Renaissance Re Holdings Limited reported Hurricane Wilma and regulatory troubles combined to create the first annual loss in company history, including a 2005 fourth-quarter loss of $210 million.

The Bermuda-based company said the fourth-quarter losses compared to earnings of $191.5 million in the comparable 2004 period.

The fourth-quarter figures represent $313.9 million net negative impact from company losses last October after Hurricane Wilma hit Florida creating an unusual amount of inland and urban insured losses.

Renaissance Re reported $53 million of expenses for the year related to ongoing federal investigations that resulted last July in the resignation of company founder James Stanard. That figure included $13 million in accelerated vesting of equity grants to the outgoing chief executive officer.

Mr. Stanard's resignation followed a Wells notice from the Securities and Exchange Commission indicating he was a possible target of an SEC investigation regarding illegal accounting practices related to finite insurance products.

Neil Currie, who assumed the top post last summer, stressed the solidity of the operation itself, rather than merely “a handful of talented individuals.”

In a conference call this morning company officials sidestepped the question of how many legal expenses will be incurred in the future, merely stating that corporate expenses should be flat.

“I think it is important to appreciate that in the worst year of catastrophe losses in history, we had a GAAP [generally accepted accounting procedures] operating loss that was less than 15 percent of beginning GAAP common equity,” Mr. Currie said.

He noted it was “a manageable blow to capital and we did not have to raise additional capital as a result of the losses.”

For the fourth quarter the company generated a combined ratio of 183 compared to 58.1 in the comparable 2004 period.

For the full year Renaissance Re reported a net loss of $281.4 million compared to earnings of $133.1 million for 2004.

The company reported a net negative impact of $909.3 million from Hurricanes Dennis, Katrina, Wilma and Rita compared to $570 million of losses the company suffered for the major hurricanes of 2004–Charley, Frances, Ivan and Jeanne.

During the conference call this morning Mr. Currie said his company enjoyed the unique advantage of a new catastrophe modeling system put in place before the Jan. 1 renewal season that took into account greater expected frequency of such storms.

Special Reports /

RenRe Suffers First Yearly Loss

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