian Branagan and RenaissanceRe Holdings Ltd. regarding secondment to the U.K. (38) |
10.6* | Employment Agreement, dated as of October 23, 2013, by and between RenaissanceRe Holdings Ltd. and Jeffrey D. Kelly. (11) |
10.7* | Separation, Consulting, and Release Agreement, dated as of July 22, 2016, by and between RenaissanceRe Holdings Ltd. and Jeffrey D. Kelly. (38) |
10.8* | RenaissanceRe Holdings Ltd. 2016 Long-Term Incentive Plan. (37) |
10.8(a)* | Form of Director Restricted Stock Agreement under the RenaissanceRe Holdings Ltd. 2016 Long-Term Incentive Plan. (38) |
10.8(b)* | Form of Restricted Stock Agreement under the RenaissanceRe Holdings Ltd. 2016 Long-Term Incentive Plan. (38) |
10.8(c)* | Form of Performance Share Agreement under the RenaissanceRe Holdings Ltd. 2016 Long-Term Incentive Plan (for awards made in 2016). (38) |
10.8(d)* | Form of Performance Share Agreement under the RenaissanceRe Holdings Ltd. 2016 Long-Term Incentive Plan. (43) |
10.9 | RenaissanceRe Holdings Ltd. Deferred Cash Award Plan. (46) |
10.9(a) | Form of Deferred Cash Award Agreement pursuant to which Deferred Cash Awards are granted under the RenaissanceRe Holdings Ltd. Deferred Cash Award Plan. (46) |
10.10* | RenaissanceRe Holdings Ltd. 2016 Restricted Stock Unit Plan. (40) |
10.10(a)* | Form of Restricted Stock Unit Agreement pursuant to which restricted stock unit grants are made under the RenaissanceRe Holdings Ltd. 2016 Restricted Stock Unit Plan. (40) |
10.11* | RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (15) |
10.11(a)* | Amendment No. 1 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (16) |
10.11(b)* | Amendment No. 2 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (16) |
10.11(c)* | Amendment No. 3 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (8) |
10.11(d)* | Amendment No. 4 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (13) |
10.11(e)* | Amendment No. 5 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (17) |
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10.11(f)* | Amendment No. 6 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (11) |
10.11(g)* | UK Schedule to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (8) |
10.11(h)* | UK Sub-Plan to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (8) |
10.11(i)* | Form of Option Grant Notice and Agreement pursuant to which option grants were made under the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (19) |
10.11(j)* | Form of Restricted Stock Grant Notice and Agreement pursuant to which restricted stock grants were made under the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (19) |
10.11(k)* | Form of Performance-Based Restricted Stock Grant Notice and Agreement pursuant to which performance-based restricted stock grants were made under the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (36) |
10.12* | RenaissanceRe Holdings Ltd. 2010 Restricted Stock Unit Plan. (14) |
10.12(a)* | Form of Restricted Stock Unit Agreement, pursuant to which restricted stock unit grants were made under the RenaissanceRe Holdings Ltd. 2010 Restricted Stock Unit Plan. (14) |
10.13* | RenaissanceRe Holdings Ltd. 2010 Performance-Based Equity Incentive Plan. (13) |
10.13(a)* | Amendment No. 1 to the RenaissanceRe Holdings Ltd. 2010 Performance-Based Equity Incentive Plan. (24) |
10.13(b)* | Form of Letter Agreement with the Named Executive Officers Regarding Performance Share Awards. (18) |
10.13(d)* | Form of Performance-Based Restricted Stock Grant Notice and Agreement pursuant to which performance-based restricted stock awards were made under the RenaissanceRe Holdings Ltd. 2010 Performance-Based Equity Incentive Plan. (24) |
10.14* | Form of Tax Reimbursement Waiver Letter with the Named Executive Officers. (20) |
10.15* | Form of Agreement Regarding Use of Aircraft Interest by and between RenaissanceRe Holdings Ltd. and Certain Executive Officers of RenaissanceRe Holdings Ltd. (12) |
10.16* | Form of Director Retention Agreement, dated as of November 8, 2002, entered into by each of the non-employee directors of RenaissanceRe Holdings Ltd. (21) |
10.17* | Form of Director Shares Grant Notice and Agreement pursuant to which restricted stock grants were made to non-employee directors on March 1, 2016. (38) |
10.18 | Third Amended and Restated Credit Agreement, dated as of April 9, 2014, among Platinum Underwriters Holdings, Ltd., Platinum Underwriters Bermuda, Ltd., Platinum Underwriters Reinsurance, Inc., Platinum Underwriters Finance, Inc., the Lenders party thereto, ING Bank N.V. and National Australian Bank Limited, as Documentation Agents, U.S. Bank National Association, as Syndication Agent, and Wells Fargo Bank, National Association, as Administrative Agent. (34) |
10.18(a) | Consent and Amendment to Credit Agreement, dated as of March 2, 2015, by and among Platinum Underwriters Holdings, Ltd., certain subsidiaries of Platinum Underwriters Holdings, Ltd. party thereto, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto. (26) |
10.18(b) | Guaranty, dated as of March 2, 2015, entered into by RenaissanceRe Holdings Ltd. for the benefit of Wells Fargo Bank, National Association, as administrative agent, and the other lenders referred to therein. (26) |
10.19 | Credit Agreement, dated as of February 25, 2015, by and between RenaissanceRe Holdings Ltd., as borrower, and Barclays Bank PLC, as lender. (25) |
10.20 | Amendment and Restatement Agreement, dated July 2, 2013, relating to a Facility Agreement dated July 31, 2012 for Platinum Underwriters Bermuda, Ltd. made between Platinum Underwriters Holdings, Ltd., Platinum Underwriters Bermuda, Ltd., National Australia Bank Limited and ING Bank N.V. (35) |
10.20(a) | Consent and Amendment to Facility Agreement, dated as of March 2, 2015, by and among Platinum Underwriters Bermuda, Ltd., Platinum Underwriters Holdings, Ltd., National Australia Bank Limited, as agent, security agent and a lender, and ING Bank, N.V., as a lender. (26) |
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10.20(b) | Guaranty, dated as of March 2, 2015, entered into by RenaissanceRe Holdings Ltd. for the benefit of National Australia Bank Limited, as agent, security agent and a lender, and ING Bank, N.V., as a lender. (26) |
10.21 | Amended and Restated Credit Agreement, dated as of May 15, 2015, among RenaissanceRe Holdings Ltd., as borrower, various financial institutions parties thereto, as lenders, Wells Fargo Bank, National Association, as 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. (28) |
10.21(a) | Guaranty Agreement, dated as of May 15, 2015, by and among RenRe North America Holdings Inc., RenaissanceRe Finance Inc., Platinum Underwriters Holdings, Ltd., Platinum Underwriters Finance, Inc. and Wells Fargo Bank, National Association, as Administrative Agent. (28) |
10.22 | Standby Letter of Credit Agreement, dated as of December 23, 2014, by and among Renaissance Reinsurance Ltd., RenaissanceRe Specialty Risks Ltd., DaVinci Reinsurance Ltd., RenaissanceRe Holdings Ltd., as Guarantor, and Wells Fargo Bank, National Association. (22) |
10.22(a) | First Amendment to Standby Letter of Credit Agreement, dated as of May 15, 2015, by and among Platinum Underwriters Bermuda, Ltd., Renaissance Reinsurance U.S. Inc., Renaissance Reinsurance Ltd., RenaissanceRe Specialty Risks Ltd., DaVinci Reinsurance Ltd., RenaissanceRe Holdings Ltd., as Guarantor, and Wells Fargo Bank, National Association. (28) |
10.23 | Facility Letter, dated September 17, 2010, from Citibank Europe PLC to Renaissance Reinsurance Ltd., DaVinci Reinsurance Ltd. and Glencoe Insurance Ltd. (9) |
10.23(a) | 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, Renaissance Specialty U.S. Ltd., Platinum Underwriters Bermuda, Ltd. and Renaissance Reinsurance U.S. Inc. each entered into an agreement with Citibank Europe PLC that is identical to the foregoing agreement, except with respect to party names and dates. (9) |
10.23(b) | 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. (10) |
10.23(c) | Amendment to Facility Letter, dated December 23, 2014, 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. (36) |
10.23(d) | Amendment to Facility Letter, dated March 31, 2015, by and among Citibank Europe PLC, Renaissance Reinsurance Ltd., DaVinci Reinsurance Ltd., RenaissanceRe Specialty Risks Ltd., Renaissance Reinsurance of Europe, RenaissanceRe Specialty U.S. Ltd., Platinum Underwriters Bermuda, Ltd. and Platinum Underwriters Reinsurance, Inc. (36) |
10.23(e) | Amendment to Facility Letter, dated December 30, 2015, by and among Citibank Europe PLC, Renaissance Reinsurance Ltd., DaVinci Reinsurance Ltd., RenaissanceRe Specialty Risks Ltd., Renaissance Reinsurance of Europe, RenaissanceRe Specialty U.S. Ltd., Platinum Underwriters Bermuda, Ltd. and Renaissance Reinsurance U.S. Inc. (31) |
10.23(f) | Amendment to Facility Letter, dated January 14, 2016, by and among Citibank Europe PLC, Renaissance Reinsurance Ltd., DaVinci Reinsurance Ltd., RenaissanceRe Specialty Risks Ltd., Renaissance Reinsurance of Europe, RenaissanceRe Specialty U.S. Ltd., Platinum Underwriters Bermuda, Ltd. and Renaissance Reinsurance U.S. Inc. (36) |
10.23(g) | Termination of Master Agreements, Control Agreements and Pledge Agreements, dated October 1, 2016, between Renaissance Reinsurance Ltd. and Citibank Europe PLC. (39) |
10.23(h) | Amendment to Facility Letter, dated December 31, 2016, by and among Citibank Europe plc, Renaissance Reinsurance Ltd., DaVinci Reinsurance Ltd., Renaissance Reinsurance of Europe, RenaissanceRe Specialty U.S. Ltd. and Renaissance Reinsurance U.S. Inc. (42) |
10.23(i) | Amendment to Facility Letter, dated December 29, 2017, by and among Citibank Europe plc, Renaissance Reinsurance Ltd., DaVinci Reinsurance Ltd., Renaissance Reinsurance of Europe Unlimited Company, RenaissanceRe Specialty U.S. Ltd. and Renaissance Reinsurance U.S. Inc. (47) |
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10.24 | Master Reimbursement Agreement, dated as of November 24, 2014, by and between RenaissanceRe Specialty Risks Ltd. and Citibank Europe PLC. (24) |
10.24(a) | Pledge Agreement, dated as of November 24, 2014 by and among RenaissanceRe Specialty Risks Ltd. and Citibank Europe PLC. (24) |
10.24(b) | Omnibus Amendment Agreement, dated October 1, 2016, between Renaissance Reinsurance Ltd., Citibank Europe PLC and Bank of New York Mellon. (39) |
10.25 | Letter of Credit Reimbursement Agreement, dated as of November 23, 2015, by and among Renaissance Reinsurance Ltd., as Borrower, various lenders, Bank of Montreal, as Documentation Agent, Citibank Europe plc, as Collateral Agent, and ING Bank N.V., London Branch, as Letter of Credit Agent. (30) |
10.25(a) | First Amendment to Letter of Credit Reimbursement Agreement, dated as of December 10, 2015, among Renaissance Reinsurance Ltd., as Borrower, various lenders party to the Letter of Credit Reimbursement Agreement dated as of November 23, 2015, Bank of Montreal, as Documentation Agent, Citibank Europe PLC, as Collateral Agent, and ING Bank N.V., London Branch, as Letter of Credit Agent. (36) |
10.25(b) | Second Amendment to Letter of Credit Reimbursement Agreement, dated as of May 20, 2016, among Renaissance Reinsurance Ltd., as Borrower, various lenders party to the Letter of Credit Reimbursement Agreement, dated as of November 23, 2015, Bank of Montreal, as Documentation Agent, Citibank Europe plc, as Collateral Agent, and ING Bank N.V., London Branch, as Letter of Credit Agent. (38) |
10.25(c) | Third Amendment to Letter of Credit Reimbursement Agreement, dated as of November 8, 2016, by and among Renaissance Reinsurance Ltd., various lenders party to the Letter of Credit Reimbursement Agreement, dated as of November 23, 2015, Bank of Montreal, as Documentation Agent, Citibank Europe plc, as Collateral Agent, and ING Bank N.V., London Branch, as Letter of Credit Agent. (40) |
10.25(d) | Fourth Amendment to Letter of Credit Reimbursement Agreement, dated as of May 25, 2017, by and among Renaissance Reinsurance Ltd., various lenders party to the Letter of Credit Reimbursement Agreement, dated as of November 23, 2015, Bank of Montreal, as Documentation Agent, Citibank Europe plc, as Collateral Agent, and ING Bank N.V., London Branch, as Letter of Credit Agent. (44) |
10.25(e) | Fifth Amendment to Letter of Credit Reimbursement Agreement dated as of November 8, 2017 by and among Renaissance Reinsurance Ltd. , various lenders party to the Letter of Credit Reimbursement Agreement, dated as of November 23, 2015, Bank of Montreal, as Documentation Agent, Citibank Europe plc, as Collateral Agent, and ING Bank N.V., London Branch, as Letter of Credit Agent. (46) |
10.26 | Standby Letter of Credit Agreement, dated as of May 19, 2015, by and among National Australia Bank Limited, New York Branch, Renaissance Reinsurance Ltd., RenaissanceRe Specialty Risks Ltd., DaVinci Reinsurance Ltd., Platinum Underwriters Bermuda, Ltd. and RenaissanceRe Holdings Ltd., as Guarantor. (28) |
10.27 | Waiver, dated as of November 15, 2016, by and between RenaissanceRe Holdings Ltd. and BlackRock, Inc. (41) |
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 Robert Qutub, 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 Robert Qutub, 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. |
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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 |
* | Represents management contract or compensatory plan or arrangement. |
** | Applicable to Stephen H. Weinstein and Ian D. Branagan. |
*** | Applicable to Ross A. Curtis and Robert Qutub. |
(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 Exhibit 3.1 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. |
(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 Quarterly Report on Form 10-Q for the period ended March 31, 2009, filed with the SEC on May 1, 2009. |
(9) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on September 23, 2010. |
(10) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on October 4, 2013. |
(11) | 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. |
(12) | 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. |
(13) | Amendment No. 4 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan is incorporated by reference to Appendix B to RenaissanceRe Holdings Ltd.'s Definitive Proxy Statement filed with the SEC on April 8, 2010. The RenaissanceRe Holdings Ltd. 2010 Performance-Based Equity Incentive Plan is incorporated by reference to Appendix A to RenaissanceRe Holdings Ltd.'s Definitive Proxy Statement filed with the SEC on April 8, 2010. |
(14) | 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. |
(15) | Incorporated by reference to Exhibit 99.2 to the Registration Statement on Form S-8 (Registration No. 333-90758) dated June 19, 2002. |
(16) | 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. |
(17) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on August 13, 2010. |
(18) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q, filed with the SEC on April 29, 2010. |
(19) | 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. |
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(20) | 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. |
(21) | 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). |
(22) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on December 30, 2014. |
(23) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on November 26, 2014. |
(24) | Incorporated by reference to RenaissanceRe Holding Ltd.’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on February 20, 2015. |
(25) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on March 2, 2015. |
(26) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on March 6, 2015. |
(27) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on March 25, 2015. |
(28) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on May 21, 2015. |
(29) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on July 8, 2015. |
(30) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on November 25, 2015. |
(31) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on December 31, 2015. |
(32) | Incorporated by reference from Platinum Underwriters Holdings, Ltd.'s Current Report on Form 8-K, filed with the SEC on May 27, 2005. |
(33) | Incorporated by reference from Platinum Underwriters Holdings, Ltd.'s Current Report on Form 8-K, filed with the SEC on November 3, 2005. |
(34) | Incorporated by reference from Platinum Underwriters Holdings, Ltd.'s Current Report on Form 8-K filed with the SEC on April 10, 2014. |
(35) | Incorporated by reference from Platinum Underwriters Holdings, Ltd.'s Current Report on Form 8-K filed with the SEC on July 3, 2013. |
(36) | Incorporated by reference to RenaissanceRe Holding Ltd.’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on February 19, 2016. |
(37) | Incorporated by reference to Appendix A to RenaissanceRe Holdings Ltd.’s Definitive Proxy Statement on Schedule 14A filed with the SEC on April 1, 2016. |
(38) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended June 30, 2016, filed with the SEC on July 27, 2016. |
(39) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended September 30, 2016, filed with the SEC on November 2, 2016. |
(40) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K filed with the SEC on November 10, 2016. |
(41) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K filed with the SEC on November 18, 2016. |
(42) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K filed with the SEC on January 5, 2017. |
(43) | Incorporated by reference to RenaissanceRe Holding Ltd’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on February 23, 2017. |
(44) | Incorporated by reference to RenaissanceRe Holding Ltd.’s Current Report on Form 8-K filed with the SEC on May 26, 2017. |
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(45) | Incorporated by reference to RenaissanceRe Holding Ltd.’s Current Report on Form 8-K filed with the SEC on June 29, 2017. |
(46) | Incorporated by reference to RenaissanceRe Holding Ltd.’s Current Report on Form 8-K filed with the SEC on November 13, 2017. |
(47) | Incorporated by reference to RenaissanceRe Holding Ltd.’s Current Report on Form 8-K filed with the SEC on January 3, 2018. |
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Date: | February 8, 2018 | RENAISSANCERE HOLDINGS LTD. | |
/s/ Kevin J. O’Donnell | |||
Kevin J. O’Donnell | |||
Chief Executive Officer and President |
Signature | Title | Date | ||
/s/ Kevin J. O’Donnell | Chief Executive Officer, President and Director (Principal Executive Officer) | February 8, 2018 | ||
Kevin J. O’Donnell | ||||
/s/ Robert Qutub | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | February 8, 2018 | ||
Robert Qutub | ||||
/s/ James C. Fraser | Senior Vice President and Chief Accounting Officer (Principal Accounting Officer) | February 8, 2018 | ||
James C. Fraser | ||||
/s/ James L. Gibbons | Non-Executive Chair of the Board of Directors | February 8, 2018 | ||
James L. Gibbons | ||||
/s/ David C. Bushnell | Director | February 8, 2018 | ||
David C. Bushnell | ||||
/s/ Brian G. J. Gray | Director | February 8, 2018 | ||
Brian G. J. Gray | ||||
/s/ Jean D. Hamilton | Director | February 8, 2018 | ||
Jean D. Hamilton | ||||
/s/ Duncan P. Hennes | Director | February 8, 2018 | ||
Duncan P. Hennes | ||||
