Form: SC 13E4

December 23, 1996

Documents

OFFER TO PURCHASE

Published on December 23, 1996



OFFER TO PURCHASE FOR CASH

BY

RENAISSANCERE HOLDINGS LTD.

FOR UP TO

813,190 OF ITS COMMON SHARES

AT

$34.50 NET PER SHARE

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON JANUARY 22, 1997, UNLESS THE OFFER IS EXTENDED.

RenaissanceRe Holdings Ltd., a company organized under the laws of Bermuda
(the "Company"), invites its shareholders to tender an aggregate of up to
813,190 Common Shares, $1.00 par value per share (such shares, together with
all other outstanding Common Shares of the Company, are herein referred to as
the "Shares"), at a price of $34.50 per Share, net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions set
forth herein and in the related Letter of Transmittal (which together
constitute the "Offer"). Upon the terms and subject to the conditions of the
Offer, including the provisions thereof relating to proration and "odd lot"
tenders, the Company will purchase for cancellation all Shares validly
tendered and not withdrawn.

On December 13, 1996, the Board of Directors of the Company (the "Board")
approved a plan to return approximately $100 million of capital to the
shareholders of the Company (the "Capital Plan") through two Share
repurchases. The Capital Plan consists of two components. First, on December
13, 1996, the Company entered into an equity purchase agreement (the "Purchase
Agreement") with Warburg, Pincus Investors, L.P., United States Fidelity and
Guaranty Company, Trustees of General Electric Pension Trust and GE Investment
Private Placement Partners I, Limited Partnership (collectively, the "Founding
Institutional Investors") pursuant to which the Company purchased for
cancellation (the "Repurchase") an aggregate of 2,085,361 Shares on a pro rata
basis at a price of $34.50 per Share for an aggregate consideration of
approximately $71.94 million. Second, by means of the Offer, the Company will
purchase for cancellation, on the terms and subject to the conditions set
forth herein and in the related Letter of Transmittal, an aggregate of up to
813,190 Shares at a price of $34.50 per Share, net to the seller in cash,
without interest thereon, for an aggregate price of approximately $28.06
million (assuming that the Offer is fully subscribed and that the Company does
not purchase for cancellation additional Shares in the Offer pursuant to
applicable law). After giving effect to the Repurchase and consummation of the
Offer, the aggregate percentage Share ownership interest of the Founding
Institutional Investors relative to that of the public shareholders of the
Company will be substantially the same as prior to such transactions (assuming
the Offer is fully subscribed by the public shareholders and that management
of the Company does not participate in the Offer). See "Purpose of the Offer;
The Capital Plan."

THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS SUBJECT, HOWEVER, TO CERTAIN OTHER CONDITIONS. SEE
SECTION 10.

THE BOARD HAS APPROVED THE MAKING OF THE OFFER. HOWEVER, NEITHER THE COMPANY
NOR THE BOARD MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO
TENDER ANY OR ALL SHARES. SHAREHOLDERS MUST MAKE THEIR OWN DECISION AS TO
WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER. SHAREHOLDERS
ARE URGED TO CAREFULLY READ THE OFFER IN ITS ENTIRETY.

The Shares are listed and principally traded on the New York Stock Exchange,
Inc. (the "NYSE"). On December 13, 1996, the last full day of trading prior to
the Company's announcement of the Offer, and on December 20, 1996, the last
full day of trading prior to the Company's commencement of the Offer, the
closing sale price of the Shares on the NYSE Composite Tape was $32.75 per
Share and $33.13 per Share, respectively. SHAREHOLDERS ARE URGED TO OBTAIN A
CURRENT MARKET QUOTATION FOR THE SHARES. SEE SECTION 6.
----------------

The Dealer Manager for the Offer is:

MERRILL LYNCH & CO.





December 23, 1996

THE FOUNDING INSTITUTIONAL INVESTORS HAVE INFORMED THE COMPANY THAT THEY DO
NOT PRESENTLY INTEND TO TENDER ANY SHARES PURSUANT TO THE OFFER. HOWEVER, THE
FOUNDING INSTITUTIONAL INVESTORS HAVE INFORMED THE COMPANY THAT IF THE OFFER
IS NOT FULLY SUBSCRIBED BY THE PUBLIC SHAREHOLDERS OF THE COMPANY, THEY MAY
TENDER SHARES IN AN AGGREGATE AMOUNT UP TO SUCH UNSUBSCRIBED PORTION OF THE
OFFER.

THE COMPANY HAS BEEN ADVISED THAT NONE OF ITS DIRECTORS OR EXECUTIVE
OFFICERS PRESENTLY INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER.
HOWEVER, SUCH DIRECTORS AND EXECUTIVE OFFICERS ARE NOT PROHIBITED FROM, AND
MAY SUBSEQUENTLY ELECT TO, PARTICIPATE IN THE OFFER.

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

IMPORTANT

Any shareholder desiring to tender all or any portion of his or her Shares
should either (1) complete and sign the enclosed Letter of Transmittal or a
facsimile thereof in accordance with the instructions in the Letter of
Transmittal, have his or her signature thereon guaranteed if required by
Instruction 1 of the Letter of Transmittal and mail or deliver the Letter of
Transmittal or such facsimile with his or her certificate(s) evidencing his or
her Shares and any other required documents to the Depositary, or follow the
procedure for book-entry tender of Shares set forth in Section 4 of this Offer
to Purchase, or (2) request his or her broker, dealer, commercial bank, trust
company or other nominee to effect the transaction for him or her.
Shareholders having Shares registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact such broker,
dealer, commercial bank, trust company or other nominee if they desire to
tender their Shares so registered.

A shareholder who desires to tender Shares and whose certificates for such
Shares are not immediately available should tender such Shares by following
the procedures for guaranteed delivery set forth in Section 4 hereof.

Questions and requests for assistance may be directed to the Information
Agent or to the Dealer Manager at the addresses and telephone numbers set
forth on the back cover of this Offer to Purchase. Requests for additional
copies of this Offer to Purchase and the Letter of Transmittal may be directed
to the Information Agent, the Dealer Manager or to brokers, dealers,
commercial banks or trust companies.

NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER SHAREHOLDERS SHOULD TENDER SHARES PURSUANT TO THE OFFER.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN
OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH RECOMMENDATION AND
SUCH INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER
TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER.


TABLE OF CONTENTS



SECTION PAGE
- ------- ----

SUMMARY................................................................... ii
INTRODUCTION.............................................................. 1
PURPOSE OF THE OFFER; THE CAPITAL PLAN.................................... 2
CERTAIN ADVANTAGES OF TENDERING AND NOT TENDERING IN THE OFFER............ 3
THE OFFER................................................................. 4
1. Number of Shares; Proration........................................... 4
2. Acceptance for Payment and Payment for Shares......................... 5
3. Withdrawal Rights..................................................... 7
4. Procedure for Tendering Shares........................................ 7
5. Certain Federal Income Tax Consequences............................... 9
6. Price Range of Shares; Dividends...................................... 11
7. Certain Information Concerning the Company............................ 12
8. Additional Information................................................ 15
9. Source and Amount of Funds............................................ 15
10. Certain Conditions of the Offer....................................... 15
11. Fees and Expenses..................................................... 16
12. Interest of Directors and Officers; Transactions and Arrangements
Concerning Shares..................................................... 17
13. Effects of the Offer on the Market for Shares; Registration Under the
Exchange Act.......................................................... 18
14. Miscellaneous......................................................... 18
Schedule I--Schedule of Transactions in the Shares During the Past 40
Business Days......................................................... I-1
Schedule II--Directors and Executive Officers of the Company.............. II-1



SUMMARY

This general summary is provided solely for the convenience of holders of
Shares and is qualified in its entirety by reference to the full text of and
the more specific details contained in this Offer to Purchase and the related
Letter of Transmittal and any amendments hereto and thereto. Capitalized terms
used in this summary without definition shall have the meaning ascribed to such
terms in this Offer to Purchase. Unless otherwise expressly stated, information
as to Share amounts and percentage Share ownership interests set forth in this
Offer to Purchase give effect to the consummation of the Repurchase.

The Company................. RenaissanceRe Holdings Ltd., a company organized
under the laws of Bermuda.

The Shares.................. Common Shares, par value $1.00 per share, of the
Company.

Number of Shares Sought..... Up to 813,190 Shares of the 23,530,616 Shares
outstanding as of December 23, 1996.

Purchase Price.............. $34.50 per Share, net to the seller in cash,
without interest thereon.

Expiration Date............. January 22, 1997 at 12:00 midnight, New York City
time, unless extended by the Company.

How to Tender Shares........ See Section 4. For further information, call the
Information Agent or consult your broker for
assistance.

Odd Lot Owners.............. There will be no proration of Shares tendered by
any shareholder beneficially owning less than 100
Shares as of the close of business on December
13, 1996 who tenders all such Shares and
completes the box captioned "Odd Lots" on the
Letter of Transmittal and, if applicable, the
Notice of Guaranteed Delivery. Shareholders
tendering Odd Lots will avoid the payment of
brokerage commissions and the applicable odd lot
discount payable in a sale of Shares in a
transaction effected on a securities exchange.

Withdrawal Rights........... Shares tendered pursuant to the Offer may be
withdrawn at any time before the Expiration Date
and, unless theretofore accepted for payment as
provided herein, may also be withdrawn after
February 21, 1997. See Section 3.

Purpose of Offer............ Given the Company's financial condition and
liquidity, its access to the capital markets and
to debt financing, and current market conditions
in the Company's principal market, property
catastrophe reinsurance, the Board has determined
that the Company has the capacity to return
approximately $100 million of capital to its
shareholders through the Repurchase and the
Offer. See "Purpose of the Offer; The Capital
Plan."

Market Price of Shares...... On December 13, 1996, the last full day of
trading prior to the Company's announcement of
the Offer, and on December 20, 1996, the last
full day of trading prior to the Company's
commencement of the Offer, the closing sale price
of the Shares on the NYSE Composite Tape was
$32.75 per Share and $33.13 per Share,
respectively. See Section 6.

ii


Dividends................... Shares validly tendered and purchased for
cancellation by the Company pursuant to the Offer
will not be entitled to any dividends in respect
of any dividends declared and paid in later
periods. See Section 6.

Brokerage Commissions....... Not payable by shareholders.

Transfer Tax................ None, except as provided in Instruction 6 of the
Letter of Transmittal.

Payment Date................ As promptly as practicable after the Expiration
Date of the Offer.

