RenaissanceRe RenaissanceRe Holdings Ltd. 2012 Annual Report
Contents
Financial Highlights 1
Company Overview 2
Letter To Our Shareholders 5
Message from the Chairman 13
Executive Committee 14
Essay: Creating Value Over Time From an Integrated System 17
Comments on Regulation G 21
Form 10-K 23
Senior Officers Last Page
Board of Directors Inside Back Cover
Financial and Investor Information Inside Back Cover
Financial Highlights
Financial Highlights for RenaissanceRe Holdings Ltd. and Subsidiaries
(In thousands of United States dollars, except per share amounts and percentages)
2012 2011 2010
Gross premiums written $1,551,591 1,434,976 1,165,295
Operating income (loss) available (attributable) to RenaissanceRe common shareholders (1) $402,366 (162,393) 536,394
Net income (loss) available (attributable) to RenaissanceRe common shareholders $566,014 (92,235) 702,613
Total assets $7,928,628 7,744,912 8,138,278
Total shareholders’ equity $3,507,056 3,608,533 3,939,214
Per common share amounts
Operating income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted (1) $7.93 (3.22) 9.32
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share - diluted $11.23 (1.84) 12.31
Tangible book value per common share (1) $67.28 58.45 60.55
Dividends per common share $1.08 1.04 1.00
Operating ratios
Operating return on average common equity (1) %12.6 (5.3) 16.5
Net claims and claim expense ratio %30.4 90.6 15.0
Underwriting expense ratio %27.4 28.0 30.1
Combined ratio %57.8 118.6 45.1
Gross Managed Premiums Written
($) (In millions) (1) Tangible Book Value Per Common Share Plus Accumulated Dividends ($) (1)
1,600 80
1,200 60
800 40
400 20
0 10 11 12 0 08 09 10 11 12
Managed Catastrophe Specialty Lloyd’s Insurance Tangible Book Value Per Common Share Accumulated Dividends
(1) In this Annual Report we refer to various non-GAAP measures, which are explained in the Comments on Regulation G on pages 21 and 22.
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Value and Focus Through an Integrated System
Company Overview
RenaissanceRe is a leading global provider of property catastrophe reinsurance and insurance worldwide. Founded in Bermuda in 1993, the Company has gained recognition for excellence in the industry through disciplined underwriting, capital management expertise, sophisticated risk analytics and responsive client service. RenaissanceRe is traded on the New York Stock Exchange under the ticker symbol ‘RNR’.
Reinsurance - Property Catastrophe
As one of the leading providers of property catastrophe reinsurance in the world based on managed catastrophe premium, our principal products include catastrophe excess of loss reinsurance and excess of loss retrocessional reinsurance.
We underwrite our reinsurance business primarily through Renaissance Reinsurance Ltd. (“Renaissance Reinsurance”), DaVinci Reinsurance Ltd. (“DaVinci”) and Top Layer Reinsurance Ltd. (“Top Layer Re”). Using sophisticated computer modeling and our proprietary technology for risk analysis and management, our seasoned team of underwriters seeks to construct a superior risk portfolio, while cultivating long-term relationships with clients who appreciate our problem-solving capabilities.
Reinsurance - Specialty
We offer global specialty reinsurance products principally on an excess of loss basis through Renaissance Reinsurance and DaVinci, and on a proportional basis through Glencoe Insurance Ltd. (“Glencoe”). As a result of our financial strength, we have the ability to provide significant capacity for select risks as well as participate in market placements.
Our coverages include agriculture, aviation, casualty clash, energy, excess casualty, mortgage guaranty, political risk, professional liability, surety, terrorism, trade credit, and catastrophe-exposed workers’ compensation reinsurance.
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RenaissanceRe Holdings Ltd. 2012 Annual Report
Lloyd’s
RenaissanceRe operates through RenaissanceRe Syndicate Management Limited and Syndicate 1458 at Lloyd’s. The extensive distribution network and worldwide licenses of the Lloyd’s marketplace complement and extend both our strategy and our strong underwriting platform in Bermuda.
Coverages currently include property insurance and treaty reinsurance, casualty insurance and treaty reinsurance, and crop reinsurance. The disciplined underwriting approach and rigorous risk management which underpin our Bermuda operation are reflected by our London team.
Ventures
RenaissanceRe’s Ventures unit structures and manages joint ventures as well as other strategic relationships that leverage the Company’s underwriting expertise and experience. We manage several property catastrophe joint ventures that provide additional high quality capacity to our clients and generate fee income for RenaissanceRe. Our principal joint ventures include Top Layer Re and DaVinci, and we seek to structure other joint ventures when market opportunities arise. We also make strategic investments to provide capital to existing clients and market participants in forms other than reinsurance.
Our weather and energy risk management operations, RenRe Energy Advisors Ltd. (REAL), has been a part of the RenaissanceRe group since 2007. This team offers risk management solutions pertaining to weather and energy price risks, which include weather, energy and commodity derivatives and hybrid products.
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Value and Focus Through an Integrated System
RenaissanceRe Holdings Ltd. 2012 Annual Report
To Our Shareholders
RenaissanceRe’s success in 2012 resulted from the focused, hard work of our talented people, the integration of our operations, and the continued execution of a clear and consistent strategy across our organization.
Our achievements during the year reflected our ongoing commitment to a strategy focused on excellence in evaluating and underwriting low-frequency, high-severity risks. We continued to benefit by enlisting our competitive advantages in the integrated operation of three core areas: superior client relationships, superior risk selection, and superior capital management - an approach explained later in this annual report.
Twenty Years of Focused Leadership
We are in our 20th year of operation. At our inception, we articulated the goal of being the first-call market for our clients and brokers, identifying the “three superiors”
I just mentioned as central drivers to achieving that goal. Over our two decades of operation, those drivers have remained embedded in our culture and proven to be fundamental to our long-term success.
I am proud to see that the business model and guiding principles we developed from the outset and have followed diligently ever since, have enabled us once again to generate attractive returns, despite large industry losses in our core market.
Stepping Up to Opportunity in an Uncertain Market
We have always sought opportunity in difficult markets and to be a consistent source of capital for our clients when they need us most. As 2012 began, the global catastrophe reinsurance market was still somewhat uncertain after the string of major disasters during 2011 and late 2010, which included the Japanese earthquake and tsunami, the New Zealand earthquakes, and Hurricane Irene. After these events, many in our industry reduced exposures during the January 2012 renewal season at a time when our clients were looking for coverages and support. We did not.
At RenaissanceRe, as we have after each major catastrophe since we were formed, we approached the January renewals looking to support our clients as expansively as possible, and to pursue promising opportunities. Despite our prior-year losses, we confidently entered the market, growing managed catastrophe premiums by 35% in the first quarter of 2012. Utilizing our ability to evaluate a wide range of risks quickly, we were able to access some of the most desirable opportunities and assemble a large and attractive portfolio. It included risks such as Japanese, Australian and New Zealand earthquake, as well as our traditionally strong participation in the Atlantic hurricane market.
Later in the year, the June 2012 renewals produced fewer and relatively less attractive growth opportunities than January had offered. However, our leading position in Atlantic hurricane exposed markets and coverages enabled us to write well-priced business. This, along with the decisions we had made in January, allowed us to construct an attractive book of business for the year.
Sandy - A Display of Exceptional Customer Service
In a sense, 2012 can be viewed in two parts: the first nine months, with limited insured catastrophic events, and the final quarter, dominated by Sandy. During the first three
Opposite page:
Neill Currie
Chief Executive Officer
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Value and Focus Through an Integrated System
“We continue to be a leader in providing rapid solutions to cedants and capital providers while striving to ensure that the risks we assume are attractive and well-suited to our own overall portfolio.”
quarters of the year, we experienced some destructive U.S. tornado activity as well as a heightened number of Atlantic hurricanes but few of these reached major strength and, for the most part, remained at sea.
But in late October, Sandy came ashore inflicting significant property damage and, regrettably, loss of life in the densely populated Northeast, especially New York City and the New Jersey coast. Although some in our industry were surprised by the nature and extent of the losses resulting from Sandy, we were not. Our risk models had incorporated the possibility of an event of this scale and in the geographical proximity in which it occurred. Within days after the storm made landfall, we were assisting our clients to evaluate their losses.
Sandy was a prime example of our integrated system at work: the seamless operation of our underwriting, scientific, modeling and claims teams, working in concert. Although it will take a great deal of time for the total claims from Sandy to develop, we quickly estimated our ultimate loss, establishing that it was within our expectation for an event of this nature and would be contained within that quarter’s earnings.
As is the case with all storms, earthquakes or other loss events, Sandy added to our base of information for future modeling. Importantly, it also served as another reminder of the inherent volatility of our business and the importance of our products to our clients. As I have said many times, we expect to incur losses in our business, but believe that through superior risk management, our losses will be manageable and our franchise will endure. Our experience with Sandy, one of the largest insured loss events in U.S. history, certainly supports that view.
Innovative Solutions for Third-Party Capital
As 2012 began, low interest rates continued to force those with capital to explore investment alternatives in order to seek better returns. New market entrants with large pools of capital, including pension funds, hedge funds and university endowments, increasingly turned their attention to our industry.
Again, our flexible business model allowed us to adapt to this market dynamic. Through our Ventures unit, we have always been a leader in developing creative solutions for matching third-party capital with risk/return profiles our capital providers find attractive. Working closely with our underwriters, our Ventures team established a fully collateralized joint venture in January 2012, Upsilon Reinsurance Ltd. (“Upsilon Re”), with a limit of $115 million to write retrocessional protection in a market dislocated by insufficient retrocessional capacity. We built upon the success of Upsilon Re and established Upsilon Re II for 2013, with capacity of $186 million, opening it to new investors.
Similarly, in June 2012 we established Timicuan Reinsurance III Limited (“Tim Re III”), a $96 million vehicle specifically focused on reinsurance for the Florida homeowners market. Tim Re III, like its predecessors, provided our investors with excellent returns.
DaVinci, our long-standing joint venture, which writes the same risks as Renaissance Reinsurance but on a separate balance sheet, significantly diversified its shareholder base. We decreased our ownership during the year from 43% to 33%, to make room for a number of high-quality, long-term investors.
Top Layer Re, our joint venture with State Farm Mutual Automobile Insurance Company that writes high layers of international catastrophe reinsurance, experienced another profitable year. Buyers appreciate the magnitude of the line sizes we offer, along with the claims-paying capability of this partnership. We continue to believe that Top Layer Re is one of the most innovative structures in the market today.
Whether providing limited life vehicles, such as the Upsilon and the Timicuan series, insurance-linked securities, or other ongoing ventures, we have proven ourselves adept at structuring innovative vehicles to match the types of risk our capital providers seek. In a market where capital flows more quickly than ever, we continue to be a leader in providing rapid solutions to cedants and capital providers while striving to ensure that the risks we assume are attractive and well-suited to our own overall portfolio.
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RenaissanceRe Holdings Ltd. 2012 Annual Report
“Sandy was a prime example of our integrated system at work: the seamless operation of our underwriting, scientific, modeling and claims teams, working in concert.”
Value and Focus Through an Integrated System
“RenaissanceRe Syndicate 1458 promotes broader recognition of the RenaissanceRe brand through the vibrant Lloyd’s market.”
Credit Ratings A.M. Best S&P(4) Moody’s Fitch
Reinsurance Segment(1)
Renaissance Reinsurance A+ AA- A1 A+
DaVinci A A+ A3 -
Glencoe A A - -
Top Layer Re A+ AA - -
Renaissance Reinsurance of Europe A+ AA- - -
Lloyd’s Segment
RenaissanceRe Syndicate 1458 - - - -
Lloyd’s Overall Market Rating(2) A A+ - A+
RenaissanceRe(3) - Excellent - -
(1) The A.M. Best, S&P, Moody’s and Fitch ratings for the companies in the Reinsurance and Insurance segments reflect the insurer’s financial strength rating.
(2) The A.M. Best, S&P and Fitch ratings for the Lloyd’s Overall Market Rating represent its financial strength rating.
(3) The S&P rating for RenaissanceRe represents the rating on its Enterprise Risk Management practices.
(4) The S&P ratings for the companies in the Reinsurance and Insurance segments reflect, in addition to the insurer’s financial strength rating, the insurer’s issuer credit rating.
Being a Core Partner in a Global Marketplace
RenaissanceRe has always focused on being a trusted long-term partner offering sophisticated risk management solutions to our clients.
Increasingly, clients want partners to provide solutions in more than one risk area. They seek “core” partners who will work closely with them, take on larger lines and provide a broader range of product offerings.
Our Specialty reinsurance unit is well positioned to help us fulfill this need, and we have developed expertise in a variety of classes beyond natural property catastrophe coverage.
Specialty premiums increased substantially in 2012, up 44% from 2011. We pursued casualty opportunities in the credit and political risk markets, and repositioned Glencoe, our separate Bermuda-based balanced sheet, to write
U.S. quota share reinsurance. Our strong Specialty teams have built out a meaningful market position, expanded our product offerings, and enhanced our risk management tools and capabilities.
Our Lloyd’s syndicate, which writes both insurance and reinsurance, grew again in 2012 and is continuing to develop as planned. RenaissanceRe Syndicate 1458 promotes broader recognition of the RenaissanceRe brand through the vibrant Lloyd’s market and provides access to transactions we would otherwise not see.
We made several steps to increase our global reach during the year. Among other things, Jon Paradine, formerly Chief Underwriting Officer of our flagship operating entity Renaissance Reinsurance, moved to Singapore to explore potential opportunities in this major regional hub to the bourgeoning Asian market.
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RenaissanceRe Holdings Ltd. 2012 Annual Report
“Tangible book value per common share, plus accumulated dividends – the primary metric by which we measure the value we create for our shareholders over time – rose by 17% from 2011.”
Tangible Book Value Per Common Share Plus Accumulated Dividends ($) (1)
80
60
40
20
0 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
Tangible Book Value Per Common Share Accumulated Dividends Per Common Share
(1) In this Annual Report, we refer to various non-GAAP measures, which are explained in the Comments on Regulation G on pages 21 and 22.
Excellence in Financial Performance and Capital Management
For the year, net income was $566 million and earnings per share were $11.23. Operating income was $402 million and we generated an operating ROE of 12.6%, one of the best among our peers.
Tangible book value per common share plus accumulated dividends – the primary metric by which we measure the value we create for our shareholders over time – rose by 17% from 2011.
Despite Sandy, 2012 was our sixth best year from a net income perspective and our third best in earnings per share.
Our investment portfolio generated attractive risk-adjusted results of 5.1%. Despite the historically low interest rate environment and the continued sluggish U.S. economy, we
concluded that pockets of opportunity existed in select fixed-income areas. We believed the housing recovery had substance and increased our allocation to non-agency residential mortgage-backed securities as well as commercial mortgage-backed securities. We also raised our allocation to highly-rated corporate bonds. These decisions paid off, although we continued to maintain a conservative posture with a portfolio duration of about two years.
Our other investments, which account for approximately 10% of our investment portfolio, also performed well.
Private equity represents our largest asset class in this portion of the portfolio and largely performed in line with the overall equity markets, returning 9.8% for the year.
At RenaissanceRe, underwriting provides the bulk of our expected profits, not investments. Given the predominantly short-tail nature of our business, we structure our portfolio such that we are able to pay a large number of claims quickly.
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Value and Focus Through an Integrated System
“In 2012, we made great strides in implementing investment, accounting and business support tools that allow us to operate seamlessly as an integrated system.”
RenaissanceRe Holdings Ltd. 2012 Annual Report
“Our objective is to maintain a unified technological infrastructure linking all our functions onto one global platform.”
Therefore, our investments chiefly maintain our liquidity while providing stability and security for our under- writing operations.
A central tenet of our capital management philosophy has always been to return excess capital to shareholders. During 2012, we repurchased 6.4 million common shares, which we viewed as attractive purchases. In addition, we redeemed 6 million shares or $ 150 million of our 6.60% Series D Preference Shares, half of the issue outstanding, and returned $110 million of capital to our DaVinci shareholders. We view these actions as being consistent with our commitment to returning capital to our shareholders and joint venture partners whenever we have more capital than we can optimally deploy.
Integration and Collaboration Through Our Technological Capabilities
RenaissanceRe has always used sophisticated technology to aid in the selection of risks and the construction of our portfolio. Over the years, we have spent considerable resources developing our proprietary systems. As we gather an ever-growing amount of information and data, we continue to upgrade capabilities and add capacity to our systems. Our goal is to facilitate the evaluation of transactions with greater granularity, to maintain the highest-quality data, and to incorporate whatever new tools and capabilities our underwriters require.
For the past few years, we have focused on ensuring that every area of the organization benefits from the same high technological standard we have developed on the risk assessment side. In 2012, we made great strides in implementing investment, accounting and business support tools that allow us to operate seamlessly as an integrated system across countries, time zones, currencies and business sectors.
Operating Return On Average Common Equity (%) (1)
45
30
15
0
-15
03 04 05 06 07 08 09 10 11 12
(1) In this Annual Report, we refer to various non-GAAP measures, which are explained
in the Comments on Regulation G on pages 21 and 22.
Our objective is to maintain a unified technological infrastructure linking all our functions – whether under- writing, risk analytics, investments, accounting or claims processing – onto one global platform, available around the clock in all our locations around the world.
This consolidated platform allows our people to employ the fullest spectrum of tools available, to optimize their interaction and keep them working together as an integrated global entity.
Thought Leadership and Talent
Externally, we continue to be a thought leader in risk mitigation and community resiliency to natural disasters. In 2012, our risk mitigation leadership forums in Orlando and New Orleans brought together elected officials, climatologists and other scientists, emergency responders,
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Value and Focus Through an Integrated System
“We work hard at hiring smart, well-educated people, who are driven to help our clients and to succeed.”
environmental groups and policy experts to discuss the latest ideas for reducing the risks that natural disasters pose to life and property. We were also closely consulted for our flood assessment expertise during the bipartisan reform of the National Flood Insurance Program.
I am proud of the depth of management throughout the Company. We continue to invest in our team and in recruiting new talent to incorporate a more diverse range of perspectives within the senior leaders of our Company. I am delighted that so many of our professionals continue to broaden their skills, through our mentoring and leadership programs and immersion in our culture, to become excellent managers and executives as well as domain experts. As we pursue our strategic plans for the future, it is critical that we continue to attract and retain talented employees who share our ethical standards and our passion for client service and risk management.
Looking Ahead
In the near term, challenges include non-traditional capital continuing to flow into our market, as well as competition steadily growing more sophisticated. Many of the innovations we pioneered, in areas such as catastrophe modeling and structuring vehicles that facilitate third party capital investment, have been imitated or are now commercially available in some fashion. Keeping our edge is a top priority and at the center of our strategy. I believe that over the past two decades, we have put together a company with unsurpassed capabilities in our field. We work hard at hiring smart, well-educated people, who are driven to help our clients and to succeed. We also try to hire people with whom others want to work, with whom clients and brokers want to do business. The importance of this should not be underestimated; our people are a differentiator for RenaissanceRe.
As always, I thank our Board of Directors for their invaluable counsel, as well as my colleagues on the executive committee for their deep commitment to the Company. I would also like to congratulate Kevin O’Donnell, who was promoted to President and remains Global Chief Underwriting Officer. His achievements have helped to instill the highest underwriting standards throughout the Company. Kevin’s contributions to our success over the years have been significant and his promotion to President reflects those contributions.
Finally, I want to thank all our employees, whose talents and teamwork make RenaissanceRe such a productive and enjoyable place to work, and of course our many shareholders for their continued support. I am gratified to see how far we have come since our formation twenty years ago and I remain excited about the future prospects of the Company.
Sincerely,
Neill A. Currie
Chief Executive Officer
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RenaissanceRe Holdings Ltd. 2012 Annual Report
Message from the Chairman
Our Company had a very good year in 2012, generating strong results, managing shareholders’ capital efficiently and delivering outstanding customer service, which contribute to enhanced long-term value. These results were enjoyed because of strong performance across our entire integrated system, as described in Neill’s letter. My fellow directors join me in thanking our whole team for its collaborative effort and focus on successfully executing the Company’s strategy.
Our principal focus as your Board of Directors is effective fiduciary oversight of the Company’s strategic planning, risk management approach, value creation and performance. The Board’s corporate governance practices are rooted in the same commitment to excellence, principles and values that our executive management team seeks to inculcate across our employee team. In 2012, we reviewed the Company’s business strategies and the performance of its tactical plans. We assessed its capital position, allocation, and optimization planning and evaluated the organization’s succession planning and management bench strength. Finally, we continued our evaluation of executive compensation programs to ensure that they do not create unintended risk, remain aligned with long-term shareholder results, and provide appropriate competitive incentives to attract and retain the talented team upon which our business depends.
On behalf of my fellow directors, I would like to recognize the invaluable contributions and expertise of Thomas Cooper, who has served RenaissanceRe since after the Company’s initial public offering and who retires from the Board this year. Tom has provided both wisdom and strong guidance to the Company and we thank him for his many years of service. In turn, we welcome Brian Gray, who joins our Board after a long career at Swiss Re where he most recently held the position of Group Chief Underwriting Officer. Brian’s industry knowledge and global experience will contribute to our stewardship of the organization on behalf of all of our shareholders.
Lastly, I would like to extend personal thanks to my Board colleagues for their dedication and insight and, together with Neill and all directors, gratitude to our shareholders for their continued support. I am proud of the excellence and discipline being exercised across the organization, which are reflected in the strong performance achieved by RenaissanceRe over time.
Sincerely,
Ralph B. Levy
Chairman
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Value and Focus Through an Integrated System
Executive Committee
RenaissanceRe Holdings Ltd. 2012 Annual Report
Neill A. Currie
Kevin J. O’Donnell
Peter C. Durhager
Jeffrey D. Kelly
Chief Executive Officer, RenaissanceRe Holdings Ltd.
President,
Global Chief Underwriting Officer, RenaissanceRe Holdings Ltd.
Executive Vice President, Chief Administrative Officer, RenaissanceRe Holdings Ltd.
Executive Vice President, Chief Financial Officer, RenaissanceRe Holdings Ltd.
Ian D. Branagan
Dana J. Cuffe
Ross A. Curtis
Aditya K. Dutt
Senior Vice President,
Chief Risk Officer, RenaissanceRe Holdings Ltd.
Senior Vice President,
Chief Information Officer, RenaissanceRe Holdings Ltd.
Senior Vice President, RenaissanceRe Holdings Ltd., Chief Underwriting Officer of European Operations
Senior Vice President, RenaissanceRe Holdings Ltd., President,
Renaissance Underwriting Managers, Ltd.
Todd R. Fonner
David E. Marra
Justin D. O’Keefe
Jonathan D. A. Paradine
Senior Vice President,
Chief Investment Officer, Treasurer,
RenaissanceRe Holdings Ltd.
Senior Vice President, RenaissanceRe Holdings Ltd.
Senior Vice President, RenaissanceRe Holdings Ltd.
Senior Vice President, RenaissanceRe Holdings Ltd., Principal Officer,
Renaissance Reinsurance Ltd., Singapore Representative Office
Stephen H. Weinstein
Mark A. Wilcox
Senior Vice President,
Chief Compliance Officer, General Counsel and Secretary, RenaissanceRe Holdings Ltd.
Senior Vice President,
Chief Accounting Officer, Corporate Controller, RenaissanceRe Holdings Ltd.
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Value and Focus Through an Integrated System
“Anticipating the final portfolio is essential to consistent selection and pricing of risks within and across renewal cycles.”
RenaissanceRe Holdings Ltd. 2012 Annual Report
Creating Value Over Time From an Integrated System
Our past three annual reports have discussed the three competitive advantages we seek to deploy: superior customer relationships, superior capital management, and superior risk selection.
Last year we concluded by saying: “It is our belief that our success comes in the first instance from our unwavering focus on each, and in the second from seamless integration of all three.” This year we explain how we seek to achieve that integration.
We have been building our Company as an integrated system since our founding. Indeed, the idea of an integrated system of three competitive advantages was outlined in longhand in notes from a staff meeting on August 24, 1993, when the staff was just four people.
The goal was to create this system and support it through integrated technology, integrated decision-making processes, empowered underwriters, and a unique culture.
The 1993 plan started with underwriting. We aspire to be “the best underwriter.” Underwriting includes both risk and capital components: the best underwriter matches well-structured risk with capital whose providers would find the risk/return trade-off attractive.
Our planning process is illustrative of how the three competitive advantages operate as a single integrated system to match risk and capital. Throughout the year we construct forward-looking representations of the portfolio we expect to write at the upcoming renewal period(s).
Our leadership position in our major markets means we have better quality data with which to estimate how the market and our portfolio will change at the next renewal.
In addition, we believe that the value we provide to ceding companies through our superior customer relationships allows us to obtain more of the business we find attractive and therefore to forecast the lines we will sign better than a typical reinsurer.
The more accurate our planning is, the better we can manage capital to support the expected portfolio. Our finance, underwriting, ventures, and risk teams meet regularly to assess the expected portfolio and plan capital management. This assessment includes the balance sheets we manage for third-party capital in our joint venture business. We adjust our plans in real time if conditions change unexpectedly in either the reinsurance or capital markets.
Having a good estimate of our expected portfolio at the next renewal also improves our ability to select risk. Each risk added to our portfolio interacts with other risks either by diversifying or amplifying aggregate risk. So, anticipating the final portfolio is essential to consistent selection and pricing of risks within and across renewal cycles.
Bringing efficient capital to the market and pricing our product consistently are two factors that we believe contribute to superior customer relationships.
In short, the three competitive advantages that we seek, when managed in an integrated manner, become self-reinforcing.
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Value and Focus Through an Integrated System
“Having one robust set of real-time numbers allows collaborative decision-making among risk, finance, ventures, and underwriting teams.”
Integrated Technology
Being the best underwriter in our definition – matching risk and capital – requires and is enabled by a single system to assess and manage all forms of risk and capital. Shortly after our founding we began building our proprietary Renaissance Exposure Management System (REMS©
). REMS©
intends to capture all assumed risk, all balance sheets, all third-party capital vehicles, all classes of business, investments, reserve risk, credit risk, and other forms of risk irrespective of where it arises within the Company. REMS©
facilitates critical processes across the Company: exposure analysis, deal structuring, gross portfolio optimization and management, the ceding of gross risk, capital management, and risk control. By providing information in real time, REMS©
allows us to adjust plans on a daily basis to incorporate new information.
Integrated Decision-Making
Having one robust set of real-time numbers allows collaborative decision-making among risk, finance, ventures, and underwriting teams. There are many forms of capital with different risk tolerances that can be deployed into the reinsurance market. We seek to bring ceding companies the most efficient capital by optimally balancing the use of our shareholders’ capital, various forms of third-party capital, and ceded retrocessional reinsurance protection. For example, if capital markets change, we can assess the trade-offs among changing our capital management plans, changing the retrocession protection we buy, changing how we assume risk, or repositioning the investment portfolio.
Empowered Underwriters
Our underwriters match our clients’ risk with the right capital. To play their role most effectively, our underwriters are empowered as decision-makers and provided industry-leading tools and risk measures to enable consistent and optimal portfolio construction. REMS©
allows underwriters to evaluate and develop price quotes for different structures backed by different forms of
capital, and it does this in real time to better serve clients and brokers. Our goal is for brokers and ceding companies to receive consistent exposure-based pricing across all our operating units.
An Integrated Culture
Our “all for one, one for all” culture is another self-reinforcing aspect of the integrated system. The culture demands that we operate as one company, not a set of independent local entities. We are a meritocracy, where our leaders reward teamwork, peer review, and careful analysis.
The culture and integrated system are supported by a compensation program focused on rewarding achievement of long-term corporate goals, centrally-managed global support functions, and an inclusive “one company” approach to long-term strategy and budgeting.
Conclusion
Operating a company with multiple lines of business, geographies, and capital sources as a seamlessly integrated system is not as simple as it may seem. Achieving our mission and vision drives us to be a leader in our markets, which comes from – and reinforces – being the best underwriter, which we believe is achievable over the long-term only through operating as an integrated system.
Over the past twenty years, we have differentiated our Company as a leader in risk and capital management, and customer service. Our founding principles have enabled us to lead many of the changes in reinsurance and capital management, while at the same time avoiding less attractive choices. Operating the Company as an integrated system positions us best to continue to achieve our mission of generating superior returns over the long term.
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Financial Information
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 D 6.60% Preference Shares, Par Value $1.00 per share | New York Stock Exchange, Inc. |
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• | we are exposed to significant losses from catastrophic events and other exposures that we cover, which we expect to cause significant volatility in our financial results from time to time; |
• | the frequency and severity of catastrophic events or other events which we cover could exceed our estimates and cause losses greater than we expect; |
• | the inherent uncertainties in our reserving process, particularly as regards to large catastrophic events and longer tail casualty lines, which uncertainties could increase as the product classes we offer evolve over time; |
• | the risk of the lowering or loss of any of the financial strength, claims paying or enterprise wide risk management ratings of RenaissanceRe Holdings Ltd. ("RenaissanceRe") or of one or more of our subsidiaries or changes in the policies or practices of the rating agencies; |
• | risks associated with appropriately modeling, pricing for, and contractually addressing new or potential factors in loss emergence, such as the trend toward potentially significant global warming and other aspects of climate change which have the potential to adversely affect our business, any of which could cause us to underestimate our exposures and potentially adversely impact our financial results; |
• | risks due to our increasing reliance on a small and potentially decreasing number of insurance and reinsurance brokers for the preponderance of our revenue; |
• | the risk that our customers may fail to make premium payments due to us (a risk that we believe has increased in certain of our key markets), as well as the risk of failures of our reinsurers, brokers or other counterparties to honor their obligations to us, including as regards to large catastrophic events, and also including their obligations to make third party payments for which we might be liable; |
• | a contention by the Internal Revenue Service that Renaissance Reinsurance Ltd. ("Renaissance Reinsurance"), or any of our other Bermuda subsidiaries, is subject to U.S. taxation; |
• | risks associated with implementing our business strategies and initiatives, including risks related to developing or enhancing the operations, controls and other infrastructure necessary in respect of our more recent, new or proposed initiatives, and the risk that we may fail to succeed in our business or financing plans for these initiatives; |
• | risks relating to operating in a highly competitive environment, which we expect to continue to increase over time from new competition from traditional and non-traditional participants, particularly as capital markets products provide alternatives and replacements for more traditional reinsurance and insurance products, as new entrants or existing competitors attempt to replicate our business model, and as a result of consolidation in the (re)insurance industry; |
• | risks associated with potential for loss of services of any one of our key senior officers, the risk that we fail to attract or retain the executives and employees necessary to manage our business, or difficulties associated with the transition of members of our senior management team for new or expanded roles necessary to execute our strategic and tactical plans; |
• | risks relating to adverse legislative developments that could reduce the size of the private markets we serve, or impede their future growth, including proposals to shift United States ("U.S.") catastrophe risks to federal mechanisms; similar proposals at the state level in the U.S., including the risk of new legislation in Florida to expand the reinsurance coverages offered by the Florida Hurricane Catastrophe Fund ("FHCF") and the insurance policies written by state-sponsored Citizens Property Insurance Corporation ("Citizens"), or failing to implement reforms to reduce such coverages; and the risk that new legislation will be enacted in the international markets we serve which might reduce market opportunities in the private sector, weaken our customers or otherwise adversely impact us; |
• | risks relating to the inability, or delay, in the claims paying ability of Citizens, FHCF or of private market participants in Florida, particularly following a large windstorm or of multiple smaller storms, which we believe would further weaken or destabilize the Florida market and give rise to an unpredictable range of impacts which might be adverse to us, perhaps materially so; |
• | the risk of potential challenges to the Company's claim of exemption from insurance regulation under certain current laws and the risk of increased global regulation of the insurance and reinsurance industry; |
• | the passage of federal or state legislation subjecting Renaissance Reinsurance or our other Bermuda subsidiaries to supervision, regulation or taxation in the U.S. or other jurisdictions in which we operate, or increasing the taxation of business ceded to us; |
• | the risk that there could be regulatory or legislative changes adversely impacting us, as a Bermuda-based company, relative to our competitors, or actions taken by multinational organizations having such an impact; |
• | risks associated with highly subjective judgments, such as valuing our more illiquid assets, and determining the impairments taken on our investments, all of which impact our reported financial position and operating results; |
• | risks associated with our investment portfolio, including the risk that our investment assets may fail to yield attractive or even positive results; and the risk that investment managers may breach our investment guidelines, or the inability of such guidelines to mitigate risks arising out of the ongoing period of relative economic weakness; |
• | risks associated with inflation, which could cause loss costs to increase, and impact the performance of our investment portfolio, thereby adversely impacting our financial position or operating results; |
