February 16, 2001 - S-3: Registration statement for specified transactions by certain issuers | RenaissanceRe Holdings Ltd. (RNR)

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 16, 2001

REGISTRATION NO. 333-

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

RENAISSANCERE HOLDINGS LTD.
(Exact name of registrant as specified in its charter)

BERMUDA 98-013-8020
(State or other jurisdiction (I.R.S. Employer
of incorporation of organization) Identification No.)

RENAISSANCE HOUSE
8-12 EAST BROADWAY
PEMBROKE HM 19 BERMUDA
(441) 295-4513
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

JOHN M. LUMMIS
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
8-12 EAST BROADWAY
PEMBROKE HM 19 BERMUDA
(441) 295-4513
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

with copies to:

JOHN S. D'ALIMONTE, ESQ. MICHAEL GROLL, ESQ.
WILLKIE FARR & GALLAGHER LEBOEUF, LAMB, GREENE & MACRAE, L.L.P.
787 SEVENTH AVENUE 125 WEST 55TH STREET
NEW YORK, NEW YORK 10019 NEW YORK, NEW YORK 10019
(212) 728-8000 (212) 424-8000

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after this Registration Statement becomes
effective.

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective Registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE

(1) Estimated pursuant to Rule 457(c) under the Securities Act solely for the
purpose of calculating the registration fee based upon the average of the
high and low prices of the common shares quoted on The New York Stock
Exchange on February 15, 2001.

(2) Previously paid by wire transfer on January 8, 2001.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.

EXPLANATORY NOTE

This Registration Statement includes a base prospectus and two
prospectus supplements. One prospectus supplement will be used if the securities
being registered are sold in a firm commitment underwritten offering. The other
prospectus supplement will be used if the securities being registered are sold
in a block transaction.

The information in this prospectus is not complete and may be changed. These
securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting offers to buy these securities
in any jurisdiction where the offer or sale is not permitted.

PROSPECTUS (SUBJECT TO COMPLETION)
ISSUED FEBRUARY , 2001

1,726,137 SHARES

RENAISSANCERE HOLDINGS LTD.

COMMON SHARES

--------------------------

This prospectus relates to the offer and sale of up to 1,726,137 of our common
shares, which are owned by United States Fidelity and Guaranty Company, an
indirect wholly owned subsidiary of The St. Paul Companies, Inc. USF&G may
offer its shares publicly or through private transactions at prevailing market
or negotiated prices, through underwriters or agents, or through a combination
of methods of sale.

We will not receive any of the proceeds from the sale of these shares by USF&G.
We have agreed to bear all expenses (other than selling discounts, concessions
or commissions) in connection with the registration and sale of these shares
being offered by USF&G.

--------------------------

Our common shares are listed on the New York Stock Exchange under the symbol
"RNR." On February 15, 2001, the closing price of the common shares on the New
York Stock Exchange was $80.89 per share.

--------------------------

INVESTING IN OUR COMMON SHARES INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 9.

The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is , 2001.

TABLE OF CONTENTS

You should rely only on the information contained or incorporated by
reference in this prospectus or any supplement. We have not authorized anyone to
provide you with different information. USF&G is offering to sell, and seeking
offers to buy, common shares only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus is accurate only at the
date of this prospectus, regardless of the time of delivery of this prospectus
or of any sale of common shares. You should carefully read any prospectus
supplement delivered with this prospectus.

Except as expressly provided in an underwriting agreement, no offered
securities may be offered or sold in Bermuda and offers may only be accepted
from persons resident in Bermuda, for Bermuda exchange control purposes, where
such offers have been delivered outside of Bermuda. Persons resident in Bermuda,
for Bermuda exchange control purposes, may require the prior approval of the
Bermuda Monetary Authority in order to acquire any offered shares if the
transfer would result in Bermudians owning more than 20% of our outstanding
shares.

In this prospectus, references to "RenaissanceRe," "we," "us" and "our"
refer to RenaissanceRe Holdings Ltd. and, unless the context otherwise requires
or as otherwise expressly stated, its subsidiaries. References to "USF&G" and
the "selling shareholder" refer to United States Fidelity and Guaranty Company,
an indirect wholly owned subsidiary of The St. Paul Companies, Inc. References
to "St. Paul" refer to The St. Paul Companies, Inc. In this prospectus and any
prospectus supplement, references to "dollar" and "$" are to United States
currency, and the terms "United States" and "U.S." mean the United States of
America, its states, its territories, its possessions and all areas subject to
its jurisdiction.

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PROSPECTUS SUMMARY

This summary may not contain all of the information that may be
important to you. You should read the entire prospectus delivered in connection
with this prospectus, including the consolidated financial statements and
related notes and the risks of investing in our common shares discussed under
"Risk Factors," before making an investment decision. We incorporate important
information into this prospectus by reference. You may obtain the information
incorporated by reference into this prospectus and any prospectus supplement
without charge by following the instructions under "Where You Can Find More
Information." All information in this prospectus assumes that none of the
employee stock options outstanding at February 15, 2001 is exercised. See
"Glossary of Selected Insurance Terms" for a selection of insurance-related and
other terms.

RENAISSANCERE HOLDINGS LTD.

OVERVIEW

Founded in 1993, RenaissanceRe is one of the leading providers of
property catastrophe reinsurance coverage in the world. We believe that we are a
provider of first choice for many insurers and reinsurers, due in large part to
our modeling and technical expertise and our industry leading performance. We
principally provide property catastrophe reinsurance to insurers and reinsurers,
with exposures worldwide, on an excess of loss basis. This means that we begin
paying when our customers' claims from a particular catastrophe exceed a
specified amount. Property catastrophe reinsurance generally provides protection
from claims arising from large catastrophes, such as earthquakes, hurricanes,
winter storms, freezes, floods, fires, tornados and other man-made or natural
disasters.

To leverage our underwriting skills, we have recently begun to write
property catastrophe reinsurance on behalf of our two joint ventures, Top Layer
Reinsurance Ltd. with State Farm Mutual Automobile Insurance Company and
Overseas Partners Cat Ltd. with Overseas Partners Ltd. Together, these joint
ventures have access to approximately $3.4 billion of capital. We receive profit
participation and fee-based income from these ventures.

We believe that our position as a leading property catastrophe
reinsurer has been strengthened by the 40% growth in total managed catastrophe
premiums we experienced in 2000. Our total managed catastrophe premiums, which
include premiums we write on behalf of our two joint ventures together with
those written by our wholly owned subsidiaries, grew to $397.0 million on a
gross basis for the year ended December 31, 2000, including $80.2 million
written on behalf of our joint ventures.

Our principal underwriting objective is to construct a portfolio of
reinsurance contracts that maximizes return on equity subject to prudent risk
constraints. To help us achieve this objective, we have developed REMS(C)
(Renaissance Exposure Management System), a proprietary computer-based pricing
and exposure modeling and management system. REMS(C) is a unique platform
which assists us in better measuring property catastrophe risk, pricing treaties
and managing our aggregate exposure. We believe that REMS(C) is among the
most sophisticated exposure management systems in use today in the reinsurance
industry. Accordingly, we believe the combination of our REMS(C) system and
the extensive experience of our underwriters provides us with a significant
competitive advantage.

Our highly analytic and disciplined approach to underwriting has
enabled us to generate industry leading operating returns on equity for each
full year of operations since our inception, even during periods of higher
industry losses. Our margin of outperformance relative to our peers has been
wider in periods of higher industry losses than in periods of lower losses,
which we believe demonstrates our superior underwriting skills. During 1999, for
instance, when we were exposed to events which resulted in insured industry
losses of approximately $31 billion, we were able to achieve an operating return
on equity of 19.8%. For the years ended December 31, 1996 through 2000, our
average operating return on equity was 23.0%.

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In addition to property catastrophe reinsurance, we write certain
specialty lines of reinsurance, including accident and health, finite, satellite
and aviation. We also write primary insurance that is exposed to catastrophe
risk and have recently expanded our management team for that business. We may
seek to expand our presence in these markets, depending on our assessment of
business opportunities.

For the year ended December 31, 2000, we wrote $293.3 million of net
premiums, of which $250.2 million (or 85.3%) was property catastrophe
reinsurance, $37.7 million (or 12.9%) was noncatastrophe reinsurance and the
remaining $5.4 million (or 1.8%) was primary insurance. For the year ended
December 31, 1999, we wrote $213.5 million of net premiums, of which $202.5
million (or 94.8%) was property catastrophe reinsurance, $2.7 million (or 1.3%)
was noncatastrophe reinsurance and the remaining $8.3 million (or 3.9%) was
primary insurance. As of December 31, 2000, we had total assets of $1.5 billion
and total shareholders' equity of $700.8 million.

In January 2001, A.M. Best Company, Inc. upgraded its claims-paying
rating on our principal operating subsidiary, Renaissance Reinsurance Ltd., to
"A+" (Superior) from our initial rating of "A" (Excellent). Standard & Poor's
Insurance Ratings Services has maintained an "A" (Strong) claims-paying rating
on Renaissance Reinsurance since first rating us and currently has us on
positive outlook. These claims-paying ratings represent independent opinions of
financial strength and ability to meet policyholder obligations and are not
applicable to the securities being offered by this prospectus.

We conduct our operations through wholly owned subsidiaries and joint
ventures in Bermuda, the United States and Europe. Our registered and principal
executive offices are located at Renaissance House, 8-12 East Broadway, Pembroke
HM 19 Bermuda, telephone (441) 295-4513.

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CORPORATE STRATEGY

We seek to generate earnings growth for our shareholders by pursuing
the following strategic objectives:

- - ENHANCE OUR POSITION AS A LEADER IN THE PROPERTY CATASTROPHE
REINSURANCE BUSINESS. Based on gross premiums written, we are among the
largest property catastrophe reinsurers in the world. Property
catastrophe reinsurance accounts for a substantial majority of our
business, and has historically generated among the most attractive
returns in our industry. We believe that our proprietary modeling
technology and underwriting expertise provide us with significant
competitive advantages in managing catastrophe risk. We will continue
to enhance our leadership position by:

- Constructing a superior portfolio of reinsurance using
proprietary underwriting models. We seek to effectively deploy
our capital base while maintaining prudent risk levels in our
reinsurance portfolio; and

- Constructing superior portfolios of catastrophe reinsurance
for third parties, in exchange for fee income and profit
participation. Top Layer Re and OPCat provide us with
additional presence in the market, by allowing us to leverage
our access to business and our underwriting capabilities on a
larger capital base.

- - PURSUE NEW BUSINESS OPPORTUNITIES IN ATTRACTIVE MARKETS WHERE WE CAN
LEVERAGE OUR CORPORATE SKILLS AND CULTURE. Our management's experience
and underwriting expertise position us to enter into new business areas
which we believe will meet our return on equity criteria. Currently, we
believe our best opportunities include:

- Certain specialty lines of reinsurance that have begun to show
improved pricing, such as accident and health, finite,
satellite and aviation; and

- Primary insurance exposed to natural catastrophe risk, which
allows us to leverage our catastrophe risk management skills.

RISK FACTORS

You should carefully consider all the information contained or
incorporated by reference in this prospectus before making an investment in our
common shares. In particular, you should consider the risk factors described
under "Risk Factors" beginning on page 9.

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SUMMARY HISTORICAL FINANCIAL DATA

The following table sets forth our summary financial data and other
financial information at and for each of the years in the five year period ended
December 31, 2000. The historical financial information was prepared in
accordance with U.S. generally accepted accounting principles. The statement of
income data for the years ended December 31, 2000, 1999, 1998, 1997 and 1996 and
the balance sheet data at December 31, 2000, 1999, 1998, 1997 and 1996 were
derived from our audited consolidated financial statements, which have been
audited by Ernst & Young, our independent auditors. You should read the summary
financial data in conjunction with our consolidated financial statements and
related notes thereto and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included in this prospectus and all other
information appearing elsewhere or incorporated into this prospectus by
reference. See "Where You Can Find More Information."

See footnotes on following page.

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- --------------------

(1) Operating income excludes net realized gains or losses on investments.
For 1998, operating income, operating earnings per common share -
diluted, the claims/claim expense ratio, the underwriting expense
ratio, the combined ratio and the operating return on average
shareholders' equity also exclude the impact of an after tax charge of
$40.1 million taken in the fourth quarter of 1998 related to our
subsidiary, Nobel Insurance Company. Including the charge related to
Nobel for 1998, operating income, operating earnings per common share -
diluted, the claims/claim expense ratio, the underwriting expense
ratio, the combined ratio and the operating return on average
shareholders' equity would have been $81.5 million, $3.63, 55.0%,
29.8%, 84.8% and 12.9%, respectively.

(2) Earnings per common share-diluted was calculated by dividing net income
available to common shareholders by the number of weighted average
common shares and common share equivalents outstanding. Common share
equivalents are calculated on the basis of the treasury stock method.

(3) The item "Company obligated mandatorily redeemable capital securities
of a subsidiary trust holding solely junior subordinated debentures of
RenaissanceRe" reflects $87.6 million aggregate liquidation amount of
the capital securities issued by a subsidiary trust. The sole assets of
the trust are $87.6 million aggregate principal amount of 8.54% Junior
Subordinated Debentures due March 1, 2027 issued by RenaissanceRe.

(4) Book value per common share was computed by dividing total
shareholders' equity by the number of outstanding common shares.

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FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements are necessarily based on
estimates and assumptions that are inherently subject to significant business,
economic and competitive uncertainties and contingencies, many of which, with
respect to future business decisions, are subject to change. These uncertainties
and contingencies can affect actual results and could cause actual results to
differ materially from those expressed in any forward-looking statements made
by, or on behalf of, us.

In particular, statements using verbs such as "expect," "anticipate,"
"intend," "believe" or words of similar import generally involve forward-looking
statements. In light of the risks and uncertainties inherent in all future
projections, the inclusion of forward-looking statements in this prospectus
should not be considered as a representation by us or any other person that our
objectives or plans will be achieved. Numerous factors could cause our actual
results to differ materially from those in the forward-looking statements,
including the following:

- the occurrence of catastrophic events with a frequency or
severity exceeding our estimates;

- a decrease in the level of demand for our reinsurance,
insurance or other businesses, or increased competition in the
industry;

- the lowering or loss of one of the financial or claims-paying
ratings of one or more of our subsidiaries;

- risks associated with implementing our business strategies;

- slower than anticipated growth in our fee-based operations;

- changes in economic conditions, including interest and
currency rate conditions which could affect our investment
portfolio;

- uncertainties in our reserving process;

- failure of our reinsurers to honor their obligations;

- loss of services of any one of our key executive officers;

- the passage of federal or state legislation subjecting
Renaissance Reinsurance to supervision or regulation,
including additional tax regulation, in the United States or
other jurisdictions in which we operate;

- challenges by insurance regulators in the United States to
Renaissance Reinsurance's claim of exemption from insurance
regulation under current laws;

- a contention by the United States Internal Revenue Service
that our Bermuda subsidiaries, including Renaissance
Reinsurance, are subject to U.S. taxation; and

- actions of competitors, including industry consolidation and
development of competing financial products.

The factors listed above should not be construed as exhaustive. We
undertake no obligation to release publicly the results of any future revisions
we may make to forward-looking statements to reflect events or circumstances
after the date of this prospectus or to reflect the occurrence of unanticipated
events.

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RISK FACTORS

Before you invest in our common shares, you should carefully consider
the risks involved, including the following factors and other information in
this prospectus.

BECAUSE OF OUR EXPOSURE TO CATASTROPHIC EVENTS, OUR FINANCIAL RESULTS MAY VARY
SIGNIFICANTLY FROM ONE PERIOD TO THE NEXT.

Our principal product is property catastrophe reinsurance. We also sell
primary insurance that is exposed to catastrophe risk. We therefore have a large
overall exposure to natural and man-made disasters. Our property catastrophe
reinsurance contracts cover unpredictable events such as earthquakes,
hurricanes, winter storms, freezes, floods, fires, tornados and other man-made
or natural disasters. As a result, our operating results have historically been,
and we expect will continue to be, largely affected by relatively few events of
high magnitude. Under the reinsurance policies that we write, we generally do
not experience significant claims until insured industry losses reach or exceed
at least several hundred million dollars.

Claims from catastrophic events could cause substantial volatility in
our financial results for any fiscal quarter or year and adversely affect our
financial condition or results of operations. Our ability to write new business
could also be impacted. We believe that increases in the value and geographic
concentration of insured property and the effects of inflation will increase the
severity of claims from catastrophic events in the future.

REINSURANCE PRICES MAY DECLINE, WHICH COULD AFFECT OUR PROFITABILITY.

Demand for reinsurance depends on numerous factors, including the
frequency and severity of catastrophic events, levels of capacity, general
economic conditions and underwriting results of primary property insurers. The
supply of reinsurance is related to prevailing prices, recent loss experience
and levels of surplus capacity. All of these factors fluctuate and may
contribute to price declines generally in the reinsurance industry. Premium
rates or other terms and conditions of trade may vary in the future. If any of
these factors were to cause the demand for reinsurance to fall or the supply to
rise, our profitability could be adversely affected.

WE OPERATE IN A HIGHLY COMPETITIVE ENVIRONMENT.

The property catastrophe reinsurance industry is highly competitive. We
compete, and will continue to compete, with major U.S. and non-U.S. insurers and
property catastrophe reinsurers, including other Bermuda-based property
catastrophe reinsurers. Many of our competitors have greater financial,
marketing and management resources than we do. In addition, we may not be aware
of other companies that may be planning to enter the property catastrophe
reinsurance market or of existing companies which may be planning to raise
additional capital. Further, catastrophe-linked derivative securities are being
developed, which could impact the demand for traditional catastrophe
reinsurance. We cannot predict what effect any of these developments may have on
our businesses.

Competition in the types of reinsurance that we underwrite is based on
many factors, including premium rates and other terms and conditions offered,
services provided, speed of claims payment, ratings assigned by independent
rating agencies, the perceived financial strength and the experience of the
reinsurer in the line of reinsurance to be written. Ultimately, increasing
competition could affect our ability to attract business on terms having the
potential to yield an attractive return on equity.

The primary insurance business is also highly competitive. Primary
insurers compete on the basis of factors including selling effort, product,
price, service and financial strength. We seek primary insurance pricing that
will result in adequate returns on the capital allocated to our primary
insurance business. We may lose primary insurance business to competitors
offering competitive insurance products at lower prices.

A number of new, proposed or potential legislative or industry
developments could further increase competition in our industries. New
competition from these developments could cause the demand for reinsurance or
insurance to fall which would adversely affect our profitability.

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WE MAY BE ADVERSELY AFFECTED BY INTEREST RATE CHANGES.

Our operating results depend in part on the performance of our
investment portfolio. Our investment portfolio contains interest sensitive
instruments, such as bonds and mortgage-backed securities, which may be
adversely affected by changes in interest rates.

Interest rates are highly sensitive to many factors, including
governmental monetary policies, domestic and international economic and
political conditions and other factors beyond our control. Although we have
taken measures intended to manage the risks of operating in a changing interest
rate environment, we may not be able to effectively mitigate interest rate
sensitivity.

U.S. TAXING AUTHORITIES COULD CONTEND THAT OUR BERMUDA SUBSIDIARIES ARE SUBJECT
TO U.S. CORPORATE INCOME TAX.

We believe that, to date, Renaissance Reinsurance and Glencoe Insurance
Ltd., a wholly owned subsidiary of Renaissance Reinsurance, have operated and,
in the future, will continue to operate their businesses in a manner that will
not cause either to be treated as being engaged in a trade or business in the
United States. However, if the United States Internal Revenue Service were to
contend successfully that Renaissance Reinsurance or Glencoe is engaged in such
a trade or business in the United States, Renaissance Reinsurance or Glencoe
would, except to the extent exempted from tax by the United States-Bermuda
income tax treaty, be subject to U.S. corporate income tax on that portion of
its net income treated as effectively connected with a U.S. trade or business,
as well as the U.S. corporate branch profits tax. Such tax could materially
adversely affect our results of operations.

Even if the IRS were to contend successfully that Renaissance
Reinsurance or Glencoe was engaged in a U.S. trade or business, the United
States-Bermuda income tax treaty could preclude the United States from taxing
Renaissance Reinsurance or Glencoe on its net premium income except to the
extent that such income were attributable to a permanent establishment
maintained by Renaissance Reinsurance or Glencoe in the United States. Although
we believe that neither Renaissance Reinsurance nor Glencoe has a permanent
establishment in the United States, we cannot assure you that the IRS will not
successfully contend that Renaissance Reinsurance or Glencoe has such an
establishment and therefore is subject to taxation.

In addition, benefits of the income tax treaty are only available to
Renaissance Reinsurance and Glencoe if more than 50% of their shares are
beneficially owned, directly or indirectly, by individuals who are Bermuda
residents or U.S. citizens or residents. Although we will attempt to monitor
compliance with this beneficial ownership test, there can be no assurance that
the beneficial ownership test will continue to be satisfied or that we will be
able to establish its satisfaction to the IRS. Finally, it should be noted that
although the income tax treaty (assuming satisfaction of the beneficial
ownership test) clearly applies to premium income, it is uncertain whether the
treaty applies to other income such as investment income.

IF ACTUAL CLAIMS EXCEED OUR CLAIM RESERVES, OUR FINANCIAL RESULTS COULD BE
ADVERSELY AFFECTED.

Claim reserves are estimates made using actuarial and statistical
projections at a given point in time of our expectations of the ultimate
settlement and administration costs of claims incurred. We utilize actuarial and
computer models as well as historical reinsurance and insurance industry loss
statistics to assist in the establishment of appropriate claim reserves.
Nevertheless, actual claims and claim expenses paid might exceed the reserve
estimates reflected in our financial statements. If this were to occur, we would
be required to increase claim reserves. This would reduce our net income by a
corresponding amount in the period in which the deficiency is identified.

A DECLINE IN THE RATINGS ASSIGNED TO OUR CLAIMS-PAYING ABILITY MAY IMPACT OUR
POTENTIAL TO WRITE NEW BUSINESS.

Third party rating agencies assess and rate the claims-paying ability
of reinsurers and insurers, such as Renaissance Reinsurance, Top Layer Re and
Glencoe. These ratings are based upon criteria established by the

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rating agencies. Periodically the rating agencies evaluate us to confirm that we
continue to meet the criteria of the ratings previously assigned to us. The
claims-paying ability ratings assigned by rating agencies to a reinsurance or
insurance companies are based upon factors relevant to policyholders and are not
directed toward the protection of investors. Ratings by rating agencies are not
ratings of securities or recommendations to buy, hold, or sell any security.

Renaissance Reinsurance is rated "A+" by A.M. Best and "A" by Standard
& Poor's. Top Layer Re is rated "AAA" by Standard & Poor's and "A++" by A.M.
Best. Glencoe is rated "A-" by A.M. Best. Although we believe that Renaissance
Reinsurance, Top Layer Re and Glencoe will continue to comply with the criteria
set by these rating agencies, we can provide no assurance that one or more of
these or other rating agencies will not downgrade or withdraw their
claims-paying ability ratings in the future. The ability of Renaissance
Reinsurance, Top Layer Re, Glencoe and our other rated insurance subsidiaries to
compete with other reinsurers and insurers, and our results of operations, could
be materially adversely affected by any such ratings downgrade.

BECAUSE WE DEPEND ON A FEW REINSURANCE BROKERS FOR A LARGE PORTION OF REVENUE,
LOSS OF BUSINESS PROVIDED BY THEM COULD ADVERSELY AFFECT US.

We market our reinsurance products worldwide exclusively through
reinsurance brokers. Five brokerage firms accounted for 78.3%, 78.8%, 64.2%,
70.1% and 58.5% of our net premiums written for the years ended December 31,
2000, 1999, 1998, 1997 and 1996, respectively. Subsidiaries and affiliates of
Marsh Inc., Greig Fester, E.W. Blanch & Co., AON Re Group, and Willis Faber
accounted for approximately 26.5%, 15.7%, 15.7%, 14.9% and 5.5%, respectively,
of our premiums written in 2000. Loss of all or a substantial portion of the
business provided by these brokers could have a material adverse effect on us.

OUR RELIANCE ON REINSURANCE BROKERS EXPOSES US TO THEIR CREDIT RISK.

In accordance with industry practice, we frequently pay amounts owed on
claims under our policies to reinsurance brokers, and these brokers, in turn,
pay these amounts over to the insurers that have reinsured a portion of their
liabilities with us (we refer to these insurers as ceding insurers). In some
jurisdictions, if a broker failed to make such a payment, we might remain liable
to the ceding insurer for the deficiency. Conversely, in certain jurisdictions,
when the ceding insurer pays premiums for these policies to reinsurance brokers
for payment over to us, these premiums are considered to have been paid and the
ceding insurer will no longer be liable to us for those amounts, whether or not
we have actually received the premiums. Consequently, in connection with the
settlement of reinsurance balances, we assume a degree of credit risk associated
with brokers around the world.

THE COVENANTS IN OUR DEBT AGREEMENTS LIMIT OUR FINANCIAL AND OPERATIONAL
FLEXIBILITY, WHICH COULD HAVE AN ADVERSE EFFECT ON OUR FINANCIAL CONDITION.

We have incurred indebtedness, and may incur additional indebtedness in
the future. At December 31, 2000, we had $50.0 million of bank loans
outstanding. In addition, we also have $87.6 million of outstanding junior
subordinated debentures relating to an issuance of trust preferred securities by
our subsidiary RenaissanceRe Capital Trust I.

The agreements covering our indebtedness, and particularly our bank
loans, contain numerous covenants that limit our ability, among other things, to
borrow money, make particular types of investments or other restricted payments,
sell assets, merge or consolidate. These agreements also require us to maintain
specified financial ratios. If we fail to comply with these covenants or meet
these financial ratios, the lenders under our credit facility could declare a
default and demand immediate repayment of all amounts owed to them.

In addition, if we are in default under our indebtedness or if we have
given notice of our intention to defer our related payment obligations, the
terms of our indebtedness would restrict our ability to:

- declare or pay any dividends on our capital shares,

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- redeem, purchase or acquire any capital shares, or

- make a liquidation payment with respect to our capital shares.

BECAUSE WE ARE A HOLDING COMPANY, WE ARE DEPENDENT ON DIVIDENDS AND PAYMENTS
FROM OUR SUBSIDIARIES.

As a holding company with no direct operations, we rely on investment
income, cash dividends and other permitted payments from our subsidiaries to
make principal and interest payments on our debt and to pay dividends to our
shareholders. If our subsidiaries are restricted from paying dividends to us, we
may be unable to pay dividends or to repay our indebtedness.

Bermuda law and regulations require our subsidiaries which are
registered in Bermuda as insurers to maintain a minimum solvency margin and
minimum liquidity ratio, and prohibit dividends that would result in a breach of
these requirements. Further, Renaissance Reinsurance, as a Class 4 insurer in
Bermuda, may not pay dividends which would exceed 25% of its capital and
surplus, unless it first makes filings confirming that it meets the required
margins.

Generally, our U.S. insurance subsidiaries may only pay dividends out
of earned surplus. Further, the amount payable without the prior approval of the
applicable state insurance department is generally limited to the greater of 10%
of policyholders' surplus or statutory capital, or 100% of the subsidiary's
prior year statutory net income.

THE LOSS OF ONE OR MORE KEY EXECUTIVE OFFICERS COULD ADVERSELY AFFECT US.

Our success has depended, and will continue to depend, in substantial
part upon our ability to attract and retain our executive officers and, in
particular, on the continued service of James N. Stanard, our Chairman,
President and Chief Executive Officer. If Mr. Stanard becomes unable to continue
in his present role, our business could be adversely affected.

Our ability to execute our business strategy is dependent on our
ability to attract and retain a staff of qualified underwriters and service
personnel. We do not currently maintain key man life insurance policies with
respect to any of our employees.

IF WE ARE UNABLE TO OBTAIN EXTENSIONS OF WORK PERMITS FOR OUR EMPLOYEES, OUR
BUSINESS WILL BE ADVERSELY AFFECTED.

Under Bermuda law, non-Bermudians may not engage in any gainful
occupation in Bermuda without the specific permission of the appropriate
government authority. The Bermuda government will issue a work permit for a
specific period of time, which may be extended upon showing that, after proper
public advertisement, no Bermudian (or spouse of a Bermudian) is available who
meets the minimum standards for the advertised position. Substantially all of
our officers are working in Bermuda under work permits that will expire over the
next three years.

Although we are not currently aware of any specific difficulties in
connection with renewing the work permits for these officers, it is possible
that the Bermuda government could refuse to extend these work permits. If any of
our senior executive officers were not permitted to remain in Bermuda, our
operations could be disrupted and our financial performance could be adversely
affected as a result.

REGULATORY CHALLENGES IN THE UNITED STATES OR ELSEWHERE COULD RESULT IN
RESTRICTIONS ON OUR ABILITY TO OPERATE.

Renaissance Reinsurance is not licensed or admitted to do business in
any jurisdiction except Bermuda. Renaissance Reinsurance conducts its business
from its principal offices in Bermuda and does not maintain an office

-12-
in the United States. Recently, the insurance and reinsurance regulatory
framework has been subject to increased scrutiny in many jurisdictions,
including the United States and various states in the United States. We do not
believe that Renaissance Reinsurance is subject to the insurance laws of any
state in the United States. Nevertheless, we could face inquiries or challenges
to the operations of Renaissance Reinsurance in the future.

Glencoe Insurance Ltd., a wholly owned, Bermuda-domiciled subsidiary,
is an eligible, non-admitted excess and surplus lines insurer in 29 states of
the United States and is subject to certain regulatory and reporting
requirements of these states. If we expand into additional insurance markets,
this could cause one or more of our subsidiaries to become subject to regulation
in additional jurisdictions.

If Renaissance Reinsurance or any of our subsidiaries were to become
subject to the laws of a new jurisdiction where that subsidiary is not presently
admitted, they may not be in compliance with the laws of the new jurisdiction.
Any failure to comply with applicable laws could result in the imposition of
significant restrictions on our ability to do business, and could also result in
fines and other sanctions, any or all of which could adversely affect our
financial results and operations.

We also own four subsidiaries which write insurance in the United
States. These subsidiaries are subject to extensive regulation under state
statutes which delegate regulatory, supervisory and administrative powers to
state insurance commissioners. Such regulation generally is designed to protect
policyholders rather than investors, and relates to such matters as rate
setting; limitations on dividends and transactions with affiliates; solvency
standards which must be met and maintained; the licensing of insurers and their
agents; the examination of the affairs of insurance companies, which includes
periodic market conduct examinations by the regulatory authorities; annual and
other reports, prepared on a statutory accounting basis; establishment and
maintenance of reserves for unearned premiums and losses; and requirements
regarding numerous other matters. We could be required to allocate considerable
time and resources to comply with these requirements, and could be adversely
affected if a regulatory authority believed we had failed to comply with
applicable law or regulation.

RENAISSANCE REINSURANCE IS NOT LICENSED OR ADMITTED IN THE UNITED STATES.

Renaissance Reinsurance is a registered Bermuda insurance company and
is not licensed or admitted as an insurer in any jurisdiction in the United
States. Because jurisdictions in the United States do not permit insurance
companies to take credit for reinsurance obtained from unlicensed or
non-admitted insurers on their statutory financial statements unless security is
posted, Renaissance Reinsurance's contracts generally require it to post a
letter of credit or provide other security after a reinsured reports a claim. In
order to post these letters of credit, issuing banks generally require us to
provide collateral.

While many of our competitors presently are also not licensed or
admitted as an insurer in any U.S. jurisdiction, the non-admitted status of
Renaissance Reinsurance could put us at a competitive disadvantage in the future
with respect to other reinsurers that are licensed and admitted in U.S.
jurisdictions.

RETROCESSIONAL REINSURANCE MAY BECOME UNAVAILABLE ON ACCEPTABLE TERMS.

In order to limit the effect of large and multiple losses upon our
financial condition, we buy reinsurance for our own account. This type of
insurance is known as "retrocessional reinsurance." Our primary insurance
companies also buy reinsurance from third parties. A reinsurer's insolvency or
inability to make payments under the terms of its reinsurance treaty with us
could have a material adverse effect on us.

From time to time, market conditions have limited, and in some cases
have prevented, insurers and reinsurers from obtaining the types and amounts of
reinsurance which they consider adequate for their business needs. There can be
no assurance that we will be able to obtain our desired amounts of
retrocessional reinsurance. There is also no assurance that, if we are able to
obtain such retrocessional reinsurance, we will be able to negotiate terms as
favorable to us as in prior years.

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WE MAY BE ADVERSELY AFFECTED BY FOREIGN CURRENCY FLUCTUATIONS.

Our functional currency is the U.S. dollar. A portion of our premium is
written in currencies other than the U.S. dollar and a portion of our loss
reserves are also in non-dollar currencies. Moreover, we maintain a portion of
our cash equivalent investments in currencies other than the U.S. dollar. We
may, from time to time, experience losses resulting from fluctuations in the
values of these foreign currencies, which could adversely affect our operating
results.

SOME ASPECTS OF OUR CORPORATE STRUCTURE MAY DISCOURAGE THIRD PARTY TAKEOVERS AND
OTHER TRANSACTIONS.

