RenaissanceRe Annual Report 2009

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FY2009 Annual Report · RenaissanceRe

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2 0 0 9 A n n u a l R e p o r t

FINANCIAL HIGHLIGHTS

RenaissanceRe Holdings Ltd. and Subsidiaries

(In thousands of United States dollars, except
per share amounts and percentages)

2009

2008

2007

2006

2005

768,177

$1,728,932

838,858
$7,801,041
$3,840,786

Gross premiums written
Operating income (loss) available
(attributable) to RenaissanceRe
common shareholders(1)
Net income (loss) available
(attributable) to RenaissanceRe
common shareholders
Total assets
Total shareholders’ equity
Per common share amounts
Operating income (loss) available
(attributable) to RenaissanceRe
common shareholders per
common share - diluted(1)
Net income (loss) available
(attributable) to RenaissanceRe
$ 13.40
common shareholders - diluted
Tangible book value per common share(1) $ 49.73
$ 0.96
Dividends per common share
Operating ratios
Operating return on average
common equity (1)
Net claims and claim expense ratio
Underwriting expense ratio

$ 12.25

27.6%
15.5%
29.8%

Combined ratio

45.3%

$1,736,028

$1,809,637

$1,943,647

$1,809,128

193,034

735,453

796,099

(274,451)

(13,280)
$7,984,051
$3,032,743

569,575
$8,286,355
$3,477,503

761,635
$7,769,026
$3,280,497

(281,413)
$6,871,261
$2,253,840

$ 3.04

$ 10.24

$ 11.05

$ (3.89)

$ (0.21)
$ 36.73
$ 0.92

$ 7.93
$ 40.94
$ 0.88

$ 10.57
$ 34.30
$ 0.84

$ (3.99)
$ 24.52
$ 0.80

7.4%
54.8%
24.2%

79.0%

27.0%
33.6%
25.7%

59.3%

37.9%
29.2%
25.5%

54.7%

(13.3%)
116.6%
23.1%

139.7%

Gross Managed Premiums Written
by Line(1)
($) millions

Tangible Book Value Per Common
Share Plus Accumulated Dividends(1)
($)

2,000

1,500

1,000

500

’05 ’06

’07

’08

’09

’05 ’06

’07

’08

’09

Individual Risk
Specialty
Managed Catastrophe

Accumulated Dividends
Tangible Book Value

(1) In this Annual Report, we refer to various non-GAAP measures, which are explained in the Comments on Regulation G on pages 21 and 22.

Perpetuating a Culture of Excellence

COMPANY OVERVIEW
RenaissanceRe is a leading provider of property catastrophe reinsurance and insurance worldwide.
Founded in Bermuda in 1993, the Company has gained recognition for excellence in the industry
through disciplined underwriting, capital management expertise, sophisticated risk modeling and
responsive client service. RenaissanceRe is traded on the New York Stock Exchange under the
ticker symbol ‘RNR’.

PROPERTY CATASTROPHE AND

SPECIALTY REINSURANCE

We underwrite our Reinsurance business principally through

Renaissance Reinsurance Ltd. and DaVinci Reinsurance Ltd.,

two of the world’s leading reinsurers specializing in property

catastrophe and specialty reinsurance products. We have been

a pioneer in the use of sophisticated computer modeling for

risk analysis and management. Using proprietary technology, our

seasoned team of underwriters seeks to construct a superior

risk portfolio, while cultivating long-term relationships with

clients who appreciate our problem-solving capabilities. In

addition to our expertise in property catastrophe reinsurance,

our coverages include aviation, casualty clash, medical malpractice,

political risk and trade credit, surety, terrorism and catastrophe-

exposed workers’ compensation reinsurance.

Perpetuating a Culture of Excellence

VENTURES

RenaissanceRe’s Ventures unit structures and manages joint

ventures and other strategic relationships that leverage the

Company’s underwriting expertise and experience. We

manage several property catastrophe joint ventures that

provide additional high-quality capacity to our clients and

generate fee income for RenaissanceRe. Our principal joint

ventures include Top Layer Reinsurance Ltd. and DaVinci

Reinsurance Ltd., and we structure other joint ventures when

market opportunities arise. We make strategic investments to

provide capital to existing clients in forms other than reinsurance.

INDIVIDUAL RISK

We also structure new ventures in partnership with other

RenaissanceRe’s Individual Risk business is written by

market participants in non-catastrophe classes of risk.

RenRe Insurance through its operating subsidiaries. Individual

Risk products primarily comprise commercial and homeowners’

property coverages including catastrophe-exposed products,

crop, commercial liability coverages including general liability,

automobile and various specialty products. Individual Risk

business is produced through several distribution channels:

wholly-owned program managers, third-party program

managers, quota share partners and brokers.

Perpetuating a Culture of Excellence

TO OUR SHAREHOLDERS
We had an outstanding year in 2009, with the highest net income in our history. We were
nimble yet disciplined – precisely as we have always sought to be. Aided by light catastrophe
losses and a jump in the value of our investment portfolio, the Company’s tangible book value
per share, plus the change in accumulated dividends – the most important metric by which
we measure shareholder value – grew by 38% for the year.

Of course, one cannot expect such an exceptional performance

every year. Ours is a volatile business, but we are willing to

accept volatility in order to pursue superior returns over time.