Position of the Company and
the Board .................. Neither the Company nor the Board makes any
recommendation to any shareholder as to whether
to tender or refrain from tendering Shares. See
Section 12.

Intention of Founding
Institutional Investors..... The Founding Institutional Investors, who
collectively own an aggregate of 16,344,056
Shares, representing approximately 69.5% of the
Shares outstanding as of December 23, 1996, have
advised the Company that they do not presently
intend to tender any Shares pursuant to the
Offer. However, the Founding Institutional
Investors have informed the Company that if the
Offer is not fully subscribed by the public
shareholders of the Company, they may tender
Shares in an aggregate amount up to such
unsubscribed portion of the Offer. See Section
12.

Further Information......... Any questions, requests for assistance or
requests for additional copies of this Offer to
Purchase, the Letter of Transmittal or other
tender offer materials may be directed to the
Dealer Manager or the Information Agent at their
respective addresses and telephone numbers set
forth on the back cover page of this Offer to
Purchase.

(iii)

To All Holders of Common Shares of
RenaissanceRe Holdings Ltd.:

INTRODUCTION

The Company hereby offers to purchase for cancellation up to 813,190 of its
outstanding Shares at a price of $34.50 per Share, net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions set
forth in this Offer to Purchase and in the related Letter of Transmittal.
Tendering shareholders will not be obliged to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase for cancellation of Shares by the
Company pursuant to the Offer.

THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 10.

The Shares are traded on the NYSE. On December 13, 1996, the last full day
of trading before the Company's announcement of the Offer, and on December 20,
1996, the last full day of trading prior to the Company's commencement of the
Offer, the closing sale price of the Shares on the NYSE Composite Tape was
$32.75 per Share and $33.13 per Share, respectively. SHAREHOLDERS ARE URGED TO
OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. SEE SECTION 6.

THE BOARD HAS APPROVED THE MAKING OF THE OFFER. HOWEVER, NEITHER THE COMPANY
NOR THE BOARD MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO
TENDER ALL OR ANY SHARES. SHAREHOLDERS MUST MAKE THEIR OWN DECISION AS TO
WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THEY SHOULD
REVIEW SECTION 1 BELOW BEFORE DETERMINING HOW MANY SHARES TO TENDER.
SHAREHOLDERS ARE URGED TO CAREFULLY READ THE OFFER IN ITS ENTIRETY.

As of December 23, 1996, the Company had issued and outstanding 23,530,616
Shares and had reserved for issuance 1,291,261 Shares upon exercise of
outstanding stock options. The 813,190 Shares that the Company is inviting
shareholders to tender pursuant to the Offer represent approximately 3.5% of
the Shares outstanding (approximately 13.3% of the publicly held Shares) as of
December 23, 1996.

THE COMPANY HAS BEEN ADVISED THAT NONE OF ITS DIRECTORS OR EXECUTIVE
OFFICERS PRESENTLY INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER.
HOWEVER, SUCH DIRECTORS AND EXECUTIVE OFFICERS ARE NOT PROHIBITED FROM, AND
MAY ELECT TO, PARTICIPATE IN THE OFFER. AS OF DECEMBER 23, 1996, THE COMPANY'S
DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (12 PERSONS) BENEFICIALLY OWNED AN
AGGREGATE OF 1,505,355 SHARES, REPRESENTING APPROXIMATELY 6.3% OF THE
OUTSTANDING SHARES, ASSUMING THE EXERCISE BY SUCH PERSONS OF THEIR VESTED AND
EXERCISABLE OPTIONS. IF THE OFFER IS FULLY SUBSCRIBED BY THE PUBLIC
SHAREHOLDERS OF THE COMPANY AND MANAGEMENT OF THE COMPANY DOES NOT PARTICIPATE
IN THE OFFER, THE AGGREGATE PERCENTAGE SHARE OWNERSHIP INTEREST OF THE
COMPANY'S EXECUTIVE OFFICERS AND DIRECTORS AS A GROUP WILL REPRESENT
APPROXIMATELY 6.5% OF THE SHARES OUTSTANDING FOLLOWING CONSUMMATION OF THE
OFFER, ASSUMING THE EXERCISE BY SUCH PERSONS OF THEIR VESTED AND EXERCISABLE
OPTIONS.

THE FOUNDING INSTITUTIONAL INVESTORS, WHO COLLECTIVELY OWN AN AGGREGATE OF
16,344,056 SHARES, REPRESENTING APPROXIMATELY 69.5% OF THE SHARES OUTSTANDING
AS OF DECEMBER 23, 1996, HAVE INFORMED THE COMPANY THAT THEY DO NOT PRESENTLY
INTEND TO TENDER ANY SHARES IN THE OFFER. HOWEVER, THE FOUNDING INSTITUTIONAL
INVESTORS HAVE INFORMED THE COMPANY THAT IF THE OFFER IS NOT FULLY SUBSCRIBED
BY THE PUBLIC SHAREHOLDERS OF THE COMPANY, THEY MAY TENDER SHARES IN AN
AGGREGATE AMOUNT UP TO SUCH UNSUBSCRIBED PORTION OF THE OFFER. AFTER GIVING
EFFECT TO THE REPURCHASE AND CONSUMMATION OF THE OFFER, THE AGGREGATE
PERCENTAGE SHARE OWNERSHIP INTEREST OF THE FOUNDING INSTITUTIONAL INVESTORS
RELATIVE TO THAT OF THE PUBLIC

SHAREHOLDERS WILL BE SUBSTANTIALLY THE SAME AS PRIOR TO SUCH TRANSACTIONS
(ASSUMING THE OFFER IS FULLY SUBSCRIBED BY THE PUBLIC SHAREHOLDERS OF THE
COMPANY AND THAT MANAGEMENT OF THE COMPANY DOES NOT PARTICIPATE IN THE OFFER).

PURPOSE OF THE OFFER; THE CAPITAL PLAN

The following discussion contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and involve certain material risks and uncertainties. The Company's actual
results may differ materially from the results discussed in such forward-
looking statements. Factors that might cause such a difference include, but
are not limited to, the matters discussed below as well as the factors
described in the Company's 1995 Annual Report (as defined herein) and the
Company's September 1996 Quarterly Report (as defined herein).

Since the Company's formation in June 1993, the Company's operations have
generated substantial cash. The Company believes that its cash, short-term
investments and borrowing capacity following consummation of the Offer,
together with anticipated cash flows from operations, are adequate for its
needs in the foreseeable future. However, the Company's actual experience may
differ from the expectations set forth in the preceding sentence, for reasons
including those discussed in the preceding paragraphs, as well as future
events that might have the effect of reducing the Company's available cash
balances (such as operating losses following catastrophes or other adverse
events) or that might reduce or eliminate the availability of external
financial resources.

In 1996, the Company continued to generate substantial cash flow. For the
nine months ended September 30, 1996, the Company's cash provided by operating
activities was approximately $135.6 million, and retained earnings increased
approximately $99.2 million. The Company's principal operating goal is to find
attractive underwriting opportunities that utilize retained earnings as they
are generated. Current market conditions in the Company's principal market,
property catastrophe reinsurance, are not sufficiently attractive to provide
underwriting opportunities to employ fully the retained earnings being
generated.

Given the Company's financial condition and liquidity, its access to the
capital markets and to debt financing, and current market conditions in the
Company's principal market, property catastrophe reinsurance, the Board
determined that the Company has the capability to return approximately $100
million of capital to shareholders. Accordingly, on December 13, 1996, the
Board approved the Capital Plan, which is comprised of two components. First,
on December 13, 1996, the Company entered into the Purchase Agreement with the
Founding Institutional Investors to purchase for cancellation an aggregate of
2,085,361 Shares on a pro rata basis, at a price of $34.50 per Share, for an
aggregate consideration of approximately $71.94 million. Second, by means of
the Offer, the Company will purchase for cancellation, on the terms and
subject to the conditions set forth herein and in the related letter of
Transmittal, an aggregate of 813,190 Shares at a price of $34.50 per Share,
net to the seller in cash, without interest thereon, for an aggregate price of
approximately $28.06 million (assuming that the Offer is fully subscribed and
that the Company does not purchase for cancellation additional Shares in the
Offer pursuant to applicable law). After giving effect to the Capital Plan,
the Company's shareholders' equity has grown in 1996, and is expected to be
sufficient to support the Company's 1997 business activities. The Board
believes that the Capital Plan is consistent with the Company's policy to
actively manage its capital and its goal to increase shareholder value.

The Board reviewed several alternative methods to return capital to
shareholders proposed by management and third-party financial advisors. The
Board determined that the Capital Plan is an advantageous method of returning
capital because it is accretive to earnings per Share, allowed for a closing
of the Repurchase in 1996 and provides public shareholders of the Company the
opportunity to tender Shares at a fixed price.


2

To establish the fixed price to offer tendering shareholders, the Board
retained Merrill Lynch & Co. ("Merrill" or the "Dealer Manager") to provide
advice on the Offer price and related matters. In establishing the Offer
price, the Board and Merrill considered the Company's past and anticipated
future operating results, the trading history of the Shares, the composition
of the Company's shareholder base, the size of the Offer in relation to the
number of Shares outstanding and selected similar transactions completed over
the last two years.

The purpose of the Offer is to allow those shareholders desiring to receive
cash for a portion of or, subject to proration, all of their Shares an
opportunity to do so. The Offer price per Share represents a premium over the
recent market prices for the Shares, and may represent a premium over market
prices for the Shares following consummation of the Offer.

THE BOARD HAS APPROVED THE MAKING OF THE OFFER. HOWEVER, NEITHER THE BOARD
NOR THE COMPANY, NOR ANY PERSON ACTING ON THEIR BEHALF, MAKES ANY
RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER ANY OR ALL SHARES.
SHAREHOLDERS MUST MAKE THEIR OWN DECISION AS TO WHETHER TO TENDER SHARES AND,
IF SO, HOW MANY SHARES TO TENDER. SHAREHOLDERS ARE URGED TO CAREFULLY READ THE
OFFER IN ITS ENTIRETY.

CERTAIN ADVANTAGES OF TENDERING AND NOT TENDERING IN THE OFFER

In deciding whether to tender Shares pursuant to the Offer (and how many
Shares to tender), shareholders should consider the following possible
advantages of tendering or, alternatively, not tendering in the Offer.

CERTAIN POSSIBLE ADVANTAGES OF TENDERING IN THE OFFER

1. The price of $34.50 per Share, net to the seller in cash, without
interest thereon, represents a premium over recent market prices for the
Shares, including the closing sale price on each of the last full NYSE trading
days prior to the announcement and the commencement of the Offer by the
Company.

