Renaissancere Holdings Ltd. 2016 Annual Report

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Renaissancere Holdings Ltd. 2016 Annual Report 2016 Annual Report RenaissanceRe Holdings Ltd. RenaissanceRe Holdings Ltd. 2016 Annual Report RenaissanceRe Holdings Ltd. Renaissance House 12 Crow Lane Pembroke HM 19 Bermuda Tel: +1 441 295 4513 renre.com 25332 aRR 2016.3.7 cc15.indd 4-1 3/9/17 10:06 AM Board of Directors Financial and Investor Information RenaissanceRe Holdings Ltd. RenaissanceRe Holdings Ltd. and Subsidiaries James L. Gibbons General Information About the Company Non-Executive Chair For the Company’s Annual Report, press releases, Forms 10-K and RenaissanceRe Holdings Ltd. 10-Q or other filings, please visit our website: renre.com Contents Kevin J. O’Donnell Or Contact: President and Chief Executive Officer Kekst and Company, 437 Madison Avenue, Financial Highlights 1 RenaissanceRe Holdings Ltd. 19th Floor, New York, NY 10022 Tel: +1 212 521 4800 Letter to Shareholders 2 David C. Bushnell Retired Chief Administrative Officer Investor Inquiries Should be Directed to: Message from the Chair 6 Citigroup Inc. Investor Relations, RenaissanceRe Holdings Ltd. Comments on Regulation G 7 Brian G. J. Gray Tel: +1 441 295 4513 E-mail: [email protected] Form 10-K 9 Former Group Chief Underwriting Officer Swiss Reinsurance Company Ltd. Additional Requests Can be Directed to: Office Locations Last Page The Corporate Secretary, RenaissanceRe Holdings Ltd. William F. Hagerty IV Tel: +1 441 295 4513 E-mail: [email protected] Leadership Team Last Page Founder and Former Managing Director Board of Directors, Inside Hagerty Peterson & Company LLC Stock Information Financial and Investor Information Back Cover Jean D. Hamilton Private Investor The Company’s stock is listed on The New York Stock Exchange Independent Consultant under the symbol ‘RNR’. Henry Klehm III 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 Partner New York Stock Exchange trading. Jones Day Ralph B. Levy Retired Senior Partner Price Range of Common Shares King & Spalding LLP 2016 2015 Carol P. Sanders Period High Low High Low Former Chief Financial Officer 1st Quarter $120.59 $107.47 $104.72 $93.89 Sentry Insurance a Mutual Company 2nd Quarter 121.38 107.27 105.96 99.20 Anthony M. Santomero 122.97 114.34 Former President 3rd Quarter 108.79 99.35 Federal Reserve Bank of Philadelphia 4th Quarter 137.21 117.36 116.10 104.78 Edward J. Zore Retired Chairman and Chief Executive Officer Certifications The Northwestern Mutual Life Insurance Company The Chief Executive Officer and Chief Financial Officer have certified in writing to the Securities and Exchange Commission (the “SEC”) as to the integrity of the Company’s financial statements included in this Annual Report and in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 filed with the SEC and as to the effectiveness of the Company’s disclosure controls and procedures and internal control over financial reporting. The certifications are filed as Exhibits 31.1, 31.2, 32.1 and 32.2 to our Form 10-K. Our Chief Executive Officer has certified to the New York Stock Exchange in 2016 that he was not aware of any violation by the Company of the New York Stock Exchange corporate governance listing standards. Independent Registered Public Accounting Firm Ernst & Young Ltd., Hamilton, Bermuda Registrar and Transfer Agent Computershare Tel: +1 800 522 6645 or +1 201 680 6578 Shareholder website www.computershare.com/investor Shareholder online inquiries https://www-us.computershare.com/investor/Contact Shareholder correspondence should be mailed to: Computershare P.O. BOX 30170 College Station, TX 77845-3170 Overnight correspondence should be sent to: All stocks used in this report are FSC® certified. Computershare Printed at a zero-discharge facility using soy-based inks. 211 Quality Circle, Suite 210 Please recycle this publication. College Station, TX 77842 25332 aRR 2016.3.7 cc15.indd 2-3 3/15/17 10:57 AM Financial Highlights Financial Highlights for RenaissanceRe Holdings Ltd. and Subsidiaries (In thousands of United States dollars, except per share amounts and percentages) 2016 2015 2014 Gross premiums written $ 2,374,576 2,011,310 1,550,572 Net income available to RenaissanceRe common shareholders $ 480,581 408,811 510,337 Operating income available to RenaissanceRe common shareholders (1) $ 339,253 477,729 468,904 Total assets $ 12,352,082 11,555,287 8,202,307 Total shareholders’ equity $ 4,866,577 4,732,184 3,865,715 Per common share amounts Net income available to RenaissanceRe common shareholders per common share – diluted $ 11.43 9.28 12.60 Operating income available to RenaissanceRe common shareholders per common share – diluted (1) $ 8.03 10.86 11.56 Book value per common share $ 108.45 99.13 90.15 Tangible book value per