• | the risk we might be bound to policyholder obligations beyond our underwriting intent, including due to emerging claims and coverage issues; |
• | risks associated with counterparty credit risk, including with respect to reinsurance brokers, customers, agents, retrocessionaires, capital providers, parties associated with our investment portfolio and/or our energy trading business, and premiums and other receivables owed to us, which risks we believe continue to be heightened as a result of the ongoing period of relative economic weakness; |
• | risks associated with our allocation of capital to our weather and energy risk management operations, including the risks that these operations may give rise to unforeseen or unanticipated losses; |
• | the risk that ongoing or future industry regulatory developments will disrupt our business, or that of our business partners, or mandate changes in industry practices in ways that increase our costs, decrease our revenues or require us to alter aspects of the way we do business; |
• | acts of terrorism, war or political unrest; |
• | changes in insurance regulations in the U.S. or other jurisdictions in which we operate, including risks arising out of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act") or its related rule making or implementation; |
• | risks that the advent of the new U.S. Federal Insurance Office or other related developments may adversely impact our business, or significantly increase our operating costs; |
• | operational risks, including system or human failures; |
• | risks in connection with our management of third party capital; |
• | changes in economic conditions, including interest rate, currency, equity and credit conditions which could affect our investment portfolio or declines in our investment returns for other reasons which could reduce our profitability and hinder our ability to pay claims promptly in accordance with our strategy, which risks we believe are currently enhanced in light of the current uncertainty regarding U.S. fiscal policy and the ongoing period of relative economic weakness, both globally, particularly in respect of Eurozone countries and companies, and in the U.S.; |
• | risks relating to our potential failure to comply with covenants in our debt agreements; |
• | risks relating to the inability of our operating subsidiaries to declare and pay dividends to RenaissanceRe; |
• | risks that we may require additional capital in the future, particularly after a catastrophic event or to support potential growth opportunities in our business, which may not be available or may be available only on unfavorable terms; |
• | risks that certain of our new or potentially expanding business lines could have a significant negative impact on our financial results or cause significant volatility in our results for any particular period, including risks relating to our weather and energy risk operations, whose results may be more volatile than we estimate; |
• | risks arising out of possible changes in the distribution or placement of risks due to increased consolidation of customers or insurance and reinsurance brokers, or from potential changes in their business practices which may be required by future regulatory changes; and |
• | risks relating to changes in regulatory regimes and/or accounting rules, which could result in significant changes to our financial results, including but not limited to, the European Union ("EU") directive concerning capital adequacy, risk management and regulatory reporting for insurers. |
(1) | Property catastrophe reinsurance, principally written for our own account, and for DaVinci, is our traditional core business. We believe we are one of the world's leading providers of this coverage, based on total catastrophe gross premiums written. This coverage protects against large natural catastrophes, such as earthquakes, hurricanes and tsunamis, as well as claims arising from other natural and man-made catastrophes such as winter storms, freezes, floods, fires, wind storms, tornadoes, explosions and acts of terrorism. We offer this coverage to insurance companies and other reinsurers primarily on an excess of loss basis. This means that we begin paying when our customers' claims from a catastrophe exceed a certain retained amount. |
(2) | Specialty reinsurance, also principally written for our own account and for DaVinci, covering certain targeted classes of business where we believe we have a sound basis for underwriting and pricing the risk that we assume. Our portfolio includes various classes of business, such as catastrophe |
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
(in thousands) | |||||||||||||
Renaissance catastrophe premiums | $ | 733,963 | $ | 742,236 | $ | 630,080 | |||||||
Renaissance specialty premiums | 207,387 | 144,192 | 126,848 | ||||||||||
Total Renaissance premiums | 941,350 | 886,428 | 756,928 | ||||||||||
DaVinci catastrophe premiums | 448,244 | 435,060 | 364,153 | ||||||||||
DaVinci specialty premiums | 2,500 | 1,699 | 2,538 | ||||||||||
Total DaVinci premiums | 450,744 | 436,759 | 366,691 | ||||||||||
Total catastrophe unit premiums (1) | 1,182,207 | 1,177,296 | 994,233 | ||||||||||
Total specialty unit premiums | 209,887 | 145,891 | 129,386 | ||||||||||
Total Reinsurance segment premiums | $ | 1,392,094 | $ | 1,323,187 | $ | 1,123,619 | |||||||
(1) | Total catastrophe premiums written includes $Nil, $Nil and $9.5 million of gross premiums written assumed from our Other category for the years ended December 31, 2012, 2011 and 2010, respectively. |
2012 | 2011 | 2010 | ||||||||||||||||||||
Year ended December 31, | Gross Premiums Written | Percentage of Gross Premiums Written | Gross Premiums Written | Percentage of Gross Premiums Written | Gross Premiums Written | Percentage of Gross Premiums Written | ||||||||||||||||
(in thousands, except percentages) | ||||||||||||||||||||||
Catastrophe | ||||||||||||||||||||||
U.S. and Caribbean | $ | 857,740 | 55.3 | % | $ | 786,721 | 54.8 | % | $ | 720,250 | 61.8 | % | ||||||||||
Worldwide (excluding U.S.) (1) | 139,265 | 9.0 | % | 164,112 | 11.4 | % | 113,270 | 9.7 | % | |||||||||||||
Worldwide | 81,595 | 5.3 | % | 124,797 | 8.7 | % | 65,500 | 5.6 | % | |||||||||||||
Japan | 43,238 | 2.8 | % | 49,021 | 3.4 | % | 26,188 | 2.2 | % | |||||||||||||
Europe | 37,113 | 2.4 | % | 31,888 | 2.2 | % | 59,480 | 5.1 | % | |||||||||||||
Australia and New Zealand | 18,578 | 1.2 | % | 16,818 | 1.2 | % | 6,269 | 0.5 | % | |||||||||||||
Other | 4,678 | 0.3 | % | 3,939 | 0.3 | % | 3,276 | 0.3 | % | |||||||||||||
Total catastrophe | 1,182,207 | 76.3 | % | 1,177,296 | 82.0 | % | 994,233 | 85.2 | % | |||||||||||||
Specialty | ||||||||||||||||||||||
Worldwide | 96,081 | 6.2 | % | 91,032 | 6.3 | % | 59,636 | 5.2 | % | |||||||||||||
U.S. and Caribbean | 69,070 | 4.4 | % | 49,832 | 3.5 | % | 57,461 | 4.9 | % | |||||||||||||
Australia and New Zealand | 28,307 | 1.8 | % | 792 | 0.1 | % | 8,934 | 0.8 | % | |||||||||||||
Europe | 16,429 | 1.1 | % | 3,595 | 0.3 | % | 2,786 | 0.2 | % | |||||||||||||
Other | — | — | % | 640 | — | % | 569 | — | % | |||||||||||||
Total specialty | 209,887 | 13.5 | % | 145,891 | 10.2 | % | 129,386 | 11.1 | % | |||||||||||||
Total Reinsurance | 1,392,094 | 89.8 | % | 1,323,187 | 92.2 | % | 1,123,619 | 96.3 | % | |||||||||||||
Lloyd's | ||||||||||||||||||||||
Worldwide | 75,132 | 4.8 | % | 47,605 | 3.3 | % | 16,207 | 1.4 | % | |||||||||||||
U.S. and Caribbean | 57,332 | 3.7 | % | 48,435 | 3.4 | % | 43,178 | 3.7 | % | |||||||||||||
Europe | 14,456 | 0.9 | % | 8,044 | 0.6 | % | 3,174 | 0.3 | % | |||||||||||||
Worldwide (excluding U.S.) (1) | 6,064 | 0.4 | % | 238 | — | % | 1,049 | 0.1 | % | |||||||||||||
Australia and New Zealand | 2,152 | 0.1 | % | 2,060 | 0.1 | % | 91 | — | % | |||||||||||||
Other | 4,851 | 0.3 | % | 5,202 | 0.4 | % | 2,510 | 0.2 | % | |||||||||||||
Total Lloyd's | 159,987 | 10.2 | % | 111,584 | 7.8 | % | 66,209 | 5.7 | % | |||||||||||||
Other category (2) | — | — | % | 282 | — | % | 2,585 | 0.3 | % | |||||||||||||
Eliminations (3) | (490 | ) | — | % | (77 | ) | — | % | (27,118 | ) | (2.3 | )% | ||||||||||
Total gross premiums written | $ | 1,551,591 | 100.0 | % | $ | 1,434,976 | 100.0 | % | $ | 1,165,295 | 100.0 | % | ||||||||||
(1) | The category "Worldwide (excluding U.S.)" consists of contracts that cover more than one geographic region (other than the U.S.). The exposure in this category for gross premiums written to date is predominantly from Europe and Japan. |
(2) | The Other category consists of contracts that are primarily exposed to U.S. risks. |
(3) | Represents $0.5 million of gross premiums ceded from the Reinsurance segment to the Lloyd's segment, for the year ended December 31, 2012 (2011 - $0.1 million of gross premiums ceded from the Reinsurance segment to the Lloyd's segment, 2010 - $9.5 million, $17.4 million and $0.2 million of gross premiums ceded from the Other category to the Reinsurance segment, from the Other category to the Lloyd's segment and from the Reinsurance segment to the Lloyd's segment, respectively). |
• | simulate a range of potential outcomes that adequately represents the risk to an individual contract; |
• | analyze the incremental impact of an individual reinsurance contract on our overall portfolio; |
• | better assess the underlying exposures associated with assumed retrocessional business; |
• | price contracts within a short time frame; |
• | capture various classes of risk, including catastrophe and other insurance risks; |
• | assess risk across multiple entities (including our various joint ventures) and across different components of our capital structure; and |
• | provide consistent pricing information. |
• | the reputation of the proposed cedant and the likelihood of establishing a long-term relationship with the cedant; |
• | the geographic area in which the cedant does business and its market share; |
• | historical loss data for the cedant and, where available, for the industry as a whole in the relevant regions and lines of business, in order to compare the cedant's historical catastrophe loss experience to industry averages; |
• | the cedant's pricing strategies; and |
• | the perceived financial strength of the cedant and factors such as the cedant's historical record of making premium payments in full and on a timely basis. |
(1) | Assumed Risk. We define assumed risk as activities where we deliberately take risk against the Company's capital base, including underwriting risks and other quantifiable risks such as credit risk and interest rate risk as they relate to investments, ceded reinsurance credit risk and strategic investment risk, each of which can be analyzed in substantial part through quantitative tools and techniques. Of these, we believe underwriting risk to be the most material to us. In order to understand, monitor, quantify and proactively assess underwriting risk, we seek to develop and deploy appropriate tools to, among other things, estimate the comparable expected returns on potential business opportunities, and estimate the impact that such incremental business could have on our overall risk profile. We use the tools and methods described above in "Underwriting" to seek to achieve these objectives. Embedded within our consideration of assumed risk is our management of the Company's aggregate, consolidated risk profile. In part through the utilization of REMS© and our other systems and procedures, we seek to analyze our in-force aggregate assumed risk portfolio on a daily basis. We believe this capability helps us to manage our aggregate exposures, as well as to rigorously analyze individual proposed transactions and evaluate them in the context of our in-force portfolio. This aggregation process captures line of business, segment and corporate risk profiles, calculates internal and external capital tests and explicitly models ceded reinsurance. Generally, additional data is added quarterly to our aggregate risk framework to reflect updated or new information or estimates relating to matters such as interest rate risk, credit risk, capital adequacy and liquidity. This information is used in day-to-day decision making for underwriting, investments and operations and is also reviewed quarterly from both a unit level and in respect of our consolidated financial position. We also regularly assess, monitor and review our regulatory risk capital and related constraints. |
(2) | Business Environment Risk. We define this as the risk of changes in the business, political or regulatory environment that could negatively impact our short term or long-term financial results or the markets in which we operate. Accordingly, these risks are predominately extrinsic to the Company and in general, our ability to alter or eliminate these risks is limited. Rather, our efforts focus on monitoring developments, assessing potential impacts of any such changes, and investing in cost effective means to attempt to mitigate the consequences of and ensure compliance with any new requirements applicable to us. |
(3) | Operational Risk. We are subject to a number of additional risks arising out of operational, regulatory, and other matters. We define operational risk to include the risk that we fail to create, manage, control or mitigate the people, processes, structures or functions required to execute our strategic and tactical plans and assemble an optimized portfolio of assumed risk, and to adjust to |
At December 31, 2012 | Case Reserves | Additional Case Reserves | IBNR | Total | |||||||||||||
(in thousands) | |||||||||||||||||
Catastrophe | $ | 706,264 | $ | 222,208 | $ | 255,786 | $ | 1,184,258 | |||||||||
Specialty | 111,234 | 80,971 | 286,108 | 478,313 | |||||||||||||
Total Reinsurance | 817,498 | 303,179 | 541,894 | 1,662,571 | |||||||||||||
Lloyd's | 29,260 | 10,548 | 109,662 | 149,470 | |||||||||||||
Other | 17,016 | 8,522 | 41,798 | 67,336 | |||||||||||||
Total | $ | 863,774 | $ | 322,249 | $ | 693,354 | $ | 1,879,377 | |||||||||
At December 31, 2011 | |||||||||||||||||
(in thousands) | |||||||||||||||||
Catastrophe | $ | 681,771 | $ | 271,990 | $ | 388,147 | $ | 1,341,908 | |||||||||
Specialty | 120,189 | 49,840 | 301,589 | 471,618 | |||||||||||||
Total Reinsurance | 801,960 | 321,830 | 689,736 | 1,813,526 | |||||||||||||
Lloyd's | 17,909 | 14,459 | 55,127 | 87,495 | |||||||||||||
Other | 32,944 | 3,515 | 54,874 | 91,333 | |||||||||||||
Total | $ | 852,813 | $ | 339,804 | $ | 799,737 | $ | 1,992,354 | |||||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
(in thousands) | |||||||||||||
Net reserves as of January 1 | $ | 1,588,325 | $ | 1,156,132 | $ | 1,260,334 | |||||||
Net incurred related to: | |||||||||||||
Current year | 483,180 | 993,168 | 431,476 | ||||||||||
Prior years | (157,969 | ) | (131,989 | ) | (302,131 | ) | |||||||
Total net incurred | 325,211 | 861,179 | 129,345 | ||||||||||
Net paid related to: | |||||||||||||
Current year | 84,056 | 299,299 | 50,793 | ||||||||||
Prior years | 142,615 | 129,687 | 182,754 | ||||||||||
Total net paid | 226,671 | 428,986 | 233,547 | ||||||||||
Total net reserves as of December 31 | 1,686,865 | 1,588,325 | 1,156,132 | ||||||||||
Reinsurance recoverable as of December 31 | 192,512 | 404,029 | 101,711 | ||||||||||
Total gross reserves as of December 31 | $ | 1,879,377 | $ | 1,992,354 | $ | 1,257,843 | |||||||
Year ended December 31, | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | |||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||||||
Gross reserve for claims and claim expenses | $ | 747.9 | $ | 924.4 | $ | 1,295.0 | $ | 2,381.4 | $ | 1,811.0 | $ | 1,717.2 | $ | 1,758.8 | $ | 1,344.4 | $ | 1,257.8 | $ | 1,992.3 | $ | 1,879.4 | ||||||||||||||||||||||||
Reserve for claims and claim expenses, net of reinsurance recoverable | $ | 595.0 | $ | 810.6 | $ | 1,099.2 | $ | 1,742.2 | $ | 1,591.3 | $ | 1,609.5 | $ | 1,565.2 | $ | 1,260.3 | $ | 1,156.1 | $ | 1,588.3 | $ | 1,686.9 | ||||||||||||||||||||||||
1 Year Later | 494.8 | 661.5 | 878.6 | 1,610.7 | 1,368.3 | 1,412.6 | 1,299.0 | 958.2 | 1,024.1 | 1,430.3 | — | |||||||||||||||||||||||||||||||||||
2 Years Later | 449.5 | 379.5 | 844.0 | 1,449.1 | 1,225.9 | 1,199.0 | 1,045.1 | 857.6 | 895.8 | — | — | |||||||||||||||||||||||||||||||||||
3 Years Later | 270.8 | 362.8 | 749.1 | 1,333.7 | 1,092.2 | 997.8 | 961.4 | 770.8 | — | — | — | |||||||||||||||||||||||||||||||||||
4 Years Later | 258.7 | 332.9 | 717.2 | 1,231.6 | 911.1 | 923.0 | 888.7 | — | — | — | — | |||||||||||||||||||||||||||||||||||
5 Years Later | 246.3 | 312.2 | 683.7 | 1,077.8 | 847.2 | 878.5 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
6 Years Later | 220.2 | 301.5 | 628.9 | 1,022.7 | 823.5 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
7 Years Later | 210.8 | 266.2 | 609.2 | 1,002.8 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
8 Years Later | 186.0 | 251.2 | 604.5 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
9 Years Later | 174.7 | 241.2 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
10 Years Later | 167.9 | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Cumulative redundancy on net reserves | $ | 427.1 | $ | 569.4 | $ | 494.7 | $ | 739.4 | $ | 767.8 | $ | 731.0 | $ | 676.5 | $ | 489.5 | $ | 260.3 | $ | 158.0 | $ | — | ||||||||||||||||||||||||
Cumulative Net Paid Losses | ||||||||||||||||||||||||||||||||||||||||||||||
1 Year Later | 81.1 | 58.0 | 302.8 | 354.8 | 247.6 | 337.1 | 191.5 | 182.8 | 129.7 | 142.6 | — | |||||||||||||||||||||||||||||||||||
2 Years Later | 85.3 | 100.6 | 370.8 | 548.4 | 435.8 | 469.5 | 369.1 | 301.5 | 301.5 | — | — | |||||||||||||||||||||||||||||||||||
3 Years Later | 113.0 | 107.5 | 395.7 | 712.6 | 529.5 | 553.0 | 471.6 | 420.6 | — | — | — | |||||||||||||||||||||||||||||||||||
4 Years Later | 91.8 | 96.4 | 446.8 | 782.9 | 569.4 | 605.7 | 585.8 | — | — | — | — | |||||||||||||||||||||||||||||||||||
5 Years Later | 85.9 | 129.8 | 472.7 | 812.0 | 594.2 | 690.4 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
6 Years Later | 102.8 | 136.1 | 482.7 | 833.1 | 656.1 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
7 Years Later | 109.6 | 137.3 | 492.2 | 879.1 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
8 Years Later | 103.0 | 139.2 | 527.6 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
9 Years Later | 99.1 | 152.1 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
10 Years Later | 99.6 | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Gross reserve for claims and claim expenses | $ | 747.9 | $ | 924.4 | $ | 1,295.0 | $ | 2,381.4 | $ | 1,811.0 | $ | 1,717.2 | $ | 1,758.8 | $ | 1,344.4 | $ | 1,257.8 | $ | 1,992.3 | $ | 1,879.4 | ||||||||||||||||||||||||
Reinsurance recoverable on unpaid losses | 152.9 | 113.8 | 195.8 | 639.2 | 219.7 | 107.7 | 193.6 | 84.1 | 101.7 | 404.0 | 192.5 | |||||||||||||||||||||||||||||||||||
Net reserve for claims and claim expenses | $ | 595.0 | $ | 810.6 | $ | 1,099.2 | $ | 1,742.2 | $ | 1,591.3 | $ | 1,609.5 | $ | 1,565.2 | $ | 1,260.3 | $ | 1,156.1 | $ | 1,588.3 | $ | 1,686.9 | ||||||||||||||||||||||||
Gross liability re-estimated | $ | 300.8 | $ | 355.4 | $ | 797.6 | $ | 1,608.7 | $ | 1,024.8 | $ | 940.8 | $ | 1,030.3 | $ | 821.3 | $ | 974.9 | $ | 1,830.4 | $ | — | ||||||||||||||||||||||||
Reinsurance recoverable on unpaid losses re-estimated | 132.9 | 114.2 | 193.1 | 605.9 | 201.3 | 62.3 | 141.6 | 50.5 | 79.1 | 400.1 | — | |||||||||||||||||||||||||||||||||||
Net liability re-estimated | $ | 167.9 | $ | 241.2 | $ | 604.5 | $ | 1,002.8 | $ | 823.5 | $ | 878.5 | $ | 888.7 | $ | 770.8 | $ | 895.8 | $ | 1,430.3 | $ | — | ||||||||||||||||||||||||
Cumulative redundancy on gross reserves | $ | 447.1 | $ | 569.0 | $ | 497.4 | $ | 772.7 | $ | 786.2 | $ | 776.4 | $ | 728.5 | $ | 523.1 | $ | 282.9 | $ | 161.9 | $ | — | ||||||||||||||||||||||||
At December 31, | 2012 | 2011 | |||||||||||||
(in thousands, except percentages) | |||||||||||||||
U.S. treasuries | $ | 1,259,800 | 19.8 | % | $ | 885,152 | 14.2 | % | |||||||
Agencies | 315,154 | 5.0 | % | 158,561 | 2.6 | % | |||||||||
Non-U.S. government (Sovereign debt) | 133,198 | 2.1 | % | 227,912 | 3.7 | % | |||||||||
FDIC guaranteed corporate | — | — | % | 423,630 | 6.8 | % | |||||||||
Non-U.S. government-backed corporate | 349,514 | 5.5 | % | 641,082 | 10.3 | % | |||||||||
Corporate | 1,615,207 | 25.4 | % | 1,206,904 | 19.4 | % | |||||||||
Agency mortgage-backed | 408,531 | 6.4 | % | 441,749 | 7.1 | % | |||||||||
Non-agency mortgage-backed | 248,339 | 3.9 | % | 104,771 | 1.7 | % | |||||||||
Commercial mortgage-backed | 406,166 | 6.4 | % | 325,729 | 5.2 | % | |||||||||
Asset-backed | 12,954 | 0.2 | % | 18,027 | 0.3 | % | |||||||||
Total fixed maturity investments, at fair value | 4,748,863 | 74.7 | % | 4,433,517 | 71.4 | % | |||||||||
Short term investments, at fair value | 821,163 | 12.9 | % | 905,477 | 14.6 | % | |||||||||
Equity investments trading, at fair value | 58,186 | 0.9 | % | 50,560 | 0.8 | % | |||||||||
Other investments, at fair value | 644,711 | 10.1 | % | 748,984 | 12.1 | % | |||||||||
Total managed investment portfolio | 6,360,647 | 98.6 | % | 6,138,538 | 98.9 | % | |||||||||
Investments in other ventures, under equity method | 87,724 | 1.4 | % | 70,714 | 1.1 | % | |||||||||
Total investments | $ | 6,360,647 | 100.0 | % | $ | 6,209,252 | 100.0 | % | |||||||
Year ended December 31, | 2012 | 2011 | 2010 | |||||||
AON Benfield | 51.5 | % | 56.1 | % | 53.5 | % | ||||
Marsh Inc. | 21.4 | % | 21.9 | % | 23.1 | % | ||||
Willis Group | 11.7 | % | 12.7 | % | 11.6 | % | ||||
Total of largest brokers | 84.6 | % | 90.7 | % | 88.2 | % | ||||
All others | 15.4 | % | 9.3 | % | 11.8 | % | ||||
Total percentage of Reinsurance segment gross premiums written | 100.0 | % | 100.0 | % | 100.0 | % | ||||
• | Class 3A and Class 4 general business insurers are required to submit annual statutory financial statements as part of its statutory financial return no later than four months after the insurer's financial year end (unless specifically extended). The annual statutory financial statements give detailed information and analyses regarding premiums, claims, reinsurance, reserves and investments. The statutory financial return includes, among other items: a report of the approved independent auditor on the statutory financial statements; a declaration of statutory ratios; a solvency certificate; the statutory financial statements themselves; the opinion of the approved loss reserve specialist; and details concerning ceded reinsurance. |
• | In addition to preparing statutory financial statements, all Class 3A and Class 4 insurers must prepare financial statements in respect of their insurance business in accordance with GAAP or International Financial Reporting Standards ("IFRS"). |
• | A general business insurer's statutory assets must exceed its statutory liabilities by an amount, equal to or greater than the prescribed minimum solvency margin, which varies with the category of its registration and net premiums written and loss reserves posted ("Minimum Solvency Margin"). The Minimum Solvency Margin that must be maintained by a Class 4 insurer is the greater of (i) $100.0 million, or (ii) 50% of net premiums written (with a credit for reinsurance ceded not exceeding 25% of gross premiums) or (iii) 15% of net discounted aggregate loss and loss expense provisions and other insurance reserves. The Minimum Solvency Margin for a Class 3A insurer is the greater of (i) $1.0 million, or (ii) 20% of the first $6.0 million of net premiums written; if in excess of $6.0 million, the figure is $1.2 million plus 15% of net premiums written in excess of $6.0 million, or (iii) 15% of net discounted aggregate loss and loss expense provisions and other insurance reserves. |
• | In addition, each Class 3A and Class 4 insurer must maintain its capital at a level equal to its enhanced capital requirement ("ECR") which is established by reference to the Bermuda Solvency Capital Requirement ("BSCR") model. Alternatively, under the Insurance Act, insurers may, subject to the terms of the Insurance Act and to the BMA's oversight, elect to utilize an approved internal capital model to determine regulatory capital. In either case, the ECR shall at all times equal or exceed the respective Class 3A and Class 4 insurer's Minimum Solvency Margin and may be adjusted in circumstances where the BMA concludes that the insurer's risk profile deviates significantly from the assumptions underlying its ECR or the insurer's assessment of its risk management policies and practices used to calculate the ECR applicable to it. While not specifically referred to in the Insurance Act, the BMA has also established a target capital level ("TCL") for each Class 3A and Class 4 insurer equal to 120% of the respective ECR. While a Class 3A and Class 4 insurer is not currently required to maintain its statutory capital and surplus at this level, the TCL serves as an early warning tool for the BMA and failure to maintain statutory capital at least equal to the TCL will likely result in increased BMA regulatory oversight. |
• | An insurer engaged in general business is required to maintain the value of its relevant assets at not less than 75% of the amount of its relevant liabilities ("Minimum Liquidity Ratio"). |
• | Both Class 3A and Class 4 insurers are prohibited from declaring or paying any dividends if in breach of the required Minimum Solvency Margin or Minimum Liquidity Ratio (the "Relevant Margins") or if the declaration or payment of such dividend would cause the insurer to fail to meet the Relevant Margins. Further, a Class 4 insurer is prohibited from declaring or paying in any financial year dividends of more than 25% of its total statutory capital and surplus (as shown on its previous financial year's statutory balance sheet) unless it files (at least seven days before payment of such dividends) with the BMA an affidavit stating that it will continue to meet its Relevant Margins. Class 3A and Class 4 insurers must obtain the BMA's prior approval for a reduction by 15% or more of the total statutory capital as set forth in its previous year's financial statements. These restrictions on declaring or paying dividends and distributions under the Insurance Act are in addition to the solvency requirements under the Companies Act which apply to all Bermuda companies. |
• | Unlike other (re)insurers, SPIs are fully funded to meet their (re)insurance obligations and are not exposed to insolvency, therefore the application and supervision processes are streamlined to facilitate the transparent structure. Further, SPIs are exempt from filing annual loss reserve specialist opinions and the BMA has the discretion to modify such insurer's accounting requirements under the Insurance Act. Like other (re)insurers, the principal representative of an SPI has a duty to inform the BMA in relation to solvency matters, where applicable. |
• | The BMA maintains supervision over the controllers (as defined herein) of all Bermuda registered insurers. Currently the Insurance Act states that no person shall become a controller of any description of a registered insurer unless he has first served the BMA notice in writing stating that he intends to become such a controller. A controller includes the managing director and chief executive of the registered insurer or its parent company; a 10%, 20%, 33% or 50% shareholder controller; and any person in accordance with whose directions or instructions the directors of the registered insurer or of its parent company are accustomed to act. In addition, all Bermuda insurers are also required to give the BMA written notice of the fact that a person has become, or ceased to be, a controller or officer of the registered insurer within 45 days of becoming aware of such fact. An officer in relation to a registered insurer includes a director, secretary, chief executive or senior executive by whatever name called. |
• | All registered insurers are required to give the BMA 14 days' notice of certain matters that are likely to be of material significance (each a "Material Change") to the BMA in carrying out its supervisory function under the Insurance Act. |
• | All Bermuda insurers are required to comply with the BMA's Insurance Code of Conduct which establishes duties, requirements and standards to be complied with to ensure each insurer implements sound corporate governance, risk management and internal controls. Failure to comply with these requirements will be a factor taken into account by the BMA in determining whether an insurer is conducting its business in a sound and prudent manner under the Insurance Act. |
• | Pursuant to the Insurance Act, the BMA acts as the group supervisor of the RenaissanceRe group of companies (the "RenaissanceRe Group") and it has designated Renaissance Reinsurance to be the "designated insurer" in respect of the RenaissanceRe Group. The designated insurer is required to ensure that the RenaissanceRe Group complies with the provisions of the Insurance Act pertaining to groups and all related group solvency and group supervision rules (together, the "Group Rules"). Under the Group Rules, the RenaissanceRe Group is required to annually prepare and submit to the BMA group GAAP financial statements, a group statutory financial return and a group capital and solvency return. Further, our Board of Directors has established solvency self assessment procedures for the RenaissanceRe Group that factor in all foreseeable material risks; Renaissance Reinsurance must ensure that the RenaissanceRe Group's assets exceed the amount of the RenaissanceRe Group's liabilities by the aggregate minimum margin of solvency of each qualifying member; and our Board of Directors has established and effectively implement corporate governance policies and procedures to ensure they support the overall organizational strategy of the RenaissanceRe Group. In addition, the RenaissanceRe Group is required to prepare and submit a quarterly financial return comprising unaudited group statutory financial statements, a schedule of intra-group transactions and a schedule of risk concentrations. |
• | The BMA has certain powers of investigation and intervention relating to insurers and their holding companies, subsidiaries and other affiliates, which it may exercise in the interest of such insurer's policyholders or if there is any risk of insolvency or of a breach of the Insurance Act or the insurer's license conditions. |
• | Under the provisions of the Insurance Act, the BMA may, from time to time, conduct "on site" visits at the offices of insurers it regulates. Over the past several years the BMA has conducted several "on site" reviews in respect of our Bermuda-domiciled operating insurers. No remedial actions were communicated to us as a result of any of the on-site reviews to date. |
• | The BMA may cancel an insurer's registration on certain grounds specified in the Insurance Act. |
Accident year | Year of occurrence of a loss. Claim payments and reserves for claims and claim expenses are allocated to the year in which the loss occurred for losses occurring contracts and in the year the loss was reported for claims made contracts. |
Acquisition expenses | The aggregate expenses incurred by a company for acquiring new business, including commissions, underwriting expenses, premium taxes and administrative expenses. |
Additional case reserves | Additional case reserves represent management's estimate of reserves for claims and claim expenses that are allocated to specific contracts, less paid and reported losses by the client. |
Attachment point | The dollar amount of loss (per occurrence or in the aggregate, as the case may be) above which excess of loss reinsurance becomes operative. |
Bordereau | A report providing premium or loss data with respect to identified specific risks. This report is periodically furnished to a reinsurer by the ceding insurers or reinsurers. |
Bound | A (re)insurance policy is considered bound, and the (re)insurer responsible for the risks of the policy, when both parties agree to the terms and conditions set forth in the policy. |
Broker | An intermediary who negotiates contracts of insurance or reinsurance, receiving a commission for placement and other services rendered, between (1) a policy holder and a primary insurer, on behalf of the insured party, (2) a primary insurer and reinsurer, on behalf of the primary insurer, or (3) a reinsurer and a retrocessionaire, on behalf of the reinsurer. |
Capacity | The percentage of surplus, or the dollar amount of exposure, that an insurer or reinsurer is willing or able to place at risk. Capacity may apply to a single risk, a program, a line of business or an entire book of business. Capacity may be constrained by legal restrictions, corporate restrictions or indirect restrictions. |
Case reserves | Loss reserves, established with respect to specific, individual reported claims. |
Casualty insurance or reinsurance | Insurance or reinsurance that is primarily concerned with the losses caused by injuries to third persons and their property (in other words, persons other than the policyholder) and the legal liability imposed on the insured resulting there from. Also referred to as liability insurance. |
Catastrophe | A severe loss, typically involving multiple claimants. Common perils include earthquakes, hurricanes, hailstorms, severe winter weather, floods, fires, tornadoes, explosions and other natural or man-made disasters. Catastrophe losses may also arise from acts of war, acts of terrorism and political instability. |
Catastrophe excess of loss reinsurance | A form of excess of loss reinsurance that, subject to a specified limit, indemnifies the ceding company for the amount of loss in excess of a specified retention with respect to an accumulation of losses resulting from a "catastrophe." |
Catastrophe-linked securities; cat-linked securities | Cat-linked securities are generally privately placed fixed income securities where all or a portion of the repayment of the principal is linked to catastrophic events. This includes securities where the repayment is linked to the occurrence and/or size of, for example, one or more hurricanes or earthquakes, or insured industry losses associated with these catastrophic events. |
Cede; cedant; ceding company | When a party reinsures its liability with another, it "cedes" business and is referred to as the "cedant" or "ceding company." |
Claim | Request by an insured or reinsured for indemnification by an insurance company or a reinsurance company for losses incurred from an insured peril or event. |
Claims made contracts | Contracts that cover claims for losses occurring during a specified period that are reported during the term of the contract. |
Claims and claim expense ratio, net | The ratio of net claims and claim expenses to net premiums earned determined in accordance with either statutory accounting principles or GAAP. |
Claim reserves | Liabilities established by insurers and reinsurers to reflect the estimated costs of claim payments and the related expenses that the insurer or reinsurer will ultimately be required to pay in respect of insurance or reinsurance policies it has issued. Claims reserves consist of case reserves, established with respect to individual reported claims, additional case reserves and "IBNR" reserves. For reinsurers, loss expense reserves are generally not significant because substantially all of the loss expenses associated with particular claims are incurred by the primary insurer and reported to reinsurers as losses. |
Combined ratio | The combined ratio is the sum of the net claims and claim expense ratio and the underwriting expense ratio. A combined ratio below 100% generally indicates profitable underwriting prior to the consideration of investment income. A combined ratio over 100% generally indicates unprofitable underwriting prior to the consideration of investment income. |
Decadal | Refers to events occurring over a 10-year period, such as an oscillation whose period is roughly 10 years. |
Excess and surplus lines reinsurance | Any type of coverage that cannot be placed with an insurer admitted to do business in a certain jurisdiction. Risks placed in excess and surplus lines markets are often substandard as respects adverse loss experience, unusual, or unable to be placed in conventional markets due to a shortage of capacity. |
Excess of loss | Reinsurance or insurance that indemnifies the reinsured or insured against all or a specified portion of losses on underlying insurance policies in excess of a specified amount, which is called a "level" or "retention." Also known as non-proportional reinsurance. Excess of loss reinsurance is written in layers. A reinsurer or group of reinsurers accepts a layer of coverage up to a specified amount. The total coverage purchased by the cedant is referred to as a "program" and will typically be placed with predetermined reinsurers in pre-negotiated layers. Any liability exceeding the outer limit of the program reverts to the ceding company, which also bears the credit risk of a reinsurer's insolvency. |
Exclusions | Those risk, perils, or classes of insurance with respect to which the reinsurer will not pay loss or provide reinsurance, notwithstanding the other terms and conditions of reinsurance. |
Expense override | An amount paid to a ceding company in addition to the acquisition cost to compensate for overhead expenses. |
Frequency | The number of claims occurring during a given coverage period. |
Funds at Lloyd's | Funds of an approved form that are lodged and held in trust at Lloyd's as security for a member's underwriting activities. They comprise the members' deposit, personal reserve fund and special reserve fund and may be drawn down in the event that the member's syndicate level premium trust funds are insufficient to cover his liabilities. The amount of the deposit is related to the member's premium income limit and also the nature of the underwriting account. |
Generally Accepted Accounting Principles in the United States ("GAAP") | Accounting principles as set forth in opinions of the Accounting Principles Board of the American Institute of Certified Public Accountants and/or statements of the Financial Accounting Standards Board and/or their respective successors and which are applicable in the circumstances as of the date in question. |
Gross premiums written | Total premiums for insurance written and assumed reinsurance during a given period. |
Incurred but not reported ("IBNR") | Reserves for estimated losses that have been incurred by insureds and reinsureds but not yet reported to the insurer or reinsurer, including unknown future developments on losses that are known to the insurer or reinsurer. |
Insurance-linked securities | Financial instruments whose values are driven by (re)insurance loss events. For the Company, insurance-linked securities are generally linked to property losses due to natural catastrophes. |
International Financial Reporting Standards ("IFRS") | Accounting principles, standards and interpretations as set forth in opinions of the International Accounting Standards Board which are applicable in the circumstances as of the date in question. |
Layer | The interval between the retention or attachment point and the maximum limit of indemnity for which a reinsurer is responsible. |
Line | The amount of excess of loss reinsurance protection provided to an insurer or another reinsurer, often referred to as limit. |
Line of business | The general classification of insurance written by insurers and reinsurers, e.g. fire, allied lines, homeowners and surety, among others. |
Lloyd's | Depending on the context this term may refer to (a) the society of individual and corporate underwriting members that insure and reinsure risks as members of one or more syndicates (i.e., Lloyd's is not an insurance company); (b) the underwriting room in the Lloyd's building in which managing agents underwrite insurance and reinsurance on behalf of their syndicate members (in this sense Lloyd's should be understood as a market place); or (c) the Corporation of Lloyd's which regulates and provides support services to the Lloyd's market. |
Loss; losses | An occurrence that is the basis for submission and/or payment of a claim. Whether losses are covered, limited or excluded from coverage is dependent on the terms of the policy. |
Loss reserve | For an individual loss, an estimate of the amount the insurer expects to pay for the reported claim. For total losses, estimates of expected payments for reported and unreported claims. These may include amounts for claims expenses. |
Managing agent | An underwriting agent which has permission from Lloyd's to manage a syndicate and carry on underwriting and other functions for a member. |
Net claims and claim expenses | The expenses of settling claims, net of recoveries, including legal and other fees and the portion of general expenses allocated to claim settlement costs (also known as claim adjustment expenses or loss adjustment expenses) plus losses incurred with respect to net claims. |
Net claims and claim expense ratio | Net claims and claim expenses incurred expressed as a percentage of net earned premiums. |
Net premiums earned | The portion of net premiums written during or prior to a given period that was actually recognized as income during such period. |
Net premiums written | Gross premiums written for a given period less premiums ceded to reinsurers and retrocessionaires during such period. |
Non-proportional reinsurance | See "Excess of loss." |
Perils | This term refers to the causes of possible loss in the property field, such as fire, windstorm, collision, hail, etc. In the casualty field, the term "hazard" is more frequently used. |
Profit commission | A provision found in some reinsurance agreements that provides for profit sharing. Parties agree to a formula for calculating profit, an allowance for the reinsurer's expenses, and the cedant's share of such profit after expenses. |