/s/ Henry Klehm, III | Director | February 8, 2018 | ||
Henry Klehm, III | ||||
/s/ Valerie Rahmani | Director | February 8, 2018 | ||
Valerie Rahmani | ||||
/s/ Carol P. Sanders | Director | February 8, 2018 | ||
Carol P. Sanders | ||||
/s/ Anthony M. Santomero | Director | February 8, 2018 | ||
Anthony M. Santomero | ||||
Director | ||||
Edward J. Zore |
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Page | |
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December 31, 2017 | December 31, 2016 | ||||||
Assets | |||||||
Fixed maturity investments trading, at fair value - amortized cost $7,434,870 at December 31, 2017 (2016 - $6,920,690) (Notes 5 and 6) | $ | 7,426,555 | $ | 6,891,244 | |||
Short term investments, at fair value (Notes 5 and 6) | 991,863 | 1,368,379 | |||||
Equity investments trading, at fair value (Notes 5 and 6) | 388,254 | 383,313 | |||||
Other investments, at fair value (Notes 5 and 6) | 594,793 | 549,805 | |||||
Investments in other ventures, under equity method (Note 5) | 101,974 | 124,227 | |||||
Total investments | 9,503,439 | 9,316,968 | |||||
Cash and cash equivalents | 1,361,592 | 421,157 | |||||
Premiums receivable | 1,304,622 | 987,323 | |||||
Prepaid reinsurance premiums (Note 7) | 533,546 | 441,260 | |||||
Reinsurance recoverable (Notes 7 and 8) | 1,586,630 | 279,564 | |||||
Accrued investment income | 42,235 | 38,076 | |||||
Deferred acquisition costs | 426,551 | 335,325 | |||||
Receivable for investments sold | 103,145 | 105,841 | |||||
Other assets | 121,226 | 175,382 | |||||
Goodwill and other intangible assets (Note 4) | 243,145 | 251,186 | |||||
Total assets | $ | 15,226,131 | $ | 12,352,082 | |||
Liabilities, Noncontrolling Interests and Shareholders’ Equity | |||||||
Liabilities | |||||||
Reserve for claims and claim expenses (Note 8) | $ | 5,080,408 | $ | 2,848,294 | |||
Unearned premiums | 1,477,609 | 1,231,573 | |||||
Debt (Note 9) | 989,623 | 948,663 | |||||
Reinsurance balances payable | 989,090 | 673,983 | |||||
Payable for investments purchased | 208,749 | 305,714 | |||||
Other liabilities | 792,771 | 301,684 | |||||
Total liabilities | 9,538,250 | 6,309,911 | |||||
Commitments and Contingencies (Note 20) | |||||||
Redeemable noncontrolling interests (Note 10) | 1,296,506 | 1,175,594 | |||||
Shareholders’ Equity (Note 12) | |||||||
Preference shares: $1.00 par value – 16,000,000 shares issued and outstanding at December 31, 2017 (2016 – 16,000,000) | 400,000 | 400,000 | |||||
Common shares: $1.00 par value – 40,023,789 shares issued and outstanding at December 31, 2017 (2016 – 41,187,413) | 40,024 | 41,187 | |||||
Additional paid-in capital | 37,355 | 216,558 | |||||
Accumulated other comprehensive income | 224 | 1,133 | |||||
Retained earnings | 3,913,772 | 4,207,699 | |||||
Total shareholders’ equity attributable to RenaissanceRe | 4,391,375 | 4,866,577 | |||||
Total liabilities, noncontrolling interests and shareholders’ equity | $ | 15,226,131 | $ | 12,352,082 |
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2017 | 2016 | 2015 | |||||||||
Revenues | |||||||||||
Gross premiums written | $ | 2,797,540 | $ | 2,374,576 | $ | 2,011,310 | |||||
Net premiums written (Note 7) | $ | 1,871,325 | $ | 1,535,312 | $ | 1,416,183 | |||||
Increase in unearned premiums | (153,750 | ) | (131,882 | ) | (15,632 | ) | |||||
Net premiums earned (Note 7) | 1,717,575 | 1,403,430 | 1,400,551 | ||||||||
Net investment income (Note 5) | 222,209 | 181,726 | 152,567 | ||||||||
Net foreign exchange gains (losses) | 10,628 | (13,788 | ) | (3,051 | ) | ||||||
Equity in earnings of other ventures (Note 5) | 8,030 | 963 | 20,481 | ||||||||
Other income | 9,415 | 14,178 | 13,472 | ||||||||
Net realized and unrealized gains (losses) on investments (Note 5) | 135,822 | 141,328 | (68,918 | ) | |||||||
Total revenues | 2,103,679 | 1,727,837 | 1,515,102 | ||||||||
Expenses | |||||||||||
Net claims and claim expenses incurred (Notes 7 and 8) | 1,861,428 | 530,831 | 448,238 | ||||||||
Acquisition expenses | 346,892 | 289,323 | 238,592 | ||||||||
Operational expenses | 160,778 | 197,749 | 219,112 | ||||||||
Corporate expenses | 18,572 | 37,402 | 76,514 | ||||||||
Interest expense (Note 9) | 44,193 | 42,144 | 36,270 | ||||||||
Total expenses | 2,431,863 | 1,097,449 | 1,018,726 | ||||||||
(Loss) income before taxes | (328,184 | ) | 630,388 | 496,376 | |||||||
Income tax (expense) benefit (Note 15) | (26,487 | ) | (340 | ) | 45,866 | ||||||
Net (loss) income | (354,671 | ) | 630,048 | 542,242 | |||||||
Net loss (income) attributable to redeemable noncontrolling interests (Note 10) | 132,282 | (127,086 | ) | (111,050 | ) | ||||||
Net (loss) income attributable to RenaissanceRe | (222,389 | ) | 502,962 | 431,192 | |||||||
Dividends on preference shares (Note 12) | (22,381 | ) | (22,381 | ) | (22,381 | ) | |||||
Net (loss) income (attributable) available to RenaissanceRe common shareholders | $ | (244,770 | ) | $ | 480,581 | $ | 408,811 | ||||
Net (loss) income (attributable) available to RenaissanceRe common shareholders per common share – basic (Note 13) | $ | (6.15 | ) | $ | 11.50 | $ | 9.36 | ||||
Net (loss) income (attributable) available to RenaissanceRe common shareholders per common share – diluted (Note 13) | $ | (6.15 | ) | $ | 11.43 | $ | 9.28 | ||||
Dividends per common share (Note 12) | $ | 1.28 | $ | 1.24 | $ | 1.20 |
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2017 | 2016 | 2015 | |||||||||
Comprehensive (loss) income | |||||||||||
Net (loss) income | $ | (354,671 | ) | $ | 630,048 | $ | 542,242 | ||||
Change in net unrealized gains on investments | (909 | ) | (975 | ) | (1,308 | ) | |||||
Comprehensive (loss) income | (355,580 | ) | 629,073 | 540,934 | |||||||
Net loss (income) attributable to redeemable noncontrolling interests | 132,282 | (127,086 | ) | (111,050 | ) | ||||||
Comprehensive (loss) income attributable to redeemable noncontrolling interests | 132,282 | (127,086 | ) | (111,050 | ) | ||||||
Comprehensive (loss) income attributable to RenaissanceRe | $ | (223,298 | ) | $ | 501,987 | $ | 429,884 | ||||
Disclosure regarding net unrealized gains | |||||||||||
Total net realized and unrealized holding (losses) gains on investments | $ | (909 | ) | $ | 403 | $ | (982 | ) | |||
Net realized gains on fixed maturity investments available for sale | — | (1,378 | ) | (326 | ) | ||||||
Change in net unrealized gains on investments | $ | (909 | ) | $ | (975 | ) | $ | (1,308 | ) |
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2017 | 2016 | 2015 | |||||||||
Preference shares | |||||||||||
Balance – January 1 | $ | 400,000 | $ | 400,000 | $ | 400,000 | |||||
Balance – December 31 | 400,000 | 400,000 | 400,000 | ||||||||
Common shares | |||||||||||
Balance – January 1 | 41,187 | 43,701 | 38,442 | ||||||||
Issuance of shares | — | — | 7,435 | ||||||||
Repurchase of shares | (1,322 | ) | (2,741 | ) | (2,473 | ) | |||||
Exercise of options and issuance of restricted stock awards (Notes 12 and 17) | 159 | 227 | 297 | ||||||||
Balance – December 31 | 40,024 | 41,187 | 43,701 | ||||||||
Additional paid-in capital | |||||||||||
Balance – January 1 | 216,558 | 507,674 | — | ||||||||
Issuance of shares | — | — | 754,384 | ||||||||
Repurchase of shares | (187,269 | ) | (306,693 | ) | (257,401 | ) | |||||
Change in redeemable noncontrolling interest | 119 | (1,655 | ) | (762 | ) | ||||||
Exercise of options and issuance of restricted stock awards (Notes 12 and 17) | 7,947 | 17,232 | 11,453 | ||||||||
Balance – December 31 | 37,355 | 216,558 | 507,674 | ||||||||
Accumulated other comprehensive income | |||||||||||
Balance – January 1 | 1,133 | 2,108 | 3,416 | ||||||||
Change in net unrealized gains on investments | (909 | ) | (975 | ) | (1,308 | ) | |||||
Balance – December 31 | 224 | 1,133 | 2,108 | ||||||||
Retained earnings | |||||||||||
Balance – January 1 | 4,207,699 | 3,778,701 | 3,423,857 | ||||||||
Cumulative effect of adoption of ASU 2016-09 (Note 2) | 2,213 | — | — | ||||||||
Net (loss) income | (354,671 | ) | 630,048 | 542,242 | |||||||
Net loss (income) attributable to redeemable noncontrolling interests (Note 10) | 132,282 | (127,086 | ) | (111,050 | ) | ||||||
Dividends on common shares | (51,370 | ) | (51,583 | ) | (53,967 | ) | |||||
Dividends on preference shares | (22,381 | ) | (22,381 | ) | (22,381 | ) | |||||
Balance – December 31 | 3,913,772 | 4,207,699 | 3,778,701 | ||||||||
Total shareholders’ equity | $ | 4,391,375 | $ | 4,866,577 | $ | 4,732,184 |
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2017 | 2016 | 2015 | |||||||||
Cash flows provided by operating activities | |||||||||||
Net (loss) income | $ | (354,671 | ) | $ | 630,048 | $ | 542,242 | ||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities | |||||||||||
Amortization, accretion and depreciation | 31,242 | 29,304 | 18,179 | ||||||||
Equity in undistributed losses (earnings) of other ventures | 6,295 | 5,504 | (10,087 | ) | |||||||
Net realized and unrealized (gains) losses on investments | (135,822 | ) | (141,328 | ) | 68,918 | ||||||
Net unrealized (gains) losses included in net investment income | (24,737 | ) | (11,542 | ) | 13,549 | ||||||
Net unrealized losses included in other income | — | — | 426 | ||||||||
Change in: | |||||||||||
Premiums receivable | (317,299 | ) | (209,314 | ) | (105,281 | ) | |||||
Prepaid reinsurance premiums | (92,286 | ) | (210,589 | ) | (128,410 | ) | |||||
Reinsurance recoverable | (1,307,066 | ) | (145,038 | ) | (64,104 | ) | |||||
Deferred acquisition costs | (91,226 | ) | (135,945 | ) | (89,241 | ) | |||||
Reserve for claims and claim expenses | 2,232,114 | 81,249 | (43,310 | ) | |||||||
Unearned premiums | 246,036 | 342,471 | 144,040 | ||||||||
Reinsurance balances payable | 315,107 | 150,009 | 64,924 | ||||||||
Other | 538,100 | 99,943 | 13,140 | ||||||||
Net cash provided by operating activities | 1,045,787 | 484,772 | 424,985 | ||||||||
Cash flows used in investing activities | |||||||||||
Proceeds from sales and maturities of fixed maturity investments trading | 9,490,669 | 8,102,514 | 9,481,742 | ||||||||
Purchases of fixed maturity investments trading | (10,093,532 | ) | (8,282,720 | ) | (9,683,068 | ) | |||||
Proceeds from sales and maturities of fixed maturity investments available for sale | — | 17,692 | 8,688 | ||||||||
Net sales (purchases) of equity investments trading | 115,837 | 184,788 | (147,558 | ) | |||||||
Net sales (purchases) of short term investments | 364,011 | (118,617 | ) | 669,116 | |||||||
Net (purchases) sales of other investments | (19,419 | ) | (68,589 | ) | 15,843 | ||||||
Net purchases of investments in other ventures | — | — | (10,150 | ) | |||||||
Net sales of other assets | — | 400 | 4,500 | ||||||||
Net purchase of Platinum | — | — | (678,152 | ) | |||||||
Net cash used in investing activities | (142,434 | ) | (164,532 | ) | (339,039 | ) | |||||
Cash flows provided by (used in) financing activities | |||||||||||
Dividends paid – RenaissanceRe common shares | (51,370 | ) | (51,583 | ) | (53,967 | ) | |||||
Dividends paid – preference shares | (22,381 | ) | (22,381 | ) | (22,381 | ) | |||||
RenaissanceRe common share repurchases | (188,591 | ) | (309,434 | ) | (259,874 | ) | |||||
Issuance of debt | 295,866 | — | 445,589 | ||||||||
Repayment of debt | (250,000 | ) | — | — | |||||||
Net third party redeemable noncontrolling interest share transactions | 260,475 | (2,990 | ) | (193,032 | ) | ||||||
Taxes paid on withholding shares | (15,139 | ) | (14,943 | ) | (10,248 | ) | |||||
Net cash provided by (used in) financing activities | 28,860 | (401,331 | ) | (93,913 | ) | ||||||
Effect of exchange rate changes on foreign currency cash | 8,222 | (4,637 | ) | (10,732 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | 940,435 | (85,728 | ) | (18,699 | ) | ||||||
Cash and cash equivalents, beginning of year | 421,157 | 506,885 | 525,584 | ||||||||
Cash and cash equivalents, end of year | $ | 1,361,592 | $ | 421,157 | $ | 506,885 | |||||
Supplemental disclosure of cash flow information | |||||||||||
Income taxes paid (refunded) | $ | 343 | $ | (1,118 | ) | $ | 10,300 | ||||
Interest paid | $ | 44,171 | $ | 53,977 | $ | 40,755 |
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• | On March 2, 2015, RenaissanceRe completed its acquisition of Platinum Underwriters Holdings, Ltd. (“Platinum”). As a result of the acquisition, Platinum and its subsidiaries became wholly owned subsidiaries of RenaissanceRe, including Renaissance Reinsurance U.S. Inc., formerly known as Platinum Underwriters Reinsurance, Inc. ("Renaissance Reinsurance U.S."). The Company accounted for the acquisition of Platinum under the acquisition method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic Business Combinations and the Company's consolidated results of operations include those of Platinum from March 2, 2015. Refer to “Note 3. Acquisition of Platinum” for more information. |
• | Renaissance Reinsurance Ltd. (“Renaissance Reinsurance”), a Bermuda-domiciled reinsurance company, is the Company’s principal reinsurance subsidiary and provides property, casualty and specialty reinsurance coverages to insurers and reinsurers on a worldwide basis. Effective October 1, 2016, each of Renaissance Reinsurance Specialty Risks Ltd. (“RenaissanceRe Specialty Risks”) and Platinum Underwriters Bermuda, Ltd. (“Platinum Bermuda”) merged into Renaissance Reinsurance, with Renaissance Reinsurance being the sole surviving entity. |
• | Renaissance Reinsurance U.S. is a reinsurance company domiciled in the state of Maryland that |
• | RenaissanceRe Underwriting Managers U.S. LLC, a specialty reinsurance agency domiciled in the state of 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, which operates subject to U.S. federal income tax, and RenaissanceRe Syndicate 1458 (“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. |
• | The Company also manages property, casualty 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 and all significant intercompany transactions have been eliminated. 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 of RenaissanceRe, acts as exclusive underwriting manager for these joint ventures in return for fee-based income and profit participation. |
• | 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. |
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• | Effective January 1, 2013, the Company formed and launched a managed joint venture, Upsilon RFO Re Ltd., formerly known as Upsilon Reinsurance II Ltd. (“Upsilon RFO”), 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. 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 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 structured to be 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 segregated accounts of Upsilon Fund and own 100% of these shares. Upsilon Fund is an investment company and is considered a VIE. The Company is not considered the primary beneficiary of Upsilon Fund and, as a result, the Company does not consolidate the financial position and results of operations of Upsilon Fund. |
• | Effective November 7, 2016, Fibonacci Reinsurance Ltd. ("Fibonacci Re"), a Bermuda-domiciled SPI, was formed to provide collateralized capacity to Renaissance Reinsurance and its affiliates. Fibonacci Re raised capital from third party investors and the Company, via private placements of participating notes which are listed on the Bermuda Stock Exchange. Fibonacci Re is considered a VIE. The Company is not considered the primary beneficiary of Fibonacci Re and, as a result, the Company does not consolidate the financial position and results of operations of Fibonacci Re. |
• | Effective December 22, 2017, the Company and Reinsurance Group of America, Incorporated closed an initiative (“Langhorne”) to source third party capital to support reinsurers targeting large in-force life and annuity blocks. Langhorne Holdings LLC (“Langhorne Holdings”) is a company that owns and manages certain reinsurance entities within Langhorne. Langhorne Partners LLC (“Langhorne Partners”) is the general partner for Langhorne and the entity which manages the third-party investors investing into Langhorne Holdings. The Company concluded that Langhorne Holdings meets the definition of a VIE. The Company is not the primary beneficiary of Langhorne Holdings and as a result, the Company does not consolidate the financial position or results of operations of Langhorne Holdings. The Company concluded that Langhorne Partners was not a VIE. The Company will account for its investments in Langhorne Holdings and Langhorne Partners under the equity method of accounting, one quarter in arrears. |
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Special Dividend | |||||||||
Number of Platinum common shares and Platinum equity awards canceled in the acquisition of Platinum | 25,320,312 | ||||||||
Special Dividend per outstanding common share of Platinum and Platinum equity award | $ | 10.00 | |||||||
Special Dividend paid to common shareholders of Platinum and holders of Platinum equity awards | $ | 253,203 | |||||||
RenaissanceRe common shares | |||||||||
Common shares issued by RenaissanceRe | 7,434,561 | ||||||||
Common share price of RenaissanceRe as of March 2, 2015 | $ | 102.47 | |||||||
Market value of RenaissanceRe common shares issued by RenaissanceRe to common shareholders of Platinum and holders of Platinum equity awards | 761,819 | ||||||||
Platinum common shares | |||||||||
Fair value of Platinum common shares owned by RenaissanceRe and canceled in connection with the acquisition of Platinum | 12,950 | ||||||||
Cash consideration | |||||||||
Number of Platinum common shares and Platinum equity awards canceled in the acquisition of Platinum | 25,320,312 | ||||||||
Platinum common shares owned by RenaissanceRe and canceled in connection with the acquisition of Platinum | (169,220 | ) | |||||||
Number of Platinum common shares and Platinum equity awards canceled in the acquisition of Platinum excluding those owned by RenaissanceRe and canceled in connection with the acquisition of Platinum | 25,151,092 | ||||||||
Agreed cash price paid to common shareholders of Platinum and holders of Platinum equity awards | $ | 35.96 | |||||||
Cash consideration paid by RenaissanceRe to common shareholders of Platinum and holders of Platinum equity awards | 904,433 | ||||||||
Total purchase price | 1,932,405 | ||||||||
Less: Special Dividend paid by Platinum | (253,203 | ) | |||||||
Net purchase price | $ | 1,679,202 | |||||||
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Shareholders’ equity of Platinum prior to Special Dividend | $ | 1,737,278 | |||||
Cash and cash equivalents (Special Dividend on Platinum common shares and Platinum equity awards) | (253,203 | ) | |||||
Adjusted shareholders’ equity of Platinum at March 2, 2015 | 1,484,075 | ||||||
Adjustments for fair value, by applicable balance sheet caption: | |||||||
Deferred acquisition costs | (44,486 | ) | |||||
Debt | (28,899 | ) | |||||
Reserve for claims and claim expenses | (21,725 | ) | |||||
Other assets - deferred debt issuance costs | (1,046 | ) | |||||
Total adjustments for fair value by applicable balance sheet caption before tax impact | (96,156 | ) | |||||
Other assets - net deferred tax asset related to fair value adjustments | 29,069 | ||||||
Total adjustments for fair value by applicable balance sheet caption | (67,087 | ) | |||||
Adjustments for fair value of the identifiable intangible assets: | |||||||
