Ashleigh Rogers
Long/short equity, growth at reasonable price, value, banks

Renaissance Re Will Not Lead To Enlightened Value For Shareholders

Renaissance Re Holdings (NYSE:RNR) is a $4.8B Bermuda-based reinsurance company whose 52-week high share price belies the risks inherent in the stock. I believe the company may struggle and miss earnings expectations next year before seeing an upturn in 2015. I'll explain my views in a moment, but first a bit of background. Renaissance mainly writes reinsurance in two different areas; catastrophe reinsurance and specialty reinsurance with the latter including everything from worker's comp to medical malpractice.

To understand why I think RNR will struggle next year, you need to understand the firm's past, and the key to this past is the combined ratio. The combined ratio is the key measure of underwriting performance for any insurer. It...

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