Table of Contents
2018 Annual Report
RenaissanceRe
Holdings Ltd.
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Financial and Investor Information
| 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) | 2018 | 2017 | 2016 | |||||||||||
Gross premiums written
| $ | 3,310,427 | 2,797,540 | 2,374,576 | ||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders
| $ | 197,276 | (244,770 | ) | 480,581 | |||||||||
Operating income (loss) available (attributable) to RenaissanceRe common shareholders (1)
| $ | 366,595 | (332,300 | ) | 342,253 | |||||||||
Total assets
| $ | 18,676,196 | 15,226,131 | 12,352,082 | ||||||||||
Total shareholders’ equity
| $ | 5,045,080 | 4,391,375 | 4,866,577 | ||||||||||
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Per common share amounts
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Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – diluted
| $ | 4.91 | (6.15 | ) | 11.43 | |||||||||
Operating income (loss) available (attributable) to RenaissanceRe common shareholders per common share – diluted (1)
| $ | 9.17 | (8.35 | ) | 8.10 | |||||||||
Book value per common share
| $ | 104.13 | 99.72 | 108.45 | ||||||||||
Tangible book value per common share (1)
| $ | 97.85 | 93.23 | 101.87 | ||||||||||
Tangible book value per common share plus accumulated dividends (1)
| $ | 117.17 | 111.23 | 118.59 | ||||||||||
Dividends per common share
| $ | 1.32 | 1.28 | 1.24 | ||||||||||
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Ratios | ||||||||||||||
Return on average common equity
| % | 4.7 | (5.7 | ) | 11.0 | |||||||||
Operating return on average common equity (1)
| % | 8.8 | (7.7 | ) | 7.9 | |||||||||
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Net claims and claim expense ratio
| % | 56.7 | 108.4 | 37.8 | ||||||||||
Underwriting expense ratio
| % | 30.9 | 29.5 | 34.7 | ||||||||||
Combined ratio
| % | 87.6 | 137.9 | 72.5 | ||||||||||
(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 | – | – | ||||||||||||
Vermeer Reinsurance Ltd. (2)
| A | – | – | – | ||||||||||||
RenaissanceRe Syndicate 1458
| – | – | – | – | ||||||||||||
Lloyd’s Overall Market Rating (3)
| A | A+ | – | AA- | ||||||||||||
RenaissanceRe Holdings Ltd. (4)
| Very Strong | Very Strong | – | – |
(1) | As of March 6, 2019. |
(2) | The A.M. Best, S&P, Moody’s and Fitch ratings for the companies set forth in the table above reflect the insurer’s financial strength rating and, in addition to the insurer’s financial strength rating, the S&P ratings 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 RenaissanceRe Syndicate 1458’s 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
Each entity in the Integrated System has a separate and defined purpose and strategic advantage, which maximizes our ability to match the most desirable risk with the most efficient capital.
Dear Shareholders,
In so many ways, 2018 was one of our strongest years to date. Our performance was the result of solid execution, continued investment in strategic imperatives and, in another active year for natural catastrophes around the world, application of ourGross-to-Net Strategy and Integrated System. We furthered our lead as the preferred market for reinsurance buyers, and solidified our recognition as the best underwriter by brokers, customers, investors and partners. At the same time, we crossed a significant milestone, exceeding $3 billion of gross premiums written.
I. Our Performance in 2018
Financial Performance
In 2018, we reported net income available to RenaissanceRe common shareholders of $197 million and operating income available to RenaissanceRe common shareholders of $367 million. Our book value per common share increased by 4.4% and our tangible book value per common share, plus change in accumulated dividends, increased by 6.4%. For the full year, our return on average common equity was 4.7% and our operating return on average common equity was 8.8%.
Throughout the year, we found several meaningful opportunities to invest in our business, and consequently we did not repurchase any of our common shares. Since our formation, however, we have consistently demonstrated good stewardship of our shareholders’ capital, returning over $3.5 billion in share buybacks and $1 billion in common share dividends. In 2019, we raised our quarterly dividend for the 24th consecutive year in a row.
2018 Losses
Once again, we were reminded that ours is a volatile business, with industry-wide insured catastrophe losses approaching $80 billion. Our results in 2018 benefited from solid underwriting, smart portfolio construction and decades of experience. Additionally, our strong emphasis on a robustGross-to-Net Strategy reflected our philosophy that it is better to make slightly less money in good years to ensure we are prepared for active ones.
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RenaissanceRe Holdings Ltd. 2018 Annual Report
An important consideration impacting any reinsurer’s performance is the development of significant losses. When losses big or small occur, we rely on, and expect, our customers to manage their claims appropriately. Continuing adverse loss development, however, has compounded the impact ofback-to-back large loss years. Most notably, industry losses associated with 2017’s Hurricane Irma continue to grow well over a year following the event, raising significant questions about the long-term health of the Florida market. Absent some large-scale changes to this market, I anticipate its role in our portfolio will continue to diminish. Thankfully, we have preferred access to the best insurance companies in Florida, who have been good partners with us over the years, and with whom we hope to continue to do business in the future.
Gross-to-Net Strategy
In 2018, ourGross-to-Net Strategy was a critical factor in our outperformance. While losses were not as severe as those in 2017, the difference between our gross and net positions was still substantial, resulting in our ceding approximately 70% of the gross losses from the year’s catastrophic events. Several years ago, I said there is a cost for doing the right thing. So, while retro purchases may look expensive when there are no losses, it is in years like 2018 where we can reap substantial benefits.
TheGross-to-Net Strategy underpins our corporate strategy in several important ways. Rather than merely assuming business, we construct portfolios of risk. While starting with attractive risk is necessary, it is not sufficient. We need to thoroughly understand the risk characteristics of the assumed business and combine these individual risks into portfolios we design to meet defined capital requirements. These portfolios are then matched with the most appropriate capital, which could include using our rated balance sheets, vehicles we manage for our partners, traditional retrocessional covers (for both ourselves and our partners), or insurance linked securities such as cat bonds. OurGross-to-Net Strategy may also encompass more innovative routes, such as structured reinsurance products with long-term partners and various aspects of our Integrated System.
The remaining net position is consequently more capital efficient, and therefore more profitable, allowing us to maximize our return on equity. The advantages to our shareholders are significant and our risk partners receive a well-underwritten portfolio that provides them with the benefits of adding diversifying risk to their often much larger portfolios. Less obvious, but equally important, ourGross-to-Net Strategy enables us to provide consistent, efficiently-priced protection to our customers, year after year, regardless of market cycles.
The Integrated System
In addition to ourGross-to-Net Strategy, I frequently discuss the importance of our Integrated System as one of the many unique components of our corporate strategy. I believe our Integrated System critically distinguishes us from our competitors, creates shareholder value and explains our strong long-term performance. As such, I would like to take a little time to explain an important aspect of it in more detail.
If you recall, last year in my letter to shareholders, I discussed the concept of Pareto optimality. A closely related concept is the Pareto efficient frontier, which is the theoretical curve that represents the optimal set of tradeoffs a company can make between different operating parameters. On the Pareto efficient frontier, you cannot improve one parameter without worsening another. It is the point where there are no free lunches, and a company is operating as efficiently as possible given its chosen tradeoffs between activities to deliver a unique mix of value.
Our Integrated System seeks Pareto outcomes by employing multiple balance sheets and funds which occupy different positions on the Pareto efficient frontier, each designed to provide a different, and optimal, mix of value to our customers. Each entity in the Integrated System has a separate and defined purpose and strategic advantage, which maximizes our ability to match the most desirable risk with the most efficient capital. Defining the purpose and benefit of each entity is critical, as it provides the allocation framework and allows us to manage the conflicts inherent in having multiple sources of capital from diverse partners.
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Letter to Shareholders (continued)
A good example of the Integrated System is our newest joint venture balance sheet, Vermeer Re, which we manage for PGGM, a leading Dutch pension fund. Vermeer Re will write risk-remote, and therefore capital intensive, U.S. property business. The portfolio we plan to construct for Vermeer Re would be capital consumptive on our existing vehicles, so this addition to our platform fills a gap in our offering and brings a new and more efficient product to our customers. Given our decades of experience, we are capable of effectively structuring vehicles. Once we identified this opportunity, we were able to bring additional, efficient coverage to our customers while making high-quality risk available to an important partner.
Taking a step back to the beginning, the foundation for the Integrated System is our original balance sheet — Renaissance Reinsurance Ltd., which we refer to as “RRL”. RRL is our flagship, rated balance sheet, and is the largest balance sheet for our risk. Every other entity we formed was created to solve a problem more effectively than RRL could.
For example, one of the first additions to our Integrated System was Top Layer Re in 1999, our joint venture with State Farm. We had access to international, risk-remote, property catastrophe risk that was attractive, but capital consumptive on RRL’s balance sheet, which made it a less efficient solution for our customers’ needs. This business, however, was diversifying against U.S. risk, and thus ideal for a partner like State Farm. So, we created Top Layer Re, with a majority of the capital provided by State Farm in the efficient form of a $3.9 billion stop-loss agreement.
DaVinci Re is another good example. We formed this balance sheet because we had access to more desirable risk than our RRL balance sheet could efficiently assume, as it was not sufficiently diversifying against RRL’s existing book. Additionally, market capacity was constrained and DaVinci Re supplied new, diversifying capital to this desirable risk, while providing a separate, rated balance sheet to our customers.
It is a similar case with Upsilon. Certain types of business, such as worldwide aggregate retro, provide broad coverage and therefore are capital consumptive against a rated
balance sheet such as RRL. We had access to a deep pool of this risk and are recognized experts in underwriting it, so in 2013 we formed Upsilon, a collateralized balance sheet. Upsilon, as an unrated vehicle, posts a dollar of collateral for every dollar of limit provided, and therefore occupies a very different position on the efficient frontier from a rated balance sheet, providing desirable risk to ILS capital and a greater supply of efficient protection to our customers.
We also have several wholly owned, rated balance sheets, the largest of which are our Lloyds’ Syndicate 1458 and Renaissance Reinsurance U.S. Inc. For certain lines of business, we needed to be closer to the customer. Syndicate 1458 and Renaissance Reinsurance U.S. helped us accomplish that goal. The Lloyds’ market is licensed in over 100 countries around the world and has great access to business that requires a market presence. Similarly, Renaissance Reinsurance U.S. is licensed or authorized in all 50 states.
Over the years, we formed several other ventures occupying unique positions on the Pareto efficient frontier. Having served their purpose, they were retired. Many of these were created to fulfill a short-term need, and thus their winding down was the expected conclusion to their limited life cycles. The combination of owned balance sheets and both short-term and long-term managed vehicles allows us to nimbly respond to opportunities and solve more customer problems. Importantly, we never compromise on our underwriting or the discipline required to service each mandate with precision, transparency and a deft ability to manage increasingly complicated conflicts.
Fees and the Integrated System
One of the benefits of our Integrated System is it allows us to earn fees for bridging the gap between risk and capital. The starting point for raising capital and creating entities, however, is always to meet customer needs. We believe the industry yardstick of assets under management as a measure of success is misplaced and can lead to unintended, and potentially deleterious, outcomes. Our vehicles are structured to deliver efficient capital in order to service customers, not to maximize assets under management or fees. So for us, fees are a serendipitous outcome of using our Integrated System to benefit our customers.
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RenaissanceRe Holdings Ltd. 2018 Annual Report
Total fee income was about $90 million in 2018, which is up over a thirdyear-on-year. The true earning power of this business is likely higher, given that the catastrophe losses experienced in both 2017 and 2018 reduced our fee income. This is significant for several reasons. First, this is risk-free income against which we do not need to hold capital, which boosts not only our bottom line, but also our return on equity. Second, these vehicles benefit from the underwriting work we already undertake for our wholly owned balance sheets. Since we only need to underwrite a risk once, we can leverage apre-existing risk curve against many sources of capital. Undoubtedly, there are some marginal costs related to running our fee generating businesses, but these are relatively small. So, not only do we generate a material amount of fee income, but much of it goes straight to our bottom line.
Third-Party Capital & the Price of Risk
While we believe third-party capital is an important component of our business, due to the inherent risk of conflicts of interest, I believe this capital needs to be intermediated by strong underwriting. Strong underwriting is critical because it helps answer the question, “What is the correct price of risk?” As important as the answer to this question is, it isa priori unknowable, andex postfactounactionable.
The best and simplest definition of “risk” I have seen is from Elroy Dimson of the London Business School — “Risk means more things can happen than will happen.” So, to best understand risk, we build stochastic models that generate probability distributions of outcomes from very good (no loss) to very bad (total loss), and we use these distributions to estimate the price necessary for us to assume a given risk. This pricing process requires us, as underwriters, to determine a final distribution that best represents the set of outcomes that can happen. I highlight this because many market participants have focused solely on expected loss, or mean of the distribution, both of which are fancy ways of saying “the average”. This is a single number, which we believe is insufficient to understand, much less price, the
assumed risk. It is the equivalent of saying, “Many very different things can happen, so let’s take the average and assume that is what will happen.” In our business, you almost never get the average.
As an example closer to home, assume we are in a world where an underwriter has a choice between two contracts. Each contract has a limit of $100, premium of $2 and expected (average) loss of 1%. In reinsurance terms, each contract has a 50% loss ratio, meaning on average $1 is earned every year. Using only this expected loss statistic, these contracts are indistinguishable. However, with more information about the shape of the risk distribution for each contract, we see they are, in fact, very different.
Assume contract 1 has no standard deviation, so every year you collect $2 in premium and pay $1 in loss. Contract 2, on the other hand, has two possible outcomes. The first outcome is 99% chance of no loss, so you keep the $2 premium most of the time. The second outcome is a 1% chance that you lose $100, which is what we call tail risk, the risk of extreme outcomes. So, both contracts still make $1 per year on average, but, I think with this additional information, a good underwriter would select contract 1 with its guarantee of making $1. In addition, in order to responsibly write contract 2, the underwriter must hold at least $100 in capital, because she never knows when the bad year will happen and must be able to settle the potential for a total loss at any time.
Obviously, this is a simplified view of the world, but it does highlight that understanding the full distribution of potential outcomes, especially the tail risk, is required to appropriately price and underwrite risk, and defaulting to a single measurement is never a good idea. Due to the growing recognition of the importance of underwriting in the third-party capital market, we are increasingly seeing more sophisticated diligence conducted by investors in order to assess the underwriting expertise of their managers. Ultimately, I expect the market to migrate to the hybrid model of rated and collateralized capacity we pioneered with our Integrated System. The benefits of the hybrid model are increasingly recognized, and provide us a significant competitive advantage.
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Letter to Shareholders (continued)
Enhancing Relationships with Key Partners
State Farm
We had a successful year in 2018, building and enhancing relationships with important partners. For example, State Farm agreed to take a substantial equity position, investing $250 million in our common shares. Our association with State Farm stretches back decades. They are founding investors in our joint ventures Top Layer Re and DaVinci Re. This most recent investment establishes them as one of our largest shareholders. Going forward, we believe partnering with the strongest companies in the value chain, like State Farm, will be of increasing importance.
TMR Acquisition
One of our most significant strategic achievements for 2018 was our agreement to acquire Tokio Marine’s reinsurance business — Tokio Millennium Re, or TMR. Acquisitions are rare for us, with our last one being Platinum Underwriters Holdings Ltd. in 2015. Given our industry reputation, we have been approached to acquire businesses in the past, but, due to the strength of our culture and insistence on strong enterprise risk management, we prefer building businesses from the bottom up. Occasionally though, we have the opportunity to acquire a good business at a competitive price.
The TMR transaction accelerates our strategy by providing greater penetration into the reinsurance market at a time when desirable risk remains scarce, while also permitting us to offer more comprehensive solutions to a larger number of customers. This transaction also enhances our relationship with Tokio Marine, a key partner since 1994. As of this writing, we had not yet closed the TMR transaction, but, if TMR’s tangible book value is unchanged from June 30, 2018, we expect to pay a total of about $1.5 billion in cash (including apre-closing dividend) and stock, or slightly over TMR’s tangible book value. We still have work to do in order to realize these benefits, but I feel confident that we have the best team in the business and that TMR will make it even stronger.
II. Looking Forward
Virtual Insurance Enterprises
A critical aspect of our strategy is using our skills to support our partners’ efforts. In the future, we believe this partnership model will mark its apex in what we call “Virtual Insurance Enterprises,” where specialists who arebest-in-breed in complementary zones of expertise partner to successfully bridge an evolving value chain. A key implication of these Virtual Insurance Enterprises is the recognition there will be more than one winner in any future state, and it will not be possible for one organization to successfully occupy all the links in the value chain. Our competitive advantages lie in creating and pricing portfolios, and sourcing the most efficient capital to back them. Understanding this, we believe we can best maximize shareholder value by focusing on our competitive advantages and bringing them to market in an industry-leading way.
Our identity is quite simply, “To be the best underwriter.” We know who we are and what we are good at; consequently, we consistently strive to be the preferred market for matching desirable risk with efficient capital. Put bluntly, if underwriting is no longer valuable, we are no longer valuable. Thankfully, we have always been able to add value through underwriting and believe we always will. We have a strong record of being a good partner, and I believe we will best maximize shareholder value in the future by focusing on our strengths and sourcing our risk through partnerships with successful insurers, thereby building Virtual Insurance Enterprises that are more effective and efficient than any actual insurance enterprise.
Market of the Future
I believe, in order to remain relevant, the insurance market must mature, with the most significant advancements focused in two areas. First, the supply chain must become more efficient. Second, providers of risk capital must manage the frictional cost of matching risk and capital more efficiently. From our perspective, we have spent the last five years focusing on the second of these imperatives, working diligently to increase our ability to efficiently match risk with capital. We recognized, as our market matured and
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RenaissanceRe Holdings Ltd. 2018 Annual Report
became more competitive, we needed to reduce the cost of our capital. We accomplished this by moving quickly to increase both our scale and our investment and capital leverage. By doing so, we returned these efficiencies to our equity investors through higher margins. We find continuing success in this effort. Over the previous five years, we more than doubled our gross premiums written while growing shareholders’ equity approximately 30% and holding the sum of operational and corporate expenses flat.
We expect our operational and capital leverage will continue to improve moving forward and adding the TMR portfolio will allow us to continue to leverage our platforms. While I am delighted with our performance to date, I note, even with the expected contribution of the TMR deal to increased efficiency, you should not expect us to continue to improve at the same pace. We believe we are at a point where our existing resources are constrained, and any continued future growth will require an expanded expense base. Our goal, however, is to grow premium faster than expenses.
Why did we choose to focus on our operational efficiency rather than on supply chain efficiency? Primarily for two reasons:
First, we retain greater control over both the process and the benefit of the efficiencies of an improved platform, which is permanent to us. Others may also close the gap to become more efficient operationally, but that simply reduces our alpha to the market; it does not reduce the benefit accrued to our shareholders.
Second, we believe focusing on the supply chain is less advantageous for us over the long run. Changes that improve the efficiency of the supply chain are likely to become transparent to competitors, and quickly adopted by all market participants, especially if they do not involve any countervailing tradeoffs. Consequently, any benefit will eventually be mutualized, with fleeting advantages to a first mover. Supply chain efficiencies are ultimately competed away, and typically inure to the long-term benefit of the consumer.
Board Evolution
We recently announced the nomination of Cynthia Trudell to our Board of Directors. Cynthia will be a great addition and brings a wealth of experience as a chief executive and leader of organizational talent. Cynthia’s expertise and proven experience in Board leadership will contribute significantly to our stewardship of the organization on behalf of all of our shareholders.
We also announced the planned retirement of Edward J. Zore at the end of his term in May 2019, after nearly a decade of service. Ed’s industry experience, investment acumen and general wise counsel have been invaluable to me and my team. I would like to thank Ed for his many years of distinguished service.
In Closing
2018 was a difficult year for the industry; however, we outperformed across the board, both financially and strategically. Once again, we benefited from our industry-leading ability to construct efficient portfolios of risk through superior underwriting and the application of ourGross-to-Net Strategy and Integrated System. In 2019, we face the challenges of successfully integrating TMR while continuing to grow the business and maximizing shareholder value, but I believe we will rise to that challenge, just as we did in 2018.
Sincerely, |
Kevin J. O’Donnell |
President and Chief Executive Officer |
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RenaissanceRe’s mission is, and has consistently been, to produce superior returns for our shareholders over the long term. We do this by being a trusted, long-term partner to our customers for assessing and managing risk, delivering responsive solutions and keeping our promises. The principal mission of your Board of Directors is to oversee management’s development and execution of a sound strategic plan, consistent with RenaissanceRe’s mission and values. In many ways 2018 reflected the rewards and continuing promise of your Company’s strategy, as RenaissanceRe delivered what the Board believes to be extraordinary financial results in the context of large industry losses; extended our value proposition and leading market position with clients and partners worldwide; and grew our operations significantly with new market offerings and through expansion of our existing, market leading franchises. In addition, we took a significant step to further accelerate our strategy with the announced acquisition of Tokio Millennium Re, the reinsurance operations of Tokio Marine Holdings, Inc. These achievements are summarized for you in this year’s letter from our Chief Executive Officer, Kevin O’Donnell.
The value propositions, execution capabilities and risk management discipline of insurers and reinsurers are tested by years of elevated industry losses, such as what we have seen in 2018 and 2017. In the view of the Board, RenaissanceRe more than passed these tests. The Company kept its promises to clients and partners, extended its market reach and presence, and generated strong net returns despite large loss events. As in 2017, investments made over time to support our industry leading portfolio construction, build and deploy new and enhanced risk management tools, and execute ourGross-to-Net Strategy bore fruit in 2018. Not every year will pose challenges of this level, but the Board will remain committed to the development and execution of the Company’s strategic plan, including oversight of management’s business plans and risk management framework.
The Board is also mindful that, against 2018’s unusually busy backdrop, the RenaissanceRe team pursued potential growth opportunities with discipline, culminating in our successful bid for Tokio Millennium Re. The Board’s oversight of this process was vigorous and robust. We share management’s confidence that the transaction will accelerate our existing strategy, and that our strategy keeps us well positioned to produce superior long-term financial results. In addition, we join the executive team in welcoming our future colleagues from Tokio Millennium Re to our organization, and in expressing our appreciation of our long-term and expanded relationship with Tokio Marine Holdings.
The Board is also pleased to welcome State Farm Mutual Automobile Insurance Company to our shareholder base, extending the long-standing relationship between our two firms. State Farm’s investment further enhances our
decades-old relationship, benefiting both franchises, the markets we respectively serve, and our shareholders. Following the closing of our acquisition of Tokio Millennium Re, we anticipate that we will continue to have the very strong capital and liquidity position you have come to expect from RenaissanceRe.
While our philosophy remains consistent, your Board’s composition evolves over time as we consider the skills and experiences that best suit your Company’s future needs and as the circumstances of individual directors change. This year, our distinguished colleague Ed Zore announced his plans to retire from your Board after three full terms as a director. Ed served with distinction on each of our committees, bringing both his extraordinary business acumen and his passion for and wisdom in respect of corporate governance. Ed was an outstanding advisor and sounding board for both Kevin and me, and we join every member of the Board in wishing Ed all the best in his retirement.
To succeed Ed, the Board is delighted to unanimously nominate Ms. Cynthia Trudell to serve you as an independent director. Cynthia’s remarkable career spans high-performance tenures in chief executive roles and as a leader of organizational talent, which is a perfect suite of experience for RenaissanceRe as we prepare to meaningfully expand our headcount, operating platform and geographic presence. Moreover, Cynthia brings to us an extensive background in governance, including in the financial risk bearing sector and in industries confronting change. We look forward to welcoming Cynthia in conjunction with our May 2019 shareholder meeting.
I also wish, once again, to thank our shareholders and stakeholders who participated over the past year in our continual engagement process. We appreciate your investment in RenaissanceRe, and overseeing management’s communications with, disclosure to, and engagement with you is a priority for the Board. Your engagement supports our ongoing efforts to attract, retain and appropriately incent what your 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 strategy, unique culture, distinctive capabilities and values let us thrive amidst the challenges of 2018, and how these attributes and our strategy position us to succeed in an exciting future. Rest assured that our commitment to overseeing these plans and this remarkable franchise on your behalf will continue as well.
