RenaissanceRe Holdings Ltd. (RNR)

RNR 
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RenaissanceRe Holdings Ltd. (RNR)

Q4 2008 Earnings Call

February 12, 2009 09:30 AM ET

Executives

Peter Hill - Investor Relations

Neill A. Currie - President and Chief Executive Officer

Kevin J. O'Donnell - Senior Vice President of RenaissanceRe Holdings Ltd. and President of Renaissance Reinsurance Ltd.

William J. Ashley - President and Chief Executive Officer, Glencoe Group Holdings Limited

Fred R. Donner - Executive Vice President and Chief Financial Officer

Analysts

Vinay Misquith - Credit Suisse

Jay Cohen - Banc of America-Merrill Lynch

Terry Shu - Pioneer Investment

Presentation

Operator

Good morning. My name is Crystal and I will be your conference operator today. At this time, I would like to welcome everyone to the Renaissance Fourth Quarter and Full Year '08 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions). Thank you.

Mr. Hill you may begin your conference.

Peter Hill

Good morning. Thank you for joining our fourth quarter and full year 2008 financial results conference call. Yesterday, after the market closed, we issued our quarterly release. If you didn't get a copy, please call me at 212-521-4800 and we'll make sure to provide you with one.

There will be an audio replay of the call available at 1 PM Eastern Time today through February 26 at 8 PM. The replay can be accessed by dialing 800-642-1687 or 706-645-9291. The passcode you will need for both numbers is 79903761. Today's call is also available through the Investors section of www.renre.com and will be archived on RenaissanceRe's website through midnight on April 23, 2009.

Before we begin, I'm obliged to caution that today's discussion may contain forward-looking statements and actual results may differ materially from those discussed. Additional information regarding these factors shaping these outcomes can be found in RenaissanceRe's SEC filings to which we direct you.

With me to discuss today's results are Neill Currie, Chief Executive Officer; Fred Donner, Chief Financial Officer; Kevin O'Donnell, President of Renaissance Reinsurance Limited; and Bill Ashley, President and Chief Executive Officer of Glencoe Group Holdings Ltd. I'd now like to turn the call over to Neill. Neill?

Neill A. Currie

Thank you Peter, good morning everyone. In the year which featured the deepest financial market prices that most of us have ever seen and which like to num with top three for industry catastrophe losses, RenaissanceRe have seen strong underwriting results in a drawling attractive portfolio of business.

Our prudent risk management which underlies all that we do enabled us to avoid some of the more high portfolio upsets experienced by part of the industry, leaving us with a strong balance sheet and a strong capital position. This allowed us to continue delivering outstanding service to our clients and importantly places us in an ideal position to capitalize on improving market conditions in several segments of the business.

We then fit not only from the strong capital position of our wholly owned companies but also of Top Layer Re and the DaVinci Re for whom we also underwrite. The combined capital resources of these companies including our stock loss protection within Top Layer Re is in excess of $8 billion and all of these companies enjoy strong ratings from Standard & Poor's and A.M. Best, a testament to the consistency and success of our products, even at a time of great turmoil.

Top Layer and DaVinci are long term partnerships, in fact we just celebrated our 10th anniversary with our partners State Farm and Top Layer Re and DaVinci was the first new company that we started in Bermuda after 9/11.

This total capacity enables us to punch our way if you will in the marketplace. During the soft market conditions that prevailed early last year, we continue to built our franchise, identify opportunities and invest for the future. We extended our capabilities organically, made select acquisitions, and also made some important high caliber hires. These new capabilities have been integrated into our organization and are already generating important new business opportunities.

We did however sustain losses in our investment portfolio as result of the extraordinary dynamics of the financial downturn. This was the first year of negative investment returns in our history and the primary driver of this result was our moderate allocations to high-yield private equity and hedge funds. Our own personal philosophy has always been and continues to be to prioritize the preservation capital, liquidity, and diversification of risk and a large majority of our investments consist of highly rated fixed income securities. Our focus in investing our assets continues to be to support the underwriting risks we assume in our core businesses.

And certainly the dislocation in the capital markets is creating very attractive opportunities to grow our book while also making it more expensive to bring in new capital. Companies continue to seek ways to reduce their overall risk profile and so the reinsurance markets is an attractive alternative to accessing the capital markets.

The strength of our balance sheet, the strength of our relationships, and our infrastructure position us well to meet our clients needs. Kevin, Bill, and Fred will now provide more detail in each of their areas. Kevin.

Kevin J. O'Donnell

Thanks Neill and good morning everyone. In most years typically the renewal season starts quite early in September with discussions with our customers and the picture becomes clearer as we approach January 1st. This year was different and that the world changed drastically since these early discussions and correspondingly price expectations in the reinsurance business changed dramatically.

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