Bermuda-based RenaissanceRe Holdings Ltd. posted $193.741 million after tax income for the second quarter of 2007. Net income available to common shareholders was $183.166 million or $2.53 per diluted common share in the quarter, compared to net income available to common shareholders of $130.4 million or $1.81 per diluted common share for the same quarter of 2006.
Operating income for the period was $194.7 million. The figure excludes net realized investment losses of $11.6 million and $24.3 million in the second quarters of 2007 and 2006, respectively. Operating income per diluted common share was $2.69 in the second quarter of 2007, compared to $2.15 in the second quarter of 2006.
CEO Neill A. Currie commented: “We are pleased to report another quarter of strong financial performance with an annualized operating ROE of over 28 percent and 5.9 percent growth in book value per share. We generated solid underwriting profits, despite the U.K. floods, achieved strong investment income and participated in the creation of another new fully-collateralized joint venture during the quarter, Starbound II, which helped bring additional capacity to our clients.”
He added that RenRe would continued to focus “on underwriting as much attractive business as possible rather than trying to achieve premium volume targets. Through the first six months, we have written more property catastrophe reinsurance and less individual risk insurance than originally contemplated. I’m very pleased with the in-force portfolio of risks that our team has constructed.”
Gross premiums written for the second quarter of 2007 were $845.9 million, a $103.3 million increase from the second quarter of 2006. The Company generated $133.6 million of underwriting income and had a combined ratio of 62.7 percent in the second quarter of 2007, compared to $120.0 million of underwriting income and a 72.2 percent combined ratio in the second quarter of 2006.
As a result of the sound performance and other factors RenRe revised its annual premium forecasts. It had forecast a 15 percent decline in its managed catastrophe premiums for the year, but the earnings announcement said it “now expects its managed catastrophe premiums for the year will decrease by approximately 5 percent from 2006. In addition, the Company now expects its specialty reinsurance premiums to grow by approximately 35 percent in 2007; the Company’s previous guidance was for its specialty reinsurance premiums to be essentially flat for the year.”
RenRe also indicated that it “expects its Individual Risk premiums to be down by at least 10 percent in 2007; the Company’s previous guidance was for its Individual Risk premiums to be essentially flat for the year. The reduction in the Company’s expected decline in managed catastrophe premiums for 2007 is due to better than expected renewals during the second quarter of 2007. The increase in the Company’s specialty reinsurance premium forecast for 2007 is due principally to one large transaction that incepted in the second quarter of 2007. The decrease in the Company’s forecasted Individual Risk premium is due to softening market conditions.”
The complete report may be obtained on the Company’s web site at: www.renre.com, as well as a live broadcast of the conference call held Wednesday Aug. 1 in the “Investor” Section.
Source: Renaissance Re
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