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News Details

RenaissanceRe Reports Operating Income of $143.1 Million for 2004 Second Quarter

July 27, 2004
Click here for a printable version of the release

  • Operating EPS of $2.00 Per Common Share for the Second Quarter of 2004 Vs. $1.84 for the Second Quarter of 2003
  • $116.2 Million Net Income for the Second Quarter of 2004; EPS of $1.62 for the Second Quarter of 2004 vs. $2.54 for the Second Quarter of 2003
  • Achieves Second Quarter 2004 Annualized Operating Return on Equity of 25.2%
  • Increases 2004 Operating Earnings Estimates to a Range of $6.95 to $7.25 per Common Share, from Prior Estimate of $6.10 to $6.50
  • PEMBROKE, Bermuda--(BUSINESS WIRE)--July 27, 2004-- RenaissanceRe Holdings Ltd. (NYSE: RNR) today reported net operating income available to common shareholders of $143.1 million for the second quarter of 2004, versus $130.5 million for the comparable period in 2003. Operating income excludes realized investment gains (losses) of ($26.9) million and $49.7 million in the second quarters of 2004 and 2003, respectively. Operating income per common share grew to $2.00 in the second quarter of 2004, from $1.84 per common share in the second quarter of 2003. Net income available to common shareholders was $116.2 million or $1.62 per common share in the quarter, compared to $180.2 million or $2.54 per common share for the same quarter of 2003. The decline in net income resulted primarily from normal course investment activities, with the change in realized investment gains (losses) reflecting the broadly favorable investment environment of 2003 compared with the rising interest rate environment of this past second quarter.

    James N. Stanard, Chairman and CEO, commented: "Our strong premium growth reflects two conflicting trends. First, Renaissance has preferred positions on various attractive reinsurance and insurance programs as a result of our strong customer relationships and credit ratings. Second, however, we continue to see price declines, and increasingly have had to turn down business that does not meet our return requirements. For 2004 we have increased estimates of our managed specialty reinsurance premium growth to over 30% compared to 2003; for our individual risk business we are maintaining our estimates of 30% growth; and for cat reinsurance we continue to expect gross managed premium declines of 5% or more. Our current expectation for 2005 is that we will continue to see growth in the individual risk business, but we will likely see a flattening of specialty reinsurance premium and further decreases in cat reinsurance premium."

    Mr. Stanard further stated, "In light of the low losses in the first half of the year, we have raised our operating EPS guidance for 2004 to a range of $6.95 to $7.25 compared with our previous range of $6.10 to $6.50. These earnings estimates assume normal loss activity in the second half of the year."

    SECOND QUARTER 2004 RESULTS:

    Premiums

    Gross premiums written for the second quarter of 2004 were $326.9 million, compared to $212.6 million for the same quarter of 2003. Gross premiums written include $215.3 million attributable to the Company's Reinsurance segment in the second quarter of 2004, compared to $114.9 million in the comparable 2003 period; and $111.6 million attributable to the Company's Individual Risk segment in the second quarter of 2004, compared to $97.7 million for the same quarter of 2003. Net premiums written for the second quarter of 2004 were $262.8 million, compared to $160.2 million for the same quarter of 2003. Net premiums written include $153.2 million attributable to the Company's Reinsurance segment in the second quarter of 2004, compared to $65.4 million for the same quarter of 2003; and $109.7 million attributable to the Company's Individual Risk segment in the second quarter of 2004, compared to $94.8 million for the same quarter of 2003.

    Net premiums earned for the second quarter of 2004 were $344.0 million, compared to $275.5 million for the same quarter of 2003. Net premiums earned include $235.9 million in net premiums earned for the Company's Reinsurance segment in the second quarter of 2004, compared to $208.9 million for the same quarter of 2003; and $108.1 million in net premiums earned for the Company's Individual Risk segment in the second quarter of 2004, compared to $66.6 million for the same quarter of 2003.