Our business model seeks to produce a portfolio of risks that

we believe will produce attractive expected returns, with the

potential of achieving outsized returns in the good years. At

the same time, we seek to manage our exposures so that in the

bad years our losses will be manageable and our franchise will

endure. Since the formation of our Company, we have been

able to grow tangible book value plus the change in accumulated

dividends by a compounded annual growth rate of over 21%.

The strategy underlying our strong track record is grounded in

perpetuating a culture of excellence, and as I reﬂ ect on the events

of 2009, the components of our culture clearly served us well.

Perpetuating a Culture of Excellence

SERVICE AT A TIME OF DISLOCATION

the ratings of our reinsurance entities were afﬁ rmed and those

I must admit that 2009 did not unfold as I initially imagined.

of our insurance segment were upgraded. Standard & Poor’s

The year commenced with the ﬁ nancial markets in crisis and

reafﬁ rmed its “Excellent” rating for our Enterprise Risk Management,

a climate of fear. Credit was scarce and ﬁ nancial assets had

a tribute received by only a handful of companies, all the more

fallen precipitously in value. This left many of our customers

meaningful given the prevailing environment. This was the result

in challenging circumstances.

of our prudent risk and investment management, our low

degree of leverage, and the short-tail nature of our business.

In contrast, RenaissanceRe emerged from the ﬁ nancial melt-

down with a strong balance sheet and ample capital, enabling

As is often the case, difﬁ cult times spell opportunity for us. At a

us to be there for our clients when they needed us. In fact,

time when many found themselves with less capital, and unable

to access additional capital, we brought increased amounts of

Credit Ratings

capacity and solutions to our customers.

At December 31, 2009

A.M. Best

S&P Moody’s Fitch

Reinsurance Segment1
Renaissance Reinsurance
DaVinci
Top Layer Re
Renaissance Reinsurance of Europe

Individual Risk Segment1
Glencoe
Stonington
Stonington Lloyds
Lantana

A+
A
A+
A+

A
A
A
A

AA-
A+

AA
AA-

A+
A+
A+
A+

A1
-
-
-

-
-
-
-

A
-
-
-

-
-
-
-

RenaissanceRe2
RenaissanceRe3

a-
-

A
Excellent

A3
-

BBB+
-

1 The A.M. Best, S&P, Moody’s and Fitch ratings for the companies in the Reinsurance and
Individual Risk segments reﬂ ect the insurer’s ﬁ nancial strength rating.

2 The A.M. Best, S&P, Moody’s and Fitch ratings for RenaissanceRe represent the credit
ratings on its senior unsecured debt.

3 This S&P rating for RenaissanceRe represents the rating on its Enterprise Risk
Management practices.

During the January 2009 renewal season, we were able to

assemble an excellent portfolio in our largest book of business,

catastrophe reinsurance. For the year, our managed catastrophe

gross premiums written grew 15% after excluding the impact of

the 2008 loss-related premiums. We were heavily committed to

Atlantic hurricane risk, where demand was high and we believed

the risk/reward trade-off was attractive. Unusually low catastrophe

activity in 2009 led our portfolio to outperform our already

high expectations. For 2009, our catastrophe reinsurance unit

achieved a remarkable combined ratio of 8%.

“Strong franchises and skillful risk selection separate good performance from average in changing
market conditions. We remain particularly focused on aligning our underwriting operations
to maintain the risk management excellence that has been at the foundation of our success.”

KEVIN J. O’DONNELL
Executive Vice President, Global Chief Underwriting Ofﬁ cer, RenaissanceRe Holdings Ltd.

Perpetuating a Culture of Excellence

“When we set up Syndicate 1458, an early success from a risk-taking perspective was the
seamless cultural alignment of that team with the rest of the organization.”

IAN D. BRANAGAN
Senior Vice President, Chief Risk Ofﬁ cer, RenaissanceRe Holdings Ltd..

We launched a new sidecar called Timicuan Re II, similar to

Our specialty reinsurance unit succeeded in ﬁ nding pockets of

our successful sidecars of prior years. Timicuan Re II enabled

dislocated market opportunity, but in general, conditions in most

investors to provide approximately $96 million of additional

of these lines were soft with increasing competition. While our

hurricane reinsurance capacity to the Florida marketplace and

specialty reinsurance gross premiums written contracted by

attracted both new and former investors.

28%, we saw good deal ﬂ ow and recruited excellent new talent

in anticipation of better opportunities ahead.

BALANCING DISCIPLINE WITH NIMBLENESS

By springtime, the ﬁ nancial markets began to stabilize and turn

On the primary insurance side, the year’s challenges included a

upward, more quickly than most had predicted. Our customers’

softer market environment for insurance than for reinsurance,

assets began to recover in value, and major but weakened

and an unusual series of Nebraska hailstorms that took a heavy

industry players were backstopped by government funding.

toll on our crop insurance results. Although it was not a banner

These conditions made capital more accessible once again,

year for proﬁ tability, we were able to learn from the hailstorm

and drove pricing lower. As the year progressed, our markets

events. In a very short period of time, we were able to convene

became increasingly competitive.

a meeting of our agribusiness team and our modelers, reﬁ ne

Tangible Book Value Per Common
Share Plus Accumulated Dividends(1)
($)

’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09

Accumulated Dividends
Tangible Book Value

(1) In this Annual Report, we refer to various non-GAAP measures, which
are explained in the Comments on Regulation G on pages 21 and 22.

our data and our modeling, and adjust our underwriting strategy

for hail going forward.

