Form: 8-K

Current report filing

July 28, 2004

Documents

PRESS RELEASE

Published on July 28, 2004



[RENAISSANCERE LOGO OMITTED]



RENAISSANCERE REPORTS OPERATING INCOME OF $143.1 MILLION FOR 2004 SECOND
QUARTER; OPERATING EPS OF $2.00 PER COMMON SHARE FOR THE SECOND QUARTER OF 2004
VS. $1.84 FOR THE SECOND QUARTER OF 2003

$116.2 MILLION NET INCOME FOR THE SECOND QUARTER OF 2004; EPS OF $1.62 FOR THE
SECOND QUARTER OF 2004 VS. $2.54 FOR THE SECOND QUARTER OF 2003

ACHIEVES SECOND QUARTER 2004 ANNUALIZED OPERATING RETURN ON EQUITY OF 25.2%

INCREASES 2004 OPERATING EARNINGS ESTIMATES TO A RANGE OF $6.95 TO $7.25 PER
COMMON SHARE, FROM PRIOR ESTIMATE OF $6.10 TO $6.50

PEMBROKE, BERMUDA, JULY 27, 2004 -- RenaissanceRe Holdings Ltd. (NYSE: RNR)
today reported net operating income available to common shareholders of $143.1
million for the second quarter of 2004, versus $130.5 million for the comparable
period in 2003. Operating income excludes realized investment gains (losses) of
($26.9) million and $49.7 million in the second quarters of 2004 and 2003,
respectively. Operating income per common share grew to $2.00 in the second
quarter of 2004, from $1.84 per common share in the second quarter of 2003. Net
income available to common shareholders was $116.2 million or $1.62 per common
share in the quarter, compared to $180.2 million or $2.54 per common share for
the same quarter of 2003. The decline in net income resulted primarily from
normal course investment activities, with the change in realized investment
gains (losses) reflecting the broadly favorable investment environment of 2003
compared with the rising interest rate environment of this past second quarter.

James N. Stanard, Chairman and CEO, commented: "Our strong premium growth
reflects two conflicting trends. First, Renaissance has preferred positions on
various attractive reinsurance and insurance programs as a result of our strong
customer relationships and credit ratings. Second, however, we continue to see
price declines, and increasingly have had to turn down business that does not
meet our return requirements. For 2004 we have increased estimates of our
managed specialty reinsurance premium growth to over 30% compared to 2003; for
our individual risk business we are maintaining our estimates of 30% growth; and
for cat reinsurance we continue to expect gross managed premium declines of 5%
or more. Our current expectation for 2005 is that we will continue to see growth
in the individual risk business, but we will likely see a flattening of
specialty reinsurance premium and further decreases in cat reinsurance premium."

Mr. Stanard further stated, "In light of the low losses in the first half of the
year, we have raised our operating EPS guidance for 2004 to a range of $6.95 to
$7.25 compared with our previous range of $6.10 to $6.50. These earnings
estimates assume normal loss activity in the second half of the year."


SECOND QUARTER 2004 RESULTS:
- ----------------------------

PREMIUMS

Gross premiums written for the second quarter of 2004 were $326.9 million,
compared to $212.6 million for the same quarter of 2003. Gross premiums written
include $215.3 million attributable to the Company's Reinsurance segment in the
second quarter of 2004, compared to $114.9 million in the comparable 2003
period; and $111.6 million attributable to the Company's Individual Risk segment
in the second quarter of 2004, compared to $97.7 million for the same quarter of
2003. Net premiums written for the second quarter of 2004 were $262.8 million,









1


compared to $160.2 million for the same quarter of 2003. Net premiums written
include $153.2 million attributable to the Company's Reinsurance segment in the
second quarter of 2004, compared to $65.4 million for the same quarter of 2003;
and $109.7 million attributable to the Company's Individual Risk segment in the
second quarter of 2004, compared to $94.8 million for the same quarter of 2003.

Net premiums earned for the second quarter of 2004 were $344.0 million, compared
to $275.5 million for the same quarter of 2003. Net premiums earned include
$235.9 million in net premiums earned for the Company's Reinsurance segment in
the second quarter of 2004, compared to $208.9 million for the same quarter of
2003; and $108.1 million in net premiums earned for the Company's Individual
Risk segment in the second quarter of 2004, compared to $66.6 million for the
same quarter of 2003.

