RenaissanceRe Reports Operating Income of $159.9 Million for the Second Quarter of 2008 or $2.50 Per Common Share

RenaissanceRe Holdings Ltd. (NYSE: RNR) today reported $159.9 million in second quarter operating income available to common shareholders compared to $194.7 million in the second quarter of 2007. Operating income excludes net realized investment losses of $24.2 million and $11.6 million in the second quarters of 2008 and 2007, respectively. Operating income per diluted common share was $2.50 in the second quarter of 2008, compared to $2.69 in the second quarter of 2007. Net income available to common shareholders was $135.7 million or $2.13 per diluted common share in the quarter, compared to net income available to common shareholders of $183.2 million or $2.53 per diluted common share for the same quarter of 2007. The Company reported an annualized operating return on average common equity of 23.4% and an annualized return on average common equity of 19.9% in the second quarter of 2008, compared to 28.5% and 26.8%, respectively, in the second quarter of 2007. Tangible book value per common share increased to $42.14 at June 30, 2008, a 0.2% increase in the second quarter of 2008, compared to a 6.0% increase in the second quarter of 2007. Book value per common share increased to $43.32 at June 30, 2008, a 2.8% increase in the second quarter of 2008, compared to a 5.9% increase in the second quarter of 2007. Neill A. Currie, CEO, commented: "I am pleased to report another solid quarter with an annualized operating ROE of over 23%. We generated strong underwriting profits and had a successful June 1st renewal season. We are pleased with our portfolio of risks, despite softening market conditions and a challenging investment environment.” Mr. Currie added: "Our ability to produce an attractive portfolio of business in this market is a testament to our position as a market leader with strong client and broker relationships. We continue to strengthen our franchise by investing in our people, risk management capabilities and underwriting tools. During the quarter we added to our business capabilities, with the addition of Agro National LLC, a managing general underwriter of multi-peril crop insurance, and Claims Management Services, Inc., a third party claims administrator. As we maintain our strong underwriting discipline in a difficult market, we continue to lay the groundwork for future opportunities.” SECOND QUARTER 2008 RESULTS Underwriting Results Gross premiums written for the second quarter of 2008 were $807.6 million, a $38.3 million decrease from the second quarter of 2007. The decrease in gross premiums written in the second quarter of 2008, compared to the second quarter of 2007, was primarily due to a $118.4 million decrease in gross premiums written in the Company’s Reinsurance segment and partially offset by a $76.5 million increase in gross premiums written within the Company’s Individual Risk segment, as described in more detail below. The Company generated $175.2 million of underwriting income and had a combined ratio of 53.5% in the second quarter of 2008, compared to $133.6 million of underwriting income and a 62.7% combined ratio in the second quarter of 2007. The Company’s underwriting results for the second quarter of 2008 were driven by a combination of higher net premiums earned and lower net claims and claim expenses incurred. The Company experienced $49.6 million of favorable development on prior year reserves in the second quarter of 2008, compared to $59.1 million of favorable development in the second quarter of 2007. The favorable development is primarily due to lower than expected claims emergence in both the Company’s Reinsurance and Individual Risk segments. Reinsurance Segment Gross premiums written for the Company’s Reinsurance segment decreased $118.4 million, or 19.5%, to $487.8 million in the second quarter of 2008, compared to the second quarter of 2007. The Company’s managed catastrophe premiums decreased $47.3 million, or 8.7%, from the second quarter of 2007 and the Company’s specialty reinsurance premiums decreased $70.3 million, or 75.2%, from the second quarter of 2007. The decrease in the Company’s managed catastrophe premiums was primarily due to softening market conditions which resulted in lower premium rates on business written during the quarter. The decrease in the Company’s specialty reinsurance premiums was principally driven by the impact of one large catastrophe exposed personal lines quota share contract which generated $2.6 million in gross premiums written in the second quarter of 2008 compared to $75.4 million in the second quarter of 2007, a decrease