Bermuda-based RenaissanceRe Holdings Ltd. has reported $25 million of net operating income for the third quarter of 2001, down 27 percent on the same period last year, reflecting the affects of events of September 11.

Last year, net operating income, excluding realised investment gains and losses for the third quarter was $34.2 million.

"During the quarter, our portfolio was able to absorb the losses from the tragic events on September 11th, allowing us to maintain our strong capital base," said James N. Stanard, chairman, president, and chief executive officer.

"These events have caused a further tightening in the market, both from a contraction of capacity from competitors and a heightened emphasis on security from clients. We have launched several initiatives to position the company to meet the increased demand for our products."

The company also said it had 11 percent managed catastrophe premium growth for the nine month period and that the reinsurance company now leads the industry with annualised operating return on equity of 18 percent for the nine

month period.

RenaissanceRe also reported year to date growth in book value per share of 15 percent.

The company's operating earnings per share were $1.23 in the third quarter compared to $1.75 per share in the comparable previous year period.

Net income was $29.9 million, or $1.48 per share, in the quarter, compared to $35.6 million, or $1.83 per share, for the same quarter of 2000.

These initiatives to meet the increased demand for reinsurance include the sale of 2.5 million common shares for total proceeds of $232.5 million, the increase in the capital of excess and surplus lines insurer, Glencoe, to $100 million and the formation of DaVinci Reinsurance Ltd., a new Bermuda-based property catastrophe reinsurer with anticipated capital of $500 million.

Mr. Stanard said: "We expect RenaissanceRe and the vehicles we manage, OPCat and DaVinci, to have over $2 billion of capital to serve the global property cat reinsurance market, in addition to the $4 billion of capacity available for non-US high layer treaties through Top Layer Re."

Gross premiums written for the third quarter of 2001 were $123.6 million, compared to $122.5 million for the same quarter of 2000. Net premiums written for the third quarter of 2001 were $79.0 million, compared to $85.6 million for the same quarter of 2000.

The company also saw an increase in the loss ratio related to the net losses incurred of $48 million related to the World Trade Center attack, and to the increase in non-catastrophe reinsurance premiums written by the company, which typically produce a higher loss ratio than the company's principal product, property catastrophe reinsurance.

Shareholders' equity at September 30, 2001 was $816.9 million, compared to $700.8 million at December 31, 2000. Book value per common share at September 30, 2001 was $41.12 per share, compared to $35.72 per share at December 31, 2000.