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News Details

RenaissanceRe Achieves Record Operating EPS of $3.72 per Common Share for 2002 First Quarter, vs. $1.84 for Comparable Quarter of 2001

April 22, 2002
PEMBROKE, Bermuda, Apr 22, 2002 (BUSINESS WIRE) -- RenaissanceRe (NYSE: RNR)

    --  Achieves ROE of 31% for the First Quarter
    --  73% Growth in Managed Cat Premium for the First Quarter
    --  Reports Growth in Premiums from Specialty Reinsurance and Cat
        Exposed Primary Insurance of $100 million
    --  Comfortable with Increase in 2002 EPS Estimates to between
        $12.00 and $12.50
RenaissanceRe Holdings Ltd. (NYSE: RNR) today reported $86.6 million in first quarter net operating income available to common shareholders (excluding realized investment gains and losses), compared to $37.3 million in the first quarter of 2001. Operating earnings per common share grew to $3.72 in the first quarter, from $1.84 per common share in the first quarter of the previous year. Net income available to common shareholders rose 94% to $87.3 million, or $3.75 per common share in the quarter, from $44.9 million or $2.22 per common share for the same quarter of 2001.

James N. Stanard, Chairman and CEO, commented: "Our record first quarter demonstrates the earnings power of our business in a period with low catastrophe losses. In addition, we achieved outstanding success, reflected by substantial revenue growth, across all our key business activities--catastrophe reinsurance, specialty reinsurance and catastrophe exposed commercial insurance. Lower than usual first quarter loss activity, together with projected increases in 2002 premiums, lead us to be comfortable with estimates of $12.00 to $12.50 for 2002 operating EPS."

Gross premiums written for the first quarter of 2002 increased by over 100% to $460.8 million, compared to $198.2 million for the same quarter of 2001. Net premiums written for the first quarter of 2002 were $379.1 million, versus $121.2 million for the same quarter of 2001. Net premiums earned for the first quarter of 2002 were $150.3 million, compared to $83.9 million for the same quarter of 2001. Those premiums include $95.3 million of gross written premiums, $95.3 million of net written premiums and $23.6 million of net premiums earned by the Company's joint venture, DaVinci Re. Premiums also include $34.9 million assumed from the OPCat Ltd. joint venture in connection with the previously announced decision of Overseas Partners Ltd. to exit the reinsurance business.

Total written Managed Catastrophe Premiums, representing gross catastrophe premiums written by RenaissanceRe Holdings Ltd. and by related joint ventures, increased by 73% and were $370.4 million for the first quarter, compared to $214.7 million for the same quarter of 2001.

Net investment income, excluding realized and unrealized investment gains and losses, for the first quarter of 2002 increased to $22.8 million, compared to $17.9 million for the same period in 2001, due primarily to the Company's capital raising activities during the second half of 2001.

The Company also reported an increase in other income to $8.1 million for the quarter, from $3.9 million for the same quarter in 2001. The increase primarily relates to an increase of $1.6 million from profits and fees earned from its joint venture activities and to $2.5 million of gains from contracts triggered by physical variables, recognized during the quarter.

The Company benefited from the low level of catastrophe losses in the quarter and, accordingly, the Company's claims and claim expenses incurred for the quarter ended March 31, 2002 were $43.1 million, or 28.7% of net premiums earned. In comparison, claims and claim expenses incurred for the quarter ended March 31, 2001 were $41.9 million, or 49.9% of net premiums earned.

The Company is reporting for the first time its pro-forma "other income", representing aggregate earnings from its joint venture activities, other fees related to catastrophe business, and other items. The principal difference between other income as reported and the pro-forma presentation is that the results of DaVinciRe Holdings Ltd. are reflected as if it were reported under the equity method and the pro-forma presentation also includes fees from other managed cat business. During the quarter, the Company recorded pro-forma other income of $22.3 million, compared to $6.3 million during the first quarter of 2001. Of the total $22.3 million of pro-forma other income during the quarter, $12.0 million relates to fees and profit commissions, compared to $3.1 million in the first quarter of 2001, $7.2 million relates to the Company's equity pick up from joint ventures, versus $2.7 million in the comparable quarter of 2001 and the remaining $3.1 million relates primarily to income from contracts triggered by physical variables, compared to $0.5 million in the first quarter of last year.

Operating expenses were $10.7 million for the first quarter of 2002, compared to $8.5 million for the same quarter of 2001. The increase was due to additional costs for personnel and operating expenses associated with the Company's increase in operations.

Shareholders' equity at March 31, 2002 was $1.29 billion. Shareholders' equity attributable to common shareholders was $1.14 billion at March 31, 2002, compared to $1.08 billion at December 31, 2001. Book value per common share at March 31, 2002 was $50.25 per common share, compared to $47.50 per common share at December 31, 2001.

Separately, the Company announced that DaVinciRe Holdings Ltd. signed a definitive agreement to replace the $100 million bridge financing provided by RenaissanceRe with a third party credit facility led by Citibank, N.A.

RenaissanceRe Holdings Ltd. will host a conference call on Tuesday, April 23, 2002 at 9:30 a.m. (ET) 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. The Company's principal product is property catastrophe 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 operations 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, 2001.