of $72.8 million. The second quarter of 2007 benefited from the assumed portfolio transfer in of this contract for the 2007 underwriting year which increased gross premiums written in that quarter while the second quarter of 2008 was impacted by the portfolio transfer out of the 2007 contract, followed by an assumed portfolio transfer in of the 2008 contract on a lower premium base. The Reinsurance segment generated $157.9 million of underwriting income and had a combined ratio of 30.2% in the second quarter of 2008, compared to $121.1 million of underwriting income and a combined ratio of 46.5% in the second quarter of 2007. The increase in underwriting income in the second quarter of 2008 was primarily due to a comparably low level of insured catastrophe events occurring compared to the second quarter of 2007 where the Company experienced $53.0 million of net claims and claim expenses associated with the flooding that occurred in the United Kingdom. The Reinsurance segment experienced $37.7 million of favorable development on prior year reserves in the second quarter of 2008, compared to $49.7 million of favorable development in the second quarter of 2007. The favorable development in the second quarters of 2008 and 2007 was the result of lower than expected claims emergence in the Company’s catastrophe and specialty reinsurance units. Individual Risk Gross premiums written for the Company’s Individual Risk segment increased $76.5 million, or 32.1%, to $314.8 million in the second quarter of 2008, compared to $238.4 million in the second quarter of 2007. The increase in gross premiums written was primarily due to the Company’s multi-peril crop insurance line of business which increased $86.4 million in the second quarter of 2008, principally due to higher agricultural commodity prices in the second quarter of 2008 compared to the second quarter of 2007, which resulted in higher premiums written for this business. The increase in the Company’s multi-peril crop insurance business was partially offset by decreases in the Company’s commercial multi-line and commercial property business, respectively, as a result of the Company maintaining its underwriting discipline due to the overall softening of market conditions with respect to premium rates. The Individual Risk segment generated $17.4 million of underwriting income in the second quarter of 2008, compared to $12.5 million in the second quarter of 2007, an increase of $4.9 million. In the second quarter of 2008, the Individual Risk segment generated a net claims and claim expenses ratio of 62.6%, an underwriting expense ratio of 25.9% and a combined ratio of 88.5%, compared to 57.7%, 33.0% and 90.7%, respectively, in the second quarter of 2007. The improved underwriting performance was primarily due to an increase in net premiums earned, principally due to the Company’s multi-peril crop insurance business, and a decrease in underwriting expenses, offset by an increase in net claims and claim expenses incurred. The decrease in the underwriting expense ratio and increase in the net claims and claim expense ratio was principally driven by an increase in the proportion of net premiums earned from the Company’s multi-peril crop insurance, compared to the Company’s other lines of business, as the multi-peril crop insurance line of business currently has a lower net acquisition expense ratio and higher net claims and claim expense ratio than the other lines of business within Individual Risk. The 5.7 percentage point increase in the current accident year net claims and claim expenses ratio also reflects a modest increase in the ultimate loss ratio for the multi-peril crop insurance business, compared to the same period of 2007, due to weather-related crop losses during the quarter such as flooding and hail storms in the Midwest portion of the U.S. and drought conditions in portions of Texas. Our Individual Risk prior year reserves experienced $11.8 million of favorable development in the second quarter of 2008 compared to $9.5 million of favorable development in the second quarter of 2007, primarily as a result of lower than expected reported claims on prior year reserves. Other Items Net investment income for the second quarter of 2008 was $38.7 million, compared to $118.1 million for the same quarter in 2007, a decrease of $79.5 million, as a result of lower returns in the Company’s investment portfolio. Net investment income from fixed maturity investments available for sale remained relatively stable at $46.3 million in the second quarter of 2008 compared to $47.7 million in the second quarter of 2007. Net investment income from the Company’s other investments generated a