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RenaissanceRe

2008 Annual Report

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Company Overview

RenaissanceRe is a leading provider of property catastrophe reinsurance and insurance worldwide. Founded in Bermuda in 1993, the Company has gained recognition for excellence in the industry through disciplined underwriting, capital management expertise, sophisticated risk modeling and responsive client service. RenaissanceRe is traded on the New York Stock Exchange under the ticker symbol ‘RNR’.

Property Catastrophe and Specialty Reinsurance

We underwrite our Reinsurance business principally through Renaissance Reinsurance Ltd. and DaVinci Reinsurance Ltd., two of the world’s leading reinsurers, specializing in property catastrophe and specialty reinsurance products. We have been a pioneer in the use of sophisticated computer modeling for risk analysis and management. Using proprietary technology, our seasoned team of underwriters seeks to construct a superior risk portfolio, while cultivating long-term relationships with clients who appreciate our problem-solving capabilities. In addition to our expertise in property catastrophe reinsurance, our coverages include casualty clash, medical malpractice, terrorism, surety and catastrophe-exposed workers’ compensation reinsurance.

Individual Risk

RenaissanceRe’s Individual Risk business is written by the Glencoe Group through its operating subsidiaries. Individual Risk products primarily include commercial and homeowners’ property coverages including catastrophe-exposed products, multi-peril crop, commercial liability coverages including general, automobile, professional and various specialty products, and reinsurance of other insurers on a quota share basis. Individual Risk business is produced through four distribution channels: a wholly owned program manager, third-party program managers, quota share partners and brokers.

Ventures

RenaissanceRe’s Ventures unit creates joint ventures and other strategic relationships that leverage the Company’s underwriting expertise and experience. We manage several property catastrophe joint ventures that provide additional high quality capacity to our clients and generate fee income for RenaissanceRe. Our principal joint ventures include Top Layer Reinsurance Ltd. and DaVinci Reinsurance Ltd., and we structure other joint ventures when market opportunities arise. We make strategic investments to provide capital to existing clients in forms other than reinsurance. We also structure new ventures in partnership with other market participants in non-catastrophe classes of risk.

Financial Highlights - 3 Letter to Shareholders - 3 Message from the Chairman - 33 Executive Committee - 33 Opportunities in Agribusiness and Crop Insurance Risk - 33 Board of Directors - 33 Senior Officers - 33 Comments on Regulation G - 33 Form 10-K - 33 Financial and Investor Information - Inside Back Cover

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Financial Highlights

RenaissanceRe Holdings Ltd. and Subsidiaries

(In thousands of United States dollars, except per share amounts and percentages) 2008 2007 2006 2005 2004

Gross premiums written $1,736,028 $1,809,637 $1,943,647 $1,809,128 $1,544,157

Operating income (loss)(1) 193,034 735,453 796,099 (274,451) 109,666

Net (loss) income (attributable) available to common shareholders (13,280) 569,575 761,635 (281,413) 133,108

Total assets $7,984,051 $8,286,355 $7,769,026 $6,871,261 $5,526,318

Total shareholders’ equity $3,032,743 $3,477,503 $3,280,497 $2,253,840 $2,644,042

Per common share amounts

Operating income (loss) - diluted(1)(2) $3.04 $10.24 $11.05 $(3.89) $1.53

Net (loss) income - diluted(2) $(0.21) $7.93 $10.57 $(3.99) $1.85

Tangible book value per common share(1) $36.73 $40.94 $34.30 $24.52 $30.19

Dividends per common share $0.92 $0.88 $0.84 $0.80 $0.76

Operating ratios

Operating return on average common equity(1) 7.4% 27.0% 37.9% (13.3%) 5.1%

Net claims and claim expense ratio 54.8% 33.6% 29.2% 116.6% 81.9%

Underwriting expense ratio 24.2% 25.7% 25.5% 23.1% 22.5%

Combined ratio 79.0% 59.3% 54.7% 139.7% 104.4%

Gross Managed Tangible Book Value per Common

Premiums Written by Line(1) Share plus Accumulated Dividends(1)

($) millions ($)

2,000 60

1,500 45

1,000 30

500 15

0 ‘04 ‘05 ‘06 ‘07 ‘08 0 ‘04 ‘05 ‘06 ‘07 ‘08

Individual Risk Tangible Book Value

Specialty Accumulated Dividends

Managed Catastrophe

(1) In this Annual Report, we refer to various non-GAAP measures, which are explained in the Comments on Regulation G on page 21.

(2) In accordance with FAS 128, earnings per share calculations use average common shares outstanding - basic, when in a net loss position.

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Letter to Shareholders

In many ways, 2008 was an excellent year for RenaissanceRe. While our results were below our targeted outcome, our Company performed well considering the forces impacting the world economy. We upheld our principles of maintaining flexibility, focusing on prudent capital management and careful risk selection, we were there for our customers and we positioned ourselves for the future. As it happened, the future came upon us faster than anticipated, and we find ourselves well prepared to execute on potential opportunities emerging from the financial and market dislocations of today.

At the time of writing last year’s Letter to Shareholders, I mentioned potential turmoil in the financial markets as one of the major challenges we would likely have to face in 2008. Few of us, however, foresaw just how precipitous the financial market downturn would be, or the extent of the credit crisis. The second half of the year saw the collapse or near-collapse of some of the most established financial services institutions. To compound matters, there were notable large natural catastrophes, resulting in 2008 being the third most costly year for insured catastrophe losses.

Performing in a Tough Market

For the year, operating income came in at $193 million, the result of strong underwriting profits despite losses of $276 million from Hurricanes Gustav and Ike. Our operating results were impacted by a total return of negative 2.5% from our investment portfolio, largely due to the financial market downturn. Our operating return on equity was 7.4%. For the year, we suffered a net loss of

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$13 million or $0.21 per fully diluted common share reflecting the impact of unrealized and realized losses in our investment portfolio.

One of the weakest segments of our portfolio was in alternative investments, our allocation to hedge funds and private equity funds. We expect the results of these allocations to be more volatile than our fixed income investments, but we also expect them to perform well over time. As we saw the economic environment deteriorate we actively managed our fixed income portfolio to seek to reduce risk in our portfolio, for example reducing our exposure to non-Agency securitized assets such as Alt-A, prime mortgages and commercial mortgages. We expect this period of uncertainty to continue and will actively monitor events and their impact on our portfolio.

Neill A. Currie

President and Chief Executive Officer

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Tangible Book Value per Common

Share plus Accumulated Dividends(1)

($)

60

45

30

15

0

‘99

‘00

‘01

‘02

‘03

‘04

‘05

‘06

‘07

‘08

Tangible Book Value

Accumulated Dividends

(1) In this Annual Report, we refer to various non-GAAP measures, which are explained in the Comments on Regulation G on page 21.

10-Year Compounded Growth in Tangible Book Value per Common Share plus Accumulated Dividends 15.9%

In 2008, we did not achieve the growth in book value that we strive for. Our tangible book value per share, plus accumulated dividends, decreased this year by 6.9%. The share repurchases we effected, principally in the first half of the year, accounted for approximately five points of that decline. One tenet of our capital management is to return excess capital to our shareholders, and we did so this year by buying back our stock at prices we found attractive at the time. As the credit markets turned, we suspended our share buyback program in order to better position our balance sheet for attractive underwriting opportunities. We have always managed our Company for long-term results; our financial objective is to build tangible book value per share, plus accumulated dividends, in excess of 15% per year over time. This year we celebrated our 15th anniversary and since our founding, RenaissanceRe has generated an average annual growth in tangible book value per share plus accumulated dividends of 21%.

Despite the year’s challenges, our financial strength ratings remain high. A.M. Best and Standard & Poor’s affirmed the ratings of our operating entities, highlighting our superior risk-based level of capitalization, excellent underwriting track record and outstanding risk management. I was pleased that A.M. Best upgraded

Credit Ratings

A.M. Best

S&P

Moody’s

Fitch

Reinsurance Segment1

Renaissance Reinsurance

A+

AA-

A2

A

DaVinci

A

A+

-

-

Top Layer Re

A+

AA

-

-

Renaissance Reinsurance of Europe

A+

AA-

-

-

Individual Risk Segment1

Glencoe

A

-

-

-

Stonington

A

-

-

-

Stonington Lloyds

A

-

-

Lantana

A

-

-

-

RenaissanceRe2

a-

A

Baa1

BBB+

1 The A.M. Best, S&P, Moody’s and Fitch ratings for the companies in the Reinsurance and Individual Risk segments reflect the insurer’s financial strength rating.

2 The A.M. Best, S&P, Moody’s and Fitch ratings for RenaissanceRe represent the credit ratings on its senior unsecured debt.

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the financial strength rating of the Glencoe Group and its operating subsidiaries to A. We remain among a select group of reinsurance firms with a “Very Strong” rating from Standard & Poor’s, and once again, we maintained our “Excellent” rating for Enterprise Risk Management, which is achieved by only a handful of companies. This year’s market turmoil makes this rating particularly meaningful.

Capital and Service

The year ended quite differently from the way it began. At its outset, we encountered relatively soft market conditions but by summertime, credit markets had turned abruptly and capital, which had been so abundant, was suddenly dear and almost inaccessible. Debt and equity markets virtually closed. Our Company, though, remains financially robust and in a strong capital position.

Despite the year’s challenges, our financial strength ratings remain high.

We were particularly active, once again, in the Florida marketplace, where Atlantic hurricane risk attracts the preponderance of catastrophe reinsurance dollars. We maintained our long-standing leadership position in that market and our well-earned reputation for supporting our clients. At the same time, we maintained our underwriting discipline, assuming only those risks for which we believed we were being adequately compensated.

The year’s major catastrophe highlight in the U.S. was Hurricane Ike, which unleashed substantial damage upon property in Texas, as well as through Kentucky and Ohio and other parts of the Midwest. Together with Hurricane Gustav, these events resulted in a large industry loss for 2008, but the outcomes were within our expectations for events of this magnitude, and we were adequately prepared. We excelled once again at rapid claims payment in the aftermath of Hurricanes Gustav and Ike, a point on which we take great pride.

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As the credit crisis took hold, financial market turmoil – and not natural catastrophic events – became the major force driving reinsurance pricing. As we headed into the January 2009 renewal season, we found insurers feeling the effects of losses from both a high-catastrophe year and the investment markets, with limited options of raising capital in the debt and equity markets, shifting relative appetites to shed, rather than absorb, risk. We believe these dynamics contributed to increased demand for traditional reinsurance and the balance sheet protection it affords.

We excelled once again at rapid claims payment in the aftermath of Hurricanes Gustav and Ike . . .

At RenaissanceRe, as always, we were able to offer capital in the form of reinsurance to our customers when they needed it.

In our Specialty Reinsurance business, which tends toward a few large transactions that are likely to change from year to year, 2008 was not a standout year and premiums were substantially lower than in the prior year. But back in 2007, we felt that sub-prime credits were likely to develop into a major insurance issue and so we determined to reduce writing further reinsurance that exposed us to that risk. Our disciplined approach especially affected our casualty clash business, which provides coverage for exposure to risk on multiple policies from one event. We worked with customers to provide them with a road map for coverage. With the market potentially poised to turn, and with our track record of service and consistency well established, our specialty non-catastrophe reinsurance lines are well positioned for the coming period.

Building Our Franchise, Our People, Our Tools

Early in the year, as is our philosophy in relatively soft market conditions, we focused on improving our operations and strengthening our franchise. We expanded our specialty reinsurance expertise with excellent recruits and are now looking forward

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to benefiting from their considerable skills as attractive opportunities arise out of the current climate. In a similar vein, we hired noted industry talent to expand specific Individual Risk business areas, such as a highly respected commercial lines specialty insurance writer to build a team in mid-size

. . . for our Individual Risk business . . . the year was highlighted by significant acquisitions and new hires.

commercial complex risk, complementing our current work in commercial property insurance.

