UNITED STATES SECURITIES AND EXCHANGE COMMISSION FORM 10-Q [ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________________ to __________________ Commission file number: 34-0-26512 RenaissanceRe Holdings Ltd. (Exact name of registrant as specified in its charter) Bermuda 98-013-8020 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) Renaissance House 8-12 East Broadway Pembroke, Bermuda HM 19 (Address of principal executive offices) (Zip Code) (441) 295-4513 (Registrant's telephone number, including area code) Not Applicable (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No --- --- The number of outstanding shares of RenaissanceRe Holding Ltd.'s common stock, par value US $1.00 per share as of June 30, 1998 was 22,264,485. Total number of pages in this report: 25
RenaissanceRe Holdings Ltd. INDEX TO FORM 10-Q <TABLE> <S> <C> Part I -- Financial Information Item 1 -- Financial Statements Consolidated Balance Sheets as of June 30, 1998 3 (Unaudited) and December 31, 1997 Unaudited Consolidated Statements of Operations for 4 the six months ended June 30, 1998 and 1997 Unaudited Consolidated Statements of Changes in Shareholders' 5 Equity for the six months ended June 30, 1998 and 1997 Unaudited Consolidated Statements of Cash Flows 6 for the six months ended June 30, 1998 and 1997 Notes to Unaudited Consolidated Financial Statements 7 Item II -- Management's Discussion and Analysis of 10 Results of Operations and Financial Condition Part II -- Other Information 18 Item 1 - Legal Proceedings Item 2 - Changes in Securities and Use of Proceeds Item 3 - Defaults Upon Senior Securities Item 4 - Submission of Matters to a Vote of Security Holders Item 5 - Other Information Item 6 - Exhibits and Reports on Form 8-K Signature - RenaissanceRe Holdings Ltd. 25 </TABLE>
Item 1 - Financial Statements RenaissanceRe Holdings Ltd. and Subsidiaries Consolidated Balance Sheets (United States Dollars) (in thousands, except per share amounts) <TABLE> <CAPTION> As at --------------------------------------------------- June 30, 1998 December 31, 1997 ------------------- ---------------------- Assets (Unaudited) <S> <C> <C> Fixed maturity investments available for sale, at fair value (Amortized cost $809,836 and $712,946 at June 30, 1998 and December 31, 1997, respectively) $ 804,558 $ 700,665 Equity securities at fair value (cost $5,808 and $24,229 at June 30, 1998 and December 31, 1997, respectively) 5,808 26,372 Short term investments 31,605 9,501 Cash and cash equivalents 87,823 122,929 ------------ ---------- Total investments and cash 929,794 859,467 Premiums receivable 126,686 56,568 Ceded reinsurance balances 51,877 17,454 Losses recoverable 74,169 - Accrued investment income 10,314 12,762 Deferred acquisition costs 18,496 5,739 Other assets 47,034 8,759 ------------ ---------- Total assets $ 1,258,370 $ 960,749 ============ ========== Liabilities, Minority Interests and Shareholders' Equity Liabilities Reserve for claims and claim adjustment expenses $ 202,839 $ 110,037 Reserve for unearned premiums 144,997 57,008 Bank loans payable 85,000 50,000 Reinsurance balances payable 73,104 21,778 Other 11,921 9,541 ------------ ---------- Total liabilities 517,861 248,364 ------------ ---------- Minority Interest - Company obligated mandatorily redeemable capital securities of a subsidiary trust holding solely junior subordinated debentures of the Company 100,000 100,000 Minority interest - Glencoe - 13,682 Shareholders' Equity Common shares 22,264 22,441 Additional paid-in capital 43,790 52,481 Unearned share grant compensation (9,607) (4,731) Accumulated other comprehensive income (net unrealized depreciation on investments) (5,278) (10,155) Retained earnings 589,340 538,667 ------------ ---------- Total shareholders' equity 640,509 598,703 ------------ ---------- Total liabilities, minority interests, and shareholders' equity $ 1,258,370 $ 960,749 ============ ========== Book value per Common Share $ 28.77 $ 26.68 ============ ========== Common Shares outstanding 22,264 22,441 ============ ========== </TABLE> The accompanying notes are an integral part of these financial statements -3-
RenaissanceRe Holdings Ltd. and Subsidiaries Consolidated Statements of Operations (United States Dollars) (in thousands, except per share amounts) (Unaudited) <TABLE> <CAPTION> Quarters Ended Year-to-Date ----------------------------------------- --------------------------------------- June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997 ------------------ ----------------- --------------- ------------------ <S> <C> <C> <C> <C> Revenues Gross Premiums Written $ 45,851 $ 34,804 $ 164,996 $ 155,163 ======== ======== ========= ========= Net premiums written $ 5,162 $ 20,576 $ 117,614 $ 138,224 Decrease (increase) in unearned premiums 41,879 30,887 (24,476) (30,860) -------- -------- --------- --------- Net premiums earned 47,041 51,463 93,138 107,364 Net investment income 12,629 12,216 26,258 24,341 Net foreign exchange gains (losses) (827) 479 (851) (1,164) Other income 347 -- 347 -- Net realized losses on investments (2,163) (302) (927) (136) -------- -------- --------- --------- Total revenues 57,027 63,856 117,965 130,405 -------- -------- --------- --------- Expenses Claims and claim adjustment expenses incurred 10,294 11,106 18,170 25,344 Acquisition expenses 5,436 5,937 11,828 12,315 Operating expenses 7,827 6,099 14,202 12,017 Corporate expenses 812 605 1,602 2,562 Interest expense 794 769 1,580 2,702 -------- -------- --------- --------- Total expenses 25,163 24,516 47,382 54,940 -------- -------- --------- --------- Income before minority interest and taxes 31,864 39,340 70,583 75,465 Minority Interest - Company Obligated Mandatorily Redeemable Capital Securities of a Subsidiary Trust holding solely Junior Subordinated Debentures of the Company 2,159 2,183 4,270 2,728 Minority interest - Glencoe 283 152 705 295 -------- -------- --------- --------- Income before taxes 29,422 37,005 65,608 72,442 Income tax expense 884 -- 1,396 -- -------- -------- --------- --------- Net income $ 28,538 $ 37,005 $ 64,212 $ 72,442 ======== ======== ========= ========= Earnings per Common Share - basic $ 1.28 $ 1.63 $ 2.88 $ 3.19 Earnings per Common Share - diluted $ 1.26 $ 1.59 $ 2.83 $ 3.12 Average shares outstanding - basic 22,237 22,700 22,267 22,740 Average shares outstanding - diluted 22,728 23,201 22,718 23,248 Claims and claim expense ratio 21.9% 21.6% 19.6% 23.6% Expense ratio 28.2% 23.4% 27.9% 22.7% -------- -------- --------- --------- Combined ratio 50.1% 45.0% 47.5% 46.3% ======== ======== ========= ========= </TABLE> The accompanying notes are an integral part of these financial statements -4-
