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RenaissanceRe Holdings Ltd. Reports Operating Results (10-Q)

April 29, 2010 | About:
10qk

10qk

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RenaissanceRe Holdings Ltd. (RNR) filed Quarterly Report for the period ended 2010-03-31.

Renaissancere Holdings Ltd. has a market cap of $3.34 billion; its shares were traded at around $55.62 with a P/E ratio of 4.5 and P/S ratio of 2. The dividend yield of Renaissancere Holdings Ltd. stocks is 1.8%.RNR is in the portfolios of Richard Pzena of Pzena Investment Management LLC, Arnold Schneider of Schneider Capital Management, Lee Ainslie of Maverick Capital, Jim Simons of Renaissance Technologies LLC, David Dreman of Dreman Value Management, Steven Cohen of SAC Capital Advisors, Chuck Royce of Royce& Associates, Jeremy Grantham of GMO LLC, Chris Davis of Davis Selected Advisers.

Highlight of Business Operations:

Book value per common share increased $2.18 to $53.86 at March 31, 2010, compared to $51.68 at December 31, 2009. Book value per common share plus accumulated dividends increased $2.43 to $62.99 at March 31, 2010, compared to $60.56 at December 31, 2009. The 4.2% growth in book value per common share was driven by our net income available to RenaissanceRe common shareholders of $165.0 million, less $14.8 million of common dividends and a $10.7 million decrease in accumulated other comprehensive income. During the first quarter of 2010, we repurchased 3.7 million common shares in open market transactions at an aggregate cost of $203.7 million and at an average share price of $54.78. Subsequent to March 31, 2010, and through the period ending April 26, 2010, we repurchased an additional 416 thousand common shares in open market transactions at an aggregate cost of $23.7 million and at an average share price of $56.85.

In the first three months of 2010, we generated $89.8 million of underwriting income, compared to $131.2 million in the first three months of 2009. The decrease in underwriting income was driven primarily by $23.6 million lower net premiums earned, a $24.8 million increase in operational expenses and partially offset by a $7.1 million decrease

Gross premiums written decreased $34.8 million, or 5.8%, to $563.5 million in the first three months of 2010, compared to $598.3 million in the first three months of 2009. The decrease in gross premiums written was primarily due to the less favorable pricing and terms experienced during the January 2010 renewals, compared to the January 2009 renewals in our catastrophe unit, where gross premiums written decreased $37.3 million in the first three months of 2010, compared to the first three months of 2009. The market conditions in our catastrophe unit were principally driven by softening market conditions as a result of the comparably low level of insured catastrophe losses in 2009, combined with the improved capital position of many participants in the (re)insurance industry in 2009. In addition, gross premiums written in our Insurance segment decreased $13.3 million, or 20.4%, to $51.9 million in the first three months of 2010, compared to $65.1 million in the first three months of 2009. The decrease was primarily due to our prior decisions to terminate several program manager relationships and a commercial property quota share contract as a result of softening market conditions, resulting in reduced commercial property and personal lines property gross premiums written. Our specialty reinsurance unit gross premiums written increased $3.0 million, or 4.1%, to $74.5 million in the first three months of 2010, compared to $71.5 million in the first three months of 2009.

Net premiums written decreased $30.9 million in the first three months of 2010 to $416.0 million from $446.8 million in the first three months of 2009. The decrease in net premiums written was primarily due to the decrease in gross premiums written noted above and offset by a $4.0 million decrease in ceded premiums written in the first three months of 2010 compared to the first three months of 2009. Net premiums earned decreased $23.6 million to $278.1 million in the first three months of 2010, compared to $301.7 million in the first three months of 2009, primarily due to a reduction in net premiums earned in our Insurance segment as discussed below.

Net claims and claim expenses decreased by $7.1 million to $79.1 million in the first three months of 2010, compared to $86.2 million in the first three months of 2009, primarily due to an increase in favorable development on prior years reserves which more than offset higher current accident year losses. Insured losses from catastrophes were significantly higher in the first three months of 2010, compared to the first three months of 2009, specifically as a result of the impact of the Chilean earthquake and Xynthia which occurred in the first quarter of 2010 and impacted our Reinsurance segment results, as discussed in more detail below, compared to the first three months of 2009, and, as a result, our current accident year net claims and claim expenses increased to $240.8 million in the first three months of 2010, compared to $78.9 million in the first three months of 2009.

We experienced $161.7 million of favorable development on prior years reserves in the first three months of 2010, compared to $7.3 million of unfavorable development on prior years reserves in the first three months of 2009, as discussed in more detail below.

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