Also for our Individual Risk business, which writes both primary insurance and quota share reinsurance, the year was highlighted by significant acquisitions and new hires. While many other companies were retrenching, we chose instead to build up our capabilities.

Our largest acquisition was of the assets of Agro National, a premier managing general underwriter of crop insurance serving the agricultural community. Since 2004, Agro National had worked closely with our Individual Risk operations as a program manager, and we decided to strengthen our multi-peril crop franchise. We were particularly attracted to Agro National for its excellent client relationships, cost-effective structure, and the fact that it is an intensively data-driven business, to which we can bring our superior analytical and technological strengths in risk selection. This acquisition reflected our strategy to balance greater control over our operating capabilities and working in partnership with our program managers. We continue to have strong relationships with our external program managers, who are important to us.

Another important acquisition was that of the assets of Claims Management Services, a claims administrator based in Roswell, Georgia. Our Individual Risk segment had worked with this firm since 2005, and found their services to be excellent and their claims adjusters some of

Gross Managed

Premiums Written by Line(1)

($) millions

2,000

1,500

1,000

500

0

‘04

‘05

‘06

‘07

‘08

Individual Risk

Specialty

Managed Catastrophe

(1) In this Annual Report, we refer to various non-GAAP measures, which are explained in the Comments on Regulation G on page 21.

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the best in the business. Again, this development brought a better balance to the mix of assets we own versus those we rent.

During the year, our WeatherPredict Consulting affiliate acquired Special Sensory Microwave/Imagery technology that monitors the wetness and temperature of global surfaces. This will add another dimension to our understanding of complex natural peril risks, particularly as it relates to our Agro National crop insurance business.

Leveraging Our Expertise

Our Ventures unit, which offers clients a variety of capital provision alternatives and leverages the Company’s core expertise into additional avenues of revenue, had a busy and rewarding year.

Our joint ventures group focuses on providing the market with needed reinsurance capacity in innovative ways. DaVinci, with $1.2 billion of capital, is our 38%-owned joint venture, which enables our partners to invest alongside us in natural catastrophe risk through a separate vehicle with its own balance sheet. In 2008, DaVinci provided a return of 7.5% despite the year’s hurricanes, offering our partners

Our joint ventures group focuses on providing the market with needed reinsurance capacity in innovative ways.

a sound investment with sound underwriting results. Top Layer Re, 50%-owned by the Company, provides higher layers of reinsurance coverage for catastrophe-exposed regions outside the United States. At the start of 2009, Top Layer celebrated its 10th anniversary of profitability and an unbroken record of no claims.

We also completed the life cycle of Starbound II, a fully-collateralized joint venture launched in 2007 to provide additional catastrophe reinsurance

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capacity. The investors in Starbound II, as well as Starbound I and Timicuan Re, two of our previous fully-collateralized joint ventures, have enjoyed attractive returns, showing that we can deliver for our partners while increasing our ability to service our valued reinsurance customer base.

WeatherPredict Consulting, with its expanding team of meteorologists, engineers, oceanographers and physicists, continued to affirm its value to the Company. With advisory services available to outside clients as well as to RenaissanceRe, WeatherPredict Consulting has become a valuable contributor to our understanding of hurricanes and other weather-related phenomena. For example, we were able to place personnel on location as Hurricane Ike made landfall, who were able to monitor and evaluate the impact and severity of the storm in real time, as well as create a unique footprint of Ike and of the accompanying storm surge. This helped our underwriters to make rapid, informed decisions and to share key information with clients as the storm unfolded.

We also increased our professional staffing at RenRe Investment Managers Ltd., which provides weather- and energy-related hedging tools and risk management products which leverage the research of our core business units and of WeatherPredict Consulting.

Risk Mitigation Outreach

RenaissanceRe believes that science-based loss mitigation and safety initiatives represent the most promising means to minimize the physical and economic impact of severe weather events. Along with saving lives and reducing the costs of catastrophes, risk mitigation can play an important role in addressing the issues of the availability and

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affordability of insurance in storm-vulnerable communities. Last year, I mentioned our partnership with the Federal Alliance for Safe Homes, Inc. (FLASH®), State Farm® and Simpson Strong-Tie, to inform the population at large about storm preparedness through “StormStruck: A Tale of Two Homes™”. This new exhibit opened this summer at INNOVENTIONS at Epcot® at the Walt Disney World® Resort and has attracted large and enthusiastic crowds since its launch.

. . . science-based initiatives represent the most promising means to minimize the physical and economic impact of severe weather events.

In addition, this year, together with WeatherPredict Consulting, FLASH® and the Institute for Business and Home Safety (IBHS), we led a series of hurricane risk mitigation leadership forums, bringing together top scientists, academics, environmentalists, first responders and policy-makers to advance the search for solutions and hurricane risk mitigation awareness. We have been encouraged by the tremendous feedback and recognition these forums have generated.

Looking Ahead

As we look ahead, financial markets are still unsettled, and we can expect to encounter a multitude of challenges. We will need to focus on optimally managing our assets and allocating our available capital most effectively to support our clients and grow our business. We will have to respond quickly to market opportunities. We will have to continue to monitor political and regulatory activities. And we will have to keep improving our infrastructure to continue operating at the very highest level.

This will demand exceptional execution, to build on the foundation that we have worked so hard to put in place. But I am confident that we will rise to these challenges. We are well positioned to continue to serve our customers in timely, innovative ways, to seize attractive opportunities when they arise, and to build our Company’s value for shareholders in the year ahead and beyond.

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As a result of the excellent relationships we have established, based upon our quality of service and the above-average financial security we offer, many of our customers continue to prefer doing business with RenaissanceRe, irrespective of market conditions. This helped us through a challenging year and stands us in good stead for the future. We have worked hard to gain such customer loyalty. And we will never take it for granted.

Sincerely,

/s/ Neill A. Currie

Neill A. Currie

President and Chief Executive Officer

Message from the Chairman

On behalf of our Board of Directors, I would like to thank the global RenaissanceRe team for their contributions towards helping our clients and our Company navigate this year’s challenges. Events this year underscored the importance of vigilant risk management to the basic welfare of any business enterprise. At our Company, robust, ever-evolving risk management is at our very core. Our management team continually seeks to improve and refine its approach to risk management, and our Board of Directors is likewise committed to effective, collaborative oversight of the Company’s risk-related policies and practices. I believe this conscientious, collective effort has been a key factor in RenaissanceRe’s historical success and underpins our plans for the future.

We believe that our Company is well positioned to support its clients in the challenging, and also potentially exciting, period before us, that RenaissanceRe’s strategy and financial position are sound, and that our management team is equipped to undertake the ambitious tasks set before them. Sound corporate governance is also important to achieving these goals, and we Directors will strive to continue to provide both strategic value and effective oversight.

Together with Neill and our fellow Board members, I would like to thank our customers, partners, shareholders and employees for their continued support. We look forward to the continued honor of serving you in the years to come.

/s/ W. James MacGinnitie

W. James MacGinnitie

Chairman of the Board

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Executive Committee

“We upheld our principles of maintaining flexibility, focusing on prudent capital management and careful risk selection, and we positioned ourselves for the future.”

Neill A. Currie

President &

Chief Executive Officer,

RenaissanceRe Holdings Ltd.

“The landscape to grow our business is as good as it has ever been and we are ready: we have a strong balance sheet and our ability to efficiently manage our capital is one of our strengths.”

Fred R. Donner

Executive Vice President & Chief Financial Officer,

RenaissanceRe Holdings Ltd.

“Top Layer Re celebrated its 10th anniversary of profitable operation without a loss or claim. DaVinci, despite the stresses in the financial markets and the third-largest insured losses in history, still generated strong returns for its shareholders.”

John D. (Jay) Nichols, Jr.

Executive Vice President,

RenaissanceRe Holdings Ltd.,

President,

RenaissanceRe Ventures Ltd.

“The agricultural business is intensely data-driven and requires judicious risk selection. We believe we can leverage our analytical expertise to our competitive advantage in this business.”

William J. Ashley

Senior Vice President,

RenaissanceRe Holdings Ltd.,

President & CEO,

Glencoe Group Holdings Ltd.

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“Our clients have experienced increasing costs of capital and challenging credit markets. Reinsurance is a form of capital and we continue to provide capacity – this is probably more important today than it has ever been.”

Kevin J. O’Donnell

Senior Vice President,

RenaissanceRe Holdings Ltd.,

President,

Renaissance Reinsurance Ltd.

“2008 was probably the most challenging year we have had in investments. On an absolute basis, our results were disappointing; on a relative basis, we managed our portfolio well in extraordinary circumstances.”

Todd R. Fonner

Senior Vice President,

Chief Investment Officer,

RenaissanceRe Holdings Ltd.

“As we assimilate new capabilities and new people, we are focusing on perpetuating the same culture and principles that have been at the core of our success since our inception.”

Peter C. Durhager

Senior Vice President,

Chief Administrative Officer,

RenaissanceRe Holdings Ltd.,

President,

RenaissanceRe Services Ltd.

“The reinsurance industry in general and the Bermuda market in particular have historically worked with the U.S. to find solutions to managing catastrophic natural peril risk.”

Stephen H. Weinstein

Senior Vice President,

Chief Compliance Officer,

General Counsel & Secretary,

RenaissanceRe Holdings Ltd.

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Opportunities in Agribusiness and Crop Insurance Risk

Despite recent turmoil in world financial markets, we believe that the demand for agricultural products and the management of that risk will likely continue to grow over time. Our acquisition of Agro National, our long-term production partner, greatly strengthened our operating platform in the marketplace for U.S. agricultural risk.

In terms of total industry premium, the multi-peril crop insurance (MPCI) product we offer through Agro National is the largest form of crop risk protection offered in the United States. MPCI provides broad-based protection against unavoidable adverse weather conditions, such as drought, excessive moisture, flooding, excess heat, hail, wind, frost, freeze, tornado, lightning, insects, plant disease, wildlife damage, fire and earthquake. MPCI policies are often sold in combination with crop hail cover and other named peril products. Total MPCI premium in the U.S. has grown over tenfold since 1989 as illustrated in Figure 1.

The MPCI program is regulated by the Risk Management Agency of the U.S. Department of Agriculture. Although over 100 different crops and 22 different insurance plans can be insured in various counties across the United States, five main crops form the bulk of premium volume.

Figure 1 Total U.S. MPCI Premium

($) in billions

12 9 6 3

0 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08

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As shown in Figure 2 below, corn, soybeans, wheat, cotton and grain sorghum comprised 87% of the total MPCI premium in 2008. Given its sales concentration in the Midwest, our crop exposures written by Agro National are exposed primarily to weather risks impacting the top three crops: corn, soybean and wheat. The indemnity payments on these crops are generally determined by farm level yields and often adjusted for revenue or price changes during the season. Well over half of all industry policies sold in 2008 (representing over 80% of total premium) had a price risk component associated with potential insurance payments. In fact, we believe that the benefits of revenue protection coverage, which was pioneered by the principals of Agro National, substantially contributed to the growth of MPCI in the U.S. during the last decade. This coverage provides valuable assistance to farm producers since yield and price volatility together influence total farm revenue. The combined risk is reflected in recent price activity, which suggests an expected drop of 25% in system-wide MPCI premium in the U.S. for 2009. Price volatility reinforces the need for revenue risk management by farmers and agribusiness concerns.

