NU Online News Service, Oct. 28, 1:33 p.m. EDT
RenaissanceRe Holdings Ltd. management said higher investment income and less catastrophe losses improved third-quarter net income to $258.6 million, reversing last year's loss for the period of $231 million.
The net income figure translates as $4.12 per diluted common share, compared to a third-quarter 2008 per share net loss of $3.79.
Operating income stood at $242.2 million, compared to an operating loss of $143.4 million, or 59 percent, in the third quarter of 2008, the Pembroke, Bermuda-based reinsurer said.
Operating income (loss) excludes net realized gains on investments and net other-than-temporary impairments of $16.8 million and $300,000, respectively, in the third quarter of 2009, and $11.2 million and $98.8 million, respectively, in the third quarter of 2008, said RenaissanceRe.
Operating income was $3.85 per share compared to an operating loss of $2.35 per share in the 2008 third quarter.
The company reported an annualized return on average common equity of 35.5 percent and an annualized operating return on average common equity of 33.3 percent in the third quarter of 2009, compared to negative 36.1 percent and negative 22.4 percent, respectively, in the third quarter of 2008.
Third-quarter book value per share was $49.21 at Sept. 30, an increase of $5.04, or 11.4 percent, compared to a 10.1 percent decrease in the third quarter of 2008. For the nine months ended Sept. 30, the company's book value per common share has increased $10.47, or 27 percent.
Neill A. Currie, RenaissanceRe chief executive officer, said in a statement: "I am pleased to report another strong quarter with an annualized operating ROE of 33 percent and over 11 percent growth in book value per share in the quarter. We generated solid underwriting profits and strong investment returns in the quarter, reflecting the quality of the portfolio of risks we have underwritten, a lack of insured catastrophes and improved investment markets."
Mr. Currie added, "Year-to-date, our book value per share has increased 27 percent and we have generated an annualized operating return on equity in excess of 29 percent."
He said he was pleased with the "quality of the portfolio of risks our team has constructed, which reflects our strong underwriting discipline."
Third-quarter gross premiums written decreased $37.4 million to $202.4 million, compared to $239.8 million in the third quarter of 2008, principally due to $49 million in reinstatement premiums written in the company's reinsurance segment in the third quarter of 2008, as a result of Hurricanes Gustav and Ike, that did not recur in the third quarter of 2009.
The company generated $167.7 million of underwriting income and a combined ratio of 43.3 compared to an underwriting loss of $240.5 million and a combined ratio of 163.4 in the third quarter of 2008.
The $408.3 million increase in underwriting income and 120.1 point decrease in the combined ratio was driven by the comparably low level of insured catastrophes during the third quarter of 2009, compared to the third quarter of 2008, specifically the comparative impact of Hurricanes Gustav and Ike, which resulted in an underwriting loss of $419.6 million and increased the company's combined ratio by 116.8 points during the third quarter of 2008.
The company experienced $70.4 million of favorable development on prior-year reserves in the third quarter of 2009, compared to $36 million of favorable development in the third quarter of 2008, primarily a result of reductions in estimated ultimate losses on certain events within the catastrophe unit and lower than expected claims emergence within the specialty unit, the insurer said.
Gross premiums written for the company's reinsurance segment decreased $37 million, or 21.8 percent, to $132.5 million, compared to $169.5 million in the third quarter of 2008.
The company said the decrease in its reinsurance segment gross premiums written is primarily due to the absence of $49 million of reinstatement premiums written and earned in the third quarter of 2008 as a result of Hurricanes Gustav and Ike and partially offset by the inception of a new program in the catastrophe unit for the 2009 third quarter.
For the nine months ended Sept. 30, the company's managed catastrophe gross premiums written increased $194.4 million, or 20 percent, compared to the comparative period in 2008, excluding the impact of $49 million of reinstatement premiums written in 2008 as a result of Hurricanes Gustav and Ike, due to improved market conditions which have resulted in higher premium rates on business written during 2009.
For the nine months ended Sept. 30, the company's specialty gross premiums written have decreased $37.6 million, or 28.7 percent, compared to the comparative period in 2008, principally due to the non-renewal and portfolio transfer out of a catastrophe-exposed homeowners personal lines property quota share contract.
The company said its reinsurance segment generated $167 million of underwriting income and a combined ratio of 17.4 compared to an underwriting loss of $227.6 million and a combined ratio of 190.6 in the third quarter of 2008.
