RenRe Gets Q4 Earnings Boost as 2004 Net Income Falls by $460 Million

RenaissanceRe Holdings Ltd., Bermuda’s premier property reinsurer, announced fourth quarter and full-year earnings that fully reflect both the strong market – net premiums written increased to $1.349 billion from $1.154 billion in 2003 – and the impact of the Florida hurricanes -claims expenses rose to $1.096 billion from $369 million in 2003.

As a result RenRe’s net income before payments on preferred shares for last year fell to $164.242 million from $624.793 million in 2003. Operating income for the fourth quarter was $189 Million, but totaled $110 million for the full year.

Net operating income per common share was $2.62 in the fourth quarter of 2004, compared to $2.14 per common share in the fourth quarter of 2003. Net income available to common shareholders was $191 million or $2.66 per common share in the quarter, compared to $161 million or $2.26 per common share for the same quarter of 2003.

Chairman and CEO James N. Stanard commented: “2004 stands out as a year of large catastrophe claims for our Company as a result of the third quarter hurricanes. However, I believe our underwriters made the right decisions to be overweight in certain classes of well-priced Florida business, and I expect to continue with our strategy of being overweight in areas where we like the risk/reward balance, and underweight in those areas where we don’t.”

“Our Company is now well established as a leader not only in Catastrophe Reinsurance, but also in various lines of Specialty Reinsurance and Individual Risk,” he continued.” We also continue to be pleased with the success of our joint venture and strategic investment activities.”

Stanard warned, however that it’s his belief that “we are moving into a softening market environment, where discipline will be critical for long-term success. We are responding as we have in the past, and are declining business that does not meet our hurdle rate. As a result of this, we project a decline of over 15 percent in gross managed Cat premium comparing 2005 with 2004, excluding reinstatement and back-up cover premium associated with the third quarter hurricanes. We still see new opportunities outside the Cat business, and project growth of over 10 percent in our Specialty business, and over 35 percent in our Individual Risk business.”

He also noted: “Given projected net losses to RenRe of over $40 million from the first quarter European storms and the softening market, we see growing downside pressures, although we are not adjusting earnings guidance at this time. Even in these softer market conditions, we expect a high teens return on equity. We have a track record of successfully navigating the softening market of the late 1990’s and are well positioned to do so again with our strong balance sheet, disciplined underwriting culture, and reputation for responsive service and prompt claims payments.”

The full earnings report is available on the company’s website at: www.renre.com.

RenRe will host a conference call today, Thursday, February 24, 2005 at 8:30 a.m. (EST) to discuss this release. Live broadcast of the conference call will be available through the Investor Section on the website.