Despite the many policy variations and the numerous perils covered by MPCI, a robust set of data exists around crop yields and prices making them analytically tractable. We believe that our proprietary risk assessment tools and our multidisciplinary team of experienced professionals offer us a competitive advantage, as well as facilitating robust risk management. MPCI has a large set of credible data available at the county and crop level going back to at least 1949. Farm level data is also available or can be generated using statistical models. We incorporate this information within the decision support tools we use to both underwrite this business and to analyze, manage

Figure 2

2008 MPCI Premium by Crop

Corn - 39% Soybeans - 26% Wheat - 16% Cotton - 4% Sorghum - 2% Other - 13%

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and cede out the risk we assume within our portfolio. We also use this data to help us analyze prospective risks and develop new products for producers and agribusiness concerns.

We believe our proprietary technology and research personnel at WeatherPredict Consulting enhance our ability to provide added value for agricultural clients as well as the robustness of our crop-related risk assessment. One such technology, owned and utilized by WeatherPredict Consulting, measures temperature and precipitation anomalies, which are among the primary factors influencing crop yields. This remote-sensing technology uses Special Sensory Microwave/Imager (SSM/I) data from satellites to monitor crop conditions almost anywhere on the planet. Conditions in one part of the world have an impact on crops globally, and such information is an important factor in assessing yield and price risks.

Figure 3, for example, illustrates dryness emerging in Argentina and southern Brazil during January 2009, a key risk period for corn tasseling and soybean pod-filling in the Southern Hemisphere. When combined with temperature anomalies and forecasts from WeatherPredict Consulting, a parametric assessment of yield and price risks may be generated in a consistent manner. Furthermore, comparisons with historical SSM/I data (available back to 1988) permit crop risk assessment and relative insurance pricing in regions where credible yield data are difficult to obtain or even where crops were not planted in years past.

We believe that agricultural risk provides RenaissanceRe with some benefits of diversification. On an historical basis, major hurricane (and earthquake) events appear somewhat independent from aggregate crop

Figure 3 Brazil & Argentina Corn Wetness Anomalies

Percentile positions on distribution of SSMI wetness, from driest to wettest.

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insurance losses. An illustrative review of years in which large wind events occurred, such as Andrew (1992), Katrina (2005) and Ike (2008), shows that large MPCI loss years did not coincide with these catastrophe losses. Although some crop damage may occur along the coast, the vast majority of industry MPCI premiums reside in the Midwest. In the fall of 2004, for instance, when Hurricanes Charley, Frances and Jeanne crisscrossed Florida, about $106 million of state-wide MPCI premium in Florida experienced a 315% loss ratio. In that same crop year, nationwide MPCI premiums of approximately $4 billion averaged a profitable 60% loss ratio. In years in which there were large crop losses, such as 1983, 1988, 1993 and 2002, lower-than-average major hurricane activity was observed. In some cases, the remnants of a hurricane may actually bring beneficial rainfall to crops in the interior United States as did Hurricane Dennis in 2005.

Hurricane Dennis made landfall near the Florida Panhandle on July 10, weakening from a previous Category 4 strength. The storm track, illustrated in Figure 4, plots its movement to the interior as it subsequently weakened into a tropical storm. Importantly that year, Dennis delivered much-needed rainfall to the Ohio Valley over the July 13 to 16 time period. This storm has been credited with “saving” the southern Illinois soybean crop during a regionally dry summer when northern Illinois corn generally suffered losses.

We believe that our deepened commitment to the agricultural market benefits the RenaissanceRe portfolio, permits us to deploy analytical capabilities similar to those used in our catastrophic risk assessment, and offers potential diversification benefits. We also believe that our clients will gain from our growing market presence and the enhanced, combined efforts of Agro National, Glencoe, WeatherPredict Consulting and other RenaissanceRe affiliates.

Figure 4

Hurricane Dennis, 10-16 July, 2005, Inland Path through Midwest U.S.

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Board of Directors

RenaissanceRe Holdings Ltd.

(Front from left)

Anthony M. Santomero

Neill A. Currie

Former President of the Federal Reserve

President and

Bank of Philadelphia

Chief Executive Officer

RenaissanceRe Holdings Ltd.

David C. Bushnell

Retired Chief Administrative Officer

W. James MacGinnitie

Citigroup Inc.

Chairman

RenaissanceRe Holdings Ltd.

William F. Hecht

Retired Chairman, President and CEO

(Behind from left)

PPL Corporation

Nicholas L. Trivisonno

Retired Chairman and CEO

Henry Klehm III

ACNielsen Corporation

Partner

Jones Day

Jean D. Hamilton

Private Investor

James L. Gibbons

Member of Brock Capital

President and CEO

Group LLC

CAPITAL G Limited

Chairman of CAPITAL G

Ralph B. Levy

Bank Limited

Senior Partner

King & Spalding LLP

Thomas A. Cooper

Chief Executive Officer

TAC Associates

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Senior Officers

RenaissanceRe Holdings Ltd. and Subsidiaries

Bermuda

Currie, Neill A.

President & Chief Executive Officer,

RenaissanceRe Holdings Ltd.

Donner, Fred R.

Executive Vice President &

Chief Financial Officer,

RenaissanceRe Holdings Ltd.

Nichols, John D.

Executive Vice President,

RenaissanceRe Holdings Ltd.,

President,

RenaissanceRe Ventures Ltd.

Ashley, William J.

Senior Vice President, RenaissanceRe Holdings Ltd., President & CEO,

Glencoe Group Holdings Ltd.

O’Donnell, Kevin J.

Senior Vice President,

RenaissanceRe Holdings Ltd.,

President,

Renaissance Reinsurance Ltd.

Branagan, Ian D.

Senior Vice President,

Chief Risk Officer,

RenaissanceRe Holdings Ltd.

Durhager, Peter C.

Senior Vice President,

Chief Administrative Officer,

RenaissanceRe Holdings Ltd.,

President,

RenaissanceRe Services Ltd.

Fonner, Todd R.

Senior Vice President,

Chief Investment Officer,

RenaissanceRe Holdings Ltd.

Weinstein, Stephen H.

Senior Vice President,

Chief Compliance Officer,

General Counsel & Secretary,

RenaissanceRe Holdings Ltd.

Curtis, Ross A.

Senior Vice President,

International Underwriting,

Renaissance Reinsurance Ltd.

Dutt, Aditya K.

Senior Vice President,

RenaissanceRe Ventures Ltd.

Lamendola, Robert J.

Senior Vice President,

Renaissance Reinsurance Ltd.

Moore, Sean M.

Senior Vice President,

RenaissanceRe Services Ltd.

Paradine, Jonathan D.

Senior Vice President,

Renaissance Reinsurance Ltd.

Prado, Juan I.

Senior Vice President,

RenaissanceRe Ventures Ltd.

Richardson, Laurence B.

Senior Vice President,

RenaissanceRe Ventures Ltd.

Wilcox, Mark A.

Senior Vice President,

Chief Accounting Officer, Corporate Controller, RenaissanceRe Holdings Ltd.

Bonanno, Laura

Vice President,

RenaissanceRe Holdings Ltd.

Brewer, Barry

Vice President,

RenaissanceRe Services Ltd.

Brookes, Trevor A.

Vice President, Internal Audit,

RenaissanceRe Holdings Ltd.

Dalton, Bryan M.

Vice President,

Renaissance Reinsurance Ltd.

Da Silva, Anne-Marie

Vice President,

RenaissanceRe Services Ltd.

Illston, Peter A.

Vice President,

RenaissanceRe Services Ltd.

James, Helen L.

Vice President,

RenaissanceRe Ventures Ltd.

Komposch, Caroline M.

Vice President,

RenaissanceRe Services Ltd.

Lewis, James R.

Vice President,

Renaissance Reinsurance Ltd.

Marra, David A.

Vice President,

Renaissance Reinsurance Ltd.

Matusiak, James J.

Vice President,

Renaissance Reinsurance Ltd.

McCue, Keith A.

Vice President,

Renaissance Reinsurance Ltd.

Montpellier, Peter R.

Vice President,

RenaissanceRe Services Ltd.

Morgenstern, Kai H.

Vice President,

RenaissanceRe Ventures Ltd.

Nusum, Maureen B.

Vice President,

RenaissanceRe Services Ltd.

O’Keefe, Justin D.

Vice President,

Renaissance Reinsurance Ltd.

Oswald, Apryle L.

Vice President,

Glenco Insurance Ltd.

Roberts, Rebecca J.

Vice President,

Renaissance Reinsurance Ltd.

Smith, Josephine A.

Vice President,

RenaissanceRe Services Ltd.

Tucker, Dion A.

Vice President,

RenaissanceRe Services Ltd.

Council Bluffs

Gibson, Kim R.

President,

Chief Operating Officer

Agro National Inc.

Watson, Thomas F.

Vice President,

Chief Financial Officer,

Agro National Inc.

Grimsley, Gene R.

Vice President,

Agro National Inc.

Janicek, Kenneth P.

Vice President,

Agro National Inc.

Connealy, Donald F.

Vice President,

Agro National Inc.

Rhodes, Randy L.

Vice President,

Agro National Inc.

Wilson, William C.

Vice President,

Agro National Inc.

Holl, Monte R.

Vice President,

Agro National Inc.

Dallas

Heatherly, David A.

President,

Glencoe Specialty Services Inc.

Bowden, Tracy H.

Senior Vice President,

General Counsel & Chief Compliance Officer,

Glencoe Specialty Services Inc.

Eudy, Dan R.

Senior Vice President,

Glencoe Specialty Services Inc.

Graff, Timothy J.

Senior Vice President,

Glencoe Specialty Services Inc.

Lewis, Travis L.

Senior Vice President,

Chief Operating Officer,

Glencoe Group Holdings Ltd.

Brockman, Robert W.

Vice President,

Glencoe Specialty Services Inc.

Hockersmith, Jeffrey S.

Vice President,

Glencoe Specialty Services Inc.

Kanan, Aileen P.

Vice President,

Glencoe Specialty Services Inc.

Kozuch, Walter J.

Vice President,

Glencoe Specialty Services Inc.

Meehan, Patricia M.

Vice President,

Glencoe Specialty Services Inc.

Primerano, Richard B.

Senior Vice President, CFO,

Glencoe Specialty Services Inc.

Radford, Kellam A.

Vice President,

Glencoe Specialty Services Inc.

Regan, Michael E.

Vice President,

Glencoe Group Services Inc.

Schlaegel, Woldemar W.

Vice President,

Glencoe Specialty Services Inc.

Scholl, David C.

Vice President, Chief Actuary,

Glencoe Specialty Services Inc.

Stahl, Brian C.

Senior Vice President,

Glencoe Specialty Services Inc.

Taylor, Rod N.

Vice President,

Glencoe Specialty Services Inc.

Ireland

Britchfield, Ian

Managing Director,

Renaissance Reinsurance of Europe

Brosnan, Sean G.

Managing Director of Investments,

Renaissance Reinsurance of Europe

Burnett-Herkes, James

Managing Director Risk Modeling,

Renaissance Reinsurance of Europe

Houston

Cole, Joseph B.

President,

RenRe Investment Managers Ltd.

Kaplan, Paul E.

Vice President & Secretary,

RenRe Investment Managers Ltd.

Tawney, Mark R.

Managing Director,

RenRe Investment Managers Ltd.

Windle, William W.

Vice President,

RenRe Investment Managers Ltd.

Raleigh

Tillman, Craig W.

President,

WeatherPredict Consulting Inc.

Lin, Jason J.

Vice President,

WeatherPredict Consulting Inc.

Bachiocci, David R.

Senior Scientist,

WeatherPredict Consulting Inc.

Williford, Eric C.

Senior Scientist,

WeatherPredict Consulting Inc.

Rhode Island

Ginis, Isaac

Principal Scientist,

WeatherPredict Consulting Inc.

Rothstein, Lewis M.

