RenaissanceRe Holdings Ltd. (NYSE:RNR.PRE) Q1 2016 Earnings Conference Call - Final Transcript

Apr 27, 2016 • 10:00 am ET

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RenaissanceRe Holdings Ltd. (NYSE:RNR.PRE) Q1 2016 Earnings Conference Call - Final Transcript

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Presentation
Executive
Kevin O' Donnell

by increasing our ceded purchases in all three of our segments, most notably in specialty. We have also diversified our risk and improved our overall return profile by building our casualty and specialty business.

The breakeven results for this quarter do not alter our perception of this business or the correctness of our overall strategy. Several events specific losses affected our results, which Jeff will explain in greater detail. These low frequency high severity loss events were not a surprise for the characteristic of the portfolios from which dominated. Assuming our customers' volatility is what we do and from time-to-time will result in a bad quarter or even a bad year. The losses we experienced over the quarter are idiosyncratic and not something I expect to continue.

Over the long-term, our record of profitability speaks for itself. This year, we will focus our intention more than ever on building and enhancing our client relationships. Recognizing the changing market dynamics, where a number of our clients are centralizing their purchases of reinsurance. While our team has been disciplined and pulled back from business that did not meet our hurdles, we have also demonstrated market leadership by bringing unique and value added services to our clients.

And with that, I'll turn the call over to Jeff.

Executive
Jeffrey Kelly

Thanks, Kevin, and good morning, everyone. I'll cover our results for the first quarter and then as always update you on our top-line forecast for the remainder of 2016. Well, the first quarter was again relatively quiet and in terms of catastrophe losses, we did experience higher claims incidence in our specially reinsurance segment. Alternative asset results from our private equity portfolio were also depressed during the quarter.

However, the decline in interest rates and credit spreads resulted in strong mark-to-market investment performance that helped our reported net income and book value growth. Year-over-year top-line growth comparisons are skewed by the inclusion of Platinum's results only after the close of the acquisition on March 2nd in the year ago period. Moving on to the financial results. We reported net income of $128 million or $2.95 per diluted share, and operating income of $66 million or $1.51 per share for the first quarter.

The annualized operating ROE for the quarter was 6.1% and our tangible book value per share growth, including change and accumulated dividends was 2.6%. Let me shift to our segment results, beginning with our Lloyd's segment followed by specialty reinsurance or by the cat segment and then followed by specialty reinsurance at Lloyd's. In our cat segment, managed cat gross premiums written in the first quarter declined by 9% from the year ago period, driven by price reductions in our decision to pull back from risk that no longer met our thresholds.

Recall last quarter, we had highlighted our decision to cut back significantly our participation in the assumed retro business at the January 1 renewals. As a reminder, managed cat includes the premiums written on our wholly owned balance sheets as well as