Property insurance or reinsurance | Insurance or reinsurance that provides coverage to a person with an insurable interest in tangible property for that person's property loss, damage or loss of use. |
Property per risk | Reinsurance on a treaty basis of individual property risks insured by a ceding company. |
Proportional reinsurance | A generic term describing all forms of reinsurance in which the reinsurer shares a proportional part of the original premiums and losses of the reinsured. (Also known as pro-rata reinsurance, quota share reinsurance or participating reinsurance.) In proportional reinsurance the reinsurer generally pays the ceding company a ceding commission. The ceding commission generally is based on the ceding company's cost of acquiring the business being reinsured (including commissions, premium taxes, assessments and miscellaneous administrative expense) and also may include a profit factor. See also "Quota Share Reinsurance". |
Quota share reinsurance | A form of proportional reinsurance in which the reinsurer assumes an agreed percentage of each insurance policy being reinsured and shares all premiums and losses according with the reinsured. See also "Proportional Reinsurance". |
Reinstatement premium | The premium charged for the restoration of the reinsurance limit of a catastrophe contract to its full amount after payment by the reinsurer of losses as a result of an occurrence. |
Reinsurance | An arrangement in which an insurance company, the reinsurer, agrees to indemnify another insurance or reinsurance company, the ceding company, against all or a portion of the insurance or reinsurance risks underwritten by the ceding company under one or more policies. Reinsurance can provide a ceding company with several benefits, including a reduction in net liability on insurances and catastrophe protection from large or multiple losses. Reinsurance also provides a ceding company with additional underwriting capacity by permitting it to accept larger risks and write more business than would be possible without an equivalent increase in capital and surplus, and facilitates the maintenance of acceptable financial ratios by the ceding company. Reinsurance does not legally discharge the primary insurer from its liability with respect to its obligations to the insured. |
Reinsurance to Close | Also referred to as a RITC, it is a contract to transfer the responsibility for discharging all the liabilities that attach to one year of account of a syndicate into a later year of account of the same or different syndicate in return for a premium. |
Retention | The amount or portion of risk that an insurer retains for its own account. Losses in excess of the retention level are paid by the reinsurer. In proportional treaties, the retention may be a percentage of the original policy's limit. In excess of loss business, the retention is a dollar amount of loss, a loss ratio or a percentage. |
Retrocedant | A reinsurer who cedes all or a portion of its assumed insurance to another reinsurer. |
Retrocessional reinsurance; Retrocessionaire | A transaction whereby a reinsurer cedes to another reinsurer, the retrocessionaire, all or part of the reinsurance that the first reinsurer has assumed. Retrocessional reinsurance does not legally discharge the ceding reinsurer from its liability with respect to its obligations to the reinsured. Reinsurance companies cede risks to retrocessionaires for reasons similar to those that cause primary insurers to purchase reinsurance: to reduce net liability on insurances, to protect against catastrophic losses, to stabilize financial ratios and to obtain additional underwriting capacity. |
Risks | A term used to denote the physical units of property at risk or the object of insurance protection that are not perils or hazards. Also defined as chance of loss or uncertainty of loss. |
Risks attaching contracts | Contracts that cover claims that arise on underlying insurance policies that incept during the term of the reinsurance contract. |
Solvency II | A proposed set of regulatory requirements that would codify and harmonize the EU insurance and reinsurance regulation. Among other things, these requirements would impact the amount of capital that EU insurance and reinsurance companies would be required to hold. Solvency II was scheduled to come into effect on January 1, 2014, however this is expected to be delayed until at least January 1, 2016. |
Specialty lines | Lines of insurance and reinsurance that provide coverage for risks that are often unusual or difficult to place and do not fit the underwriting criteria of standard commercial products carriers. |
Statutory accounting principles | Recording transactions and preparing financial statements in accordance with the rules and procedures prescribed or permitted by Bermuda, U.S. state insurance regulatory authorities including the NAIC and/or in accordance with Lloyd's specific principles, all of which generally reflect a liquidating, rather than going concern, concept of accounting. |
Stop loss | A form of reinsurance under which the reinsurer pays some or all of a cedant's aggregate retained losses in excess of a predetermined dollar amount or in excess of a percentage of premium. |
Submission | An unprocessed application for (i) insurance coverage forwarded to a primary insurer by a prospective policyholder or by a broker on behalf of such prospective policyholder, (ii) reinsurance coverage forwarded to a reinsurer by a prospective ceding insurer or by a broker or intermediary on behalf of such prospective ceding insurer or (iii) retrocessional coverage forwarded to a retrocessionaire by a prospective ceding reinsurer or by a broker or intermediary on behalf of such prospective ceding reinsurer. |
Syndicate | A member or group of members underwriting (re)insurance business at Lloyd's through the agency of a managing agent or substitute agent to which a syndicate number is assigned. |
Treaty | A reinsurance agreement covering a book or class of business that is automatically accepted on a bulk basis by a reinsurer. A treaty contains common contract terms along with a specific risk definition, data on limit and retention, and provisions for premium and duration. |
Underwriting | The insurer's or reinsurer's process of reviewing applications submitted for insurance coverage, deciding whether to accept all or part of the coverage requested and determining the applicable premiums. |
Underwriting capacity | The maximum amount that an insurance company can underwrite. The limit is generally determined by a company's retained earnings and investment capital. Reinsurance serves to increase a company's underwriting capacity by reducing its exposure from particular risks. |
Underwriting expense ratio | The ratio of the sum of the acquisition expenses and operational expenses to net premiums earned. |
Underwriting expenses | The aggregate of policy acquisition costs, including commissions, and the portion of administrative, general and other expenses attributable to underwriting operations. |
Unearned premium | The portion of premiums written representing the unexpired portions of the policies or contracts that the insurer or reinsurer has on its books as of a certain date. |
• | a classified Board, whose size is fixed and whose members may be removed by the shareholders only for cause upon a 66 2/3% vote; |
• | restrictions on the ability of shareholders to nominate persons to serve as directors, submit resolutions to a shareholder vote and requisition special general meetings; |
• | a large number of authorized but unissued shares which may be issued by the Board without further shareholder action; and |
• | a 66 2/3% shareholder vote to amend, repeal or adopt any provision inconsistent with several provisions of the Bye-Laws. |
• | provide insurance and reinsurance capacity in markets and to consumers that we target, such as the legislation enacted in Florida in 2007 or the proposed federal legislation described above; |
• | expand the scope of coverage under existing policies for perils such as hurricanes or earthquakes or for a pandemic disease outbreak; |
• | increasingly mandate the terms of insurance and reinsurance policies; |
• | expand the proposed scope of the FIO or establish a new federal insurance regulator; |
• | revise laws, regulations, or contracts under which we operate; |
• | disproportionately benefit the companies of one country over those of another; or |
• | repeal or diminish the insurance company antitrust exemption from the McCarran Ferguson Act. |
Price Range of Common Shares | |||||||||
High | Low | ||||||||
2012 | |||||||||
First Quarter | $ | 79.11 | $ | 71.18 | |||||
Second Quarter | 80.53 | 72.41 | |||||||
Third Quarter | 78.39 | 70.00 | |||||||
Fourth Quarter | 82.76 | 75.29 | |||||||
2011 | |||||||||
First Quarter | $ | 70.58 | $ | 60.64 | |||||
Second Quarter | 73.93 | 67.58 | |||||||
Third Quarter | 72.30 | 59.50 | |||||||
Fourth Quarter | 75.16 | 60.34 | |||||||
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 | $ | 459.6 | ||||||||||||||||||||||||
October 1 - 31, 2012 | 111,016 | $ | 77.01 | — | $ | — | 111,016 | $ | 77.01 | (8.5 | ) | |||||||||||||||
November 1 - 30, 2012 | 4,736 | $ | 77.30 | 4,736 | $ | 77.30 | — | $ | — | — | ||||||||||||||||
November 13, 2012 - increased authorized share repurchase program to $500.0 million | 48.9 | |||||||||||||||||||||||||
Dollar amount available to be repurchased | 500.0 | |||||||||||||||||||||||||
December 1 - 31, 2012 | 2,669,951 | $ | 80.16 | 495 | $ | 82.63 | 2,669,456 | $ | 80.16 | (214.0 | ) | |||||||||||||||
Total | 2,785,703 | $ | 80.03 | 5,231 | $ | 77.80 | 2,780,472 | $ | 80.03 | $ | 286.0 | |||||||||||||||
Year ended December 31, | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||
(in thousands, except share and per share data and percentages) | |||||||||||||||||||||
Statements of Operations Data: | |||||||||||||||||||||
Gross premiums written | $ | 1,551,591 | $ | 1,434,976 | $ | 1,165,295 | $ | 1,228,881 | $ | 1,242,287 | |||||||||||
Net premiums written | 1,102,657 | 1,012,773 | 848,965 | 838,333 | 935,500 | ||||||||||||||||
Net premiums earned | 1,069,355 | 951,049 | 864,921 | 882,204 | 984,448 | ||||||||||||||||
Net investment income | 167,375 | 118,000 | 203,955 | 318,179 | 13,879 | ||||||||||||||||
Net realized and unrealized gains on investments | 163,991 | 70,668 | 144,444 | 93,679 | 11,462 | ||||||||||||||||
Net other-than-temporary impairments | (343 | ) | (552 | ) | (829 | ) | (22,450 | ) | (214,897 | ) | |||||||||||
Net claims and claim expenses incurred | 325,211 | 861,179 | 129,345 | (70,698 | ) | 481,498 | |||||||||||||||
Acquisition expenses | 113,542 | 97,376 | 94,961 | 104,150 | 141,616 | ||||||||||||||||
Operational expenses | 179,301 | 169,666 | 166,042 | 153,552 | 94,414 | ||||||||||||||||
Underwriting income (loss) | 451,301 | (177,172 | ) | 474,573 | 695,200 | 266,920 | |||||||||||||||
Income (loss) from continuing operations | 746,662 | (74,502 | ) | 798,482 | 1,045,959 | 50,307 | |||||||||||||||
Income (loss) from discontinued operations | 2,287 | (15,890 | ) | 62,670 | 6,700 | 33,846 | |||||||||||||||
Net income (loss) | 748,949 | (90,392 | ) | 861,152 | 1,052,659 | 84,153 | |||||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | 566,014 | (92,235 | ) | 702,613 | 838,858 | (13,280 | ) | ||||||||||||||
Income (loss) from continuing operations available (attributable) to RenaissanceRe common shareholders per common share – diluted | 11.18 | (1.53 | ) | 11.18 | 13.29 | (0.75 | ) | ||||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – diluted | 11.23 | (1.84 | ) | 12.31 | 13.40 | (0.21 | ) | ||||||||||||||
Dividends per common share | 1.08 | 1.04 | 1.00 | 0.96 | 0.92 | ||||||||||||||||
Weighted average common shares outstanding – diluted | 49,603 | 50,747 | 55,641 | 61,210 | 63,411 | ||||||||||||||||
Return on average common equity | 17.7 | % | (3.0 | )% | 21.7 | % | 30.2 | % | (0.5 | )% | |||||||||||
Combined ratio | 57.8 | % | 118.6 | % | 45.1 | % | 21.2 | % | 72.9 | % | |||||||||||
At December 31, | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||
Balance Sheet Data: | |||||||||||||||||||||
Total investments | $ | 6,360,647 | $ | 6,209,252 | $ | 6,100,212 | $ | 6,015,259 | $ | 5,833,816 | |||||||||||
Total assets | 7,928,628 | 7,744,912 | 8,138,278 | 7,926,212 | 8,155,609 | ||||||||||||||||
Reserve for claims and claim expenses | 1,879,377 | 1,992,354 | 1,257,843 | 1,344,433 | 1,758,776 | ||||||||||||||||
Unearned premiums | 399,517 | 347,655 | 286,183 | 317,592 | 360,684 | ||||||||||||||||
Debt | 351,775 | 353,620 | 549,155 | 300,000 | 450,000 | ||||||||||||||||
Capital leases | 27,428 | 25,366 | 25,706 | 26,014 | 26,292 | ||||||||||||||||
Preferred shares | 400,000 | 550,000 | 550,000 | 650,000 | 650,000 | ||||||||||||||||
Total shareholders' equity attributable to RenaissanceRe | 3,503,065 | 3,605,193 | 3,936,325 | 3,840,786 | 3,032,743 | ||||||||||||||||
Common shares outstanding | 45,542 | 51,543 | 54,110 | 61,745 | 61,503 | ||||||||||||||||
Book value per common share | $ | 68.14 | $ | 59.27 | $ | 62.58 | $ | 51.68 | $ | 38.74 | |||||||||||
Accumulated dividends | 12.00 | 10.92 | 9.88 | 8.88 | 7.92 | ||||||||||||||||
Book value per common share plus accumulated dividends | $ | 80.14 | $ | 70.19 | $ | 72.46 | $ | 60.56 | $ | 46.66 | |||||||||||
Change in book value per common share plus change in accumulated dividends | 16.8 | % | (3.6 | )% | 23.0 | % | 35.9 | % | (3.3 | )% | |||||||||||
(1) | Property catastrophe reinsurance, principally written for our own account, and for DaVinci, is our traditional core business. We believe we are one of the world's leading providers of this coverage, based on catastrophe gross premiums written. This coverage protects against large natural catastrophes, such as earthquakes, hurricanes and tsunamis, as well as claims arising from other natural and man-made catastrophes such as winter storms, freezes, floods, fires, wind storms, tornadoes, explosions and acts of terrorism. We offer this coverage to insurance companies and other reinsurers primarily on an excess of loss basis. This means that we begin paying when our customers' claims from a catastrophe exceed a certain retained amount. |
(2) | Specialty reinsurance, also principally written for our own account, and for DaVinci, covering certain targeted classes of business where we believe we have a sound basis for underwriting and pricing the risk that we assume. Our portfolio includes various classes of business, such as catastrophe exposed workers' compensation, surety, terrorism, energy, aviation, crop, political risk, trade credit, financial, mortgage guarantee, catastrophe-exposed personal lines property, casualty clash, certain other casualty lines and other specialty lines of reinsurance that we collectively refer to as specialty reinsurance. We believe that we are seen as a market leader in certain of these classes of business. We are seeking to expand our specialty reinsurance operations over time, although we cannot assure you that we will do so, particularly in light of current and forecasted market conditions. Our specialty reinsurance business is typically significantly impacted by a comparably small number of relatively large transactions. |
At December 31, 2012 | Case Reserves | Additional Case Reserves | IBNR | Total | |||||||||||||
(in thousands) | |||||||||||||||||
Catastrophe | $ | 706,264 | $ | 222,208 | $ | 255,786 | $ | 1,184,258 | |||||||||
Specialty | 111,234 | 80,971 | 286,108 | 478,313 | |||||||||||||
Total Reinsurance | 817,498 | 303,179 | 541,894 | 1,662,571 | |||||||||||||
Lloyd's | 29,260 | 10,548 | 109,662 | 149,470 | |||||||||||||
Other | 17,016 | 8,522 | 41,798 | 67,336 | |||||||||||||
Total | $ | 863,774 | $ | 322,249 | $ | 693,354 | $ | 1,879,377 | |||||||||
At December 31, 2011 | |||||||||||||||||
(in thousands) | |||||||||||||||||
Catastrophe | $ | 681,771 | $ | 271,990 | $ | 388,147 | $ | 1,341,908 | |||||||||
Specialty | 120,189 | 49,840 | 301,589 | 471,618 | |||||||||||||
Total Reinsurance | 801,960 | 321,830 | 689,736 | 1,813,526 | |||||||||||||
Lloyd's | 17,909 | 14,459 | 55,127 | 87,495 | |||||||||||||
Other | 32,944 | 3,515 | 54,874 | 91,333 | |||||||||||||
Total | $ | 852,813 | $ | 339,804 | $ | 799,737 | $ | 1,992,354 | |||||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
Net reserves as of January 1 | $ | 1,588,325 | $ | 1,156,132 | $ | 1,260,334 | |||||||
Net incurred related to: | |||||||||||||
Current year | 483,180 | 993,168 | 431,476 | ||||||||||
Prior years | (157,969 | ) | (131,989 | ) | (302,131 | ) | |||||||
Total net incurred | 325,211 | 861,179 | 129,345 | ||||||||||
Net paid related to: | |||||||||||||
Current year | 84,056 | 299,299 | 50,793 | ||||||||||
Prior years | 142,615 | 129,687 | 182,754 | ||||||||||
Total net paid | 226,671 | 428,986 | 233,547 | ||||||||||
Net reserves as of December 31 | 1,686,865 | 1,588,325 | 1,156,132 | ||||||||||
Reinsurance recoverable as of December 31 | 192,512 | 404,029 | 101,711 | ||||||||||
Gross reserves as of December 31 | $ | 1,879,377 | $ | 1,992,354 | $ | 1,257,843 | |||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
Catastrophe | $ | 110,568 | $ | 59,137 | $ | 157,458 | |||||||
Specialty | 34,146 | 77,761 | 128,561 | ||||||||||
Reinsurance | 144,714 | 136,898 | 286,019 | ||||||||||
Lloyd's | 16,202 | (478 | ) | 197 | |||||||||
Other | (2,947 | ) | (4,431 | ) | 15,915 | ||||||||
Total | $ | 157,969 | $ | 131,989 | $ | 302,131 | |||||||
Year ended December 31, 2012 | Catastrophe Reinsurance Unit | ||||
Catastrophe claims and claim expenses | |||||
Large catastrophe events | |||||
Chile Earthquake (2010) | $ | 24,575 | |||
Hurricanes Gustav & Ike (2008) | 17,541 | ||||
U.K. Floods (2007) | 17,271 | ||||
Hurricanes Katrina, Rita and Wilma (2005) | 6,420 | ||||
Hurricane Irene (2011) | 4,630 | ||||
Thailand Floods (2011) | 3,933 | ||||
Tohoku Earthquake and Tsunami (2011) | 3,896 | ||||
Windstorm Kyrill (2007) | 3,417 | ||||
New Zealand Earthquake (2010) | (3,570 | ) | |||
New Zealand Earthquake (2011) | (17,912 | ) | |||
Other | 2,542 | ||||
Total large catastrophe events | 62,743 | ||||
Small catastrophe events | |||||
Danish Floods (2011) | 5,000 | ||||
U.S. PCS 63 Winter Storm (2011) | 5,000 | ||||
U.S. PCS 42 Winter Storm (2011) | 2,560 | ||||
U.S. PCS 53 Winter Storm (2011) | 2,558 | ||||
Other | 32,707 | ||||
Total small catastrophe events | 47,825 | ||||
Total favorable development of prior accident years claims and claim expenses | $ | 110,568 | |||
Year ended December 31, 2011 | Catastrophe Reinsurance Unit | ||||
(in thousands) | |||||
Catastrophe claims and claim expenses | |||||
Large catastrophe events | |||||
Tropical Cyclone Tasha (2010) | $ | 13,922 | |||
Hurricanes Katrina, Rita and Wilma (2005) | 10,008 | ||||
Chilean Earthquake (2010) | 8,455 | ||||
World Trade Center (2001) | 4,701 | ||||
Hurricanes Charley, Francis, Ivan and Jeanne (2004) | 4,076 | ||||
U.K. Floods (2007) | 3,635 | ||||
Windstorm Kyrill (2007) | 2,494 | ||||
New Zealand Earthquake (2010) | (15,179 | ) | |||
Total large catastrophe events | 32,112 | ||||
Small catastrophe events | |||||
U.S. PCS 21 Wildland Fire (2007) | 4,554 | ||||
U.S. PCS 33 Great Midwest Storm (2010) | 3,125 | ||||
U.S. PCS 31 Wind and Thunderstorm (2010) | 3,039 | ||||
U.S. PCS 96 Wind and Thunderstorm (2010) | 2,288 | ||||
Other | 14,019 | ||||
Total small catastrophe events | 27,025 | ||||
Total favorable development of prior accident years claims and claim expenses | $ | 59,137 | |||
Year ended December 31, 2010 | Catastrophe Reinsurance Unit | ||||
(in thousands) | |||||
Catastrophe claims and claim expenses | |||||
Large catastrophe events | |||||
Mature, large catastrophe events | |||||
European Windstorm Erwin (2005) | $ | 10,593 | |||
World Trade Center (2001) | 9,914 | ||||
Hurricanes Martin and Floyd (1999) | 4,822 | ||||
European Floods (2002) | 4,361 | ||||
U.S. PCS 88 Wind and Thunderstorm (2003) | 2,873 | ||||
Hurricane Isabel (2003) | 1,995 | ||||
U.S. PCS 97 Wildland Fire (2003) | 1,231 | ||||
Windstorm Anatol (1999) | 971 | ||||
Northridge Earthquake (1993) | 1,094 | ||||
Total mature, large catastrophe events | 37,854 | ||||
Buncefield Oil Depot (2005) | 27,418 | ||||
Hurricanes Katrina, Rita and Wilma (2005) | 25,482 | ||||
Hurricanes Gustav and Ike (2008) | 10,878 | ||||
Hurricanes Charley, Francis, Ivan and Jeanne (2004) | 8,149 | ||||
European Windstorm Klaus (2009) | 8,000 | ||||
Total large catastrophe events | 117,781 | ||||
Small catastrophe events | |||||
U.S. PCS 78 Wind and Thunderstorm (2009) | 3,215 | ||||
U.S. PCS 66 Wind and Thunderstorm (2009) | 3,149 | ||||
U.S. Winter Storm (2009) | 3,000 | ||||
Hurricane Bill (2009) | 2,500 | ||||
U.S. PCS 82 Wind and Thunderstorm (2009) | 2,429 | ||||
Austrian Floods (2009) | 2,356 | ||||
Other | 23,028 | ||||
Total small catastrophe events | 39,677 | ||||
Total favorable development of prior accident years claims and claim expenses | $ | 157,458 | |||
(in thousands, except percentages) | Re-estimated Claims and Claim Expenses as of December 31, | Cumulative Favorable (Adverse) Development | % Decrease (Increase) from Initial Ultimate | Claims and Claim Expense Reserves as of December 31, 2012 | % of Claims and Claim Expenses Unpaid as of December 31, 2012 | |||||||||||||||||||||||||||
Accident Year | Initial Estimate of Accident Year Claims and Claim Expenses | 2010 | 2011 | 2012 | ||||||||||||||||||||||||||||
1994 | $ | 100,816 | $ | 137,135 | $ | 137,498 | $ | 137,130 | $ | (36,314 | ) | (36.0 | )% | $ | 310 | 0.2 | % | |||||||||||||||
1995 | 72,561 | 61,348 | 61,345 | 61,345 | 11,216 | 15.5 | % | 48 | 0.1 | % | ||||||||||||||||||||||
1996 | 67,671 | 45,214 | 45,209 | 45,219 | 22,452 | 33.2 | % | 14 | — | % | ||||||||||||||||||||||
1997 | 43,050 | 9,046 | 9,040 | 9,041 | 34,009 | 79.0 | % | 5 | 0.1 | % | ||||||||||||||||||||||
1998 | 129,171 | 151,755 | 151,951 | 152,038 | (22,867 | ) | (17.7 | )% | 564 | 0.4 | % | |||||||||||||||||||||
1999 | 267,981 | 199,097 | 198,257 | 197,849 | 70,132 | 26.2 | % | 304 | 0.2 | % | ||||||||||||||||||||||
2000 | 54,600 | 17,794 | 17,803 | 17,787 | 36,813 | 67.4 | % | 27 | 0.2 | % | ||||||||||||||||||||||
2001 | 257,285 | 212,678 | 205,078 | 201,140 | 56,145 | 21.8 | % | 8,756 | 4.4 | % | ||||||||||||||||||||||
2002 | 155,573 | 65,486 | 65,436 | 65,118 | 90,455 | 58.1 | % | 277 | 0.4 | % | ||||||||||||||||||||||
2003 | 126,312 | 68,892 | 69,057 | 67,608 | 58,704 | 46.5 | % | 218 | 0.3 | % | ||||||||||||||||||||||
2004 | 762,392 | 821,350 | 815,773 | 815,915 | (53,523 | ) | (7.0 | )% | 2,267 | 0.3 | % | |||||||||||||||||||||
2005 | 1,473,974 | 1,283,225 | 1,272,485 | 1,263,198 | 210,776 | 14.3 | % | 7,936 | 0.6 | % | ||||||||||||||||||||||
2006 | 121,754 | 60,413 | 60,313 | 58,392 | 63,362 | 52.0 | % | 1,028 | 1.8 | % | ||||||||||||||||||||||
2007 | 245,892 | 150,809 | 138,329 | 116,568 | 129,324 | 52.6 | % | 17,609 | 15.1 | % | ||||||||||||||||||||||
2008 | 599,481 | 480,907 | 481,878 | 455,909 | 143,572 | 23.9 | % | 41,903 | 9.2 | % | ||||||||||||||||||||||
2009 | 90,800 | 53,991 | 47,189 | 42,288 | 48,512 | 53.4 | % | 7,433 | 17.6 | % | ||||||||||||||||||||||
2010 | 385,207 | 385,207 | 355,564 | 321,522 | 63,685 | 16.5 | % | 175,570 | 54.6 | % | ||||||||||||||||||||||
2011 | 1,243,138 | — | 1,243,138 | 1,246,752 | (3,614 | ) | (0.3 | )% | 641,316 | 51.4 | % | |||||||||||||||||||||
2012 | 345,776 | — | — | 345,776 | — | — | % | 278,673 | 80.6 | % | ||||||||||||||||||||||
$ | 6,543,434 | $ | 4,204,347 | $ | 5,375,343 | $ | 5,620,595 | $ | 922,839 | 14.9 | % | $ | 1,184,258 | 21.1 | % | |||||||||||||||||
(in thousands, except percentages) | Ultimate Claims and Claim Expenses at December 31, 2012 | $ Impact of Change on Ultimate Claims and Claim Expenses at December 31, 2012 | % Impact of Change on Reserve for Claims and Claim Expenses at December 31, 2012 | % Impact of Change on Net Income for the Year Ended December 31, 2012 | % Impact of Change on Shareholders' Equity at December 31, 2012 | |||||||||||||
Higher | $ | 6,205,941 | $ | 585,346 | 31.1 | % | (78.2 | )% | (16.7 | )% | ||||||||
Recorded | 5,620,595 | — | — | % | — | % | — | % | ||||||||||
Lower | $ | 5,035,249 | $ | (585,346 | ) | (31.1 | )% | 78.2 | % | 16.7 | % | |||||||
Year ended December 31, 2012 | Specialty Reinsurance Unit | ||||
Catastrophe claims and claim expenses | |||||
Large catastrophe events | |||||
Hurricanes Katrina, Rita and Wilma (2005) | $ | 3,000 | |||
�� | Total catastrophe claims and claim expenses | $ | 3,000 | ||
Attritional claims and claim expenses | |||||
Bornhuetter-Ferguson actuarial method - actual reported claims less than expected claims | $ | 16,747 | |||
Actuarial assumption changes | 14,399 | ||||
Total attritional claims and claim expenses | $ | 31,146 | |||
Total favorable development of prior accident years claims and claim expenses | $ | 34,146 | |||
Year ended December 31, 2011 | Specialty Reinsurance Unit | ||||
(in thousands) | |||||
Catastrophe claims and claim expenses | |||||
Hurricanes Katrina, Rita and Wilma (2005) | $ | 6,215 | |||
Chilean Earthquake (2010) | 4,688 | ||||
Tropical Cyclone Tasha (2010) | 3,000 | ||||
Total catastrophe claims and claim expenses | $ | 13,903 | |||
Attritional claims and claim expenses | |||||
Bornhuetter-Ferguson actuarial method - actual reported claims less than expected claims | $ | 37,058 | |||
Actuarial assumption changes | 26,800 | ||||
Total attritional claims and claim expenses | $ | 63,858 | |||
Total favorable development of prior accident years claims and claim expenses | $ | 77,761 | |||
Year ended December 31, 2010 | Specialty Reinsurance Unit | ||||
(in thousands) | |||||
Catastrophe claims and claim expenses | |||||
Large catastrophe events | |||||
Hurricanes Katrina, Rita and Wilma (2005) | $ | 5,350 | |||
Buncefield Oil Depot (2005) | 2,073 | ||||
Total catastrophe claims and claim expenses | $ | 7,423 | |||
Attritional claims and claim expenses | |||||
Bornhuetter-Ferguson actuarial method - actual reported claims less than expected claims | $ | 71,261 | |||
Actuarial assumption changes | 31,400 | ||||
Reductions in specific events | 18,477 | ||||
Total attritional claims and claim expenses | $ | 121,138 | |||
Total favorable development of prior accident years claims and claim expenses | $ | 128,561 | |||
Estimated Ultimate Claims and Claim Expenses Ratio | ||||||||||
Underwriting Year | Initial Estimate | Re-estimate at | ||||||||
December 31, 2010 | December 31, 2011 | December 31, 2012 | ||||||||
2002 | 77.2% | 21.5% | 20.5% | 19.6% | ||||||
2003 | 76.8% | 28.1% | 26.2% | 25.3% | ||||||
2004 | 78.2% | 40.1% | 36.9% | 37.0% | ||||||
2005 | 78.2% | 31.6% | 29.1% | 28.1% | ||||||
2006 | 76.6% | 36.9% | 31.7% | 29.8% | ||||||
2007 | 62.9% | 55.5% | 55.6% | 56.1% | ||||||
2008 | 57.9% | 77.1% | 74.9% | 63.9% | ||||||
2009 | 68.6% | 50.9% | 38.0% | 35.8% | ||||||
2010 | 57.7% | 84.1% | 67.1% | 60.8% | ||||||
2011 | 56.8% | —% | 73.0% | 61.4% | ||||||
2012 | 55.3% | —% | —% | 88.1% | ||||||
(in thousands,except percentages) | Estimated Loss Reporting Pattern | $ Impact of Change on Reserves for Claims and Claim Expenses at December 31, 2012 | % Impact of Change on Reserve for Claims and Claim Expenses at December 31, 2012 | % Impact of Change on Net Income for the Year Ended December 31, 2012 | % Impact of Change on Shareholders' Equity at December 31, 2012 | |||||||||||
Increase expected claims and claim expense ratio by 25% | Slower reporting | $ | 153,397 | 8.2 | % | (20.5 | )% | (4.4 | )% | |||||||
Increase expected claims and claim expense ratio by 25% | Expected reporting | 71,455 | 3.8 | % | (9.5 | )% | (2.0 | )% | ||||||||
Increase expected claims and claim expense ratio by 25% | Faster reporting | 2,404 | 0.1 | % | (0.3 | )% | (0.1 | )% | ||||||||
Expected claims and claim expense ratio | Slower reporting | 65,554 | 3.5 | % | (8.8 | )% | (1.9 | )% | ||||||||
Expected claims and claim expense ratio | Expected reporting | — | — | % | — | % | — | % | ||||||||
Expected claims and claim expense ratio | Faster reporting | (55,240 | ) | (2.9 | )% | 7.4 | % | 1.6 | % | |||||||
Decrease expected claims and claim expense ratio by 25% | Slower reporting | (22,289 | ) | (1.2 | )% | 3.0 | % | 0.6 | % | |||||||
Decrease expected claims and claim expense ratio by 25% | Expected reporting | (71,455 | ) | (3.8 | )% | 9.5 | % | 2.0 | % | |||||||
Decrease expected claims and claim expense ratio by 25% | Faster reporting | (112,885 | ) | (6.0 | )% | 15.1 | % | 3.2 | % | |||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
Attritional claims and claim expenses | $ | 8,011 | $ | (478 | ) | $ | 197 | ||||||
Catastrophe events - property catastrophe reinsurance | 5,726 | — | — | ||||||||||
Catastrophe events - other | 3,750 | — | — | ||||||||||
Actuarial assumption changes | (1,285 | ) | — | — | |||||||||
Total | $ | 16,202 | $ | (478 | ) | $ | 197 | ||||||
(in thousands, except percentages) | ||||||||||||||||||||||||||||||||
Accident Year | Initial Estimate of Accident Year Claims and Claim Expenses | Re-estimated Claims and Claim Expenses as of December 31, | Cumulative Favorable (Adverse) Development | % Decrease (Increase) from Initial Ultimate | Claims and Claim Expense Reserves at December 31, 2012 | % of Claims and Claim Expenses Unpaid at December 31, 2011 | ||||||||||||||||||||||||||
2010 | 2011 | 2012 | ||||||||||||||||||||||||||||||
2010 | $ | 5,277 | $ | 5,277 | $ | 5,986 | $ | 6,310 | $ | (1,033 | ) | (19.6 | )% | $ | 6,310 | 100.0 | % | |||||||||||||||
2011 | 30,121 | — | 30,121 | 24,037 | 6,084 | 20.2 | % | 8,256 | 34.3 | % | ||||||||||||||||||||||
2012 | 10,957 | — | — | 10,957 | — | — | % | 9,355 | 85.4 | % | ||||||||||||||||||||||
$ | 46,355 | $ | 5,277 | $ | 36,107 | $ | 41,304 | $ | 5,051 | 14.3 | % | $ | 23,921 | 57.9 | % | |||||||||||||||||
Estimated Ultimate Claims and Claim Expenses Ratio | |||||||||||
Underwriting Year | Initial Estimate | Re-estimate at | |||||||||
December 31, 2010 | December 31, 2011 | December 31, 2012 | |||||||||
2010 | 63.3% | 62.7% | 56.5% | 53.5 | % | ||||||
2011 | 66.0% | —% | 83.0% | 60.6 | % | ||||||
2012 | 58.4% | —% | —% | 87.4 | % | ||||||
(in thousands, except percentages) | Ultimate Claims and Claim Expenses at December 31, 2012 | $ Impact of Change on Ultimate Claims and Claim Expenses at December 31, 2012 | % Impact of Change on Reserve for Claims and Claim Expenses at December 31, 2012 | % Impact of Change on Net Income for the Year Ended December 31, 2012 | % Impact of Change on Shareholders' Equity at December 31, 2012 | |||||||||||||
Higher | $ | 51,608 | $ | 10,304 | 0.5 | % | (1.4 | )% | (0.3 | )% | ||||||||
Recorded | 41,304 | — | — | % | — | % | — | % | ||||||||||
Lower | $ | 31,000 | $ | (10,304 | ) | (0.5 | )% | 1.4 | % | 0.3 | % | |||||||
(in thousands,except percentages) | Estimated Loss Reporting Pattern | $ Impact of Change on Reserves for Claims and Claim Expenses at December 31, 2012 | % Impact of Change on Reserves for Claims and Claim Expenses at December 31, 2012 | % Impact of Change on Net Income for the Year Ended December 31, 2012 | % Impact of Change on Shareholders' Equity at December 31, 2012 | |||||||||||
Increase expected claims and claim expense ratio by 25% | Slower reporting | $ | 45,302 | 2.4 | % | (6.0 | )% | (1.3 | )% | |||||||
Increase expected claims and claim expense ratio by 25% | Expected reporting | 22,761 | 1.2 | % | (3.0 | )% | (0.6 | )% | ||||||||
Increase expected claims and claim expense ratio by 25% | Faster reporting | (7,138 | ) | (0.4 | )% | 1.0 | % | 0.2 | % | |||||||
Expected claims and claim expense ratio | Slower reporting | 18,033 | 1.0 | % | (2.4 | )% | (0.5 | )% | ||||||||
Expected claims and claim expense ratio | Expected reporting | — | — | % | — | % | — | % | ||||||||
Expected claims and claim expense ratio | Faster reporting | (23,919 | ) | (1.3 | )% | 3.2 | % | 0.7 | % | |||||||
Decrease expected claims and claim expense ratio by 25% | Slower reporting | (9,236 | ) | (0.5 | )% | 1.2 | % | 0.3 | % | |||||||
Decrease expected claims and claim expense ratio by 25% | Expected reporting | (22,761 | ) | (1.2 | )% | 3.0 | % | 0.6 | % | |||||||
Decrease expected claims and claim expense ratio by 25% | Faster reporting | (40,700 | ) | (2.2 | )% | 5.4 | % | 1.2 | % | |||||||
2012 | 2011 | 2010 | |||||||||||
Catastrophe events | $ | 1,171 | $ | 4,243 | $ | 300 | |||||||
Attritional claims and claim expenses | 3,265 | 1,389 | 15,615 | ||||||||||
Loss portfolio transfer | (7,383 | ) | — | — | |||||||||
Actuarial assumption changes | — | (10,063 | ) | — | |||||||||
Total | $ | (2,947 | ) | $ | (4,431 | ) | $ | 15,915 | |||||
Estimated Ultimate Claims and Claim Expenses Ratio | ||||||||||
Underwriting Year | Initial Estimate | Re-estimate at | ||||||||
December 31, 2010 | December 31, 2011 | December 31, 2012 | ||||||||
2003 | 55.3% | 30.6% | 32.6% | 32.8% | ||||||
2004 | 50.2% | 45.1% | 45.6% | 46.3% | ||||||
2005 | 45.0% | 46.5% | 46.5% | 45.8% | ||||||
2006 | 47.4% | 36.6% | 40.6% | 40.6% | ||||||
2007 | 45.7% | 24.3% | 24.7% | 24.8% | ||||||
2008 | 46.0% | 68.0% | 64.4% | 63.2% | ||||||
2009 | 53.0% | 66.7% | 61.5% | 63.1% | ||||||
2010 | 57.9% | 129.5% | 68.9% | 64.8% | ||||||
2011 | —% | —% | —% | —% | ||||||
2012 | —% | —% | —% | —% | ||||||
(in thousands, except percentages) | Re-estimated Claims and Claim Expenses at | |||||||||||||||||||||||||||||||
Events (Accident Year) | Initial Estimate of Accident Year Claims and Claim Expenses | December 31, 2010 | December 31, 2011 | December 31, 2012 | Cumulative Favorable (Adverse) Development | % Decrease (Increase) from Initial Estimate | Claims and Claim Expense Reserves at December 31, 2012 | % of Claims and Claim Expenses Unpaid at December 31, 2012 | ||||||||||||||||||||||||
Charley, Frances, Ivan and Jeanne (2004) | $ | 210,323 | $ | 249,949 | $ | 249,456 | $ | 249,500 | $ | (39,177 | ) | (18.6 | )% | $ | 585 | 0.2 | % | |||||||||||||||
Katrina, Rita and Wilma (2005) | 311,312 | 297,596 | 293,477 | 296,801 | 14,511 | 4.7 | % | 5,278 | 1.8 | % | ||||||||||||||||||||||
Gustav and Ike (2008) | 19,258 | 19,849 | 18,500 | 18,500 | 758 | 3.9 | % | 5,949 | 32.2 | % | ||||||||||||||||||||||
$ | 540,893 | $ | 567,394 | $ | 561,433 | $ | 564,801 | $ | (23,908 | ) | (4.4 | )% | $ | 11,812 | 2.1 | % | ||||||||||||||||
(in thousands,except percentages) | Estimated Loss Reporting Pattern | $ Impact of Change on Reserves for Claims and Claim Expenses at December 31, 2012 | % Impact of Change on Reserves for Claims and Claim Expenses at December 31, 2012 | % Impact of Change on Net Income for the Year Ended December 31, 2012 | % Impact of Change on Shareholders' Equity at December 31, 2012 | |||||||||||
Increase expected claims and claim expense ratio by 25% | Slower reporting | $ | 27,914 | 1.5 | % | (3.7 | )% | (0.8 | )% | |||||||
Increase expected claims and claim expense ratio by 25% | Expected reporting | 10,450 | 0.6 | % | (1.4 | )% | (0.3 | )% | ||||||||
Increase expected claims and claim expense ratio by 25% | Faster reporting | (1,541 | ) | (0.1 | )% | 0.2 | % | — | % | |||||||
Expected claims and claim expense ratio | Slower reporting | 13,971 | 0.7 | % | (1.9 | )% | (0.4 | )% | ||||||||
Expected claims and claim expense ratio | Expected reporting | — | — | % | — | % | — | % | ||||||||
Expected claims and claim expense ratio | Faster reporting | (9,592 | ) | (0.5 | )% | 1.3 | % | 0.3 | % | |||||||
Decrease expected claims and claim expense ratio by 25% | Slower reporting | 29 | — | % | — | % | — | % | ||||||||
Decrease expected claims and claim expense ratio by 25% | Expected reporting | (10,450 | ) | (0.6 | )% | 1.4 | % | 0.3 | % | |||||||
Decrease expected claims and claim expense ratio by 25% | Faster reporting | (17,644 | ) | (0.9 | )% | 2.4 | % | 0.5 | % | |||||||
• | Fair values determined by Level 1 inputs utilize unadjusted quoted prices obtained from active markets for identical assets or liabilities for which we have access. The fair value is determined by multiplying the quoted price by the quantity held by us; |
• | Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals, broker quotes and certain pricing indices; and |
• | Level 3 inputs are based all or in part on significant unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In these cases, significant management assumptions can be used to establish management's best estimate of the assumptions used by other market participants in determining the fair value of the asset or liability. |
At December 31, 2012 | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Fixed maturity investments | |||||||||||||||||
U.S. treasuries | $ | 1,259,800 | $ | 1,259,800 | $ | — | $ | — | |||||||||
Agencies | 315,154 | — | 315,154 | — | |||||||||||||
Non-U.S. government (Sovereign debt) | 133,198 | — | 133,198 | — | |||||||||||||
Non-U.S. government-backed corporate | 349,514 | — | 349,514 | — | |||||||||||||
Corporate | 1,615,207 | — | 1,587,415 | 27,792 | |||||||||||||
Agency mortgage-backed | 408,531 | — | 408,531 | — | |||||||||||||
Non-agency mortgage-backed | 248,339 | — | 248,339 | — | |||||||||||||
Commercial mortgage-backed | 406,166 | — | 406,166 | — | |||||||||||||
Asset-backed | 12,954 | — | 12,954 | — | |||||||||||||
Total fixed maturity investments | 4,748,863 | 1,259,800 | 3,461,271 | 27,792 | |||||||||||||
Short term investments | 821,163 | — | 821,163 | — | |||||||||||||
Equity investments trading | 58,186 | 58,186 | — | — | |||||||||||||
Other investments | |||||||||||||||||
Private equity partnerships | 344,669 | — | — | 344,669 | |||||||||||||
Senior secured bank loan funds | 202,929 | — | 172,334 | 30,595 | |||||||||||||
Catastrophe bonds | 91,310 | — | 91,310 | — | |||||||||||||
Hedge funds | 5,803 | — | — | 5,803 | |||||||||||||
Total other investments | 644,711 | — | 263,644 | 381,067 | |||||||||||||
Other assets and (liabilities) | |||||||||||||||||
Assumed and ceded (re)insurance contracts | 2,647 | — | — | 2,647 | |||||||||||||
Derivatives (1) | 19,123 | (125 | ) | 14,821 | 4,427 | ||||||||||||
Other | 7,315 | — | (11,551 | ) | 18,866 | ||||||||||||
Total other assets and (liabilities) | 29,085 | (125 | ) | 3,270 | 25,940 | ||||||||||||
$ | 6,302,008 | $ | 1,317,861 | $ | 4,549,348 | $ | 434,799 | ||||||||||
(1) | See "Note 19. Derivative Instruments in our Notes to Consolidated Financial Statements" for additional information related to the fair value by type of contract, of derivatives entered into by us. |
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
(in thousands, except per share amounts and percentages) | |||||||||||||
Statements of operations highlights | |||||||||||||
Gross premiums written | $ | 1,551,591 | $ | 1,434,976 | $ | 1,165,295 | |||||||
Net premiums written | 1,102,657 | 1,012,773 | 848,965 | ||||||||||
Net premiums earned | 1,069,355 | 951,049 | 864,921 | ||||||||||
Net claims and claim expenses incurred | 325,211 | 861,179 | 129,345 | ||||||||||
Underwriting income (loss) | 451,301 | (177,172 | ) | 474,573 | |||||||||
Net investment income | 167,375 | 118,000 | 203,955 | ||||||||||
Net realized and unrealized gains on investments | 163,991 | 70,668 | 144,444 | ||||||||||
Income (loss) from continuing operations | 746,662 | (74,502 | ) | 798,482 | |||||||||
Income (loss) from discontinued operations | 2,287 | (15,890 | ) | 62,670 | |||||||||
Net income (loss) | 748,949 | (90,392 | ) | 861,152 | |||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | 566,014 | (92,235 | ) | 702,613 | |||||||||
Income (loss) from continuing operations available (attributable) to RenaissanceRe common shareholders per common share – diluted | $ | 11.18 | $ | (1.53 | ) | $ | 11.18 | ||||||
Income (loss) from discontinued operations per common share – diluted | 0.05 | (0.31 | ) | 1.13 | |||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – diluted | $ | 11.23 | $ | (1.84 | ) | $ | 12.31 | ||||||
Dividends per common share | $ | 1.08 | $ | 1.04 | $ | 1.00 | |||||||
Key ratios | |||||||||||||
Net claims and claim expense ratio – current accident year | 45.2 | % | 104.4 | % | 49.9 | % | |||||||
Net claims and claim expense ratio – prior accident years | (14.8 | )% | (13.8 | )% | (34.9 | )% | |||||||
Net claims and claim expense ratio – calendar year | 30.4 | % | 90.6 | % | 15.0 | % | |||||||
Underwriting expense ratio | 27.4 | % | 28.0 | % | 30.1 | % | |||||||
Combined ratio | 57.8 | % | 118.6 | % | 45.1 | % | |||||||
Return on average common equity | 17.7 | % | (3.0 | )% | 21.7 | % | |||||||
Book value | December 31, 2012 | December 31, 2011 | December 31, 2010 | ||||||||||
Book value per common share | $ | 68.14 | $ | 59.27 | $ | 62.58 | |||||||
Accumulated dividends per common share | 12.00 | 10.92 | 9.88 | ||||||||||
Book value per common share plus accumulated dividends | $ | 80.14 | $ | 70.19 | $ | 72.46 | |||||||
Change in book value per common share plus change in accumulated dividends | 16.8 | % | (3.6 | )% | 23.0 | % | |||||||
Balance sheet highlights | December 31, 2012 | December 31, 2011 | December 31, 2010 | ||||||||||
Total assets | $ | 7,928,628 | $ | 7,744,912 | $ | 8,138,278 | |||||||
Total shareholders' equity attributable to RenaissanceRe | $ | 3,503,065 | $ | 3,605,193 | $ | 3,936,325 | |||||||
• | Increased Gross Premiums Written - gross premiums written increased $116.6 million, or 8.1%, to $1,551.6 million. Excluding the impact of $20.1 million and $160.3 million of net reinstatement premiums written from large losses in 2012 and 2011, respectively, gross premiums written increased $256.8 million, or 20.1% for the year, due to a combination of improved pricing during the 2012 renewals within our core markets, and continued growth across most lines of business within our specialty unit and Lloyd's segment; |
