Bermuda-based global property catastrophe reinsurer RenaissanceRe Ltd. has bucked the trend in the downturn in the reinsurance market and reported a 13 percent increase in net income.

Yesterday, it announced a net operating income of $30 million for its third quarter ended September 30, compared to $26.2 million a year ago.

Earnings per share rose from $1.17 last year to $1.46 for the quarter this year.

"Renaissance continues to outperform the reinsurance market with a 20 percent operation return on equity both in the quarter and year to date,'' said James Stanard, president and chief executive officer of RenaissanceRe.

"We were able to maintain our trend of strong reinsurance premium growth that began in the first quarter of this year. There are pockets of the market that are hardening which makes more business available to us that meets our underwriting hurdle rate of return.'' The company also reported a 25 percent increase in gross premiums written for the quarter, coming in at $97.6 million compared to the same period in 1998 when the gross premiums were $78.1 million.

The growth came mainly from the reinsurance part of the company. Here gross written premiums increased to $79.5 million and $269.7 million for the three-month and nine-month periods ended September 30, 1999, compared to $54.5 million and $201.3 million for the same periods last year.

"Although prices have generally stopped falling, there is a significant amount of cat business which is priced to yield an expected loss to the reinsurer,'' said Mr. Stanard.

"As market prices fell to levels below our hurdle rates, we pulled back from several segments of the business over the past few years. Recent indication of pricing for January renewals are that the market might not increase prices as much as is needed on the segments that we left.'' But he warned: "The cycle has turned, but the upswing could be shallow.

Superior skill is required to succeed in this environment, we have produced the best returns in our segment over a variety of market conditions since 1993.'' According to the report, net operating income was down on last year from $91.3 million last year to $89.6 million, which works out at $4.30 per share compared to $4.04 per share in the same period in 1998.

Net premiums written were $58.22 compared with $66.4 million last year and the net premiums earned were $54.1 million compared to $58.7 for the same quarter in 1998.

Gross premiums written for the nine months ended September this year were $320 million compared with $243.1 million last year.

Net premiums written for the nine months were $209.5 million compared with $184 million in 1998. Net investment income, excluding realised investment gains and losses for the quarter was $15.7 million, compared with $13.3 million last year. Net investment income for the nine months was $42.9 million, up on last year's $39.6 million.

Claims and expenses incurred in the quarter were $19.4 million, or 35.9 percent of net premiums earned. In comparison, claims and claim expenses for the quarter were $26.7 million or 45.5 percent of net premiums earned.

Claims and claim expenses incurred for the last nine months were $56.1 million or 33.1 percent of net premiums earned. The year before the nine-month figures stood at $44.9 million and 29.6 percent respectively.

Operating expenses were down to $8.8 million for the quarter, from $9.6 million.

Shareholders equity was $612.8 million by the end of September compared to $612.2 million at December 31 1998.