RenaissanceRe Holdings Ltd. and Subsidiaries Consolidated Statements of Changes in Shareholders' Equity For the six months ended June 30, 1998 and 1997 (United States Dollars) (in thousands, except per share amounts) (Unaudited) <TABLE> <CAPTION> 1998 1997 ------------------------ ------------------------ <S> <C> <C> <C> <C> Retained earnings Balance -- January 1 $ 538,667 $ 422,061 Net income 64,212 $ 64,212 72,442 $72,442 Dividends paid (13,539) (11,438) ---------- ---------- Balance -- June 30 589,340 483,065 ---------- ---------- Accumulated other comprehensive income Balance -- January 1 (10,155) 1,577 Net unrealized gains on securities, net of adjustment (see disclosure) 4,877 4,877 5,384 5,384 --------- -------- Comprehensive income $ 69,089 $77,826 ---------- ========= ---------- ======== Balance -- June 30 (5,278) 6,961 ---------- ---------- Unearned share grant compensation & loans to officers Balance -- January 1 (4,731) (3,868) Share grants awarded (5,964) - Amortization and / or interest on loans 1,088 (122) ---------- ---------- Balance -- June 30 (9,607) (3,990) ---------- ---------- Common Shares Balance -- January 1 22,441 23,531 Restricted stock granted and exercise of options 173 172 Issuance of shares - 174 Repurchase of shares (350) (1,513) ---------- ---------- Balance -- June 30 22,264 22,364 ---------- ---------- Paid-in Capital Balance -- January 1 52,481 102,902 Restricted stock granted and exercise of options 6,606 (2,226) Issuance of shares - 5,764 Repurchase of shares (15,297) (51,945) ---------- ---------- Balance -- June 30 43,790 54,495 ---------- ---------- Total Equity $ 640,509 $ 562,895 ========== ========== Disclosure regarding net unrealized gains Net unrealized holding gains arising during period $ 5,804 $ 5,520 Less: net realized gains included in net income (927) (136) ---------- ---------- Net unrealized gains on securities $ 4,877 $ 5,384 ========== ========== </TABLE> The accompanying notes are an integral part of these financial statements. -5-
RenaissanceRe Holdings Ltd. and Subsidiaries Consolidated Statements of Cash Flows (United States Dollars in thousands) (Unaudited) <TABLE> <CAPTION> Year to date ----------------------------------- June 30, 1998 June 30, 1997 ------------- ------------- <S> <C> <C> Cash Flows from Operating Activities Net income $ 64,212 $ 72,442 Adjustments to reconcile net income to cash provided by operating activities Amortization and depreciation 2,540 520 Realized investment gains 927 136 Minority share of income 706 295 Change in: Reinsurance balances, net (24,292) (36,099) Deferred acquisition costs (7,140) (4,651) Reserve for claims and claim adjustment expenses, net 4,235 756 Reserve for unearned premiums, net 28,366 38,191 Other (25) 1,679 --------- ---------- Cash provided by operating activities 69,529 73,269 --------- ---------- Cash flows from investing activities Proceeds from sale of fixed income investments 340,078 278,100 Purchase of investments available for sale (385,811) (377,281) Proceeds from sale of equity investments 26,148 - Net purchases of short-term investments (18,312) - Purchase of minority interest's share in Glencoe (13,682) - Payment for puchase of Nobel, net of cash acquired (58,869) - --------- ---------- Cash used in investing activities (110,448) (99,181) --------- ---------- Cash flows from financing activities Proceeds from issuance of capital securities - 100,000 Proceeds from (repayment of) bank loan 35,000 (100,000) Dividends paid (13,539) (11,438) Purchase of Common Shares (15,647) (53,458) --------- ---------- Cash provided by (used in) financing activities 5,814 (64,896) --------- ---------- Net decrease in cash and cash equivalents (35,105) (90,808) Cash and cash equivalents, beginning of period 122,928 198,982 --------- ---------- Cash and cash equivalents, end of period $ 87,823 $ 108,174 ========= ========== </TABLE> The accompanying notes are an integral part of these financial statements -6-
Notes to Consolidated Financial Statements (Expressed in United States Dollars) (Unaudited) 1. The consolidated financial statements have been prepared on the basis of United States generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The consolidated financial statements include the accounts of RenaissanceRe Holdings Ltd. ("RenaissanceRe") and its subsidiaries, which are collectively referred to herein as the "Company". In the opinion of the Company's management, these financial statements reflect all the normal recurring adjustments necessary for a fair presentation of the Company's financial position at June 30, 1998 and December 31, 1997, and its results of operations, changes in shareholders' equity and cash flows for the six months ended June 30, 1998 and 1997. These consolidated financial statements should be read in conjunction with the 1997 audited consolidated financial statements and related notes thereto. Certain comparative information has been reclassified to conform to current presentation. Because of the seasonality of the Company's business the results of operations for any interim period will not necessarily be indicative of results of operations for the full fiscal year. 2. Significant Accounting Policies a) Earnings per share In 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 128, Earnings per Share. SFAS No. 128 replaced the previously reported primary and fully diluted earnings per share with basic and diluted earnings per share. All earnings per share amounts for all periods have been presented, and where necessary, restated to conform to the requirements of SFAS No.128. b) Comprehensive Income As of January 1, 1998 the Company adopted SFAS No. 130, "Reporting Comprehensive Income". SFAS No. 130 requires an enterprise to (a) classify items of other comprehensive income by their nature in a financial statement and (b) display the accumulated balance of other comprehensive income separately in the equity section of a statement of financial position. SFAS No. 130 requires net unrealized appreciation (depreciation) on the Company's available for sale investments, which were previously reported separately in shareholders' equity, to be included in other comprehensive income. Prior year financial statements have been reclassified to conform to the 1998 presentation. The adoption of this accounting statement had no impact on the Company's net income or shareholders' equity. Currently, other than the net unrealized gain on the Company's investments available for sale, there are no other Company balances which are required to be included as a component of other comprehensive income. -7-
