Dj Brown & Brown Inc. Stock Underperforms Wednesday When Compared To Competitors

RenaissanceRe Holdings Ltd. RNR reported fourth-quarter 2024 operating income of $8.06 per share, which beat the Zacks Consensus Estimate by 5.9%. However, the bottom line declined 31.5% year over year.

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Total operating revenues of $3 billion advanced 12.6% year over year. Yet, the top line fell short of the consensus mark by 1.2%.

The quarterly results were aided by strong premium growth, supported by the Validus acquisition and organic growth. Higher net investment income also benefited the quarterly performance. However, the upside was partly offset by softer underwriting results as a result of the Hurricane Milton, coupled with an elevated expense level.

RenaissanceRe Holdings Ltd. Price, Consensus and EPS Surprise

RenaissanceRe Holdings Ltd. price-consensus-eps-surprise-chart | RenaissanceRe Holdings Ltd. Quote

RNR’s Quarterly Operational Update

Gross premiums written of $1.9 billion rose 6.4% year over year but missed our estimate of $2.1 billion.

Net premiums earned advanced 12.4% year over year to $2.53 billion. The metric lagged the consensus mark of $2.56 billion but was higher than our estimate of $2.5 billion.

Net investment income was $428.8 million, which improved 13.8% year over year in the fourth quarter, attributable to an increase in average invested assets and higher-yielding assets in the fixed maturity investments portfolios. However, the figure missed the Zacks Consensus Estimate of $430.3 million and our estimate of $430.5 million.

Total expenses of $2.38 billion escalated 31.6% year over year but were lower than our estimate of $2.4 billion. The year-over-year increase was due to elevated net claims and claim expenses incurred, coupled with higher acquisition and operational expenses.

RenaissanceRe reported an underwriting income of $208.6 million, which declined nearly three-fold year over year. The combined ratio deteriorated 1,570 basis points (bps) year over year to 91.7%.

Book value per share was $195.77 as of Dec. 31, 2024, which increased 18.5% year over year. Annualized operating return on average common equity deteriorated 580 bps year over year to 23.5%.

RNR’s Segmental Update

Property Segment

The segment recorded gross premiums written of $390 million, which advanced 13.2% year over year but fell short of our estimate of $410 million. The metric benefited on the back of organic growth and the renewal of accounts acquired through the Validus buyout.

Net premiums earned improved 6.1% year over year to $938.7 million but missed the Zacks Consensus Estimate of $969.8 million and our estimate of $984.1 million.

Underwriting income of $266.9 million plunged 47% year over year. The combined ratio deteriorated 2,850 bps year over year to 71.6% mainly due to the adversities inflicted by Hurricane Milton.

Casualty & Specialty Segment

The unit’s gross premiums written advanced 4.8% year over year to $1.5 billion but lagged our estimate of $1.7 billion. The metric was aided by growing other specialty and professional liability business lines.

Net premiums earned were $1.59 billion, which rose 16.4% year over year and surpassed the Zacks Consensus Estimate of $1.58 billion and our estimate of $1.51 billion.

The segment incurred an underwriting loss of $58.3 million against the prior-year quarter’s underwriting income of $37.4 million. The combined ratio deteriorated 640 bps year over year to 103.7%.

RNR’s Financial Position (As of Dec. 31, 2024)

RenaissanceRe exited the fourth quarter with cash and cash equivalents of $1.7 billion, which tumbled 10.7% from the 2023-end level. Total assets of $50.7 billion increased 3.5% from the figure at 2023-end.

Debt amounted to $1.9 billion, down 3.7% from the figure as of Dec. 31, 2023.

Total shareholders’ equity of $10.6 billion advanced 11.8% from the 2023-end level.

RNR’s Capital Deployment Update

RNR bought back common shares worth $462.3 million in the fourth quarter. From Jan. 1, 2025, to Jan. 24, 2025, additional share repurchases of $137.7 million were made.

Management declared a quarterly dividend of 39 cents per share.

RNR’s Full-Year Update

Gross premiums written of $11.7 billion rose 32.4% year over year. Net premiums earned advanced 35.1% year over year to $10.1 billion.

Operating income of $42.99 per share improved 14.5% year over year.

RNR’s Zacks Rank

RenaissanceRe currently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Of the insurance industry players that have reported fourth-quarter 2024 results so far, the bottom-line results of W. R. Berkley Corporation WRB, The Travelers Companies, Inc. TRV and Brown & Brown, Inc. BRO beat the Zacks Consensus Estimate.

W.R. Berkley reported fourth-quarter 2024 operating income of $1.13 per share, which beat the Zacks Consensus Estimate by 20.2%. The bottom line improved 17.7% year over year. Net premiums written were $2.9 billion, up 8% year over year. Operating revenues were $3.5 billion, up 9.2% year over year. The top line beat the consensus estimate by 4.2%. Net investment income grew 1.3% to $317.4 million.

Catastrophe losses of $79.6 million in the quarter were wider than the $32 million incurred in the year-ago quarter. The consolidated combined ratio (a measure of underwriting profitability) deteriorated 180 bps year over year to 90.2. Net premiums written at the Insurance segment increased 9.8% year over year to $2.6 billion . Net premiums written in the Reinsurance & Monoline Excess segment decreased 5.5% year over year to $316 million.

Travelers’ fourth-quarter 2024 core income of $9.15 per share beat the Zacks Consensus Estimate by 39.3% and improved 30.5% year over year. Total revenues increased 10.4% from the year-ago quarter to $11.9 billion. The top-line figure beat the Zacks Consensus Estimate by 1%. Net written premiums increased 7% year over year to a record $10.7 billion. Net investment income increased 26% year over year to $955 million.

Travelers witnessed an underwriting gain of $1.4 billion, up 30.5% year over year. The consolidated underlying combined ratio of 84 improved 190 bps year over year. Net written premiums in the Business Insurance unit increased 9% year over year to about $5.4 billion. The combined ratio improved 130 bps year over year to 85.2. Segment income of $1.2 billion increased 24.1% year over year. Bond & Specialty Insurance segment’s net written premiums increased 7% year over year to $1 billion. The combined ratio deteriorated 540 bps year over year to 82.7.

Brown & Brown reported fourth-quarter 2024 adjusted earnings of 86 cents per share, which beat the Zacks Consensus Estimate by 14.7%. The bottom line increased 48.3% year over year. Total revenues of $1.2 billion beat the consensus estimate by 6.4%. The top line improved 15.4% year over year. Commission and fees grew 15.4% year over year to $1.1 billion.

Organic revenues improved 13.8% to $1.1 billion. Investment income increased 22.2% year over year to $22 million. Adjusted EBITDAC was $390 million, up 22.6% year over year. The EBITDAC margin expanded 190 bps year over year to 32.9%.

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(17:29 GMT) Brown & Brown Price Target Raised to $120.00/Share From $118.00 by RBC Capital