           RenaissanceRe Holdings Ltd. and Subsidiaries
               Summary Consolidated Balance Sheets
     (in thousands of United States Dollars, except per share amounts)
                                                   As at
                                    March 31, 2002   December 31, 2001
                                       (Unaudited)        (Audited)
Assets
Fixed maturity investments
 available for sale, at fair value
 (Amortized cost $1,545,137 and
  $1,266,188 at March 31, 2002 and
  December 31, 2001, respectively)      $ 1,551,140      $ 1,282,483
Short term investments                       10,131            7,372
Other investments                            49,965           38,307
Cash and cash equivalents                   709,743          866,268
       Total investments and cash         2,320,979        2,194,430
Premiums receivable                         348,113          102,202
Ceded reinsurance balances                   77,828           41,690
Losses and premiums recoverable             213,558          217,556
Accrued investment income                    18,192           17,696
Deferred acquisition costs                   42,345           12,814
Other assets                                 69,734           57,264
     Total assets                       $ 3,090,749      $ 2,643,652
Liabilities, Minority Interest
 and Shareholders' Equity
Liabilities
Reserve for claims
 and claim expenses                       $ 610,493        $ 572,877
Reserve for unearned premiums               402,797          125,053
Debt                                        183,500          183,500
Reinsurance balances payable                135,923          115,967
Other                                        71,777           58,650
     Total liabilities                    1,404,490        1,056,047
Minority Interest - Capital
 Securities                                  84,630           87,630
Minority Interest - DaVinci                 308,530          274,951
Shareholders' Equity
Series A Preference Shares                  150,000          150,000
Common shares and additional
 paid-in capital                            263,173          264,623
Unearned stock grant compensation           (17,968)         (20,163)
Accumulated other
 comprehensive income                         6,003           16,295
Retained earnings                           891,891          814,269
     Total shareholders' equity           1,293,099        1,225,024
     Total liabilities,
      minority interest, and
     shareholders' equity               $ 3,090,749      $ 2,643,652
Book value per Common Share                 $ 50.25          $ 47.50
Common Shares outstanding                    22,748           22,631
             RenaissanceRe Holdings Ltd. and Subsidiaries
               Summary Consolidated Statements of Income
             For the periods ended March 31, 2002 and 2001
  (in thousands of United States Dollars, except per share amounts)
                              (Unaudited)
                                                  Quarters Ended
                                       March 31, 2002   March 31, 2001
Revenues
     Gross premiums written                  $ 460,834      $ 198,208
     Net premiums written                    $ 379,096      $ 121,232
     Increase in unearned premiums            (228,788)       (37,332)
     Net premiums earned                       150,308         83,900
     Net investment income                      22,783         17,884
     Net foreign exchange losses                (1,950)          (296)
     Other income                                8,129          3,868
     Net realized gains on investments             686          7,616
     Total revenues                            179,956        112,972
Expenses
     Claims and claim expenses incurred         43,118         41,895
     Acquisition expenses                       18,549         12,545
     Operational expenses                       10,663          8,512
     Corporate expenses                          2,690          1,528
     Interest expense                            2,714            864
     Total expenses                             77,734         65,344
Income before minority interest and taxes      102,222         47,628
Minority interest - Capital Securities           1,833          1,847
Minority interest - DaVinci                      9,477             -
Income before taxes                             90,912         45,781
Income tax expense                                 596            876
     Net income                               $ 90,316       $ 44,905
Dividends on Series A Preference Shares          3,038             -
     Net income available to
      Common Shareholders                     $ 87,278       $ 44,905
Operating earnings per
 Common Share - diluted                         $ 3.72         $ 1.84
Earnings per Common Share - basic               $ 3.92         $ 2.34
Earnings per Common Share - diluted             $ 3.75         $ 2.22
Average shares outstanding - basic              22,263         19,227
Average shares outstanding - diluted            23,262         20,230
Claims and claim expense ratio                   28.7%          49.9%
Expense ratio                                    19.4%          25.1%
Combined ratio                                   48.1%          75.0%
Operating return on average
 equity (annualized)                             31.2%          20.7%
             RenaissanceRe Holdings Ltd. and Subsidiaries
                      Supplemental Financial Data
               (in thousands of United States Dollars)
                              (Unaudited)
Gross Written Premiums                            Quarters Ended
                                        March 31, 2002  March 31, 2001
Cat Premium
     Renaissance                          $    201,920    $    166,047
     Assumed from OPCat                         34,873               -
     DaVinci                                    95,269               -
          Total Cat Premium                    332,062         166,047
Specialty Reinsurance Premium                  101,023          22,266
          Total Reinsurance Premium            433,085         188,313
Glencoe Premium                                 22,677           1,756
Other Primary Premium                            5,072           8,139
          Total Primary                         27,749           9,895
          Total Premiums                  $    460,834    $    198,208
Top Layer Re Premiums                     $     38,292    $     19,540
Total Managed Cat Premiums                $    370,354    $    214,652
Other Income                                       Quarters Ended
                                        March 31, 2002  March 31, 2001
As Reported
Cat business - fee income                 $      1,001    $        675
Cat business - equity pick up                    3,990           2,700
Other items                                      3,138             493
Total other income - as reported          $      8,129    $      3,868
Pro-forma (1)
Cat business - fee income                 $     11,976    $      3,053
Cat business - equity pick up                    7,146           2,700
Other items                                      3,138             539
Total other income - pro-forma            $     22,260    $      6,292
(1) Adjusted to reflect DaVinci under the equity method and other fee
    income on managed cat business.
CONTACT:          RenaissanceRe Holdings Ltd.                                                       
                  Investor:                                                                 
                  Martin J. Merritt, 441/299-7230
                  or
                  Kekst and Company 
                  Media:                         
                  Sarah Zitter Milstein  or  Dawn Dover, 212/521-4800                        

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