3. Earnings per share The following table sets forth the computation of basic and diluted earnings per share. <TABLE> <CAPTION> ------------------------------------------------------------- ------------------------------------ ------- Quarter ended June 30, 1998 1997 ------------------------------------------------------------- --------------------- ---------------------- (in thousands of U.S. dollars except share and per share data) ------------------------------------------------------------- --------------------- ---------------------- <S> <C> <C> Numerator: Net income $ 28,538 $ 37,005 ===================== ====================== Denominator: Denominator for basic earnings per share - weighted average shares 22,236,500 22,700,224 Per share equivalents of employee stock options and restricted shares 491,732 501,075 --------------------- ---------------------- Denominator for diluted earnings per share - adjusted weighted average shares and assumed conversions 22,728,232 23,201,299 ===================== ====================== Basic earnings per share $1.28 $1.63 Diluted earnings per share $1.26 $1.59 ------------------------------------------------------------- ------------------------------------ ------- Six months to June 30, 1998 1997 ------------------------------------------------------------- --------------------- ---------------------- (in thousands of U.S. dollars except share and per share data) ------------------------------------------------------------- --------------------- ---------------------- Numerator: Net income $ 64,212 $ 72,442 ===================== ====================== Denominator: Denominator for basic earnings per share - weighted average shares 22,267,217 22,739,843 Per share equivalents of employee stock options and restricted shares 450,774 508,162 --------------------- ---------------------- Denominator for diluted earnings per share - adjusted weighted average shares and assumed conversions 22,717,991 23,248,005 ===================== ====================== Basic earnings per share $2.88 $3.19 Diluted earnings per share $2.83 $3.12 </TABLE> 4. The Board of Directors of the Company declared, and the Company paid, dividends of $.30 per share to shareholders of record on each of May 20 and February 18, 1998. On August 5, 1998, the Board of Directors of the Company declared a dividend of $.30 per share payable on September 2, 1998 to shareholders of record on August 19, 1998. -8-
5. Interest paid was $1.6 million for the six month period ended June 30, 1998 and $2.5 for the same period in 1997. On March 1, 1998 the Company paid a semi-annual dividend on the Capital Securities of $4.3 million. 6. In January 1998, the Company began to provide personal lines coverages through DeSoto Insurance Company ("DeSoto"), a wholly owned subsidiary of Glencoe. DeSoto is a special purpose Florida homeowners insurance company that is licensed to assume and renew homeowner policies from the Florida JUA, a state sponsored insurance company. 7. On June 25, 1998 the Company completed its acquisition of the U.S. operating subsidiaries of Nobel Insurance Limited, a Bermuda company ("Nobel Limited"), for approximately $54.1 million. The Company also provided Nobel Limited with a limited recourse loan of $8.9 million to support Nobel Limited's liquidation. The Company estimates that Nobel Limited, after liquidating its liabilities, will have the ability to repay $7.9 million of this loan. The gross assets and gross liabilities purchased in the transaction were $188.1 million and $155.9 million. In connection with the transactions the Company recognized approximately $23.9 million of goodwill, which included approximately $1 million of loan forgiveness and $1 million in costs associated with the transaction. Also, as part of the transaction, the Company's U.S. holding company borrowed $35 million from a syndicate of banks. This five year term loan has mandatory repayment provisions in years two through five. The banks also provided a $15 million revolving credit facility from which the Company borrowed $4 million on July 13, 1998. The principal U.S. operating subsidiaries of Nobel Limited, Nobel Insurance Company and IAS/CatCrew Inc., will continue to conduct business under their current names as subsidiaries of Renaissance U.S. Holdings, Inc. The principal businesses of Nobel Insurance Company, which is admitted in 50 states, are the service and underwriting of personal lines property coverage for low-value dwellings and commercial casualty risks for specialized industries. Contemporaneously with the Nobel acquisition, Nobel Insurance Company entered into a retrospective reinsurance agreement with respect to its casualty business with Inter-Ocean Reinsurance Company Ltd. IAS/CatCrew Inc. provides professional loss adjustment services to property insurance companies. Effective April 20, 1998, Nobel Insurance Company sold the renewal rights to its surety business for $3.5 million plus an additional contingent fee of up to an additional $3.5 million. The Company does not currently anticipate receiving any portion of this contingent fee. 8. In May 1998 the Company announced a $25 million share repurchase program. Through June 30, 1998 the Company had repurchased 350,000 shares under this program at total cost of $15.6 million. 9. On June 5, 1998, Glencoe Insurance Ltd. completed the repurchase from Underwriters Reinsurance Company of its 20 percent interest in Glencoe. The purchase price was $15.2 million. RenaissanceRe now owns 100% of the outstanding stock of Glencoe. -9-
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS For the quarter ended June 30, 1998 compared to the quarter ended June 30, 1997 For the quarter ended June 30, 1998, net income available to common shareholders was $28.5 million or $1.26 per share, compared to $37.0 million or $1.59 per share for the same quarter in 1997. Gross premiums written for the second quarter of 1998 increased to $45.8 million compared to gross written premiums of $34.8 million for the same quarter of 1997. The 31.6 percent increase in gross premiums written was the result of a 75.7 percent increase in premiums relating to new business, a 12.9 percent decrease relating to the Company not renewing certain coverages and a 31.2 percent decrease related to changes in coverage, participation level and pricing on certain renewed business. The quarterly increase in premiums related to new business is primarily the result of new business written by Renaissance Reinsurance. During 1998, the Company continued to purchase reinsurance to reduce its exposure to certain losses. During the second quarter of 1998, ceded premiums written were $40.7 million compared with $14.2 million for the same quarter in 1997. This higher level of ceded reinsurance reduces net premiums earned but management believes that purchases of reinsurance reduces the Company's level of risk. The table below sets forth the Company's combined ratio and components thereof for the quarters ended June 30, 1998 and 1997. <TABLE> <CAPTION> Quarters Ended -------------- June 30, -------- 1998 1997 ---- ---- <S> <C> <C> Loss ratio 21.9% 21.6% Expense ratio 28.2% 23.4% ----- ----- Combined ratio 50.1% 45.0% ===== ===== </TABLE> Claims and claim adjustment expenses incurred for the quarter ended June 30, 1998 were $10.3 million or 21.9 percent of net premiums earned. In comparison, claims and claim adjustment expenses for the quarter ended June 30, 1997 were $11.1 million or 21.6 percent of net premiums earned. Underwriting expenses are comprised of acquisition expenses and operational expenses. Acquisition expenses were $5.4 million for the quarter ended June 30, 1998 and $5.9 million in the same quarter of 1997. Operating expenses for the second quarter of 1998 increased to $7.8 million compared with $6.1 million for the same quarter of 1997. The primary cause for the increase in operating expenses was the continued development of the Company's primary operations. -10-