Some provisions of our Memorandum of Association and of our Amended and
Restated Bye-Laws have the effect of making more difficult or discouraging
unsolicited takeover bids from third parties. In particular, our Bye-Laws
prohibit transfers of our capital shares if the transfer would result in a
person owning or controlling shares that constitute 9.9% or more of any class or
series of our shares. The primary purpose of this restriction is to reduce the
likelihood that we will be deemed a "controlled foreign corporation" within the
meaning of the Internal Revenue Code for U.S. federal tax purposes. However,
this limit may also have the effect of deterring purchases of large blocks of
common shares or proposals to acquire us, even if some or a majority of our
shareholders might deem these purchases or acquisition proposals to be in their
best interests.

In addition, our Bye-Laws provide for:

- a classified Board, whose size is fixed and whose members may
be removed by the shareholders only for cause upon a 66-2/3%
vote;

- restrictions on the ability of shareholders to nominate
persons to serve as directors, submit resolutions to a
shareholder vote and requisition special general meetings;

- a large number of authorized but unissued shares which may be
issued by the Board without further shareholder action; and

- a 66-2/3% shareholder vote to amend, repeal or adopt any
provision inconsistent with several provisions of the
Bye-Laws.

These Bye-Law provisions make it more difficult to acquire control of
us by means of a tender offer, open market purchase, a proxy fight or otherwise.
These provisions are designed to encourage persons seeking to acquire control of
us to negotiate with our directors, which we believe would generally best serve
the interests of our shareholders. However, these provisions could have the
effect of discouraging a prospective acquiror from making a tender offer or
otherwise attempting to obtain control of us. To the extent these provisions
discourage takeover attempts, they could deprive shareholders of opportunities
to realize takeover premiums for their shares or could depress the market price
of the shares.

We indirectly own DeSoto Insurance Company Ltd., a Florida domiciled
special purpose insurance company, DeSoto Prime Insurance Company, a Florida
domiciled insurance company, and Nobel Insurance Company, a Texas domiciled
insurance company. Our ownership of U.S. insurance companies such as these can,
under applicable state insurance company laws and regulations, delay or impede a
change of control of RenaissanceRe. Under applicable Florida and Texas insurance
regulations, any proposed purchase of 10% or more of our voting securities would
require the prior approval of the Florida and Texas insurance regulatory
authorities.

THE NUMBER OF SHARES ELIGIBLE FOR FUTURE SALE OR REGISTRATION COULD HAVE AN
ADVERSE EFFECT ON THE MARKET PRICE OF OUR COMMON SHARES.

Public or private sales of substantial amounts of our common shares, or
the perception that these sales could occur, could adversely affect the market
price of the common shares as well as our ability to raise additional

-14-
capital in the public equity markets at a desirable time and price. At December
31, 2000, affiliates of GE Investments and members of our management held a
total of 3,124,096 common shares, all of which are or will be eligible for sale
in the public market, subject to compliance with Rule 144.

Additionally, these investors have the right to require us to register
under the Securities Act any common shares held by them. We may also provide for
the registration of shares currently held or acquired in the future by employees
under compensation arrangements, which will permit these shares to be sold in
the public market from time to time.

INVESTORS MAY HAVE DIFFICULTIES IN SERVING PROCESS OR ENFORCING JUDGMENTS
AGAINST US IN THE UNITED STATES.

We are a Bermuda company. In addition, certain of our officers and
directors reside in countries outside the United States. All or a substantial
portion of our assets and the assets of these officers and directors are or may
be located outside the United States. We would expect to appoint an agent in the
United States to receive service of process for actions based on offers and
sales of our securities covered by a registration statement filed with the
Securities and Exchange Commission. Nevertheless, investors may have difficulty
effecting service of process within the United States on our directors and
officers who reside outside the United States or to recover against us or these
directors and officers on judgments of United States courts based on civil
liabilities provisions of the United States federal securities laws.

USE OF PROCEEDS

We will not receive any proceeds from the sale of shares by USF&G.

PRICE RANGE OF COMMON SHARES

Our common shares began publicly trading on June 27, 1995. Our New York
Stock Exchange symbol is "RNR." The following table sets forth, for the periods
indicated, the high and low prices per share of our common shares as reported in
composite New York Stock Exchange trading.

On February 15, 2001 the last reported sale price for our common shares
was $80.89 per share. At February 15, 2001 there were approximately 110 holders
of record of our common shares and approximately 3,000 beneficial holders.

-15-
DIVIDEND POLICY

Historically, we have paid quarterly dividends on our common shares,
and have increased our dividend during each of the six years since our initial
public offering. Our Board has declared a dividend of $0.40 per share payable on
March 6, 2001 to shareholders of record at February 20, 2001. Purchasers of
shares from USF&G will not receive this dividend. We expect to continue the
payment of such dividends in the future, but we cannot assure you that they will
continue. The declaration and payment of dividends are subject to the discretion
of the Board and depend on, among other things, our financial condition, general
business conditions, legal, contractual and regulatory restrictions regarding
the payment of dividends by us and our subsidiaries and other factors which the
Board may in the future consider to be relevant.

As a holding company with no direct operations, we rely on investment
income, cash dividends and other permitted payments from our subsidiaries to pay
dividends to our shareholders. Our Bermuda insurance subsidiaries are required
by applicable law and regulations to maintain a minimum solvency margin and
minimum liquidity ratio, and are prohibited from paying dividends that would
result in a breach of these requirements. Further, Renaissance Reinsurance, as a
Class 4 insurer in Bermuda, may not pay dividends which would exceed 25% of its
capital and surplus, unless it first makes filings confirming that it meets the
required margins. Generally, our U.S. insurance subsidiaries may only pay
dividends out of earned surplus. Further, the amount payable without the prior
approval of the applicable state insurance department is generally limited to
the greater of 10% of policyholders' surplus or statutory capital, or 100% of
the subsidiary's prior year statutory net income. If our subsidiaries are
restricted from paying dividends to us, we may be unable to pay dividends to
shareholders.

CAPITALIZATION

The following table sets forth our consolidated capitalization at
December 31, 2000. This table should be read in conjunction with our
consolidated financial statements and notes thereto included in this prospectus,
as well as "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

- -------------------------

(1) Reflects $87.6 million aggregate liquidation amount of the capital
securities issued by a subsidiary trust. The sole assets of the trust
are $87.6 million aggregate principal amount of 8.54% Junior
Subordinated Debentures due March 1, 2027 issued by RenaissanceRe.

-16-
SELECTED HISTORICAL FINANCIAL DATA

The following table sets forth our selected financial data and other
financial information at and for each of the years in the five year period ended
December 31, 2000. The historical financial information was prepared in
accordance with U.S. generally accepted accounting principles. The statement of
income data for the years ended December 31, 2000, 1999, 1998, 1997 and 1996 and
the balance sheet data at December 31, 2000, 1999, 1998, 1997 and 1996 were
derived from our audited consolidated financial statements, which have been
audited by Ernst & Young, our independent auditors. You should read the selected
financial data in conjunction with our consolidated financial statements and
related notes thereto and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included in this prospectus and all other
information appearing elsewhere or incorporated into this prospectus by
reference. See "Where You Can Find More Information."

See footnotes on following page.

-17-

- ---------------

(1) Operating income excludes net realized gains or losses on investments. For
1998, operating income, operating earnings per common share - diluted, the
claims/claim expense ratio, the underwriting ratio, the combined ratio and
the operating return on average shareholders' equity also exclude the
impact of an after tax charge of $40.1 million taken in the fourth quarter
of 1998 related to our subsidiary, Nobel Insurance Company. Including the
charge related to Nobel, operating income, operating earnings per common
share - diluted, the claims/claim expense ratio, the underwriting ratio,
the combined ratio and the operating return on average shareholders' equity
would have been $81.5 million, $3.63, 55.0%, 29.8%, 84.8% and 12.9%,
respectively. Also for 1998, the primary segment information of pre-tax
income and the claims/claim expense ratio also excludes the impact of the
Nobel charge. Including the charge relating to Nobel, primary segment
pre-tax income would have been a loss of $51.4 million and the claims/claim
expense ratio would have been 200.0%.

(2) Earnings per common share-diluted was calculated by dividing net income
available to common shareholders by the number of weighted average common
shares and common share equivalents outstanding. Common share equivalents
are calculated on the basis of the treasury stock method.

(3) The item "Company obligated mandatorily redeemable capital securities of a
subsidiary trust holding solely junior subordinated debentures of
RenaissanceRe" reflects $87.6 million aggregate liquidation amount of the
capital securities issued by a subsidiary trust. The sole assets of the
trust are $87.6 million aggregate principal amount of 8.54% Junior
Subordinated Debentures due March 1, 2027 issued by RenaissanceRe.

(4) Book value per common share was computed by dividing total shareholders'
equity by the number of outstanding common shares.

(5) The ratios are not meaningful for 1996 as this was the initial year of
operations and earned premiums were $0.2 million.

-18-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The following is a discussion and analysis of our results of operations
for the year ended December 31, 2000 compared with the year ended December 31,
1999, and for the year ended December 31, 1999 compared with the year ended
December 31, 1998 and also a discussion of our financial condition at December
31, 2000. This discussion and analysis should be read in conjunction with the
audited consolidated financial statements and related notes included in this
prospectus. This prospectus contains forward-looking statements that involve
risks and uncertainties. Actual results may differ materially from the results
described or implied by these forward-looking statements.

OVERVIEW

Founded in 1993, RenaissanceRe is one of the leading providers of
property catastrophe reinsurance coverage in the world. We believe that we are a
provider of first choice for many insurers and reinsurers, due to our modeling
and technical expertise and our industry leading performance. We principally
provide property catastrophe reinsurance to insurers and reinsurers, with
exposures worldwide, on an excess of loss basis. Property catastrophe
reinsurance generally provides protection from claims arising from large
catastrophes, such as earthquakes, hurricanes, winter storms, freezes, floods,
fires, tornados and other man-made or natural disasters.

For the years ended December 31, 2000 and December 31, 1999, our gross
premiums written were approximately $433.0 million and $351.3 million,
respectively, our net premiums written were $293.3 million and $213.5 million,
respectively, our operating income was $134.4 million (or $6.86 per share) and
$120.0 million (or $5.82 per share), respectively, and our net income was $127.2
million (or $6.50 per share) and $104.2 million (or $5.05 per share),
respectively. At December 31, 2000, we had total assets of $1.5 billion and
total shareholders' equity of $700.8 million.

Our principal subsidiary is Renaissance Reinsurance, a Bermuda
domiciled company. In 2000, Renaissance Reinsurance wrote $382.8 million of
gross written premiums, compared to $282.3 million in 1999. Of these premiums,
$345.0 million were derived from property catastrophe reinsurance coverage,
compared to $279.7 million in 1999. Renaissance Reinsurance is one of the
largest providers of this coverage in the world. In addition to property
catastrophe reinsurance, we write certain specialty lines of reinsurance,
including accident and health, finite, satellite and aviation.

In January 1999, Renaissance Reinsurance formed Top Layer Re with State
Farm to provide high layer coverage for non-U.S. risks. Renaissance Reinsurance
and State Farm each own 50% of Top Layer Re. OPCat is a wholly owned subsidiary
of Overseas Partners. In November 1999, RenaissanceRe incorporated Renaissance
Underwriting Managers to act as underwriting manager to OPCat. Together, these
joint ventures have access to approximately $3.4 billion of capital. We receive
profit participation and fee-based income from these ventures.

We believe that our position as a leading property catastrophe
reinsurance underwriter has been strengthened by the 40% growth in total managed
catastrophe premiums we experienced in 2000. Our total managed catastrophe
premiums, which include premiums we write on behalf of our Top Layer Re and
OPCat joint ventures together with those written by our wholly owned
subsidiaries, grew to $397.0 million on a gross basis for the year ended
December 31, 2000, including $80.2 million written on behalf of our joint
ventures.

We also provide reinsurance coverage through Renaissance Reinsurance of
Europe. Renaissance Europe was incorporated in 1998 under the laws of Ireland as
a wholly owned subsidiary of Renaissance Reinsurance.

We also write primary insurance and provide certain related services,
principally in lines that are exposed to catastrophe risk. Our subsidiaries
involved in primary insurance include Glencoe Insurance Ltd., Paget Insurance
Services, Pembroke Managing Agents, DeSoto Insurance Company, DeSoto Prime
Insurance Company and Nobel Insurance Company.

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Glencoe Insurance Ltd. was incorporated in 1996 as a wholly owned
subsidiary of RenaissanceRe. Glencoe provides primary catastrophe exposed
property coverage on an excess and surplus lines basis, and is eligible to write
business in 29 states. During 2000, Glencoe wrote $5.3 million of primary
insurance premium, compared to $5.0 million in 1999. DeSoto Insurance was
incorporated in 1997 as a wholly owned subsidiary of Glencoe, to assume and
renew homeowner policies from the Florida Residential Property and Casualty
Joint Underwriting Association, a state sponsored insurance company. During
2000, DeSoto wrote $12.7 million of primary homeowners insurance coverage,
compared to $14.3 million in 1999. Paget, Pembroke and DeSoto Prime are all
active in the Florida homeowners market.

We also own Nobel Insurance Company, a Texas-domiciled insurance
company. Following a 1998 fourth quarter after-tax charge of $40.1 million,
Nobel disposed of its business lines in 1999. Nobel continues to be a licensed
insurer in all 50 states, although there can be no assurance that these licenses
can be retained.

Our results depend to a large extent on the frequency and severity of
catastrophic events, and the coverage offered to clients impacted by these
events. In addition, from time to time, we may consider opportunistic
diversification into new ventures, either through organic growth or the
acquisition of other companies or books of business. In evaluating such new
ventures, we seek an attractive return on equity, the ability to develop or
capitalize on a competitive advantage and opportunities that will not detract
from our core reinsurance operations. Accordingly, we regularly review strategic
opportunities and periodically engage in discussions regarding possible
transactions, although there can be no assurance that we will complete any such
transactions or that any such transaction would contribute materially to our
results of operations or financial condition.

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

Our operating income, which excludes realized gains and losses on
investments, for the year ended December 31, 2000 was $134.4 million, compared
with $120.0 million for the year ended December 31, 1999. Our operating earnings
per common share for the year ended December 31, 2000 was $6.86, compared with
$5.82 for the year ended December 31, 1999. The increase in operating income was
primarily the result of increased fee income from our joint ventures, Top Layer
Re and OPCat, and also from an increase in investment income due to increased
yields and an increase in the size of the investment portfolio, slightly offset
by an increase in interest expense.

Our gross premiums written for the year ended December 31, 2000
increased by $81.7 million, or 23.2%, to $433.0 million from $351.3 million for
the year ended December 31, 1999. Gross premiums written by segment were:

Our increase in reinsurance premiums written in 2000 resulted primarily
from (1) an increase of $35.0 million in our premiums from noncatastrophe
reinsurance, from $2.7 million in 1999 to $37.7 million in 2000, (2) an increase
in reinstatement premiums to $20.3 million in 2000, compared with $6.8 million
in 1999, primarily related to the 1999 European windstorms and (3) increased
opportunities to provide reinsurance to reinsurers due to the large level of
catastrophes in 1999. Premiums written by our primary insurance companies
decreased due to the reduced premiums at Nobel, from $49.6 million in 1999 to
$32.2 million in 2000, due to the run-off of the Nobel businesses.

During 2000, we continued to purchase reinsurance to reduce our
exposure to certain losses. Our ceded premiums were as follows:

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The increase in ceded reinsurance was primarily the result of increased
costs of ceded reinsurance contracts renewed by Renaissance Reinsurance and
increased purchases of reinsurance by Renaissance Reinsurance. The reduction in
ceded reinsurance by our primary insurance companies primarily relates to the
reduction in gross written premiums from Nobel. Approximately 55% of the limits
under our reinsurance coverage has been purchased on a multi-year basis, which
we expect will result in relatively stable costs on the majority of those
policies for the fiscal years 2001 and 2002. To the extent that appropriately
priced coverage is available, we anticipate continued use of reinsurance to
reduce the potential volatility of our results.

Our gross premiums written by geographic region were as follows:

Our claims and claim expenses incurred for the year ended December 31,
2000 were $108.6 million, or 40.6% of net premiums earned. In comparison, our
claims and claim expenses incurred for the year ended December 31, 1999 were
$77.1 million, or 34.9% of net premiums earned. The primary reason for the
increase in the claims and claim expenses ratio was the increase in gross
premiums written from noncatastrophe reinsurance products which typically
produce a higher loss ratio than our principal product, property catastrophe
reinsurance. Due to the potential high severity of claims related to the
property catastrophe reinsurance business, there can be no assurance that we
will continue to experience this level of claims in future years.

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For our reinsurance operations, estimates of claims and claim expenses
incurred and losses recoverable are based in part upon the estimation of claims
resulting from catastrophic events. Our estimation of claims resulting from
catastrophic events based upon our own historical claim experience is inherently
difficult because of the variability and uncertainty associated with property
catastrophe claims. Therefore, we utilize both proprietary and commercially
available models, as well as historical reinsurance industry property
catastrophe claims experience, for purposes of evaluating future trends and
providing an estimate of ultimate claims costs.

For both our reinsurance and primary operations, we use statistical and
actuarial methods to estimate ultimate expected claims and claim expenses. The
period of time from the reporting of a loss to us through the settlement of our
liability may be several years. During this period, additional facts and trends
will be revealed. As these factors become apparent, case reserves will be
adjusted, sometimes requiring an increase in our overall reserves, while at
other times we may reallocate incurred but not reported (IBNR) reserves to
specific case reserves. Reserve estimates are reviewed regularly, and such
adjustments, if any, are reflected in results of operations in the period in
which they become known and are accounted for as changes in estimates.

Acquisition costs and operational expenses, consisting of brokerage
commissions, excise taxes and other costs directly related to our underwriting
operations, for the year ended December 31, 2000 were $76.5 million, or 28.5% of
net premiums earned, compared with $62.3 million, or 28.1% of net premiums
earned, for the year ended December 31, 1999. The primary contributor to the
increase in the underwriting expense ratio was the increase in gross premiums
earned by Renaissance Reinsurance with respect to noncatastrophe reinsurance
products, which typically produce a higher underwriting expense ratio than our
principal product, property catastrophe reinsurance.

Net investment income (which excludes net realized investment losses)
for the year ended December 31, 2000 was $77.9 million, compared with $60.3
million for the year ended December 31, 1999. The increase in investment income
resulted primarily from an increase in interest rates during 2000, together with
an increase in the investment base during the year. Although invested assets at
the end of the year only reflected an increase of $22.3 million from the prior
year end, we had an additional $200.0 million available during most of the year,
prior to repaying $200.0 million on our bank loans during the fourth quarter.

During 2000, we reported other income of $11.0 million, compared with
$4.9 million for the year ended December 31, 1999. Substantially all of this
income related to our profit participation and performance-based fees received
by us from our joint ventures, Top Layer Re and OPCat. Also included in other
income is approximately $0.7 million from our primary operations, and $0.4
million from our investments in non-indemnity catastrophe index transactions.
For 1999, we reported $2.5 million in other income relating to recoveries on
catastrophe linked index transactions and $1.4 million relating to other income
from our primary operations.

During 2000, net realized losses on sales of investments were $7.1
million, compared with $15.7 million in 1999. The realized losses in 2000 and in
1999 were primarily the result of increased interest rates and the subsequent
sales of fixed income securities.

Corporate expenses were $7.0 million in 2000 compared with $3.1 million
in 1999, excluding the write-off of goodwill attributable to Nobel of $1.0
million in 2000 and $6.7 million in 1999. The primary cause of the increase was
an increase in developmental expenses for our primary operations and other
business development activities.

During the year ended December 31, 2000, we recorded interest expense
of $17.2 million on our outstanding debt compared with $9.9 million in 1999. The
increase in interest expense was primarily related to an increase in borrowing
rates during late 1999 and early 2000 and additional borrowings of $150.0
million which were outstanding for approximately five months during 1999 and for
approximately eleven months during 2000. In the fourth quarter of 2000, we
repaid $200.0 million of our outstanding debt.

Also during 2000, we recorded $4.6 million of tax expense compared with
a tax benefit of $1.5 million in 1999. The increase in our tax expense primarily
relates to a $8.2 million deferred tax valuation allowance we recorded during
2000. Primarily as a result of the losses from Nobel, Renaissance U.S. has
recorded a net deferred tax asset, the balance of which is $18.5 million at
December 31, 2000. We believe the future operations of Nobel,

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combined with other operating subsidiaries of Renaissance U.S., will enable us
to utilize the remainder of this net operating loss carry-forward. However, it
is not certain that we will realize the full benefit of this asset.

YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998

Our operating income for the year ended December 31, 1999 was $120.0
million, compared with $121.5 million for the year ended December 31, 1998. Our
operating earnings per common share for the year ended December 31, 1999 was
$5.82, compared with $5.42 for the year ended December 31, 1998. Our
consolidated net operating income excludes the impact of net realized investment
gains and losses on investments, as well as, in the case of 1998, the fourth
quarter charge of $40.1 million related to Nobel.

Our gross premiums written for the year ended December 31, 1999
increased by $80.8 million, or 29.9%, to $351.3 million from $270.5 million for
the year ended December 31, 1998. Our gross premiums written by segment were:

Our increased reinsurance premiums in 1999 resulted primarily from the
numerous industry losses which occurred late in 1998 and during 1999 and the
related contraction in capacity in the property catastrophe reinsurance market,
which resulted in increased prices in certain pockets of the property
catastrophe reinsurance market during 1999. The $75.2 million, or 36.3%,
increase in premiums from our reinsurance operations was primarily the result of
a 26.8% increase in premiums related to new business and a 25.3% increase
related to changes in pricing, participation levels and coverage on renewed
business, partially offset by a 15.8% decrease in premiums because either we or
the cedent did not renew coverage.

Premiums written by our primary insurance companies increased in 1999,
largely because such results reflect a full year of premiums written for Nobel,
compared with only six months of Nobel premiums during 1998. This increase was
partially offset by reduced premiums written for DeSoto Insurance in 1999. The
reduction in DeSoto Insurance premiums was due to the one-time initial premiums
assumed from the Florida JUA during 1998 of approximately $10.0 million. During
1999 Nobel sold its principal operating units and, as a result, we expect a
decrease in future premium volume from our primary insurance businesses.

During 1999, we continued to purchase reinsurance to reduce our
exposure to certain losses. Our ceded premiums were as follows:

The increase in ceded reinsurance was primarily the result of increased
costs of ceded reinsurance contracts renewed by Renaissance Reinsurance,
increased purchases of reinsurance by Renaissance Reinsurance and Nobel ceding
the large majority of its 1999 gross premiums written as part of the planned
reduction of its operations. Nobel's ceded reinsurance was $41.5 million in
1999, compared with $21.8 million during 1998. To the extent that appropriately
priced coverage is available, we anticipate continued use of reinsurance to
reduce the potential volatility of our results.

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Our gross premiums written by geographic region were as follows:

Our claims and claim expenses incurred for the year ended December 31,
1999 were $77.1 million, or 34.9%, of net premiums earned. In comparison, claims
and claim expenses incurred for the year ended December 31, 1998 were $67.8
million, or 33.1%, of net premiums earned. The primary reason for the increase
in the net incurred losses was the significant catastrophe losses that occurred
during 1999. During 1999 nine significant worldwide catastrophic events
occurred: the hail storms in Sydney, Australia, in April; the Oklahoma tornados
in May; Hurricane Floyd in September; Typhoon Bart which struck Japan in
September; Turkish and Taiwanese earthquakes in August and September,
respectively; and the Danish windstorm, Anatol, and the French windstorms,
Lothar and Martin, in December. Seven of these events each resulted in over $1
billion of insured damages. These events caused net incurred losses for
Renaissance Reinsurance to increase to $64.4 million for 1999, or a loss ratio
of 32.7%, compared with $42.4 million for 1998, or a loss ratio of 25.0%. Due to
the potential high severity of claims related to the property catastrophe
reinsurance business, there can be no assurance that we will continue to
experience this level of claims in future years.

Renaissance Reinsurance's incurred losses in 1998 included claims on a
number of aggregate stop loss and excess of loss contracts, as well as claims
related to Hurricane Georges, the January Canadian freeze, Hurricane Bonnie and
additional claims from various U.S. wind, hail, tornado and flood events.

The claims and claim expenses incurred from our primary operations for
the year ended December 31, 1999 were $12.7 million, or a loss ratio of 52.2% of
net premiums earned. In comparison, claims and claim expenses incurred from our
primary operations for the year ended December 31, 1998 were $25.4 million, or a
loss ratio of 72.1%. During 1999, DeSoto and Glencoe continued to perform within
targeted loss ratios. The primary factor contributing to the reduction in net
losses from our primary operations was the recognition of a portion of a

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deferred gain related to a retroactive reinsurance contract entered into by
Nobel during 1998. Our 1998 combined ratio and components thereof exclude the
1998 Nobel charge.

Acquisition costs and operational expenses, consisting of brokerage
commissions, excise taxes and other costs directly related to our underwriting
operations, for the year ended December 31, 1999 were $62.3 million, or 28.1%,
of net premiums earned, compared with $60.1 million, or 29.3%, of net premiums
earned for the year ended December 31, 1998, excluding the 1998 Nobel charge.
The primary contributor to the decrease in the underwriting expense ratio was
the increase in premiums earned by Renaissance Reinsurance with no corresponding
increase in the costs to operate the reinsurance operations. This was slightly
offset by increased costs at Nobel, primarily related to severance costs, and
increased costs at DeSoto Insurance for additional hires.

Net investment income (which excludes net realized investment losses)
for the year ended December 31, 1999 was $60.3 million, compared with $52.8
million for the year ended December 31, 1998. The increase in investment income
resulted primarily from an increase in interest rates during 1999 plus the
$132.5 million increase in the amount of invested assets during the year, which
was primarily the result of cash flows provided by operations of $130.3 million
and an increase in the borrowings under our line of credit of $150.0 million,
partially offset by dividends paid and share repurchases of $28.9 million and
$80.1 million, respectively.

During 1999, we reported other income of $4.9 million, compared with
$9.8 million for the year ended December 31, 1998. The majority of other income
in 1999 relates to recoveries on non-indemnity catastrophe index transactions.

During 1999, our net realized losses on sales of investments were $15.7
million, compared with $6.9 million in 1998. The 1999 losses were primarily the
result of increased interest rates during 1999 and the subsequent sales of fixed
income securities.

Excluding a write-off of goodwill attributable to Nobel, corporate
expenses were $3.1 million in 1999, compared with $4.2 million in 1998. During
1999, in conjunction with the sale and reinsurance of the primary business units
of Nobel, we wrote off $6.7 million of goodwill. The 1998 amount excludes
charges related to Nobel.

During the year ended December 31, 1999, we recorded interest expense
of $9.9 million on our outstanding debt and $8.3 million on our capital trust
securities, compared with $4.5 million and $8.5 million in 1998, respectively.
The increase in interest expense on our outstanding debt was primarily related
to an increase in borrowing rates and the additional borrowings of $150.0
million during 1999, $125.0 million of which was drawn on August 17, 1999.

On June 25, 1998, we completed our acquisition of the U.S. operating
subsidiaries (including Nobel Insurance Company) of Nobel Insurance Limited, a
Bermuda company, for $56.1 million. We accounted for this acquisition using the
purchase method of accounting. We did not issue shares as part of the purchase.

During the fourth quarter of 1998, we recorded an after tax charge of
$40.1 million, consisting of $29.6 million of adverse development on Nobel's
casualty and surety books of business, a goodwill write-down of $6.6 million,
and other related costs of $3.9 million. Consequently, we adopted a plan to exit
each of Nobel's business units. Subsequently, Nobel completed the reinsurance of
the casualty and surety books of business and its bail and low-value dwelling
books of business have been assumed by third parties. Also, Nobel completed the
sale of its IAS/Cat Crew subsidiary to its management team in an earn-out
transaction.

FINANCIAL CONDITION

LIQUIDITY AND CAPITAL RESOURCES

As a holding company, we rely on investment income, cash dividends and
other permitted payments from our subsidiaries to make principal and interest
payments on our debt, cash distributions on outstanding obligations and to pay
quarterly dividends to our shareholders. The payment of dividends by our
subsidiaries is, under certain circumstances, limited under U.S. statutory
regulations and Bermuda insurance law. U.S. statutory regulations and

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The Bermuda Insurance Act 1978, amendments thereto and related regulations of
Bermuda require our Bermuda insurance subsidiaries to maintain certain measures
of solvency and liquidity. At December 31, 2000, the statutory capital and
surplus of our Bermuda insurance subsidiaries was $738.5 million, and the amount
required to be maintained by the Act was $135.0 million. During 2000,
Renaissance Reinsurance paid aggregate cash dividends of $95.6 million to our
parent company, compared with $95.1 million in 1999.

Our operating subsidiaries have historically produced sufficient cash
flows to meet expected claims payments and operational expenses and to provide
dividend payments to us. Our subsidiaries also maintain a concentration of
investments in high quality liquid securities, which management believes will
provide sufficient liquidity to meet extraordinary claims payments should the
need arise. Additionally, we maintain a $310.0 million credit facility to meet
the liquidity needs of our subsidiaries. We had drawn down $8.0 million of this
facility at December 31, 2000.

In connection with the Nobel acquisition, Renaissance U.S. borrowed
$35.0 million from a syndicate of banks. In addition, the banks provided a $15.0
million revolving loan facility. At December 31, 2000, $42.0 million was
outstanding under these lines. RenaissanceRe has guaranteed these borrowings.

CASH FLOWS

Cash flows from operating activities resulted principally from
premiums, collections on losses recoverable and investment income, net of paid
losses, acquisition costs and underwriting expenses. Cash flows from operations
in 2000 were $250.8 million, compared with $130.3 million in 1999. The 2000 cash
flows from operations were primarily utilized to purchase $25.1 million of our
common shares, pay aggregate quarterly dividends of $29.2 million and repay
$200.0 million of our bank loans. Our 1999 cash flows from operations were
primarily utilized to purchase $80.1 million of our common shares and pay
aggregate quarterly dividends of $28.9 million. Also during 1999, we borrowed an
additional $150.0 million under our revolving credit facility, which was
primarily used to purchase additional fixed income securities for the holding
company's portfolio of investments.

We have generated cash flows from operations in 2000 and in 1999
significantly in excess of our operating commitments. To the extent that capital
is not utilized in our reinsurance business, we will consider using such capital
to invest in new opportunities or will consider returning such capital to our
shareholders.

Because of the nature of the coverages we provide, which typically can
produce losses of high severity and low frequency, it is not possible to
accurately predict our future cash flows from operating activities. As a
consequence, cash flows from operating activities may fluctuate, perhaps
significantly, between individual quarters and years.

CAPITAL RESOURCES

Our total capital resources at December 31, 2000 and 1999 were as
follows:

We have a revolving credit and term loan agreement with a syndicate of
commercial banks. During 1999 we increased our borrowings under the facility to
$200.0 million from $50.0 million at December 31, 1998. The additional funds
drawn during 1999 increased the liquidity at the holding company, RenaissanceRe,
and were available, if necessary, to be contributed to the operating
subsidiaries following a large catastrophic event. During

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2000, we renegotiated our revolving credit facility and repaid $200.0 million of
the then outstanding balance. Interest rates on the facility are based on a
spread above LIBOR and averaged 7.03% during 2000, compared to 5.76% in 1999.
Our revolving credit agreement contains certain financial covenants including
requirements that consolidated debt to capital does not exceed a ratio of
0.35:1; consolidated net worth must exceed the greater of $100.0 million or 125%
of consolidated debt; and 80% of invested assets must be rated BBB- or better.
Under the terms of the agreement, and if we are in compliance with the covenants
thereunder, we have access to the $302.0 million. We were in compliance with all
the covenants of this revolving credit and term loan agreement at December 31,
2000.

Renaissance U.S. has a $27.0 million term loan and $15.0 million
revolving loan facility with a syndicate of commercial banks, each of which is
guaranteed by RenaissanceRe. Interest rates on the facility are based upon a
spread above LIBOR, and averaged 6.98% during 2000, compared to 5.91% in 1999.
The related agreements contain certain financial covenants, including a covenant
that RenaissanceRe, as principal guarantor, maintain a ratio of liquid assets to
debt service of 4:1. The term loan has mandatory repayment provisions
approximating $9 million per year in each of years 2001 through 2003. During
2000, Renaissance U.S. repaid approximately $8 million of this facility. We were
in compliance with all the covenants of this term loan and revolving loan
facility at December 31, 2000.

Our subsidiary RenaissanceRe Capital Trust has issued capital
securities which pay cumulative cash distributions at an annual rate of 8.54%,
payable semi-annually. During 2000 we purchased $2.0 million of these capital
securities recognizing a gain of $0.5 million which has been reflected in
shareholders' equity. During 1999 we purchased $10.4 million of these capital
securities recognizing a gain of $1.8 million which was also reflected in
shareholders' equity. The sole asset of the Trust consists of our junior
subordinated debentures in an amount equal to the outstanding capital
securities. The Indenture relating to these junior subordinated debentures
contains certain covenants, including a covenant prohibiting us from the payment
of dividends if we are in default under the Indenture. We were in compliance
with all of the covenants of the Indenture at December 31, 2000. The capital
trust securities mature on March 1, 2027. These securities are required by
accounting principles to be classified as minority interest, rather than as a
component of our shareholders' equity.