Sincerely, |
James L. Gibbons |
Non-Executive Chair |
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In addition to financial measures prepared in accordance 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”), which was enacted on December 21, 2017. 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)
| 2018 | 2017 | 2016 | |||||||||
| ||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | $197,276 | $ | (244,770 | ) | $480,581 | |||||||
Adjustment for net realized and unrealized losses (gains) on investments | 175,069 | (135,822 | ) | (141,328) | ||||||||
Adjustment for deferred tax asset write-down (1) | - | 36,705 | - | |||||||||
Adjustment for income tax (benefit) expense (2)
| (5,750 | ) | 11,587 | 3,000 | ||||||||
| ||||||||||||
Operating income (loss) available (attributable) to RenaissanceRe common shareholders
| $ | 366,595 | $ | (332,300 | ) | $342,253 | ||||||
| ||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted | $ | 4.91 | $ | (6.15 | ) | $ 11.43 | ||||||
Adjustment for net realized and unrealized losses (gains) on investments | 4.40 | (3.41 | ) | (3.40) | ||||||||
Adjustment for deferred tax asset write-down (1) | - | 0.92 | - | |||||||||
Adjustment for income tax (benefit) expense (2)
| (0.14 | ) | 0.29 | 0.07 | ||||||||
| ||||||||||||
Operating income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted
| $ | 9.17 | $ | (8.35 | ) | $ | 8.10 | |||||
| ||||||||||||
Return on average common equity | 4.7 | % | (5.7 | %) | 11.0% | |||||||
Adjustment for net realized and unrealized losses (gains) on investments | 4.2 | % | (3.2 | %) | (3.2% | ) | ||||||
Adjustment for deferred tax asset write-down (1) | - | 0.9 | % | - | ||||||||
Adjustment for income tax (benefit) expense (2)
| (0.1 | %) | 0.3 | % | 0.1% | |||||||
| ||||||||||||
Operating return on average common equity
| 8.8 | % | (7.7 | %) | 7.9% | |||||||
|
(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 (benefit) expense represents the income tax (benefit) expense associated with the adjustment for net realized and unrealized losses (gains) 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 common share. “Tangible book value per common share plus accumulated dividends” is defined as book value per common share excluding goodwill and intangible assets per common share, plus accumulated dividends. The Company believes book value per common share to be the most directly comparable GAAP measure to “tangible book value per common share” and “tangible book value per common share plus accumulated dividends,” respectively. 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, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
| ||||||||||||
Book value per common share
| $104.13 | $ 99.72 | $108.45 | |||||||||
Adjustment for goodwill and other intangibles (1)
| (6.28 | ) | (6.49 | ) | (6.58 | ) | ||||||
| ||||||||||||
Tangible book value per common share
| 97.85 | 93.23 | 101.87 | |||||||||
Adjustment for accumulated dividends
| 19.32 | 18.00 | 16.72 | |||||||||
| ||||||||||||
Tangible book value per common share plus accumulated dividends
| $117.17 | $111.23 | $118.59 | |||||||||
| ||||||||||||
Change in book value per common share
| 4.4 | % | (8.0 | %) | 9.4 | % | ||||||
Change in tangible book value per common share plus change in accumulated dividends
| 6.4 | % | (7.2 | %) | 11.4 | % | ||||||
|
(1) | For 2018, 2017 and 2016, goodwill and other intangibles includes $27.7 million, $16.7 million and $19.7 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. |
Depositary Shares, each representing a 1/1,000th interest in a Series F 5.750% Preference Share, Par Value $1.00 per share | New York Stock Exchange, Inc. |
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• | the failure to obtain regulatory approvals or satisfy other conditions to completion of the proposed TMR Stock Purchase (as defined herein); |
• | risks that the TMR Stock Purchase disrupts or distracts from current plans and operations; |
• | the ability to recognize the benefits of the TMR Stock Purchase; |
• | the amount of the costs, fees, expenses and charges related to the TMR Stock Purchase; |
• | 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.; |
• | the success of any of our acquisitions or strategic investments, including our ability to manage our operations as our product and geographical diversity increases; |
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• | 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; |
• | 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 industries; |
• | 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; |
• | 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; |
• | our ability to comply with sanctions and foreign corrupt practices laws with respect to our international operations; |
• | 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, | 2018 | 2017 | 2016 | ||||||||||
(in thousands) | |||||||||||||
Property | $ | 1,760,926 | $ | 1,440,437 | $ | 1,111,263 | |||||||
Casualty and Specialty | 1,549,501 | 1,357,110 | 1,263,313 | ||||||||||
Other category | — | (7 | ) | — | |||||||||
Total gross premiums written | $ | 3,310,427 | $ | 2,797,540 | $ | 2,374,576 | |||||||
Year ended December 31, 2018 | Property | Casualty and Specialty | Other | Total | |||||||||||||
(in thousands) | |||||||||||||||||
Excess of loss | $ | 1,473,381 | $ | 366,635 | $ | — | $ | 1,840,016 | |||||||||
Proportional | 220,458 | 965,141 | — | 1,185,599 | |||||||||||||
Delegated authority | 67,087 | 217,725 | — | 284,812 | |||||||||||||
Total gross premiums written | $ | 1,760,926 | $ | 1,549,501 | $ | — | $ | 3,310,427 | |||||||||
Year ended December 31, 2017 | |||||||||||||||||
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 | |||||||||
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Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
(in thousands) | |||||||||||||
Catastrophe | $ | 1,349,324 | $ | 1,104,450 | $ | 884,361 | |||||||
Other property | 411,602 | 335,987 | 226,902 | ||||||||||
Total Property segment gross premiums written | $ | 1,760,926 | $ | 1,440,437 | $ | 1,111,263 | |||||||
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Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
(in thousands) | |||||||||||||
Professional liability (1) | $ | 485,851 | $ | 452,310 | $ | 377,580 | |||||||
General casualty (2) | 453,097 | 417,880 | 327,939 | ||||||||||
Financial lines (3) | 352,902 | 303,800 | 413,068 | ||||||||||
Other (4) | 257,651 | 183,120 | 144,726 | ||||||||||
Total Casualty and Specialty segment gross premiums written | $ | 1,549,501 | $ | 1,357,110 | $ | 1,263,313 | |||||||
(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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2018 | 2017 | 2016 | ||||||||||||||||||||
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 | $ | 978,063 | 29.4 | % | $ | 954,269 | 34.1 | % | $ | 743,226 | 31.3 | % | ||||||||||
Worldwide | 464,311 | 14.0 | % | 305,915 | 10.9 | % | 210,168 | 8.9 | % | |||||||||||||
Japan | 71,601 | 2.2 | % | 49,821 | 1.8 | % | 44,536 | 1.9 | % | |||||||||||||
Europe | 144,857 | 4.4 | % | 49,486 | 1.8 | % | 37,611 | 1.6 | % | |||||||||||||
Worldwide (excluding U.S.) (1) | 66,872 | 2.0 | % | 48,182 | 1.7 | % | 55,043 | 2.3 | % | |||||||||||||
Australia and New Zealand | 19,273 | 0.6 | % | 14,151 | 0.5 | % | 13,729 | 0.6 | % | |||||||||||||
Other | 15,949 | 0.5 | % | 18,613 | 0.7 | % | 6,950 | 0.3 | % | |||||||||||||
Total Property Segment | 1,760,926 | 53.1 | % | 1,440,437 | 51.5 | % | 1,111,263 | 46.9 | % | |||||||||||||
Casualty and Specialty Segment | ||||||||||||||||||||||
Worldwide | 776,976 | 23.4 | % | 686,253 | 24.5 | % | 581,972 | 24.5 | % | |||||||||||||
U.S. and Caribbean | 667,125 | 20.2 | % | 622,757 | 22.3 | % | 646,381 | 27.2 | % | |||||||||||||
Europe | 15,296 | 0.5 | % | 9,752 | 0.3 | % | 5,541 | 0.2 | % | |||||||||||||
Worldwide (excluding U.S.) (1) | 31,734 | 1.0 | % | 10,104 | 0.4 | % | 13,840 | 0.6 | % | |||||||||||||
Australia and New Zealand | 3,667 | 0.1 | % | 4,141 | 0.1 | % | 5,073 | 0.2 | % | |||||||||||||
Other | 54,703 | 1.7 | % | 24,103 | 0.9 | % | 10,506 | 0.4 | % | |||||||||||||
Total Casualty and Specialty Segment | 1,549,501 | 46.9 | % | 1,357,110 | 48.5 | % | 1,263,313 | 53.1 | % | |||||||||||||
Other category | — | — | % | (7 | ) | — | % | — | — | % | ||||||||||||
Total gross premiums written | $ | 3,310,427 | 100.0 | % | $ | 2,797,540 | 100.0 | % | $ | 2,374,576 | 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. |
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• | 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 |
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• | 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, 2018 | Property | Casualty and Specialty | Total | |||||||
AON | 42.7 | % | 38.4 | % | 40.7 | % | ||||
Marsh | 29.1 | % | 19.5 | % | 24.6 | % | ||||
Willis Towers Watson | 7.2 | % | 12.9 | % | 9.9 | % | ||||
Total of largest brokers | 79.0 | % | 70.8 | % | 75.2 | % | ||||
All others | 21.0 | % | 29.2 | % | 24.8 | % | ||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | ||||
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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. |
Bordereaux | 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. |
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Catastrophe | A severe loss, typically involving multiple claimants. Common perils include earthquakes, hurricanes, hailstorms, severe winter weather, floods, fires, tornadoes, explosions and other natural or man-made disasters. Catastrophe losses may also arise from acts of war, acts of terrorism and political instability. |
Catastrophe excess of loss reinsurance | A form of excess of loss reinsurance that, subject to a specified limit, indemnifies the ceding company for the amount of loss in excess of a specified retention with respect to an accumulation of losses resulting from a “catastrophe.” |
Catastrophe-linked securities; cat-linked securities | Cat-linked securities are generally privately placed fixed income securities where all or a portion of the repayment of the principal is linked to catastrophic events. This includes securities where the repayment is linked to the occurrence and/or size of, for example, one or more hurricanes or earthquakes, or insured industry losses associated with these catastrophic events. |
Cede; cedant; ceding company | When a party reinsures its liability with another, it “cedes” business and is referred to as the “cedant” or “ceding company.” |
Claim | Request by an insured or reinsured for indemnification by an insurance company or a reinsurance company for losses incurred from an insured peril or event. |
Claims made contracts | Contracts that cover claims for losses occurring during a specified period that are reported during the term of the contract. |
Claims and claim expense ratio, net | The ratio of net claims and claim expenses to net premiums earned determined in accordance with either statutory accounting principles or GAAP. |
Claim reserves | Liabilities established by insurers and reinsurers to reflect the estimated costs of claim payments and the related expenses that the insurer or reinsurer will ultimately be required to pay in respect of insurance or reinsurance policies it has issued. Claims reserves consist of case reserves, established with respect to individual reported claims, additional case reserves and “IBNR” reserves. For reinsurers, loss expense reserves are generally not significant because substantially all of the loss expenses associated with particular claims are incurred by the primary insurer and reported to reinsurers as losses. |
Combined ratio | The combined ratio is the sum of the net claims and claim expense ratio and the underwriting expense ratio. A combined ratio below 100% generally indicates profitable underwriting prior to the consideration of investment income. A combined ratio over 100% generally indicates unprofitable underwriting prior to the consideration of investment income. |
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. |
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Excess of loss reinsurance or insurance | 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. |
Frequency | The number of claims occurring during a given coverage period. |
Funds at Lloyd’s | Funds of an approved form that are lodged and held in trust at Lloyd’s as security for a member’s underwriting activities. They comprise the members’ deposit, personal reserve fund and special reserve fund and may be drawn down in the event that the member’s syndicate level premium trust funds are insufficient to cover its liabilities. The amount of the deposit is related to the member’s premium income limit and also the nature of the underwriting account. |
Generally Accepted Accounting Principles in the United States (“GAAP”) | Accounting principles as set forth in 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. |
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Loss; losses | An occurrence that is the basis for submission and/or payment of a claim. Whether losses are covered, limited or excluded from coverage is dependent on the terms of the policy. |
Loss reserve | For an individual loss, an estimate of the amount the insurer expects to pay for the reported claim. For total losses, estimates of expected payments for reported and unreported claims. These may include amounts for claims expenses. |
Managing agent | An underwriting agent which has permission from Lloyd’s to manage a syndicate and carry on underwriting and other functions for a member. |
Net claims and claim expenses | The expenses of settling claims, net of recoveries, including legal and other fees and the portion of general expenses allocated to claim settlement costs (also known as claim adjustment expenses or loss adjustment expenses) plus losses incurred with respect to net claims. |
Net claims and claim expense ratio | Net claims and claim expenses incurred expressed as a percentage of net earned premiums. |
Net premiums earned | The portion of net premiums written during or prior to a given period that was actually recognized as income during such period. |
Net premiums written | Gross premiums written for a given period less premiums ceded to reinsurers and retrocessionaires during such period. |
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. |
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Reinsurance | An arrangement in which an insurance company, the reinsurer, agrees to indemnify another insurance or reinsurance company, the ceding company, against all or a portion of the insurance or reinsurance risks underwritten by the ceding company under one or more policies. Reinsurance can provide a ceding company with several benefits, including a reduction in net liability on insurances and catastrophe protection from large or multiple losses. Reinsurance also provides a ceding company with additional underwriting capacity by permitting it to accept larger risks and write more business than would be possible without an equivalent increase in capital and surplus, and facilitates the maintenance of acceptable financial ratios by the ceding company. Reinsurance does not legally discharge the primary insurer from its liability with respect to its obligations to the insured. |
Reinsurance to Close | Also referred to as a RITC, it is a contract to transfer the responsibility for discharging all the liabilities that attach to one year of account of a syndicate into a later year of account of the same or different syndicate in return for a premium. |
Retention | The amount or portion of risk that an insurer retains for its own account. Losses in excess of the retention level are paid by the reinsurer. In proportional treaties, the retention may be a percentage of the original policy’s limit. In excess of loss business, the retention is a dollar amount of loss, a loss ratio or a percentage. |
Retrocedant | A reinsurer who cedes all or a portion of its assumed insurance to another reinsurer. |
Retrocessional reinsurance; Retrocessionaire | A transaction whereby a reinsurer cedes to another reinsurer, the retrocessionaire, all or part of the reinsurance that the first reinsurer has assumed. Retrocessional reinsurance does not legally discharge the ceding reinsurer from its liability with respect to its obligations to the reinsured. Reinsurance companies cede risks to retrocessionaires for reasons similar to those that cause primary insurers to purchase reinsurance: to reduce net liability on insurances, to protect against catastrophic losses, to stabilize financial ratios and to obtain additional underwriting capacity. |
Risks | A term used to denote the physical units of property at risk or the object of insurance protection that are not perils or hazards. Also defined as chance of loss or uncertainty of loss. |
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. |
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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. |
Surplus lines insurance | 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. |
Syndicate | A member or group of members underwriting (re)insurance business at Lloyd’s through the agency of a managing agent or substitute agent to which a syndicate number is assigned. |
Treaty | A reinsurance agreement covering a book or class of business that is automatically accepted on a bulk basis by a reinsurer. A treaty contains common contract terms along with a specific risk definition, data on limit and retention, and provisions for premium and duration. |
Underwriting | The insurer’s or reinsurer’s process of reviewing applications submitted for insurance coverage, deciding whether to accept all or part of the coverage requested and determining the applicable premiums. |
Underwriting capacity | The maximum amount that an insurance company can underwrite. The limit is generally determined by a company’s retained earnings and investment capital. Reinsurance serves to increase a company’s underwriting capacity by reducing its exposure from particular risks. |
Underwriting expense ratio | The ratio of the sum of the acquisition expenses and operational expenses to net premiums earned. |
Underwriting expenses | The aggregate of policy acquisition costs, including commissions, and the portion of administrative, general and other expenses attributable to underwriting operations. |
Unearned premium | The portion of premiums written representing the unexpired portions of the policies or contracts that the insurer or reinsurer has on its books as of a certain date. |
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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; |
• | 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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• | delays in the integration of management teams, strategies, operations, products and services; |
• | diversion of the attention of management as a result of the TMR Stock Purchase; |
• | differences in business backgrounds, corporate cultures and management philosophies that may delay successful integration; |
• | the inability to retain key employees; |
• | the inability to establish and maintain integrated risk management systems, underwriting methodologies and controls, which could give rise to excess accumulation or aggregation of risks, underreporting or underrepresentation of exposures or other adverse consequences; |
• | the inability to create and enforce uniform financial, compliance and operating controls, procedures, policies and information systems; |
• | complexities associated with managing the TMR Group Entities’ operating units as a component of RenaissanceRe, including the challenge of integrating complex systems, technology, networks and other assets of the TMR Group Entities into those of RenaissanceRe in a seamless manner that minimizes any adverse impact on customers, brokers, employees and other constituencies; |
• | potential unknown liabilities and unforeseen increased expenses or delays associated with the TMR Stock Purchase, including one-time cash costs to integrate the TMR Group Entities beyond current estimates; and |
• | the disruption of, or the loss of momentum in, the combined company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies. |
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• | the unsuccessful integration of the TMR Group Entities into RenaissanceRe; |
• | our failure to achieve the anticipated benefits of the TMR Stock Purchase, including financial results, as rapidly as or to the extent anticipated; |
• | decreases in our financial results before or after the closing of the TMR Stock Purchase; |
• | as described below, any failure to maintain our financial strength, claims-paying and enterprise-wide risk management ratings as a result of the TMR Stock Purchase; or |
• | general market or economic conditions unrelated to our performance. |
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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 | $ | 500.0 | ||||||||||||||||||||||||
October 1 - 31, 2018 | — | $ | — | — | $ | — | — | $ | — | — | ||||||||||||||||
November 1 - 30, 2018 | 1,360 | $ | 124.85 | 1,360 | $ | 124.85 | — | $ | — | — | ||||||||||||||||
December 1 - 31, 2018 | 4,508 | $ | 133.58 | 4,508 | $ | 133.58 | — | $ | — | — | ||||||||||||||||
Total | 5,868 | $ | 131.56 | 5,868 | $ | 131.56 | — | $ | — | $ | 500.0 | |||||||||||||||
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Year ended December 31, | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||
(in thousands, except share and per share data and percentages) | |||||||||||||||||||||
Statements of Operations Data: | |||||||||||||||||||||
Gross premiums written | $ | 3,310,427 | $ | 2,797,540 | $ | 2,374,576 | $ | 2,011,310 | $ | 1,550,572 | |||||||||||
Net premiums written | 2,131,902 | 1,871,325 | 1,535,312 | 1,416,183 | 1,068,236 | ||||||||||||||||
Net premiums earned | 1,976,129 | 1,717,575 | 1,403,430 | 1,400,551 | 1,062,416 | ||||||||||||||||
Net investment income | 261,866 | 222,209 | 181,726 | 152,567 | 124,316 | ||||||||||||||||
Net realized and unrealized (losses) gains on investments | (175,069 | ) | 135,822 | 141,328 | (68,918 | ) | 41,433 | ||||||||||||||
Net claims and claim expenses incurred | 1,120,018 | 1,861,428 | 530,831 | 448,238 | 197,947 | ||||||||||||||||
Acquisition expenses | 432,989 | 346,892 | 289,323 | 238,592 | 144,476 | ||||||||||||||||
Operational expenses | 178,267 | 160,778 | 197,749 | 219,112 | 190,639 | ||||||||||||||||
Underwriting income (loss) | 244,855 | (651,523 | ) | 385,527 | 494,609 | 529,354 | |||||||||||||||
Net income (loss) | 268,917 | (354,671 | ) | 630,048 | 542,242 | 686,256 | |||||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | 197,276 | (244,770 | ) | 480,581 | 408,811 | 510,337 | |||||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – diluted | 4.91 | (6.15 | ) | 11.43 | 9.28 | 12.60 | |||||||||||||||
Dividends per common share | 1.32 | 1.28 | 1.24 | 1.20 | 1.16 | ||||||||||||||||
Weighted average common shares outstanding – diluted | 39,755 | 39,854 | 41,559 | 43,526 | 39,968 | ||||||||||||||||
Return on average common equity | 4.7 | % | (5.7 | )% | 11.0 | % | 9.8 | % | 14.9 | % | |||||||||||
Combined ratio | 87.6 | % | 137.9 | % | 72.5 | % | 64.7 | % | 50.2 | % | |||||||||||
At December 31, | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||
Balance Sheet Data: | |||||||||||||||||||||
Total investments | $ | 11,885,747 | $ | 9,503,439 | $ | 9,316,968 | $ | 8,999,068 | $ | 6,743,750 | |||||||||||
Total assets | 18,676,196 | 15,226,131 | 12,352,082 | 11,555,287 | 8,202,307 | ||||||||||||||||
Reserve for claims and claim expenses | 6,076,271 | 5,080,408 | 2,848,294 | 2,767,045 | 1,412,510 | ||||||||||||||||
Unearned premiums | 1,716,021 | 1,477,609 | 1,231,573 | 889,102 | 512,386 | ||||||||||||||||
Debt | 991,127 | 989,623 | 948,663 | 960,495 | 248,279 | ||||||||||||||||
Capital leases | 25,853 | 26,387 | 26,073 | 26,463 | 26,817 | ||||||||||||||||
Preference shares | 650,000 | 400,000 | 400,000 | 400,000 | 400,000 | ||||||||||||||||
Total shareholders’ equity attributable to RenaissanceRe | 5,045,080 | 4,391,375 | 4,866,577 | 4,732,184 | 3,865,715 | ||||||||||||||||
Common shares outstanding | 42,207 | 40,024 | 41,187 | 43,701 | 38,442 | ||||||||||||||||
Book value per common share | $ | 104.13 | $ | 99.72 | $ | 108.45 | $ | 99.13 | $ | 90.15 | |||||||||||
Accumulated dividends | 19.32 | 18.00 | 16.72 | 15.48 | 14.28 | ||||||||||||||||
Book value per common share plus accumulated dividends | $ | 123.45 | $ | 117.72 | $ | 125.17 | $ | 114.61 | $ | 104.43 | |||||||||||
Change in book value per common share plus change in accumulated dividends | 5.7 | % | (6.9 | )% | 10.7 | % | 11.3 | % | 13.7 | % | |||||||||||
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At December 31, 2018 | Case Reserves | Additional Case Reserves | IBNR | Total | |||||||||||||
(in thousands) | |||||||||||||||||
Property | $ | 690,718 | $ | 1,308,307 | $ | 1,087,229 | $ | 3,086,254 | |||||||||
Casualty and Specialty | 771,537 | 116,877 | 2,096,979 | 2,985,393 | |||||||||||||
Other | 1,458 | — | 3,166 | 4,624 | |||||||||||||
Total | $ | 1,463,713 | $ | 1,425,184 | $ | 3,187,374 | $ | 6,076,271 | |||||||||
At December 31, 2017 | |||||||||||||||||