Principal Scientist,

WeatherPredict Consulting Inc.

Rowe, Dail

Senior Scientist,

WeatherPredict Consulting Inc.

Roswell, GA

Jones, Gene L.

Vice President,

Glencoe Group Claims Management Inc.

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COMMENTS ON REGULATION G

In addition to the financial measures set forth in this Annual Report prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), the Company has included certain non-GAAP financial measures in this Annual Report within the meaning of Regulation G. The Company has consistently provided these financial measurements in previous annual reports 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 years 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 (loss)” 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 (loss)” as used herein differs from “net (loss) income (attributable) 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 and net unrealized gains and losses on credit derivatives issued by entities included in investments in other ventures, under equity method and the cumulative effect of a change in accounting principle – goodwill. In the presentation below, the only adjustments in respect of unrealized gains and losses on credit derivatives reflect unrealized mark-to-market losses on credit derivatives and other credit-related products issued by ChannelRe Holdings Ltd. (“ChannelRe”), a financial guarantee reinsurer whose investment is accounted for by the Company under the equity method. The Company believes that the prevailing convention among financial guarantee insurers, reinsurers and other market participants, such as ChannelRe, is to exclude from “operating income (loss)” such unrealized gains and losses attributable to credit derivatives and other credit-related products. The Company’s management believes that “operating income (loss)” is useful to investors because it more accurately measures and predicts the Company’s results of operations by removing the variability arising from the fluctuations in the Company’s investment portfolio and credit derivatives issued by entities included in investments in other ventures, under equity method, which are not considered by management to be relevant indicators of business operations. The Company also uses “operating income (loss)” to calculate “operating income (loss) per common share – diluted” and “operating return on average common equity”. The following is a reconciliation of 1) net (loss) income (attributable) available to common shareholders to operating income (loss) available (attributable) to common shareholders; 2) net (loss) income (attributable) available to common shareholders per common share – diluted to operating income (loss) available (attributable) to common shareholders per common share – diluted; and 3) return on average common equity to operating return on average common equity:

Year Ended

(In thousands of United States dollars, except per share amounts and percentages)

2008

2007

2006

2005

2004

Net (loss) income (attributable) available to common shareholders

$(13,280)

$569,575

$761,635

$(281,413)

$133,108

Adjustment for net realized losses (gains) on investments

206,314

(1,293)

34,464

6,962

(23,442)

Adjustment for net unrealized losses on credit derivatives issued by entities included in investments in other ventures, under equity method

—

167,171

—

—

—

Adjustment for cumulative effect of a change in accounting principle - FAS 142 - Goodwill

—

—

—

—

—

Operating income (loss) available (attributable) to common shareholders

$193,034

$735,453

$796,099

$(274,451)

$109,666

Net (loss) income (attributable) available to common shareholders per common share (1)

$(0.21)

$7.93

$10.57

$(3.99)

$1.85

Adjustment for net realized losses (gains) on investments

3.25

(0.02)

0.48

0.10

(0.32)

Adjustment for net unrealized losses on credit derivatives issued by entities included in investments in other ventures, under equity method

—

2.33

—

—

—

Adjustment for cumulative effect of a change in accounting principle - FAS 142 - Goodwill

—

—

—

—

—

Operating income (loss) available (attributable) to common shareholders per common share - diluted (1)

$3.04

$10.24

$11.05

$(3.89)

$1.53

Return on average common equity

(0.5)%

20.9%

36.3%

(13.6)%

6.2%

Adjustment for net realized losses (gains) on investments

7.9%

(0.1)%

1.6%

0.3%

(1.1)%

Adjustment for net unrealized losses on credit derivatives issued by entities included in investments in other ventures, under equity method

—

6.2%

—

—

—

Adjustment for cumulative effect of a change in accounting principle - FAS 142 - Goodwill

—

—

—

—

—

Operating return on average common equity

7.4%

27.0%

37.9%

(13.3)%

5.1%

(1) In accordance with FAS 128, earnings per share calculations use average common shares outstanding - - basic, when in a net loss position.

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The Company has also included in this Annual Report “gross managed premiums written” and “managed catastrophe premiums”. “Gross managed premiums written” differs from gross premiums written, which the Company believes is the most directly comparable GAAP measure, due to the inclusion of premiums written on behalf of our joint venture Top Layer Re, which is accounted for under the equity method of accounting. “Managed catastrophe premiums” is defined as gross catastrophe premiums written by Renaissance Reinsurance and its related joint ventures. “Managed catastrophe premiums” differs from total catastrophe premiums, which the Company believes is the most directly comparable GAAP measure, due to the inclusion of catastrophe premiums written on behalf of the Company’s joint venture Top Layer Re, which is accounted for under the equity method of accounting, and the exclusion of catastrophe premiums assumed from the Company’s Individual Risk segment. The Company’s management believes “gross managed premiums written” and “managed catastrophe premiums” are useful to investors and other interested parties because they each provide a measure of total premiums assumed by the Company through its consolidated subsidiaries and related joint ventures. The following is a reconciliation of 1) total catastrophe premiums to managed catastrophe premiums and 2) gross premiums written to gross managed premiums written:

Year Ended

(In thousands of U.S. dollars)

2008

2007

2006

2005

2004

Total catastrophe premiums

$994,621

$1,003,104

$1,099,114

$775,573

$702,010

Catastrophe premiums assumed from the Individual Risk segment

(5,672)

(36,968)

(64,573)

(43,594)

(18,831)

Catastrophe premiums written by Top Layer Re

55,370

66,436

51,244

59,908

70,242

Managed catastrophe premiums

$1,044,319

$1,032,572

$1,085,785

$791,887

$753,421

Gross premiums written

$1,736,028

$1,809,637

$1,943,647

$1,809,128

$1,544,157

Premiums written by Top Layer Re

55,370

66,436

51,244

59,908

70,242

Gross managed premiums written

$1,791,398

$1,876,073

$1,994,891

$1,869,036

$1,614,399

The Company has also included in this Annual Report “tangible book value per common share plus accumulated dividends”, which is defined as book value per common share excluding goodwill and other intangibles, plus accumulated dividends. “Tangible book value per common share plus accumulated dividends” differs from book value per common share, which the Company believes is the most directly comparable GAAP measure, due to the exclusion of goodwill and other intangibles and the inclusion of accumulated dividends. The following is a reconciliation of book value per common share to tangible book value per common share plus accumulated dividends:

Year Ended

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

Book value per common share

$38.74

$41.03

$34.38

$24.52

$30.19

$29.61

$21.37

$16.14

$11.91

$10.17

Adjustment for goodwill and other intangibles(1)

(2.01)

(0.09)

(0.08)

-

-

-

-

(0.14)

(0.17)

(0.11)

Tangible book value per common share

$36.73

$40.94

$34.30

$24.52

$30.19

$29.61

$21.37

$16.00

$11.74

$10.06

Adjustment for accumulated dividends

7.92

7.00

6.12

5.28

4.48

3.72

3.12

2.55

2.05

1.53

Tangible book value per common share plus accumulated dividends

$44.65

$47.94

$40.42

$29.80

$34.67

$33.33

$24.49

$18.55

$13.79

$11.59

(1) For 2008, goodwill and other intangibles includes $49.8 million of goodwill and other intangibles included in investments in other ventures, under equity method.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

x    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For The Fiscal Year Ended December 31, 2008

OR

¨    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                  to                 

Commission File No. 001-14428

RENAISSANCERE HOLDINGS LTD.

(Exact Name Of Registrant As Specified In Its Charter)

Renaissance House, 8-20 East Broadway, Pembroke HM 19 Bermuda

(Address of Principal Executive Offices)

(441) 295-4513

(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer (as defined in Rule 405 of the Act).

Yes x    No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨    No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x    No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, as defined in Rule 12b-2 of the Act. Large accelerated filer x, Accelerated filer ¨, Non-accelerated filer ¨, Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ¨    No x

The aggregate market value of Common Shares held by nonaffiliates of the registrant at June 30, 2008 was $2,677.0 million based on the closing sale price of the Common Shares on the New York Stock Exchange on that date.

The number of Common Shares outstanding at February 11, 2009 was 61,500,840.

The information required by Part III of this report, to the extent not set forth herein, is incorporated by reference to the registrant’s Definitive Proxy Statement to be filed in respect of our 2009 Annual General Meeting of Shareholders.

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RENAISSANCERE HOLDINGS LTD.

TABLE OF CONTENTS

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PART I

Unless the context otherwise requires, references in this Form 10-K to “RenaissanceRe” or the “Company” mean RenaissanceRe Holdings Ltd. and its subsidiaries, which include, but are not limited to, the following entities named herein.

Agro National Inc. (“Agro National”)

Accurate Environmental Forecasting Inc. (“AEF”)

Glencoe Group Claims Management Inc. (“Glencoe Claims”)

Glencoe Group Holdings Ltd. (“Glencoe Group”)

Glencoe Insurance Ltd. (“Glencoe”)

Glencoe Specialty Holdings Inc. (“Glencoe Holdings”)

Glencoe Specialty Services Inc. (“Glencoe Specialty Services”)

Glencoe U.S. Holdings Inc. (“Glencoe U.S.”)

Lantana Insurance Ltd. (“Lantana”)

Renaissance Investment Holdings Ltd. (“RIHL”)

Renaissance Investment Management Company Limited. (“RIMCO”)

Renaissance Other Investments Holdings Ltd. (“ROIHL”)

Renaissance Reinsurance Ltd. (“Renaissance Reinsurance”)

Renaissance Reinsurance of Europe (“Renaissance Europe”)

Renaissance Trading Ltd. (“RTL”)

Renaissance Underwriting Managers, Ltd. (“RUM”)

RenaissanceRe Capital Trust (“Capital Trust”)

RenaissanceRe Services Ltd. (“Renaissance Services”)

RenaissanceRe Ventures Ltd. (“Ventures”)

RenRe Investment Managers Ltd. (“RIM”)

RenTech U.S. Holdings Inc. (“RenTech”)

Starbound Reinsurance Ltd. (“Starbound Re”)

Starbound Reinsurance II Ltd. (“Starbound II”)

Stonington Insurance Company (“Stonington”)

Timicuan Reinsurance Ltd. (“Tim Re”)

Weather Predict Inc. (“Weather Predict”)

WeatherPredict Consulting Inc. (“WP Consulting”)

We also underwrite reinsurance on behalf of joint ventures, principally including Top Layer Reinsurance Ltd. (“Top Layer Re”), recorded under the equity method of accounting, and DaVinci Reinsurance Ltd. (“DaVinci”). The financial results of DaVinci and DaVinci’s parent company, DaVinciRe Holdings Ltd. (“DaVinciRe”), are consolidated in our financial statements. For your convenience, we have included a glossary beginning on page 54 of selected insurance and reinsurance terms. All dollar amounts referred to in this Form 10-K are in U.S. dollars unless otherwise indicated. Any discrepancies in the tables included herein between the amounts listed and the totals thereof are due to rounding.

NOTE ON FORWARD-LOOKING STATEMENTS

This Form 10-K 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”). Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, us.

In particular, statements using words such as “may”, “should”, “estimate”, “expect”, “anticipate”, “intends”, “believe”, “predict”, “potential”, or words of similar import generally involve forward-looking statements. For example, we may include certain forward-looking statements in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” with regard to trends in results, prices, volumes, operations, investment results, margins, combined ratios, reserves, overall market trends, risk management and exchange rates. This Form 10-K also contains forward-looking statements with respect to

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our business and industry, such as those relating to our strategy and management objectives, trends in market conditions, market standing and product volumes, investment results, government initiatives and regulatory matters, and pricing conditions in the reinsurance and insurance industries.