Net investment income, excluding realized investment gains and losses, increased to $12.6 million for the second quarter of 1998, compared to $12.2 million for the same period in 1997. Interest expense and minority interest for the quarters ended June 30, 1998 and 1997 increased to $3.2 million from $3.1 million. For the six months ended June 30, 1998 compared to the six months ended June 30, 1997 For the six months ended June 30, 1998, net income available to common shareholders was $64.2 million or $2.83 per share, compared to $72.4 million or $3.12 per share for the same six months in 1997. Gross premiums written for the first six months of 1998 increased 6.3 percent to $165.0 million compared to gross written premiums of $155.2 million for the same six months of 1997. The 6.3 percent increase in written premiums was the result of a 33.8 percent increase in premiums relating to new business, an 18.2 percent decrease relating to the Company not renewing certain coverages and a 9.3 percent decrease related to changes in coverage, participation level and pricing on certain renewed business. During 1998, the Company continued to purchase reinsurance to reduce its exposure to certain losses. During the first six months of 1998, ceded premiums written were $47.4 million compared with $16.9 million for the same period in 1997. This higher level of ceded reinsurance reduces net premiums earned but management believes that purchases of reinsurance significantly reduces the company's level of risk. The table below sets forth the Company's combined ratio and components thereof for the six months ended June 30, 1998 and 1997. <TABLE> <CAPTION> Six months ended ---------------- June 30, -------- 1998 1997 ---- ---- <S> <C> <C> Loss ratio 19.6% 23.6% Expense ratio 27.9% 22.7% ----- ----- Combined ratio 47.5% 46.3% ===== ===== </TABLE> Claims and claim adjustment expenses incurred for the six months ended June 30, 1998 were $18.2 million or 19.6 percent of net premiums earned. In comparison, claims and claim adjustment expenses for the six months ended June 30, 1997 were $25.3 million or 23.6 percent of net premiums earned. Underwriting expenses are comprised of acquisition expenses and operational expenses. Acquisition expenses were $11.8 million for the six months ended June 30, 1998 and $12.3 million in the same six months of 1997. Operating expenses for the first six months of 1998 increased to $14.2 million compared with $12.0 million for the same six months of 1997. The primary cause for the increase in operating expenses was the continued development of the Company's primary operations. -11-
Net investment income, excluding realized investment gains and losses, increased for the first six months of 1998 to $26.3 million, compared to $24.3 million for the same period in 1997. The increase in net investment income was largely the result of higher average invested assets which is primarily related to cash flows from operations. Interest expense and minority interest for the six months ended June 30, 1998 increased to $6.6 million from $5.7 million for the same period in 1997. The increase was related to increased minority interest earnings of Glencoe and the accrual on the $100.0 million of Capital Securities that were issued during the first quarter of 1997. FINANCIAL CONDITION General The Company provides reinsurance and insurance where risk of natural catastrophe represents a significant component of the overall exposure. The Company's results depend to a large extent on the frequency and severity of catastrophic events, and the concentration and coverage offered to clients impacted thereby. In addition, the Company writes other lines of insurance and reinsurance on a limited basis, and is actively exploring new opportunities. Liquidity and Capital Requirements As a holding company, RenaissanceRe relies on invested assets, investment income, cash dividends and permitted payments from its subsidiaries to make principal payments, interest payments, cash distributions on outstanding obligations and pay quarterly dividends, if any, to RenaissanceRe's shareholders. The payment of dividends by its subsidiaries to RenaissanceRe is, under certain circumstances, limited under Bermuda insurance law. The Bermuda Insurance Act 1978, amendments thereto and related regulations of Bermuda (the "Act"), requires the subsidiaries to maintain certain measures of solvency and liquidity. As at June 30, 1998 the statutory capital and surplus of the Company's subsidiaries was $640.0 million, and the amount required to be maintained was $170.5 million. The Company's operating subsidiaries have historically produced sufficient cash flows to meet expected claims payments and operational expenses and to provide dividend payments to RenaissanceRe. The subsidiaries also maintain a concentration of their investments in high quality liquid securities, which management believes will provide sufficient liquidity to meet claims payments should the need arise. During the second quarter of 1998, Glencoe purchased the 20 percent minority interest in Glencoe held by Underwriters Re for approximately $15.2 million. As a result of the purchase of Glencoe's shares from Underwriters Re, Glencoe is now wholly-owned by RenaissanceRe. Under the terms of its agreement to acquire the operating subsidiaries of Nobel Insurance Limited, the Company paid $54.1 million in cash to consummate the purchase, and provided approximately $8.9 million of limited recourse financing, in exchange for a promissory note from Nobel Insurance Limited, to enable Nobel Insurance Limited to support certain of its obligations in the liquidation of its remaining operations. As part of the transaction the Company's U.S. holding company borrowed $35 million from a syndicate of banks. This five year term loan has -12-
mandatory repayment provisions in years two through five. The banks also provided a $15 million revolving credit facility from which the Company borrowed $4 million on July 13, 1998. Both the loan and the credit facility bear interest at a spread above LIBOR and are guaranteed by RenaissanceRe. The Company anticipates that its primary insurance operations, including Glencoe, DeSoto and Nobel, will become an increasingly important element of the Company over time. The Company currently believes that internally generated capital will be sufficient to support its reinsurance and insurance businesses, however external financing may be utilized to finance significant transactions. From time to time, the Company may consider opportunistic diversification into new ventures, either through organic growth or the acquisition of other companies or books of business. In evaluating such new ventures, the Company seeks an attractive return on equity, the ability to develop or capitalize on a competitive advantage and opportunities that will not detract from its core reinsurance operations. Accordingly, the Company regularly reviews strategic transaction opportunities and periodically engages in discussions regarding possible transactions. However, currently the Company has no definitive agreements with respect