Bermuda-based RenaissanceRe Holdings Ltd reported net income available to common shareholders of $204.8 million or $3.70 per diluted common share in the third quarter of 2010, compared to net income available to common shareholders of $258.6 million or $4.12 per diluted common share for the third quarter of 2009.
Operating income, which excludes capital gains/losses, available to common shareholders was $90.9 million or $1.59 per diluted common share in the third quarter of 2010, compared to operating income available to common shareholders of $242.2 million or $3.85 per diluted common share for the third quarter of 2009.
RenRe reported an annualized return on average common equity of 25.4 percent and an annualized operating return on average common equity of 11.3 percent in the third quarter of 2010, compared to 35.5 percent and 33.3 percent, respectively, in the third quarter of 2009. Book value per common share increased $3.61 to $60.57 at September 30, 2010, a 6.3 percent increase in the third quarter of 2010, compared to an 11.4 percent increase in the third quarter of 2009.
The combined ratio for the third quarter was 72.6 percent, compared to 43.3 percent in Q3 2009. For the first nine months of 2010 RenRe’s combined ratio was 60.3 percent, compared to 47.6 percent in the first nine months of 2010.
CEO Neill A. Currie commented: “In the third quarter we generated an annualized operating return on average common equity in excess of 11 percent and grew our book value per share by over 6 percent, with solid underwriting profits and strong total returns in our investment portfolio contributing to our book value growth. Our results reflect, among other things, a quiet season for land-falling U.S. hurricanes, offset in part by $73.6 million of net negative impact from the New Zealand earthquake.”
“Despite a quiet season for land-falling U.S. hurricanes, the New Zealand and Chilean earthquakes this year serve as a reminder that there is significant catastrophe risk around the globe, and that our clients value mitigating this risk.
“As one of the largest writers of catastrophe reinsurance risk in the world, we seek to build a diversified portfolio of risks that assists our clients in managing their catastrophe risk while also generating solid returns for our shareholders over the long term. As we approach the January 1st renewal season, we will continue to maintain our underwriting discipline, focusing on expected profit rather than premium volume.”
RenRe provided a summary of its underwriting results in the third quarter. “Gross premiums written for the third quarter of 2010 decreased $75.7 million, or 37.4 percent, to $126.7 million, compared to $202.4 million for the third quarter of 2009,” it stated.
The decrease in gross premiums written was “due to decreases in the Company’s Insurance segment premiums of $67.6 million, or 81.1 percent, and in its Reinsurance segment premiums of $13.1 million, or 9.9 percent. The Company generated $84.6 million of underwriting income and had a combined ratio of 72.6 percent in the third quarter of 2010, compared to $167.7 million of underwriting income and a 43.3 percent combined ratio in the third quarter of 2009.
“Included in the Company’s underwriting income for the third quarter of 2010 was $37.0 million of favorable development on prior year reserves, compared to $70.4 million of favorable development on prior year reserves in the third quarter of 2009.”
RenRe will host a conference call today, Thursday, October 28, 2010 at 9:30 a.m. (ET) to discuss the earnings release. Live broadcast of the conference call will be available through the “Investor Information – Company Webcasts” section of RenaissanceRe’s web site .
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