• | Significantly Improved Underwriting Results - underwriting income of $451.3 million and a combined ratio of 57.8% in 2012, compared to an underwriting loss of $177.2 million and a combined ratio of 118.6% in 2011, was positively impacted by the increase in gross premiums written, noted above, and a decrease in net claims and claim expenses of $536.0 million due to significantly lower insured losses with respect of large events. Included in underwriting income for 2012 was $149.1 million and $26.3 million of underwriting losses related to storm Sandy and hurricane Isaac, respectively, which added a total of 19.0 percentage points to our 2012 combined ratio. In 2011, a number of large losses, namely the 2011 New Zealand and Tohoku earthquakes, the large U.S. tornadoes, the Australian floods, losses arising from aggregate contracts, hurricane Irene and the Thailand floods (collectively referred to as the "2011 Large Losses") resulted in $725.2 million of underwriting losses and added 85.4 percentage points to the Company's combined ratio, as detailed in the table below; |
• | Higher Investment Results - our net investment income and net realized and unrealized gains on investments increased $49.4 million and $93.3 million, respectively, in 2012, compared to 2011, primarily due to higher total returns in our fixed maturity investments portfolio as a result of the significant tightening of credit spreads combined with higher average invested assets and improved valuations in our portfolio of other investments, specifically our senior secured bank loan funds; |
• | Equity in Earnings of Other Ventures - our equity in earnings of other ventures improved to earnings of $23.2 million in 2012, compared to a loss of $36.5 million in 2011. The $59.8 million improvement is primarily due to our equity investment in Top Layer Re which generated income of $20.8 million in 2012, compared to a loss of $37.5 million in 2011, an improvement of $58.3 million, principally due to the absence of large losses during 2012, compared to claims and claim expenses incurred in 2011 in Top Layer Re related to the 2011 New Zealand and Tohoku earthquakes; and partially offset by |
• | Other Loss - our other loss deteriorated $22.2 million to a loss of $22.9 million in 2012, compared to a loss of $0.7 million in 2011, primarily the result of ceded reinsurance contracts accounted for at fair value which incurred a loss of $4.6 million in 2012, compared to income of $37.4 million in 2011, due to net recoverables on the Tohoku earthquake in the first quarter of 2011 which did not reoccur in 2012 and partially offset by $20.8 million of trading losses within the Company's weather and energy risk management operations, compared to trading losses of $45.0 million in 2011; and |
• | Net (Income) Loss Attributable to Redeemable Noncontrolling Interest - DaVinciRe - our net income attributable to redeemable noncontrolling interest - DaVinciRe was $147.5 million in 2012, compared to net loss attributable to redeemable noncontrolling interest - DaVinciRe of $33.7 million in 2011, a change of $181.2 million, principally due to a significant improvement in underwriting income as a result of the decrease in current accident year net claims and claim expenses and higher investment results, as noted above, which also impacted DaVinciRe, and together resulted in net income of $212.5 million for DaVinciRe in 2012, compared to net loss of $61.3 million for DaVinciRe in 2011. In addition, our ownership in DaVinciRe decreased from 42.8% at December 31, 2011 to 30.8% at December 31, 2012, consequently increasing redeemable noncontrolling interest - DaVinciRe. |
• | Significant Catastrophe Events and Corresponding Underwriting Losses - our underwriting loss of $177.2 million in 2011 deteriorated $651.7 million from underwriting income of $474.6 million in 2010, primarily due to $725.2 million of underwriting losses as a result of a number of large losses, namely the 2011 Large Losses, and resulted in $559.5 million of net negative impact, compared to $211.7 million of net negative impact from the large losses of 2010, an increase of $347.9 million, as detailed below; |
• | Lower Favorable Development on Prior Years Claims and Claim Expenses - favorable development on prior years claims and claim expenses decreased $170.1 million to $132.0 million in 2011, compared to $302.1 million in 2010, and was comprised primarily of $136.9 million related to our Reinsurance segment, as detailed below; |
• | Lower Investment Results - net investment income and net realized and unrealized gains on investments deteriorated $86.0 million and $73.8 million, respectively, compared to 2010. The decrease in our investment results was primarily due to lower total returns on the fixed maturity investments portfolio, a decrease in the returns from our hedge fund and private equity investments due to relatively weaker performance, and lower returns on certain non-investment grade allocations included in other investments; |
• | Other (Loss) Income - our other (loss) income deteriorated $41.8 million to a loss of $0.7 million in 2011, compared to income of $41.1 million in 2010, primarily the result of $45.0 million of trading losses within the Company's weather and energy risk management operations due to the unusually warm weather experienced in the United Kingdom and certain parts of the the United States during the fourth quarter of 2011, compared to trading income of $8.1 million in 2010, more than offsetting our ceded reinsurance contracts accounted for at fair value which generated $37.4 million in income in 2011, compared to $5.2 million in 2010, principally as a result of net recoverables from the Tohoku earthquake; |
• | Equity in Losses of Other Ventures - our equity in losses of other ventures deteriorated to a loss of $36.5 million in 2011, compared to a loss of $11.8 million in 2010. The decrease is primarily due to our equity investment in Top Layer Re which incurred a loss of $37.5 million in 2011, compared to a loss of $12.1 million in 2010, a deterioration of $25.4 million, principally due to current accident year claims and claim expenses in Top Layer Re related to the 2011 New Zealand earthquake and the Tohoku earthquake; |
• | Loss from Discontinued Operations - our loss from discontinued operations is $15.9 million in 2011, compared to income from discontinued operations of $62.7 million in 2010, and is primarily due to certain tax related adjustments and the recognition of a $10.0 million expense related to a contractually agreed obligation to pay, or otherwise reimburse, QBE for amounts up to $10.0 million in respect of net adverse development on prior accident years net claims and claims expenses for reserves that were sold to QBE. Income from discontinued operations in 2010 is primarily due to underwriting income of $57.0 million which was principally attributable to strong underwriting results for the 2010 crop year; and partially offset by |
• | Net Loss Attributable to Redeemable Noncontrolling Interest - DaVinciRe - our net loss attributable to redeemable noncontrolling interest - DaVinciRe was $33.7 million in 2011, compared to net income attributable to redeemable noncontrolling interest - DaVinciRe of $116.5 million in 2010, a change of $150.2 million, and principally due to a significant reduction in underwriting income, due to the increase in current accident year net claims and claim expenses, combined with lower investment results, as noted above, which also impacted DaVinciRe and together resulted in a net loss for 2011, compared to net income in 2010, and consequently decreased redeemable noncontrolling interest - DaVinciRe. |
Year ended December 31, 2012 | Hurricane Isaac | Storm Sandy | Total | ||||||||||
(in thousands, except percentages) | |||||||||||||
Net claims and claim expenses incurred | $ | (33,185 | ) | $ | (187,944 | ) | $ | (221,129 | ) | ||||
Reinstatement premiums earned | 8,863 | 37,437 | 46,300 | ||||||||||
Ceded reinstatement premiums earned | — | (385 | ) | (385 | ) | ||||||||
Lost profit commissions | (2,016 | ) | 1,771 | (245 | ) | ||||||||
Net negative impact on underwriting result | (26,338 | ) | (149,121 | ) | (175,459 | ) | |||||||
Redeemable noncontrolling interest - DaVinciRe | 8,925 | 22,160 | 31,085 | ||||||||||
Net negative impact | $ | (17,413 | ) | $ | (126,961 | ) | $ | (144,374 | ) | ||||
Percentage point impact on consolidated combined ratio | 2.8 | 16.0 | 19.0 | ||||||||||
Net negative impact on Reinsurance segment underwriting result | $ | (25,857 | ) | $ | (132,061 | ) | $ | (157,918 | ) | ||||
Net negative impact on Lloyd's segment underwriting result | (481 | ) | (17,060 | ) | (17,541 | ) | |||||||
Net negative impact on underwriting result | $ | (26,338 | ) | $ | (149,121 | ) | $ | (175,459 | ) | ||||
2011 Large Losses | |||||||||||||||||||||||||||||||||
Year ended December 31, 2011 | 2011 New Zealand Earthquake | Tohoku Earthquake | Australian Floods | Large U.S. Tornadoes | Aggregate Contracts | Hurricane Irene | Thailand Floods | Total | |||||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||||||||||
Net claims and claim expenses incurred | $ | (273,596 | ) | $ | (284,348 | ) | $ | (12,273 | ) | $ | (135,090 | ) | $ | (33,080 | ) | $ | (32,530 | ) | $ | (76,437 | ) | $ | (847,354 | ) | |||||||||
Assumed reinstatement premiums earned | 49,878 | 60,914 | 1,694 | 23,273 | 1,524 | 5,874 | 17,144 | 160,301 | |||||||||||||||||||||||||
Ceded reinstatement premiums earned | (3,542 | ) | (26,004 | ) | — | — | — | — | — | (29,546 | ) | ||||||||||||||||||||||
Lost profit commissions | (7,522 | ) | (331 | ) | (348 | ) | (151 | ) | — | — | (245 | ) | (8,597 | ) | |||||||||||||||||||
Net negative impact on underwriting result | (234,782 | ) | (249,769 | ) | (10,927 | ) | (111,968 | ) | (31,556 | ) | (26,656 | ) | (59,538 | ) | (725,196 | ) | |||||||||||||||||
Equity in net claims and claim expenses of Top Layer Re | (23,757 | ) | (26,243 | ) | — | — | — | — | — | (50,000 | ) | ||||||||||||||||||||||
Recoveries from ceded reinsurance contracts accounted for at fair value | — | 45,000 | — | — | — | — | — | 45,000 | |||||||||||||||||||||||||
Redeemable noncontrolling interest - DaVinciRe | 55,748 | 53,669 | 1,182 | 32,941 | 4,944 | 7,698 | 14,474 | 170,656 | |||||||||||||||||||||||||
Net negative impact | $ | (202,791 | ) | $ | (177,343 | ) | $ | (9,745 | ) | $ | (79,027 | ) | $ | (26,612 | ) | $ | (18,958 | ) | $ | (45,064 | ) | $ | (559,540 | ) | |||||||||
Percentage point impact on consolidated combined ratio | 25.0 | 26.5 | 1.1 | 11.6 | 3.3 | 2.7 | 6.0 | 85.4 | |||||||||||||||||||||||||
Net negative impact on Reinsurance segment underwriting result | $ | (228,756 | ) | $ | (237,480 | ) | $ | (10,927 | ) | $ | (109,043 | ) | $ | (31,556 | ) | (24,156 | ) | (53,538 | ) | (695,456 | ) | ||||||||||||
Net negative impact on Lloyd's segment underwriting result | (6,026 | ) | (12,289 | ) | — | (2,925 | ) | — | (2,500 | ) | (6,000 | ) | (29,740 | ) | |||||||||||||||||||
Net negative impact on underwriting result | $ | (234,782 | ) | $ | (249,769 | ) | $ | (10,927 | ) | $ | (111,968 | ) | $ | (31,556 | ) | $ | (26,656 | ) | $ | (59,538 | ) | $ | (725,196 | ) | |||||||||
Reinsurance segment overview | |||||||||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
(in thousands, except percentages) | |||||||||||||
Gross premiums written (1) | $ | 1,392,094 | $ | 1,323,187 | $ | 1,123,619 | |||||||
Net premiums written | $ | 967,587 | $ | 913,499 | $ | 809,719 | |||||||
Net premiums earned | $ | 946,423 | $ | 873,088 | $ | 838,790 | |||||||
Net claims and claim expenses incurred | 242,022 | 783,704 | 113,804 | ||||||||||
Acquisition expenses | 90,491 | 82,978 | 77,954 | ||||||||||
Operational expenses | 132,935 | 131,251 | 129,990 | ||||||||||
Underwriting income (loss) | $ | 480,975 | $ | (124,845 | ) | $ | 517,042 | ||||||
Net claims and claim expenses incurred – current accident year | $ | 386,736 | $ | 920,602 | $ | 399,823 | |||||||
Net claims and claim expenses incurred – prior accident years | (144,714 | ) | (136,898 | ) | (286,019 | ) | |||||||
Net claims and claim expenses incurred – total | $ | 242,022 | $ | 783,704 | $ | 113,804 | |||||||
Net claims and claim expense ratio – current accident year | 40.9 | % | 105.4 | % | 47.7 | % | |||||||
Net claims and claim expense ratio – prior accident years | (15.3 | )% | (15.6 | )% | (34.1 | )% | |||||||
Net claims and claim expense ratio – calendar year | 25.6 | % | 89.8 | % | 13.6 | % | |||||||
Underwriting expense ratio | 23.6 | % | 24.5 | % | 24.8 | % | |||||||
Combined ratio | 49.2 | % | 114.3 | % | 38.4 | % | |||||||
(1) | Includes gross premiums written of $Nil assumed from the Other category for the year ended December 31, 2012 (2011 - $Nil, 2010 - $9.5 million). |
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
(in thousands) | |||||||||||||
Ceded premiums written – Reinsurance segment | $ | 424,507 | $ | 409,688 | $ | 313,900 | |||||||
Year ended December 31, 2012 | Hurricane Isaac | Storm Sandy | Total | ||||||||||
(in thousands, except percentages) | |||||||||||||
Net claims and claim expenses incurred | $ | (32,685 | ) | $ | (169,477 | ) | $ | (202,162 | ) | ||||
Reinstatement premiums earned | 8,844 | 36,030 | 44,874 | ||||||||||
Ceded reinstatement premiums earned | — | (385 | ) | (385 | ) | ||||||||
Lost profit commissions | (2,016 | ) | 1,771 | (245 | ) | ||||||||
Net negative impact on Reinsurance segment underwriting result | (25,857 | ) | (132,061 | ) | (157,918 | ) | |||||||
Percentage point impact on Reinsurance segment combined ratio | 3.3 | 16.5 | 20.0 | ||||||||||
Net negative impact on catastrophe unit underwriting result | $ | (25,857 | ) | $ | (121,061 | ) | $ | (146,918 | ) | ||||
Net negative impact on specialty unit underwriting result | — | (11,000 | ) | (11,000 | ) | ||||||||
Net negative impact on Reinsurance segment underwriting result | $ | (25,857 | ) | $ | (132,061 | ) | $ | (157,918 | ) | ||||
2011 Large Losses | |||||||||||||||||||||||||||||||||
Year ended December 31, 2011 | 2011 New Zealand Earthquake | Tohoku Earthquake | Australian Floods | Large U.S. Tornadoes | Aggregate Contracts | Hurricane Irene | Thailand Floods | Total | |||||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||||||||||
Net claims and claim expenses incurred | $ | (267,570 | ) | $ | (273,334 | ) | $ | (12,273 | ) | $ | (131,965 | ) | $ | (33,080 | ) | $ | (30,030 | ) | $ | (70,437 | ) | $ | (818,689 | ) | |||||||||
Assumed reinstatement premiums earned | 49,878 | 60,603 | 1,694 | 23,073 | 1,524 | 5,874 | 17,144 | 159,790 | |||||||||||||||||||||||||
Ceded reinstatement premiums earned | (3,542 | ) | (24,418 | ) | — | — | — | — | — | (27,960 | ) | ||||||||||||||||||||||
Lost profit commissions | (7,522 | ) | (331 | ) | (348 | ) | (151 | ) | — | — | (245 | ) | (8,597 | ) | |||||||||||||||||||
Net negative impact on Reinsurance segment underwriting result | $ | (228,756 | ) | $ | (237,480 | ) | $ | (10,927 | ) | $ | (109,043 | ) | $ | (31,556 | ) | $ | (24,156 | ) | $ | (53,538 | ) | $ | (695,456 | ) | |||||||||
Percentage point impact on Reinsurance segment combined ratio | 26.9 | 27.8 | 1.2 | 12.4 | 3.6 | 2.7 | 6.0 | 91.3 | |||||||||||||||||||||||||
Net negative impact on catastrophe unit underwriting result | $ | (222,256 | ) | $ | (229,980 | ) | $ | (4,927 | ) | $ | (109,043 | ) | $ | (31,556 | ) | $ | (24,156 | ) | $ | (47,538 | ) | $ | (669,456 | ) | |||||||||
Net negative impact on specialty unit underwriting result | (6,500 | ) | (7,500 | ) | (6,000 | ) | — | — | — | (6,000 | ) | (26,000 | ) | ||||||||||||||||||||
Net negative impact on Reinsurance segment underwriting result | $ | (228,756 | ) | $ | (237,480 | ) | $ | (10,927 | ) | $ | (109,043 | ) | $ | (31,556 | ) | $ | (24,156 | ) | $ | (53,538 | ) | $ | (695,456 | ) | |||||||||
Catastrophe unit overview | |||||||||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
(in thousands, except percentages) | |||||||||||||
Property catastrophe gross premiums written | |||||||||||||
Renaissance | $ | 733,963 | $ | 742,236 | $ | 630,080 | |||||||
DaVinci | 448,244 | 435,060 | 364,153 | ||||||||||
Total property catastrophe gross premiums written (1) | $ | 1,182,207 | $ | 1,177,296 | $ | 994,233 | |||||||
Net premiums written | $ | 766,035 | $ | 773,560 | $ | 685,393 | |||||||
Net premiums earned | $ | 781,738 | $ | 737,545 | $ | 721,419 | |||||||
Net claims and claim expenses incurred | 165,209 | 770,350 | 153,290 | ||||||||||
Acquisition expenses | 66,665 | 62,882 | 63,889 | ||||||||||
Operational expenses | 103,811 | 100,932 | 104,535 | ||||||||||
Underwriting income (loss) | $ | 446,053 | $ | (196,619 | ) | $ | 399,705 | ||||||
Net claims and claim expenses incurred – current accident year | $ | 275,777 | $ | 829,487 | $ | 310,748 | |||||||
Net claims and claim expenses incurred – prior accident years | (110,568 | ) | (59,137 | ) | (157,458 | ) | |||||||
Net claims and claim expenses incurred – total | $ | 165,209 | $ | 770,350 | $ | 153,290 | |||||||
Net claims and claim expense ratio – current accident year | 35.3 | % | 112.5 | % | 43.1 | % | |||||||
Net claims and claim expense ratio – prior accident years | (14.2 | )% | (8.1 | )% | (21.9 | )% | |||||||
Net claims and claim expense ratio – calendar year | 21.1 | % | 104.4 | % | 21.2 | % | |||||||
Underwriting expense ratio | 21.8 | % | 22.3 | % | 23.4 | % | |||||||
Combined ratio | 42.9 | % | 126.7 | % | 44.6 | % | |||||||
(1) | Includes gross premiums written of $Nil assumed from the Other category for the year ended December 31, 2012 (2011 - $Nil, 2010 - $9.5 million). |
Year ended December 31, 2012 | Hurricane Isaac | Storm Sandy | Total | ||||||||||
(in thousands, except percentages) | |||||||||||||
Net claims and claim expenses incurred | $ | (32,685 | ) | $ | (158,477 | ) | $ | (191,162 | ) | ||||
Reinstatement premiums earned | 8,844 | 36,030 | 44,874 | ||||||||||
Ceded reinstatement premiums earned | — | (385 | ) | (385 | ) | ||||||||
Lost profit commissions | (2,016 | ) | 1,771 | (245 | ) | ||||||||
Net negative impact on catastrophe unit underwriting result | $ | (25,857 | ) | $ | (121,061 | ) | $ | (146,918 | ) | ||||
Percentage point impact on catastrophe unit combined ratio | 4.8 | 21.0 | 23.3 | ||||||||||
2011 Large Losses | |||||||||||||||||||||||||||||||||
Year ended December 31, 2011 | 2011 New Zealand Earthquake | Tohoku Earthquake | Large U.S. Tornadoes | Australian Floods | Aggregate Contracts | Hurricane Irene | Thailand Floods | Total | |||||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||||||||||
Net claims and claim expenses incurred | $ | (261,070 | ) | $ | (265,834 | ) | $ | (131,965 | ) | $ | (6,273 | ) | $ | (33,080 | ) | $ | (30,030 | ) | $ | (64,437 | ) | $ | (792,689 | ) | |||||||||
Assumed reinstatement premiums earned | 49,878 | 60,603 | 23,073 | 1,694 | 1,524 | 5,874 | 17,144 | 159,790 | |||||||||||||||||||||||||
Ceded reinstatement premiums earned | (3,542 | ) | (24,418 | ) | — | — | — | — | — | (27,960 | ) | ||||||||||||||||||||||
Lost profit commissions | (7,522 | ) | (331 | ) | (151 | ) | (348 | ) | — | — | (245 | ) | (8,597 | ) | |||||||||||||||||||
Net negative impact on catastrophe unit underwriting result | $ | (222,256 | ) | $ | (229,980 | ) | $ | (109,043 | ) | $ | (4,927 | ) | $ | (31,556 | ) | $ | (24,156 | ) | $ | (47,538 | ) | $ | (669,456 | ) | |||||||||
Percentage point impact on catastrophe unit combined ratio | 30.4 | 31.5 | 14.4 | 0.6 | 4.3 | 3.1 | 6.0 | 104.8 | |||||||||||||||||||||||||
Specialty unit overview | |||||||||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
(in thousands, except percentages) | |||||||||||||
Specialty gross premiums written | |||||||||||||
Renaissance | $ | 207,387 | $ | 144,192 | $ | 126,848 | |||||||
DaVinci | 2,500 | 1,699 | 2,538 | ||||||||||
Total specialty gross premiums written | $ | 209,887 | $ | 145,891 | $ | 129,386 | |||||||
Net premiums written | $ | 201,552 | $ | 139,939 | $ | 124,326 | |||||||
Net premiums earned | $ | 164,685 | $ | 135,543 | $ | 117,371 | |||||||
Net claims and claim expenses incurred | 76,813 | 13,354 | (39,486 | ) | |||||||||
Acquisition expenses | 23,826 | 20,096 | 14,065 | ||||||||||
Operational expenses | 29,124 | 30,319 | 25,455 | ||||||||||
Underwriting income | $ | 34,922 | $ | 71,774 | $ | 117,337 | |||||||
Net claims and claim expenses incurred – current accident year | $ | 110,959 | $ | 91,115 | $ | 89,075 | |||||||
Net claims and claim expenses incurred – prior accident years | (34,146 | ) | (77,761 | ) | (128,561 | ) | |||||||
Net claims and claim expenses incurred – total | $ | 76,813 | $ | 13,354 | $ | (39,486 | ) | ||||||
Net claims and claim expense ratio – current accident year | 67.4 | % | 67.2 | % | 75.9 | % | |||||||
Net claims and claim expense ratio – prior accident years | (20.8 | )% | (57.3 | )% | (109.5 | )% | |||||||
Net claims and claim expense ratio – calendar year | 46.6 | % | 9.9 | % | (33.6 | )% | |||||||
Underwriting expense ratio | 32.2 | % | 37.1 | % | 33.6 | % | |||||||
Combined ratio | 78.8 | % | 47.0 | % | — | % | |||||||
Lloyd's segment overview | |||||||||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
(in thousands, except percentages) | |||||||||||||
Lloyd's gross premiums written | |||||||||||||
Specialty | $ | 123,099 | $ | 83,641 | $ | 34,065 | |||||||
Catastrophe | 36,888 | 27,943 | 14,724 | ||||||||||
Insurance | — | — | 17,420 | ||||||||||
Total Lloyd's gross premiums written (1) | $ | 159,987 | $ | 111,584 | $ | 66,209 | |||||||
Net premiums written | $ | 135,131 | $ | 98,617 | $ | 61,189 | |||||||
Net premiums earned | $ | 122,968 | $ | 76,386 | $ | 50,204 | |||||||
Net claims and claim expenses incurred | 80,242 | 73,259 | 25,676 | ||||||||||
Acquisition expenses | 22,864 | 14,031 | 10,784 | ||||||||||
Operational expenses | 45,680 | 36,732 | 24,837 | ||||||||||
Underwriting loss | $ | (25,818 | ) | $ | (47,636 | ) | $ | (11,093 | ) | ||||
Net claims and claim expenses incurred – current accident year | $ | 96,444 | $ | 72,781 | $ | 25,873 | |||||||
Net claims and claim expenses incurred – prior accident years | (16,202 | ) | 478 | (197 | ) | ||||||||
Net claims and claim expenses incurred – total | $ | 80,242 | $ | 73,259 | $ | 25,676 | |||||||
Net claims and claim expense ratio – current accident year | 78.4 | % | 95.3 | % | 51.5 | % | |||||||
Net claims and claim expense ratio – prior accident years | (13.1 | )% | 0.6 | % | (0.4 | )% | |||||||
Net claims and claim expense ratio – calendar year | 65.3 | % | 95.9 | % | 51.1 | % | |||||||
Underwriting expense ratio | 55.7 | % | 66.5 | % | 71.0 | % | |||||||
Combined ratio | 121.0 | % | 162.4 | % | 122.1 | % | |||||||
(1) | Includes gross premiums written of $Nil and $0.5 million assumed from the Other category and Reinsurance segment, respectively, for the year ended December 31, 2012 (2011 - $Nil and $0.1 million, 2010 - $17.4 million and $0.2 million, respectively). |
2011 Large Losses | |||||||||||||||||||||||||
Year ended December 31, 2011 | 2011 New Zealand Earthquake | Tohoku Earthquake | Large U.S. Tornadoes | Hurricane Irene | Thailand Floods | Total | |||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||
Net claims and claim expenses incurred | $ | (6,026 | ) | $ | (11,014 | ) | $ | (3,125 | ) | $ | (2,500 | ) | $ | (6,000 | ) | $ | (28,665 | ) | |||||||
Assumed reinstatement premiums earned | — | 311 | 200 | — | — | 511 | |||||||||||||||||||
Ceded reinstatement premiums earned | — | (1,586 | ) | — | — | — | (1,586 | ) | |||||||||||||||||
Net negative impact on Lloyd's segment underwriting result | $ | (6,026 | ) | $ | (12,289 | ) | $ | (2,925 | ) | $ | (2,500 | ) | $ | (6,000 | ) | $ | (29,740 | ) | |||||||
Percentage point impact on Lloyd's segment combined ratio | 7.9 | 16.9 | 3.7 | 3.3 | 7.9 | 39.3 | |||||||||||||||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
(in thousands) | |||||||||||||
Underwriting loss | $ | (3,856 | ) | $ | (4,691 | ) | $ | (31,376 | ) | ||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
(in thousands) | |||||||||||||
Fixed maturity investments | $ | 102,476 | $ | 89,858 | $ | 108,195 | |||||||
Short term investments | 1,007 | 1,666 | 2,318 | ||||||||||
Equity investments trading | 1,086 | 471 | — | ||||||||||
Other investments | |||||||||||||
Hedge funds and private equity investments | 36,635 | 27,541 | 64,419 | ||||||||||
Other | 37,784 | 8,458 | 39,305 | ||||||||||
Cash and cash equivalents | 194 | 163 | 277 | ||||||||||
179,182 | 128,157 | 214,514 | |||||||||||
Investment expenses | (11,807 | ) | (10,157 | ) | (10,559 | ) | |||||||
Net investment income | $ | 167,375 | $ | 118,000 | $ | 203,955 | |||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
(in thousands) | |||||||||||||
Gross realized gains | $ | 97,787 | $ | 79,358 | $ | 138,814 | |||||||
Gross realized losses | (16,705 | ) | (30,659 | ) | (19,147 | ) | |||||||
Net realized gains on fixed maturity investments | 81,082 | 48,699 | 119,667 | ||||||||||
Net unrealized gains on fixed maturity investments trading | 75,283 | 19,404 | 24,777 | ||||||||||
Net unrealized gains on equity investments trading | 7,626 | 2,565 | — | ||||||||||
Net realized and unrealized gains on investments | $ | 163,991 | $ | 70,668 | $ | 144,444 | |||||||
Total other-than-temporary impairments | (395 | ) | (630 | ) | (831 | ) | |||||||
Portion recognized in other comprehensive income, before taxes | 52 | 78 | 2 | ||||||||||
Net other-than-temporary impairments | $ | (343 | ) | $ | (552 | ) | $ | (829 | ) | ||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
(in thousands) | |||||||||||||
Top Layer Re | $ | 20,792 | $ | (37,471 | ) | $ | (12,103 | ) | |||||
Tower Hill Companies | 4,965 | 2,923 | 1,151 | ||||||||||
Other | (2,519 | ) | (1,985 | ) | (862 | ) | |||||||
Total equity in earnings (losses) of other ventures | $ | 23,238 | $ | (36,533 | ) | $ | (11,814 | ) | |||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
(in thousands) | |||||||||||||
Gain on NBIC | $ | — | $ | 4,836 | $ | — | |||||||
Mark-to-market on Platinum warrant | — | 2,975 | 10,054 | ||||||||||
Gain on sale of ChannelRe | — | — | 15,835 | ||||||||||
Assumed and ceded reinsurance contracts accounted for as derivatives and deposits | (4,648 | ) | 37,414 | 5,214 | |||||||||
Weather and energy risk management operations | (20,785 | ) | (45,030 | ) | 8,149 | ||||||||
Other | 2,528 | (880 | ) | 1,868 | |||||||||
Total other (loss) income | $ | (22,905 | ) | $ | (685 | ) | $ | 41,120 | |||||
• | a $42.1 million decrease in other income generated by our assumed and ceded reinsurance contracts accounted for at fair value, principally as a result of $45.0 million of net recoverables from the Tohoku earthquake during 2011 not reoccurring in 2012; |
• | the absence in 2012 of a mark-to-market adjustment on the Platinum warrant due to its sale during the first quarter of 2011 and the sale of NBIC in the third quarter of 2011; and partially offset by |
• | a relatively lower level of losses from our weather and energy risk management operations of $20.8 million due to the unusually warm weather experienced in parts of the United Kingdom and parts of the United States during the first quarter of 2012, compared to losses from these operations of $45.0 million in 2011. |
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
(in thousands) | |||||||||||||
Total corporate expenses | $ | 16,692 | $ | 18,264 | $ | 20,136 | |||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
(in thousands) | |||||||||||||
Interest expense | |||||||||||||
DaVinciRe revolving credit facility | $ | — | $ | 474 | $ | 2,029 | |||||||
$100 million 5.875% Senior Notes | 5,875 | 5,875 | 5,875 | ||||||||||
$250 million 5.75% Senior Notes | 14,375 | 14,375 | 11,373 | ||||||||||
Other | 2,847 | 2,644 | 2,552 | ||||||||||
Total interest expense | 23,097 | 23,368 | 21,829 | ||||||||||
Preferred share dividends | |||||||||||||
$100 million 7.30% Series B Preference Shares | — | — | 7,118 | ||||||||||
$250 million 6.08% Series C Preference Shares | 15,200 | 15,200 | 15,200 | ||||||||||
$150 million 6.60% Series D Preference Shares (1) | 19,695 | 19,800 | 19,800 | ||||||||||
Total preferred share dividends | 34,895 | 35,000 | 42,118 | ||||||||||
Total interest expense and preferred share dividends | $ | 57,992 | $ | 58,368 | $ | 63,947 | |||||||
(1) | On November 27, 2012, we announced mandatory partial redemption of 6.0 million of our outstanding Series D Preference Shares at a redemption price of $25.00 per Series D Preference Share. The partial redemption was allocated by random lottery in accordance with the Depository Trust Company's rules and procedures and on December 27, 2012 we redeemed the 6.0 million Series D Preference Shares called for redemption for $150.0 million plus accrued and unpaid dividends thereon. Following this transaction, 6.0 million Series D Preference Shares remain outstanding. |
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
(in thousands) | |||||||||||||
Income tax (expense) benefit | $ | (1,429 | ) | $ | 315 | $ | 6,124 | ||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
(in thousands) | |||||||||||||
Net (income) loss attributable to noncontrolling interests | $ | (148,040 | ) | $ | 33,157 | $ | (116,421 | ) | |||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
(in thousands) | |||||||||||||
Income (loss) from discontinued operations | $ | 2,287 | $ | (15,890 | ) | $ | 62,670 | ||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
(in thousands) | |||||||||||||
Net cash provided by operating activities | $ | 716,929 | $ | 165,933 | $ | 494,720 | |||||||
Net cash (used in) provided by investing activities | (71,677 | ) | 315,031 | 108,610 | |||||||||
Net cash used in financing activities | (538,570 | ) | (542,236 | ) | (531,592 | ) | |||||||
Effect of exchange rate changes on foreign currency cash | 1,692 | 518 | (1,003 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents | 108,374 | (60,754 | ) | 70,735 | |||||||||
Cash and cash equivalents, beginning of period | 216,984 | 277,738 | 203,112 | ||||||||||
Cash and cash equivalents, end of period | $ | 325,358 | $ | 216,984 | $ | 277,738 | |||||||
At December 31, 2012 | Case Reserves | Additional Case Reserves | IBNR | Total | |||||||||||||
(in thousands) | |||||||||||||||||
Catastrophe | $ | 706,264 | $ | 222,208 | $ | 255,786 | $ | 1,184,258 | |||||||||
Specialty | 111,234 | 80,971 | 286,108 | 478,313 | |||||||||||||
Total Reinsurance | 817,498 | 303,179 | 541,894 | 1,662,571 | |||||||||||||
Lloyd's | 29,260 | 10,548 | 109,662 | 149,470 | |||||||||||||
Other | 17,016 | 8,522 | 41,798 | 67,336 | |||||||||||||
Total | $ | 863,774 | $ | 322,249 | $ | 693,354 | $ | 1,879,377 | |||||||||
At December 31, 2011 | |||||||||||||||||
(in thousands) | |||||||||||||||||
Catastrophe | $ | 681,771 | $ | 271,990 | $ | 388,147 | $ | 1,341,908 | |||||||||
Specialty | 120,189 | 49,840 | 301,589 | 471,618 | |||||||||||||
Total Reinsurance | 801,960 | 321,830 | 689,736 | 1,813,526 | |||||||||||||
Lloyd's | 17,909 | 14,459 | 55,127 | 87,495 | |||||||||||||
Other | 32,944 | 3,515 | 54,874 | 91,333 | |||||||||||||
Total | $ | 852,813 | $ | 339,804 | $ | 799,737 | $ | 1,992,354 | |||||||||
At December 31, | 2012 | 2011 | Change | ||||||||||
(in thousands) | |||||||||||||
Common shareholders' equity | $ | 3,103,065 | $ | 3,055,193 | $ | 47,872 | |||||||
Preference shares | 400,000 | 550,000 | (150,000 | ) | |||||||||
Total shareholders' equity attributable to RenaissanceRe | 3,503,065 | 3,605,193 | (102,128 | ) | |||||||||
5.875% Senior Notes | 100,000 | 100,000 | — | ||||||||||
5.750% Senior Notes | 249,339 | 249,247 | 92 | ||||||||||
RenaissanceRe revolving credit facility – borrowed | — | — | — | ||||||||||
RenaissanceRe revolving credit facility – unborrowed | 150,000 | 150,000 | — | ||||||||||
Renaissance Trading credit facility – borrowed | 2,436 | 4,373 | (1,937 | ) | |||||||||
Renaissance Trading credit facility – unborrowed | 17,564 | 5,627 | 11,937 | ||||||||||
Total capital resources | $ | 4,022,404 | $ | 4,114,440 | $ | (92,036 | ) | ||||||
February 20, 2013 | A.M. Best | S&P (4) | Moody's | Fitch | |||||
REINSURANCE SEGMENT (1) | |||||||||
Renaissance Reinsurance | A+ | AA- | A1 | A+ | |||||
DaVinci | A | A+ | A3 | — | |||||
Glencoe | A | A | — | — | |||||
Top Layer Re | A+ | AA | — | — | |||||
ROE | A+ | AA- | — | — | |||||
LLOYD'S SEGMENT | |||||||||
Syndicate 1458 | — | — | — | — | |||||
Lloyd's Overall Market Rating (2) | A | A+ | — | A+ | |||||
RENAISSANCERE (3) | — | Excellent | — | — | |||||
(1) | The A.M. Best, S&P, Moody's and Fitch ratings for the companies in the Reinsurance segment reflect the insurer's financial strength rating. |
(2) | The A.M. Best, S&P and Fitch ratings for the Lloyd's Overall Market Rating represent its financial strength rating. |
(3) | The S&P rating for RenaissanceRe represents rating on its Enterprise Risk Management practices. |
(4) | The S&P ratings for the companies in the Reinsurance segment reflect, in addition to the insurer's financial strength rating, the insurer's issuer credit rating. |
At December 31, | 2012 | 2011 | |||||||||||||
(in thousands, except percentages) | |||||||||||||||
U.S. treasuries | $ | 1,259,800 | 19.8 | % | $ | 885,152 | 14.3 | % | |||||||
Agencies | 315,154 | 5.0 | % | 158,561 | 2.6 | % | |||||||||
Non-U.S. government (Sovereign debt) | 133,198 | 2.1 | % | 227,912 | 3.7 | % | |||||||||
FDIC guaranteed corporate | — | — | % | 423,630 | 6.8 | % | |||||||||
Non-U.S. government-backed corporate | 349,514 | 5.5 | % | 641,082 | 10.3 | % | |||||||||
Corporate | 1,615,207 | 25.4 | % | 1,206,904 | 19.4 | % | |||||||||
Agency mortgage-backed | 408,531 | 6.4 | % | 441,749 | 7.1 | % | |||||||||
Non-agency mortgage-backed | 248,339 | 3.9 | % | 104,771 | 1.7 | % | |||||||||
Commercial mortgage-backed | 406,166 | 6.4 | % | 325,729 | 5.2 | % | |||||||||
Asset-backed | 12,954 | 0.2 | % | 18,027 | 0.3 | % | |||||||||
Total fixed maturity investments, at fair value | 4,748,863 | 74.7 | % | 4,433,517 | 71.4 | % | |||||||||
Short term investments, at fair value | 821,163 | 12.9 | % | 905,477 | 14.6 | % | |||||||||
Equity investments trading, at fair value | 58,186 | 0.9 | % | 50,560 | 0.8 | % | |||||||||
Other investments, at fair value | 644,711 | 10.1 | % | 748,984 | 12.1 | % | |||||||||
Total managed investment portfolio | 6,360,647 | 98.6 | % | 6,138,538 | 98.9 | % | |||||||||
Investments in other ventures, under equity method | 87,724 | 1.4 | % | 70,714 | 1.1 | % | |||||||||
Total investments | $ | 6,360,647 | 100.0 | % | $ | 6,209,252 | 100.0 | % | |||||||
Credit Rating (1) | |||||||||||||||||||||||||||||||||||||||
December 31, 2012 | Amortized Cost | Fair Value | % of Total Investment Portfolio | Weighted Average Effective Yield | AAA | AA | A | BBB | Non- Investment Grade | Not Rated | |||||||||||||||||||||||||||||
Short term investments | $ | 821,163 | $ | 821,163 | 12.9 | % | 0.2 | % | $ | 753,883 | $ | 63,737 | $ | 163 | $ | 3,371 | $ | 9 | $ | — | |||||||||||||||||||
100.0 | % | 91.8 | % | 7.8 | % | — | % | 0.4 | % | — | % | — | % | ||||||||||||||||||||||||||
Fixed maturity investments | |||||||||||||||||||||||||||||||||||||||
U.S. treasuries | 1,256,607 | 1,259,800 | 19.8 | % | 0.4 | % | — | 1,259,800 | — | — | — | — | |||||||||||||||||||||||||||
Agencies | |||||||||||||||||||||||||||||||||||||||
Fannie Mae & Freddie Mac | 289,884 | 292,098 | 4.6 | % | 0.6 | % | — | 292,098 | — | — | — | — | |||||||||||||||||||||||||||
Other agencies | 22,865 | 23,056 | 0.4 | % | 0.7 | % | — | 23,056 | — | — | — | — | |||||||||||||||||||||||||||
Total agencies | 312,749 | 315,154 | 5.0 | % | 0.7 | % | — | 315,154 | — | — | — | — | |||||||||||||||||||||||||||
Non-U.S. government (Sovereign debt) | 128,207 | 133,198 | 2.1 | % | 1.9 | % | 66,653 | 23,914 | 6,828 | 21,767 | 13,793 | 243 | |||||||||||||||||||||||||||
Non-U.S. government-backed corporate | 343,924 | 349,514 | 5.5 | % | 0.7 | % | 287,288 | 56,059 | 6,167 | — | — | — | |||||||||||||||||||||||||||
Corporate | 1,552,194 | 1,615,207 | 25.4 | % | 2.6 | % | 25,361 | 263,541 | 765,050 | 280,598 | 265,045 | 15,612 | |||||||||||||||||||||||||||
Mortgage-backed | |||||||||||||||||||||||||||||||||||||||
Residential mortgage-backed | |||||||||||||||||||||||||||||||||||||||
Agency securities | 404,423 | 408,531 | 6.4 | % | 1.3 | % | — | 408,531 | — | — | — | — | |||||||||||||||||||||||||||
Non-agency securities - Prime | 124,832 | 131,819 | 2.1 | % | 3.6 | % | 17,159 | 7,402 | 6,247 | 8,286 | 92,725 | — | |||||||||||||||||||||||||||
Non-agency securities - Alt A | 107,485 | 116,520 | 1.8 | % | 5.2 | % | 5,152 | 1,951 | 13,385 | 11,876 | 84,156 | — | |||||||||||||||||||||||||||
Total residential mortgage-backed | 636,740 | 656,870 | 10.3 | % | 2.5 | % | 22,311 | 417,884 | 19,632 | 20,162 | 176,881 | — | |||||||||||||||||||||||||||
Commercial mortgage-backed | 383,176 | 406,166 | 6.4 | % | 1.7 | % | 266,325 | 92,820 | 47,021 | — | — | — | |||||||||||||||||||||||||||
Total mortgage-backed | 1,019,916 | 1,063,036 | 16.7 | % | 2.2 | % | 288,636 | 510,704 | 66,653 | 20,162 | 176,881 | — | |||||||||||||||||||||||||||
Asset-backed | |||||||||||||||||||||||||||||||||||||||
Credit cards | 4,270 | 4,623 | 0.1 | % | 1.7 | % | 4,623 | — | — | — | — | — | |||||||||||||||||||||||||||
Auto loans | 2,119 | 2,238 | — | % | 0.9 | % | 2,238 | — | — | — | — | — | |||||||||||||||||||||||||||
Student loans | 1,626 | 1,650 | — | % | 1.0 | % | 1,650 | — | — | — | — | — | |||||||||||||||||||||||||||
Other | 4,195 | 4,443 | 0.1 | % | 2.7 | % | 4,443 | — | — | — | — | — | |||||||||||||||||||||||||||
Total asset-backed | 12,210 | 12,954 | 0.2 | % | 1.8 | % | 12,954 | — | — | — | — | — | |||||||||||||||||||||||||||
Total securitized assets | 1,032,126 | 1,075,990 | 16.9 | % | 2.2 | % | 301,590 | 510,704 | 66,653 | 20,162 | 176,881 | — | |||||||||||||||||||||||||||
Total fixed maturity investments | 4,625,807 | 4,748,863 | 74.7 | % | 1.6 | % | 680,892 | 2,429,172 | 844,698 | 322,527 | 455,719 | 15,855 | |||||||||||||||||||||||||||
100.0 | % | 14.3 | % | 51.2 | % | 17.8 | % | 6.8 | % | 9.6 | % | 0.3 | % | ||||||||||||||||||||||||||
Equity investments trading | 58,186 | 0.9 | % | — | — | — | — | — | 58,186 | ||||||||||||||||||||||||||||||
100.0 | % | — | % | — | % | — | % | — | % | — | % | 100.0 | % | ||||||||||||||||||||||||||
Other investments | |||||||||||||||||||||||||||||||||||||||
Private equity partnerships | 344,669 | 5.4 | % | — | — | — | — | — | 344,669 | ||||||||||||||||||||||||||||||
Senior secured bank loan funds | 202,929 | 3.2 | % | — | — | — | — | 172,334 | 30,595 | ||||||||||||||||||||||||||||||
Catastrophe bonds | 91,310 | 1.4 | % | — | — | — | — | 91,310 | — | ||||||||||||||||||||||||||||||
Hedge funds | 5,803 | 0.1 | % | — | — | — | — | — | 5,803 | ||||||||||||||||||||||||||||||
Total other investments | 644,711 | 10.1 | % | — | — | — | — | 263,644 | 381,067 | ||||||||||||||||||||||||||||||
100.0 | % | — | % | — | % | — | % | — | % | 40.9 | % | 59.1 | % | ||||||||||||||||||||||||||
Investments in other ventures | 87,724 | 1.4 | % | — | — | — | — | — | 87,724 | ||||||||||||||||||||||||||||||
100.0 | % | — | % | — | % | — | % | — | % | — | % | 100.0 | % | ||||||||||||||||||||||||||
Total investment portfolio | $ | 6,360,647 | 100.0 | % | $ | 1,434,775 | $ | 2,492,909 | $ | 844,861 | $ | 325,898 | $ | 719,372 | $ | 542,832 | |||||||||||||||||||||||
100.0 | % | 22.6 | % | 39.2 | % | 13.3 | % | 5.1 | % | 11.3 | % | 8.5 | % | ||||||||||||||||||||||||||
(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 A-2 short term issue credit rating as AA and short term investments with an A-3 short term issue credit rating as A. |
• | Changes in the overall interest rate environment can expose us to "prepayment risk" on our mortgage-backed investments. When interest rates decline, consumers will generally make prepayments on their mortgages and, as a result, our investments in mortgage-backed securities will be repaid to us more quickly than we might have originally anticipated. When we receive these prepayments, our opportunities to reinvest these proceeds back into the investment markets will likely be at reduced interest rates. Conversely, when interest rates increase, consumers will generally make fewer prepayments on their mortgages and, as a result, our investments in mortgage-backed securities will be repaid to us less quickly than we might have originally anticipated. This will increase the duration of our portfolio, which is disadvantageous to us in a rising interest rate environment. |
• | Our investments in mortgage-backed securities are also subject to default risk. This risk is due in part to defaults on the underlying securitized mortgages, which would decrease the market value of the investment and be disadvantageous to us. Similar risks apply to other asset-backed securities in which we may invest from time to time. |
• | Our investments in debt securities of other corporations are exposed to losses from insolvencies of these corporations, and our investment portfolio can also deteriorate based on reduced credit quality of these corporations. We are also exposed to the impact of widening credit spreads even if specific securities are not downgraded. |
• | Our investments in asset-backed securities are subject to prepayment risks, as noted above, and to the structural risks of these securities. The structural risks primarily emanate from the priority of each security in the issuer's overall capital structure. We are also exposed to the impact of widening credit spreads. |
• | Within our other investments category, we have several funds that invest in non-investment grade fixed income securities as well as securities denominated in foreign currencies. These investments expose us to losses from insolvencies and other credit-related issues. We are also exposed to fluctuations in foreign exchange rates that may result in realized losses to us if our exposures are not hedged or if our hedging strategies are not effective and also to widening of credit spreads. |
At December 31, | 2012 | 2011 | |||||||||||||
(in thousands, except percentages) | |||||||||||||||
Due in less than one year | $ | 433,074 | 9.1 | % | $ | 619,845 | 14.0 | % | |||||||
Due after one through five years | 2,389,856 | 50.3 | % | 2,035,383 | 45.9 | % | |||||||||
Due after five through ten years | 711,844 | 15.0 | % | 742,050 | 16.7 | % | |||||||||
Due after ten years | 138,099 | 2.9 | % | 145,963 | 3.3 | % | |||||||||
Mortgage-backed | 1,063,036 | 22.4 | % | 872,249 | 19.7 | % | |||||||||
Asset-backed | 12,954 | 0.3 | % | 18,027 | 0.4 | % | |||||||||