MEASURED EXPANSION AND DIVERSIFICATION

Our entry into the Lloyd’s market in London signaled an

important expansion effort. The new RenaissanceRe Syndicate

1458 provides property and specialty products in both insurance

and reinsurance. We believe that the extensive distribution

network and worldwide licenses of the Lloyd’s marketplace

further enhance our global underwriting platform. In tandem,

Perpetuating a Culture of Excellence

we acquired Spectrum Syndicate Management Ltd. (“Spectrum”)

FINANCIAL AND CAPITAL MANAGEMENT

as our managing agent at Lloyd’s. Although we envision that our

STRENGTH

Lloyd’s underwriting activity will build slowly, given the current

For the year, operating income was $768 million – an extraordinary

environment and our disciplined underwriting approach, we

result. Net income rose to $839 million, or $13.40 per fully

believe this expansion presents signiﬁ cant long-term potential.

diluted common share. Our earnings include $245 million of

In Individual Risk, during 2009, we augmented systems and staff

on equity was over 27%, and growth in tangible book value per

to enhance our risk management and further integrate our newer

share, plus the change in accumulated dividends, was 38%.

favorable development on prior year reserves. Operating return

operations. We opened new ofﬁ ces in Hartford and Atlanta,

where we created teams in modeling and underwriting.

Our location in these major insurance hubs enabled us to tap

into a talented pool of people and provides access to major

Operating Return on Average Common Equity(1)
(%)

distribution channels.

In our crop business, we successfully integrated the prior year’s

acquisition of Agro National, our long-term managing general

agent, and markedly grew our presence in this market.

We will continue to seek lines of primary insurance business

that are diversifying to our catastrophe portfolio and can both

reduce volatility in our overall results and increase the efﬁ cient

use of Company capital.

’00 ’01 ’02 ’03 ’04

’06 ’07 ’08 ’09

’05

-10

(1) In this Annual Report, we refer to various non-GAAP measures, which
are explained in the Comments on Regulation G on pages 21 and 22.

Perpetuating a Culture of Excellence

“ 2008 and 2009 were remarkable for what amounted to the consecutive occurrence of two
low-probability events in the ﬁ nancial markets – one of the largest widenings in spreads in
history, followed by one of the biggest rallies. The fourth quarter of 2008 and the second
quarter of 2009 were extraordinary for the speed at which people reassessed risk.”

TODD R. FONNER
Senior Vice President, Chief Investment Ofﬁ cer & Treasurer, RenaissanceRe Holdings Ltd.

We achieved these results even though gross premiums written

With the stabilization of the economy, we have modestly increased

were only marginally higher. As I have stated many times, when

our allocations to high-quality credit, focusing mainly on investment

we write business, we focus on the potential for proﬁ tability,

grade corporate debt. We are maintaining a relatively short

not simply on generating revenue or increasing market share.

duration proﬁ le for the portfolio as we remain concerned

about the potential for an increase in interest rates. Overall,

Our investments performed unusually well, returning approximately

our investment portfolio remains conservatively positioned.

7%. This was better than we had expected, especially given our

We have also begun the process of shifting the accounting for

decision to reduce risk in the investment portfolio in the fourth

our ﬁ xed maturity investment portfolio to a trading basis to

quarter of 2008. We did this to preserve capital in response to

increase the transparency of our investment results.

the uncertainty of the ongoing ﬁ nancial crisis. At that time, we

were anticipating an increase in demand for our products given

Fundamental to our strategy has always been the return of

that the capital bases of many in our industry had been reduced

excess capital to shareholders. In 2008 we suspended our share

by underwriting and investment losses.

repurchase program to preserve capital, but beginning late in

2009, we resumed buying back our stock to take advantage of

When the ﬁ xed income markets recovered in 2009, we beneﬁ ted

its unusual and historically low price-to-book value.

from the rally in spreads and the recovery in mark-to-market

valuations in many of the sectors in which we were deployed.

LEVERAGING OUR EXPERTISE THROUGH

Much of our return in 2009 was driven by a modest allocation

VENTURES

to high yield, which rebounded substantially from the losses

2009 was an active and productive year for our Ventures

sustained in 2008, and strong returns in investment grade debt.

group, which offers alternative ways to provide capital to

In 2009 we also saw a return to proﬁ tability in our hedge fund

clients and leverages our core expertise into additional avenues

and private equity allocations. We do not expect to produce

of revenue. We increased our investment in DaVinciRe, formed

investment returns like those of 2009 in most years, given that

Timicuan Re II, and further enhanced our understanding

our investment strategy is designed to preserve capital and

of earthquake and storm surge exposure through the work of

maintain robust levels of liquidity while producing diversifying

WeatherPredict Consulting.

but relatively conservative returns.

Perpetuating a Culture of Excellence

“The real competitive advantage of our Company lies not so much in the sophistication of its
risk modeling and risk management, but more in the seamless integration of these functions
within the ﬁ rm’s risk-taking process.”

JEFFREY D. KELLY
Executive Vice President, Chief Financial Ofﬁ cer, RenaissanceRe Holdings Ltd.