(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 | |||||||||
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Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
(in thousands) | |||||||||||||
Net reserves as of January 1 | $ | 3,493,778 | $ | 2,568,730 | $ | 2,632,519 | |||||||
Net incurred related to: | |||||||||||||
Current year | 1,390,767 | 1,902,424 | 694,957 | ||||||||||
Prior years | (270,749 | ) | (40,996 | ) | (164,126 | ) | |||||||
Total net incurred | 1,120,018 | 1,861,428 | 530,831 | ||||||||||
Net paid related to: | |||||||||||||
Current year | 391,061 | 450,527 | 83,015 | ||||||||||
Prior years | 503,708 | 524,298 | 506,279 | ||||||||||
Total net paid | 894,769 | 974,825 | 589,294 | ||||||||||
Foreign exchange | (14,977 | ) | 38,445 | (5,326 | ) | ||||||||
Net reserves as of December 31 | 3,704,050 | 3,493,778 | 2,568,730 | ||||||||||
Reinsurance recoverable as of December 31 | 2,372,221 | 1,586,630 | 279,564 | ||||||||||
Gross reserves as of December 31 | $ | 6,076,271 | $ | 5,080,408 | $ | 2,848,294 | |||||||
Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
(in thousands) | (Favorable) adverse development | (Favorable) adverse development | (Favorable) adverse development | ||||||||||
Property | $ | (221,290 | ) | $ | (45,596 | ) | $ | (104,876 | ) | ||||
Casualty and Specialty | (49,262 | ) | 6,183 | (58,140 | ) | ||||||||
Other | (197 | ) | (1,583 | ) | (1,110 | ) | |||||||
Total favorable development of prior accident years net claims and claim expenses | $ | (270,749 | ) | $ | (40,996 | ) | $ | (164,126 | ) | ||||
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Incurred claims and claim expenses, net of reinsurance | ||||||||||||||||||||||||||||||||||||||||||
(in thousands) | For the year ended December 31, | |||||||||||||||||||||||||||||||||||||||||
Accident Year | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||||||||||||||||||
2009 | $ | 219,979 | $ | 164,369 | $ | 145,207 | $ | 138,747 | $ | 134,490 | $ | 135,245 | $ | 134,539 | $ | 134,811 | $ | 134,355 | $ | 134,876 | ||||||||||||||||||||||
2010 | — | 609,380 | 561,524 | 526,928 | 531,199 | 550,980 | 554,733 | 564,345 | 566,475 | 555,642 | ||||||||||||||||||||||||||||||||
2011 | — | — | 1,264,374 | 1,192,868 | 1,141,403 | 1,091,415 | 1,070,957 | 1,040,721 | 1,036,663 | 1,033,601 | ||||||||||||||||||||||||||||||||
2012 | — | — | — | 437,940 | 344,487 | 311,648 | 293,873 | 275,910 | 264,532 | 257,246 | ||||||||||||||||||||||||||||||||
2013 | — | — | — | — | 227,268 | 196,729 | 174,335 | 152,715 | 141,197 | 137,660 | ||||||||||||||||||||||||||||||||
2014 | — | — | — | — | — | 183,249 | 154,469 | 147,138 | 142,864 | 142,457 | ||||||||||||||||||||||||||||||||
2015 | — | — | — | — | — | — | 226,039 | 195,164 | 176,159 | 167,916 | ||||||||||||||||||||||||||||||||
2016 | — | — | — | — | — | — | — | 252,556 | 254,151 | 241,296 | ||||||||||||||||||||||||||||||||
2017 | — | — | — | — | — | — | — | — | 1,342,161 | 1,167,013 | ||||||||||||||||||||||||||||||||
2018 | — | — | — | — | — | — | — | — | — | 718,266 | ||||||||||||||||||||||||||||||||
Total | $ | 4,555,973 | ||||||||||||||||||||||||||||||||||||||||
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(in thousands, except percentages) | Reserve for Claims and Claim Expenses at December 31, 2018 | $ Impact of Change Reserve for Claims and Claim Expenses at December 31, 2018 | % Impact of Change on Reserve for Claims and Claim Expenses at December 31, 2018 | % Impact of Change on Net Income for the Year Ended December 31, 2018 | % Impact of Change on Shareholders’ Equity at December 31, 2018 | |||||||||||||
Higher | $ | 3,401,044 | $ | 314,790 | 5.2 | % | (117.1 | )% | (6.2 | )% | ||||||||
Recorded | 3,086,254 | — | — | % | — | % | — | % | ||||||||||
Lower | 2,911,835 | (174,419 | ) | (2.9 | )% | 64.9 | % | 3.5 | % | |||||||||
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Incurred claims and claim expenses, net of reinsurance | ||||||||||||||||||||||||||||||||||||||||||
(in thousands) | For the year ended December 31, | |||||||||||||||||||||||||||||||||||||||||
Accident Year | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||||||||||||||||||
2009 | $ | 479,421 | $ | 470,031 | $ | 471,808 | $ | 438,538 | $ | 417,569 | $ | 395,631 | $ | 387,184 | $ | 382,077 | $ | 385,230 | $ | 386,863 | ||||||||||||||||||||||
2010 | — | 382,996 | 389,460 | 375,980 | 340,465 | 318,979 | 305,784 | 304,096 | 300,054 | 299,490 | ||||||||||||||||||||||||||||||||
2011 | — | — | 382,194 | 381,062 | 351,692 | 321,471 | 313,955 | 307,899 | 297,405 | 303,844 | ||||||||||||||||||||||||||||||||
2012 | — | — | — | 427,341 | 425,617 | 395,823 | 387,532 | 377,527 | 391,350 | 409,458 | ||||||||||||||||||||||||||||||||
2013 | — | — | — | — | 392,146 | 362,017 | 338,054 | 319,555 | 305,114 | 295,703 | ||||||||||||||||||||||||||||||||
2014 | — | — | — | — | — | 477,587 | 459,317 | 454,589 | 439,609 | 416,162 | ||||||||||||||||||||||||||||||||
2015 | — | — | — | — | — | — | 413,112 | 432,538 | 453,052 | 422,675 | ||||||||||||||||||||||||||||||||
2016 | — | — | — | — | — | — | — | 427,483 | 430,606 | 425,157 | ||||||||||||||||||||||||||||||||
2017 | — | — | — | — | — | — | — | — | 553,215 | 564,282 | ||||||||||||||||||||||||||||||||
2018 | — | — | — | — | — | — | — | — | — | 649,147 | ||||||||||||||||||||||||||||||||
Total | $ | 4,172,781 | ||||||||||||||||||||||||||||||||||||||||
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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, 2018 | % Impact of Change on Reserve for Claims and Claim Expenses at December 31, 2018 | % Impact of Change on Net Income for the Year Ended December 31, 2018 | % Impact of Change on Shareholders’ Equity at December 31, 2018 | |||||||||||
Increase expected claims and claim expense ratio by 10% | Slower reporting | $ | 364,293 | 6.0 | % | (135.5 | )% | (7.2 | )% | |||||||
Increase expected claims and claim expense ratio by 10% | Expected reporting | 209,698 | 3.5 | % | (78.0 | )% | (4.2 | )% | ||||||||
Increase expected claims and claim expense ratio by 10% | Faster reporting | 76,341 | 1.3 | % | (28.4 | )% | (1.5 | )% | ||||||||
Expected claims and claim expense ratio | Slower reporting | 140,541 | 2.3 | % | (52.3 | )% | (2.8 | )% | ||||||||
Expected claims and claim expense ratio | Expected reporting | — | — | % | — | % | — | % | ||||||||
Expected claims and claim expense ratio | Faster reporting | (121,234 | ) | (2.0 | )% | 45.1 | % | 2.4 | % | |||||||
Decrease expected claims and claim expense ratio by 10% | Slower reporting | (83,211 | ) | (1.4 | )% | 30.9 | % | 1.6 | % | |||||||
Decrease expected claims and claim expense ratio by 10% | Expected reporting | (209,698 | ) | (3.5 | )% | 78.0 | % | 4.2 | % | |||||||
Decrease expected claims and claim expense ratio by 10% | Faster reporting | (318,808 | ) | (5.2 | )% | 118.6 | % | 6.3 | % | |||||||
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Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
(in thousands, except per share amounts and percentages) | |||||||||||||
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Gross premiums written | $ | 3,310,427 | $ | 2,797,540 | $ | 2,374,576 | |||||||
Net premiums written | $ | 2,131,902 | $ | 1,871,325 | $ | 1,535,312 | |||||||
Net premiums earned | $ | 1,976,129 | $ | 1,717,575 | $ | 1,403,430 | |||||||
Net claims and claim expenses incurred | 1,120,018 | 1,861,428 | 530,831 | ||||||||||
Acquisition expenses | 432,989 | 346,892 | 289,323 | ||||||||||
Operational expenses | 178,267 | 160,778 | 197,749 | ||||||||||
Underwriting income (loss) | $ | 244,855 | $ | (651,523 | ) | $ | 385,527 | ||||||
Net investment income | $ | 261,866 | $ | 222,209 | $ | 181,726 | |||||||
Net realized and unrealized (losses) gains on investments | (175,069 | ) | 135,822 | 141,328 | |||||||||
Change in net unrealized gains on fixed maturity investments available for sale | — | — | (1,870 | ) | |||||||||
Total investment result | $ | 86,797 | $ | 358,031 | $ | 321,184 | |||||||
Net income (loss) | $ | 268,917 | $ | (354,671 | ) | $ | 630,048 | ||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | $ | 197,276 | $ | (244,770 | ) | $ | 480,581 | ||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – diluted | $ | 4.91 | $ | (6.15 | ) | $ | 11.43 | ||||||
Dividends per common share | $ | 1.32 | $ | 1.28 | $ | 1.24 | |||||||
Key ratios | |||||||||||||
Net claims and claim expense ratio – current accident year | 70.4 | % | 110.8 | % | 49.5 | % | |||||||
Net claims and claim expense ratio – prior accident years | (13.7 | )% | (2.4 | )% | (11.7 | )% | |||||||
Net claims and claim expense ratio – calendar year | 56.7 | % | 108.4 | % | 37.8 | % | |||||||
Underwriting expense ratio | 30.9 | % | 29.5 | % | 34.7 | % | |||||||
Combined ratio | 87.6 | % | 137.9 | % | 72.5 | % | |||||||
Return on average common equity | 4.7 | % | (5.7 | )% | 11.0 | % | |||||||
Book value | December 31, 2018 | December 31, 2017 | December 31, 2016 | ||||||||||
Book value per common share | $ | 104.13 | $ | 99.72 | $ | 108.45 | |||||||
Accumulated dividends per common share | 19.32 | 18.00 | 16.72 | ||||||||||
Book value per common share plus accumulated dividends | $ | 123.45 | $ | 117.72 | $ | 125.17 | |||||||
Change in book value per common share plus change in accumulated dividends | 5.7 | % | (6.9 | )% | 10.7 | % | |||||||
Balance sheet highlights | December 31, 2018 | December 31, 2017 | December 31, 2016 | ||||||||||
Total assets | $ | 18,676,196 | $ | 15,226,131 | $ | 12,352,082 | |||||||
Total shareholders’ equity attributable to RenaissanceRe | $ | 5,045,080 | $ | 4,391,375 | $ | 4,866,577 | |||||||
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• | Impact of Catastrophe Events - we had a net negative impact on our net income available to RenaissanceRe common shareholders of $216.1 million from the Q3 2018 Catastrophe Events, the Q4 2018 Catastrophe Events, and the 2018 Aggregate Losses (each as defined herein and collectively, the “2018 Large Loss Events”), partially offset by a net positive impact of $129.8 million resulting from decreases in the estimates of the net negative impact of the 2017 Large Loss Events , compared to a net negative impact of $720.2 million associated with the 2017 Large Loss Events recorded in 2017; |
• | Underwriting Results - we generated underwriting income of $244.9 million and had a combined ratio of 87.6% in 2018, compared to an underwriting loss of $651.5 million and a combined ratio of 137.9%, in 2017. Our underwriting income in 2018 was comprised of $262.1 million of underwriting income in our Property segment, partially offset by a $17.0 million underwriting loss in our Casualty and Specialty segment. |
• | Non-recurring Reinsurance Transactions - our results for 2018 include certain large, non-recurring reinsurance transactions, which are reflected in our Property segment and increased net premiums earned by $72.3 million and contributed $56.2 million to our net income available to RenaissanceRe common shareholders. While we expect these transactions to be non-recurring, we believe they reflect our differentiated strategy, our capability to provide bespoke or large solutions for our clients and our continued focus on serving our clients with unique coverages; |
• | Gross Premiums Written - our gross premiums written increased by $512.9 million, or 18.3%, to $3.3 billion in 2018, compared to 2017, driven primarily by increases of $320.5 million in the Property segment and $192.4 million in the Casualty and Specialty segment. Included in gross premiums written in 2018 were $94.5 million of reinstatement premiums written associated with the 2018 Large Loss Events and changes in the estimates of the 2017 Large Loss Events, and $102.3 million of gross premiums written associated with a large, non-recurring reinsurance transaction, each principally within the Property segment. Included in the gross premiums written in 2017 were $180.2 million of reinstatement premiums written associated with the 2017 Large Loss Events; |
• | Investment Results - our total investment result, which includes the sum of net investment income and net realized and unrealized gains and losses on investments, was $86.8 million in 2018, compared to $358.0 million in 2017, a decrease of $271.2 million. The decrease was primarily driven by net realized and unrealized losses on investments of $175.1 million in 2018, compared to net realized and unrealized gains on investments of $135.8 million in 2017. The net realized and unrealized losses on investments in 2018 were driven by net realized and unrealized losses on the fixed maturity investments portfolio, and net realized and unrealized losses on the equity investments trading portfolio. Partially offsetting these items was higher net investment income from our portfolios of fixed maturity investments trading and short term investments, primarily driven by higher average invested assets and the impact of interest rate increases during recent periods; and |
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• | Net Income Attributable to Redeemable Noncontrolling Interests - our net income attributable to redeemable noncontrolling interests was $41.6 million in 2018, compared to a net loss attributable to redeemable noncontrolling interests of $132.3 million in 2017. The increase was principally due to DaVinciRe generating underwriting income in 2018 compared to significant underwriting losses in 2017. Our ownership in DaVinciRe was 22.1% at both December 31, 2018 and December 31, 2017. |
• | Underwriting Loss - Primarily as a result of 2017 Large Loss Events, 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 2017 Large Loss Events, 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 2017 Large Loss Events 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, our portfolio of other investments experienced higher returns during 2017, compared to 2016, principally driven by our 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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Year ended December 31, 2018 | Q3 2018 Catastrophe Events (1) | Q4 2018 Catastrophe Events (2) | 2018 Aggregate Losses | Total 2018 Large Loss Events | Changes in Estimates of the 2017 Large Loss Events (3) | Total | |||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||
(Increase) decrease in net claims and claims expenses incurred | $ | (152,672 | ) | $ | (232,702 | ) | $ | (54,818 | ) | $ | (440,192 | ) | $ | 187,484 | $ | (252,708 | ) | ||||||||
Net reinstatement premiums earned | 26,956 | 59,660 | 2 | 86,618 | (18,376 | ) | 68,242 | ||||||||||||||||||
Lost (earned) profit commissions | 2,279 | 11,971 | (900 | ) | 13,350 | (11,355 | ) | 1,995 | |||||||||||||||||
Net (negative) positive impact on underwriting result | (123,437 | ) | (161,071 | ) | (55,716 | ) | (340,224 | ) | 157,753 | (182,471 | ) | ||||||||||||||
Redeemable noncontrolling interest - DaVinciRe | 20,815 | 87,245 | 16,035 | 124,095 | (27,983 | ) | 96,112 | ||||||||||||||||||
Net (negative) positive impact on net income available to RenaissanceRe common shareholders | $ | (102,622 | ) | $ | (73,826 | ) | $ | (39,681 | ) | $ | (216,129 | ) | $ | 129,770 | $ | (86,359 | ) | ||||||||
Percentage point impact on consolidated combined ratio | 6.5 | 8.8 | 2.8 | 18.6 | (8.0 | ) | 10.0 | ||||||||||||||||||
Net (negative) positive impact on Property segment underwriting result | $ | (121,875 | ) | $ | (161,071 | ) | $ | (55,716 | ) | $ | (338,662 | ) | $ | 145,724 | $ | (192,938 | ) | ||||||||
Net (negative) positive impact on Casualty and Specialty segment underwriting result (4) | (1,562 | ) | — | — | (1,562 | ) | 12,029 | 10,467 | |||||||||||||||||
Net (negative) positive impact on underwriting result | $ | (123,437 | ) | $ | (161,071 | ) | $ | (55,716 | ) | $ | (340,224 | ) | $ | 157,753 | $ | (182,471 | ) | ||||||||
(1) | Q3 2018 Catastrophe Events includes Typhoons Jebi, Mangkhut and Trami, Hurricane Florence and the wildfires in California during the third quarter of 2018. |
(2) | Q4 2018 Catastrophe Events includes Hurricane Michael and the wildfires in California during the fourth quarter of 2018. |
(3) | An initial estimate of the net negative impact of the 2017 Large Loss Events was recorded in our consolidated financial statements during 2017. The amounts noted in the table above reflect changes in the estimates of the net negative impact of the 2017 Large Loss Events recorded in 2018. |
(4) | Impact on Casualty and Specialty segment result includes loss estimates from catastrophe exposed contracts within certain specialty lines of business (i.e., energy, marine, and regional multi-line business). Amounts shown for the Q4 2018 Catastrophe Events, which includes the Q4 2018 California Wildfires, do not reflect impacts from certain casualty liability exposures within the Casualty and Specialty segment associated with the Q4 2018 California Wildfires, as different actuarial techniques are used to estimate losses related to such exposures. |
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Year ended December 31, 2017 | 2017 Large Loss Events (1) | ||||
(in thousands, except percentages) | |||||
Net claims and claim expenses incurred | $ | (1,166,295 | ) | ||
Net reinstatement premiums earned | 145,154 | ||||
Earned profit commissions | 31,944 | ||||
Net negative impact on underwriting result | (989,197 | ) | |||
Redeemable noncontrolling interest - DaVinciRe | 268,952 | ||||
Net negative impact | $ | (720,245 | ) | ||
Percentage point impact on consolidated combined ratio | 59.4 | ||||
Net negative impact on Property segment underwriting result | $ | (959,762 | ) | ||
Net negative impact on Casualty and Specialty segment underwriting result | (29,435 | ) | |||
Net negative impact on underwriting result | $ | (989,197 | ) | ||
(1) | 2017 Large Loss Events includes Hurricanes Harvey, Irma and Maria and the Mexico City Earthquake, the wildfires in California during the fourth quarter of 2017 and losses associated with aggregate loss contracts. |
Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
(in thousands, except percentages) | |||||||||||||
Gross premiums written | $ | 1,760,926 | $ | 1,440,437 | $ | 1,111,263 | |||||||
Net premiums written | $ | 1,055,188 | $ | 978,014 | $ | 725,321 | |||||||
Net premiums earned | $ | 1,050,831 | $ | 931,070 | $ | 720,951 | |||||||
Net claims and claim expenses incurred | 497,895 | 1,297,985 | 151,545 | ||||||||||
Acquisition expenses | 177,912 | 113,816 | 97,594 | ||||||||||
Operational expenses | 112,954 | 94,194 | 108,642 | ||||||||||
Underwriting income (loss) | $ | 262,070 | $ | (574,925 | ) | $ | 363,170 | ||||||
Net claims and claim expenses incurred – current accident year | $ | 719,185 | $ | 1,343,581 | $ | 256,421 | |||||||
Net claims and claim expenses incurred – prior accident years | (221,290 | ) | (45,596 | ) | (104,876 | ) | |||||||
Net claims and claim expenses incurred – total | $ | 497,895 | $ | 1,297,985 | $ | 151,545 | |||||||
Net claims and claim expense ratio – current accident year | 68.4 | % | 144.3 | % | 35.6 | % | |||||||
Net claims and claim expense ratio – prior accident years | (21.0 | )% | (4.9 | )% | (14.6 | )% | |||||||
Net claims and claim expense ratio – calendar year | 47.4 | % | 139.4 | % | 21.0 | % | |||||||
Underwriting expense ratio | 27.7 | % | 22.3 | % | 28.6 | % | |||||||
Combined ratio | 75.1 | % | 161.7 | % | 49.6 | % | |||||||
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Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
(in thousands) | |||||||||||||
Ceded premiums written - Property | $ | 705,738 | $ | 462,423 | $ | 385,942 | |||||||
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Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
(in thousands, except percentages) | |||||||||||||
Gross premiums written | $ | 1,549,501 | $ | 1,357,110 | $ | 1,263,313 | |||||||
Net premiums written | $ | 1,076,714 | $ | 893,307 | $ | 809,848 | |||||||
Net premiums earned | $ | 925,298 | $ | 786,501 | $ | 682,337 | |||||||
Net claims and claim expenses incurred | 622,320 | 565,026 | 380,396 | ||||||||||
Acquisition expenses | 255,079 | 233,077 | 191,729 | ||||||||||
Operational expenses | 64,883 | 66,548 | 88,984 | ||||||||||
Underwriting (loss) income | $ | (16,984 | ) | $ | (78,150 | ) | $ | 21,228 | |||||
Net claims and claim expenses incurred – current accident year | $ | 671,582 | $ | 558,843 | $ | 438,536 | |||||||
Net claims and claim expenses incurred – prior accident years | (49,262 | ) | 6,183 | (58,140 | ) | ||||||||
Net claims and claim expenses incurred – total | $ | 622,320 | $ | 565,026 | $ | 380,396 | |||||||
Net claims and claim expense ratio – current accident year | 72.6 | % | 71.1 | % | 64.3 | % | |||||||
Net claims and claim expense ratio – prior accident years | (5.3 | )% | 0.7 | % | (8.6 | )% | |||||||
Net claims and claim expense ratio – calendar year | 67.3 | % | 71.8 | % | 55.7 | % | |||||||
Underwriting expense ratio | 34.5 | % | 38.1 | % | 41.2 | % | |||||||
Combined ratio | 101.8 | % | 109.9 | % | 96.9 | % | |||||||
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Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
(in thousands) | |||||||||||||
Ceded premiums written - Casualty and Specialty | $ | 472,787 | $ | 463,803 | $ | 453,465 | |||||||
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Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
(in thousands) | |||||||||||||
Management fee income | |||||||||||||
Joint ventures | $ | 26,387 | $ | 15,358 | $ | 19,919 | |||||||
Managed funds | 11,462 | 3,659 | 2,381 | ||||||||||
Structured reinsurance products | 33,312 | 31,177 | 28,643 | ||||||||||
Total management fee income | 71,161 | 50,194 | 50,943 | ||||||||||
Performance fee income | |||||||||||||
Joint ventures | $ | 15,093 | $ | 9,429 | $ | 19,429 | |||||||
Managed funds | 62 | 197 | 1,758 | ||||||||||
Structured reinsurance products | 3,580 | 4,719 | 30,231 | ||||||||||
Total performance fee income (1) | 18,735 | 14,345 | 51,418 | ||||||||||
Total fee income | $ | 89,896 | $ | 64,539 | $ | 102,361 | |||||||
(1) | Performance fees are based on the performance of the individual vehicles and/or product, and could be negative in any given quarter when large losses occur, which can result in the reversal of previously accrued performance fees. |
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Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
(in thousands) | |||||||||||||
Fixed maturity investments | $ | 211,973 | $ | 179,624 | $ | 160,661 | |||||||
Short term investments | 33,571 | 11,082 | 5,127 | ||||||||||
Equity investments trading | 4,474 | 3,628 | 4,235 | ||||||||||
Other investments | |||||||||||||
Private equity investments | 477 | 33,999 | 6,155 | ||||||||||
Other | 22,475 | 8,067 | 20,181 | ||||||||||
Cash and cash equivalents | 3,810 | 1,196 | 788 | ||||||||||
276,780 | 237,596 | 197,147 | |||||||||||
Investment expenses | (14,914 | ) | (15,387 | ) | (15,421 | ) | |||||||
Net investment income | $ | 261,866 | $ | 222,209 | $ | 181,726 | |||||||
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Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
(in thousands) | |||||||||||||
Gross realized gains | $ | 21,284 | $ | 49,121 | $ | 72,739 | |||||||
Gross realized losses | (91,098 | ) | (38,832 | ) | (38,315 | ) | |||||||
Net realized (losses) gains on fixed maturity investments | (69,814 | ) | 10,289 | 34,424 | |||||||||
Net unrealized (losses) gains on fixed maturity investments trading | (57,310 | ) | 8,479 | 26,954 | |||||||||
Net realized and unrealized (losses) gains on investments-related derivatives | (8,784 | ) | (2,490 | ) | (15,414 | ) | |||||||
Net realized gains on equity investments trading | 27,739 | 80,027 | 14,190 | ||||||||||
Net unrealized (losses) gains on equity investments trading | (66,900 | ) | 39,517 | 81,174 | |||||||||
Net realized and unrealized (losses) gains on investments | $ | (175,069 | ) | $ | 135,822 | $ | 141,328 | ||||||
• | net realized and unrealized losses on our fixed maturity investments trading of $127.1 million in 2018, compared to net realized and unrealized gains of $18.8 million in 2017, a decrease of $145.9 million, principally driven by an upward shift in the interest rate yield curve and a widening of credit spreads during 2018, compared to a tightening of credit spreads and a decrease in interest rates at the longer end of the yield curve in 2017; and |
• | net realized and unrealized losses on equity investments trading of $39.2 million in 2018, compared to net realized and unrealized gains of $119.5 million in 2017, a decrease of $158.7 million, principally driven by lower returns on certain of our larger equity positions during 2018. |
• | 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. |
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Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
(in thousands) | |||||||||||||
Total foreign exchange (losses) gains | $ | (12,428 | ) | $ | 10,628 | $ | (13,788 | ) | |||||
Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
(in thousands) | |||||||||||||
Tower Hill Companies | $ | 9,605 | $ | (1,647 | ) | $ | 10,379 | ||||||
Top Layer Re | 8,852 | 9,851 | (8,576 | ) | |||||||||
Other | 17 | (174 | ) | (840 | ) | ||||||||
Total equity in earnings of other ventures | $ | 18,474 | $ | 8,030 | $ | 963 | |||||||
Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
(in thousands) | |||||||||||||
Assumed and ceded reinsurance contracts accounted for as derivatives and deposits | $ | 4,807 | $ | 8,655 | $ | 14,246 | |||||||
Other | 1,162 | 760 | (68 | ) | |||||||||
Total other income | $ | 5,969 | $ | 9,415 | $ | 14,178 | |||||||
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Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
(in thousands) | |||||||||||||
Total corporate expenses | $ | 33,983 | $ | 18,572 | $ | 37,402 | |||||||
Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
(in thousands) | |||||||||||||
Interest expense | |||||||||||||
$250.0 million Series B 7.50% Senior Notes due 2017 | $ | — | $ | 7,813 | $ | 18,750 | |||||||
$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 | 11,100 | ||||||||||
$300.0 million 3.450% Senior Notes due 2027 | 10,350 | 5,482 | — | ||||||||||
$150.0 million 4.750% Senior Notes due 2025 (DaVinciRe) | 7,125 | 7,125 | 7,125 | ||||||||||
Other | 4,119 | (1,702 | ) | (9,206 | ) | ||||||||
Total interest expense | 47,069 | 44,193 | 42,144 | ||||||||||
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 | ||||||||||
$250.0 million 5.575% Series F Preference Shares | 7,707 | — | — | ||||||||||
Total preferred share dividends | 30,088 | 22,381 | 22,381 | ||||||||||
Total interest expense and preferred share dividends | $ | 77,157 | $ | 66,574 | $ | 64,525 | |||||||
• | additional interest expense due to twelve months of interest expense in 2018 on the $300.0 million of 3.450% Senior Notes due 2027 issued in June 2017, compared to seven months of interest expense on these notes in 2017. |
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• | additional interest expense due to the June 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 on these notes 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. |
Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
(in thousands) | |||||||||||||
Income tax benefit (expense) | $ | 6,302 | $ | (26,487 | ) | $ | (340 | ) | |||||
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Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
(in thousands) | |||||||||||||
Net (income) loss attributable to redeemable noncontrolling interests | $ | (41,553 | ) | $ | 132,282 | $ | (127,086 | ) | |||||
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Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
(in thousands) | |||||||||||||
Net cash provided by operating activities | $ | 1,221,701 | $ | 1,025,787 | $ | 484,772 | |||||||
Net cash used in investing activities | (2,536,613 | ) | (122,434 | ) | (164,532 | ) | |||||||
Net cash provided by (used in) financing activities | 1,066,340 | 28,860 | (401,331 | ) | |||||||||
Effect of exchange rate changes on foreign currency cash | (5,098 | ) | 8,222 | (4,637 | ) | ||||||||
Net (decrease) increase in cash and cash equivalents | (253,670 | ) | 940,435 | (85,728 | ) | ||||||||
Cash and cash equivalents, beginning of period | 1,361,592 | 421,157 | 506,885 | ||||||||||
Cash and cash equivalents, end of period | $ | 1,107,922 | $ | 1,361,592 | $ | 421,157 | |||||||
• | an increase in reserve for claims and claim expenses of $995.9 million as a result of claims and claims expenses incurred of $2.6 billion during 2018 principally driven by the 2018 Large Loss Events, partially offset by claims payments of $1.6 billion primarily associated with the 2017 Large Loss Events; |
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• | an increase in reinsurance balances payable of $913.0 million principally driven by the issuance of non-voting preference shares to investors in Upsilon RFO, following capital being deployed in the vehicle, which are accounted for as prospective reinsurance and included in reinsurance balances payable on our consolidated balance sheet. See “Note 10. Variable Interest Entities” for additional information related to Upsilon RFO’s non-voting preference shares; |
• | an increase in unearned premiums of $238.4 million due to the timing of renewals and the increase in gross premiums written in 2018, compared to 2017; partially offset by |
• | an increase in reinsurance recoverable of $785.6 million primarily resulting from the increase in net claims and claim expenses principally driven by the 2018 Large Loss Events, noted above, as we continue to execute our gross-to-net strategy; |
• | a decrease in other operating cash flows of $223.3 million primarily associated with movements in subscriptions received in advance associated with the issuance of Upsilon RFO’s non-voting preference shares effective January 1, 2019 and 2018. See “Note 10. Variable Interest Entities” and “Note. 23 Subsequent Events” in our Notes to the Consolidated Financial Statements for additional information related to Upsilon RFO’s non-voting preference shares; |
• | increases in premiums receivable and deferred acquisition costs of $232.6 million and $50.1 million, respectively, due to the timing of payments of our gross premiums written and amortization of deferred acquisition costs, respectively; |
• | net realized and unrealized losses on investments of $175.1 million principally related to our fixed maturity investments portfolio which experienced an upward shift in the interest rate yield curve and a widening of credit spreads during 2018, and our equity investments trading portfolio which was impacted by lower returns on certain of our larger equity positions during 2018; and |
• | an increase of $82.6 million in our prepaid reinsurance premiums due to ceded premiums written associated renewals in 2018. |
• | net inflows of $665.7 million related to a net contribution of capital from third-party shareholders, primarily related to the creation of Vermeer, which was initially capitalized with $600.0 million of participating, non-voting common shares; |
• | net inflows of $241.4 million associated with the issuance of $250.0 million of Depositary Shares (each representing a 1/1000th interest in a share of our 5.750% Series F Preference Shares), net of expenses; |
• | net inflows of $250.0 million associated with the issuance of 1,947,496 of our common shares to State Farm; partially offset by |
• | dividends paid on our common and preference shares of $52.8 million and $30.1 million, respectively. |
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• | 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 2017 Large Loss Events; |
• | 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 2017 Large Loss Events; |
• | an increase in other operating cash flows of $518.1 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 10. Variable Interest Entities” for additional information related to Upsilon RFO; |
• | 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 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. |
• | 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. |
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At December 31, 2018 | At December 31, 2017 | Change | |||||||||||
(in thousands) | |||||||||||||
Common shareholders’ equity | $ | 4,395,080 | $ | 3,991,375 | $ | 403,705 | |||||||
Preference shares | 650,000 | 400,000 | 250,000 | ||||||||||
Total shareholders’ equity attributable to RenaissanceRe | 5,045,080 | 4,391,375 | 653,705 | ||||||||||
3.450% Senior Notes due 2027 | 295,797 | 295,303 | 494 | ||||||||||
3.700% Senior Notes due 2025 | 297,688 | 297,318 | 370 | ||||||||||
5.750% Senior Notes due 2020 | 249,602 | 249,272 | 330 | ||||||||||
4.750% Senior Notes due 2025 (DaVinciRe) (1) | 148,040 | 147,730 | 310 | ||||||||||
RenaissanceRe revolving credit facility – unborrowed | 500,000 | 250,000 | 250,000 | ||||||||||
Total debt | 1,491,127 | 1,239,623 | 251,504 | ||||||||||
Total shareholders’ equity attributable to RenaissanceRe and debt | $ | 6,536,207 | $ | 5,630,998 | $ | 905,209 | |||||||
(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 income attributable to RenaissanceRe of $225.7 million; |
• | raising $250.0 million from the issuance of 10,000,000 Depositary Shares (each representing a 1/1,000th interest in a share of our 5.750% Series F Preference Shares); |
• | raising $250.0 million from the issuance of 1,947,496 of our common shares in connection with the State Farm Stock Purchase; and partially offset by |
• | $52.8 million and $30.1 million of dividends on our common and preference shares, respectively. |
At December 31, 2018 | Issued or Drawn | ||||
(in thousands) | |||||
RenaissanceRe Revolving Credit Facility (1) | $ | — | |||
Uncommitted Standby Letter of Credit Facility with Wells Fargo | 86,861 | ||||
Bilateral Letter of Credit Facility with Citibank Europe | 243,696 | ||||
Renaissance Reinsurance FAL Facility | 180,000 | ||||
Total credit facilities in U.S. dollars | $ | 510,557 | |||
Specialty Risks FAL Facility (1) | — | ||||
Total credit facilities in pound sterling | £ | — | |||
(1) | At December 31, 2018, no amounts were issued or drawn under these facilities. |
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A.M. Best | S&P | Moody’s | Fitch | ||||||
Renaissance Reinsurance (1) | A+ | A+ | A1 | A+ | |||||
DaVinci (1) | A | A+ | A3 | — | |||||
Renaissance Reinsurance U.S. (1) | A+ | A+ | — | — | |||||
RenaissanceRe Specialty U.S. (1) | A+ | A+ | — | — | |||||
Renaissance Reinsurance of Europe (1) | A+ | A+ | — | — | |||||
Top Layer Re (1) | A+ | AA | — | — | |||||
Vermeer Reinsurance Ltd. (1) | A | — | — | — | |||||
Syndicate 1458 | — | — | — | — | |||||
Lloyd’s Overall Market Rating (2) | A | A+ | — | AA- | |||||
RenaissanceRe (3) | Very Strong | Very Strong | — | — | |||||
(1) | The A.M. Best, S&P, Moody's and Fitch ratings for the companies set forth in the table above reflect the insurer's financial strength rating and, in addition to the insurer’s financial strength rating, the S&P ratings 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 Syndicate 1458’s financial strength rating. |
(3) | The A.M. Best rating for RenaissanceRe refers to the ERM A.M. Best score within A.M. Best’s credit ratings methodology. The S&P rating for RenaissanceRe represents the rating on its ERM practices. |
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At December 31, | 2018 | 2017 | Change | ||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||
U.S. treasuries | $ | 3,331,411 | 28.0 | % | $ | 3,168,763 | 33.3 | % | $ | 162,648 | |||||||||
Agencies | 174,883 | 1.5 | % | 47,646 | 0.5 | % | 127,237 | ||||||||||||
Municipal | 6,854 | 0.1 | % | 509,802 | 5.4 | % | (502,948 | ) | |||||||||||
Non-U.S. government | 279,818 | 2.4 | % | 287,660 | 3.0 | % | (7,842 | ) | |||||||||||
Non-U.S. government-backed corporate | 160,063 | 1.3 | % | 163,651 | 1.7 | % | (3,588 | ) | |||||||||||
Corporate | 2,450,244 | 20.6 | % | 2,063,459 | 21.7 | % | 386,785 | ||||||||||||
Agency mortgage-backed | 817,880 | 6.8 | % | 500,456 | 5.3 | % | 317,424 | ||||||||||||
Non-agency mortgage-backed | 278,680 | 2.4 | % | 300,331 | 3.1 | % | (21,651 | ) | |||||||||||
Commercial mortgage-backed | 282,294 | 2.4 | % | 202,062 | 2.1 | % | 80,232 | ||||||||||||
Asset-backed | 306,743 | 2.6 | % | 182,725 | 2.0 | % | 124,018 | ||||||||||||
Total fixed maturity investments, at fair value | 8,088,870 | 68.1 | % | 7,426,555 | 78.1 | % | 662,315 | ||||||||||||
Short term investments, at fair value | 2,586,520 | 21.8 | % | 991,863 | 10.4 | % | 1,594,657 | ||||||||||||
Equity investments trading, at fair value | 310,252 | 2.6 | % | 388,254 | 4.1 | % | (78,002 | ) | |||||||||||
Other investments, at fair value | 784,933 | 6.5 | % | 594,793 | 6.3 | % | 190,140 | ||||||||||||
Total managed investment portfolio | 11,770,575 | 99.0 | % | 9,401,465 | 98.9 | % | 2,369,110 | ||||||||||||
Investments in other ventures, under equity method | 115,172 | 1.0 | % | 101,974 | 1.1 | % | 13,198 | ||||||||||||
Total investments | $ | 11,885,747 | 100.0 | % | $ | 9,503,439 | 100.0 | % | $ | 2,382,308 | |||||||||
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Credit Rating (1) | |||||||||||||||||||||||||||||||||||||||
December 31, 2018 | Amortized Cost | Fair Value | % of Total Investment Portfolio | Weighted Average Yield to Maturity | AAA | AA | A | BBB | Non- Investment Grade | Not Rated | |||||||||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||||||||||||||||
Short term investments | $ | 2,586,520 | $ | 2,586,520 | 21.8 | % | 2.1 | % | $ | 2,579,900 | $ | 2,541 | $ | 553 | $ | 1,511 | $ | 751 | $ | 1,264 | |||||||||||||||||||
100.0 | % | 99.8 | % | 0.1 | % | — | % | 0.1 | % | — | % | — | % | ||||||||||||||||||||||||||
Fixed maturity investments | |||||||||||||||||||||||||||||||||||||||
U.S. treasuries | 3,336,969 | 3,331,411 | 28.0 | % | 2.5 | % | — | 3,331,411 | — | — | — | — | |||||||||||||||||||||||||||
Agencies | 175,185 | 174,883 | 1.5 | % | 3.0 | % | — | 174,883 | — | — | — | — | |||||||||||||||||||||||||||
Municipal | 6,070 | 6,854 | 0.1 | % | 4.8 | % | — | 1,044 | 4,546 | 504 | — | 760 | |||||||||||||||||||||||||||
Non-U.S. government | 284,965 | 279,818 | 2.4 | % | 2.7 | % | 207,103 | 61,233 | 8,216 | — | 3,266 | — | |||||||||||||||||||||||||||
Non-U.S. government-backed corporate | 160,286 | 160,063 | 1.3 | % | 2.8 | % | 55,843 | 49,635 | 54,188 | 397 | — | — | |||||||||||||||||||||||||||
Corporate | 2,513,434 | 2,450,244 | 20.6 | % | 4.9 | % | 41,668 | 197,653 | 854,801 | 607,745 | 719,459 | 28,918 | |||||||||||||||||||||||||||
Agency mortgage-backed | 825,365 | 817,880 | 6.8 | % | 3.5 | % | 262 | 817,618 | — | — | — | — | |||||||||||||||||||||||||||
Non-agency mortgage-backed | 266,705 | 278,680 | 2.4 | % | 4.7 | % | 18,521 | 12,485 | 3,890 | 11,216 | 177,969 | 54,599 | |||||||||||||||||||||||||||
Commercial mortgage-backed | 284,495 | 282,294 | 2.4 | % | 3.6 | % | 214,161 | 57,704 | 895 | 9,534 | — | — | |||||||||||||||||||||||||||
Asset-backed | 310,488 | 306,743 | 2.6 | % | 4.3 | % | 232,199 | 41,641 | 1,669 | 29,429 | — | 1,805 | |||||||||||||||||||||||||||
Total fixed maturity investments | 8,163,962 | 8,088,870 | 68.1 | % | 3.5 | % | 769,757 | 4,745,307 | 928,205 | 658,825 | 900,694 | 86,082 | |||||||||||||||||||||||||||
100.0 | % | 9.5 | % | 58.7 | % | 11.5 | % | 8.1 | % | 11.1 | % | 1.1 | % | ||||||||||||||||||||||||||
Equity investments trading | 310,252 | 2.6 | % | — | — | — | — | — | 310,252 | ||||||||||||||||||||||||||||||
100.0 | % | — | % | — | % | — | % | — | % | — | % | 100.0 | % | ||||||||||||||||||||||||||
Other investments | |||||||||||||||||||||||||||||||||||||||
Catastrophe bonds | 516,571 | 4.3 | % | — | — | — | — | 516,571 | — | ||||||||||||||||||||||||||||||
Private equity investments | 242,647 | 2.0 | % | — | — | — | — | — | 242,647 | ||||||||||||||||||||||||||||||
Senior secured bank loan funds | 14,482 | 0.1 | % | — | — | — | — | — | 14,482 | ||||||||||||||||||||||||||||||
Hedge funds | 11,233 | 0.1 | % | — | — | — | — | — | 11,233 | ||||||||||||||||||||||||||||||
Total other investments | 784,933 | 6.5 | % | — | — | — | — | 516,571 | 268,362 | ||||||||||||||||||||||||||||||
100.0 | % | — | % | — | % | — | % | — | % | 65.8 | % | 34.2 | % | ||||||||||||||||||||||||||
Investments in other ventures | 115,172 | 1.0 | % | — | — | — | — | — | 115,172 | ||||||||||||||||||||||||||||||
100.0 | % | — | % | — | % | — | % | — | % | — | % | 100.0 | % | ||||||||||||||||||||||||||
Total investment portfolio | $ | 11,885,747 | 100.0 | % | $ | 3,349,657 | $ | 4,747,848 | $ | 928,758 | $ | 660,336 | $ | 1,418,016 | $ | 781,132 | |||||||||||||||||||||||
100.0 | % | 28.2 | % | 39.9 | % | 7.8 | % | 5.6 | % | 11.9 | % | 6.6 | % | ||||||||||||||||||||||||||
(1) | The credit ratings included in this table are those assigned by S&P. When ratings provided by S&P were not available, ratings from other nationally recognized rating agencies were used. 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, 2018 | |||||||||||||
(in thousands) | |||||||||||||
Issuer | Total | Short term investments | Fixed maturity investments | ||||||||||
JP Morgan Chase & Co. | $ | 61,983 | $ | — | $ | 61,983 | |||||||
Goldman Sachs Group Inc. | 53,330 | — | 53,330 | ||||||||||
Bank of America Corp. | 51,889 | — | 51,889 | ||||||||||
Morgan Stanley | 48,966 | — | 48,966 | ||||||||||
Wells Fargo & Co. | 36,443 | — | 36,443 | ||||||||||
HSBC Holdings PLC | 32,551 | — | 32,551 | ||||||||||
Banco Santander, S.A. | 27,701 | — | 27,701 | ||||||||||
Citigroup Inc. | 27,190 | — | 27,190 | ||||||||||
UBS Group AG | 26,177 | — | 26,177 | ||||||||||
Barclays P.L.C | 24,694 | — | 24,694 | ||||||||||
Total (1) | $ | 390,924 | $ | — | $ | 390,924 | |||||||
(1) | Excludes non-U.S. government-backed corporate fixed maturity investments, reverse repurchase agreements and commercial paper, at fair value. |
At December 31, | 2018 | 2017 | Change | ||||||||||
(in thousands) | |||||||||||||
Financials | $ | 200,357 | $ | 253,543 | $ | (53,186 | ) | ||||||
Communications and technology | 42,333 | 49,526 | (7,193 | ) | |||||||||
Industrial, utilities and energy | 24,520 | 34,325 | (9,805 | ) | |||||||||
Consumer | 20,639 | 24,779 | (4,140 | ) | |||||||||
Healthcare | 18,925 | 21,364 | (2,439 | ) | |||||||||
Basic materials | 3,478 | 4,717 | (1,239 | ) | |||||||||
Total | $ | 310,252 | $ | 388,254 | $ | (78,002 | ) | ||||||
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At December 31, | 2018 | 2017 | Change | ||||||||||
(in thousands) | |||||||||||||
Catastrophe bonds | $ | 516,571 | $ | 380,475 | $ | 136,096 | |||||||
Private equity investments | 242,647 | 196,220 | 46,427 | ||||||||||
Senior secured bank loan funds | 14,482 | 17,574 | (3,092 | ) | |||||||||
Hedge funds | 11,233 | 524 | 10,709 | ||||||||||
Total other investments | $ | 784,933 | $ | 594,793 | $ | 190,140 | |||||||
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At December 31, | 2018 | 2017 | |||||||||||||||||||||
(in thousands, except percentages) | Investment | Ownership % | Carrying Value | Investment | Ownership % | Carrying Value | |||||||||||||||||
Total Tower Hill Companies | 64,750 | 24.9 | % | 38,241 | 64,750 | 26.3 | % | 42,167 | |||||||||||||||
Top Layer Re | 65,375 | 50.0 | % | 46,562 | 65,375 | 50.0 | % | 50,211 | |||||||||||||||
Other | 35,862 | 30.6 | % | 30,369 | 13,650 | 40.4 | % | 9,596 | |||||||||||||||
Total investments in other ventures, under equity method | $ | 165,987 | $ | 115,172 | $ | 143,775 | $ | 101,974 | |||||||||||||||
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At December 31, 2018 | 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 | $ | 387,965 | $ | 10,350 | $ | 20,700 | $ | 20,700 | $ | 336,215 | |||||||||||
3.700% Senior Notes due 2025 | 369,364 | 11,100 | 22,200 | 22,200 | 313,864 | ||||||||||||||||
5.750% Senior Notes due 2020 | 267,293 | 14,375 | 252,918 | — | — | ||||||||||||||||
4.750% Senior Notes due 2025 (DaVinciRe) (1) | 195,714 | 7,125 | 14,250 | 14,250 | 160,089 | ||||||||||||||||
Total long term debt obligations | 1,220,336 | 42,950 | 310,068 | 57,150 | 810,168 | ||||||||||||||||
Private equity and investment commitments (2) | 470,754 | 470,754 | — | — | — | ||||||||||||||||
Operating lease obligations | 23,418 | 7,137 | 10,228 | 5,755 | 298 | ||||||||||||||||
Capital lease obligations | 28,959 | 3,331 | 6,672 | 6,166 | 12,790 | ||||||||||||||||
Payable for investments purchased | 380,332 | 380,332 | — | — | — | ||||||||||||||||
Reserve for claims and claim expenses (3) | 6,076,271 | 1,762,119 | 1,883,644 | 1,032,966 | 1,397,542 | ||||||||||||||||
Total contractual obligations (4) | $ | 8,200,070 | $ | 2,666,623 | $ | 2,210,612 | $ | 1,102,037 | $ | 2,220,798 | |||||||||||
(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. |
(4) | In connection with the TMR Stock Purchase, we expect certain of the obligations to increase as we will consolidate the TMR Group Entities’ assets and liabilities, including the TMR Group Entities’ claim and claim expense reserves. |
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Interest Rate Shift in Basis Points | |||||||||||||||||||||
At December 31, 2018 | -100 | -50 | Base | 50 | 100 | ||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||
Fair value of fixed maturity and short term investments | $ | 10,877,855 | $ | 10,777,893 | $ | 10,675,390 | $ | 10,571,175 | $ | 10,466,211 | |||||||||||
Net increase (decrease) in fair value | $ | 202,465 | $ | 102,503 | $ | — | $ | (104,215 | ) | $ | (209,179 | ) | |||||||||
Percentage change in fair value | 1.9 | % | 1.0 | % | — | % | (1.0 | )% | (2.0 | )% | |||||||||||
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 | )% | |||||||||||
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At December 31, 2018 | AUD | CAD | EUR | GBP | JPY | NZD | Other | Total | |||||||||||||||||||||||||
(in thousands, except for percentages) | |||||||||||||||||||||||||||||||||
Net assets denominated in foreign currencies | $ | (7,428 | ) | $ | 57,425 | $ | 190,573 | $ | (94,769 | ) | $ | (233,041 | ) | $ | (15,495 | ) | $ | (36,968 | ) | $ | (139,703 | ) | |||||||||||
Net foreign currency derivatives notional amounts | (2,360 | ) | (54,656 | ) | (136,404 | ) | 98,195 | 163,909 | 16,413 | 10,030 | 95,127 | ||||||||||||||||||||||
Total net foreign currency exposure | $ | (9,788 | ) | $ | 2,769 | $ | 54,169 | $ | 3,426 | $ | (69,132 | ) | $ | 918 | $ | (26,938 | ) | $ | (44,576 | ) | |||||||||||||
Net foreign currency exposure as a percentage of total shareholders’ equity attributable to RenaissanceRe | (0.2 | )% | 0.1 | % | 1.1 | % | 0.1 | % | (1.4 | )% | — | % | (0.5 | )% | (0.9 | )% | |||||||||||||||||
Impact of a hypothetical 10% change in total net foreign currency exposure | $ | 979 | $ | (277 | ) | $ | (5,417 | ) | $ | (343 | ) | $ | 6,913 | $ | (92 | ) | $ | 2,694 | $ | 4,458 | |||||||||||||
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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 | ) | ||||||||||||
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At December 31, | 2018 | 2017 | |||||
AAA | 31.4 | % | 20.2 | % | |||
AA | 44.5 | % | 51.9 | % | |||
A | 8.7 | % | 9.7 | % | |||
BBB | 6.2 | % | 6.2 | % | |||
Non-investment grade | 8.4 | % | 11.4 | % | |||
Not rated | 0.8 | % | 0.6 | % | |||
Total | 100.0 | % | 100.0 | % | |||
Credit Spread Shift in Basis Points | |||||||||||||||||||||
At December 31, 2018 | -100 | -50 | Base | 50 | 100 | ||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||
Fair value of fixed income and short term investments | $ | 10,804,654 | $ | 10,750,213 | $ | 10,675,390 | $ | 10,589,321 | $ | 10,503,252 | |||||||||||
Net increase (decrease) in fair value | $ | 129,264 | $ | 74,823 | $ | — | $ | (86,069 | ) | $ | (172,138 | ) | |||||||||
Percentage change in fair value | 1.2 | % | 0.7 | % | — | % | (0.8 | )% | (1.6 | )% | |||||||||||
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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At December 31, | 2018 | 2017 | |||||||
(in thousands, except for percentages) | |||||||||
Equity investments trading, at fair value | $ | 310,252 | $ | 388,254 | |||||
Private equity investments, at fair value | 242,647 | 196,220 | |||||||
Investments in other ventures, under equity method | 115,172 | 101,974 | |||||||
Hedge funds, at fair value | 11,233 | 524 | |||||||
Total carrying value of investments exposed to equity price risk | $ | 679,304 | $ | 686,972 | |||||
Impact of a hypothetical 10% increase in the carrying value of investments exposed to equity price risk | $ | 67,930 | $ | 68,697 | |||||
Impact of a hypothetical 10% decrease in the carrying value of investments exposed to equity price risk | $ | (67,930 | ) | $ | (68,697 | ) | |||
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Number | Description |
2.1 | Stock Purchase Agreement, dated as of October 30, 2018, by and among Tokio Marine & Nichido Fire Insurance Co., Ltd., Tokio Marine Holdings, Inc., and RenaissanceRe Holdings Ltd., including the exhibits thereto. (42) |
3.1 | Memorandum of Association. (P) (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. (P) (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 | Certificate of Designation, Preferences and Rights of 5.750% Series F Preference Shares. (41) |
4.3(a) | Form of Stock Certificate Evidencing the 5.750% Series F Preference Shares. (41) |
4.3(b) | Deposit Agreement, dated June 18, 2018, among RenaissanceRe Holdings Ltd., Computershare, Inc. and Computershare Trust Company, N.A. (41) |
4.3(c) | Form of Depositary Receipt. (41) |
4.4 | 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) |
4.4(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) |
4.4(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) |
4.4(c) | Waiver Agreement, dated as of January 21, 2011, by and among RenRe North America Holdings Inc., RenaissanceRe Holdings Ltd. and Deutsche Bank Trust Company Americas, as trustee. (7) |
4.4(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. (25) |
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. (23) |
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. (23) |
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. (23) |
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. (36) |
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. (36) |
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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. (36) |
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. (29) |
10.2* | Legacy Form of Further Amended and Restated Employment Agreement for Named Executive Officers (other than our Chief Executive Officer). (29)** |