net investment loss of $17.5 million in the second quarter of 2008 compared with $41.6 million of net investment income in the second quarter of 2007, a decrease of $59.1 million. Included in the net investment loss from other investments is a $29.4 million loss from hedge funds and private equity investments in the second quarter of 2008 compared to $35.2 million of net investment income in the second quarter of 2007, a decrease of $64.6 million. Net investment income from short term investments decreased $16.3 million in the second quarter of 2008 to $12.1 million from $28.3 million in the second quarter of 2007, principally due to a decrease in the average balances of short term investments and a decrease in short term interest rates. Net realized losses on investments totaled $24.2 million in the second quarter of 2008 and includes $26.6 million of other than temporary impairment charges on the Company’s fixed maturity investments available for sale, compared to net realized investment losses and other than temporary impairment charges of $11.6 million and $12.1 million, respectively, in the second quarter of 2007. None of the other than temporary impairment charges were credit-related and the Company had no fixed maturity investments available for sale in an unrealized loss position at June 30, 2008. The Company’s cash flows from operations were $100.1 million for the second quarter of 2008, compared to $190.7 million for the second quarter of 2007. During the second quarter of 2008, the Company repurchased approximately 2.2 million common shares in open market transactions at an aggregate cost of $113.0 million and at an average share price of $52.12. During the second quarter of 2008, goodwill and other intangible assets increased by $68.6 million to $74.2 million at June 30, 2008 due to the acquisition of substantially all the net assets of Agro National LLC, a managing general underwriter of multi-peril crop insurance, and Claims Management Services, Inc., a third party claims administrator. This press release includes certain non-GAAP financial measures including "operating income”, "operating income per common share – diluted”, "operating return on average common equity – annualized”, "managed catastrophe premium” and "tangible book value per common share plus accumulated dividends”. A reconciliation of such measures to the most comparable GAAP figures in accordance with Regulation G is presented in the attached supplemental financial data. Please refer to the Investor Information – Financial Reports – Financial Supplements section of the Company's website at www.renre.com for a copy of the Financial Supplement which includes additional information on the Company’s financial performance. RenaissanceRe Holdings Ltd. will host a conference call on Wednesday, July 30, 2008 at 9:30 a.m. (ET) to discuss this release. Live broadcast of the conference call will be available through the Investor Section of RenaissanceRe’s website at www.renre.com. RenaissanceRe Holdings Ltd. is a global provider of reinsurance and insurance. The Company’s business consists of two segments: (1) Reinsurance, which includes catastrophe reinsurance, specialty reinsurance and certain joint ventures and other investments managed by the Company’s subsidiary RenaissanceRe Ventures Ltd., and (2) Individual Risk, which includes primary insurance and quota share reinsurance. Cautionary Statement under "Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995: Statements made in this news release contain information about the Company's future business prospects. These statements may be considered "forward-looking." These statements are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by such forward-looking statements. For further information regarding cautionary statements and factors affecting future results, please refer to RenaissanceRe Holdings Ltd.’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K, as amended, for the year ended December 31, 2007 and its quarterly report on Form 10-Q for the quarter ending March 31, 2008. RenaissanceRe Holdings Ltd. and Subsidiaries Summary Consolidated Statements of Operations For the three and six months ended June 30, 2008 and 2007 (in thousands of United States Dollars, except per share amounts) (Unaudited)           Three months ended Six months ended June 30,2008 June 30,2007 June 30,2008 June 30,2007 Revenues Gross premiums written $ 807,575   $ 845,860   $ 1,334,613   $ 1,478,589     Net premiums written $ 614,022 $ 609,842 $ 1,017,138 $ 1,180,869 Increase in unearned premiums   (237,449 )   (251,388 )   (331,651 )   (459,797 )   Net premiums earned 376,573 358,454 685,487 721,072 Net