Under the terms of certain reinsurance contracts, we may be required to
provide letters of credit to reinsureds in respect of reported claims and/or
unearned premiums. We have obtained a facility providing for the issuance of
letters of credit. This facility is secured by a lien on a portion of our
investment portfolio. At December 31, 2000, we had outstanding letters of credit
aggregating $44.9 million, compared to $73.2 million in 1999. Also, in
connection with our Top Layer Re joint venture we have committed $37.5 million
of collateral to support of a letter of credit.

In order to encourage employee ownership of common shares, we have
guaranteed certain loan and pledge agreements between certain employees and Bank
of America Illinois. Pursuant to the terms of this employee credit facility,
BofA has agreed to loan the participating employees up to an aggregate of $25.0
million. The balance outstanding at December 31, 2000 was $24.8 million,
compared to $24.1 million in 1999. Each loan under this employee credit facility
is required to be initially collateralized by the respective participating
employee with common shares or other collateral acceptable to BofA. If the value
of the collateral provided by a participating employee subsequently decreases,
the participating employee is required to contribute additional collateral in
the amount of such deficiency. Loans under this employee credit facility are
otherwise non-recourse to the participating employees. Given the level of
collateral, we do not presently anticipate that we will be required to honor any
guarantees under the employee credit facility, although there can be no
assurance that we will not be so required in the future.

SHAREHOLDERS' EQUITY

During 2000, shareholders' equity increased by $100.5 million, from
$600.3 million at December 31, 1999, to $700.8 million at December 31, 2000. The
significant components of the change in shareholders' equity included net income
from continuing operations of $127.2 million, plus an increase in unrealized
appreciation on investments of $25.3 million, offset by the payment of dividends
of $29.2 million and the purchase of common shares for $25.0 million.

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From time to time, we have sought to return capital to our shareholders
through share repurchase programs. We currently have $27.1 million remaining
under our existing programs. During 2000, we purchased 671,900 common shares for
an aggregate value of $25.1 million. During 1999, we repurchased 2,226,700
common shares for an aggregate value of $80.1 million. During 1998, we purchased
1,020,670 common shares for an aggregate value of $42.7 million.

INVESTMENTS

At December 31, 2000, we held cash and investments totaling $1,082.0
million, compared to $1,059.8 million in 1999, with net unrealized appreciation
of $6.8 million, compared to unrealized loss of $18.5 million in 1999.

Because we primarily provide coverage for damages resulting from
natural and man-made catastrophes, we may become liable for substantial claim
payments. Accordingly, our investment portfolio is structured to preserve
capital and provide a high level of liquidity.

The table below shows the aggregate amounts of investments available
for sale, other investments and cash and cash equivalents comprising our
portfolio of invested assets:

The growth in our portfolio of invested assets for the year ended
December 31, 2000 resulted primarily from net cash provided by operating
activities of $250.8 million, partially offset by payments of $200.0 million
under our revolving credit facility, $29.2 million of dividends paid and $25.1
million of common share repurchases. Our investment income also increased during
this period, largely as a result of the increased size of the fixed income
portfolio and an increase in interest rates.

Our current investment guidelines call for the invested asset
portfolio, including cash and cash equivalents, to have at least an average AA
rating as measured by Standard & Poor's Ratings Group. At December 31, 2000, our
invested asset portfolio had a dollar weighted average rating of AA, an average
duration of 2.7 years and an average yield to maturity of 6.7%.

Catastrophe Linked Instruments. We have assumed risk through
catastrophe and weather linked securities and derivative instruments under which
losses could be triggered by an industry loss index or natural parameters. To
date we have not experienced any losses from such securities or derivatives. We
can not assure you that this performance will continue. During 1999 and 1998, we
recorded recoveries on non-indemnity catastrophe index transactions of $2.5
million and $7.5 million, respectively. We report these recoveries in other
income.

Derivative Securities. In order to reduce our exposure to currency
fluctuations, we have entered into forward window contracts to hedge our foreign
currency outstanding loss reserves. At December 31, 2000, based on market
information and information provided by independent brokers, the estimated fair
value of these contracts is $0.8 million. The aggregate notional amount of the
contracts at December 31, 2000 is $32.0 million.

MARKET SENSITIVE INSTRUMENTS

Our investment portfolio includes investments which are subject to
changes in market values with changes in interest rates. The aggregate
hypothetical loss generated from an immediate adverse parallel shift in the
treasury yield curve of 100 basis points would cause a decrease in total return
of 2.7%, which equated to a decrease in market

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value of approximately $28.4 million on a portfolio valued at $1,052.4 million
at December 31, 2000. At December 31, 1999, the decrease in total return would
have been 2.7%, which equated to a decrease in market value of approximately
$28.4 million on a portfolio valued at $1,052.6 million. The foregoing reflects
the use of an immediate time horizon, since this presents the worst-case
scenario. Credit spreads are assumed to remain constant in these hypothetical
examples.

CURRENCY

Our functional currency is the U.S. dollar. We write a substantial
portion of our business in currencies other than U.S. dollars and may, from time
to time, experience exchange gains and losses and incur underwriting losses in
currencies other than U.S. dollars, which will in turn affect our financial
statements.

Our current foreign currency policy is to hold foreign currency assets,
including cash and receivables, that approximate the net monetary foreign
currency liabilities, including loss reserves and reinsurance balances payable.
All changes in the exchange rates are recognized currently in our statement of
income. We seek to hedge our exposure to foreign currency transactions.

EFFECTS OF INFLATION

The potential exists, after a catastrophe loss, for the development of
inflationary pressures in a local economy. The anticipated effects on us are
considered in our catastrophe loss models. The effects of inflation are also
considered in pricing and in estimating reserves for unpaid claims and claim
expenses. The actual effects of inflation on our results cannot be accurately
known until claims are ultimately settled.

NEW ACCOUNTING PRONOUNCEMENT

Effective January 1, 2001 we implemented SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities." SFAS No. 133 establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedging activities.
It requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. The adoption of SFAS No. 133 had no significant impact on our
consolidated financial statements.

CURRENT OUTLOOK

Due to industry losses in 1999, and the related contraction of capacity
in the market, we received price increases on a substantial majority of our
reinsurance policies sold or renewed during the recent renewal season. However,
even after these price increases, we believe that there continues to be numerous
transactions in the market that are underpriced relative to expected losses. We
believe that because of our competitive advantages, including our technological
capabilities and our relationships with leading brokers and ceding companies, we
are able to identify contracts that are adequately priced and will continue to
find opportunities in the property catastrophe reinsurance markets.

Primarily because of higher than average loss activity in 1999, our
aggregate cost for reinsurance protection increased during 2000 and could
continue to increase during 2001. If prices rise to levels whereby we believe
the purchase of reinsurance protection would become uneconomical, then in
certain geographic regions we would retain a greater level of net risk. In order
to give us longer term retrocessional capacity, we have entered into multi-year
contracts with respect to a portion of our portfolio. As of January 1, 2001,
approximately 55% of the limits under our retrocessional coverage were purchased
on a multi-year basis.

Our financial strength and underwriting expertise have enabled us to
pursue opportunities outside the property catastrophe reinsurance market,
including various lines of reinsurance and the catastrophe exposed primary
insurance market. We believe that our financial strength will enable us to
continue to pursue other opportunities in the future. There can be no assurance
that our pursuit of such opportunities will materially impact our financial
condition and results of operations.

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During recent fiscal years there has been considerable consolidation
among leading brokerage firms and also among our customers. Although
consolidation may continue to occur, we believe that our financial strength, our
position as one of the market leaders in the property catastrophe reinsurance
industry and our ability to provide innovative products to the industry will
minimize any adverse effect of such consolidation on our business.

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BUSINESS

OVERVIEW

Founded in 1993, RenaissanceRe is one of the leading providers of
property catastrophe reinsurance coverage in the world. We believe that we are a
provider of first choice for many insurers and reinsurers, due in large part to
our modeling and technical expertise and our industry leading performance. We
principally provide property catastrophe reinsurance to insurers and reinsurers,
with exposures worldwide, on an excess of loss basis. This means that we begin
paying when our customers' claims from a particular catastrophe exceed a
specified amount. Property catastrophe reinsurance generally provides protection
from claims arising from large catastrophes, such as earthquakes, hurricanes,
winter storms, freezes, floods, fires, tornados and other man-made or natural
disasters.

To leverage our underwriting skills, we have recently begun to write
property catastrophe reinsurance on behalf of our two joint ventures, Top Layer
Reinsurance Ltd. with State Farm Mutual Automobile Insurance Company and
Overseas Partners Cat Ltd. with Overseas Partners Ltd. Together, these joint
ventures have access to approximately $3.4 billion of capital. We receive profit
participation and fee-based income from these ventures.

In addition to property catastrophe reinsurance, we write certain
specialty lines of reinsurance, including accident and health, finite, satellite
and aviation. We also write primary insurance that is exposed to catastrophe
risk and have recently expanded our management team for that business. We may
seek to expand our presence in these markets, depending on our assessment of
business opportunities.

We conduct our operations through wholly owned subsidiaries and joint
ventures in Bermuda, the United States and Europe. We provide property
catastrophe reinsurance coverage primarily though Renaissance Reinsurance, our
principal operating subsidiary. We also provide reinsurance coverage through
Renaissance Reinsurance of Europe, a wholly owned subsidiary of Renaissance
Reinsurance.

We write primary insurance and provide certain related services through
wholly owned subsidiaries organized in the U.S. and Bermuda. Glencoe Insurance
Ltd. provides primary catastrophe exposed property coverage on an excess and
surplus lines basis, and is eligible to write business in 29 states. DeSoto
Insurance Company, DeSoto Prime Insurance Company, Paget Insurance Services and
Pembroke Managing Agents focus on the Florida homeowners market.

Our principal underwriting objective is to construct a portfolio of
reinsurance contracts that maximizes return on equity subject to prudent risk
constraints. To help us achieve this objective, we have developed REMS(C) , a
proprietary computer-based pricing and exposure modeling and management system.
REMS(C) is a unique platform which assists us in better measuring property
catastrophe risk, pricing treaties and managing our aggregate exposure. We
believe that REMS(C) is among the most sophisticated exposure management
systems in use today in the reinsurance industry. Accordingly, we believe the
combination of our REMS(C) system and the extensive experience of our
underwriters provides us with a significant competitive advantage.

Our management expertise and financial strength have enabled us to
pursue opportunities outside of the property catastrophe reinsurance markets,
including the catastrophe exposed primary insurance market. We plan to continue
to pursue other opportunities in the upcoming year. There can be no assurance
that our pursuit of such opportunities will materially impact our financial
condition and results of operations.

RATINGS

Over the last five years, we have consistently received among the
highest claims-paying and financial strength ratings from Standard & Poor's
Insurance Ratings Services and A.M. Best Company, Inc. In January 2001, A.M.
Best upgraded Renaissance Reinsurance from "A" (Excellent) to "A+" (Superior).
Standard & Poor's has given us an "A" (Strong) rating and currently has us on
positive outlook. These ratings represent independent opinions of financial
strength and ability to meet policyholder obligations.

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"A+" is the second highest designation of A.M. Best's sixteen rating
levels. " A+" rated insurance companies are defined as Superior companies and
are considered by A.M. Best to have a very strong ability to meet their
obligations to policyholders.

The "A" range ("A+", "A" and "A-") is the third highest of four ratings
ranges within what S&P considers the "secure" category. An insurer rated "A" is
believed by S&P to have strong financial security characteristics, but to be
somewhat more likely to be affected by business conditions than are insurers
with higher ratings.

INDUSTRY TRENDS

Prior to 1999, excess capacity placed competitive pressures on the
reinsurance industry. However, market participants have reported significant
price increases in catastrophe reinsurance during 2000 and into the 2001 renewal
season due to industry losses in 1999 and the subsequent contraction of capacity
in the market. According to publicly available industry information, U.S.
pricing of year-end renewals generally increased up to 15-20%. International
pricing of renewals generally increased 20-300%, the top end of the range
largely related to European risks, particularly in France.

Industry observers expect demand for property catastrophe reinsurance
to continue to grow on a worldwide basis as many regions are currently
underinsured. Current catastrophe insurance levels in developing countries lag
significantly behind the levels seen in Western economies, as demonstrated by
the difference between total losses (approximately $20 billion) and total
insured losses ($2 billion) in the 1999 Turkish earthquake. Furthermore, as the
concentration and value of insured property continues to grow in high
catastrophe-exposed regions, such as Southern California, Florida, Coastal
Carolina and Texas, demand for catastrophe coverage is expected to grow. The
increased demand for catastrophe reinsurance following the French windstorms in
1999 indicates that many insurers were inadequately insured prior to the
events.

During 1999, insured losses from natural catastrophes and man-made
disasters amounted to approximately $31 billion, the second-highest claims total
ever for insurers behind 1992, the year of Hurricane Andrew. During 1999 nine
significant worldwide catastrophic events occurred: the hail storms in Sydney,
Australia, in April; the Oklahoma tornados in May; Hurricane Floyd in September;
Typhoon Bart which struck Japan in September; Turkish and Taiwanese earthquakes
in August and September, respectively; and the Danish windstorm, Anatol, and the
French windstorms, Lothar and Martin, in December. Seven of these events each
resulted in over $1 billion of insured damages.

During recent fiscal years there has been considerable consolidation
among leading brokerage firms and also among insurance and reinsurance
companies, which could affect the distribution of catastrophe-related
reinsurance products.

A number of new, proposed or potential legislative or industry changes
may impact the worldwide demand for property catastrophe reinsurance and other
catastrophe related products. There are also many potential initiatives by
capital market participants to produce alternative products that may compete
with the existing catastrophe reinsurance markets.

CORPORATE STRATEGY

We seek to generate earnings growth for our shareholders by pursuing
the following strategic objectives:

- ENHANCE OUR POSITION AS A LEADER IN THE PROPERTY CATASTROPHE
REINSURANCE BUSINESS. Based on gross premiums written, we are
among the largest property catastrophe reinsurers in the
world. Property catastrophe reinsurance accounts for a
substantial majority of our business, and has historically
generated among the most attractive returns in our industry.
We believe that our proprietary modeling technology and
underwriting expertise provide us with significant competitive
advantages in managing catastrophe risk. We will continue to
enhance our leadership position by:

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- Constructing a superior portfolio of reinsurance using
proprietary underwriting models. We seek to effectively deploy
our capital base while maintaining prudent risk levels in our
reinsurance portfolio. We use our proprietary catastrophe
exposure management system, REMS(C), to evaluate the risk and
return characteristics of individual contracts relative to our
portfolio, and, as a result, to determine appropriate
underwriting opportunities; and

- Constructing superior portfolios of catastrophe reinsurance
for third parties, in exchange for fee income and profit
participation. Top Layer Re and OPCat provide us with
additional presence in the market, by allowing us to leverage
our access to business and our underwriting capabilities on a
larger capital base.

- - PURSUE NEW BUSINESS OPPORTUNITIES IN ATTRACTIVE MARKETS WHERE WE CAN
LEVERAGE OUR CORPORATE SKILLS AND CULTURE. Our management's experience
and underwriting expertise position us to enter into new business areas
which we believe will meet our return on equity criteria. Currently, we
believe our best opportunities include:

- Certain specialty lines of reinsurance which have begun to
show improved pricing, such as accident and health, finite,
satellite and aviation; and

- Primary insurance exposed to natural catastrophe risk, which
allows us to leverage our catastrophe risk management skills.

We believe we are positioned to fulfill these objectives by virtue of
the experience and skill of our management and our strong relationships with
brokers and clients. Our senior management team has extensive experience in the
reinsurance and/or insurance industries, with an average of approximately 20
years of experience for each of our four senior executives. We market our
reinsurance products worldwide exclusively through reinsurance brokers and have
established a reputation with our brokers and clients for prompt response on
underwriting submissions, fast claims payments and the development of customized
reinsurance programs. The modeling demonstrations and seminars that we provide
to our brokers and clients further enhances our position as a provider of first
choice.

REINSURANCE

Our principal product is property catastrophe reinsurance, primarily
written through Renaissance Reinsurance. We also write reinsurance with respect
to various other lines, including accident and health, aviation, satellite and
finite reinsurance. We continuously review opportunities to provide additional
coverages where we can utilize our modeling and other expertise and where we
believe we can identify attractive potential returns and apply prudent risk
constraints.

The following table sets forth our gross premiums written and number of
programs written by type of reinsurance.

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CATASTROPHE REINSURANCE

Our property catastrophe reinsurance contracts are generally "all risk"
in nature. Our most significant exposure is to losses from earthquakes and
hurricanes, although we are also exposed to claims arising from other natural
and man-made catastrophes, such as winter storms, freezes, floods, fires and
tornados, in connection with the coverages we provide. Our predominant exposure
under such coverage is to property damage. However, other risks, including
business interruption and other non-property losses, may also be covered under
the property reinsurance contract when arising from a covered peril. In
accordance with market practice, our property reinsurance contracts generally
exclude certain risks such as war, nuclear contamination or radiation.

Because of the wide range of possible catastrophic events to which we
are exposed, and because of the potential for multiple events to occur in the
same time period, our business is volatile, and results of operations may
reflect such volatility. Further, our financial condition may be impacted by
this volatility over time or at any point in time. The effects of claims from
one or a number of severe catastrophic events could have a material adverse
effect on us. We expect that increases in the values and concentrations of
insured property and the effects of inflation will increase the severity of such
occurrences per year in the future.

We seek to moderate the volatility described in the preceding paragraph
through the use of contract terms, portfolio selection methodology,
diversification criteria and probability analyses. Also, consistent with risk
management practices, we purchase property catastrophe coverage for our own
account to seek to further reduce the potential volatility of results.

Catastrophe Excess of Loss Reinsurance. We write catastrophe excess of
loss reinsurance, which provides coverage to primary insurers when aggregate
claims and claim expenses from a single occurrence of a covered peril exceed the
attachment point specified in a particular contract. Under these contracts we
indemnify an insurer for a portion of the losses on insurance policies in excess
of a specified loss amount, and up to an amount per loss specified in the
contract.

A portion of our property catastrophe excess of loss contracts limit
coverage to one occurrence in a contract year, but most such contracts provide
for coverage of a second occurrence after the payment of a reinstatement
premium. The coverage provided under excess of loss reinsurance contracts may be
on a worldwide basis or limited in scope to selected geographic areas. Coverage
can also vary from "all property" perils to limited coverage on selected perils,
such as "earthquake only" coverage.

Excess of Loss Retrocessional Reinsurance. We also enter into
retrocessional contracts that provide property catastrophe coverage to other
reinsurers or retrocedents. In providing retrocessional reinsurance, we focus on
property catastrophe retrocessional reinsurance which covers the retrocedent on
an excess of loss basis when aggregate claims and claim expenses from a single
occurrence of a covered peril and from a multiple number of reinsureds exceed a
specified attachment point. The coverage provided under excess of loss
retrocessional contracts may be on a worldwide basis or limited in scope to
selected geographic areas. Coverage can also vary from "all property" perils to
limited coverage on selected perils, such as "earthquake only" coverage.
Retrocessional coverage is characterized by high volatility, principally because
retrocessional contracts expose a reinsurer to an aggregation of losses from a
single catastrophic event. In addition, the information available to
retrocessional underwriters concerning the original primary risk can be less
precise than the information received from primary companies directly. Moreover,
exposures from retrocessional business can change within a contract term as the
underwriters of a retrocedent alter their book of business after retrocessional
coverage has been bound.

Proportional Retrocessional Reinsurance. We write proportional
retrocessions of catastrophe excess of loss reinsurance treaties when we believe
that premium rates and volume are attractive. In such proportional
retrocessional reinsurance, we assume a specified proportion of the risk on a
specified coverage and receive an equal proportion of the premium. The ceding
insurer receives a commission, based upon the premiums ceded to the reinsurer,
and may also be entitled to receive a profit commission based on the ratio of
losses, loss adjustment expense and the reinsurer's expenses to premiums ceded.
A proportional retrocessional catastrophe reinsurer is dependent upon the ceding
insurer's underwriting, pricing and claims administration to yield an
underwriting profit. Although we generally obtain detailed underwriting
information concerning the underlying exposures, it is more difficult to assess
the exposures in retrocessional contracts.

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NONCATASTROPHE REINSURANCE

We also write other reinsurance relating to accident and health,
finite, satellite and aviation risk coverages. In 2000, we began to write
accident and health reinsurance coverage, usually on a stop-loss basis subject
to specified caps on our ultimate exposure. In selected cases, we also write
customized financial reinsurance contracts when the expected returns are
particularly attractive.

PRIMARY INSURANCE

We currently write primary insurance where natural catastrophe
exposures represent a significant component of the overall exposure. We believe
that our industry knowledge of the catastrophe business and our proprietary risk
management software provide us with a competitive advantage in terms of
appropriately underwriting and pricing such policies.

Renaissance U.S. Holdings, Inc. In 1998, we formed a U.S. holding
company, Renaissance U.S. Holdings, Inc., whose principal subsidiary was Nobel
Insurance Company, a Texas-domiciled insurance company. Following a 1998 fourth
quarter after-tax charge of $40.1 million, Nobel disposed of its principal
business lines in 1999. Nobel continues to be a licensed insurer in all 50
states, although there can be no assurance such licenses can be retained. Our
U.S.-based insurance subsidiaries are currently writing, in a limited capacity,
catastrophe-exposed primary insurance.

Glencoe Insurance Ltd. Glencoe Insurance Ltd. was incorporated in
January 1996 and is domiciled in Bermuda. Glencoe is an excess and surplus lines
insurance company, which pursues opportunities in the catastrophe-exposed
primary insurance business in the United States by writing policies that are
primarily exposed to earthquake and wind perils. Glencoe is eligible to do
business in the United States on an excess and surplus lines basis in 29 states.

DeSoto Insurance and Related Entities. In September 1997, Glencoe
organized DeSoto Insurance Company as a wholly owned subsidiary in Florida to
pursue the assumption of policies from the Florida JUA. We also participate in
the Florida homeowners market through DeSoto Prime, Paget and Pembroke.

JOINT VENTURES

We believe that many reinsurers, insurers and other providers of
capital have concluded that offering catastrophe reinsurance coverage can yield
attractive returns and provide financial and risk diversification when
underwritten by experienced and knowledgeable parties. We believe that our
underwriting and risk modeling expertise, track record and market leadership
position will enable us to become a leading provider of outsourced underwriting
of property catastrophe reinsurance.

In 2000, we continued to increase our market penetration in catastrophe
reinsurance through our two joint venture relationships. The amount of total
managed catastrophe premiums we underwrote grew by approximately 40% to $397.0
million in 2000 compared to $284.0 million for 1999.

These ventures provide us with additional presence in the market as
well as fee income. They allow us to leverage our access to business and our
underwriting capabilities on a larger capital base while still actively managing
our equity base to maximize value to our shareholders. We currently have two
significant joint ventures, Top Layer Re, which we own together with State Farm,
and OPCat, which was formed by Overseas Partners.

Top Layer Re was established in 1999 to write high excess non-U.S.
property catastrophe reinsurance. Top Layer Re is owned 50% by State Farm and
50% by Renaissance Reinsurance and has received claims-paying ratings of "AAA"
(Extremely Strong) from Standard & Poor's and "A++" (Superior) from A.M. Best.
State Farm also provides stop loss reinsurance coverage that gives Top Layer Re
sufficient capital resources to write $3.0 billion of aggregate limit. For the
year ended December 31, 2000, Top Layer Re had gross written premiums of $24.9
million, and at December 31, 2000, Top Layer Re had deployed approximately
one-third of its capacity.

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OPCat was established by Overseas Partners in 1999 as a wholly owned
subsidiary to write companion lines on reinsurance contacts to Renaissance
Reinsurance. We are the exclusive underwriting manager for OPCat. OPCat has
approximately $400 million of capital. For the year ended December 31, 2000,
OPCat's gross written premiums were approximately $55.3 million. OPCat provides
us with access to additional capital to extend our market penetration and
generates fee income. In general, we seek to construct for OPCat a portfolio
with risk characteristics similar to those of Renaissance Reinsurance's
portfolio.

In our joint ventures, we typically provide our partners with
underwriting, claims management, risk modeling, capital and investment
management services, marketing, reporting, remittances and payments processing
and other services. Essentially, we serve as the catastrophe reinsurance
underwriting department for our partners, representing our partners in the
catastrophe reinsurance marketplace. We work within agreed-upon underwriting
guidelines, tailored to our partners' requirements. We seek to provide our
partners with an attractive return while creating fee for services and profit
sharing income for Renaissance Reinsurance.

The following table shows our committed capacity at December 31, 2000
and the growth in our total managed catastrophe premiums written:

We apply the same disciplined approach to the underwriting we conduct
on behalf of our joint ventures as we apply to our own portfolio.

Our joint ventures have increased the capital we can commit to the
catastrophe reinsurance market and have deepened our market penetration. This
flexible capital also broadens the capacity and capital we can offer our
customers. We believe that joint venture opportunities may increasingly
contribute to our capital base and managed catastrophe premiums growth.

POTENTIAL NEW OPPORTUNITIES

From time to time, we may consider opportunistic diversification into
new ventures, either through organic growth or the acquisition of other
companies or books of business. Accordingly, we regularly review strategic
opportunities and periodically engage in discussions regarding possible
transactions. However, there can be no assurance that we will enter into any
such agreement in the future, or that any consummated transaction would
contribute materially to our results.

UNDERWRITING

Our primary underwriting goal is to construct a portfolio of
reinsurance and insurance contracts that maximizes our return on shareholders'
equity subject to prudent risk constraints. We assess underwriting decisions on
the basis of the expected incremental return on equity of each new reinsurance
contract in relation to our overall portfolio of reinsurance contracts.

We have developed a proprietary, computer-based pricing and exposure
management system, Renaissance Exposure Management System (REMS(C)), which we
utilize to assess property catastrophe risks, price treaties and limit aggregate
exposure. REMS(C) was initially developed with consulting assistance from
Tillinghast, an actuarial consulting unit of Towers, Perrin, Forster & Crosby,
Inc., and Applied Insurance Research, Inc., the developer of the CATMAP(TM)
system. Since inception, we have continued to invest in and improve REMS(C),
incorporating our underwriting experience, additional proprietary software and
new data. REMS(C) has analytic and modeling capabilities that help us to assess
the catastrophe exposure risk and return of each incremental reinsurance
contract

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in relation to our overall portfolio of reinsurance contracts. We combine the
analyses generated by REMS(C) with other information available to us, including
our own knowledge of the client submitting the proposed program, to assess the
premium offered against the risk of loss which such a program presents.

We have licensed and integrated into REMS(C) a number of third party
catastrophe computer models in addition to our base model, which we use to
validate and stress test our base REMS(C) results. In our stress tests we
increase the frequency and severity of catastrophic events above the levels
embedded in the models purchased from third parties to further test our
exposures and potential impact on our future results.

We believe that REMS(C) is a more robust underwriting and risk
management system than is currently available in the reinsurance industry.
REMS(C) combines computer-generated statistical simulations that estimate
catastrophic event probabilities with exposure and coverage information on each
client's reinsurance contract to produce expected claims for reinsurance
programs submitted to us. REMS(C) employs simulation techniques to generate
40,000 years of catastrophic event activity, including events causing in excess
of $300 billion in insured industry losses. From this 40,000 year simulation, we
generate estimates of expected claims, expected profits and a probability
distribution of potential outcomes for each program in our portfolio and for our
total portfolio.

All our underwriters utilize REMS(C) in their pricing decisions, which
we believe provides them with several competitive advantages. These include the
ability:

- to simulate 40,000 years of catastrophic event activity
compared to a much smaller sample in generally available
models, allowing us to analyze exposure to a greater number
and combination of potential events;

- to analyze the incremental impact of an individual reinsurance
contract on our overall portfolio;

- to better assess the underlying exposures associated with
assumed retrocessional business;

- to price contracts within a short time frame; and

- to provide consistent and accurate pricing information.

As part of our risk management process, we also utilize REMS(C) to
assist us with the purchase of reinsurance coverage for our own account. During
2000, we increased the amount of premiums ceded through property catastrophe
reinsurance coverage purchased for our own account. Although the amount of ceded
premium increased in 2000, the magnitude of our net exposures grew in 2000
because of increases in our gross portfolio and changes in the terms of our
ceded reinsurance. Ceded premiums written in our reinsurance operations during
2000 were $95.1 million, compared to $77.2 million in 1999. Additionally, our
primary operations had ceded premiums of $44.8 million, compared to $60.6
million in 1999. To the extent that appropriately priced coverage is available,
we anticipate continued purchase of reinsurance to reduce the potential
volatility of our results.

We have developed underwriting guidelines, to be used in conjunction
with REMS(C), that limit the exposure to claims from any single catastrophic
event and the exposure to losses from a series of catastrophic events. As part
of our pricing and underwriting process, we also assess a variety of other
factors, including:

- the reputation of the proposed cedent and the likelihood of
establishing a long-term relationship with the cedent;

- the geographic area in which the cedent does business and its
market share;

- historical loss data for the cedent and, where available, for
the industry as a whole in the relevant regions, in order to
compare the cedent's historical catastrophe loss experience to
industry averages;

- the cedent's pricing strategies; and

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- the perceived financial strength of the cedent.

We have developed underwriting guidelines with respect to our
noncatastrophe book of business which are designed to limit the amount of
exposure we will accept for any one risk. These guidelines include, but are not
limited to, utilizing contract terms to cap our losses from any one exposure or
any one contract, employing analytical tools to assess risks where practical and
accessing the knowledge of experienced professionals in assisting with unique
and complex terms and coverages.

GEOGRAPHIC BREAKDOWN

Our exposures are generally diversified across geographic zones, but
are also a function of market conditions and opportunities. The following table
sets forth the percentage of our gross insurance and reinsurance premiums
written allocated to the territory of coverage exposure.

(1) The category "Worldwide (excluding U.S.)" consists of contracts that cover
more than one geographic region (other than the U.S.). The exposure in this
category for gross premiums written to date is predominantly from Europe and
Japan.

(2) The category "Noncatastrophe reinsurance" includes coverages related to
noncatastrophe reinsurance risks assumed by us. These coverages primarily
include exposure to claims from accident and health, finite, satellite, and
aviation risks assumed by us.

RESERVES

For both our reinsurance and primary operations, we use statistical and
actuarial methods to estimate ultimate expected claims and claim expenses. The
reserve for claims and claim expenses includes estimates for unpaid claims and
claim expenses on reported losses as well as an estimate of IBNR losses.

Our loss reserves are based on individual claims, case reserves and
other reserve estimates reported by insureds and ceding companies as well as
management estimates of ultimate losses. Inherent in the estimates of ultimate
losses are expected trends in claim severity and frequency and other factors
which could vary significantly as claims are settled. Accordingly, ultimate
losses may vary materially from the amounts provided in the consolidated
financial statements. These estimates are reviewed regularly and, as experience
develops and new information becomes known, the reserves are adjusted as
necessary. Such adjustments, if any, are reflected in our consolidated statement
of income in the period in which they become known and are accounted for as
changes in estimates.

For our reinsurance operations, estimates of claims and claim expenses
and losses recoverable are based in part upon the estimation of claims resulting
from catastrophic events. Our estimates of claims resulting from catastrophic
events based upon our own historical claim experience is inherently difficult
because of the variability and uncertainty associated with property catastrophe
claims. Therefore, we utilize both proprietary and

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commercially available models, as well as historical reinsurance industry
property catastrophe claims experience, for purposes of evaluating future trends
and providing an estimate of ultimate claims costs.

Given the nature of the catastrophe reinsurance business, the period of
time from the reporting of a loss to us to the settlement of our liability may
be significant. During this period, additional facts and trends will be
revealed. As these factors become apparent, case reserves will be adjusted,
sometimes requiring an increase in our overall reserves, and at other times
requiring a reallocation of IBNR reserves to specific case reserves. These
estimates are reviewed regularly, and such adjustments, if any, are reflected in
our consolidated statement of income in the period in which they become known
and are accounted for as changes in estimates.

Claim reserves and losses recoverable represent estimates, including
actuarial and statistical projections at a given point in time, of an insurer's
or reinsurer's expectations of the ultimate settlement and administration costs
of claims incurred, and it is possible that the ultimate liability may exceed or
be less than such estimates. Such estimates are not precise in that, among other
things, they are based on predictions of future developments and estimates of
future trends in claim severity and frequency and other variable factors such as
inflation. During the claim settlement period, it often becomes necessary to
refine and adjust the estimates of liability or recovery on a claim either
upward or downward. Even after such adjustments, ultimate liability or recovery
may exceed or be less than the revised estimates.

We incurred claims of $108.6 million, $77.1 million, and $112.8 million
for the years ended December 31, 2000, 1999 and 1998, respectively. Our claim
reserves were $403.6 million, $478.6 million and $298.8 million at December 31,
2000, 1999 and 1998, respectively.

INVESTMENTS

At December 31, 2000, we held cash and investments totaling $1,082.0
million with net unrealized appreciation of $6.8 million. Our strategy is to
maximize our underwriting profitability and fully deploy our capital through our
underwriting activities. Consequently, we have established an investment policy,
which we consider to be conservative.