    Premiums for the second quarter of 2004 include $34.2 million of gross written premiums, $38.3 million of net written premiums and $53.7 million of net premiums earned by the Company's consolidated joint venture, DaVinci Re during the second quarter of 2004, compared to $17.1 million of gross written premiums, $19.0 million of net written premiums and $46.7 million of net premiums earned by DaVinci Re during the second quarter of 2003.

    Total managed cat premiums written, representing gross catastrophe premiums written by Renaissance Reinsurance and by related joint ventures, were $175.5 million for the second quarter of 2004, compared to $103.8 million for the same quarter of 2003, representing an increase of 69.1%. The increase was primarily due to timing differences. See the attached supplemental financial data for additional information regarding managed premiums.

    Joint Venture Income

    During the quarter, income from the DaVinci joint venture and other fee income was $37.9 million, compared to $31.6 million during the second quarter of 2003. Of this, $23.9 million reflects fees and profit commissions, compared to $15.6 million in the second quarter of 2003, and $15.7 million reflects equity in earnings of unconsolidated ventures and DaVinci, versus $16.5 million in the comparable quarter of 2003.

    Underwriting Ratios, Reserve Development

    For the second quarter of 2004, the Company generated a combined ratio of 58.5%, a loss ratio of 35.1% and an expense ratio of 23.4%, compared to a combined ratio, loss ratio and expense ratio of 57.0%, 36.3% and 20.7%, respectively, for the second quarter of 2003. The increase in the expense ratio primarily relates to the increased scale of the Company's Individual Risk segment, which typically generates higher expense ratios than the Reinsurance segment. For the quarter, the Company's Reinsurance segment generated a loss ratio of 27.6% and an expense ratio of 16.3%, compared to 29.2% and 16.9%, respectively, during the second quarter of 2003. For the quarter, the Company's Individual Risk segment generated a loss ratio of 51.5% and an expense ratio of 38.8%, compared to 58.5% and 32.6%, respectively, during the second quarter of 2003.

    During the quarter, the Company recorded favorable development on prior year reserves of $29.7 million or a benefit of 8.6 percentage points to the Company's quarterly loss ratio. The Company's Reinsurance segment contributed $27.4 million of favorable development, and the Company's Individual Risk segment contributed $2.3 million of favorable development. Net recovered losses for the quarter were $7.8 million. The Company had net recoveries in the second quarter due to the timing of collections on certain reinsurance recoverables. See the attached supplemental financial data for additional information regarding claims and claim expenses incurred and loss ratios by segment.

    Investments

    Net investment income for the second quarter of 2004 was $29.8 million, compared to $34.1 million for the same quarter in 2003. Net investment income includes appreciation (depreciation) related to investments in hedge funds and private equity funds recorded during the second quarter of 2004 of ($1.3) million compared to $6.1 million of net appreciation recorded during the second quarter of 2003.

    The Company's cash flows from operations were $231.0 million for the second quarter of 2004.

    Shareholders' Equity

    Shareholders' equity attributable to common shareholders was $2.3 billion at June 30, 2004, compared to $2.1 billion at December 31, 2003. Book value per common share at June 30, 2004 was $32.60 compared to $29.61 per common share at December 31, 2003.

    This Press Release includes certain non-GAAP financial measures including "operating income," "operating EPS or operating income per common share," "annualized operating return on equity," "managed cat premium" and "summary of income from joint venture relationships." A reconciliation of such measures to the most comparable GAAP figures in accordance with Regulation G is presented in the attached supplemental financial data.

    RenaissanceRe Holdings Ltd. will host a conference call on Wednesday, July 28, 2004 at 9:00 a.m. (EST) to discuss this release. Live broadcast of the conference call will be available through the Investor Section of RenaissanceRe's website at www.renre.com.