Total fixed maturity investments, at fair value | $ | 4,748,863 | 100.0 | % | $ | 4,433,517 | 100.0 | % | |||||||
At December 31, 2012 | |||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||
Sector | Total | AAA | AA | A | BBB | Non-Investment Grade | Not Rated | ||||||||||||||||||||||
Financials | $ | 697,161 | $ | 15,908 | $ | 148,549 | $ | 417,084 | $ | 61,095 | $ | 41,534 | $ | 12,991 | |||||||||||||||
Industrial, utilities and energy | 342,474 | 6,908 | 32,997 | 125,294 | 103,725 | 71,852 | 1,698 | ||||||||||||||||||||||
Communications and technology | 229,444 | 1,656 | 13,866 | 106,747 | 51,493 | 55,682 | — | ||||||||||||||||||||||
Consumer | 157,828 | — | 11,036 | 54,766 | 37,648 | 53,533 | 845 | ||||||||||||||||||||||
Health care | 110,827 | — | 52,523 | 30,802 | 3,372 | 24,130 | — | ||||||||||||||||||||||
Basic materials | 60,068 | — | — | 22,649 | 21,258 | 16,083 | 78 | ||||||||||||||||||||||
Other | 17,405 | 889 | 4,570 | 7,708 | 2,007 | 2,231 | — | ||||||||||||||||||||||
Total corporate fixed maturity investments, at fair value (1) | $ | 1,615,207 | $ | 25,361 | $ | 263,541 | $ | 765,050 | $ | 280,598 | $ | 265,045 | $ | 15,612 | |||||||||||||||
(1) | Excludes non-U.S. government-backed corporate fixed maturity investments, at fair value. |
At December 31, 2012 | |||||||||||||
(in thousands) | |||||||||||||
Issuer | Total | Short term investments | Fixed maturity investments | ||||||||||
JP Morgan Chase & Co. | $ | 64,532 | $ | 1,552 | $ | 62,980 | |||||||
General Electric Company | 56,039 | — | 56,039 | ||||||||||
Bank of America Corp. | 53,290 | 163 | 53,127 | ||||||||||
Goldman Sachs Group Inc. | 52,126 | — | 52,126 | ||||||||||
Citigroup Inc. | 47,160 | — | 47,160 | ||||||||||
HSBC Holdings PLC | 37,872 | — | 37,872 | ||||||||||
Morgan Stanley | 32,984 | — | 32,984 | ||||||||||
AT&T Inc. | 27,881 | — | 27,881 | ||||||||||
BP PLC | 21,920 | — | 21,920 | ||||||||||
Wells Fargo & Co. | 20,587 | — | 20,587 | ||||||||||
Total (1) | $ | 414,391 | $ | 1,715 | $ | 412,676 | |||||||
(1) | Excludes non-U.S. government-backed corporate fixed maturity investments, repurchase agreements and commercial paper, at fair value. |
Sector | Credit Rating | ||||||||||||||||||||||||||||||||||||||||
At December 31, 2012 | Amortized Cost (1) | Fair Value (1) | Non-U.S. Government (Sovereign debt) | Non-U.S. Government-backed Corporate | Corporate | AAA | AA | A | BBB | Non-Investment Grade | |||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||||||||
Country of Issuer | |||||||||||||||||||||||||||||||||||||||||
Non-Eurozone | |||||||||||||||||||||||||||||||||||||||||
United Kingdom | $ | 135,475 | $ | 140,486 | $ | 10,296 | $ | 26,730 | $ | 103,460 | $ | 37,026 | $ | 19,500 | $ | 68,618 | $ | 10,467 | $ | 4,875 | |||||||||||||||||||||
Sweden | 27,751 | 28,531 | — | 10,155 | 18,376 | 10,155 | 17,846 | 530 | — | — | |||||||||||||||||||||||||||||||
Norway | 26,068 | 26,799 | — | 8,047 | 18,752 | 11,260 | 7,368 | 988 | — | 7,183 | |||||||||||||||||||||||||||||||
Denmark | 36,256 | 36,498 | 7,787 | 28,590 | 121 | 36,498 | — | — | — | — | |||||||||||||||||||||||||||||||
Switzerland | 42,771 | 44,157 | — | — | 44,157 | — | 19,197 | 23,886 | 1,074 | — | |||||||||||||||||||||||||||||||
Russian Federation | 14,139 | 15,220 | 4,628 | — | 10,592 | — | — | — | 14,217 | 1,003 | |||||||||||||||||||||||||||||||
Other | 8,814 | 9,441 | 7,419 | — | 2,022 | — | — | 1,372 | 3,930 | 4,139 | |||||||||||||||||||||||||||||||
Non-Eurozone Total | $ | 291,274 | $ | 301,132 | $ | 30,130 | $ | 73,522 | $ | 197,480 | $ | 94,939 | $ | 63,911 | $ | 95,394 | $ | 29,688 | $ | 17,200 | |||||||||||||||||||||
Eurozone | |||||||||||||||||||||||||||||||||||||||||
Netherlands | $ | 119,744 | $ | 122,049 | $ | 8,134 | $ | 79,944 | $ | 33,971 | $ | 89,123 | $ | 11,532 | $ | 18,688 | $ | 1,552 | $ | 1,154 | |||||||||||||||||||||
France | 45,042 | 46,149 | — | 23,824 | 22,325 | — | 28,978 | 16,148 | 517 | 506 | |||||||||||||||||||||||||||||||
Austria | 40,214 | 40,342 | 7,721 | 32,621 | — | — | 40,342 | — | — | — | |||||||||||||||||||||||||||||||
Germany | 57,900 | 58,645 | 142 | 29,447 | 29,056 | 32,997 | — | 22,345 | 744 | 2,559 | |||||||||||||||||||||||||||||||
Finland | 21,352 | 21,414 | 21,414 | — | — | 21,414 | — | — | — | — | |||||||||||||||||||||||||||||||
Luxembourg | 6,249 | 6,167 | — | — | 6,167 | — | — | — | — | 6,167 | |||||||||||||||||||||||||||||||
Belgium | 17,433 | 17,640 | — | — | 17,640 | — | — | 14,938 | 2,702 | — | |||||||||||||||||||||||||||||||
307,934 | 312,406 | 37,411 | 165,836 | 109,159 | 143,534 | 80,852 | 72,119 | 5,515 | 10,386 | ||||||||||||||||||||||||||||||||
Ireland | 1,042 | 1,049 | — | — | 1,049 | — | — | — | 1,049 | — | |||||||||||||||||||||||||||||||
Italy | 834 | 902 | — | — | 902 | — | — | — | — | 902 | |||||||||||||||||||||||||||||||
Spain | 4,047 | 4,110 | — | — | 4,110 | — | — | 1,341 | 674 | 2,095 | |||||||||||||||||||||||||||||||
Greece | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Portugal | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
$ | 5,923 | $ | 6,061 | $ | — | $ | — | $ | 6,061 | $ | — | $ | — | $ | 1,341 | $ | 1,723 | $ | 2,997 | ||||||||||||||||||||||
Eurozone Total | $ | 313,857 | $ | 318,467 | $ | 37,411 | $ | 165,836 | $ | 115,220 | $ | 143,534 | $ | 80,852 | $ | 73,460 | $ | 7,238 | $ | 13,383 | |||||||||||||||||||||
European Issuer Total | $ | 605,131 | $ | 619,599 | $ | 67,541 | $ | 239,358 | $ | 312,700 | $ | 238,473 | $ | 144,763 | $ | 168,854 | $ | 36,926 | $ | 30,583 | |||||||||||||||||||||
Subsector | |||||||||||||||||||||||||||||||||||||||||
Non-US Government | $ | 65,710 | $ | 67,541 | $ | 67,541 | $ | — | $ | — | $ | 47,774 | $ | 7,721 | $ | 1,371 | $ | 6,924 | $ | 3,751 | |||||||||||||||||||||
Financial | 336,178 | 343,669 | — | 198,747 | 144,922 | 174,077 | 70,397 | 81,941 | 8,252 | 9,002 | |||||||||||||||||||||||||||||||
Industrial, Utilities & Energy | 92,963 | 95,659 | — | 23,990 | 71,669 | — | 44,018 | 41,247 | 7,574 | 2,820 | |||||||||||||||||||||||||||||||
Other | 110,280 | 112,730 | — | 16,621 | 96,109 | 16,622 | 22,627 | 44,295 | 14,176 | 15,010 | |||||||||||||||||||||||||||||||
Total | $ | 605,131 | $ | 619,599 | $ | 67,541 | $ | 239,358 | $ | 312,700 | $ | 238,473 | $ | 144,763 | $ | 168,854 | $ | 36,926 | $ | 30,583 | |||||||||||||||||||||
(1) | Included in amortized cost and fair value is $0.2 million and $0.3 million, respectively, of fixed maturity investments available for sale. |
At December 31, | 2012 | 2011 | Change | ||||||||||
(in thousands) | |||||||||||||
Private equity partnerships | $ | 344,669 | $ | 367,909 | $ | (23,240 | ) | ||||||
Senior secured bank loan funds | 202,929 | 257,870 | (54,941 | ) | |||||||||
Catastrophe bonds | 91,310 | 70,999 | 20,311 | ||||||||||
Hedge funds | 5,803 | 21,344 | (15,541 | ) | |||||||||
Non-U.S. fixed income funds | — | 28,862 | (28,862 | ) | |||||||||
Miscellaneous other investments | — | 2,000 | (2,000 | ) | |||||||||
Total other investments | $ | 644,711 | $ | 748,984 | $ | (104,273 | ) | ||||||
At December 31, 2012 | Fair Value | Unfunded Commitments | Redemption Frequency | Redemption Notice Period (Minimum Days) | Redemption Notice Period (Maximum Days) | ||||||||||
Private equity partnerships | $ | 344,669 | $ | 91,762 | See below | See below | See below | ||||||||
Senior secured bank loan funds | 202,929 | 17,506 | See below | See below | See below | ||||||||||
Hedge funds | 5,803 | — | See below | See below | See below | ||||||||||
Total other investments measured using net asset valuations | $ | 553,401 | $ | 109,268 | |||||||||||
At December 31, | 2012 | 2011 | |||||||||||||||||||||
(in thousands, except percentages) | Investment | Ownership % | Carrying Value | Investment | Ownership % | Carrying Value | |||||||||||||||||
THIG | $ | 50,000 | 25.0 | % | $ | 28,303 | $ | 50,000 | 25.0 | % | $ | 32,645 | |||||||||||
Tower Hill | 10,000 | 28.6 | % | 13,969 | 10,000 | 28.6 | % | 14,173 | |||||||||||||||
Tower Hill Signature | 500 | 25.0 | % | 896 | 500 | 25.0 | % | — | |||||||||||||||
Total Tower Hill Companies | 60,500 | 43,168 | 60,500 | 46,818 | |||||||||||||||||||
Top Layer Re | 65,375 | 50.0 | % | 36,664 | 65,375 | 50.0 | % | 15,872 | |||||||||||||||
Other | 8,226 | 38.8 | % | 7,892 | 6,000 | 40.0 | % | 8,024 | |||||||||||||||
Total investments in other ventures, under equity method | $ | 134,101 | $ | 87,724 | $ | 131,875 | $ | 70,714 | |||||||||||||||
At December 31, 2012 | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | ||||||||||||||||
(in thousands) | |||||||||||||||||||||
Long term debt obligations (1) | |||||||||||||||||||||
5.875% Senior Notes | $ | 100,740 | $ | 100,740 | $ | — | $ | — | $ | — | |||||||||||
5.75% Senior Notes | 363,539 | 14,375 | 28,750 | 38,750 | 281,664 | ||||||||||||||||
Private equity and investment commitments (2) | 133,161 | 133,161 | — | — | — | ||||||||||||||||
Operating lease obligations | 26,267 | 6,829 | 10,647 | 5,777 | 3,014 | ||||||||||||||||
Capital lease obligations | 43,082 | 3,017 | 6,034 | 5,434 | 28,597 | ||||||||||||||||
Payable for investments purchased | 278,787 | 278,787 | — | — | — | ||||||||||||||||
Reserve for claims and claim expenses (3) | 1,879,377 | 642,819 | 659,865 | 230,006 | 346,687 | ||||||||||||||||
Renaissance Trading credit facility | 2,436 | 2,436 | — | — | — | ||||||||||||||||
Other | 7,324 | 5,915 | 1,206 | 203 | — | ||||||||||||||||
Total contractual obligations | $ | 2,834,713 | $ | 1,188,079 | $ | 706,502 | $ | 280,170 | $ | 659,962 | |||||||||||
(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) | We caution the reader that the information provided above related to estimated future payment dates of our reserves for claims and claim expenses is not prepared or utilized for internal purposes and that we currently do not estimate the future payment dates of claims and claim expenses. Because of the nature of the coverages that we provide, the amount and timing of the cash flows associated with our policy liabilities will fluctuate, perhaps significantly, and therefore are highly uncertain. We have based our estimates of future claim payments upon benchmark industry payment patterns, drawing upon available relevant sources of loss and allocated loss adjustment expense development data. These benchmarks are revised periodically as new trends emerge. We believe that it is likely that this benchmark data will not be predictive of our future claim payments and that material fluctuations can occur due to the nature of the losses which we insure and the coverages which we provide. |
Interest Rate Shift in Basis Points | |||||||||||||||||||||
At December 31, 2012 | -100 | -50 | Base | 50 | 100 | ||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||
Fair value of fixed income and short term investments | $ | 5,714,441 | $ | 5,642,460 | $ | 5,570,026 | $ | 5,497,140 | $ | 5,423,801 | |||||||||||
Net increase (decrease) in fair value | $ | 144,415 | $ | 72,434 | $ | — | $ | (72,886 | ) | $ | (146,225 | ) | |||||||||
Percentage change in fair value | 2.6 | % | 1.3 | % | — | % | (1.3 | )% | (2.6 | )% | |||||||||||
Interest Rate Shift in Basis Points | |||||||||||||||||||||
At December 31, 2011 | -100 | -50 | Base | 50 | 100 | ||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||
Fair value of fixed income and short term investments | $ | 5,477,626 | $ | 5,408,377 | $ | 5,338,994 | $ | 5,269,479 | $ | 5,199,831 | |||||||||||
Net increase (decrease) in fair value | $ | 138,632 | $ | 69,383 | $ | — | $ | (69,515 | ) | $ | (139,163 | ) | |||||||||
Percentage change in fair value | 2.6 | % | 1.3 | % | — | % | (1.3 | )% | (2.6 | )% | |||||||||||
At December 31, 2012 | CAD | EUR | GBP | JPY | NZD | Other | Total | ||||||||||||||||||||||
(in thousands, except for percentages) | |||||||||||||||||||||||||||||
Net assets denominated in foreign currencies | $ | 25,472 | $ | (83,501 | ) | $ | 75,391 | $ | (40,935 | ) | $ | (217,506 | ) | $ | 19,909 | $ | (221,170 | ) | |||||||||||
Net foreign currency derivatives notional amounts | (18,159 | ) | 98,159 | (74,091 | ) | 32,705 | 211,981 | (2,759 | ) | 247,836 | |||||||||||||||||||
Total net foreign currency exposure | $ | 7,313 | $ | 14,658 | $ | 1,300 | $ | (8,230 | ) | $ | (5,525 | ) | $ | 17,150 | $ | 26,666 | |||||||||||||
Net foreign currency exposure as a percentage of total shareholders' equity attributable to RenaissanceRe | 0.2 | % | 0.4 | % | — | % | (0.2 | )% | (0.2 | )% | 0.5 | % | 0.8 | % | |||||||||||||||
Impact of a hypothetical 10% change in total net foreign currency exposure | $ | (731 | ) | $ | (1,466 | ) | $ | (130 | ) | $ | 823 | $ | 553 | $ | (1,715 | ) | $ | (2,667 | ) | ||||||||||
At December 31, 2011 | CAD | EUR | GBP | JPY | NZD | Other | Total | ||||||||||||||||||||||
(in thousands, except for percentages) | |||||||||||||||||||||||||||||
Net assets denominated in foreign currencies | $ | 8,722 | $ | 2,969 | $ | 9,693 | $ | (147,479 | ) | $ | (293,076 | ) | $ | 16,578 | $ | (402,593 | ) | ||||||||||||
Net foreign currency derivatives notional amounts | (6,723 | ) | (43,550 | ) | (22,425 | ) | 151,874 | 290,324 | (3,260 | ) | 366,240 | ||||||||||||||||||
Total net foreign currency exposure | $ | 1,999 | $ | (40,581 | ) | $ | (12,732 | ) | $ | 4,395 | $ | (2,752 | ) | $ | 13,318 | $ | (36,353 | ) | |||||||||||
Net foreign currency exposure as a percentage of total shareholders' equity attributable to RenaissanceRe | 0.1 | % | (1.1 | )% | (0.4 | )% | 0.1 | % | (0.1 | )% | 0.4 | % | (1.0 | )% | |||||||||||||||
Impact of a hypothetical 10% change in total net foreign currency exposure | $ | (200 | ) | $ | 4,058 | $ | 1,273 | $ | (440 | ) | $ | 275 | $ | (1,332 | ) | $ | 3,635 | ||||||||||||
At December 31, | 2012 | 2011 | |||||
AAA | 25.8 | % | 32.7 | % | |||
AA | 44.7 | % | 45.4 | % | |||
A | 15.2 | % | 11.9 | % | |||
BBB | 5.8 | % | 6.3 | % | |||
Non-investment grade | 8.2 | % | 3.5 | % | |||
Not rated | 0.3 | % | 0.2 | % | |||
Total | 100.0 | % | 100.0 | % | |||
Credit Spread Shift in Basis Points | |||||||||||||||||||||
At December 31, 2012 | -100 | -50 | Base | 50 | 100 | ||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||
Fair value of fixed income and short term investments | $ | 5,691,346 | $ | 5,630,687 | $ | 5,570,026 | $ | 5,509,367 | $ | 5,448,707 | |||||||||||
Net increase (decrease) in fair value | $ | 121,320 | $ | 60,661 | $ | — | $ | (60,659 | ) | $ | (121,319 | ) | |||||||||
Percentage change in fair value | 2.2 | % | 1.1 | % | — | % | (1.1 | )% | (2.2 | )% | |||||||||||
Credit Spread Shift in Basis Points | |||||||||||||||||||||
At December 31, 2011 | -100 | -50 | Base | 50 | 100 | ||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||
Fair value of fixed income and short term investments | $ | 5,452,249 | $ | 5,395,622 | $ | 5,338,994 | $ | 5,282,367 | $ | 5,225,740 | |||||||||||
Net increase (decrease) in fair value | $ | 113,255 | $ | 56,628 | $ | — | $ | (56,627 | ) | $ | (113,254 | ) | |||||||||
Percentage change in fair value | 2.1 | % | 1.1 | % | — | % | (1.1 | )% | (2.1 | )% | |||||||||||
At December 31, | 2012 | 2011 | |||||||
(in thousands, except for percentages) | |||||||||
Equity investments trading, at fair value | $ | 58,186 | $ | 50,560 | |||||
Private equity investments, at fair value | 344,669 | 367,909 | |||||||
Hedge funds, at fair value | 5,803 | 21,344 | |||||||
Investments in other ventures, under equity method | 87,724 | 70,714 | |||||||
Total carrying value of investments exposed to equity price risk | $ | 496,382 | $ | 510,527 | |||||
Impact of a hypothetical 10% increase in the carrying value of investments exposed to equity price risk | $ | 49,638 | $ | 51,053 | |||||
Impact of a hypothetical 10% decrease in the carrying value of investments exposed to equity price risk | $ | (49,638 | ) | $ | (51,053 | ) | |||
(a) | Financial Statements, Financial Statement Schedules and Exhibits. |
1 | Financial Statements |
2 | Financial Statement Schedules |
3 | Exhibits |
3.1 | Memorandum of Association. (1) |
3.2 | Amended and Restated Bye-Laws. (2) |
3.3 | Memorandum of Increase in Share Capital of RenaissanceRe Holdings Ltd. (3) |
3.4 | Specimen Common Share certificate. (1) |
10.1 | Form of Director Retention Agreement, dated as of November 8, 2002, entered into by each of the non-employee directors of RenaissanceRe Holdings Ltd. (4) |
10.2 | Further Amended and Restated Employment Agreement, dated as of February 19, 2009, between RenaissanceRe Holdings Ltd. and Neill A. Currie. (8) |
10.3 | Amendment No. 1 to the Further Amended and Restated Employment Agreement, dated January 8, 2010, by and among RenaissanceRe Holdings Ltd. and Neill A. Currie. (9) |
10.4 | Employment Agreement, dated as of June 10, 2009, by and between RenaissanceRe Holdings Ltd. and Jeffrey D. Kelly. (11) |
10.5 | Memorandum of Agreement by and between the Company and Neill A. Currie, dated February 21, 2012 (5). |
10.6 | Amendment No. 1 the Employment Agreement, dated January 8, 2010, by and among RenaissanceRe Holdings Ltd. and Jeffrey D. Kelly. (9) |
10.7 | Form of Employment Agreement for Executive Officers. (10) |
10.8 | Form of Amendment to Employment Agreement for Executive Officers. (13) |
10.9 | Form of Amendment No. 2 to Employment Agreement for Executive Officers. (7) |
10.10 | Form of Amendment No. 3 to the Amended and Restated Employment Agreement for Executive Officers. (9) |
10.11 | RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (18) |
10.12 | Amendment No. 1 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (19) |
10.13 | Amendment No. 2 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (19) |
10.14 | Amendment No. 3 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (20) |
10.15 | Amendment No. 4 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (40) |
10.16 | Amendment No. 5 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (37) |
10.17 | UK Schedule to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (20) |
10.18 | UK Sub-Plan to the RenaissanceRe Holdings 2001 Stock Incentive Plan. (20) |
10.19 | Form of Option Grant Notice and Agreement pursuant to which option grants are made under the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (21) |
10.20 | Form of Restricted Stock Grant Notice and Agreement pursuant to which Restricted Stock grants are made under the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (21) |
10.21 | RenaissanceRe Holdings Ltd. 2004 Stock Option Incentive Plan. (22) |
10.22 | Amendment No. 1 to the RenaissanceRe Holdings Ltd. 2004 Stock Option Incentive Plan. (23) |
10.23 | Form of Option Agreement pursuant to which option grants are made under the RenaissanceRe Holdings 2004 Stock Option Incentive Plan to executive officers. (22) |
10.24 | Amended and Restated RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (25) |
10.25 | Amendment No. 1 to the RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (25) |
10.26 | Amendment No. 2 to the RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (26) |
10.27 | Amendment No. 3 to the RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (31) |
10.28 | Form of Restricted Stock Grant Agreement for Directors. (5) |
10.29 | Form of Option Grant Agreement for Directors. (5) |
10.30 | Certificate of Designation, Preferences and Rights of 6.08% Series C Preference Shares. (29) |
10.31 | Certificate of Designation, Preferences and Rights of 6.60% Series D Preference Shares. (30) |
10.32 | Senior Indenture, dated as of July 1, 2001, between RenaissanceRe Holdings Ltd., as Issuer, and Bankers Trust Company, as Trustee. (12) |
10.33 | Second Supplemental Indenture, by and between RenaissanceRe Holdings Ltd. and Deutsche Bank Trust Company Americas (f/k/a Bankers Trust Company), dated as of January 31, 2003. (14) |
10.34 | Master Reimbursement Agreement, dated as of April 29, 2009, by and between Renaissance Reinsurance Ltd. and Citibank Europe PLC. (20) |
10.35 | Pledge Agreement, dated as of April 29, 2009, by and between Renaissance Reinsurance Ltd. and Citibank Europe PLC. (20) |
10.36 | Agreement Regarding Use of Aircraft Interest, dated as of November 17, 2009, by and between RenaissanceRe Holdings Ltd. and Neill A. Currie. (42) |
10.37 | RenaissanceRe Holdings Ltd. 2010 Restricted Stock Unit Plan. (42) |
10.38 | Form of Restricted Stock Unit Agreement, pursuant to which restricted stock unit grants are made under the RenaissanceRe Holdings Ltd. 2010 Restricted Stock Unit Plan. (42) |
10.39 | 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. (33) |
10.40 | First Supplemental Indenture, dated as of March 17, 2010, among RenRe North America Holdings Inc., as Insurer, RenaissanceRe Holdings Ltd., as Guarantor, and Deutsche Bank Trust Companies America, as Trustee. (33) |
10.41 | 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. (33) |
10.42 | 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. (41) |
10.43 | Credit Agreement, dated as of May 17, 2012, by and among RenaissanceRe Holdings Ltd., various banks and financial institutions parties thereto, Wells Fargo Bank, National Association, as Fronting Bank, LC Administrator and Administrative Agent for the Lenders, Citibank, N.A., as Syndication Agent, and Wells Fargo Securities, LLC and Citigroup Global Markets Inc., as Joint Lead Arrangers and Joint Lead Bookrunners (43). |
10.44 | Fourth Amended and Restated Reimbursement Agreement, dated as of May 17, 2012, by and among RenaissanceRe Holdings Ltd., Renaissance Reinsurance Ltd., Renaissance Reinsurance of Europe, Glencoe Insurance Ltd., DaVinci Reinsurance Ltd., the banks and financial institutions parties thereto, Wells Fargo Bank, National Association, as issuing bank, administrative agent and collateral agent for the lenders, and certain other agents (43). |
10.45 | Form of Letter Agreement with Neill A. Currie Regarding Performance Share Awards. (35) |
10.46 | Form of Letter Agreement with the Named Executive Officers Regarding Performance Share Awards. (35) |
10.47 | Form of Tax Reimbursement Waiver Letter with the Named Executive Officers. (45) |
10.48 | Form of Performance-Based Restricted Stock Grant Notice and Agreement pursuant to which performance-based restricted stock awards are made under the RenaissanceRe Holdings Ltd. 2010 Performance-Based Equity Incentive Plan. (36) |
10.49 | Performance-Based Restricted Stock Grant Notice and Agreement under the RenaissanceRe Holdings Ltd. 2010 Performance-Based Equity Incentive Plan, dated June 9, 2010, between RenaissanceRe Holdings Ltd. and Neill A. Currie. (36) |
10.50 | Facility Letter, dated September 17, 2010, from Citibank Europe plc to Renaissance Reinsurance Ltd., DaVinci Reinsurance Ltd. and Glencoe Insurance Ltd. (38) |
10.51 | Insurance Letters of Credit - Master Agreement, dated September 17, 2010, between Renaissance Reinsurance Ltd. and Citibank Europe plc. DaVinci Reinsurance Ltd. and Glencoe Insurance Ltd. have each entered into an agreement with Citibank Europe plc that is identical to the foregoing agreement, except with respect to party names. (38) |
10.52 | Stock Purchase Agreement, dated as of November 18, 2010, by and between RenRe North America Holdings Inc., and QBE Holdings Inc. (39) |
10.53 | Memorandum of Agreement by and between RenaissanceRe Holdings Ltd. and Neill A. Currie, dated February 21, 2012. (44) |
10.54 | RenaissanceRe Holdings Ltd. 2010 Performance-Based Equity Incentive Plan. (40) |
10.55 | Amendment No. 2 to Further Amended and Restated Employment Agreement by and between RenaissanceRe Holdings Ltd. and Neill A. Currie, dated February 19, 2013. |
10.56 | Form of Agreement Regarding Use of Aircraft Interest by and between RenaissanceRe Holdings Ltd. and Certain Executive Officers of RenaissanceRe Holdings Ltd. |
21.1 | List of Subsidiaries of the Registrant. |
23.1 | Consent of Ernst & Young Ltd. |
31.1 | Certification of Neill A. Currie, Chief Executive Officer of RenaissanceRe Holdings Ltd., pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended. |
31.2 | Certification of Jeffrey D. Kelly, Chief Financial Officer of RenaissanceRe Holdings Ltd., pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended. |
32.1 | Certification of Neill A. Currie, Chief Executive Officer of RenaissanceRe Holdings Ltd., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2 | Certification of Jeffrey D. Kelly, Chief Financial Officer of RenaissanceRe Holdings Ltd., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
(1) | Incorporated by reference to the Registration Statement on Form S-1 of RenaissanceRe Holdings Ltd. (Registration No. 33-70008) which was declared effective by the SEC on July 26, 1995. |
(2) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Quarterly Report on Form 10-Q for the period ended June 30, 2002, filed with the SEC on August 14, 2002. |
(3) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Quarterly Report on Form 10-Q for the period ended March 31, 1998, filed with the SEC on May 14, 1998 (SEC File Number 000-26512) |
(4) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s 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) |
(5) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on February 27, 2006 |
(6) | 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. |
(7) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on November 25, 2008. |
(8) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on February 25, 2009. |
(9) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on January 14, 2010. |
(10) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on July 21, 2006, relating to certain events which occurred on July 19, 2006. Other than with respect to the Percent and Lump Sum Percent (as defined and disclosed in the Form 8-K) and matters such as names and titles, the employment agreements for Messrs. O'Donnell and Ashley are identical to the form filed as Exhibit 10.9. |
(11) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on June 15, 2009. |
(12) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on July 17, 2001. |
(13) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Quarterly Report on Form 10-Q for the period ended March 31, 2008, filed with the SEC on May 2, 2008. |
(14) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on January 31, 2003. |
(15) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on April 14, 2009. |
(16) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on April 11, 2006, relating to certain events which occurred on April 5, 2006. |
(17) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on May 3, 2007. |
(18) | Incorporated by reference to Exhibit 99.2 to the Registration Statement on Form S-8 (Registration No. 333-90758) dated June 19, 2002. |
(19) | 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. |
(20) | 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. |
(21) | 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. |
(22) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on September 2, 2004. |
(23) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Annual Report on Form 10-K for the year ended December 31, 2004, filed with the SEC on March 31, 2005 (SEC File Number 001-14428). |
(24) | Incorporated by reference to Exhibit 99.1 to the Registration Statement on Form S-8 (Registration No. 333-90758) dated June 19, 2002. |
(25) | 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. |
(26) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Quarterly Report on Form 10-Q for the period ended September 30, 2008, filed with the SEC on October 30, 2008. |
(27) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on April 1, 2002. |
(28) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on February 4, 2003. |
(29) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on March 18, 2004. |
(30) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Form 8-A, filed with the SEC on December 14, 2006. |
(31) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Annual Report on Form 10-K for the year ended December 31, 2008, filed with the SEC on February 20, 2009. |
(32) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on March 11, 2010. |
(33) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on March 18, 2010. |
(34) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on April 27, 2010. |
(35) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Quarterly Report on Form 10-Q, filed with the SEC on April 29, 2010. |
(36) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on June 11, 2010. |
(37) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on August 13, 2010. |
(38) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on September 23, 2010. |
(39) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on November 18, 2010. |
(40) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Definitive Proxy Statement filed with the Commission on April 8, 2010. |
(41) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on January 24, 2011. |
(42) | 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. |
(43) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on May 22, 2012. |
(44) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on February 27, 2012. |
(45) | 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. |
/s/ Neill A. Currie | ||||||
Neill A. Currie | ||||||
Chief Executive Officer, Director | ||||||
Signature | Title | Date | ||||
/s/ Neill A. Currie | Chief Executive Officer, Director | February 21, 2013 | ||||
Neill A. Currie | ||||||
/s/ Jeffrey D. Kelly | Executive Vice President, Chief Financial Officer | February 21, 2013 | ||||
Jeffrey D. Kelly | ||||||
/s/ Mark A. Wilcox | Senior Vice President, Corporate Controller and Chief Accounting Officer | February 21, 2013 | ||||
Mark A. Wilcox | ||||||
/s/ Ralph B. Levy | Chairman of the Board of Directors | February 21, 2013 | ||||
Ralph B. Levy | ||||||
/s/ David C. Bushnell | Director | February 21, 2013 | ||||
David C. Bushnell | ||||||
/s/ Thomas A. Cooper | Director | February 21, 2013 | ||||
Thomas A. Cooper | ||||||
/s/ James L. Gibbons | Director | February 21, 2013 | ||||
James L. Gibbons | ||||||
/s/ Jean D. Hamilton | Director | February 21, 2013 | ||||
Jean D. Hamilton | ||||||
/s/ Henry Klehm, III | Director | February 21, 2013 | ||||
Henry Klehm, III | ||||||
/s/ W. James MacGinnitie | Director | February 21, 2013 | ||||
W. James MacGinnitie | ||||||
/s/ Anthony M. Santomero | Director | February 21, 2013 | ||||
Anthony M. Santomero | ||||||
/s/ Nicholas L. Trivisonno | Director | February 21, 2013 | ||||
Nicholas L. Trivisonno | ||||||
/s/ Edward J. Zore | Director | February 21, 2013 | ||||
Edward J. Zore |
Page | |
December 31, 2012 | December 31, 2011 | ||||||
Assets | |||||||
Fixed maturity investments trading, at fair value | |||||||
(Amortized cost $4,554,362 and $4,265,929 at December 31, 2012 and December 31, 2011, respectively) (Notes 5 and 6) | $ | 4,665,421 | $ | 4,291,465 | |||
Fixed maturity investments available for sale, at fair value | |||||||
(Amortized cost $71,445 and $130,669 at December 31, 2012 and December 31, 2011, respectively) (Notes 5 and 6) | 83,442 | 142,052 | |||||
Short term investments, at fair value (Notes 5 and 6) | 821,163 | 905,477 | |||||
Equity investments trading, at fair value (Notes 5 and 6) | 58,186 | 50,560 | |||||
Other investments, at fair value (Notes 5 and 6) | 644,711 | 748,984 | |||||
Investments in other ventures, under equity method (Note 5) | 87,724 | 70,714 | |||||
Total investments | 6,360,647 | 6,209,252 | |||||
Cash and cash equivalents | 325,358 | 216,984 | |||||
Premiums receivable | 491,365 | 471,878 | |||||
Prepaid reinsurance premiums (Note 7) | 77,082 | 58,522 | |||||
Reinsurance recoverable (Notes 7 and 8) | 192,512 | 404,029 | |||||
Accrued investment income | 33,478 | 33,523 | |||||
Deferred acquisition costs | 52,622 | 43,721 | |||||
Receivable for investments sold | 168,673 | 117,117 | |||||
Other assets | 218,405 | 180,992 | |||||
Goodwill and other intangible assets (Note 4) | 8,486 | 8,894 | |||||
Total assets | $ | 7,928,628 | $ | 7,744,912 | |||
Liabilities, Noncontrolling Interests and Shareholders’ Equity | |||||||
Liabilities | |||||||
Reserve for claims and claim expenses (Note 8) | $ | 1,879,377 | $ | 1,992,354 | |||
Unearned premiums | 399,517 | 347,655 | |||||
Debt (Note 9) | 351,775 | 353,620 | |||||
Reinsurance balances payable | 290,419 | 256,883 | |||||
Payable for investments purchased | 278,787 | 303,264 | |||||
Other liabilities | 253,438 | 211,369 | |||||
Liabilities of discontinued operations held for sale (Note 3) | — | 13,507 | |||||
Total liabilities | 3,453,313 | 3,478,652 | |||||
Commitments and Contingencies (Note 20) | |||||||
Redeemable noncontrolling interest – DaVinciRe (Note 10) | 968,259 | 657,727 | |||||
Shareholders’ Equity (Note 12) | |||||||
Preference Shares: $1.00 par value – 16,000,000 shares issued and outstanding at December 31, 2012 (December 31, 2011 – 22,000,000) | 400,000 | 550,000 | |||||
Common shares: $1.00 par value – 45,542,203 shares issued and outstanding at December 31, 2012 (December 31, 2011 – 51,542,955) | 45,542 | 51,543 | |||||
Accumulated other comprehensive income | 13,622 | 11,760 | |||||
Retained earnings | 3,043,901 | 2,991,890 | |||||
Total shareholders’ equity attributable to RenaissanceRe | 3,503,065 | 3,605,193 | |||||
Noncontrolling interest (Note 10) | 3,991 | 3,340 | |||||
Total shareholders’ equity | 3,507,056 | 3,608,533 | |||||
Total liabilities, noncontrolling interests and shareholders’ equity | $ | 7,928,628 | $ | 7,744,912 |
2012 | 2011 | 2010 | |||||||||
Revenues | |||||||||||
Gross premiums written | $ | 1,551,591 | $ | 1,434,976 | $ | 1,165,295 | |||||
Net premiums written (Note 7) | $ | 1,102,657 | $ | 1,012,773 | $ | 848,965 | |||||
(Increase) decrease in unearned premiums | (33,302 | ) | (61,724 | ) | 15,956 | ||||||
Net premiums earned (Note 7) | 1,069,355 | 951,049 | 864,921 | ||||||||
Net investment income (Note 5) | 167,375 | 118,000 | 203,955 | ||||||||
Net foreign exchange gains (losses) | 5,223 | (6,911 | ) | (17,126 | ) | ||||||
Equity in earnings (losses) of other ventures (Note 5) | 23,238 | (36,533 | ) | (11,814 | ) | ||||||
Other (loss) income | (22,905 | ) | (685 | ) | 41,120 | ||||||
Net realized and unrealized gains on investments (Note 5) | 163,991 | 70,668 | 144,444 | ||||||||
Total other-than-temporary impairments | (395 | ) | (630 | ) | (831 | ) | |||||
Portion recognized in other comprehensive income (loss), before taxes | 52 | 78 | 2 | ||||||||
Net other-than-temporary impairments (Note 5) | (343 | ) | (552 | ) | (829 | ) | |||||
Total revenues | 1,405,934 | 1,095,036 | 1,224,671 | ||||||||
Expenses | |||||||||||
Net claims and claim expenses incurred (Notes 7 and 8) | 325,211 | 861,179 | 129,345 | ||||||||
Acquisition expenses | 113,542 | 97,376 | 94,961 | ||||||||
Operational expenses | 179,301 | 169,666 | 166,042 | ||||||||
Corporate expenses | 16,692 | 18,264 | 20,136 | ||||||||
Interest expense (Note 9) | 23,097 | 23,368 | 21,829 | ||||||||
Total expenses | 657,843 | 1,169,853 | 432,313 | ||||||||
Income (loss) from continuing operations before taxes | 748,091 | (74,817 | ) | 792,358 | |||||||
Income tax (expense) benefit (Note 15) | (1,429 | ) | 315 | 6,124 | |||||||
Income (loss) from continuing operations | 746,662 | (74,502 | ) | 798,482 | |||||||
Income (loss) from discontinued operations (Note 3) | 2,287 | (15,890 | ) | 62,670 | |||||||
Net income (loss) | 748,949 | (90,392 | ) | 861,152 | |||||||
Net (income) loss attributable to noncontrolling interests (Note 10) | (148,040 | ) | 33,157 | (116,421 | ) | ||||||
Net income (loss) attributable to RenaissanceRe | 600,909 | (57,235 | ) | 744,731 | |||||||
Dividends on preference shares (Note 12) | (34,895 | ) | (35,000 | ) | (42,118 | ) | |||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | $ | 566,014 | $ | (92,235 | ) | $ | 702,613 | ||||
Income (loss) from continuing operations available (attributable) to RenaissanceRe common shareholders per common share – basic | $ | 11.35 | $ | (1.53 | ) | $ | 11.28 | ||||
Income (loss) from discontinued operations available (attributable) to RenaissanceRe common shareholders per common share – basic | 0.05 | (0.31 | ) | 1.14 | |||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – basic (Note 13) | $ | 11.40 | $ | (1.84 | ) | $ | 12.42 | ||||
Income (loss) from continuing operations available (attributable) to RenaissanceRe common shareholders per common share – diluted | $ | 11.18 | $ | (1.53 | ) | $ | 11.18 | ||||
Income (loss) from discontinued operations available (attributable) to RenaissanceRe common shareholders per common share – diluted | 0.05 | (0.31 | ) | 1.13 | |||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – diluted (Note 13) | $ | 11.23 | $ | (1.84 | ) | $ | 12.31 | ||||
Dividends per common share (Note 12) | $ | 1.08 | $ | 1.04 | $ | 1.00 |
2012 | 2011 | 2010 | |||||||||
Comprehensive income (loss) | |||||||||||
Net income (loss) | $ | 748,949 | $ | (90,392 | ) | $ | 861,152 | ||||
Change in net unrealized gains on investments | 1,914 | (7,991 | ) | (25,040 | ) | ||||||
Portion of other-than-temporary impairments recognized in other comprehensive income (loss), before taxes | (52 | ) | (78 | ) | (2 | ) | |||||
Comprehensive income (loss) | 750,811 | (98,461 | ) | 836,110 | |||||||
Net (income) loss attributable to noncontrolling interests | (148,040 | ) | 33,157 | (116,421 | ) | ||||||
Change in net unrealized gains on fixed maturity investments available for sale attributable to noncontrolling interests | — | 6 | 3,427 | ||||||||
Comprehensive (income) loss attributable to noncontrolling interests | (148,040 | ) | 33,163 | (112,994 | ) | ||||||
Comprehensive income (loss) attributable to RenaissanceRe | $ | 602,771 | $ | (65,298 | ) | $ | 723,116 | ||||
Disclosure regarding net unrealized gains | |||||||||||
Total realized and net unrealized holding gains (losses) on investments and net other-than-temporary impairments | $ | 5,100 | $ | (2,426 | ) | $ | 58,284 | ||||
Net realized gains on fixed maturity investments available for sale (1) | (3,529 | ) | (6,111 | ) | (80,726 | ) | |||||
Net other-than-temporary impairments recognized in earnings | 343 | 552 | 829 | ||||||||
Change in net unrealized gains on investments | $ | 1,914 | $ | (7,985 | ) | $ | (21,613 | ) |
(1) | Included in net realized gains on fixed maturity investments available for sale is $Nil, $Nil and $7.7 million of net realized gains on fixed maturity investments available for sale included within the Company's discontinued operations for the years ended December 31, 2012, 2011 and 2010, respectively. |
2012 | 2011 | 2010 | |||||||||
Preference shares | |||||||||||
Balance – January 1 | $ | 550,000 | $ | 550,000 | $ | 650,000 | |||||
Repurchase of shares | (150,000 | ) | — | (100,000 | ) | ||||||
Balance – December 31 | 400,000 | 550,000 | 550,000 | ||||||||
Common shares | |||||||||||
Balance – January 1 | 51,543 | 54,110 | 61,745 | ||||||||
Repurchase of shares | (6,399 | ) | (2,889 | ) | (8,198 | ) | |||||
Exercise of options and issuance of restricted stock awards (Notes 12 and 17) | 398 | 322 | 563 | ||||||||
Balance – December 31 | 45,542 | 51,543 | 54,110 | ||||||||
Additional paid-in capital | |||||||||||
Balance – January 1 | — | — | — | ||||||||
Repurchase of shares | (27,376 | ) | (13,923 | ) | (30,284 | ) | |||||
Change in redeemable noncontrolling interest | 9,091 | (473 | ) | 5,200 | |||||||
Exercise of options and issuance of restricted stock awards (Notes 12 and 17) | 18,285 | 14,396 | 25,084 | ||||||||
Balance – December 31 | — | — | — | ||||||||
Accumulated other comprehensive income | |||||||||||
Balance – January 1 | 11,760 | 19,823 | 41,438 | ||||||||
Change in net unrealized gains on investments | 1,914 | (7,985 | ) | (21,613 | ) | ||||||
Portion of other-than-temporary impairments recognized in other comprehensive income (loss) | (52 | ) | (78 | ) | (2 | ) | |||||
Balance – December 31 | 13,622 | 11,760 | 19,823 | ||||||||
Retained earnings | |||||||||||
Balance – January 1 | 2,991,890 | 3,312,392 | 3,087,603 | ||||||||
Net income (loss) | 748,949 | (90,392 | ) | 861,152 | |||||||
Net (income) loss attributable to noncontrolling interests (Note 10) | (148,040 | ) | 33,157 | (116,421 | ) | ||||||
Repurchase of shares | (460,647 | ) | (174,807 | ) | (421,888 | ) | |||||
Dividends on common shares | (53,356 | ) | (53,460 | ) | (55,936 | ) | |||||
Dividends on preference shares | (34,895 | ) | (35,000 | ) | (42,118 | ) | |||||
Balance – December 31 | 3,043,901 | 2,991,890 | 3,312,392 | ||||||||
Noncontrolling interest (Note 10) | 3,991 | 3,340 | 2,889 | ||||||||
Total shareholders' equity | $ | 3,507,056 | $ | 3,608,533 | $ | 3,939,214 |
2012 | 2011 | 2010 | |||||||||
Cash flows provided by operating activities | |||||||||||
Net income (loss) | $ | 748,949 | $ | (90,392 | ) | $ | 861,152 | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities | |||||||||||
Amortization, accretion and depreciation | 59,695 | 42,298 | 59,719 | ||||||||
Equity in undistributed (earnings) losses of other ventures | (19,316 | ) | 39,581 | 23,959 | |||||||
Net realized and unrealized gains on investments | (163,991 | ) | (70,668 | ) | (151,213 | ) | |||||
Net other-than-temporary impairments | 343 | 552 | 829 | ||||||||
Net unrealized gains included in net investment income | (39,832 | ) | (22,683 | ) | (57,540 | ) | |||||
Net unrealized (gains) losses included in other (loss) income | (330 | ) | 1,553 | (12,337 | ) | ||||||
Change in: | |||||||||||
Premiums receivable | (19,487 | ) | (149,798 | ) | (23,215 | ) | |||||
Prepaid reinsurance premiums | (18,560 | ) | 2,121 | 14,030 | |||||||
Reinsurance recoverable | 211,517 | (302,318 | ) | 10,110 | |||||||
Deferred acquisition costs | (8,901 | ) | (8,073 | ) | 10,479 | ||||||
Reserve for claims and claim expenses | (112,977 | ) | 734,511 | (169,974 | ) | ||||||
Unearned premiums | 51,862 | 61,472 | (46,023 | ) | |||||||
Reinsurance balances payable | 33,536 | (61,141 | ) | (29,432 | ) | ||||||
Other | (5,579 | ) | (11,082 | ) | 4,176 | ||||||
Net cash provided by operating activities | 716,929 | 165,933 | 494,720 | ||||||||
Cash flows (used in) provided by investing activities | |||||||||||
