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Noncontrolling Interests

6 Months Ended

Jun. 30, 2019

Business Combination, Acquisition of Less than 100 Percent, Noncontrolling Interest [Abstract]

Noncontrolling Interests

NONCONTROLLING INTERESTS

A summary of the Company’s redeemable noncontrolling interests on its consolidated balance sheets is set forth below:

		June 30, 2019				December 31, 2018
	Redeemable noncontrolling interest - DaVinciRe	$	1,431,101			$	1,034,946
	Redeemable noncontrolling interest - Medici	515,915				416,765
	Redeemable noncontrolling interest - Vermeer	765,450				599,989
	Redeemable noncontrolling interests	$	2,712,466			$	2,051,700

A summary of the Company’s redeemable noncontrolling interests on its consolidated statements of operations is set forth below:

		Three months ended								Six months ended
		June 30, 2019				June 30, 2018				June 30, 2019				June 30, 2018
	Redeemable noncontrolling interest - DaVinciRe	$	59,855			$	50,252			$	122,388			$	71,205
	Redeemable noncontrolling interest - Medici	1,704				4,231				4,185				13,177
	Redeemable noncontrolling interest - Vermeer	10,253				—				15,461				—
	Net income attributable to redeemable noncontrolling interests	$	71,812			$	54,483			$	142,034			$	84,382

Redeemable Noncontrolling Interest – DaVinciRe

RenaissanceRe owns a noncontrolling economic interest in DaVinciRe; however, because RenaissanceRe controls a majority of DaVinciRe’s outstanding voting rights, the consolidated financial statements of DaVinciRe are included in the consolidated financial statements of the Company. The portion of DaVinciRe’s earnings owned by third parties is recorded in the consolidated statements of operations as net income attributable to redeemable noncontrolling interests. The Company’s noncontrolling economic ownership in DaVinciRe was 21.9% at June 30, 2019 (December 31, 2018 - 22.1%).

DaVinciRe shareholders are party to a shareholders agreement which provides DaVinciRe shareholders, excluding RenaissanceRe, with certain redemption rights that enable each shareholder to notify DaVinciRe of such shareholder’s desire for DaVinciRe to repurchase up to half of such shareholder’s initial aggregate number of shares held, subject to certain limitations, such as limiting the aggregate of all share repurchase requests to 25% of DaVinciRe’s capital in any given year and satisfying all applicable regulatory requirements. If total shareholder requests exceed 25% of DaVinciRe’s capital, the number of shares repurchased will be reduced among the requesting shareholders pro-rata, based on the amounts desired to be repurchased. Shareholders desiring to have DaVinci repurchase their shares must notify DaVinciRe before March 1 of each year. The repurchase price will be based on GAAP book value as of the end of the year in which the shareholder notice is given, and the repurchase will be effective as of January 1 of the

following year. The repurchase price is generally subject to a true-up for potential development on outstanding loss reserves after settlement of all claims relating to the applicable years.

2019

Effective June 1, 2019, DaVinciRe completed an equity capital raise of $349.2 million, comprised of $263.1 million from third-party investors and $86.1 million from RenaissanceRe. In addition, RenaissanceRe sold an aggregate of $11.6 million of its shares in DaVinciRe to a third-party investor. The Company’s noncontrolling economic ownership in DaVinciRe subsequent to these transactions was 21.9%, effective June 1, 2019.

The Company expects its noncontrolling economic ownership in DaVinciRe to fluctuate over time.

The activity in redeemable noncontrolling interest – DaVinciRe is detailed in the table below:

		Three months ended								Six months ended
		June 30, 2019				June 30, 2018				June 30, 2019				June 30, 2018
	Beginning balance	$	1,097,245			$	1,032,543			$	1,034,946			$	1,011,659
	Redemption of shares from redeemable noncontrolling interest, net of adjustments	(698		)		(370		)		(932		)		(439		)
	Sale of shares to redeemable noncontrolling interests	274,699				—				274,699				—
	Net income attributable to redeemable noncontrolling interest	59,855				50,252				122,388				71,205
	Ending balance	$	1,431,101			$	1,082,425			$	1,431,101			$	1,082,425

Redeemable Noncontrolling Interest - RenaissanceRe Medici Fund Ltd. (“Medici”)

Medici is an exempted company incorporated under the laws of Bermuda and its objective is to seek to invest substantially all of its assets in various insurance-based investment instruments that have returns primarily tied to property catastrophe risk. RenaissanceRe owns a noncontrolling economic interest in Medici; however, because RenaissanceRe controls all of Medici’s outstanding voting rights, the financial statements of Medici are included in the consolidated financial statements of the Company. The portion of Medici’s earnings owned by third parties is recorded in the consolidated statements of operations as net income attributable to redeemable noncontrolling interests. Any shareholder may redeem all or any portion of its shares as of the last day of any calendar month, upon at least 30 calendar days’ prior irrevocable written notice to Medici.