    RenaissanceRe Holdings Ltd. is a global provider of reinsurance and insurance. Our business consists of two segments: (1) Reinsurance, which includes catastrophe reinsurance, specialty reinsurance and certain joint ventures and other structured relationships managed by our subsidiary Renaissance Underwriting Managers, and (2) Individual Risk business, which includes primary insurance and quota share reinsurance.

    Cautionary Statement under "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995: Statements made in this news release contain information about the Company's future business prospects. These statements may be considered "forward-looking." These statements are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by such forward-looking statements. For further information regarding cautionary statements and factors affecting future results, please refer to RenaissanceRe Holdings Ltd.'s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2003, and Form 10-Q for the quarter ended March 31, 2004.

    
    
                 RenaissanceRe Holdings Ltd. and Subsidiaries
                   Summary Consolidated Statements of Income
       For the three and six month periods ended June 30, 2004 and 2003
       (in thousands of United States Dollars, except per share amounts)
    
    
                                   Three months ended   Six months ended
                                  -------------------- -------------------
                                   June 30,  June 30,  June 30,  June 30,
                                     2004      2003      2004      2003
                                  ---------- -------- ----------- --------
                                       (Unaudited)        (Unaudited)
    Revenues
    Gross premiums written          $326,876 $212,560 $1,107,164 $897,727
                                  ========== ======== =========== ========
    
    Net premiums written            $262,842 $160,223   $968,863 $750,593
    Decrease (increase) in
     unearned premiums                81,142  115,312   (315,310)(211,584)
                                  ----------- -------- ---------- --------
    Net premiums earned              343,984  275,535    653,553  539,009
    Net investment income             29,833   34,109     64,883   65,543
    Net foreign exchange gains           786    7,640      2,873   11,591
    Equity in earnings of
     unconsolidated ventures           4,923    6,493     11,443   12,561
    Other income (loss)                 (689)     745        420      182
    Net realized gains (losses) on
     investments                     (26,920)  49,660      5,601   70,772
                                  ------------ -------- --------- --------
    
    Total revenues                   351,917  374,182    738,773  699,658
                                  ----------- --------- --------- --------
    Expenses
    Claims and claim expenses
     incurred                        120,737  100,076    232,915  182,856
    Acquisition expenses              64,047   40,704    122,078   82,837
    Operational expenses              16,502   16,332     28,878   31,239
    Corporate expenses                 4,986    4,677      9,538    8,145
    Interest expense                   6,334    5,335     12,605    9,834
                                  ------------ -------- ---------- -------
    
    Total expenses                   212,606  167,124    406,014  314,911
                                  ----------- ---------- --------- -------
    Income before minority
     interest and taxes              139,311  207,058    332,759  384,747
    Minority interest - Capital
     Securities                            -    1,827          -    3,282
    Minority interest - DaVinci       14,492   20,150     32,482   41,035
                                  ----------- ---------- --------- -------
    Income before taxes              124,819  185,081    300,277  340,430
    Income tax benefit                     -        -          -       55
                                  ----------- ---------- --------- -------
    
    Net income                       124,819  185,081    300,277  340,485
    Dividends on preference shares     8,609    4,917     13,713    9,036
                                  ----------- ----------- ------- --------
    Net income available to common
     shareholders                   $116,210 $180,164   $286,564 $331,449
                                  =========== ========= ======== =========
    
    Operating income per Common
     Share - diluted (1)               $2.00    $1.84      $3.92    $3.68
    Net income available to common
     shareholders per Common Share
      - basic                          $1.67    $2.62      $4.12    $4.82
    Net income available to common
     shareholders per Common Share
      - diluted                        $1.62    $2.54      $4.00    $4.68
    
    Average common shares
     outstanding - basic              69,664   68,914     69,554   68,754
    Average common shares
     outstanding - diluted            71,683   71,056     71,638   70,810
    
