Form: 8-K

Current report filing

October 24, 2001

Documents

PRESS RELEASE

Published on October 24, 2001


EXHIBIT 99.1
------------

CONTACT:
Martin J. Merritt
Vice President - Finance
RenaissanceRe Holdings Ltd.
(441) 299-7230

FOR IMMEDIATE RELEASE

RENAISSANCERE REPORTS THIRD QUARTER OPERATING INCOME OF $1.23 PER SHARE
-----------------------------------------------------------------------

-11% MANAGED CAT PREMIUM GROWTH FOR THE NINE MONTH PERIOD-

-LEADS INDUSTRY WITH ANNUALIZED OPERATING ROE OF 18% FOR THE NINE MONTH PERIOD-

-REPORTS YEAR TO DATE GROWTH IN BOOK VALUE PER SHARE OF 15%-

Pembroke, Bermuda, October 22, 2001 -- RenaissanceRe Holdings Ltd. (NYSE: RNR)
today reported $25.0 million of net operating income for the third quarter of
2001, excluding realized investment gains and losses, compared to $34.2 million
for the comparable quarter in the prior year; the decrease reflects the effect
of the events of September 11 which is in line with the estimates previously
provided by the Company. Operating earnings per share were $1.23 in the third
quarter compared to $1.75 per share in the comparable previous year period. Net
income was $29.9 million, or $1.48 per share, in the quarter, compared to $35.6
million, or $1.83 per share, for the same quarter of 2000.

"During the quarter, our portfolio was able to absorb the losses from the tragic
events on September 11th, allowing us to maintain our strong capital base," said
James N. Stanard, Chairman, President, and Chief Executive Officer. "These
events have caused a further tightening in the market, both from a contraction
of capacity from competitors and a heightened emphasis on security from clients.
We have launched several initiatives to position the Company to meet the
increased demand for our products. These initiatives include: the sale of 2.5
million common shares for total proceeds of $232.5 million; the increase in the
capital of our Excess and Surplus lines insurer, Glencoe, to $100 million; and
the formation of DaVinci Reinsurance Ltd., a new Bermuda-based property
catastrophe reinsurer with anticipated capital of $500 million. We expect
RenaissanceRe and the vehicles we manage, OPCat and DaVinci, to have over $2
billion of capital to serve the global property cat reinsurance market, in
addition to the $4 billion of capacity available for non-US high layer treaties
through Top Layer Re."

For the nine months ended September 30, 2001, net operating income was $99.7
million or $4.93 per share, compared to $98.3 million or $5.07 per share for the
same period in 2000. Net income for the nine months ended September 30, 2001 was
$115.2 million or $5.70 per share, compared to $89.4 million or $4.61 per share
for the same period in 2000.


Gross premiums written for the third quarter of 2001 were $123.6 million,
compared to $122.5 million for the same quarter of 2000. Net premiums written
for the third quarter of 2001 were $79.0 million, compared to $85.6 million for
the same quarter of 2000. Net premiums earned for the third quarter of 2001 were
$79.9 million, compared to $73.3 million for the same quarter of 2000.

Gross premiums written for the nine months ended September 30, 2001 were $443.8
million, compared to $380.6 million for the same period of 2000. Net premiums
written for the nine months ended September 30, 2001 were $293.2 million,
compared to $253.7 million for the same period of 2000.

Total Managed Cat Premiums written, representing gross catastrophe premiums
written by RenaissanceRe Holdings Ltd. and by the OPCat Ltd. and Top Layer Re
Ltd. joint ventures, were $107.6 million for the third quarter, compared to
$113.8 million for the same quarter of 2000. Total Managed Cat Premiums written
for the nine months ended September 30, 2001 were $414.7 million, compared to
$372.3 for the same period of 2000.

Net investment income, excluding realized and unrealized investment gains and
losses, for the third quarter of 2001 was $18.7 million, compared to $21.2
million for the same period in 2000. Net investment income for the first nine
months of 2001 was $54.9 million, compared to $58.7 million for the same period
in 2000.

Claims and claim expenses incurred for the quarter ended September 30, 2001 were
$47.0 million or 58.8% of net premiums earned. In comparison, claims and claim
expenses incurred for the quarter ended September 30, 2000 were $30.0 million or
40.9% of net premiums earned. Claims and claim expenses incurred for the nine
months ended September 30, 2001 were $121.2 million or 50.6% of net premiums
earned. In comparison, claims and claim expenses incurred for the nine months
ended September 30, 2000 were $72.5 million or 38.4% of net premiums earned. The
increase in the loss ratio relates to the net losses incurred by the Company of
$48 million related to the World Trade Center attack, and to the increase in
non-catastrophe reinsurance premiums written by the Company, which typically
produce a higher loss ratio than the Company's principal product, property
catastrophe reinsurance.

Operating expenses were $9.4 million for the third quarter of 2001, compared to
$11.1 million for the same period of the prior year.

Shareholders' equity at September 30, 2001 was $816.9 million, compared to
$700.8 million at December 31, 2000. Book value per common share at September
30, 2001 was $41.12 per share, compared to $35.72 per share at December 31,
2000.

On October 16, the Company sold 2.5 million of its common shares at a price of
$93.01 net to the Company for a total of $232.5 million. Proceeds will be used
for general


corporate purposes. Book value per share, pro forma for this offering, was
$46.92 at September 30, 2001.

The Company previously announced that it is planning to form a new Bermuda-based
property catastrophe reinsurer, DaVinci Reinsurance Ltd. with State Farm Mutual
Automobile Insurance Company and other investors. DaVinci Re is expected to be
initially capitalized with $500 million.