common share (1) $ 101.87 92.54 89.29 Tangible book value per common share plus accumulated dividends (1) $ 118.59 108.02 103.57 Dividends per common share $ 1.24 1.20 1.16 Ratios Return on average common equity % 11.0 9.8 14.9 Operating return on average common equity (1) % 7.8 11.4 13.7 Net claims and claim expense ratio % 37.8 32.0 18.6 Underwriting expense ratio % 34.7 32.7 31.6 Combined ratio % 72.5 64.7 50.2 (1) Represents a non-GAAP financial measure, which is reconciled in the Comments on Regulation G on pages 7 and 8. Financial Strength Ratings A.M. Best S&P Moody’s Fitch Renaissance Reinsurance Ltd. (1) A+ AA- A1 A+ DaVinci Reinsurance Ltd. (1) A AA- A3 – Renaissance Reinsurance U.S. Inc. (1) A AA- – – RenaissanceRe Specialty U.S. Ltd. (1) A AA- – – Renaissance Reinsurance of Europe Unlimited Company (1) A+ AA- – – Top Layer Reinsurance Ltd. (1) A+ AA – – RenaissanceRe Syndicate 1458 – – – – Lloyd’s Overall Market Rating (2) A A+ – AA- RenaissanceRe (3) – Very Strong – – (1) The A.M. Best, S&P, Moody’s and Fitch ratings for these companies set forth in the table above reflect the insurer’s financial strength rating and, in addition to the insurer’s financial strength rating, the S&P ratings reflect the insurer’s issuer credit rating. (2) The A.M. Best, S&P and Fitch ratings for the Lloyd’s Overall Market Rating represent its financial strength rating. (3) The S&P rating for RenaissanceRe represents the rating on its Enterprise Risk Management practices. 1 25332 aRR 2016.3.7 cc15.indd 1 3/9/17 10:12 AM Letter to Shareholders By Kevin O’Donnell President and Chief Executive Officer Dear Shareholders, The common thread across When I look back on 2016, I am proud of our changing markets has been accomplishments and the shareholder value we delivered. We achieved strong financial performance; our focus on leadership deepened and broadened our relationships with customers and brokers; continued to build an attractive through innovation. casualty and specialty business; effectively executed on our gross-to-net strategy; and strengthened our team. Our most significant accomplishment in 2016, however, is not what changed, but what stayed the same. At the core of our culture and deep in our DNA, we remain the same company we were at our founding 24 years ago – we are still very much RenaissanceRe. Financial Performance In 2016, our focus on shareholder value was reflected across a number of financial metrics. We generated net income available to RenaissanceRe common shareholders of $480.6 million and operating income available to RenaissanceRe common shareholders of $339.3 million, resulting in a return on average common equity of 11.0% and an operating return on average common equity of 7.8%. We increased book value per common share by 9.4% and tangible book value per common share plus change in accumulated dividends by 11.4%. Our combined ratio, the sum of our loss ratio and underwriting expense ratio, was 72.5%, which was higher than in prior low-loss years. We expect our underwriting expense ratio to grow as we expand our casualty business, which tends to generate higher loss ratios, but lower volatility. At the end of 2016, we had $4.9 billion of total shareholders’ equity, not counting the capital we manage on behalf of private investors. Our total shareholder return in 2016 was 21.6%. During 2016, we returned $361.0 million to our shareholders through common share buybacks and dividends. We take a long-term view of capital management, with the goal of maximizing shareholder value. Our capital management philosophy remains unchanged, and we primarily seek to deploy capital in our existing businesses. This ensures that we have adequate capital and liquidity to meet our customers’ needs. We endeavor to be good stewards of your capital, and have returned more than $1.2 billion to you over the past three years. 2 25332 aRR 2016.3.7 cc15.indd 2 3/15/17 11:00 AM RenaissanceRe Holdings Ltd. 2016 Annual Report Deepening Superior Customer programs, where customers looked to consolidate their Relationships panels, and we wrote more lines of business with existing customers. Notably, we now derive more than half of our A year ago, I set the goal of strengthening and deepening gross premiums written from casualty and specialty business, our customer relationships. With risk being scarce and capital a big change from the past. abundant, we increased our focus on listening to what customers wanted, and responded with new products and platforms to meet those needs. Now we have a larger, more Customers and brokers have long recognized our core diversified portfolio supporting our customers across more strengths are building risk distributions, assessing lines of business than at any other time in our history.
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