Identifiable indefinite lived intangible assets (insurance licenses) | 8,400 | ||||||
Identifiable finite lived intangible assets (non-contractual relationships, renewal rights, value of business acquired, trade name, internally developed and used computer software and covenants not to compete) | 75,200 | ||||||
Identifiable intangible assets before tax impact | 83,600 | ||||||
Other liabilities - deferred tax liability on identifiable intangible assets | (13,115 | ) | |||||
Total adjustments for fair value of the identifiable intangible assets | 70,485 | ||||||
Total adjustments for fair value by applicable balance sheet caption and identifiable intangible assets | 3,398 | ||||||
Shareholders’ equity of Platinum at fair value | 1,487,473 | ||||||
Total net purchase price paid by RenaissanceRe | 1,679,202 | ||||||
Excess purchase price over the fair value of net assets acquired assigned to goodwill | $ | 191,729 | |||||
• | Deferred acquisition costs - to eliminate Platinum’s deferred acquisition costs; |
• | Debt - to reflect Platinum’s existing senior notes at fair value using indicative market pricing obtained from third-party service providers; |
• | Reserve for claims and claim expenses - to reflect an increase in net claims and claim expenses due to the addition of a market based risk margin that represented the cost of capital required by a market participant to assume the net claims and claim expenses of Platinum, partially offset by a deduction which represents the discount due to the present value calculation of the unpaid claims and claim expenses based on the expected payout of the net unpaid claims and claim expenses; |
• | Other assets - to eliminate deferred debt issuance costs related to Platinum’s existing senior notes and to reflect net deferred tax assets related to fair value adjustments; |
• | Identifiable indefinite lived and finite lived intangible assets - to establish the fair value of identifiable intangible assets related to the acquisition of Platinum described in detail below; and |
• | Other liabilities - to reflect the deferred tax liability on identifiable intangible assets. |
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Amount | Economic Useful Life | ||||||
Key non-contractual relationships | $ | 30,400 | 10 years | ||||
Value of business acquired | 20,200 | 2 years | |||||
Renewal rights | 15,800 | 15 years | |||||
Insurance licenses | 8,400 | Indefinite | |||||
Internally developed and used computer software | 3,500 | 2 years | |||||
Other non-contractual relationships | 2,300 | 3 years | |||||
Non-compete agreements | 1,900 | 2.5 years | |||||
Trade name | 1,100 | 6 months | |||||
Identifiable intangible assets, before amortization, at March 2, 2015 | 83,600 | ||||||
Amortization (from March 2, 2015 through December 31, 2017) | (39,914 | ) | |||||
Net identifiable intangible assets at December 31, 2017 related to the acquisition of Platinum | $ | 43,686 | |||||
• | Key non-contractual relationships - these relationships included Platinum’s top four brokers (Aon plc, Marsh & McLennan Companies, Inc., Willis Group Holdings plc. and Jardine Lloyd Thompson Group plc.) and consideration was given to the expectation of the renewal of these relationships and the associated expenses; |
• | Value of business acquired (“VOBA”) - the expected future losses and expenses associated with the policies that were in-force as of the closing date of the transaction were estimated and compared to the future premium remaining expected to be earned. The difference between the risk-adjusted future loss and expenses, discounted to present value and the unearned premium reserve, was estimated to be the VOBA; |
• | Renewal rights - the value of policy renewal rights taking into consideration written premium on assumed retention ratios and the insurance cash flows and the associated equity cash flows from these renewal policies over the expected life of the renewals; |
• | Insurance licenses - the value of insurance licenses acquired providing the ability to write reinsurance in all 50 states of the U.S. and the District of Columbia; |
• | Internally developed and used computer software - represents the value of internally developed and used computer software to be utilized by the Company; |
• | Other non-contractual relationships - these relationships consisted of Platinum’s brokers with the exception of those previously listed above as key non-contractual relationships and consideration was given to the expectation of the renewal of these relationships and the associated expenses; |
• | Non-compete agreements - represent non-compete agreements with key employees of Platinum; and |
• | Trade name - represents the value of the Platinum brand acquired. |
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Year ended December 31, | 2015 | ||||
Total revenues | $ | 1,593,735 | |||
Net income available to RenaissanceRe common shareholders | 423,768 | ||||
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Goodwill and other intangible assets | |||||||||||||
Goodwill | Other intangible assets | Total | |||||||||||
Balance as of December 31, 2015 | |||||||||||||
Gross amount | $ | 199,889 | $ | 96,599 | $ | 296,488 | |||||||
Accumulated impairment losses and amortization | (2,299 | ) | (29,035 | ) | (31,334 | ) | |||||||
197,590 | 67,564 | 265,154 | |||||||||||
Amortization | — | (13,968 | ) | (13,968 | ) | ||||||||
Balance as of December 31, 2016 | |||||||||||||
Gross amount | 199,889 | 96,599 | 296,488 | ||||||||||
Accumulated impairment losses and amortization | (2,299 | ) | (43,003 | ) | (45,302 | ) | |||||||
197,590 | 53,596 | 251,186 | |||||||||||
Amortization | — | (8,041 | ) | (8,041 | ) | ||||||||
Balance as of December 31, 2017 | |||||||||||||
Gross amount | 199,889 | 96,599 | 296,488 | ||||||||||
Accumulated impairment losses and amortization | (2,299 | ) | (51,044 | ) | (53,343 | ) | |||||||
$ | 197,590 | $ | 45,555 | $ | 243,145 | ||||||||
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Goodwill and other intangible assets included in investments in other ventures, under equity method | |||||||||||||
Goodwill | Other intangible assets | Total | |||||||||||
Balance as of December 31, 2015 | |||||||||||||
Gross amount | $ | 12,318 | $ | 51,796 | $ | 64,114 | |||||||
Accumulated impairment losses and amortization | (4,500 | ) | (36,460 | ) | (40,960 | ) | |||||||
7,818 | 15,336 | 23,154 | |||||||||||
Amortization | — | (3,474 | ) | (3,474 | ) | ||||||||
Balance as of December 31, 2016 | |||||||||||||
Gross amount | 12,318 | 51,796 | 64,114 | ||||||||||
Accumulated impairment losses and amortization | (4,500 | ) | (39,934 | ) | (44,434 | ) | |||||||
7,818 | 11,862 | 19,680 | |||||||||||
Amortization | — | (2,946 | ) | (2,946 | ) | ||||||||
Balance as of December 31, 2017 | |||||||||||||
Gross amount | 12,318 | 51,796 | 64,114 | ||||||||||
Accumulated impairment losses and amortization | (4,500 | ) | (42,880 | ) | (47,380 | ) | |||||||
$ | 7,818 | $ | 8,916 | $ | 16,734 | ||||||||
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Other intangible assets | |||||||||||||
At December 31, 2017 | Gross carrying value | Accumulated amortization and impairment losses | Total | ||||||||||
Customer relationships and customer lists | $ | 95,458 | $ | (51,633 | ) | $ | 43,825 | ||||||
Value of business acquired | 20,200 | (20,200 | ) | — | |||||||||
Software | 12,230 | (12,230 | ) | — | |||||||||
Licenses | 10,267 | — | 10,267 | ||||||||||
Patents and intellectual property | 4,500 | (4,500 | ) | — | |||||||||
Covenants not-to-compete | 4,030 | (4,030 | ) | — | |||||||||
Trademarks and trade names | 1,710 | (1,331 | ) | 379 | |||||||||
$ | 148,395 | $ | (93,924 | ) | $ | 54,471 | |||||||
Other intangible assets | |||||||||||||
At December 31, 2016 | Gross carrying value | Accumulated amortization and impairment losses | Total | ||||||||||
Customer relationships and customer lists | $ | 95,458 | $ | (42,142 | ) | $ | 53,316 | ||||||
Value of business acquired | 20,200 | (19,527 | ) | 673 | |||||||||
Software | 12,230 | (11,938 | ) | 292 | |||||||||
Licenses | 10,267 | — | 10,267 | ||||||||||
Patents and intellectual property | 4,500 | (4,500 | ) | — | |||||||||
Covenants not-to-compete | 4,030 | (3,523 | ) | 507 | |||||||||
Trademarks and trade names | 1,710 | (1,307 | ) | 403 | |||||||||
$ | 148,395 | $ | (82,937 | ) | $ | 65,458 | |||||||
Other intangibles | Other intangible assets included in investments in other ventures, under equity method | Total | |||||||||||
2018 | $ | 5,727 | $ | 2,596 | $ | 8,323 | |||||||
2019 | 5,446 | 2,427 | 7,873 | ||||||||||
2020 | 5,237 | 1,564 | 6,801 | ||||||||||
2021 | 4,910 | 702 | 5,612 | ||||||||||
2022 | 4,522 | 702 | 5,224 | ||||||||||
2023 and thereafter | 9,446 | 925 | 10,371 | ||||||||||
Total remaining amortization expense | 35,288 | 8,916 | 44,204 | ||||||||||
Indefinite lived | 10,267 | — | 10,267 | ||||||||||
Total | $ | 45,555 | $ | 8,916 | $ | 54,471 | |||||||
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December 31, 2017 | December 31, 2016 | ||||||||
U.S. treasuries | $ | 3,168,763 | $ | 2,617,894 | |||||
Agencies | 47,646 | 90,972 | |||||||
Municipal | 509,802 | 519,069 | |||||||
Non-U.S. government (Sovereign debt) | 287,660 | 333,224 | |||||||
Non-U.S. government-backed corporate | 163,651 | 133,300 | |||||||
Corporate | 2,063,459 | 1,877,243 | |||||||
Agency mortgage-backed | 500,456 | 462,493 | |||||||
Non-agency mortgage-backed | 300,331 | 258,944 | |||||||
Commercial mortgage-backed | 202,062 | 409,747 | |||||||
Asset-backed | 182,725 | 188,358 | |||||||
Total fixed maturity investments trading | $ | 7,426,555 | $ | 6,891,244 | |||||
At December 31, 2017 | Amortized Cost | Fair Value | |||||||
Due in less than one year | $ | 547,468 | $ | 546,255 | |||||
Due after one through five years | 4,551,757 | 4,521,930 | |||||||
Due after five through ten years | 997,163 | 1,007,656 | |||||||
Due after ten years | 163,188 | 165,140 | |||||||
Mortgage-backed | 993,005 | 1,002,849 | |||||||
Asset-backed | 182,289 | 182,725 | |||||||
Total | $ | 7,434,870 | $ | 7,426,555 | |||||
December 31, 2017 | December 31, 2016 | ||||||||
Financials | $ | 253,543 | $ | 275,065 | |||||
Communications and technology | 49,526 | 36,770 | |||||||
Industrial, utilities and energy | 34,325 | 30,303 | |||||||
Consumer | 24,779 | 20,501 | |||||||
Healthcare | 21,364 | 17,245 | |||||||
Basic materials | 4,717 | 3,429 | |||||||
Total | $ | 388,254 | $ | 383,313 | |||||
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
Fixed maturity investments | $ | 179,624 | $ | 160,661 | $ | 134,800 | |||||||
Short term investments | 11,082 | 5,127 | 1,227 | ||||||||||
Equity investments | 3,628 | 4,235 | 8,346 | ||||||||||
Other investments | |||||||||||||
Private equity investments | 33,999 | 6,155 | 9,455 | ||||||||||
Other | 8,067 | 20,181 | 12,472 | ||||||||||
Cash and cash equivalents | 1,196 | 788 | 467 | ||||||||||
237,596 | 197,147 | 166,767 | |||||||||||
Investment expenses | (15,387 | ) | (15,421 | ) | (14,200 | ) | |||||||
Net investment income | $ | 222,209 | $ | 181,726 | $ | 152,567 | |||||||
Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
Gross realized gains | $ | 49,121 | $ | 72,739 | $ | 50,488 | |||||||
Gross realized losses | (38,832 | ) | (38,315 | ) | (53,630 | ) | |||||||
Net realized gains (losses) on fixed maturity investments | 10,289 | 34,424 | (3,142 | ) | |||||||||
Net unrealized gains (losses) on fixed maturity investments trading | 8,479 | 26,954 | (64,908 | ) | |||||||||
Net realized and unrealized (losses) gains on investments-related derivatives | (2,490 | ) | (15,414 | ) | 5,443 | ||||||||
Net realized gains on equity investments trading | 80,027 | 14,190 | 16,348 | ||||||||||
Net unrealized gains (losses) on equity investments trading | 39,517 | 81,174 | (22,659 | ) | |||||||||
Net realized and unrealized gains (losses) on investments | $ | 135,822 | $ | 141,328 | $ | (68,918 | ) | ||||||
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At December 31, | 2017 | 2016 | |||||||
Catastrophe bonds | $ | 380,475 | $ | 335,209 | |||||
Private equity partnerships | 196,220 | 191,061 | |||||||
Senior secured bank loan funds | 17,574 | 22,040 | |||||||
Hedge funds | 524 | 1,495 | |||||||
Total other investments | $ | 594,793 | $ | 549,805 | |||||
2017 | 2016 | ||||||||||||||||||||||
At December 31, | Investment | Ownership % | Carrying Value | Investment | Ownership % | Carrying Value | |||||||||||||||||
THIG | $ | 50,000 | 25.0 | % | $ | 20,856 | $ | 50,000 | 25.0 | % | $ | 19,286 | |||||||||||
Tower Hill | 10,000 | 33.3 | % | 14,917 | 10,000 | 32.3 | % | 21,590 | |||||||||||||||
Tower Hill Re | 4,250 | 25.0 | % | — | 4,250 | 25.0 | % | 2,903 | |||||||||||||||
Tower Hill Signature | 500 | 25.0 | % | 6,394 | 500 | 25.0 | % | 9,085 | |||||||||||||||
Total Tower Hill Companies | 64,750 | 42,167 | 64,750 | 52,864 | |||||||||||||||||||
Top Layer Re | 65,375 | 50.0 | % | 50,211 | 65,375 | 50.0 | % | 60,360 | |||||||||||||||
Other | 13,650 | 40.4 | % | 9,596 | 23,923 | 41.8 | % | 11,003 | |||||||||||||||
Total investments in other ventures, under equity method | $ | 143,775 | $ | 101,974 | $ | 154,048 | $ | 124,227 | |||||||||||||||
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
Top Layer Re | $ | 9,851 | $ | (8,576 | ) | $ | 8,026 | ||||||
Tower Hill Companies | (1,647 | ) | 10,379 | 13,116 | |||||||||
Other | (174 | ) | (840 | ) | (661 | ) | |||||||
Total equity in earnings of other ventures | $ | 8,030 | $ | 963 | $ | 20,481 | |||||||
• | 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. |
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At December 31, 2017 | 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 | $ | 3,168,763 | $ | 3,168,763 | $ | — | $ | — | |||||||||
Agencies | 47,646 | — | 47,646 | — | |||||||||||||
Municipal | 509,802 | — | 509,802 | — | |||||||||||||
Non-U.S. government (Sovereign debt) | 287,660 | — | 287,660 | — | |||||||||||||
Non-U.S. government-backed corporate | 163,651 | — | 163,651 | — | |||||||||||||
Corporate | 2,063,459 | — | 2,063,459 | — | |||||||||||||
Agency mortgage-backed | 500,456 | — | 500,456 | — | |||||||||||||
Non-agency mortgage-backed | 300,331 | — | 300,331 | — | |||||||||||||
Commercial mortgage-backed | 202,062 | — | 202,062 | — | |||||||||||||
Asset-backed | 182,725 | — | 182,725 | — | |||||||||||||
Total fixed maturity investments | 7,426,555 | 3,168,763 | 4,257,792 | — | |||||||||||||
Short term investments | 991,863 | — | 991,863 | — | |||||||||||||
Equity investments trading | 388,254 | 388,254 | — | — | |||||||||||||
Other investments | |||||||||||||||||
Catastrophe bonds | 380,475 | — | 380,475 | — | |||||||||||||
Private equity partnerships (1) | 196,220 | — | — | — | |||||||||||||
Senior secured bank loan funds (1) | 17,574 | — | — | — | |||||||||||||
Hedge funds (1) | 524 | — | — | — | |||||||||||||
Total other investments | 594,793 | — | 380,475 | — | |||||||||||||
Other assets and (liabilities) | |||||||||||||||||
Assumed and ceded (re)insurance contracts (2) | (2,952 | ) | — | — | (2,952 | ) | |||||||||||
Derivatives (3) | 4,636 | (45 | ) | 4,681 | — | ||||||||||||
Other | (11,002 | ) | — | (11,002 | ) | — | |||||||||||
Total other assets and (liabilities) | (9,318 | ) | (45 | ) | (6,321 | ) | (2,952 | ) | |||||||||
$ | 9,392,147 | $ | 3,556,972 | $ | 5,623,809 | $ | (2,952 | ) | |||||||||
(1) | Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet. |
(2) | Included in assumed and ceded (re)insurance contracts at December 31, 2017 was $2.5 million and $5.5 million of other assets and other liabilities, respectively. |
(3) | See “Note 19. Derivative Instruments” for additional information related to the fair value, by type of contract, of derivatives entered into by the Company. |
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At December 31, 2016 | 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 | $ | 2,617,894 | $ | 2,617,894 | $ | — | $ | — | |||||||||
Agencies | 90,972 | — | 90,972 | — | |||||||||||||
Municipal | 519,069 | — | 519,069 | — | |||||||||||||
Non-U.S. government (Sovereign debt) | 333,224 | — | 333,224 | — | |||||||||||||
Non-U.S. government-backed corporate | 133,300 | — | 133,300 | — | |||||||||||||
Corporate | 1,877,243 | — | 1,877,243 | — | |||||||||||||
Agency mortgage-backed | 462,493 | — | 462,493 | — | |||||||||||||
Non-agency mortgage-backed | 258,944 | — | 258,944 | — | |||||||||||||
Commercial mortgage-backed | 409,747 | — | 409,747 | — | |||||||||||||
Asset-backed | 188,358 | — | 188,358 | — | |||||||||||||
Total fixed maturity investments | 6,891,244 | 2,617,894 | 4,273,350 | — | |||||||||||||
Short term investments | 1,368,379 | — | 1,368,379 | — | |||||||||||||
Equity investments trading | 383,313 | 383,313 | — | — | |||||||||||||
Other investments | |||||||||||||||||
Catastrophe bonds | 335,209 | — | 335,209 | — | |||||||||||||
Private equity partnerships (1) | 191,061 | — | — | — | |||||||||||||
Senior secured bank loan fund (1) | 22,040 | — | — | — | |||||||||||||
Hedge funds (1) | 1,495 | — | — | — | |||||||||||||
Total other investments | 549,805 | — | 335,209 | — | |||||||||||||
Other assets and (liabilities) | |||||||||||||||||
Assumed and ceded (re)insurance contracts (2) | (13,004 | ) | — | — | (13,004 | ) | |||||||||||
Derivatives (3) | (8,922 | ) | (646 | ) | (8,276 | ) | — | ||||||||||
Other | (13,105 | ) | — | (13,105 | ) | — | |||||||||||
Total other assets and (liabilities) | (35,031 | ) | (646 | ) | (21,381 | ) | (13,004 | ) | |||||||||
$ | 9,157,710 | $ | 3,000,561 | $ | 5,955,557 | $ | (13,004 | ) | |||||||||
(1) | Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet. |
(2) | Included in assumed and ceded (re)insurance contracts at December 31, 2016 was $4.4 million and $17.4 million of other assets and other liabilities, respectively. |
(2) | See “Note 19. Derivative Instruments” for additional information related to the fair value, by type of contract, of derivatives entered into by the Company. |
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December 31, 2017 | Fair Value (Level 3) | Valuation Technique | Unobservable (U) and Observable (O) Inputs | Low | High | Weighted Average or Actual | |||||||||||||||
Other assets and (liabilities) | |||||||||||||||||||||
Assumed and ceded (re)insurance contracts | $ | 850 | Internal valuation model | Bond price (U) | $ | 101.53 | $ | 111.56 | $ | 107.15 | |||||||||||
Liquidity discount (U) | n/a | n/a | 1.3 | % | |||||||||||||||||
Assumed and ceded (re)insurance contracts | (3,802 | ) | Internal valuation model | Net undiscounted cash flows (U) | n/a | n/a | $ | (4,626 | ) | ||||||||||||
Expected loss ratio (U) | n/a | n/a | 22.1 | % | |||||||||||||||||
Net acquisition expense ratio (O) | n/a | n/a | 13.5 | % | |||||||||||||||||
Contract period (O) | 2.0 years | 4.7 years | 4.1 years | ||||||||||||||||||
Discount rate (U) | n/a | n/a | 2.2 | % | |||||||||||||||||
Total other assets and (liabilities) | $ | (2,952 | ) | ||||||||||||||||||
Other assets and (liabilities) | |||||
Balance - January 1, 2017 | $ | (13,004 | ) | ||
Total realized and unrealized gains | |||||
Included in other income | 3,761 | ||||
Purchases | 354 | ||||
Settlements | 5,937 | ||||
Balance - December 31, 2017 | $ | (2,952 | ) | ||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | |||||||||||||
