Nat cats squeeze RenRe’s profit prior TMR acquisition

Natural catastrophes have impacted Bermuda-based RenaissanceRe Holdings’ (RenRe) profits in the third quarter of 2018 while the company revealed that it is  acquiring Tokio Millennium Re (TMR) for approximately $1.5 billion.

RenRe reported net income available to RenRe common shareholders of $32.7 million in the third quarter of 2018 compared to a net loss of $504.8 million in the same period a year ago.

The company experienced a net negative impact of $151.9 million from Typhoons Jebi, Mangkut and Trami, Hurricane Florence and the wildfires in California during the third quarter of 2018.

As a result, RenRe reported an underwriting loss of $29.0 million and a combined ratio of 105.5 percent in the third quarter of 2018, compared to an underwriting loss of $793.2 million and a combined ratio of 244.8 percent in the third quarter of 2017.

Gross premiums written decreased by 2.3 percent year on year to $625.7 million, in the third quarter of 2018 driven by a decrease of $24.0 million in the property segment.

“Once again this quarter, our industry experienced multiple large catastrophic events around the world,” said CEO Kevin O’Donnell. “Our track record of sourcing large, one of a kind opportunities to provide bespoke solutions to key customers remains unparalleled in the industry. We remain confident in our strategy and our ability to deliver long-term shareholder value.”

RenRe has announced that it is acquiring its peer TMR for approximately $1.5 billion from its parent company Tokio Marine Holdings.

The purchase consists of approximately $1.22 billion of cash and $250 million of RenRe common shares. The cash consideration will be funded through RenRe available funds and a potential pre-closing dividend from TMR.