Premiums for the second quarter of 2004 include $34.2 million of gross written
premiums, $38.3 million of net written premiums and $53.7 million of net
premiums earned by the Company's consolidated joint venture, DaVinci Re during
the second quarter of 2004, compared to $17.1 million of gross written premiums,
$19.0 million of net written premiums and $46.7 million of net premiums earned
by DaVinci Re during the second quarter of 2003.

Total managed cat premiums written, representing gross catastrophe premiums
written by Renaissance Reinsurance and by related joint ventures, were $175.5
million for the second quarter of 2004, compared to $103.8 million for the same
quarter of 2003, representing an increase of 69.1%. The increase was primarily
due to timing differences. See the attached supplemental financial data for
additional information regarding managed premiums.


JOINT VENTURE INCOME

During the quarter, income from the DaVinci joint venture and other fee income
was $37.9 million, compared to $31.6 million during the second quarter of 2003.
Of this, $23.9 million reflects fees and profit commissions, compared to $15.6
million in the second quarter of 2003, and $15.7 million reflects equity in
earnings of unconsolidated ventures and DaVinci, versus $16.5 million in the
comparable quarter of 2003.


UNDERWRITING RATIOS, RESERVE DEVELOPMENT

For the second quarter of 2004, the Company generated a combined ratio of 58.5%,
a loss ratio of 35.1% and an expense ratio of 23.4%, compared to a combined
ratio, loss ratio and expense ratio of 57.0%, 36.3% and 20.7%, respectively, for
the second quarter of 2003. The increase in the expense ratio primarily relates
to the increased scale of the Company's Individual Risk segment, which typically
generates higher expense ratios than the Reinsurance segment. For the quarter,
the Company's Reinsurance segment generated a loss ratio of 27.6% and an expense
ratio of 16.3%, compared to 29.2% and 16.9%, respectively, during the second
quarter of 2003. For the quarter, the Company's Individual Risk segment
generated a loss ratio of 51.5% and an expense ratio of 38.8%, compared to 58.5%
and 32.6%, respectively, during the second quarter of 2003.

During the quarter, the Company recorded favorable development on prior year
reserves of $29.7 million or a benefit of 8.6 percentage points to the Company's
quarterly loss ratio. The Company's Reinsurance segment contributed $27.4
million of favorable development, and the Company's Individual Risk segment
contributed $2.3 million of favorable development. Net recovered losses for the
quarter were $7.8 million. The Company had net recoveries in the second quarter
due to the timing of collections on certain reinsurance recoverables. See the
attached supplemental financial data for additional information regarding claims
and claim expenses incurred and loss ratios by segment.


INVESTMENTS

Net investment income for the second quarter of 2004 was $29.8 million, compared
to $34.1 million for the same quarter in 2003. Net investment income includes
appreciation (depreciation) related to investments in hedge funds and private
equity funds recorded during the second quarter of 2004 of ($1.3) million
compared to $6.1 million of net appreciation recorded during the second quarter
of 2003.






2


The Company's cash flows from operations were $231.0 million for the second
quarter of 2004.


SHAREHOLDERS' EQUITY

Shareholders' equity attributable to common shareholders was $2.3 billion at
June 30, 2004, compared to $2.1 billion at December 31, 2003. Book value per
common share at June 30, 2004 was $32.60 compared to $29.61 per common share at
December 31, 2003.

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

This Press Release includes certain non-GAAP financial measures including
"operating income," "operating EPS or operating income per common share,"
"annualized operating return on equity," "managed cat premium" and "summary of
income from joint venture relationships." A reconciliation of such measures to
the most comparable GAAP figures in accordance with Regulation G is presented in
the attached supplemental financial data.

RenaissanceRe Holdings Ltd. will host a conference call on Wednesday, July 28,
2004 at 9:00 a.m. (EST) to discuss this release. Live broadcast of the
conference call will be available through the Investor Section of
RenaissanceRe's website at www.renre.com.

RenaissanceRe Holdings Ltd. is a global provider of reinsurance and insurance.
Our business consists of two segments: (1) Reinsurance, which includes
catastrophe reinsurance, specialty reinsurance and certain joint ventures and
other structured relationships managed by our subsidiary Renaissance
Underwriting Managers, and (2) Individual Risk business, which includes primary
insurance and quota share reinsurance.