Proceeds from sales and maturities of fixed maturity investments trading | 8,192,867 | 6,089,468 | 7,795,587 | ||||||||
Purchases of fixed maturity investments trading | (8,536,238 | ) | (6,271,623 | ) | (11,122,823 | ) | |||||
Proceeds from sales and maturities of fixed maturity investments available for sale | 65,168 | 106,362 | 3,751,669 | ||||||||
Purchases of fixed maturity investments available for sale | — | (4,107 | ) | (403,660 | ) | ||||||
Purchases of equity investments trading | — | (47,995 | ) | — | |||||||
Net sales (purchases) of short term investments | 68,777 | 103,148 | (26,752 | ) | |||||||
Net sales of other investments | 150,828 | 50,940 | 122,065 | ||||||||
Net purchases of investments in other ventures | — | (39,000 | ) | (1,915 | ) | ||||||
Net (purchases) sales of other assets | (4,079 | ) | 58,318 | (5,561 | ) | ||||||
Net (payments) proceeds related to sale of discontinued operations | (9,000 | ) | 269,520 | — | |||||||
Net cash (used in) provided by investing activities | (71,677 | ) | 315,031 | 108,610 | |||||||
Cash flows used in financing activities | |||||||||||
Dividends paid – RenaissanceRe common shares | (53,356 | ) | (53,460 | ) | (55,936 | ) | |||||
Dividends paid – preference shares | (34,895 | ) | (35,000 | ) | (42,118 | ) | |||||
RenaissanceRe common share repurchases | (463,309 | ) | (191,619 | ) | (448,882 | ) | |||||
Net (repayment) drawdown of debt | (1,937 | ) | (200,000 | ) | 249,046 | ||||||
Redemption of preference shares | (150,000 | ) | — | (100,000 | ) | ||||||
Net third party DaVinciRe share transactions | 164,927 | (62,157 | ) | (136,702 | ) | ||||||
Third party investment in noncontrolling interest | — | — | 3,000 | ||||||||
Net cash used in financing activities | (538,570 | ) | (542,236 | ) | (531,592 | ) | |||||
Effect of exchange rate changes on foreign currency cash | 1,692 | 518 | (1,003 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | 108,374 | (60,754 | ) | 70,735 | |||||||
Net decrease in cash and cash equivalents of discontinued operations | — | — | 3,891 | ||||||||
Cash and cash equivalents, beginning of period | 216,984 | 277,738 | 203,112 | ||||||||
Cash and cash equivalents, end of period | $ | 325,358 | $ | 216,984 | $ | 277,738 |
• | Renaissance Reinsurance Ltd. ("Renaissance Reinsurance"), the Company's principal reinsurance subsidiary, provides property catastrophe and specialty reinsurance coverages to insurers and reinsurers on a worldwide basis. |
• | The Company also manages property catastrophe and specialty reinsurance business written on behalf of joint ventures, which principally include Top Layer Reinsurance Ltd. ("Top Layer Re"), recorded under the equity method of accounting, and DaVinci Reinsurance Ltd. ("DaVinci"). Because the Company owns a noncontrolling equity interest in, but controls a majority of the outstanding voting power of DaVinci's parent, DaVinciRe Holdings Ltd. ("DaVinciRe"), the results of DaVinci and DaVinciRe are consolidated in the Company's financial statements. Redeemable noncontrolling interest – DaVinciRe represents the interests of external parties with respect to the net (income) loss and shareholders' equity of DaVinciRe. Renaissance Underwriting Managers, Ltd. ("RUM"), a wholly owned subsidiary, acts as exclusive underwriting manager for these joint ventures in return for fee-based income and profit participation. |
• | Glencoe Insurance Ltd. ("Glencoe") is a Bermuda domiciled excess and surplus lines insurance company that is currently eligible to do business on an excess and surplus lines basis in 49 U.S. states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. |
• | RenaissanceRe Syndicate 1458 ("Syndicate 1458") is the Company's Lloyd's syndicate. RenaissanceRe Corporate Capital (UK) Limited ("RenaissanceRe CCL"), a wholly owned subsidiary of RenaissanceRe, is Syndicate 1458's sole corporate member and RenaissanceRe Syndicate Management Ltd. ("RSML"), a wholly owned subsidiary of RenaissanceRe, is the managing agent for Syndicate 1458. |
• | The Company, through Renaissance Trading Ltd. ("Renaissance Trading") and RenRe Energy Advisors Ltd. ("REAL"), transacts certain derivative-based risk management products primarily to address weather and energy risk and engages in hedging and trading activities related to those transactions. |
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
Revenues | |||||||||||||
Gross premiums written | $ | — | $ | 21,546 | $ | 478,308 | |||||||
Net premiums written | $ | — | $ | (44,935 | ) | $ | 290,188 | ||||||
Decrease in unearned premiums | — | 66,137 | 16,037 | ||||||||||
Net premiums earned | $ | — | $ | 21,202 | $ | 306,225 | |||||||
Net investment income | — | 339 | 5,082 | ||||||||||
Other income (loss) | 2,730 | (9,904 | ) | 5,811 | |||||||||
Net realized and unrealized gains on fixed maturity investments | — | 42 | 6,769 | ||||||||||
Total revenues | 2,730 | 11,679 | 323,887 | ||||||||||
Expenses | |||||||||||||
Net claims and claim expenses incurred | — | 8,430 | 113,186 | ||||||||||
Acquisition expenses | — | 6,059 | 68,777 | ||||||||||
Operational expenses | 436 | 7,272 | 67,236 | ||||||||||
Corporate expenses | — | 770 | 5,567 | ||||||||||
Total expenses | 436 | 22,531 | 254,766 | ||||||||||
Income (loss) before taxes | 2,294 | (10,852 | ) | 69,121 | |||||||||
Income tax expense | (7 | ) | (5,038 | ) | (6,451 | ) | |||||||
Income (loss) from discontinued operations | $ | 2,287 | $ | (15,890 | ) | $ | 62,670 | ||||||
Goodwill and other intangibles | |||||||||||||
Goodwill | Other intangible assets | Total | |||||||||||
Balance as of December 31, 2010 (1) | |||||||||||||
Gross amount | $ | 8,160 | $ | 12,999 | $ | 21,159 | |||||||
Accumulated impairment losses and amortization | — | (6,469 | ) | (6,469 | ) | ||||||||
�� | 8,160 | 6,530 | 14,690 | ||||||||||
Acquired during the year | — | — | — | ||||||||||
Amortization | — | (563 | ) | (563 | ) | ||||||||
Impairment losses | (2,299 | ) | (2,934 | ) | (5,233 | ) | |||||||
Balance as of December 31, 2011 | |||||||||||||
Gross amount | 8,160 | 12,999 | 21,159 | ||||||||||
Accumulated impairment losses and amortization | (2,299 | ) | (9,966 | ) | (12,265 | ) | |||||||
5,861 | 3,033 | 8,894 | |||||||||||
Acquired during the year | — | — | — | ||||||||||
Amortization | — | (408 | ) | (408 | ) | ||||||||
Impairment losses | — | — | — | ||||||||||
Balance as of December 31, 2012 | |||||||||||||
Gross amount | 8,160 | 12,999 | 21,159 | ||||||||||
Accumulated impairment losses and amortization | (2,299 | ) | (10,374 | ) | (12,673 | ) | |||||||
$ | 5,861 | $ | 2,625 | $ | 8,486 | ||||||||
(1) | Excludes goodwill and intangible assets of $23.7 million and $33.3 million, respectively, at December 31, 2010 associated with the assets of discontinued operations held for sale. |
Goodwill and other intangible assets included in investments in other ventures, under equity method | |||||||||||||
Goodwill | Other intangible assets | Total | |||||||||||
Balance as of December 31, 2010 | |||||||||||||
Gross amount | $ | 8,477 | $ | 44,323 | $ | 52,800 | |||||||
Accumulated impairment losses and amortization | — | (14,659 | ) | (14,659 | ) | ||||||||
8,477 | 29,664 | 38,141 | |||||||||||
Acquired during the year | 544 | — | 544 | ||||||||||
Amortization | — | (5,161 | ) | (5,161 | ) | ||||||||
Impairment losses | — | — | — | ||||||||||
Balance as of December 31, 2011 | |||||||||||||
Gross amount | 9,021 | 44,323 | 53,344 | ||||||||||
Accumulated impairment losses and amortization | — | (19,820 | ) | (19,820 | ) | ||||||||
9,021 | 24,503 | 33,524 | |||||||||||
Acquired during the year | 1,819 | — | 1,819 | ||||||||||
Amortization | — | (4,949 | ) | (4,949 | ) | ||||||||
Impairment losses | — | — | — | ||||||||||
Balance as of December 31, 2012 | |||||||||||||
Gross amount | 10,840 | 44,323 | 55,163 | ||||||||||
Accumulated impairment losses and amortization | — | (24,769 | ) | (24,769 | ) | ||||||||
$ | 10,840 | $ | 19,554 | $ | 30,394 | ||||||||
Other intangible assets | |||||||||||||
At December 31, 2012 | Gross carrying value | Accumulated amortization and impairment losses | Total | ||||||||||
Customer relationships and customer lists | $ | 39,485 | $ | (20,936 | ) | $ | 18,549 | ||||||
Lloyd's managing agency license | 1,867 | — | 1,867 | ||||||||||
Covenants not-to-compete | 2,130 | (1,369 | ) | 761 | |||||||||
Trademarks and trade names | 610 | (110 | ) | 500 | |||||||||
Software | 8,730 | (8,395 | ) | 335 | |||||||||
Patents and intellectual property | 4,500 | (4,333 | ) | 167 | |||||||||
$ | 57,322 | $ | (35,143 | ) | $ | 22,179 | |||||||
Other intangibles | Other intangible assets included in investments in other ventures, under equity method | Total | |||||||||||
2013 | $ | 375 | $ | 3,927 | $ | 4,302 | |||||||
2014 | 209 | 3,253 | 3,462 | ||||||||||
2015 | 174 | 2,592 | 2,766 | ||||||||||
2016 | — | 2,100 | 2,100 | ||||||||||
2017 | — | 1,931 | 1,931 | ||||||||||
2018 and thereafter | — | 5,751 | 5,751 | ||||||||||
Total remaining amortization expense | $ | 758 | $ | 19,554 | $ | 20,312 | |||||||
Indefinite lived | 1,867 | — | 1,867 | ||||||||||
Total | $ | 2,625 | $ | 19,554 | $ | 22,179 | |||||||
December 31, 2012 | December 31, 2011 | ||||||||
U.S. treasuries | $ | 1,259,800 | $ | 885,152 | |||||
Agencies | 315,154 | 158,561 | |||||||
Non-U.S. government (Sovereign debt) | 133,198 | 216,916 | |||||||
FDIC guaranteed corporate | — | 423,630 | |||||||
Non-U.S. government-backed corporate | 349,514 | 640,757 | |||||||
Corporate | 1,607,233 | 1,187,437 | |||||||
Agency mortgage-backed | 399,619 | 428,042 | |||||||
Non-agency mortgage-backed | 230,747 | 82,096 | |||||||
Commercial mortgage-backed | 361,645 | 255,885 | |||||||
Asset-backed | 8,511 | 12,989 | |||||||
Total fixed maturity investments trading | $ | 4,665,421 | $ | 4,291,465 | |||||
Included in Accumulated Other Comprehensive Income | |||||||||||||||||||||
At December 31, 2012 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Non-Credit Other-Than- Temporary Impairments (1) | ||||||||||||||||
Corporate | $ | 7,065 | $ | 1,002 | $ | (93 | ) | $ | 7,974 | $ | (85 | ) | |||||||||
Agency mortgage-backed | 8,280 | 632 | — | 8,912 | — | ||||||||||||||||
Non-agency mortgage-backed | 14,613 | 2,989 | (10 | ) | 17,592 | (835 | ) | ||||||||||||||
Commercial mortgage-backed | 37,292 | 7,229 | — | 44,521 | — | ||||||||||||||||
Asset-backed | 4,195 | 248 | — | 4,443 | — | ||||||||||||||||
Total fixed maturity investments available for sale | $ | 71,445 | $ | 12,100 | $ | (103 | ) | $ | 83,442 | $ | (920 | ) | |||||||||
Included in Accumulated Other Comprehensive Income | |||||||||||||||||||||
At December 31, 2011 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Non-Credit Other-Than- Temporary Impairments (1) | ||||||||||||||||
Non-U.S. government (Sovereign debt) | $ | 10,087 | $ | 921 | $ | (12 | ) | $ | 10,996 | $ | — | ||||||||||
Non-U.S. government-backed corporate | 312 | 13 | — | 325 | — | ||||||||||||||||
Corporate | 18,449 | 1,535 | (517 | ) | 19,467 | (873 | ) | ||||||||||||||
Agency mortgage-backed | 12,636 | 1,071 | — | 13,707 | — | ||||||||||||||||
Non-agency mortgage-backed | 21,097 | 1,862 | (284 | ) | 22,675 | (1,837 | ) | ||||||||||||||
Commercial mortgage-backed | 63,269 | 6,576 | (1 | ) | 69,844 | — | |||||||||||||||
Asset-backed | 4,819 | 219 | — | 5,038 | — | ||||||||||||||||
Total fixed maturity investments available for sale | $ | 130,669 | $ | 12,197 | $ | (814 | ) | $ | 142,052 | $ | (2,710 | ) | |||||||||
(1) | Represents the non-credit component of other-than-temporary impairments recognized in accumulated other comprehensive income since the adoption of guidance related to the recognition and presentation of other-than-temporary impairments under FASB ASC Topic Financial Instruments – Debt and Equity Securities, during the second quarter of 2009, adjusted for subsequent sales of securities. It does not include the change in fair value subsequent to the impairment measurement date. |
Trading | Available for Sale | Total Fixed Maturity Investments | |||||||||||||||||||||||
At December 31, 2012 | Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||||||||
Due in less than one year | $ | 431,824 | $ | 432,400 | $ | 501 | $ | 674 | $ | 432,325 | $ | 433,074 | |||||||||||||
Due after one through five years | 2,357,902 | 2,386,475 | 3,043 | 3,381 | 2,360,945 | 2,389,856 | |||||||||||||||||||
Due after five through ten years | 674,560 | 709,307 | 2,331 | 2,537 | 676,891 | 711,844 | |||||||||||||||||||
Due after ten years | 122,330 | 136,717 | 1,190 | 1,382 | 123,520 | 138,099 | |||||||||||||||||||
Mortgage-backed | 959,731 | 992,011 | 60,185 | 71,025 | 1,019,916 | 1,063,036 | |||||||||||||||||||
Asset-backed | 8,015 | 8,511 | 4,195 | 4,443 | 12,210 | 12,954 | |||||||||||||||||||
Total | $ | 4,554,362 | $ | 4,665,421 | $ | 71,445 | $ | 83,442 | $ | 4,625,807 | $ | 4,748,863 | |||||||||||||
December 31, 2012 | December 31, 2011 | ||||||||
Financial institution securities | $ | 58,186 | $ | 50,560 | |||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
Fixed maturity investments | $ | 102,476 | $ | 89,858 | $ | 108,195 | |||||||
Short term investments | 1,007 | 1,666 | 2,318 | ||||||||||
Equity investments | 1,086 | 471 | — | ||||||||||
Other investments | |||||||||||||
Hedge funds and private equity investments | 36,635 | 27,541 | 64,419 | ||||||||||
Other | 37,784 | 8,458 | 39,305 | ||||||||||
Cash and cash equivalents | 194 | 163 | 277 | ||||||||||
179,182 | 128,157 | 214,514 | |||||||||||
Investment expenses | (11,807 | ) | (10,157 | ) | (10,559 | ) | |||||||
Net investment income | $ | 167,375 | $ | 118,000 | $ | 203,955 | |||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
Gross realized gains | $ | 97,787 | $ | 79,358 | $ | 138,814 | |||||||
Gross realized losses | (16,705 | ) | (30,659 | ) | (19,147 | ) | |||||||
Net realized gains on fixed maturity investments | 81,082 | 48,699 | 119,667 | ||||||||||
Net unrealized gains on fixed maturity investments trading | 75,283 | 19,404 | 24,777 | ||||||||||
Net unrealized gains on equity investments trading | 7,626 | 2,565 | — | ||||||||||
Net realized and unrealized gains on investments | $ | 163,991 | $ | 70,668 | $ | 144,444 | |||||||
Total other-than-temporary impairments | $ | (395 | ) | $ | (630 | ) | $ | (831 | ) | ||||
Portion recognized in other comprehensive income, before taxes | 52 | 78 | 2 | ||||||||||
Net other-than-temporary impairments | $ | (343 | ) | $ | (552 | ) | $ | (829 | ) | ||||
Less than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||||
At December 31, 2012 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||
Corporate | $ | 598 | $ | (30 | ) | $ | 440 | $ | (63 | ) | $ | 1,038 | $ | (93 | ) | ||||||||||
Non-agency mortgage-backed | — | — | 101 | (10 | ) | 101 | (10 | ) | |||||||||||||||||
Total | $ | 598 | $ | (30 | ) | $ | 541 | $ | (73 | ) | $ | 1,139 | $ | (103 | ) | ||||||||||
Less than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||||
At December 31, 2011 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||
Non-U.S. government (Sovereign debt) | $ | 915 | $ | (9 | ) | $ | 42 | $ | (3 | ) | $ | 957 | $ | (12 | ) | ||||||||||
Corporate | 3,935 | (385 | ) | 412 | (132 | ) | 4,347 | (517 | ) | ||||||||||||||||
Non-agency mortgage-backed | 8,024 | (224 | ) | 798 | (60 | ) | 8,822 | (284 | ) | ||||||||||||||||
Commercial mortgage-backed | — | — | 455 | (1 | ) | 455 | (1 | ) | |||||||||||||||||
Total | $ | 12,874 | $ | (618 | ) | $ | 1,707 | $ | (196 | ) | $ | 14,581 | $ | (814 | ) | ||||||||||
2012 | 2011 | ||||||||
Balance – January 1 | $ | 2,370 | $ | 3,098 | |||||
Additions: | |||||||||
Amount related to credit loss for which an other-than-temporary impairment was not previously recognized | 8 | 134 | |||||||
Amount related to credit loss for which an other-than-temporary impairment was previously recognized | 110 | 145 | |||||||
Reductions: | |||||||||
Securities sold during the period | (1,650 | ) | (1,007 | ) | |||||
Securities for which the amount previously recognized in other comprehensive income was recognized in earnings, because the Company intends to sell the security or is more likely than not the Company will be required to sell the security | — | — | |||||||
Increases in cash flows expected to be collected that are recognized over the remaining life of the security | — | — | |||||||
Balance – December 31 | $ | 838 | $ | 2,370 | |||||
At December 31, | 2012 | 2011 | |||||||
Private equity partnerships | $ | 344,669 | $ | 367,909 | |||||
Senior secured bank loan funds | 202,929 | 257,870 | |||||||
Catastrophe bonds | 91,310 | 70,999 | |||||||
Hedge funds | 5,803 | 21,344 | |||||||
Non-U.S. fixed income funds | — | 28,862 | |||||||
Miscellaneous other investments | — | 2,000 | |||||||
Total other investments | $ | 644,711 | $ | 748,984 | |||||
2012 | 2011 | ||||||||||||||||||||||
At December 31, | Investment | Ownership % | Carrying Value | Investment | Ownership % | Carrying Value | |||||||||||||||||
THIG | $ | 50,000 | 25.0 | % | $ | 28,303 | $ | 50,000 | 25.0 | % | $ | 32,645 | |||||||||||
Tower Hill | 10,000 | 28.6 | % | 13,969 | 10,000 | 28.6 | % | 14,173 | |||||||||||||||
Tower Hill Signature | 500 | 25.0 | % | 896 | 500 | 25.0 | % | — | |||||||||||||||
Total Tower Hill Companies | 60,500 | 43,168 | 60,500 | 46,818 | |||||||||||||||||||
Top Layer Re | 65,375 | 50.0 | % | 36,664 | 65,375 | 50.0 | % | 15,872 | |||||||||||||||
Other | 8,226 | 38.8 | % | 7,892 | 6,000 | 40.0 | % | 8,024 | |||||||||||||||
Total investments in other ventures, under equity method | $ | 134,101 | $ | 87,724 | $ | 131,875 | $ | 70,714 | |||||||||||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
Top Layer Re | $ | 20,792 | $ | (37,471 | ) | $ | (12,103 | ) | |||||
Tower Hill Companies | 4,965 | 2,923 | 1,151 | ||||||||||
Other | (2,519 | ) | (1,985 | ) | (862 | ) | |||||||
Total equity in earnings (losses) of other ventures | $ | 23,238 | $ | (36,533 | ) | $ | (11,814 | ) | |||||
• | Fair values determined by Level 1 inputs utilize unadjusted quoted prices obtained from active markets for identical assets or liabilities for which the Company has access. The fair value is determined by multiplying the quoted price by the quantity held by the Company; |
• | Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals, broker quotes and certain pricing indices; and |
• | Level 3 inputs are based all or in part on significant unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In these cases, significant management assumptions can be used to establish management's best estimate of the assumptions used by other market participants in determining the fair value of the asset or liability. |
At December 31, 2012 | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Fixed maturity investments | |||||||||||||||||
U.S. treasuries | $ | 1,259,800 | $ | 1,259,800 | $ | — | $ | — | |||||||||
Agencies | 315,154 | — | 315,154 | — | |||||||||||||
Non-U.S. government (Sovereign debt) | 133,198 | — | 133,198 | — | |||||||||||||
Non-U.S. government-backed corporate | 349,514 | — | 349,514 | — | |||||||||||||
Corporate | 1,615,207 | — | 1,587,415 | 27,792 | |||||||||||||
Agency mortgage-backed | 408,531 | — | 408,531 | — | |||||||||||||
Non-agency mortgage-backed | 248,339 | — | 248,339 | — | |||||||||||||
Commercial mortgage-backed | 406,166 | — | 406,166 | — | |||||||||||||
Asset-backed | 12,954 | — | 12,954 | — | |||||||||||||
Total fixed maturity investments | 4,748,863 | 1,259,800 | 3,461,271 | 27,792 | |||||||||||||
Short term investments | 821,163 | — | 821,163 | — | |||||||||||||
Equity investments trading | 58,186 | 58,186 | — | — | |||||||||||||
Other investments | |||||||||||||||||
Private equity partnerships | 344,669 | — | — | 344,669 | |||||||||||||
Senior secured bank loan funds | 202,929 | — | 172,334 | 30,595 | |||||||||||||
Catastrophe bonds | 91,310 | — | 91,310 | — | |||||||||||||
Hedge funds | 5,803 | — | — | 5,803 | |||||||||||||
Total other investments | 644,711 | — | 263,644 | 381,067 | |||||||||||||
Other assets and (liabilities) | |||||||||||||||||
Assumed and ceded (re)insurance contracts | 2,647 | — | — | 2,647 | |||||||||||||
Derivatives (1) | 19,123 | (125 | ) | 14,821 | 4,427 | ||||||||||||
Other | 7,315 | — | (11,551 | ) | 18,866 | ||||||||||||
Total other assets and (liabilities) | 29,085 | (125 | ) | 3,270 | 25,940 | ||||||||||||
$ | 6,302,008 | $ | 1,317,861 | $ | 4,549,348 | $ | 434,799 | ||||||||||
(1) | See "Note 19. Derivative Instruments" for additional information related to the fair value by type of contract, of derivatives entered into by the Company. |
At December 31, 2011 | 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 | $ | 885,152 | $ | 885,152 | $ | — | $ | — | |||||||||
Agencies | 158,561 | — | 158,561 | — | |||||||||||||
Non-U.S. government (Sovereign debt) | 227,912 | — | 227,912 | — | |||||||||||||
FDIC guaranteed corporate | 423,630 | — | 423,630 | — | |||||||||||||
Non-U.S. government-backed corporate | 641,082 | — | 641,082 | — | |||||||||||||
Corporate | 1,206,904 | — | 1,179,143 | 27,761 | |||||||||||||
Agency mortgage-backed | 441,749 | — | 441,749 | — | |||||||||||||
Non-agency mortgage-backed | 104,771 | — | 104,771 | — | |||||||||||||
Commercial mortgage-backed | 325,729 | — | 325,729 | — | |||||||||||||
Asset-backed | 18,027 | — | 18,027 | — | |||||||||||||
Total fixed maturity investments | 4,433,517 | 885,152 | 3,520,604 | 27,761 | |||||||||||||
Short term investments | 905,477 | — | 905,477 | — | |||||||||||||
Equity investments trading | 50,560 | 50,560 | — | — | |||||||||||||
Other investments | |||||||||||||||||
Private equity partnerships | 367,909 | — | — | 367,909 | |||||||||||||
Senior secured bank loan funds | 257,870 | — | 237,815 | 20,055 | |||||||||||||
Catastrophe bonds | 70,999 | — | 70,999 | — | |||||||||||||
Non-U.S. fixed income funds | 28,862 | — | 28,862 | — | |||||||||||||
Hedge funds | 21,344 | — | 14,782 | 6,562 | |||||||||||||
Miscellaneous other investments | 2,000 | — | — | 2,000 | |||||||||||||
Total other investments | 748,984 | — | 352,458 | 396,526 | |||||||||||||
Other assets and (liabilities) | |||||||||||||||||
Assumed and ceded (re)insurance contracts | 2,115 | — | — | 2,115 | |||||||||||||
Derivatives (1) | 3,312 | 707 | (6,293 | ) | 8,898 | ||||||||||||
Other | 10,644 | (6,869 | ) | — | 17,513 | ||||||||||||
Total other assets and (liabilities) | 16,071 | (6,162 | ) | (6,293 | ) | 28,526 | |||||||||||
$ | 6,154,609 | $ | 929,550 | $ | 4,772,246 | $ | 452,813 | ||||||||||
At December 31, 2012 | Fair Value (Level 3) | Valuation Technique | Unobservable (U) and Observable (O) Inputs | Low | High | Weighted Average or Actual | ||||||||||||||
Fixed maturity investments | ||||||||||||||||||||
Corporate | $ | 17,538 | Discounted cash flow ("DCF") | Credit spread (U) | n/a | n/a | 4.6 | % | ||||||||||||
Illiquidity premium (U) | n/a | n/a | 1.0 | % | ||||||||||||||||
Risk-free rate (O) | n/a | n/a | 0.1 | % | ||||||||||||||||
Dividend rate (O) | n/a | n/a | 5.9 | % | ||||||||||||||||
10,254 | Internal valuation model | Private transaction (U) | n/a | n/a | See below | |||||||||||||||
Total fixed maturity investments | 27,792 | |||||||||||||||||||
Other investments | ||||||||||||||||||||
Private equity partnerships | 344,669 | Net asset valuation | Estimated performance (U) | (8.8 | )% | 30.0 | % | 2.6 | % | |||||||||||
Senior secured bank loan funds | 30,595 | Net asset valuation | Estimated performance (U) | 0.3 | % | 1.0 | % | 0.8 | % | |||||||||||
Hedge funds | 5,803 | Net asset valuation | Estimated performance (U) | 0.0 | % | 0.0 | % | 0.0 | % | |||||||||||
Total other investments | 381,067 | |||||||||||||||||||
Other assets and (liabilities) | ||||||||||||||||||||
Assumed and ceded (re)insurance contracts | 2,647 | Internal valuation model | Net premiums written (O) | $ | — | $ | 12,250 | See below | ||||||||||||
Contract period (O) | 183 days | 365 days | See below | |||||||||||||||||
Net reserve for claims and claim expenses (U) | — | — | See below | |||||||||||||||||
Weather and energy related derivatives | 4,427 | Spread option; Quanto; Black Scholes; Simulation | Correlation (U) | 0 | 1 | See below | ||||||||||||||
Volatility (U) | 21.0 | % | 185.0 | % | See below | |||||||||||||||
Commodity curve (U) | $ | 3.19 | $ | 84.32 | See below | |||||||||||||||
Weather curve (U) | 6 | 5,555 | See below | |||||||||||||||||
Counterparty default risk (U) | 0.0 | % | 22.5 | % | See below | |||||||||||||||
Other | 18,241 | Net asset valuation | Estimated performance (U) | n/a | n/a | (0.1 | )% | |||||||||||||
625 | Internal valuation model | Private transaction (U) | n/a | n/a | See below | |||||||||||||||
Total other assets and (liabilities) | 25,940 | |||||||||||||||||||
$ | 434,799 | |||||||||||||||||||
• | observable inputs: contract price, notional, option strike, term to expiry, interest rate, contractual limits; |
• | unobservable inputs: correlation; and |
• | both observable and unobservable: spot and forward volatilities, forward commodity price, forward weather curve, counterparty credit risk. |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | |||||||||||||||||
Fixed maturity investments trading | Other investments | Other assets and (liabilities) | Total | ||||||||||||||
Balance – January 1, 2011 | $ | 21,785 | $ | 362,102 | $ | 16,499 | $ | 400,386 | |||||||||
Total unrealized gains (losses) | |||||||||||||||||
Included in net investment income | 5,976 | 23,473 | — | 29,449 | |||||||||||||
Included in other (loss) income | — | — | (4,528 | ) | (4,528 | ) | |||||||||||
Total realized (losses) gains | |||||||||||||||||
Included in net investment income | — | (223 | ) | — | (223 | ) | |||||||||||
Included in other (loss) income | — | — | 38,318 | 38,318 | |||||||||||||
Total foreign exchange losses | — | (1,635 | ) | (95 | ) | (1,730 | ) | ||||||||||
Purchases | — | 74,293 | 56,543 | 130,836 | |||||||||||||
Sales | — | — | (44,562 | ) | (44,562 | ) | |||||||||||
Settlements | — | (68,046 | ) | (33,649 | ) | (101,695 | ) | ||||||||||
Net transfers into Level 3 | — | 6,562 | — | 6,562 | |||||||||||||
Balance – December 31, 2011 | $ | 27,761 | $ | 396,526 | $ | 28,526 | $ | 452,813 | |||||||||
Change in unrealized gains for the period included in earnings for assets held at the end of the period included in net investment income | $ | 5,976 | $ | 23,473 | $ | — | $ | 29,449 | |||||||||
Change in unrealized losses for the period included in earnings for assets held at the end of the period included in other (loss) income | $ | — | $ | — | $ | 4,932 | $ | 4,932 | |||||||||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | |||||||||||||||||
Fixed maturity investments, trading | Other investments | Other assets and (liabilities) | Total | ||||||||||||||
Balance – January 1, 2012 | $ | 27,761 | $ | 396,526 | $ | 28,526 | $ | 452,813 | |||||||||
Total unrealized gains | |||||||||||||||||
Included in net investment income | 31 | 24,947 | — | 24,978 | |||||||||||||
Included in other (loss) income | — | — | 330 | 330 | |||||||||||||
Total realized losses | |||||||||||||||||
Included in net investment income | — | — | — | — | |||||||||||||
Included in other (loss) income | — | — | (28,308 | ) | (28,308 | ) | |||||||||||
Total foreign exchange gains | — | 699 | 42 | 741 | |||||||||||||
Purchases | — | 48,631 | 69,181 | 117,812 | |||||||||||||
Sales | — | (2,842 | ) | (116,059 | ) | (118,901 | ) | ||||||||||
Settlements | — | (86,894 | ) | 72,228 | (14,666 | ) | |||||||||||
Net transfers into Level 3 | — | — | — | — | |||||||||||||
Balance – December 31, 2012 | $ | 27,792 | $ | 381,067 | $ | 25,940 | $ | 434,799 | |||||||||
Change in unrealized gains for the period included in earnings for assets held at the end of the period included in net investment income | $ | 31 | $ | 24,947 | $ | — | $ | 24,978 | |||||||||
Change in unrealized gains for the period included in earnings for assets held at the end of the period included in other (loss) income | $ | — | $ | — | $ | 10,892 | $ | 10,892 | |||||||||
2012 | 2011 | ||||||||
Other investments | $ | 644,711 | $ | 748,984 | |||||
Other assets | $ | 21,513 | $ | 19,628 | |||||
At December 31, 2012 | Fair Value | Unfunded Commitments | Redemption Frequency | Redemption Notice Period (Minimum Days) | Redemption Notice Period (Maximum Days) | ||||||||||
Private equity partnerships | $ | 344,669 | $ | 91,762 | See below | See below | See below | ||||||||
Senior secured bank loan funds | 202,929 | 17,506 | See below | See below | See below | ||||||||||
Hedge funds | 5,803 | — | See below | See below | See below | ||||||||||
Total other investments measured using net asset valuations | $ | 553,401 | $ | 109,268 | |||||||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
Premiums written | |||||||||||||
Direct | $ | 36,367 | $ | 29,725 | $ | 9,133 | |||||||
Assumed | 1,515,224 | 1,405,251 | 1,156,162 | ||||||||||
Ceded | (448,934 | ) | (422,203 | ) | (316,330 | ) | |||||||
Net premiums written | $ | 1,102,657 | $ | 1,012,773 | $ | 848,965 | |||||||
Premiums earned | |||||||||||||
Direct | $ | 34,028 | $ | 17,794 | $ | 5,329 | |||||||
Assumed | 1,465,701 | 1,356,205 | 1,191,375 | ||||||||||
Ceded | (430,374 | ) | (422,950 | ) | (331,783 | ) | |||||||
Net premiums earned | $ | 1,069,355 | $ | 951,049 | $ | 864,921 | |||||||
Claims and claim expenses | |||||||||||||
Gross claims and claim expenses incurred | $ | 403,491 | $ | 1,270,487 | $ | 178,422 | |||||||
Claims and claim expenses recovered | (78,280 | ) | (409,308 | ) | (49,077 | ) | |||||||
Net claims and claim expenses incurred | $ | 325,211 | $ | 861,179 | $ | 129,345 | |||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
Net reserves as of January 1 | $ | 1,588,325 | $ | 1,156,132 | $ | 1,260,334 | |||||||
Net incurred related to: | |||||||||||||
Current year | 483,180 | 993,168 | 431,476 | ||||||||||
Prior years | (157,969 | ) | (131,989 | ) | (302,131 | ) | |||||||
Total net incurred | 325,211 | 861,179 | 129,345 | ||||||||||
Net paid related to: | |||||||||||||
Current year | 84,056 | 299,299 | 50,793 | ||||||||||
Prior years | 142,615 | 129,687 | 182,754 | ||||||||||
Total net paid | 226,671 | 428,986 | 233,547 | ||||||||||
Net reserves as of December 31 | 1,686,865 | 1,588,325 | 1,156,132 | ||||||||||
Reinsurance recoverable as of December 31 | 192,512 | 404,029 | 101,711 | ||||||||||
Gross reserves as of December 31 | $ | 1,879,377 | $ | 1,992,354 | $ | 1,257,843 | |||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
Catastrophe | $ | (110,568 | ) | $ | (59,137 | ) | $ | (157,458 | ) | ||||
Specialty | (34,146 | ) | (77,761 | ) | (128,561 | ) | |||||||
Reinsurance | (144,714 | ) | (136,898 | ) | (286,019 | ) | |||||||
Lloyd's | (16,202 | ) | 478 | (197 | ) | ||||||||
Other | 2,947 | 4,431 | (15,915 | ) | |||||||||
Total | $ | (157,969 | ) | $ | (131,989 | ) | $ | (302,131 | ) | ||||
Year ended December 31, 2012 | Catastrophe Reinsurance Unit | Specialty Reinsurance Unit | Reinsurance Segment | ||||||||||
Catastrophe claims and claim expenses | |||||||||||||
Large catastrophe events | |||||||||||||
Chile Earthquake (2010) | $ | 24,575 | $ | — | $ | 24,575 | |||||||
Hurricanes Gustav & Ike (2008) | 17,541 | — | 17,541 | ||||||||||
U.K. Floods (2007) | 17,271 | — | 17,271 | ||||||||||
Hurricanes Katrina, Rita and Wilma (2005) | 6,420 | 3,000 | 9,420 | ||||||||||
Hurricane Irene (2011) | 4,630 | — | 4,630 | ||||||||||
Thailand Floods (2011) | 3,933 | — | 3,933 | ||||||||||
Tohoku Earthquake and Tsunami (2011) | 3,896 | — | 3,896 | ||||||||||
Windstorm Kyrill (2007) | 3,417 | — | 3,417 | ||||||||||
New Zealand Earthquake (2010) | (3,570 | ) | — | (3,570 | ) | ||||||||
New Zealand Earthquake (2011) | (17,912 | ) | — | (17,912 | ) | ||||||||
Other | 2,542 | — | 2,542 | ||||||||||
Total large catastrophe events | 62,743 | 3,000 | 65,743 | ||||||||||
Small catastrophe events | |||||||||||||
Danish Floods (2011) | 5,000 | — | 5,000 | ||||||||||
U.S. PCS 63 Winter Storm (2011) | 5,000 | — | 5,000 | ||||||||||
U.S. PCS 42 Winter Storm (2011) | 2,560 | — | 2,560 | ||||||||||
U.S. PCS 53 Winter Storm (2011) | 2,558 | — | 2,558 | ||||||||||
Other | 32,707 | — | 32,707 | ||||||||||
Total small catastrophe events | 47,825 | — | 47,825 | ||||||||||
Total catastrophe claims and claim expenses | $ | 110,568 | $ | 3,000 | $ | 113,568 | |||||||
Attritional claims and claim expenses | |||||||||||||
Bornhuetter-Ferguson actuarial method - actual reported claims less than expected claims | $ | — | $ | 16,747 | $ | 16,747 | |||||||
Actuarial assumption changes | — | 14,399 | 14,399 | ||||||||||
Total attritional claims and claim expenses | $ | — | $ | 31,146 | $ | 31,146 | |||||||
Total favorable development of prior accident years claims and claim expenses | $ | 110,568 | $ | 34,146 | $ | 144,714 | |||||||
Year ended December 31, 2011 | Catastrophe Reinsurance Unit | Specialty Reinsurance Unit | Reinsurance Segment | ||||||||||
Catastrophe claims and claim expenses | |||||||||||||
Large catastrophe events | |||||||||||||
Tropical Cyclone Tasha (2010) | $ | 13,922 | $ | 3,000 | $ | 16,922 | |||||||
Hurricanes Katrina, Rita and Wilma (2005) | 10,008 | 6,215 | 16,223 | ||||||||||
Chilean Earthquake (2010) | 8,455 | 4,688 | 13,143 | ||||||||||
World Trade Center (2001) | 4,701 | — | 4,701 | ||||||||||
Hurricanes Charley, Francis, Ivan and Jeanne (2004) | 4,076 | — | 4,076 | ||||||||||
U.K. Floods (2007) | 3,635 | — | 3,635 | ||||||||||
Windstorm Kyrill (2007) | 2,494 | — | 2,494 | ||||||||||
New Zealand Earthquake (2010) | (15,179 | ) | — | (15,179 | ) | ||||||||
Total large catastrophe events | 32,112 | 13,903 | 46,015 | ||||||||||
Small catastrophe events | |||||||||||||
U.S. PCS 21 Wildland Fire (2007) | 4,554 | — | 4,554 | ||||||||||
U.S. PCS 33 Great Midwest Storm (2010) | 3,125 | — | 3,125 | ||||||||||
U.S. PCS 31 Wind and Thunderstorm (2010) | 3,039 | — | 3,039 | ||||||||||
U.S. PCS 96 Wind and Thunderstorm (2010) | 2,288 | — | 2,288 | ||||||||||
Other | 14,019 | — | 14,019 | ||||||||||
Total small catastrophe events | 27,025 | — | 27,025 | ||||||||||
Total catastrophe claims and claim expenses | $ | 59,137 | $ | 13,903 | $ | 73,040 | |||||||
Attritional claims and claim expenses | |||||||||||||
Bornhuetter-Ferguson actuarial method - actual reported claims less than expected claims | $ | — | $ | 37,058 | $ | 37,058 | |||||||
Actuarial assumption changes | — | 26,800 | 26,800 | ||||||||||
Total attritional claims and claim expenses | $ | — | $ | 63,858 | $ | 63,858 | |||||||
Total favorable development of prior accident years claims and claim expenses | $ | 59,137 | $ | 77,761 | $ | 136,898 | |||||||
Year ended December 31, 2010 | Catastrophe Reinsurance Unit | Specialty Reinsurance Unit | Reinsurance Segment | ||||||||||
Catastrophe claims and claim expenses | |||||||||||||
Large catastrophe events | |||||||||||||
Mature, large catastrophe events | |||||||||||||
European Windstorm Erwin (2005) | $ | 10,593 | $ | — | $ | 10,593 | |||||||
World Trade Center (2001) | 9,914 | — | 9,914 | ||||||||||
Hurricanes Martin and Floyd (1999) | 4,822 | — | 4,822 | ||||||||||
European Floods (2002) | 4,361 | — | 4,361 | ||||||||||
U.S. PCS 88 Wind and Thunderstorm (2003) | 2,873 | — | 2,873 | ||||||||||
Hurricane Isabel (2003) | 1,995 | — | 1,995 | ||||||||||
U.S. PCS 97 Wildland Fire (2003) | 1,231 | — | 1,231 | ||||||||||
Northridge Earthquake (1993) | 1,094 | — | 1,094 | ||||||||||
Windstorm Anatol (1999) | 971 | — | 971 | ||||||||||
Total mature, large catastrophe events | 37,854 | — | 37,854 | ||||||||||
Hurricanes Katrina, Rita and Wilma (2005) | 25,482 | 5,350 | 30,832 | ||||||||||
Buncefield Oil Depot (2005) | 27,418 | 2,073 | 29,491 | ||||||||||
Hurricanes Gustav and Ike (2008) | 10,878 | — | 10,878 | ||||||||||
Hurricanes Charley, Francis, Ivan and Jeanne (2004) | 8,149 | — | 8,149 | ||||||||||
European Windstorm Klaus (2009) | 8,000 | — | 8,000 | ||||||||||
Total large catastrophe events | 117,781 | 7,423 | 125,204 | ||||||||||
Small catastrophe events | |||||||||||||
U.S. PCS 78 Wind and Thunderstorm (2009) | 3,215 | — | 3,215 | ||||||||||
U.S. PCS 66 Wind and Thunderstorm (2009) | 3,149 | — | 3,149 | ||||||||||
U.S. Winter Storm (2009) | 3,000 | — | 3,000 | ||||||||||
Hurricane Bill (2009) | 2,500 | — | 2,500 | ||||||||||
U.S. PCS 82 Wind and Thunderstorm (2009) | 2,429 | — | 2,429 | ||||||||||
Austrian Floods (2009) | 2,356 | — | 2,356 | ||||||||||
Other | 23,028 | — | 23,028 | ||||||||||
Total small catastrophe events | 39,677 | — | 39,677 | ||||||||||
Total catastrophe claims and claim expenses | $ | 157,458 | $ | 7,423 | $ | 164,881 | |||||||
Attritional claims and claim expenses | |||||||||||||
Bornhuetter-Ferguson actuarial method - actual reported claims less than expected claims | $ | — | $ | 71,261 | $ | 71,261 | |||||||
Actuarial assumption changes | — | 31,400 | 31,400 | ||||||||||
Reductions in specific events | — | 18,477 | 18,477 | ||||||||||
Total attritional claims and claim expenses | $ | — | $ | 121,138 | $ | 121,138 | |||||||
Total favorable development of prior accident years claims and claim expenses | $ | 157,458 | $ | 128,561 | $ | 286,019 | |||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
Attritional claims and claim expenses | $ | 8,011 | $ | (478 | ) | $ | 197 | ||||||
Catastrophe events - property catastrophe reinsurance | 5,726 | — | — | ||||||||||
Catastrophe events - other | 3,750 | — | — | ||||||||||
Actuarial assumption changes | (1,285 | ) | — | — | |||||||||
Total | $ | 16,202 | $ | (478 | ) | $ | 197 | ||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
Catastrophe events | $ | 1,171 | $ | 4,243 | $ | 300 | |||||||
Attritional claims and claim expenses | 3,265 | 1,389 | 15,615 | ||||||||||
Loss portfolio transfer | (7,383 | ) | — | — | |||||||||
Actuarial assumption changes | — | (10,063 | ) | — | |||||||||
Total | $ | (2,947 | ) | $ | (4,431 | ) | $ | 15,915 | |||||
2013 | $ | 102,436 | |||
2014 | — | ||||
2015 | — | ||||
2016 | — | ||||
2017 | — | ||||
After 2017 | 250,000 | ||||
Unamortized debt issuance expenses | (661 | ) | |||
$ | 351,775 | ||||
2012 | 2011 | ||||||||
Balance – January 1 | $ | 657,727 | $ | 757,655 | |||||
Purchase of shares from redeemable noncontrolling interest | — | (136,225 | ) | ||||||
Sale of shares to redeemable noncontrolling interests | 163,033 | 70,000 | |||||||
Comprehensive income: | |||||||||
Net income (loss) attributable to redeemable noncontrolling interest | 147,499 | (33,697 | ) | ||||||
Other comprehensive loss attributable to redeemable noncontrolling interest | — | (6 | ) | ||||||
Balance – December 31 | $ | 968,259 | $ | 657,727 | |||||
2012 | 2011 | ||||||||
Balance – January 1 | $ | 3,340 | $ | 2,889 | |||||
Sale of shares to noncontrolling interest | 300 | 100 | |||||||
Net income attributable to noncontrolling interest | 541 | 540 | |||||||
Dividends on common shares | (190 | ) | (189 | ) | |||||
Balance – December 31 | $ | 3,991 | $ | 3,340 | |||||
Year ended December 31, | 2012 | 2011 | 2010 | |||||||
(thousands of shares) | ||||||||||
Issued and outstanding shares – January 1 | 51,543 | 54,110 | 61,745 | |||||||
Shares repurchased | (6,399 | ) | (2,889 | ) | (8,198 | ) | ||||
Exercise of options and issuance of restricted stock awards | 398 | 322 | 563 | |||||||
Issued and outstanding shares – December 31 | 45,542 | 51,543 | 54,110 | |||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
(thousands of shares) | |||||||||||||
Numerator: | |||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | $ | 566,014 | $ | (92,235 | ) | $ | 702,613 | ||||||
Amount allocated to participating common shareholders (1) | (8,973 | ) | (990 | ) | (17,765 | ) | |||||||
Net income (loss) allocated to RenaissanceRe common shareholders | $ | 557,041 | $ | (93,225 | ) | $ | 684,848 | ||||||
Denominator: | |||||||||||||
Denominator for basic income (loss) per RenaissanceRe common share - weighted average common shares | 48,873 | 50,747 | 55,145 | ||||||||||
Per common share equivalents of employee stock options and restricted shares | 730 | — | 496 | ||||||||||
Denominator for diluted income (loss) per RenaissanceRe common share - adjusted weighted average common shares and assumed conversions | 49,603 | 50,747 | 55,641 | ||||||||||
Basic income (loss) per RenaissanceRe common share | $ | 11.40 | $ | (1.84 | ) | $ | 12.42 | ||||||
Diluted income (loss) per RenaissanceRe common share | $ | 11.23 | $ | (1.84 | ) | $ | 12.31 | ||||||
(1) | Represents earnings attributable to holders of unvested restricted shares issued under the Company's 2001 Stock Incentive Plan and Non-Employee Director Stock Incentive Plan. |
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
Domestic | |||||||||||||
Bermuda | $ | 795,361 | $ | 18,259 | $ | 808,715 | |||||||
Foreign | |||||||||||||
United Kingdom | (15,404 | ) | (22,895 | ) | (7,929 | ) | |||||||
U.S. | (35,197 | ) | (70,157 | ) | (10,938 | ) | |||||||
Ireland | 3,318 | (24 | ) | 2,510 | |||||||||
Other | 13 | — | — | ||||||||||
Income (loss) from continuing operations before taxes | $ | 748,091 | $ | (74,817 | ) | $ | 792,358 | ||||||
Year ended December 31, 2012 | Current | Deferred | Total | ||||||||||
Total income tax (expense) benefit | $ | (1,693 | ) | $ | 264 | $ | (1,429 | ) | |||||
Year ended December 31, 2011 | |||||||||||||
Total income tax benefit (expense) | $ | 13,467 | $ | (13,152 | ) | $ | 315 | ||||||
Year ended December 31, 2010 | |||||||||||||
Total income tax (expense) benefit | $ | (1,384 | ) | $ | 7,508 | $ | 6,124 | ||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
Expected income tax benefit | $ | 15,445 | $ | 30,589 | $ | 5,647 | |||||||
Change in valuation allowance | (13,190 | ) | (27,601 | ) | (1,175 | ) | |||||||
Other | (3,684 | ) | (2,673 | ) | 1,652 | ||||||||
Income tax (expense) benefit | $ | (1,429 | ) | $ | 315 | $ | 6,124 | ||||||
At December 31, | 2012 | 2011 | |||||||
Deferred tax assets | |||||||||
Tax loss and credit carryforwards | $ | 27,658 | $ | 15,692 | |||||
Accrued expenses | 2,716 | 2,983 | |||||||
Investments | 3,720 | 7,744 | |||||||
Deferred interest expense | 8,448 | 4,011 | |||||||
Deferred underwriting results | 4,366 | 3,538 | |||||||