DaVinciRe, one of our ﬂ agship managed joint ventures

MAINTAINING OUR RISK MANAGEMENT EDGE

participating alongside the Company in natural catastrophe

We believe that one of RenaissanceRe’s key differentiators

risk, had a very strong year. In 2009, our stake in DaVinciRe

has always been our risk management and modeling capability.

increased to 38% as certain shareholders elected to reduce

This year, we continued to invest heavily in both our risk

or exit their investment, and as we determined to increase

management models and data analytics as well as in our business

our participation in light of client and market needs. These

processing systems. This has become particularly important as

decisions had the effect of increasing our share of DaVinciRe’s

we have evolved, with more people in more locations worldwide.

proﬁ table results for 2009. In the future, it is possible

DaVinciRe will accept new investors and that our percentage

We undertook a signiﬁ cant upgrade of our proprietary REMS©

ownership will ﬂ uctuate.

risk modeling system, which we anticipate will continue to meet

Top Layer Re, our 50%-owned joint venture providing remote layers

aggregation and ‘roll-up’, through which we generate an accurate

of catastrophe coverage for regions outside the United States, was

snapshot of our reinsurance portfolios and capital management

proﬁ table and loss-free for the eleventh consecutive year.

in real time on a daily basis, we focused this year on extending

our needs well into the future. As an early innovator in risk

this capability across a more diverse set of risks underwritten

Our energy advisory group, RenRe Energy Advisors Ltd.,

in more locations.

(“REAL”), had an outstanding year. This team provides hedging

and risk management solutions to clients in the energy industry

We are mindful, however, that technology alone does not

(ranging from large utilities to small heating oil distributors)

translate into underwriting success. It is the thorough

to help them manage risk from ﬂ uctuations in temperature

understanding of the strengths and weaknesses of models,

and commodity prices. REAL is a recognized leader in the ﬁ eld.

of their varying assumptions and biases, that enables us to

Bringing to bear its extensive market knowledge, expertise

sharpen the underwriting decisions we base upon them.

in both weather-related analysis and risk management, in 2009

REAL was able to expand its product and services suite,

enhance its risk management systems and personnel, and

produce diversifying, positive returns.

Perpetuating a Culture of Excellence

PEOPLE, CULTURE AND COMMUNICATION

We made tremendous progress in company-wide communication.

Over the years, the Company has grown – deliberately and

An example of this was setting up a new project management

carefully, but steadily. Today we have almost twice as many

ofﬁ ce to allow anyone within the organization to see the

employees than just three years ago. A large part of this

different activities we are working on, so they can offer advice,

increase is due to the acquisition last year of Agro National

share best ideas and proﬁ t from experience already gained

and Claims Management Services, as well as the growth of our

elsewhere in the Company. I continue to be convinced that

commercial property risk operations, the start-up of our Lloyd’s

a signiﬁ cant contributor to our success to date has been

syndicate and purchase of its managing agent, Spectrum. With

the openness with which our people share ideas with one

culture so essential to our success, this presents a challenge.

another. We must never lose this trait.

As we add people, and spread ourselves across more locations

worldwide, we need to work hard at maintaining those precious

Above all, our focus is always on developing our people: training

qualities that generate our competitive advantages.

them to grow, challenging them to assume new responsibilities,

and nurturing their leadership skills. At RenaissanceRe, we

This year, we expended signiﬁ cant energy thinking about the

have a rigorous hiring process to ensure that those who come

perpetuation of our core culture and its consistency through-

aboard possess not only the technical skills and work ethic

out the organization. We refreshed our mission and vision

we expect, but also personalities that will mesh with their

statements, making them meaningful and understandable to all

colleagues. We seek to maintain a uniﬁ ed environment that is

employees. We expanded centers of excellence, like our Dublin

demanding, open-minded, innovative, collaborative, proﬁ t-driven

ofﬁ ce, whose expertise in modeling and deal analytics can be

and, at the same time, where our people have fun.

leveraged across the business units. We increased the practice

of moving people from one ofﬁ ce into another to help carry

our culture around the Company.

“As we expand, we are concentrating more skills and capacity in regional centers. This is
maximizing efﬁ ciency, accelerating learning and promoting cultural integration.”

PETER C. DURHAGER
Executive Vice President, Chief Administrative Ofﬁ cer, RenaissanceRe Holdings Ltd.

Perpetuating a Culture of Excellence

“ We will address any changes in the regulatory and legislative environment in which we
operate with the same commitment, discipline and rigor with which we have responded to
the evolution of the markets we serve.”

STEPHEN H. WEINSTEIN
Senior Vice President, General Counsel, Chief Compliance Ofﬁ cer & Secretary, RenaissanceRe Holdings Ltd.

THANKS AND APPRECIATION

are willing to retain more risk in order to retain more proﬁ ts if

I want to thank our employees for their hard work during this

loss activity is low. On the insurance side, the markets continue

eventful year. I also want to welcome the newcomers and

to exhibit competitive pressure on pricing.

express my appreciation of, and gratitude to, those leaving us.

In addition, we are carefully monitoring governmental, regulatory

Speciﬁ cally, I’d like to welcome Jeff Kelly, our new Chief Financial

and legislative developments and the range of outcomes we

Ofﬁ cer. We have already seen the beneﬁ ts of his signiﬁ cant

may see there. We remain engaged in sharing our scientiﬁ c

executive experience, and I look forward to working closely

and risk mitigation research not only with policy-makers and

with him over the coming years.

legislators but also with the general public, and in doing our

part in promoting knowledge that can ultimately save lives

At the same time, we will miss two individuals who recently

and reduce the economic losses of the inevitable natural

announced their intention to retire and who have played

catastrophes of the future.

important roles in our history – Jay Nichols and Bill Ashley.