investment income 38,685 118,140 91,188 226,155 Net foreign exchange (losses) gains (231 ) (373 ) 4,705 4,794 Equity in earnings of other ventures 4,872 9,675 11,122 20,376 Other (loss) income (24 ) (5,498 ) 7,988 (7,701 ) Net realized losses on investments   (24,161 )   (11,566 )   (34,831 )   (7,481 )   Total revenues   395,714     468,832     765,659     957,215     Expenses Net claims and claim expenses incurred 114,217 138,854 196,373 284,846 Acquisition expenses 53,613 59,509 100,041 123,238 Operational expenses 33,494 26,527 63,607 55,051 Corporate expenses 7,111 4,927 15,814 11,931 Interest expense   5,937     7,195     12,741     19,174     Total expenses   214,372     237,012     388,576     494,240     Income before minority interest and taxes 181,342 231,820 377,083 462,975 Minority interest - DaVinciRe   (41,341 )   (37,399 )   (81,656 )   (66,506 )   Income before taxes 140,001 194,421 295,427 396,469 Income tax benefit (expense)   6,295     (680 )   (1,391 )   (787 )   Net income 146,296 193,741 294,036 395,682 Dividends on preference shares   (10,575 )   (10,575 )   (21,150 )   (21,711 )   Net income available to common shareholders $ 135,721   $ 183,166   $ 272,886   $ 373,971     Operating income available to common shareholders per Common Share - diluted (1) $ 2.50 $ 2.69 $ 4.71 $ 5.26   Net income available to common shareholders per Common Share - basic $ 2.16 $ 2.57 $ 4.25 $ 5.25 Net income available to common shareholders per Common Share - diluted $ 2.13 $ 2.53 $ 4.18 $ 5.16   Average shares outstanding - basic 62,921 71,259 64,224 71,270 Average shares outstanding - diluted 63,878 72,430 65,340 72,472   Net claims and claim expense ratio 30.3 % 38.7 % 28.6 % 39.5 % Underwriting expense ratio   23.2 %   24.0 %   23.9 %   24.7 %   Combined ratio   53.5 %   62.7 %   52.5 %   64.2 %   Operating return on average common equity - annualized (1)   23.4 %   28.5 %   22.3 %   28.8 %   (1) See Comments on Regulation G for a reconciliation of non-GAAP financial measures. RenaissanceRe Holdings Ltd. and Subsidiaries Summary Consolidated Balance Sheets (in thousands of United States Dollars, except per share amounts)       At June 30, 2008 December 31, 2007 (Unaudited) (Audited) Assets Fixed maturity investments available for sale, at fair value $ 3,775,345 $ 3,914,363 Short term investments, at fair value 1,400,884 1,821,549 Other investments, at fair value 927,247 807,864 Investments in other ventures, under equity method   104,438   90,572   Total investments 6,207,914 6,634,348 Cash and cash equivalents 262,951 330,226 Premiums receivable 965,955 475,075 Ceded reinsurance balances 206,888 107,916 Losses recoverable 191,789 183,275 Accrued investment income 32,976 39,084 Deferred acquisition costs 134,319 104,212 Receivable for investments sold 209,320 144,037 Other secured assets 107,025 90,488 Other assets 156,970 171,457 Goodwill and other intangibles   74,169   6,237   Total assets $ 8,550,276 $ 8,286,355   Liabilities, Minority Interest and Shareholders' Equity Liabilities Reserve for claims and claim expenses $ 2,009,803 $ 2,028,496 Reserve for unearned premiums 993,959 563,336 Debt 450,000 451,951 Reinsurance balances payable 408,775 275,430 Payable for investments purchased 247,482 422,974 Other secured liabilities 106,420 88,920 Other liabilities   165,905   162,294   Total liabilities   4,382,344   3,993,401   Minority interest - DaVinciRe 794,499 815,451   Shareholders' Equity Preference shares 650,000 650,000 Common shares 62,862 68,920 Additional paid-in capital - 107,867 Accumulated other comprehensive income 35,562 44,719 Retained earnings   2,625,009   2,605,997   Total shareholders' equity   3,373,433   3,477,503   Total liabilities, minority interest and shareholders' equity $ 8,550,276 $ 8,286,355   Book value per common share (unaudited) $ 43.32 $ 41.03   Common shares outstanding   62,862   68,920 RenaissanceRe Holdings Ltd. and Subsidiaries Supplemental Financial Data - Segment Information (in thousands of United States Dollars) (Unaudited)             Three months ended June 30, 2008 Reinsurance Individual Risk Eliminations (1) Other Total   Gross premiums written $ 487,793 $ 314,845 $ 4,937 $ - $ 807,575   Net premiums written $ 353,187 $ 260,835 - $ 614,022   Net premiums earned $ 226,286 $ 150,287 - $ 376,573 Net claims and claim expenses incurred 20,120 94,097 - 114,217 Acquisition expenses 25,511 28,102 - 53,613 Operational expenses   22,756   10,738   -   33,494   Underwriting income $ 157,899 $ 17,350 - 175,249 Net investment income 38,685 38,685 Equity in earnings of other ventures 4,872 4,872 Other loss (24) (24) Interest and preference share dividends (16,512) (16,512) Minority