RenRe Posts $137.8 Million Q1 Operating Income

RenaissanceRe, Bermuda’s premier property reinsurer, reported first quarter operating earnings of $137.8 million compared to $130.2 million in the first quarter of 2003.

The company also gave the following additional highlights for the period:
— Operating earnings per share of $1.93 Per Common Share for the First Quarter of 2004 vs. $1.84 for the First Quarter of 2003.
— $170.4 million net Income for the first quarter of 2004; EPS of $2.38 for the period of vs. EPS of $2.14 for the first quarter of 2003.
— Managed Specialty Reinsurance Premium Grew to $258 Million Compared to $205.8 Million in 2003.
— Individual Risk Segment Premium Grew to $119.9 Million for the First Quarter of 2004 Compared to $63.8 Million in 2003.
— A first quarter 2004 Annualized Operating Return on Equity of 25.5 percent.

Chairman and CEO James N. Stanard commented: “This quarter demonstrates the increasing diversification of RenaissanceRe’s business mix. Strong first quarter growth in Individual Risk and specialty reinsurance positions us well to meet our targeted 2004 growth rates in these lines of 30 percent and 20 percent, respectively, and more than offset the 5 percent decline in gross managed cat premium, which was in line with our expectations. We also benefited from another quarter of light catastrophes, and continued to deliver strong returns on equity and growth in book value per share.”

RenRe reported: “Gross premiums written for the first quarter of 2004 were $780.3 million, compared to $685.2 million for the same quarter of 2003. Gross premiums written include $660.4 million in gross premiums written for the Company’s Reinsurance segment in the first quarter of 2004, compared to $621.3 million for the same quarter of 2003; and $119.9 million in gross premiums written for the Company’s Individual Risk segment in the first quarter of 2004, compared to $63.8 million for the same quarter of 2003.

“Net premiums written for the first quarter of 2004 were $706.0 million, versus $590.4 million for the same quarter of 2003. Net premiums written include $596.2 million in net premiums written for the Company’s Reinsurance segment in the first quarter of 2004, compared to $557.9 million for the same quarter of 2003; and $109.8 million in net premiums written for the Company’s Individual Risk segment in the first quarter of 2004, compared to $32.5 million for the same quarter of 2003.

“Net premiums earned for the first quarter of 2004 were $309.6 million, compared to $263.5 million for the same quarter of 2003. Net premiums earned include $208.8 million in net premiums earned for the Company’s Reinsurance segment in the first quarter of 2004, compared to $200.4 million for the same quarter of 2003; and $100.8 million in net premiums earned for the Company’s Individual Risk segment in the first quarter of 2004, compared to $63.0 million for the same quarter of 2003.”

The company also detailed significant activity involving its joint ventures during the first quarter. It reported that “income from the DaVinci joint venture and other fee income was $33.7 million, compared to $36.1 million during the first quarter of 2003. Of this, $16.9 million reflects fees and profit commissions, compared to $20.2 million in the first quarter of 2003, and $16.8 million reflects equity in earnings of unconsolidated ventures and DaVinci, versus $17.7 million in the comparable quarter of 2003.

“Also during the quarter, the Company consummated its $119.7 million investment in ChannelRe Holdings Ltd. This investment has been reflected in the balance sheet under the caption ‘investments in other ventures, under the equity method’, which also includes our investment in Top Layer Reinsurance Ltd. The earnings on our investment in ChannelRe Holdings Ltd. will be recorded one quarter in arrears, therefore the first quarterly earnings impact of this investment will be recorded in our consolidated statements of income in the second quarter.”

RenRe reported that its combined ratio for the period was 59 percent, with a loss ratio of 36.2 percent and an expense ratio of 22.8 percent, compared to a combined ratio, loss ratio and expense ratio of 53 percent 31.4 percent and 21.6 percent for the first quarter of 2003, respectively. Almost any other company would be ecstatic over those figures, but RenRe “explained that the slightly higher ratio was due to “the increased scale of the Company’s Individual Risk segment, which typically generates higher loss and expense ratios than the Reinsurance segment.”

The company will host a conference call on Wednesday, May 5, 2004 at 8:00 a.m. (EST) to discuss its earnings. Live broadcast of the conference call will be available through the Investor Section of RenaissanceRe’s website at www.renre.com.