Jay has been a valued member of our team almost since our

Our long term strategy will be to lead in whatever business

inception and we celebrate his creativity and accomplishments

sectors we choose to engage – in ideas and skill, not necessarily

as an innovative pioneer in our industry. Bill has played a critical

in size. At the same time, we will stay lean and ﬂ exible. We will

role in establishing and building our Individual Risk segment,

refuse to write business that does not meet our hurdles for

recently driving the acquisition and integration of Agro National,

proﬁ tability. And, as we have done since the formation of our

our integrated crop insurance platform. I wish them both all

Company, we will manage our business to the market cycles.

the very best in the future.

Thank you for your continuing support.

OUTLOOK AND FUTURE DIRECTION

Looking ahead, we enter 2010 optimistic about our new

Sincerely,

initiatives and the portfolio of business we have assembled.

We are conscious, however, of the challenges that lie ahead.

As is usual following a low-catastrophe year, eager capital

providers are crowding into the market, while some customers

Neill A. Currie
President and Chief Executive Ofﬁ cer

Perpetuating a Culture of Excellence

MESSAGE FROM THE CHAIRMAN

On behalf of the Board of Directors, I would like to thank the

compensation elements. In particular, a meaningful amount

global team at RenaissanceRe for an outstanding year. The Board

of target compensation will be at risk if our total shareholder

is proud of the Company’s achievements in 2009, accomplished

return substantially lags the peer group determined by the

against a backdrop of economic upheaval, ﬁ nancial uncertainty,

Board. The entire Executive Committee has also agreed to

and other severe challenges. RenaissanceRe’s performance under

similar arrangements. While these speciﬁ c features are new,

these circumstances has reinforced our conviction that diligent,

they perpetuate a consistent commitment at RenaissanceRe

continuously evolving risk management is essential to the

to align executive compensation with robust risk management

welfare of any enterprise, and especially to one with our

and long-term shareholder results.

strategy and vision. In particular, we are pleased by the degree

to which high risk management standards, and the related

Finally, together with Neill and our fellow Directors, we

cultural attributes described by Neill in his letter, have been

are grateful to our customers, partners, shareholders and

transmitted to and embraced throughout the organization.

employees for their continuing support. We look forward

to serving you in the future.

I would also like to acknowledge the key role played by my

fellow Directors in providing careful, collaborative oversight to

Sincerely,

the Company’s risk-related policies and practices. As regulators,

rating agencies and other stakeholders continue to expand the

scope of a board’s risk oversight obligations, I am conﬁ dent

our Directors will continue to meet these demands.

W. James MacGinnitie
Chairman of the Board

We were pleased to announce in 2009 that our CEO renewed

his contract for an additional four years. It is noteworthy

that the contract incorporates new performance-based

Perpetuating a Culture of Excellence

NEILL A. CURRIE

President & Chief Executive Ofﬁ cer,

RenaissanceRe Holdings Ltd.

PETER C. DURHAGER

Executive Vice President,

Chief Administrative Ofﬁ cer,

RenaissanceRe Holdings Ltd.

JEFFREY D. KELLY

Executive Vice President,

Chief Financial Ofﬁ cer,

RenaissanceRe Holdings Ltd.

KEVIN J. O’DONNELL

Executive Vice President,

Global Chief Underwriting Ofﬁ cer,

RenaissanceRe Holdings Ltd.

IAN D. BRANAGAN

Senior Vice President,

Chief Risk Ofﬁ cer,

RenaissanceRe Holdings Ltd.

TODD R. FONNER

Senior Vice President,

Chief Investment Ofﬁ cer & Treasurer,

RenaissanceRe Holdings Ltd.

STEPHEN H. WEINSTEIN

Senior Vice President,

General Counsel,

Chief Compliance Ofﬁ cer & Secretary,

RenaissanceRe Holdings Ltd.

Opposite Page
Seated front: Neill Currie
Clockwise from left:
Ian Branagan, Jeff Kelly,
Todd Fonner, Stephen Weinstein
Kevin O’Donnell (seated)
and Peter Durhager

EXECUTIVE COMMITTEE
“I continue to be pleased with the depth and breadth of our
senior management team and our culture of open discourse,
data-grounded discussion and rational decision making.”

NEILL A. CURRIE
President & Chief Executive Ofﬁ cer,

RenaissanceRe Holdings Ltd.

Perpetuating a Culture of Excellence

16 YEARS OF ENTERPRISE RISK
MANAGEMENT (ERM)
We are in the business of assuming risk, and there is a strong and direct relationship between
the amount of well-priced risk we take and our long term proﬁ tability. Consequently, since
our founding 16 years ago, we have focused relentlessly on developing and consistently
applying as rigorous a risk management process as possible.

Formed in the wake of Hurricane Andrew, we started with the

idea that rigorous, state of the art analytics could be incorporated

into the broader underwriting process to both assess risk at

the individual deal level and to achieve capital-efﬁ cient portfolio

optimization across the entire organization. As we have grown

over the years, we have stayed true to this risk and capital

management framework, striving to consistently integrate new

lines of business and new operations as they have been added.