RenaissanceRe Holdings Ltd. will host a conference call on Tuesday, October 23,
2001 at 9:30 a.m. (ET) to discuss this release. A live broadcast of the
conference call will be available at http://www.vcall.com (enter ticker: RNR).

RenaissanceRe Holdings Ltd. is a global provider of reinsurance and insurance.
The Company's principal product is property catastrophe reinsurance.

Cautionary Statement under "Safe Harbor", Provision of the Private Securities
Litigation Reform Act of 1995: Statements made in this news release contain
information about the Company's future business prospects. These statements may
be considered "forward-looking." These statements are subject to risks and
uncertainties that could cause actual results to differ materially from those
set forth in or implied by such forward-looking statements. For further
information regarding cautionary statements and factors affecting future
operations results, please refer to RenaissanceRe Holdings Ltd.'s annual report
on Form 10-K for the year ended December 31, 2000 and Form 10-Q for the quarters
ended March 31, 2001, and June 30, 2001 and its current reports on form 8-K
filed in 2001.

# # #


RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
For the periods ended September 30, 2001 and 2000
(in thousands of United States Dollars, except per share amounts)
(Unaudited)



Quarters Ended Year to date
-------------------------------------- --------------------------------------
September 30, 2001 September 30, 2000 September 30, 2001 September 30, 2000
------------------ ------------------ ------------------ ------------------

REVENUES

Gross premiums written $123,571 $122,470 $443,791 $380,591
======== ======== ======== ========
Net premiums written $ 79,030 $ 85,564 $293,208 $253,693
Decrease (increase) in unearned premiums 903 (12,280) (53,844) (65,125)
-------- -------- -------- --------
Net premiums earned 79,933 73,284 239,364 188,568
Net investment income 18,738 21,236 54,892 58,663
Net foreign exchange gains (losses) (1,051) 447 (1,113) 141
Other income 1,070 2,960 8,840 6,352
Net realized gains (losses) on investments 4,978 1,482 15,474 (8,899)
-------- -------- -------- --------
103,668 99,409 317,457 244,825
-------- -------- -------- --------
EXPENSES

Claims and claim expenses incurred 46,986 29,953 121,196 72,544
Acquisition expenses 11,461 11,074 34,614 25,918
Operational expenses 9,408 11,050 27,814 27,922
Corporate expenses 1,366 196 7,674 5,070
Interest expense 2,699 4,639 4,246 13,249
-------- -------- -------- --------
TOTAL EXPENSES 71,920 56,912 195,544 144,703
-------- -------- -------- --------
Income before minority interest and taxes 31,748 42,497 121,913 100,122

Minority interest - Capital Securities 1,823 1,866 5,565 5,663
-------- -------- -------- --------
Income before taxes 29,925 40,631 116,348 94,459

Income tax expense (benefit) (3) 4,986 1,175 5,018
-------- -------- -------- --------
NET INCOME $ 29,928 $ 35,645 $115,173 $ 89,441
======== ======== ======== ========
Operating earnings per Common Share -diluted $ 1.23 $ 1.75 $ 4.93 $ 5.07
Earnings per Common Share -basic $ 1.54 $ 1.89 $ 5.97 $ 4.71
Earnings per Common Share -diluted $ 1.48 $ 1.83 $ 5.70 $ 4.61

Average shares outstanding -basic 19,377 18,877 19,294 18,998

Average shares outstanding -diluted 20,288 19,520 20,223 19,381

Claims and claim expense ratio 58.8% 40.9% 50.6% 38.4%
Expense ratio 26.1% 30.2% 26.1% 28.6%
-------- -------- -------- --------
Combined ratio 84.9% 71.1% 76.7% 67.0%
======== ======== ======== ========
Operating return on average equity (annualized) 12.5% 21.2% 17.5% 21.0%
-------- -------- -------- --------



RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands of United States Dollars, except per share amounts)



AS AT
--------------------------------------
SEPTEMBER 30, 2001 DECEMBER 31, 2000
------------------ -----------------
(Unaudited)

ASSETS
Fixed maturity investments available for sale, at fair value
(Amortized cost $1,136,173 and $921,750 at September 30, 2001 and
December 31, 2000, respectively) $1,161,814 $ 928,102
Short term investments 14,780 13,760
Other investments 41,685 29,613
Cash and cash equivalents 212,617 110,571
---------- ----------
Total investments and cash 1,430,896 1,082,046

Premiums receivable 152,809 95,423
Ceded reinsurance balances 73,828 37,520
Losses and premiums recoverable 231,751 167,604
Accrued investment income 14,304 15,034
Deferred acquisition costs 18,286 8,599
Other assets 69,380 62,763
---------- ----------
TOTAL ASSETS $1,991,254 $1,468,989
========== ==========

LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS'EQUITY

LIABILITIES
Reserve for claims and claim expenses $ 576,836 $ 403,611
Reserve for unearned premiums 204,398 112,541
Debt 183,500 50,000
Reinsurance balances payable 66,387 50,779
Other 55,610 63,610
---------- ----------
TOTAL LIABILITIES 1,086,731 680,541
---------- ----------
Minority Interest - Capital Securities 87,630 87,630

SHAREHOLDERS'EQUITY
Common shares and additional paid-in capital 36,248 22,999
Unearned stock grant compensation (19,124) (11,716)
Accumulated other comprehensive income 25,641 6,831
Retained earnings 774,128 682,704
---------- ----------
TOTAL SHAREHOLDERS'EQUITY 816,893 700,818
---------- ----------
TOTAL LIABILITIES, MINORITY INTEREST, AND
SHAREHOLDERS'EQUITY $1,991,254 $1,468,989
========== ==========
BOOK VALUE PER COMMON SHARE $ 41.12 $ 35.72
========== ==========
COMMON SHARES OUTSTANDING 19,866 19,621
========== ==========