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RenaissanceRe Reports 16% Growth In Fourth Quarter Operating Earnings Per Common Share

January 24, 2002
PEMBROKE, Bermuda, Jan 24, 2002 (BUSINESS WIRE) --

Reports Record Operating Earnings of $2.07 Per Common Share for the Fourth Quarter and $7.03 Per Common Share for the Full Year 2001

                     Achieves ROE of 18% for 2001
      Records 33% Growth in Book Value Per Common Share for 2001
              Comfortable with Increased Street Earnings
       Estimates for 2002 of $10.50 to $11.00 Per Common Share
RenaissanceRe Holdings Ltd. (NYSE: RNR) today reported a 29% increase in net operating income available to common shareholders for the fourth quarter of 2001, excluding realized investment gains and losses, to $46.6 million, from $36.0 million in the fourth quarter of 2000. Operating earnings per common share grew to $2.07 in the fourth quarter, from $1.79 per common share in the fourth quarter of the previous year. Net income available to common shareholders rose 30% to $49.2 million, or $2.18 per common share in the quarter, from $37.8 million or $1.87 per common share for the same quarter of 2000.

For the twelve months ended December 31, 2001, net operating income available to common shareholders was $146.3 million or $7.03 per common share, compared to $134.4 million or $6.86 per common share for the same quarter in 2000. Net income available to common shareholders for the twelve months ended December 31, 2001 was $164.4 million or $7.90 per common share, compared to $127.2 million or $6.50 per common share for the same quarter in 2000.

James N. Stanard, Chairman, President and CEO, commented: "We turned in record earnings per share in fiscal 2001 and achieved an 18% return on equity, despite severe market challenges. In addition, we are off to a great start in 2002 with an extremely successful January 1 renewal season.

"For 2002 we again anticipate superior results, with an expected return on equity greater than 20% and projected Managed Cat Premium growth of over 50%. Also, we expect our Cat Exposed Commercial Insurance and Specialty Reinsurance businesses to contribute in excess of $200 million in net written premium, for a growth rate of well over 100%. For these reasons, we are comfortable with increases of Street estimates to $10.50 to $11.00 for 2002 operating earnings per share."

Gross premiums written for the fourth quarter of 2001 were $57.5 million, compared to $52.4 million for the same quarter of 2000. Net premiums written for the fourth quarter of 2001 were $46.3 million, versus $39.6 million for the same quarter of 2000. Net premiums earned for the fourth quarter of 2001 were $93.7 million, compared to $79.1 million for the same quarter of 2000. Premiums written and earned in the fourth quarter of 2001 each benefited from $13.7 million of reinstatement premiums.

Gross premiums written for the twelve months ended December 31, 2001 were $501.3 million, compared to $433.0 million for the same period of 2000. Net premiums written for the twelve months ended December 31, 2001 were $339.5 million, compared to $293.3 million for the same period of 2000.

Total Managed Catastrophe Premiums written, representing gross catastrophe premiums written by RenaissanceRe Holdings Ltd. and by related joint ventures, were $27.1 million for the fourth quarter, compared to $24.6 million for the same quarter of 2000. Total Managed Catastrophe Premiums written for fiscal year 2001 were $441.8 million, compared to $397.0 million for the same period of 2000.

Net investment income, excluding realized and unrealized investment gains and losses, for the fourth quarter of 2001 was $20.3 million, compared to $19.2 million for the same period in 2000. Net investment income for the twelve months of 2001 was $75.2 million, compared to $77.9 million for the same period in 2000.