Our investment guidelines, which are approved by our Board, stress
preservation of capital, market liquidity, and diversification of risk. To
achieve this objective, our current fixed income investment guidelines call for
an average credit quality of "AA" as measured by Standard & Poor's Ratings
Group. Notwithstanding the foregoing, our investments are subject to market-wide
risks and fluctuations, as well as to risks inherent in particular securities.

Primarily because of the potential for large claims payments, our
investment portfolio is structured to provide a high level of liquidity. The
table below shows the aggregate amounts of investments available for sale,
equity securities and cash and cash equivalents comprising our portfolio of
invested assets:

The growth in our portfolio of invested assets for the year ended
December 31, 2000 resulted primarily from net cash provided by operating
activities of $250.8 million, compared with $130.3 million in 1999. The 2000
cash flows from operations were primarily utilized to repay $192.0 million of
the amounts outstanding under our revolving credit facility, to purchase $25.1
million of our common shares and to pay aggregate dividends of $29.2 million.
Also during 2000, our U.S. holding company repaid approximately $8.0 million
under its revolving credit facility.

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At December 31, 2000, our invested asset portfolio had a dollar
weighted average rating of AA, an average duration of 2.7 years and an average
yield to maturity of 6.7% before investment expenses.

Under the terms of certain reinsurance contracts, we may be required to
provide letters of credit to reinsureds in respect of reported claims and/or
unearned premiums. We have obtained capacity from one of our primary lenders for
the issuance of letters of credit. Issued letters of credit are secured by a
lien on a portion of our investment portfolio. At December 31, 2000, we had
outstanding letters of credit aggregating $44.9 million. Also, in connection
with our January 6, 1999 investment in Top Layer Re, we have committed $37.5
million of collateral in the form of a letter of credit. This letter of credit
is also secured by a portion of our investments.

Catastrophe Linked Instruments. We have assumed risk through
catastrophe and weather linked securities and derivative instruments under which
losses could be triggered by an industry loss index or natural parameters. To
date we have not experienced any losses from such securities or derivatives
although there can be no assurance this performance will continue. We recorded
recoveries on non-indemnity catastrophe index transactions in each of the last
quarters of 2000 and 1999. These recoveries are included in other income. In the
future, we may also utilize other derivative instruments.

Market Sensitive Instruments. Our investment portfolio includes
investments which are subject to changes in market values with changes in
interest rates. The aggregate hypothetical loss generated from an immediate
adverse parallel shift in the treasury yield curve of 100 basis points would
cause a decrease in total return of approximately 2.7%, which equates to a
decrease in market value of approximately $28.4 million on a portfolio valued at
$1,052.4 million at December 31, 2000. The foregoing reflects the use of an
immediate time horizon, since this presents the worst-case scenario. Credit
spreads are assumed to remain constant in these hypothetical examples.

The following table summarizes the fair value of our investments and
cash and cash equivalents at the dates indicated.

The following table summarizes the fair value by contractual maturities of
our fixed maturity investment portfolio at the dates indicated.

Maturity and Duration of Fixed Maturity Portfolio. Currently, we
maintain a target duration of approximately three years on a weighted average
basis, reflecting our belief that it is important to maintain a liquid,
shorter-duration portfolio to better assure our ability to pay claims on a
timely basis. The actual portfolio duration

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may not exceed the target duration by more than two years. From time to time, we
expect to reevaluate the target duration in light of estimates of the duration
of our liabilities and market conditions, including the levels of then
prevailing interest rates.

Quality of Debt Securities in Portfolio. Our guidelines for our various
investment classes have strict restrictions on credit quality, duration and
benchmark relative exposures.

The following table summarizes the composition of the fair value of the
fixed maturity portfolio at the dates indicated by rating as assigned by S&P or,
with respect to non-rated issues, as estimated by our investment managers.

COMPETITION

With total managed gross premiums written of $397.0 million for the
year ended December 31, 2000, we are one of the largest providers of property
catastrophe reinsurance in the world. We have an estimated market share of
approximately 7-9% of the property catastrophe reinsurance business, based on
gross premiums written.

Our main competition in the industry comes from multi-line insurance
and reinsurance providers that write catastrophe-based products as part of a
larger portfolio. The major players include companies based in the United
States, Europe and Bermuda. Though all of these companies offer property
catastrophe reinsurance, in many cases it accounts for a small percentage of
their total portfolio. Further, the reinsurance industry is undergoing a marked
trend toward greater consolidation.

In our primary business, we face competition from independent insurance
companies, subsidiaries or affiliates of major worldwide companies and others,
some of which have greater financial and other resources than RenaissanceRe.
Primary insurers compete on the basis of factors including selling effort,
product, price, service, financial strength and reputation.

We are also aware of many potential initiatives by capital market
participants to produce alternative products that may compete with the existing
catastrophe reinsurance markets. Among other things, over the last several years
capital markets participants, including exchanges and financial intermediaries,
have developed financial products intended to compete with traditional
reinsurance. In addition, the tax policies of the countries where our clients
operate can affect demand for reinsurance. We are unable to predict the extent
to which the foregoing new, proposed or potential initiatives may affect the
demand for our products or the risks which may be available for us to consider
underwriting.

MARKETING

REINSURANCE

We believe that our modeling and technical expertise, combined with our
leading industry performance, has enabled us to become a provider of first
choice to our insurers and reinsurers worldwide. We market our reinsurance
products worldwide exclusively through reinsurance brokers. We focus our
marketing efforts on

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targeted brokers and insurance and reinsurance companies. We believe that our
existing portfolio of business is a valuable asset given the renewal nature of
the reinsurance industry and, therefore, we attempt to continually strengthen
relationships with our existing brokers and clients. We target prospects that
are capable of supplying detailed and accurate underwriting data and that
potentially add further diversification to our book of business.

We believe that primary insurers' and brokers' willingness to use a
particular reinsurer is based not just on pricing terms, but on the financial
security of the reinsurer, its claim paying ability ratings, perceptions of the
quality of a reinsurer's service, the reinsurer's willingness to design
customized programs, its long-term stability and its commitment to provide
reinsurance capacity. We believe that we have established a reputation with our
brokers and clients for prompt response on underwriting submissions and for fast
claims payments. The modeling demonstrations and seminars that we provide to our
brokers and clients further enhance our position as a provider of first choice.
Since we selectively write large lines on a limited number of property
catastrophe reinsurance contracts, we can establish reinsurance terms and
conditions on those contracts that are attractive in our judgment, make large
commitments to the most attractive programs and provide superior client
responsiveness.

We believe that our ability to design customized programs and to
provide advice on catastrophe risk management has helped us to develop long-term
relationships with brokers and clients.

Our reinsurance brokers perform data collection, contract preparation
and other administrative tasks, enabling us to market our reinsurance products
cost effectively by maintaining a smaller staff. We believe that by maintaining
close relationships with brokers, we are able to obtain access to a broad range
of potential reinsureds. Subsidiaries and affiliates of Marsh Inc., Greig
Fester, E.W. Blanch & Co., AON Re Group, and Willis Faber accounted for
approximately 26.5%, 15.7%, 15.7%, 14.9% and 5.5%, respectively, of our gross
premiums written in 2000.

During 2000, Renaissance Reinsurance issued authorization for coverage
on programs submitted by 26 brokers worldwide. We received approximately 1,400
program submissions during 2000. Of these submissions, we issued authorizations
for coverage in 2000 for only 410 programs, or 29.3% of the program submissions
received.

PRIMARY INSURANCE

Glencoe markets its products through a diverse group of surplus lines
brokers operating primarily in catastrophe exposed states. Our homeowners
insurance operations primarily market their products utilizing direct marketing
techniques. We also employ point of sale distribution relationships such as
mortgage companies, title companies and realtors. Our primary operations strive
to retain the renewal rights to the customer and to create and maintain a
comprehensive database of catastrophe-exposed property risks.

EMPLOYEES

At December 31, 2000, we and our subsidiaries employed approximately
100 people. We believe that our strong employee relations are among our most
significant strengths. None of our employees are subject to collective
bargaining agreements. We are not aware of any current efforts to implement such
agreements at any of our subsidiaries.

A majority of our employees receive some form of equity-based incentive
compensation as part of their overall package. At December 31, 2000, our
directors and officers beneficially owned 6.8% of our outstanding shares.

Many Bermuda-based employees of RenaissanceRe and Renaissance
Reinsurance, including all of our senior executives, are employed pursuant to
work permits granted by the Bermuda authorities. These permits expire at various
times over the next few years. We have no reason to believe that these permits
would not be extended at expiration upon request, although no assurance can be
given in this regard.

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REGULATION

Bermuda. The Insurance Act 1978, as amended, and Related Regulations
(the "Insurance Act"), which regulates the business of Renaissance Reinsurance
and Glencoe, provides that no person may carry on an insurance business
(including the business of reinsurance) in or from within Bermuda unless
registered as an insurer under the Insurance Act by the Bermuda Minister of
Finance (the "Minister"). Renaissance Reinsurance and Glencoe are registered as
a Class 4 and a Class 3 insurer under the Insurance Act, respectively. The
Minister, in deciding whether to grant registration, has broad discretion to act
as he thinks fit in the public interest. The Minister is required by the
Insurance Act to determine whether the applicant is a fit and proper body to be
engaged in the insurance business and, in particular, whether it has, or has
available to it, adequate knowledge and expertise. In connection with the
applicant's registration, the Minister may impose conditions relating to the
writing of certain types of insurance. Further, the Insurance Act stipulates
that no person shall, in or from within Bermuda, act as an insurance manager,
broker, agent or salesman unless registered for the purpose by the Minister.
Renaissance Managers is registered as an insurance manager under the Insurance
Act.

An Insurance Advisory Committee appointed by the Minister advises him
on matters connected with the discharge of his functions, and sub-committees
thereof supervise and review the law and practice of insurance in Bermuda,
including reviews of accounting and administrative procedures.

The Insurance Act imposes on Bermuda insurance companies solvency and
liquidity standards and auditing and reporting requirements and grants to the
Minister powers to supervise, investigate and intervene in the affairs of
insurance companies. Certain significant aspects of the Bermuda insurance
regulatory framework are set forth below.

Cancellation of Insurer's Registration. An insurer's registration may
be canceled by the Minister on certain grounds specified in the Insurance Act,
including failure of the insurer to comply with a requirement made of it under
the Insurance Act or, if in the opinion of the Minister, after consultation with
the Insurance Advisory Committee, the insurer has not been carrying on business
in accordance with sound insurance principles.

Independent Approved Auditor. Every registered insurer must appoint an
independent auditor who will annually audit and report on the Statutory
Financial Statements and the Statutory Financial Return of the insurer, both of
which, in the case of each of a Class 3 insurer and a Class 4 insurer, are
required to be filed annually with the Registrar of Companies (the "Registrar"),
who is the chief administrative officer under the Insurance Act. The auditor
must be approved by the Minister as the independent auditor of the insurer. The
approved auditor may be the same person or firm which audits the insurer's
financial statements and reports for presentation to its shareholders.

Loss Reserve Specialist. Each Class 3 and Class 4 insurer is required
to submit an annual loss reserve opinion when filing the Annual Statutory
Financial Return. This opinion must be issued by the insurer's approved Loss
Reserve Specialist. The Loss Reserve Specialist, who will normally be a
qualified casualty actuary, must be approved by the Minister.

Statutory Financial Statements. An insurer must prepare annual
Statutory Financial Statements. The Insurance Act prescribes rules for the
preparation and substance of such Statutory Financial Statements (which include,
in statutory form, a balance sheet, income statement, and a statement of capital
and surplus, and detailed notes thereto). The insurer is required to give
detailed information and analyses regarding premiums, claims, reinsurance and
investments. The Statutory Financial Statements are not prepared in accordance
with GAAP and are distinct from the financial statements prepared for
presentation to the insurer's shareholders under the Companies Act 1981 of
Bermuda, which financial statements may be prepared in accordance with GAAP. The
insurer is required to submit the Annual Statutory Financial Statements as part
of the Annual Statutory Financial Return. The Statutory Financial Statements and
the Statutory Financial Return do not form part of the public records maintained
by the Registrar.

Minimum Solvency Margin and Restrictions on Dividends and
Distributions. The Insurance Act provides that the statutory assets of an
insurer must exceed its statutory liabilities by an amount greater than the
prescribed

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minimum solvency margin which varies with the type of registration of the
insurer under the Insurance Act and the insurer's net premiums written and loss
reserve level. The minimum solvency margin for a Class 4 insurer is the greatest
of $100.0 million, 50% of net premiums written (with a credit for reinsurance
ceded not exceeding 25% of gross premiums) and 15% of loss and loss expense
provisions and other insurance reserves. The minimum solvency margin for a Class
3 insurer is the greatest of $1.0 million, 20% of the first $6.0 million of net
premiums written plus 15% of net premiums written in excess of $6.0 million, and
15% of loss and loss expense provisions and other insurance reserves.

The Insurance Act mandates certain actions and filings with the
Minister and the Registrar if a Class 3 insurer or a Class 4 insurer fails to
meet and or maintain the required minimum solvency margin. Both Class 3 insurers
and Class 4 insurers are prohibited from declaring or paying any dividends if in
breach of the required minimum solvency margin or minimum liquidity ratio (the
relevant margins) or if the declaration or payment of such dividend would cause
the insurer to fail to meet the relevant margins. Where an insurer fails to meet
its relevant margins on the last day of any financial year, it is prohibited
from declaring or paying any dividends during the next financial year without
the approval of the Minister. Further, a Class 4 insurer is prohibited from
declaring or paying in any financial year dividends of more than 25% of its
total statutory capital and surplus (as shown on its previous financial year's
statutory balance sheet) unless it files (at least seven days before payment of
such dividends) with the Registrar an affidavit stating that it will continue to
meet its relevant margins. Class 3 insurers and Class 4 insurers must obtain the
Minister's prior approval for a reduction by 15% or more of the total statutory
capital as set forth in its previous year's financial statements. These
restrictions on declaring or paying dividends and distributions under the
Insurance Act are in addition to those under the Companies Act 1981 which apply
to all Bermuda companies.

Annual Statutory Financial Return. Class 3 and Class 4 insurers are
required to file with the Registrar a Statutory Financial Return no later than
four months after the insurer's financial year end (unless specifically
extended). The Statutory Financial Return includes, among other items, a report
of the approved independent auditor on the Statutory Financial Statements of the
insurer; a declaration of the statutory ratios; a solvency certificate; the
Statutory Financial Statements themselves; the opinion of the approved Loss
Reserve Specialist in respect of the loss and loss expense provisions and, only
in the case of Class 4 insurers, certain details concerning ceded reinsurance.
The solvency certificate and the declaration of the statutory ratios must be
signed by the principal representative and at least two directors of the
insurer, who are required to state whether the minimum solvency margin and, in
the case of the solvency certificate, the minimum liquidity ratio, have been
met, and the independent approved auditor is required to state whether in its
opinion it was reasonable for them to so state and whether the declaration of
the statutory ratios complies with the requirements of the Insurance Act. Where
an insurer's accounts have been audited for any purpose other than compliance
with the Insurance Act, a statement to that effect must be filed with the
Statutory Financial Return.

Supervision, Investigation and Intervention. The Minister may appoint
an inspector with extensive powers to investigate the affairs of an insurer if
the Minister believes that an investigation is required in the interest of the
insurer's policyholders or persons who may become policyholders. In order to
verify or supplement information otherwise provided to him, the Minister may
direct an insurer to produce documents or information relating to matters
connected with the insurer's business.

If it appears to the Minister that there is a risk of the insurer
becoming insolvent, or that the insurer is in breach of the Insurance Act or any
conditions or its registration under the Insurance Act, the Minister may direct
the insurer not to take on any new insurance business; not to vary any insurance
contract if the effect would be to increase the insurer's liabilities; not to
make certain investments; to realize certain investments; to maintain in, or
transfer to the custody of a specified bank, certain assets; not to declare or
pay any dividends or other distributions or to restrict the making of such
payments and/or to limit its premium income.

An insurer is required to maintain a principal office in Bermuda and to
appoint and maintain a principal representative in Bermuda. For the purpose of
the Insurance Act, the principal office of each of Renaissance Reinsurance and
Glencoe is at our offices at Renaissance House, 8-12 East Broadway, Pembroke HM
19 Bermuda and Mr. John D. Nichols, our Senior Vice President, is the principal
representative of Renaissance Reinsurance and Glencoe. Without a reason
acceptable to the Minister, an insurer may not terminate the appointment of its
principal representative, and the principal representative may not cease to act
as such, unless thirty days' notice in writing to

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the Minister is given of the intention to do so. It is the duty of the principal
representative, within thirty days of his reaching the view that there is a
likelihood of the insurer for which he acts becoming insolvent or its coming to
his knowledge, or his having reason to believe, that a reportable event has
occurred, to make a report in writing to the Minister setting out all the
particulars of the case that are available to him. Examples of such an event
include failure by the insurer to comply substantially with a condition imposed
upon the insurer by the Minister relating to a solvency margin or a liquidity or
other ratio.

Certain Other Bermuda Law Considerations. As "exempted companies," we
and our Bermuda subsidiaries are exempt from certain Bermuda laws restricting
the percentage of share capital that may be held by non-Bermudians. However, as
exempted companies, we and our Bermuda subsidiaries may not participate in
certain business transactions, including (1) the acquisition or holding of land
in Bermuda (except that required for their business and held by way of lease or
tenancy for terms of not more than 50 years) without required authorization, (2)
the taking of mortgages on land in Bermuda to secure an amount in excess of
$50,000 without the consent of the Minister, (3) the acquisition of any bonds or
debentures secured by any land in Bermuda, other than certain types of Bermuda
government securities or securities issued by Bermuda public authorities or (4)
the carrying on of business of any kind in Bermuda, except in furtherance of
our business carried on outside Bermuda or under license granted by the
Minister. Generally it is not permitted without a special license granted by
the Minister to insure Bermuda domestic risks or risks of persons of, in or
based in Bermuda.

We and our Bermuda subsidiaries must comply with the provisions of the
Companies Act regulating the payment of dividends and making distributions from
contributed surplus. A company may not declare or pay a dividend, or make a
distribution out of contributed surplus, if there are reasonable grounds for
believing that: (a) the company is, or would after the payment be, unable to pay
its liabilities as they become due; or (b) the realizable value of the company's
assets would thereby be less than the aggregate of its liabilities and its
issued share capital and share premium accounts.

United States and Other. Renaissance Reinsurance is not admitted to
transact the business of insurance in any jurisdiction except Bermuda. However,
the insurance laws of each state of the United States and of many other
countries permit and regulate the sale of insurance and reinsurance to insureds
and ceding insurers located within their jurisdictions by non-admitted alien
insurers, such as Renaissance Reinsurance, from locations outside the state or
country. With some exceptions, such sale of insurance or reinsurance from within
a jurisdiction where the insurer is not admitted to do business is prohibited.
Renaissance Reinsurance does not intend to maintain an office or to solicit,
advertise, settle claims or conduct other insurance activities in any
jurisdiction other than Bermuda where the conduct of such activities would
require that Renaissance Reinsurance be so admitted.

Glencoe is eligible to write excess and surplus lines primary insurance
in 29 states and is subject to the regulation and reporting requirements of
these states. In accordance with certain requirements of the National
Association of Insurance Commissioners, Glencoe has established, and is required
to maintain, a trust funded with a minimum of $15.0 million as a condition of
its status as an eligible, non-admitted insurer in the U.S. DeSoto is a licensed
property/casualty insurer in Florida and Nobel is licensed and subject to
regulation as a property/casualty insurer in all 50 U.S. states and the District
of Columbia.

Our U.S. operations are subject to extensive regulation under statutes
which delegate regulatory, supervisory and administrative powers to state
insurance commissioners. The extent of regulation varies from state to state but
generally has its source in statutes that delegate regulatory, supervisory and
administrative authority to a department of insurance in each state. Among other
things, state insurance commissioners regulate insurer solvency standards,
insurer licensing, authorized investments, premium rates, restrictions on the
size of risks that may be insured under a single policy, loss and expense
reserves and provisions for unearned premiums, deposits of securities for the
benefit of policyholders, policy form approval, and market conduct regulation
including the use of credit information in underwriting and other underwriting
and claims practices. State insurance departments also conduct periodic
examinations of the affairs of insurance companies and require the filing of
annual and other reports relating to the financial condition of companies and
other matters. In general, regulated insurers must file all rates for directly
underwritten insurance with the insurance department of each state in which they
operate on an admitted basis; however, reinsurance generally is not subject to
rate regulation.

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Our U.S. insurance subsidiaries are subject to guaranty fund laws which
can result in assessments, up to prescribed limits, for losses incurred by
policyholders as a result of the impairment or insolvency of unaffiliated
insurance companies. Typically, an insurance company is subject to the guaranty
fund laws of the states in which it conducts insurance business; however,
companies such as Glencoe which conduct business on a surplus lines basis in a
particular state are generally exempt from that state's guaranty fund laws. We
do not expect the amount of any such guaranty fund assessments to be paid by us,
if any, in 2000 to be material.

Holding Company Regulation. We and our U.S. insurance subsidiaries are
subject to regulation under the insurance holding company laws of various
jurisdictions. The insurance holding company laws and regulations vary from
jurisdiction to jurisdiction, but generally require an insurance holding
company, and insurers that are subsidiaries of insurance holding companies, to
register with state regulatory authorities and to file with those authorities
certain reports, including information concerning their capital structure,
ownership, financial condition, certain intercompany transactions and general
business operations.

Further, in order to protect insurance company solvency, state
insurance statutes typically place limitations on the amount of dividends or
other distributions payable by insurance companies. Florida, DeSoto's state of
domicile, requires that dividends be paid only out of earned surplus and limits
the annual amount payable without the prior approval of the Florida Insurance
Department to the greater of 10% of policyholders' surplus adjusted for
unrealized gains or 100% of prior year statutory net income. Texas, Nobel's
state of domicile, currently requires that dividends be paid only out of earned
statutory surplus and limits the annual amount of dividends payable without the
prior approval of the Texas Insurance Department to the greater of 10% of
statutory capital and surplus at the end of the previous calendar year or 100%
of statutory net income from operations for the previous calendar year. These
insurance holding company laws also impose prior approval requirements for
certain transactions with affiliates.

In addition, as a result of our ownership of DeSoto and Nobel, under
the terms of applicable state statutes, any person or entity desiring to
purchase more than 10% of our outstanding voting securities is required to
obtain prior regulatory approval for the purchase.

NAIC Ratios. The NAIC has established eleven financial ratios to assist
state insurance departments in their oversight of the financial condition of
insurance companies operating in their respective states. The NAIC's Insurance
Regulatory Information System ("IRIS") calculates these ratios based on
information submitted by insurers on an annual basis and shares the information
with the applicable state insurance departments. Generally, an insurance company
will be subject to regulatory scrutiny if it falls outside the usual ranges with
respect to four or more of the ratios.

Codification of Statutory Accounting Principles. In their ongoing
effort to improve solvency regulations, the NAIC and individual states have
enacted certain laws and statutory financial statement reporting requirements.
For example, NAIC rules require audited statutory financial statements as well
as actuarial certification of loss and loss adjustment expense reserves therein.
Other activities are focused on greater disclosure of an insurer's reliance on
reinsurance and changes in its reinsurance programs and stricter rules on
accounting for certain overdue reinsurance. These regulatory initiatives, and
the overall focus on solvency, may intensify the restructuring and consolidation
of the insurance industry. While the impact of these regulatory efforts on our
operations cannot be quantified until enacted, we believe we will be adequately
positioned to compete in an environment of more stringent regulation.

Risk Based Capital. The NAIC has implemented a risk-based or RBC
formula and model law to be applied to all property/casualty insurance
companies.

Reinsurance Regulation. The terms and conditions of reinsurance
agreements generally are not subject to regulation with respect to rates or
policy terms. This contrasts with primary insurance policies and agreements, the
rates and policy terms of which are generally closely regulated by state
insurance departments. As a practical matter, however, the rates charged by
primary insurers do have an effect on the rates reinsurers can charge.

The ability of a primary insurer to take credit for the reinsurance
purchased from reinsurance companies is a significant component of reinsurance
regulation. Typically, a primary insurer will only enter into a reinsurance

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agreement if it can obtain credit on its statutory financial statements for the
reinsurance ceded to the reinsurer. With respect to U.S. domiciled reinsurers
that reinsure U.S. insurers, credit is usually granted when the reinsurer is
licensed or accredited in a state where the primary insurer is domiciled. In
addition, many states allow credit for reinsurance ceded to a reinsurer that is
licensed in another state and which meets certain financial requirements,
provided in some instances that the state has substantially similar reinsurance
credit law requirements or the primary insurer is provided with collateral to
secure the reinsurer's obligations.

In order for primary U.S. insurers to obtain financial statement credit
for the reinsurance obligations of non-U.S. reinsurers, those reinsurers must
satisfy specific reinsurance credit requirements. Non- U.S. reinsurers, such as
RenaissanceRe, that are not licensed in a state generally may become accredited
by filing certain financial information with the relevant state commissioner and
maintaining a U.S. trust fund for the payment of valid reinsurance claims in an
amount equal to the reinsurer's reinsurance liabilities covered by the trust
plus an additional $20 million. In addition, unlicensed and unaccredited
reinsurers may secure the U.S. primary insurer with funds equal to its
reinsurance obligations in the form of cash, securities, letters of credit or
reinsurance trusts. Renaissance Reinsurance generally posts a letter of credit
or provides other forms of security after a claim is reported to comply with
U.S. reinsurance credit requirements.

The Gramm-Leach-Bliley Act. On November 12, 1999, President Clinton
signed into law the Gramm-Leach-Bliley Act of 1999 ("GLBA") implementing
fundamental changes in the regulation of the financial services industry in the
United States. The GLBA permits the transformation of the already converging
banking, insurance and securities industries by permitted mergers that combine
commercial banks, insurers and securities firms under one holding company, a
"financial holding company." Bank holding companies and other entities that
qualify and elect to be treated as a financial holding company may engage in
activities, and acquire companies engaged in activities that are "financial" in
nature or "incidental" or "complementary" to such financial activities. These
financial activities include acting as principal, agent or broker in the
underwriting and sale of life, property, casualty and other forms of insurance
and annuities.

A financial holding company can own any kind of insurer or insurance
broker or agent but its bank subsidiary cannot own an insurance company. Under
the GLBA, national banks retain their existing ability to sell insurance
products in some circumstances.

Under state law, the financial holding company must apply to the
insurance commissioner in the insurer's state of domicile for prior approval of
the acquisition of the insurer. Under the GLBA, no state may prevent or
interfere with affiliations between banks and insurers, insurance agents or
brokers or the licensing of a bank or bank affiliate as an insurer, agent or
broker as permitted by the GLBA.

Until the passage of the GLBA, the Glass-Steagall Act of 1933, as
amended, had limited the ability of banks to engage in securities-related
businesses, and the Bank Holding Company Act of 1956, as amended, had restricted
banks from being affiliated with insurers. With the passage of the GLBA, among
other things, bank holding companies may acquire insurers, and insurance holding
companies may acquire banks. The ability of banks to affiliate with insurers may
materially affect our U.S. subsidiaries' product lines by substantially
increasing the number, size and financial strength of potential competitors.

The expansion of our primary insurance operations, together with the
potential of further expansion into additional insurance markets, could expose
us or our subsidiaries to increasing regulatory oversight. However, we intend to
continue to conduct our operations so as to minimize the likelihood that
RenaissanceRe or Renaissance Reinsurance will become subject to U.S. regulation.

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MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The table below sets forth the names, ages and titles of the persons
who were our directors and executive officers at February 15, 2001.

James N. Stanard has served as our Chairman of the Board, President and
Chief Executive Officer since our formation in June 1993. Mr. Stanard is a Class
II Director. From 1991 through June 1993, Mr. Stanard served as Executive Vice
President of USF&G and was a member of a three-person Office of the President.
As Executive Vice President of USF&G, he was responsible for USF&G's
underwriting, claims and ceded reinsurance. From October 1983 to 1991, Mr.
Stanard was an Executive Vice President of F&G Re, Inc., USF&G's start-up
reinsurance subsidiary. Mr. Stanard was one of two senior officers primarily
responsible for the formation of F&G Re, where he was responsible for
underwriting, pricing and marketing activities of F&G Re during its first seven
years of operations. As Executive Vice President of F&G Re, Mr. Stanard was
personally involved in the design of pricing procedures, contract terms and
analytical underwriting tools for all types of treaty reinsurance, including
both U.S. and international property catastrophe reinsurance.

William I. Riker was appointed as one of our Directors in August 1998.
Mr. Riker is a Class I Director. Mr. Riker was appointed as Executive Vice
President of RenaissanceRe in December 1997 and previously served as our Senior
Vice President from March 1995 and as our Vice President-Underwriting from
November 1993. Mr. Riker has served as President and Chief Operating Officer of
Renaissance Reinsurance since February 1998. From March 1993 through October
1993, Mr. Riker served as Vice President of Applied Insurance Research, Inc.
Prior to that, Mr. Riker held the position of Senior Vice President, Director of
Underwriting at American Royal Reinsurance Company. He was responsible for
developing various analytical underwriting tools while holding various positions
at American Royal from 1984 through 1993.

David A. Eklund has served as Chief Underwriting Officer of Renaissance
Reinsurance Ltd. since February 1999, and as Executive Vice President of
Renaissance Reinsurance since December 1997, prior to which he served as our
Senior Vice President and Senior Vice President of Renaissance Reinsurance from
February 1996. Mr. Eklund previously served as our Vice President-Underwriting
and Renaissance Reinsurance from September 1993. From November 1989 through
September 1993, Mr. Eklund held various positions in casualty underwriting at
Old Republic International Reinsurance Group, Inc., where he was responsible for
casualty treaty underwriting and marketing. From March 1988 to November 1989,
Mr. Eklund held various positions in catastrophe reinsurance at Berkshire
Hathaway Inc., where he was responsible for underwriting and marketing finite
risk and property catastrophe reinsurance.

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John M. Lummis has served as our Executive Vice President since
February 2001 and Chief Financial Officer since September 1997. Mr. Lummis
served as Senior Vice President from September 1997 to February 2001. Mr. Lummis
served as one of our directors from July 1993 to December 1997, when he resigned
in connection with his appointment as an executive officer. Mr. Lummis served as
Vice President-Business Development of USF&G Corporation from 1994 until August
1997 and served as Vice President and Group General Counsel of USF&G Corporation
from 1991 until 1995. USF&G Corporation is the parent company of USF&G and was
acquired by St. Paul in May 1998. From 1982 until 1991, Mr. Lummis was engaged
in the private practice of law with Shearman & Sterling.

Arthur S. Bahr has served as one of our directors since our formation
in June 1993. Mr. Bahr is a Class III Director. Mr. Bahr served as Director and
Executive Vice President-Equities of General Electric Investment Corporation, a
subsidiary of General Electric Company and registered investment adviser, from
1987 until December 1993. Mr. Bahr has served GEIC in various senior investment
positions since 1978 and was a Trustee of General Electric Pension Trust from
1976 until December 1993. Mr. Bahr served as a Director and Executive Vice
President of GE Investment Management Incorporated, a subsidiary of General
Electric Company, and a registered investment adviser, from 1988 until his
retirement in December 1993. From December 1993 until December 1995, Mr. Bahr
served as a consultant to GEIC.

Thomas A. Cooper has served as one of our directors since August 7,
1996. Mr. Cooper is a Class II Director. Mr. Cooper has served as Chairman and
Chief Executive Officer of TAC Associates, a privately held investment company
since August 1993. Also from August 1993 until August 1996, Mr. Cooper served as
Chairman and Chief Executive Officer of Chase Federal Bank FSB. From June 1992
until July 1993, Mr. Cooper served as principal of TAC Associates. From April
1990 until May 1992, Mr. Cooper served as Chairman and Chief Executive Officer
of Goldome FSB. From 1986 to April 1990, Mr. Cooper served as Chairman and Chief
Executive Officer of Investment Services of America, one of the largest full
service securities brokerage and investment companies in the United States.

Edmund B. Greene has served as one of our directors of since formation
in June 1993. Mr. Greene is a Class I Director. Mr. Greene currently serves as a
consultant to Aon Corporation. Mr. Greene retired as Deputy Treasurer-Insurance
of General Electric Company in October 1998, where he had served from March
1995. Prior to that, Mr. Greene was Manager-Corporate Insurance Operation of
General Electric Company since 1985, and previously served in various financial
management assignments at General Electric Company since 1962.

Brian Hall has served as one of our directors since August 1999. Mr.
Hall is a Class I Director. Mr. Hall, who is President of Inter-Ocean Management
Ltd., an independent company providing management and general consulting
services, retired as a Director of Johnson & Higgins, and Chairman of Johnson &
Higgins (Bermuda) Ltd. in July 1997. Mr. Hall started his career in the Bermuda
insurance industry when he joined American International Group in 1958. He moved
to International Risk Management Ltd. in 1964. In 1969 he founded Inter-Ocean
Management Ltd. which entered into an association with Johnson & Higgins in
1970. Inter-Ocean was acquired by Johnson & Higgins in 1979, and Mr. Hall was
appointed President of Johnson & Higgins (Bermuda) Ltd., and became a Director
of Johnson & Higgins in 1989. After his retirement in 1997, Mr. Hall
re-established Inter-Ocean Management Ltd.

