RenRe Posts $195.7 Million Q1 Operating Income; $179 Million Net

Bermuda-based RenaissanceRe Holdings Ltd. reported a record $195.7 million in first quarter operating income, which excludes investment gains/losses, available to common shareholders compared to $54.5 million in the first quarter of 2005. Operating income per common share was $2.73 in the first quarter of 2006, compared to $0.76 in the first quarter of 2005.

Net income available to common shareholders was $179.0 million or $2.49 per common share in the quarter, compared to net income available to common shareholders of $44.3 million or $0.62 per common share for the same quarter of 2005.

CEO Neill A. Currie commented: “We had a strong first quarter with over 8 percent growth in our book value per common share. Our first quarter results benefited from light catastrophe losses and lower than expected reported claims on prior year reserves within our Reinsurance segment, but also demonstrate the ongoing strength of the RenaissanceRe business and franchise.

“Given improving pricing and terms for catastrophe reinsurance,” he continued, “we grew our managed catastrophe reinsurance premium by 23 percent in the quarter; for the year, we continue to expect growth of over 15 percent, but recognize that there is substantial uncertainty – and potential upside – depending largely upon the ultimate magnitude of our opportunities in Florida. Conversely, we are seeing fewer attractive opportunities within specialty reinsurance than we had hoped. Our specialty premium declined by 43 percent which is more pronounced than our 2006 guidance of a 35 percent decline, although our specialty premium can fluctuate from quarter to quarter. Our Individual Risk segment is on track with our expectations of 15 percent top line growth for the year and generated solid underwriting income for the quarter.”

Currie added: “Overall, we are pleased with the performance for the quarter. The team is energized, and we are well positioned to participate in the hardening property catastrophe market we now see for this year.”

A summary of other earnings highlights included the following:

— Gross premiums written for the first quarter of 2006 were $748.4 million, compared to $694.3 million for the same quarter of 2005.
— Net premiums written for the first quarter of 2006 were $697.8 million, compared to $615.8 million for the same quarter of 2005.
— Net premiums earned for the first quarter of 2006 were $351.7 million, compared to $301.5 million for the same quarter of 2005.
— Premiums for the first quarter of 2006 include $174.1 million of gross premiums written, $176.7 million of net premiums written and $60.8 million of net premiums earned by the Company’s consolidated joint venture, DaVinci Reinsurance Ltd. during the first quarter of 2006, compared to $104.7 million of gross premiums written, $119.4 million of net premiums written and $40.9 million of net premiums earned by DaVinci during the first quarter of 2005.
— For the first quarter of 2006, the Company generated a combined ratio of 53.7 percent, a loss ratio of 28.2 percent and an underwriting expense ratio of 25.5 percent, compared to a combined ratio, loss ratio and underwriting expense ratio of 90.2 percent, 66.9 percent and 23.3 percent, respectively, for the first quarter of 2005.
— During the first quarter of 2006, the Company recorded favorable development on prior year reserves of $41.9 million or a decrease of 11.9 percentage points in the Company’s quarterly loss ratio. Net paid losses for the quarter were $247.0 million compared to $159.5 million in the first quarter of 2005.

As previously announced (See IJ Website May 2), RenRe will host a conference call today, Wednesday, May 3, 2006 at 8:30 a.m. (EDT) to discuss this release. Live broadcast of the conference call will be available through the Investor Section of RenaissanceRe’s Website at www.renre.com. The full earnings report may also be obtained on the Website.

Topics Profit Loss Reinsurance