    Claims and claim expense ratio      35.1%    36.3%      35.6%    33.9%
    Expense ratio                       23.4%    20.7%      23.1%    21.2%
                                  ------------ -------- ---------- -------
    Combined ratio                      58.5%    57.0%      58.7%    55.1%
                                  ============ ========= ========= =======
    
    Operating return on average
     common equity (annualized) (1)     25.2%    30.2%      25.4%    31.6%
                                  ============ ========= ========= =======
    
        (1) Excludes realized gains (losses) on investments (see comments
            on Regulation G)
    
    
    
                 RenaissanceRe Holdings Ltd. and Subsidiaries
                      Summary Consolidated Balance Sheets
       (in thousands of United States Dollars, except per share amounts)
    
                                                              At
                                                    ----------------------
                                                     June        December
                                                      30,          31,
                                                     2004         2003
                                                    ---------- -----------
                                                    (Unaudited) (Audited)
    Assets
    Fixed maturity investments available for sale,
     at fair value                                  $3,117,925 $2,947,841
    Short term investments                           1,009,011    660,564
    Other investments                                  503,884    369,242
    Cash and cash equivalents                           74,130     63,397
                                                    ----------- ----------
           Total managed investment portfolio and
            cash                                     4,704,950  4,041,044
    Equity investments in reinsurance company, at
     fair value                                        147,962    145,535
    Investments in other ventures, under equity
     method                                            178,052     41,130
                                                    ----------- ----------
           Total investments and cash                5,030,964  4,227,709
    Premiums receivable                                404,676    167,996
    Ceded reinsurance balances                          88,326     56,852
    Losses recoverable                                  90,055    149,201
    Accrued investment income                           31,811     22,793
    Deferred acquisition costs                         107,718     75,261
    Other assets                                        39,498     29,890
                                                    ----------- ----------
         Total assets                               $5,793,048 $4,729,702
                                                    =========== ==========
    
    Liabilities, Minority Interest and Shareholders'
     Equity
    Liabilities
    Reserve for claims and claim expenses           $1,100,159   $977,892
    Reserve for unearned premiums                      696,608    349,824
    Debt                                               350,000    350,000
    Subordinated obligation to capital trust           103,093    103,093
    Reinsurance balances payable                        88,741    131,629
    Net payable on investments purchased               166,772          -
    Other liabilities                                   88,773     52,123
                                                    ------------ ---------
         Total liabilities                           2,594,146  1,964,561
                                                    ----------- ----------
    
    Minority interest - DaVinci                        398,214    430,498
    Shareholders' Equity
    Preference shares                                  500,000    250,000
    Common shares and additional paid-in capital       308,852    314,414
    Accumulated other comprehensive income              75,168    113,382
    Retained earnings                                1,916,668  1,656,847
                                                    ----------- ----------
    
         Total shareholders' equity                  2,800,688  2,334,643
                                                    ----------- ----------
         Total liabilities, minority interest, and
         shareholders' equity                       $5,793,048 $4,729,702
                                                    ========== ===========
    Book value per common share                         $32.60     $29.61
                                                    =========== ==========
    Common shares outstanding                           70,565     70,399
                                                    =========== ==========
    
    
    
                 RenaissanceRe Holdings Ltd. and Subsidiaries
                          Supplemental Financial Data
                    (in thousands of United States Dollars)
    
    Segment Information
    ---------------------
    
    
    
                       Three months ended June 30, 2004
                      ----------------------------------
                   Reinsurance  Individual    Other    Total
                                 Risk
                   ----------- ------------ --------- --------
    
      Gross
       premiums
       written (1)   $215,284    $111,592       $-    $326,876
                   =========== ===========            =========
      Net premiums
       written       $153,162    $109,680        -    $262,842
                   =========== ===========            =========
      Net premiums
       earned        $235,862    $108,122        -    $343,984
      Claims and
       claim
       expenses
       incurred        65,016      55,721        -     120,737
      Acquisition
       expenses        27,936      36,111        -      64,047
      Operational
       expenses        10,624       5,878        -      16,502
                   ----------- -----------  ---------  ---------
      Underwriting
       income        $132,286     $10,412        -     142,698
                   =========== ===========
      Other items                         $(26,488)    (26,488)
                                          =========    ---------
      Net income
       available to
       common
       shareholders                                   $116,210
                                                      =========
    