The fourth quarter of 2001 was a relatively light quarter for catastrophe losses and accordingly, the Company's claims and claim expenses incurred for the quarter ended December 31, 2001 were $28.7 million or 30.7 percent of net premiums earned. In comparison, claims and claim expenses incurred for the quarter ended December 31, 2000 were $36.1 million or 45.6 percent of net premiums earned. The claims and claims expense ratio for the fourth quarter of 2001 also benefited from the additional reinstatement premiums in the quarter. Claims and claim expenses incurred for the twelve months ended December 31, 2001 were $150.0 million or 45.0 percent of net premiums earned. In comparison, claims and claim expenses incurred for the twelve months ended December 31, 2000 were $108.6 million or 40.6 percent of net premiums earned. The increase in the claims and claim expenses incurred for the year primarily relates to the losses incurred by the Company during the third quarter related to the World Trade Center attack.

At year-end, the Company decided to increase its valuation allowance for its deferred tax asset by $13.1 million, which is reflected as income tax expense.

The increase in the Company's cash and investments from $1.4 billion as of September 30, 2001 to $2.2 billion as of December 31, 2001 is a result of $232 million raised from the issuance of 2.5 million common shares, $145 million received from the issuance of 6 million Series A Preference Shares, and $275 million of third party investment in the Company's most recent joint venture, DaVinci Reinsurance. DaVinci is consolidated with Renaissance and the third party investment in DaVinci is reflected as minority interest.

Shareholders' equity at December 31, 2001 was $1,225.0 million. Shareholders' equity attributable to common shareholders was $1,075.0 million at December 31, 2001, compared to $700.8 million at December 31, 2000. Book value per common share at December 31, 2001 was $47.50 per common share, compared to $35.72 per common share at December 31, 2000. The increase in shareholders' equity is partially attributable to the Company's sale of 2.5 million common shares during the fourth quarter of 2001.

RenaissanceRe Holdings Ltd. will host a conference call on Friday, January 25, 2002 at 9:00 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", Provision 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 annual report on Form 10-K for the year ended December 31, 2000 and Form 10-Q for the quarter ended September 30, 2001 and its reports on form 8-K filed in 2001.

