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