to any material transaction.. Cash flows from operating activities for the first six months of 1998 resulted principally from premium and investment income, net of paid losses, acquisition costs and underwriting expenses. Cash flows from operations in the first six months of 1998 were $69.5 million, compared to $73.2 million for the same period in 1997. The Company has produced cash flows from operations in the first six months of 1998, and the full years of 1997 and 1996 significantly in excess of its commitments. To the extent that capital is not utilized in the Company's reinsurance business, the Company will consider using such capital to invest in new opportunities or will consider returning such capital to its shareholders. Because of the potential high severity and low frequency of losses on the coverages written by the Company, and the seasonality of the Company's business, it is not possible to accurately predict the Company's future cash flows from operating activities. As a consequence, cash flows from operating activities may fluctuate, perhaps significantly, between individual quarters and years. The Company has assumed risk through catastrophe and weather linked securities and derivative instruments. The Company may in the future also utilize other derivatives. To date the Company has not experienced any losses from such securities or derivatives. Reserves The Company's policy is to establish claim reserves for the settlement costs of all claims and claim adjustment expenses incurred by the Company when an event occurs. During the quarter ended June 30, 1998 the Company incurred claims of $10.3 million and paid losses of $6.6 million. Due to the high severity and low frequency of losses related to the property catastrophe insurance and reinsurance business, there can be no assurance that the Company will continue to experience this level of losses. Claim reserves represent estimates, including actuarial and statistical projections at a given point in time, of an insurer's or reinsurer's expectations of the ultimate settlement and administration costs of claims incurred, and it is possible that the ultimate liability may exceed or be less than -13-
such estimates. Such estimates are not precise in that, among other things, they are based on predictions of future developments and estimates of future trends in claim severity and frequency and other variable factors such as inflation. During the claim settlement period, it often becomes necessary to refine and adjust the estimates of liability on a claim either upward or downward. Even after such adjustments, ultimate liability may exceed or be less than the revised estimates. Reserves for claims and claim expenses may include reserves for unpaid reported claims and claim expenses and reserves for estimated losses that have been incurred but not reported to the Company. Such reserves are estimated by management based upon reports received from ceding companies, as supplemented by the Company's own estimates of reserves on such reported losses as well as reserves for losses that are incurred but not reported. The Company's reserve estimates are continually reviewed and, in accordance with GAAP, as adjustments to these reserves become necessary, such adjustments are reflected in current operations. Capital Resources & Shareholders' Equity The total capital resources of the Company as at June 30, 1998 and December 31, 1997 was as follows: <TABLE> <CAPTION> - -------------------------------------------------------------------------------------- June 30, December 31, (in thousands) 1998 1997 - -------------------------------------------------------------------------------------- <S> <C> <C> Term loan payable $ 35,000 $ - Revolving Credit Facility-- borrowed 50,000 50,000 Revolving Credit Facility-- unborrowed 165,000 150,000 Minority interest-- Company obligated mandatorily redeemable capital securities of a subsidiary trust 100,000 100,000 Shareholders' Equity 640,509 598,703 - -------------------------------------------------------------------------------------- TOTAL CAPITAL RESOURCES $990,509 $898,703 ====================================================================================== </TABLE> During the first six months of 1998, shareholders' equity increased by $41.8 million, from $598.7 million at December 31, 1997 to $640.5 million at June 30, 1998. The significant components of the increase included net income from continuing operations of $64.2 million, partially offset by the payment of dividends of $13.5 million and the purchase of common stock of $15.6 million. In May 1998 the Company announced a $25 million share repurchase program. Through June 30, 1998 the Company had repurchased 350,000 shares under this program at total cost of $15.6 million. Investments The table below shows the aggregate amounts of investments available for sale, equity securities and cash and cash equivalents comprising the Company's portfolio of invested assets: -14-
<TABLE> <CAPTION> - -------------------------------------------------------------------------------------------- June 30, December 31 (in thousands) 1998 1997 - -------------------------------------------------------------------------------------------- <S> <C> <C> Investments available for sale, at fair value $ 804,558 $ 700,665 Equity securities, at fair value 5,808 26,372 Cash and cash equivalents 119,428 132,430 - -------------------------------------------------------------------------------------------- TOTAL INVESTED ASSETS $ 929,794 $ 859,467 ============================================================================================ </TABLE> The growth in the Company's portfolio of invested assets for the six months ended June 30, 1998 primarily resulted from net cash provided by operating activities of $69.5 million. The Company's current investment guidelines call for the invested asset portfolio, including cash and cash equivalents, to have at least an average AA rating as measured by Standard & Poor's Ratings Group. At June 30, 1998, the fixed income portfolio had a dollar weighted average rating of AA, an average duration of 2.6 years and an average yield to maturity of 6.0 percent, after investment expenses. All fixed income securities in the Company's investment portfolio are classified as securities available for sale and are carried at fair value. Any unrealized gains or losses as a result of changes in fair value over the period such investments are held are not reflected in the Company's statement of operations, but rather are reflected in accumulated other comprehensive income in the consolidated statement of shareholders' equity, in accordance with SFAS No. 115 and 130. As at June 30, 1998 the Company held investments and cash totaling $929.8 million with net unrealized depreciation of $5.3 million. The Company's investment portfolio is subject to the risks of declines in realizable value. The Company attempts to mitigate this risk through the diversification and active management of its portfolio. At June 30, 1998, $7.6 million of cash and cash equivalents were invested in currencies other than the U.S. dollar, which represented less than 1.0 percent of the Company's invested assets. Effects of Inflation The potential exists, after a catastrophe loss, for the development of inflationary pressures in a local or regional economy. The anticipated effects on the Company are implicitly considered in the Company's catastrophe loss models. The effects of inflation are also considered in pricing and in estimating reserves for unpaid claims and claim adjustment expenses. The actual effects of this post event inflation on the results of the Company cannot be accurately known until claims are ultimately settled. Year 2000 Certain computer programs and/or software may recognize a date using "00" as the year 1900 rather than the year 2000, which could result in miscalculations or system failures. The Company has completed an assessment of its business applications and computer systems, and believes that -15-