2018

During the six months ended June 30, 2018, third-party investors subscribed for $156.5 million and redeemed $43.5 million of the participating, non-voting common shares of Medici. As a result of these net subscriptions, the Company’s noncontrolling economic ownership in Medici was 16.8% at June 30, 2018.

2019

During the six months ended June 30, 2019, third-party investors subscribed for $132.4 million and redeemed $37.4 million of the participating, non-voting common shares of Medici. As a result of these net subscriptions, the Company’s noncontrolling economic ownership in Medici was 13.9% at June 30, 2019.

The Company expects its noncontrolling economic ownership in Medici to fluctuate over time.

The activity in redeemable noncontrolling interest – Medici is detailed in the table below:

		Three months ended								Six months ended
		June 30, 2019				June 30, 2018				June 30, 2019				June 30, 2018
	Beginning balance	$	406,958			$	392,821			$	416,765			$	284,847
	Redemption of shares from redeemable noncontrolling interest, net of adjustments	(21,556		)		(42,792		)		(37,440		)		(43,503		)
	Sale of shares to redeemable noncontrolling interests	128,809				56,743				132,405				156,482
	Net income attributable to redeemable noncontrolling interest	1,704				4,231				4,185				13,177
	Ending balance	$	515,915			$	411,003			$	515,915			$	411,003

Redeemable Noncontrolling Interest – Vermeer

Vermeer is an exempted Bermuda reinsurer that provides capacity focused on risk remote layers in the U.S. property catastrophe market. Vermeer is managed by RUM in return for a management fee. The Company maintains majority voting control of Vermeer, while the sole third-party investor, PGGM, retains all of the economic benefits. The Company concluded that Vermeer is a VIE as it has voting rights that are not proportional to its participating rights, and the Company is the primary beneficiary. As a result, the Company consolidates Vermeer and all significant inter-company transactions have been eliminated. The portion of Vermeer’s earnings owned by PGGM is recorded in the consolidated statements of operations as net income attributable to redeemable noncontrolling interests. The Company has not provided any financial or other support to Vermeer that it was not contractually required to provide.

2018

During the three months ended December 31, 2018, PGGM subscribed for $600.0 million of the participating, non-voting common shares of Vermeer and the Company subscribed for $1 thousand of all the voting, non-participating shares of Vermeer.

2019

During the three months ended June 30, 2019, PGGM subscribed for $150.0 million of the participating, non-voting common shares of Vermeer.

The activity in redeemable noncontrolling interest – Vermeer is detailed in the table below:

		Three months ended								Six months ended
		June 30, 2019				June 30, 2018				June 30, 2019				June 30, 2018
	Beginning balance	$	605,197			$	—			$	599,989			$	—
	Sale of shares to redeemable noncontrolling interest	150,000				—				150,000				—
	Net income attributable to redeemable noncontrolling interest	10,253				—				15,461				—
	Ending balance	$	765,450			$	—			$	765,450			$	—

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- References

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- Definition

The entire disclosure for noncontrolling interest in consolidated subsidiaries, which could include the name of the subsidiary, the ownership percentage held by the parent, the ownership percentage held by the noncontrolling owners, the amount of the noncontrolling interest, the location of this amount on the balance sheet (when not reported separately), an explanation of the increase or decrease in the amount of the noncontrolling interest, the noncontrolling interest share of the net Income or Loss of the subsidiary, the location of this amount on the income statement (when not reported separately), the nature of the noncontrolling interest such as background information and terms, the amount of the noncontrolling interest represented by preferred stock, a description of the preferred stock, and the dividend requirements of the preferred stock.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-URI http://asc.fasb.org/topic&trid=2197479

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