NU Online News Service, May 3, 1:13 p.m. EDT

Two Bermuda reinsurers report positive gains in their net earnings for the first quarter of this year helped by light catastrophe losses during the period.

Pembroke, Bermuda-based RenaissanceRe Holdings Ltd. reports net income of $201 million, or $3.88 a share, compared to net loss of $248 million, or loss per share of $4.69, for the same period last year.

Revenues dropped more than $31 million from 2010 to $357 million during the period.

Revenues were negatively impacted by $39 million in trading losses within the company's weather and energy risk management operations as a result of unusually warm weather in parts of the United Kingdom and the United States. There was also $1.8 billion loss on ceded reinsurance contacts as a result of “net recoverables on the Tohoku earthquake in the first quarter of 2011 which did not reoccur in the first quarter of 2012.”

“Our results reflect a light catastrophe loss quarter, strong investment returns and favorable development,” says Neill A. Currie, chief executive officer of RenaissanceRe in a statement. “We also benefited from a successful January 1^st renewal season in which we deployed more capital, increased our premiums by over 30 percent in each of our [catastrophe], specialty and Lloyd's units, and constructed an attractive portfolio of business.”

The company reports underwriting income of $197 million and a combined ratio of 29.4 for the first quarter of 2012 compared to an underwriting loss of $397 million and combined ratio of 230 for the first quarter of 2011.

The 2011 results were impacted by Australian flooding and the New Zealand and Tohoku earthquakes.

In an analyst's note from Deutsche Bank, the report says RenaissanceRe operating earnings per share of $2.98 beat street consensus of $2.42 and Deutsche Bank's own estimate of $2.14. The reason for the difference is the net favorable reserve development of $49 million.

The company did have investment gains of close to $43 million related to hedge funds, private equity and other non-traditional offsetting the trading losses, says Deutsche Bank.

Last week, Partner Re Ltd., based in Pembroke, reported net income of $360 million, or $5.24 a share, for the first quarter of 2012 compared to net loss of $807 million or $11.99 a share for the previous year.

Total revenues grew 20 percent, or $226 million, to $1.33 billion.

The company's first quarter combined ratio stood at 84.7, an improvement from last year's combined ratio of 193.7.

“We had a good first quarter with consistently strong underwriting results in all our segments, resulting in 13 percent operating return on beginning equity,” said Costas Miranthis, president and chief executive for Partner Re. “We also had significant gains in our investment portfolio and this enabled us to grow our book value per share approximately 6 percent during the quarter. These results give us a good start to the year.”

The company, which is a mix of non-life and life business, says net written premiums were flat at $1.5 billion. New business growth in some segments was offset by decreases in the catastrophe exposed business.

Updated 1:40 p.m. EDT with report from Deutsche Bank.

Special Reports /

Light Cat Losses Mean Profit for Two Reinsurers

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