all critical business applications and systems will function properly with respect to dates in the year 2000 and thereafter. The Company is in the process of evaluating its potential exposures from the non-compliance, if any, of its vendors' and customers' systems with the Year 2000. There can be no assurance that the systems of its vendors and customers, on which the Company relies for supporting information, will be timely converted and would not have an effect on the Company's business operations. Currently, none of the Company's reinsurance or insurance policies specifically provides coverage for Year 2000 losses, and the Company does not intend to provide coverage for these losses. However, in the future, it is possible that the Company may elect to provide such coverage, or that certain of the Company's policies could be held to cover such losses. If so, there can be no assurance that such losses would not have a material adverse effect on the Company's future results of operations. The Company anticipates completing the Year 2000 evaluation prior to December 31, 1998 and it is anticipated that any future costs associated with the Year 2000 project will not be material and accordingly not have an adverse effect on the future results of operations. Current Outlook It is anticipated that the competitive pressures that have existed since 1995 will continue through 1998. The Company anticipates that these pressures will continue to suppress the growth in premiums from property catastrophe reinsurance contracts. However, although no assurance can be given, the Company believes that opportunities in certain select markets will continue to exist which, because of the Company's competitive advantages, including its technological capabilities and its relationships with leading brokers and ceding companies, will enable the Company to find additional opportunities in the property catastrophe reinsurance business that otherwise would not be available. The Company has entered the primary insurance business, focusing particularly on catastrophe exposed business, with a view to leveraging the risk assessment skills of the core reinsurance business. Through Nobel, the Company's business activities now also include liability insurance. In addition, the Company from time to time considers other new business opportunities unrelated to its business in catastrophe exposed insurance and reinsurance. Note on Forward-Looking Statements This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. Forward-looking statements are statements other than historical information or statements of current condition. Some forward-looking statements may be identified by use of terms such as "believes," "anticipates," "intends," or "expects." These forward-looking statements relate, among other things, to the plans and objectives of the Company for future operations. In light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this report should not be considered as a representation by the Company or any other person that the objectives or plans of the Company will be achieved. Numerous factors could cause the -16-
Company's actual results to differ materially from those in the forward-looking statements, including the following: (i) the occurrence of catastrophic events with a frequency or severity exceeding the Company's estimates; (ii) a decrease in the level of demand for property catastrophe reinsurance, or increased competition owing to increased capacity of property catastrophe reinsurers; (iii) any lowering or loss of one of the financial or claims-paying ratings of the Company or one or more of its subsidiaries; (iv) actions of competitors; (v) loss of services of any one of the Company's key executive officers; (vi) the passage of federal or state legislation subjecting Renaissance Reinsurance to supervision or regulation in the United States; (vii) challenges by insurance regulators in the United States to Renaissance Reinsurance's claim of exemption from insurance regulation under the current laws; (viii) changes in economic conditions, including currency rate conditions; or (ix) a contention by the United States Internal Revenue Service that the Company or Renaissance Reinsurance is engaged in the conduct of a trade or business within the U.S. The foregoing review of important factors should not be construed as exhaustive; the Company undertakes no obligation to release publicly the results of any future revisions it may make to forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. -17-
Part II -- OTHER INFORMATION Item 1 -- Legal Proceedings None Item 2 -- Changes in Securities and Use of Proceeds None Item 3 -- Defaults Upon Senior Securities None Item 4 -- Submission of Matters to a Vote of Security Holders: (a) The registrant's 1998 Annual General Meeting of Shareholders was held on May 5, 1998. (b) Proxies were solicited by Registrant's management pursuant to Regulation 14A under the Securities Exchange Act of 1934; there was no solicitation in opposition to management's nominees as listed in the proxy statement. Each of the Directors was re-elected to the Board. (c) The following matters were voted upon and approved at the Annual General Meeting with the voting results as indicated: 1. To elect eleven directors of the Company to serve for the terms indicated and until their successors are duly elected and qualified, as follows: (x) four of the eleven directors to serve until the Company's 1999 annual general meeting of shareholders; (y) three of the eleven directors to serve until the Company's 2000 annual general meeting of shareholders; and (z) four of the eleven directors to serve until the Company's 2001 annual general meeting of shareholders. <TABLE> <CAPTION> Nominee Votes For Withheld ------- --------- -------- <S> <C> <C> Arthur S. Bahr 18,590,490 2,962,783 Thomas A. Cooper 18,590,490 2,962,783 Edmund B. Greene 18,589,990 2,963,283 Daniel Hale 18,590,090 2,963,183 Gerald L. Igou 18,590,090 2,963,183 Kewsong Lee 18,589,990 2,963,283 Howard H. Newman 18,589,990 2,963,283 Scott E. Pardee 18,590,490 2,962,783 James N. Stanard 18,590,490 2,962,783 John C. Sweeney 18,589,990 2,963,283 David A. Tanner 18,589,990 2,963,283 </TABLE> 2. To amend the Company's Bye-Laws to provide for a classified Board of Directors. -18-