In light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this report should not be considered as a representation by us or any other person that our objectives or plans will be achieved. Numerous factors could cause our actual results to differ materially from those addressed by the forward-looking statements, including the following:

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The factors listed above should not be construed as exhaustive. Certain of these risk factors and others are described in more detail in “Item 1A. Risk Factors” below. We undertake no obligation to release publicly the results of any future revisions we may make to forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

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ITEM 1.    BUSINESS

GENERAL

RenaissanceRe, established in Bermuda in 1993 to write principally property catastrophe reinsurance, is today a leading global provider of reinsurance and insurance coverages and related services. Through our operating subsidiaries, we seek to obtain a portfolio of reinsurance, insurance and financial risks in each of our businesses that are significantly better than the market average and produce an attractive return on equity. We accomplish this by leveraging our core capabilities of risk assessment and information management, and by investing in our capabilities to serve our customers across the cycles that have historically characterized our markets. Overall, our strategy focuses on superior risk selection, marketing, capital management and joint ventures. We provide value to our clients and joint venture partners in the form of financial security, innovative products, and responsive service. We are known as a leader in paying valid reinsurance claims promptly. We principally measure our financial success through long-term growth in tangible book value per common share plus accumulated dividends, which we believe is the most appropriate measure of our Company’s performance, and believe we have delivered superior performance in respect of this measure over time.

Our core products include property catastrophe reinsurance, which we write through our principal operating subsidiary Renaissance Reinsurance and joint ventures, principally DaVinci and Top Layer Re; specialty reinsurance risks written through Renaissance Reinsurance and DaVinci; and primary insurance and quota share reinsurance, which we write through the operating subsidiaries of the Glencoe Group. We believe that we are one of the world’s leading providers of property catastrophe reinsurance. We also believe we have a strong position in certain specialty reinsurance lines of business and are building a unique franchise in the U.S. program business. Our reinsurance and insurance products are principally distributed through intermediaries, with whom we seek to cultivate strong relationships.

We conduct our business through two reportable segments, Reinsurance and Individual Risk. For the year ended December 31, 2008, our Reinsurance and Individual Risk segments accounted for approximately 66% and 34%, respectively, of our total consolidated gross premiums written. Our segments are more fully described in “Business Segments” below.

CORPORATE STRATEGY

We seek to generate long-term growth in tangible book value per common share plus accumulated dividends for our shareholders by pursuing the following strategic objectives:

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We believe we are well positioned to fulfill these objectives by virtue of the experience and skill of our management team, our significant financial strength, and our strong relationships with brokers and clients. In addition, we believe our superior service, our proprietary modeling technology, and our extensive business relationships, which have enabled us to become a leader in the property catastrophe reinsurance market, will be instrumental in allowing us to achieve our strategic objectives. In particular, we believe our strategy, high performance and ethical culture, and commitment to our clients and joint venture partners permit us to differentiate ourselves by offering specialized services and products at times and in markets where capacity and alternatives may be limited.

BUSINESS SEGMENTS

We conduct our business through two reportable segments, Reinsurance and Individual Risk. Financial data relating to our two segments is included in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Reinsurance Segment

Our Reinsurance operations are comprised of three units: 1) property catastrophe reinsurance, primarily written through Renaissance Reinsurance and DaVinci; 2) specialty reinsurance, primarily written through Renaissance Reinsurance and DaVinci; and 3) certain other activities of ventures as described herein. Our Reinsurance operations are managed by the President of Renaissance Reinsurance, who leads a team of underwriters, risk modelers and other industry professionals, who have access to our proprietary risk management, underwriting and modeling resources and tools. We believe the expertise of our underwriting and modeling team and our proprietary analytic tools, together with superior customer service, provide us with a significant competitive advantage.

Our portfolio of business has continued to be increasingly characterized by relatively large transactions with ceding companies with whom we do business, although no current relationship exceeds 15% of our gross premiums written. Accordingly, our gross premiums written are subject to significant fluctuations depending on our success in maintaining or expanding our relationships with these large customers. We believe that recent market dynamics, and trends in our industry in respect of potential future consolidation, have increased our exposure to the risks of broker, client and counterparty concentration.

The following table shows our total catastrophe and specialty reinsurance gross premiums written:

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Property Catastrophe Reinsurance

We believe we are one of the largest providers of property catastrophe reinsurance in the world, based on our total catastrophe premium. Our principal property catastrophe reinsurance products include catastrophe excess of loss reinsurance and excess of loss retrocessional reinsurance as described below:

Catastrophe Excess of Loss Reinsurance.    We principally write catastrophe reinsurance on an excess of loss basis, which means we provide coverage to our insureds when aggregate claims and claim expenses from a single occurrence of a covered peril exceed the attachment point specified in a particular contract. Under these contracts we indemnify an insurer for a portion of the losses on insurance policies in excess of a specified loss amount, and up to an amount per loss specified in the contract. The coverage provided under excess of loss reinsurance contracts may be on a worldwide basis or limited in scope to selected geographic areas. Coverage can also vary from “all property” perils to limited coverage on selected perils, such as “earthquake only” coverage.

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

Our property catastrophe reinsurance contracts are generally “all risk” in nature. Our most significant exposure is to losses from earthquakes and hurricanes and other windstorms, although we are also exposed to claims arising from other catastrophes, such as tsunamis, freezes, floods, fires, tornadoes, explosions and acts of terrorism in connection with the coverages we provide. Our predominant exposure under such coverage is to property damage. However, other risks, including business interruption and other non-property losses, may also be covered under our property reinsurance contracts when arising from a covered peril. We offer our coverages on a worldwide basis.

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

Catastrophe-Linked Securities.    We also invest in catastrophe-linked securities (“cat-linked securities”). Cat-linked securities are generally privately placed fixed income securities as to which all or a portion of the repayment of the principal is linked to catastrophic events; for example, the occurrence of one or more hurricanes or earthquakes producing industry losses exceeding certain specified thresholds. We underwrite, model, evaluate and monitor these securities using the same tools and techniques used to evaluate our more traditional property catastrophe reinsurance business assumed. In addition, we may enter into derivative transactions, such as total return swaps, that are based on or referenced to underlying cat-linked securities. Based on an evaluation of the specific features of each cat-linked security, we account for these

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securities as reinsurance or at fair value, as applicable, in accordance with U.S. generally accepted accounting principles (“GAAP”). In addition, in future periods we may utilize the growing market for cat-linked securities to expand our ceded reinsurance buying if we find the pricing and terms of such coverage attractive.

We seek to moderate the volatility of our risk portfolio through superior risk selection, diversification and the purchase of retrocessional coverages and other protections. In furtherance of our strategy, we may increase or decrease our presence in the catastrophe reinsurance business based on market conditions and our assessment of risk-adjusted pricing adequacy. We frequently seek to purchase reinsurance or other protection for our own account to further reduce the financial impact that a large catastrophe or a series of catastrophes could have on our results.

As a result of our position in the market and reputation for superior customer service, we believe we have superior access to business we view as desirable compared to the market as a whole. As described above, we use our proprietary underwriting tools and guidelines to attempt to construct an attractive portfolio from these opportunities. We dynamically model policy submissions against our current in-force underwriting portfolio, comparing our estimate of the modeled expected returns of the contract against the amount of capital that we allocate to the contract, based on our estimate of its marginal impact on our overall risk portfolio. At times, our approach to portfolio management has resulted and may result in the future in our having a relatively large market share of catastrophe reinsurance exposure in a particular geographic region, such as Florida, or to a particular peril, such as U.S. hurricane risk, where we believe supply and demand characteristics promote our providing significant capacity, or where the risks or class of risks otherwise adds efficiency to our portfolio. Conversely, from time to time we may have a disproportionately low market share in certain regions or perils where we believe our capital would be less effectively deployed.

Specialty Reinsurance

We write a number of lines of reinsurance other than property catastrophe, such as catastrophe exposed workers’ compensation, surety, terrorism, medical malpractice, catastrophe exposed personal lines property, casualty clash, certain other casualty lines and other specialty lines of reinsurance, which we collectively refer to as specialty reinsurance. As with our catastrophe business, our team of experienced professionals seek to underwrite these lines using a disciplined underwriting approach and sophisticated analytical tools.

We generally target lines of business where we believe we can adequately quantify the risks assumed and where potential losses could be characterized as low frequency and high severity, similar to our catastrophe reinsurance coverages. We also seek to identify market dislocations and write new lines of business whose risk and return characteristics are estimated to exceed our hurdle rates. We also seek to manage the correlations of this business with our overall portfolio, including our aggregate exposure to single and aggregated catastrophe events. We believe that our underwriting and analytical capabilities have positioned us well to manage this business.

We offer our specialty reinsurance products principally on an excess of loss basis, as described above with respect to our catastrophe reinsurance products, and also provide some proportional coverage. In a proportional reinsurance arrangement (also referred to as quota share reinsurance and pro-rata reinsurance), the reinsurer shares a proportional part of the original premiums and losses of the reinsured. The reinsurer pays the cedant a commission which is generally based on the cedant’s cost of acquiring the business being reinsured (including commissions, premium taxes, assessments and miscellaneous administrative expenses) and may also include a profit factor. Our products generally include tailored features such as limits or sub-limits which we believe help us manage our exposures. Any liability exceeding, or otherwise not subject to, such limits reverts to the cedant. As with our catastrophe reinsurance business, our specialty reinsurance frequently provides coverage for relatively large limits or exposures, and thus we are subject to potential significant claims volatility.

We generally seek to write significant lines on our specialty reinsurance treaties. As a result of our financial strength, we have the ability to offer significant capacity and, for select risks, we have made available significant limits. We believe these capabilities, the strength of our specialty reinsurance underwriting team, and our demonstrated ability and willingness to pay valid claims are competitive advantages of our specialty reinsurance business.

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Ventures

We pursue a number of other opportunities through our ventures unit, which has responsibility for managing our joint venture relationships, executing customized reinsurance transactions to assume or cede risk and managing certain investments directed at classes of risk other than catastrophe reinsurance.

Property Catastrophe Managed Joint Ventures.    We actively manage property catastrophe-oriented joint ventures, which provide us with an additional presence in the market, enhance client relationships and generate fee income. These joint ventures allow us to leverage our access to business and our underwriting capabilities on a larger capital base. Currently, our joint ventures include Top Layer Re and DaVinci. RUM, a wholly owned subsidiary of the Company, acts as the exclusive underwriting manager for each of these joint ventures.

DaVinci was established in 2001 and principally writes property catastrophe reinsurance and certain low frequency, high severity specialty reinsurance lines of business on a global basis. In general, we seek to construct for DaVinci a property catastrophe reinsurance portfolio with risk characteristics similar to those of Renaissance Reinsurance’s property catastrophe reinsurance portfolio and certain lines of specialty reinsurance such as terrorism and catastrophe exposed workers’ compensation. In accordance with DaVinci’s underwriting guidelines, it can only participate in business that is underwritten by Renaissance Reinsurance. We maintain majority voting control of DaVinciRe and, accordingly, consolidate the results of DaVinciRe into our consolidated results of operations and financial position. We seek to manage DaVinci’s capital efficiently over time in light of the market opportunities and needs we perceive and believe we are able to serve. Our ownership in DaVinciRe was 22.8% and 20.5% at December 31, 2008 and 2007, respectively. On January 30, 2009, we purchased the shares of certain third party DaVinciRe shareholders for $145.5 million, less a $21.8 million reserve holdback. The purchase price was based on GAAP book value as of December 31, 2008. As a result of these purchases, our ownership interest in DaVinciRe increased to 37.6%. We expect our ownership in DaVinciRe to fluctuate over time.

