RenaissanceRe Reports Quarterly Net Fell 27%

RenaissanceRe Holdings Ltd. reported a 27 percent decline in net income for the first quarter of 2008 compared to the first quarter of 2007 due to lower net investment income and a decline in premiums written.

The Bermuda-based reinsurer said its net income was $147.7 million for 2008, compared to $201.9 in 2007.

Net written premiums declined in the first quarter of 2008 to $403.1 million from $571 million in 2007. This included a decline in reinsurance from $476.2 million in 2007 to $342.9 million in 2008, and a decline in individual risk from $94.8 million in 2007 to $60.2 million in 2008. RenaissanceRe attributed this decline largely to the softening market conditions.

The combined ratio for the quarter improved to 51.4 compared to 65.6 in the first quarter of 2007. The company said the improvement was "principally driven by lower insured catastrophic events compared to the first quarter of 2007, which was impacted by European windstorm Kyrill."

In a conference call, Fred R. Donner, executive vice president and chief financial officer of RenaissanceRe, said: "Overall, our top line declined by 17 percent for the quarter driven primarily by our disciplined underwriting approach in this softening market. However, our underwriting profits remain strong, and we generated a 51 percent combined ratio, benefiting from another quarter of a low level of insured events."

RenaissanceRe reported a net realized loss on investments of $10.7 million, compared to a $4.1 million gain in the first quarter of 2007. Net investment income was reported at $52.5 million for 2008 compared to $108 million in the first quarter of 2007. This was due to a $16.4 million loss in "other investments," compared to a $37.1 million gain in 2007.

The "other investments" loss included a $1.9 million loss from hedge funds and private equity investments compared to a $28.5 million gain in 2007.

In a statement, Neill A. Currie, RenaissanceRe chief executive officer, described the results for the quarter as "solid."

"I am pleased to report another solid quarter with an annualized operating ROE of over 21 percent and almost 3 percent growth in book value per share, inclusive of the impact of share buybacks. We continue to actively manage capital and returned over $239 million to our shareholders through share buybacks during the quarter, bringing our total purchases to date to over $460 million since the start of 2007," said Mr. Currie.