As a result, we are now a multi-line, multi-location organization

focused on maintaining the same rigorous and holistic approach

to risk analysis, aggregation and management we had when we

wrote one line of business from a single location.

PERPETUATING EXCELLENCE IN ERM

It is one thing to know the strategic importance of ERM and to

understand what it entails; to execute it well is another. We are

pleased to be one of the few companies in our industry to have

Perpetuating a Culture of Excellence

received an ERM classiﬁ cation of “Excellent” from Standard &

Poor’s. We believe this achievement is due to our focus on the

‘four C’s’ of risk management – culture, capability, consistency

We are pleased to be one of the few companies in
our industry to have received an ERM classiﬁ cation
of “Excellent” from Standard & Poor’s.

and coordination.

We have always had a strong culture of risk management,

Excellent risk management demands the capability to price

which starts with tone at the top. But tone is not enough. At

and track risks appropriately, which requires experienced

RenaissanceRe, risk management has always been the responsibility

people using good systems expertly, with well-understood

of every person. This culture is transmitted through training

data. We have just completed a substantial enhancement of

and reinforced through incentives, which reward our people for

our industry-leading pricing and exposure management system

assuming well-priced risks and not growth for growth’s sake.

(REMS©) to incorporate the last 16 years’ worth of development

and extension in a new technology platform, which will

accommodate potential tools of the future and enable us to

maintain our leading edge. But the real value of tools comes

from having people trained to understand both their uses and

Core Risk Technology Timeline

Vendor
Cat Models

First Use
of County-
Level
Exposure
Data

REMS©
Marginal
ROE (Return
on Risk-
Adjusted
Capital)

Probabilistic &
Deterministic
Capital
Management

Multi-
Model
Analysis

REMS©
Assumed
& Ceded
Retroces-
sional Tools

Hurricane
Forecasts /
“Live Cat”
Trading /
Superensemble™

Multiple
Balance Sheet
Portfolio
Aggregation

Addition of
WeatherPredict –
Generated Data

Internal
Worldwide
Catastrophe
Model

500 Thousand &
1 Million Year
Simulations

Multi-Model
Exposure Data
Import / Export
& Analysis
Tools

Probabilistic
“Haircuts”
(Counterparty
Contingent &
Recoverables)

1993

1994

1995

1996

1997

1998

1999

2000

2001

Models are enhanced and revised on an ongoing basis and new models are built in according to business needs.

Perpetuating a Culture of Excellence

their limitations. We devote considerable resources to develop-

We believe there should be a consistency of approach to

ing tools, scrubbing data and training people to ensure that we

risk evaluation and assumption across all business units. One of

evaluate risk in a rigorous, consistent fashion – with the aim that

our underwriting principles is to continually compare deals in

actual outcomes are within our modeled ranges. Our multiple

an effort to increase on the best and decrease on the worst.

models/multiple views approach to risk analysis is a core part

To do this effectively across our organization, we need to have

of this strategy. Every model approaches risk differently and has

a consistent view of risk, and that view needs to be consistently

its strengths and weaknesses, so rather than blindly trusting the

applied. Our ultimate goal is to build the most efﬁ cient portfolio

output of one model, we prefer to use multiple models and rely

of risk possible for the Company as a whole, with every deal

on our knowledge and experience to interpret the results. We

evaluated against the same metrics.

constantly augment this knowledge and experience base with

new research and learning from actual outcomes. When there

Finally, coordination across all operating entities is critical

is no commercially available model, we will build our own and

– people and units should not operate in silos. Each decision to

reﬁ ne it over time.

assume risk carries a capital cost that affects every other deal

that we underwrite, and we seek to optimize our capital use as

Specialty
REMS©

MGA Partner
Marginal
Portfolio Pricing

Quarterly
Rating
Agency
Model Runs

Real Time
Adjustment
of Hurricane
Models

Nightly
Portfolio
Aggregation

Quarterly
DFA

Nightly DFA

Nightly
Multiple
Binding
Constraints
Analysis
Including
Rating Agency

Complete
Redesign
of REMS©
Framework

REMS©
Insurance
(Primary
Marginal
Deal Pricing
Tool)

2002

2003

2004

2005

2006

2007

2008

2009

Perpetuating a Culture of Excellence

an organization. Therefore, each underwriting decision must be

BUSINESS AND OPERATIONAL RISKS

validated at the group level. To achieve this, we seek to subject

While the risks we knowingly assume as part of our reinsurance,

every deal of import to multiple layers of review, including a

insurance and other businesses constitute a signiﬁ cant portion

review of its impact at the operating company level and on

of the risks we face as an organization, we are also subject to

RenaissanceRe as a whole. For signiﬁ cant decisions, we frequently

other risks related to our business and operating environments.

deploy a peer review prior to binding, which we refer to as the

These are risks that we are not paid to assume, and therefore

“second set of eyes.” Each day, or when required, we aggregate

we attempt to mitigate them as much as possible. We have

our underwriting risks across the Company from all sources

worked hard to bring our management of these important

into our consolidated portfolio, allowing us to monitor the

risks up to the high standards we have set for ourselves

underwriting process in real time. And on a quarterly basis, we

generally. In doing so, we believe we have built world-class

bring together our business units to discuss our underwriting

legal, accounting and internal audit functions. We continually

position, our capital allocation, and quality of our individual and

assess these business and operational risks and try to ensure

consolidated portfolios. We focus relentlessly on identifying

that appropriate mitigation strategies are in place.

underperforming deals, managing risk across our business units

and obtaining the best possible overall portfolio for the Company.

