RenaissanceRe Holdings Ltd. (RNR)

RNR 
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RenaissanceRe Holdings Ltd. (RNR)

Q1 2009 Earnings Call

April 30, 2009 9:30 am ET

Executives

Neill Currie - CEO

Fred Donner - CFO

Kevin O'Donnell - President of Renaissance Reinsurance

Bill Ashley - President and CEO of Glencoe Group Holdings Limited

Peter Hill - IR

Analyst

Vinay Misquith - Credit Suisse

Presentation

Operator

At this time, I would like to welcome everyone to the RenaissanceRe first quarter 2009 financial results conference call. (Operator Instructions). Mr. Hill, you may begin your conference.

Peter Hill

Good morning, thank you for joining our first quarter 2009 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 1:00 p.m. Eastern time today through May 14, at 8:00 PM. The replay can be accessed by dialing 800-642-1687 or 706-645-9291. The pass code you will need for both numbers is 94217224. Today's call is also available through the investor's section of www.renre.com and will be archived on RenaissanceRe's website through midnight on July 9, 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 Limited.

I'd now like to turn the call over to Neill. Neill?

Neill Currie

Thank you, good morning, everyone. Our results for the quarter reflect the tension and the dynamics of the marketplace we are in. Pricing continues to show every sign affirming, but our results are still impacted by the ongoing financial turmoil.

On the one hand, we generated a 15.5% operating return on average common equity. Thanks to fine execution from our Reinsurance segment and a light catastrophe quarter, and we are seeing a healthy flow of business, a testament to the strength of our capital position, ratings, reputation and relationships.

On the other hand, our earnings performance reflected continued pressure from the ongoing financial crisis, which reduced our overall investment return. Having said that, we believe our investment portfolio is appropriately positioned given the current climate.

It was also a difficult quarter for our Crop business, as Bill and Fred will explain later in the call. However, we continue to believe that our Crop business is well positioned for profitable growth and superior returns.

The firming of rates that we observed during the January 1, renewals has persisted in the reinsurance market. New possibilities are opening up in specialty and signs of hardening in the primary market are appearing.

We believe these trends will continue for some time. We have both the financial resources to meet the needs of our customers in our traditional lines of business and the ability to respond to opportunities that may be present in a broader range of attractive lines.

For example, after a rigorous period of capabilities development and preparation and with careful application of our traditional risk management discipline we have launched our commercial property business. You may have seen this morning that we are launching a Lloyd's syndicate.

This syndicate will enable us to respond more effectively to our customer's needs and develop new opportunities. Our team is excited about our entry into Lloyd's and we feel it will become an important part of our organization over the coming years.

As we have said on past calls, we believe we have core competencies that apply in a range of businesses and we will continue to develop new platforms where we see the potential for generating higher shareholder returns and profitable earnings growth.

We have always been proud of our risk management discipline and as we continue to build out our business, we want to make sure that our risk management function not only keeps pace, but remains best in class. To that end, Ian Branagan was promoted to the position of Chief Risk Officer this quarter. Ian has been instrumental in developing the enterprise risk management systems that have consistently earned us an excellent rating from S&P. He and his team are focused on ensuring that our risk management processes and practices continue to meet the needs of our evolving organization.

With June 1, approaching, much of our focus turns to Florida and the significant volume of business up for renewal on that date. There is quite a bit to play out there. Both from a market and a legislative standpoint. As always, we are carefully tracking events, but anticipate an increase in our Florida business at June 1.

To summarize, we are well positioned, focused and energized to capitalize on the opportunities that the hardening market is creating. We are ready to continue providing the quality of service and execution that our customers have come to expect, but also to evolve and grow for optimal performance over the coming years.

So, with that I'll turn the call over to Kevin.

Kevin O'Donnell

Thanks, Neill and good morning everyone. As we discussed in our last call we have seen an improvement in our market with the cap market leading other reinsurance lines. We continue to be the "first call" market for property cat and are increasing the flow of business for our specialty lines.

Read the rest of this transcript for free on seekingalpha.com