2. After the Expiration Date, the Shares may trade at prices below $34.50
per Share.

3. The purchase for cancellation by the Company of Shares pursuant to the
Offer could have an adverse effect on the liquidity and market value of the
Shares remaining outstanding following the consummation of the Offer.

4. Consummation of the Offer will have the effect of reducing the Company's
cash available to comply with the financial covenants and other restrictions
contained in the Third Amended and Restated Credit Agreement, dated as of
December 12, 1996 (the "Credit Facility"), by and among the Company and the
various financial institutions thereto. In addition, funds available for
working capital, capital expenditures, acquisitions and general corporate
purposes will be reduced as a result of the Tender Offer. However, the Company
expects to have sufficient cash available following consummation of the Offer
for such purposes and to meet the financial covenants of the Credit Facility.

5. Because the volume of Shares typically traded on a daily basis is small
relative to the shareholdings of some of the Company's shareholders, a
shareholder wishing to sell a substantial block of Shares may find it
difficult to sell that block on the NYSE without adversely affecting the
market price received for that block. The Offer, if not subject to proration,
may enable holders of blocks to avoid that problem in disposing of a portion
of their Shares. See Section 1.

6. The Offer gives shareholders an opportunity to dispose of Shares without
incurring any transaction costs.

7. Giving effect to the Repurchase and assuming the Offer is fully
subscribed, the pro forma book value as of September 30, 1996 of Shares not
purchased for cancellation in the Offer will be diluted by $1.51 per Share.

CERTAIN POSSIBLE ADVANTAGES OF NOT TENDERING IN THE OFFER

1. Shareholders who do not tender Shares in the Offer will experience an
increase in their percentage Share ownership interests as a result of the
consummation of the Offer and thus an increase in their proportionate interest

3

in the Company's assets and equity, and therefore in the Company's future
earnings and assets, subject to the Company's right to issue additional Shares
and other equity securities in the future. As a result, such shareholders will
benefit from any future growth in the Company's business to a greater degree
than if they tender Shares, and any or all of such Shares are purchased, in the
Offer.

2. Upon consummation of the Offering, the Company's return on equity and
earnings per Share will be higher in subsequent periods than would have been
reported had the Repurchase and the Offer not occurred, as a result of the
Company's reduced equity base and the smaller number of Shares outstanding
following consummation of the Offer.

THE OFFER

1. Number of Shares; Proration. Upon the terms and subject to the conditions
of the Offer, the Company will accept for payment and pay for up to 813,190
Shares or such lesser number of Shares as are validly tendered on or before the
Expiration Date and not theretofore withdrawn in accordance with Section 3 of
this Offer to Purchase. The term "Expiration Date" means 12:00 midnight, New
York City time, on January 22, 1997, unless and until the Company, in its sole
discretion, shall have extended the period of time for which the Offer is open,
in which event the term "Expiration Date" shall mean the latest time and date
at which the Offer, as so extended by the Company, shall expire. The Company
reserves the right to purchase for cancellation more than 813,190 Shares
pursuant to the Offer. In accordance with applicable regulations of the
Securities and Exchange Commission (the "Commission"), the Company may purchase
for cancellation pursuant to the Offer an additional amount of Shares not to
exceed 2% of the outstanding Shares without amending or extending the Offer.

THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 10.

If more than 813,190 Shares are validly tendered on or before the Expiration
Date and not withdrawn, and the Company does not elect to increase the number
of Shares being sought in the Offer or to purchase additional Shares pursuant
to Rule 13e-4(f)(1) under the Exchange Act (as described below), the Company
will, upon the terms and subject to the conditions of the Offer, accept for
payment 813,190 Shares as follows: (i) all Shares validly tendered before the
Expiration Date by any shareholder (an "Odd Lot Holder") who owned
beneficially, as of the close of business on December 13, 1996, an aggregate of
fewer than 100 Shares ("Odd Lot Shares") and who tenders all of such Shares and
completes the box captioned "Odd Lots" on the Letter of Transmittal and, if
applicable, the Notice of Guaranteed Delivery, will be purchased; and (ii)
other Shares validly tendered before the Expiration Date will be purchased on a
pro rata basis (with appropriate adjustments to avoid purchases of fractional
Shares). If not more than 813,190 Shares are validly tendered on or before the
Expiration Date and not withdrawn, the Company will, upon the terms and subject
to the conditions of the Offer, accept for payment all such Shares.

As of December 23, 1996, there were approximately 3,700 holders of record of
Shares. Because of the relatively large number of Shares held in the names of
brokers and nominees, the Company is unable to estimate the number of
beneficial owners of fewer than 100 Shares or the aggregate number of Shares
they own. Any Odd Lot Holder wishing to tender all of his or her Shares free of
proration pursuant to this Section must complete the box captioned "Odd Lots"
on the Letter of Transmittal and, if applicable, on the Notice of Guaranteed
Delivery.

In the event that proration of tendered Shares is required, the Company will
determine the proration factor as soon as practicable following the Expiration
Date. Proration for each shareholder of tendered Shares, other than Odd Lot
Holders, shall be based on the ratio of the number of Shares tendered by such
shareholder to the total number of Shares tendered by all shareholders, other
than Odd Lot Holders. Because of the difficulty of determining the precise
number of Shares validly tendered and not withdrawn and as a result of the "Odd
Lots" procedure outlined above, if proration is required, the Company will
announce the preliminary and final proration factors as soon as practicable
after the Expiration Date. Shareholders may obtain such preliminary and final

4

information from the Dealer Manager or the Information Agent, and may be able
to obtain such information from their brokers.

The Company expressly reserves the right, in its sole discretion, at any
time and from time to time, and regardless of whether or not any of the events
set forth in Section 10 shall have occurred or shall be deemed by the Company
to have occurred, to extend the period of time during which the Offer is open
and thereby delay acceptance for payment of, and payment for, any Shares, by
giving oral or written notice of such extension to the Depositary and making
public announcement thereof. There cannot be any assurance that the Company
will exercise such right to extend the Offer. The Company also expressly
reserves the right, in its sole discretion, to terminate the Offer and not
accept for payment or pay for any Shares not theretofore accepted for payment
or paid for or, subject to applicable law, to postpone payment for Shares upon
the occurrence of any of the conditions specified in Section 10 hereof by
giving oral or written notice of such termination or postponement to the
Depositary and making a public announcement thereof. The Company's reservation
of the right to delay payment for Shares which it has accepted for payment is
limited by Rule 13e-4(f)(5) promulgated under the Exchange Act, which requires
that the Company must pay the consideration offered or return the Shares
tendered promptly after termination or withdrawal of a tender offer. Subject
to compliance with applicable law, the Company further reserves the right, in
its sole discretion, and regardless of whether any of the events set forth in
Section 10 shall have occurred or shall be deemed by the Company to have
occurred, to amend the Offer in any respect (including, without limitation, by
decreasing or increasing the consideration offered in the Offer to holders of
Shares or by decreasing or increasing the number of Shares being sought in the
Offer). Amendments to the Offer may be made at any time and from time to time
effected by public announcement thereof, such announcement, in the same case
of an extension, to be issued no later than 9:00 a.m., New York City time, on
the next business day after the last previously scheduled or announced
Expiration Date. For purposes of the Offer, a "business day" means any day,
other than a Saturday, Sunday or Federal holiday and consists of the time
period from 12:01 A.M. through 12:00 midnight, New York City time. Any public
announcement made pursuant to the Offer will be disseminated promptly to
shareholders in a manner reasonably designated to inform shareholders of such
change. Without limiting the manner in which the Company may choose to make a
public announcement, except as required by applicable law, the Company shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by making a release to the Dow Jones News
Service.

If the Company materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer, the
Company will extend the Offer to the extent required by Rules 13e-4(d)(2) and
13e-4(e)(2) promulgated under the Exchange Act. These rules require that the
minimum period during which an offer must remain open following material
changes in the terms of the offer or information concerning the offer (other
than a change in price or a change in percentage of securities sought) will
depend on the facts and circumstances, including the relative materiality of
such terms or information. If (i) the Company increases or decreases the price
to be paid for Shares in the Offer, the number of Shares being sought in the
Offer or the Dealer Manager's soliciting fees and, in the event of an increase
in the number of Shares being sought, such increase exceeds 2% of the
outstanding Shares, and (ii) the Offer is scheduled to expire at any time
earlier than the expiration of a period ending on the tenth business day from
and including the date that such notice of an increase or decrease is first
published, sent or given in the manner specified herein, the Offer will be
extended until the expiration of such period of ten business days.

This Offer to Purchase and the related Letter of Transmittal and other
relevant materials will be mailed to record holders of Shares and will be
furnished to brokers, banks and similar persons whose names, or the names of
whose nominees, appear on the shareholder lists or, if applicable, who are
listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Shares by the Company.

2. Acceptance for Payment and Payment for Shares. Upon the terms and subject
to the conditions of the Offer (including, if the Offer is extended or
amended, the terms and conditions of any such extension or amendment), the
Company will accept for payment, and will pay for, Shares validly tendered
before the Expiration Date and not properly withdrawn in accordance with
Section 3 (including Shares validly tendered and not withdrawn during any
extension of the Offer, if the Offer is extended, subject to the terms and
conditions

5

of such extension) as soon as practicable after the Expiration Date. In
addition, the Company expressly reserves the right, in its sole discretion, to
delay the acceptance for payment of or payment for Shares in order to comply,
in whole or in part, with any applicable law.

Any such delays will be effected in compliance with Rule 14e-1(c) under the
Exchange Act (relating to the Company's obligation to pay for or return
tendered Shares promptly after the termination of withdrawal of the Offer).
See Sections 3, 4 and 13.

All Odd Lot Shares properly tendered and not withdrawn prior to the
Expiration Date will be accepted before proration, if any, of the purchase for
cancellation of other tendered Shares. This preference is not available to
holders of 100 or more Shares, even if such holders have separate certificates
for fewer than 100 Shares. A purchase of Odd Lot Shares pursuant to the Offer
will reduce the costs to the Company of servicing the accounts of holders of
Odd Lot Shares.

The per Share consideration paid to any shareholder pursuant to the Offer
will be the highest per Share consideration paid to any other shareholder in
the Offer. In all cases, payment for Shares accepted for payment pursuant to
the Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Shares (or timely confirmation (a "Book-Entry
Confirmation") of the book-entry transfer of such Shares into the Depositary's
account at The Depositary Trust Company, the Midwest Securities Trust Company
or the Philadelphia Depositary Trust Company (collectively, the "Book-Entry
Transfer Facilities")), pursuant to the procedures set forth in Section 4,
(ii) a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) with any required signature guarantees, or an Agent's
Message (as defined below) in connection with a book-entry transfer, and (iii)
any other documents required by the Letter of Transmittal.