interest - DaVinciRe (41,341) (41,341) Other items, net (1,047) (1,047) Net realized losses on investments   (24,161)   (24,161)   Net income available to common shareholders $ (39,528) $ 135,721   Net claims and claim expenses incurred - current accident year $ 57,861 $ 105,926 $ 163,787 Net claims and claim expenses incurred - prior accident years   (37,741)   (11,829)   (49,570)   Net claims and claim expenses incurred - total $ 20,120 $ 94,097 $ 114,217   Net claims and claim expense ratio - current accident year 25.6% 70.5% 43.5% Net claims and claim expense ratio - prior accident years   (16.7%)   (7.9%)   (13.2%)   Net claims and claim expense ratio - calendar year 8.9% 62.6% 30.3% Underwriting expense ratio   21.3%   25.9%   23.2%   Combined ratio   30.2%   88.5%   53.5%   (1) Represents gross premiums ceded from the Individual Risk segment to the Reinsurance segment.                                 Three months ended June 30, 2007 Reinsurance Individual Risk Eliminations (1) Other Total   Gross premiums written $ 606,215 $ 238,391 $ 1,254 $ - $ 845,860   Net premiums written $ 428,355 $ 181,487 - $ 609,842   Net premiums earned $ 225,987 $ 132,467 - $ 358,454 Net claims and claim expenses incurred 62,528 76,326 - 138,854 Acquisition expenses 25,927 33,582 - 59,509 Operational expenses   16,451   10,076   -   26,527   Underwriting income $ 121,081 $ 12,483 - 133,564 Net investment income 118,140 118,140 Equity in earnings of other ventures 9,675 9,675 Other loss (5,498) (5,498) Interest and preference share dividends (17,770) (17,770) Minority interest - DaVinciRe (37,399) (37,399) Other items, net (5,980) (5,980) Net realized losses on investments   (11,566)   (11,566)   Net income available to common shareholders $ 49,602 $ 183,166   Net claims and claim expenses incurred - current accident year $ 112,208 $ 85,793 $ 198,001 Net claims and claim expenses incurred - prior accident years   (49,680)   (9,467)   (59,147)   Net claims and claim expenses incurred - total $ 62,528 $ 76,326 $ 138,854   Net claims and claim expense ratio - current accident year 49.7% 64.8% 55.2% Net claims and claim expense ratio - prior accident years   (22.0%)   (7.1%)   (16.5%)   Net claims and claim expense ratio - calendar year 27.7% 57.7% 38.7% Underwriting expense ratio   18.8%   33.0%   24.0%   Combined ratio   46.5%   90.7%   62.7%   (1) Represents gross premiums ceded from the Individual Risk segment to the Reinsurance segment.         RenaissanceRe Holdings Ltd. and Subsidiaries Supplemental Financial Data - Segment Information (cont'd.) (in thousands of United States Dollars) (Unaudited)       Six months ended June 30, 2008 Reinsurance Individual Risk Eliminations (1) Other Total   Gross premiums written $ 931,521 $ 395,666 $ 7,426 $ - $ 1,334,613   Net premiums written $ 696,107 $ 321,031 - $ 1,017,138   Net premiums earned $ 458,513 $ 226,974 - $ 685,487 Net claims and claim expenses incurred 67,189 129,184 - 196,373 Acquisition expenses 44,026 56,015 - 100,041 Operational expenses   43,895   19,712   -   63,607   Underwriting income $ 303,403 $ 22,063 - 325,466 Net investment income 91,188 91,188 Equity in earnings of other ventures 11,122 11,122 Other income 7,988 7,988 Interest and preference share dividends (33,891) (33,891) Minority interest - DaVinciRe (81,656) (81,656) Other items, net (12,500) (12,500) Net realized losses on investments   (34,831)   (34,831)   Net income available to common shareholders $ (52,580) $ 272,886   Net claims and claim expenses incurred - current accident year $ 128,437 $ 162,591 $ 291,028 Net claims and claim expenses incurred - prior accident years   (61,248)   (33,407)   (94,655)   Net claims and claim expenses incurred - total $ 67,189 $ 129,184 $ 196,373   Net claims and claim expense ratio - current accident year 28.0% 71.6% 42.5% Net claims and claim expense ratio - prior accident years   (13.3%)   (14.7%)   (13.9%)   Net claims and claim expense ratio - calendar year 14.7% 56.9% 28.6% Underwriting expense ratio   19.1%   33.4%   23.9%   Combined ratio   33.8%   90.3%   52.5%   (1) Represents gross premiums ceded from the Individual Risk segment to the Reinsurance segment.           