Gerald L. Igou has served as one of our directors since our formation
in June 1993. Mr. Igou is a Class III Director. Mr. Igou has served as a Vice
President-Investment Analyst for GEIC since September 1993. He is a Certified
Financial Analyst and has served GEIC in the capacities of investment analyst
and sector portfolio manager since 1968. Prior to joining General Electric, Mr.
Igou was an analyst with the Wall Street firms of Smith Barney Inc. and Dean
Witter & Co.

Kewsong Lee has served as one of our directors since December 1994. Mr.
Lee is a Class II Director. Mr. Lee has served as a Member and Managing Director
of E.M. Warburg, Pincus & Co. LLC and a general partner of Warburg, Pincus & Co.
since January 1, 1997. Mr. Lee served as a Vice President of Warburg, Pincus
Ventures, Inc. from January 1995 to December 1996, and as an associate at E.M.
Warburg, Pincus & Co., Inc. from 1992 to until December 1994. Prior to joining
E.M. Warburg, Mr. Lee was a consultant at McKinsey & Company, Inc., a management
consulting company, from 1990 to 1992. Mr. Lee is a director of Knoll, Inc.,
Eagle Family Foods, Inc. and several privately held companies.

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Paul J. Liska has served as one of our directors since August 1998. Mr.
Liska is a Class III Director. Mr. Liska has served as Executive Vice President
and Chief Financial Officer of St. Paul since 1997. From 1996 to 1997, Mr. Liska
served as President and Chief Executive Officer of Specialty Foods Corporation.
During 1994 to 1996, Mr. Liska served as Chief Operating Officer and Chief
Financial Officer of Specialty Foods Corporation. From 1988 to 1994, Mr. Liska
held several positions with Kraft General Foods, including Chief Financial
Officer of Kraft U.S.A. Mr. Liska also held a finance position with Quaker Oats
Co., and positions in finance, sales and sales management with American Hospital
Supply Corp. A certified public accountant, he began his career with Price
Waterhouse & Co.

W. James MacGinnitie has served as one of our directors since February
2000. Mr. MacGinnitie is a Class II Director. Mr. MacGinnitie is an independent
actuary and consultant. He served as Senior Vice President and Chief Financial
Officer of CNA Financial from September 1997 to September 1999. From May 1994
until September 1997, Mr. MacGinnitie was a partner of Ernst & Young LLP and
National Director of its actuarial services. From 1975 until 1994 he was a
principal in Tillinghast, primarily responsible for its property-casualty
actuarial consulting services. Prior thereto, Mr. MacGinnitie was a Professor of
Actuarial Science & Director of Actuarial Program at the University of Michigan,
Ann Arbor, Michigan, from 1973 to 1975.

Scott E. Pardee has served as one of our directors since February 1997.
Mr. Pardee is a Class I Director. Mr. Pardee serves as Alan R. Holmes Professor
of Economics at Middlebury College, where he has taught since January 1, 2000.
Previously he served as a Senior Lecturer at the MIT Sloan School of Management
and Executive Director of the Finance Research Center at the Sloan School from
November 1997. Mr. Pardee served as Chairman of Yamaichi International
(America), Inc., a financial services company, from 1989 to 1995. Mr. Pardee
previously served as Executive Vice President and a member of the Board of
Directors of Discount Corporation of New York, a primary dealer in U.S.
government securities, and Senior Vice President of the Federal Reserve Bank of
New York and Manager of Foreign Operations of the Open Market Committee of the
Federal Reserve System.

COMPOSITION OF THE BOARD; PROPOSED BYE-LAW AMENDMENT

Our Bye-Laws provide for a classified Board, consisting of eleven
members (which the Board may determine to expand to twelve members) divided into
three classes of approximately equal size. Each director, once elected, serves a
three year term. At our 2001 Annual Meeting, our shareholders will elect the
Class III Directors, who would then be scheduled to serve until our 2004 Annual
Meeting. Our incumbent Class I Directors are scheduled to serve until our 2002
Annual Meeting and our Class II Directors are scheduled to serve until our 2003
Annual Meeting.

If the shares being offered are sold before our 2001 Annual General
Meeting, we plan to propose that our shareholders adopt an amendment to our
Bye-Laws reducing the size of our Board from eleven members to eight members.
The Board would have the power to increase its size to eleven members. We fixed
the size of our Board at eleven members in part to accommodate the inclusion of
representatives of our founding institutional shareholders, such as USF&G and GE
Investments, as well as a substantial number of independent directors. If the
shares being offered are sold, we believe it would be appropriate to reduce the
number of current directors.

The terms of office of Mr. Liska and Mr. Igou will expire at the Annual
Meeting. It is expected that Messrs. Liska and Igou will not stand for
re-election if the shares offered hereby have been sold prior to the Annual
Meeting. In addition, Mr. Lee is expected to resign following the Annual Meeting
if our shareholders approve this Bye-Law amendment. In addition, the
configuration of the classes of the Board may be adjusted to accommodate this
reduction in number. We will provide more details about any amendment proposal
in a Proxy Statement on Schedule 14A, which we will distribute in connection
with the 2001 Annual Meeting.

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SHAREHOLDERS AGREEMENT

PT Investments and USF&G are parties to an amended and restated
shareholders agreement among themselves and RenaissanceRe, pursuant to which
they have each agreed to use their respective reasonable best efforts to
nominate and to elect a designee of each of PT Investment and USF&G to the
Board. Assuming PT Investments and St. Paul act in concert, they have the
ability to influence on the outcome of any matters presented to our
shareholders. If the shares being offered are sold, USF&G would automatically
cease to be a party to this shareholders agreement.

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SELLING SHAREHOLDER

The following table sets forth information with respect to the common
shares beneficially owned by USF&G at February 15, 2001 and the amount of shares
that USF&G may offer hereunder. Because USF&G may offer some or all of its
shares in an offering that is not underwritten on a firm commitment basis, no
estimate can be given as to the amount of securities that will be held by USF&G
after completion of the offering. See "Plan of Distribution." To the extent
required, the specific number of securities to be sold, the number of shares to
be owned by USF&G after such sale, the name of any agent, dealer or underwriter
participating in such sale and any applicable commission or discount with
respect to the sale will be set forth in a supplement to this prospectus.
Beneficial ownership is determined in accordance with the rules of the SEC and
generally includes voting or investment power with respect to securities and
options that are exercisable within 60 days.

The nature of the positions, offices or other material relationships
that certain shareholders have had with us within the past three years are set
forth in documents incorporated into this prospectus by reference.

USF&G is an indirect wholly owned subsidiary of The St. Paul Companies,
Inc., whose business address is 385 Washington Street, St. Paul, Minnesota
55102.

DESCRIPTION OF COMMON SHARES

The following description of our common shares includes a summary of
certain provisions of our Memorandum of Association and Bye-Laws. Because this
summary is not complete, you should refer to our Memorandum and Bye-Laws for
complete information regarding the provisions of the Memorandum and Bye-Laws,
including the definitions of some of the terms used below. Copies of the
Memorandum and Bye-Laws are incorporated by reference as exhibits to the
registration statement of which this prospectus forms a part. Whenever we refer
to particular sections or defined terms of the Memorandum and Bye-Laws, such
sections or defined terms are incorporated herein by reference, and the
statement in connection with which such reference is made is qualified in its
entirety by such reference.

GENERAL

Our common shares are listed on the New York Stock Exchange under the
symbol "RNR." The common shares currently issued and outstanding are fully paid
and nonassessable. Our authorized capital consists of 225 million common shares
and 100 million preference shares, each of $1.00 par value. At December 31,
2000, 19.6 million common shares were outstanding. The common shares held by
USF&G and offered by this prospectus are fully paid and nonassessable within the
meaning of applicable Bermuda law. There are no provisions of Bermuda law or the
Memorandum or the Bye-Laws which impose any limitation on the rights of
shareholders to hold or vote common shares by reason of their not being
residents of Bermuda.

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A more detailed description of our common shares is set forth in our
registration statement filed under the Exchange Act on Form 8-A on July 24,
1995, including any amendment or report filed for the purpose of updating such
description.

DILUTED VOTING COMMON SHARES

Certain of our outstanding common shares consist of our diluted voting
class I common shares. All of these shares are currently held by PT Investments,
Inc. Each holder of these diluted voting common shares is entitled to a fixed
voting interest in RenaissanceRe of up to 9.9% of all outstanding voting rights
attached to the full voting common shares, taking into account the percentage
interest in RenaissanceRe represented by full voting common shares owned
directly, indirectly, or constructively by the holder within the meaning of
Section 958 of the Internal Revenue Code and applicable rules and regulations
thereunder. The diluted voting common shares are not listed on the New York
Stock Exchange. We do not presently intend to issue any additional diluted
voting common shares.

The diluted voting common shares are convertible into an equal number
of our full voting common shares on a one-for-one basis at the option of the
holder thereof upon two days prior written notice. We have agreed with PT
Investments that it is a condition to the delivery of the diluted voting common
shares that, immediately following the sale of these shares, they be converted
into full voting common shares.

We have authorized both diluted voting class I common shares and
diluted voting class II common shares. PT Investments, at January 1, 2001, held
a total of 1,448,504 diluted voting class I common shares. A total of 14,039,089
diluted voting class I common shares were authorized and unissued at December
31, 2000. In addition, 185,532 diluted voting class II shares are authorized and
unissued. There are no diluted voting class II shares outstanding. Approximately
4.3 million diluting voting shares have been returned to us for conversion to
full voting common shares. These shares have been cancelled, and are no longer
available for issuance.

TRANSFER AGENT

Our registrar and transfer agent for the common shares is Mellon
Investor Services, L.L.C.

TRANSFER OF SHARES

Our Bye-Laws contain various provisions affecting the transferability
of our shares. Under the Bye-Laws, the Board has absolute discretion to decline
to register a transfer of shares:

- unless the appropriate instrument of transfer is submitted
along with such evidence as the Board may reasonably require
showing the right of the transferor to make the transfer;

- unless all applicable consents and authorizations of any
governmental body or agency in Bermuda have been obtained; or

- if the Board determines that such transfer would result in a
person owning or controlling shares that constitute 9.9% or
more of any class or series of our issued shares.

The primary purpose for the restriction on a holder of our shares from
owning or exercising more than 9.9% of the total voting rights of all our
shareholders is to reduce the likelihood that we will be deemed a "controlled
foreign corporation" within the meaning of the Internal Revenue Code for U.S.
Federal tax purposes. This limit may also have the effect of deterring purchases
of large blocks of common shares or proposals to acquire us, even if some or a
majority of the shareholders might deem these purchases or acquisition proposals
to be in their best interests. With respect to this issue, also see the
provisions discussed below under "Anti-Takeover Effects of Certain Bye-Laws
Provisions."

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If the Board refuses to register any transfer of shares, our Secretary
will send notice of such refusal to the transferor and transferee within 10 days
of the date on which the transfer was lodged with us.

Our Bermuda counsel has advised us that while the precise form of the
restrictions on transfers contained in the Bye-Laws is untested, as a matter of
general principle, restrictions on transfers are enforceable under Bermuda law
and are not uncommon. The transferor of such shares will be deemed to own such
shares for dividend, voting and reporting purposes until a transfer of such
shares has been registered on our register of members.

ANTI-TAKEOVER EFFECTS OF CERTAIN BYE-LAWS PROVISIONS

Our Bye-Laws contain certain provisions that make it more difficult to
acquire control of RenaissanceRe by means of a tender offer, open market
purchase, a proxy fight or otherwise. These provisions are designed to encourage
persons seeking to acquire control of us to negotiate with our directors. We
believe that, as a general rule, the interests of our shareholders would be best
served if any change in control results from negotiations with our directors.
Our directors would negotiate based upon careful consideration of the proposed
terms, such as the price to be paid to shareholders, the form of consideration
to be paid and the anticipated tax effects of the transaction. However, these
provisions could have the effect of discouraging a prospective acquiror from
making a tender offer or otherwise attempting to obtain control of
RenaissanceRe. To the extent these provisions discourage takeover attempts, they
could deprive shareholders of opportunities to realize takeover premiums for
their shares or could depress the market price of the shares.

In addition to those provisions of the Bye-Laws discussed above under
"Transfers of Shares", set forth below is a description of certain other
provisions of the Bye-Laws. Because the following description is intended as a
summary only and is therefore not complete, you should refer to the Bye-Laws,
which are incorporated by reference as an exhibit to the registration statement
of which this prospectus forms a part, for complete information regarding these
provisions.

BOARD OF DIRECTOR PROVISIONS

Our Bye-Laws provide for a classified board, to which approximately
one-third of the Board is elected each year at our annual general meeting of
shareholders. Accordingly, our directors serve three-year terms rather than
one-year terms. Moreover, our Bye-Laws provide that each director may be removed
by the shareholders only for cause upon the affirmative vote of the holders of
not less than 66-2/3% of the voting rights attached to all issued and
outstanding capital shares entitled to vote for the election of that director.
Further, our Bye-Laws fix the size of the Board at eleven directors (although
the incumbent Board may increase its size to twelve members). If this offering
is completed, we plan to propose that our shareholders amend our Bye-Laws to fix
the size of the Board at eight, as described above. In addition, shareholders
may only nominate persons for election as director at an annual or special
general meeting of shareholders called for the purpose of electing directors and
only if, among other things, a satisfactory written notice signed by not less
than 20 shareholders holding in the aggregate not less than 10% of our
outstanding paid up share capital is timely submitted.

We believe that these Bye-Law provisions enhance the likelihood of
continuity and stability in the composition of the Board and in the policies
formulated by the Board. We believe these provisions assist our Board to
represent more effectively the interests of all shareholders, including taking
action in response to demands or actions by a minority shareholder or group.

Our classified Board makes it more difficult for shareholders to change
the composition of our Board even if some or a majority of the shareholders
believe such a change would be desirable. Moreover, these Bye-Law provisions may
deter changes in the composition of the Board or certain mergers, tender offers
or other future takeover attempts which some or a majority of holders of our
securities may deem to be in their best interest.

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RESTRICTIONS ON CERTAIN SHAREHOLDER ACTIONS

Our Bye-Laws restrict the ability of our shareholders to take certain
actions. These restrictions, among other things, limit the power of our
shareholders to:

- nominate persons to serve as directors;

- submit resolutions to the vote of shareholders at an annual or
special general meeting; and

- to requisition special general meetings.

Generally, our Bye-Laws prohibit shareholders from taking these actions
unless certain requirements specified in the Bye-Laws are met. These
requirements include the giving of written notice, specify information that must
be provided in connection with the notice or in relation to the requested
action, provide that action must be taken within specified time periods, and
require a minimum number of holders to act.

These requirements regulating shareholder nominations and proposals may
have the effect of deterring a contest for the election of directors or the
introduction of a shareholder proposal if the procedures summarized above are
not followed. They may also discourage or deter a third party from conducting a
solicitation of proxies to elect its own slate of directors or to introduce a
proposal. For a more complete description of these provisions, you should refer
to the Bye-Laws, which are incorporated by reference as an exhibit to the
registration statement of which this prospectus forms a part.

SUPERMAJORITY REQUIREMENTS FOR CERTAIN AMENDMENTS

Our Bye-Laws require the affirmative vote of at least 66-2/3% of the
voting rights attached to all of our issued and outstanding capital shares to
amend, repeal or adopt any provision inconsistent with several provisions of the
Bye-Laws. The provisions include, among others things, those relating to: the
size of our Board and its division into classes, the removal of directors, the
powers of shareholders to nominate directors, to call shareholder meetings and
to propose matters to be acted on at shareholder meetings. This supermajority
requirement could make it more difficult for shareholders to propose and adopt
changes to the Bye-Laws intended to facilitate the acquisition or exercise of
control over RenaissanceRe.

AVAILABILITY OF SHARES FOR FUTURE ISSUANCES; SHAREHOLDER RIGHTS PLAN

We have available for issuance a large number of authorized but
unissued shares. Generally, these shares may be issued by action of our
directors without further action by shareholders (except as may be required by
applicable stock exchange requirements). The availability of these shares for
issue could be viewed as enabling the directors to make more difficult a change
in our control. For example, the directors could determine to issue warrants or
rights to acquire shares. In addition, we have authorized a sufficient amount of
our shares such that we could put in place a shareholder rights plan without
further action by shareholders. A shareholder rights plan could serve to dilute
or deter stock ownership of persons seeking to obtain control of RenaissanceRe.

Our ability to take these actions makes it more difficult for a third
party to acquire us without negotiating with the Board, even if some or a
majority of the shareholders desired to pursue a proposed transaction. Moreover,
these powers could discourage or defeat unsolicited stock accumulation programs
and acquisition proposals.

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PROPOSED BYE-LAWS AMENDMENT; 2001 STOCK INCENTIVE PLAN

In February 2001, our Board authorized us to seek shareholder approval
of certain changes to our Bye-Laws, if all the shares offered hereby before we
conduct our 2001 Annual General Meeting. We will not propose that our
shareholders adopt these proposals if all the shares being offered are not sold
by the annual meeting.

First, we plan to propose that our shareholders approve an amendment to
our Bye-Laws which would provide for an eight-member Board. The incumbent Board
would have the power to increase its size to eleven members. Presently, our
Bye-Laws provide for an eleven-member Board. We established our Board at this
size in order to accommodate the inclusion of representatives of our founding
institutional shareholders, such as USF&G and GE Investments, together with a
substantial number of independent directors. If USF&G completes this offering,
we believe it would be appropriate to lessen the number of our current
directors.

Second, we plan to ask our shareholders to approve an amendment to our
Bye-Laws repealing the current requirement that we submit to our shareholders
proposals required to be voted on by RenaissanceRe as the sole shareholder of
Renaissance Reinsurance. We have maintained this requirement, to among other
things, lessen the likelihood that Renaissance Reinsurance will be deemed to be
a controlled foreign corporation for U.S. federal tax purposes. Since the sale
by USF&G of our shares will make it less likely Renaissance Reinsurance will be
deemed a controlled foreign corporation, we believe it would be appropriate to
remove this bifurcated voting requirement if this offering is completed.

Finally, we also plan to seek shareholder ratification of a new stock
incentive plan authorizing the issuance of up to 950,000 shares. Our Board
approved this new plan in February 2001. At December 31, 2000, the total shares
remaining for issuance under our current plans was 278,170. Approval of this new
plan will permit us to continue our focus on equity-based incentive
compensation. We will seek approval of this proposal whether or not this
offering is complete by the time of the annual meeting.

REGISTRATION RIGHTS

We have entered into an amended and restated registration rights
agreement with PT Investments and USF&G among other parties. Pursuant to this
agreement these investors have the right to require us to register the common
shares held by them. This offering is being conducted in connection with a
request for registration by USF&G. We have the right once in any twelve-month
period to not effect a demand for registration for up to 120 days if, in the
good faith judgment of our Board, it would be seriously detrimental to us and
our shareholders to effect the registration. We are required to bear all related
registration and selling expenses, other than underwriting fees and commissions.
Parties to the registration rights agreement may transfer or assign their
registration rights in certain circumstances in accordance with the terms of the
registration rights agreement.

CERTAIN TAX CONSIDERATIONS

The following discussion of our taxation and Renaissance Reinsurance
and of the taxation of our shareholders is based (i) upon the opinion of Conyers
Dill & Pearman, Hamilton, Bermuda, with respect to the matters discussed under
"Taxation of the Company and Renaissance Reinsurance" and "Taxation of
Shareholders--Bermuda Taxation" and (ii) upon the opinion of Willkie Farr &
Gallagher, New York, New York, with respect to the matters discussed under
"Taxation of the Company and Renaissance Reinsurance" and "Taxation of
Shareholders--United States Taxation of U.S. and non-U.S. Shareholders." The
opinions of these firms do not address, and do not include, opinions as to
whether RenaissanceRe, Renaissance Reinsurance or Glencoe has a permanent
establishment in the United States, any factual or accounting matters,
determinations or conclusions such as to whether we, Renaissance Reinsurance or
Glencoe is engaged in a U.S. trade or business, Related Person Insurance Income
(RPII) amounts and computations and components thereof (for example, amounts or
computations of income or expense items or reserves entering into RPII
computations) or facts relating to our business or activities, Renaissance
Reinsurance or Glencoe, all of which are matters and information determined and
provided by us. The following discussion is based upon current law and describes
the material U.S. federal and Bermuda tax consequences at the date of this
Prospectus and is for general information only. The tax treatment of a holder of
common shares, or a person treated as a holder of common shares for U.S. federal
income, state, local or non-U.S.

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tax purposes may vary depending on the holder's particular tax situation.
Legislative, judicial or administrative changes or interpretations may be
forthcoming that could be retroactive and could affect the tax consequences to
holders of common shares. PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR OWN
TAX ADVISORS CONCERNING THE FEDERAL, STATE, LOCAL AND NON-U.S. TAX CONSEQUENCES
TO THEM OF OWNING COMMON SHARES.

TAXATION OF THE COMPANY, RENAISSANCE REINSURANCE AND GLENCOE

BERMUDA

RenaissanceRe, Renaissance Reinsurance and Glencoe have each received
from the Minister of Finance of Bermuda an assurance under the Exempted
Undertakings Tax Protection Act 1966 of Bermuda, to the effect that in the event
of there being enacted in Bermuda any legislation imposing tax computed on
profits or income, or computed on any capital asset, gain or appreciation, or
any tax in the nature of estate duty or inheritance tax, then the imposition of
any such tax shall not be applicable to RenaissanceRe, Renaissance Reinsurance
and Glencoe or to any of our operations or the shares, debentures or other
obligations of RenaissanceRe, Renaissance Reinsurance or Glencoe until March 28,
2016. These assurances are subject to the proviso that they are not construed so
as to prevent the application of any tax or duty to such persons as are
ordinarily resident in Bermuda or to prevent the application of any tax payable
in accordance with the provisions of The Land Tax Act 1967 of Bermuda or
otherwise payable in relation to the land leased to Renaissance Reinsurance or
Glencoe. RenaissanceRe, Renaissance Reinsurance and Glencoe are required to pay
certain annual Bermuda government fees. Additionally, Renaissance Reinsurance
and Glencoe are required to pay certain insurance registration fees as an
insurer under the Insurance Act. Under current rates, RenaissanceRe pays a fixed
fee of $15,000 and Renaissance Reinsurance and Glencoe pay a fee of $30,000 and
$10,900 per year, respectively (which is the applicable annual Bermuda
government fee and the annual insurance registration fee for each company).
Currently there is no Bermuda withholding tax on dividends that may be paid by
Renaissance Reinsurance or Glencoe to RenaissanceRe.

UNITED STATES

We believe that, to date, Renaissance Reinsurance and Glencoe have
operated and, in the future, will continue to operate their businesses in a
manner that will not cause either to be treated as being engaged in a U.S. trade
or business. On this basis, we do not expect Renaissance Reinsurance or Glencoe
to be required to pay U.S. corporate income tax. However, whether a corporation
is engaged in a U.S. trade or business is considered a factual question. Because
there are no definitive standards provided by the Code, existing or proposed
regulations thereunder or judicial precedent, and as the determination is
inherently factual and not a legal issue on which counsel can opine, there is
considerable uncertainty as to activities that constitute being engaged in a
U.S. trade or business. As a result, there can be no assurance that the IRS
could not successfully contend that Renaissance Reinsurance or Glencoe is
engaged in such a trade or business.

If the IRS so contended, Renaissance Reinsurance or Glencoe, unless
exempted from tax by the income tax treaty between the United States and
Bermuda, discussed below, would be subject to U.S. corporate income tax on that
portion of its net income treated as effectively connected with a U.S. trade or
business, as well as the U.S. corporate branch profits tax. The U.S. corporate
income tax is currently imposed at the rate of 35% on net corporate profits and
the U.S. corporate branch profits tax is imposed at the rate of 30% on a
corporation's after-tax profits deemed distributed as a dividend.

Even though we will take the position that Renaissance Reinsurance and
Glencoe are not engaged in U.S. trades or businesses, Renaissance Reinsurance
and Glencoe have filed and intend to continue to file U.S. federal income tax
returns to avoid having all deductions disallowed in the event that either
Renaissance Reinsurance or Glencoe were held to be engaged in a U.S. trade or
business. In addition, filing U.S. tax returns will allow Renaissance
Reinsurance and Glencoe to claim benefits under the income tax treaty without
penalty.

Even if the IRS were to contend successfully that Renaissance
Reinsurance or Glencoe was engaged in a U.S. trade or business, the United
States-Bermuda income tax treaty could preclude the United States from taxing
Renaissance Reinsurance or Glencoe on its net premium income except to the
extent that such income were

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attributable to a permanent establishment maintained by Renaissance Reinsurance
or Glencoe in the United States. Although we believe that neither Renaissance
Reinsurance nor Glencoe has a permanent establishment in the United States, we
cannot assure you that the IRS will not successfully contend that Renaissance
Reinsurance or Glencoe has such a permanent establishment and therefore is
subject to taxation. In addition, benefits of the income tax treaty are only
available to Renaissance Reinsurance and Glencoe if more than 50% of their
shares is beneficially owned, directly or indirectly, by individuals who are
Bermuda residents or U.S. citizens or residents. Although we believe we meet and
we will attempt to monitor compliance with this beneficial ownership test, there
can be no assurance that the beneficial ownership test will continue to be
satisfied or that we will be able to establish its satisfaction to the IRS.
Furthermore, income tax treaty benefits will also not be available if the income
of Renaissance Reinsurance or Glencoe is used in substantial part, directly or
indirectly, to make disproportionate distributions to, or to meet certain
liabilities to, persons who are neither residents of the United States or
Bermuda nor U.S. citizens. This limitation could apply if premiums paid for
ceded reinsurance by Renaissance Reinsurance or Glencoe to persons who are
neither residents of the United States or Bermuda nor U.S. citizens exceed 50%
of gross premiums received by Renaissance Reinsurance or Glencoe. We believe
that this limitation also will not apply, but there can be no assurance that
this will be so in the future. Finally, it should be noted that although the
income tax treaty (assuming the limitations previously discussed do not apply)
clearly applies to premium income, it is uncertain whether the income tax treaty
applies to other income such as investment income.

If Renaissance Reinsurance or Glencoe were considered to be engaged in
a U.S. trade or business and it were held not to be entitled to the benefits of
the permanent establishment clause of the income tax treaty, and, thus, subject
to U.S. income taxation, our results of operations and cash flows could be
materially adversely affected.

Code section 842 requires that foreign insurance companies carrying on
an insurance business within the United States have a certain minimum amount of
effectively connected net investment income, determined in accordance with a
formula that depends, in part, on the amount of U.S. risk insured or reinsured
by Renaissance Reinsurance or Glencoe. If Renaissance Reinsurance or Glencoe is
considered to be engaged in the conduct of an insurance business in the United
States and such company (i) is not entitled to the benefits of the income tax
treaty in general (because we fail to satisfy one of the limitations on treaty
benefits discussed above) or (ii) is entitled to the benefits of the income tax
treaty in general, but the income tax treaty is interpreted to not apply to
investment income, then section 842 could subject a significant portion of the
investment income of such company to U.S. income tax.

The United States also imposes an excise tax on insurance and
reinsurance premiums paid to foreign insurers or reinsurers with respect to
risks located in the United States. Insurance and reinsurance premiums paid to
foreign insurers or reinsurers with respect to risks located outside the United
States should not be subject to this excise tax. The rate of tax currently
applicable to reinsurance premiums paid to foreign reinsurers such as
Renaissance Reinsurance, with respect to risks located in the United States, is
1% of gross premiums. Congress has in the past, however, considered legislation
that would increase the excise tax rate on reinsurance premiums paid to foreign
reinsurers to 4%. Although no such legislation has to date been enacted,
hearings on the subject were held in 1993, and it is uncertain whether, or in
what form, such legislation may ultimately be enacted. The rate of tax currently
applicable to insurance premiums paid to foreign insurers such as Glencoe with
respect to risks located in the U.S. is 4% of gross premiums.

TAXATION OF SHAREHOLDERS

BERMUDA TAXATION

Currently, there is no Bermuda withholding tax on dividends paid by us.

UNITED STATES TAXATION OF U.S. AND NON-U.S. SHAREHOLDERS

Classification of Renaissance Reinsurance and Glencoe as non-CFCs.
Although Renaissance Reinsurance and Glencoe were classified as "controlled
foreign corporations" ("CFCs") in prior years, we believe that they no longer
meet the requirements for such classification. Further, our Amended and Restated
Bye-Laws contain certain

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"Excess Share" provisions designed to prevent any person from becoming a 10%
shareholder and to prevent us from becoming a CFC in the future. There can be no
absolute assurance that such provisions will operate as intended.

Each prospective investor should consult its own tax advisor to
determine whether its ownership interest in RenaissanceRe would cause it to
become a 10% shareholder of RenaissanceRe, Renaissance Reinsurance and Glencoe
or of any subsidiary that may be created by RenaissanceRe or Renaissance
Reinsurance and to determine the impact of such a classification of such
investor.

Related Person Insurance Income ("RPII") Rules. Certain special subpart
F provisions of the Code will apply to persons who, through their ownership of
common shares, are indirect shareholders of Renaissance Reinsurance if both (A)
25% or more of the value or voting power of the common shares is owned or deemed
owned (directly or indirectly through foreign entities) by U.S. persons, as will
be the case; and (B)(i) 20% or more of either the voting power or the value of
the stock of Renaissance Reinsurance and Glencoe is owned directly or indirectly
by U.S. persons insured or reinsured by Renaissance Reinsurance or Glencoe or by
persons related to them; and (ii) Renaissance Reinsurance or Glencoe has RPII,
determined on a gross basis, equal to 20% or more of its gross insurance income.
RPII is income (investment income and premium income) from the direct or
indirect insurance or reinsurance of (i) the risk of any U.S. person who owns
common shares (directly or indirectly through foreign entities) or (ii) the risk
of a person related to such a U.S. person.

Renaissance Reinsurance may be considered to indirectly reinsure the
risk of a holder of common shares that is a U.S. person, and thus generate RPII,
if an unrelated company that insured such risk in the first instance reinsures
the risk with Renaissance Reinsurance. There is a suggestion in the Treasury
Regulations proposed in 1991 that in order for this rule to be applied there
must be a prearrangement to reinsure the risk with the company in which the
insured is a shareholder (so-called "fronting"), but the proposed Treasury
Regulations do not explicitly limit the application of the rule to a fronting
situation.

We do not expect Renaissance Reinsurance or Glencoe, respectively, to
knowingly enter into reinsurance or insurance arrangements where the ultimate
risk insured is that of a holder of common shares that is a U.S. person or
person related to such a U.S. person. However, unless the proposed Treasury
Regulations are clarified so that this rule would apply only if the unrelated
insurer is fronting for the party related to the insured, there can be no
assurance that the IRS will not require a holder of common shares that is a U.S.
person or person related to such a U.S. person to demonstrate that we have not
indirectly (albeit unknowingly) reinsured risks of such a shareholder. If the
IRS requires a shareholder that is a U.S. person or person related to such a
U.S. person to demonstrate that the risks reinsured by us were not risks of
related parties, while we will cooperate in providing information regarding our
shareholders and the insurance and reinsurance arrangements of Renaissance
Reinsurance and Glencoe, we may not be in a position to identify the names of
many of our shareholders or the names of the persons whose risks we indirectly
reinsure. Therefore, each prospective investor should consult with his own tax
advisor to evaluate the risk that the IRS would take this position and the tax
consequences that might arise.

Notwithstanding the foregoing discussion it is anticipated (although
not assured) that less than 20% of the gross insurance income of Renaissance
Reinsurance or Glencoe for any taxable year will constitute RPII. However, there
can be no assurance that the IRS will not assert that 20% or more of the income
of Renaissance Reinsurance or Glencoe RPII or that a taxpayer will be able to
meet its burden of proving otherwise. If 20% or more of the gross insurance
income of Renaissance Reinsurance or Glencoe for any taxable year constitutes
RPII and 20% or more of the voting power or value of the stock of Renaissance
Reinsurance or Glencoe is held, directly or indirectly, by U.S. insureds or
reinsureds or by persons related thereto, each direct and indirect U.S. holder
of our common shares will be taxable currently on its allocable share of the
RPII of Renaissance Reinsurance or Glencoe. In that case, RPII will be taxable
to each U.S. holder of common shares regardless of whether such holder is a U.S.
Shareholder and regardless of whether such holder is an insured or related to an
insured. For this purpose, all of the RPII of Renaissance Reinsurance or Glencoe
would be allocated solely to U.S. holders, but not in excess of a holder's
ratable share, based on the extent of its interest in ReinaissanceRe, of the
total income of Renaissance Reinsurance or Glencoe.

Under proposed Treasury Regulations, RPII that is taxed to a U.S.
holder will increase such holder's tax basis in the common shares to which it is
allocable. Dividends distributed by Renaissance Reinsurance or Glencoe to
RenaissanceRe and by RenaissanceRe to U.S. persons who are not U.S. Shareholders
will, under such regulations,

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be deemed to come first out of taxed RPII and to that extent will not constitute
income to the holder. This will be the result whether the dividend is
distributed in the same year in which the RPII is taxed or a later year. The
untaxed dividend will decrease the holder's tax basis in such holder's common
shares as well.