    
     Claims and
      claim   expenses
      incurred -
      current
      accident year   $92,375     $58,060             $150,435
     Claims and
      claim
      expenses
      incurred -
      prior years     (27,359)     (2,339)             (29,698)
                   ----------- -----------            ---------
     Net claims and
      claim
      expenses
      incurred -
      total           $65,016     $55,721             $120,737
                   =========== ===========            =========
    
     Claims and
      claim expense
      ratio -
      accident year      39.2%       53.7%                43.7%
                   =========== ===========            =========
     Claims and
      claim expense
      ratio -
      calendar year      27.6%       51.5%                35.1%
     Underwriting
      expense ratio      16.3%       38.8%                23.4%
                   ----------- -----------            ---------
     Combined ratio      43.9%       90.3%                58.5%
                   =========== ===========            =========
    
    
        (1) Reinsurance segment gross premiums written excludes $0.8
            million of premiums ceded from the Individual Risk segment.
    
    
    
                       Three months ended June 30, 2003
                   -----------------------------------------
                   Reinsurance Individual  Other    Total
                                Risk
                   ----------- ----------- ------- -----------
    
      Gross
       premiums
       written (1)   $114,872     $97,688     $-   $212,560
                   =========== ===========         =========
      Net premiums
       written        $65,424     $94,799      -   $160,223
                   =========== ===========         =========
      Net premiums
       earned        $208,905     $66,630      -   $275,535
      Claims and
      claim expenses
      incurred         61,100      38,976      -    100,076
      Acquisition
       expenses        22,220      18,484      -     40,704
      Operational
       expenses        13,107       3,225      -     16,332
                   -----------  ----------- -------- ----------
      Underwriting
       income        $112,478      $5,945      -    118,423
                   =========== ===========
      Other items                         $61,741    61,741
                                          ========  ---------
      Net income
      available to
      common shareholders                          $180,164
                                                   =========
    
     Claims and
      claim expenses
      incurred -
      current
      accident year   $66,270     $46,563          $112,833
     Claims and
      claim expenses
      incurred -
      prior years      (5,170)     (7,587)          (12,757)
                    -----------  -----------        ---------
     Net claims and
      claim
      expenses
      incurred -
      total           $61,100     $38,976          $100,076
                   =========== ===========         =========
    
     Claims and
      claim expense
      ratio -
      accident year      31.7%       69.9%             41.0%
                   =========== ===========         =========
     Claims and
      claim expense
      ratio -
      calendar year      29.2%       58.5%             36.3%
     Underwriting
      expense ratio      16.9%       32.6%             20.7%
                   ----------- -----------         ---------
     Combined ratio      46.1%       91.1%             57.0%
                   =========== ===========         =========
    
    
        (1) Reinsurance segment gross premiums written excludes $1.0
            million of premiums ceded from the Individual Risk segment.
    
    
    
                 RenaissanceRe Holdings Ltd. and Subsidiaries
                          Supplemental Financial Data
                    (in thousands of United States Dollars)
    
    Segment Information, cont'd
    ----------------------------
    
    
                        Six months ended June 30, 2004
                  ------------------------------------------
                 Reinsurance  Individual    Other          Total
                               Risk
                 ----------- ------------  ----------     --------
    