We are risk-takers, and it is our job to
pick the best risks.

THE PROPER ROLE FOR ERM

In our industry, risk management should not be confused with

SUMMARY

risk avoidance. We are risk-takers, and it is our job to pick the

A history of strong risk management does not automatically

best risks. The proper role of enterprise risk management is

propagate into the future. Retaining our excellence in

to allow us, when picking risks, to make deliberate decisions

risk management as we evolve will require the ongoing

rather than having to react to accidental outcomes. Our goal is

implementation of the ‘four C’s’. Our culture of risk

to avoid being surprised by an outcome; we aim to capture and

management excellence constitutes a key competitive

quantify all the risks to which we are exposed. We accept that

advantage and is the result of 16 years of committed effort

exact estimation of the probability of a particular risk may not

and resources. We will do everything within our capabilities to

always be feasible, but nonetheless strive to include all risks in

safeguard and enhance it. This is our commitment to you.

our modeled distributions of potential outcomes.

Perpetuating a Culture of Excellence

COMMENTS ON REGULATION G

In addition to the Generally Accepted Accounting Principles (“GAAP”) ﬁ nancial measures set forth in this Annual Report, the
Company has included certain non-GAAP ﬁ nancial measures in this Annual Report within the meaning of Regulation G. The
Company has provided these ﬁ nancial measurements in previous investor communications and the Company’s management
believes that these measurements are important to investors and other interested persons, and that investors and such other
persons beneﬁ t from having a consistent basis for comparison between quarters and for the comparison with other companies
within the industry. These measures may not, however, be comparable to similarly titled measures used by companies outside
of the insurance industry. Investors are cautioned not to place undue reliance on these non-GAAP measures in assessing the
Company’s overall ﬁ nancial performance.

The Company uses “operating income (loss) available (attributable) to RenaissanceRe common shareholders” as a measure to
evaluate the underlying fundamentals of its operations and believes it to be a useful measure of its corporate performance.
“Operating income (loss) available (attributable) to RenaissanceRe common shareholders” as used herein differs from “net
income (loss) available (attributable) to RenaissanceRe common shareholders,” which the Company believes is the most directly
comparable GAAP measure, by the exclusion of net realized and unrealized gains and losses on ﬁ xed maturity investments, net
other-than-temporary impairments, net unrealized gains and losses on credit derivatives issued by entities included in investments
in other ventures, under equity method and the cumulative effect of a change in accounting principle – goodwill. In the presentation
below, the only adjustments in respect of unrealized gains and losses on credit derivatives reﬂ ect unrealized mark-to-market losses
on credit derivatives and other credit-related products issued by ChannelRe Holdings Ltd. (“ChannelRe”), a ﬁ nancial guarantee
reinsurer whose investment is accounted for by the Company under the equity method of accounting. The Company believes that
the prevailing convention among ﬁ nancial guarantee insurers, reinsurers and other market participants, such as ChannelRe, is to
exclude from “operating income (loss) available (attributable) to RenaissanceRe common shareholders” such unrealized gains and
losses attributable to credit derivatives and other credit-related products. The Company’s management believes that “operating
income (loss) available (attributable) to RenaissanceRe common shareholders” is useful to investors because it more accurately
measures and predicts the Company’s results of operations by removing the variability arising from ﬂ uctuations in the Company’s
ﬁ xed maturity investment portfolio. The Company also uses “operating income (loss) available (attributable) to RenaissanceRe
common shareholders” to calculate “operating income (loss) available (attributable) to RenaissanceRe common shareholders per
common share – diluted” and “operating return on average common equity”. The following is a reconciliation of: 1) net income
(loss) available (attributable) to RenaissanceRe common shareholders to operating income (loss) available (attributable) to
RenaissanceRe common shareholders; 2) net income (loss) available (attributable) to RenaissanceRe common shareholders per
common share – diluted to operating income (loss) available (attributable) to RenaissanceRe common shareholders per common
share – diluted; and 3) return on average common equity to operating return on average common equity:

(In thousands of United States dollars, except per
share amounts and percentages)

Net income (loss) available (attributable) to
RenaissanceRe common shareholders

Adjustment for net realized and unrealized
(gains) losses on ﬁ xed maturity investments

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

Year Ended

$838,858

$(13,280)

$569,575

$761,635 $(281,413)

$133,108

$605,992

$342,879

$184,956

$127,228

(93,162)

(10,700)

(26,806)

34,464

6,962

(23,442)

(80,504)

(10,177)

(18,096)

7,151

Adjustment for net other-than-temporary impairments*

22,481

217,014

25,513

Adjustment for net unrealized losses on credit

derivatives issued by entities included in investments
in other ventures, under equity method

Adjustment for cumulative effect of a change in
accounting principle - FAS 142 - Goodwill

Operating income (loss) available (attributable) to
RenaissanceRe common shareholders

Net income (loss) available (attributable) to
RenaissanceRe common shareholders
per common share - diluted

Adjustment for net realized and unrealized
(gains) losses on ﬁ xed maturity investments

Adjustment for net other-than-temporary impairments*

Adjustment for net unrealized losses on

credit derivatives issued by entities included in
investments in other ventures, under equity method

Adjustment for cumulative effect of a change in
accounting principle - FAS 142 - Goodwill