10.3* | Form of Employment Agreement for Named Executive Officers (other than our Chief Executive Officer). (29)*** |
10.4* | Letter agreement, dated July 6, 2016, between Ian Branagan and RenaissanceRe Holdings Ltd. regarding secondment to the U.K. (29) |
10.5* | Letter agreement, dated April 11, 2013, between Ian Branagan and RenaissanceRe Holdings Ltd. regarding secondment to the U.K. (29) |
10.6* | RenaissanceRe Holdings Ltd. 2016 Long-Term Incentive Plan. (39) |
10.6(a)* | Form of Director Restricted Stock Agreement under the RenaissanceRe Holdings Ltd. 2016 Long-Term Incentive Plan. (29) |
10.6(b)* | Form of Restricted Stock Agreement under the RenaissanceRe Holdings Ltd. 2016 Long-Term Incentive Plan. (29) |
10.6(c)* | Form of Performance Share Agreement under the RenaissanceRe Holdings Ltd. 2016 Long-Term Incentive Plan (for awards made in 2016). (38) |
10.6(d)* | Form of Performance Share Agreement under the RenaissanceRe Holdings Ltd. 2016 Long-Term Incentive Plan (for awards made in 2017 and March 2018). (34) |
10.6(e)* | Form of Performance Share Agreement under the RenaissanceRe Holdings Ltd. 2016 Long-Term Incentive Plan (for awards made in May 2018 and later). (40) |
10.7 | RenaissanceRe Holdings Ltd. Deferred Cash Award Plan. (37) |
10.7(a) | Form of Deferred Cash Award Agreement pursuant to which Deferred Cash Awards are granted under the RenaissanceRe Holdings Ltd. Deferred Cash Award Plan. (37) |
10.8* | RenaissanceRe Holdings Ltd. 2016 Restricted Stock Unit Plan. (40) |
10.8(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. (31) |
10.9* | RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (15) |
10.9(a)* | Amendment No. 1 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (16) |
10.9(b)* | Amendment No. 2 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (16) |
10.9(c)* | Amendment No. 3 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (8) |
10.9(d)* | Amendment No. 4 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (13) |
10.9(e)* | Amendment No. 5 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (17) |
10.9(f)* | Amendment No. 6 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (11) |
10.9(g)* | UK Schedule to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (8) |
10.9(h)* | UK Sub-Plan to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (8) |
10.9(i)* | Form of Option Grant Notice and Agreement pursuant to which option grants were made under the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (18) |
10.9(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. (18) |
10.9(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. (28) |
10.10* | RenaissanceRe Holdings Ltd. 2010 Restricted Stock Unit Plan. (14) |
10.10(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) |
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10.11* | RenaissanceRe Holdings Ltd. 2010 Performance-Based Equity Incentive Plan. (13) |
10.11(a)* | Amendment No. 1 to the RenaissanceRe Holdings Ltd. 2010 Performance-Based Equity Incentive Plan. (22) |
10.11(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. (22) |
10.12* | Form of Tax Reimbursement Waiver Letter with the Named Executive Officers. (19) |
10.13* | Form of Agreement Regarding Use of Aircraft Interest by and between RenaissanceRe Holdings Ltd. and Certain Executive Officers of RenaissanceRe Holdings Ltd. (12) |
10.14* | Form of Director Retention Agreement, dated as of November 8, 2002, entered into by each of the non-employee directors of RenaissanceRe Holdings Ltd. (20) |
10.15* | Form of Director Shares Grant Notice and Agreement pursuant to which restricted stock grants were made to non-employee directors on March 1, 2016. (29) |
10.16 | 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. (21) |
10.16(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. (24) |
10.17 | Facility Letter, dated September 17, 2010, from Citibank Europe PLC to Renaissance Reinsurance Ltd., DaVinci Reinsurance Ltd. and Glencoe Insurance Ltd. (9) |
10.17(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) |
10.17(b) | Amendment to Facility Letter, dated July 14, 2011, by and among Citibank Europe plc, Renaissance Reinsurance Ltd., DaVinci Reinsurance Ltd and Glencoe Insurance Ltd. |
10.17(c) | 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) |
10.17(d) | 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. (28) |
10.17(e) | 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. (28) |
10.17(f) | 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. (27) |
10.17(g) | 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. (28) |
10.17(h) | Termination of Master Agreements, Control Agreements and Pledge Agreements, dated October 1, 2016, between Renaissance Reinsurance Ltd. and Citibank Europe PLC. (30) |
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10.17(i) | 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. (33) |
10.17(j) | 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. (38) |
10.17(k) | 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. (45) |
10.18 | Master Reimbursement Agreement, dated as of November 24, 2014, by and between RenaissanceRe Specialty Risks Ltd. and Citibank Europe PLC. (22) |
10.18(a) | Pledge Agreement, dated as of November 24, 2014 by and among RenaissanceRe Specialty Risks Ltd. and Citibank Europe PLC. (22) |
10.18(b) | Omnibus Amendment Agreement, dated October 1, 2016, between Renaissance Reinsurance Ltd., Citibank Europe PLC and Bank of New York Mellon. (30) |
10.18(c) | First Amendment to Pledge Agreement, dated as of November 22, 2016, between Citibank Europe plc and Renaissance Reinsurance Ltd. |
10.19 | 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. (26) |
10.19(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. (14) |
10.19(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. (29) |
10.19(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. (31) |
10.19(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. (35) |
10.19(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. (37) |
10.19(f) | Sixth Amendment to Letter of Credit Reimbursement Agreement, dated as of November 5, 2018, by and among Renaissance Reinsurance Ltd. and each of Bank of Montreal, as documentation agent, Bank of Montreal, London Branch, as a lender, Citibank Europe plc, as a lender and as collateral agent, and ING Bank N.V., London Branch, as a lender and as letter of credit agent. (43) |
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10.20 | Second Amended and Restated Credit Agreement, dated as of November 9, 2018, by and among RenaissanceRe Holdings Ltd., Renaissance Reinsurance Ltd., RenaissanceRe Specialty U.S. Ltd., Renaissance Reinsurance U.S. Inc., various banks and financial institutions parties thereto, and Wells Fargo Bank, National Association, as Fronting Bank, LC Administrator and Administrative Agent for the Lenders. (44) |
10.20(a) | Guaranty Agreement, dated as of November 9, 2018, by and among RenRe North America Holdings Inc., RenaissanceRe Finance Inc. and Wells Fargo Bank, National Association, as Administrative Agent. (44) |
10.21 | Waiver, dated as of November 15, 2016, by and between RenaissanceRe Holdings Ltd. and BlackRock, Inc. (32) |
10.22 | Waiver, dated as of May 11, 2018, by and between RenaissanceRe Holdings Ltd. and The Vanguard Group, Inc. (40) |
10.23 | Investment Agreement, dated as of October 30, 2018, by and between RenaissanceRe Holdings Ltd. And State Farm Mutual Automobile Insurance Company, including the exhibits thereto. (42) |
10.24 | Registration Rights Agreement, dated October 30, 2018, by and between RenaissanceRe Holdings Ltd. and Tokio Marine & Nichido Fire Insurance Co. Ltd. (42) |
10.25 | Registration Rights Agreement, dated October 30, 2018, by and between RenaissanceRe Holdings Ltd. and State Farm Mutual Automobile Insurance Co. Ltd. (42) |
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. |
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. |
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(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, for the period ended September 30, 2004, filed with the SEC on November 9, 2004. |
(19) | 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. |
(20) | 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). |
(21) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on December 30, 2014. |
(22) | 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. |
(23) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on March 25, 2015. |
(24) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on May 21, 2015. |
(25) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on July 8, 2015. |
(26) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on November 25, 2015. |
(27) | Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on December 31, 2015. |
(28) | 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. |
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(29) | 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. |
(30) | 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. |
(31) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K filed with the SEC on November 10, 2016. |
(32) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K filed with the SEC on November 18, 2016. |
(33) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K filed with the SEC on January 5, 2017. |
(34) | 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. |
(35) | Incorporated by reference to RenaissanceRe Holding Ltd.’s Current Report on Form 8-K filed with the SEC on May 26, 2017. |
(36) | Incorporated by reference to RenaissanceRe Holding Ltd.’s Current Report on Form 8-K filed with the SEC on June 29, 2017. |
(37) | Incorporated by reference to RenaissanceRe Holding Ltd.’s Current Report on Form 8-K filed with the SEC on November 13, 2017. |
(38) | Incorporated by reference to RenaissanceRe Holding Ltd.’s Current Report on Form 8-K filed with the SEC on January 3, 2018. |
(39) | Incorporated by reference to RenaissanceRe Holding Ltd.’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on February 9, 2018. |
(40) | Incorporated by reference to RenaissanceRe Holding Ltd.’s Current Report on Form 8-K filed with the SEC on May 16, 2018. |
(41) | Incorporated by reference to RenaissanceRe Holding Ltd.’s Current Report on Form 8-K filed with the SEC on June 19, 2018. |
(42) | Incorporated by reference to RenaissanceRe Holding Ltd.’s Current Report on Form 8-K filed with the SEC on November 5, 2018. |
(43) | Incorporated by reference to RenaissanceRe Holding Ltd.’s Current Report on Form 8-K filed with the SEC on November 9, 2018. |
(44) | Incorporated by reference to RenaissanceRe Holding Ltd.’s Current Report on Form 8-K filed with the SEC on November 14, 2018. |
(45) | Incorporated by reference to RenaissanceRe Holding Ltd.’s Current Report on Form 8-K filed with the SEC on January 3, 2019. |
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Date: | February 7, 2019 | 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 7, 2019 | ||
Kevin J. O’Donnell | ||||
/s/ Robert Qutub | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | February 7, 2019 | ||
Robert Qutub | ||||
/s/ James C. Fraser | Senior Vice President and Chief Accounting Officer (Principal Accounting Officer) | February 7, 2019 | ||
James C. Fraser | ||||
/s/ James L. Gibbons | Non-Executive Chair of the Board of Directors | February 7, 2019 | ||
James L. Gibbons | ||||
/s/ David C. Bushnell | Director | February 7, 2019 | ||
David C. Bushnell | ||||
/s/ Brian G. J. Gray | Director | February 7, 2019 | ||
Brian G. J. Gray | ||||
/s/ Jean D. Hamilton | Director | February 7, 2019 | ||
Jean D. Hamilton | ||||
/s/ Duncan P. Hennes | Director | February 7, 2019 | ||
Duncan P. Hennes | ||||
/s/ Henry Klehm, III | Director | February 7, 2019 | ||
Henry Klehm, III | ||||
/s/ Valerie Rahmani | Director | February 7, 2019 | ||
Valerie Rahmani | ||||
/s/ Carol P. Sanders | Director | February 7, 2019 | ||
Carol P. Sanders | ||||
/s/ Anthony M. Santomero | Director | February 7, 2019 | ||
Anthony M. Santomero | ||||
/s/ Edward J. Zore | Director | February 7, 2019 | ||
Edward J. Zore |
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Page | |
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December 31, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Fixed maturity investments trading, at fair value - amortized cost $8,163,962 at December 31, 2018 (2017 - $7,434,870) (Notes 4 and 5) | $ | 8,088,870 | $ | 7,426,555 | |||
Short term investments, at fair value (Notes 4 and 5) | 2,586,520 | 991,863 | |||||
Equity investments trading, at fair value (Notes 4 and 5) | 310,252 | 388,254 | |||||
Other investments, at fair value (Notes 4 and 5) | 784,933 | 594,793 | |||||
Investments in other ventures, under equity method (Note 4) | 115,172 | 101,974 | |||||
Total investments | 11,885,747 | 9,503,439 | |||||
Cash and cash equivalents | 1,107,922 | 1,361,592 | |||||
Premiums receivable | 1,537,188 | 1,304,622 | |||||
Prepaid reinsurance premiums (Note 6) | 616,185 | 533,546 | |||||
Reinsurance recoverable (Notes 6 and 7) | 2,372,221 | 1,586,630 | |||||
Accrued investment income | 51,311 | 42,235 | |||||
Deferred acquisition costs | 476,661 | 426,551 | |||||
Receivable for investments sold | 256,416 | 103,145 | |||||
Other assets | 135,127 | 121,226 | |||||
Goodwill and other intangible assets (Note 3) | 237,418 | 243,145 | |||||
Total assets | $ | 18,676,196 | $ | 15,226,131 | |||
Liabilities, Noncontrolling Interests and Shareholders’ Equity | |||||||
Liabilities | |||||||
Reserve for claims and claim expenses (Note 7) | $ | 6,076,271 | $ | 5,080,408 | |||
Unearned premiums | 1,716,021 | 1,477,609 | |||||
Debt (Note 8) | 991,127 | 989,623 | |||||
Reinsurance balances payable | 1,902,056 | 989,090 | |||||
Payable for investments purchased | 380,332 | 208,749 | |||||
Other liabilities | 513,609 | 792,771 | |||||
Total liabilities | 11,579,416 | 9,538,250 | |||||
Commitments and Contingencies (Note 19) | |||||||
Redeemable noncontrolling interests (Note 9) | 2,051,700 | 1,296,506 | |||||
Shareholders’ Equity (Note 11) | |||||||
Preference shares: $1.00 par value – 16,010,000 shares issued and outstanding at December 31, 2018 (2017 – 16,000,000) | 650,000 | 400,000 | |||||
Common shares: $1.00 par value – 42,207,390 shares issued and outstanding at December 31, 2018 (2017 – 40,023,789) | 42,207 | 40,024 | |||||
Additional paid-in capital | 296,099 | 37,355 | |||||
Accumulated other comprehensive (loss) income | (1,433 | ) | 224 | ||||
Retained earnings | 4,058,207 | 3,913,772 | |||||
Total shareholders’ equity attributable to RenaissanceRe | 5,045,080 | 4,391,375 | |||||
Total liabilities, noncontrolling interests and shareholders’ equity | $ | 18,676,196 | $ | 15,226,131 |
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2018 | 2017 | 2016 | |||||||||
Revenues | |||||||||||
Gross premiums written | $ | 3,310,427 | $ | 2,797,540 | $ | 2,374,576 | |||||
Net premiums written (Note 6) | $ | 2,131,902 | $ | 1,871,325 | $ | 1,535,312 | |||||
Increase in unearned premiums | (155,773 | ) | (153,750 | ) | (131,882 | ) | |||||
Net premiums earned (Note 6) | 1,976,129 | 1,717,575 | 1,403,430 | ||||||||
Net investment income (Note 4) | 261,866 | 222,209 | 181,726 | ||||||||
Net foreign exchange (losses) gains | (12,428 | ) | 10,628 | (13,788 | ) | ||||||
Equity in earnings of other ventures (Note 4) | 18,474 | 8,030 | 963 | ||||||||
Other income | 5,969 | 9,415 | 14,178 | ||||||||
Net realized and unrealized (losses) gains on investments (Note 4) | (175,069 | ) | 135,822 | 141,328 | |||||||
Total revenues | 2,074,941 | 2,103,679 | 1,727,837 | ||||||||
Expenses | |||||||||||
Net claims and claim expenses incurred (Notes 6 and 7) | 1,120,018 | 1,861,428 | 530,831 | ||||||||
Acquisition expenses | 432,989 | 346,892 | 289,323 | ||||||||
Operational expenses | 178,267 | 160,778 | 197,749 | ||||||||
Corporate expenses | 33,983 | 18,572 | 37,402 | ||||||||
Interest expense (Note 8) | 47,069 | 44,193 | 42,144 | ||||||||
Total expenses | 1,812,326 | 2,431,863 | 1,097,449 | ||||||||
Income (loss) before taxes | 262,615 | (328,184 | ) | 630,388 | |||||||
Income tax benefit (expense) (Note 14) | 6,302 | (26,487 | ) | (340 | ) | ||||||
Net income (loss) | 268,917 | (354,671 | ) | 630,048 | |||||||
Net (income) loss attributable to redeemable noncontrolling interests (Note 9) | (41,553 | ) | 132,282 | (127,086 | ) | ||||||
Net income (loss) attributable to RenaissanceRe | 227,364 | (222,389 | ) | 502,962 | |||||||
Dividends on preference shares (Note 11) | (30,088 | ) | (22,381 | ) | (22,381 | ) | |||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | $ | 197,276 | $ | (244,770 | ) | $ | 480,581 | ||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – basic (Note 12) | $ | 4.91 | $ | (6.15 | ) | $ | 11.50 | ||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – diluted (Note 12) | $ | 4.91 | $ | (6.15 | ) | $ | 11.43 |
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2018 | 2017 | 2016 | |||||||||
Comprehensive income (loss) | |||||||||||
Net income (loss) | $ | 268,917 | $ | (354,671 | ) | $ | 630,048 | ||||
Change in net unrealized (losses) gains on investments | (1,657 | ) | (909 | ) | (975 | ) | |||||
Comprehensive income (loss) | 267,260 | (355,580 | ) | 629,073 | |||||||
Net (income) loss attributable to redeemable noncontrolling interests | (41,553 | ) | 132,282 | (127,086 | ) | ||||||
Comprehensive (income) loss attributable to redeemable noncontrolling interests | (41,553 | ) | 132,282 | (127,086 | ) | ||||||
Comprehensive income (loss) attributable to RenaissanceRe | $ | 225,707 | $ | (223,298 | ) | $ | 501,987 | ||||
Disclosure regarding net unrealized (losses) gains | |||||||||||
Total net realized and unrealized holding (losses) gains on investments | $ | (1,657 | ) | $ | (909 | ) | $ | 403 | |||
Net realized losses on fixed maturity investments available for sale | — | — | (1,378 | ) | |||||||
Change in net unrealized (losses) gains on investments | $ | (1,657 | ) | $ | (909 | ) | $ | (975 | ) |
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2018 | 2017 | 2016 | |||||||||
Preference shares | |||||||||||
Balance – January 1 | $ | 400,000 | $ | 400,000 | $ | 400,000 | |||||
Issuance of shares (Note 11) | 250,000 | — | — | ||||||||
Balance – December 31 | 650,000 | 400,000 | 400,000 | ||||||||
Common shares | |||||||||||
Balance – January 1 | 40,024 | 41,187 | 43,701 | ||||||||
Issuance of shares (Note 11) | 1,947 | — | — | ||||||||
Repurchase of shares | — | (1,322 | ) | (2,741 | ) | ||||||
Exercise of options and issuance of restricted stock awards (Notes 12 and 16) | 236 | 159 | 227 | ||||||||
Balance – December 31 | 42,207 | 40,024 | 41,187 | ||||||||
Additional paid-in capital | |||||||||||
Balance – January 1 | 37,355 | 216,558 | 507,674 | ||||||||
Issuance of shares (Note 11) | 248,053 | — | — | ||||||||
Repurchase of shares | — | (187,269 | ) | (306,693 | ) | ||||||
Offering expenses | (8,552 | ) | — | — | |||||||
Change in redeemable noncontrolling interest | 837 | 119 | (1,655 | ) | |||||||
Exercise of options and issuance of restricted stock awards (Notes 12 and 16) | 18,406 | 7,947 | 17,232 | ||||||||
Balance – December 31 | 296,099 | 37,355 | 216,558 | ||||||||
Accumulated other comprehensive (loss) income | |||||||||||
Balance – January 1 | 224 | 1,133 | 2,108 | ||||||||
Change in net unrealized (losses) gains on investments | (1,657 | ) | (909 | ) | (975 | ) | |||||
Balance – December 31 | (1,433 | ) | 224 | 1,133 | |||||||
Retained earnings | |||||||||||
Balance – January 1 | 3,913,772 | 4,207,699 | 3,778,701 | ||||||||
Cumulative effect of adoption of ASU 2016-09 (Note 2) | — | 2,213 | — | ||||||||
Net income (loss) | 268,917 | (354,671 | ) | 630,048 | |||||||
Net (income) loss attributable to redeemable noncontrolling interests (Note 9) | (41,553 | ) | 132,282 | (127,086 | ) | ||||||
Dividends on common shares | (52,841 | ) | (51,370 | ) | (51,583 | ) | |||||
Dividends on preference shares | (30,088 | ) | (22,381 | ) | (22,381 | ) | |||||
Balance – December 31 | 4,058,207 | 3,913,772 | 4,207,699 | ||||||||
Total shareholders’ equity | $ | 5,045,080 | $ | 4,391,375 | $ | 4,866,577 |
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2018 | 2017 | 2016 | |||||||||
Cash flows provided by operating activities | |||||||||||
Net income (loss) | $ | 268,917 | $ | (354,671 | ) | $ | 630,048 | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities | |||||||||||
Amortization, accretion and depreciation | 123 | 31,242 | 29,304 | ||||||||
Equity in undistributed (earnings) losses of other ventures | (3,772 | ) | 6,295 | 5,504 | |||||||
Net realized and unrealized losses (gains) on investments | 175,069 | (135,822 | ) | (141,328 | ) | ||||||
Net unrealized losses (gains) included in net investment income | 8,309 | (24,737 | ) | (11,542 | ) | ||||||
Change in: | |||||||||||
Premiums receivable | (232,566 | ) | (317,299 | ) | (209,314 | ) | |||||
Prepaid reinsurance premiums | (82,639 | ) | (92,286 | ) | (210,589 | ) | |||||
Reinsurance recoverable | (785,591 | ) | (1,307,066 | ) | (145,038 | ) | |||||
Deferred acquisition costs | (50,110 | ) | (91,226 | ) | (135,945 | ) | |||||
Reserve for claims and claim expenses | 995,863 | 2,232,114 | 81,249 | ||||||||
Unearned premiums | 238,412 | 246,036 | 342,471 | ||||||||
Reinsurance balances payable | 912,966 | 315,107 | 150,009 | ||||||||
Other | (223,280 | ) | 518,100 | 99,943 | |||||||
Net cash provided by operating activities | 1,221,701 | 1,025,787 | 484,772 | ||||||||
Cash flows used in investing activities | |||||||||||
Proceeds from sales and maturities of fixed maturity investments trading | 11,585,576 | 9,490,669 | 8,102,514 | ||||||||
Purchases of fixed maturity investments trading | (12,489,972 | ) | (10,093,532 | ) | (8,282,720 | ) | |||||
Proceeds from sales and maturities of fixed maturity investments available for sale | — | — | 17,692 | ||||||||
Net sales of equity investments trading | 14,156 | 115,837 | 184,788 | ||||||||
Net (purchases) sales of short term investments | (1,436,389 | ) | 364,011 | (118,617 | ) | ||||||
Net purchases of other investments | (199,475 | ) | (19,419 | ) | (68,589 | ) | |||||
Net purchases of investments in other ventures | (21,473 | ) | — | — | |||||||
Return of investment from investment in other ventures | 8,464 | 20,000 | — | ||||||||
Net sales of other assets | 2,500 | — | 400 | ||||||||
Net cash used in investing activities | (2,536,613 | ) | (122,434 | ) | (164,532 | ) | |||||
Cash flows provided by (used in) financing activities | |||||||||||
Dividends paid – RenaissanceRe common shares | (52,841 | ) | (51,370 | ) | (51,583 | ) | |||||
Dividends paid – preference shares | (30,088 | ) | (22,381 | ) | (22,381 | ) | |||||
RenaissanceRe common share repurchases | — | (188,591 | ) | (309,434 | ) | ||||||
RenaissanceRe common share issuance | 250,000 | — | — | ||||||||
Issuance of debt, net of expenses | — | 295,866 | — | ||||||||
Repayment of debt | — | (250,000 | ) | — | |||||||
Issuance of preference shares, net of expenses | 241,448 | — | — | ||||||||
Net third party redeemable noncontrolling interest share transactions | 665,683 | 260,475 | (2,990 | ) | |||||||
Taxes paid on withholding shares | (7,862 | ) | (15,139 | ) | (14,943 | ) | |||||
Net cash provided by (used in) financing activities | 1,066,340 | 28,860 | (401,331 | ) | |||||||
Effect of exchange rate changes on foreign currency cash | (5,098 | ) | 8,222 | (4,637 | ) | ||||||
Net (decrease) increase in cash and cash equivalents | (253,670 | ) | 940,435 | (85,728 | ) | ||||||
Cash and cash equivalents, beginning of year | 1,361,592 | 421,157 | 506,885 | ||||||||
Cash and cash equivalents, end of year | $ | 1,107,922 | $ | 1,361,592 | $ | 421,157 | |||||
Supplemental disclosure of cash flow information | |||||||||||
Income taxes paid (refunded) | $ | 341 | $ | 343 | $ | (1,118 | ) | ||||
Interest paid | $ | 45,623 | $ | 44,171 | $ | 53,977 |
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• | 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. Inc. (“Renaissance Reinsurance U.S.”) is a reinsurance company domiciled in the state of Maryland that provides property, casualty and specialty reinsurance coverages to insurers and reinsurers, primarily in the Americas. |
• | 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 consolidated 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. Because the Company owns a noncontrolling equity interest in, but controls a majority of the outstanding voting power of Medici’s parent, RenaissanceRe Fund Holdings Ltd. (“Fund Holdings”), the results of Medici and Fund Holdings are consolidated in the Company’s consolidated financial statements and all significant inter-company transactions have been eliminated. Redeemable noncontrolling interest - Medici represents the interests of external parties with respect to the net income and shareholders’ equity of Medici. |
• | Upsilon RFO Re Ltd., formerly known as Upsilon Reinsurance II Ltd. (“Upsilon RFO”), a Bermuda domiciled special purpose insurer (“SPI”), is a managed joint venture formed by the Company |