      Gross
       premiums
       written (1)   $875,634    $231,530      $-     $1,107,164
                   =========== ===========            ===========
      Net premiums
       written       $749,400    $219,463       -       $968,863
                   =========== ===========            ===========
      Net premiums
       earned        $444,655    $208,898       -       $653,553
      Claims and
       claim
       expenses
       incurred       123,555     109,360       -        232,915
      Acquisition
       expenses        51,747      70,331       -        122,078
      Operational
       expenses        16,750      12,128       -         28,878
                   ----------- ---------- ---------    -----------
      Underwriting
       income        $252,603     $17,079       -        269,682
                   =========== ===========
      Other items                           $16,882       16,882
                                            ========    -----------
      Net income
       available to
       common shareholders                              $286,564
                                                        ===========
    
    
     Claims and
      claim
      expenses
      incurred -
      current
      accident year  $167,785    $116,517               $284,302
     Claims and
      claim
      expenses
      incurred -
      prior years     (44,230)     (7,157)               (51,387)
                   ----------- -----------            -----------
     Net claims and
      claim
      expenses
      incurred -
      total          $123,555    $109,360               $232,915
                   =========== ===========            ===========
    
     Claims and
      claim expense
      ratio -
      accident year      37.7%       55.8%                  43.5%
                   =========== ===========            ===========
     Claims and
      claim expense
      ratio -
      calendar year      27.8%       52.4%                  35.6%
     Underwriting
      expense ratio      15.4%       39.5%                  23.1%
                   ----------- -----------            -----------
     Combined ratio      43.2%       91.9%                  58.7%
                   =========== ===========            ===========
    
        (1) Reinsurance segment gross premiums written excludes $0.8
            million of premiums ceded from the Individual Risk segment.
    
    
    
                        Six months ended June 30, 2003
                     -----------------------------------------
               Reinsurance  Individual   Other       Total
                             Risk
               ----------- ------------ -------   -----------
    
      Gross
       premiums
       written (1)   $736,196    $161,531    $-   $897,727
                   =========== ===========        ===========
      Net premiums
       written       $623,277    $127,316     -   $750,593
                   =========== ===========        ===========
      Net premiums
       earned        $409,338    $129,671     -   $539,009
      Claims and
       claim
       expenses
       incurred       117,996      64,860     -    182,856
      Acquisition
       expenses        45,077      37,760     -     82,837
      Operational
       expenses        25,191       6,048     -     31,239
                   ----------- ----------- ------- ------------
      Underwriting
       income        $221,074     $21,003     -    242,077
                   =========== ===========
      Other items                         $89,372   89,372
                                          ======== -----------
      Net income
       available to
       common shareholders                        $331,449
                                                 ===========
    
    
     Claims and
      claim  expenses
      incurred -
      current
      accident year  $135,784     $71,555         $207,339
     Claims and
      claim
      expenses
      incurred -
      prior years     (17,788)     (6,695)         (24,483)
                   -----------  -----------        -----------
     Net claims and
      claim
      expenses
      incurred -
      total          $117,996     $64,860         $182,856
                   =========== ===========        ===========
    
     Claims and
      claim expense
      ratio -
      accident year      33.2%       55.2%            38.5%
                   =========== ===========        ===========
     Claims and
      claim expense
      ratio -
      calendar year      28.8%       50.0%            33.9%
     Underwriting
      expense ratio      17.2%       33.8%            21.2%
                   ----------- -----------        -----------
     Combined ratio      46.0%       83.8%            55.1%
                   =========== ===========        ===========
    
    
    
        (1)Reinsurance segment gross premiums written excludes $5.7
            million of premiums ceded from the Individual Risk segment.
    