Cautionary Statement under "Safe Harbor" Provisions 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
results, please refer to RenaissanceRe Holdings Ltd.'s filings with the
Securities and Exchange Commission, including its Annual Report on Form 10-K for
the year ended December 31, 2003, and Form 10-Q for the quarter ended March 31,
2004.


INVESTOR CONTACT: MEDIA CONTACT:
Martin J. Merritt David Lilly or Dawn Dover
Senior Vice President - Finance Kekst and Company
RenaissanceRe Holdings Ltd. (212) 521-4800
(441) 299-7230












3




RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
For the three and six month periods ended June 30, 2004 and 2003
(in thousands of United States Dollars, except per share amounts)




THREE MONTHS ENDED SIX MONTHS ENDED
----------------------------------- ---------------------------------
JUNE 30, 2004 JUNE 30, 2003 JUNE 30, 2004 JUNE 30, 2003
--------------- --------------- --------------- ---------------
(Unaudited) (Unaudited)
REVENUES

Gross premiums written $326,876 $212,560 $1,107,164 $ 897,727
======== ======== ========== =========
Net premiums written $262,842 $160,223 $ 968,863 $ 750,593
Decrease (increase) in unearned premiums 81,142 115,312 (315,310) (211,584)
-------- -------- ---------- ---------
Net premiums earned 343,984 275,535 653,553 539,009
Net investment income 29,833 34,109 64,883 65,543
Net foreign exchange gains 786 7,640 2,873 11,591
Equity in earnings of unconsolidated ventures 4,923 6,493 11,443 12,561
Other income (loss) (689) 745 420 182
Net realized gains (losses) on investments (26,920) 49,660 5,601 70,772
-------- -------- ---------- ---------
TOTAL REVENUES 351,917 374,182 738,773 699,658
-------- -------- ---------- ---------
EXPENSES
Claims and claim expenses incurred 120,737 100,076 232,915 182,856
Acquisition expenses 64,047 40,704 122,078 82,837
Operational expenses 16,502 16,332 28,878 31,239
Corporate expenses 4,986 4,677 9,538 8,145
Interest expense 6,334 5,335 12,605 9,834
-------- -------- ---------- ---------
TOTAL EXPENSES 212,606 167,124 406,014 314,911
-------- -------- ---------- ---------
Income before minority interest and taxes 139,311 207,058 332,759 384,747
Minority interest - Capital Securities -- 1,827 -- 3,282
Minority interest - DaVinci 14,492 20,150 32,482 41,035
-------- -------- ---------- ---------
Income before taxes 124,819 185,081 300,277 340,430
Income tax benefit -- -- -- 55
-------- -------- ---------- ---------
NET INCOME 124,819 185,081 300,277 340,485
Dividends on preference shares 8,609 4,917 13,713 9,036
-------- -------- ---------- ---------
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $116,210 $180,164 $ 286,564 $ 331,449
======== ======== ========== =========

Operating income per Common Share - diluted * $ 2.00 $ 1.84 $ 3.92 $ 3.68
Net income available to common shareholders
per Common Share - basic $ 1.67 $ 2.62 $ 4.12 $ 4.82
Net income available to common shareholders
per Common Share - diluted $ 1.62 $ 2.54 $ 4.00 $ 4.68

Average common shares outstanding - basic 69,664 68,914 69,554 68,754
Average common shares outstanding - diluted 71,683 71,056 71,638 70,810

Claims and claim expense ratio 35.1% 36.3% 35.6% 33.9%
Expense ratio 23.4% 20.7% 23.1% 21.2%
-------- -------- ---------- ---------
Combined ratio 58.5% 57.0% 58.7% 55.1%
======== ======== ========== =========
Operating return on average common equity (annualized) * 25.2% 30.2% 25.4% 31.6%
======== ======== ========== =========


* Excludes realized gains (losses) on investments (see comments on Regulation G)