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• | RenaissanceRe Upsilon Fund Ltd. (“Upsilon Fund”), an exempted Bermuda segregated accounts company was formed by the Company 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 raises 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 is 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. |
• | Effective December 17, 2018, the Company formed Vermeer Reinsurance Ltd. (“Vermeer”), an exempted Bermuda reinsurer, with PGGM, a Dutch pension fund manager. Vermeer provides capacity focused on risk remote layers in the U.S. property catastrophe market. Vermeer is managed by RUM in return for a management fee. The Company maintains a majority voting control of Vermeer, while PGGM retains economic benefits. Vermeer is considered a VIE, as it has voting rights that are not proportional to its participating rights and the Company is the primary beneficiary. As a result, the Company consolidates Vermeer and all significant inter-company transactions have been eliminated. The Company does not currently expect its voting or economic interest in Vermeer to fluctuate. |
• | On October 30, 2018, the Company entered into a Stock Purchase Agreement by and among the Company, Tokio Marine & Nichido Fire Insurance Co. Ltd. (“Tokio”) and, with respect to certain sections only, Tokio Marine Holdings, Inc. (the “TMR Stock Purchase Agreement”), pursuant to which the Company agreed, subject to the terms and conditions therein, to cause its wholly owned subsidiary RenaissanceRe Specialty Holdings (UK) Limited to purchase all of the share capital of Tokio Millennium Re AG (“TMR AG”), Tokio Millennium Re (UK) Limited (“TMR UK” and, together with TMR AG and their respective subsidiaries, the “TMR Group Entities”) (the “TMR Stock Purchase”). The TMR Stock Purchase is expected to close in the first half of 2019, subject to the closing conditions set forth in the TMR Stock Purchase Agreement, including the receipt of required regulatory approvals. Refer to “Note 20. Acquisition of Tokio Millennium Re” for additional information regarding the TMR Stock Purchase. |
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Goodwill and other intangible assets | |||||||||||||
Goodwill | Other intangible assets | Total | |||||||||||
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 | |||||||||||
Amortization | — | (5,727 | ) | (5,727 | ) | ||||||||
Balance as of December 31, 2018 | |||||||||||||
Gross amount | 199,889 | 96,599 | 296,488 | ||||||||||
Accumulated impairment losses and amortization | (2,299 | ) | (56,771 | ) | (59,070 | ) | |||||||
$ | 197,590 | $ | 39,828 | $ | 237,418 | ||||||||
Goodwill and other intangible assets included in investments in other ventures, under equity method | |||||||||||||
Goodwill | Other intangible assets | Total | |||||||||||
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 | |||||||||||
Acquired during the year | 2,780 | 11,108 | 13,888 | ||||||||||
Amortization | — | (2,886 | ) | (2,886 | ) | ||||||||
Balance as of December 31, 2018 | |||||||||||||
Gross amount | 15,098 | 62,904 | 78,002 | ||||||||||
Accumulated impairment losses and amortization | (4,500 | ) | (45,766 | ) | (50,266 | ) | |||||||
$ | 10,598 | $ | 17,138 | $ | 27,736 | ||||||||
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Other intangible assets | |||||||||||||
At December 31, 2018 | Gross carrying value | Accumulated amortization and impairment losses | Total | ||||||||||
Customer relationships and customer lists | $ | 97,419 | $ | (60,221 | ) | $ | 37,198 | ||||||
Value of business acquired | 20,200 | (20,200 | ) | — | |||||||||
Software | 12,230 | (12,230 | ) | — | |||||||||
Licenses | 19,414 | — | 19,414 | ||||||||||
Patents and intellectual property | 4,500 | (4,500 | ) | — | |||||||||
Covenants not-to-compete | 4,030 | (4,030 | ) | — | |||||||||
Trademarks and trade names | 1,710 | (1,356 | ) | 354 | |||||||||
$ | 159,503 | $ | (102,537 | ) | $ | 56,966 | |||||||
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 | |||||||
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Other intangibles | Other intangible assets included in investments in other ventures, under equity method | Total | |||||||||||
2019 | $ | 5,446 | $ | 2,815 | $ | 8,261 | |||||||
2020 | 5,237 | 1,955 | 7,192 | ||||||||||
2021 | 4,910 | 1,095 | 6,005 | ||||||||||
2022 | 4,522 | 1,095 | 5,617 | ||||||||||
2023 | 4,093 | 631 | 4,724 | ||||||||||
2024 and thereafter | 5,353 | 400 | 5,753 | ||||||||||
Total remaining amortization expense | 29,561 | 7,991 | 37,552 | ||||||||||
Indefinite lived | 10,267 | 9,147 | 19,414 | ||||||||||
Total | $ | 39,828 | $ | 17,138 | $ | 56,966 | |||||||
December 31, 2018 | December 31, 2017 | ||||||||
U.S. treasuries | $ | 3,331,411 | $ | 3,168,763 | |||||
Agencies | 174,883 | 47,646 | |||||||
Municipal | 6,854 | 509,802 | |||||||
Non-U.S. government | 279,818 | 287,660 | |||||||
Non-U.S. government-backed corporate | 160,063 | 163,651 | |||||||
Corporate | 2,450,244 | 2,063,459 | |||||||
Agency mortgage-backed | 817,880 | 500,456 | |||||||
Non-agency mortgage-backed | 278,680 | 300,331 | |||||||
Commercial mortgage-backed | 282,294 | 202,062 | |||||||
Asset-backed | 306,743 | 182,725 | |||||||
Total fixed maturity investments trading | $ | 8,088,870 | $ | 7,426,555 | |||||
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At December 31, 2018 | Amortized Cost | Fair Value | |||||||
Due in less than one year | $ | 511,932 | $ | 507,728 | |||||
Due after one through five years | 4,799,196 | 4,762,712 | |||||||
Due after five through ten years | 1,086,697 | 1,056,087 | |||||||
Due after ten years | 79,084 | 76,746 | |||||||
Mortgage-backed | 1,376,565 | 1,378,854 | |||||||
Asset-backed | 310,488 | 306,743 | |||||||
Total | $ | 8,163,962 | $ | 8,088,870 | |||||
December 31, 2018 | December 31, 2017 | ||||||||
Financials | $ | 200,357 | $ | 253,543 | |||||
Communications and technology | 42,333 | 49,526 | |||||||
Industrial, utilities and energy | 24,520 | 34,325 | |||||||
Consumer | 20,639 | 24,779 | |||||||
Healthcare | 18,925 | 21,364 | |||||||
Basic materials | 3,478 | 4,717 | |||||||
Total | $ | 310,252 | $ | 388,254 | |||||
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Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
Fixed maturity investments | $ | 211,973 | $ | 179,624 | $ | 160,661 | |||||||
Short term investments | 33,571 | 11,082 | 5,127 | ||||||||||
Equity investments | 4,474 | 3,628 | 4,235 | ||||||||||
Other investments | |||||||||||||
Private equity investments | 477 | 33,999 | 6,155 | ||||||||||
Other | 22,475 | 8,067 | 20,181 | ||||||||||
Cash and cash equivalents | 3,810 | 1,196 | 788 | ||||||||||
276,780 | 237,596 | 197,147 | |||||||||||
Investment expenses | (14,914 | ) | (15,387 | ) | (15,421 | ) | |||||||
Net investment income | $ | 261,866 | $ | 222,209 | $ | 181,726 | |||||||
Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
Gross realized gains | $ | 21,284 | $ | 49,121 | $ | 72,739 | |||||||
Gross realized losses | (91,098 | ) | (38,832 | ) | (38,315 | ) | |||||||
Net realized (losses) gains on fixed maturity investments | (69,814 | ) | 10,289 | 34,424 | |||||||||
Net unrealized (losses) gains on fixed maturity investments trading | (57,310 | ) | 8,479 | 26,954 | |||||||||
Net realized and unrealized losses on investments-related derivatives | (8,784 | ) | (2,490 | ) | (15,414 | ) | |||||||
Net realized gains on equity investments trading sold during the period | 27,739 | 80,027 | 14,190 | ||||||||||
Net unrealized (losses) gains on equity investments trading still held at reporting date | (66,900 | ) | 39,517 | 81,174 | |||||||||
Net realized and unrealized (losses) gains on equity investments trading | (39,161 | ) | 119,544 | 95,364 | |||||||||
Net realized and unrealized (losses) gains on investments | $ | (175,069 | ) | $ | 135,822 | $ | 141,328 | ||||||
At December 31, | 2018 | 2017 | |||||||
Catastrophe bonds | $ | 516,571 | $ | 380,475 | |||||
Private equity investments | 242,647 | 196,220 | |||||||
Senior secured bank loan funds | 14,482 | 17,574 | |||||||
Hedge funds | 11,233 | 524 | |||||||
Total other investments | $ | 784,933 | $ | 594,793 | |||||
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2018 | 2017 | ||||||||||||||||||||||
At December 31, | Investment | Ownership % | Carrying Value | Investment | Ownership % | Carrying Value | |||||||||||||||||
Tower Hill Companies | 64,750 | 24.9 | % | 38,241 | 64,750 | 26.3 | % | 42,167 | |||||||||||||||
Top Layer Re | 65,375 | 50.0 | % | 46,562 | 65,375 | 50.0 | % | 50,211 | |||||||||||||||
Other | 35,862 | 30.6 | % | 30,369 | 13,650 | 40.4 | % | 9,596 | |||||||||||||||
Total investments in other ventures, under equity method | $ | 165,987 | $ | 115,172 | $ | 143,775 | $ | 101,974 | |||||||||||||||
Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
Tower Hill Companies | $ | 9,605 | $ | (1,647 | ) | $ | 10,379 | ||||||
Top Layer Re | 8,852 | 9,851 | (8,576 | ) | |||||||||
Other | 17 | (174 | ) | (840 | ) | ||||||||
Total equity in earnings of other ventures | $ | 18,474 | $ | 8,030 | $ | 963 | |||||||
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• | 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, 2018 | 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 | $ | 3,331,411 | $ | 3,331,411 | $ | — | $ | — | |||||||||
Agencies | 174,883 | — | 174,883 | — | |||||||||||||
Municipal | 6,854 | — | 6,854 | — | |||||||||||||
Non-U.S. government | 279,818 | — | 279,818 | — | |||||||||||||
Non-U.S. government-backed corporate | 160,063 | — | 160,063 | — | |||||||||||||
Corporate | 2,450,244 | — | 2,450,244 | — | |||||||||||||
Agency mortgage-backed | 817,880 | — | 817,880 | — | |||||||||||||
Non-agency mortgage-backed | 278,680 | — | 278,680 | — | |||||||||||||
Commercial mortgage-backed | 282,294 | — | 282,294 | — | |||||||||||||
Asset-backed | 306,743 | — | 306,743 | — | |||||||||||||
Total fixed maturity investments | 8,088,870 | 3,331,411 | 4,757,459 | — | |||||||||||||
Short term investments | 2,586,520 | — | 2,586,520 | — | |||||||||||||
Equity investments trading | 310,252 | 310,252 | — | — | |||||||||||||
Other investments | |||||||||||||||||
Catastrophe bonds | 516,571 | — | 516,571 | — | |||||||||||||
Private equity investments (1) | 242,647 | — | — | 54,545 | |||||||||||||
Senior secured bank loan funds (1) | 14,482 | — | — | — | |||||||||||||
Hedge funds (1) | 11,233 | — | — | — | |||||||||||||
Total other investments | 784,933 | — | 516,571 | 54,545 | |||||||||||||
Other assets and (liabilities) | |||||||||||||||||
Assumed and ceded (re)insurance contracts (2) | (8,359 | ) | — | — | (8,359 | ) | |||||||||||
Derivatives (3) | 12,399 | 484 | 11,915 | — | |||||||||||||
Total other assets and (liabilities) | 4,040 | 484 | 11,915 | (8,359 | ) | ||||||||||||
$ | 11,774,615 | $ | 3,642,147 | $ | 7,872,465 | $ | 46,186 | ||||||||||
(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, 2018 was $5.0 million and $13.3 million of other assets and other liabilities, respectively. |
(3) | See “Note 18. 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, 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 | 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 investments (1) | 196,220 | — | — | — | |||||||||||||
Senior secured bank loan fund (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 | — | ||||||||||||
Total other assets and (liabilities) | 1,684 | (45 | ) | 4,681 | (2,952 | ) | |||||||||||
$ | 9,403,149 | $ | 3,556,972 | $ | 5,634,811 | $ | (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. |
(2) | See “Note 18. 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, 2018 | Fair Value (Level 3) | Valuation Technique | Unobservable Inputs | Low | High | Weighted Average or Actual | |||||||||||||||
Other investments | |||||||||||||||||||||
Private equity investments | $ | 54,545 | Internal valuation model | Discount rate | 16.8 | % | 29.6 | % | 23.2 | % | |||||||||||
Total other investments | 54,545 | ||||||||||||||||||||
Other assets and (liabilities) | |||||||||||||||||||||
Assumed and ceded (re)insurance contracts | 550 | Internal valuation model | Bond price | $ | 100.74 | $ | 107.82 | $ | 104.66 | ||||||||||||
Liquidity discount | n/a | n/a | 1.3 | % | |||||||||||||||||
Assumed and ceded (re)insurance contracts | (8,909 | ) | Internal valuation model | Net undiscounted cash flows | n/a | n/a | $ | (10,528 | ) | ||||||||||||
Expected loss ratio | n/a | n/a | 36.1 | % | |||||||||||||||||
Discount rate | n/a | n/a | 2.5 | % | |||||||||||||||||
Total other assets and (liabilities) | $ | (8,359 | ) | ||||||||||||||||||
$ | 46,186 | ||||||||||||||||||||
Other investments | Other assets and (liabilities) | Total | |||||||||||
Balance - January 1, 2018 | $ | — | $ | (2,952 | ) | $ | (2,952 | ) | |||||
Total realized and unrealized gains | |||||||||||||
Included in other income | — | 2,901 | 2,901 | ||||||||||
Purchases | 54,545 | (9,291 | ) | 45,254 | |||||||||
Settlements | — | 983 | 983 | ||||||||||
Balance - December 31, 2018 | $ | 54,545 | $ | (8,359 | ) | $ | 46,186 | ||||||
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 | ) | ||
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2018 | 2017 | ||||||||
Other investments | $ | 784,933 | $ | 594,793 | |||||
Other assets | $ | 4,968 | $ | 2,542 | |||||
Other liabilities | $ | 13,327 | $ | 5,494 | |||||
At December 31, 2018 | Fair Value | Unfunded Commitments | Redemption Frequency | Redemption Notice Period (Minimum Days) | Redemption Notice Period (Maximum Days) | ||||||||||
Private equity investments | $ | 188,102 | $ | 393,700 | See below | See below | See below | ||||||||
Senior secured bank loan funds | 14,482 | 20,121 | See below | See below | See below | ||||||||||
Hedge funds | 11,233 | — | See below | See below | See below | ||||||||||
Total other investments measured using net asset valuations | $ | 213,817 | $ | 413,821 | |||||||||||
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Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
Premiums written | |||||||||||||
Direct | $ | 337,587 | $ | 290,730 | $ | 208,282 | |||||||
Assumed | 2,972,840 | 2,506,810 | 2,166,294 | ||||||||||
Ceded | (1,178,525 | ) | (926,215 | ) | (839,264 | ) | |||||||
Net premiums written | $ | 2,131,902 | $ | 1,871,325 | $ | 1,535,312 | |||||||
Premiums earned | |||||||||||||
Direct | $ | 292,219 | $ | 244,285 | $ | 157,112 | |||||||
Assumed | 2,779,796 | 2,307,219 | 1,874,993 | ||||||||||
Ceded | (1,095,886 | ) | (833,929 | ) | (628,675 | ) | |||||||
Net premiums earned | $ | 1,976,129 | $ | 1,717,575 | $ | 1,403,430 | |||||||
Claims and claim expenses | |||||||||||||
Gross claims and claim expenses incurred | $ | 2,578,536 | $ | 3,420,388 | $ | 710,651 | |||||||
Claims and claim expenses recovered | (1,458,518 | ) | (1,558,960 | ) | (179,820 | ) | |||||||
Net claims and claim expenses incurred | $ | 1,120,018 | $ | 1,861,428 | $ | 530,831 | |||||||
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At December 31, 2018 | Case Reserves | Additional Case Reserves | IBNR | Total | |||||||||||||
Property | $ | 690,718 | $ | 1,308,307 | $ | 1,087,229 | $ | 3,086,254 | |||||||||
Casualty and Specialty | 771,537 | 116,877 | 2,096,979 | 2,985,393 | |||||||||||||
Other | 1,458 | — | 3,166 | 4,624 | |||||||||||||
Total | $ | 1,463,713 | $ | 1,425,184 | $ | 3,187,374 | $ | 6,076,271 | |||||||||
At December 31, 2017 | |||||||||||||||||
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 | |||||||||
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Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
Net reserves as of January 1 | $ | 3,493,778 | $ | 2,568,730 | $ | 2,632,519 | |||||||
Net incurred related to: | �� | ||||||||||||
Current year | 1,390,767 | 1,902,424 | 694,957 | ||||||||||
Prior years | (270,749 | ) | (40,996 | ) | (164,126 | ) | |||||||
Total net incurred | 1,120,018 | 1,861,428 | 530,831 | ||||||||||
Net paid related to: | |||||||||||||
Current year | 391,061 | 450,527 | 83,015 | ||||||||||
Prior years | 503,708 | 524,298 | 506,279 | ||||||||||
Total net paid | 894,769 | 974,825 | 589,294 | ||||||||||
Foreign exchange | (14,977 | ) | 38,445 | (5,326 | ) | ||||||||
Net reserves as of December 31 | 3,704,050 | 3,493,778 | 2,568,730 | ||||||||||
Reinsurance recoverable as of December 31 | 2,372,221 | 1,586,630 | 279,564 | ||||||||||
Gross reserves as of December 31 | $ | 6,076,271 | $ | 5,080,408 | $ | 2,848,294 | |||||||
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Incurred claims and claim expenses, net of reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||
For the year ended December 31, | At December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||
Accident Year | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | IBNR and ACR | |||||||||||||||||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||||||||||||||||||||
2009 | $ | 699,400 | $ | 634,400 | $ | 617,015 | $ | 577,285 | $ | 552,059 | $ | 530,876 | $ | 521,723 | $ | 516,888 | $ | 519,585 | $ | 521,739 | $ | 17,510 | ||||||||||||||||||||||||
2010 | — | 992,376 | 950,984 | 902,908 | 871,664 | 869,959 | 860,517 | 868,441 | 866,529 | 855,132 | 52,575 | |||||||||||||||||||||||||||||||||||
2011 | — | — | 1,646,568 | 1,573,930 | 1,493,095 | 1,412,886 | 1,384,912 | 1,348,620 | 1,334,068 | 1,337,445 | 76,002 | |||||||||||||||||||||||||||||||||||
2012 | — | — | — | 865,281 | 770,104 | 707,471 | 681,405 | 653,437 | 655,882 | 666,704 | 52,680 | |||||||||||||||||||||||||||||||||||
2013 | — | — | — | — | 619,414 | 558,746 | 512,389 | 472,270 | 446,311 | 433,363 | 46,050 | |||||||||||||||||||||||||||||||||||
2014 | — | — | — | — | — | 660,836 | 613,786 | 601,727 | 582,473 | 558,619 | 117,354 | |||||||||||||||||||||||||||||||||||
2015 | — | — | — | — | — | — | 639,151 | 627,702 | 629,211 | 590,591 | 136,328 | |||||||||||||||||||||||||||||||||||
2016 | — | — | — | — | — | — | — | 680,039 | 684,757 | 666,453 | 241,938 | |||||||||||||||||||||||||||||||||||
2017 | — | — | — | — | — | — | — | — | 1,895,376 | 1,731,295 | 828,815 | |||||||||||||||||||||||||||||||||||
2018 | — | — | — | — | — | — | — | — | — | 1,367,413 | 923,976 | |||||||||||||||||||||||||||||||||||
Total | $ | 8,728,754 | $ | 2,493,228 | ||||||||||||||||||||||||||||||||||||||||||
Cumulative paid claims and claim expenses, net of reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||
For the year ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||||||||||||||||||||
2009 | $ | 96,462 | $ | 269,714 | $ | 321,506 | $ | 365,731 | $ | 398,452 | $ | 437,232 | $ | 458,920 | $ | 465,244 | $ | 472,679 | $ | 481,632 | ||||||||||||||||||||||||||
2010 | — | 128,276 | 315,357 | 431,562 | 500,974 | 555,252 | 626,094 | 715,191 | 741,629 | 758,762 | ||||||||||||||||||||||||||||||||||||
2011 | — | — | 260,326 | 540,985 | 889,387 | 1,043,763 | 1,133,013 | 1,176,892 | 1,203,998 | 1,222,512 | ||||||||||||||||||||||||||||||||||||
2012 | — | — | — | 166,564 | 266,980 | 357,821 | 417,628 | 461,035 | 525,736 | 551,846 | ||||||||||||||||||||||||||||||||||||
2013 | — | — | — | — | 86,998 | 179,709 | 243,544 | 289,144 | 326,807 | 348,436 | ||||||||||||||||||||||||||||||||||||
2014 | — | — | — | — | — | 111,067 | 200,830 | 268,871 | 317,901 | 357,894 | ||||||||||||||||||||||||||||||||||||
2015 | — | — | — | — | — | — | 95,862 | 193,965 | 287,522 | 362,419 | ||||||||||||||||||||||||||||||||||||
2016 | — | — | — | — | — | — | — | 79,577 | 217,746 | 324,224 | ||||||||||||||||||||||||||||||||||||
2017 | — | — | — | — | — | — | — | — | 450,034 | 548,619 | ||||||||||||||||||||||||||||||||||||
2018 | — | — | — | — | — | — | — | — | — | 389,492 | ||||||||||||||||||||||||||||||||||||
Total | $ | 5,345,836 | ||||||||||||||||||||||||||||||||||||||||||||
Outstanding liabilities from accident year 2008 and prior, net of reinsurance | 286,863 | |||||||||||||||||||||||||||||||||||||||||||||
Claims and claim expenses, net of reinsurance, from the Company's former Bermuda-based insurance operations | 368 | |||||||||||||||||||||||||||||||||||||||||||||
Adjustment for unallocated claim expenses | 28,956 | |||||||||||||||||||||||||||||||||||||||||||||
Unamortized fair value adjustments recorded in connection with the acquisition of Platinum | 4,945 | |||||||||||||||||||||||||||||||||||||||||||||
Liability for claims and claim expenses, net of reinsurance | $ | 3,704,050 | ||||||||||||||||||||||||||||||||||||||||||||
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Incurred claims and claim expenses, net of reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||
For the year ended December 31, | At December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||
Accident Year | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | IBNR and ACR | |||||||||||||||||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||||||||||||||||||||
2009 | $ | 219,979 | $ | 164,369 | $ | 145,207 | $ | 138,747 | $ | 134,490 | $ | 135,245 | $ | 134,539 | $ | 134,811 | $ | 134,355 | $ | 134,876 | $ | 74 | ||||||||||||||||||||||||
2010 | — | 609,380 | 561,524 | 526,928 | 531,199 | 550,980 | 554,733 | 564,345 | 566,475 | 555,642 | 33,429 | |||||||||||||||||||||||||||||||||||
2011 | — | — | 1,264,374 | 1,192,868 | 1,141,403 | 1,091,415 | 1,070,957 | 1,040,721 | 1,036,663 | 1,033,601 | 46,427 | |||||||||||||||||||||||||||||||||||
2012 | — | — | — | 437,940 | 344,487 | 311,648 | 293,873 | 275,910 | 264,532 | 257,246 | 16,299 | |||||||||||||||||||||||||||||||||||
2013 | — | — | — | — | 227,268 | 196,729 | 174,335 | 152,715 | 141,197 | 137,660 | 1,971 | |||||||||||||||||||||||||||||||||||
2014 | — | — | — | — | — | 183,249 | 154,469 | 147,138 | 142,864 | 142,457 | 4,689 | |||||||||||||||||||||||||||||||||||
2015 | — | — | — | — | — | — | 226,039 | 195,164 | 176,159 | 167,916 | 19,347 | |||||||||||||||||||||||||||||||||||
2016 | — | — | — | — | — | — | — | 252,556 | 254,151 | 241,296 | 64,136 | |||||||||||||||||||||||||||||||||||
2017 | — | — | — | — | — | — | — | — | 1,342,161 | 1,167,013 | 454,395 | |||||||||||||||||||||||||||||||||||
2018 | — | — | — | — | — | — | — | — | — | 718,266 | 336,082 | |||||||||||||||||||||||||||||||||||
Total | $ | 4,555,973 | $ | 976,849 | ||||||||||||||||||||||||||||||||||||||||||
Cumulative paid claims and claim expenses, net of reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||
For the year ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||||||||||||||||||||
2009 | $ | 56,142 | $ | 101,124 | $ | 115,459 | $ | 123,281 | $ | 129,204 | $ | 133,750 | $ | 134,770 | $ | 135,721 | $ | 135,729 | $ | 136,329 | ||||||||||||||||||||||||||
2010 | — | 93,423 | 216,504 | 295,243 | 337,060 | 372,499 | 398,691 | 474,179 | 483,738 | 497,547 | ||||||||||||||||||||||||||||||||||||
2011 | — | — | 212,259 | 427,501 | 743,745 | 868,489 | 926,747 | 952,780 | 966,304 | 971,324 | ||||||||||||||||||||||||||||||||||||
2012 | — | — | — | 100,057 | 145,098 | 189,199 | 208,653 | 218,638 | 230,839 | 233,647 | ||||||||||||||||||||||||||||||||||||
2013 | — | — | — | — | 49,032 | 93,041 | 117,642 | 128,631 | 132,822 | 134,044 | ||||||||||||||||||||||||||||||||||||
2014 | — | — | — | — | — | 55,090 | 96,074 | 118,768 | 123,790 | 126,897 | ||||||||||||||||||||||||||||||||||||
2015 | — | — | — | — | — | — | 62,169 | 108,679 | 127,509 | 138,283 | ||||||||||||||||||||||||||||||||||||
2016 | — | — | — | — | — | — | — | 47,491 | 119,260 | 155,917 | ||||||||||||||||||||||||||||||||||||
2017 | — | — | — | — | — | — | — | — | 411,961 | 443,130 | ||||||||||||||||||||||||||||||||||||
2018 | — | — | — | — | — | — | — | — | — | 354,616 | ||||||||||||||||||||||||||||||||||||
Total | $ | 3,191,734 | ||||||||||||||||||||||||||||||||||||||||||||
Outstanding liabilities from accident year 2008 and prior, net of reinsurance | 4,222 | |||||||||||||||||||||||||||||||||||||||||||||
Adjustment for unallocated claim expenses | 4,028 | |||||||||||||||||||||||||||||||||||||||||||||
Unamortized fair value adjustments recorded in connection with the acquisition of Platinum | 636 | |||||||||||||||||||||||||||||||||||||||||||||
Liability for claims and claim expenses, net of reinsurance | $ | 1,373,125 | ||||||||||||||||||||||||||||||||||||||||||||
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Incurred claims and claim expenses, net of reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||
For the year ended December 31, | At December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||
Accident Year | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | IBNR and ACR | |||||||||||||||||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||||||||||||||||||||
2009 | $ | 479,421 | $ | 470,031 | $ | 471,808 | $ | 438,538 | $ | 417,569 | $ | 395,631 | $ | 387,184 | $ | 382,077 | $ | 385,230 | $ | 386,863 | $ | 17,436 | ||||||||||||||||||||||||
2010 | — | 382,996 | 389,460 | 375,980 | 340,465 | 318,979 | 305,784 | 304,096 | 300,054 | 299,490 | 19,146 | |||||||||||||||||||||||||||||||||||
2011 | — | — | 382,194 | 381,062 | 351,692 | 321,471 | 313,955 | 307,899 | 297,405 | 303,844 | 29,575 | |||||||||||||||||||||||||||||||||||
2012 | — | — | — | 427,341 | 425,617 | 395,823 | 387,532 | 377,527 | 391,350 | 409,458 | 36,381 | |||||||||||||||||||||||||||||||||||
2013 | — | — | — | — | 392,146 | 362,017 | 338,054 | 319,555 | 305,114 | 295,703 | 44,079 | |||||||||||||||||||||||||||||||||||
2014 | — | — | — | — | — | 477,587 | 459,317 | 454,589 | 439,609 | 416,162 | 112,665 | |||||||||||||||||||||||||||||||||||
2015 | — | — | — | — | — | — | 413,112 | 432,538 | 453,052 | 422,675 | 116,981 | |||||||||||||||||||||||||||||||||||