Computation of RPII. In an effort to determine how much RPII
Renaissance Reinsurance and Glencoe have earned in each fiscal year, we monitor
the percentage of gross premiums that are received by Renaissance Reinsurance
and Glencoe from U.S. persons and persons related to U.S. persons. Beyond that,
we will use our reasonable best efforts to secure such additional information
relevant to determining the amount of such income that is RPII as we believe
advisable, but there can be no assurance that such information will be
sufficient to enable a holder of common shares to clearly establish such amount.
For any year that we determine that the gross RPII of Renaissance Reinsurance or
Glencoe is 20% or more of our gross insurance income for the year, we may also
seek information from its shareholders as to whether beneficial owners of common
shares at the end of the year are U.S. persons, so that RPII may be apportioned
among such persons. To the extent we are unable to determine whether a
beneficial owner of shares is a U.S. person, we may assume that such owner is
not a U.S. person for purposes of apportioning RPII, thereby increasing the per
share RPII amount for all known U.S. holders of common shares.

Disposition of Common Shares by U.S. Persons Generally. U.S. persons
will, upon the sale or exchange of common shares, generally recognize gain or
loss for federal income tax purposes equal to the excess of the amount realized
upon such sale or exchange over such person's federal income tax basis for the
common shares disposed of. Different rules would apply if Renaissance
Reinsurance or Glencoe were classified as CFC's.

Passive Foreign Investment Companies. Sections 1291 through 1297 of the
Code contain special rules applicable with respect to foreign corporations that
are "passive foreign investment companies" ("PFICs"). In general, a foreign
corporation will be a PFIC if 75% or more of its income constitutes passive
income or 50% or more of its assets produce passive income. If we were to be
characterized as a PFIC, U.S. holders of common shares would be subject to a
penalty tax at the time of their sale of (or receipt of an "excess distribution"
with respect to) its shares. In general, a U.S. holder of common shares receives
an "excess distribution" if the amount of the distribution is more than 125% of
the average distribution with respect to the common shares during the three
preceding taxable years (or the taxpayer's holding period if it is less than
three years). In general, the penalty tax is equivalent to an interest charge on
taxes that are deemed due during the taxpayer's holding period but not paid,
computed by assuming that the excess distribution or gain (in the case of a
sale) with respect to the common shares was received ratably throughout the
holding period. The interest charge is equal to the applicable rate imposed on
underpayments of U.S. federal income tax for such period.

The Code contains an express exception for income "derived in the
active conduct of an insurance business by a corporation which is predominantly
engaged in an insurance business." This exception is intended to ensure that
income derived by a bona fide insurance company is not treated as passive
income, except to the extent such income is attributable to financial reserves
in excess of the reasonable needs of the insurance business. In our view,
RenaissanceRe, Renaissance Reinsurance and Glencoe, taken together, are
predominantly engaged in an insurance business and do not have financial
reserves in excess of the reasonable needs of their insurance business. The Code
contains a look-through rule which states that, for purposes of determining
whether a foreign corporation is a PFIC, such foreign corporation shall be
treated as if it "received directly its proportionate share of the income" and
as if it "held its proportionate share of the assets" of any other corporation
in which it owns at least 25% of the stock. Under the look-through rule,
RenaissanceRe would be deemed to own the assets and to have received the income
of Renaissance Reinsurance and Glencoe directly for the purposes of determining
whether we qualify for the insurance exception described above.

Other. Dividends paid by RenaissanceRe to U.S. corporate shareholders
will not be eligible for the dividends received deduction provided by section
243 of the Code.

Except as discussed below with respect to backup withholding, dividends
paid by us will not be subject to a U.S. withholding tax.

Persons who are not citizens of or domiciled in the United States will
not be subject to U.S. estate tax with respect to common shares.

-60-

Information reporting to the IRS by paying agents and custodians
located in the United States will be required with respect to payments of
dividends on the common shares to U.S. persons. In addition, a holder of common
shares may be subject to backup withholding at the rate of 31% with respect to
dividends paid to such persons, unless such corporation comes within certain
other exempt categories and, when required, demonstrates this fact, or provides
a taxpayer identification number, certifies as to no loss of exemption from
backup withholding and otherwise complies with applicable requirements of the
backup withholding rules. The backup withholding tax is not an additional tax
and may be credited against a holder's regular U.S. federal income tax
liability.

Subject to certain exceptions, persons that are not U.S. persons will
be subject to U.S. federal income tax on dividend distributions with respect to,
and gain realized from the sale or exchange of, common shares if such dividends
or gains are effectively connected with the conduct of a U.S. trade or business.

PLAN OF DISTRIBUTION

USF&G may sell all or some of the securities covered by this prospectus
either:

- through one or more underwriters on a firm commitment
basis; or

- in a block trade in which a broker-dealer will
attempt to sell a block of common shares as agent but
may position and sell a portion of the block as
principal to facilitate the trade.

We will not receive any of the proceeds from the sale of the shares by
USF&G.

In connection with the sale of the common shares covered by this
prospectus through underwriters, underwriters may receive compensation in the
form of underwriting discounts or commissions and may also receive commissions
from purchasers of common shares for whom they may act as agent. Underwriters
may sell to or through dealers, and such dealers may receive compensation in the
form of discounts, concessions or commissions from the underwriters and/or
commissions form the purchasers for whom they may act as agent. USF&G and any
underwriters, dealers or agents that participate in the distribution of the
shares offered under this prospectus may be deemed to be underwriters, and any
profit on the sale of shares by them and any discounts, commissions or
concessions received by them, might be deemed to be underwriting discounts and
commissions under the Securities Act.

At the time a particular offer of securities is made, to the extent
required, a supplement to this prospectus will be distributed that will set
forth the aggregate amount of securities being offered and the terms of the
offering, including the name or names of any underwriters, dealers or agents,
and discounts, commissions and other items constituting compensation from USF&G
and any discounts, commissions or concessions allowed or reallowed or paid to
dealers. Any such prospectus supplement will be filed with the SEC to reflect
disclosure of additional information with respect to the distribution of the
common shares.

USF&G will pay the commissions and discounts of underwriters, dealers
or agents, if any, incurred in connection with the registration of the common
shares. We have agreed to pay all expenses incident to the offering and sale of
the shares to the public.

We have also agreed with USF&G to provide reciprocal indemnification
against certain liabilities in connection with the registration statement of
which this prospectus is a part, including liabilities under the Securities Act.

LEGAL MATTERS

Certain legal matters with respect to United States, New York and
Delaware law with respect to the validity of the offered securities will be
passed upon for us by Willkie Farr & Gallagher, New York, New York. Certain
legal matters with respect to Bermuda law will be passed upon for us by Conyers
Dill & Pearman, Hamilton, Bermuda. The description of United States tax laws
will be passed upon by Willkie Farr & Gallagher. USF&G is being advised as to
certain matters by Sullivan & Cromwell, New York, NY.

-61-

EXPERTS

Ernst & Young, independent auditors, have audited our consolidated
financial statements at December 31, 2000 and 1999, and for each of the three
years in the period ended December 31, 2000, as set forth in their report. Ernst
& Young have also audited our consolidated financial statements and schedules
included or incorporated by reference in our Annual Report on Form 10-K for the
year ended December 31, 1999, as set forth in their report, which is
incorporated by reference in this prospectus and elsewhere in the registration
statement. We have included or incorporated by reference our financial
statements and schedules in the prospectus and elsewhere in the registration
statement in reliance on Ernst & Young's reports, given on their authority as
experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission a
registration statement on Form S-3 under the Securities Act of 1933, as amended,
relating to our common shares as described in this prospectus. This prospectus
is a part of the registration statement, but the registration statement also
contains additional information and exhibits.

We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended. Accordingly, we file annual, quarterly and
current reports, proxy statements and other reports with the Commission. You can
read and copy the Registration Statement and the reports that we file with the
Commission at the Commission's public reference rooms at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549; 7 World Trade Center, Suite 1300, New York,
New York 10048; and 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such material can also be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates.

The Commission allows us to "incorporate by reference" the information
we file with it, which means that we can disclose important information to you
by referring to those documents. The information incorporated by reference is an
important part of this prospectus. Any statement contained in a document which
is incorporated by reference in this prospectus is automatically updated and
superseded if information contained in this prospectus, or information that we
later file with the Commission, modifies or replaces this information. All
documents we subsequently file pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act, prior to the termination of this offering shall be deemed to
be incorporated by reference into this prospectus. We incorporate by reference
the following documents:

- Our Annual Report on Form 10-K for the year ended December 31,
2000;

- Our Quarterly Reports on Form 10-Q for the quarter ended
September 30, 2000, dated November 14, 2000, the quarter ended
June 30, 2000, dated August 14, 2000 and the quarter ended
March 31, 2000, dated May 15, 2000;

- The portions of our Proxy Statement filed on March 24, 2000
for our 2000 Annual Meeting of Stockholders that have been
incorporated by reference into our Annual Report on Form 10-K;
and

- The description of our common shares set forth in our
registration statement filed under the Exchange Act on Form
8-A on July 24, 1995, including any amendment or report for
the purpose of updating such description.

To receive a free copy of any of the documents incorporated by
reference in this Prospectus (other than exhibits) call or write us at the
following address: RenaissanceRe Holdings Ltd., Attn: Martin J. Merritt,
Secretary, P.O. Box 2527, Hamilton, HMGX, Bermuda, (441) 295-4513.

-62-

Our filings with the Commission are also available from the
Commission's Web Site at http://www.sec.gov. Please call the Commission's
toll-free telephone number at 1-800-SEC-0330 if you need further information
about the operation of the Commission's public reference rooms. Our common
shares are listed on the New York Stock Exchange and our reports can also be
inspected at the offices of the NYSE, 20 Broad Street, 17th Floor, New York, New
York 10005. For further information on obtaining copies of our public filings at
the NYSE, please call 1-212-656-5060.

-63-

GLOSSARY OF SELECTED INSURANCE TERMS

Attachment point The amount of loss (per occurrence or in the aggregate, as the case may
be) above which excess of loss reinsurance becomes operative.

Broker One who negotiates contracts of insurance or reinsurance, receiving a
commission for placement and other services rendered, between (1) a
policy holder and a primary insurer, on behalf of the insured party, (2)
a primary insurer and reinsurer, on behalf of the primary insurer, or (3)
a reinsurer and a retrocessionaire, on behalf of the reinsurer.

Catastrophe excess of loss reinsurance A form of excess of loss reinsurance that, subject to a specified limit,
indemnifies the ceding company for the amount of loss in excess of a
specified retention with respect to an accumulation of losses resulting from a
"catastrophe cover."

Cede; cedent; ceding company When a party reinsures its liability with another, it "cedes" business and is
referred to as the "cedent" or "ceding company."

Claim expenses The expenses of settling claims, including legal and other fees and the portion
of general expenses allocated to claim settlement costs.

Claim reserves Liabilities established by insurers and reinsurers to reflect the estimated
cost of claims payments and the related expenses that the insurer or reinsurer
will ultimately be required to pay in respect of insurance or reinsurance it
has written. Reserves are established for losses and for claim adjustment
expenses.

Excess of loss reinsurance A generic term describing reinsurance that indemnifies the reinsured against
all or a specified portion of losses on underlying insurance policies in excess
of a specified amount, which is called a "level" or "retention." Also known as
non-proportional reinsurance. Excess of loss reinsurance is written in layers. A
reinsurer or group of reinsurers accepts a band of coverage up to a
specified amount. The total coverage purchased by the cedent is referred
to as a "program" and will typically be placed with predetermined
reinsurers in pre-negotiated layers. Any liability exceeding the outer
limit of the program reverts to the ceding company, which also bears the
credit risk of a reinsurer's insolvency.

Generally accepted accounting principles Accounting principles as set forth in opinions of the Accounting Principles
Board of the American Institute of Certified Public Accountants and/or
statements of the Financial Accounting Standards Board and/or their respective
successors and which are applicable in the circumstances at the date in question.

Incurred but not reported ("IBNR") Reserves for estimated losses that have been incurred by insureds and reinsureds
but not yet reported to the insurer or reinsurer including unknown future
developments on losses which are known to the insurer or reinsurer.

Layer The interval between the retention or attachment point and the maximum limit of
indemnity for which a reinsurer is responsible.

Net premiums written Gross premiums written for a given period less premiums ceded to reinsurers and
retrocessionaires during such period.

-64-

Proportional reinsurance A generic term describing all forms of reinsurance in which the
reinsurer shares a proportional part of the original
premiums and losses of the reinsured. (Also known as pro rata
reinsurance, quota share reinsurance or participating reinsurance.) In
proportional reinsurance the reinsurer generally pays the ceding
company a ceding commission. The ceding commission generally is based
on the ceding company's cost of acquiring the business being
reinsured (including commissions, premium taxes, assessments and
miscellaneous administrative expense) and also may include a
profit factor.

Reinstatement premium The premium charged for the restoration of the reinsurance limit of a
catastrophe contract to its full amount after payment by the reinsurer of
losses as a result of an occurrence.

Reinsurance An arrangement in which an insurance company, the reinsurer, agrees to
indemnify another insurance or reinsurance company, the ceding
company, against all or a portion of the insurance or reinsurance risks
underwritten by the ceding company under one or more policies.
Reinsurance can provide a ceding company with several benefits,
including a reduction in net liability on individual risks and
catastrophe protection from large or multiple losses. Reinsurance also
provides a ceding company with additional underwriting capacity by
permitting it to accept larger risks and write more business than would
be possible without a concomitant increase in capital and surplus, and
facilitates the maintenance of acceptable financial ratios by the
ceding company. Reinsurance does not legally discharge the primary
insurer from its liability with respect to its obligations to the
insured.

Retention The amount or portion of risk that an insurer retains for its own account.
Losses in excess of the retention level are paid by the reinsurer. In
proportional treaties, the retention may be a percentage of the original
policy's limit. In excess of loss business, the retention is a dollar
amount of loss, a loss ratio or a percentage.

Retrocessional reinsurance;
retrocessionaire A transaction whereby a reinsurer cedes to another reinsurer, the
retrocessionaire, all or part of the reinsurance that the first reinsurer
has assumed. Retrocessional reinsurance does not legally
discharge the ceding reinsurer from its liability with respect to its
obligations to the reinsured. Reinsurance companies cede risks to
retrocessionaires for reasons similar to those that cause primary
insurers to purchase reinsurance: to reduce net liability on individual
risks, to protect against catastrophic losses, to stabilize
financial ratios and to obtain additional underwriting capacity.

Risk excess of loss reinsurance A form of excess of loss reinsurance that covers a loss of the reinsured
on a single "risk" in excess of its retention level of the type reinsured,
rather than to aggregate losses for all covered risks, as does catastrophe
excess of loss reinsurance. A "risk" in this context might mean the insurance
coverage on one building or a group of buildings or the insurance
coverage under a single policy, which the reinsured treats as a
single risk.

Statutory accounting principles ("SAP") Recording transactions and preparing financial statements in accordance
with the rules and procedures prescribed or permitted by

-65-

Bermuda and/or the United States state insurance regulatory authorities
including the NAIC, which in general reflect a liquidating, rather than
going concern, concept of accounting.

Total managed catastrophe premiums We use this term to refer to the total catastrophe reinsurance premiums
written on a gross basis by our Top Layer Re and OPCat joint ventures as well
as by our wholly owned subsidiaries.

Underwriting The insurer's or reinsurer's process of reviewing applications submitted for
insurance coverage, deciding whether to accept all or part of the coverage
requested and determining the applicable premiums.

Underwriting capacity The maximum amount that an insurance company can underwrite. The limit is
generally determined by the company's retained earnings and investment capital.
Reinsurance serves to increase a company's underwriting capacity by
reducing its exposure from particular risks.

Underwriting expenses The aggregate of policy acquisition costs, including commissions, and the
portion of administrative, general and other expenses attributable to
underwriting operations.

ENFORCEMENT OF CIVIL LIABILITIES UNDER
UNITED STATES FEDERAL SECURITIES LAWS

We are a Bermuda company. In addition, certain of our directors and
officers as well as certain of the experts named in this prospectus reside
outside the United States, and all or a substantial portion of our assets and
their assets are located outside the United States. Therefore, it may be
difficult for investors to effect service of process within the United States
upon those persons or to recover against us or those persons on judgments of
courts in the United States, including judgments based on civil liabilities
provisions of the United States federal securities laws.

We have been advised by Conyers Dill & Pearman, our Bermuda counsel,
that the United States and Bermuda do not currently have a treaty providing for
reciprocal recognition and enforcement of judgments in civil and commercial
matters. We also have been advised by Conyers Dill & Pearman that there is doubt
as to whether the courts of Bermuda would enforce (1) judgments of United States
courts based on the civil liability provisions of the United States federal
securities laws obtained in actions against us or our directors and officers,
and (2) original actions brought in Bermuda against us or our officers and
directors based solely upon the United States federal securities laws. A Bermuda
court may, however, impose civil liability on us or our directors or officers in
a suit brought in the Supreme Court of Bermuda provided that the facts alleged
constitute or give rise to a cause of action under Bermuda law. Certain remedies
available under the laws of U.S. jurisdictions, including certain remedies under
the U.S. federal securities laws, would not be allowed in Bermuda courts to the
extent that they are contrary to public policy.

-66-
[Form of Prospectus Supplement for Underwritten Offering]

The information in this prospectus supplement is not complete and may be
changed. This prospectus supplement and the accompanying prospectus are not an
offer to sell these securities and we are not soliciting offers to buy these
securities in any jurisdiction where the offer or sale is not permitted.

PROSPECTUS SUPPLEMENT (SUBJECT TO COMPLETION) ISSUED FEBRUARY , 2001
(TO PROSPECTUS DATED FEBRUARY , 2001)

1,569,215 SHARES

RENAISSANCERE HOLDINGS LTD.

COMMON SHARES

--------------------------

United States Fidelity and Guaranty Company, an indirect wholly owned subsidiary
of The St. Paul Companies, Inc., is offering 1,569,215 of our common shares. We
will not receive any of the proceeds from the sale of these shares by USF&G.

--------------------------

Our common shares are listed on the New York Stock Exchange under the symbol
"RNR." On February 15, 2001, the closing price of the common shares on the New
York Stock Exchange was $80.89 per share.

--------------------------

INVESTING IN OUR COMMON SHARES INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 9 OF THE ACCOMPANYING PROSPECTUS.

--------------------------

PRICE $ A SHARE

--------------------------

UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS USF&G
------ ----------- -----

Per Share................................... $ $ $
Total....................................... $ $ $

USF&G has granted the underwriters the right to purchase up to an additional
156,922 shares to cover over-allotments.

The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this prospectus
supplement or the accompanying prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.

Morgan Stanley & Co. Incorporated expects to deliver the shares to purchasers on
February , 2001.

-----------------------------------------------

MORGAN STANLEY DEAN WITTER

JPMORGAN

MERRILL LYNCH & CO.

, 2001
[Form of Prospectus Supplement for Underwritten Offering]

PROSPECTUS SUPPLEMENT
TABLE OF CONTENTS

Page
----

THE OFFERING.................................................................................................... S-3
SELLING SHAREHOLDER............................................................................................. S-4
UNDERWRITERS.................................................................................................... S-5
LEGAL MATTERS................................................................................................... S-7

PROSPECTUS
TABLE OF CONTENTS

Page
----

PROSPECTUS SUMMARY.............................................................................................. 3
FORWARD-LOOKING STATEMENTS...................................................................................... 8
RISK FACTORS.................................................................................................... 9
USE OF PROCEEDS................................................................................................. 15
PRICE RANGE OF COMMON SHARES.................................................................................... 15
DIVIDEND POLICY................................................................................................. 16
CAPITALIZATION.................................................................................................. 16
SELECTED HISTORICAL FINANCIAL DATA.............................................................................. 17
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS........................... 19
BUSINESS........................................................................................................ 31
MANAGEMENT...................................................................................................... 48
SELLING SHAREHOLDER............................................................................................. 52
DESCRIPTION OF COMMON SHARES.................................................................................... 52
CERTAIN TAX CONSIDERATIONS...................................................................................... 56
PLAN OF DISTRIBUTION............................................................................................ 61
LEGAL MATTERS................................................................................................... 61
EXPERTS......................................................................................................... 62
WHERE YOU CAN FIND MORE INFORMATION............................................................................. 62
GLOSSARY OF SELECTED INSURANCE TERMS............................................................................ 64
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS...................................................................... F-1

S-2
[Form of Prospectus Supplement for Underwritten Offering]

THE OFFERING

Common shares offered by USF&G.............................. 1,569,215 shares

Common shares to be outstanding after
this offering.......................................... 19,638,596 shares

Use of proceeds............................................. We will not receive any of the proceeds
from this offering.

Dividend policy............................................. Historically, our Board of Directors has
declared quarterly dividends on our common
shares. The declaration and payment of
dividends are subject to the discretion of
the Board and depend, among other things,
on our financial condition, general
business conditions, legal, contractual
and regulatory restrictions regarding the
payment of dividends by us and our
subsidiaries and other factors which the
Board may in the future consider to be
relevant. The Board has declared a
dividend of $0.40 per share payable on
March 6, 2001 to shareholders of record as
of February 20, 2001. Purchasers of
shares in this offering will not receive
this dividend.

NYSE symbol................................................. RNR

Unless we specifically state otherwise, the information in this
prospectus supplement does not take into account the sale of up to 156,922
common shares which the underwriters have the option to purchase from USF&G to
cover over-allotments.

The number of shares outstanding after this offering is based on the
number of our common shares outstanding as of February 15, 2001 and does not
include a total of 769,416 common shares issuable upon the exercise of options
granted to our employees and directors pursuant to our stock incentive plans as
of December 31, 2000, having a weighted average exercise price of $60.94 per
share.

S-3
[Form of Prospectus Supplement for Underwritten Offering]

SELLING SHAREHOLDER

USF&G may offer and sell up to 1,726,137 common shares under this
prospectus supplement, including 156,922 common shares which are subject to an
option USF&G has granted the underwriters to cover over-allotments, if any.

The following table sets forth information with respect to the common
shares beneficially owned by USF&G at February 15, 2001 and as adjusted to give
effect to this offering. The table assumes exercise of the underwriters'
over-allotment option. All of this information has been provided by USF&G.
Beneficial ownership is determined in accordance with the rules of the SEC and
generally includes voting or investment power with respect to securities and
options that are exercisable within 60 days.

Number of
Number of Shares Shares
Beneficially Shares to be Beneficially
Name and Address of Owned Prior to Sold in This Owned After
Selling Shareholder Offering Percentage Offering Offering
- ------------------- -------- ---------- -------- --------

United States Fidelity and
Guaranty Company 1,726,137 8.8% 1,726,137 --
6225 Smith Avenue
Baltimore, Maryland 21209

The nature of the positions, offices or other material relationships
that certain shareholders have had with us within the past three years are set
forth in documents incorporated by reference into the accompanying prospectus.

USF&G is an indirect wholly owned subsidiary of The St. Paul Companies,
Inc., whose business address is 385 Washington Street, St. Paul, Minnesota
55102.

S-4
[Form of Prospectus Supplement for Underwritten Offering]

UNDERWRITERS

Under the terms and subject to the conditions of the underwriting
agreement, the underwriters named below have severally agreed to purchase, and
USF&G has agreed to sell to them, severally, the number of common shares
indicated below.

Name Number of Shares
- ---- ----------------

Morgan Stanley & Co. Incorporated ..........................................
J.P. Morgan Securities Inc. ................................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated .................................................
---------
Total ................................................................. 1,569,215
=========

The underwriters are offering the common shares subject to their
acceptance of the shares from USF&G and subject to prior sale. The underwriting
agreement provides that the obligations of the several underwriters to pay for
and accept delivery of the common shares offered by this prospectus supplement
are subject to the approval of various legal matters by their counsel and to
other conditions. The underwriters are obligated to take and pay for all of the
shares offered by this prospectus supplement if any shares are taken. However,
the underwriters are not required to take or pay for the over-allotment option
discussed below.

The underwriters initially propose to offer part of the common shares
directly to the public at the public offering price listed on the cover page of
this prospectus supplement and part to selected dealers at a price that
represents a concession not in excess of $ a share under the public
offering price. After the initial offering of the common shares, the offering
price and other selling terms may from time to time be varied by the
representatives.

USF&G has granted to the underwriters an option, exercisable for 30
days from the date of this prospectus supplement, to purchase up to an aggregate
of 156,922 additional common shares at the public offering price listed on the
cover page of this prospectus, less underwriting discounts and commissions. The
underwriters may exercise this option solely for the purpose of covering
overallotments, if any, made in connection with the offering of the common
shares offered by this prospectus supplement. To the extent the option is
exercised, each underwriter will become obligated, subject to certain
conditions, to purchase about the same percentage of the additional common
shares as the number listed next to the underwriter's name in the preceding
table bears to the total number of shares listed next to the names of all
underwriters in the preceding table. If the underwriters' over-allotment option
is exercised in full, the total price to the public would be $ , the total
underwriters' discounts and commissions would be $ and the total proceeds
to the selling shareholder would be $ .

We, our directors and executive officers, USF&G and PT Investments,
Inc., a founding institutional shareholder have agreed that, subject to limited
exceptions, without the prior written consent of Morgan Stanley & Co.
Incorporated on behalf of the underwriters, during the period ending 90 days
after the date of this prospectus supplement, we, our directors and executive
officers and USF&G will not:

- offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option
or contract to sell, grant any option, right or
warrant to purchase, lend or otherwise transfer or
dispose of directly or indirectly, any common shares
or any securities convertible into or exercisable or
exchangeable for common shares; or

- enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the
economic consequences of ownership of the common
shares, whether any transaction described in this
clause or above is to be settled by delivery of
common shares or such other securities, in cash or
otherwise.

The restrictions described in the preceding paragraph do not apply to:

- the sale of common shares to the underwriters under
the Underwriting Agreement;

S-5
[Form of Prospectus Supplement for Underwritten Offering]

- the issuance by RenaissanceRe of common shares upon
the exercise of an option or a warrant or the
conversion of a security outstanding on the date of
this prospectus supplement of which the underwriters
have been advised in writing;

- transactions by any person other than RenaissanceRe
or USF&G relating to our common shares or other
securities acquired in open market transactions after
the completion of this offering;

- the granting by RenaisssanceRe of any options,
deferred shares or other equity awards under
RenaissanceRe's stock incentive plans, so long as
such options do not vest and become exercisable or
such deferred share or other awards do not vest, in
each case, in the absence of extraordinary events or
occurrences beyond the control of the grantee or
recipient, until after the expiration of the 90 day
period;

- the issuance by RenaissanceRe of common shares in
connection with acquisitions of businesses or
portions thereof, provided the parties in any such
acquisition agree in writing to be bound by the
foregoing restrictions;

- the pledge of common shares by our employees to
secure loans to purchase our securities; or

- any disposition made among such persons' family
members or affiliates.

Kingsway PT Limited Partnership, a founding institutional shareholder,
has agreed, with respect to 349,000 shares of our common shares owned by it,
that, subject to limited exceptions, without the prior consent of Morgan Stanley
& Co. Incorporated on behalf of the underwriters, Kingsway will not, during the
period commencing on the date of this prospectus supplement and ending seven
days after the date of this prospectus supplement, at a price at or below the
public offering price listed on the cover page of this prospectus supplement:

- offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option
or contract to sell, grant any option, right or
warrant to purchase, lend or otherwise transfer or
dispose of directly or indirectly, any common shares
or any securities convertible into or exercisable or
exchangeable for common shares; or

- enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the
economic consequences of ownership of the common
shares, whether any transaction described in this
clause or above is to be settled by delivery of
common shares or such other securities, in cash or
otherwise.

In order to facilitate the offering of the common shares, the
underwriters may engage in transactions that stabilize, maintain or otherwise
affect the price of the common shares. Specifically, the underwriters may
over-allot in connection with the offering, creating a short position in the
common shares for their own account. In addition, to cover over-allotments or
to stabilize the price of the common shares, the underwriters may bid for, and
purchase, common shares in the open market. Finally, the underwriting syndicate
may reclaim selling concessions allowed to an underwriter or a dealer for
distributing the common shares in the offering, if the syndicate repurchases
previously distributed common shares in transactions to cover syndicate short
positions, in stabilization transactions

S-6
[Form of Prospectus Supplement for Underwritten Offering]

or otherwise. Any of these activities may stabilize or maintain the market price
of the common shares above independent market levels. The underwriters are not
required to engage in these activities, and may end any of these activities at
any time.

All costs, expenses and fees in connection with the registration of the
shares will be borne by us. Commissions, discounts and any other fees or
expenses, if any, attributable to the sales of the shares will be borne by
USF&G. We will not receive any proceeds from the sale of the shares by USF&G.

Morgan Stanley & Co. Incorporated has provided, and may continue to
provide, investment banking services to us from time to time. J.P. Morgan
Securities Inc. and its affiliates have provided, and may continue to provide,
investment banking and commercial banking services to us from time to time.
Merrill Lynch, Pierce, Fenner & Smith Incorporated and its affiliates have
provided, and may continue to provide, investment banking services to us from
time to time.

We, the underwriters and USF&G have agreed to indemnify each other
against various liabilities, including liabilities under the Securities Act of
1933, as amended.

LEGAL MATTERS

Certain legal matters with respect to United States, New York and
Delaware law with respect to the validity of the offered securities will be
passed upon for us by Willkie Farr & Gallagher, New York, New York. Certain
legal matters with respect to Bermuda law will be passed upon for us by Conyers
Dill & Pearman, Hamilton, Bermuda. The description of United States tax laws
will be passed upon by Willkie Farr & Gallagher. Additional legal matters in
connection with this offering will be passed on for the underwriters by LeBoeuf,
Lamb, Greene & MacRae, L.L.P, a limited liability partnership including
professional corporations, New York, New York. LeBoeuf, Lamb, Greene & MacRae,
L.L.P. renders certain legal services to us from time to time. Certain legal
matters with respect to Bermuda law will be passed on for the underwriters by
Appleby, Spurling & Kempe, Hamilton, Bermuda. USF&G is being advised as to
certain legal matters by Sullivan & Cromwell, New York, New York.

S-7

[Form of Prospectus Supplement for Block Trade]

The information in this prospectus supplement is not complete and may be
changed. This prospectus supplement and the accompanying prospectus are not an
offer to sell these securities and we are not soliciting offers to buy these
securities in any jurisdiction where the offer or sale is not permitted.

PROSPECTUS SUPPLEMENT (SUBJECT TO COMPLETION) ISSUED FEBRUARY , 2001
(TO PROSPECTUS DATED FEBRUARY , 2001)

1,726,137 SHARES

RENAISSANCERE HOLDINGS LTD.

COMMON SHARES

--------------------------

United States Fidelity and Guaranty Company, an indirect wholly owned
subsidiary of The St. Paul Companies, Inc., has sold 1,726,137 of our common
shares to at $ per share.
intends to offer the 1,726,137 common shares to the public at $ per
share. We will not receive any of the proceeds from the sale of these shares by
USF&G.

--------------------------

Our common shares are listed on the New York Stock Exchange under the symbol
"RNR." On February 15, 2001, the closing price of the common shares on the New
York Stock Exchange was $80.89 per share.

--------------------------

INVESTING IN OUR COMMON SHARES INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 9 OF THE ACCOMPANYING PROSPECTUS.

--------------------------

PRICE $ A SHARE

--------------------------

PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS USF&G
-------- ------------- -----------

Per Share............................... $ $ $
Total................................... $ $ $

The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.

expects to deliver the shares to purchasers on , 2001.
[Form of Prospectus Supplement for Block Trade]

PROSPECTUS SUPPLEMENT

TABLE OF CONTENTS

Page
----

SELLING SHAREHOLDER.............................................................................................S-3
THE UNDERWRITER.................................................................................................S-4
LEGAL MATTERS...................................................................................................S-4

PROSPECTUS

TABLE OF CONTENTS

Page
----

PROSPECTUS SUMMARY................................................................................................3
FORWARD-LOOKING STATEMENTS........................................................................................8
RISK FACTORS......................................................................................................9
USE OF PROCEEDS..................................................................................................15
PRICE RANGE OF COMMON SHARES.....................................................................................15
DIVIDEND POLICY..................................................................................................16
CAPITALIZATION...................................................................................................16
SELECTED HISTORICAL FINANCIAL DATA...............................................................................17
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS............................19
BUSINESS.........................................................................................................31
MANAGEMENT.......................................................................................................48
SELLING SHAREHOLDER..............................................................................................52
DESCRIPTION OF COMMON SHARES.....................................................................................52
CERTAIN TAX CONSIDERATIONS.......................................................................................56
PLAN OF DISTRIBUTION.............................................................................................61
LEGAL MATTERS....................................................................................................61
EXPERTS..........................................................................................................62
WHERE YOU CAN FIND MORE INFORMATION..............................................................................62
GLOSSARY OF SELECTED INSURANCE TERMS.............................................................................64
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS......................................................................F-1

S-2
[Form of Prospectus Supplement for Block Trade]

SELLING SHAREHOLDER

The following table sets forth information with respect to the common
shares beneficially owned by USF&G at February 15, 2001. See "Plan Of
Distribution."

Number of Number of
Shares Shares
Beneficially Shares to be Beneficially
Name and Address of Owned Prior to Sold in This Owned After
Selling Shareholder Offering Percentage Offering Offering
- ------------------- -------- ----------- ------------ ------------

United States Fidelity and
Guaranty Company 1,726,137 8.8% 1,726,137 --
6225 Smith Avenue
Baltimore, Maryland 21209

The nature of the positions, offices or other material relationships
that certain shareholders have had with us within the past three years are set
forth in documents incorporated by reference into the accompanying prospectus.