The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary, and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility
has received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Company may enforce such agreement against the participant.

For purposes of the Offer, the Company will be deemed to have accepted for
payment, and thereby purchased for cancellation, tendered Shares properly
tendered and not withdrawn (subject to proration), if, as and when the Company
gives oral or written notice to the Depositary of its acceptance for payment
of the tenders of such Shares. Payment for Shares accepted for payment
pursuant to the Offer will be made by deposit of the purchase price therefor
with the Depositary, which will act as agent for the tendering shareholders
for purposes of receiving payment from the Company and transmitting payment to
tendering shareholders. Under no circumstances will the Company pay interest
on the Offer price of the Shares to be paid by the Company, regardless of any
delay in making such payment. If any tendered Shares are not accepted for
payment pursuant to the terms and conditions of the Offer for any reason or
are not paid for because of invalid tender, or if certificates are submitted
for more Shares than are tendered, certificates for such unpurchased Shares
will be returned, without expense to the tendering shareholder (or, in the
case of Shares tendered by book-entry transfer of such Shares into the
Depositary's account at a Book-Entry Transfer Facility as described in Section
4, such Shares will be credited to an account maintained within such Book-
Entry Transfer Facility), as soon as practicable following expiration or
termination of the Offer.

Payment for Shares accepted for payment pursuant to the Offer may be delayed
in the event of proration due to the difficulty of determining the number of
Shares validly tendered and not withdrawn. If the Company is delayed in its
acceptance for payment of or in its payment for Shares or is unable to accept
for payment or pay for Shares pursuant to the Offer for any reason, then,
without prejudice to the Company's rights under this Offer to Purchase (but
subject to compliance with Rule 14e-1(c) under the Exchange Act), the
Depositary may, nevertheless, on behalf of the Company, retain tendered
Shares, and such Shares may not be withdrawn except to the extent tendering
shareholders are entitled to withdrawal rights as described in Section 3.

6

3. Withdrawal Rights. Except as otherwise provided in this Section 3,
tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered
pursuant to the Offer may be withdrawn at any time prior to the Expiration
Date and, unless theretofore accepted for payment as provided herein, may also
be withdrawn after 12:00 midnight, New York City time, on February 21, 1997.

If the Company extends the period of time during which the Offer is open, is
delayed in accepting for payment or paying for Shares or is unable to accept
for payment or pay for Shares pursuant to the Offer for any reason, then,
without prejudice to the Company's rights under the Offer, the Depositary may,
on behalf of the Company, retain all Shares tendered, and such Shares may not
be withdrawn except as otherwise provided in this Section 3, subject to Rule
13-4(f)(5) under the Exchange Act, which provides that the issuer making the
tender offer shall either pay the consideration offered, or return the
tendered Shares promptly after the termination or withdrawal of the tender
offer.

To be effective, a written or facsimile transmission notice of withdrawal
must be received timely by the Depositary at one of its addresses set forth on
the back cover of this Offer to Purchase and must specify the name of the
person who tendered the Shares to be withdrawn and the number of Shares to be
withdrawn. If the Shares to be withdrawn have been delivered to the
Depositary, a signed notice of withdrawal with signatures guaranteed by an
Eligible Institution (except in the case of Shares tendered by an Eligible
Institution) must be submitted prior to the release of such Shares. In
addition, such notice must specify, in the case of Shares tendered by delivery
of certificates, the name of the registered holder (if different from that of
the tendering stockholder) and the serial numbers shown on the particular
certificates evidencing the Shares to be withdrawn or, in the case of Shares
tendered by book-entry transfer, the name and number of the account at one of
the Book-Entry Transfer Facilities to be credited with the withdrawn Shares.

Withdrawals may not be rescinded, and Shares withdrawn will thereafter be
deemed not validly tendered for purposes of the Offer. However, withdrawn
Shares may be retendered by following one of the procedures described in
Section 4 at any time prior to the Expiration Date.

All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by the Company, at its sole
discretion, which determination shall be final and binding. None of the
Company, the Dealer Manager, the Depositary, the Information Agent or any
other person shall be obligated to give notification of any defect or
irregularity in any notice of withdrawal or incur any liability for failure to
give any such notification.

4. Procedures for Tendering Shares.

Proper Tender of Shares. For Shares to be tendered properly pursuant to the
Offer, (a) the certificates for such Shares (or confirmation of receipt of
such Shares pursuant to the procedures for book-entry transfer set forth
below), together with a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof) including any required
signature guarantees, or an Agent's Message in connection with book-entry
delivery of the Shares, and any other documents required by the Letter of
Transmittal, must be received prior to 12:00 midnight, New York City time, on
the Expiration Date by the Depositary at one of its addresses set forth on the
back cover of this Offer to Purchase or (b) the tendering shareholder must
comply with the guaranteed delivery procedure set forth below.

In addition, Odd Lot Holders who tender all such Shares must complete the
box captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on
the Notice of Guaranteed Delivery, in order to qualify for the preferential
treatment available to Odd Lot Holders as set forth in Section 1.

Signatures on all Letters of Transmittal must be guaranteed by a firm that
is a member of a registered national securities exchange or the National
Association of Securities Dealers, Inc., or by a commercial bank or trust
company having an office or correspondent in the United States which is a
participant in an approved signature Guarantee Medallion Program (each of the
foregoing being referred to as an "Eligible Institution"),

7

except in cases where Shares are tendered (i) by a registered holder of Shares
who has not completed either the box entitled "Special Payment Instructions"
or the box entitled "Special Delivery Instructions" on the Letter of
Transmittal or (ii) for the account of an Eligible Institution. See
Instruction 1 of the Letter of Transmittal. If the certificates are registered
in the name of a person other than the signer of the Letter of Transmittal, or
if payment is to be made to a person other than the registered owner of the
certificates surrendered, then the certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered owner or owners appear on the certificates,
with the signature(s) on the certificates or stock powers guaranteed as
aforesaid. See Instruction 5 of the Letter of Transmittal.

THE METHOD OF DELIVERY OF ALL REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK
OF EACH TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.

Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's certificates are not immediately available,
or such shareholder cannot deliver the certificates and all other required
documents to the Depositary before the Expiration Date, or the procedure for
book-entry transfer cannot be complied with in a timely manner, such Shares
may nevertheless be tendered, provided that all of the following conditions
are satisfied:

(a) such tenders are made by or through an Eligible Institution;

(b) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by the Company (with any required
signature guarantees), is received by the Depositary as provided below on
or before the Expiration Date; and

(c) the certificates for all tendered Shares, in proper form for transfer
(or the confirmation of the book-entry transfer of such Shares into the
Depositary's account at one of the Book-Entry Transfer Facilities),
together with a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) with any required signature guarantees (or, in the
case of a book-entry transfer, an Agent's Message) and all other documents
required by the Letter of Transmittal are received by the Depositary within
three NYSE trading days after the date of receipt of such Notice of
Guaranteed Delivery by the Depositary.

The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, telex, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in such
Notice.

In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of
certificates for such Shares (or a Book Entry Confirmation of such Shares), a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) (or, in the case of a book-entry transfer, an Agent's Message) and
any other documents required by the Letter of Transmittal.

Tendering Shareholder's Representation and Warranty; Company's Acceptance
Constitutes an Agreement. A tender of Shares pursuant to any of the procedures
described above will constitute the tendering shareholder's acceptance of the
terms and conditions of the Offer, as well as the tendering shareholder's
representation and warranty to the Company that (a) such shareholder has a net
long position in the Shares being tendered within the meaning of Rule 14e-4
promulgated by the Commission under the Exchange Act and (b) the tender of
such Shares complies with Rule 14e-4. It is a violation of Rule 14e-4 for a
person, directly or indirectly, to tender Shares for such person's own account
unless, at the time of tender and at the end of the proration period or period
during which Shares are accepted by lot (including any extensions thereof),
the person so tendering (i) has a net long position equal to or greater than
the amount of (x) Shares tendered or (y) other securities convertible into or
exchangeable or exercisable for the Shares tendered and will acquire such
Shares for tender by conversion, exchange or exercise and (ii) will deliver or
cause to be delivered such Shares in accordance with the terms and subject to
the conditions of the Offer. Rule 14e-4 provides a similar restriction
applicable to the tender or guarantee of a tender on behalf of another person.
The Company's acceptance for payment of Shares tendered pursuant to the Offer
will constitute a binding agreement between the tendering shareholder and the
Company upon the terms and conditions of the Offer.

8

All questions as to the validity, form, eligibility (including time of
receipt) and acceptance for payment of any tender of Shares will be determined
by the Company, in its sole discretion, whose determination shall be final and
binding. The Company reserves the absolute right to reject any and all tenders
determined by it not to be in proper form or the acceptance for payment of
which may, in the opinion of its counsel, be unlawful. The Company also
reserves the absolute right to waive any of the conditions of the Offer or any
defect or irregularity in the tender of any Shares of any particular
shareholder whether or not similar defects or irregularities are waived in the
case of other shareholders. None of the Company, the Depositary, the
Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in tenders or shall incur any
liability for failure to give any such notification. The Company's
interpretation of the terms and conditions of the Offer (including the Letter
of Transmittal and of the instructions thereto) will be final and binding.

5. Certain Federal Income Tax Consequences. The following summary describes
certain United States federal income tax consequences relevant to the Offer.
The discussion contained in this summary is based upon the Internal Revenue
Code of 1986, as amended to the date hereof (the "Code"), existing and
proposed Treasury regulations promulgated thereunder, administrative
pronouncements and judicial decisions, changes to which could materially
affect the tax consequences described herein and could be made on a
retroactive basis.