Top Layer Re writes high excess non-U.S. property catastrophe reinsurance. Top Layer Re is owned 50% by State Farm Mutual Automobile Insurance Company (“State Farm”) and 50% by ROIHL, a wholly owned subsidiary of the Company. State Farm provides $3.9 billion of stop loss reinsurance coverage to Top Layer Re. We account for our equity ownership in Top Layer Re under the equity method of accounting and our proportionate share of its results are reflected in equity in (losses) earnings of other ventures in our consolidated statements of operations.

During 2007 and 2006, we participated in the formation of Starbound II and Starbound Re, respectively. These joint ventures provided capacity to the U.S. property catastrophe market, primarily for the 2007 and 2006 U.S. hurricane seasons, respectively. While these joint ventures were active we owned a minority interest share of the entities and accounted for them as investments in other ventures, under equity method. These joint ventures have subsequently terminated and have returned capital to the joint venture shareholders. Effective July 31, 2008 and August 31, 2007 we repurchased all of the issued and outstanding share capital of Starbound II and Starbound Re, respectively. We now account for these entities as consolidated subsidiaries.

In addition, in May 2006, the Company sold third-party capital in Tim Re, currently a wholly owned subsidiary, to provide additional capacity to accept property catastrophe excess of loss reinsurance business for the 2006 hurricane season, in return for a profit commission. In January 2007, the Company purchased all of the issued and outstanding equity securities of Tim Re. The Company accounts for Tim Re as a consolidated subsidiary.

Ventures works on a range of other customized reinsurance transactions. For example, we have participated, and continuously analyze other attractive opportunities to participate, in the market for cat-linked securities and derivatives. We also offer products through which we cede participations in the performance of our catastrophe reinsurance portfolio. We believe our products contain a number of customized features designed to fit the needs of our partners, as well as our risk management objectives.

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Strategic Investments.    Ventures also pursues strategic investments where, rather than assuming exclusive management responsibilities ourselves, we instead partner with other market participants. These investments are directed at classes of risk other than catastrophe, and at times may also be directed at non-insurance risks. We find these investments attractive both for their expected returns, and also because they provide us diversification benefits and information and exposure to other aspects of the market.

An example of these investments includes our investment in Tower Hill Insurance Group, LLC (“THIG”), Tower Hill Claims Services, LLC (“THCS”) and Tower Hill Claims Management, LLC (“THCM”) (collectively, the “Tower Hill Companies”), which operate primarily in the State of Florida. THIG is a managing general agency specializing in insurance coverage for site built and manufactured homes. THCS and THCM provide claim adjustment services through exclusive agreements with THIG. During the third quarter of 2008, we invested $50.0 million in the Tower Hill Companies, representing a 25.0% ownership interest, to expand our core platforms by obtaining ownership in an additional distribution channel for the Florida homeowners market and to enhance our relationships with other stakeholders.

Weather-Related Activities.    We undertake weather-related consulting and trading activities through our operating companies including Weather Predict, WP Consulting, AEF, RIM and RTL. Weather Predict, WP Consulting and AEF provide fee-based consulting services, sell weather-related information and forecasts, and engage in education, research and development, and loss mitigation activities, such as the RenaissanceRe Wall of Wind research facility located in southern Florida and the Stormstruck^® interactive weather experience at the Walt Disney World^® Resort in Florida. RTL sells certain financial products primarily to address weather risks, and engages in certain weather, energy and commodity derivatives trading activities. Principally through RTL, we expect that our participation will increase in the trading markets for securities and derivatives linked to energy, commodities, weather, other natural phenomena, and/or products or indices linked in part to such phenomena. As this unit grows, we are seeking to develop client and customer relationships, continuing to invest in operating and control environment systems and procedures, hire staff and develop and install management information and other systems. We are also taking numerous other steps to implement our strategies. Success in executing our strategies in respect of this unit requires us to develop new expertise in certain areas.

Business activities that appear in our consolidated underwriting results, such as DaVinci and certain reinsurance transactions, are included in our Reinsurance segment results; the results of our investments, such as Top Layer Re, ChannelRe Holdings Ltd. (“ChannelRe”), Starbound II, Platinum Underwriters Holdings Ltd. (“Platinum”), our weather-related activities and other ventures are included in the “Other” category of our segment results.

Competition

The markets in which we operate are highly competitive, and we believe that competition is increasing and becoming more robust. With respect to our Reinsurance operations, we believe that our principal competitors include other companies active in the Bermuda market including Ace Limited (“Ace”), Allied World Assurance Company Ltd. (“Allied World”), Arch Capital Group (“Arch”), Axis Capital Holdings (“Axis”), Endurance Specialty Holdings Ltd. (“Endurance”), Everest Re Group Ltd. (“Everest Re”), IPC Holdings, Ltd. (“IPC”), Montpelier Re Holdings Ltd. (“Montpelier Re”), PartnerRe Ltd. (“Partner Re”), Platinum, Transatlantic Holdings Inc. (“Transatlantic”), Validus Holdings, Ltd. (“Validus”), White Mountains Insurance Group Ltd. (“White Mountains”) and XL Capital Ltd. (“XL”) We also compete with certain Lloyd’s syndicates active in the London market, as well as with a number of other industry participants, such as American International Group, Inc. (“AIG”), Berkshire Hathaway (“Berkshire”), Hannover Re, Munich Re Group and Swiss Re. As our business evolves over time we expect our competitors to change as well.

While their participation in the reinsurance market may be decreasing somewhat due to the current issues facing the capital and credit markets, hedge funds, investment banks, exchanges and other capital market participants have also shown increasing interest over the past several years in entering the reinsurance market. For example, over the last several years there has been substantial growth in financial products such as exchange traded catastrophe options, cat-linked securities, catastrophe-linked derivative agreements and other financial products, intended to compete with traditional reinsurance. We believe that competition from non-traditional sources such as these will continue to increase in the future. Many of

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these new competitors have greater financial, marketing and management resources than we do. In addition, the tax policies of the countries where our clients operate, as well as government sponsored or backed catastrophe funds, affect demand for reinsurance. We are unable to predict the extent to which the foregoing new, proposed or potential initiatives may affect the demand for our products or the risks which may be available for us when providing coverage.

Individual Risk Segment

We define our Individual Risk segment to include underwriting that involves understanding the characteristics of the original underlying insurance policy. Our Individual Risk segment is managed by the Chief Executive Officer of the Glencoe Group. Our Individual Risk operations seek to identify and write classes of business which are attractively priced relative to the risk exposure and, particularly in the case of catastrophe-exposed risks, where our expertise in modeling, analytical tools and information systems may provide a competitive advantage.

The following table shows our Individual Risk gross premiums written by major type of business:

Our Individual Risk business is written by the Glencoe Group through its principal operating subsidiaries:

Our principal contracts include insurance policies and quota share reinsurance with respect to risks including: 1) multi-peril crop, which includes multi-peril crop insurance, crop hail and other named peril agriculture risk management products; 2) commercial property, which principally includes catastrophe-exposed commercial property products; 3) commercial multi-line, which includes commercial property and liability coverage, such as general liability, automobile liability and physical damage, building and contents, professional liability and various specialty products; and 4) personal lines property, which principally includes homeowners personal lines property coverage and catastrophe exposed personal lines property coverage.

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Our Individual Risk business is produced primarily through four distribution channels:

The following table shows the percentage of our Individual Risk gross premiums written by distribution channel:

We seek to identify and do business with third party program managers and quota share reinsurance cedants whom we believe utilize superior underwriting methodologies. We rely on these third parties for services including policy issuance, premium collection, claims processing, and compliance with various state laws and regulations including licensing. We seek to work closely with these partners, attempting to employ our analytical methodologies and, where appropriate, our expertise in catastrophe risk, to arrive at adequate pricing for the risks being underwritten. We seek to structure these relationships to provide value to both parties and meaningful protections to us. Historically, our strategy relating to program manager relationships has been to pursue a relatively small number of relatively large relationships. Currently, we are investing in initiatives to strengthen our operating platform, enhance our internal capabilities, and expand the resources we commit to our Individual Risk operations. In furtherance of these initiatives, in 2008 we completed the acquisition of substantially all the net assets of Agro National, LLC and Claims Management Services, Inc. (“CMS”).

We actively oversee our third party relationships through an operations review team at Glencoe Specialty Services and through the use of proprietary tools such as PACeR. Our operations review team includes professionals from diverse disciplines including actuarial science, accounting, claims management, law, regulatory compliance and underwriting. This group assists with the initial due diligence as well as the ongoing monitoring of these third parties. Our ongoing monitoring includes periodic audits of our third party program managers and third party administrators. In addition, for our large third party program managers

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we maintain an employee in an underwriting capacity on-site at the program manager to oversee the program manager’s compliance with our prescribed underwriting guidelines. We generally seek to have contractual performance standards for each of our programs and third party administrators whose compensation is subject to adjustment based on meeting these standards. The program operations team audits compliance with our underwriting guidelines and contractually agreed operating guidelines and performance standards. The program operations team also seeks to ensure corrective action is taken quickly to resolve issues identified during the audit process.

Competition

In our Individual Risk business, we face competition from independent insurance companies, subsidiaries or affiliates of major worldwide companies and others, some of which have greater financial and other resources than we do. Primary insurers compete on the basis of various factors including distribution channels, product, price, service, financial strength and reputation. Many of our Reinsurance segment competitors listed above also compete for the program business and quota share reinsurance we write within our Individual Risk segment. We believe that our principal competitors in the program business of our Individual Risk segment include operating subsidiaries of AIG, Arch, WR Berkley Corp. (“Berkley”), Berkshire, Endurance, Hannover Re and Zurich Financial Services Group (“Zurich”). In our Individual Risk business, we compete not only in respect of the insurance and reinsurance products we offer, but in respect of the contractual relationships with the third party program managers with whom we seek to partner. Increased competition in respect of our products could result in decreased premium rates, less attractive terms and conditions, and a decrease in our share of attractive programs. Increased competition in respect of our program manager partners, as to whom we are extremely selective and whose relationship we seek to tightly manage in a disciplined, consistent fashion, could result in less favorable terms and conditions in respect of our contractual arrangements with our partners, the loss of existing program manager relationships, or constrain our ability to add new relationships to our operations. In addition, there has been a growing trend of insurance and reinsurance companies acquiring third party program managers. Acquisitions of third party program managers with whom we do business by other insurance or reinsurance companies could result in us losing that program manager relationship. Any of the foregoing could adversely impact the growth and profitability of our Individual Risk segment.

RATINGS

Financial strength ratings are an important factor in respect of the competitive position of reinsurance and insurance companies. Rating organizations continually review the financial positions of our reinsurers and insurers. Over the last five years, we have received high claims-paying and financial strength ratings from A.M. Best Co. (“A.M. Best”), Standard & Poor’s Rating Agency (“S&P”), Moody’s and Fitch. These ratings represent independent opinions of an insurer’s financial strength, operating performance and ability to meet policyholder obligations, and are not an evaluation directed toward the protection of investors or a recommendation to buy, sell or hold any of our securities.

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Presented below are the ratings of our principal operating subsidiaries and joint ventures by segment and the senior debt ratings of RenaissanceRe as of February 11, 2009. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Capital Resources – Credit Ratings” for information about recent ratings actions.

A.M. Best.    “A+” is the second highest designation of A.M. Best’s sixteen rating levels. “A+” rated insurance companies are defined as “Superior” companies and are considered by A.M. Best to have a very strong ability to meet their obligations to policyholders. “A” is the third highest designation assigned by A.M. Best, representing A.M. Best’s opinion that the insurer has an excellent ability to meet its ongoing obligations to policyholders.

A.M. Best also assigns a financial size category to each of the insurance companies rated. “VII” represents a company with $50.0 – $100.0 million in capital, “XI” represents a company with $750.0 million – $1.0 billion in capital, “XII” represents a company with $1.0 – $1.25 billion in capital and “XIV” represents a company with $1.5 – $2.0 billion in capital. The outlooks for all companies rated by A.M. Best are stable.

