RenaissanceRe Holdings Ltd. has been affirmed an Issuer Default Rating (IDR) of A-, while subsidiary Renaissance Reinsurance Ltd. has been affirmed an A Insurer Financial Strength (IFS) rating by Fitch Ratings.

This was despite shareholders' equity dropping by 13 percent in 2008, compared to the prior year level, reflecting the effect of $428 million of share repurchases and operating results, including a net negative effect of $276 million from Hurricanes Ike and Gustav, and a negative total investment result of $152 million, according to Fitch.

The rating outlook for all ratings is stable.

It will come as a boost to the re/insurance company after Fitch said in February that it may downgrade more than half of insurers worldwide this year based on declines in the value of their investments backing policies.

The agency said the ratings reflected RenRe's strong underwriting skills, leading position in the property/catastrophe reinsurance market, and substantial high-quality and liquid fixed income and short-term investment portfolios, while considering the potential for earnings volatility tied to the company's investments in alternative asset classes, such as private equity and hedge fund investments, as well as the earnings and capital volatility derived from the company's property/catastrophe reinsurance focus.

Meanwhile Fitch said the decline in equity was significant, it was not outside the ratings agency's expectation of potential outcomes and RenRe's year-end 2008 operating leverage metrics were materially unchanged from those of recent years.

It said that RenRe had a history of producing combined ratios that were lower and less volatile than those of its peers that focus on writing property/catastrophe reinsurance, with the company's 2004-2008 average combined ratio, and combined ratio standard deviation approximately five and 39 percentage points lower, respectively, than median levels of a property/catastrophe-focused peers over the same period.

Fitch said that RenRe had maintained high-quality and liquid fixed income and short-term investment portfolios to support its loss reserves, totalling $5.2 billion and with an average credit rating of AA and weighted average duration of one and a half years, at year end 2008.

But, it added that the company also invested in alternative asset classes such as hedge funds, private equity, and bank loan funds, with declines in the value of these asset classes having a significant adverse effect on RenRe's earnings in 2008.