4



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


AT
-------------------------------------
JUNE 30, 2004 DECEMBER 31, 2003
--------------- -------------------
(Unaudited) (Audited)
ASSETS
Fixed maturity investments available
for sale, at fair value $3,117,925 $2,947,841
Short term investments 1,009,011 660,564
Other investments 503,884 369,242
Cash and cash equivalents 74,130 63,397
---------- ----------
Total managed investment portfolio
and cash 4,704,950 4,041,044

Equity investments in reinsurance
company, at fair value 147,962 145,535
Investments in other ventures, under
equity method 178,052 41,130
---------- ----------

Total investments and cash 5,030,964 4,227,709
Premiums receivable 404,676 167,996
Ceded reinsurance balances 88,326 56,852
Losses recoverable 90,055 149,201
Accrued investment income 31,811 22,793
Deferred acquisition costs 107,718 75,261
Other assets 39,498 29,890
---------- ----------
TOTAL ASSETS $5,793,048 $4,729,702
========== ==========
LIABILITIES, MINORITY INTEREST AND
SHAREHOLDERS' EQUITY
LIABILITIES
Reserve for claims and claim expenses $1,100,159 $ 977,892
Reserve for unearned premiums 696,608 349,824
Debt 350,000 350,000
Subordinated obligation to capital
trust 103,093 103,093
Reinsurance balances payable 88,741 131,629
Net payable on investments purchased 166,772 --
Other liabilities 88,773 52,123
---------- ----------
TOTAL LIABILITIES 2,594,146 1,964,561
---------- ----------
Minority interest - DaVinci 398,214 430,498

SHAREHOLDERS' EQUITY
Preference shares 500,000 250,000
Common shares and additional paid-in
capital 308,852 314,414
Accumulated other comprehensive
income 75,168 113,382
Retained earnings 1,916,668 1,656,847
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 2,800,688 2,334,643
TOTAL LIABILITIES, MINORITY
INTEREST, AND
SHAREHOLDERS' EQUITY $5,793,048 $4,729,702
========== ==========
BOOK VALUE PER COMMON SHARE $ 32.60 $ 29.61
========== ==========
COMMON SHARES OUTSTANDING 70,565 70,399
========== ==========



5

RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA
(in thousands of United States Dollars)

SEGMENT INFORMATION



- ---------------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED JUNE 30, 2004
-------------------------------------------------------------
REINSURANCE INDIVIDUAL RISK OTHER TOTAL
------------- ----------------- ----------- ----------

Gross premiums written (1) $ 215,284 $ 111,592 $ -- $ 326,876
========= ========= =========
Net premiums written $ 153,162 $ 109,680 -- $ 262,842
========= ========= =========
Net premiums earned $ 235,862 $ 108,122 -- $ 343,984
Claims and claim expenses incurred 65,016 55,721 -- 120,737
Acquisition expenses 27,936 36,111 -- 64,047
Operational expenses 10,624 5,878 -- 16,502
--------- --------- --------- ---------
Underwriting income $ 132,286 $ 10,412 -- 142,698
Other items ========= ========= $ (26,488) (26,488)
========= ---------
Net income available to common shareholders $ 116,210
=========
Claims and claim expenses incurred -
current accident year $ 92,375 $ 58,060 $ 150,435
Claims and claim expenses incurred - prior
years (27,359) (2,339) (29,698)
--------- --------- ---------
Net claims and claim expenses incurred -
total $ 65,016 $ 55,721 $ 120,737
========= ========= =========
Claims and claim expense ratio - accident
year 39.2% 53.7% 43.7%
========= ========= =========
Claims and claim expense ratio - calendar
year 27.6% 51.5% 35.1%
Underwriting expense ratio 16.3% 38.8% 23.4%
--------- --------- ---------
Combined ratio 43.9% 90.3% 58.5%
========= ========= =========


(1) Reinsurance segment gross premiums written excludes $0.8 million of premiums ceded from the Individual Risk segment.
- ---------------------------------------------------------------------------------------------------------------------




- ---------------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED JUNE 30, 2003
-------------------------------------------------------------
REINSURANCE INDIVIDUAL RISK OTHER TOTAL
------------- ----------------- ----------- ----------

