Fitch ratings agency has assigned an `A-' long-term rating to Bermuda-based RenaissanceRe Holdings, Ltd. (Ren Re).

Fitch also assigned an `A-' rating to Ren Re's outstanding senior notes due 2008, and `BBB+' ratings to Ren Re's cumulative preferred stock and to RenaissanceRe Capital Trust (Ren Re Capital) capital securities due 2027.

Fitch added that the Rating Outlook is stable.

Fitch said: "Rationale for the ratings include Ren Re's better than industry average underwriting results, consistently solid earnings and interest coverage, and reasonable financial leverage and good financial flexibility.

"Partially offsetting these positives is the potential underwriting volatility associated with the company's concentrated focus in key business lines."

Ren Re's subsidiaries write property/catastrophe reinsurance world wide, and to a much lesser extent, primary property insurance in the United States.

Fitch noted that the company has significant modelling expertise and relies heavily on sophisticated computer-based models to measure exposure to natural catastrophes and to price and manage its portfolio of insured risks.

Fitch also said: "Ren Re has consistently outperformed the reinsurance industry from an underwriting perspective. Through the first nine months of 2001 the company's combined ratio was 76.7 percent while Fitch estimates the reinsurance industry's average combined ratio in a 130-140 percent range. The company's longer-term results are also impressive. Ren Re's average combined ratio for the five-year period through 2000 was 58.7 percent compared to the reinsurance industry's average of 108.3 percent."

Fitch said that despite Ren Re's focus on the volatile property/catastrophe reinsurance market, the company has consistently posted solid earnings but added:

"Although the company's net operating earnings through Sept. 30, 2001, were essentially flat at $100 million, they included $48 million of pretax losses from the events of September 11. Between 2000 and 1996, Ren Re's net operating earnings ranged from a high of $159 million to a low of $120 million and averaged $135 million.

"Ren Re utilises a reasonable amount of financial leverage and at its current ratings and interest coverage levels, Fitch believes that the company has sufficient financial flexibility to continue to opportunistically expand its revenue base."

In the fourth quarter of 2001, the company completed a $150 million cumulative perpetual preferred stock offering and a $233 million common stock offering and Fitch anticipates that Ren Re will use the majority of this capital to support underwriting activities and to take advantage of favourable underwriting conditions and firming rates in the reinsurance market.