Fixed maturity investments trading | Other assets and (liabilities) | Total | |||||||||||
Balance - January 1, 2016 | $ | 7,618 | $ | (5,899 | ) | $ | 1,719 | ||||||
Total realized and unrealized (losses) gains | |||||||||||||
Included in net investment income | (118 | ) | — | (118 | ) | ||||||||
Included in other income | — | 6,339 | 6,339 | ||||||||||
Purchases | — | (13,444 | ) | (13,444 | ) | ||||||||
Settlements | (7,500 | ) | — | (7,500 | ) | ||||||||
Balance - December 31, 2016 | $ | — | $ | (13,004 | ) | $ | (13,004 | ) | |||||
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2017 | 2016 | ||||||||
Other investments | $ | 594,793 | $ | 549,805 | |||||
Other assets | $ | 2,542 | $ | 4,379 | |||||
Other liabilities | $ | 5,494 | $ | 17,383 | |||||
At December 31, 2017 | Fair Value | Unfunded Commitments | Redemption Frequency | Redemption Notice Period (Minimum Days) | Redemption Notice Period (Maximum Days) | ||||||||||
Private equity partnerships | $ | 196,220 | $ | 356,525 | See below | See below | See below | ||||||||
Senior secured bank loan funds | 17,574 | 23,958 | See below | See below | See below | ||||||||||
Hedge funds | 524 | — | See below | See below | See below | ||||||||||
Total other investments measured using net asset valuations | $ | 214,318 | $ | 380,483 | |||||||||||
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
Premiums written | |||||||||||||
Direct | $ | 290,730 | $ | 208,282 | $ | 130,681 | |||||||
Assumed | 2,506,810 | 2,166,294 | 1,880,629 | ||||||||||
Ceded | (926,215 | ) | (839,264 | ) | (595,127 | ) | |||||||
Net premiums written | $ | 1,871,325 | $ | 1,535,312 | $ | 1,416,183 | |||||||
Premiums earned | |||||||||||||
Direct | $ | 244,285 | $ | 157,112 | $ | 98,182 | |||||||
Assumed | 2,307,219 | 1,874,993 | 1,769,088 | ||||||||||
Ceded | (833,929 | ) | (628,675 | ) | (466,719 | ) | |||||||
Net premiums earned | $ | 1,717,575 | $ | 1,403,430 | $ | 1,400,551 | |||||||
Claims and claim expenses | |||||||||||||
Gross claims and claim expenses incurred | $ | 3,420,388 | $ | 710,651 | $ | 544,972 | |||||||
Claims and claim expenses recovered | (1,558,960 | ) | (179,820 | ) | (96,734 | ) | |||||||
Net claims and claim expenses incurred | $ | 1,861,428 | $ | 530,831 | $ | 448,238 | |||||||
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At December 31, 2017 | Case Reserves | Additional Case Reserves | IBNR | Total | |||||||||||||
Property | $ | 696,285 | $ | 896,522 | $ | 893,583 | $ | 2,486,390 | |||||||||
Casualty and Specialty | 689,962 | 124,923 | 1,760,607 | 2,575,492 | |||||||||||||
Other | 6,605 | — | 11,921 | 18,526 | |||||||||||||
Total | $ | 1,392,852 | $ | 1,021,445 | $ | 2,666,111 | $ | 5,080,408 | |||||||||
At December 31, 2016 | |||||||||||||||||
Property | $ | 214,954 | $ | 186,308 | $ | 226,512 | $ | 627,774 | |||||||||
Casualty and Specialty | 591,705 | 105,419 | 1,498,002 | 2,195,126 | |||||||||||||
Other | 6,935 | — | 18,459 | 25,394 | |||||||||||||
Total | $ | 813,594 | $ | 291,727 | $ | 1,742,973 | $ | 2,848,294 | |||||||||
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
Net reserves as of January 1 | $ | 2,568,730 | $ | 2,632,519 | $ | 1,345,816 | |||||||
Net incurred related to: | |||||||||||||
Current year | 1,902,424 | 694,957 | 610,685 | ||||||||||
Prior years | (40,996 | ) | (164,126 | ) | (162,447 | ) | |||||||
Total net incurred | 1,861,428 | 530,831 | 448,238 | ||||||||||
Net paid related to: | |||||||||||||
Current year | 450,527 | 83,015 | 95,747 | ||||||||||
Prior years | 524,298 | 506,279 | 425,565 | ||||||||||
Total net paid | 974,825 | 589,294 | 521,312 | ||||||||||
Amounts acquired (1) | — | — | 1,394,117 | ||||||||||
Foreign exchange | 38,445 | (5,326 | ) | (34,340 | ) | ||||||||
Net reserves as of December 31 | 3,493,778 | 2,568,730 | 2,632,519 | ||||||||||
Reinsurance recoverable as of December 31 | 1,586,630 | 279,564 | 134,526 | ||||||||||
Gross reserves as of December 31 | $ | 5,080,408 | $ | 2,848,294 | $ | 2,767,045 | |||||||
(1) | Represents the fair value of Platinum's reserve for claims and claim expenses and reinsurance recoverable acquired at March 2, 2015. |
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Incurred claims and claim expenses, net of reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||
For the year ended December 31, | At December 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||
Accident Year | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | IBNR and ACR | |||||||||||||||||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||||||||||||||||||||
2008 | $ | 1,459,436 | $ | 1,421,816 | $ | 1,401,967 | $ | 1,383,378 | $ | 1,310,946 | $ | 1,288,248 | $ | 1,266,331 | $ | 1,256,183 | $ | 1,239,405 | $ | 1,241,116 | $ | 44,189 | ||||||||||||||||||||||||
2009 | — | 711,042 | 645,608 | 628,671 | 589,136 | 563,850 | 542,653 | 533,597 | 528,693 | 531,523 | 23,021 | |||||||||||||||||||||||||||||||||||
2010 | — | — | 1,016,922 | 975,846 | 927,941 | 897,148 | 896,219 | 886,997 | 895,201 | 894,050 | 76,527 | |||||||||||||||||||||||||||||||||||
2011 | — | — | — | 1,670,722 | 1,604,273 | 1,523,332 | 1,441,370 | 1,413,256 | 1,375,169 | 1,361,430 | 89,094 | |||||||||||||||||||||||||||||||||||
2012 | — | — | — | — | 867,675 | 773,367 | 710,123 | 683,784 | 655,602 | 658,180 | 94,086 | |||||||||||||||||||||||||||||||||||
2013 | — | — | — | — | — | 625,081 | 564,791 | 518,266 | 477,294 | 450,984 | 86,709 | |||||||||||||||||||||||||||||||||||
2014 | — | — | — | — | — | — | 664,603 | 617,617 | 605,648 | 586,559 | 83,121 | |||||||||||||||||||||||||||||||||||
2015 | — | — | — | — | — | — | — | 642,977 | 631,559 | 634,948 | 240,331 | |||||||||||||||||||||||||||||||||||
2016 | — | — | — | — | — | — | — | — | 684,960 | 691,472 | 358,843 | |||||||||||||||||||||||||||||||||||
2017 | — | — | — | — | — | — | — | — | — | 1,901,309 | 1,334,903 | |||||||||||||||||||||||||||||||||||
Total | $ | 8,951,571 | $ | 2,430,824 | ||||||||||||||||||||||||||||||||||||||||||
Cumulative paid claims and claim expenses, net of reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||
For the year ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | ||||||||||||||||||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||||||||||||||||||||
2008 | $ | 275,963 | $ | 593,570 | $ | 800,202 | $ | 940,911 | $ | 1,016,658 | $ | 1,064,412 | $ | 1,095,431 | $ | 1,123,287 | $ | 1,145,149 | $ | 1,164,647 | ||||||||||||||||||||||||||
2009 | — | 96,574 | 271,031 | 323,183 | 367,996 | 400,991 | 440,320 | 462,407 | 468,759 | 476,298 | ||||||||||||||||||||||||||||||||||||
2010 | — | — | 131,436 | 325,377 | 444,618 | 516,321 | 572,829 | 644,975 | 737,478 | 764,337 | ||||||||||||||||||||||||||||||||||||
2011 | — | — | — | 259,261 | 550,668 | 909,176 | 1,067,386 | 1,158,233 | 1,202,703 | 1,230,285 | ||||||||||||||||||||||||||||||||||||
2012 | — | — | — | — | 166,907 | 267,650 | 358,789 | 418,697 | 462,253 | 527,153 | ||||||||||||||||||||||||||||||||||||
2013 | — | — | — | — | — | 87,837 | 181,738 | 246,582 | 292,542 | 330,184 | ||||||||||||||||||||||||||||||||||||
2014 | — | — | — | — | — | — | 111,451 | 201,873 | 270,380 | 319,540 | ||||||||||||||||||||||||||||||||||||
2015 | — | — | — | — | — | — | — | 96,141 | 195,140 | 289,630 | ||||||||||||||||||||||||||||||||||||
2016 | — | — | — | — | — | — | — | — | 79,943 | 219,416 | ||||||||||||||||||||||||||||||||||||
2017 | — | — | — | — | — | — | — | — | — | 450,886 | ||||||||||||||||||||||||||||||||||||
Total | $ | 5,772,376 | ||||||||||||||||||||||||||||||||||||||||||||
Outstanding liabilities from accident year 2007 and prior, net of reinsurance | 282,782 | |||||||||||||||||||||||||||||||||||||||||||||
Claims and claim expenses, net of reinsurance, from the Company's former Bermuda-based insurance operations | 673 | |||||||||||||||||||||||||||||||||||||||||||||
Adjustment for unallocated claim expenses | 23,694 | |||||||||||||||||||||||||||||||||||||||||||||
Unamortized fair value adjustments recorded in connection with the acquisition of Platinum | 7,434 | |||||||||||||||||||||||||||||||||||||||||||||
Liability for claims and claim expenses, net of reinsurance | $ | 3,493,778 | ||||||||||||||||||||||||||||||||||||||||||||
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Incurred claims and claim expenses, net of reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||
For the year ended December 31, | At December 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||
Accident Year | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | IBNR and ACR | |||||||||||||||||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||||||||||||||||||||
2008 | $ | 852,500 | $ | 754,840 | $ | 754,393 | $ | 750,523 | $ | 716,537 | $ | 701,522 | $ | 692,225 | $ | 684,834 | $ | 683,757 | $ | 683,374 | $ | 130 | ||||||||||||||||||||||||
2009 | — | 224,928 | 169,191 | 149,830 | 143,232 | 138,899 | 139,676 | 138,948 | 139,167 | 138,732 | 238 | |||||||||||||||||||||||||||||||||||
2010 | — | — | 632,510 | 584,878 | 550,608 | 555,419 | 576,079 | 580,084 | 590,023 | 592,679 | 43,479 | |||||||||||||||||||||||||||||||||||
2011 | — | — | — | 1,286,890 | 1,221,811 | 1,170,141 | 1,118,651 | 1,098,124 | 1,066,200 | 1,063,035 | 41,910 | |||||||||||||||||||||||||||||||||||
2012 | — | — | — | — | 438,548 | 345,168 | 312,216 | 294,400 | 276,236 | 265,058 | 24,297 | |||||||||||||||||||||||||||||||||||
2013 | — | — | — | — | — | 230,355 | 200,105 | 177,533 | 155,384 | 143,823 | 5,264 | |||||||||||||||||||||||||||||||||||
2014 | — | — | — | — | — | — | 184,076 | 155,335 | 147,610 | 143,419 | 8,018 | |||||||||||||||||||||||||||||||||||
2015 | — | — | — | — | — | — | — | 227,093 | 196,094 | 177,296 | 32,432 | |||||||||||||||||||||||||||||||||||
2016 | — | — | — | — | — | — | — | — | 254,595 | 256,759 | 91,193 | |||||||||||||||||||||||||||||||||||
2017 | — | — | — | — | — | — | — | — | — | 1,345,006 | 857,673 | |||||||||||||||||||||||||||||||||||
Total | $ | 4,809,181 | $ | 1,104,634 | ||||||||||||||||||||||||||||||||||||||||||
Cumulative paid claims and claim expenses, net of reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||
For the year ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | ||||||||||||||||||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||||||||||||||||||||
2008 | $ | 247,123 | $ | 392,800 | $ | 541,278 | $ | 631,204 | $ | 664,217 | $ | 678,266 | $ | 681,988 | $ | 683,821 | $ | 685,229 | $ | 685,874 | ||||||||||||||||||||||||||
2009 | — | 56,244 | 102,402 | 117,045 | 125,021 | 131,136 | 135,756 | 136,806 | 137,783 | 137,775 | ||||||||||||||||||||||||||||||||||||
2010 | — | — | 96,570 | 226,433 | 308,198 | 352,293 | 389,954 | 417,446 | 496,324 | 506,297 | ||||||||||||||||||||||||||||||||||||
2011 | — | — | — | 211,151 | 437,082 | 763,384 | 891,928 | 951,725 | 978,298 | 992,272 | ||||||||||||||||||||||||||||||||||||
2012 | — | — | — | — | 100,067 | 145,326 | 189,555 | 209,059 | 219,069 | 231,272 | ||||||||||||||||||||||||||||||||||||
2013 | — | — | — | — | — | 49,805 | 94,776 | 120,117 | 131,293 | 135,499 | ||||||||||||||||||||||||||||||||||||
2014 | — | — | — | — | — | — | 55,365 | 96,667 | 119,473 | 124,533 | ||||||||||||||||||||||||||||||||||||
2015 | — | — | — | — | — | — | — | 62,358 | 109,386 | 128,434 | ||||||||||||||||||||||||||||||||||||
2016 | — | — | — | — | — | — | — | — | 47,716 | 119,977 | ||||||||||||||||||||||||||||||||||||
2017 | — | — | — | — | — | — | — | — | — | 412,477 | ||||||||||||||||||||||||||||||||||||
Total | $ | 3,474,410 | ||||||||||||||||||||||||||||||||||||||||||||
Outstanding liabilities from accident year 2007 and prior, net of reinsurance | 4,211 | |||||||||||||||||||||||||||||||||||||||||||||
Adjustment for unallocated claim expenses | 3,352 | |||||||||||||||||||||||||||||||||||||||||||||
Unamortized fair value adjustments recorded in connection with the acquisition of Platinum | 956 | |||||||||||||||||||||||||||||||||||||||||||||
Liability for claims and claim expenses, net of reinsurance | $ | 1,343,290 | ||||||||||||||||||||||||||||||||||||||||||||
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Incurred claims and claim expenses, net of reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||
For the year ended December 31, | At December 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||
Accident Year | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | IBNR and ACR | |||||||||||||||||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||||||||||||||||||||
2008 | $ | 606,936 | $ | 666,976 | $ | 647,574 | $ | 632,855 | $ | 594,409 | $ | 586,726 | $ | 574,106 | $ | 571,349 | $ | 555,648 | $ | 557,742 | $ | 44,059 | ||||||||||||||||||||||||
2009 | — | 486,114 | 476,417 | 478,841 | 445,904 | 424,951 | 402,977 | 394,649 | 389,526 | 392,791 | 22,783 | |||||||||||||||||||||||||||||||||||
2010 | — | — | 384,412 | 390,968 | 377,333 | 341,729 | 320,140 | 306,913 | 305,178 | 301,371 | 33,048 | |||||||||||||||||||||||||||||||||||
2011 | — | — | — | 383,832 | 382,462 | 353,191 | 322,719 | 315,132 | 308,969 | 298,395 | 47,184 | |||||||||||||||||||||||||||||||||||
2012 | — | — | — | — | 429,127 | 428,199 | 397,907 | 389,384 | 379,366 | 393,122 | 69,789 | |||||||||||||||||||||||||||||||||||
2013 | — | — | — | — | — | 394,726 | 364,686 | 340,733 | 321,910 | 307,161 | 81,445 | |||||||||||||||||||||||||||||||||||
2014 | — | — | — | — | — | — | 480,527 | 462,282 | 458,038 | 443,140 | 75,103 | |||||||||||||||||||||||||||||||||||
2015 | — | — | — | — | — | — | — | 415,884 | 435,465 | 457,652 | 207,899 | |||||||||||||||||||||||||||||||||||
2016 | — | — | — | — | — | — | — | — | 430,365 | 434,713 | 267,650 | |||||||||||||||||||||||||||||||||||
2017 | — | — | — | — | — | — | — | — | — | 556,303 | 477,230 | |||||||||||||||||||||||||||||||||||
Total | $ | 4,142,390 | $ | 1,326,190 | ||||||||||||||||||||||||||||||||||||||||||
Cumulative paid claims and claim expenses, net of reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||
For the year ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | ||||||||||||||||||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||||||||||||||||||||
2008 | $ | 28,840 | $ | 200,770 | $ | 258,924 | $ | 309,707 | $ | 352,441 | $ | 386,146 | $ | 413,443 | $ | 439,466 | $ | 459,920 | $ | 478,773 | ||||||||||||||||||||||||||
2009 | — | 40,330 | 168,629 | 206,138 | 242,975 | 269,855 | 304,564 | 325,601 | 330,976 | 338,523 | ||||||||||||||||||||||||||||||||||||
2010 | — | — | 34,866 | 98,944 | 136,420 | 164,028 | 182,875 | 227,529 | 241,154 | 258,040 | ||||||||||||||||||||||||||||||||||||
2011 | — | — | — | 48,110 | 113,586 | 145,792 | 175,458 | 206,508 | 224,405 | 238,013 | ||||||||||||||||||||||||||||||||||||
2012 | — | — | — | — | 66,840 | 122,324 | 169,234 | 209,638 | 243,184 | 295,881 | ||||||||||||||||||||||||||||||||||||
2013 | — | — | — | — | — | 38,032 | 86,962 | 126,465 | 161,249 | 194,685 | ||||||||||||||||||||||||||||||||||||
2014 | — | — | — | — | — | — | 56,086 | 105,206 | 150,907 | 195,007 | ||||||||||||||||||||||||||||||||||||
2015 | — | — | — | — | — | — | — | 33,783 | 85,754 | 161,196 | ||||||||||||||||||||||||||||||||||||
2016 | — | — | — | — | — | — | — | — | 32,227 | 99,439 | ||||||||||||||||||||||||||||||||||||
2017 | — | — | — | — | — | — | — | — | — | 38,409 | ||||||||||||||||||||||||||||||||||||
Total | $ | 2,297,966 | ||||||||||||||||||||||||||||||||||||||||||||
Outstanding liabilities from accident year 2007 and prior, net of reinsurance | 278,571 | |||||||||||||||||||||||||||||||||||||||||||||
Adjustment for unallocated claim expenses | 20,342 | |||||||||||||||||||||||||||||||||||||||||||||
Unamortized fair value adjustments recorded in connection with the acquisition of Platinum | 6,478 | |||||||||||||||||||||||||||||||||||||||||||||
Liability for claims and claim expenses, net of reinsurance | $ | 2,149,815 | ||||||||||||||||||||||||||||||||||||||||||||
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(Favorable) adverse development | (Favorable) adverse development | (Favorable) adverse development | |||||||||||
Property | $ | (45,596 | ) | $ | (104,876 | ) | $ | (93,786 | ) | ||||
Casualty and Specialty | 6,183 | (58,140 | ) | (67,791 | ) | ||||||||
Other | (1,583 | ) | (1,110 | ) | (870 | ) | |||||||
Total favorable development of prior accident years net claims and claim expenses | $ | (40,996 | ) | $ | (164,126 | ) | $ | (162,447 | ) | ||||
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Year ended December 31, | 2017 | ||||
(Favorable) adverse development | |||||
Catastrophe net claims and claim expenses | |||||
Large catastrophe events | |||||
Storm Sandy (2012) | $ | (4,395 | ) | ||
April and May U.S. Tornadoes (2011) | (4,177 | ) | |||
Thailand Floods (2011) | (2,513 | ) | |||
Hurricane Matthew (2016) | (1,239 | ) | |||
New Zealand Earthquake (2011) | 5,807 | ||||
New Zealand Earthquake (2010) | 4,061 | ||||
Other | (5,184 | ) | |||
Total large catastrophe events | (7,640 | ) | |||
Small catastrophe events | |||||
2016 PCS Events (2016) | (18,550 | ) | |||
Tianjin Explosion (2015) | (8,002 | ) | |||
Fort McMurray Wildfire (2016) | (6,364 | ) | |||
Other | (5,882 | ) | |||
Total small catastrophe events | (38,798 | ) | |||
Total catastrophe net claims and claim expenses | (46,438 | ) | |||
Actuarial assumption changes | 842 | ||||
Total net favorable development of prior accident years net claims and claim expenses | $ | (45,596 | ) | ||
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Year ended December 31, | 2016 | ||||
(Favorable) adverse development | |||||
Catastrophe net claims and claim expenses | |||||
Large catastrophe events | |||||
Thailand Floods (2011) | $ | (15,131 | ) | ||
Storm Sandy (2012) | (10,849 | ) | |||
Tohoku Earthquake and Tsunami (2011) | (7,314 | ) | |||
New Zealand Earthquake (2011) | 1,987 | ||||
New Zealand Earthquake (2010) | 6,904 | ||||
Other | (9,523 | ) | |||
Total large catastrophe events | (33,926 | ) | |||
Small catastrophe events | |||||
U.S. PCS 13/14 Wind and Thunderstorm (2013) | (6,286 | ) | |||
Tianjin Explosion (2015) | (5,686 | ) | |||
U.S. PCS 15 Wind and Thunderstorm (2013) | (5,648 | ) | |||
U.S. PCS 81 Wind and Thunderstorm (2015) | (5,098 | ) | |||
Other | (48,232 | ) | |||
Total small catastrophe events | (70,950 | ) | |||
Total catastrophe net claims and claim expenses | (104,876 | ) | |||
Total net favorable development of prior accident years net claims and claim expenses | $ | (104,876 | ) | ||
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Year ended December 31, | 2015 | ||||
(Favorable) adverse development | |||||
Catastrophe net claims and claim expenses | |||||
Large catastrophe events | |||||
Thailand Floods (2011) | $ | (18,823 | ) | ||
Tohoku Earthquake and Tsunami (2011) | (5,313 | ) | |||
New Zealand Earthquake (2011) | 22,754 | ||||
2011 International Events | (1,382 | ) | |||
Storm Sandy (2012) | (12,503 | ) | |||
April and May U.S. Tornadoes (2011) | (10,190 | ) | |||
New Zealand Earthquake (2010) | 1,095 | ||||
Other | (11,300 | ) | |||
Total large catastrophe events | (34,280 | ) | |||
Small catastrophe events | |||||
Other | (58,005 | ) | |||
Total small catastrophe events | (58,005 | ) | |||
Total catastrophe net claims and claim expenses | (92,285 | ) | |||
Actuarial assumption changes | (1,501 | ) | |||
Total net favorable development of prior accident years net claims and claim expenses | $ | (93,786 | ) | ||
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(Favorable) adverse development | (Favorable) adverse development | (Favorable) adverse development | |||||||||||