USF&G is an indirect wholly owned subsidiary of The St. Paul Companies,
Inc., whose business address is 385 Washington Street, St. Paul, Minnesota
55102.

S-3
[Form of Prospectus Supplement for Block Trade]

THE UNDERWRITER

The underwriter has agreed to purchase, and USF&G has agreed to sell,
common shares.

The underwriter initially proposes to offer part of the common shares
directly to the public at the public offering price listed on the cover page of
this prospectus supplement and part to selected dealers at a price that
represents a concession not in excess of $ a share under the public
offering price.

In order to facilitate the offering of the common shares, the
underwriter may engage in transactions that stabilize, maintain or otherwise
affect the price of the common shares. To stabilize the price of the common
shares, the underwriter may bid for, and purchase, common shares in the open
market. Any of these activities may stabilize or maintain the market price of
the common shares above independent market levels. The underwriter is not
required to engage in these activities, and may end any of these activities at
any time.

All costs, expenses and fees in connection with the registration of the
shares will be borne by us. Commissions, discounts and any other fees or
expenses, if any, attributable to the sales of the shares will be borne by
USF&G. We will not receive any proceeds from the sale of the shares by USF&G.

From time to time, has provided, and may
continue to provide, investment banking services to us.

We and the underwriter have agreed to indemnify each other against
various liabilities, including liabilities under the Securities Act of 1933, as
amended. We and USF&G have agreed to indemnify each other against various
liabilities, including liabilities under the Securities Act of 1933, as amended.

LEGAL MATTERS

Certain legal matters with respect to United States, New York and
Delaware law with respect to the validity of the offered securities will be
passed upon for us by Willkie Farr & Gallagher, New York, New York. Certain
legal matters with respect to Bermuda law will be passed upon for us by Conyers
Dill & Pearman, Hamilton, Bermuda. The description of United States tax laws
will be passed upon by Willkie Farr & Gallagher. Additional legal matters in
connection with this offering will be passed on for the underwriter by LeBoeuf,
Lamb, Greene & MacRae, L.L.P, a limited liability partnership including
professional corporations, New York, New York. LeBoeuf, Lamb, Greene & MacRae,
L.L.P. renders certain legal services to us from time to time. Certain legal
matters with respect to Bermuda law will be passed on for the underwriters by
Appleby, Spurling & Kempe, Hamilton, Bermuda. USF&G is being advised as to
certain legal matters by Sullivan & Cromwell, New York, New York.

S-4

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page
----

Report of Independent Auditors..................................................................... F-1

Consolidated Balance Sheets at December 31, 1999 and
2000.......................................................................................... F-2

Consolidated Statements of Income for the Years Ended
December 31, 1998, 1999 and 2000.............................................................. F-3

Consolidated Statements of Changes in Shareholders' Equity for the Years Ended
December 31, 1998, 1999 and 2000.............................................................. F-4

Consolidated Statements of Cash Flows for the Years Ended
December 31, 1998, 1999 and 2000.............................................................. F-5

Notes to Consolidated Financial Statements......................................................... F-6

REPORT OF INDEPENDENT AUDITORS

TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
RENAISSANCERE HOLDINGS LTD.

We have audited the accompanying consolidated balance sheets of
RenaissanceRe Holdings Ltd. and Subsidiaries as of December 31, 2000 and 1999
and the related consolidated statements of income, changes in shareholders'
equity and cash flows for each of the three years in the period ended December
31, 2000. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
RenaissanceRe Holdings Ltd. and Subsidiaries as of December 31, 2000 and 1999,
and the consolidated results of their operations and their cash flows for each
of the three years in the period ended December 31, 2000, in conformity with
accounting principles generally accepted in the United States.

Hamilton, Bermuda
January 26, 2001

F-1

RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

2000 1999
AT DECEMBER 31, 2000 AND 1999 ---------- ----------
(IN THOUSANDS OF UNITED STATES DOLLARS, EXCEPT PER SHARE AMOUNTS)

ASSETS
Investments and cash
Fixed maturity investments available for sale, at fair value... $ 928,102 $ 907,706
(Amortized cost $921,750 and $926,176 at December 31, 2000
and 1999, respectively) (Note 3)
Short term investments, at cost............................. 13,760 12,759
Other investments........................................... 29,613 7,213
Cash and cash equivalents................................... 110,571 132,112
---------- ----------
Total investments and cash.......................... 1,082,046 1,059,790
Reinsurance premiums receivable............................... 95,423 80,455
Ceded reinsurance balances.................................... 37,520 50,237
Losses and premiums recoverable (Note 4)...................... 167,604 328,627
Accrued investment income..................................... 15,034 13,456
Deferred acquisition costs.................................... 8,599 14,221
Other assets.................................................. 62,763 70,457
---------- ----------
TOTAL ASSETS........................................ $1,468,989 $1,617,243
========== ==========
LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS' EQUITY
LIABILITIES
Reserve for claims and claim expenses (Note 5)................ $ 403,611 $ 478,601
Reserve for unearned premiums................................. 112,541 98,386
Bank loans (Note 6)........................................... 50,000 250,000
Reinsurance balances payable.................................. 50,779 50,157
Other liabilities............................................. 63,610 50,140
---------- ----------
TOTAL LIABILITIES................................... 680,541 927,284
---------- ----------
Minority interest -- Company obligated, mandatorily redeemable
capital securities of a subsidiary trust holding solely junior
subordinated debentures of RenaissanceRe (Note 7)........... 87,630 89,630
Commitments and contingencies (Note 18)
SHAREHOLDERS' EQUITY (NOTE 9)
Common Shares and additional paid-in capital: $1 par
value-authorized 225,000,000 shares; issued and outstanding at
December 31, 2000 -- 19,621,267 shares (1999 -- 19,686,480
shares)..................................................... 22,999 19,686
Unearned stock grant compensation (Note 16)................... (11,716) (10,026)
Accumulated other comprehensive income........................ 6,831 (18,470)
Retained earnings............................................. 682,704 609,139
---------- ----------
TOTAL SHAREHOLDERS' EQUITY.......................... 700,818 600,329
---------- ----------
TOTAL LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS'
EQUITY............................................ $1,468,989 $1,617,243
========== ==========
BOOK VALUE PER COMMON SHARE................................... $ 35.72 $ 30.50
========== ==========

See accompanying notes to the consolidated financial statements.
F-2

RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

2000 1999 1998
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 -------- -------- --------
(IN THOUSANDS OF UNITED STATES DOLLARS, EXCEPT PER SHARE AMOUNTS)

REVENUES
Gross premiums written...................................... $433,002 $351,305 $270,460
======== ======== ========

Net premiums written........................................ $293,303 $213,513 $195,019
Decrease (increase) in unearned premiums.................... (25,622) 7,604 9,928
-------- -------- --------
Net premiums earned......................................... 267,681 221,117 204,947
Net investment income (Note 3).............................. 77,868 60,334 52,834
Net foreign exchange gains (losses)......................... 378 (411) (153)
Other income................................................ 10,959 4,915 9,789
Net realized losses on investments (Note 3)................. (7,151) (15,720) (6,890)
-------- -------- --------
TOTAL REVENUES...................................... 349,735 270,235 260,527
-------- -------- --------
EXPENSES
Claims and claim expenses incurred (Note 5)................. 108,604 77,141 112,752
Acquisition costs........................................... 38,530 25,500 26,506
Operational expenses........................................ 37,954 36,768 34,525
Corporate expenses.......................................... 8,022 9,888 18,924
Interest expense............................................ 17,167 9,934 4,473
-------- -------- --------
TOTAL EXPENSES...................................... 210,277 159,231 197,180
-------- -------- --------
Income before minority interests and taxes.................... 139,458 111,004 63,347
Minority interest -- Company obligated, mandatorily redeemable
Capital Securities of a subsidiary trust holding solely junior
subordinated debentures of RenaissanceRe (Note 7)........... (7,582) (8,288) (8,540)
Minority interest -- Glencoe.................................. -- -- (705)
-------- -------- --------
Income before taxes........................................... 131,876 102,716 54,102
Income tax (expense) benefit (Note 13)........................ (4,648) 1,525 20,475
-------- -------- --------
Net income available to Common Shareholders................... $127,228 $104,241 $ 74,577
======== ======== ========
Earnings per Common Share -- basic............................ $ 6.68 $ 5.10 $ 3.39
Earnings per Common Share -- diluted.......................... $ 6.50 $ 5.05 $ 3.33

See accompanying notes to the consolidated financial statements.

F-3

RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

2000 1999 1998
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 -------- -------- --------
(IN THOUSANDS OF UNITED STATES DOLLARS, EXCEPT PER SHARE AMOUNTS)

Common stock & additional paid-in capital
Balance -- January 1.......................................... $ 19,686 $ 39,035 $ 74,922
Exercise of stock options & restricted stock awards........... 3,495 6,461 6,837
Repurchase of shares.......................................... (672) (26,695) (42,724)
Other......................................................... 490 885 --
-------- -------- --------
Balance -- December 31........................................ 22,999 19,686 39,035
-------- -------- --------

Unearned stock grant compensation
Balance -- January 1.......................................... (10,026) (8,183) (4,731)
Stock grants awarded.......................................... (7,215) (5,382) (5,964)
Amortization.................................................. 5,525 3,539 2,512
-------- -------- --------
Balance -- December 31........................................ (11,716) (10,026) (8,183)
-------- -------- --------

Accumulated other comprehensive income
Balance -- January 1.......................................... (18,470) (5,144) (10,155)
Net unrealized gains (losses) on securities, net of adjustment
(see disclosure below)...................................... 25,301 (13,326) 5,011
-------- -------- --------
Balance -- December 31........................................ 6,831 (18,470) (5,144)
-------- -------- --------

Retained earnings
Balance -- January 1.......................................... 609,139 586,524 538,667
Net income.................................................... 127,228 104,241 74,577
Dividends paid................................................ (29,228) (28,885) (26,720)
Repurchase of shares.......................................... (24,435) (53,403) --
Other......................................................... -- 662 --
-------- -------- --------
Balance -- December 31........................................ 682,704 609,139 586,524
-------- -------- --------
Total Shareholders' Equity.................................... $700,818 $600,329 $612,232
======== ======== ========
COMPREHENSIVE INCOME
Net income.................................................... $127,228 $104,241 $ 74,577
Other comprehensive income.................................... 25,301 (13,326) 5,011
-------- -------- --------
Comprehensive income.......................................... $152,529 $ 90,915 $ 79,588
======== ======== ========
DISCLOSURE REGARDING NET UNREALIZED GAINS (LOSSES)
Net unrealized holding gains (losses) arising during period... $ 18,150 $(29,046) $ (1,879)
Net realized losses included in net income.................... 7,151 15,720 6,890
-------- -------- --------
Net unrealized gains (losses) on securities................... $ 25,301 $(13,326) $ 5,011
======== ======== ========

See accompanying notes to the consolidated financial statements.

F-4

RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

2000 1999 1998
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 ----------- ----------- ---------
(IN THOUSANDS OF UNITED STATES DOLLARS)

Cash Flows Provided by Operating Activities:
Net income............................................... $ 127,228 $ 104,241 $ 74,577
Adjustments to reconcile net income to cash provided by
operating activities:
Depreciation and amortization.......................... 315 9,810 14,488
Net realized losses on investments..................... 7,151 15,720 6,890
Reinsurance balances, net.............................. (14,346) (27,595) 54,187
Ceded reinsurance balances............................. 12,717 (8,867) (34,245)
Accrued investment income.............................. (1,578) (3,488) 3,572
Reserve for unearned premiums.......................... 14,155 3,920 5,132
Reserve for claims and claim expenses, net............. 86,033 51,524 (8,530)
Other, net............................................. 19,153 (14,960) (13,579)
----------- ----------- ---------
Net cash provided by operating activities................ 250,828 130,305 102,492
----------- ----------- ---------
Cash Flows Applied to Investing Activities:
Proceeds from maturities and sales of investments...... 2,171,484 1,986,498 783,735
Purchase of investments available for sale............. (2,187,007) (2,146,361) (828,299)
Net sales (purchases) of short term investments........ (1,001) 12,224 (2,189)
Proceeds from sale of equities......................... -- 1,319 30,550
Acquisition of subsidiary, net of cash acquired........ -- -- (58,869)
Purchase of minority interest in Glencoe............... -- -- (15,204)
----------- ----------- ---------
Net cash applied to investing activities................. (16,524) (146,320) (90,276)
----------- ----------- ---------
Cash Flows Provided by (Applied to) Financing Activities:
Purchase of Common Shares.............................. (25,107) (80,098) (42,724)
Net proceeds from (repayment of) bank loan............. (200,000) 150,000 50,000
Purchase of Capital Securities......................... (1,510) (8,591) --
Dividends paid......................................... (29,228) (28,885) (26,720)
----------- ----------- ---------
Net cash provided by (applied to) financing
activities.......................................... (255,845) 32,426 (19,444)
----------- ----------- ---------
Net increase (decrease) in cash and cash equivalents..... (21,541) 16,411 (7,228)
Cash and Cash Equivalents, Beginning of Year............. 132,112 115,701 122,929
----------- ----------- ---------
Cash and Cash Equivalents, End of Year................... $ 110,571 $ 132,112 $ 115,701
=========== =========== =========

See accompanying notes to the consolidated financial statements.

F-5

RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000
(AMOUNTS IN TABLES EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS, EXCEPT PER
SHARE AMOUNTS)

NOTE 1. ORGANIZATION

RenaissanceRe Holdings Ltd. ("RenaissanceRe"), was formed under the laws of
Bermuda on June 7, 1993 and through its subsidiaries it provides reinsurance and
insurance coverage where the risk of natural catastrophes represents a
significant component of the overall exposure.

- Renaissance Reinsurance Ltd. ("Renaissance Reinsurance") is the Company's
principal subsidiary and provides property catastrophe reinsurance
coverage to insurers and reinsurers on a worldwide basis. To a lesser
extent, Renaissance Reinsurance also writes noncatastrophe reinsurance in
certain specialty lines.

- More recently the Company has begun to write property catastrophe
reinsurance on behalf of two joint ventures, Top Layer Reinsurance Ltd.
("Top Layer Re") and Overseas Partners Cat Ltd. ("OPCat"). The Company
acts as exclusive underwriting manager for these joint ventures in return
for fee-based income and profit participation.

- The Company's primary operations include Glencoe Insurance Ltd.
("Glencoe"), DeSoto Insurance Company ("DeSoto"), DeSoto Prime Insurance
Company ("DeSoto Prime") and Nobel Insurance Company ("Nobel"). Glencoe
provides catastrophe exposed property coverage on an insurance and
reinsurance basis and DeSoto and DeSoto Prime operate in the U.S.
homeowners market. Nobel is licensed to operate in 50 states in the U.S.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The consolidated financial statements have been prepared on the basis of
United States generally accepted accounting principles ("GAAP") and include the
accounts of RenaissanceRe and its subsidiaries, which are collectively referred
to herein as the "Company". All intercompany transactions and balances have been
eliminated on consolidation. Minority interests represent the interests of
external parties in respect of net income and shareholders' equity of Glencoe
and the Trust. See Note 7. Certain comparative information has been reclassified
to conform with the current year presentation.

Use of estimates in financial statements

The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported and
disclosed amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates. The significant estimates reflected in the
Company's financial statements include, but are not limited to, the reserves for
claims and claim expenses and the related losses and premiums recoverable.

Premiums and related expenses

Premiums are recognized as income, net of any applicable retrocessional
coverage, over the terms of the related contracts and policies. Premiums written
are based on policy and contract terms and include estimates based on
information received from both insureds and ceding companies. Subsequent
differences arising on such estimates are recorded in the period in which they
are determined. Reserve for unearned premiums represents the portion of premiums
written that relate to the unexpired terms of contracts and policies in force.
Such reserves are computed by pro-rata methods based on statistical data or
reports received from ceding companies.

F-6
RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Acquisition costs, consisting principally of commissions and brokerage
expenses incurred at the time a contract or policy is issued, are deferred and
amortized over the period in which the related premiums are earned. Deferred
policy acquisition costs are limited to their estimated realizable value based
on the related unearned premiums. Anticipated claims and claim expenses, based
on historical and current experience, and anticipated investment income related
to those premiums are considered in determining the recoverability of deferred
acquisition costs.

Reinsurance

Amounts recoverable from reinsurers are estimated in a manner consistent
with the claim liability associated with the reinsured policies. The Company
evaluates the financial condition of its reinsurers through internal evaluation
by senior management. For retroactive reinsurance contracts, the amount by which
liabilities associated with the reinsured policies exceed the amount paid for
reinsurance coverage is deferred and amortized into income using the recovery
method.

Claims and claim expenses

The reserve for claims and claim expenses includes estimates for unpaid
claims and claim expenses on reported losses as well as an estimate of losses
incurred but not reported. The reserve is based on individual claims, case
reserves and other reserve estimates reported by insureds and ceding companies
as well as management estimates of ultimate losses. Inherent in the estimates of
ultimate losses are expected trends in claim severity and frequency and other
factors which could vary significantly as claims are settled. Accordingly,
ultimate losses may vary materially from the amounts provided in the
consolidated financial statements. These estimates are reviewed regularly and,
as experience develops and new information becomes known, the reserves are
adjusted as necessary. Such adjustments, if any, are reflected in the
consolidated statement of income in the period in which they become known and
are accounted for as changes in estimates.

Investments and cash

Investments are considered available for sale and are reported at fair
value. The net unrealized appreciation or depreciation on investments is
included in accumulated other comprehensive income. Investment transactions are
recorded on the trade date with balances pending settlement reflected in the
balance sheet as a component of other assets or other liabilities.

Realized gains or losses on the sale of investments are determined on the
basis of the specific identification method and include adjustments to the net
realizable value of investments for declines in value that are considered to be
other-than-temporary. Net investment income includes interest and dividend
income together with amortization of market premiums and discounts and is net of
investment management and custody fees. The amortization of premium and
accretion of discount for fixed maturity securities is computed utilizing the
interest method. The effective yield utilized in the interest method is adjusted
when sufficient information exists to estimate the probability and timing of
prepayments. Fair values of investments are based on quoted market prices, or
when such prices are not available, by reference to broker or underwriter bid
indications.

Short term investments, which have a maturity of one year or less when
purchased, are carried at cost which approximates fair value. Cash equivalents
include money market instruments with a maturity of ninety days or less when
purchased.

Goodwill

The Company amortizes goodwill on a straight-line basis over the expected
recovery period, principally twenty years. Goodwill is periodically reviewed for
impairment and amounts deemed unrecoverable are

F-7
RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

adjusted accordingly. Goodwill is included in other assets on the consolidated
balance sheet and is expensed through corporate expenses in the consolidated
statement of income.

Earnings per share

Basic earnings per share is based on weighted average Common Shares and
excludes any dilutive effects of options and restricted stock. Diluted earnings
per share assumes the exercise of all dilutive stock options and restricted
stock grants.

Foreign exchange

The Company's functional currency is the United States dollar. Revenues and
expenses denominated in foreign currencies are translated at the prevailing
exchange rate at the transaction date. Monetary assets and liabilities
denominated in foreign currencies are translated at exchange rates in effect at
the balance sheet date, which may result in the recognition of exchange gains or
losses which are included in the determination of net income.

Stock incentive compensation plans

The Company has elected to follow Accounting Principles Board ("APB")
Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25") and
related interpretations in accounting for its employee stock options. The
alternative fair value accounting provided for under Statement of Financial
Accounting Standard ("SFAS") No. 123 requires the use of option valuation models
that were not necessarily developed for use in valuing employee stock options.
It is the opinion of management that disclosure of the pro-forma impact of fair
values provides a more relevant and informative presentation of the impact of
stock options issued to employees than financial statement recognition of such
amounts. Under APB 25, the Company recognizes compensation expense for stock
option grants to the extent that the fair value of the stock exceeds the stock
option exercise price at the measurement date.

Taxation

The Company utilizes the liability method of accounting for income taxes.
Under the liability method, deferred income taxes reflect the net tax effect of
temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes. A
valuation allowance against the deferred tax asset is provided for if and when
the Company believes that a portion of the deferred tax asset may not be
realized in future years.

New Accounting Pronouncement

Effective January 1, 2001, the Company adopted SFAS No. 133, "Accounting
for Derivative Instruments and Hedging Activities." SFAS No. 133 establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedging activities.
It requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. The adoption of SFAS No. 133 had no significant impact on the
Company's consolidated financial statements.

F-8
RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 3. INVESTMENTS

The amortized cost, fair value and related unrealized gains and losses on
fixed maturity investments are as follows:

DECEMBER 31, 2000
-------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
--------- ---------- ---------- --------

U.S. Government bonds................... $271,774 $ 3,661 $ (1,303) $274,132
Non-U.S. government bonds............... 107,312 4,010 (1,100) 110,222
Non-U.S. corporate bonds................ 18,310 257 (2,007) 16,560
U.S. corporate bonds.................... 423,703 8,011 (7,240) 424,474
U.S. mortgage backed securities......... 100,651 2,276 (213) 102,714
-------- ------- -------- --------
$921,750 $18,215 $(11,863) $928,102
======== ======= ======== ========

DECEMBER 31, 1999
-------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
--------- ---------- ---------- --------

U.S. Government bonds................... $298,748 $ 115 $ (3,135) $295,728
Non-U.S. government bonds............... 55,308 -- (835) 54,473
Non-U.S. corporate bonds................ 371,631 895 (15,954) 356,572
U.S. corporate bonds.................... 50,456 3,540 (36) 53,960
U.S. mortgage backed securities......... 150,033 35 (3,095) 146,973
-------- ------- -------- --------
$926,176 $ 4,585 $(23,055) $907,706
======== ======= ======== ========

Included in other investments are redeemable securities with a fair value
of $15.5 million and an unrealized gain of $0.5 million as of December 31, 2000.

Contractual maturities of fixed maturity securities are shown below.
Expected maturities will differ from contractual maturities because borrowers
may have the right to call or prepay obligations with or without call or
prepayment penalties.

DECEMBER 31, 2000
---------------------
AMORTIZED FAIR
COST VALUE
--------- --------

Due within one year......................................... $ 28,908 $ 28,959
Due after one through five years............................ 513,219 519,809
Due after five through ten years............................ 204,382 201,431
Due after ten years......................................... 74,590 75,189
U.S. mortgage backed securities............................. 100,651 102,714
-------- --------
$921,750 $928,102
======== ========

F-9
RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table summarizes the composition of the fair value of the
fixed maturity portfolio by ratings assigned by rating agencies (e.g. Standard &
Poor's Corporation) or, with respect to non-rated issues, as estimated by the
Company's investment managers.

AT DECEMBER 31,
----------------
2000 1999
------ ------

AAA......................................................... 70.7% 72.9%
AA.......................................................... 11.9 5.0
A........................................................... 11.0 5.9
BBB......................................................... 3.0 4.8
BB.......................................................... 0.8 3.7
B........................................................... 1.5 5.3
CCC......................................................... 0.1 --
NR.......................................................... 1.0 2.4
----- -----
100.0% 100.0%
===== =====

Investment income

The components of net investment income are as follows:

YEARS ENDED DECEMBER 31,
-----------------------------
2000 1999 1998
------- ------- -------

Fixed maturities............................................ $62,588 $52,470 $45,392
Short term investments...................................... 6,213 6,200 2,354
Cash and cash equivalents................................... 10,858 2,898 6,831
------- ------- -------
79,659 61,568 54,577
Investment expenses......................................... 1,791 1,234 1,743
------- ------- -------
Net investment income....................................... $77,868 $60,334 $52,834
======= ======= =======

The analysis of realized gains (losses) and the change in unrealized gains
(losses) on investments is as follows:

YEARS ENDED DECEMBER 31,
--------------------------------
2000 1999 1998
-------- -------- --------

Gross realized gains............................... $ 11,173 $ 4,619 $ 13,192
Gross realized losses.............................. (18,324) (20,339) (20,082)
-------- -------- --------
Net realized losses on investments................. (7,151) (15,720) (6,890)
Unrealized gains (losses).......................... 25,301 (13,326) 5,011
-------- -------- --------
Total realized and unrealized gains (losses) on
investments...................................... $ 18,150 $(29,046) $ (1,879)
======== ======== ========

At December 31, 2000 and 1999 approximately $15.0 million of cash and
investments were on deposit with various regulatory authorities as required by
law.

Catastrophe linked instruments

The Company has assumed and ceded risk through catastrophe and weather
linked securities and derivative instruments under which losses or recoveries
are triggered by an industry loss index or geological or physical variables. Net
related fees and risk premiums assumed and ceded are not material to the
Company's

F-10
RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

operations. During 1999 and 1998, the Company recognized gains on non-indemnity
catastrophe index contracts of $2.5 million and $7.5 million, respectively,
which are included in other income.

NOTE 4. CEDED REINSURANCE

The Company utilizes reinsurance to reduce its exposure to large losses.
The Company currently has in place contracts that provide for recovery of a
portion of certain claims and claim expenses from reinsurers in excess of
various retentions and loss warranties. The Company would remain liable to the
extent that any reinsurance company fails to meet its obligations. The earned
reinsurance premiums ceded were $149.8 million, $128.1 million and $68.1 million
for 2000, 1999 and 1998, respectively.

Other than loss recoveries, certain of the Company's ceded reinsurance
contracts also provide for recoveries of additional premiums, reinstatement
premiums and lost no-claims bonuses which are incurred when losses are ceded to
reinsurance contracts. Total recoveries netted against premiums and claims and
claim expenses incurred were $52.0 million, $255.3 million and $110.1 million
for 2000, 1999 and 1998, respectively.

Included in losses and premiums recoverable as of December 31, 2000, are
recoverables of $23.2 million (1999 -- $37.8 million) which relate to a
retroactive reinsurance contract entered into by Nobel. This contract provides
Nobel with $38.0 million of protection from adverse development on its
pre-October 1, 1997 casualty book of business plus $40 million of capacity on
transferred reserves. SFAS No. 113, "Accounting and Reporting for Reinsurance of
Short-Duration and Long-Duration Contracts", requires that adverse development
of the reserves covered by this contract be reflected in the Company's statement
of income when the adverse development becomes known. However, the offsetting
recovery under the contract is required to be deferred and recognized into
income as payments are received from the reinsurer. During 1998, the Company
recognized in its statement of income, $27.6 million of adverse development on
the business covered by this contract, however the offsetting recovery is
reflected on the balance sheet as a deferred gain. As payments are received from
the reinsurer, the gain is pro-rated and reflected in the statement of income as
a reduction to claims and claim expenses.

NOTE 5. RESERVE FOR CLAIMS AND CLAIM EXPENSES

For the Company's reinsurance operations, estimates of claims and claim
expenses are based in part upon the estimation of claims resulting from
catastrophic events. Estimation by the Company of claims resulting from
catastrophic events based upon its own historical claim experience is inherently
difficult because of the Company's short operating history and the potential
severity of property catastrophe claims. Therefore, the Company utilizes both
proprietary and commercially available models, as well as historical reinsurance
industry property catastrophe claims experience, for purposes of evaluating
future trends and providing an estimate of ultimate claims costs.

On both the Company's reinsurance and primary operations, the Company uses
statistical and actuarial methods to reasonably estimate ultimate expected
claims and claim expenses. The period of time from the reporting of a loss to
the Company and the settlement of the Company's liability may be several years.
During this period, additional facts and trends will be revealed. As these
factors become apparent, case reserves will be adjusted, sometimes requiring an
increase in the overall reserves of the Company, and at other times requiring a
reallocation of IBNR reserves to specific case reserves. These estimates are
reviewed regularly, and such adjustments, if any, are reflected in results of
operations in the period in which they become known and are accounted for as
changes in estimates.

F-11
RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Activity in the liability for unpaid claims and claim expenses is
summarized as follows:

YEARS ENDED DECEMBER 31,
--------------------------------
2000 1999 1998
-------- -------- --------

Net reserves as of January 1....................... $174,913 $197,512 $110,037
Net reserves assumed in respect of acquired
company.......................................... -- -- 55,317
Net incurred related to:
Current year.................................. 100,168 111,720 96,431
Prior years................................... 8,436 (34,579) 16,321
-------- -------- --------
Total net incurred............................ 108,604 77,141 112,752
-------- -------- --------
Net paid related to:
Current year.................................. 12,545 44,701 49,671
Prior years................................... 33,958 55,039 30,923
-------- -------- --------
Total net paid................................ 46,503 99,740 80,594
-------- -------- --------
Total net reserves as of December 31............. 237,014 174,913 197,512
Losses recoverable as of December 31............. 166,597 303,688 101,317
-------- -------- --------
Total gross reserves as of December 31........... $403,611 $478,601 $298,829
======== ======== ========

The prior year development in 2000 was due primarily to development on the
1999 losses related to the European storms. During 1999, the prior year
development was due primarily to favorable development on property catastrophe
reserves for 1998 and prior. During 1998, the prior year development was due
primarily to adverse development of Nobel's surety and casualty businesses,
partially offset by favorable development on property catastrophe reserves. The
Company's total gross reserve for incurred but not reported claims was $228.8
million as of December 31, 2000 (1999 -- $293.2 million).

NOTE 6. BANK LOANS

The Company has a revolving credit and term loan agreement with a syndicate
of commercial banks. The commitment under the revolving credit facility was
increased during the year from $300 million to $310 million. During 2000, the
Company made net repayments of $192 million on this facility and the balance
outstanding as of December 31, 2000 was $8 million (1999 - $200 million).
Interest rates on the facility are based on a spread above LIBOR and averaged
7.03 percent during 2000 (5.76 percent in 1999). The credit agreement contains
certain financial covenants including requirements that consolidated debt to
capital does not exceed a ratio of 0.35:1; consolidated net worth must exceed
the greater of $100 million or 125 percent of consolidated debt; and 80 percent
of invested assets must be rated BBB- by S&P or Baa3 by Moody's Investor Service
or better. Under the terms of the agreement, and if the Company is in compliance
with the covenants thereunder, the Company has access to an additional $302
million should the need arise. The Company was in compliance with all the
covenants of this revolving credit and term loan agreement as at December 31,
2000.

Renaissance U.S. has a $27 million term loan and $15 million revolving loan
facility with a syndicate of commercial banks. Interest rates on the facility
are based on a spread above LIBOR, and averaged 6.98 percent during 2000 (5.91
percent in 1999). The credit agreement contains certain financial covenants, the
primary one being that, RenaissanceRe, being its principal guarantor, maintain a
ratio of liquid assets to debt service of 4:1. The term loan has mandatory
repayment provisions approximating $9 million per year in each of years 2001
through 2003.

F-12
RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

During 2000, in accordance with the provisions of the term loan, the
Company repaid the first installment of $8.0 million. The Company was in
compliance with all the covenants of this term loan and revolving loan facility
as at December 31, 2000.

Interest payments on the above loans totaled $17.2 million, $8.3 million
and $4.4 million for the years ended December 31, 2000, 1999 and 1998,
respectively. Fair value of bank loans approximate the carrying values, because
such loans reprice frequently.

NOTE 7. CAPITAL SECURITIES

On March 7, 1997 RenaissanceRe Capital Trust (the "Trust") issued $100
million of "Company Obligated, Mandatorily Redeemable Capital Securities of a
Subsidiary Trust holding solely $103,092,783 of RenaissanceRe's 8.54 percent
Junior Subordinated Debentures due March 1, 2027" ("Capital Securities")
guaranteed by the Company. The Capital Securities pay cumulative cash
distributions at an annual rate of 8.54 percent, payable semi-annually. The
Trust is a wholly owned subsidiary of the Company and is consolidated into the
Company's consolidated financial statements. The Capital Securities and the
related dividends are reflected in the consolidated financial statements as a
minority interest.

During 2000 and 1999 the Company repurchased $2.0 million and $10.4 million
of the Capital Securities, respectively, recognizing gains of $0.5 million and
$1.8 million, respectively, which are reflected as a change in shareholders'
equity.

NOTE 8. ACQUISITION

In June 1998, the Company acquired the U.S. operating subsidiaries of Nobel
Insurance Limited, a Bermuda company ("Nobel Limited"), for $56.1 million. The
gross assets and gross liabilities purchased in the transaction were $188.1
million and $155.9 million, respectively, thereby resulting in the recognition
of $23.9 million of goodwill (subsequently written down to $14.0 million due to
the 1998 fourth quarter charge described below). The Company accounted for this
acquisition using the purchase method of accounting. The Company issued no
shares as part of the purchase.

During the fourth quarter of 1998, the Company recorded an after tax charge
of $40.1 million, consisting of $29.6 million of adverse development on Nobel's
casualty and surety books of business, a goodwill write-down of $6.6 million,
and other related costs of $3.9 million. At the end of 1998, RenaissanceRe
adopted a plan to exit each of Nobel's business units and accordingly, Nobel
completed the reinsurance of the casualty and surety books of business and its
bail and low-value dwelling books of business have been assumed by third
parties. Reflected in corporate expenses are write-offs of goodwill of $1.0
million and $6.7 million for the years ended December 31, 2000, and 1999,
respectively.

Renaissance U.S. expects to retain ownership of Nobel along with its
licenses in the 50 U.S. states, although there can be no assurance that such
licenses can be successfully maintained following the disposition of the
business units.

