RenRe Q4 Loss $44.6 Million; FY Income Drops 95% to $29 Million

February 13, 2009

Bermuda-based Renaissance Re Holdings reported a $44.617 million net loss for the fourth quarter of 2008. Net income for the full year was $29.02 million, compared to $612.436 million in 2007, a 95 percent decline. Investment losses were, as usual this year, the primary cause.

RenRe reported $28.7 million in fourth quarter operating income, which excludes investment gains/losses, available to common shareholders, or $0.47 per diluted common share, compared to $186.2 million, or $2.64 per diluted common share, in the fourth quarter of 2007.

The figure excluded “net realized losses on investments of $83.9 million and net realized gains on investments of $7.2 million in the fourth quarters of 2008 and 2007, respectively, and, in the fourth quarter of 2007, $131.2 million of net unrealized losses on credit derivatives issued by ChannelRe Holdings Ltd.,” said the announcement.

Net loss attributable to common shareholders (an additional $10.575 million was paid to holders of preference shares) was $55.2 million, or a loss of $0.91 per diluted common share in the fourth quarter of 2008, compared to net income available to common shareholders of $62.2 million, or $0.88 per diluted common share for the same quarter of 2007.

CEO Neill A. Currie commented: “Our results reflect the impact of a tumultuous investment environment, as negative total returns in our investment portfolio for the quarter overshadowed very strong operating results.

“These strong results include over $200.0 million of underwriting profits and a 36 percent combined ratio, driven in part by a low level of insured catastrophe losses and favorable reserve development. We generated $193.0 million of operating income and a 7.4 percent operating return on equity for the year.”

He also indicated that the “results of our January 1 renewals reflect an improving pricing environment. With our well-capitalized balance sheet, strong ratings at all of our operating subsidiaries and continued investments in our people, infrastructure and product offerings, we are well positioned to execute on the opportunities we see in 2009 and beyond.”

RenRe also announced that “gross premiums written for the fourth quarter of 2008 were $161.6 million, a $39.4 million increase from the fourth quarter of 2007, driven by increases in both of the Company’s segments as described in more detail below.

“The Company generated $205.7 million of underwriting income and had a combined ratio of 36.1 percent in the fourth quarter of 2008, compared to $177.3 million of underwriting income and a combined ratio of 47.3 percent in the fourth quarter of 2007. The Company experienced $104.2 million of favorable development on prior year reserves in the fourth quarter of 2008, compared to $106.8 million in the fourth quarter of 2007.

For the full report, additional comments and to obtain access to yesterday’s earnings conference call, go to the Group’s web site at: www.renre.com.

Source: RenaissanceRe

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