In addition, A.M. Best assigns an issuer credit rating (“ICR”) to an entity which is an opinion on the ability of an entity to meet its senior obligations. RenaissanceRe has been assigned “a-” which is defined as “Excellent” by A.M. Best and the outlook is considered stable.

S&P.    The “AA” range (“AA+”, “AA”, AA-”), which has been assigned by S&P to Renaissance Reinsurance, Renaissance Europe and Top Layer Re, is the second highest rating assigned by S&P, and indicates that S&P believes the insurers have very strong financial security characteristics, differing only slightly from those rated higher. DaVinci has been assigned a rating of “A+” by S&P, indicating the insurer has strong financial security characteristics but is somewhat more likely to be affected by adverse business conditions than are insurers with higher ratings.

S&P also assigns an issuer credit rating to an entity which is an opinion on the credit worthiness of obligor with respect to a specific financial obligation. RenaissanceRe has been assigned an ICR of “A”, which is the third highest rating assigned by S&P.

Moody’s.    Moody’s Insurance Financial Strength Ratings and Moody’s Credit Ratings represent its opinions of the ability of insurance companies to pay punctually policyholder claims and obligations and senior unsecured debt instruments. Moody’s believes that insurance companies rated A2, such as Renaissance Reinsurance, and companies rated Baa1, such as RenaissanceRe, offer good financial security. However, Moody’s believes that elements may be present which suggest a susceptibility to impairment sometime in the future.

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Fitch.    Fitch Ratings Ltd. Issuer Financial Strength ratings provide an assessment of the financial strength of an insurance organization. Fitch believes that insurance companies rated “A”, such as Renaissance Reinsurance, have “Strong” capacity to meet policyholders and contract obligations on a timely basis with a low expectation of ceased or interrupted payments. Fitch also provides Long-Term Credit Ratings, used as a benchmark measure of probability of default; these were formerly described as Issuer Default Ratings. RenaissanceRe has been rated “BBB+”, meaning there are currently expectations of low credit risk.

While the ratings of our principal operating subsidiaries and joint ventures within our Reinsurance segment remain among the highest in our business, adverse ratings actions could have a negative effect on our ability to fully realize current or future market opportunities. In addition, it is common for our reinsurance contracts to contain provisions permitting our clients to cancel coverage pro-rata if our relevant operating subsidiary is downgraded below a certain rating level. Whether a client would exercise this right would depend, among other factors, on the reason for such a downgrade, the extent of the downgrade, the prevailing market conditions and the pricing and availability of replacement reinsurance coverage. Therefore, in the event of a downgrade, it is not possible to predict in advance the extent to which this cancellation right would be exercised, if at all, or what effect such cancellations would have on the financial condition or future operations, but such effect potentially could be material. To date we are not aware that we have experienced such a cancellation. Our ratings are subject to periodic review and may be revised or revoked by the agencies which issue them.

UNDERWRITING AND ENTERPRISE RISK MANAGEMENT

Underwriting

Our primary underwriting goal is to construct a portfolio of reinsurance and insurance contracts and other financial risks that maximizes our return on shareholders’ equity, subject to prudent risk constraints, and to generate long-term growth in tangible book value per common share plus accumulated dividends. We assess each new (re)insurance contract on the basis of the expected incremental return relative to the incremental contribution to portfolio risk.

Reinsurance

We have developed a proprietary, computer-based pricing and exposure management system, REMS^©. Since inception, we have continued to invest in and improve REMS^©, incorporating our underwriting experience, additional proprietary software and a significant amount of new industry data. REMS^© has analytic and modeling capabilities that help us to assess the risk and return of each incremental reinsurance contract in relation to our overall portfolio of reinsurance contracts. We combine the analyses generated by REMS^© with other information available to us, including our own knowledge of the client submitting the proposed program, to assess the premium offered against the risk of loss which the program presents. We have licensed and integrated into REMS^© a number of third party catastrophe computer models in addition to our base model, which we use to validate and stress test our base REMS^© results. REMS^© is most developed in analyzing catastrophe risks. We believe that our tools for assessing non-catastrophe risks are much less sophisticated and much less well developed than those for catastrophe risks. We continuously strive to improve our analytical techniques relating to non-catastrophe risks.

We believe that REMS^© is a more robust underwriting and risk management system than is currently commercially available elsewhere in the reinsurance industry. Before we bind a reinsurance risk, exposure data is typically gathered from clients and this exposure data is input into the REMS^© modeling system. We believe that the REMS^© modeling system helps us to analyze each policy on a consistent basis, assisting our determination of what we believe to be an appropriate price to charge for each policy based upon the risk that is assumed. REMS^© combines computer-generated statistical simulations that estimate event probabilities with exposure and coverage information on each client’s reinsurance contract to produce expected claims for reinsurance programs submitted to us. Our models employ simulation techniques to generate 40,000 years of loss activity, including events causing in excess of $600 billion in insured losses. From this simulation, we generate a probability distribution of potential outcomes for each policy in our portfolio and for our total portfolio. In part through the utilization of REMS^© we seek to compare our estimate of the expected returns in respect of a contract with the amount of capital that we notionally

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allocate to the contract based on our estimate of its marginal impact on our portfolio of risks. We have also customized REMS^© by including additional perils, risks and geographic areas that may not be captured in the commercially available models.

We periodically review the estimates and assumptions that are reflected in REMS^© and our other tools. For example, in the second half of 2005 we revised our assumptions relating to Atlantic basin hurricane frequency and severity. While many commercial catastrophe models base their frequency and severity distributions on the last 100 years of hurricane activity, assuming that this time frame is an appropriate framework on which to base estimates of the hurricane risk to which the insurance industry is exposed, we currently do not believe, based on our review of the scientific literature, private research, and discussions with climatologists, meteorologists and other weather scientists, including those at Weather Predict, that the past 100 years of data is reflective of current climatological risks. In particular, we believe there has been an increase in the frequency and severity of hurricanes that have the potential to make landfall in the U.S., potentially as a result of decadal ocean water temperature cyclical trends, a longer-term trend towards global warming, or both or other factors. We started using these revised assumptions in REMS^© to model and evaluate our portfolio of risk in the latter part of 2005. The process of updating all of the underlying risk models is continuous, and many of the assumptions involve significant judgment on our part, and further experience or scientific research may lead us to further adjust these assumptions. Changes in our modeled assumptions may impact from time to time the amount of capacity we are prepared to offer.

Our catastrophe reinsurance underwriters use REMS^© in their pricing decisions, which we believe provides them with several competitive advantages. These include the ability:

As part of our risk management process, we also use REMS^© to assist us with the purchase of reinsurance coverage for our own account.

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

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In order to estimate the risk profile of each line of specialty reinsurance, we establish probability distributions and assess the correlations with the rest of our portfolio. In lines with catastrophe risk, such as excess workers’ compensation and terrorism, we are leveraging directly off our skill in modeling for our property catastrophe reinsurance risks, and seek to appropriately estimate and manage the correlations between these specialty lines and our catastrophe reinsurance portfolio. For other classes of business, in which we believe we have little or no natural catastrophe exposure, and hence estimate we will have significantly less correlation with our property catastrophe reinsurance coverages, we derive probability distributions from a variety of underlying information sources, including recent historical experience, but with the application of judgment as appropriate. The nature of some of these businesses lends itself less to the analysis that we use for our property catastrophe reinsurance coverages, reflecting both the nature of available exposure information, and the impact of human factors such as tort exposure. We produce probability distributions to represent our estimates of the related underlying risks which our products cover, which we believe helps us to make consistent underwriting decisions and to manage our total risk portfolio. Overall, we undertake to construct conservative representations of the risks within our models, although there can be no assurance that this has occurred or will occur in the future.

Individual Risk

For our catastrophe-exposed business in our Individual Risk segment, we utilize proprietary modeling tools that have been developed in conjunction with the modeling and other resources utilized in our Reinsurance operations, as described above. We also combine these analyses with those of our Reinsurance segment to monitor our aggregate group catastrophic exposures. In general, we believe our techniques for evaluating catastrophe risk are better developed than those for other classes of risk.

For the business produced through third party program managers, we seek to carefully identify and evaluate potential third party program managers. When evaluating a potential new program manager, we consider numerous factors including: (i) whether the program manager can provide and help us analyze historic loss and other business data; (ii) whether the program manager will agree to accept a portion of their compensation based on the underwriting performance of their program and provide us with the other terms and conditions we require; (iii) our assessment of the integrity and experience of the program manager’s management team; (iv) the potential profitability of the program to us; and (v) the availability of our internal resources to appropriately conduct due diligence, negotiate and execute transaction terms, and provide the ongoing monitoring we require. In considering pricing for the products to be offered by the program manager, we evaluate the expected frequency and severity of losses, the costs of providing the necessary coverage (including the cost of administering policy benefits, sales and other administrative and overhead costs), the necessity of third party reinsurance, the estimated costs thereof and an anticipated margin for profit.

In addition to utilizing REMS^©, within our Individual Risk operations we have developed a proprietary information management and analytical database, PACeR, within which our data related to substantially all our business is maintained. With the use and development of PACeR, we are seeking to develop statistical and analytical techniques to evaluate the U.S. program lines of business we write within this segment and which over time we hope will create a competitive advantage. We believe that PACeR helps our clients better understand their business, thus creating value for them and us. For example, we believe that PACeR enables us to better identify and estimate the expected loss experience of particular products and PACeR is employed in the design of our products and the establishment of rates. We also seek to monitor pricing adequacy on our products by region, risk and producer. Subject to regulatory considerations, we seek to make timely premium and coverage modifications where we determine them to be appropriate.

We provide our third party program managers with written underwriting guidelines and monitor their compliance with our guidelines on a regular basis. Also, our contracts generally provide that a portion of the commission payable to our third party program managers will be on a retrospective basis, which is intended to permit us to adjust commissions based on our profitability and claims experience once an underwriting year is reasonably mature. We rely on our third party program managers to perform underwriting pursuant to these contractual guidelines, and believe we benefit from their superior local information and expertise in niche areas.

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Enterprise Risk Management

We have sought to develop and utilize a series of tools and processes that support a robust system of enterprise risk management (“ERM”) within our organization. We consider ERM to be a key process, overseen by our senior management team under the supervision of our Board of Directors, and implemented by personnel from across our organization. We believe that ERM helps us to identify potential events that may affect us, to quantify, evaluate and manage the risks to which we are exposed, and to provide reasonable assurance regarding the achievement of our objectives. We believe that effective ERM can provide us with a significant competitive advantage. We also believe that effective ERM assists our efforts to minimize the likelihood of suffering financial outcomes in excess of the ranges which we have estimated in respect of specific investments, underwriting decisions, or other operating or business activities. We believe that our risk management tools support our strategy of pursuing opportunities created by dislocated markets and help us to identify opportunities that we believe to be the most attractive. Our risk management tools allow us to monitor our capital position, on a consolidated basis and for each of our major operating subsidiaries, and these tools help us determine the appropriate amount of capital to support the risks that we have assumed in the aggregate and for each of our major operating subsidiaries. We believe that our risk management efforts are essential to our corporate strategy and our goal of achieving long-term growth in tangible book value per share plus accumulated dividends for our shareholders.

Our ERM framework comprises four key activities, as set forth below:

Underwriting and Other Quantifiable Risks.    We believe that our operations are subject to a number of key risks, including underwriting risk, credit risk and interest rate risk as they relate to investments, ceded reinsurance credit risk and strategic investment risk, each of which can be analyzed in substantial part through quantitative tools and techniques. Of these, we believe underwriting risk to be the most material to us. In order to understand, monitor, quantify and proactively assess underwriting risk, we seek to develop and deploy appropriate tools to, among other things, estimate the comparable expected returns on potential business opportunities, and estimate the impact that such incremental business could have on our overall risk profile. We use the tools and methods described above in “Underwriting” to seek to achieve these objectives.