This summary discusses only Shares held as capital assets, within the
meaning of Section 1221 of the Code, and does not address all of the tax
consequences that may be relevant to particular shareholders in light of their
personal circumstances, or to certain types of shareholders (such as certain
financial institutions, dealers in securities or commodities, insurance
companies, tax-exempt organizations or persons who hold Shares as a position
in a straddle). In particular, the discussion of the consequences of an
exchange of Shares for cash pursuant to the Offer applies only to a United
States shareholder (herein, a "Holder"). For purposes of this summary, a
"United States shareholder" is (i) a citizen or resident of the United States,
(ii) a corporation, partnership or other entity created or organized in or
under the laws of the United States, any State or any political subdivision
thereof, or (iii) an estate or trust the income of which is subject to United
States federal income taxation regardless of source. This discussion does not
address the tax consequences to foreign shareholders who will be subject to
United States federal income tax on a net basis on the proceeds of their
exchange of Shares pursuant to the Offer because such income is effectively
connected with the conduct of a trade or business within the United States.
Such shareholders are generally taxed in a manner similar to United States
shareholders; however, certain special rules apply. The summary may not be
applicable with respect to Shares acquired as compensation (including Shares
acquired upon the exercise of options or which were or are subject to
forfeiture restrictions). The summary also does not address the state, local
or foreign tax consequences of participating in the Offer. Each Holder of
Shares should consult such Holder's tax advisor as to the particular
consequences to him of participation in the Offer.

Consequences to Tendering Shareholders of Exchange of Shares for Cash
Pursuant to the Offer. An exchange of Shares for cash in the Offer by a Holder
will be a taxable transaction for United States federal income tax purposes.
As a consequence of the exchange, the Holder will, depending on such Holder's
particular circumstances, be treated either as recognizing gain or loss from
the disposition of the Shares or as receiving a dividend distribution from the
Company.

Under Section 302 of the Code, a Holder will recognize a gain or loss on an
exchange of Shares for cash if the exchange (i) results in a "complete
termination" of all such Holder's equity interest in the Company, (ii) results
in a "substantially disproportionate" redemption with respect to such Holder
or (iii) is "not essentially equivalent to a dividend" with respect to the
Holder. In applying each of the Section 302 tests, a Holder is in general
deemed to constructively own the Shares actually owned by certain related
individuals and entities. For example, an individual Holder is generally
considered to own the Shares owned directly or indirectly by or for his or her
spouse and his or her children, grandchildren and parents. In addition, a
Holder is considered to own a proportionate number of the Shares owned by
trusts or estates in which the Holder has a beneficial interest, by
partnerships in which the Holder is a partner, and by corporations in which
the Holder owns, directly or indirectly, 50% or more in value of the stock.
Similarly, Shares directly or indirectly owned by beneficiaries

9

of estates or trusts, by partners of partnerships and, under certain
circumstances, by shareholders of corporations may be considered owned by
these entities. A Holder will generally also be deemed to own Shares which the
Holder has the right to acquire by exercise of an option.

A Holder that exchanges all Shares actually or constructively owned by such
Holder for cash pursuant to the Offer will be regarded as having completely
terminated such Holder's equity interest in the Company. A Holder that
exchanges all Shares actually owned for cash pursuant to the Offer, but is not
treated as having disposed of all Shares constructively owned pursuant to the
Offer because of the application of the family attribution rules described
above, may nevertheless be able to qualify his exchange as a "complete
termination" of his interest in the Company if certain technical requirements
are met. Among other requirements, a Holder must include a statement with his
1996 federal income tax return notifying the Service that he has elected to
waive the family attribution rules and agreeing to provide certain information
in the future, and must not have any interest in the Company immediately after
the disposition (including an interest as an officer, director or employee),
other than an interest as a creditor. A Holder wishing to satisfy the
"complete termination" test through waiver of the family attribution rules
should consult his tax advisor. An exchange of Shares for cash will be a
"substantially disproportionate" redemption with respect to a Holder if the
percentage of the then outstanding Shares owned by such Holder immediately
after the exchange is less than 80% of the percentage of the Shares owned by
such Holder immediately before the exchange. If an exchange of Shares for cash
fails to satisfy the "substantially disproportionate" test, the Holder may
nonetheless satisfy the "not essentially equivalent to a dividend" test. A
Holder who wishes to satisfy (or avoid) the "not essentially equivalent to a
dividend" test is urged to consult such Holder's tax advisor because this test
will be met only if the reduction in such Holder's proportionate interest in
the Company constitutes a "meaningful reduction" given such Holder's
particular facts and circumstances. The Internal Revenue Service (the "IRS")
has indicated in published rulings that any reduction in the percentage
interest of a shareholder whose relative stock interest in a publicly held
corporation is minimal (an interest of less than 1% should satisfy this
requirement) and who exercises no control over corporate affairs should
constitute such a "meaningful reduction." If a Holder sells Shares to persons
other than the Company at or about the time such Holder also sells Shares to
the Company pursuant to the Offer, and the various sales effected by the
Holder are part of an overall plan to reduce or terminate such Holder's
proportionate interest in the Company, then the sales to persons other than
the Company may, for federal income tax purposes, be integrated with the
Holder's sale of Shares pursuant to the Offer and, if integrated, may be taken
into account in determining whether the Holder satisfies any of the three
tests described above. A Holder should consult his tax advisor regarding the
treatment of other exchanges of Shares for cash which may be integrated with
such Holder's sale of Shares to the Company pursuant to the Offer. Conversely,
it is likely that the Repurchase by the Founding Institutional Investors would
be integrated with the exchange of Shares by a Holder in the Offer, so that
the proportionate interest of a Holder after the exchange of Shares and other
integrated sales by the Holder should be compared to the Holder's
proportionate interest prior to the Repurchase by the Founding Institutional
Investors.

If a Holder is treated as recognizing gain or loss from the disposition of
Shares for cash, such gain or loss will be equal to the difference between the
amount of cash received and such Holder's tax basis in the Shares exchanged
therefor. Any such gain or loss will be capital gain or loss and will be long-
term capital gain or loss if the holding period of the Shares exceeds one year
as of the date of the exchange. Gain or loss must be determined separately for
each block of Shares (that is, Shares acquired at the same cost in a single
transaction) that is exchanged for cash. A Holder may be able to designate
(generally through its broker) which blocks of Shares are tendered pursuant to
the Offer if less than all of such Holder's Shares are tendered, and the order
in which different blocks would be exchanged for cash, in the event of
proration pursuant to the Offer. Each Holder should consult such Holder's tax
advisor concerning the mechanics and desirability of such a designation.

If a Holder is not treated under the Section 302 tests as recognizing gain
or loss on an exchange of Shares for cash, the entire amount of cash received
by such Holder in such exchange will be treated as a dividend to the extent of
the Company's current and accumulated earnings and profits. Such a dividend
will be includible in the Holder's gross income as ordinary income in its
entirety, without reduction for the tax basis of the Shares

10

exchanged, and no loss will be recognized. The Holder's tax basis in the
Shares exchanged, however, will be added to such Holder's tax basis in the
remaining Shares that it owns. The dividends received deduction will not be
available to corporate Holders.

The Company cannot predict whether or the extent to which the Offer will be
oversubscribed. If the Offer is oversubscribed, proration of tenders pursuant
to the Offer will cause the Company to accept fewer Shares than are tendered.
Therefore, a Holder can be given no assurance that a sufficient number of such
Holder's Shares will be purchased for cancellation pursuant to the Offer to
ensure that such purchase will be treated as a sale or exchange, rather than
as a dividend, for federal income tax purposes pursuant to the rules discussed
above.

Consequences to Shareholders who do not Tender Pursuant to the
Offer. Shareholders who do not accept the Offer to tender their Shares will
not incur any tax liability as a result of the consummation of the Offer.

Federal Income Tax Withholding. Under the federal income tax backup
withholding rules, unless an exemption applies under the applicable law and
regulations, 31% of the gross proceeds payable to a shareholder or other payee
pursuant to the Offer must be withheld and remitted to the United States
Treasury, unless the shareholder or other payee provides his or her taxpayer
identification number (employer identification number or social security
number) to the Depositary and certifies that such number is correct.
Therefore, unless such an exception exists and is proven in a manner
satisfactory to the Depositary, each tendering shareholder should complete and
sign the Substitute Form W-9 included as part of the Letter of Transmittal so
as to provide the information and certification necessary to avoid backup
withholding. Certain shareholders (including, among others, all corporations
and certain foreign individuals) are not subject to these backup withholding
and reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, that shareholder must submit an IRS Form W-8, signed under
penalties of perjury, attesting to that individual's exempt status.

THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY.
EACH SHAREHOLDER IS URGED TO CONSULT SUCH HOLDER'S OWN TAX ADVISOR TO
DETERMINE THE PARTICULAR TAX CONSEQUENCES TO HIM OR HER OF THE OFFER,
INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS.

6. Price Range of Shares; Dividends. The Shares began trading publicly on
the Nasdaq National Market (the "NNM") on July 26, 1995 under the symbol
"RNREF." Prior to that date, there was no public market for the Shares. The
Shares have been listed and trading on the NYSE under the symbol "RNR" since
July 24, 1996. The following table sets forth, for the periods indicated, the
reported (i) NNM per Share high ask and low bid information from July 26, 1995
through July 23, 1996 and (ii) high and low NYSE per Share closing sales
prices from July 24, 1996 through December 20, 1996, and the amount of cash
dividends paid per Share for each quarterly period set forth below.



HIGH LOW DIVIDENDS
------ ------ ---------

FISCAL YEAR ENDED DECEMBER 31, 1995
Third Quarter (commencing July 26).................... $25.38 $22.00 $ --
Fourth Quarter........................................ 33.13 22.88 0.16

FISCAL YEAR ENDED DECEMBER 31, 1996
First Quarter......................................... $31.88 $26.75 $0.20
Second Quarter........................................ 31.25 26.88 0.20
Third Quarter (through July 23)....................... 30.88 29.25 --
Third Quarter (commencing July 24).................... 30.88 26.75 0.20
Fourth Quarter (through December 20).................. 36.00 29.00 0.20


On December 13, 1996, the last full trading day before the announcement of
the Offer, the closing sale price per Share as reported on the NYSE Composite
Tape was $32.75. On December 20, 1996, the last full

11

trading day before commencement of the Offer, the closing sale price per Share
as reported on the NYSE Composite Tape was $33.13. SHAREHOLDERS ARE URGED TO
OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.

Shares validly tendered and purchased for cancellation by the Company
pursuant to the Offer will not be entitled to any dividends declared and paid
in later periods.

7. Certain Information Concerning the Company.

General. The Company is a Bermuda company with its registered and principal
executive offices located at Renaissance House, 8-12 East Broadway, Pembroke
HM 19 Bermuda. The Company, through its subsidiaries, Renaissance Reinsurance
Ltd. and Glencoe Insurance Ltd. (collectively, the "Subsidiaries"), is a
global provider of insurance and reinsurance. The Company's principal product
is property catastrophe reinsurance.