Amortization and depreciation | 1,490 | 1,256 | |||||||
48,398 | 35,224 | ||||||||
Deferred tax liabilities | |||||||||
Amortization and depreciation | (369 | ) | (649 | ) | |||||
(369 | ) | (649 | ) | ||||||
Net deferred tax asset before valuation allowance | 48,029 | 34,575 | |||||||
Valuation allowance | (48,173 | ) | (34,983 | ) | |||||
Net deferred tax liability | $ | (144 | ) | $ | (408 | ) | |||
Year ended December 31, 2012 | Reinsurance | Lloyd's | Other | Eliminations (1) | Total | ||||||||||||||||
Gross premiums written | $ | 1,392,094 | $ | 159,987 | $ | — | $ | (490 | ) | $ | 1,551,591 | ||||||||||
Net premiums written | $ | 967,587 | $ | 135,131 | $ | (61 | ) | $ | 1,102,657 | ||||||||||||
Net premiums earned | $ | 946,423 | $ | 122,968 | $ | (36 | ) | $ | 1,069,355 | ||||||||||||
Net claims and claim expenses incurred | 242,022 | 80,242 | 2,947 | 325,211 | |||||||||||||||||
Acquisition expenses | 90,491 | 22,864 | 187 | 113,542 | |||||||||||||||||
Operational expenses | 132,935 | 45,680 | 686 | 179,301 | |||||||||||||||||
Underwriting income (loss) | $ | 480,975 | $ | (25,818 | ) | $ | (3,856 | ) | 451,301 | ||||||||||||
Net investment income | 167,375 | 167,375 | |||||||||||||||||||
Net foreign exchange gains | 5,223 | 5,223 | |||||||||||||||||||
Equity in earnings of other ventures | 23,238 | 23,238 | |||||||||||||||||||
Other loss | (22,905 | ) | (22,905 | ) | |||||||||||||||||
Net realized and unrealized gains on investments | 163,991 | 163,991 | |||||||||||||||||||
Net other-than-temporary impairments | (343 | ) | (343 | ) | |||||||||||||||||
Corporate expenses | (16,692 | ) | (16,692 | ) | |||||||||||||||||
Interest expense | (23,097 | ) | (23,097 | ) | |||||||||||||||||
Income from continuing operations before taxes | 748,091 | ||||||||||||||||||||
Income tax expense | (1,429 | ) | (1,429 | ) | |||||||||||||||||
Income from discontinued operations | 2,287 | 2,287 | |||||||||||||||||||
Net income attributable to noncontrolling interests | (148,040 | ) | (148,040 | ) | |||||||||||||||||
Dividends on preference shares | (34,895 | ) | (34,895 | ) | |||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 566,014 | |||||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 386,736 | $ | 96,444 | $ | — | $ | 483,180 | |||||||||||||
Net claims and claim expenses incurred – prior accident years | (144,714 | ) | (16,202 | ) | 2,947 | (157,969 | ) | ||||||||||||||
Net claims and claim expenses incurred – total | $ | 242,022 | $ | 80,242 | $ | 2,947 | $ | 325,211 | |||||||||||||
Net claims and claim expense ratio – current accident year | 40.9 | % | 78.4 | % | — | % | 45.2 | % | |||||||||||||
Net claims and claim expense ratio – prior accident years | (15.3 | )% | (13.1 | )% | (8,186.1 | )% | (14.8 | )% | |||||||||||||
Net claims and claim expense ratio – calendar year | 25.6 | % | 65.3 | % | (8,186.1 | )% | 30.4 | % | |||||||||||||
Underwriting expense ratio | 23.6 | % | 55.7 | % | (2,425.0 | )% | 27.4 | % | |||||||||||||
Combined ratio | 49.2 | % | 121.0 | % | (10,611.1 | )% | 57.8 | % | |||||||||||||
(1) | Represents $0.5 million of gross premiums ceded from the Reinsurance segment to the Lloyd's segment. |
Year ended December 31, 2011 | Reinsurance | Lloyd's | Other | Eliminations (1) | Total | ||||||||||||||||
Gross premiums written | $ | 1,323,187 | $ | 111,584 | $ | 282 | $ | (77 | ) | $ | 1,434,976 | ||||||||||
Net premiums written | $ | 913,499 | $ | 98,617 | $ | 657 | $ | 1,012,773 | |||||||||||||
Net premiums earned | $ | 873,088 | $ | 76,386 | $ | 1,575 | $ | 951,049 | |||||||||||||
Net claims and claim expenses incurred | 783,704 | 73,259 | 4,216 | 861,179 | |||||||||||||||||
Acquisition expenses | 82,978 | 14,031 | 367 | 97,376 | |||||||||||||||||
Operational expenses | 131,251 | 36,732 | 1,683 | 169,666 | |||||||||||||||||
Underwriting loss | $ | (124,845 | ) | $ | (47,636 | ) | $ | (4,691 | ) | (177,172 | ) | ||||||||||
Net investment income | 118,000 | 118,000 | |||||||||||||||||||
Net foreign exchange losses | (6,911 | ) | (6,911 | ) | |||||||||||||||||
Equity in losses of other ventures | (36,533 | ) | (36,533 | ) | |||||||||||||||||
Other loss | (685 | ) | (685 | ) | |||||||||||||||||
Net realized and unrealized gains on investments | 70,668 | 70,668 | |||||||||||||||||||
Net other-than-temporary impairments | (552 | ) | (552 | ) | |||||||||||||||||
Corporate expenses | (18,264 | ) | (18,264 | ) | |||||||||||||||||
Interest expense | (23,368 | ) | (23,368 | ) | |||||||||||||||||
Loss from continuing operations before taxes | (74,817 | ) | |||||||||||||||||||
Income tax benefit | 315 | 315 | |||||||||||||||||||
Loss from discontinued operations | (15,890 | ) | (15,890 | ) | |||||||||||||||||
Net loss attributable to noncontrolling interests | 33,157 | 33,157 | |||||||||||||||||||
Dividends on preference shares | (35,000 | ) | (35,000 | ) | |||||||||||||||||
Net loss attributable to RenaissanceRe common shareholders | $ | (92,235 | ) | ||||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 920,602 | $ | 72,781 | $ | (215 | ) | $ | 993,168 | ||||||||||||
Net claims and claim expenses incurred – prior accident years | (136,898 | ) | 478 | 4,431 | (131,989 | ) | |||||||||||||||
Net claims and claim expenses incurred – total | $ | 783,704 | $ | 73,259 | $ | 4,216 | $ | 861,179 | |||||||||||||
Net claims and claim expense ratio – current accident year | 105.4 | % | 95.3 | % | (13.7 | )% | 104.4 | % | |||||||||||||
Net claims and claim expense ratio – prior accident years | (15.6 | )% | 0.6 | % | 281.4 | % | (13.8 | )% | |||||||||||||
Net claims and claim expense ratio – calendar year | 89.8 | % | 95.9 | % | 267.7 | % | 90.6 | % | |||||||||||||
Underwriting expense ratio | 24.5 | % | 66.5 | % | 130.1 | % | 28.0 | % | |||||||||||||
Combined ratio | 114.3 | % | 162.4 | % | 397.8 | % | 118.6 | % | |||||||||||||
(1) | Represents $0.1 million of gross premiums ceded from the Reinsurance segment to the Lloyd's segment. |
Year ended December 31, 2010 | Reinsurance | Lloyd's | Other | Eliminations (1) | Total | ||||||||||||||||
Gross premiums written | $ | 1,123,619 | $ | 66,209 | $ | 2,585 | $ | (27,118 | ) | $ | 1,165,295 | ||||||||||
Net premiums written | $ | 809,719 | $ | 61,189 | $ | (21,943 | ) | $ | 848,965 | ||||||||||||
Net premiums earned | $ | 838,790 | $ | 50,204 | $ | (24,073 | ) | $ | 864,921 | ||||||||||||
Net claims and claim expenses incurred | 113,804 | 25,676 | (10,135 | ) | 129,345 | ||||||||||||||||
Acquisition expenses | 77,954 | 10,784 | 6,223 | 94,961 | |||||||||||||||||
Operational expenses | 129,990 | 24,837 | 11,215 | 166,042 | |||||||||||||||||
Underwriting income (loss) | $ | 517,042 | $ | (11,093 | ) | $ | (31,376 | ) | 474,573 | ||||||||||||
Net investment income | 203,955 | 203,955 | |||||||||||||||||||
Net foreign exchange losses | (17,126 | ) | (17,126 | ) | |||||||||||||||||
Equity in losses of other ventures | (11,814 | ) | (11,814 | ) | |||||||||||||||||
Other income | 41,120 | 41,120 | |||||||||||||||||||
Net realized and unrealized gains on investments | 144,444 | 144,444 | |||||||||||||||||||
Net other-than-temporary impairments | (829 | ) | (829 | ) | |||||||||||||||||
Corporate expenses | (20,136 | ) | (20,136 | ) | |||||||||||||||||
Interest expense | (21,829 | ) | (21,829 | ) | |||||||||||||||||
Income from continuing operations before taxes | 792,358 | ||||||||||||||||||||
Income tax benefit | 6,124 | 6,124 | |||||||||||||||||||
Income from discontinued operations | 62,670 | 62,670 | |||||||||||||||||||
Income attributable to redeemable noncontrolling interest – DaVinciRe | (116,421 | ) | (116,421 | ) | |||||||||||||||||
Dividends on preference shares | (42,118 | ) | (42,118 | ) | |||||||||||||||||
Net income available to RenaissanceRe common shareholders | $ | 702,613 | |||||||||||||||||||
Net claims and claim expenses incurred – current accident year | $ | 399,823 | $ | 25,873 | $ | 5,780 | $ | 431,476 | |||||||||||||
Net claims and claim expenses incurred – prior accident years | (286,019 | ) | (197 | ) | (15,915 | ) | (302,131 | ) | |||||||||||||
Net claims and claim expenses incurred – total | $ | 113,804 | $ | 25,676 | $ | (10,135 | ) | $ | 129,345 | ||||||||||||
Net claims and claim expense ratio – current accident year | 47.7 | % | 51.5 | % | (24.0 | )% | 49.9 | % | |||||||||||||
Net claims and claim expense ratio – prior accident years | (34.1 | )% | (0.4 | )% | 66.1 | % | (34.9 | )% | |||||||||||||
Net claims and claim expense ratio – calendar year | 13.6 | % | 51.1 | % | 42.1 | % | 15.0 | % | |||||||||||||
Underwriting expense ratio | 24.8 | % | 71.0 | % | (72.4 | )% | 30.1 | % | |||||||||||||
Combined ratio | 38.4 | % | 122.1 | % | (30.3 | )% | 45.1 | % | |||||||||||||
(1) | Represents $9.5 million, $17.4 million and $0.2 million of gross premiums ceded from the Other category to the Reinsurance segment, from the Other category to the Lloyd's segment and from the Reinsurance segment to the Lloyd's segment, respectively. |
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||
Catastrophe | |||||||||||||
U.S. and Caribbean | $ | 857,740 | $ | 786,721 | $ | 720,250 | |||||||
Worldwide (excluding U.S.) (1) | 139,265 | 164,112 | 113,270 | ||||||||||
Worldwide | 81,595 | 124,797 | 65,500 | ||||||||||
Japan | 43,238 | 49,021 | 26,188 | ||||||||||
Europe | 37,113 | 31,888 | 59,480 | ||||||||||
Australia and New Zealand | 18,578 | 16,818 | 6,269 | ||||||||||
Other | 4,678 | 3,939 | 3,276 | ||||||||||
Total catastrophe | 1,182,207 | 1,177,296 | 994,233 | ||||||||||
Specialty | |||||||||||||
Worldwide | 96,081 | 91,032 | 59,636 | ||||||||||
U.S. and Caribbean | 69,070 | 49,832 | 57,461 | ||||||||||
Australia and New Zealand | 28,307 | 792 | 8,934 | ||||||||||
Europe | 16,429 | 3,595 | 2,786 | ||||||||||
Other | — | 640 | 569 | ||||||||||
Total specialty | 209,887 | 145,891 | 129,386 | ||||||||||
Total Reinsurance | 1,392,094 | 1,323,187 | 1,123,619 | ||||||||||
Lloyd's | |||||||||||||
Worldwide | 75,132 | 47,605 | 16,207 | ||||||||||
U.S. and Caribbean | 57,332 | 48,435 | 43,178 | ||||||||||
Europe | 14,456 | 8,044 | 3,174 | ||||||||||
Worldwide (excluding U.S.) (1) | 6,064 | 238 | 1,049 | ||||||||||
Australia and New Zealand | 2,152 | 2,060 | 91 | ||||||||||
Other | 4,851 | 5,202 | 2,510 | ||||||||||
Total Lloyd's | 159,987 | 111,584 | 66,209 | ||||||||||
Other category (2) | — | 282 | 2,585 | ||||||||||
Eliminations (3) | (490 | ) | (77 | ) | (27,118 | ) | |||||||
Total gross premiums written | $ | 1,551,591 | $ | 1,434,976 | $ | 1,165,295 | |||||||
(1) | The category "Worldwide (excluding U.S.)" consists of contracts that cover more than one geographic region (other than the U.S.). The exposure in this category for gross premiums written to date is predominantly from Europe and Japan. |
(2) | The Other category consists of contracts that are primarily exposed to U.S. risks. |
(3) | Represents $0.5 million of gross premiums ceded from the Reinsurance segment to the Lloyd's segment for the year ended December 31, 2012 (2011 - $0.1 million of gross premiums ceded from the Reinsurance segment to the Lloyd's segment, 2010 - $9.5 million, $17.4 million and $0.2 million of gross premiums ceded from the Other category to the Reinsurance segment, from the Other category to the Lloyd's segment and from the Reinsurance segment to the Lloyd's segment). |
Performance Shares | |||||
Year ended December 31, | 2012 | 2011 | |||
Expected volatility (1) | 19.8% - 24.4% | 35% | |||
Expected term (in years) | n/a | n/a | |||
Expected dividend yield | n/a | n/a | |||
Risk-free interest rate (1) | 0.16% - 0.64% | 0.16% - 2.11% | |||
(1) | The expected volatility and risk-free interest rate applied are specific to each tranche of Performance Shares. |
Weighted options outstanding | Weighted average exercise price | Weighted average remaining contractual life | Aggregate intrinsic value | Range of exercise prices | |||||||||||||
Balance, December 31, 2009 | 3,572,979 | $ | 46.42 | 5.9 | $ | 24,891 | $12.40 – $59.66 | ||||||||||
Options granted | — | — | — | ||||||||||||||
Options forfeited | (35,942 | ) | 54.11 | ||||||||||||||
Options expired | (42,029 | ) | 53.86 | ||||||||||||||
Options exercised | (653,673 | ) | 41.77 | $ | 10,491 | ||||||||||||
Balance, December 31, 2010 | 2,841,335 | $ | 47.28 | 4.8 | $ | 46,616 | $33.85 – $59.66 | ||||||||||
Options granted | — | — | — | ||||||||||||||
Options forfeited | (40,010 | ) | 52.68 | ||||||||||||||
Options expired | (4,404 | ) | 53.86 | ||||||||||||||
Options exercised | (823,614 | ) | 46.88 | $ | 18,155 | ||||||||||||
Balance, December 31, 2011 | 1,973,307 | $ | 47.33 | 4.6 | $ | 53,363 | $37.51 - $59.66 | ||||||||||
Options granted | — | — | — | ||||||||||||||
Options forfeited | — | — | |||||||||||||||
Options expired | — | — | |||||||||||||||
Options exercised | (240,668 | ) | $ | 45.30 | $ | 7,910 | |||||||||||
Balance, December 31, 2012 | 1,732,639 | $ | 47.61 | 3.7 | $ | 58,305 | $37.51 - $59.66 | ||||||||||
Total options exercisable at December 31, 2012 | 1,732,639 | $ | 47.61 | 3.7 | $ | 58,305 | $37.51 - $59.66 | ||||||||||
Weighted options outstanding | Weighted average exercise price | Weighted average remaining contractual life | Aggregate intrinsic value | Range of exercise prices | ||||||||||||
Balance, December 31, 2009 | 1,274,000 | $ | 73.96 | $ | — | $73.06 – $74.24 | ||||||||||
Options granted | — | — | ||||||||||||||
Options forfeited | (82,000 | ) | 74.24 | |||||||||||||
Options expired | — | — | ||||||||||||||
Options exercised | — | — | ||||||||||||||
Balance, December 31, 2010 | 1,192,000 | $ | 73.94 | $ | — | $73.06 – $74.24 | ||||||||||
Options granted | — | — | ||||||||||||||
Options forfeited | — | — | ||||||||||||||
Options expired | — | — | ||||||||||||||
Options exercised | — | — | ||||||||||||||
Balance, December 31, 2011 | 1,192,000 | $ | 73.94 | $ | — | $73.06 - $74.24 | ||||||||||
Options granted | — | — | ||||||||||||||
Options forfeited | — | — | ||||||||||||||
Options expired | — | — | ||||||||||||||
Options exercised | (350,000 | ) | 74.24 | $ | 1,250 | |||||||||||
Balance, December 31, 2012 | 842,000 | $ | 73.82 | 2.0 | $ | 6,265 | $73.06 - $74.24 | |||||||||
Total options exercisable at December 31, 2012 | 842,000 | $ | 73.82 | 2.0 | $ | 6,265 | $73.06 - $74.24 | |||||||||
Cash Settled Restricted Stock Unit Plan | Performance Shares | ||||||||||
Number of shares | Number of shares | Weighted average grant-dated fair value | |||||||||
Nonvested at December 31, 2010 | 371,788 | 275,813 | $ | 56.76 | |||||||
Awards granted | 215,711 | 89,037 | $ | 79.83 | |||||||
Awards vested | (98,676 | ) | (63,562 | ) | |||||||
Awards forfeited | (65,850 | ) | (11,421 | ) | |||||||
Nonvested at December 31, 2011 | 422,973 | 289,867 | $ | 63.24 | |||||||
Awards granted | 225,105 | 144,635 | $ | 70.43 | |||||||
Awards vested | (128,401 | ) | (70,843 | ) | |||||||
Awards forfeited | (26,121 | ) | (4,139 | ) | |||||||
Nonvested at December 31, 2012 | 493,556 | 359,520 | $ | 67.31 | |||||||
Employee restricted stock | Non-employee director restricted stock | Total restricted stock | ||||||||||||||||||||
Number of shares | Weighted average grant- dated fair value | Number of shares | Weighted average grant- dated fair value | Number of shares | Weighted average grant- dated fair value | |||||||||||||||||
Nonvested at December 31, 2009 | 1,348,794 | $ | 46.64 | 44,615 | $ | 47.81 | 1,393,409 | $ | 46.68 | |||||||||||||
Awards granted | 284,873 | 55.80 | 23,327 | 56.15 | 308,200 | 55.83 | ||||||||||||||||
Awards vested | (561,086 | ) | 46.81 | (25,134 | ) | 49.46 | (586,220 | ) | 46.92 | |||||||||||||
Awards forfeited | (68,155 | ) | 49.89 | — | — | (68,155 | ) | 49.89 | ||||||||||||||
Nonvested at December 31, 2010 | 1,004,426 | $ | 48.93 | 42,808 | $ | 51.38 | 1,047,234 | $ | 49.03 | |||||||||||||
Awards granted | 200,745 | 66.21 | 18,272 | 66.21 | 219,017 | 66.21 | ||||||||||||||||
Awards vested | (362,234 | ) | 48.74 | (21,495 | ) | 50.66 | (383,729 | ) | 48.84 | |||||||||||||
Awards forfeited | (78,176 | ) | 47.71 | — | — | (78,176 | ) | 47.71 | ||||||||||||||
Nonvested at December 31, 2011 | 764,761 | $ | 53.68 | 39,585 | $ | 58.43 | 804,346 | $ | 53.91 | |||||||||||||
Awards granted | 226,827 | 72.46 | 16,874 | 71.69 | 243,701 | 72.40 | ||||||||||||||||
Awards vested | (337,683 | ) | 51.06 | (20,536 | ) | 54.62 | (358,219 | ) | 51.26 | |||||||||||||
Awards forfeited | (7,157 | ) | 53.90 | — | — | (7,157 | ) | 53.90 | ||||||||||||||
Nonvested at December 31, 2012 | 646,748 | $ | 61.63 | 35,923 | $ | 66.83 | 682,671 | $ | 61.90 | |||||||||||||
Derivative Assets | |||||||||||||
December 31, 2012 | December 31, 2011 | ||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||
Interest rate futures | Other assets | $ | 441 | Other assets | $ | 612 | |||||||
Foreign currency forward contracts (1) | Other assets | 7,191 | Other assets | — | |||||||||
Foreign currency forward contracts (2) | Other liabilities | 2,534 | Other liabilities | 7,219 | |||||||||
Foreign currency forward contracts (3) | Other assets | — | Other assets | 387 | |||||||||
Credit default swaps | Other assets | 784 | Other assets | — | |||||||||
Energy and weather contracts (4) | Other assets | 30,060 | Other assets | 52,721 | |||||||||
Total | $ | 41,010 | $ | 60,939 | |||||||||
Derivative Liabilities | |||||||||||||
December 31, 2012 | December 31, 2011 | ||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||
Interest rate futures | Other liabilities | $ | 41 | Other liabilities | $ | 339 | |||||||
Foreign currency forward contracts (1) | Other liabilities | 4,173 | Other liabilities | 11,754 | |||||||||
Foreign currency forward contracts (2) | Other liabilities | 2,296 | Other liabilities | 1,606 | |||||||||
Foreign currency forward contracts (3) | Other assets | 526 | Other assets | — | |||||||||
Credit default swaps | Other assets | 333 | Other assets | 539 | |||||||||
Energy and weather contracts (4) | Other liabilities | 14,518 | Other liabilities | 43,389 | |||||||||
Total | $ | 21,887 | $ | 57,627 | |||||||||
(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. Included in other liabilities are derivative assets of $2.5 million (2011 – $7.2 million) which are netted with derivative liabilities of $2.3 million (2011 – $1.6 million) under master netting arrangements. |
(3) | Contracts used to manage foreign currency risks in energy and risk operations. |
(4) | Included in other assets is $43.4 million of derivative assets (2011 – $104.6 million) and $13.4 million of derivative liabilities (2011 – $51.9 million). Included in other liabilities is $19.2 million of derivative assets (2011 – $8.8 million) and $33.7 million of derivative liabilities (2011 – $52.2 million). |
Location of gain (loss) recognized on derivatives | Amount of gain (loss) recognized on derivatives | ||||||||||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||||||
Interest rate futures | Net investment income | $ | (1,746 | ) | $ | (25,256 | ) | $ | (9,124 | ) | |||||
Foreign currency forward contracts (1) | Net foreign exchange gains (losses) | 13,804 | (5,443 | ) | 4,242 | ||||||||||
Foreign currency forward contracts (2) | Net foreign exchange gains (losses) | (3,445 | ) | (4,335 | ) | 20,111 | |||||||||
Foreign currency forward contracts (3) | Net foreign exchange gains (losses) | (415 | ) | 620 | 498 | ||||||||||
Credit default swaps | Net investment income | 1,074 | (1,467 | ) | 1,265 | ||||||||||
Energy and weather contracts | Other (loss) income | 4,058 | (22,978 | ) | 28,976 | ||||||||||
Platinum warrant | Other (loss) income | — | 2,975 | 10,054 | |||||||||||
Total | $ | 13,330 | $ | (55,884 | ) | $ | 56,022 | ||||||||
(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. |
(3) | Contracts used to manage foreign currency risks in energy and risk operations. |
Quantity (1) | |||||||||
December 31, 2012 | December 31, 2011 | Unit of measurement | |||||||
Energy | 107,521,592 | 240,363,364 | One million British thermal units ("MMBTUs") | ||||||
Temperature | 8,168,052 | 14,917,438 | $ per Degree Day Fahrenheit | ||||||
Precipitation | 4,453,934 | 65,000 | $ per Inch | ||||||
Agriculture | — | 6,098,000 | Bushels | ||||||
Wind | — | 712 | $ per Meters per Second Hour | ||||||
(1) | Represents the sum of gross long and gross short derivative contracts. |
Minimum lease payments | |||||
2013 | $ | 6,829 | |||
2014 | 5,646 | ||||
2015 | 5,001 | ||||
2016 | 4,105 | ||||
2017 | 1,672 | ||||
After 2017 | 3,014 | ||||
Future minimum lease payments under existing operating leases | $ | 26,267 | |||
Minimum lease payments | |||||
2013 | $ | 3,017 | |||
2014 | 3,017 | ||||
2015 | 3,017 | ||||
2016 | 3,017 | ||||
2017 | 2,417 | ||||
After 2017 | 28,597 | ||||
Future minimum lease payments under existing capital leases | $ | 43,082 | |||
Quarter Ended March 31, | Quarter Ended June 30, | Quarter Ended September 30, | Quarter Ended December 31, | ||||||||||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||||||
Gross premiums written | $ | 664,151 | $ | 610,505 | $ | 667,336 | $ | 641,563 | $ | 136,359 | $ | 139,938 | $ | 83,745 | $ | 42,970 | |||||||||||||||||
Net premiums written | $ | 492,575 | $ | 452,575 | $ | 427,630 | $ | 427,995 | $ | 105,035 | $ | 103,010 | $ | 77,417 | $ | 29,193 | |||||||||||||||||
(Increase) decrease in unearned premiums | (213,910 | ) | (147,034 | ) | (183,214 | ) | (210,820 | ) | 157,588 | 126,214 | 206,234 | 169,916 | |||||||||||||||||||||
Net premiums earned | 278,665 | 305,541 | 244,416 | 217,175 | 262,623 | 229,224 | 283,651 | 199,109 | |||||||||||||||||||||||||
Net investment income (loss) | 66,971 | 60,281 | 14,743 | 33,328 | 45,164 | (27,940 | ) | 40,497 | 52,331 | ||||||||||||||||||||||||
Net foreign exchange (losses) gains | (1,460 | ) | 660 | 2,410 | (4,521 | ) | 3,001 | (2,650 | ) | 1,272 | (400 | ) | |||||||||||||||||||||
Equity in earnings (losses) of other ventures | 5,470 | (23,753 | ) | 6,846 | 5,128 | 4,310 | 4,794 | 6,612 | (22,702 | ) | |||||||||||||||||||||||
Other (loss) income | (39,094 | ) | 50,145 | 11,289 | (5,167 | ) | (881 | ) | (2,015 | ) | 5,781 | (43,648 | ) | ||||||||||||||||||||
Net realized and unrealized gains (losses) on investments | 46,113 | (5,214 | ) | 31,003 | 34,979 | 76,258 | 16,983 | 10,617 | 23,920 | ||||||||||||||||||||||||
Total other-than-temporary impairments | (161 | ) | — | (234 | ) | — | — | (498 | ) | — | (132 | ) | |||||||||||||||||||||
Portion recognized in other comprehensive income, before taxes | 27 | — | 25 | — | — | 49 | — | 29 | |||||||||||||||||||||||||
Net other-than-temporary impairments | (134 | ) | — | (209 | ) | — | — | (449 | ) | — | (103 | ) | |||||||||||||||||||||
Total revenues | 356,531 | 387,660 | 310,498 | 280,922 | 390,475 | 217,947 | 348,430 | 208,507 | |||||||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||||||||
Net claims and claim expenses incurred | 15,552 | 628,537 | 49,551 | 151,261 | 73,215 | 77,830 | 186,893 | 3,551 | |||||||||||||||||||||||||
Acquisition costs | 24,111 | 32,335 | 25,608 | 13,883 | 24,438 | 26,057 | 39,385 | 25,101 | |||||||||||||||||||||||||
Operational expenses | 42,383 | 41,830 | 41,407 | 42,299 | 42,390 | 42,169 | 53,121 | 43,368 | |||||||||||||||||||||||||
Corporate expenses | 4,811 | 2,064 | 4,067 | 4,011 | 3,850 | 3,582 | 3,964 | 8,607 | |||||||||||||||||||||||||
Interest expense | 5,718 | 6,195 | 5,716 | 5,730 | 5,891 | 5,722 | 5,772 | 5,721 | |||||||||||||||||||||||||
Total expenses | 92,575 | 710,961 | 126,349 | 217,184 | 149,784 | 155,360 | 289,135 | 86,348 | |||||||||||||||||||||||||
Income (loss) from continuing operations before taxes | 263,956 | (323,301 | ) | 184,149 | 63,738 | 240,691 | 62,587 | 59,295 | 122,159 | ||||||||||||||||||||||||
Income tax benefit (expense) | 37 | 52 | (898 | ) | 1,773 | (144 | ) | 1,435 | (424 | ) | (2,945 | ) | |||||||||||||||||||||
Income (loss) from continuing operations | 263,993 | (323,249 | ) | 183,251 | 65,511 | 240,547 | 64,022 | 58,871 | 119,214 | ||||||||||||||||||||||||
(Loss) income from discontinued operations | (173 | ) | (1,526 | ) | 1,393 | (10,094 | ) | (54 | ) | (965 | ) | 1,121 | (3,305 | ) | |||||||||||||||||||
Net income (loss) | 263,820 | (324,775 | ) | 184,644 | 55,417 | 240,493 | 63,057 | 59,992 | 115,909 | ||||||||||||||||||||||||
Net (income) loss attributable to noncontrolling interests | (53,641 | ) | 85,492 | (33,624 | ) | (21,903 | ) | (51,083 | ) | (5,044 | ) | (9,692 | ) | (25,388 | ) | ||||||||||||||||||
Net income (loss) available (attributable) to RenaissanceRe | 210,179 | (239,283 | ) | 151,020 | 33,514 | 189,410 | 58,013 | 50,300 | 90,521 | ||||||||||||||||||||||||
Dividends on preference shares | (8,750 | ) | (8,750 | ) | (8,750 | ) | (8,750 | ) | (8,750 | ) | (8,750 | ) | (8,645 | ) | (8,750 | ) | |||||||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | $ | 201,429 | $ | (248,033 | ) | $ | 142,270 | $ | 24,764 | $ | 180,660 | $ | 49,263 | $ | 41,655 | $ | 81,771 | ||||||||||||||||
Income (loss) from continuing operations available (attributable) to RenaissanceRe common shareholders per common share – basic | $ | 3.93 | $ | (4.66 | ) | $ | 2.75 | $ | 0.68 | $ | 3.67 | $ | 0.98 | $ | 0.86 | $ | 1.66 | ||||||||||||||||
(Loss) income from discontinued operations (attributable) available to RenaissanceRe common shareholders per common share – basic | — | (0.03 | ) | 0.03 | (0.20 | ) | — | (0.02 | ) | 0.02 | (0.07 | ) | |||||||||||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – basic | $ | 3.93 | $ | (4.69 | ) | $ | 2.78 | $ | 0.48 | $ | 3.67 | $ | 0.96 | $ | 0.88 | $ | 1.59 | ||||||||||||||||
Income (loss) from continuing operations available (attributable) to RenaissanceRe common shareholders per common share – diluted | $ | 3.88 | $ | (4.66 | ) | $ | 2.72 | $ | 0.68 | $ | 3.62 | $ | 0.97 | $ | 0.85 | $ | 1.64 | ||||||||||||||||
(Loss) income from discontinued operations (attributable) available to RenaissanceRe common shareholders per common share – diluted | — | (0.03 | ) | 0.03 | (0.20 | ) | — | (0.02 | ) | 0.02 | (0.06 | ) | |||||||||||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders per common share – diluted | $ | 3.88 | $ | (4.69 | ) | $ | 2.75 | $ | 0.48 | $ | 3.62 | $ | 0.95 | $ | 0.87 | $ | 1.58 | ||||||||||||||||
Average shares outstanding – basic | 50,377 | 51,504 | 50,278 | 50,493 | 48,394 | 50,501 | 46,442 | 50,501 | |||||||||||||||||||||||||
Average shares outstanding – diluted | 50,981 | 51,504 | 51,012 | 51,050 | 49,119 | 50,973 | 47,297 | 50,860 | |||||||||||||||||||||||||
Condensed Consolidating Balance Sheet at December 31, 2012 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | ||||||||||||||
Assets | |||||||||||||||||||
Total investments | $ | 572,139 | $ | 49,618 | $ | 5,738,890 | $ | — | $ | 6,360,647 | |||||||||
Cash and cash equivalents | 6,298 | 1,528 | 317,532 | — | 325,358 | ||||||||||||||
Investments in subsidiaries | 2,864,793 | 113,856 | — | (2,978,649 | ) | — | |||||||||||||
Due from subsidiaries and affiliates | 53,296 | 117 | — | (53,413 | ) | — | |||||||||||||
Premiums receivable | — | — | 491,365 | — | 491,365 | ||||||||||||||
Prepaid reinsurance premiums | — | — | 77,082 | — | 77,082 | ||||||||||||||
Reinsurance recoverable | — | — | 192,512 | — | 192,512 | ||||||||||||||
Accrued investment income | 2,535 | 69 | 30,874 | — | 33,478 | ||||||||||||||
Deferred acquisition costs | — | — | 52,622 | — | 52,622 | ||||||||||||||
Other assets | 175,105 | 15,754 | 320,198 | (115,493 | ) | 395,564 | |||||||||||||
Total assets | $ | 3,674,166 | $ | 180,942 | $ | 7,221,075 | $ | (3,147,555 | ) | $ | 7,928,628 | ||||||||
Liabilities, Noncontrolling Interests and Shareholders' Equity | |||||||||||||||||||
Liabilities | |||||||||||||||||||
Reserve for claims and claim expenses | $ | — | $ | — | $ | 1,879,377 | $ | — | $ | 1,879,377 | |||||||||
Unearned premiums | — | — | 399,517 | — | 399,517 | ||||||||||||||
Debt | 100,000 | 249,339 | 2,436 | — | 351,775 | ||||||||||||||
Amounts due to subsidiaries and affiliates | 11,371 | 5,593 | — | (16,964 | ) | — | |||||||||||||
Reinsurance balances payable | — | — | 290,419 | — | 290,419 | ||||||||||||||
Other liabilities | 59,730 | 4,572 | 469,381 | (1,458 | ) | 532,225 | |||||||||||||
Total liabilities | 171,101 | 259,504 | 3,041,130 | (18,422 | ) | 3,453,313 | |||||||||||||
Redeemable noncontrolling interest – DaVinciRe | — | — | 968,259 | — | 968,259 | ||||||||||||||
Shareholders' Equity | |||||||||||||||||||
Total shareholders' equity | 3,503,065 | (78,562 | ) | 3,211,686 | (3,129,133 | ) | 3,507,056 | ||||||||||||
Total liabilities, noncontrolling interests and shareholders' equity | $ | 3,674,166 | $ | 180,942 | $ | 7,221,075 | $ | (3,147,555 | ) | $ | 7,928,628 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments. |
Condensed Consolidating Balance Sheet at December 31, 2011 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | ||||||||||||||
Assets | |||||||||||||||||||
Total investments | $ | 593,973 | $ | 104,869 | $ | 5,510,410 | $ | — | $ | 6,209,252 | |||||||||
Cash and cash equivalents | 10,606 | 4,920 | 201,458 | — | 216,984 | ||||||||||||||
Investments in subsidiaries | 2,776,997 | 83,031 | — | (2,860,028 | ) | — | |||||||||||||
Due from subsidiaries and affiliates | 172,069 | 846 | — | (172,915 | ) | — | |||||||||||||
Premiums receivable | — | — | 471,878 | — | 471,878 | ||||||||||||||
Prepaid reinsurance premiums | — | — | 58,522 | — | 58,522 | ||||||||||||||
Reinsurance recoverable | — | — | 404,029 | — | 404,029 | ||||||||||||||
Accrued investment income | 4,106 | 311 | 29,106 | — | 33,523 | ||||||||||||||
Deferred acquisition costs | — | — | 43,721 | — | 43,721 | ||||||||||||||
Other assets | 206,171 | 27,198 | 275,092 | (201,458 | ) | 307,003 | |||||||||||||
Total assets | $ | 3,763,922 | $ | 221,175 | $ | 6,994,216 | $ | (3,234,401 | ) | $ | 7,744,912 | ||||||||
Liabilities, Redeemable Noncontrolling Interest and Shareholders' Equity | |||||||||||||||||||
Liabilities | |||||||||||||||||||
Reserve for claims and claim expenses | $ | — | $ | — | $ | 1,992,354 | $ | — | $ | 1,992,354 | |||||||||
Unearned premiums | — | — | 347,655 | — | 347,655 | ||||||||||||||
Debt | 100,000 | 249,247 | 4,373 | — | 353,620 | ||||||||||||||
Amounts due to subsidiaries and affiliates | 30,519 | 6,081 | — | (36,600 | ) | — | |||||||||||||
Reinsurance balances payable | — | — | 256,883 | — | 256,883 | ||||||||||||||
Other liabilities | 28,210 | 3,755 | 482,668 | — | 514,633 | ||||||||||||||
Liabilities of discontinued operations held for sale | — | 13,507 | — | — | 13,507 | ||||||||||||||
Total liabilities | 158,729 | 272,590 | 3,083,933 | (36,600 | ) | 3,478,652 | |||||||||||||
Redeemable noncontrolling interest – DaVinciRe | — | — | 657,727 | — | 657,727 | ||||||||||||||
Shareholders' Equity | |||||||||||||||||||
Total shareholders' equity | 3,605,193 | (51,415 | ) | 3,252,556 | (3,197,801 | ) | 3,608,533 | ||||||||||||
Total liabilities, redeemable noncontrolling interest and shareholders' equity | $ | 3,763,922 | $ | 221,175 | $ | 6,994,216 | $ | (3,234,401 | ) | $ | 7,744,912 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments. |
Condensed Consolidating Statement of Operations for the year ended December 31, 2012 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | ||||||||||||||
Revenues | |||||||||||||||||||
Net premiums earned | $ | — | $ | — | $ | 1,069,355 | $ | — | $ | 1,069,355 | |||||||||
Net investment income | 14,305 | 829 | 152,451 | (210 | ) | 167,375 | |||||||||||||
Net foreign exchange gains | 33 | — | 5,190 | — | 5,223 | ||||||||||||||
Equity in earnings of other ventures | — | — | 23,238 | — | 23,238 | ||||||||||||||
Other income (loss) | 2,822 | — | (25,727 | ) | — | (22,905 | ) | ||||||||||||
Net realized and unrealized gains on investments | 14,752 | 1,556 | 147,683 | — | 163,991 | ||||||||||||||
Net other-than-temporary impairments | — | — | (343 | ) | — | (343 | ) | ||||||||||||
Total revenues | 31,912 | 2,385 | 1,371,847 | (210 | ) | 1,405,934 | |||||||||||||
Expenses | |||||||||||||||||||
Net claims and claim expenses incurred | — | — | 325,211 | — | 325,211 | ||||||||||||||
Acquisition expenses | — | — | 113,542 | — | 113,542 | ||||||||||||||
Operational expenses | (5,103 | ) | 7,013 | 177,391 | — | 179,301 | |||||||||||||
Corporate expenses | 14,282 | 273 | 2,137 | — | 16,692 | ||||||||||||||
Interest expense | 5,875 | 14,467 | 2,755 | — | 23,097 | ||||||||||||||
Total expenses | 15,054 | 21,753 | 621,036 | — | 657,843 | ||||||||||||||
Income (loss) before equity in net income (loss) of subsidiaries and taxes | 16,858 | (19,368 | ) | 750,811 | (210 | ) | 748,091 | ||||||||||||
Equity in net income (loss) of subsidiaries | 584,051 | (17,113 | ) | — | (566,938 | ) | — | ||||||||||||
Income (loss) from continuing operations before taxes | 600,909 | (36,481 | ) | 750,811 | (567,148 | ) | 748,091 | ||||||||||||
Income tax expense | — | (499 | ) | (930 | ) | — | (1,429 | ) | |||||||||||
Income (loss) from continuing operations | 600,909 | (36,980 | ) | 749,881 | (567,148 | ) | 746,662 | ||||||||||||
Income from discontinued operations | — | 2,287 | — | — | 2,287 | ||||||||||||||
Net income (loss) | 600,909 | (34,693 | ) | 749,881 | (567,148 | ) | 748,949 | ||||||||||||
Net income attributable to noncontrolling interests | — | — | (148,040 | ) | — | (148,040 | ) | ||||||||||||
Net income (loss) attributable to RenaissanceRe | 600,909 | (34,693 | ) | 601,841 | (567,148 | ) | 600,909 | ||||||||||||
Dividends on preference shares | (34,895 | ) | — | — | — | (34,895 | ) | ||||||||||||
Net income (loss) attributable to RenaissanceRe common shareholders | $ | 566,014 | $ | (34,693 | ) | $ | 601,841 | $ | (567,148 | ) | $ | 566,014 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments. |
Condensed Consolidating Statement of Comprehensive Income (Loss) for the year ended December 31, 2012 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | ||||||||||||||
Comprehensive income (loss) | |||||||||||||||||||
Net income (loss) | $ | 600,909 | $ | (34,693 | ) | $ | 749,881 | $ | (567,148 | ) | $ | 748,949 | |||||||
Change in net unrealized gains on investments | — | — | 1,914 | — | 1,914 | ||||||||||||||
Portion of other-than-temporary impairments recognized in other comprehensive income (loss) | — | — | (52 | ) | — | (52 | ) | ||||||||||||
Comprehensive income (loss) | 600,909 | (34,693 | ) | 751,743 | (567,148 | ) | 750,811 | ||||||||||||
Net income attributable to noncontrolling interests | — | — | (148,040 | ) | — | (148,040 | ) | ||||||||||||
Comprehensive income attributable to noncontrolling interests | — | — | (148,040 | ) | — | (148,040 | ) | ||||||||||||
Comprehensive income (loss) attributable to RenaissanceRe | $ | 600,909 | $ | (34,693 | ) | $ | 603,703 | $ | (567,148 | ) | $ | 602,771 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments. |
Condensed Consolidating Statement of Operations for the year ended December 31, 2011 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | ||||||||||||||
Revenues | |||||||||||||||||||
Net premiums earned | $ | — | $ | — | $ | 951,049 | $ | — | $ | 951,049 | |||||||||
Net investment income | 20,845 | 944 | 102,023 | (5,812 | ) | 118,000 | |||||||||||||
Net foreign exchange gains (losses) | 112 | — | (7,023 | ) | — | (6,911 | ) | ||||||||||||
Equity in losses of other ventures | — | — | (36,533 | ) | — | (36,533 | ) | ||||||||||||
Other loss | (11 | ) | — | (674 | ) | — | (685 | ) | |||||||||||
Net realized and unrealized gains on investments | 11,377 | 1,217 | 58,074 | — | 70,668 | ||||||||||||||
Net other-than-temporary impairments | — | — | (552 | ) | — | (552 | ) | ||||||||||||
Total revenues | 32,323 | 2,161 | 1,066,364 | (5,812 | ) | 1,095,036 | |||||||||||||
Expenses | |||||||||||||||||||
Net claims and claim expenses incurred | — | — | 861,179 | — | 861,179 | ||||||||||||||
Acquisition expenses | — | — | 97,376 | — | 97,376 | ||||||||||||||
Operational expenses | (4,842 | ) | 7,910 | 166,598 | — | 169,666 | |||||||||||||
Corporate expenses | 11,486 | 229 | 6,549 | — | 18,264 | ||||||||||||||
Interest expense | 10,472 | 14,568 | 3,026 | (4,698 | ) | 23,368 | |||||||||||||
Total expenses | 17,116 | 22,707 | 1,134,728 | (4,698 | ) | 1,169,853 | |||||||||||||
Income (loss) before equity in net loss of subsidiaries and taxes | 15,207 | (20,546 | ) | (68,364 | ) | (1,114 | ) | (74,817 | ) | ||||||||||
Equity in net loss of subsidiaries | (73,066 | ) | (52,358 | ) | — | 125,424 | — | ||||||||||||
Loss from continuing operations before taxes | (57,859 | ) | (72,904 | ) | (68,364 | ) | 124,310 | (74,817 | ) | ||||||||||
Income tax benefit (expense) | 624 | 1,677 | (1,986 | ) | — | 315 | |||||||||||||
Loss from continuing operations | (57,235 | ) | (71,227 | ) | (70,350 | ) | 124,310 | (74,502 | ) | ||||||||||
Loss from discontinued operations | — | (15,890 | ) | — | — | (15,890 | ) | ||||||||||||
Net loss | (57,235 | ) | (87,117 | ) | (70,350 | ) | 124,310 | (90,392 | ) | ||||||||||
Net loss attributable to redeemable noncontrolling interest – DaVinciRe | — | — | 33,157 | — | 33,157 | ||||||||||||||
Net loss attributable to RenaissanceRe | (57,235 | ) | (87,117 | ) | (37,193 | ) | 124,310 | (57,235 | ) | ||||||||||
Dividends on preference shares | (35,000 | ) | — | — | — | (35,000 | ) | ||||||||||||
Net loss attributable to RenaissanceRe common shareholders | $ | (92,235 | ) | $ | (87,117 | ) | $ | (37,193 | ) | $ | 124,310 | $ | (92,235 | ) |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments. |
Condensed Consolidating Statement of Comprehensive Loss for the year ended December 31, 2011 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | ||||||||||||||
Comprehensive loss | |||||||||||||||||||
Net loss | $ | (57,235 | ) | $ | (87,117 | ) | $ | (70,350 | ) | $ | 124,310 | $ | (90,392 | ) | |||||
Change in net unrealized gains on investments | — | — | (7,991 | ) | — | (7,991 | ) | ||||||||||||
Portion of other-than-temporary impairments recognized in other comprehensive loss | — | — | (78 | ) | — | (78 | ) | ||||||||||||
Comprehensive loss | (57,235 | ) | (87,117 | ) | (78,419 | ) | 124,310 | (98,461 | ) | ||||||||||
Net loss attributable to noncontrolling interests | — | — | 33,157 | — | 33,157 | ||||||||||||||
Change in net unrealized gains on fixed maturity investments available for sale attributable to noncontrolling interests | — | — | 6 | — | 6 | ||||||||||||||
Comprehensive loss attributable to noncontrolling interests | — | — | 33,163 | — | 33,163 | ||||||||||||||
Comprehensive loss attributable to RenaissanceRe | $ | (57,235 | ) | $ | (87,117 | ) | $ | (45,256 | ) | $ | 124,310 | $ | (65,298 | ) |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments. |
Condensed Consolidating Statement of Operations for the year ended December 31, 2010 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | ||||||||||||||
Revenues | |||||||||||||||||||
Net premiums earned | $ | — | $ | — | $ | 864,921 | $ | — | $ | 864,921 | |||||||||
Net investment income | 16,101 | 914 | 186,981 | (41 | ) | 203,955 | |||||||||||||
Net foreign exchange losses | (523 | ) | — | (16,603 | ) | — | (17,126 | ) | |||||||||||
Equity in losses of other ventures | — | — | (11,814 | ) | — | (11,814 | ) | ||||||||||||
Other income | 631 | — | 40,489 | — | 41,120 | ||||||||||||||
Net realized and unrealized gains (losses) on investments | 10,107 | (2,432 | ) | 136,769 | — | 144,444 | |||||||||||||
Net other-than-temporary impairments | — | — | (829 | ) | — | (829 | ) | ||||||||||||
Total revenues | 26,316 | (1,518 | ) | 1,199,914 | (41 | ) | 1,224,671 | ||||||||||||
Expenses | |||||||||||||||||||
Net claims and claim expenses incurred | — | — | 129,345 | — | 129,345 | ||||||||||||||
Acquisition expenses | — | — | 94,961 | — | 94,961 | ||||||||||||||
Operational expenses | (3,819 | ) | 5,014 | 164,847 | — | 166,042 | |||||||||||||
Corporate expenses | 13,022 | 199 | 6,915 | — | 20,136 | ||||||||||||||
Interest expense | 15,464 | 14,518 | 1,510 | (9,663 | ) | 21,829 | |||||||||||||
Total expenses | 24,667 | 19,731 | 397,578 | (9,663 | ) | 432,313 | |||||||||||||
Income (loss) before equity in net loss of subsidiaries and taxes | 1,649 | (21,249 | ) | 802,336 | 9,622 | 792,358 | |||||||||||||
Equity in net income (loss) of subsidiaries | 744,492 | (66,323 | ) | — | (678,169 | ) | — | ||||||||||||
Income (loss) from continuing operations before taxes | 746,141 | (87,572 | ) | 802,336 | (668,547 | ) | 792,358 | ||||||||||||
Income tax (expense) benefit | (1,410 | ) | 20,733 | (13,199 | ) | — | 6,124 | ||||||||||||
Income (loss) from continuing operations | 744,731 | (66,839 | ) | 789,137 | (668,547 | ) | 798,482 | ||||||||||||
Loss from discontinued operations | — | 62,670 | — | — | 62,670 | ||||||||||||||
Net income (loss) | 744,731 | (4,169 | ) | 789,137 | (668,547 | ) | 861,152 | ||||||||||||
Net income attributable to redeemable noncontrolling interest – DaVinciRe | — | — | (116,421 | ) | — | (116,421 | ) | ||||||||||||
Net income (loss) available (attributable) to RenaissanceRe | 744,731 | (4,169 | ) | 672,716 | (668,547 | ) | 744,731 | ||||||||||||
Dividends on preference shares | (42,118 | ) | — | — | — | (42,118 | ) | ||||||||||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | $ | 702,613 | $ | (4,169 | ) | $ | 672,716 | $ | (668,547 | ) | $ | 702,613 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments. |
Condensed Consolidating Statement of Comprehensive Income (Loss) for the year ended December 31, 2010 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | Consolidating Adjustments (2) | RenaissanceRe Consolidated | ||||||||||||||
Comprehensive income (loss) | |||||||||||||||||||
Net income (loss) | $ | 744,731 | $ | (4,169 | ) | $ | 789,137 | $ | (668,547 | ) | $ | 861,152 | |||||||
Change in net unrealized gains on investments | — | — | (25,040 | ) | — | (25,040 | ) | ||||||||||||
Portion of other-than-temporary impairments recognized in other comprehensive loss | — | — | (2 | ) | — | (2 | ) | ||||||||||||
Comprehensive income (loss) | 744,731 | (4,169 | ) | 764,095 | (668,547 | ) | 836,110 | ||||||||||||
Net income attributable to noncontrolling interests | — | — | (116,421 | ) | — | (116,421 | ) | ||||||||||||
Change in net unrealized gains on fixed maturity investments available for sale attributable to noncontrolling interests | — | — | 3,427 | — | 3,427 | ||||||||||||||