    
    
                 RenaissanceRe Holdings Ltd. and Subsidiaries
                          Supplemental Financial Data
                    (in thousands of United States Dollars)
    
    
    Gross Written Premiums         Three months ended  Six months ended
    ----------------------         ---------------------------------------
                                    June 30, June 30,  June 30,  June 30,
                                       2004     2003      2004      2003
                                    -------- ---------- ---------- -------
    
    Renaissance cat premium         $120,405  $64,211   $419,541 $372,930
    Renaissance specialty premium     60,675   33,557    291,130  219,639
                                    --------- --------- --------- --------
         Total Renaissance
          Reinsurance premium        181,080   97,768    710,671  592,569
                                    --------- --------- --------- --------
    DaVinci cat premium (1)           29,885   16,402    133,081  123,218
    DaVinci specialty premium          4,319      702     31,882   20,409
                                    ---------- -------- ---------- -------
         Total DaVinci Reinsurance
          premium                     34,204   17,104    164,963  143,627
                                    ---------- -------- --------- --------
              Total Reinsurance
               premium               215,284  114,872    875,634  736,196
    Individual Risk premium (2)      111,592   97,688    231,530  161,531
                                    --------- --------- --------- --------
              Total premiums        $326,876 $212,560 $1,107,164 $897,727
                                    ======== ========= ========= =========
    Total Managed Cat Premiums (3)  $175,506 $103,774   $616,893 $568,509
                                    ======== ========= ========= =========
    Total Managed Specialty Premiums $64,994  $34,259   $323,012 $240,048
                                    ========= ========= ======== =========
    
        (1) Excludes premium ceded to Renaissance of $3.5 million for the
            three months ended June 30, 2004 and $8.4 million for the six
            months ended June 30, 2004.
    
        (2) Includes combined premium ceded to Renaissance and DaVinci of
            $1.0 million for the three months ended June 30, 2003 and $5.7
            million for the six months ended June 30, 2003. Such amounts
            of premium are excluded from the Renaissance and DaVinci
            premiums shown above.
    
        (3) Total Managed Cat Premiums include Renaissance and DaVinci Cat
            Premium, as above, and Cat Premium of $25.2 million and $23.2
            million for the three months ended June 30, 2004 and 2003,
            respectively, and Cat premium of $64.3 million and $72.4
            million for the six months ended June 30, 2004 and 2003,
            respectively, written on behalf of our joint venture, Top
            Layer Re.
    
    
    
    Other Income and Equity in
     Earnings of Unconsolidated
     Ventures                       Three months ended   Six months ended
    ----------------------------- --------------------- ------------------
                                    June 30, June 30,  June 30,  June 30,
                                       2004     2003      2004      2003
                                    -------- --------- --------- ---------
    As Reported
    --------------------------------
    Fee income                        $1,074   $1,250     $2,189   $2,478
    Other items                       (1,763)    (505)    (1,769)  (2,296)
                                    --------- --------- --------- --------
         Total other income (loss) -
          as reported                   (689)     745        420      182
    Equity in earnings of
     unconsolidated ventures           4,923    6,493     11,443   12,561
                                    ---------- -------- --------- --------
         Total                        $4,234   $7,238    $11,863  $12,743
                                    ========== ========= ======== ========
    
    Summary of income from joint
     venture relationships (1)
    --------------------------------
    Fee income (2)                   $23,933  $15,616    $40,901  $35,820
    Other items                       (1,763)    (505)    (1,769)  (2,296)
                                    --------- --------- ---------- -------
         Total other income           22,170   15,111     39,132   33,524
    Equity in earnings of
     unconsolidated ventures and
     DaVinci                          15,743   16,522     32,522   34,224
                                    --------- --------- ---------- -------
         Total                       $37,913  $31,633    $71,654  $67,748
                                    ========= ========= ========= ========
    
        (1) Reported GAAP presentation adjusted to reflect:
            - fee income and the Company's interest in DaVinci as if
            DaVinci were accounted for under the equity method.
            - other fee income on managed cat business which is reflected
            on the income statement as a reduction of acquisition and
            operational expenses.
    
        (2) Excludes fee income received on capital invested by
            RenaissanceRe Holdings.
    