Actuarial methods - actual reported claims less than expected claims | $ | (24,836 | ) | $ | (52,601 | ) | $ | (72,551 | ) | ||||
Ogden Rate change | 33,481 | — | — | ||||||||||
Actuarial assumption changes | (2,462 | ) | (5,539 | ) | 4,760 | ||||||||
Total favorable development of prior accident years net claims and claim expenses | $ | 6,183 | $ | (58,140 | ) | $ | (67,791 | ) | |||||
Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(Favorable) adverse development | (Favorable) adverse development | (Favorable) adverse development | |||||||||||
Other | $ | (1,583 | ) | $ | (1,110 | ) | $ | (870 | ) | ||||
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At December 31, 2017 | |||||
Net reserve for claims and claim expenses | |||||
Property | $ | 1,343,290 | |||
Casualty and Specialty | 2,149,815 | ||||
Other | 673 | ||||
Total net reserve for claims and claim expenses | 3,493,778 | ||||
Reinsurance recoverable | |||||
Property | $ | 1,143,100 | |||
Casualty and Specialty | 425,677 | ||||
Other | 17,853 | ||||
Total reinsurance recoverable | 1,586,630 | ||||
Total gross reserve for claims and claim expenses | $ | 5,080,408 | |||
Average annual percentage payout of incurred claims by age, net of reinsurance (number of years) | |||||||||||||||||||||||||||||||
At December 31, 2017 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | |||||||||||||||||||||
Property | 27.8 | % | 23.0 | % | 21.3 | % | 10.1 | % | 5.2 | % | 3.1 | % | 3.9 | % | 0.9 | % | 0.2 | % | 0.1 | % | |||||||||||
Casualty and Specialty | 10.1 | % | 19.6 | % | 11.8 | % | 9.8 | % | 8.3 | % | 9.5 | % | 4.9 | % | 3.9 | % | 2.9 | % | 3.4 | % | |||||||||||
• | Claims below the insured layer of a contract are excluded; |
• | If an insured loss event results in claims associated with a number of layers of a contract, the Company would consider this to be a single claim; and |
• | If an insured loss event results in claims associated with a number of the Company's operating subsidiaries, the Company considers each operating subsidiary to have a reported claim. |
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At December 31, 2017 | ||||||
Cumulative number of reported claims | ||||||
Accident Year | Property | Casualty and Specialty | ||||
2008 | 1,355 | 1,395 | ||||
2009 | 743 | 1,112 | ||||
2010 | 784 | 1,052 | ||||
2011 | 1,184 | 1,367 | ||||
2012 | 679 | 1,354 | ||||
2013 | 628 | 1,409 | ||||
2014 | 549 | 1,771 | ||||
2015 | 591 | 1,569 | ||||
2016 | 818 | 1,114 | ||||
2017 | 1,173 | 313 | ||||
December 31, 2017 | December 31, 2016 | ||||||||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | ||||||||||||||
3.450% Senior Notes due 2027 | $ | 294,654 | $ | 295,303 | $ | — | $ | — | |||||||||
3.700% Senior Notes due 2025 | 302,781 | 297,318 | 291,750 | 296,948 | |||||||||||||
5.75% Senior Notes due 2020 | 263,750 | 249,272 | 270,875 | 248,941 | |||||||||||||
Series B 7.50% Senior Notes due 2017 | — | — | 257,500 | 255,352 | |||||||||||||
4.750% Senior Notes due 2025 (DaVinciRe) (1) | 157,050 | 147,730 | 144,675 | 147,422 | |||||||||||||
$ | 1,018,235 | $ | 989,623 | $ | 964,800 | $ | 948,663 | ||||||||||
(1) | RenaissanceRe owns a noncontrolling economic interest in its joint venture DaVinciRe. Because RenaissanceRe controls a majority of DaVinciRe’s outstanding voting rights, the consolidated financial statements of DaVinciRe are included in the consolidated financial statements of RenaissanceRe. However, RenaissanceRe does not guarantee or provide credit support for DaVinciRe and RenaissanceRe’s financial exposure to DaVinciRe is limited to its investment in DaVinciRe’s shares and counterparty credit risk arising from reinsurance transactions. |
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At December 31, 2017 | Issued or Drawn | ||||
RenaissanceRe Revolving Credit Facility | $ | — | |||
Uncommitted Standby Letter of Credit Facility with Wells Fargo | 106,794 | ||||
Uncommitted Standby Letter of Credit Facility with NAB | 3,785 | ||||
Bilateral Letter of Credit Facility with Citibank Europe | 197,278 | ||||
Renaissance Reinsurance FAL Facility | 180,000 | ||||
Total credit facilities in U.S. dollars | $ | 487,857 | |||
Specialty Risks FAL Facility | £ | 10,000 | |||
Total credit facilities in British Pounds | £ | 10,000 | |||
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2018 | $ | — | |||
2019 | — | ||||
2020 | 250,000 | ||||
2021 | — | ||||
2022 | — | ||||
After 2022 | 750,000 | ||||
Unamortized discount and debt issuance expenses | (10,377 | ) | |||
$ | 989,623 | ||||
December 31, 2017 | December 31, 2016 | ||||||||
Redeemable noncontrolling interest - DaVinciRe | $ | 1,011,659 | $ | 994,458 | |||||
Redeemable noncontrolling interest - Medici | 284,847 | 181,136 | |||||||
Redeemable noncontrolling interests | $ | 1,296,506 | $ | 1,175,594 | |||||
2017 | 2016 | 2015 | |||||||||||
Redeemable noncontrolling interest - DaVinciRe | $ | (134,860 | ) | $ | 118,748 | $ | 106,399 | ||||||
Redeemable noncontrolling interest - Medici | 2,578 | 8,338 | 4,651 | ||||||||||
Net income attributable to redeemable noncontrolling interests | $ | (132,282 | ) | $ | 127,086 | $ | 111,050 | ||||||
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2017 | 2016 | ||||||||
Balance – January 1 | $ | 994,458 | $ | 930,955 | |||||
Redemption of shares from redeemable noncontrolling interest | (80,058 | ) | (98,285 | ) | |||||
Sale of shares to redeemable noncontrolling interest | 232,119 | 43,040 | |||||||
Net (loss) income attributable to redeemable noncontrolling interest | (134,860 | ) | 118,748 | ||||||
Balance – December 31 | $ | 1,011,659 | $ | 994,458 | |||||
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2017 | 2016 | ||||||||
Balance – January 1 | $ | 181,136 | $ | 115,009 | |||||
Redemption of shares from redeemable noncontrolling interest | (48,049 | ) | (21,729 | ) | |||||
Sale of shares to redeemable noncontrolling interest | 149,182 | 79,518 | |||||||
Net income attributable to redeemable noncontrolling interest | 2,578 | 8,338 | |||||||
Balance – December 31 | $ | 284,847 | $ | 181,136 | |||||
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Year ended December 31, | 2017 | 2016 | 2015 | |||||||
(thousands of shares) | ||||||||||
Issued and outstanding shares – January 1 | 41,187 | 43,701 | 38,442 | |||||||
Issuance of shares | — | — | 7,435 | |||||||
Repurchase of shares | (1,322 | ) | (2,741 | ) | (2,473 | ) | ||||
Exercise of options and issuance of restricted stock awards | 159 | 227 | 297 | |||||||
Issued and outstanding shares – December 31 | 40,024 | 41,187 | 43,701 | |||||||
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
(thousands of shares) | |||||||||||||
Numerator: | |||||||||||||
Net (loss) income (attributable) available to RenaissanceRe common shareholders | $ | (244,770 | ) | $ | 480,581 | $ | 408,811 | ||||||
Amount allocated to participating common shareholders (1) | (457 | ) | (5,666 | ) | (4,721 | ) | |||||||
Net (loss) income allocated to RenaissanceRe common shareholders | $ | (245,227 | ) | $ | 474,915 | $ | 404,090 | ||||||
Denominator: | |||||||||||||
Denominator for basic (loss) income per RenaissanceRe common share - weighted average common shares | 39,854 | 41,314 | 43,157 | ||||||||||
Per common share equivalents of employee stock options and performance shares | — | 245 | 369 | ||||||||||
Denominator for diluted (loss) income per RenaissanceRe common share - adjusted weighted average common shares and assumed conversions | 39,854 | 41,559 | 43,526 | ||||||||||
Net (loss) income (attributable) available to RenaissanceRe common shareholders per common share – basic | $ | (6.15 | ) | $ | 11.50 | $ | 9.36 | ||||||
Net (loss) income (attributable) available to RenaissanceRe common shareholders per common share – diluted | $ | (6.15 | ) | $ | 11.43 | $ | 9.28 | ||||||
(1) | Represents earnings attributable to holders of unvested restricted shares issued pursuant to the Company’s 2001 Stock Incentive Plan, 2010 Performance-Based Equity Incentive Plan, 2016 Long-Term Incentive Plan and to the Company’s non-employee directors. |
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
Domestic | |||||||||||||
Bermuda | $ | (262,827 | ) | $ | 652,758 | $ | 511,114 | ||||||
Foreign | |||||||||||||
U.K. | (41,656 | ) | (24,278 | ) | (22,712 | ) | |||||||
Singapore | (12,421 | ) | 2,180 | (4,737 | ) | ||||||||
U.S. | (11,897 | ) | (1,236 | ) | 12,523 | ||||||||
Ireland | 617 | 964 | 188 | ||||||||||
(Loss) income before taxes | $ | (328,184 | ) | $ | 630,388 | $ | 496,376 | ||||||
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Year ended December 31, 2017 | Current | Deferred | Total | ||||||||||
Total income tax (expense) benefit | $ | (844 | ) | $ | (25,643 | ) | $ | (26,487 | ) | ||||
Year ended December 31, 2016 | |||||||||||||
Total income tax (expense) benefit | $ | (2,090 | ) | $ | 1,750 | $ | (340 | ) | |||||
Year ended December 31, 2015 | |||||||||||||
Total income tax (expense) benefit | $ | (3,471 | ) | $ | 49,337 | $ | 45,866 | ||||||
Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
Expected income tax benefit | $ | 14,216 | $ | 4,856 | $ | 1,011 | |||||||
Tax exempt income | 3,794 | 4,487 | 4,939 | ||||||||||
Non-taxable foreign exchange gains (losses) | 2,574 | (1,126 | ) | (1,897 | ) | ||||||||
Transaction costs | — | (131 | ) | 3,654 | |||||||||
Withholding tax | (216 | ) | (2,578 | ) | (3,036 | ) | |||||||
Change in valuation allowance | (11,718 | ) | (924 | ) | 43,808 | ||||||||
Effect of change in tax rate | (38,083 | ) | — | — | |||||||||
Other | 2,946 | (4,924 | ) | (2,613 | ) | ||||||||
Income tax (expense) benefit | $ | (26,487 | ) | $ | (340 | ) | $ | 45,866 | |||||
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At December 31, | 2017 | 2016 | |||||||
Deferred tax assets | |||||||||
Tax loss and credit carryforwards | $ | 62,643 | $ | 51,620 | |||||
Reserve for claims and claim expenses | 13,992 | 26,265 | |||||||
Deferred interest expense | 11,320 | 18,408 | |||||||
Unearned premiums | 9,436 | 7,496 | |||||||
Deferred underwriting results | 3,407 | — | |||||||
Investments | — | 3,269 | |||||||
Accrued expenses | 2,641 | 9,386 | |||||||
103,439 | 116,444 | ||||||||
Deferred tax liabilities | |||||||||
Deferred acquisition expenses | (12,343 | ) | (7,485 | ) | |||||
Amortization and depreciation | (3,340 | ) | (7,097 | ) | |||||
Investments | (1,047 | ) | — | ||||||
Deferred underwriting results | — | (2,964 | ) | ||||||
(16,730 | ) | (17,546 | ) | ||||||
Net deferred tax asset before valuation allowance | 86,709 | 98,898 | |||||||
Valuation allowance | (30,016 | ) | (18,776 | ) | |||||
Net deferred tax asset | $ | 56,693 | $ | 80,122 | |||||
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Year ended December 31, 2017 | Property | Casualty and Specialty | Other | Total | |||||||||||||
Gross premiums written | $ | 1,440,437 | $ | 1,357,110 | $ | (7 | ) | $ | 2,797,540 | ||||||||
Net premiums written | $ | 978,014 | $ | 893,307 | $ | 4 | $ | 1,871,325 | |||||||||
Net premiums earned | $ | 931,070 | $ | 786,501 | $ | 4 | $ | 1,717,575 | |||||||||
Net claims and claim expenses incurred | 1,297,985 | 565,026 | (1,583 | ) | 1,861,428 | ||||||||||||
Acquisition expenses | 113,816 | 233,077 | (1 | ) | 346,892 | ||||||||||||
Operational expenses | 94,194 | 66,548 | 36 | 160,778 | |||||||||||||
Underwriting (loss) income | $ | (574,925 | ) | $ | (78,150 | ) | $ | 1,552 | (651,523 | ) | |||||||
Net investment income | 222,209 | 222,209 | |||||||||||||||
Net foreign exchange gains | 10,628 | 10,628 | |||||||||||||||
Equity in losses of other ventures | 8,030 | 8,030 | |||||||||||||||
Other income | 9,415 | 9,415 | |||||||||||||||
Net realized and unrealized gains on investments | 135,822 | 135,822 | |||||||||||||||
Corporate expenses | (18,572 | ) | (18,572 | ) | |||||||||||||
Interest expense | (44,193 | ) | (44,193 | ) | |||||||||||||
Loss before taxes and redeemable noncontrolling interests | (328,184 | ) | |||||||||||||||
Income tax benefit | (26,487 | ) | (26,487 | ) | |||||||||||||
Net loss attributable to redeemable noncontrolling interests | 132,282 | 132,282 | |||||||||||||||
Dividends on preference shares | (22,381 | ) | (22,381 | ) | |||||||||||||
Net loss attributable to RenaissanceRe common shareholders | $ | (244,770 | ) | ||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 1,343,581 | $ | 558,843 | $ | — | $ | 1,902,424 | |||||||||
Net claims and claim expenses incurred – prior accident years | (45,596 | ) | 6,183 | (1,583 | ) | (40,996 | ) | ||||||||||
Net claims and claim expenses incurred – total | $ | 1,297,985 | $ | 565,026 | $ | (1,583 | ) | $ | 1,861,428 | ||||||||
Net claims and claim expense ratio – current accident year | 144.3 | % | 71.1 | % | 110.8 | % | |||||||||||
Net claims and claim expense ratio – prior accident years | (4.9 | )% | 0.7 | % | (2.4 | )% | |||||||||||
Net claims and claim expense ratio – calendar year | 139.4 | % | 71.8 | % | 108.4 | % | |||||||||||
Underwriting expense ratio | 22.3 | % | 38.1 | % | 29.5 | % | |||||||||||
Combined ratio | 161.7 | % | 109.9 | % | 137.9 | % | |||||||||||
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Year ended December 31, 2016 | Property | Casualty and Specialty | Other | Total | |||||||||||||
Gross premiums written | $ | 1,111,263 | $ | 1,263,313 | $ | — | $ | 2,374,576 | |||||||||
Net premiums written | $ | 725,321 | $ | 809,848 | $ | 143 | $ | 1,535,312 | |||||||||
Net premiums earned | $ | 720,951 | $ | 682,337 | $ | 142 | $ | 1,403,430 | |||||||||
Net claims and claim expenses incurred | 151,545 | 380,396 | (1,110 | ) | 530,831 | ||||||||||||
Acquisition expenses | 97,594 | 191,729 | — | 289,323 | |||||||||||||
Operational expenses | 108,642 | 88,984 | 123 | 197,749 | |||||||||||||
Underwriting income | $ | 363,170 | $ | 21,228 | $ | 1,129 | 385,527 | ||||||||||
Net investment income | 181,726 | 181,726 | |||||||||||||||
Net foreign exchange losses | (13,788 | ) | (13,788 | ) | |||||||||||||
Equity in earnings of other ventures | 963 | 963 | |||||||||||||||
Other income | 14,178 | 14,178 | |||||||||||||||
Net realized and unrealized gains on investments | 141,328 | 141,328 | |||||||||||||||
Corporate expenses | (37,402 | ) | (37,402 | ) | |||||||||||||
Interest expense | (42,144 | ) | (42,144 | ) | |||||||||||||
Income before taxes and noncontrolling interests | 630,388 | ||||||||||||||||
Income tax expense | (340 | ) | (340 | ) | |||||||||||||
Net income attributable to noncontrolling interests | (127,086 | ) | (127,086 | ) | |||||||||||||
Dividends on preference shares | (22,381 | ) | (22,381 | ) | |||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 480,581 | |||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 256,421 | $ | 438,536 | $ | — | $ | 694,957 | |||||||||
Net claims and claim expenses incurred – prior accident years | (104,876 | ) | (58,140 | ) | (1,110 | ) | (164,126 | ) | |||||||||
Net claims and claim expenses incurred – total | $ | 151,545 | $ | 380,396 | $ | (1,110 | ) | $ | 530,831 | ||||||||
Net claims and claim expense ratio – current accident year | 35.6 | % | 64.3 | % | 49.5 | % | |||||||||||
Net claims and claim expense ratio – prior accident years | (14.6 | )% | (8.6 | )% | (11.7 | )% | |||||||||||
Net claims and claim expense ratio – calendar year | 21.0 | % | 55.7 | % | 37.8 | % | |||||||||||
Underwriting expense ratio | 28.6 | % | 41.2 | % | 34.7 | % | |||||||||||
Combined ratio | 49.6 | % | 96.9 | % | 72.5 | % | |||||||||||
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Year ended December 31, 2015 | Property | Casualty and Specialty | Other | Total | |||||||||||||
Gross premiums written | $ | 1,072,159 | $ | 939,241 | $ | (90 | ) | $ | 2,011,310 | ||||||||
Net premiums written | $ | 726,145 | $ | 690,086 | $ | (48 | ) | $ | 1,416,183 | ||||||||
Net premiums earned | $ | 805,985 | $ | 594,614 | $ | (48 | ) | $ | 1,400,551 | ||||||||
Net claims and claim expenses incurred | 128,290 | 320,818 | (870 | ) | 448,238 | ||||||||||||
Acquisition expenses | 94,249 | 144,095 | 248 | 238,592 | |||||||||||||
Operational expenses | 118,666 | 100,180 | 266 | 219,112 | |||||||||||||
Underwriting income | $ | 464,780 | $ | 29,521 | $ | 308 | 494,609 | ||||||||||
Net investment income | 152,567 | 152,567 | |||||||||||||||
Net foreign exchange losses | (3,051 | ) | (3,051 | ) | |||||||||||||
Equity in earnings of other ventures | 20,481 | 20,481 | |||||||||||||||
Other income | 13,472 | 13,472 | |||||||||||||||
Net realized and unrealized losses on investments | (68,918 | ) | (68,918 | ) | |||||||||||||
Corporate expenses | (76,514 | ) | (76,514 | ) | |||||||||||||
Interest expense | (36,270 | ) | (36,270 | ) | |||||||||||||
Income before taxes and redeemable noncontrolling interests | 496,376 | ||||||||||||||||
Income tax benefit | 45,866 | 45,866 | |||||||||||||||
Net income attributable to redeemable noncontrolling interests | (111,050 | ) | (111,050 | ) | |||||||||||||
Dividends on preference shares | (22,381 | ) | (22,381 | ) | |||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 408,811 | |||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 222,076 | $ | 388,609 | $ | — | $ | 610,685 | |||||||||
Net claims and claim expenses incurred – prior accident years | (93,786 | ) | (67,791 | ) | (870 | ) | (162,447 | ) | |||||||||
Net claims and claim expenses incurred – total | $ | 128,290 | $ | 320,818 | $ | (870 | ) | $ | 448,238 | ||||||||
Net claims and claim expense ratio – current accident year | 27.6 | % | 65.4 | % | 43.6 | % | |||||||||||
Net claims and claim expense ratio – prior accident years | (11.7 | )% | (11.4 | )% | (11.6 | )% | |||||||||||
Net claims and claim expense ratio – calendar year | 15.9 | % | 54.0 | % | 32.0 | % | |||||||||||
Underwriting expense ratio | 26.4 | % | 41.0 | % | 32.7 | % | |||||||||||
Combined ratio | 42.3 | % | 95.0 | % | 64.7 | % | |||||||||||
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Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||
Property | |||||||||||||
U.S. and Caribbean | $ | 954,269 | $ | 743,226 | $ | 671,887 | |||||||
Worldwide | 305,915 | 210,168 | 234,801 | ||||||||||
Japan | 49,821 | 44,536 | 32,830 | ||||||||||
Europe | 49,486 | 37,611 | 32,973 | ||||||||||
Worldwide (excluding U.S.) (1) | 48,182 | 55,043 | 76,370 | ||||||||||
Australia and New Zealand | 14,151 | 13,729 | 15,869 | ||||||||||
Other | 18,613 | 6,950 | 7,429 | ||||||||||
Total Property | 1,440,437 | 1,111,263 | 1,072,159 | ||||||||||
Casualty and Specialty | |||||||||||||
Worldwide | 686,253 | 581,972 | 320,452 | ||||||||||
U.S. and Caribbean | 622,757 | 646,381 | 522,778 | ||||||||||
Europe | 9,752 | 5,541 | 936 | ||||||||||
Worldwide (excluding U.S.) (1) | 10,104 | 13,840 | 87,597 | ||||||||||
Australia and New Zealand | 4,141 | 5,073 | 1,627 | ||||||||||
Other | 24,103 | 10,506 | 5,851 | ||||||||||
Total Casualty and Specialty | 1,357,110 | 1,263,313 | 939,241 | ||||||||||
Other category | (7 | ) | — | (90 | ) | ||||||||
Total gross premiums written | $ | 2,797,540 | $ | 2,374,576 | $ | 2,011,310 | |||||||
(1) | The category “Worldwide (excluding U.S.)” consists of contracts that cover more than one geographic region (other than the U.S.). |
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Performance Shares | |||||
Year ended December 31, | 2017 | 2016 | |||
Expected volatility (1) | 14.3% | 14.3% - 14.7% | |||