Six months ended June 30, 2007 Reinsurance Individual Risk Eliminations (1) Other Total   Gross premiums written $ 1,122,182 $ 361,707 $ (5,300) $ - $ 1,478,589   Net premiums written $ 904,574 $ 276,295 - $ 1,180,869   Net premiums earned $ 480,766 $ 240,306 - $ 721,072 Net claims and claim expenses incurred 154,655 130,191 - 284,846 Acquisition expenses 54,289 68,949 - 123,238 Operational expenses   34,642   20,409   -   55,051   Underwriting income $ 237,180 $ 20,757 - 257,937 Net investment income 226,155 226,155 Equity in earnings of other ventures 20,376 20,376 Other loss (7,701) (7,701) Interest and preference share dividends (40,885) (40,885) Minority interest - DaVinciRe (66,506) (66,506) Other items, net (7,924) (7,924) Net realized losses on investments   (7,481)   (7,481)   Net income available to common shareholders $ 116,034 $ 373,971   Net claims and claim expenses incurred - current accident year $ 234,614 $ 156,452 $ 391,066 Net claims and claim expenses incurred - prior accident years   (79,959)   (26,261)   (106,220)   Net claims and claim expenses incurred - total $ 154,655 $ 130,191 $ 284,846   Net claims and claim expense ratio - current accident year 48.8% 65.1% 54.2% Net claims and claim expense ratio - prior accident years   (16.6%)   (10.9%)   (14.7%)   Net claims and claim expense ratio - calendar year 32.2% 54.2% 39.5% Underwriting expense ratio   18.5%   37.2%   24.7%   Combined ratio   50.7%   91.4%   64.2%   (1) Represents gross premiums ceded from the Individual Risk segment to the Reinsurance segment. RenaissanceRe Holdings Ltd. and Subsidiaries Supplemental Financial Data - Gross Premiums Written Analysis (in thousands of United States Dollars) (Unaudited)             Three months ended Six months ended Reinsurance Segment June 30,2008 June 30,2007 June 30,2008 June 30,2007   Renaissance catastrophe premiums $ 291,317 $ 340,913 $ 516,285 $ 580,940 Renaissance specialty premiums   22,955     93,258     98,418     200,848     Total Renaissance premiums   314,272     434,171     614,703     781,788     DaVinci catastrophe premiums 173,349 171,915 312,527 330,852 DaVinci specialty premiums   172     129     4,291     9,542     Total DaVinci premiums   173,521     172,044     316,818     340,394     Total Reinsurance premiums $ 487,793   $ 606,215   $ 931,521   $ 1,122,182     Total specialty premiums $ 23,127   $ 93,387   $ 102,709   $ 210,390     Total catastrophe premiums $ 464,666 $ 512,828 $ 828,812 $ 911,792   Catastrophe premiums written on behalf of our joint venture, Top Layer Re (1) 24,042 26,822 55,663 63,725 Catastrophe premiums assumed from the Individual Risk segment   4,937     1,254     7,426     (5,300 )   Total managed catastrophe premiums (2) 493,645 540,904 891,901 970,217   Managed premiums assumed for fully-collateralized joint ventures   (2,286 )   (65,798 )   (2,286 )   (59,363 )   Total managed catastrophe premiums, net of fully-collateralized joint ventures (2) $ 491,359   $ 475,106   $ 889,615   $ 910,854     (1) Top Layer Re is accounted for under the equity method of accounting. (2) See Comments on Regulation G for a reconciliation of non-GAAP financial measures.         Three months ended Six months ended Individual Risk Segment June 30,2008 June 30,2007 June 30,2008 June 30,2007   Multi-peril crop $ 203,077 $ 116,690 $ 208,449 $ 127,941 Commercial multi-line 31,699 44,435 63,083 92,325 Commercial property 60,830 75,013 91,683 117,518 Personal lines property   19,239     2,253     32,451     23,923   Total Individual Risk premiums $ 314,845   $ 238,391   $ 395,666   $ 361,707   Comments on Regulation G In addition to the GAAP financial measures set forth in this Press Release, the Company has included certain non-GAAP financial measures in this Press Release within the meaning of Regulation G. The Company has provided these financial measurements in previous investor communications and the Company’s management believes that these measurements are important to investors and other interested persons, and that investors and such other persons benefit from having a consistent basis for comparison between quarters and for the comparison with other companies within the industry. These measures may not, however, be comparable to similarly titled measures used by companies outside of the insurance industry. Investors are cautioned not to place undue reliance on these non-GAAP measures in assessing the Company’s overall financial performance. The Company uses "operating income” as a measure to evaluate the underlying fundamentals of its operations and believes it to be a useful measure of its corporate performance. "Operating income” as used herein differs from "net income available to common shareholders,” which the Company believes is the most directly comparable GAAP measure, by the exclusion of net realized gains and losses on the Company’s investments. The Company's management believes that "operating income” is useful to investors because it more accurately measures and predicts the Company's results of operations by removing the variability arising from fluctuations in the Company’s investment portfolio, which is not considered by management to be a relevant