In connection with the Nobel acquisition, Renaissance U.S. borrowed $35
million from a syndicate of banks. In addition, the banks provided a $15 million
revolving credit facility which is fully utilized. RenaissanceRe has guaranteed
these arrangements. See Note 6. Contemporaneously with the Nobel acquisition,
Nobel entered into a retroactive reinsurance contract. This contract provides
Nobel with $38 million of protection from adverse development on its pre October
1, 1997 casualty book of business. See Note 4.

F-13
RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 9. SHAREHOLDERS' EQUITY

On May 5, 1998, the shareholders voted to increase the authorized capital
to an aggregate of 325,000,000 shares consisting of 225,000,000 Common Shares
and 100,000,000 Preference Shares. The Company's 225,000,000 authorized Common
Shares, $1.00 par value, consist of three separate series with differing voting
rights as follows:

DECEMBER 31, 2000
--------------------------
ISSUED AND
AUTHORIZED OUTSTANDING
----------- -----------

Full Voting Common Shares
(includes all shares registered and available to the
public).................................................. 210,775,379 18,172,763
Diluted Voting Class I Common Shares
(the Diluted Voting I Shares)............................ 14,039,089 1,448,504
Diluted Voting Class II Common Shares
(the Diluted Voting II Shares)........................... 185,532 --
----------- ----------
225,000,000 19,621,267
----------- ----------

The Diluted Voting I Shares and the Diluted Voting II Shares (together the
Diluted Voting Shares) were authorized at a special general meeting of
shareholders on December 23, 1996 and, subsequent to the authorization,
affiliates of General Electric Investment Corporation ("GE") exchanged 5.7
million Full Voting Common Shares for 4.2 million Diluted Voting I Shares and
1.5 million Diluted Voting II Shares, and as such are the sole holders of such
diluted voting securities.

The Diluted Voting Shareholders vote together with the common shareholders.
The Diluted Voting I Shares are limited to a fixed voting interest in the
Company of up to 9.9 percent on most corporate matters. The Diluted Voting
Shareholders are entitled to the same rights, including receipt of dividends and
the right to vote on certain significant corporate matters, and are subject to
the same restrictions as the common shareholders. The Company currently does not
intend to register or list the Diluted Voting Shares on the New York Stock
Exchange.

In February and May of 2000, the Board authorized share repurchase programs
of $25.0 million each. For the year ended December 31, 2000, the Company
repurchased 671,900 Full Voting Common Shares at an aggregate price of $25.1
million. During 1999 the Company repurchased a total of 2,226,700 Full Voting
Common Shares at an aggregate price of $80.1 million. During 1998, the Company
repurchased a total of 1,020,670 Full Voting Common Shares at an aggregate price
of $42.7 million. Full Voting Common Shares repurchased by the Company are
normally cancelled and retired.

During 2000, GE completed the sale of 1.0 million Diluted Voting I Shares
pursuant to an S-3 registration which were subsequently converted into Full
Voting Common Shares.

On November 17, 1999, the Company purchased and cancelled 700,000 Full
Voting Common Shares at $38.00 per share for an aggregate purchase price of
$26.6 million from one of the Company's founding institutional shareholders.

On December 1, 1999, one of the Company's founding institutional
shareholders sold 318,213 Diluted Voting II Shares into the public market where
they were subsequently converted into Full Voting Common Shares.

NOTE 10. EARNINGS PER SHARE

The Company utilizes SFAS No. 128, "Earnings per Share" to account for its
weighted average shares. The numerator in both the Company's basic and diluted
earnings per share calculations is identical. The

F-14
RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

following table sets forth the reconciliation of the denominator from basic to
diluted weighted average shares outstanding (in thousands of per share amounts):

YEAR ENDED DECEMBER 31,
--------------------------
2000 1999 1998
------ ------ ------

Weighted average shares -- basic......................... 19,034 20,444 22,021
Per share equivalents of employee stock options and
restricted shares...................................... 542 184 407
------ ------ ------
Weighted average shares -- diluted....................... 19,576 20,628 22,428
====== ====== ======

NOTE 11. RELATED PARTY TRANSACTIONS AND MAJOR CUSTOMERS

The Company has in force several treaties with subsidiaries of two of its
founding shareholders (or their successors), The St. Paul Companies and
affiliates of GE, covering property catastrophe risks in several geographic
regions. The terms of these treaties were determined in arms length negotiations
and the Company believes that such terms are comparable to terms the Company
would expect to negotiate in similar transactions with unrelated parties. For
the years ended December 31, 2000, 1999 and 1998, the Company received $14.3
million, $11.1 million and $13.7 million in reinsurance premiums and deposits
related to these treaties, respectively.

Other assets include the Company's investment in Top Layer Re of $21.2
million. Top Layer Re, which is 50% owned by Renaissance Reinsurance, is carried
using the equity method. The Company's earnings from Top Layer Re and the
Company's performance-based fee from OPCat totalled $9.8 million for the year
ended December 31, 2000 (1999 -- $1.9 million) and are included in other income.
During 2000, the Company also received a $1.2 million distribution from Top
Layer Re.

During the years ended December 31, 2000, 1999 and 1998, the Company
received 78.3%, 78.8%, and 64.2%, respectively, of its premium assumed from its
five largest reinsurance brokers. Subsidiaries and affiliates of Marsh Inc.,
Greig Fester, E. W. Blanch & Co., AON Re Group and Willis Faber accounted for
approximately 26.5%, 15.7%, 15.7%, 14.9% and 5.5%, respectively, of the
Company's premiums written in 2000.

NOTE 12. DIVIDENDS

During 2000, four regular quarterly dividends of $0.375 per share were paid
to shareholders of record as of February 17, May 18, August 17, and November 16.
During 1999, four regular quarterly dividends of $0.35 per share were paid to
shareholders of record as of February 18, May 28, August 19, and November 18.
During 1998, four regular quarterly dividends of $0.30 per share were paid to
shareholders of record as of February 18, May 20, August 19, and November 19.
The total amount of dividends paid to Common Shareholders during 2000, 1999 and
1998 was $29.2 million, $28.9 million and $26.7 million, respectively.

NOTE 13. TAXATION

Under current Bermuda law, the Company is not required to pay taxes in
Bermuda on either income or capital gains. Income from U.S. company operations
is subject to taxes imposed by U.S. authorities. Renaissance Reinsurance of
Europe is subject to the taxation laws of Ireland.

F-15
RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Income tax expense consists of:

DECEMBER 31, 2000 CURRENT DEFERRED TOTAL
- ----------------- ------- -------- ------

U.S. Federal............................................. $28 $4,602 $4,630
U.S. state and local..................................... 18 -- 18
--- ------ ------
$46 $4,602 $4,648
=== ====== ======

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at December 31,
2000 and 1999 are presented below:

2000 1999
------- --------

Deferred tax assets:
Allowance for doubtful accounts............................. $ 583 $ 127
Unearned premiums........................................... 162 288
Claims reserves, principally due to discounting for tax..... 1,726 2,474
Retroactive reinsurance gain................................ 4,716 4,613
Net operating loss carryforwards............................ 16,980 14,553
Others...................................................... 3,487 4,167
------- --------
27,654 26,222
Deferred tax liabilities:
Other....................................................... (883) (2,719)
------- --------
Net deferred tax asset before valuation allowance........... 26,771 23,503
Valuation allowance......................................... 8,218 --
------- --------
Net deferred tax asset...................................... $18,553 $ 23,503
======= ========

At December 31, 2000, the net deferred tax asset of $18.6 million
(1999 -- $23.5 million) is included in other assets on the consolidated balance
sheet. The U.S. companies have a net operating loss carryforward of $49.9
million (1999 -- $42.8 million) which will be available to offset regular
taxable U.S. income during the carryforward period (through 2020).

During 2000, the Company recorded a valuation allowance of $8.2 million
against the net deferred tax asset. Although the net operating losses which gave
rise to a deferred tax asset have a carryforward period through 2020, the
Company's U.S. operations did not generate significant taxable income during the
years ended December 31, 2000 and 1999. Accordingly, under the circumstances,
and until the Company's U.S. operations begin to generate significant taxable
income, the Company believes that it is prudent to establish and maintain a
valuation allowance against the net deferred tax asset.

F-16
RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 14. GEOGRAPHIC INFORMATION

Financial information relating to gross premiums written by geographic
region is as follows:

YEAR ENDED DECEMBER 31,
--------------------------------
2000 1999 1998
-------- -------- --------

United States and Caribbean........................ $145,871 $173,598 $132,776
Worldwide.......................................... 98,923 46,712 17,033
Worldwide (excluding U.S.)(1)...................... 60,382 27,276 26,326
Europe............................................. 22,071 26,437 18,522
Other.............................................. 9,559 2,370 4,495
Australia and New Zealand.......................... 8,280 3,212 3,932
Noncatastrophe reinsurance premium(2).............. 37,730 2,740 4,105
-------- -------- --------
Total reinsurance.................................. 382,816 282,345 207,189
United States -- primary........................... 50,186 68,960 63,271
-------- -------- --------
Total gross written premium........................ $433,002 $351,305 $270,460
======== ======== ========

(1) The category "Worldwide (excluding U.S.)" consists of contracts that
cover more than one geographic region (other than the U.S.). The exposure in
this category for gross premiums written to date is predominantly from Europe
and Japan.

(2) The category "Noncatastrophe reinsurance" includes coverages related to
noncatastrophe reinsurance risks. These coverages primarily include exposure to
claims from accident and health, finite, satellite, and aviation risks.

NOTE 15. SEGMENT REPORTING

The Company has two reportable segments: reinsurance operations and primary
operations. The reinsurance segment provides property catastrophe reinsurance as
well as other reinsurance to selected insurers and reinsurers on a worldwide
basis. The primary segment provides insurance both on a direct and on a surplus
lines basis for commercial and homeowners catastrophe-exposed property business.
Also included in the primary segment are coverages written by Nobel for
commercial auto and general liability as well as surety business which provides
coverage to small and mid-size contractors. The Nobel business has been
substantially reinsured.

The activities of the Company's Bermuda and U.S. holding companies are
reflected in the other column. The pre tax loss of the holding companies
primarily consisted of interest expense on bank loans, the minority interest on
the Capital Securities, and realized investment losses on the sales of
investments, partially offset by

F-17
RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

investment income on the assets of the holding companies. Data for the three
years ended December 31, 2000, 1999 and 1998 was as follows:

YEAR ENDED DECEMBER 31, 2000
-------------------------------------------------
REINSURANCE PRIMARY OTHER TOTAL
----------- -------- -------- ----------

Gross premiums written............... $ 382,816 $ 50,186 $ -- $ 433,002
Total revenues....................... 325,637 13,280 10,818 349,735
Income (loss) before taxes........... 150,003 (4,406) (13,721) 131,876

Assets............................... 1,169,568 251,740 47,681 1,468,989
---------- -------- -------- ----------

Claims and claim expense ratio....... 40.4% 47.0% -- 40.6%
Underwriting expense ratio........... 26.8 98.1 -- 28.5
---------- -------- -------- ----------
Combined ratio....................... 67.2% 145.1% -- 69.1%
========== ======== ======== ==========

YEAR ENDED DECEMBER 31, 1999
-------------------------------------------------
REINSURANCE PRIMARY OTHER TOTAL
----------- -------- -------- ----------

Gross premiums written............... $ 282,345 $ 68,960 $ -- $ 351,305
Total revenues....................... 232,715 31,377 6,143 270,235
Income (loss) before taxes........... 117,408 8,926 (23,618) 102,716

Assets............................... 1,112,692 274,401 230,150 1,617,243
---------- -------- -------- ----------

Claims and claim expense ratio....... 32.7% 52.2% -- 34.9%
Underwriting expense ratio........... 25.8 12.4 -- 28.1
---------- -------- -------- ----------
Combined ratio....................... 58.5% 64.6% -- 63.0%
========== ======== ======== ==========

YEAR ENDED DECEMBER 31, 1998
-------------------------------------------------
REINSURANCE PRIMARY OTHER TOTAL
----------- -------- -------- ----------

Gross premiums written............... $ 207,189 $ 63,271 $ -- $ 270,460
Total revenues....................... 216,976 42,229 1,322 260,527
Income (loss) before taxes........... 126,768 (51,438) (21,228) 54,102

Assets............................... 897,656 369,801 88,707 1,356,164
---------- -------- -------- ----------

Claims and claim expense ratio....... 25.0% 200.2% -- 55.0%
Underwriting expense ratio........... 28.1 37.1 -- 29.8
---------- -------- -------- ----------
Combined ratio....................... 53.1% 237.3% -- 84.8%
========== ======== ======== ==========

NOTE 16. STOCK INCENTIVE COMPENSATION AND EMPLOYEE BENEFIT PLANS

The Company has a stock incentive plan under which all employees of the
Company and its subsidiaries may be granted stock options and restricted stock
awards. A stock option award under the Company's stock incentive plan allows for
the purchase of the Company's Common Shares at a price that is generally equal
to the five day average closing price of the Common Shares immediately prior to
the date of grant. Options to purchase Common Shares are granted periodically by
the Board of Directors, generally vest over four years and generally expire ten
years from the date of grant.

F-18
RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company adopted the disclosure-only method under SFAS No. 123,
"Accounting for Stock Based Compensation", as of December 31, 1996, and
continues to account for stock-based compensation plans under Accounting
Principles Board Opinion No. 25. In accordance with SFAS No. 123, the fair value
of option grants is estimated on the date of grant using the Black-Scholes
option pricing model for pro-forma footnote purposes with the following weighted
average assumptions used for grants in 2000, 1999 and 1998, respectively;
dividend yield of 1.9, 3.4 and 2.7 percent, expected option life of five years
for all years, and expected volatility of 28.51, 27.41 and 25.09 percent. The
risk-free interest rate was assumed to be 5.0 percent in 2000, 6.3 percent in
1999 and 5.5 percent in 1998. If the compensation cost had been determined based
upon the fair value method recommended in SFAS No. 123, the Company's net income
would have been $109.4 million, $100.9 million and $71.8 million for each of
2000, 1999 and 1998, respectively, and the Company's earnings per share on a
diluted basis would have been $5.59, $4.89 and $3.20 for each of 2000, 1999 and
1998, respectively. The following is a table of the changes in options
outstanding for 2000, 1999 and 1998, respectively:

AWARDS WEIGHTED FAIR VALUE
AVAILABLE OPTIONS AVERAGE OF RANGE OF
FOR GRANT OUTSTANDING EXERCISE PRICE OPTIONS EXERCISE PRICES
---------- ----------- -------------- ---------- ---------------

BALANCE, DECEMBER 31,
1997...................... 1,960,320 1,286,807 $26.67
Options granted............. (486,079) 486,079 $45.05 $10.84 $34.97-$48.00
Options forfeited........... 16,225 (16,225) $33.45
Options exercised........... -- (136,891) $17.69
Shares turned in or
withheld.................. 59,928
Restricted stock issued..... (136,313)
Restricted stock
forfeited................. 461
----------------------------------------------------------------------------
BALANCE, DECEMBER 31,
1998...................... 1,414,542 1,619,770 $35.62
Options granted............. (363,139) 363,139 $36.42 $12.24 $33.19-$41.29
Options forfeited........... 247,537 (247,537) $38.46
Options exercised........... -- (148,504) $16.41
Shares turned in or
withheld.................. 82,811
Restricted stock issued..... (186,625)
Restricted stock
forfeited................. 16,335
----------------------------------------------------------------------------
BALANCE, DECEMBER 31,
1999...................... 1,211,461 1,586,868 $37.22
Options granted............. (1,590,118) 1,590,118 $49.02 $13.51 $34.00-$74.45
Options forfeited........... 75,560 (75,560) $43.44
Options exercised........... -- (1,078,575) $38.73
Shares turned in or
withheld.................. 729,360
Restricted stock issued..... (236,879)
Restricted stock
forfeited................. 8,970
----------------------------------------------------------------------------
BALANCE, DECEMBER 31,
2000...................... 198,354 2,022,851 $46.50
Total options exercisable at
December 31, 2000......... 737,413

Under the Company's 1993 Amended Stock Incentive Plan the total number of
shares authorized under the plan is 4,000,000 shares. The Plan also allows for
the issuance of share-based awards, the issuance of restricted Common Shares and
an adjustment in the calculation of shares available for issuance thereunder by

F-19
RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

deeming the number of shares tendered to or withheld by the Company in
connection with certain option exercises to be so available.

The Company has also established a Non-Employee Director Stock Incentive
Plan to issue stock options and shares of restricted stock. The authorized
shares available for issuance under the Plan is 200,000 Common Shares, with
79,816 awards available for grant at December 31, 2000. In 2000, 70,000 options
to purchase Common Shares and 3,328 restricted Common Shares were granted. In
1999, 12,000 options to purchase Common Shares and 1,665 restricted Common
Shares were granted. In 1998, 6,000 options to purchase Common Shares and 939
restricted Common Shares were granted. The options and restricted Common Shares
vest ratably over three years.

The Company has also established an employee stock bonus plan. Under the
plan, eligible employees may elect to receive a grant of Common Shares of up to
50 percent of their bonus in lieu of cash, with an associated grant from the
Company of an equal number of restricted shares. The restricted Common Shares
vest ratably over a three or four year period. During the restricted period, the
employee receives dividends and votes the restricted Common Shares, but the
restricted shares may not be sold, transferred or assigned. In 2000, 1999 and
1998 the Company issued 77,342, 56,430, and 33,036 shares under this plan,
respectively, with fair values of $2.9 million, $2.0 million and $1.5 million,
respectively. Additionally, in 2000, 1999 and 1998 the Board of Directors
granted 159,537, 130,195 and 103,277 restricted shares with a fair value of $6.3
million, $4.6 million, and $4.5 million to certain employees. The shares granted
to these employees vest ratably over a four to five year period. At the time of
grant, the market value of the shares awarded under these plans is recorded as
unearned stock grant compensation and is presented as a separate component of
shareholders' equity. The unearned compensation is charged to operations over
the vesting period. Compensation expense related to these plans was $5.5
million, $3.4 million, and $2.5 million in 2000, 1999 and 1998, respectively.

In 2000, the Company granted a special option grant to all of its officers
equal to three times the normal annual grant. As a result of this special grant,
it is not anticipated that annual option grants will be granted in 2001 and
2002. However, the Company may grant options and/or restricted stock in upcoming
years if it is deemed appropriate to attract or retain personnel.

All of the Company's employees are eligible for defined contribution
pension plans. Contributions are primarily based upon a percentage of eligible
compensation.

NOTE 17. STATUTORY REQUIREMENTS

Under the Insurance Act, 1978, amendments thereto and related regulations
of Bermuda ("The Act"), Renaissance Reinsurance and Glencoe are required to
prepare statutory financial statements and to file in Bermuda a statutory
financial return. The Act also requires Renaissance Reinsurance and Glencoe to
maintain certain measures of solvency and liquidity during the period. As at
December 31, 2000 the statutory capital and surplus of the Bermuda subsidiaries
was $738.5 million and the amount required to be maintained under Bermuda law
was $135.0 million.

Under the Act, Renaissance Reinsurance is classified as a Class 4 insurer,
and is therefore restricted as to the payment of dividends in the amount of 25
percent of the prior year's statutory capital and surplus, unless at least two
members of the board of directors attest that a dividend in excess of this
amount would not cause Renaissance Reinsurance to fail to meet its relevant
margins. During 2000, Renaissance Reinsurance paid aggregate cash dividends of
$95.6 million to RenaissanceRe.

Glencoe is also eligible as an excess and surplus lines insurer in a number
of states in America. There are various capital and surplus requirements in
these states, with the most onerous requiring the Company to maintain a minimum
of $15.0 million in capital and surplus. In this regard the declaration of
dividends from retained earnings and distributions from additional paid-in
capital are limited to the extent that the above requirements are met.
F-20
RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company's U.S. insurance subsidiaries are subject to various statutory
and regulatory restrictions regarding the payment of dividends. The restrictions
are primarily based upon statutory surplus and statutory net income. The U.S.
insurance subsidiaries' combined statutory surplus amounted to $32.6 million at
December 31, 2000 and the amount required to be maintained was $29.9 million.

Codification of statutory accounting in the U.S. is generally effective
January 1, 2001. Codification is not expected to have a significant impact on
the statutory surplus of the Company's U.S. insurance subsidiaries.

NOTE 18. COMMITMENTS AND CONTINGENCIES

Concentration of credit risk

Financial instruments which potentially subject the Company to
concentration of credit risk consist principally of investments, cash and
reinsurance balances. The Company limits the amount of credit exposure to any
one financial institution and except for U.S. Government bonds, none of the
Company's investments exceeded 10 percent of shareholders' equity at December
31, 2000.

Concentrations of credit risk with respect to reinsurance balances are
limited due to their dispersion across various companies and geographies.

Financial instruments with off-balance sheet risk

The Company's investment guidelines permit, subject to specific approval,
investments in derivative instruments such as futures, options and foreign
currency forward contracts for purposes other than trading. Their use is limited
to yield enhancement, duration management, foreign currency exposure management
or to obtain an exposure to a particular financial market.

Foreign currency exposure management

The Company uses foreign currency forward and option contracts to minimize
the effect of fluctuating foreign currencies on the value of non-U.S. dollar
claim reserves. Contract gains and losses, realized and unrealized, are reported
in the consolidated statements of income. At December 31, 2000, no foreign
currency forward contract has a maturity of more than nine months. The table
below summarizes the notional amounts, the current fair values and the
unrealized gain of the Company's foreign currency forward contracts at December
31, 2000.

NOTIONAL
AMOUNT FAIR VALUE
-------- ----------
(IN MILLIONS OF
U.S. DOLLARS)

~~Forward contracts........................................... $32.0 $ 0.8~~

The credit risk associated with the above derivative financials instruments
relates to the potential for non-performance by counterparties. Non-performance
is not anticipated; however, in order to minimize the risk of loss, management
monitors the creditworthiness of its counterparties. For forward contracts, the
counterparties are principally banks, which must meet certain criteria according
to the Company's investment guidelines.

Letters of credit

As of December 31, 2000 the Company's bankers have issued letters of credit
of approximately $44.9 million in favor of certain ceding companies. Also, in
connection with the Top Layer Re joint venture, the Company has committed $37.5
million of collateral in the form of a letter of credit. The letters of credit
are secured by cash and investments of similar amounts.

F-21
RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Employment agreements

The Board of Directors has authorized the execution of employment
agreements between the Company and certain officers. These agreements provide
for severance payments under certain circumstances, as well as accelerated
vesting of options and restricted stock grants, under a change in control, as
defined therein and by the Company's stock option plan.

Employee Credit Facility

In June of 1997, the Company executed a credit facility in order to
encourage direct, long-term ownership of the Company's stock, and to facilitate
purchases of the Company's stock by officers of the Company. Under the terms of
the facility, the purchases are financed by personal loans to the officers from
the bank. Such loans are collateralized by the stock purchased. The Company
guarantees the loans, but has recourse to the collateral if it incurs a loss
under the guarantee. At December 31, 2000, the bank loans guaranteed by the
Company totaled $24.8 million. At December 31, 2000, the common stock that
collateralizes the loans had a fair value of $67.4 million.

Litigation

The Company is party to various lawsuits arising in the normal course of
business. The Company does not believe that any of the litigation will have a
material impact on its consolidated financial statements.

F-22

RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 19. QUARTERLY FINANCIAL RESULTS (UNAUDITED)

QUARTER ENDED QUARTER ENDED QUARTER ENDED QUARTER ENDED
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
------------------- ----------------- ------------------ -----------------
2000 1999 2000 1999 2000 1999 2000 1999
DECEMBER 31, 2000 -------- -------- ------- ------- -------- ------- ------- -------
(AMOUNTS IN TABLES EXPRESSED IN THOUSANDS OF
UNITED STATES DOLLARS, EXCEPT PER SHARE AMOUNTS)

Gross premiums written..................... $160,471 $155,095 $97,650 $67,374 $122,470 $97,582 $52,411 $31,254
======== ======== ======= ======= ======== ======= ======= =======
Net premiums written....................... $103,364 $116,284 $64,765 $34,929 $ 85,564 $58,238 $39,610 $ 4,062
======== ======== ======= ======= ======== ======= ======= =======
Net premiums earned........................ 52,765 57,988 62,519 57,668 73,284 54,123 79,113 51,338
Net investment income...................... 18,467 13,106 19,240 14,039 21,236 15,714 19,205 17,475
Net foreign exchange gains (losses)........ (137) (666) (169) 394 447 107 237 (246)
Other income............................... 1,402 (269) 1,709 460 2,960 882 4,607 3,842
Net realized investment gains (losses)..... (6,787) (497) (3,594) (5,030) 1,482 (6,020) 1,748 (4,173)
-------- -------- ------- ------- -------- ------- ------- -------
Total revenues............................. 65,710 69,662 79,705 67,531 99,409 64,806 104,910 68,236
-------- -------- ------- ------- -------- ------- ------- -------
Claims and claim expenses incurred......... 17,713 15,695 24,878 21,005 29,953 19,420 36,060 21,021
Acquisitions costs......................... 7,242 6,784 7,602 6,025 11,074 7,540 12,612 5,151
Operational expenses....................... 7,807 9,516 9,065 9,092 11,050 8,771 10,032 9,389
Corporate expenses......................... 2,342 3,961 2,532 3,936 196 693 2,952 1,298
Interest expense........................... 4,252 1,406 4,358 1,712 4,639 2,675 3,918 4,147
-------- -------- ------- ------- -------- ------- ------- -------
Total expenses............................. 39,356 37,362 48,435 41,770 56,912 39,099 65,574 41,006
-------- -------- ------- ------- -------- ------- ------- -------
Income before minority interest and
taxes.................................... 26,354 32,300 31,270 25,761 42,497 25,707 39,336 27,230
Minority interest -- Capital Securities.... 1,859 2,111 1,938 2,128 1,866 1,861 1,919 2,182
-------- -------- ------- ------- -------- ------- ------- -------
Income before taxes........................ 24,495 30,189 29,332 23,633 40,631 23,846 37,417 25,048
Income tax (expense) benefit............... (420) (171) 388 416 (4,986) 128 370 1,152
-------- -------- ------- ------- -------- ------- ------- -------
Net income................................. $ 24,075 $ 30,018 $29,720 $24,049 $ 35,645 $23,974 $37,787 $26,200
======== ======== ======= ======= ======== ======= ======= =======
Earnings per share -- basic................ $ 1.25 $ 1.42 $ 1.58 $ 1.17 $ 1.89 $ 1.18 $ 1.97 $ 1.33

Earnings per share -- diluted.............. $ 1.24 $ 1.41 $ 1.55 $ 1.16 $ 1.83 $ 1.17 $ 1.87 $ 1.31

Weighted average shares -- basic........... 19,266 21,138 18,851 20,524 18,877 20,356 19,141 19,759
Weighted average shares -- diluted......... 19,475 21,323 19,147 20,703 19,520 20,536 20,163 19,949

Claims and claim expense ratio............. 33.6% 27.1% 39.8% 36.4% 40.9% 35.9% 45.6% 41.0%
Underwriting expense ratio................. 28.5% 28.1% 26.7% 26.2% 30.2% 30.1% 28.6% 28.3%
-------- -------- ------- ------- -------- ------- ------- -------
Combined ratio............................. 62.1% 55.2% 66.5% 62.6% 71.1% 66.0% 74.2% 69.3%
======== ======== ======= ======= ======== ======= ======= =======

F-23

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the estimated expenses in connection
with the issuance and distribution of the securities registered hereby, other
than underwriting discounts and commissions:

Securities and Exchange Commission
registration fee..................................... $35,215
Printing and engraving expenses........................ 250,000
Accounting fees and expenses........................... 85,000
Legal fees and expenses................................ 350,000
Blue Sky fees and expenses............................. 10,000
Miscellaneous.......................................... 120,000
--------
Total........................................... $850,215
========

We have agreed to pay all expenses of the selling shareholder incident
to this registration statement other than underwriting discounts and
commissions.

ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.

Section 98 of the Companies Act of 1981 of Bermuda (the "Act") provides
generally that a Bermuda company may indemnify its directors, officers and
auditors against any liability that by virtue of Bermuda law otherwise would be
imposed on them, except in cases where such liability arises from the fraud or
dishonesty of which such director, officer or auditor may be guilty in relation
to the company. Section 98 further provides that a Bermudian company may
indemnify its directors, officers and auditors against any liability incurred by
them in defending any proceedings, whether civil or criminal, in which judgment
is awarded in their favor or in which they are acquitted or granted relief by
the Supreme Court of Bermuda in certain proceedings arising under Section 281 of
the Act.

We have adopted provisions in our Bye-Laws that provide that we shall
indemnify our officers and directors to the maximum extent permitted under the
Act, except where such liability arises from fraud, dishonesty, willful
negligence or default.

We have entered into employment agreements with all of our executive
officers which each contain provisions pursuant to which we have agreed to
indemnify the executive as required by the Bye-Laws and maintain customary
insurance policies providing for indemnification.

We have purchased insurance on behalf of our directors and officers for
liabilities arising out of their capacities as such.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

See Exhibit Index included herewith which is incorporated herein by
reference.

II-1

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes that:

(a) For purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to section 13(a)
or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

(c) (1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement at the time it was declared effective.

(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

II-2

SIGNATURE

Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized in Pembroke, Bermuda, on the 15th day of February 2001.

RENAISSANCERE HOLDINGS LTD.

By: /s/ John M. Lummis
----------------------------------
John M. Lummis
Executive Vice President and
Chief Financial Officer

POWER OF ATTORNEY AND SIGNATURES

KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints each of John M. Lummis and Martin J.
Merritt, and each of them, as his true and lawful attorneys-in-fact and agents
for the undersigned, with full power of substitution, for and in the name, place
and stead of the undersigned to sign and file with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, (i) any and all
pre-effective and post-effective amendments to this registration statement, (ii)
any registration statement relating to this offering that is to be effective
upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as
amended, (iii) any exhibits to any such registration statement or pre-effective
or post-effective amendments or (iv) any and all applications and other
documents in connection with any such registration statement or pre-effective or
post-effective amendments, and generally to do all things and perform any and
all acts and things whatsoever requisite and necessary or desirable to enable
the registrant to comply with the provisions of the Securities Act of 1933, as
amended, and all requirements of the Securities and Exchange Commission.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on behalf of
RenaissanceRe Holdings Ltd. in the capacities indicated on this 15th day of
February 2001.

SIGNATURE TITLE
- --------- -----

/s/ James N. Stanard
JAMES N. STANARD President, Chief Executive Officer and
Chairman of the Board of Directors (Principal
Executive Officer)

/s/ John M. Lummis
JOHN M. LUMMIS Executive Vice President and Chief Financial
Officer (Principal Financial and Accounting
Officer)

II-3

/s/ William I. Riker
WILLIAM I. RIKER Director & Executive Vice President

/s/ Arthur S. Bahr
ARTHUR S. BAHR Director

/s/ Thomas A. Cooper
THOMAS A. COOPER Director

/s/ Edmund B. Greene
EDMUND B. GREENE Director

/s/ Brian R. Hall
BRIAN R. HALL Director

/s/ Gerald L. Igou
GERALD L. IGOU Director

KEWSONG LEE Director

/s/ Paul J. Liska
PAUL J. LISKA Director

/s/ W. James MacGinnitie
W. JAMES MACGINNITIE Director

/s/ Scott E. Pardee
SCOTT E. PARDEE Director

II-4

/s/ Mark J. Rickey
Name: Mark J. Rickey Authorized Representative in the United States
Title: President, Renaissance U.S. Holdings Inc.

II-5

EXHIBIT INDEX

Sequential
Exhibit Page
Number Description Number
------ ----------- ------

1.1 Form of Underwriting Agreement

4.2 Memorandum of Increase in Share Capital (incorporated by reference to our
Quarterly Report on Form 10-Q for the period ended March 31, 1998, filed
with the Commission on May 14, 1998)

4.3 Amended and Restated Bye-Laws of RenaissanceRe Holdings Ltd. (incorporated
by reference to our Quarterly Report on Form 10-Q for the period ended June
30, 1998, filed with the Commission on August 14, 1998)

4.4 Specimen Stock Certificate (incorporated by reference to our Registration
Statement on Form S-1 (Registration No. 33-70008) which was declared
effective by the Commission on July 26, 1995)

5.1 Opinion of Conyers Dill & Pearman as to the legality of the common shares

8.1 Opinion of Willkie Farr & Gallagher as to certain tax matters

10.1 Amended and Restated Registration Rights Agreement by and among
RenaissanceRe Holdings Ltd., Warburg, Pincus Investors, L.P., PT
Investments, Inc., GE Investment Private Placement Partners I-Insurance,
Limited Partnership, United States Fidelity and Guaranty Company, and the
other parties listed therein, dated at March 23, 1998, incorporated by
reference from the Annual Report on Form 10-K of RenaissanceRe Holdings,
Ltd., dated at March 31, 1998.

23.1 Consent of Conyers Dill & Pearman (included in Exhibit 5.1)

23.2 Consent of Willkie Farr & Gallagher (included in Exhibit 8.1)

23.3 Consent of Ernst & Young

24.1 Powers of Attorney (included in registration statement)

Form: S-3

Documents

S-3: Registration statement for specified transactions by certain issuers