<TABLE> <CAPTION> Votes For Against Withheld --------- ------- -------- <S> <C> <C> 12,288,851 4,849,718 4,414,704 </TABLE> 3. To amend the Company's Bye-Laws to provide that Directors may be removed only for cause upon the affirmative vote of the holders of not less than 66-2/3% of the voting rights attached to all issued and outstanding capital shares of the Company entitled to vote thereon. <TABLE> <CAPTION> Votes For Against Withheld --------- ------- -------- <S> <C> <C> 11,936,773 5,201,234 4,415,266 </TABLE> 4. To amend the Company's Bye-Laws to fix the size of the Board at eleven directors and to authorize the Board, at its discretion, to expand the size of the Board to twelve directors and to fill any additional position so created. <TABLE> <CAPTION> Votes For Against Withheld --------- ------- -------- <S> <C> <C> 16,875,540 1,794,430 2,883,303 </TABLE> 5. To amend the Company's Bye-Laws to provide that shareholders of record may nominate persons for election as director at an annual or special general meeting of shareholders only if prior written notice signed by no less than 20 shareholders holding in the aggregate not less than 10% of the outstanding paid up share capital of the Company stating such shareholders' intent to make such nomination has been given to the Secretary of the Company: (a) in the case of an annual general meeting, not less than 60 days nor more than 90 days prior to the anniversary date of the immediately preceding annual general meeting of shareholders; and (b) in the case of a special general meeting called for the purpose of electing directors, not later than the close of business on the tenth day following the day on which notice of the date of the special general meeting was mailed or public disclosure of the date of the special general meeting was made, whichever first occurs. <TABLE> <CAPTION> Votes For Against Withheld --------- ------- -------- <S> <C> <C> 12,588,366 4,551,809 4,413,098 </TABLE> 6. To amend the Company's Bye-Laws to provide that business may be properly introduced by the shareholders at an annual general meeting where such business is not brought by or at the direction of the Board, in addition to any other applicable requirements, only if written notice thereof containing certain prescribed information concerning such proposal is deposited with the Secretary of the Company by shareholders representing at least one-twentieth of the Company's outstanding voting rights or constituting not less than 100 persons at least six weeks prior to the date of the annual general meeting whichever first occurs. <TABLE> <CAPTION> Votes For Against Withheld --------- ------- -------- <S> <C> <C> 12,551,585 4,587,968 4,413,720 </TABLE> -19-
7. To amend the Company's Bye-Laws to provide that not less than 60 nor more than 90 days notice shall be given of a special general meeting properly requisitioned by shareholders holding at least 10% of the outstanding paid up share capital of the Company. <TABLE> <CAPTION> Votes For Against Withheld --------- ------- -------- <S> <C> <C> 12,800,686 4,337,634 4,414,953 </TABLE> 8. To amend the Company's Bye-Laws to prohibit holders of the Company's capital shares, other than certain exempted persons, from obtaining or exercising more than 9.9% of the voting rights attached to all issued and outstanding capital shares of the Company. <TABLE> <CAPTION> Votes For Against Withheld --------- ------- -------- <S> <C> <C> 12,245,618 4,895,595 4,412,060 </TABLE> 9. To amend the Company's Bye-Laws to require the affirmative vote of at least 66-2/3% of the outstanding voting rights attached to all issued and outstanding capital shares of the Company entitled to vote thereon to amend, repeal or adopt any provision inconsistent with any of Proposals 2, 3, 4, 5, 6, 7 or 8 and the amendment contemplated by this Proposal. <TABLE> <CAPTION> Votes For Against Withheld --------- ------- -------- <S> <C> <C> 11,165,498 5,975,680 4,412,095 </TABLE> 10. To amend the Company's Memorandum of Association to increase the Company's authorized capital to an aggregate of 325,000,000 shares, consisting of 225,000,000 Common Shares and 100,000,000 Preference Shares, in order to facilitate the potential adoption by the Board in the future of a shareholder rights plan. <TABLE> <CAPTION> Votes For Against Withheld --------- ------- -------- <S> <C> <C> 13,472,537 5,197,333 2,883,403 </TABLE> 11. To amend the RenaissanceRe Holdings Ltd. Amended and Restated Non-Employee Directors Stock Plan (the "Directors Plan") which would (i) increase the number of authorized shares available for issuance thereunder from 100,000 Common Shares to 200,000 Common Shares, and (ii) provide that any shares which are tendered to or withheld by the Company under the Directors Plan in connection with the exercise of options granted thereunder or the payment of related withholding taxes shall again become available for grant thereunder. <TABLE> <CAPTION> Votes For Against Withheld --------- ------- -------- <S> <C> <C> 18,374,051 290,694 2,888,528 </TABLE> 12. To appoint independent auditors of the Company for the 1998 fiscal year to serve until the Company's 1999 annual general meeting of shareholders and to refer to the Board the determination of the auditors' remuneration. -20-
<TABLE> <CAPTION> Votes For Against Withheld --------- ------- -------- <S> <C> <C> <C> 18,663,299 7,917 2,882,057 </TABLE> 13. In accordance with the Company's Bye-Laws, to vote on a proposal as the holder of all outstanding capital shares of Renaissance Reinsurance Ltd. ("Reinsurance"), to elect eleven directors of Reinsurance to serve for the terms indicated and until their successors are duly elected and qualified, as follows: (x) four of the eleven directors to serve until the Reinsurance 1999 annual general meeting of shareholders; (y) three of the eleven directors to serve until the Reinsurance 2000 annual general meeting of shareholders; and (z) four of the eleven directors to serve until the Reinsurance 2001 annual general meeting of shareholders. <TABLE> <CAPTION> Nominee Votes For Withheld ------- --------- -------- <S> <C> <C> Arthur S. Bahr 18,590,490 2,962,783 Thomas A. Cooper 18,590,490 2,962,783 Edmund B. Greene 18,589,990 2,963,283 Daniel Hale 18,590,090 2,963,183 Gerald L. Igou 18,590,090 2,963,183 Kewsong Lee 18,589,990 2,963,283 Howard H. Newman 18,589,990 2,963,283 Scott E. Pardee 18,590,490 2,962,783 James N. Stanard 18,590,490 2,962,783 John C. Sweeney 18,589,990 2,963,283 David A. Tanner 18,589,990 2,963,283 </TABLE> 14. In accordance with the Company's Bye-Laws, to vote on a proposal as the holder of all outstanding capital shares of Reinsurance, to amend the Reinsurance Bye-Laws to provide for a classified board of directors of Reinsurance (the "Reinsurance Board"). <TABLE> <CAPTION> Votes For Against Withheld --------- ------- -------- <S> <C> <C> 12,338,711 4,800,143 4,414,419 </TABLE> 15. In accordance with the Company's Bye-Laws, as the holder of all outstanding capital shares of Reinsurance, to amend the Reinsurance Bye-Laws to fix the size of the Reinsurance Board at eleven directors and to authorize the Reinsurance Board, at its discretion, to expand its size to twelve directors and to fill any additional position so created. <TABLE> <CAPTION> Votes For Against Withheld --------- ------- -------- <S> <C> <C> 16,696,465 1,971,805 2,885,003 </TABLE> 16. In accordance with the Company's Bye-Laws, as the holder of all outstanding capital shares of Reinsurance, to appoint independent auditors of Reinsurance for the 1998 fiscal year to serve until the 1999 annual general meeting of shareholders of Reinsurance and to refer to the Reinsurance Board the determination of the auditors' remuneration. <TABLE> <CAPTION> Votes For Against Withheld --------- ------- -------- <S> <C> <C> 18,660,824 8,867 2,883,582 </TABLE> -21-