Aggregate Risk Profile.    In part through the utilization of REMS^© and our other systems and procedures, we seek to analyze our in-force aggregate underwriting portfolio on a daily basis. We believe this capability, not only helps us to manage our aggregate exposures, but assists our efforts to rigorously analyze individual proposed transactions and evaluate them in the context of our in-force portfolio. This aggregation process captures line of business, segment and corporate risk profiles, calculates internal and external capital tests and explicitly models ceded reinsurance. Generally, additional data is added quarterly to our aggregate risk framework to reflect updated or new information or estimates relating to matters such as interest rate risk, credit risk, capital adequacy and liquidity. This information is used in day-to-day decision making for underwriting, investments and operations and is also reviewed quarterly from both a unit level and in respect of our consolidated financial position.

Operational Risk.    We believe we are subject to a number of additional risks arising out of operational, regulatory, and other matters, which we also seek to actively monitor and manage. This effort is coordinated by senior personnel including our Chief Financial Officer (“CFO”), General Counsel and Chief Compliance Officer (“CCO”), Corporate Controller and Chief Accounting Officer (“CAO”), Chief Administrative Officer, Chief Risk Officer (“CRO”) and Internal Audit, utilizing resources within the Company.

In an effort to identify and reduce operational and regulatory risk, we have significantly enhanced our control environment and have added additional finance, legal and back-office resources, to keep pace with the rate of growth experienced by the Company and will continue to do so in the future as appropriate. For example:

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Although financial reporting is a key area of our focus, other operational risks are addressed through our disaster recovery program, human resource practices such as motivating and retaining top talent, and our strict compliance, legal and tax protocols.

Controls and Compliance Committee.    As part of monitoring our risks, we have instituted a Controls and Compliance Committee. The Controls and Compliance Committee is comprised of our CFO, CCO, CAO, Chief Administrative Officer, CRO, staff compliance function and representatives from our business units. The Controls and Compliance Committee meets periodically to review and address corporate compliance policies and is charged with monitoring, implementing and educating the Company on control and compliance topics and initiatives. In addition, the Controls and Compliance Committee is charged with reviewing certain transactions that potentially contain complex and/or significant underwriting, tax, legal, accounting, regulatory, reputational or compliance issues.

Ongoing Development and Enhancement.    We frequently seek to increase the number of risks we monitor in part through quantitative risk distributions, even where we believe that such quantitative analysis is not as robust or well developed as our tools and models for measuring and evaluating other risks, such as catastrophe and market risks. We also seek to improve the methods by which we measure risks. We believe effective risk management is a continual process that requires ongoing improvement and development. We seek from time to time to identify new best practices or additional developments both from within our industry and from other sectors. We believe that our ongoing efforts to embed ERM throughout our organization are important to our efforts to produce and maintain a competitive advantage to achieve our corporate goals.

Our ERM is currently rated “excellent” by S&P which is S&P’s highest ERM rating.

GEOGRAPHIC BREAKDOWN

Our exposures are generally diversified across geographic zones, but are also a function of market conditions and opportunities. The Company’s largest exposure has historically been to the U.S. and Caribbean property catastrophe market, which represented 42.9% of the Company’s gross premiums written for the year ended December 31, 2008. A significant amount of our U.S. and Caribbean premium provides coverage against windstorms, mainly U.S. Atlantic hurricanes, as well as earthquakes and other natural and man-made catastrophes. The following table sets forth the percentage of our gross premiums written allocated to the territory of coverage exposure:

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RESERVES FOR CLAIMS AND CLAIM EXPENSES

Claims and claim expense reserves represent estimates, including actuarial and statistical projections at a given point in time, of the ultimate settlement and administration costs for unpaid claims and claim expenses arising from the insurance and reinsurance contracts we sell. We establish our claims and claim expense reserves by taking claims reported to us by insureds and ceding companies, but which have not yet been paid (“case reserves”), adding the costs for additional case reserves (“additional case reserves”) which represent our estimates for claims previously reported to us which we believe may not be adequately reserved as of that date, and adding estimates for the anticipated cost of claims incurred but not yet reported to us (“IBNR”).

The following table summarizes our claims and claim expense reserves by line of business and split between case reserves, additional case reserves and IBNR at December 31, 2008 and 2007:

The increase in the total amount of claims and claim expense reserves from December 31, 2007 to December 31, 2008, as shown in the table above, was principally a result of net claims and claim expenses incurred relating to current and prior years of $760.5 million, including hurricanes Gustav and Ike which made landfall during the third quarter of 2008, and partially offset by the net payment of claims in respect of current year losses of $346.8 million, relating primarily to hurricanes Gustav and Ike and our multi-peril crop insurance line of business, and the payment of prior year losses of $397.8 million, in particular the prior year losses resulting from the large hurricanes of 2005, European windstorm Kyrill (“Kyrill”), the United Kingdom (“U.K.”) flood losses and our specialty unit and Individual Risk segment losses. Our estimates of claims and claim expense reserves are not precise in that, among other matters, they are based on predictions of future developments and estimates of future trends and other variable factors. Some, but not all, of our reserves are further subject to the uncertainty inherent in actuarial methodologies and estimates. Because a reserve estimate is simply an insurer’s estimate at a point in time of its ultimate liability, and because there are numerous factors which affect reserves and claims payments but cannot be determined with certainty in advance, our ultimate payments will vary, perhaps materially, from our

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estimates of reserves. If we determine in a subsequent period that adjustments to our previously established reserves are appropriate, such adjustments are recorded in the period in which they are identified. During the twelve months ended December 31, 2008, changes to prior year estimated claims reserves increased our net income or reduced our net loss by $234.8 million (2007 – $233.2 million, 2006 – $136.6 million), excluding the consideration of changes in reinstatement premium, profit commissions, minority interest and income tax expense.

Our reserving methodology for each line of business uses a loss reserving process that calculates a point estimate for the Company’s ultimate settlement and administration costs for claims and claim expenses. We do not calculate a range of estimates. We use this point estimate, along with paid claims and case reserves, to record our best estimate of additional case reserves and IBNR in our financial statements. Under GAAP, we are not permitted to establish estimates for catastrophe claims and claim expense reserves until an event occurs that gives rise to a loss.

Reserving for our reinsurance claims involves other uncertainties, such as the dependence on information from ceding companies, which among other matters, includes the time lag inherent in reporting information from the primary insurer to us or to our ceding companies and differing reserving practices among ceding companies. The information received from ceding companies is typically in the form of bordereaux, broker notifications of loss and/or discussions with ceding companies or their brokers. This information can be received on a monthly, quarterly or transactional basis and normally includes estimates of paid claims and case reserves. We sometimes also receive an estimate or provision for IBNR. This information is often updated and adjusted from time-to-time during the loss settlement period as new data or facts in respect of initial claims, client accounts, industry or event trends may be reported or emerge in addition to changes in applicable statutory and case laws.

Included in our results for 2008 are $468.0 million of net claims and claim expenses incurred as a result of losses arising from hurricanes Gustav and Ike which struck the United States in the third quarter of 2008. Our estimates of losses from hurricanes Gustav and Ike, as well as other 2008 catastrophe events, are based on factors including currently available information derived from the Company’s preliminary claims information from certain clients and brokers, industry assessments of losses from the events, proprietary models, and the terms and conditions of our contracts. Given the magnitude and recent occurrence of these events, meaningful uncertainty remains regarding total covered losses for the insurance industry and, accordingly, several of the key assumptions underlying our loss estimates. In addition, actual losses from these events may increase if our reinsurers or other obligors fail to meet their obligations. Our actual losses from these events will likely vary, perhaps materially, from these current estimates due to the inherent uncertainties in reserving for such losses, including the preliminary nature of the available information, the potential inaccuracies and inadequacies in the data provided by clients and brokers, the inherent uncertainty of modeling techniques and the application of such techniques, the effects of any demand surge on claims activity and complex coverage and other legal issues.

Included in our results for 2007 are $157.5 million of net claims and claim expenses from Kyrill and the U.K. flood losses which occurred in 2007, as well as $60.0 million in estimated net losses associated with exposure to sub-prime related casualty losses. Estimates of these losses are based on a review of potentially exposed contracts, information reported by and discussions with counterparties, and the Company’s estimate of losses related to those contracts and are subject to change as more information is reported and becomes available. Such information is frequently reported more slowly, and with less initial accuracy, with respect to non-U.S. events such as Kyrill and the U.K. floods than with large U.S. catastrophe losses. In addition, the sub-prime related casualty net claims and claim expenses are based on underlying liability contracts which are considered “long-tail” business, and will therefore take many years before the actual losses are known and reported, which increases the uncertainty with respect to the estimate for ultimate losses for this event. The net claims and claim expenses from Kyrill, the U.K. floods and sub-prime related casualty losses are all attributable to the Company’s Reinsurance segment.

During 2005, we incurred significant losses from hurricanes Katrina, Rita and Wilma. Our estimates of these losses are based on factors including currently available information derived from claims information from our clients and brokers, industry assessments of losses from the events, proprietary models and the terms and conditions of our contracts. In particular, due to the size and unusual complexity of certain legal and

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claims issues, particularly but not exclusively relating to hurricane Katrina, meaningful uncertainty remains regarding total covered losses for the insurance industry and, accordingly, our loss estimates. Our actual losses from these events will likely vary, perhaps materially, from our current estimates due to the inherent uncertainties in reserving for such losses, the potential inaccuracies and inadequacies in the data provided by clients and brokers, the inherent uncertainty of modeling techniques and the application of such techniques, and complex coverage and other legal issues.

Because of the inherent uncertainties discussed above, we have developed a reserving philosophy which attempts to incorporate prudent assumptions and estimates, and we have generally experienced favorable development on prior year reserves in the last several years. However, there is no assurance that this will occur in future periods.

Our reserving techniques, assumptions and processes differ between our Reinsurance and Individual Risk segments, as well as between our property catastrophe reinsurance and specialty reinsurance businesses within our Reinsurance segment. Refer to our “Claims and Claim Expense Reserves Critical Accounting Estimates” discussion in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” for more information on the risks we insure and reinsure, the reserving techniques, assumptions and processes we follow to estimate our claims and claim expense reserves, and our current estimates versus our initial estimates of our claims reserves, for each of these units.

The following table represents the development of our GAAP balance sheet reserves for December 31, 1998 through December 31, 2008. This table does not present accident or policy year development data. The top line of the table shows the gross reserves for claims and claim expenses at the balance sheet date for each of the indicated years. This represents the estimated amounts of claims and claim expenses arising in the current year and all prior years that are unpaid at the balance sheet date, including additional case reserves and IBNR reserves. The table also shows the re-estimated amount of the previously recorded reserves based on experience as of the end of each succeeding year. The estimate changes as more information becomes known about the frequency and severity of claims for individual years. The “cumulative redundancy (deficiency) on net reserves” represents the aggregate change to date from the indicated estimate of the gross reserve for claims and claim expenses, net of losses recoverable on the second line of the table. The table also shows the cumulative net paid amounts as of successive years with respect to the net reserve liability. At the bottom of the table is a reconciliation of the gross reserve for claims and claim expenses to the net reserve for claims and claim expenses, the gross re-estimated liability to the net re-estimated liability for claims and claim expenses, and the cumulative redundancy (deficiency) on gross reserves.

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With respect to the information in the table below, it should be noted that each amount includes the effects of all changes in amounts for prior periods, including the effect of foreign exchange rates.