indicator of business operations. The Company also uses "operating income” to calculate "operating income per common share – diluted” and "operating return on average common equity – annualized”. The following is a reconciliation of: 1) net income available to common shareholders to operating income available to common shareholders; 2) net income available to common shareholders per common share – diluted to operating income available to common shareholders per common share – diluted; and 3) return on average common equity – annualized to operating return on average common equity – annualized:           Three months ended Six months ended (in thousands of United States dollars, except for per share amounts) June 30, 2008 June 30, 2007 June 30, 2008 June 30, 2007   Net income available to common shareholders $ 135,721 $ 183,166 $ 272,886 $ 373,971 Adjustment for net realized losses on investments   24,161     11,566     34,831     7,481     Operating income available to common shareholders $ 159,882   $ 194,732   $ 307,717   $ 381,452     Net income available to common shareholders per common share - diluted $ 2.13 $ 2.53 $ 4.18 $ 5.16 Adjustment for net realized losses on investments   0.37     0.16     0.53     0.10     Operating income available to common shareholders per common share - diluted $ 2.50   $ 2.69   $ 4.71   $ 5.26     Return on average common equity - annualized 19.9 % 26.8 % 19.8 % 28.2 % Adjustment for net realized losses on investments   3.5 %   1.7 %   2.5 %   0.6 %   Operating return on average common equity - annualized   23.4 %   28.5 %   22.3 %   28.8 % The Company has also included in this Press Release "managed catastrophe premiums” and "managed catastrophe premiums, net of fully-collateralized joint ventures.” "Managed catastrophe premiums” is defined as gross catastrophe premiums written by Renaissance Reinsurance and its related joint ventures. "Managed catastrophe premiums” differ from total catastrophe premiums, which the Company believes is the most directly comparable GAAP measure, due to the inclusion of catastrophe premiums written on behalf of the Company’s joint venture Top Layer Re, which is accounted for under the equity method of accounting. "Managed catastrophe premiums, net of fully-collateralized joint ventures” differ from total catastrophe premiums, which the Company believes is the most directly comparable GAAP measure, due to: 1) the inclusion of catastrophe premiums written on behalf of the Company’s joint venture Top Layer Re, which is accounted for under the equity method of accounting; and 2) the deduction of catastrophe premiums that are written by the Company and ceded directly to the Company’s fully-collateralized joint ventures which include Starbound Reinsurance Ltd., Starbound Reinsurance II Ltd. and Timicuan Reinsurance Ltd. The Company’s management believes "managed catastrophe premiums” is useful to investors and other interested parties because it provides a measure of total catastrophe reinsurance premiums assumed by the Company through its consolidated subsidiaries and related joint ventures. The Company believes "managed catastrophe premiums, net of fully-collateralized joint ventures” is also a useful measure to investors and other interested parties because it provides a measure of total catastrophe reinsurance premiums assumed by the Company through its consolidated subsidiaries and related joint ventures, net of catastrophe premiums written directly on behalf of the Company’s fully-collateralized joint ventures. The Company has also included in this Press Release "tangible book value per common share plus accumulated dividends”. This is defined as book value per common share excluding goodwill and other intangibles, plus accumulated dividends. "Tangible book value per common share plus accumulated dividends” differs from book value per common share, which the Company believes is the most directly comparable GAAP measure, due to the exclusion of goodwill and other intangibles and the inclusion of accumulated dividends. The following is a reconciliation of book value per common share to tangible book value per common share plus accumulated dividends:                                 At June 30, 2008   March 31, 2008   Dec. 31, 2007   Sept. 30, 2007   June 30, 2007   Book value per common share $ 43.32 $ 42.14 $ 41.03 $ 40.53 $ 38.88 Adjustment for goodwill and intangible assets (1.18) (0.09) (0.09) (0.09) (0.09)   Tangible book value per common share $ 42.14 $ 42.05 $ 40.94 $ 40.44 $ 38.79 Adjustment for accumulated dividends 7.46 7.23 7.00 6.78 6.56   Tangible book value per common share plus accumulated dividends $ 49.60 $ 49.28 $ 47.94 $ 47.22 $ 45.35