2016 | — | — | — | — | — | — | — | 427,483 | 430,606 | 425,157 | 177,802 | |||||||||||||||||||||||||||||||||||
2017 | — | — | — | — | — | — | — | — | 553,215 | 564,282 | 374,420 | |||||||||||||||||||||||||||||||||||
2018 | — | — | — | — | — | — | — | — | — | 649,147 | 587,894 | |||||||||||||||||||||||||||||||||||
Total | $ | 4,172,781 | $ | 1,516,379 | ||||||||||||||||||||||||||||||||||||||||||
Cumulative paid claims and claim expenses, net of reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||
For the year ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||||||||||||||||||||
2009 | $ | 40,320 | $ | 168,590 | $ | 206,047 | $ | 242,450 | $ | 269,248 | $ | 303,482 | $ | 324,150 | $ | 329,523 | $ | 336,950 | $ | 345,303 | ||||||||||||||||||||||||||
2010 | — | 34,853 | 98,853 | 136,319 | 163,914 | 182,753 | 227,403 | 241,012 | 257,891 | 261,215 | ||||||||||||||||||||||||||||||||||||
2011 | — | — | 48,067 | 113,484 | 145,642 | 175,274 | 206,266 | 224,112 | 237,694 | 251,188 | ||||||||||||||||||||||||||||||||||||
2012 | — | — | — | 66,507 | 121,882 | 168,622 | 208,975 | 242,397 | 294,897 | 318,199 | ||||||||||||||||||||||||||||||||||||
2013 | — | — | — | — | 37,966 | 86,668 | 125,902 | 160,513 | 193,985 | 214,392 | ||||||||||||||||||||||||||||||||||||
2014 | — | — | — | — | — | 55,977 | 104,756 | 150,103 | 194,111 | 230,997 | ||||||||||||||||||||||||||||||||||||
2015 | — | — | — | — | — | — | 33,693 | 85,286 | 160,013 | 224,136 | ||||||||||||||||||||||||||||||||||||
2016 | — | — | — | — | — | — | — | 32,086 | 98,486 | 168,307 | ||||||||||||||||||||||||||||||||||||
2017 | — | — | — | — | — | — | — | — | 38,073 | 105,489 | ||||||||||||||||||||||||||||||||||||
2018 | — | — | — | — | — | — | — | — | — | 34,876 | ||||||||||||||||||||||||||||||||||||
Total | $ | 2,154,102 | ||||||||||||||||||||||||||||||||||||||||||||
Outstanding liabilities from accident year 2008 and prior, net of reinsurance | 282,641 | |||||||||||||||||||||||||||||||||||||||||||||
Adjustment for unallocated claim expenses | 24,928 | |||||||||||||||||||||||||||||||||||||||||||||
Unamortized fair value adjustments recorded in connection with the acquisition of Platinum | 4,309 | |||||||||||||||||||||||||||||||||||||||||||||
Liability for claims and claim expenses, net of reinsurance | $ | 2,330,557 | ||||||||||||||||||||||||||||||||||||||||||||
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Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
(Favorable) adverse development | (Favorable) adverse development | (Favorable) adverse development | |||||||||||
Property | $ | (221,290 | ) | $ | (45,596 | ) | $ | (104,876 | ) | ||||
Casualty and Specialty | (49,262 | ) | 6,183 | (58,140 | ) | ||||||||
Other | (197 | ) | (1,583 | ) | (1,110 | ) | |||||||
Total favorable development of prior accident years net claims and claim expenses | $ | (270,749 | ) | $ | (40,996 | ) | $ | (164,126 | ) | ||||
Year ended December 31, | 2018 | ||||
(Favorable) adverse development | |||||
Catastrophe net claims and claim expenses | |||||
Large catastrophe events | |||||
2017 Large Loss Events | $ | (172,512 | ) | ||
Other | (9,517 | ) | |||
Total large catastrophe events | (182,029 | ) | |||
Small catastrophe events and attritional loss movements | |||||
Other small catastrophe events and attritional loss movements | (33,579 | ) | |||
Total small catastrophe events and attritional loss movements | (33,579 | ) | |||
Total catastrophe and attritional net claims and claim expenses | (215,608 | ) | |||
Actuarial assumption changes | (5,682 | ) | |||
Total net favorable development of prior accident years net claims and claim expenses | $ | (221,290 | ) | ||
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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 | ) | |||
New Zealand Earthquake (2010) | 4,061 | ||||
New Zealand Earthquake (2011) | 5,807 | ||||
Other | (8,936 | ) | |||
Total large catastrophe events | (7,640 | ) | |||
Small catastrophe events and attritional loss movements | |||||
Tianjin Explosion (2015) | (8,002 | ) | |||
Fort McMurray Wildfire (2016) | (6,364 | ) | |||
Other small catastrophe events and attritional loss movements | (24,432 | ) | |||
Total small catastrophe events and attritional loss movements | (38,798 | ) | |||
Total catastrophe and attritional 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 and attritional loss movements | |||||
Tianjin Explosion (2015) | (5,686 | ) | |||
Other small catastrophe events and attritional loss movements | (65,264 | ) | |||
Total small catastrophe events and attritional loss movements | (70,950 | ) | |||
Total catastrophe and attritional 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, | 2018 | 2017 | 2016 | ||||||||||
(Favorable) adverse development | (Favorable) adverse development | (Favorable) adverse development | |||||||||||
Actuarial methods - actual reported claims less than expected claims | $ | (41,476 | ) | $ | (24,836 | ) | $ | (52,601 | ) | ||||
Ogden Rate change | — | 33,481 | — | ||||||||||
Actuarial assumption changes | (7,786 | ) | (2,462 | ) | (5,539 | ) | |||||||
Total (favorable) adverse development of prior accident years net claims and claim expenses | $ | (49,262 | ) | $ | 6,183 | $ | (58,140 | ) | |||||
Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
(Favorable) adverse development | (Favorable) adverse development | (Favorable) adverse development | |||||||||||
Other | $ | (197 | ) | $ | (1,583 | ) | $ | (1,110 | ) | ||||
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At December 31, 2018 | |||||
Net reserve for claims and claim expenses | |||||
Property | $ | 1,373,125 | |||
Casualty and Specialty | 2,330,557 | ||||
Other | 368 | ||||
Total net reserve for claims and claim expenses | 3,704,050 | ||||
Reinsurance recoverable | |||||
Property | $ | 1,713,129 | |||
Casualty and Specialty | 654,836 | ||||
Other | 4,256 | ||||
Total reinsurance recoverable | 2,372,221 | ||||
Total gross reserve for claims and claim expenses | $ | 6,076,271 | |||
Average annual percentage payout of incurred claims by age, net of reinsurance (number of years) | |||||||||||||||||||||||||||||||
At December 31, 2018 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | |||||||||||||||||||||
Property | 31.7 | % | 17.3 | % | 20.8 | % | 9.1 | % | 5.2 | % | 3.3 | % | 4.7 | % | 0.9 | % | 2.0 | % | 0.4 | % | |||||||||||
Casualty and Specialty | 10.1 | % | 16.9 | % | 12.9 | % | 10.9 | % | 8.5 | % | 10.0 | % | 5.1 | % | 3.6 | % | 1.6 | % | 2.2 | % | |||||||||||
• | 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, 2018 | ||||||
Cumulative number of reported claims | ||||||
Accident Year | Property | Casualty and Specialty | ||||
2009 | 743 | 1,132 | ||||
2010 | 787 | 1,081 | ||||
2011 | 1,186 | 1,411 | ||||
2012 | 679 | 1,448 | ||||
2013 | 629 | 1,557 | ||||
2014 | 553 | 2,040 | ||||
2015 | 606 | 1,992 | ||||
2016 | 845 | 1,650 | ||||
2017 | 1,812 | 1,028 | ||||
2018 | 1,014 | 277 | ||||
December 31, 2018 | December 31, 2017 | ||||||||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | ||||||||||||||
3.450% Senior Notes due 2027 | $ | 283,680 | $ | 295,797 | $ | 294,654 | $ | 295,303 | |||||||||
3.700% Senior Notes due 2025 | 292,557 | 297,688 | 302,781 | 297,318 | |||||||||||||
5.750% Senior Notes due 2020 | 255,938 | 249,602 | 263,750 | 249,272 | |||||||||||||
4.750% Senior Notes due 2025 (DaVinciRe) (1) | 142,539 | 148,040 | 157,050 | 147,730 | |||||||||||||
$ | 974,714 | $ | 991,127 | $ | 1,018,235 | $ | 989,623 | ||||||||||
(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, 2018 | Issued or Drawn | ||||
RenaissanceRe Revolving Credit Facility (1) | $ | — | |||
Uncommitted Standby Letter of Credit Facility with Wells Fargo | 86,861 | ||||
Bilateral Letter of Credit Facility with Citibank Europe | 243,696 | ||||
Renaissance Reinsurance FAL Facility | 180,000 | ||||
Total credit facilities in U.S. dollars | $ | 510,557 | |||
Specialty Risks FAL Facility (1) | £ | — | |||
Total credit facilities in pound sterling | £ | — | |||
(1) | At December 31, 2018, no amounts were issued or drawn under these facilities. |
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2019 | $ | — | |||
2020 | 250,000 | ||||
2021 | — | ||||
2022 | — | ||||
2023 | — | ||||
After 2023 | 750,000 | ||||
Unamortized discount and debt issuance expenses | (8,873 | ) | |||
$ | 991,127 | ||||
December 31, 2018 | December 31, 2017 | ||||||||
Redeemable noncontrolling interest - DaVinciRe | $ | 1,034,946 | $ | 1,011,659 | |||||
Redeemable noncontrolling interest - Medici | 416,765 | 284,847 | |||||||
Redeemable noncontrolling interest - Vermeer | 599,989 | — | |||||||
Redeemable noncontrolling interests | $ | 2,051,700 | $ | 1,296,506 | |||||
2018 | 2017 | 2016 | |||||||||||
Redeemable noncontrolling interest - DaVinciRe | $ | 27,638 | $ | (134,860 | ) | $ | 118,748 | ||||||
Redeemable noncontrolling interest - Medici | 13,926 | 2,578 | 8,338 | ||||||||||
Redeemable noncontrolling interest - Vermeer | (11 | ) | — | — | |||||||||
Net income (loss) attributable to redeemable noncontrolling interests | $ | 41,553 | $ | (132,282 | ) | $ | 127,086 | ||||||
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2018 | 2017 | ||||||||
Balance – January 1 | $ | 1,011,659 | $ | 994,458 | |||||
Redemption of shares from redeemable noncontrolling interest | (4,351 | ) | (80,058 | ) | |||||
Sale of shares to redeemable noncontrolling interest | — | 232,119 | |||||||
Net income (loss) attributable to redeemable noncontrolling interest | 27,638 | (134,860 | ) | ||||||
Balance – December 31 | $ | 1,034,946 | $ | 1,011,659 | |||||
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2018 | 2017 | ||||||||
Balance – January 1 | $ | 284,847 | $ | 181,136 | |||||
Redemption of shares from redeemable noncontrolling interest | (90,490 | ) | (48,049 | ) | |||||
Sale of shares to redeemable noncontrolling interest | 208,482 | 149,182 | |||||||
Net income attributable to redeemable noncontrolling interest | 13,926 | 2,578 | |||||||
Balance – December 31 | $ | 416,765 | $ | 284,847 | |||||
2018 | 2017 | ||||||||
Balance – January 1 | $ | — | $ | — | |||||
Sale of shares to redeemable noncontrolling interest | 600,000 | — | |||||||
Net loss attributable to redeemable noncontrolling interest | (11 | ) | — | ||||||
Balance – December 31 | $ | 599,989 | $ | — | |||||
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Year ended December 31, | 2018 | 2017 | 2016 | |||||||
(thousands of shares) | ||||||||||
Issued and outstanding shares – January 1 | 40,024 | 41,187 | 43,701 | |||||||
Issuance of shares | 1,947 | — | — | |||||||
Repurchase of shares | — | (1,322 | ) | (2,741 | ) | |||||
Exercise of options and issuance of restricted stock awards | 236 | 159 | 227 | |||||||
Issued and outstanding shares – December 31 | 42,207 | 40,024 | 41,187 | |||||||
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Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
(common shares in thousands) | |||||||||||||
Numerator: | |||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | $ | 197,276 | $ | (244,770 | ) | $ | 480,581 | ||||||
Amount allocated to participating common shareholders (1) | (2,121 | ) | (457 | ) | (5,666 | ) | |||||||
Net income (loss) allocated to RenaissanceRe common shareholders | $ | 195,155 | $ | (245,227 | ) | $ | 474,915 | ||||||
Denominator: | |||||||||||||
Denominator for basic income (loss) per RenaissanceRe common share - weighted average common shares | 39,732 | 39,854 | 41,314 | ||||||||||
Per common share equivalents of employee stock options and performance shares | 23 | — | 245 | ||||||||||
Denominator for diluted income (loss) per RenaissanceRe common share - adjusted weighted average common shares and assumed conversions | 39,755 | 39,854 | 41,559 | ||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – basic | $ | 4.91 | $ | (6.15 | ) | $ | 11.50 | ||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – diluted | $ | 4.91 | $ | (6.15 | ) | $ | 11.43 | ||||||
(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, | 2018 | 2017 | 2016 | ||||||||||
Domestic | |||||||||||||
Bermuda | $ | 349,959 | $ | (262,827 | ) | $ | 652,758 | ||||||
Foreign | |||||||||||||
U.S. | (56,261 | ) | (11,897 | ) | (1,236 | ) | |||||||
U.K. | (28,574 | ) | (41,656 | ) | (24,278 | ) | |||||||
Singapore | (3,226 | ) | (12,421 | ) | 2,180 | ||||||||
Ireland | 551 | 617 | 964 | ||||||||||
Switzerland | 166 | — | — | ||||||||||
Income (loss) before taxes | $ | 262,615 | $ | (328,184 | ) | $ | 630,388 | ||||||
Year ended December 31, 2018 | Current | Deferred | Total | ||||||||||
Total income tax (expense) benefit | $ | (1,668 | ) | $ | 7,970 | $ | 6,302 | ||||||
Year ended December 31, 2017 | |||||||||||||
Total income tax expense | $ | (844 | ) | $ | (25,643 | ) | $ | (26,487 | ) | ||||
Year ended December 31, 2016 | |||||||||||||
Total income tax (expense) benefit | $ | (2,090 | ) | $ | 1,750 | $ | (340 | ) | |||||
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Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||
Expected income tax benefit | $ | 17,697 | $ | 14,216 | $ | 4,856 | |||||||
Tax exempt income | 944 | 3,794 | 4,487 | ||||||||||
Non-taxable foreign exchange gains (losses) | 586 | 2,574 | (1,126 | ) | |||||||||
Effect of change in tax rate | (708 | ) | (38,083 | ) | (1,421 | ) | |||||||
U.S. base erosion and anti-abuse tax | (1,271 | ) | — | — | |||||||||
Withholding tax | (1,831 | ) | (216 | ) | (2,578 | ) | |||||||
Transfer pricing | (2,481 | ) | (11 | ) | 27 | ||||||||
Change in valuation allowance | (5,255 | ) | (11,718 | ) | (924 | ) | |||||||
Other | (1,379 | ) | 2,957 | (3,661 | ) | ||||||||
Income tax benefit (expense) | $ | 6,302 | $ | (26,487 | ) | $ | (340 | ) | |||||
At December 31, | 2018 | 2017 | |||||||
Deferred tax assets | |||||||||
Tax loss and credit carryforwards | $ | 60,395 | $ | 62,643 | |||||
Reserve for claims and claim expenses | 17,345 | 13,992 | |||||||
Deferred finance charges | 14,646 | 11,320 | |||||||
Unearned premiums | 10,108 | 9,436 | |||||||
Investments | 4,427 | — | |||||||
Accrued expenses | 4,292 | 2,641 | |||||||
Deferred underwriting results | 3,514 | 3,407 | |||||||
114,727 | 103,439 | ||||||||
Deferred tax liabilities | |||||||||
Deferred acquisition expenses | (11,801 | ) | (12,343 | ) | |||||
Amortization and depreciation | (2,992 | ) | (3,340 | ) | |||||
Investments | — | (1,047 | ) | ||||||
(14,793 | ) | (16,730 | ) | ||||||
Net deferred tax asset before valuation allowance | 99,934 | 86,709 | |||||||
Valuation allowance | (35,271 | ) | (30,016 | ) | |||||
Net deferred tax asset | $ | 64,663 | $ | 56,693 | |||||
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Year ended December 31, 2018 | Property | Casualty and Specialty | Other | Total | |||||||||||||
Gross premiums written | $ | 1,760,926 | $ | 1,549,501 | $ | — | $ | 3,310,427 | |||||||||
Net premiums written | $ | 1,055,188 | $ | 1,076,714 | $ | — | $ | 2,131,902 | |||||||||
Net premiums earned | $ | 1,050,831 | $ | 925,298 | $ | — | $ | 1,976,129 | |||||||||
Net claims and claim expenses incurred | 497,895 | 622,320 | (197 | ) | 1,120,018 | ||||||||||||
Acquisition expenses | 177,912 | 255,079 | (2 | ) | 432,989 | ||||||||||||
Operational expenses | 112,954 | 64,883 | 430 | 178,267 | |||||||||||||
Underwriting income (loss) | $ | 262,070 | $ | (16,984 | ) | $ | (231 | ) | 244,855 | ||||||||
Net investment income | 261,866 | 261,866 | |||||||||||||||
Net foreign exchange losses | (12,428 | ) | (12,428 | ) | |||||||||||||
Equity in earnings of other ventures | 18,474 | 18,474 | |||||||||||||||
Other income | 5,969 | 5,969 | |||||||||||||||
Net realized and unrealized losses on investments | (175,069 | ) | (175,069 | ) | |||||||||||||
Corporate expenses | (33,983 | ) | (33,983 | ) | |||||||||||||
Interest expense | (47,069 | ) | (47,069 | ) | |||||||||||||
Income before taxes and redeemable noncontrolling interests | 262,615 | ||||||||||||||||
Income tax benefit | 6,302 | 6,302 | |||||||||||||||
Net income attributable to redeemable noncontrolling interests | (41,553 | ) | (41,553 | ) | |||||||||||||
Dividends on preference shares | (30,088 | ) | (30,088 | ) | |||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 197,276 | |||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 719,185 | $ | 671,582 | $ | — | $ | 1,390,767 | |||||||||
Net claims and claim expenses incurred – prior accident years | (221,290 | ) | (49,262 | ) | (197 | ) | (270,749 | ) | |||||||||
Net claims and claim expenses incurred – total | $ | 497,895 | $ | 622,320 | $ | (197 | ) | $ | 1,120,018 | ||||||||
Net claims and claim expense ratio – current accident year | 68.4 | % | 72.6 | % | 70.4 | % | |||||||||||
Net claims and claim expense ratio – prior accident years | (21.0 | )% | (5.3 | )% | (13.7 | )% | |||||||||||
Net claims and claim expense ratio – calendar year | 47.4 | % | 67.3 | % | 56.7 | % | |||||||||||
Underwriting expense ratio | 27.7 | % | 34.5 | % | 30.9 | % | |||||||||||
Combined ratio | 75.1 | % | 101.8 | % | 87.6 | % | |||||||||||
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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 earnings 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 noncontrolling interests | (328,184 | ) | |||||||||||||||
Income tax expense | (26,487 | ) | (26,487 | ) | |||||||||||||
Net loss attributable to 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, | 2018 | 2017 | 2016 | ||||||||||
Property | |||||||||||||
U.S. and Caribbean | $ | 978,063 | $ | 954,269 | $ | 743,226 | |||||||
Worldwide | 464,311 | 305,915 | 210,168 | ||||||||||
Europe | 144,857 | 49,486 | 37,611 | ||||||||||
Japan | 71,601 | 49,821 | 44,536 | ||||||||||
Worldwide (excluding U.S.) (1) | 66,872 | 48,182 | 55,043 | ||||||||||
Australia and New Zealand | 19,273 | 14,151 | 13,729 | ||||||||||
Other | 15,949 | 18,613 | 6,950 | ||||||||||
Total Property | 1,760,926 | 1,440,437 | 1,111,263 | ||||||||||
Casualty and Specialty | |||||||||||||
Worldwide | 776,976 | 686,253 | 581,972 | ||||||||||
U.S. and Caribbean | 667,125 | 622,757 | 646,381 | ||||||||||
Worldwide (excluding U.S.) (1) | 31,734 | 10,104 | 13,840 | ||||||||||
Europe | 15,296 | 9,752 | 5,541 | ||||||||||
Australia and New Zealand | 3,667 | 4,141 | 5,073 | ||||||||||
Other | 54,703 | 24,103 | 10,506 | ||||||||||
Total Casualty and Specialty | 1,549,501 | 1,357,110 | 1,263,313 | ||||||||||
Other category | — | (7 | ) | — | |||||||||
Total gross premiums written | $ | 3,310,427 | $ | 2,797,540 | $ | 2,374,576 | |||||||
(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 Share Awards | |||||
Year ended December 31, | 2018 | 2017 | |||
Expected volatility (1) | 15.8% | 14.3% | |||
Expected term (in years) | n/a | n/a | |||
Expected dividend yield | n/a | n/a | |||
Risk-free interest rate (1) | 1.85% - 2.36% | 0.93% - 1.69% | |||
(1) | The expected volatility and risk-free interest rate applied are specific to each tranche of performance share awards. |
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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, 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 | |||||||||||
Options granted | — | — | — | |||||||||||||||
Options forfeited | — | — | ||||||||||||||||
Options expired | — | — | ||||||||||||||||
Options exercised | (32,001 | ) | $ | 53.86 | $ | 2,320 | $ | — | ||||||||||
Balance, December 31, 2018 | — | $ | — | 0.0 | $ | — | $ | — | ||||||||||
Total options exercisable at December 31, 2018 | — | $ | — | 0.0 | $ | — | $ | — | ||||||||||
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Number of shares | ||||
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 | |||
Awards granted | — | |||
Awards vested | (108,344 | ) | ||
Awards forfeited | (7,069 | ) | ||
Nonvested at December 31, 2018 | 146,917 | |||
Number of shares (1) | Weighted average grant-date fair value | |||||||
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 | |||||
Awards granted | 83,475 | $ | 60.69 | |||||
Awards vested | (16,456 | ) | $ | 53.79 | ||||
Awards forfeited | (82,241 | ) | ||||||
Nonvested at December 31, 2018 | 152,451 | $ | 57.21 | |||||
(1) | For performance share awards, 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, 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 | |||||||||||||
Awards granted | 255,799 | 132.70 | 12,169 | 127.29 | 267,968 | 132.79 | ||||||||||||||||
Awards vested | (139,454 | ) | 112.70 | (9,761 | ) | 123.59 | (149,215 | ) | 113.41 | |||||||||||||
Awards forfeited | (1,642 | ) | 134.38 | — | — | (1,642 | ) | 134.38 | ||||||||||||||
Nonvested at December 31, 2018 | 447,740 | $ | 130.37 | 22,534 | $ | 132.29 | 470,274 | $ | 130.46 | |||||||||||||
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Bermuda (1) | U.S. | U.K. (2) (3) | |||||||||||||||||||||||
At December 31, | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||
Statutory economic capital and surplus | $ | 4,256,830 | $ | 4,155,368 | $ | 502,803 | $ | 523,384 | $ | 519,689 | $ | 527,325 | |||||||||||||
Required statutory capital and surplus | 950,915 | 836,181 | 306,628 | 306,375 | 519,689 | 527,325 | |||||||||||||||||||
Unrestricted net assets | 931,387 | 790,177 | 31,228 | 24,109 | — | — | |||||||||||||||||||
(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. |
Statutory Net Income (Loss) | |||||||||||||
Bermuda | U.S. | U.K. | |||||||||||
Year ended December 31, 2018 | $ | 326,386 | $ | 25,851 | $ | (6,692 | ) | ||||||
Year ended December 31, 2017 | (334,142 | ) | (3,627 | ) | (57,050 | ) | |||||||
Year ended December 31, 2016 | 625,371 | 43,292 | 28,007 | ||||||||||
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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 paid out as dividends. |
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Derivative Assets | |||||||||||||||||||||||
At December 31, 2018 | 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 | $ | 2,361 | 1,660 | $ | 701 | Other assets | $ | — | $ | 701 | |||||||||||||
Interest rate swaps | 860 | — | 860 | Other assets | — | 860 | |||||||||||||||||
Foreign currency forward contracts (1) | 16,459 | 2,260 | 14,199 | Other assets | — | 14,199 | |||||||||||||||||
Foreign currency forward contracts (2) | 3,194 | 71 | 3,123 | Other assets | — | 3,123 | |||||||||||||||||
Total | $ | 22,874 | $ | 3,991 | $ | 18,883 | $ | — | $ | 18,883 | |||||||||||||
Derivative Liabilities | |||||||||||||||||||||||
At December 31, 2018 | Gross Amounts of Recognized Liabilities | Gross Amounts Offset in the Balance Sheet | Net Amounts of Liabilities Presented in the Balance Sheet | Balance Sheet Location | Collateral Pledged | Net Amount | |||||||||||||||||
Interest rate futures | $ | 1,887 | 1,670 | $ | 217 | Other liabilities | $ | 217 | $ | — | |||||||||||||
Interest rate swaps | 506 | — | 506 | Other liabilities | 254 | 252 | |||||||||||||||||
Foreign currency forward contracts (1) | 4,154 | — | 4,154 | Other liabilities | — | 4,154 | |||||||||||||||||
Foreign currency forward contracts (2) | 72 | 71 | 1 | Other liabilities | — | 1 | |||||||||||||||||
Credit default swaps | 1,606 | — | 1,606 | Other liabilities | 1,605 | 1 | |||||||||||||||||
Total | $ | 8,225 | $ | 1,741 | $ | 6,484 | $ | 2,076 | $ | 4,408 | |||||||||||||
(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, 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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Location of gain (loss) recognized on derivatives | Amount of gain (loss) recognized on derivatives | ||||||||||||||
Year ended December 31, | 2018 | 2017 | 2016 | ||||||||||||
Interest rate futures | Net realized and unrealized (losses) gains on investments | $ | (5,594 | ) | $ | (3,252 | ) | $ | (17,379 | ) | |||||
Interest rate swaps | Net realized and unrealized (losses) gains on investments | (84 | ) | 436 | — | ||||||||||
Foreign currency forward contracts (1) | Net foreign exchange (losses) gains | 3,840 | 9,628 | (6,937 | ) | ||||||||||
Foreign currency forward contracts (2) | Net foreign exchange (losses) gains | 5,736 | (916 | ) | (1,591 | ) | |||||||||
Credit default swaps | Net realized and unrealized (losses) gains on investments | (3,106 | ) | 326 | 1,965 | ||||||||||
Total | $ | 792 | $ | 6,222 | $ | (23,942 | ) | ||||||||
(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 | |||||
2019 | $ | 7,137 | |||
2020 | 5,294 | ||||
2021 | 4,934 | ||||
2022 | 4,225 | ||||
2023 | 1,530 | ||||
After 2023 | 298 | ||||
Future minimum lease payments under existing operating leases | $ | 23,418 | |||
Minimum lease payments | |||||
2019 | $ | 3,331 | |||
2020 | 3,336 | ||||
2021 | 3,336 | ||||
2022 | 3,336 | ||||
2023 | 2,830 | ||||
After 2023 | 12,790 | ||||
Future minimum lease payments under existing capital leases | $ | 28,959 | |||
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Quarter Ended March 31, | Quarter Ended June 30, | Quarter Ended September 30, | Quarter Ended December 31, | ||||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||||||
Gross premiums written | $ | 1,159,652 | $ | 922,090 | $ | 977,343 | $ | 827,415 | $ | 625,677 | $ | 640,269 | $ | 547,755 | $ | 407,766 | |||||||||||||||||
Net premiums written | $ | 663,044 | $ | 544,136 | $ | 604,509 | $ | 555,745 | $ | 453,255 | $ | 483,221 | $ | 411,094 | $ | 288,223 | |||||||||||||||||
(Increase) decrease in unearned premiums | (222,762 | ) | (178,091 | ) | (175,124 | ) | (173,480 | ) | 78,594 | 64,571 | 163,519 | 133,250 | |||||||||||||||||||||