Gross premiums written (1) $ 114,872 $ 97,688 $ -- $ 212,560
========= ========= =========
Net premiums written $ 65,424 $ 94,799 -- $ 160,223
========= ========= =========
Net premiums earned $ 208,905 $ 66,630 -- $ 275,535
Claims and claim expenses incurred 61,100 38,976 -- 100,076
Acquisition expenses 22,220 18,484 -- 40,704
Operational expenses 13,107 3,225 -- 16,332
--------- --------- --------- -------
Underwriting income $ 112,478 $ 5,945 -- 118,423
========= =========
Other items $ 61,741 61,741
========= ---------
Net income available to common shareholders $ 180,164
=========
Claims and claim expenses incurred - current accident
year $ 66,270 $ 46,563 $ 112,833
Claims and claim expenses incurred - prior years (5,170) (7,587) (12,757)
--------- --------- ---------
Net claims and claim expenses incurred - total $ 61,100 $ 38,976 $ 100,076
========= ========= =========
Claims and claim expense ratio - accident year 31.7% 69.9% 41.0%
========= ========= =========
Claims and claim expense ratio - calendar year 29.2% 58.5% 36.3%
Underwriting expense ratio 16.9% 32.6% 20.7%
--------- --------- ---------
Combined ratio 46.1% 91.1% 57.0%
========= ========= =========

(1) Reinsurance segment gross premiums written excludes $1.0 million of premiums ceded from the Individual Risk segment.
- ---------------------------------------------------------------------------------------------------------------------


6
RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA
(in thousands of United States Dollars)

SEGMENT INFORMATION, CONT'D


- ---------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED JUNE 30, 2004
-------------------------------------------------------------
REINSURANCE INDIVIDUAL RISK OTHER TOTAL
------------- ----------------- ----------- ----------

Gross premiums written (1) $875,634 $231,530 $ -- $1,107,164
======== ======== ==========
Net premiums written $749,400 $219,463 -- $ 968,863
======== ======== ==========
Net premiums earned $444,655 $208,898 -- $ 653,553
Claims and claim expenses incurred 123,555 109,360 -- 232,915
Acquisition expenses 51,747 70,331 -- 122,078
Operational expenses 16,750 12,128 -- 28,878
-------- -------- ------- ----------
Underwriting income $252,603 $ 17,079 -- 269,682
======== ========
Other items $16,882 16,882
======= ----------
Net income available to common shareholders $ 286,564
==========
Claims and claim expenses incurred -
current accident year $167,785 $116,517 $ 284,302
Claims and claim expenses incurred - prior
years (44,230) (7,157) (51,387)
-------- -------- ----------
Net claims and claim expenses incurred -
total $123,555 $109,360 $ 232,915
======== ======== ==========
Claims and claim expense ratio - accident
year 37.7% 55.8% 43.5%
======== ======== ==========
Claims and claim expense ratio - calendar
year 27.8% 52.4% 35.6%
Underwriting expense ratio 15.4% 39.5% 23.1%
-------- -------- ----------
Combined ratio 43.2% 91.9% 58.7%
======== ======== ==========

(1) Reinsurance segment gross premiums written excludes $0.8 million of premiums ceded from the Individual Risk segment.




- ---------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED JUNE 30, 2003
-------------------------------------------------------------
REINSURANCE INDIVIDUAL RISK OTHER TOTAL
------------- ----------------- ----------- ----------


Gross premiums written (1) $ 736,196 $ 161,531 $ -- $ 897,727
========= ========= =========
Net premiums written $ 623,277 $ 127,316 -- $ 750,593
========= ========= =========
Net premiums earned $ 409,338 $ 129,671 -- $ 539,009
Claims and claim expenses incurred 117,996 64,860 -- 182,856
Acquisition expenses 45,077 37,760 -- 82,837
Operational expenses 25,191 6,048 -- 31,239
--------- --------- --------- ---------
Underwriting income $ 221,074 $ 21,003 -- 242,077
========= =========
Other items $ 89,372 89,372
========= ---------
Net income available to common shareholders $ 331,449
=========
Claims and claim expenses incurred -
current accident year $ 135,784 $ 71,555 $ 207,339
Claims and claim expenses incurred - prior
years (17,788) (6,695) (24,483)
--------- --------- ---------
Net claims and claim expenses incurred -
total $ 117,996 $ 64,860 $ 182,856
========= ========= =========
Claims and claim expense ratio - accident
year 33.2% 55.2% 38.5%
========= ========= =========
Claims and claim expense ratio - calendar
year 28.8% 50.0% 33.9%
Underwriting expense ratio 17.2% 33.8% 21.2%
--------- --------- ---------
Combined ratio 46.0% 83.8% 55.1%
========= ========= =========