    Comments on Regulation G

    In addition to the GAAP financial measures set forth in this Press Release, the Company has included certain non-GAAP financial measures in this Press Release within the meaning of Regulation G. The Company has consistently provided these financial measurements in previous investor communications and the Company's management believes that these measurements are important to investors and other interested persons, and that investors and such other persons benefit from having a consistent basis for comparison between quarters and for the comparison with other companies within the industry. These measures may not, however, be comparable to similarly titled measures used by companies outside of the insurance industry. Investors are cautioned not to place undue reliance on these non-GAAP measures in assessing the Company's overall financial performance.

    The Company uses "operating income" as a measure to evaluate the underlying fundamentals of its operations and believes it to be a useful measure of its corporate performance. "Operating income" as used herein differs from "net income available to common shareholders", which the Company believes is the most directly comparable GAAP measure, by the exclusion of net realized gains and losses on investments. In addition, the Company's management believes that "operating income" is useful to investors because it more accurately measures and predicts the Company's results of operations by removing the variability arising from fluctuations in the Company's investment portfolio, which is not considered by management to be a relevant indicator of business operations. The Company also uses operating income to calculate operating income per common share and operating return on average common equity. The following is a reconciliation of 1) net income available to common shareholders to operating income; 2) net income available to common shareholders per common share to operating income per common share; and 3) return on average common equity to operating return on average common equity:

                                      Three months ended Six months ended
                                      ------------------ -----------------
    (In thousands of U.S. dollars)    June 30, June 30, June 30, June 30,
                                         2004     2003     2004     2003
                                      --------- ------- --------- --------
    
    Net income available to common
     shareholders                     $116,210 $180,164 $286,564 $331,449
    Adjustment for net realized losses
     (gains) on investments             26,920  (49,660)  (5,601) (70,772)
                                      --------- -------- -------- --------
    Operating income                  $143,130 $130,504 $280,963 $260,677
                                      ========= ======== ======= =========
    
    
    Net income available to common
     shareholders per common share -
     diluted                             $1.62    $2.54    $4.00    $4.68
    Adjustment for net realized losses
     (gains) on investments               0.38    (0.70)   (0.08)   (1.00)
                                      ---------- -------- -------- -------
    Operating income per common share
     - diluted                           $2.00    $1.84    $3.92    $3.68
                                      ========== ========= ======= =======
    
    
    Return on average common equity
     (annualized)                         20.5%    41.7%    25.9%    40.2%
    Adjustment for net realized losses
     (gains) on investments                4.7%   (11.5%)   (0.5%)  (8.6%)
                                      ---------- --------- ------- -------
    Operating return on average common
     equity (annualized)                  25.2%    30.2%    25.4%    31.6%
                                      =========== ========= ====== =======
    

    The Company has also included in this Press Release "managed cat premium". "Managed cat premium" is defined as gross catastrophe premium written by Renaissance Reinsurance and its related joint ventures. "Managed cat premium" differs from total catastrophe premium, which the Company believes is the most directly comparable GAAP measure, due to the inclusion of catastrophe premium written on behalf of our joint venture Top Layer Re, which is accounted for under the equity method of accounting. Refer to supplemental financial data on gross written premiums.

    The Company has also included in this Press Release "summary of income from joint venture relationships" which is a non-GAAP financial measure. The principal differences between "summary of income from joint venture relationships" and "other income and equity in earnings of unconsolidated ventures," which the Company believes is the most directly comparable GAAP measure, are that the results of DaVinci Reinsurance Ltd., a joint venture the financial results of which are consolidated in the Company's financial statements, are reflected in "summary of income from joint venture relationships" as if reported under the equity accounting method, and that this presentation also includes fees earned on certain quota share cessions of catastrophe business by the Company which are reflected on its income statement as a reduction of acquisition and operational expenses.

    CONTACT: Investors contact:
    RenaissanceRe Holdings Ltd.
    Martin J. Merritt, 441-299-7230
    or
    Media contact:
    Kekst and Company
    David Lilly or Dawn Dover, 212-521-4800

    SOURCE: RenaissanceRe Holdings Ltd.