             RenaissanceRe Holdings Ltd. and Subsidiaries
               Summary Consolidated Statements of Income
           For the periods ended December 31, 2001 and 2000
   (in thousands of United States Dollars, except per share amounts)
                               (Audited)
                                 Quarters Ended        Year to date
                               -----------------   -------------------
                               Dec. 31,  Dec. 31,   Dec. 31   Dec. 31,
                                 2001      2000       2001      2000
Revenues                       -------- --------   --------  ---------
Gross premiums written        $ 57,530  $ 52,411   $ 501,321 $ 433,002
                              ========  ========   ========= =========
Net premiums written          $ 46,339  $ 39,610   $ 339,547 $ 293,303
Decrease (increase)
 in unearned premiums           47,362    39,503      (6,482)  (25,622)
                              --------  --------   --------- ---------
Net premiums earned             93,701    79,113     333,065   267,681
Net investment income           20,264    19,205      75,156    77,868
Net foreign
 exchange gains (losses)          (554)      237      (1,667)      378
Other income                     7,404     4,607      16,244    10,959
Net realized gains
 (losses) on investments         2,622     1,748      18,096    (7,151)
                              --------  --------   --------- ---------
                               123,437   104,910     440,894   349,735
                              --------  --------   --------- ---------
Expenses
Claims and
 claim expenses incurred        28,721    36,060     149,917   108,604
Acquisition expenses            10,745    12,612      45,359    38,530
Operational expenses            10,789    10,032      38,603    37,954
Corporate expenses               3,811     2,952      11,485     8,022
Interest expense                 3,003     3,918       7,249    17,167
                              --------  --------   --------- ---------
Total expenses                  57,069    65,574     252,613   210,277
                              --------  --------   --------- ---------
Income before minority
 interest and taxes             66,368    39,336     188,281   139,458
Minority interest
 - Capital Securities            1,919     1,919       7,484     7,582
Minority interest - Other          751         -         751         -
                              --------  --------   --------- ---------
Income before taxes             63,698    37,417     180,046   131,876
Income tax expense (benefit)    13,087      (370)     14,262     4,648
                              --------  --------   --------- ---------
Net income                    $ 50,611  $ 37,787   $ 165,784 $ 127,228
Dividends on Series
 A Preference Shares             1,418         -       1,418         -
                              --------  --------   --------- ---------
Net income available to
 Common Shareholders          $ 49,193  $ 37,787   $ 164,366 $ 127,228
                              ========  ========   ========= =========
Operating earnings
 per Common Share - diluted     $ 2.07    $ 1.79      $ 7.03    $ 6.86
Earnings per
 Common Share - basic           $ 2.29    $ 1.97      $ 8.29    $ 6.68
Earnings per
 Common Share - diluted         $ 2.18    $ 1.87      $ 7.90    $ 6.50
Average shares
 outstanding - basic            21,439    19,141      19,830    19,034
Average shares
 outstanding - diluted          22,518    20,163      20,797    19,576
Claims and claim expense ratio    30.7%     45.6%       45.0%     40.6%
Expense ratio                     23.0%     28.6%       25.2%     28.5%
                              --------  --------   --------- ---------
Combined ratio                    53.7%     74.2%       70.2%     69.1%
                              ========  ========   ========= =========
Operating return on
 average equity (annualized)      19.6%     21.1%       17.8%     21.0%
                              ========  ========   ========= =========
             RenaissanceRe Holdings Ltd. and Subsidiaries
                  Summary Consolidated Balance Sheets
   (in thousands of United States Dollars, except per share amounts)
                               (Audited)
                                                     As at
                                           ---------------------------
                                           December 31,   December 31,
                                               2001          2000
                                           ------------   ------------
Assets
Fixed maturity investments available
 for sale, at fair value (Amortized
 cost $1,266,188 and $921,750 at
 December 31, 2001 and
 December 31, 2000, respectively)          $ 1,282,483       $ 928,102
Short term investments                           7,372          13,760
Other investments                               45,484          29,613
Cash and cash equivalents                      866,268         110,571
                                           -----------      ----------
Total investments and cash                   2,201,607       1,082,046
Premiums receivable                            102,202          95,423
Ceded reinsurance balances                      41,690          37,520
Losses and premiums recoverable                217,556         167,604
Accrued investment income                       17,696          15,034
Deferred acquisition costs                      12,814           8,599
Other assets                                    50,087          62,763
                                           -----------     -----------
Total assets                               $ 2,643,652     $ 1,468,989
                                           ===========     ===========
Liabilities, Minority
 Interest and Shareholders' Equity
Liabilities
Reserve for claims and claim expenses        $ 572,877       $ 403,611
Reserve for unearned premiums                  125,053         112,541
Debt                                           183,500          50,000
Reinsurance balances payable                   115,967          50,779
Other                                           58,650          63,610
                                           -----------     -----------
Total liabilities                            1,056,047         680,541
                                           -----------     -----------
Minority Interest - Capital Securities          87,630          87,630
Minority Interest - DaVinci                    274,951               -
Shareholders' Equity
Series A Preference Shares                     150,000               -
Common shares and
 additional paid-in capital                    264,623          22,999
Unearned stock grant compensation              (20,163)        (11,716)
Accumulated other comprehensive income          16,295           6,831
Retained earnings                              814,269         682,704
                                           -----------     -----------
Total shareholders' equity                   1,225,024         700,818
                                           -----------     -----------
Total liabilities, minority
 interest, and shareholders' equity        $ 2,643,652     $ 1,468,989
                                           ===========     ===========
Book value per Common Share                    $ 47.50         $ 35.72
                                           ===========     ===========
Common Shares outstanding                       22,631          19,621
                                           ===========     ===========
CONTACT:          Investor Contact:
                  RenaissanceRe Holdings Ltd.
                  Martin J. Merritt, 441/299-7230
                  or
                  Media Contact:
                  Kekst and Company
                  Sarah Zitter Milstein or Dawn Dover
                  212/521-4800

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