(1) Reinsurance segment gross premiums written excludes $5.7 million of premiums ceded from the Individual Risk segment.
- ---------------------------------------------------------------------------------------------------------------------

7


RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA
(in thousands of United States Dollars)



- -------------------------------------------------------------------------------------------------------------
GROSS WRITTEN PREMIUMS THREE MONTHS ENDED SIX MONTHS ENDED
- ---------------------- ---------------------------------------------------------------------
JUNE 30, 2004 JUNE 30, 2003 JUNE 30, 2004 JUNE 30, 2003
--------------- --------------- --------------- ---------------

Renaissance cat premium $ 120,405 $ 64,211 $ 419,541 $ 372,930
Renaissance specialty premium 60,675 33,557 291,130 219,639
--------- ---------- ---------- ----------
Total Renaissance Reinsurance premium 181,080 97,768 710,671 592,569
--------- ---------- ---------- ----------
DaVinci cat premium (1) 29,885 16,402 133,081 123,218
DaVinci specialty premium 4,319 702 31,882 20,409
--------- ---------- ---------- ----------
Total DaVinci Reinsurance premium 34,204 17,104 164,963 143,627
--------- ---------- ---------- ----------
Total Reinsurance premium 215,284 114,872 875,634 736,196
Individual Risk premium (2) 111,592 97,688 231,530 161,531
--------- ---------- ---------- ----------
Total premiums $ 326,876 $ 212,560 $1,107,164 $ 897,727
========= ========== ========== ==========
Total Managed Cat Premiums (3) $ 175,506 $ 103,774 $ 616,893 $ 568,509
========= ========== ========== ==========
Total Managed Specialty Premiums $ 64,994 $ 34,259 $ 323,012 $ 240,048
========= ========== ========== ==========


(1) Excludes premium ceded to Renaissance of $3.5 million for the three months ended June 30, 2004 and
$8.4 million for the six months ended June 30, 2004.

(2) Includes combined premium ceded to Renaissance and DaVinci of $1.0 million for the three months ended
June 30, 2003 and $5.7 million for the six months ended June 30, 2003. Such amounts of premium are
excluded from the Renaissance and DaVinci premiums shown above.

(3) Total Managed Cat Premiums include Renaissance and DaVinci Cat Premium, as above, and Cat Premium of
$25.2 million and $23.2 million for the three months ended June 30, 2004 and 2003, respectively, and Cat
premium of $64.3 million and $72.4 million for the six months ended June 30, 2004 and 2003, respectively,
written on behalf of our joint venture, Top Layer Re.
- -------------------------------------------------------------------------------------------------------------





- --------------------------------------------------------------------------------------------------------------------------------
OTHER INCOME AND EQUITY IN EARNINGS OF UNCONSOLIDATED VENTURES THREE MONTHS ENDED SIX MONTHS ENDED
- -------------------------------------------------------------- -------------------------------- -------------------------------
JUNE 30, 2004 JUNE 30, 2003 JUNE 30, 2004 JUNE 30, 2003
--------------- --------------- --------------- ---------------

As Reported
Fee income $ 1,074 $ 1,250 $ 2,189 $ 2,478
Other items (1,763) (505) (1,769) (2,296)
------- ------- ------- -------
Total other income (loss) - as reported (689) 745 420 182
Equity in earnings of unconsolidated ventures 4,923 6,493 11,443 12,561
------- ------- ------- -------
Total $ 4,234 $ 7,238 $11,863 $12,743
======= ======= ======= =======
Summary of income from joint venture relationships (1)
Fee income (2) $23,933 $15,616 $40,901 $35,820
Other items (1,763) (505) (1,769) (2,296)
------- ------- ------- -------
Total other income 22,170 15,111 39,132 33,524
Equity in earnings of unconsolidated ventures and DaVinci 15,743 16,522 32,522 34,224
------- ------- ------- -------
Total $37,913 $31,633 $71,654 $67,748
======= ======= ======= =======