17. RESOLVED, in accordance with the Company's Bye-Laws, to vote on a proposal to amend the Memorandum of Association of Reinsurance to increase the minimum issued and fully paid share capital of Reinsurance to $1 million. <TABLE> <CAPTION> Votes For Against Withheld --------- ------- -------- <S> <C> <C> 18,484,754 176,297 2,892,222 </TABLE> Item 5. Other Information Pursuant to recent amendments to the rules relating to proxy statements under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), shareholders of the Company are hereby notified that any shareholder proposal not included in the Company's proxy materials for its 1999 Annual Meeting of Shareholders (the "Annual Meeting") in accordance with Rule 14a-8 under the Exchange Act but subsequently or otherwise proposed for presentment at the Annual Meeting will be considered untimely for the purposes of Rules 14a-4 and 14a-5 under the Exchange Act if notice thereof is received by the Company (i) with respect to the election of directors, after March 6, 1999 and (ii) with respect to any other matter, after March 21, 1999. Management proxies will be authorized to exercise discretionary voting authority with respect to any shareholder proposal not included in the Company's proxy materials for the Annual Meeting unless (a) the Company receives notice of such proposal by March 21, 1999, and (b) the conditions set forth in Rule 14a-4(c)(2)(i)-(iii) under the Exchange Act are met. The Company's Bye-laws provide that, in addition to any other applicable requirements, in order for a resolution to be properly moved by shareholders in accordance with the Bermuda Companies Act and the Bye-laws at an annual general meeting of shareholders where such business is not brought by or at the direction of the Board, such resolution may be introduced by such shareholders at such meeting only if prior written notice thereof is given by such shareholders to the Secretary of the Company at the Company's registered office setting forth as to each matter such shareholders propose to bring before the annual meeting: (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting; (ii) the name and record address of such shareholder; (iii) the class or series and number of shares of capital stock of the Company which are owned beneficially or of record by such shareholder; (iv) a description of all arrangements or understandings between such shareholder and any other person (including his or her name and address) in connection with the proposal of such business by such shareholder and any material interest of such shareholder in such business; and (v) a representation that such shareholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting. The Chairman of an annual general meeting may, if the facts warrant, determine and declare that any business was not properly brought before the meeting and such business will not be transacted. With respect to the election of directors, the Company's Bye-laws provide that the only persons who shall be eligible for appointment or election as a director of the Company at any general meeting of the Company other than persons nominated by the Board shall be persons for whom a written notice of nomination signed by not less than twenty shareholders of the Company holding in the aggregate not less than 10% of the outstanding paid up share capital of the Company at that time has been delivered to the -22-
registered office of the Company for the attention of the Secretary not less than sixty days prior to the scheduled date of such general meeting or any adjournment thereof. A shareholder's notice proposing a director for nomination must set forth (x) as to each person whom the shareholder proposes to nominate for election as a director: (i) the name, age, business address and residence address of the person; (ii) the principal occupation or employment of the person; (iii) the class or series and number of shares of capital stock of the Company which are owned beneficially or of record by the person; and (iv) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Proxy Filings"); and (y) as to the shareholder giving the notice: (i) the name and record address of such shareholder; (ii) the class or series and number of shares of capital stock of the Company which are owned beneficially or of record by such shareholder; (iii) a description of all arrangements or understandings between such shareholder and each proposed nominee and any other person (including his name and address) pursuant to which the nomination(s) are to be made by such shareholder; (iv) a representation that such shareholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice; and (v) any other information relating to such shareholder that would be required to be disclosed in a Proxy Filing. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected. The Chairman of the meeting may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedure. Item 6 -- Exhibits and Reports on Form 8-K a. Exhibits: 5.1 Amended and Restated Bye-laws of the Company 10.1 Credit Agreement, dated as of June 24, 1998, among Renaissance U.S. Holdings, Inc., as Borrower, Various Financial Institutions, as Lenders, Bank of America National Trust and Savings Association, as Administrative Agent, and BancAmerica Robertson Stephens, as Arranger. 10.2 Guaranty, dated as of June 24, 1998, among RenaissanceRe Holdings, Ltd., as Guarantor, and Bank of America National Trust & Savings Association. 10.3 Second Amendment Agreement, dated as of June 15, 1998, among RenaissanceRe Holdings Ltd., the Lenders identified therein and Bank of America National Trust and Savings Association, as Administrative Agent for the Lenders. 10.4 Third Amended and Restated Employment Agreement, dated as of June 3, 1998, between Renaissance Reinsurance Ltd. and James N. Stanard. 21.1 List of Subsidiaries of RenaissanceRe Holdings Ltd. -23-
27 Financial Data Schedule b. Current Reports on Form 8-K: None. -24-
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed by the undersigned thereunto duly authorized. RenaissanceRe Holdings Ltd. Date: August 14, 1998 By: /s/ John M. Lummis ------------------ John M. Lummis Senior Vice President and Chief Financial Officer -25-