Recent Developments. On December 12, 1996, the Company amended and restated
its Credit Facility to provide for the borrowing of an additional $50 million,
increasing the amount available for borrowing thereunder to up to $200
million. As of the date hereof, the Company has borrowings outstanding under
the Credit Facility of $150 million, the same amount borrowed under the Credit
Facility prior to its amendment and restatement.

On December 23, 1996, the Company held a Special General Meeting of
Shareholders (the "Special Meeting") to approve (i) an amendment to the
Amended and Restated Bye-laws of the Company creating (by redesignation of the
authorized share capital of the Company), and setting forth the rights and
preferences of, two new series of Common Shares of the Company having diluted
voting rights which are issuable, pursuant to the approval of the Board, to
certain shareholders of the Company in exchange for an equal number of full
voting Common Shares held by such shareholders on a one-for-one basis and (ii)
certain related corporate governance changes. Except with respect to voting
rights, the diluted voting Common Shares have the same rights and preferences
as the full voting Common Shares, and are convertible into an equal number of
full voting Common Shares on a one-for-one basis at the option of any
purchaser or transferee thereof. References in this Offer to Purchase to
Shares outstanding as of December 23, 1996 include such newly authorized
diluting voting Common Shares. See Schedule I.

At the Special Meeting, the shareholders also approved the expansion of the
Board from nine members (including one vacancy) to eleven members. Immediately
thereafter, three new directors were duly qualified and commenced serving on
the Board. See Schedule II.

12

SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION

The following table sets forth summary historical consolidated financial
information of the Company and the Subsidiaries. The historical financial
information was derived from the audited consolidated financial statements
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 (the "1995 Annual Report") and from unaudited summary
consolidated financial statements included in the Company's Quarterly Report
on Form 10-Q for the period ended September 30, 1996 (the "September 1996
Quarterly Report"), each of which is hereby incorporated herein by reference,
and other information and data contained in the 1995 Annual Report and the
Company's Quarterly Report on Form 10-Q for the period ended September 30,
1995. More comprehensive financial information is included in such reports and
the financial information which follows is qualified in its entirety by
reference to such reports and all of the financial statements and related
notes contained therein, copies of which may be obtained as set forth below.
See Section 8.



UNAUDITED NINE MONTHS YEAR ENDED
ENDED SEPTEMBER 30, DECEMBER 31,
---------------------- -----------------
1996 1995 1995 1994
---------- ---------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

STATEMENT OF INCOME DATA:
Net premiums written................. $ 236,635 $ 275,752 $289,928 $269,954
Net premiums earned.................. 187,167 214,629 288,886 242,762
Net investment income................ 32,838 24,624 32,320 14,942
Net realized gains (losses) on sale
of investments...................... (2,791) 1,690 2,315 246
Claims and claim expenses incurred... 65,615 78,218 110,555 114,095
Acquisition costs.................... 19,018 22,034 29,286 25,653
Underwriting expenses................ 11,594 7,553 10,448 9,725
Pre-tax income....................... 114,915 125,035 165,322 109,298
Net income........................... 114,915 125,035 165,322 109,298
Net income available to
shareholders........................ 114,915 122,499 162,786 96,419
Net income per Share(1).............. $ 4.41 $ 5.21 $ 6.75 $ 4.24
Dividends per Share(2)............... $ 0.60 -- $ 0.16 --

BALANCE SHEET DATA:
Total investments available for sale
at fair value, short-term
investments and cash and cash
equivalents......................... $ 840,729 $ 630,141 $667,999 $437,542
Total assets......................... 983,088 760,412 757,060 509,410
Reserve for claims and claim
adjustment expenses................. 106,174 82,372 100,445 63,268
Reserve for unearned premiums........ 109,911 119,791 60,444 59,401
Bank loan............................ 150,000 100,000 100,000 60,000
Total shareholders' equity........... 579,736 446,299 486,336 265,247
Book value per Share(3).............. $ 22.63 $ 17.43 $ 18.99 $ 11.79


Notes to Summary Historical Consolidated Financial Information

(1) Net income per Share is calculated by dividing net income available to
shareholders by weighted average Shares and Share equivalents outstanding. For
the nine months ended September 30, 1996, the Company had 26,082,000 weighted
average Shares outstanding consisting of 25,609,000 weighted average Shares
and 473,000 Share equivalents issuable pursuant to stock plans. For the nine
months ended September 30, 1995, the Company had 23,493,000 weighted average
Shares outstanding consisting of 23,190,000 weighted average Shares and
303,000 Share equivalents issuable pursuant to stock plans. For the year ended
December 31, 1995, the Company had 24,121,000 weighted average Shares
outstanding consisting of 23,793,000 weighted average Shares and 328,000 Share
equivalents issuable pursuant to stock plans. For the year ended December 31,
1994, the Company had 22,750,000 weighted average Shares outstanding
consisting of 22,500,000 weighted average Shares and 250,000 Share equivalents
issuable pursuant to stock plans.

13

(2) On November 6, 1995, the Board declared and on December 5, 1995, the
Company paid its initial quarterly dividend of $.16 per Share. On February 5,
1996, the Board declared and on March 6, 1995, the Company paid a quarterly
dividend of $.20 per Share. The Board declared and the Company paid a dividend
of $.20 per Share in each of the two following calendar quarters of 1996.

(3) Book value at September 30, 1996 and 1995 was computed by dividing total
shareholders' equity by 25,605,000 Shares and 22,500,000 Shares, respectively.
Book value at December 31, 1995 and December 31, 1994 was computed by dividing
total shareholders' equity by 25,605,000 Shares and 22,500,000 Shares,
respectively.

SUMMARY UNAUDITED CONSOLIDATED
PRO FORMA FINANCIAL INFORMATION

The following table sets forth summary unaudited consolidated pro forma
financial information of the Company and the Subsidiaries giving effect to (i)
the Repurchase and (ii) the purchase for cancellation of 813,190 Shares
pursuant to the Offer (based upon certain assumptions described in the notes
hereto) as if such transactions had occurred on January 1, 1996 and January 1,
1995. The summary unaudited consolidated pro forma financial information
should be read in conjunction with the summary historical consolidated
financial information herein, and does not purport to be indicative of the
results that would actually have been obtained had the Repurchase and the
Offer been consummated at the dates indicated.



NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1996 DECEMBER 31, 1995
-------------------- --------------------
HISTORICAL PRO FORMA HISTORICAL PRO FORMA
---------- --------- ---------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)

STATEMENT OF INCOME DATA:
Net premiums written................. $236,635 $236,635 $289,928 $289,928
Net premiums earned.................. 187,167 187,167 288,886 288,886
Net investment income(3)............. 32,838 28,338 32,320 26,320
Net realized gains (losses) on sale
of investments...................... (2,791) (2,791) 2,315 2,315
Claims and claim expenses incurred... 65,615 65,615 110,555 110,555
Acquisition costs.................... 19,018 19,018 29,286 29,286
Underwriting expenses................ 11,594 11,594 10,448 10,448
Pre-tax income....................... 114,915 110,415 165,322 159,322
Net income........................... 114,915 110,415 165,322 159,322
Net income available to
shareholders........................ 114,915 110,415 162,786 156,786
Net income per Share(1).............. $ 4.41 $ 4.76 $ 6.75 $ 7.39
Dividends per Share.................. $ 0.60 $ 0.60 $ 0.16 $ 0.16

BALANCE SHEET DATA:
Total investments available for sale
at fair value, short term
investments and cash and cash
equivalents(3)...................... $840,729 $740,729 $667,999 $567,999
Total assets......................... 983,088 883,088 757,060 657,060
Reserve for claims and claim
adjustment expenses................. 106,174 106,174 100,445 100,445
Reserve for unearned premiums........ 109,911 109,911 60,444 60,444
Bank loan............................ 150,000 150,000 100,000 100,000
Total shareholders' equity........... 579,736 479,736 486,336 386,336
Book value per Share(2).............. $ 22.63 $ 21.12 $ 18.99 $ 17.01


14

Notes to Summary Unaudited Consolidated Pro Forma Financial Information

(1) Net income per Share is calculated by dividing net income available to
shareholders by weighted average Shares and Share equivalents outstanding. For
the nine months ended September 30, 1996, the Company had 26,082,000 weighted
average Shares outstanding consisting of 25,609,000 weighted average Shares
and 473,000 Share equivalents issuable pursuant to stock plans. For the year
ended December 31, 1995, the Company had 24,121,000 weighted average Shares
outstanding consisting of 23,793,000 weighted average Shares and 328,000 Share
equivalents issuable pursuant to stock plans.

(2) Book value at September 30, 1996 was computed by dividing total
shareholders' equity by 25,615,977 Shares (historical) and 22,717,426 Shares
(pro forma), as applicable. Book value at December 31, 1995 was computed by
dividing total shareholders' equity by 25,605,000 Shares (historical) and
22,706,449 Shares (pro forma), as applicable.

(3) The information gives effect to the Repurchase of 2,085,361 Shares from
the Founding Institutional Investors at a price of $34.50 per Share and
assumes the purchase for cancellation of 813,190 Shares pursuant to the Offer
at a price of $34.50 per Share, net to the seller in cash, without interest
thereon, with the proceeds reducing invested assets by approximately $100
million, which are assumed to yield 6%.

8. Additional Information. The Company is subject to the informational
filing requirements of the Exchange Act and in accordance therewith is
obligated to file reports and other information with the Commission relating
to its business, financial condition and other matters. Information, as of
particular dates, concerning the Company's directors and officers, their
remuneration and stock option grants, the principal holders of the Company's
securities, any material interests of such persons in transactions with the
Company and other matters is required to be disclosed in proxy statements
distributed to the Company's shareholders and filed with the Commission. Such
reports, proxy statements and other information may be inspected at the public
reference facilities of the Commission at 450 Fifth Street, N.W., Room 2120,
Washington, D.C. 20549, and at the regional offices of the Commission at 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and 7 World
Trade Center, New York, New York 10048. Copies of such material may also be
obtained by mail, upon payment of the Commission's customary charges, from the
Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549. The Commission also maintains a Web site
on the World Wide Web at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission. Such reports, proxy statements and other
information concerning the Company also can be inspected at the offices of the
NYSE, 20 Broad Street, New York, New York 10005, on which the Shares are
listed.

9. Source and Amount of Funds. Assuming the Company purchases for
cancellation 813,190 Shares at a price of $34.50 per Share, net to the seller
in cash, without interest thereon, pursuant to the Offer, the Company
estimates that the maximum aggregate amount of funds required to purchase for
cancellation such Shares and to pay related fees and expenses of the Offer
will be approximately $28.6 million, which amount the Company will fund from
its available cash and invested assets.