Comprehensive income attributable to noncontrolling interests | — | — | (112,994 | ) | — | (112,994 | ) | ||||||||||||
Comprehensive income attributable to RenaissanceRe | $ | 744,731 | $ | (4,169 | ) | $ | 651,101 | $ | (668,547 | ) | $ | 723,116 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
(2) | Includes Parent Guarantor and Subsidiary Issuer consolidating adjustments. |
Condensed Consolidating Statement of Cash Flows for the year ended December 31, 2012 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | RenaissanceRe Consolidated | |||||||||||
Cash flows provided by (used in) operating activities | |||||||||||||||
Net cash provided by (used in) operating activities | $ | 128,567 | $ | (10,376 | ) | $ | 598,738 | $ | 716,929 | ||||||
Cash flows provided by (used in) investing activities | |||||||||||||||
Proceeds from sales and maturities of fixed maturity investments trading | 744,211 | 140,626 | 7,308,030 | 8,192,867 | |||||||||||
Purchases of fixed maturity investments trading | (692,783 | ) | (73,800 | ) | (7,769,655 | ) | (8,536,238 | ) | |||||||
Proceeds from sales and maturities of fixed maturity investments available for sale | — | — | 65,168 | 65,168 | |||||||||||
Net (purchases) sales of short term investments | (80,485 | ) | (10,624 | ) | 159,886 | 68,777 | |||||||||
Net sales of other investments | — | — | 150,828 | 150,828 | |||||||||||
Net purchases of other assets | — | — | (4,079 | ) | (4,079 | ) | |||||||||
Dividends and return of capital from subsidiaries | 979,311 | 9,541 | (988,852 | ) | — | ||||||||||
Contributions to subsidiaries | (366,210 | ) | (50,000 | ) | 416,210 | — | |||||||||
Due (from) to subsidiary | (15,359 | ) | 241 | 15,118 | — | ||||||||||
Net payments related to sale of discontinued operations | — | (9,000 | ) | — | (9,000 | ) | |||||||||
Net cash provided by (used in) investing activities | 568,685 | 6,984 | (647,346 | ) | (71,677 | ) | |||||||||
Cash flows used in financing activities | |||||||||||||||
Dividends paid – RenaissanceRe common shares | (53,356 | ) | — | — | (53,356 | ) | |||||||||
Dividends paid – preference shares | (34,895 | ) | — | — | (34,895 | ) | |||||||||
RenaissanceRe common share repurchases | (463,309 | ) | — | — | (463,309 | ) | |||||||||
Net drawdown of debt | — | — | (1,937 | ) | (1,937 | ) | |||||||||
Redemption of preference shares | (150,000 | ) | — | — | (150,000 | ) | |||||||||
Third party DaVinciRe share transactions | — | — | 164,927 | 164,927 | |||||||||||
Net cash used in financing activities | (701,560 | ) | — | 162,990 | (538,570 | ) | |||||||||
Effect of exchange rate changes on foreign currency cash | — | — | 1,692 | 1,692 | |||||||||||
Net (decrease) increase in cash and cash equivalents | (4,308 | ) | (3,392 | ) | 116,074 | 108,374 | |||||||||
Cash and cash equivalents, beginning of period | 10,606 | 4,920 | 201,458 | 216,984 | |||||||||||
Cash and cash equivalents, end of period | $ | 6,298 | $ | 1,528 | $ | 317,532 | $ | 325,358 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
Condensed Consolidating Statement of Cash Flows for the year ended December 31, 2011 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | RenaissanceRe Consolidated | |||||||||||
Cash flows (used in) provided by operating activities | |||||||||||||||
Net cash (used in) provided by operating activities | $ | (58,721 | ) | $ | (56,438 | ) | $ | 281,092 | $ | 165,933 | |||||
Cash flows provided by investing activities | |||||||||||||||
Proceeds from sales and maturities of fixed maturity investments trading | 532,864 | 221,189 | 5,335,415 | 6,089,468 | |||||||||||
Purchases of fixed maturity investments trading | (684,951 | ) | (322,318 | ) | (5,264,354 | ) | (6,271,623 | ) | |||||||
Proceeds from sales and maturities of fixed maturity investments available for sale | — | — | 106,362 | 106,362 | |||||||||||
Purchases of fixed maturity investments available for sale | — | — | (4,107 | ) | (4,107 | ) | |||||||||
Net purchases of equity investments trading | — | — | (47,995 | ) | (47,995 | ) | |||||||||
Net (purchases) sales of short term investments | (6,014 | ) | 9,184 | 99,978 | 103,148 | ||||||||||
Net sales of other investments | 102,717 | — | (51,777 | ) | 50,940 | ||||||||||
Net purchases of investments in other ventures | — | — | (39,000 | ) | (39,000 | ) | |||||||||
Net sales of other assets | — | — | 58,318 | 58,318 | |||||||||||
Dividends and return of capital from subsidiaries | 945,195 | 9,306 | (954,501 | ) | — | ||||||||||
Contributions to subsidiaries | (272,366 | ) | (8,294 | ) | 280,660 | — | |||||||||
Due to (from) subsidiaries | 6,059 | 3,780 | (9,839 | ) | — | ||||||||||
Net proceeds from sale of discontinued operations | — | 269,520 | — | 269,520 | |||||||||||
Net cash provided by investing activities | 623,504 | 182,367 | (490,840 | ) | 315,031 | ||||||||||
Cash flows used in financing activities | |||||||||||||||
Dividends paid – RenaissanceRe common shares | (53,460 | ) | — | — | (53,460 | ) | |||||||||
Dividends paid – preference shares | (35,000 | ) | — | — | (35,000 | ) | |||||||||
RenaissanceRe common share repurchases | (191,619 | ) | — | — | (191,619 | ) | |||||||||
Net repayment of debt | (277,512 | ) | (124,949 | ) | 202,461 | (200,000 | ) | ||||||||
Third party DaVinciRe share transactions | — | — | (62,157 | ) | (62,157 | ) | |||||||||
Net cash used in financing activities | (557,591 | ) | (124,949 | ) | 140,304 | (542,236 | ) | ||||||||
Effect of exchange rate changes on foreign currency cash | — | — | 518 | 518 | |||||||||||
Net increase (decrease) in cash and cash equivalents | 7,192 | 980 | (68,926 | ) | (60,754 | ) | |||||||||
Cash and cash equivalents, beginning of period | 3,414 | 3,940 | 270,384 | 277,738 | |||||||||||
Cash and cash equivalents, end of period | $ | 10,606 | $ | 4,920 | $ | 201,458 | $ | 216,984 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
Condensed Consolidating Statement of Cash Flows for the year ended December 31, 2010 | RenaissanceRe Holdings Ltd. (Parent Guarantor) | RenRe North America Holdings Inc. (Subsidiary Issuer) | Other RenaissanceRe Holdings Ltd. Subsidiaries and Eliminations (Non-guarantor Subsidiaries) (1) | RenaissanceRe Consolidated | |||||||||||
Cash flows (used in) provided by operating activities | |||||||||||||||
Net cash (used in) provided by operating activities | $ | (112,852 | ) | $ | (7,561 | ) | $ | 615,133 | $ | 494,720 | |||||
Cash flows provided by (used in) investing activities | |||||||||||||||
Proceeds from sales and maturities of investments available for sale | 37,457 | 244,147 | 3,470,065 | 3,751,669 | |||||||||||
Purchases of investments available for sale | (240 | ) | (246,570 | ) | (156,850 | ) | (403,660 | ) | |||||||
Proceeds from sales and maturities of investments trading | 528,662 | — | 7,266,925 | 7,795,587 | |||||||||||
Purchases of investments trading | (610,276 | ) | — | (10,512,547 | ) | (11,122,823 | ) | ||||||||
Net sales (purchases) of short term investments | 16,339 | (12,150 | ) | (30,941 | ) | (26,752 | ) | ||||||||
Net (purchases) sales of other investments | (3,814 | ) | — | 125,879 | 122,065 | ||||||||||
Net purchases of investments in other ventures | — | — | (1,915 | ) | (1,915 | ) | |||||||||
Net purchases of other assets | — | — | (5,561 | ) | (5,561 | ) | |||||||||
Dividends and return of capital from subsidiaries | 941,878 | 11,676 | (953,554 | ) | — | ||||||||||
Contributions to subsidiaries | (301,555 | ) | (47,493 | ) | 349,048 | — | |||||||||
Due to (from) subsidiary | 23,329 | (312 | ) | (23,017 | ) | — | |||||||||
Net cash provided by (used in) investing activities | 631,780 | (50,702 | ) | (472,468 | ) | 108,610 | |||||||||
Cash flows (used in) provided by financing activities | |||||||||||||||
Dividends paid – RenaissanceRe common shares | (55,936 | ) | — | — | (55,936 | ) | |||||||||
Dividends paid – preference shares | (42,118 | ) | — | — | (42,118 | ) | |||||||||
RenaissanceRe common share repurchases | (448,882 | ) | — | — | (448,882 | ) | |||||||||
Return of additional paid in capital to parent company | — | (239,599 | ) | 239,599 | — | ||||||||||
Net issuance (repayment) of debt | 253,512 | 294,196 | (298,662 | ) | 249,046 | ||||||||||
Redemption of 7.30% Series B preference shares | (100,000 | ) | — | — | (100,000 | ) | |||||||||
Third party investment in noncontrolling interest | — | — | 3,000 | 3,000 | |||||||||||
Third party DaVinciRe share repurchases | (136,702 | ) | — | — | (136,702 | ) | |||||||||
Net cash (used in) provided by financing activities | (530,126 | ) | 54,597 | (56,063 | ) | (531,592 | ) | ||||||||
Effect of exchange rate changes on foreign currency cash | (594 | ) | — | (409 | ) | (1,003 | ) | ||||||||
Net (decrease) increase in cash and cash equivalents | (11,792 | ) | (3,666 | ) | 86,193 | 70,735 | |||||||||
Net decrease in cash and cash equivalents of discontinued operations | — | — | 3,891 | 3,891 | |||||||||||
Cash and cash equivalents, beginning of year | 15,206 | 7,606 | 180,300 | 203,112 | |||||||||||
Cash and cash equivalents, end of year | $ | 3,414 | $ | 3,940 | $ | 270,384 | $ | 277,738 |
(1) | Includes all other subsidiaries of RenaissanceRe Holdings Ltd. and eliminations. |
Page | |||
I | |||
II | |||
III | |||
IV | |||
VI |
December 31, 2012 | |||||||||||
Amortized Cost | Market Value | Amount at which shown in the Balance Sheet | |||||||||
Type of investment: | |||||||||||
Fixed maturity investments | |||||||||||
U.S. treasuries | $ | 1,256,607 | $ | 1,259,800 | $ | 1,259,800 | |||||
Agencies | 312,749 | 315,154 | 315,154 | ||||||||
Non-U.S. government (Sovereign debt) | 128,207 | 133,198 | 133,198 | ||||||||
Non-U.S. government-backed corporate | 343,924 | 349,514 | 349,514 | ||||||||
Corporate | 1,552,194 | 1,615,207 | 1,615,207 | ||||||||
Agency mortgage-backed | 404,423 | 408,531 | 408,531 | ||||||||
Non-agency mortgage-backed | 232,317 | 248,339 | 248,339 | ||||||||
Commercial mortgage-backed | 383,176 | 406,166 | 406,166 | ||||||||
Asset-backed | 12,210 | 12,954 | 12,954 | ||||||||
Total fixed maturity investments | $ | 4,625,807 | 4,748,863 | 4,748,863 | |||||||
Short term investments | 821,163 | 821,163 | |||||||||
Equity investments | 58,186 | 58,186 | |||||||||
Other investments | 644,711 | 644,711 | |||||||||
Investments in other ventures, under equity method | 87,724 | 87,724 | |||||||||
Total investments | $ | 6,360,647 | $ | 6,360,647 |
At December 31, | |||||||
2012 | 2011 | ||||||
Assets | |||||||
Fixed maturity investments trading, at fair value (Amortized cost $324,160 and $421,278 at December 31, 2012 and 2011, respectively) | $ | 337,376 | $ | 430,007 | |||
Short term investments, at fair value | 234,763 | 163,966 | |||||
Total investments | 572,139 | 593,973 | |||||
Cash and cash equivalents | 6,298 | 10,606 | |||||
Investments in subsidiaries | 2,864,793 | 2,776,997 | |||||
Due from subsidiaries | 32,467 | 17,108 | |||||
Dividends due from subsidiaries | 20,829 | 154,961 | |||||
Accrued investment income | 2,535 | 4,106 | |||||
Other assets | 175,105 | 206,171 | |||||
Total Assets | $ | 3,674,166 | $ | 3,763,922 | |||
Liabilities and Shareholders' Equity | |||||||
Liabilities | |||||||
Notes and bank loans payable | $ | 100,000 | $ | 100,000 | |||
Contributions due to subsidiaries | 11,371 | 30,519 | |||||
Other liabilities | 59,730 | 28,210 | |||||
Total Liabilities | 171,101 | 158,729 | |||||
Shareholders' Equity | |||||||
Preference Shares: $1.00 par value – 16,000,000 shares issued and outstanding at December 31, 2012 (2011 – 22,000,000 shares) | 400,000 | 550,000 | |||||
Common Shares: $1.00 par value – 45,542,203 shares issued and outstanding at December 31, 2012 (2011 – 51,542,955 shares) | 45,542 | 51,543 | |||||
Accumulated other comprehensive income | 13,622 | 11,760 | |||||
Retained earnings | 3,043,901 | 2,991,890 | |||||
Total Shareholders' Equity | 3,503,065 | 3,605,193 | |||||
Total Liabilities and Shareholders' Equity | $ | 3,674,166 | $ | 3,763,922 |
Year ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Revenues | |||||||||||
Net investment income | $ | 14,305 | $ | 20,845 | $ | 16,101 | |||||
Net foreign exchange gains (losses) | 33 | 112 | (523 | ) | |||||||
Other income (loss) | 2,822 | (11 | ) | 631 | |||||||
Net realized and unrealized gains on investments | 14,752 | 11,377 | 10,107 | ||||||||
Total revenues | 31,912 | 32,323 | 26,316 | ||||||||
Expenses | |||||||||||
Interest expense | 5,875 | 10,472 | 15,464 | ||||||||
Operating and corporate expenses | 9,179 | 6,644 | 9,203 | ||||||||
Total expenses | 15,054 | 17,116 | 24,667 | ||||||||
Income before equity in net income (losses) of subsidiaries and taxes | 16,858 | 15,207 | 1,649 | ||||||||
Equity in net income (losses) of subsidiaries | 584,051 | (73,066 | ) | 744,492 | |||||||
Income (loss) before taxes | 600,909 | (57,859 | ) | 746,141 | |||||||
Income tax benefit (expense) | — | 624 | (1,410 | ) | |||||||
Net income (loss) | 600,909 | (57,235 | ) | 744,731 | |||||||
Dividends on preference shares | (34,895 | ) | (35,000 | ) | (42,118 | ) | |||||
Net income (loss) available (attributable) to RenaissanceRe common shareholders | $ | 566,014 | $ | (92,235 | ) | $ | 702,613 |
Year ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Comprehensive income (loss) | |||||||||||
Net income (loss) | $ | 600,909 | $ | (57,235 | ) | $ | 744,731 | ||||
Comprehensive income (loss) attributable to RenaissanceRe | $ | 600,909 | $ | (57,235 | ) | $ | 744,731 |
Year ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Cash flows provided by (used in) operating activities: | |||||||||||
Net income (loss) | $ | 600,909 | $ | (57,235 | ) | $ | 744,731 | ||||
Less: equity in net (income) loss of subsidiaries | (584,051 | ) | 73,066 | (744,492 | ) | ||||||
16,858 | 15,831 | 239 | |||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | |||||||||||
Net unrealized losses (gains) included in net investment income | 348 | (1,696 | ) | (4,462 | ) | ||||||
Net unrealized (gains) losses included in other (loss) income | (193 | ) | 304 | (267 | ) | ||||||
Net realized and unrealized gains on investments | (14,752 | ) | (11,377 | ) | (10,107 | ) | |||||
Other | 126,306 | (61,783 | ) | (98,255 | ) | ||||||
Net cash provided by (used in) operating activities | 128,567 | (58,721 | ) | (112,852 | ) | ||||||
Cash flows provided by investing activities: | |||||||||||
Proceeds from maturities and sales of fixed maturity investments trading | 744,211 | 532,864 | 528,662 | ||||||||
Purchases of fixed maturity investments trading | (692,783 | ) | (684,951 | ) | (610,276 | ) | |||||
Proceeds from maturities and sales of fixed maturity investments available for sale | — | — | 37,457 | ||||||||
Purchases of fixed maturity investments available for sale | — | — | (240 | ) | |||||||
Contributions to subsidiaries | (366,210 | ) | (272,366 | ) | (301,555 | ) | |||||
Dividends and return of capital from subsidiaries | 979,311 | 945,195 | 941,878 | ||||||||
Net (purchases) sales of short term investments | (80,485 | ) | (6,014 | ) | 16,339 | ||||||
Net sales (purchases) of other investments | — | 102,717 | (3,814 | ) | |||||||
Due (from) to subsidiary | (15,359 | ) | 6,059 | 23,329 | |||||||
Net cash provided by investing activities | 568,685 | 623,504 | 631,780 | ||||||||
Cash flows used in financing activities: | |||||||||||
Dividends paid – RenaissanceRe common shares | (53,356 | ) | (53,460 | ) | (55,936 | ) | |||||
Dividends paid – preference shares | (34,895 | ) | (35,000 | ) | (42,118 | ) | |||||
RenaissanceRe common share repurchases | (463,309 | ) | (191,619 | ) | (448,882 | ) | |||||
Redemption of preference shares | (150,000 | ) | — | (100,000 | ) | ||||||
Net (repayment) issuance of debt | — | (277,512 | ) | 253,512 | |||||||
Third party DaVinciRe share repurchases | — | — | (136,702 | ) | |||||||
Net cash used in financing activities | (701,560 | ) | (557,591 | ) | (530,126 | ) | |||||
Effect of exchange rate changes on foreign currency cash | — | — | (594 | ) | |||||||
Net (decrease) increase in cash and cash equivalents | (4,308 | ) | 7,192 | (11,792 | ) | ||||||
Cash and cash equivalents, beginning of year | 10,606 | 3,414 | 15,206 | ||||||||
Cash and cash equivalents, end of year | $ | 6,298 | $ | 10,606 | $ | 3,414 |
December 31, 2012 | Year ended December 31, 2012 | ||||||||||||||||||||||||||||||||||
Deferred Policy Acquisition Costs | Future Policy Benefits, Losses, Claims and Loss Expenses | Unearned Premiums | Premium Revenue | Net Investment Income | Benefits, Claims, Losses and Settlement Expenses | Amortization of Deferred Policy Acquisition Costs | Other Operating Expenses | Net Written Premiums | |||||||||||||||||||||||||||
Reinsurance | $ | 43,316 | $ | 1,662,571 | $ | 345,514 | $ | 946,423 | $ | — | $ | 242,022 | $ | 90,491 | $ | 132,935 | $ | 967,587 | |||||||||||||||||
Lloyd's | 9,306 | 149,470 | 54,003 | 122,968 | — | 80,242 | 22,864 | 45,680 | 135,131 | ||||||||||||||||||||||||||
Other | — | 67,336 | — | (36 | ) | 167,375 | 2,947 | 187 | 686 | (61 | ) | ||||||||||||||||||||||||
Total | $ | 52,622 | $ | 1,879,377 | $ | 399,517 | $ | 1,069,355 | $ | 167,375 | $ | 325,211 | $ | 113,542 | $ | 179,301 | $ | 1,102,657 | |||||||||||||||||
December 31, 2011 | Year ended December 31, 2011 | ||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||
Reinsurance | $ | 34,923 | $ | 1,813,526 | $ | 301,845 | $ | 873,088 | $ | — | $ | 783,704 | $ | 82,978 | $ | 131,251 | $ | 913,499 | |||||||||||||||||
Lloyd's | 8,039 | 87,495 | 43,367 | 76,386 | — | 73,259 | 14,031 | 36,732 | 98,617 | ||||||||||||||||||||||||||
Other | 759 | 91,333 | 2,443 | 1,575 | 118,000 | 4,216 | 367 | 1,683 | 657 | ||||||||||||||||||||||||||
Total | $ | 43,721 | $ | 1,992,354 | $ | 347,655 | $ | 951,049 | $ | 118,000 | $ | 861,179 | $ | 97,376 | $ | 169,666 | $ | 1,012,773 | |||||||||||||||||
December 31, 2010 | Year ended December 31, 2010 | ||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||
Reinsurance | $ | 31,685 | $ | 1,130,670 | $ | 264,113 | $ | 838,790 | $ | — | $ | 113,804 | $ | 77,954 | $ | 129,990 | $ | 809,719 | |||||||||||||||||
Lloyd's | 3,585 | 20,031 | 21,162 | 50,204 | — | 25,676 | 10,784 | 24,837 | 61,189 | ||||||||||||||||||||||||||
Other | 378 | 107,142 | 908 | (24,073 | ) | 203,955 | (10,135 | ) | 6,223 | 11,215 | (21,943 | ) | |||||||||||||||||||||||
Total | $ | 35,648 | $ | 1,257,843 | $ | 286,183 | $ | 864,921 | $ | 203,955 | $ | 129,345 | $ | 94,961 | $ | 166,042 | $ | 848,965 |
Gross Amounts | Ceded to Other Companies | Assumed From Other Companies | Net Amount | Percentage of Amount Assumed to Net | ||||||||||||||
Year ended December 31, 2012 | ||||||||||||||||||
Property and liability premiums earned | $ | 34,028 | $ | 430,374 | $ | 1,465,701 | $ | 1,069,355 | 137 | % | ||||||||
Year ended December 31, 2011 | ||||||||||||||||||
Property and liability premiums earned | $ | 17,794 | $ | 422,950 | $ | 1,356,205 | $ | 951,049 | 143 | % | ||||||||
Year ended December 31, 2010 | ||||||||||||||||||
Property and liability premiums earned | $ | 5,329 | $ | 331,783 | $ | 1,191,375 | $ | 864,921 | 138 | % |
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, 2012 | $ | 52,622 | $ | 1,879,377 | $ | — | $ | 399,517 | $ | 1,069,355 | $ | 167,375 | |||||||||||
Year ended December 31, 2011 | $ | 43,721 | $ | 1,992,354 | $ | — | $ | 347,655 | $ | 951,049 | $ | 118,000 | |||||||||||
Year ended December 31, 2010 | $ | 35,648 | $ | 1,257,843 | $ | — | $ | 286,183 | $ | 864,921 | $ | 203,955 | |||||||||||
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, 2012 | $ | 483,180 | $ | (157,969 | ) | $ | 113,542 | $ | 226,671 | $ | 1,102,657 | ||||||||||||
Year ended December 31, 2011 | $ | 993,168 | $ | (131,989 | ) | $ | 97,376 | $ | 428,986 | $ | 1,012,773 | ||||||||||||
Year ended December 31, 2010 | $ | 431,476 | $ | (302,131 | ) | $ | 94,961 | $ | 233,547 | $ | 848,965 |
(a) | Financial Statements, Financial Statement Schedules and Exhibits. |
1 | Financial Statements |
2 | Financial Statement Schedules |
3 | Exhibits |
3.1 | Memorandum of Association. (1) |
3.2 | Amended and Restated Bye-Laws. (2) |
3.3 | Memorandum of Increase in Share Capital of RenaissanceRe Holdings Ltd. (3) |
3.4 | Specimen Common Share certificate. (1) |
10.1 | Form of Director Retention Agreement, dated as of November 8, 2002, entered into by each of the non-employee directors of RenaissanceRe Holdings Ltd. (4) |
10.2 | Further Amended and Restated Employment Agreement, dated as of February 19, 2009, between RenaissanceRe Holdings Ltd. and Neill A. Currie. (8) |
10.3 | Amendment No. 1 to the Further Amended and Restated Employment Agreement, dated January 8, 2010, by and among RenaissanceRe Holdings Ltd. and Neill A. Currie. (9) |
10.4 | Employment Agreement, dated as of June 10, 2009, by and between RenaissanceRe Holdings Ltd. and Jeffrey D. Kelly. (11) |
10.5 | Memorandum of Agreement by and between the Company and Neill A. Currie, dated February 21, 2012 (5). |
10.6 | Amendment No. 1 the Employment Agreement, dated January 8, 2010, by and among RenaissanceRe Holdings Ltd. and Jeffrey D. Kelly. (9) |
10.7 | Form of Employment Agreement for Executive Officers. (10) |
10.8 | Form of Amendment to Employment Agreement for Executive Officers. (13) |
10.9 | Form of Amendment No. 2 to Employment Agreement for Executive Officers. (7) |
10.10 | Form of Amendment No. 3 to the Amended and Restated Employment Agreement for Executive Officers. (9) |
10.11 | RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (18) |
10.12 | Amendment No. 1 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (19) |
10.13 | Amendment No. 2 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (19) |
10.14 | Amendment No. 3 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (20) |
10.15 | Amendment No. 4 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (40) |
10.16 | Amendment No. 5 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (37) |
10.17 | UK Schedule to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (20) |
10.18 | UK Sub-Plan to the RenaissanceRe Holdings 2001 Stock Incentive Plan. (20) |
10.19 | Form of Option Grant Notice and Agreement pursuant to which option grants are made under the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (21) |
10.20 | Form of Restricted Stock Grant Notice and Agreement pursuant to which Restricted Stock grants are made under the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (21) |
10.21 | RenaissanceRe Holdings Ltd. 2004 Stock Option Incentive Plan. (22) |
10.22 | Amendment No. 1 to the RenaissanceRe Holdings Ltd. 2004 Stock Option Incentive Plan. (23) |
10.23 | Form of Option Agreement pursuant to which option grants are made under the RenaissanceRe Holdings 2004 Stock Option Incentive Plan to executive officers. (22) |
10.24 | Amended and Restated RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (25) |
10.25 | Amendment No. 1 to the RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (25) |
10.26 | Amendment No. 2 to the RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (26) |
10.27 | Amendment No. 3 to the RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (31) |
10.28 | Form of Restricted Stock Grant Agreement for Directors. (5) |
10.29 | Form of Option Grant Agreement for Directors. (5) |
10.30 | Certificate of Designation, Preferences and Rights of 6.08% Series C Preference Shares. (29) |
10.31 | Certificate of Designation, Preferences and Rights of 6.60% Series D Preference Shares. (30) |
10.32 | Senior Indenture, dated as of July 1, 2001, between RenaissanceRe Holdings Ltd., as Issuer, and Bankers Trust Company, as Trustee. (12) |
10.33 | Second Supplemental Indenture, by and between RenaissanceRe Holdings Ltd. and Deutsche Bank Trust Company Americas (f/k/a Bankers Trust Company), dated as of January 31, 2003. (14) |
10.34 | Master Reimbursement Agreement, dated as of April 29, 2009, by and between Renaissance Reinsurance Ltd. and Citibank Europe PLC. (20) |
10.35 | Pledge Agreement, dated as of April 29, 2009, by and between Renaissance Reinsurance Ltd. and Citibank Europe PLC. (20) |
10.36 | Agreement Regarding Use of Aircraft Interest, dated as of November 17, 2009, by and between RenaissanceRe Holdings Ltd. and Neill A. Currie. (42) |
10.37 | RenaissanceRe Holdings Ltd. 2010 Restricted Stock Unit Plan. (42) |
10.38 | Form of Restricted Stock Unit Agreement, pursuant to which restricted stock unit grants are made under the RenaissanceRe Holdings Ltd. 2010 Restricted Stock Unit Plan. (42) |
10.39 | 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. (33) |
10.40 | First Supplemental Indenture, dated as of March 17, 2010, among RenRe North America Holdings Inc., as Insurer, RenaissanceRe Holdings Ltd., as Guarantor, and Deutsche Bank Trust Companies America, as Trustee. (33) |
10.41 | 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. (33) |
10.42 | 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. (41) |
10.43 | Credit Agreement, dated as of May 17, 2012, by and among RenaissanceRe Holdings Ltd., various banks and financial institutions parties thereto, Wells Fargo Bank, National Association, as Fronting Bank, LC Administrator and Administrative Agent for the Lenders, Citibank, N.A., as Syndication Agent, and Wells Fargo Securities, LLC and Citigroup Global Markets Inc., as Joint Lead Arrangers and Joint Lead Bookrunners (43). |
10.44 | Fourth Amended and Restated Reimbursement Agreement, dated as of May 17, 2012, by and among RenaissanceRe Holdings Ltd., Renaissance Reinsurance Ltd., Renaissance Reinsurance of Europe, Glencoe Insurance Ltd., DaVinci Reinsurance Ltd., the banks and financial institutions parties thereto, Wells Fargo Bank, National Association, as issuing bank, administrative agent and collateral agent for the lenders, and certain other agents (43). |
10.45 | Form of Letter Agreement with Neill A. Currie Regarding Performance Share Awards. (35) |
10.46 | Form of Letter Agreement with the Named Executive Officers Regarding Performance Share Awards. (35) |
10.47 | Form of Tax Reimbursement Waiver Letter with the Named Executive Officers. (45) |
10.48 | Form of Performance-Based Restricted Stock Grant Notice and Agreement pursuant to which performance-based restricted stock awards are made under the RenaissanceRe Holdings Ltd. 2010 Performance-Based Equity Incentive Plan. (36) |
10.49 | Performance-Based Restricted Stock Grant Notice and Agreement under the RenaissanceRe Holdings Ltd. 2010 Performance-Based Equity Incentive Plan, dated June 9, 2010, between RenaissanceRe Holdings Ltd. and Neill A. Currie. (36) |
10.50 | Facility Letter, dated September 17, 2010, from Citibank Europe plc to Renaissance Reinsurance Ltd., DaVinci Reinsurance Ltd. and Glencoe Insurance Ltd. (38) |
10.51 | Insurance Letters of Credit - Master Agreement, dated September 17, 2010, between Renaissance Reinsurance Ltd. and Citibank Europe plc. DaVinci Reinsurance Ltd. and Glencoe Insurance Ltd. have each entered into an agreement with Citibank Europe plc that is identical to the foregoing agreement, except with respect to party names. (38) |
10.52 | Stock Purchase Agreement, dated as of November 18, 2010, by and between RenRe North America Holdings Inc., and QBE Holdings Inc. (39) |
10.53 | Memorandum of Agreement by and between RenaissanceRe Holdings Ltd. and Neill A. Currie, dated February 21, 2012. (44) |
10.54 | RenaissanceRe Holdings Ltd. 2010 Performance-Based Equity Incentive Plan. (40) |
10.55 | Amendment No. 2 to Further Amended and Restated Employment Agreement by and between RenaissanceRe Holdings Ltd. and Neill A. Currie, dated February 19, 2013. |
10.56 | Form of Agreement Regarding Use of Aircraft Interest by and between RenaissanceRe Holdings Ltd. and Certain Executive Officers of RenaissanceRe Holdings Ltd. |
21.1 | List of Subsidiaries of the Registrant. |
23.1 | Consent of Ernst & Young Ltd. |
31.1 | Certification of Neill A. Currie, Chief Executive Officer of RenaissanceRe Holdings Ltd., pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended. |
31.2 | Certification of Jeffrey D. Kelly, Chief Financial Officer of RenaissanceRe Holdings Ltd., pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended. |
32.1 | Certification of Neill A. Currie, Chief Executive Officer of RenaissanceRe Holdings Ltd., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2 | Certification of Jeffrey D. Kelly, Chief Financial Officer of RenaissanceRe Holdings Ltd., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
(1) | Incorporated by reference to the Registration Statement on Form S-1 of RenaissanceRe Holdings Ltd. (Registration No. 33-70008) which was declared effective by the SEC on July 26, 1995. |
(2) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Quarterly Report on Form 10-Q for the period ended June 30, 2002, filed with the SEC on August 14, 2002. |
(3) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Quarterly Report on Form 10-Q for the period ended March 31, 1998, filed with the SEC on May 14, 1998 (SEC File Number 000-26512) |
(4) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s 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) |
(5) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on February 27, 2006 |
(6) | 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. |
(7) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on November 25, 2008. |
(8) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on February 25, 2009. |
(9) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on January 14, 2010. |
(10) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on July 21, 2006, relating to certain events which occurred on July 19, 2006. Other than with respect to the Percent and Lump Sum Percent (as defined and disclosed in the Form 8-K) and matters such as names and titles, the employment agreements for Messrs. O'Donnell and Ashley are identical to the form filed as Exhibit 10.9. |
(11) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on June 15, 2009. |
(12) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on July 17, 2001. |
(13) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Quarterly Report on Form 10-Q for the period ended March 31, 2008, filed with the SEC on May 2, 2008. |
(14) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on January 31, 2003. |
(15) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on April 14, 2009. |
(16) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on April 11, 2006, relating to certain events which occurred on April 5, 2006. |
(17) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on May 3, 2007. |
(18) | Incorporated by reference to Exhibit 99.2 to the Registration Statement on Form S-8 (Registration No. 333-90758) dated June 19, 2002. |
(19) | 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. |
(20) | 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. |
(21) | 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. |
(22) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on September 2, 2004. |
(23) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Annual Report on Form 10-K for the year ended December 31, 2004, filed with the SEC on March 31, 2005 (SEC File Number 001-14428). |
(24) | Incorporated by reference to Exhibit 99.1 to the Registration Statement on Form S-8 (Registration No. 333-90758) dated June 19, 2002. |
(25) | 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. |
(26) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Quarterly Report on Form 10-Q for the period ended September 30, 2008, filed with the SEC on October 30, 2008. |
(27) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on April 1, 2002. |
(28) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on February 4, 2003. |
(29) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on March 18, 2004. |
(30) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Form 8-A, filed with the SEC on December 14, 2006. |
(31) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Annual Report on Form 10-K for the year ended December 31, 2008, filed with the SEC on February 20, 2009. |
(32) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on March 11, 2010. |
(33) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on March 18, 2010. |
(34) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on April 27, 2010. |
(35) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Quarterly Report on Form 10-Q, filed with the SEC on April 29, 2010. |
(36) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on June 11, 2010. |
(37) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on August 13, 2010. |
(38) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on September 23, 2010. |
(39) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on November 18, 2010. |
(40) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Definitive Proxy Statement filed with the Commission on April 8, 2010. |
(41) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on January 24, 2011. |
(42) | 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. |
(43) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on May 22, 2012. |
(44) | Incorporated by reference to RenaissanceRe Holdings Ltd.'s Current Report on Form 8-K, filed with the SEC on February 27, 2012. |
(45) | 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. |
Senior Officers
RenaissanceRe Holdings Ltd. and Subsidiaries
Bermuda
Currie, Neill A.
Chief Executive Officer, RenaissanceRe Holdings Ltd.
O’Donnell, Kevin J.
President,
Global Chief Underwriting Officer, RenaissanceRe Holdings Ltd.
Durhager, Peter C.
Executive Vice President,
Chief Administrative Officer, RenaissanceRe Holdings Ltd.
Kelly, Jeffrey D.
Executive Vice President,
Chief Financial Officer, RenaissanceRe Holdings Ltd.
Branagan, Ian D.
Senior Vice President,
Chief Risk Officer,
RenaissanceRe Holdings Ltd.
Cuffe, Dana J.
Senior Vice President,
Chief Information Officer, RenaissanceRe Holdings Ltd.
Curtis, Ross A.
Senior Vice President, RenaissanceRe Holdings Ltd., Chief Underwriting Officer of European Operations
Dutt, Aditya K.
Senior Vice President, RenaissanceRe Holdings Ltd., President,
Renaissance Underwriting
Managers, Ltd.
Marra, David E.
Senior Vice President, RenaissanceRe Holdings Ltd.
O’Keefe, Justin D.
Senior Vice President, RenaissanceRe Holdings Ltd.
Paradine, Jonathan D. A.
Senior Vice President, RenaissanceRe Holdings Ltd., Principal Officer,
Renaissance Reinsurance Ltd., Singapore Representative Office
Weinstein, Stephen H.
Senior Vice President,
General Counsel,
Chief Compliance Officer and Secretary,
RenaissanceRe Holdings Ltd.
Wilcox, Mark A.
Senior Vice President,
Chief Accounting Officer, Corporate Controller, RenaissanceRe Holdings Ltd.
Dalton, Bryan M.
Senior Vice President, RenaissanceRe Underwriting Management Ltd.
Doak, Michael J.
Senior Vice President, RenaissanceRe Ventures Ltd.
James, Helen L.
Senior Vice President, RenaissanceRe Ventures Ltd.
Roberts, Rebecca J.
Senior Vice President, RenaissanceRe Underwriting Management Ltd.
A’Zary, Angela H.
Vice President, RenaissanceRe Services Ltd.
Bonanno, Laura
Vice President, RenaissanceRe Services Ltd.
Cahill, W. Jay
Vice President, RenaissanceRe Underwriting Management Ltd.
Carr, Cathal J.
Vice President, RenaissanceRe Underwriting Management Ltd.
Chaves, Natalie C.
Vice President, RenaissanceRe Services Ltd.
Fraser, Jamie C.
Vice President,
Head of Internal Audit, RenaissanceRe Services Ltd.
Freisenbruch, W. Justin
Vice President, RenaissanceRe Underwriting Management Ltd.
Gunther, Keil A.
Vice President, RenaissanceRe Services Ltd.
Manson, Jeff H.
Vice President, RenaissanceRe Underwriting Management Ltd.
McCue, Keith A.
Vice President,
Renaissance Reinsurance Ltd.
Mitchell, James A.
Vice President, RenaissanceRe Underwriting Management Ltd.
Morgenstern, Kai H.
Vice President,
Managing Director, RenaissanceRe Ventures Ltd.
Nusum, Maureen B.
Vice President, RenaissanceRe Services Ltd.
Regan, Michael E.
Vice President,
Global Tax Director, RenaissanceRe Services Ltd.
Reingevurts, Vadim V.
Vice President, RenaissanceRe Services Ltd.
Smith, Josephine A.
Vice President, RenaissanceRe Services Ltd.
Valdes, Humberto M.
Vice President, RenaissanceRe Underwriting Management Ltd.
Fonner, Todd R.
Senior Vice President,
Chief Investment Officer, Treasurer,
RenaissanceRe Holdings Ltd.
Moore, Sean M.
Senior Vice President, RenaissanceRe Services Ltd.
Komposch, Caroline M.
Vice President, RenaissanceRe Services Ltd.
Walker, Blythe W.
Vice President, RenaissanceRe Services Ltd.
Werner, Loral L.
Vice President, RenaissanceRe Services Ltd.
Ireland
United Kingdom
Britchfield, Ian D.
Managing Director,
Renaissance Services of Europe Limited
Brosnan, Sean G.
Managing Director, Investments, Renaissance Services of Europe Limited
De Vere, Gerard
Vice President,
Renaissance Services of Europe Limited
Finnan, Orla M.
Vice President,
Renaissance Services of Europe Limited
Curtis, Ross A.
Active Underwriter,
Chief Underwriting Officer of European Operations, RenaissanceRe Syndicate Management Limited
Murphy, Richard J.
Chief Executive Officer, RenaissanceRe Syndicate Management Limited
McMenamin, Conor S.
Senior Vice President, Chief Risk Officer of European Operations, RenaissanceRe Syndicate Management Limited
Fox, Kim T.
Chief Operating Officer, RenaissanceRe Syndicate Management Limited
Heatherly, David A.
Executive Director, RenaissanceRe Syndicate Management Limited
Mann, James W.
Executive Director, RenaissanceRe Syndicate Management Limited
Brennan, Hugh R.
Finance Director, RenaissanceRe Syndicate Management Limited
Burr, Stephen D.
Senior Specialty Actuary, RenaissanceRe Syndicate Management Limited
Cruttenden, Edward J.
Underwriter,
RenaissanceRe Syndicate Management Limited
Lang, Robin J.
Vice President, RenaissanceRe Services Ltd.
Oakley, Ian R.
Underwriter,
RenaissanceRe Syndicate Management Limited
O’Leary, John Paul
Underwriter,
RenaissanceRe Syndicate Management Limited
Shepherd, Alex H.
Underwriter,
RenaissanceRe Syndicate Management Limited
United States
Tawney, Mark R.
President,
RenRe Energy Advisors Ltd.
Carrick, George M.
Vice President,
RenRe Energy Advisors Ltd.
Kaplan, Paul E.
Vice President,
RenRe Energy Advisors Ltd.
Williford, Eric C.
Senior Scientist, WeatherPredict Consulting Inc.
Tillman, Craig W.
President,
WeatherPredict Consulting Inc.
Bachiochi, David R.
Senior Scientist, WeatherPredict Consulting Inc.
Cohen, Michael N.
Regulatory and Government Affairs, Vice President,
RenRe North America Employee Services Inc.
Rowe, G. Dail
Senior Scientist, WeatherPredict Consulting Inc.
Windle, William W.
Vice President,
RenRe Energy Advisors Ltd.
Board of Directors
RenaissanceRe Holdings Ltd.
Neill A. Currie
Chief Executive Officer RenaissanceRe Holdings Ltd.
Ralph B. Levy
Chairman
RenaissanceRe Holdings Ltd.
David C. Bushnell
Retired Chief Administrative Officer Citigroup Inc.
Thomas A. Cooper*
Chief Executive Officer TAC Associates
James L. Gibbons
President, CEO and Chairman CAPITAL G Bank Limited
Brian G. J. Gray*
Retired Group Chief Underwriting Officer Swiss Reinsurance Company Ltd.
Jean D. Hamilton
Private Investor Independent Consultant
Henry Klehm III
Partner Jones Day
W. James MacGinnitie
Former Chairman RenaissanceRe Holdings Ltd.
Independent Consultant
Anthony M. Santomero
Former Senior Advisor McKinsey & Company
Nicholas L. Trivisonno
Retired Chairman and CEO ACNielsen Corporation
Edward J. Zore
Retired Chairman and CEO
The Northwestern Mutual Life Insurance Company
*Mr. Cooper will retire from the Board and Mr. Gray is nominated to fill the vacancy created by the retirement of Mr. Cooper from the Board, each to occur in conjunction with the Company’s Annual General Meeting of Shareholders in May 2013.
Financial and Investor Information
RenaissanceRe Holdings Ltd. and Subsidiaries
General Information About the Company
For the Company’s Annual Report, press releases, Forms 10-K and 10-Q or other filings, please visit our website: www.renre.com
Or contact:
Kekst and Company, 437 Madison Avenue,
19th Floor, New York, NY 10022 Tel: +1 212 521 4800
Investor inquiries should be directed to:
Investor Relations, RenaissanceRe Holdings Ltd.
Tel: +1 441 295 4513 E-mail: investorrelations@renre.com
Additional requests can be directed to:
The Company Secretary, RenaissanceRe Holdings Ltd.
Tel: +1 441 295 4513 E-mail: secretary@renre.com
Stock Information
The Company’s stock is listed on The New York Stock Exchange under the symbol ‘RNR’.
The following table sets forth, for the period indicated, the high and low closing prices per share of our common shares as reported in composite New York Stock Exchange trading.
Price Range of Common Shares
2012
2011
Period
High
Low
High
Low
1st Quarter
$79.11
$71.18
$70.58
$60.64
2nd Quarter
80.53
72.41
73.93
67.58
3rd Quarter
78.39
70.00
72.30
59.50
4th Quarter
82.76
75.26
75.16
60.34
Certifications
The Chief Executive Officer and Chief Financial Officer have certified in writing to the Securities and Exchange Commission (SEC) as to the integrity of the Company’s financial statements included in this Annual Report and in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 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 Exhibit 31 and Exhibit 32 to our Form 10-K. The Chief Executive Officer has also certified to the New York Stock Exchange in 2012 that he is 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 Shareowner Services LLC
480 Washington Boulevard
Jersey City, NJ 07310
Tel: +1 866 245 5019 or + 1 201 680 6578
www.computershare.com
The cover stock is Green Seal Certified and contains 30% post consumer waste. The narrative stock is FSC certified and contains 10% recycled fiber with chlorine free (TCF/ECF) pulp using timber from managed forests. The financial stock is FSC certified, elemental chlorine free and contains 30% post consumer waste.
Printed at a zero-discharge facility using soy-based inks.
Please recycle this publication. Printed on paper containing post consumer materials.
RenaissanceRe
RenaissanceRe Holdings Ltd. Renaissance House 12 Crow Lane Pembroke HM19 Bermuda
Telephone:+1 441 295 4513 Fax: +1 441 295 4327 www.renre.com