(1) Reported GAAP presentation adjusted to reflect:
- fee income and the Company's interest in DaVinci as if DaVinci were accounted for under the equity method.
- other fee income on managed cat business which is reflected on the income statement as a reduction of acquisition
and operational expenses.
(2) Excludes fee income received on capital invested by RenaissanceRe Holdings.
- --------------------------------------------------------------------------------------------------------------------------------






8




COMMENTS ON REGULATION G

In addition to the GAAP financial measures set forth in this Press Release, the
Company has included certain non-GAAP financial measures in this Press Release
within the meaning of Regulation G. The Company has consistently provided these
financial measurements in previous investor communications and the Company's
management believes that these measurements are important to investors and other
interested persons, and that investors and such other persons benefit from
having a consistent basis for comparison between quarters and for the comparison
with other companies within the industry. These measures may not, however, be
comparable to similarly titled measures used by companies outside of the
insurance industry. Investors are cautioned not to place undue reliance on these
non-GAAP measures in assessing the Company's overall financial performance.

The Company uses "operating income" as a measure to evaluate the underlying
fundamentals of its operations and believes it to be a useful measure of its
corporate performance. "Operating income" as used herein differs from "net
income available to common shareholders", which the Company believes is the most
directly comparable GAAP measure, by the exclusion of net realized gains and
losses on investments. In addition, the Company's management believes that
"operating income" is useful to investors because it more accurately measures
and predicts the Company's results of operations by removing the variability
arising from fluctuations in the Company's investment portfolio, which is not
considered by management to be a relevant indicator of business operations. The
Company also uses operating income to calculate operating income per common
share and operating return on average common equity. The following is a
reconciliation of 1) net income available to common shareholders to operating
income; 2) net income available to common shareholders per common share to
operating income per common share; and 3) return on average common equity to
operating return on average common equity:



THREE MONTHS ENDED SIX MONTHS ENDED
-----------------------------------------------------------------
(In thousands of U.S. dollars) JUNE 30, 2004 JUNE 30, 2003 JUNE 30, 2004 JUNE 30, 2003
--------------- --------------- --------------- ---------------

Net income available to common shareholders $116,210 $180,164 $286,564 $331,449
Adjustment for net realized losses (gains) on investments 26,920 (49,660) (5,601) (70,772)
-------- -------- -------- --------
Operating income $143,130 $130,504 $280,963 $260,677
======== ======== ======== ========
Net income available to common shareholders per common share -
diluted $ 1.62 $ 2.54 $ 4.00 $ 4.68
Adjustment for net realized losses (gains) on investments 0.38 (0.70) (0.08) (1.00)
-------- -------- -------- --------
Operating income per common share - diluted $ 2.00 $ 1.84 $ 3.92 $ 3.68
======== ======== ======== ========

Return on average common equity (annualized) 20.5% 41.7% 25.9% 40.2%
Adjustment for net realized losses (gains) on investments 4.7% (11.5%) (0.5%) (8.6%)
-------- -------- -------- --------
Operating return on average common equity (annualized) 25.2% 30.2% 25.4% 31.6%
======== ======== ======== ========




9



The Company has also included in this Press Release "managed cat premium".
"Managed cat premium" is defined as gross catastrophe premium written by
Renaissance Reinsurance and its related joint ventures. "Managed cat premium"
differs from total catastrophe premium, which the Company believes is the most
directly comparable GAAP measure, due to the inclusion of catastrophe premium
written on behalf of our joint venture Top Layer Re, which is accounted for
under the equity method of accounting. Refer to supplemental financial data on
gross written premiums.

The Company has also included in this Press Release "summary of income from
joint venture relationships" which is a non-GAAP financial measure. The
principal differences between "summary of income from joint venture
relationships" and "other income and equity in earnings of unconsolidated
ventures," which the Company believes is the most directly comparable GAAP
measure, are that the results of DaVinci Reinsurance Ltd., a joint venture the
financial results of which are consolidated in the Company's financial
statements, are reflected in "summary of income from joint venture
relationships" as if reported under the equity accounting method, and that this
presentation also includes fees earned on certain quota share cessions of
catastrophe business by the Company which are reflected on its income statement
as a reduction of acquisition and operational expenses.


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