10. Certain Conditions of the Offer. Notwithstanding any other provision of
the Offer, the Company shall not be required to accept for payment or pay for,
or may delay the acceptance for payment of or payment for, tendered Shares, or
may, in the sole discretion of the Company, terminate or amend the Offer as to
any Shares not then paid for if, on or after January 22, 1997, and at or
before the time of payment for any of such Shares, any of the following events
shall occur:

(a) there shall be threatened, instituted or pending any action or
proceeding by any government or governmental authority or agency, domestic
or foreign, or by any other person, domestic or foreign, before any court
or governmental authority or agency, domestic or foreign, (i) challenging
or seeking to make illegal, to delay or otherwise directly or indirectly to
restrain or prohibit the making of the Offer, the acceptance for payment of
or payment for some of or all the Shares by the Company, (ii) otherwise
directly or indirectly relating to the Offer or which otherwise, in the
sole judgment of the Company, might materially adversely affect the Company
or the value of the Shares, (iii) challenging or adversely affecting the

15

Company's cash and invested assets available to fund the Offer, or (iv) in
the sole judgment of the Company, materially adversely affecting the
business, properties, assets, liabilities, capitalization, shareholders'
equity, condition (financial or other), operations, licenses or franchises,
results of operations or prospects of the Company or the Subsidiaries;

(b) there shall be any action taken, or any statute, rule, regulation,
interpretation, judgment, order or injunction proposed, enacted, enforced,
promulgated, amended, issued or deemed applicable by any court, government
or governmental, administrative or regulatory authority or agency, domestic
or foreign, which, in the sole judgment of the Company, might, directly or
indirectly, result in any of the consequences referred to in clauses (i)
through (iv) of paragraph (a) above;

(c) any change (or any condition, event or development involving a
prospective change) shall have occurred or been threatened in the business,
properties, assets, liabilities, capitalization, shareholders' equity,
condition (financial or other), operations, licenses, franchises, permits,
permit applications, results of operations or prospects of the Company or
the Subsidiaries which, in the sole judgment of the Company, is or may be
materially adverse;

(d) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on any national securities exchange
or in the over-the-counter market, or any material adverse change in prices
generally of securities on the NYSE, (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks by federal or
state authorities in the United States or Bermuda, (iii) any limitation
(whether or not mandatory) by any governmental authority or agency on, or
other event which, in the sole judgment of the Company, might affect the
extension of credit by banks or other lending institutions, (iv) a
commencement of a war, armed hostilities or other national or international
calamity directly or indirectly involving the United States or Bermuda, (v)
a material change in United States, Bermuda or any other currency exchange
rates or a suspension of, or limitation on, the markets therefor, or (vi)
or (vii) in the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof;

(e) a tender or exchange offer for any Shares shall have been made or
publicly proposed to be made by any other person, or it shall have been
publicly disclosed or the Company shall have otherwise learned that (i) any
person, entity or "group" (within the meaning of Section 13(d)(3) of the
Exchange Act) shall have acquired or proposed to acquire beneficial
ownership of more than 5% of any class or series of capital shares of the
Company (including the Shares), through the acquisition of shares, the
formation of a group or otherwise, or shall have been granted any right,
option or warrant, conditional or otherwise, to acquire beneficial
ownership of more than 5% or any class or series of capital shares of the
Company (including the Shares) other than acquisitions for bona fide
arbitrage purposes only and except as disclosed in a Schedule 13D or 13G on
file with the Commission on December 23, 1996, or (ii) any such person,
entity or group which before December 23, 1996 had filed such a Schedule
with the Commission has acquired or proposes to acquire, through the
acquisition of stock, the formation of a group or otherwise, beneficial
ownership of 1% or more of any class or series of capital shares of the
Company (including the Shares), or shall have been granted any right,
option or warrant, conditional or otherwise, to acquire beneficial
ownership of 1% or more of any class or series of capital shares of the
Company (including the Shares); and

(f) Standard & Poor's shall have (i) downgraded or withdrawn the rating
accorded the Company or (ii) publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
the Company.

The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances giving rise to such
condition or may be waived by the Company in whole or in part at any time and
from time to time in the sole discretion of the Company. Any determination by
the Company concerning any event described in this Section 10 shall be final
and binding upon all parties.

11. Fees and Expenses. Merrill has been retained by the Company to act as
its financial advisor in connection with the Capital Plan and is acting as
Dealer Manager for the Offer. Merrill will be paid a customary fee in
connection therewith and also will be reimbursed for the reasonable fees and
expenses of its counsel. The

16

Company has agreed to indemnify Merrill and certain related persons against
certain liabilities and expenses in connection with the Offer, including
certain liabilities under the federal securities laws. Merrill has rendered
various investment banking and other advisory services to the Company in the
past, for which it has received customary compensation, and may render similar
services to the Company in the future.

MacKenzie Partners, Inc. has been retained by the Company to act as the
Information Agent and ChaseMellon Shareholder Services, L.L.C. has been
retained by the Company to act as Depositary in connection with the Offer. The
Information Agent may contact holders of Shares by mail, telephone, telegraph
and personal interviews and may request brokers, dealers and other nominee
shareholders to forward materials relating to the Offer to beneficial owners.
The Information Agent and the Depositary each will receive reasonable and
customary compensation for their services, will be reimbursed for certain
reasonable out-of-pocket expenses and will be indemnified against certain
liabilities and expenses in connection therewith, including certain
liabilities under the federal securities laws.

The Company will not pay any fees or commissions to any broker or dealer or
other person (other than the Dealer Manager, the Information Agent and the
Depositary, as described above) for soliciting tenders of Shares pursuant to
the Offer. The Company, however, upon request, will reimburse brokers, dealers
and commercial banks for customary mailing and handling expenses incurred by
such persons in forwarding the Offer and related materials to the beneficial
owners of Shares held by any such person as a nominee or in a fiduciary
capacity. No broker, dealer, commercial bank or trust company has been
authorized to act as the agent of the Company, the Dealer Manager, the
Information Agent or the Depositary for purposes of the Offer. The Company
will pay or cause to be paid all stock transfer taxes, if any, on its purchase
of Shares, except as otherwise provided in Instruction 6 in the Letter of
Transmittal.

12. Interest of Directors and Officers; Transactions and Arrangements
Concerning the Shares. As of December 23, 1996, the Company had issued and
outstanding 23,530,616 Shares and had reserved for issuance upon exercise of
outstanding stock options 1,291,261 Shares. As of December 23, 1996, the
Company's directors and executive officers as a group (12 persons)
beneficially owned an aggregate of 1,505,355 Shares, representing
approximately 6.3% of the outstanding Shares, assuming the exercise by such
persons of their vested and exercisable options. The 831,190 Shares that the
Company is inviting shareholders to tender pursuant to the Offer represent
approximately 3.5% of the Shares outstanding (approximately 13.3% of the
publicly held Shares) as of December 23, 1996.

The Company has been advised that none of its directors or executive
officers presently intends to tender any Shares pursuant to the Offer.
However, such directors and executive officers are not prohibited from, and
may subsequently elect to, participate in the Offer. If the Offer is fully
subscribed by the public shareholders of the Company and management of the
Company does not participate in the Offer, the aggregate percentage Share
ownership interest of the Company's executive officers and directors as a
group will represent approximately 6.5% of the Shares outstanding following
consummation of the Offer, assuming exercise by such persons of their vested
and exercisable options.

The Founding Institutional Investors, who collectively own an aggregate of
16,344,056 Shares, representing approximately 69.5% of the Shares outstanding
as of December 23, 1996, have informed the Company that they do not presently
intend to tender any Shares pursuant to the Offer. However, the Founding
Institutional Investors have informed the Company that if the Offer is not
fully subscribed by the public shareholders of the Company, they may tender
Shares in an aggregate amount up to such unsubscribed portion of the Offer.
After giving effect to the Repurchase and consummation of the Offer, the
aggregate percentage Share ownership interest of the Founding Institutional
Investors relative to that of the public shareholders of the Company will be
substantially the same as prior to such transactions (assuming the Offer is
fully subscribed by the public shareholders and that management of the Company
does not participate in the Offer).


17

Except as set forth in Schedule I, neither the Company, nor any Subsidiary,
nor, to the best of the Company's knowledge, any of the Company's directors or
executive officers, nor any affiliates of any of the foregoing, had any
transactions involving the Shares during the 40 business days prior to the
date hereof.

Except for the Repurchase, outstanding options to purchase Shares granted
from time to time to certain employees (including executive officers) of the
Company pursuant to the Company's stock option plans and except as otherwise
described herein or in the Company's reports under the Exchange Act, neither
the Company nor, to the best of the Company's knowledge, any of its
affiliates, directors or executive officers, is a party to any contract,
arrangement, understanding or relationship with any other person relating,
directly or indirectly, to the Offer with respect to any securities of the
Company including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or the voting of any
such securities, joint ventures, option arrangements, puts or calls,
guaranties against loss or the giving or withholding of proxies, consents or
authorizations.

13. Effects of the Offer on the Market for Shares; Registration Under the
Exchange Act. The Company's purchase of Shares for cancellation pursuant to
the Offer will reduce the number of Shares that might otherwise be traded
publicly and may reduce the number of shareholders of the Company.
Nonetheless, the Company anticipates that there will be a sufficient number of
Shares outstanding and publicly traded following consummation of the Offer to
ensure a continued trading market for the Shares. Based upon published
guidelines of the NYSE, the Company does not believe that its purchase of
Shares for cancellation pursuant to the Offer will cause the Shares
outstanding following consummation of the Offer to be delisted from the NYSE.

If fewer than 813,190 Shares are purchased for cancellation pursuant to
Offer, the Company may purchase for cancellation the remainder of such Shares
in the open market, in privately negotiated transactions or otherwise, in
compliance with applicable law. In the future, the Company also may determine
to purchase for cancellation additional Shares in the open market, in
privately negotiated transactions, through one or more subsequent tender
offers or otherwise. Any such purchases may be on the same terms or on terms
which are more or less favorable to shareholders than the terms of the Offer.
However, Rule 13e-4 under the Exchange Act prohibits the Company and its
affiliates from purchasing for cancellation any Shares, other than pursuant to
the Offer, until at least ten business days after the Expiration Date;
provided, however, that Rule 13e-4(f) under the Exchange Act permits, and the
Board has authorized, the Company to purchase an additional amount of Shares
in the Offer not to exceed 2% of the Shares outstanding (an aggregate of
470,612 Shares as of December 23, 1996), without amending the Offer or
increasing the number of days which the Offer must remain open. Any future
purchases for cancellation of Shares by the Company would depend on many
factors, including the market price of the Shares, the Company's business and
financial position, and general economic and market conditions.