Expected term (in years) | n/a | n/a | |||
Expected dividend yield | n/a | n/a | |||
Risk-free interest rate (1) | 0.93% - 1.69% | 0.38% - 1.18% | |||
(1) | The expected volatility and risk-free interest rate applied are specific to each tranche of performance shares. |
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Weighted options outstanding | Weighted average exercise price | Weighted average remaining contractual life | Aggregate intrinsic value | Range of exercise prices | ||||||||||||||
Balance, December 31, 2014 | 767,830 | $ | 48.71 | 2.0 | $ | 37,246 | $37.51 - $59.66 | |||||||||||
Options granted | — | — | — | |||||||||||||||
Options forfeited | — | — | ||||||||||||||||
Options expired | — | — | ||||||||||||||||
Options exercised | (359,618 | ) | 45.09 | $ | 21,205 | |||||||||||||
Balance, December 31, 2015 | 408,212 | $ | 51.90 | 1.6 | $ | 25,020 | $42.66 - $59.66 | |||||||||||
Options granted | — | — | — | |||||||||||||||
Options forfeited | — | — | ||||||||||||||||
Options expired | — | — | ||||||||||||||||
Options exercised | (201,417 | ) | 50.59 | $ | 14,806 | |||||||||||||
Balance, December 31, 2016 | 206,795 | $ | 53.17 | 0.9 | $ | 17,174 | $50.71 - $59.66 | |||||||||||
Options granted | — | — | — | |||||||||||||||
Options forfeited | — | — | ||||||||||||||||
Options expired | — | — | ||||||||||||||||
Options exercised | (174,794 | ) | $ | 53.04 | $ | 15,945 | ||||||||||||
Balance, December 31, 2017 | 32,001 | $ | 53.86 | 0.2 | $ | 2,295 | $ | 53.86 | ||||||||||
Total options exercisable at December 31, 2017 | 32,001 | $ | 53.86 | 0.2 | $ | 2,295 | $ | 53.86 | ||||||||||
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Number of shares | ||||
Nonvested at December 31, 2014 | 338,323 | |||
Awards granted | 160,817 | |||
Awards vested | (144,440 | ) | ||
Awards forfeited | (28,622 | ) | ||
Nonvested at December 31, 2015 | 326,078 | |||
Awards granted | 135,119 | |||
Awards vested | (133,278 | ) | ||
Awards forfeited | (19,575 | ) | ||
Nonvested at December 31, 2016 | 308,344 | |||
Awards granted | 98,067 | |||
Awards vested | (122,088 | ) | ||
Awards forfeited | (21,993 | ) | ||
Nonvested at December 31, 2017 | 262,330 | |||
Number of shares (1) | Weighted average grant-date fair value | |||||||
Nonvested at December 31, 2014 | 248,572 | $ | 39.62 | |||||
Awards granted | 103,024 | $ | 44.98 | |||||
Awards vested | — | |||||||
Awards forfeited | (121,325 | ) | ||||||
Nonvested at December 31, 2015 | 230,271 | $ | 41.40 | |||||
Awards granted | 77,045 | $ | 48.31 | |||||
Awards vested | (58,032 | ) | $ | 38.30 | ||||
Awards forfeited | (37,903 | ) | ||||||
Nonvested at December 31, 2016 | 211,381 | $ | 44.63 | |||||
Awards granted | 64,947 | $ | 65.27 | |||||
Awards vested | (62,499 | ) | $ | 43.51 | ||||
Awards forfeited | (46,156 | ) | ||||||
Nonvested at December 31, 2017 | 167,673 | $ | 53.11 | |||||
(1) | For performance shares, the number of shares is stated at the maximum number that can be attained if the performance conditions are fully met. Forfeitures represent shares forfeited due to vesting below the maximum attainable as a result of the Company not fully meeting the performance conditions. |
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Employee restricted stock awards | Non-employee director restricted stock awards | Total restricted stock awards | ||||||||||||||||||||
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, 2014 | 451,722 | $ | 87.29 | 30,055 | $ | 88.41 | 481,777 | $ | 87.36 | |||||||||||||
Awards granted | 195,337 | 102.17 | 14,575 | 102.90 | 209,912 | 102.22 | ||||||||||||||||
Awards vested | (168,019 | ) | 82.75 | (17,744 | ) | 86.37 | (185,763 | ) | 83.10 | |||||||||||||
Awards forfeited | — | — | — | — | — | — | ||||||||||||||||
Nonvested at December 31, 2015 | 479,040 | $ | 94.95 | 26,886 | $ | 97.61 | 505,926 | $ | 95.09 | |||||||||||||
Awards granted | 179,003 | 112.41 | 14,727 | 114.71 | 193,730 | 112.59 | ||||||||||||||||
Awards vested | (255,873 | ) | 93.98 | (16,068 | ) | 96.83 | (271,941 | ) | 94.15 | |||||||||||||
Awards forfeited | — | — | — | — | — | — | ||||||||||||||||
Nonvested at December 31, 2016 | 402,170 | $ | 103.34 | 25,545 | $ | 107.95 | 427,715 | $ | 103.61 | |||||||||||||
Awards granted | 116,345 | 148.66 | 12,193 | 150.05 | 128,538 | 148.79 | ||||||||||||||||
Awards vested | (185,478 | ) | 100.17 | (17,612 | ) | 110.66 | (203,090 | ) | 101.08 | |||||||||||||
Awards forfeited | — | — | — | — | — | — | ||||||||||||||||
Nonvested at December 31, 2017 | 333,037 | $ | 120.93 | 20,126 | $ | 131.09 | 353,163 | $ | 121.51 | |||||||||||||
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Bermuda (1) | U.S. | U.K. (2) (3) | |||||||||||||||||||||||
At December 31, | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
Statutory capital and surplus | $ | 4,155,440 | $ | 4,212,374 | $ | 523,384 | $ | 523,340 | $ | 527,325 | $ | 491,213 | |||||||||||||
Required statutory capital and surplus | 824,545 | 788,437 | 306,375 | 221,023 | 527,325 | 491,213 | |||||||||||||||||||
Unrestricted net assets | 790,177 | 867,624 | 24,109 | 25,375 | — | — | |||||||||||||||||||
(1) | The Company's Bermuda-domiciled insurance subsidiaries’ capital and surplus is based on the relevant insurer’s statutory financial statements and required statutory capital and surplus is based on the MSM. |
(2) | With respect to statutory capital and surplus 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. |
(3) | Syndicate 1458 is capitalized by its FAL, with the related assets not held on its balance sheet. As such, unrestricted 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. |
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Statutory Net (Loss) Income | |||||||||||||
Bermuda | U.S. | U.K. | |||||||||||
Year ended December 31, 2017 | $ | (334,142 | ) | $ | (3,627 | ) | $ | (57,050 | ) | ||||
Year ended December 31, 2016 | 625,371 | 43,292 | 28,007 | ||||||||||
Year ended December 31, 2015 | 355,132 | 58,752 | 1,627 | ||||||||||
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• | 10% of the insurer's statutory policyholders' surplus (as determined under statutory accounting principles) as of December 31 of the prior year; or |
• | the insurer's net investment income excluding realized capital gains (as determined under statutory accounting principles) for the twelve-month period ending on December 31 of the prior year and pro rata distributions of any class of the insurer's securities, plus any amounts of net investment income (subject to the foregoing exclusions) in the three calendar years prior to the preceding year which have not been distributed. |
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Derivative Assets | |||||||||||||||||||||||
At December 31, 2017 | 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 | $ | 684 | 524 | $ | 160 | Other assets | $ | — | $ | 160 | |||||||||||||
Interest rate swaps | 424 | — | 424 | Other assets | — | 424 | |||||||||||||||||
Foreign currency forward contracts (1) | 3,865 | 358 | 3,507 | Other assets | — | 3,507 | |||||||||||||||||
Foreign currency forward contracts (2) | 39 | 11 | 28 | Other assets | — | 28 | |||||||||||||||||
Credit default swaps | 1,518 | — | 1,518 | Other assets | — | 1,518 | |||||||||||||||||
Total | $ | 6,530 | $ | 893 | $ | 5,637 | $ | — | $ | 5,637 | |||||||||||||
Derivative Liabilities | |||||||||||||||||||||||
At December 31, 2017 | 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 | $ | 729 | 524 | $ | 205 | Other liabilities | $ | 205 | $ | — | |||||||||||||
Foreign currency forward contracts (1) | 670 | — | 670 | Other liabilities | — | 670 | |||||||||||||||||
Foreign currency forward contracts (2) | 115 | 11 | 104 | Other liabilities | — | 104 | |||||||||||||||||
Credit default swaps | 22 | — | 22 | Other liabilities | 22 | — | |||||||||||||||||
Total | $ | 1,536 | $ | 535 | $ | 1,001 | $ | 227 | $ | 774 | |||||||||||||
(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. |
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Derivative Assets | |||||||||||||||||||||||
At December 31, 2016 | 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 | $ | 1,384 | 1,235 | $ | 149 | Other assets | $ | — | $ | 149 | |||||||||||||
Foreign currency forward contracts (1) | 774 | — | 774 | Other assets | — | 774 | |||||||||||||||||
Foreign currency forward contracts (2) | 621 | 447 | 174 | Other assets | — | 174 | |||||||||||||||||
Credit default swaps | 1,429 | 23 | 1,406 | Other assets | — | 1,406 | |||||||||||||||||
Total | $ | 4,208 | $ | 1,705 | $ | 2,503 | $ | — | $ | 2,503 | |||||||||||||
Derivative Liabilities | |||||||||||||||||||||||
At December 31, 2016 | 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 | $ | 2,030 | 1,235 | $ | 795 | Other liabilities | $ | 789 | $ | 6 | |||||||||||||
Foreign currency forward contracts (1) | 10,550 | 397 | 10,153 | Other liabilities | — | 10,153 | |||||||||||||||||
Foreign currency forward contracts (2) | 766 | 447 | 319 | Other liabilities | — | 319 | |||||||||||||||||
Credit default swaps | 181 | 23 | 158 | Other liabilities | — | 158 | |||||||||||||||||
Total | $ | 13,527 | $ | 2,102 | $ | 11,425 | $ | 789 | $ | 10,636 | |||||||||||||
(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. |
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�� | |||||||||||||||
Location of gain (loss) recognized on derivatives | Amount of gain (loss) recognized on derivatives | ||||||||||||||
Year ended December 31, | 2017 | 2016 | 2015 | ||||||||||||
Interest rate futures | Net realized and unrealized gains (losses) on investments | $ | (3,252 | ) | $ | (17,379 | ) | $ | 5,573 | ||||||
Interest rate swaps | Net realized and unrealized gains (losses) on investments | 436 | — | — | |||||||||||
Foreign currency forward contracts (1) | Net foreign exchange gains (losses) | 9,628 | (6,937 | ) | (1,943 | ) | |||||||||
Foreign currency forward contracts (2) | Net foreign exchange gains (losses) | (916 | ) | (1,591 | ) | 8,862 | |||||||||
Credit default swaps | Net realized and unrealized gains (losses) on investments | 326 | 1,965 | (313 | ) | ||||||||||
Weather contract | Net realized and unrealized gains (losses) on investments | — | — | 183 | |||||||||||
Total | $ | 6,222 | $ | (23,942 | ) | $ | 12,362 | ||||||||
(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. |
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Minimum lease payments | |||||
2018 | $ | 7,604 | |||
2019 | 6,937 | ||||
2020 | 5,249 | ||||
2021 | 4,925 | ||||
2022 | 4,249 | ||||
After 2022 | 1,841 | ||||
Future minimum lease payments under existing operating leases | $ | 30,805 | |||
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Minimum lease payments | |||||
2018 | $ | 3,150 | |||
2019 | 3,331 | ||||
2020 | 3,336 | ||||
2021 | 3,336 | ||||
2022 | 3,336 | ||||
After 2022 | 15,620 | ||||
Future minimum lease payments under existing capital leases | $ | 32,109 | |||
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Quarter Ended March 31, | Quarter Ended June 30, | Quarter Ended September 30, | Quarter Ended December 31, | ||||||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||||||
Gross premiums written | $ | 922,090 | $ | 862,133 | $ | 827,415 | $ | 759,128 | $ | 640,269 | $ | 430,224 | $ | 407,766 | $ | 323,091 | |||||||||||||||||
Net premiums written | $ | 544,136 | $ | 511,675 | $ | 555,745 | $ | 519,916 | $ | 483,221 | $ | 284,222 | $ | 288,223 | $ | 219,499 | |||||||||||||||||
(Increase) decrease in unearned premiums | (178,091 | ) | (158,069 | ) | (173,480 | ) | (168,514 | ) | 64,571 | 62,299 | 133,250 | 132,402 | |||||||||||||||||||||
Net premiums earned | 366,045 | 353,606 | 382,265 | 351,402 | 547,792 | 346,521 | 421,473 | 351,901 | |||||||||||||||||||||||||
Net investment income | 54,325 | 28,863 | 54,163 | 54,124 | 40,257 | 51,423 | 73,464 | 47,316 | |||||||||||||||||||||||||
Net foreign exchange gains (losses) | 8,165 | (1,692 | ) | 3,109 | (690 | ) | (156 | ) | (5,986 | ) | (490 | ) | (5,420 | ) | |||||||||||||||||||
Equity in (losses) earnings of other ventures | (1,507 | ) | 1,611 | 5,543 | 6,022 | 1,794 | (11,630 | ) | 2,200 | 4,960 | |||||||||||||||||||||||
Other income | 1,665 | 4,079 | 2,392 | 2,654 | 2,996 | 2,268 | 2,362 | 5,177 | |||||||||||||||||||||||||
Net realized and unrealized gains (losses) on investments | 43,373 | 61,653 | 58,113 | 69,772 | 42,052 | 59,870 | (7,716 | ) | (49,967 | ) | |||||||||||||||||||||||
Total revenues | 472,066 | 448,120 | 505,585 | 483,284 | 634,735 | 442,466 | 491,293 | 353,967 | |||||||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||||||||
Net claims and claim expenses incurred | 193,081 | 126,605 | 142,587 | 167,750 | 1,221,696 | 112,575 | 304,064 | 123,901 | |||||||||||||||||||||||||
Acquisition costs | 83,282 | 65,592 | 88,251 | 69,005 | 76,761 | 80,580 | 98,598 | 74,146 | |||||||||||||||||||||||||
Operational expenses | 47,283 | 56,235 | 41,766 | 51,073 | 42,537 | 40,493 | 29,192 | 49,948 | |||||||||||||||||||||||||
Corporate expenses | 5,286 | 8,225 | 4,636 | 5,752 | 4,413 | 11,537 | 4,237 | 11,888 | |||||||||||||||||||||||||
Interest expense | 10,526 | 10,538 | 10,091 | 10,536 | 11,799 | 10,536 | 11,777 | 10,534 | |||||||||||||||||||||||||
Total expenses | 339,458 | 267,195 | 287,331 | 304,116 | 1,357,206 | 255,721 | 447,868 | 270,417 | |||||||||||||||||||||||||
Income (loss) before taxes | 132,608 | 180,925 | 218,254 | 179,168 | (722,471 | ) | 186,745 | 43,425 | 83,550 | ||||||||||||||||||||||||
Income tax (expense) benefit | (334 | ) | (2,744 | ) | (3,904 | ) | (6,612 | ) | 18,977 | 1,316 | (41,226 | ) | 7,700 | ||||||||||||||||||||
Net income (loss) | 132,274 | 178,181 | 214,350 | 172,556 | (703,494 | ) | 188,061 | 2,199 | 91,250 | ||||||||||||||||||||||||
Net (income) loss attributable to redeemable noncontrolling interests | (34,327 | ) | (44,591 | ) | (37,612 | ) | (30,635 | ) | 204,277 | (35,641 | ) | (56 | ) | (16,219 | ) | ||||||||||||||||||
Net income (loss) available (attributable) to RenaissanceRe | 97,947 | 133,590 | 176,738 | 141,921 | (499,217 | ) | 152,420 | 2,143 | 75,031 | ||||||||||||||||||||||||
Dividends on preference shares | (5,595 | ) | (5,595 | ) | (5,596 | ) | (5,596 | ) | (5,595 | ) | (5,595 | ) | (5,595 | ) | (5,595 | ) | |||||||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | $ | 92,352 | $ | 127,995 | $ | 171,142 | $ | 136,325 | $ | (504,812 | ) | $ | 146,825 | $ | (3,452 | ) | $ | 69,436 | |||||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – basic | $ | 2.26 | $ | 2.97 | $ | 4.25 | $ | 3.23 | $ | (12.75 | ) | $ | 3.58 | $ | (0.09 | ) | $ | 1.70 | |||||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – diluted | $ | 2.25 | $ | 2.95 | $ | 4.24 | $ | 3.22 | $ | (12.75 | ) | $ | 3.56 | $ | (0.09 | ) | $ | 1.69 | |||||||||||||||
Average shares outstanding – basic | 40,408 | 42,577 | 39,937 | 41,693 | 39,591 | 40,513 | 39,478 | 40,474 | |||||||||||||||||||||||||
Average shares outstanding – diluted | 40,623 | 42,912 | 40,024 | 41,885 | 39,591 | 40,733 | 39,478 | 40,707 | |||||||||||||||||||||||||
Table of Contents
Condensed Consolidating Balance Sheet at December 31, 2017 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | RenaissanceRe Finance, Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | |||||||||||||||||
Assets | |||||||||||||||||||||||
Total investments | $ | 225,266 | $ | 129,732 | $ | 31,255 | $ | 9,117,186 | $ | — | $ | 9,503,439 | |||||||||||
Cash and cash equivalents | 14,656 | 139 | 1,469 | 1,345,328 | — | 1,361,592 | |||||||||||||||||
Investments in subsidiaries | 4,105,760 | 36,140 | 1,141,733 | — | (5,283,633 | ) | — | ||||||||||||||||
Due from subsidiaries and affiliates | 4,602 | 91,891 | — | — | (96,493 | ) | — | ||||||||||||||||
Premiums receivable | — | — | — | 1,304,622 | — | 1,304,622 | |||||||||||||||||
Prepaid reinsurance premiums | — | — | — | 533,546 | — | 533,546 | |||||||||||||||||
Reinsurance recoverable | — | — | — | 1,586,630 | — | 1,586,630 | |||||||||||||||||
Accrued investment income | 405 | 428 | 82 | 41,320 | — | 42,235 | |||||||||||||||||
Deferred acquisition costs | — | — | — | 426,551 | — | 426,551 | |||||||||||||||||
Receivable for investments sold | 135 | 51 | 8 | 102,951 | — | 103,145 | |||||||||||||||||
Other assets | 433,468 | 21,342 | 430,481 | 76,703 | (840,768 | ) | 121,226 | ||||||||||||||||
Goodwill and other intangible assets | 124,960 | — | — | 118,185 | — | 243,145 | |||||||||||||||||
Total assets | $ | 4,909,252 | $ | 279,723 | $ | 1,605,028 | $ | 14,653,022 | $ | (6,220,894 | ) | $ | 15,226,131 | ||||||||||
Liabilities, Noncontrolling Interests and Shareholders’ Equity | |||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Reserve for claims and claim expenses | $ | — | $ | — | $ | — | $ | 5,080,408 | $ | — | $ | 5,080,408 | |||||||||||
Unearned premiums | — | — | — | 1,477,609 | — | 1,477,609 | |||||||||||||||||
Debt | 417,000 | — | 841,892 | 147,731 | (417,000 | ) | 989,623 | ||||||||||||||||
Amounts due to subsidiaries and affiliates | 82,579 | 54 | 92,794 | — | (175,427 | ) | — | ||||||||||||||||
Reinsurance balances payable | — | — | — | 989,090 | — | 989,090 | |||||||||||||||||
Payable for investments purchased | — | — | — | 208,749 | — | 208,749 | |||||||||||||||||
Other liabilities | 18,298 | 1,053 | 14,117 | 764,432 | (5,129 | ) | 792,771 | ||||||||||||||||
Total liabilities | 517,877 | 1,107 | 948,803 | 8,668,019 | (597,556 | ) | 9,538,250 | ||||||||||||||||
Redeemable noncontrolling interests | — | — | — | 1,296,506 | — | 1,296,506 | |||||||||||||||||
Shareholders’ Equity | |||||||||||||||||||||||
Total shareholders’ equity | 4,391,375 | 278,616 | 656,225 | 4,688,497 | (5,623,338 | ) | 4,391,375 | ||||||||||||||||
Total liabilities, noncontrolling interests and shareholders’ equity | $ | 4,909,252 | $ | 279,723 | $ | 1,605,028 | $ | 14,653,022 | $ | (6,220,894 | ) | $ | 15,226,131 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments. |
Table of Contents
Condensed Consolidating Balance Sheet at December 31, 2016 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Platinum Underwriters Finance, Inc. (Subsidiary Issuer) | RenaissanceRe Finance, Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | ||||||||||||||||||||
Assets | |||||||||||||||||||||||||||
Total investments | $ | 387,274 | $ | 119,163 | $ | 267,556 | $ | 45,027 | $ | 8,497,948 | $ | — | $ | 9,316,968 | |||||||||||||
Cash and cash equivalents | 7,067 | 162 | 6,671 | 9,397 | 397,860 | — | 421,157 | ||||||||||||||||||||
Investments in subsidiaries | 4,074,769 | 34,761 | 843,089 | 1,165,413 | — | (6,118,032 | ) | — | |||||||||||||||||||
Due from subsidiaries and affiliates | 7,413 | 91,892 | — | — | — | (99,305 | ) | — | |||||||||||||||||||
Premiums receivable | — | — | — | — | 987,323 | — | 987,323 | ||||||||||||||||||||
Prepaid reinsurance premiums | — | — | — | — | 441,260 | — | 441,260 | ||||||||||||||||||||
Reinsurance recoverable | — | — | — | — | 279,564 | — | 279,564 | ||||||||||||||||||||
Accrued investment income | 105 | 289 | 551 | 106 | 37,025 | — | 38,076 | ||||||||||||||||||||
Deferred acquisition costs | — | — | — | — | 335,325 | — | 335,325 | ||||||||||||||||||||
Receivable for investments sold | 136 | 2 | 99 | 45 | 105,559 | — | 105,841 | ||||||||||||||||||||
Other assets | 410,757 | 37,204 | 4,689 | 127,572 | 118,098 | (522,938 | ) | 175,382 | |||||||||||||||||||
Goodwill and other intangible assets | 130,407 | — | — | — | 120,779 | — | 251,186 | ||||||||||||||||||||
