RenaissanceRe Reports Net Income Of $142.3 Million For The Second Quarter Of 2012 Or $2.75 Per Diluted Common Share; Quarterly Operating Income Of $111.5 Million Or $2.14 Per Diluted Common Share

RenaissanceRe Holdings Ltd. (NYSE: RNR) today reported net income available to RenaissanceRe common shareholders of $142.3 million or $2.75 per diluted common share in the second quarter of 2012, compared to $24.8 million or $0.48 per diluted common share in the second quarter of 2011. Operating income available to RenaissanceRe common shareholders was $111.5 million or $2.14 per diluted common share for the second quarter of 2012, compared to an operating loss attributable to RenaissanceRe common shareholders of $10.2 million or $0.21 per diluted common share in the second quarter of 2011. The Company reported an annualized return on average common equity of 17.5% and an annualized operating return on average common equity of 13.7% in the second quarter of 2012, compared to 3.3% and negative 1.4%, respectively, in the second quarter of 2011. Book value per common share increased $2.39, or 3.8%, in the second quarter of 2012 to $65.07, compared to a 0.5% increase in the second quarter of 2011.

See Comments on Regulation G for a reconciliation of non-GAAP measures.

Neill A. Currie, CEO, commented: “In the second quarter of 2012, we generated an annualized operating ROE of 13.7%. We increased our book value per share by 3.8% for the quarter and almost 10% year to date. Our results benefited from relatively low catastrophe losses, solid investment returns and favorable reserve development.”

Mr. Currie, continued: “Although property catastrophe pricing at June 1 st was a little lower than we had anticipated, we are pleased with the results of the recent renewal season. We have grown significantly in each unit this year, and have produced an attractive portfolio of risks.”

SECOND QUARTER 2012 HIGHLIGHTS (1)
  • Underwriting income of $127.9 million and a combined ratio of 47.7%, compared to $9.7 million and 95.5%, respectively, was primarily driven by a relatively low level of insured catastrophes during the second quarter of 2012, compared to the second quarter of 2011, which was impacted by the U.S. tornadoes which had a net negative impact (2) of $70.8 million and added 51.8 percentage points to the combined ratio.
  • Gross premiums written increased $25.8 million, or 4.0%, to $667.3 million. Excluding the impact of $30.7 million of negative reinstatement premium adjustments on the 2011 New Zealand and Tohoku earthquakes during the second quarter of 2012, and $23.2 million of reinstatement premiums written from large losses during the second quarter of 2011, respectively, gross premiums written increased $79.7 million, or 12.9%, due to growth in the Company's catastrophe, specialty and Lloyd's units, and inclusive of $37.7 million of gross premiums written on behalf of the Company's most recent fully collateralized joint venture, Timicuan Reinsurance III Limited ("Tim Re III").
  • Total investment income of $44.8 million, which includes the sum of net investment income, net realized and unrealized gains on investments and net other-than-temporary impairments, compared to $66.5 million. The decrease in total investment income was primarily due to lower returns in the Company's portfolio of other investments, principally its private equity investments.
  • Other income of $11.3 million, compared to an other loss of $5.2 million, was primarily due to the Company's weather and energy risk management operations generating income of $5.9 million, compared to incurring a loss of $3.8 million primarily as a result of positive results from its positions in the United Kingdom and its summer positions as at June 30, 2012 in certain regions of the United States and Canada.

Underwriting Results by Segment (1)

Reinsurance Segment

Gross premiums written in the Reinsurance segment were $617.0 million, an increase of $9.6 million, or 1.6%. Excluding the impact of $30.7 million of negative reinstatement premiums adjustments on the 2011 New Zealand and Tohoku earthquakes, as discussed below, and $23.0 million of reinstatement premiums written from large losses in the second quarter of 2012 and 2011, respectively, gross premiums written increased $63.4 million, or 10.9%, primarily due to the catastrophe unit writing more business during the June 2012 renewals, and inclusive of $37.7 million of gross premiums written on behalf of Tim Re III. Managed catastrophe premiums totaled $628.3 million, an increase of $63.3 million, or 10.6%, excluding the impact of the negative reinstatement premiums adjustments in the second quarter of 2012, as discussed below, and the reinstatement premiums written from large losses in the second quarter of 2011. In addition, gross premiums written in the specialty unit were $37.3 million, an increase of $13.1 million, or 54.4%, due to the inception of several new quota share contracts and loss related premiums.

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