Shares that the Company purchases for cancellation pursuant to the Offer
will be authorized and unissued Shares, and will be available for issuance by
the Company without further shareholder action (except as may be required by
applicable law or the rules of any securities exchanges on which the Shares
may be listed). Such Shares could be issued without shareholder approval for,
among other things, acquisitions, the raising of additional capital for use in
the Company's business, share dividends or in connection with employee stock,
stock option and other plans, or a combination thereof. The Company has no
current plans for the Shares it may acquire pursuant to the Offer or any other
authorized and unissued Shares.

The Shares are registered under the Exchange Act, which requires, among
other things, that the Company furnish certain information to its shareholders
and the Commission, and comply with the Commission's proxy rules in connection
with meetings of the Company's shareholders. The Company believes that its
purchase of Shares for cancellation pursuant to the Offer will not result in
the Shares becoming eligible for deregistration under the Exchange Act.

14. Miscellaneous. The Offer is not being made to (nor will tenders be
accepted from or on behalf of) holders of Shares in any jurisdiction in which
the making of the Offer or the acceptance thereof would not be in compliance
with the laws of such jurisdiction. Nevertheless, the Company may, in its sole
discretion, take such

18

action as it may deem necessary to make the Offer in any such jurisdiction and
extend the Offer to holders of Shares in such jurisdiction. In any
jurisdiction the securities laws or blue sky laws of which require the Offer
to be made by a licensed broker or dealer, the Offer shall be made on behalf
of the Company by the Dealer Manager or one or more registered brokers or
dealers licensed under the laws of such jurisdiction.

The Company has filed with the Commission a Statement on Schedule 13E-4
(including exhibits), pursuant to Rule 13e-4 under the Exchange Act,
furnishing certain additional information with respect to the Offer, and may
file amendments thereto. Such Statement and any amendments thereto, including
exhibits, may be examined and copies may be obtained from the principal office
of the Commission in Washington, D.C. in the manner set forth in Section 8 of
this Offer to Purchase.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE COMPANY OR THE DEALER MANAGER IN CONNECTION
WITH THE OFFER, OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE
RELATED LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR THE DEALER MANAGER.

RENAISSANCERE HOLDINGS LTD.

December 23, 1996

19

SCHEDULE I

SCHEDULE OF TRANSACTIONS IN SHARES
DURING THE PAST 40 BUSINESS DAYS

On December 13, 1996, pursuant to the Purchase Agreement, the Company
purchased for cancellation an aggregate of 2,085,361 Shares from the Founding
Institutional Investors, on a pro rata basis, at a per share price of $34.50
for an aggregate price of approximately $71.94 million as follows: Warburg,
Pincus Investors, L.P. sold 1,009,838 Shares; Trustees of General Electric
Pension Trust ("GEPT") sold 360,656 Shares; GE Investment Private Placement
Partners I, Limited Partnership ("GEIPPPI") sold 360,656 Shares; and United
States Fidelity and Guaranty Company sold 354,211 Shares.

At the Special Meeting held on December 23, 1996, the Company's shareholders
approved, among other things, the creation of two new series of Common Shares
having diluted voting rights. Immediately thereafter, the Board approved, and
the Company effected, the issuance to GEPT and GEIPPPI of an aggregate of
2,826,650 diluted voting Common Shares in exchange for an equal number of full
voting Common Shares on a one-for-one basis. See Section 7.


I-1

SCHEDULE II

RENAISSANCERE HOLDINGS LTD.

DIRECTORS AND EXECUTIVE OFFICERS

The following information sets forth the name, business address and present
principal occupation and five year prior employment history of each of the
directors and executive officers of the Company. Each of the directors and
executive officers of the Company is a citizen of the United States. The
business address of each of the persons named below is Renaissance House, 8-12
East Broadway, Pembroke HM19 Bermuda.

James N. Stanard has served as President and Chief Executive Officer and as
a director of the Company since its formation in June 1993. 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, 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.

Neill A. Currie has served as Senior Vice President of the Company since its
formation in June 1993. Mr. Currie served as a director of the Company from
August 1994 through August 1995. From November 1992 through May 1993, Mr.
Currie served as Chief Executive Officer of G.J. Sullivan Co.--Atlanta, a
private domestic reinsurance broker. From 1982 through 1992, Mr. Currie served
as Senior Vice President at R/I and G.L. Hodson, predecessors to Willis Faber.

David A. Eklund has served as Senior Vice President of the Company since
February 1996. Mr. Eklund served as Vice President--Underwriting of the
Company from September 1993 until February 1996. 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.

Keith S. Hynes has served as Senior Vice President and Chief Financial
Officer of the Company since June 1994. Mr. Hynes was employed by Hartford
Steam Boiler Inspection & Insurance Co. ("Hartford Steam") from January 1983
to January 1994. From April 1992 to January 1994, he served as Hartford
Steam's Senior Vice President and Chief Financial Officer. From November 1986
to April 1992, Mr. Hynes worked in Hartford Steam's Underwriting Department,
advancing to Senior Vice President and Chief Underwriting Officer, where he
managed Hartford Steam's underwriting and ceded reinsurance activities, from
April 1990 to April 1992. From January 1983 to November 1986, Mr. Hynes was
Hartford Steam's Chief Investment Officer. Mr. Hynes held several investment
management positions with Aetna Insurance Company from June 1978 to January
1983.

William I. Riker has served as Senior Vice President of the Company since
March 1995 and as Vice President--Underwriting of the Company from November
1993 until such time. 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 ("American Royal"). Mr. Riker was
responsible for developing various analytical underwriting tools while holding
various positions at American Royal from 1984 through 1993.

II-1

Arthur S. Bahr has served as a director of the Company since its formation
in June 1993. Mr. Bahr served as Director and Executive Vice President--
Equities of General Electric Investment Corporation ("GEIC"), a subsidiary of
General Electric Company and registered investment adviser, from 1987 until
December 1993. Mr. Bahr has served GEIC in various senior investment positions
since 1978 and was a Trustee of General Electric Pension Trust from 1976 until
December 1993. Mr. Bahr served as 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 a Director of the Company since August 7,
1996. From May 1992 until August 1996 Mr. Cooper served as Chairman and Chief
Executive Officer of TAC Bancshares, Inc. 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. Prior thereto, Mr.
Cooper served as President of Bank of America from February 1983 to April
1986. From 1980 to 1982 Mr. Cooper served as Vice Chairman of Mellon Bank.
From 1978 to 1982, Mr. Cooper was President of Girard Bank in Philadelphia.

Edmund B. Greene has served as a director of the Company since its formation
in June 1993. Mr. Greene has served as Deputy Treasurer--Insurance of General
Electric Company since 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 since 1962.

Kewsong Lee has served as a director of the Company since December 1994. Mr.
Lee has served as a Vice President at WP Ventures since January 1, 1995. Mr.
Lee has served as an associate at EMW since 1992. Prior to joining EMW, Mr.
Lee was a consultant at McKinsey & Company, Inc., a management consulting
company, from 1990 to 1992. Mr. Lee serves as a director of several privately-
held companies.

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

Sidney Lapidus has served as a Director of the Company since December 23,
1996. Mr. Lapidus has served as a Managing Director of EMW since 1982. Mr.
Lapidus is a director of Panavision Inc., Renaissance Communications Corp.,
Pacific Greystone Corporation, Caribiner International, Inc. and several
privately held companies.

John M. Lummis has served as a director of the Company since July 1993. Mr.
Lummis has served as Vice President--Business Development of USF&G Corporation
since 1994 and served as Vice President and Group General Counsel for USF&G
Corporation from 1991 until September 1995. USF&G Corporation is the parent
company of USF&G. From 1982 until 1991, Mr. Lummis was engaged in the private
practice of law with the law firm of Shearman & Sterling.

Howard H. Newman has served as a director of the Company since its formation
in June 1993. Mr. Newman has served as a Managing Director of EMW since 1987.
Mr. Newman is a director of ADVO, Inc., Newfield Exploration Company and
Comcast UK Cable Partners Limited.

John C. Sweeney has served as a Director of the Company since December 23,
1996. Mr. Sweeney has served as Senior Vice President and Chief Investment
Officer of USF&G since 1992, and as Chairman of Falcon Asset Management since
1992. Prior thereto, Mr. Sweeney served as Principal and Practice Director of
Towers Perrin Consulting Services from 1985 to 1992, and as Chief Investment
Officer of McM/Occidental Peninsular Insurance Companies from 1981 to 1984.
Mr. Sweeney also serves as a Director of USF&G Pacholder Fund, Inc.

II-2

David A. Tanner has served as a Director of the Company since December 23,
1996. Mr. Tanner has served as a Managing Director of EMW since January 1993.
Mr. Tanner served as a Vice President of EMW from January 1991 to January 1993
and was an associate at EMW from March 1986 to December 1990. Mr. Tanner is a
director of Golden Books Family Entertainment, Inc., the New York Venture
Capital Forum and several privately held companies. Mr. Tanner previously
served as a director of the Company from December 1994 through May 1996.

II-3

Facsimile copies of the Letter of Transmittal will be accepted. The Letter of
Transmittal and certificates for Shares and any other required documents should
be sent or delivered by each shareholder or his broker, dealer, commercial
bank, trust company or other nominee to the Depositary at one of its addresses
set forth below:

The Depositary for the Offer is:

CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.

By Mail: By Facsimile: By Hand or Overnight
P.O. Box 798 (201) 329-8936 Delivery:
Midtown Station Confirm by Telephone 13th Floor
New York, NY 10018 to: (201) 296-4209 120 Broadway
New York, NY 10271



Any questions or requests for assistance or additional copies of this
Offer to Purchase and the Letter of Transmittal may be directed to the
Information Agent or the Dealer Manager at their respective telephone
numbers and locations listed below. Shareholders may also contact their
local broker, dealer, commercial bank or trust company or other nominee
for assistance concerning the Offer.


The Information Agent for the Offer is:

[LOGO] MACKENZIE
PARTNERS, INC.

156 Fifth Avenue, 9th Floor
New York, New York 10010
(212) 929-5500 (call collect)
or
CALL TOLL FREE (800) 322-2885

The Dealer Manager for the Offer is:

MERRILL LYNCH & CO.

World Financial Center
North Tower
New York, New York 10281-1305
(212) 449-8209 (call collect)