March 9, 2001 - 424B1: Prospectus filed pursuant to Rule 424(b)(1) | RenaissanceRe Holdings Ltd. (RNR)

Filed pursuant to Rule 424(b)(1)
Registration Number 333-55852

PROSPECTUS SUPPLEMENT
(To Prospectus dated February 21, 2001)
1,569,215 Shares

[RenaissanceRe Holdings Logo]

COMMON SHARES

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UNITED STATES FIDELITY AND GUARANTY COMPANY, AN INDIRECT WHOLLY OWNED SUBSIDIARY
OF THE ST. PAUL COMPANIES, INC., IS OFFERING 1,569,215 COMMON SHARES OF
RENAISSANCERE HOLDINGS LTD. WE WILL NOT RECEIVE ANY OF THE PROCEEDS FROM THE
SALE OF THESE SHARES BY USF&G.

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OUR COMMON SHARES ARE LISTED ON THE NEW YORK STOCK EXCHANGE UNDER THE SYMBOL
"RNR." ON MARCH 7, 2001, THE CLOSING PRICE OF THE COMMON SHARES ON THE NEW YORK
STOCK EXCHANGE WAS $72.20 PER SHARE.

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INVESTING IN OUR COMMON SHARES INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 8 OF THE ACCOMPANYING PROSPECTUS.
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PRICE $72.20 A SHARE

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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
March 13, 2001.

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MORGAN STANLEY DEAN WITTER

JPMORGAN

MERRILL LYNCH & CO.
March 8, 2001

TABLE OF CONTENTS

PROSPECTUS SUPPLEMENT PROSPECTUS

You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. You
should carefully read the prospectus delivered with this prospectus 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 supplement and the accompanying prospectus is accurate only at
the date of this prospectus supplement or the date of the accompanying
prospectus, regardless of the time of delivery of this prospectus supplement and
the accompanying prospectus or of any sale of common shares.

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 supplement, 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, a wholly owned subsidiary of The St. Paul Companies, Inc.
References to "St. Paul" refer to The St. Paul Companies, Inc. In this
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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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 declared a dividend of $0.40
per share which was paid 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.

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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 March 7, 2001 and as adjusted to give
effect to this offering. 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.

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(1) Assumes exercise of the underwriters' over-allotment option.

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

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.

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 $2.35 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 underwriters.

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 supplement, less underwriting discounts and
commissions. The underwriters may exercise this option solely for the purpose of
covering over-allotments, 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 $124,627,091, the
total underwriting discounts and commissions would be $6,231,355 and the total
proceeds to USF&G would be $118,395,736.

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

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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, USF&G and PT Investments 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;

- 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 RenaissanceRe 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 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

S-6

syndicate repurchases previously distributed common shares in transactions to
cover syndicate short positions, in stabilization transactions 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. The underwriters are being
advised as to certain legal matters with respect to Bermuda law by Appleby,
Spurling & Kempe, Hamilton, Bermuda. USF&G is being advised as to certain legal
matters by Sullivan & Cromwell, New York, New York.

RECENT DEVELOPMENTS

On February 28, 2001, an earthquake measuring approximately 6.8 on the
Richter Scale and centered about 10 miles northeast of Olympia, Washington
impacted the Pacific Northwest, including the Seattle, Washington area. On March
5, we announced that we remain comfortable with Wall Street earnings estimates
for our first quarter. Based on our estimates of our losses from the Seattle
event, and modest loss activity to date in the quarter, we anticipate that our
loss experience in the quarter will be consistent with Street estimates.

Our assessment of our losses from the Seattle earthquake is preliminary,
and assumes that industry insured losses are less than $3.5 billion. Our
estimate of our first quarter earnings also assumes that we will not experience
significant loss activity for the balance of the quarter.

S-7

PROSPECTUS

1,726,137 Shares

RENAISSANCERE HOLDINGS LTD.

COMMON SHARES

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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.

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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.

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INVESTING IN OUR COMMON SHARES INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 8.

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 February 21, 2001.

TABLE OF CONTENTS

You should rely only on the information contained or incorporated by
reference in this prospectus or any prospectus 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 and any accompanying prospectus supplement 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 and any prospectus supplement, 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.

2

PROSPECTUS SUMMARY

This summary may not contain all of the information that may be important
to you. You should read the entire prospectus and any accompanying prospectus
supplement delivered in connection with this offering, 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%.

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
3

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.

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 8.
4

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."

footnotes appear on following page

5

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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.

6

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.

7

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.
8

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 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

9

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,

- redeem, purchase or acquire any capital shares, or

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

10

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 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 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.

11

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.

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,

12

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 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

13

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.

14

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.

16

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.

17

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."

footnotes appear on following page

18

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.

22

During 2000, 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 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

23

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.

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
24

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. Holdings,
Inc. 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,
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:

25

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.

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.

26

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
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) 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.

27

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 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.

28

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 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 a letter of credit.

29

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.

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

30

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 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 can not 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.

31

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.

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.

32

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 provides
primary catastrophe exposed property coverage on an excess and surplus lines
basis, and is eligible to write business in 29 states. DeSoto Insurance, DeSoto
Prime Insurance, Paget and Pembroke 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.

33

"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:

-- 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

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-- 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 enhance 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.

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

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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., whose principal subsidiary was Nobel, 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 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 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 contracts 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

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of each incremental reinsurance contract 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

- the perceived financial strength of the cedent.

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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

40

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.

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.

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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 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.
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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 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.

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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.

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

45

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 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.

46

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 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

47

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.

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

48

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
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.

49

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.

50

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.

51

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,
formerly a subsidiary of General Electric Company and registered investment
adviser, from 1987 until December 1993. Mr. Bahr 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 since our 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 Vice
President -- Investment Analyst for GE Asset Management Incorporated, or GEAM,
and certain of its predecessors since September 1993. He is a Certified
Financial Analyst and has served GEAM and its predecessors 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
52

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.

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.

53

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 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.

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

55

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."

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.

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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.

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

57

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.

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

58

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. 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

59

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 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
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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 "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

61

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 RenaissanceRe, 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, 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

62

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.

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

63

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.

64

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.

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.

65

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.

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.

66

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.

67

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

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

68

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 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.

69

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

F-1

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-2

RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

See accompanying notes to the consolidated financial statements.
F-3

RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

See accompanying notes to the consolidated financial statements.

F-4

RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

See accompanying notes to the consolidated financial statements.

F-5

RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

See accompanying notes to the consolidated financial statements.

F-6

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-7
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-8
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-9
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:

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.

F-10
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.

Investment income

The components of net investment income are as follows:

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

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 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.
F-11
RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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-12
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:

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-13
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-14
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:

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-15
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):

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-16
RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Income tax expense consists of:

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:

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-17
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:

(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-18
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:

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-19
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:

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-20
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-21
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.

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-22
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-23

RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 19. QUARTERLY FINANCIAL RESULTS (UNAUDITED)

F-24

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