Net premiums earned | 440,282 | 366,045 | 429,385 | 382,265 | 531,849 | 547,792 | 574,613 | 421,473 | |||||||||||||||||||||||||
Net investment income | 56,476 | 54,325 | 71,356 | 54,163 | 80,696 | 40,257 | 53,338 | 73,464 | |||||||||||||||||||||||||
Net foreign exchange gains (losses) | 3,757 | 8,165 | (10,687 | ) | 3,109 | (4,566 | ) | (156 | ) | (932 | ) | (490 | ) | ||||||||||||||||||||
Equity in earnings (losses) of other ventures | 857 | (1,507 | ) | 5,826 | 5,543 | 7,648 | 1,794 | 4,143 | 2,200 | ||||||||||||||||||||||||
Other (loss) income | (1,242 | ) | 1,665 | 1,225 | 2,392 | 497 | 2,996 | 5,489 | 2,362 | ||||||||||||||||||||||||
Net realized and unrealized (losses) gains on investments | (82,144 | ) | 43,373 | (17,901 | ) | 58,113 | 13,630 | 42,052 | (88,654 | ) | (7,716 | ) | |||||||||||||||||||||
Total revenues | 417,986 | 472,066 | 479,204 | 505,585 | 629,754 | 634,735 | 547,997 | 491,293 | |||||||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||||||||
Net claims and claim expenses incurred | 171,703 | 193,081 | 60,167 | 142,587 | 410,510 | 1,221,696 | 477,638 | 304,064 | |||||||||||||||||||||||||
Acquisition costs | 97,711 | 83,282 | 105,052 | 88,251 | 109,761 | 76,761 | 120,465 | 98,598 | |||||||||||||||||||||||||
Operational expenses | 41,272 | 47,283 | 37,543 | 41,766 | 40,593 | 42,537 | 58,859 | 29,192 | |||||||||||||||||||||||||
Corporate expenses | 6,733 | 5,286 | 8,301 | 4,636 | 6,841 | 4,413 | 12,108 | 4,237 | |||||||||||||||||||||||||
Interest expense | 11,767 | 10,526 | 11,768 | 10,091 | 11,769 | 11,799 | 11,765 | 11,777 | |||||||||||||||||||||||||
Total expenses | 329,186 | 339,458 | 222,831 | 287,331 | 579,474 | 1,357,206 | 680,835 | 447,868 | |||||||||||||||||||||||||
Income (loss) before taxes | 88,800 | 132,608 | 256,373 | 218,254 | 50,280 | (722,471 | ) | (132,838 | ) | 43,425 | |||||||||||||||||||||||
Income tax benefit (expense) | 3,407 | (334 | ) | (4,506 | ) | (3,904 | ) | (1,451 | ) | 18,977 | 8,852 | (41,226 | ) | ||||||||||||||||||||
Net income (loss) | 92,207 | 132,274 | 251,867 | 214,350 | 48,829 | (703,494 | ) | (123,986 | ) | 2,199 | |||||||||||||||||||||||
Net (income) loss attributable to redeemable noncontrolling interests | (29,899 | ) | (34,327 | ) | (54,483 | ) | (37,612 | ) | (6,440 | ) | 204,277 | 49,269 | (56 | ) | |||||||||||||||||||
Net income (loss) available (attributable) to RenaissanceRe | 62,308 | 97,947 | 197,384 | 176,738 | 42,389 | (499,217 | ) | (74,717 | ) | 2,143 | |||||||||||||||||||||||
Dividends on preference shares | (5,595 | ) | (5,595 | ) | (5,596 | ) | (5,596 | ) | (9,708 | ) | (5,595 | ) | (9,189 | ) | (5,595 | ) | |||||||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | $ | 56,713 | $ | 92,352 | $ | 191,788 | $ | 171,142 | $ | 32,681 | $ | (504,812 | ) | $ | (83,906 | ) | $ | (3,452 | ) | ||||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – basic | $ | 1.42 | $ | 2.26 | $ | 4.78 | $ | 4.25 | $ | 0.82 | $ | (12.75 | ) | $ | (2.10 | ) | $ | (0.09 | ) | ||||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – diluted | $ | 1.42 | $ | 2.25 | $ | 4.78 | $ | 4.24 | $ | 0.82 | $ | (12.75 | ) | $ | (2.10 | ) | $ | (0.09 | ) | ||||||||||||||
Average shares outstanding – basic | 39,552 | 40,408 | 39,641 | 39,937 | 39,624 | 39,591 | 40,111 | 39,478 | |||||||||||||||||||||||||
Average shares outstanding – diluted | 39,599 | 40,623 | 39,654 | 40,024 | 39,637 | 39,591 | 40,111 | 39,478 | |||||||||||||||||||||||||
Table of Contents
Condensed Consolidating Balance Sheet at December 31, 2018 | 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 | $ | 313,360 | $ | 77,842 | $ | 28,885 | $ | 11,465,660 | $ | — | $ | 11,885,747 | |||||||||||
Cash and cash equivalents | 3,534 | 3,350 | 9,604 | 1,091,434 | — | 1,107,922 | |||||||||||||||||
Investments in subsidiaries | 4,414,475 | 58,458 | 1,215,663 | — | (5,688,596 | ) | — | ||||||||||||||||
Due from subsidiaries and affiliates | 57,039 | 101,579 | — | — | (158,618 | ) | — | ||||||||||||||||
Premiums receivable | — | — | — | 1,537,188 | — | 1,537,188 | |||||||||||||||||
Prepaid reinsurance premiums | — | — | — | 616,185 | — | 616,185 | |||||||||||||||||
Reinsurance recoverable | — | — | — | 2,372,221 | — | 2,372,221 | |||||||||||||||||
Accrued investment income | 1,046 | 310 | 127 | 49,828 | — | 51,311 | |||||||||||||||||
Deferred acquisition costs | — | — | — | 476,661 | — | 476,661 | |||||||||||||||||
Receivable for investments sold | 203 | 23,885 | — | 232,328 | — | 256,416 | |||||||||||||||||
Other assets | 458,842 | 22,571 | 313,636 | (1,403,636 | ) | 743,714 | 135,127 | ||||||||||||||||
Goodwill and other intangible assets | 120,476 | — | — | 116,942 | — | 237,418 | |||||||||||||||||
Total assets | $ | 5,368,975 | $ | 287,995 | $ | 1,567,915 | $ | 16,554,811 | $ | (5,103,500 | ) | $ | 18,676,196 | ||||||||||
Liabilities, Noncontrolling Interests and Shareholders’ Equity | |||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Reserve for claims and claim expenses | $ | — | $ | — | $ | — | $ | 6,076,271 | $ | — | $ | 6,076,271 | |||||||||||
Unearned premiums | — | — | — | 1,716,021 | — | 1,716,021 | |||||||||||||||||
Debt | 300,000 | — | 843,086 | 148,041 | (300,000 | ) | 991,127 | ||||||||||||||||
Amounts due to subsidiaries and affiliates | 6,453 | 217 | 102,243 | — | (108,913 | ) | — | ||||||||||||||||
Reinsurance balances payable | — | — | — | 1,902,056 | — | 1,902,056 | |||||||||||||||||
Payable for investments purchased | — | 24 | — | 380,308 | — | 380,332 | |||||||||||||||||
Other liabilities | 17,442 | 5,362 | 13,918 | 482,422 | (5,535 | ) | 513,609 | ||||||||||||||||
Total liabilities | 323,895 | 5,603 | 959,247 | 10,705,119 | (414,448 | ) | 11,579,416 | ||||||||||||||||
Redeemable noncontrolling interests | — | — | — | 2,051,700 | — | 2,051,700 | |||||||||||||||||
Shareholders’ Equity | |||||||||||||||||||||||
Total shareholders’ equity | 5,045,080 | 282,392 | 608,668 | 3,797,992 | (4,689,052 | ) | 5,045,080 | ||||||||||||||||
Total liabilities, noncontrolling interests and shareholders’ equity | $ | 5,368,975 | $ | 287,995 | $ | 1,567,915 | $ | 16,554,811 | $ | (5,103,500 | ) | $ | 18,676,196 |
(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, 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, Redeemable Noncontrolling Interest 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, redeemable noncontrolling interest 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 Statement of Operations for the year ended December 31, 2018 | 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 | |||||||||||||||||
Revenues | |||||||||||||||||||||||
Net premiums earned | $ | — | $ | — | $ | — | $ | 1,976,129 | $ | — | $ | 1,976,129 | |||||||||||
Net investment income | 24,791 | 2,193 | 6,219 | 261,192 | (32,529 | ) | 261,866 | ||||||||||||||||
Net foreign exchange losses | (3 | ) | — | — | (12,425 | ) | — | (12,428 | ) | ||||||||||||||
Equity in earnings of other ventures | — | — | 3,065 | 15,409 | — | 18,474 | |||||||||||||||||
Other income | — | — | — | 5,969 | — | 5,969 | |||||||||||||||||
Net realized and unrealized gains (losses) on investments | 633 | (4,360 | ) | (329 | ) | (171,013 | ) | — | (175,069 | ) | |||||||||||||
Total revenues | 25,421 | (2,167 | ) | 8,955 | 2,075,261 | (32,529 | ) | 2,074,941 | |||||||||||||||
Expenses | |||||||||||||||||||||||
Net claims and claim expenses incurred | — | — | — | 1,120,018 | — | 1,120,018 | |||||||||||||||||
Acquisition expenses | — | — | — | 432,989 | — | 432,989 | |||||||||||||||||
Operational expenses | 7,679 | 110 | 34,534 | 164,605 | (28,661 | ) | 178,267 | ||||||||||||||||
Corporate expenses | 25,190 | — | 7 | 3,103 | 5,683 | 33,983 | |||||||||||||||||
Interest expense | 5,683 | — | 37,019 | 4,367 | — | 47,069 | |||||||||||||||||
Total expenses | 38,552 | 110 | 71,560 | 1,725,082 | (22,978 | ) | 1,812,326 | ||||||||||||||||
(Loss) income before equity in net income of subsidiaries and taxes | (13,131 | ) | (2,277 | ) | (62,605 | ) | 350,179 | (9,551 | ) | 262,615 | |||||||||||||
Equity in net income of subsidiaries | 240,495 | 5,631 | 9,091 | — | (255,217 | ) | — | ||||||||||||||||
Income (loss) before taxes | 227,364 | 3,354 | (53,514 | ) | 350,179 | (264,768 | ) | 262,615 | |||||||||||||||
Income tax benefit (expense) | — | 582 | 6,119 | (399 | ) | — | 6,302 | ||||||||||||||||
Net income (loss) | 227,364 | 3,936 | (47,395 | ) | 349,780 | (264,768 | ) | 268,917 | |||||||||||||||
Net income attributable to redeemable noncontrolling interests | — | — | — | (41,553 | ) | — | (41,553 | ) | |||||||||||||||
Net income (loss) attributable to RenaissanceRe | 227,364 | 3,936 | (47,395 | ) | 308,227 | (264,768 | ) | 227,364 | |||||||||||||||
Dividends on preference shares | (30,088 | ) | — | — | — | — | (30,088 | ) | |||||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | $ | 197,276 | $ | 3,936 | $ | (47,395 | ) | $ | 308,227 | $ | (264,768 | ) | $ | 197,276 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor, Subsidiary Guarantor and Subsidiary Issuer consolidating adjustments. |
Condensed Consolidating Statement of Comprehensive Income (Loss) for the year ended December 31, 2018 | 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 | |||||||||||||||||
Comprehensive income (loss) | |||||||||||||||||||||||
Net income (loss) | $ | 227,364 | $ | 3,936 | $ | (47,395 | ) | $ | 349,780 | $ | (264,768 | ) | $ | 268,917 | |||||||||
Change in net unrealized gains on investments | — | — | — | (1,657 | ) | — | (1,657 | ) | |||||||||||||||
Comprehensive income (loss) | 227,364 | 3,936 | (47,395 | ) | 348,123 | (264,768 | ) | 267,260 | |||||||||||||||
Net income attributable to redeemable noncontrolling interests | — | — | — | (41,553 | ) | — | (41,553 | ) | |||||||||||||||
Comprehensive income attributable to redeemable noncontrolling interests | — | — | — | (41,553 | ) | — | (41,553 | ) | |||||||||||||||
Comprehensive income (loss) available (attributable) to RenaissanceRe | $ | 227,364 | $ | 3,936 | $ | (47,395 | ) | $ | 306,570 | $ | (264,768 | ) | $ | 225,707 |
(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, 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 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 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 attributable 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 Cash Flows for the year ended December 31, 2018 | 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) | RenaissanceRe Consolidated | ||||||||||||||
Cash flows (used in) provided by operating activities | |||||||||||||||||||
Net cash (used in) provided by operating activities | $ | (9,659 | ) | $ | 6,315 | $ | 62,645 | $ | 1,162,400 | $ | 1,221,701 | ||||||||
Cash flows used in investing activities | |||||||||||||||||||
Proceeds from sales and maturities of fixed maturity investments trading | 384,818 | 97,272 | 56,518 | 11,046,968 | 11,585,576 | ||||||||||||||
Purchases of fixed maturity investments trading | (520,935 | ) | (72,292 | ) | (55,932 | ) | (11,840,813 | ) | (12,489,972 | ) | |||||||||
Net (purchases) sales of equity investments trading | — | (1,308 | ) | — | 15,464 | 14,156 | |||||||||||||
Net sales (purchases) of short term investments | 48,600 | (404 | ) | 455 | (1,485,040 | ) | (1,436,389 | ) | |||||||||||
Net purchases of other investments | — | — | — | (199,475 | ) | (199,475 | ) | ||||||||||||
Net purchases of investments in other ventures | — | — | — | (21,473 | ) | (21,473 | ) | ||||||||||||
Return of investment from investment in other ventures | — | — | — | 8,464 | 8,464 | ||||||||||||||
Net sales of other assets | — | — | — | 2,500 | 2,500 | ||||||||||||||
Dividends and return of capital from subsidiaries | 672,098 | — | — | (672,098 | ) | — | |||||||||||||
Contributions to subsidiaries | (785,785 | ) | (16,847 | ) | (65,000 | ) | 867,632 | — | |||||||||||
Due (from) to subsidiary | (200,916 | ) | (9,525 | ) | 9,449 | 200,992 | — | ||||||||||||
Net cash used in investing activities | (402,120 | ) | (3,104 | ) | (54,510 | ) | (2,076,879 | ) | (2,536,613 | ) | |||||||||
Cash flows provided by financing activities | |||||||||||||||||||
Dividends paid – RenaissanceRe common shares | (52,841 | ) | — | — | — | (52,841 | ) | ||||||||||||
Dividends paid – preference shares | (30,088 | ) | — | — | — | (30,088 | ) | ||||||||||||
RenaissanceRe common share issuance | 250,000 | — | — | — | 250,000 | ||||||||||||||
Issuance of preference shares, net of expenses | 241,448 | — | — | — | 241,448 | ||||||||||||||
Net third party redeemable noncontrolling interest share transactions | — | — | — | 665,683 | 665,683 | ||||||||||||||
Taxes paid on withholding shares | (7,862 | ) | — | — | — | (7,862 | ) | ||||||||||||
Net cash provided by financing activities | 400,657 | — | — | 665,683 | 1,066,340 | ||||||||||||||
Effect of exchange rate changes on foreign currency cash | — | — | — | (5,098 | ) | (5,098 | ) | ||||||||||||
Net (decrease) increase in cash and cash equivalents | (11,122 | ) | 3,211 | 8,135 | (253,894 | ) | (253,670 | ) | |||||||||||
Cash and cash equivalents, beginning of period | 14,656 | 139 | 1,469 | 1,345,328 | 1,361,592 | ||||||||||||||
Cash and cash equivalents, end of period | $ | 3,534 | $ | 3,350 | $ | 9,604 | $ | 1,091,434 | $ | 1,107,922 |
(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, 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 | ) | $ | 1,388,311 | $ | 1,025,787 | |||||||
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 | ) | |||||||||||||||
Return of investment from investment in other ventures | — | — | — | — | 20,000 | 20,000 | |||||||||||||||||
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) subsidiaries | 319,646 | 13 | (123 | ) | (509 | ) | (319,027 | ) | — | ||||||||||||||
Net cash provided by (used in) investing activities | 289,179 | 8,230 | 245,601 | 44,096 | (709,540 | ) | (122,434 | ) | |||||||||||||||
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, net of expenses | — | — | — | 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 |
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 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) subsidiary | 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 year | 10,185 | 5,908 | 7,103 | 677 | 483,012 | 506,885 | |||||||||||||||||
Cash and cash equivalents, end of year | $ | 7,067 | $ | 162 | $ | 6,671 | $ | 9,397 | $ | 397,860 | $ | 421,157 |
(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, 2018 | |||||||||||
Amortized Cost or Cost | Fair Value | Amount at which shown in the Balance Sheet | |||||||||
Type of investment: | |||||||||||
Fixed maturity investments | |||||||||||
U.S. treasuries | $ | 3,336,969 | $ | 3,331,411 | $ | 3,331,411 | |||||
Agencies | 175,185 | 174,883 | 174,883 | ||||||||
Municipal | 6,070 | 6,854 | 6,854 | ||||||||
Non-U.S. government | 284,965 | 279,818 | 279,818 | ||||||||
Non-U.S. government-backed corporate | 160,286 | 160,063 | 160,063 | ||||||||
Corporate | 2,513,434 | 2,450,244 | 2,450,244 | ||||||||
Agency mortgage-backed | 825,365 | 817,880 | 817,880 | ||||||||
Non-agency mortgage-backed | 266,705 | 278,680 | 278,680 | ||||||||
Commercial mortgage-backed | 284,495 | 282,294 | 282,294 | ||||||||
Asset-backed | 310,488 | 306,743 | 306,743 | ||||||||
Total fixed maturity investments | $ | 8,163,962 | 8,088,870 | 8,088,870 | |||||||
Short term investments | 2,586,520 | 2,586,520 | |||||||||
Equity investments | 310,252 | 310,252 | |||||||||
Other investments | 784,933 | 784,933 | |||||||||
Investments in other ventures, under equity method | 115,172 | 115,172 | |||||||||
Total investments | $ | 11,885,747 | $ | 11,885,747 |
Table of Contents
At December 31, | |||||||
2018 | 2017 | ||||||
Assets | |||||||
Fixed maturity investments trading, at fair value - amortized cost $238,989 at December 31, 2018 (2017 - $104,521) | $ | 240,443 | $ | 103,638 | |||
Short term investments, at fair value | 72,917 | 121,628 | |||||
Cash and cash equivalents | 3,534 | 14,656 | |||||
Investments in subsidiaries | 4,414,475 | 4,105,760 | |||||
Due from subsidiaries | 57,039 | 4,602 | |||||
Accrued investment income | 1,046 | 405 | |||||
Receivable for investments sold | 203 | 135 | |||||
Other assets | 458,842 | 433,468 | |||||
Goodwill and other intangible assets | 120,476 | 124,960 | |||||
Total assets | $ | 5,368,975 | $ | 4,909,252 | |||
Liabilities and Shareholders’ Equity | |||||||
Liabilities | |||||||
Notes and bank loans payable | $ | 300,000 | $ | 417,000 | |||
Due to subsidiaries | 6,453 | 82,579 | |||||
Other liabilities | 17,442 | 18,298 | |||||
Total liabilities | 323,895 | 517,877 | |||||
Shareholders’ Equity | |||||||
Preference shares: $1.00 par value – 16,010,000 shares issued and outstanding at December 31, 2018 (2017 – 16,000,000) | 650,000 | 400,000 | |||||
Common shares: $1.00 par value – 42,207,390 shares issued and outstanding at December 31, 2018 (2017 – 40,023,789) | 42,207 | 40,024 | |||||
Additional paid-in capital | 296,099 | 37,355 | |||||
Accumulated other comprehensive (loss) income | (1,433 | ) | 224 | ||||
Retained earnings | 4,058,207 | 3,913,772 | |||||
Total shareholders’ equity | 5,045,080 | 4,391,375 | |||||
Total liabilities and shareholders’ equity | $ | 5,368,975 | $ | 4,909,252 |
Table of Contents
Year ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Revenues | |||||||||||
Net investment income | $ | 24,791 | $ | 23,109 | $ | 24,178 | |||||
Net foreign exchange losses | (3 | ) | (1 | ) | (2 | ) | |||||
Other loss | — | — | (772 | ) | |||||||
Net realized and unrealized gains (losses) on investments | 633 | (1,357 | ) | 4,151 | |||||||
Total revenues | 25,421 | 21,751 | 27,555 | ||||||||
Expenses | |||||||||||
Interest expense | 5,683 | 1,572 | 562 | ||||||||
Operational expenses | 7,679 | 11,314 | 13,716 | ||||||||
Corporate expenses | 25,190 | 18,546 | 26,848 | ||||||||
Total expenses | 38,552 | 31,432 | 41,126 | ||||||||
Loss before equity in net income (loss) of subsidiaries | (13,131 | ) | (9,681 | ) | (13,571 | ) | |||||
Equity in net income (loss) of subsidiaries | 240,495 | (212,708 | ) | 516,533 | |||||||
Net income (loss) | 227,364 | (222,389 | ) | 502,962 | |||||||
Dividends on preference shares | (30,088 | ) | (22,381 | ) | (22,381 | ) | |||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | $ | 197,276 | $ | (244,770 | ) | $ | 480,581 |
Year ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Comprehensive income (loss) | |||||||||||
Net income (loss) | $ | 227,364 | $ | (222,389 | ) | $ | 502,962 | ||||
Comprehensive income (loss) available (attributable) to RenaissanceRe | $ | 227,364 | $ | (222,389 | ) | $ | 502,962 |
Table of Contents
Year ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Cash flows used in operating activities: | |||||||||||
Net income (loss) | $ | 227,364 | $ | (222,389 | ) | $ | 502,962 | ||||
Less: equity in net (income) loss of subsidiaries | (240,495 | ) | 212,708 | (516,533 | ) | ||||||
(13,131 | ) | (9,681 | ) | (13,571 | ) | ||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities | |||||||||||
Net realized and unrealized (gains) losses on investments | (633 | ) | 1,357 | (4,151 | ) | ||||||
Other | 4,105 | 4,215 | 14,213 | ||||||||
Net cash used in operating activities | (9,659 | ) | (4,109 | ) | (3,509 | ) | |||||
Cash flows (used in) provided by investing activities: | |||||||||||
Proceeds from maturities and sales of fixed maturity investments trading | 384,818 | 261,601 | 314,568 | ||||||||
Purchases of fixed maturity investments trading | (520,935 | ) | (344,463 | ) | (336,345 | ) | |||||
Net sales (purchases) of short term investments | 48,600 | 243,571 | (111,814 | ) | |||||||
Dividends and return of capital from subsidiaries | 672,098 | 478,496 | 617,239 | ||||||||
Contributions to subsidiaries | (785,785 | ) | (669,672 | ) | (108,674 | ) | |||||
Due to (from) subsidiary | (200,916 | ) | 319,646 | 23,758 | |||||||
Net cash (used in) provided by investing activities | (402,120 | ) | 289,179 | 398,732 | |||||||
Cash flows provided by (used in) financing activities: | |||||||||||
Dividends paid – RenaissanceRe common shares | (52,841 | ) | (51,370 | ) | (51,583 | ) | |||||
Dividends paid – preference shares | (30,088 | ) | (22,381 | ) | (22,381 | ) | |||||
RenaissanceRe common share repurchases | — | (188,591 | ) | (309,434 | ) | ||||||
RenaissanceRe common share issuance | 250,000 | — | — | ||||||||
Issuance of preference shares, net of expenses | 241,448 | — | — | ||||||||
Taxes paid on withholding shares | (7,862 | ) | (15,139 | ) | (14,943 | ) | |||||
Net cash provided by (used in) financing activities | 400,657 | (277,481 | ) | (398,341 | ) | ||||||
Net (decrease) increase in cash and cash equivalents | (11,122 | ) | 7,589 | (3,118 | ) | ||||||
Cash and cash equivalents, beginning of year | 14,656 | 7,067 | 10,185 | ||||||||
Cash and cash equivalents, end of year | $ | 3,534 | $ | 14,656 | $ | 7,067 |
Table of Contents
December 31, 2018 | Year ended December 31, 2018 | ||||||||||||||||||||||||||||||||||
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 | $ | 66,656 | $ | 3,086,254 | $ | 379,943 | $ | 1,050,831 | $ | — | $ | 497,895 | $ | 177,912 | $ | 112,954 | $ | 1,055,188 | |||||||||||||||||
Casualty and Specialty | 410,005 | 2,985,393 | 1,336,078 | 925,298 | — | 622,320 | 255,079 | 64,883 | 1,076,714 | ||||||||||||||||||||||||||
Other | — | 4,624 | — | — | 261,866 | (197 | ) | (2 | ) | 430 | — | ||||||||||||||||||||||||
Total | $ | 476,661 | $ | 6,076,271 | $ | 1,716,021 | $ | 1,976,129 | $ | 261,866 | $ | 1,120,018 | $ | 432,989 | $ | 178,267 | $ | 2,131,902 | |||||||||||||||||
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 |
Table of Contents
Gross Amounts | Ceded to Other Companies | Assumed From Other Companies | Net Amount | Percentage of Amount Assumed to Net | ||||||||||||||
Year ended December 31, 2018 | ||||||||||||||||||
Property and liability premiums earned | $ | 292,219 | $ | 1,095,886 | $ | 2,779,796 | $ | 1,976,129 | 141 | % | ||||||||
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 | % |
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, 2018 | $ | 476,661 | $ | 6,076,271 | $ | — | $ | 1,716,021 | $ | 1,976,129 | $ | 261,866 | |||||||||||
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 | |||||||||||
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, 2018 | $ | 1,390,767 | $ | (270,749 | ) | $ | 432,989 | $ | 894,769 | $ | 2,131,902 | ||||||||||||
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 |
Table of Contents
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 200 North Martingale Road |
Suite 510 |
Schaumburg, Il 60173, USA |
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 |
RenaissanceRe Holdings Ltd. and Subsidiaries
Kevin J. O’Donnell |
President and |
Chief Executive Officer |
RenaissanceRe Holdings Ltd. |
Robert Qutub |
Executive Vice President |
and Chief Financial Officer |
RenaissanceRe Holdings Ltd. |
Ian D. Branagan |
Senior Vice President |
and Group Chief Risk Officer |
RenaissanceRe Holdings Ltd. |
Sean G. Brosnan |
Senior Vice President and |
Chief Investment Officer |
RenaissanceRe Holdings Ltd. |
Ross A. Curtis |
Senior Vice President and |
Group Chief Underwriting Officer |
RenaissanceRe Holdings Ltd. |
Bryan Dalton |
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. |
James C. Fraser |
Senior Vice President and |
Chief Accounting Officer |
RenaissanceRe Holdings Ltd. |
David E. Marra |
Senior Vice President and |
Chief Underwriting Officer |
– Casualty and Specialty |
RenaissanceRe Holdings Ltd. |
President |
Renaissance Reinsurance U.S. |
Justin D. O’Keefe |
Senior Vice President and |
Chief Underwriting Officer |
– Property |
RenaissanceRe Holdings Ltd. |
Jonathan D. A. Paradine |
Chief Executive |
– Singapore Branch |
Renaissance Reinsurance Ltd. |
DaVinci Reinsurance Ltd. |
Senior Vice President |
RenaissanceRe Holdings Ltd. |
Stephen H. Weinstein |
Senior Vice President, |
Chief Compliance Officer, |
Group General Counsel |
and Corporate Secretary |
RenaissanceRe Holdings Ltd. |
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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 |
Cynthia Trudell* |
Former Chief Human Resources Officer |
PepsiCo, Inc. |
Edward J. Zore* |
Retired Chairman and Chief Executive Officer |
The Northwestern Mutual Life Insurance Company |
* | Mr. Zore will retire from the Board in conjunction with the Company’s Annual General Meeting of Shareholders in May 2019 and Ms. Trudell has been nominated to fill the vacancy that will be created by his retirement. |
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 CNC 437 Madison Avenue, 37th 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 4513E-mail: investorrelations@renre.com |
Additional Requests Can be Directed to: |
The Corporate Secretary, RenaissanceRe Holdings Ltd. |
Tel: +1 441 295 4513E-mail: secretary@renre.com |
Stock Information |
The Company’s common shares are listed on The New York Stock |
Exchange under the symbol ‘RNR’. |
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, 2018 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 2018 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 |
All stocks used in this report are FSC certified. Printed at a zero-discharge facility using soy-based inks. Please recycle this publication. |
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RenaissanceRe Holdings Ltd. |
Renaissance House 12 Crow Lane |
Pembroke HM 19 |
Bermuda |
Tel: +1 441 295 4513 renre.com |