Total assets | $ | 5,017,928 | $ | 283,473 | $ | 1,122,655 | $ | 1,347,560 | $ | 11,320,741 | $ | (6,740,275 | ) | $ | 12,352,082 | ||||||||||||
Liabilities, Redeemable Noncontrolling Interest and Shareholders’ Equity | |||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||
Reserve for claims and claim expenses | $ | — | $ | — | $ | — | $ | — | $ | 2,848,294 | $ | — | $ | 2,848,294 | |||||||||||||
Unearned premiums | — | — | — | — | 1,231,573 | — | 1,231,573 | ||||||||||||||||||||
Debt | 117,000 | — | 255,352 | 545,889 | 147,422 | (117,000 | ) | 948,663 | |||||||||||||||||||
Amounts due to subsidiaries and affiliates | 14,644 | 42 | 123 | 96,061 | — | (110,870 | ) | — | |||||||||||||||||||
Reinsurance balances payable | — | — | — | — | 673,983 | — | 673,983 | ||||||||||||||||||||
Payable for investments purchased | — | — | — | — | 305,714 | — | 305,714 | ||||||||||||||||||||
Other liabilities | 19,707 | 10,544 | — | 13,350 | 270,610 | (12,527 | ) | 301,684 | |||||||||||||||||||
Total liabilities | 151,351 | 10,586 | 255,475 | 655,300 | 5,477,596 | (240,397 | ) | 6,309,911 | |||||||||||||||||||
Redeemable noncontrolling interests | — | — | — | — | 1,175,594 | — | 1,175,594 | ||||||||||||||||||||
Shareholders’ Equity | |||||||||||||||||||||||||||
Total shareholders’ equity | 4,866,577 | 272,887 | 867,180 | 692,260 | 4,667,551 | (6,499,878 | ) | 4,866,577 | |||||||||||||||||||
Total liabilities, redeemable noncontrolling interest and shareholders’ equity | $ | 5,017,928 | $ | 283,473 | $ | 1,122,655 | $ | 1,347,560 | $ | 11,320,741 | $ | (6,740,275 | ) | $ | 12,352,082 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments. |
Table of Contents
Condensed Consolidating Statement of Operations for the year ended December 31, 2017 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Platinum Underwriters Finance, Inc. (Subsidiary Issuer) | RenaissanceRe Finance, Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | ||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||
Net premiums earned | $ | — | $ | — | $ | — | $ | — | $ | 1,717,575 | $ | — | $ | 1,717,575 | |||||||||||||
Net investment income | 23,109 | 1,947 | 1,373 | 3,090 | 219,490 | (26,800 | ) | 222,209 | |||||||||||||||||||
Net foreign exchange (losses) gains | (1 | ) | — | — | — | 10,629 | — | 10,628 | |||||||||||||||||||
Equity in (losses) earnings of other ventures | — | — | — | (223 | ) | 8,253 | — | 8,030 | |||||||||||||||||||
Other income | — | — | — | — | 9,415 | — | 9,415 | ||||||||||||||||||||
Net realized and unrealized (losses) gains on investments | (1,357 | ) | 9,621 | 4,916 | (479 | ) | 123,121 | — | 135,822 | ||||||||||||||||||
Total revenues | 21,751 | 11,568 | 6,289 | 2,388 | 2,088,483 | (26,800 | ) | 2,103,679 | |||||||||||||||||||
Expenses | |||||||||||||||||||||||||||
Net claims and claim expenses incurred | — | — | — | — | 1,861,428 | — | 1,861,428 | ||||||||||||||||||||
Acquisition expenses | — | — | — | — | 346,892 | — | 346,892 | ||||||||||||||||||||
Operational expenses | 11,314 | 103 | 85 | 26,063 | 141,572 | (18,359 | ) | 160,778 | |||||||||||||||||||
Corporate expenses | 18,546 | — | — | — | 26 | — | 18,572 | ||||||||||||||||||||
Interest expense | 1,572 | — | 2,461 | 31,657 | 10,075 | (1,572 | ) | 44,193 | |||||||||||||||||||
Total expenses | 31,432 | 103 | 2,546 | 57,720 | 2,359,993 | (19,931 | ) | 2,431,863 | |||||||||||||||||||
(Loss) income before equity in net (loss) income of subsidiaries and taxes | (9,681 | ) | 11,465 | 3,743 | (55,332 | ) | (271,510 | ) | (6,869 | ) | (328,184 | ) | |||||||||||||||
Equity in net (loss) income of subsidiaries | (212,708 | ) | 756 | 28,028 | 9,298 | — | 174,626 | — | |||||||||||||||||||
(Loss) income before taxes | (222,389 | ) | 12,221 | 31,771 | (46,034 | ) | (271,510 | ) | 167,757 | (328,184 | ) | ||||||||||||||||
Income tax (expense) benefit | — | (18,147 | ) | (1,175 | ) | 7,163 | (14,328 | ) | — | (26,487 | ) | ||||||||||||||||
Net (loss) income | (222,389 | ) | (5,926 | ) | 30,596 | (38,871 | ) | (285,838 | ) | 167,757 | (354,671 | ) | |||||||||||||||
Net loss attributable to redeemable noncontrolling interests | — | — | — | — | 132,282 | — | 132,282 | ||||||||||||||||||||
Net (loss) income attributable to RenaissanceRe | (222,389 | ) | (5,926 | ) | 30,596 | (38,871 | ) | (153,556 | ) | 167,757 | (222,389 | ) | |||||||||||||||
Dividends on preference shares | (22,381 | ) | — | — | — | — | — | (22,381 | ) | ||||||||||||||||||
Net (loss) income (attributable) available to RenaissanceRe common shareholders | $ | (244,770 | ) | $ | (5,926 | ) | $ | 30,596 | $ | (38,871 | ) | $ | (153,556 | ) | $ | 167,757 | $ | (244,770 | ) |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor, Subsidiary Guarantor and Subsidiary Issuer consolidating adjustments. |
Table of Contents
Condensed Consolidating Statement of Comprehensive (Loss) Income for the year ended December 31, 2017 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Platinum Underwriters Finance, Inc. (Subsidiary Issuer) | RenaissanceRe Finance, Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | ||||||||||||||||||||
Comprehensive (loss) income | |||||||||||||||||||||||||||
Net (loss) income | $ | (222,389 | ) | $ | (5,926 | ) | $ | 30,596 | $ | (38,871 | ) | $ | (285,838 | ) | $ | 167,757 | $ | (354,671 | ) | ||||||||
Change in net unrealized gains on investments | — | — | — | — | (909 | ) | — | (909 | ) | ||||||||||||||||||
Comprehensive (loss) income | (222,389 | ) | (5,926 | ) | 30,596 | (38,871 | ) | (286,747 | ) | 167,757 | (355,580 | ) | |||||||||||||||
Net loss attributable to redeemable noncontrolling interests | — | — | — | — | 132,282 | — | 132,282 | ||||||||||||||||||||
Comprehensive loss attributable to redeemable noncontrolling interests | — | — | — | — | 132,282 | — | 132,282 | ||||||||||||||||||||
Comprehensive (loss) income (attributable) available to RenaissanceRe | $ | (222,389 | ) | $ | (5,926 | ) | $ | 30,596 | $ | (38,871 | ) | $ | (154,465 | ) | $ | 167,757 | $ | (223,298 | ) |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor, Subsidiary Guarantor and Subsidiary Issuer consolidating adjustments. |
Table of Contents
Condensed Consolidating Statement of Operations for the year ended December 31, 2016 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Platinum Underwriters Finance, Inc. (Subsidiary Issuer) | RenaissanceRe Finance, Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | ||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||
Net premiums earned | $ | — | $ | — | $ | — | $ | — | $ | 1,403,430 | $ | — | $ | 1,403,430 | |||||||||||||
Net investment income | 24,178 | 1,852 | 3,989 | 569 | 175,407 | (24,269 | ) | 181,726 | |||||||||||||||||||
Net foreign exchange losses | (2 | ) | — | — | — | (13,786 | ) | — | (13,788 | ) | |||||||||||||||||
Equity in earnings of other ventures | — | — | — | — | 963 | — | 963 | ||||||||||||||||||||
Other (loss) income | (772 | ) | — | — | — | 14,950 | — | 14,178 | |||||||||||||||||||
Net realized and unrealized gains on investments | 4,151 | 4,659 | 8,193 | 46 | 124,279 | — | 141,328 | ||||||||||||||||||||
Total revenues | 27,555 | 6,511 | 12,182 | 615 | 1,705,243 | (24,269 | ) | 1,727,837 | |||||||||||||||||||
Expenses | |||||||||||||||||||||||||||
Net claims and claim expenses incurred | — | — | — | — | 530,831 | — | 530,831 | ||||||||||||||||||||
Acquisition expenses | — | — | — | — | 289,323 | — | 289,323 | ||||||||||||||||||||
Operational expenses | 13,716 | (112 | ) | 296 | 22,152 | 176,041 | (14,344 | ) | 197,749 | ||||||||||||||||||
Corporate expenses | 26,848 | 203 | — | 7 | 10,344 | — | 37,402 | ||||||||||||||||||||
Interest expense | 562 | — | 5,906 | 26,176 | 10,062 | (562 | ) | 42,144 | |||||||||||||||||||
Total expenses | 41,126 | 91 | 6,202 | 48,335 | 1,016,601 | (14,906 | ) | 1,097,449 | |||||||||||||||||||
(Loss) income before equity in net income of subsidiaries and taxes | (13,571 | ) | 6,420 | 5,980 | (47,720 | ) | 688,642 | (9,363 | ) | 630,388 | |||||||||||||||||
Equity in net income of subsidiaries | 516,533 | 3,857 | 25,073 | 38,628 | — | (584,091 | ) | — | |||||||||||||||||||
Income (loss) before taxes | 502,962 | 10,277 | 31,053 | (9,092 | ) | 688,642 | (593,454 | ) | 630,388 | ||||||||||||||||||
Income tax (expense) benefit | — | (2,275 | ) | (1,462 | ) | 11,014 | (7,617 | ) | — | (340 | ) | ||||||||||||||||
Net income | 502,962 | 8,002 | 29,591 | 1,922 | 681,025 | (593,454 | ) | 630,048 | |||||||||||||||||||
Net income attributable to redeemable noncontrolling interests | — | — | — | — | (127,086 | ) | — | (127,086 | ) | ||||||||||||||||||
Net income attributable to RenaissanceRe | 502,962 | 8,002 | 29,591 | 1,922 | 553,939 | (593,454 | ) | 502,962 | |||||||||||||||||||
Dividends on preference shares | (22,381 | ) | — | — | — | — | — | (22,381 | ) | ||||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 480,581 | $ | 8,002 | $ | 29,591 | $ | 1,922 | $ | 553,939 | $ | (593,454 | ) | $ | 480,581 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments. |
Table of Contents
Condensed Consolidating Statement of Comprehensive Income for the year ended December 31, 2016 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Platinum Underwriters Finance, Inc. (Subsidiary Issuer) | RenaissanceRe Finance, Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | ||||||||||||||||||||
Comprehensive income | |||||||||||||||||||||||||||
Net income | $ | 502,962 | $ | 8,002 | $ | 29,591 | $ | 1,922 | $ | 681,025 | $ | (593,454 | ) | $ | 630,048 | ||||||||||||
Change in net unrealized gains on investments | — | — | — | — | (975 | ) | — | (975 | ) | ||||||||||||||||||
Comprehensive income | 502,962 | 8,002 | 29,591 | 1,922 | 680,050 | (593,454 | ) | 629,073 | |||||||||||||||||||
Net income attributable to redeemable noncontrolling interests | — | — | — | — | (127,086 | ) | — | (127,086 | ) | ||||||||||||||||||
Comprehensive income attributable to redeemable noncontrolling interests | — | — | — | — | (127,086 | ) | — | (127,086 | ) | ||||||||||||||||||
Comprehensive income available to RenaissanceRe | $ | 502,962 | $ | 8,002 | $ | 29,591 | $ | 1,922 | $ | 552,964 | $ | (593,454 | ) | $ | 501,987 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments. |
Table of Contents
Condensed Consolidating Statement of Operations for the year ended December 31, 2015 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Platinum Underwriters Finance, Inc. (Subsidiary Issuer) | RenaissanceRe Finance, Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | ||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||
Net premiums earned | $ | — | $ | — | $ | — | $ | — | $ | 1,400,551 | $ | — | $ | 1,400,551 | |||||||||||||
Net investment income | 15,391 | 1,251 | 4,063 | 996 | 144,642 | (13,776 | ) | 152,567 | |||||||||||||||||||
Net foreign exchange gains (losses) | 4 | — | — | — | (3,055 | ) | — | (3,051 | ) | ||||||||||||||||||
Equity in earnings of other ventures | — | — | — | — | 20,481 | — | 20,481 | ||||||||||||||||||||
Other income | 663 | — | — | — | 13,472 | (663 | ) | 13,472 | |||||||||||||||||||
Net realized and unrealized (losses) gains on investments | (2,080 | ) | 566 | (2,600 | ) | — | (64,804 | ) | — | (68,918 | ) | ||||||||||||||||
Total revenues | 13,978 | 1,817 | 1,463 | 996 | 1,511,287 | (14,439 | ) | 1,515,102 | |||||||||||||||||||
Expenses | |||||||||||||||||||||||||||
Net claims and claim expenses incurred | — | — | — | — | 448,238 | — | 448,238 | ||||||||||||||||||||
Acquisition expenses | — | — | — | — | 238,592 | — | 238,592 | ||||||||||||||||||||
Operational expenses | 4,249 | 4,561 | 3 | 2,503 | 207,802 | (6 | ) | 219,112 | |||||||||||||||||||
Corporate expenses | 40,808 | 312 | 3 | — | 35,391 | — | 76,514 | ||||||||||||||||||||
Interest expense | 1,255 | 7,233 | 4,922 | 16,179 | 7,677 | (996 | ) | 36,270 | |||||||||||||||||||
Total expenses | 46,312 | 12,106 | 4,928 | 18,682 | 937,700 | (1,002 | ) | 1,018,726 | |||||||||||||||||||
(Loss) income before equity in net income of subsidiaries and taxes | (32,334 | ) | (10,289 | ) | (3,465 | ) | (17,686 | ) | 573,587 | (13,437 | ) | 496,376 | |||||||||||||||
Equity in net income of subsidiaries | 463,526 | 5,493 | 35,329 | 72,925 | — | (577,273 | ) | — | |||||||||||||||||||
Income (loss) before taxes | 431,192 | (4,796 | ) | 31,864 | 55,239 | 573,587 | (590,710 | ) | 496,376 | ||||||||||||||||||
Income tax benefit | — | 32,005 | 1,985 | 6,190 | 5,686 | — | 45,866 | ||||||||||||||||||||
Net income | 431,192 | 27,209 | 33,849 | 61,429 | 579,273 | (590,710 | ) | 542,242 | |||||||||||||||||||
Net income attributable to redeemable noncontrolling interests | — | — | — | — | (111,050 | ) | — | (111,050 | ) | ||||||||||||||||||
Net income attributable to RenaissanceRe | 431,192 | 27,209 | 33,849 | 61,429 | 468,223 | (590,710 | ) | 431,192 | |||||||||||||||||||
Dividends on preference shares | (22,381 | ) | — | — | — | — | — | (22,381 | ) | ||||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 408,811 | $ | 27,209 | $ | 33,849 | $ | 61,429 | $ | 468,223 | $ | (590,710 | ) | $ | 408,811 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments. |
Table of Contents
Condensed Consolidating Statement of Comprehensive Income for the year ended December 31, 2015 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Platinum Underwriters Finance, Inc. (Subsidiary Issuer) | RenaissanceRe Finance, Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | ||||||||||||||||||||
Comprehensive income | |||||||||||||||||||||||||||
Net income | $ | 431,192 | $ | 27,209 | $ | 33,849 | $ | 61,429 | $ | 579,273 | $ | (590,710 | ) | $ | 542,242 | ||||||||||||
Change in net unrealized gains on investments | — | — | — | — | (1,308 | ) | — | (1,308 | ) | ||||||||||||||||||
Comprehensive income | 431,192 | 27,209 | 33,849 | 61,429 | 577,965 | (590,710 | ) | 540,934 | |||||||||||||||||||
Net income attributable to redeemable noncontrolling interests | — | — | — | — | (111,050 | ) | — | (111,050 | ) | ||||||||||||||||||
Comprehensive income attributable to redeemable noncontrolling interests | — | — | — | — | (111,050 | ) | — | (111,050 | ) | ||||||||||||||||||
Comprehensive income attributable to RenaissanceRe | $ | 431,192 | $ | 27,209 | $ | 33,849 | $ | 61,429 | $ | 466,915 | $ | (590,710 | ) | $ | 429,884 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments. |
Table of Contents
Condensed Consolidating Statement of Cash Flows for the year ended December 31, 2017 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Platinum Underwriters Finance, Inc. (Subsidiary Issuer) | RenaissanceRe Finance, 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 | $ | (4,109 | ) | $ | (8,253 | ) | $ | (2,272 | ) | $ | (347,890 | ) | $ | 1,408,311 | $ | 1,045,787 | |||||||
Cash flows provided by (used in) investing activities | |||||||||||||||||||||||
Proceeds from sales and maturities of fixed maturity investments trading | 261,601 | 100,248 | 289,741 | 288,900 | 8,550,179 | 9,490,669 | |||||||||||||||||
Purchases of fixed maturity investments trading | (344,463 | ) | (99,568 | ) | (143,991 | ) | (275,778 | ) | (9,229,732 | ) | (10,093,532 | ) | |||||||||||
Net (purchases) sales of equity investments trading | — | (1,752 | ) | 85,324 | — | 32,265 | 115,837 | ||||||||||||||||
Net sales (purchases) of short term investments | 243,571 | 114 | 41,299 | (493 | ) | 79,520 | 364,011 | ||||||||||||||||
Net purchases of other investments | — | — | — | — | (19,419 | ) | (19,419 | ) | |||||||||||||||
Dividends and return of capital from subsidiaries | 478,496 | 9,175 | — | 41,866 | (529,537 | ) | — | ||||||||||||||||
Contributions to subsidiaries | (669,672 | ) | — | (26,649 | ) | (9,890 | ) | 706,211 | — | ||||||||||||||
Due to (from) subsidiary | 319,646 | 13 | (123 | ) | (509 | ) | (319,027 | ) | — | ||||||||||||||
Net cash provided by (used in) investing activities | 289,179 | 8,230 | 245,601 | 44,096 | (729,540 | ) | (142,434 | ) | |||||||||||||||
Cash flows (used in) provided by financing activities | |||||||||||||||||||||||
Dividends paid – RenaissanceRe common shares | (51,370 | ) | — | — | — | — | (51,370 | ) | |||||||||||||||
Dividends paid – preference shares | (22,381 | ) | — | — | — | — | (22,381 | ) | |||||||||||||||
RenaissanceRe common share repurchases | (188,591 | ) | — | — | — | — | (188,591 | ) | |||||||||||||||
Issuance of debt | — | — | — | 295,866 | — | 295,866 | |||||||||||||||||
Repayment of debt | — | — | (250,000 | ) | — | — | (250,000 | ) | |||||||||||||||
Net third party redeemable noncontrolling interest share transactions | — | — | — | — | 260,475 | 260,475 | |||||||||||||||||
Taxes paid on withholding shares | (15,139 | ) | — | — | — | — | (15,139 | ) | |||||||||||||||
Net cash (used in) provided by financing activities | (277,481 | ) | — | (250,000 | ) | 295,866 | 260,475 | 28,860 | |||||||||||||||
Effect of exchange rate changes on foreign currency cash | — | — | — | — | 8,222 | 8,222 | |||||||||||||||||
Net increase (decrease) in cash and cash equivalents | 7,589 | (23 | ) | (6,671 | ) | (7,928 | ) | 947,468 | 940,435 | ||||||||||||||
Cash and cash equivalents, beginning of period | 7,067 | 162 | 6,671 | 9,397 | 397,860 | 421,157 | |||||||||||||||||
Cash and cash equivalents, end of period | $ | 14,656 | $ | 139 | $ | — | $ | 1,469 | $ | 1,345,328 | $ | 1,361,592 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
Table of Contents
Condensed Consolidating Statement of Cash Flows for the year ended December 31, 2016 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Platinum Underwriters Finance, Inc. (Subsidiary Issuer) | RenaissanceRe Finance, 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 | $ | (3,509 | ) | $ | 1,477 | $ | (14,501 | ) | $ | (34,607 | ) | $ | 535,912 | $ | 484,772 | ||||||||
Cash flows provided by (used in) investing activities | |||||||||||||||||||||||
Proceeds from sales and maturities of fixed maturity investments trading | 314,568 | 69,941 | 145,082 | — | 7,572,923 | 8,102,514 | |||||||||||||||||
Purchases of fixed maturity investments trading | (336,345 | ) | (123,046 | ) | (291,053 | ) | — | (7,532,276 | ) | (8,282,720 | ) | ||||||||||||
Proceeds from sales and maturities of fixed maturity investments available for sale | — | — | — | — | 17,692 | 17,692 | |||||||||||||||||
Net (purchases) sales of equity investments trading | — | (2,389 | ) | 193,022 | — | (5,845 | ) | 184,788 | |||||||||||||||
Net (purchases) sales of short term investments | (111,814 | ) | 67,684 | (32,901 | ) | — | (41,586 | ) | (118,617 | ) | |||||||||||||
Net purchases of other investments | — | — | — | — | (68,589 | ) | (68,589 | ) | |||||||||||||||
Net purchases of investments in other ventures | — | — | — | — | — | — | |||||||||||||||||
Net sales of other assets | — | — | — | — | 400 | 400 | |||||||||||||||||
Dividends and return of capital from subsidiaries | 617,239 | 2,900 | — | 13,125 | (633,264 | ) | — | ||||||||||||||||
Contributions to subsidiaries | (108,674 | ) | — | — | — | 108,674 | — | ||||||||||||||||
Due to (from) subsidiaries | 23,758 | (22,313 | ) | (81 | ) | 30,202 | (31,566 | ) | — | ||||||||||||||
Net cash provided by (used in) investing activities | 398,732 | (7,223 | ) | 14,069 | 43,327 | (613,437 | ) | (164,532 | ) | ||||||||||||||
Cash flows used in financing activities | |||||||||||||||||||||||
Dividends paid – RenaissanceRe common shares | (51,583 | ) | — | — | — | — | (51,583 | ) | |||||||||||||||
