Bermuda-based RenaissanceRe Holdings Ltd. yesterday reported a 35 percent loss in net income, citing losses on the sales of investments as a result of a weaker investing environment in 2004.

But Renaissance also joined the chorus of insurance companies warning that insurance rates were weakening and said that rising interest rates was hurting the investment market.

Renaissance closed the second quarter of 2004 with net income of $116.2 million, or $1.62 per common share compared to $180.2 million, or $2.54 per common share, for the same quarter of 2003.

Operating income, excluding an investment loss of $26.9 million, rose to common shareholders of $143.1 million, compared to $130.5 million for the same period in 2003. In the second quarter of 2003, the company reported an investment gain of$49.7 million.

Renaissance chairman and CEO James N. Stanard said: ?Our strong premium growth reflects two conflicting trends. First, Renaissance has preferred positions on various attractive reinsurance and insurance programmes as a result of our strong customer relationships and credit ratings.

?Second, however, we continue to see price declines, and increasingly have had to turn down business that does not meet our return requirements.?

In spite of declining rates, Mr. Stanard said it was increasing its premium growth estimates for managed speciality reinsurance and its individual risk business to 30 percent growth over 2003. But he said the company expected catastrophe reinsurance gross managed premiums to decline by five percent or more.

?Our current expectation for 2005 is that we will continue to see growth in the individual risk business, but we will likely see a flattening of speciality reinsurance premium and further decreases in cat reinsurance premium,? he said.

Mr. Stanard said low losses in the first half of the year meant the company was raising its operating earnings per share (EPS) guidance for 2004 to a range of $6.95 to $7.25 compared with our previous range of $6.10 to $6.50.

Gross premiums written for the second quarter of 2004 were $326.9 million, compared to $212.6 million for the same quarter of 2003, while net premiums written for the second quarter of 2004 were $262.8 million, compared to $160.2 million for the same quarter of 2003.

Net premiums earned for the second quarter of 2004 were $344 million, compared to $275.5 million for the same quarter of 2003.

For the second quarter of 2004, the Company generated a combined ratio of 58.5 percent, a loss ratio of 35.1 percent and an expense ratio of 23.4 percent, compared to a combined ratio, loss ratio and expense ratio of 57 percent, 36.3 percent and 20.7 percent, respectively, for the second quarter of 2003.

Net investment income for the second quarter of 2004 was $29.8 million, compared to $34.1 million for the same quarter in 2003.