RenaissanceRe Holdings Ltd. (RNR)

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RenaissanceRe Holdings Ltd. (RNR)

Q4 2009 Earnings Call

February 10, 2010 9:30 am ET

Executives

David Lilly - IR

Neill Currie - CEO

Jeff Kelly - EVP & CFO

Kevin O'Donnell - EVP & Global CUO

Analyst

Josh Shanker - Deutsche Bank

Vinay Misquith - Credit Suisse

Doug Mewhirter - RBC Capital Markets

Brian Meredith - UBS

Ian Gutterman - Adage Capital

Jay Cohen -Bank of America-Merrill Lynch

Samuel Hoffman - Lincoln Square

Josh Smith - TIAA-CREF

Presentation

Operator

Ladies and gentlemen, thank you for standing by and welcome to the RenaissanceRe fourth quarter and full year 2009 financial results conference call. (Operator Instructions).

Thank you. I would now like to turn the conference over to Mr. David Lilly. Sir, you may begin your conference.

David Lilly

Good morning, thank you for joining our fourth quarter and full year 2009 financial results conference call. Yesterday, after the market close, 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 beginning at 2'o clock p.m. Eastern Time today through February 24, at 8'o clock PM. Replay can be accessed by dialing 800-642-1687 or 706-645-9291. The pass code you will need for both numbers is 48506457. 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 April 21st, 2010.

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 the 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; Jeff Kelly, Executive Vice President and Chief Financial Officer and Kevin O'Donnell, Executive Vice President and Global Chief Underwriting Officer.

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

Neill Currie

Thank you, David and good morning everyone, thank you for joining us. I am pleased to report we had a strong fourth quarter and a great year. As you know, we focus on building tangible book value per share plus the change in accumulated dividends and this year the increase was extraordinary, a 38%, that's not going to happen to all.

There are a number of factors that drove these results. While our reinsurance portfolio is quite attractive on an expected basis, our actual results were better than we anticipated due to an unusually light level of cap losses, favorable loss development and an ongoing rebound in the value of our invested assets.

While volatility is inherent to our business, our goal is to build a portfolio of risks with attractive expected returns and with the potential to achieve superior returns in good years like we had in 2009 and keep losses within manageable levels in high cap years.

Our success in building a great portfolio of business frankly is attributable to the terrific experienced team we have here at RenRe. We saw continued pressure on the top line during the January renewals as several major clients elected to purchase less reinsurance.

Compared to a year ago there is much less fear in the system today as improved investment performance and stronger balance sheets have increased the appetite for risk from both our clients and our competitors. In this environment we will focus on maintaining the quality of over book of business. Kevin O'Donnell is here to provide more color on that in few minutes.

As I'm sure you are aware we announced senior management changes in January, this was the result of two factors, our decision to consolidate our global underwriting operations and the announcement of retirement Jay Nichols who headed up our Ventures unit and Bill Ashley who ran our Individual Risk operations. I'd like to thank Jay and Bill for their valuable contributions to our company and wish them each the very best in the future.

Kevin O'Donnell, who was running our reinsurance operations, will now have responsibility for both our reinsurance and insurance businesses. This is in line with our strategy to further enhance the consistency and effectiveness of our global underwriting in general and to boost the performance of our Insurance segment in particular. Kevin has demonstrated his talent for building and managing strong disciplined underwriting teams and we are confident that our global underwriting operations will fly under his leadership.

Jon Paradine and Ross Curtis each with over 10 years at RenRe and reinsurance have both stepped up into broader roles. Jon has been named Chief Underwriting Officer of RenaissanceRe Ltd., and Ross has been named Chief Underwriting Officer of our European operations, which includes our Lloyds operation, both will continue to report to Kevin.

Aditya Dutt, who has been an [enterable] member of our Ventures unit since joining our company from the leading investment bank, has taken over from Jay as head of RenaissanceRe Ventures. He has ongoing responsibilities for Joint Ventures and Venture Capital, as well as responsibility for RenRe Energy Advisors Limited.

Aditya now reports to Jeff Kelly, whose overall responsibility for capital management will now also encompass strategic investments and joint ventures. These changes reflect our commitment to maximizing effectiveness and performance through the best possible alignment of businesses and responsibilities.

Looking ahead, our industry faces a number of challenges; pressure on pricing is expected to continue through 2010, we are closely monitoring legislative developments in Florida with the financial help of many primary companies' remains an issue. We're watching the evolution of the government's SRA agreement or Standard Reinsurance Agreement for 2011 underwriting year and its potentially impact on our multi-peril crop insurance business.

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