about RenaissanceRe Holdings Ltd
RenaissanceRe Holdings Ltd., together with its subsidiaries, provides reinsurance and insurance products in the United States and internationally. The company operates through Property, and Casualty and Specialty segments. The Property segment writes property catastrophe excess of loss reinsurance and excess of loss reinsurance to insure insurance and reinsurance companies against natural and man-made catastrophes, including hurricanes, earthquakes, typhoons, and tsunamis, as well as winter storms, freezes, floods, fires, windstorms, tornadoes, explosions, and acts of terrorism; and other property class of products, such as proportional reinsurance, property per risk, property reinsurance, binding facilities, and regional U.S. multi-line reinsurance. The Casualty and Specialty segment writes various classes of products, such as directors and officers, medical malpractice, and professional indemnity; automobile and employer’s liability, casualty clash, umbrella or excess casualty, workers’ compensation, and general liability; financial and mortgage guaranty, political risk, surety, and trade credit; and accident and health, agriculture, aviation, cyber, energy, marine, satellite, and terrorism. It distributes products and services primarily through intermediaries. The company invests in and manages funds. RenaissanceRe Holdings Ltd. was founded in 1993 and is headquartered in Pembroke, Bermuda.
Results of RenaissanceRe Holdings Ltd
During the third quarter results for fiscal 2024, the company reported strong financial performance, highlighting key achievements and strategies that have contributed to its success. The company earned over $540 million in operating income for the quarter, resulting in a 22% return on average common equity. Year-to-date, the total operating income reached $1.8 billion, with a 26% return on equity.
Management attributed its success to three main areas including underwriting, investments, and capital partners business. RenaissanceRe Holdings Ltd. (NYSE:RNR) has been able to expand aggressively in favorable market conditions, particularly in its Property and Specialty segments, which have seen year-to-date topline growth rates between 35% and 75%. Moreover, Elevated interest rates have allowed the company to generate significant investment income. Net investment income for the quarter was $423.9 million, up 28.8% year-over-year.
RenaissanceRe Holdings Ltd. (RNR) share price forecast
RenaissanceRe is a Bermuda-based global provider of insurance and reinsurance. The company has a reputation for being the leading specialist in property-casualty reinsurance, providing insurance coverage to other insurance companies.
The earnings of RenRe and other reinsurance stocks are levered to weather and seismic activity, creating volatility risk. However, it also makes them less correlated to financial markets as a whole.
Analyst Joshua Shanker says a handful of commercial insurance companies have reported a deterioration of their reserves in the past year, causing investors to become concerned about the insurance industry’s balance sheet health as a whole. However, Shanker says RennaissanceRe’s reserves are “rock solid,” and the company remains “best-in-class” among its peers. At the same time, Shanker says investors shouldn’t overlook the company’s $750 million share repurchase authorization, which will help boost RenRe’s earnings-per-share growth.
Bank of America has a “buy” rating and $410 price target for RNR stock, which closed at $279.67 on Nov. 25.
Are RenaissanceRe Holdings Ltd shares worth buying
Looking ahead, RenaissanceRe Holdings Ltd. (NYSE:RNR) expects continued opportunities for growth in both its Property Catastrophe and Casualty segments. The demand for reinsurance is projected to increase, particularly with an estimated rise of $10 billion in U.S. catastrophe limit purchases by 2025. It is one of the best extremely profitable stocks to buy now.
TimesSquare Capital U.S. Focus Growth Strategy stated the following regarding RenaissanceRe Holdings Ltd. (NYSE:RNR) in its first quarter 2024 investor letter:
“Earnings for RenaissanceRe Holdings outstripped expectations as RenaissanceRe Holdings Ltd. (NYSE:RNR) showed better rates of underwriting, higher fee income, and increased investment income—all of which also exceeded levels of industry peers. Pricing also appeared to remain strong for this year and into 2025, and the result lifted RenRe’s shares by 20%.”
Overall, RNR ranks 8th on our list of best extremely profitable stocks to buy now.