Dividends paid – preference shares | (22,381 | ) | — | — | — | — | (22,381 | ) | |||||||||||||||
RenaissanceRe common share repurchases | (309,434 | ) | — | — | — | — | (309,434 | ) | |||||||||||||||
Net third party redeemable noncontrolling interest share transactions | — | — | — | — | (2,990 | ) | (2,990 | ) | |||||||||||||||
Taxes paid on withholding shares | (14,943 | ) | — | — | — | — | (14,943 | ) | |||||||||||||||
Net cash used in financing activities | (398,341 | ) | — | — | — | (2,990 | ) | (401,331 | ) | ||||||||||||||
Effect of exchange rate changes on foreign currency cash | — | — | — | — | (4,637 | ) | (4,637 | ) | |||||||||||||||
Net (decrease) increase in cash and cash equivalents | (3,118 | ) | (5,746 | ) | (432 | ) | 8,720 | (85,152 | ) | (85,728 | ) | ||||||||||||
Cash and cash equivalents, beginning of period | 10,185 | 5,908 | 7,103 | 677 | 483,012 | 506,885 | |||||||||||||||||
Cash and cash equivalents, end of period | $ | 7,067 | $ | 162 | $ | 6,671 | $ | 9,397 | $ | 397,860 | $ | 421,157 |
Table of Contents
Condensed Consolidating Statement of Cash Flows for the year ended December 31, 2015 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Platinum Underwriters Finance, Inc. (Subsidiary Issuer) | RenaissanceRe Finance, 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 | $ | (28,965 | ) | $ | (9,201 | ) | $ | (6,830 | ) | $ | (17,871 | ) | $ | 487,852 | $ | 424,985 | |||||||
Cash flows provided by (used in) investing activities | |||||||||||||||||||||||
Proceeds from sales and maturities of fixed maturity investments trading | 63,824 | 49,807 | 45,087 | — | 9,323,024 | 9,481,742 | |||||||||||||||||
Purchases of fixed maturity investments trading | (161,183 | ) | (59,040 | ) | — | — | (9,462,845 | ) | (9,683,068 | ) | |||||||||||||
Proceeds from sales and maturities of fixed maturity investments available for sale | — | — | — | — | 8,688 | 8,688 | |||||||||||||||||
Net sales (purchases) of equity investments trading | — | 33,693 | (269,244 | ) | — | 87,993 | (147,558 | ) | |||||||||||||||
Net (purchases) sales of short term investments | (116,461 | ) | (63,305 | ) | 238,177 | — | 610,705 | 669,116 | |||||||||||||||
Net sales of other investments | — | — | — | — | 15,843 | 15,843 | |||||||||||||||||
Net purchases of investments in other ventures | — | — | — | — | (10,150 | ) | (10,150 | ) | |||||||||||||||
Net sales of other assets | — | — | — | — | 4,500 | 4,500 | |||||||||||||||||
Dividends and return of capital from subsidiaries | 1,584,624 | 180,000 | 65,000 | 87,553 | (1,917,177 | ) | — | ||||||||||||||||
Contributions to subsidiaries | (294,733 | ) | (8,550 | ) | (66,753 | ) | (185,000 | ) | 555,036 | — | |||||||||||||
Due to (from) subsidiary | 207,996 | (118,529 | ) | 129 | (183,405 | ) | 93,809 | — | |||||||||||||||
Net purchase of Platinum | (904,433 | ) | — | 1,537 | — | 224,744 | (678,152 | ) | |||||||||||||||
Net cash provided by (used in) investing activities | 379,634 | 14,076 | 13,933 | (280,852 | ) | (465,830 | ) | (339,039 | ) | ||||||||||||||
Cash flows (used in) provided by financing activities | |||||||||||||||||||||||
Dividends paid – RenaissanceRe common shares | (53,967 | ) | — | — | — | — | (53,967 | ) | |||||||||||||||
Dividends paid – preference shares | (22,381 | ) | — | — | — | — | (22,381 | ) | |||||||||||||||
RenaissanceRe common share repurchases | (259,874 | ) | — | — | — | — | (259,874 | ) | |||||||||||||||
Net repayment of debt | — | — | — | 299,400 | 146,189 | 445,589 | |||||||||||||||||
Net third party redeemable noncontrolling interest share transactions | — | — | — | — | (193,032 | ) | (193,032 | ) | |||||||||||||||
Taxes paid on withholding shares | (10,248 | ) | — | — | — | — | (10,248 | ) | |||||||||||||||
Net cash (used in) provided by financing activities | (346,470 | ) | — | — | 299,400 | (46,843 | ) | (93,913 | ) | ||||||||||||||
Effect of exchange rate changes on foreign currency cash | — | — | — | — | (10,732 | ) | (10,732 | ) | |||||||||||||||
Net increase (decrease) in cash and cash equivalents | 4,199 | 4,875 | 7,103 | 677 | (35,553 | ) | (18,699 | ) | |||||||||||||||
Cash and cash equivalents, beginning of year | 5,986 | 1,033 | — | — | 518,565 | 525,584 | |||||||||||||||||
Cash and cash equivalents, end of year | $ | 10,185 | $ | 5,908 | $ | 7,103 | $ | 677 | $ | 483,012 | $ | 506,885 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
Table of Contents
Table of Contents
Page | |||
I | |||
II | |||
III | |||
IV | |||
VI |
Table of Contents
Table of Contents
December 31, 2017 | |||||||||||
Amortized Cost or Cost | Fair Value | Amount at which shown in the Balance Sheet | |||||||||
Type of investment: | |||||||||||
Fixed maturity investments | |||||||||||
U.S. treasuries | $ | 3,195,767 | $ | 3,168,763 | $ | 3,168,763 | |||||
Agencies | 48,151 | 47,646 | 47,646 | ||||||||
Municipal | 506,486 | 509,802 | 509,802 | ||||||||
Non-U.S. government (Sovereign debt) | 287,641 | 287,660 | 287,660 | ||||||||
Non-U.S. government-backed corporate | 164,312 | 163,651 | 163,651 | ||||||||
Corporate | 2,057,219 | 2,063,459 | 2,063,459 | ||||||||
Agency mortgage-backed | 507,250 | 500,456 | 500,456 | ||||||||
Non-agency mortgage-backed | 283,303 | 300,331 | 300,331 | ||||||||
Commercial mortgage-backed | 202,452 | 202,062 | 202,062 | ||||||||
Asset-backed | 182,289 | 182,725 | 182,725 | ||||||||
Total fixed maturity investments | $ | 7,434,870 | 7,426,555 | 7,426,555 | |||||||
Short term investments | 991,863 | 991,863 | |||||||||
Equity investments | 388,254 | 388,254 | |||||||||
Other investments | 594,793 | 594,793 | |||||||||
Investments in other ventures, under equity method | 101,974 | 101,974 | |||||||||
Total investments | $ | 9,503,439 | $ | 9,503,439 |
Table of Contents
At December 31, | |||||||
2017 | 2016 | ||||||
Assets | |||||||
Fixed maturity investments trading, at fair value - amortized cost $104,521 at December 31, 2017 (2016 - $22,402) | $ | 103,638 | $ | 22,119 | |||
Short term investments, at fair value | 121,628 | 365,155 | |||||
Cash and cash equivalents | 14,656 | 7,067 | |||||
Investments in subsidiaries | 4,105,760 | 4,074,769 | |||||
Due from subsidiaries | 4,602 | 7,413 | |||||
Accrued investment income | 405 | 105 | |||||
Receivable for investments sold | 135 | 136 | |||||
Other assets | 433,468 | 410,757 | |||||
Goodwill and other intangible assets | 124,960 | 130,407 | |||||
Total assets | $ | 4,909,252 | $ | 5,017,928 | |||
Liabilities and Shareholders’ Equity | |||||||
Liabilities | |||||||
Notes and bank loans payable | $ | 417,000 | $ | 117,000 | |||
Due to subsidiaries | 82,579 | 14,644 | |||||
Other liabilities | 18,298 | 19,707 | |||||
Total liabilities | 517,877 | 151,351 | |||||
Shareholders’ Equity | |||||||
Preference shares: $1.00 par value – 16,000,000 shares issued and outstanding at December 31, 2017 (2016 – 16,000,000) | 400,000 | 400,000 | |||||
Common shares: $1.00 par value – 40,023,789 shares issued and outstanding at December 31, 2017 (2016 – 41,187,413) | 40,024 | 41,187 | |||||
Additional paid-in capital | 37,355 | 216,558 | |||||
Accumulated other comprehensive income | 224 | 1,133 | |||||
Retained earnings | 3,913,772 | 4,207,699 | |||||
Total shareholders’ equity | 4,391,375 | 4,866,577 | |||||
Total liabilities and shareholders’ equity | $ | 4,909,252 | $ | 5,017,928 |
Table of Contents
Year ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Revenues | |||||||||||
Net investment income | $ | 23,109 | $ | 24,178 | $ | 15,391 | |||||
Net foreign exchange (losses) gains | (1 | ) | (2 | ) | 4 | ||||||
Other (loss) income | — | (772 | ) | 663 | |||||||
Net realized and unrealized (losses) gains on investments | (1,357 | ) | 4,151 | (2,080 | ) | ||||||
Total revenues | 21,751 | 27,555 | 13,978 | ||||||||
Expenses | |||||||||||
Interest expense | 1,572 | 562 | 1,255 | ||||||||
Operational expenses | 11,314 | 13,716 | 4,249 | ||||||||
Corporate expenses | 18,546 | 26,848 | 40,808 | ||||||||
Total expenses | 31,432 | 41,126 | 46,312 | ||||||||
Loss before equity in net (loss) income of subsidiaries | (9,681 | ) | (13,571 | ) | (32,334 | ) | |||||
Equity in net (loss) income of subsidiaries | (212,708 | ) | 516,533 | 463,526 | |||||||
Net (loss) income | (222,389 | ) | 502,962 | 431,192 | |||||||
Dividends on preference shares | (22,381 | ) | (22,381 | ) | (22,381 | ) | |||||
Net (loss) income (attributable) available to RenaissanceRe common shareholders | $ | (244,770 | ) | $ | 480,581 | $ | 408,811 |
Year ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Comprehensive (loss) income | |||||||||||
Net (loss) income | $ | (222,389 | ) | $ | 502,962 | $ | 431,192 | ||||
Comprehensive (loss) income (attributable) available to RenaissanceRe | $ | (222,389 | ) | $ | 502,962 | $ | 431,192 |
Table of Contents
Year ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Cash flows used in operating activities: | |||||||||||
Net (loss) income | $ | (222,389 | ) | $ | 502,962 | $ | 431,192 | ||||
Less: equity in net loss (income) of subsidiaries | 212,708 | (516,533 | ) | (463,526 | ) | ||||||
(9,681 | ) | (13,571 | ) | (32,334 | ) | ||||||
Adjustments to reconcile net (loss) income to net cash used in operating activities | |||||||||||
Net realized and unrealized losses (gains) on investments | 1,357 | (4,151 | ) | 2,080 | |||||||
Other | 4,215 | 14,213 | 1,289 | ||||||||
Net cash used in operating activities | (4,109 | ) | (3,509 | ) | (28,965 | ) | |||||
Cash flows provided by investing activities: | |||||||||||
Proceeds from maturities and sales of fixed maturity investments trading | 261,601 | 314,568 | 63,824 | ||||||||
Purchases of fixed maturity investments trading | (344,463 | ) | (336,345 | ) | (161,183 | ) | |||||
Net sales (purchases) of short term investments | 243,571 | (111,814 | ) | (116,461 | ) | ||||||
Dividends and return of capital from subsidiaries | 478,496 | 617,239 | 1,584,624 | ||||||||
Contributions to subsidiaries | (669,672 | ) | (108,674 | ) | (294,733 | ) | |||||
Due to (from) subsidiary | 319,646 | 23,758 | 207,996 | ||||||||
Net purchase of Platinum | — | — | (904,433 | ) | |||||||
Net cash provided by investing activities | 289,179 | 398,732 | 379,634 | ||||||||
Cash flows used in financing activities: | |||||||||||
Dividends paid – RenaissanceRe common shares | (51,370 | ) | (51,583 | ) | (53,967 | ) | |||||
Dividends paid – preference shares | (22,381 | ) | (22,381 | ) | (22,381 | ) | |||||
RenaissanceRe common share repurchases | (188,591 | ) | (309,434 | ) | (259,874 | ) | |||||
Taxes paid on withholding shares | (15,139 | ) | (14,943 | ) | (10,248 | ) | |||||
Net cash used in financing activities | (277,481 | ) | (398,341 | ) | (346,470 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 7,589 | (3,118 | ) | 4,199 | |||||||
Cash and cash equivalents, beginning of year | 7,067 | 10,185 | 5,986 | ||||||||
Cash and cash equivalents, end of year | $ | 14,656 | $ | 7,067 | $ | 10,185 |
Table of Contents
December 31, 2017 | Year ended December 31, 2017 | ||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||
Property | $ | 63,583 | $ | 2,486,390 | $ | 347,032 | $ | 931,070 | $ | — | $ | 1,297,985 | $ | 113,816 | $ | 94,194 | $ | 978,014 | |||||||||||||||||
Casualty and Specialty | 362,968 | 2,575,492 | 1,130,577 | 786,501 | — | 565,026 | 233,077 | 66,548 | 893,307 | ||||||||||||||||||||||||||
Other | — | 18,526 | — | 4 | 222,209 | (1,583 | ) | (1 | ) | 36 | 4 | ||||||||||||||||||||||||
Total | $ | 426,551 | $ | 5,080,408 | $ | 1,477,609 | $ | 1,717,575 | $ | 222,209 | $ | 1,861,428 | $ | 346,892 | $ | 160,778 | $ | 1,871,325 | |||||||||||||||||
December 31, 2016 | Year ended December 31, 2016 | ||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||
Property | $ | 46,938 | $ | 627,774 | $ | 289,080 | $ | 720,951 | $ | — | $ | 151,545 | $ | 97,594 | $ | 108,642 | $ | 725,321 | |||||||||||||||||
Casualty and Specialty | 288,387 | 2,195,126 | 942,493 | 682,337 | — | 380,396 | 191,729 | 88,984 | 809,848 | ||||||||||||||||||||||||||
Other | — | 25,394 | — | 142 | 181,726 | (1,110 | ) | — | 123 | 143 | |||||||||||||||||||||||||
Total | $ | 335,325 | $ | 2,848,294 | $ | 1,231,573 | $ | 1,403,430 | $ | 181,726 | $ | 530,831 | $ | 289,323 | $ | 197,749 | $ | 1,535,312 | |||||||||||||||||
December 31, 2015 | Year ended December 31, 2015 | ||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||
Property | $ | 39,763 | $ | 706,199 | $ | 272,050 | $ | 805,985 | $ | — | $ | 128,290 | $ | 94,249 | $ | 118,666 | $ | 726,145 | |||||||||||||||||
Casualty and Specialty | 159,617 | 2,033,168 | 617,052 | 594,614 | — | 320,818 | 144,095 | 100,180 | 690,086 | ||||||||||||||||||||||||||
Other | — | 27,678 | — | (48 | ) | 152,567 | (870 | ) | 248 | 266 | (48 | ) | |||||||||||||||||||||||
Total | $ | 199,380 | $ | 2,767,045 | $ | 889,102 | $ | 1,400,551 | $ | 152,567 | $ | 448,238 | $ | 238,592 | $ | 219,112 | $ | 1,416,183 |
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Gross Amounts | Ceded to Other Companies | Assumed From Other Companies | Net Amount | Percentage of Amount Assumed to Net | ||||||||||||||
Year ended December 31, 2017 | ||||||||||||||||||
Property and liability premiums earned | $ | 244,285 | $ | 833,929 | $ | 2,307,219 | $ | 1,717,575 | 134 | % | ||||||||
Year ended December 31, 2016 | ||||||||||||||||||
Property and liability premiums earned | $ | 157,112 | $ | 628,675 | $ | 1,874,993 | $ | 1,403,430 | 134 | % | ||||||||
Year ended December 31, 2015 | ||||||||||||||||||
Property and liability premiums earned | $ | 98,182 | $ | 466,719 | $ | 1,769,088 | $ | 1,400,551 | 126 | % |
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, 2017 | $ | 426,551 | $ | 5,080,408 | $ | — | $ | 1,477,609 | $ | 1,717,575 | $ | 222,209 | |||||||||||
Year ended December 31, 2016 | $ | 335,325 | $ | 2,848,294 | $ | — | $ | 1,231,573 | $ | 1,403,430 | $ | 181,726 | |||||||||||
Year ended December 31, 2015 | $ | 199,380 | $ | 2,767,045 | $ | — | $ | 889,102 | $ | 1,400,551 | $ | 152,567 | |||||||||||
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, 2017 | $ | 1,902,424 | $ | (40,996 | ) | $ | 346,892 | $ | 974,825 | $ | 1,871,325 | ||||||||||||
Year ended December 31, 2016 | $ | 694,957 | $ | (164,126 | ) | $ | 289,323 | $ | 589,294 | $ | 1,535,312 | ||||||||||||
Year ended December 31, 2015 | $ | 610,685 | $ | (162,447 | ) | $ | 238,592 | $ | 521,312 | $ | 1,416,183 |
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RenaissanceRe Holdings Ltd. and Subsidiaries
Bermuda
Headquarters
Renaissance House
12 Crow Lane
Pembroke HM 19
Bermuda
Tel: +1 441 295 4513
London
125 Old Broad Street
London, EC2N 1AR
United Kingdom
Tel: +44 (0)20 7283 2646
Dublin
4th and 5th Floors
Hardwicke House
Upper Hatch Street
Dublin 2, Ireland
Tel: +353 1 678 7388
Singapore
50 Collyer Quay
OUE Bayfront#12-02
Singapore 049321
Tel: +65 6572 8866
Zurich
Dufourstrasse 101
CH-8008 Zurich, Switzerland
Tel: +41 (0)44 385 8051
USA
New York
140 Broadway, Suite 4200
New York, New York 10005
Tel: +1 212 238 9600
Chicago
1901 N. Roselle Rd. Suite 340
Schaumburg, IL 60195
Tel: +1 847 310 5960
Connecticut
Two Stamford Plaza
281 Tresser Blvd., 15th Floor
Stamford, CT 06901
Tel: +1 203 900 1200
North Carolina
WeatherPredict Consulting Inc.
3128 Highwoods Boulevard
Suite 230
Raleigh, NC 27604
Tel: +1 919 876 3633
Rhode Island
WeatherPredict Consulting Inc.
26 South County Commons Way
Unit A7
South Kingstown, RI 02879
Tel: +1 401 788 9031
Leadership Team | ||
RenaissanceRe Holdings Ltd. and Subsidiaries |
Kevin J. O’Donnell | James C. Fraser | |
President and | Senior Vice President and | |
Chief Executive Officer | Chief Accounting Officer | |
RenaissanceRe Holdings Ltd. | RenaissanceRe Holdings Ltd. | |
Robert Qutub | David E. Marra | |
Executive Vice President | Senior Vice President and | |
and Chief Financial Officer | Chief Underwriting Officer | |
RenaissanceRe Holdings Ltd. | – Casualty and Specialty | |
RenaissanceRe Holdings Ltd. | ||
Ian D. Branagan | President | |
Senior Vice President | Renaissance Reinsurance U.S. Inc. | |
and Group Chief Risk Officer | ||
RenaissanceRe Holdings Ltd. | Justin D. O’Keefe | |
Senior Vice President and | ||
Sean G. Brosnan | Chief Underwriting Officer | |
Senior Vice President and | – Property | |
Chief Investment Officer | RenaissanceRe Holdings Ltd. | |
RenaissanceRe Holdings Ltd. | ||
Jonathan D. A. Paradine | ||
Ross A. Curtis | Principal Officer | |
Senior Vice President and | Singapore Branch | |
Group Chief Underwriting Officer | Renaissance Reinsurance Ltd. | |
RenaissanceRe Holdings Ltd. | DaVinci Reinsurance Ltd. | |
Bryan Dalton | Stephen H. Weinstein | |
Senior Vice President and Active Underwriter RenaissanceRe Syndicate 1458
Aditya K. Dutt President Renaissance Underwriting Managers, Ltd. Senior Vice President and Treasurer RenaissanceRe Holdings Ltd. | Senior Vice President, Chief Compliance Officer, Group General Counsel and Corporate Secretary RenaissanceRe Holdings Ltd. |
Table of Contents
RenaissanceRe Holdings Ltd.
James L. Gibbons
Non-Executive Chair
RenaissanceRe Holdings Ltd.
Kevin J. O’Donnell
President and Chief Executive Officer
RenaissanceRe Holdings Ltd.
David C. Bushnell
Retired Chief Administrative Officer
Citigroup Inc.
Brian G. J. Gray
Former Group Chief Underwriting Officer
Swiss Reinsurance Company Ltd.
Jean D. Hamilton
Private Investor
Independent Consultant
Duncan P. Hennes
Partner andCo-Founder
Atrevida Partners, LLC
Henry Klehm III
Partner
Jones Day
Valerie Rahmani
Former Chief Executive Officer
Damballa, Inc.
Carol P. Sanders
Former Chief Financial Officer
Sentry Insurance a Mutual Company
Anthony M. Santomero
Former President
Federal Reserve Bank of Philadelphia
Edward J. Zore
Retired Chairman and Chief Executive Officer
The Northwestern Mutual Life Insurance Company
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Financial and Investor Information
RenaissanceRe Holdings Ltd. and Subsidiaries
General Information About the Company
For the Company’s Annual Report, press releases, Forms10-K and10-Q or other filings, please visit our website: 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 common shares are 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
2017 | 2016 | |||||||||||||||
Period | High | Low | High | Low | ||||||||||||
1st Quarter |
$ |
150.74 |
|
$ |
134.62 |
|
$ |
120.59 |
|
$ |
107.47 |
| ||||
2nd Quarter | 145.62 | 134.08 | 121.38 | 107.27 | ||||||||||||
3rd Quarter | 152.00 | 120.55 | 122.97 | 114.34 | ||||||||||||
4th Quarter | 141.77 | 123.86 | 137.21 | 117.36 |
Certifications
The Chief Executive Officer and Chief Financial Officer have certified 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 Form10-K for the fiscal year ended December 31, 2017 filed with the SEC and as to the effectiveness of the Company’s disclosure controls and procedures and internal control over financial reporting.
The certifications are filed as Exhibits 31.1, 31.2, 32.1 and 32.2 to our Form10-K. Our Chief Executive Officer has certified to the New York Stock Exchange in 2017 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
Tel: +1 866 245 5019
Shareholder website
www.computershare.com/investor
Shareholder online inquiries
https://www-us.computershare.com/investor/Contact
Shareholder correspondence should be mailed to:
Computershare
PO Box 505000
Louisville, KY 40233-5000
Tel: +1 866 245 5019
Table of Contents
RenaissanceRe Holdings Ltd.
Renaissance House
12 Crow Lane
Pembroke HM 19
Bermuda
Tel: +1 441 295 4513
renre.com