Operating income (loss) available (attributable)
to RenaissanceRe common shareholders
per common share - diluted

167,171

9,187

$768,177

$193,034

$735,453

$796,099

$(274,451)

$109,666

$525,488

$341,889

$166,860

$134,379

$13.40

$(0.21)

$7.93

$10.57

$(3.99)

$1.85

$8.53

$4.88

$2.96

$2.17

(1.52)

0.37

(0.17)

3.42

(0.38)

0.36

0.48

0.10

(0.32)

(1.13)

(0.14)

(0.29)

0.12

2.33

0.13

$12.25

$3.04

$10.24

$11.05

$(3.89)

$1.53

$7.40

$4.87

$2.67

$2.29

Return on average common equity

30.2%

(0.5%)

20.9%

36.3%

(13.6%)

6.2%

33.8%

27.0%

22.1%

19.9%

(3.4%)

0.8%

(0.4%)

(1.0%)1

8.3%

0.9%

1.6%

0.3%

(1.1%)

(4.5%)

(0.8%)

(2.2%)

Adjustment for net realized and unrealized
(gains) losses on ﬁ xed maturity investments

Adjustment for net other-than-temporary impairments*

Adjustment for net unrealized losses on credit

derivatives issued by entities included in investments
in other ventures, under equity method

Adjustment for cumulative effect of a change in
accounting principle - FAS 142 - Goodwill

1.1%

Operating return on average common equity

27.6%

27.0%

37.9%

(13.3%)

19.9%

21.0%

6.2%

7.4%

5.1%

29.3%

0.7%

26.9%

* For the years ending December 31, 2006 and prior, the Company included net other-than-temporary impairments in net realized and unrealized (gains) losses on ﬁ xed maturity investments.

401159.Text.cs2.indd 21

3/4/10 9:32:44 AM

The Company has also included in this Annual Report “gross managed premiums written” and “managed catastrophe premiums.”
“Gross managed premiums written” differs from gross premiums written, which the Company believes is the most directly com-
parable GAAP measure, due to the inclusion of premiums written on behalf of our joint venture, Top Layer Reinsurance Ltd. (“Top
Layer Re”), which is accounted for under the equity method of accounting. “Managed catastrophe premiums” is deﬁ ned as gross
catastrophe premiums written by Renaissance Reinsurance and its related joint ventures, excluding catastrophe premiums assumed
from the Company’s Individual Risk segment. “Managed catastrophe premiums” differ from total catastrophe premiums, which the
Company believes is the most directly comparable GAAP measure, due to the inclusion of catastrophe premiums written on behalf
of the Company’s joint venture Top Layer Re, which is accounted for under the equity method of accounting, and the exclusion of
catastrophe premiums assumed from the Company’s Individual Risk segment. The Company’s management believes “gross managed
premiums written” and “managed catastrophe premiums” are useful to investors and other interested parties because they provide
a measure of total catastrophe reinsurance premiums assumed by the Company through its consolidated subsidiaries and related
joint ventures. The following is a reconciliation of 1) total catastrophe premiums to managed catastrophe premiums and 2) gross
premiums written to gross managed premiums written:

Year Ended

(In thousands of U.S. dollars)

2009

2008

2007

2006

2005

Total catastrophe premiums

$1,096,449 $ 994,621 $1,003,104 $1,099,114 $ 775,573

Catastrophe premiums assumed from the

Individual Risk segment

(12,650)

(5,672)

(36,968)

(64,573)

(43,594)

Catastrophe premiums written by Top Layer Re

51,974

55,370

66,436

51,244

59,908

Managed catastrophe premiums

$1,135,773 $1,044,319 $1,032,572 $1,085,785

$791,887

Gross premiums written

$1,728,932 $1,736,028 $1,809,637 $1,943,647 $1,809,128

Premiums written by Top Layer Re

51,974

55,370

66,436

51,244

59,908

Gross managed premiums written

$1,780,906 $1,791,398 $1,876,073 $1,994,891 $1,869,036

The Company has also included in this Annual Report “tangible book value per common share plus accumulated dividends.” This
is deﬁ ned as book value per common share excluding goodwill and intangible assets, plus accumulated dividends. “Tangible book
value per common share plus accumulated dividends” differs from book value per common share, which the Company believes
is the most directly comparable GAAP measure, due to the exclusion of goodwill and intangible assets and the inclusion of
accumulated dividends. The following is a reconciliation of book value per common share to tangible book value per common
share plus accumulated dividends:

Book value per common share

Adjustment for goodwill and other intangibles(1)

Tangible book value per common share

Adjustment for accumulated dividends

Tangible book value per common share
plus accumulated dividends

Year Ended

2009

2008

2007

2006

2005

2004

2003

2002

2001

$51.68

(1.95)

49.73

8.88

$38.74

$41.03

$34.38

$24.52

$30.19

$29.61

$21.37

$16.14

(2.01)

(0.09)

(0.08)

(0.14)

36.73

7.92

40.94

7.00

34.30

6.12

24.52

5.28

30.19

4.48

29.61

3.72

21.37

3.12

16.00

2.55

$58.61

$44.65

$47.94

$40.42

$29.80

$34.67

$33.33

$24.49

$18.55

2000

1999

1998

1997

1996

1995

1994

1993

Year Ended

Book value per common share

$11.91

$10.17

$ 9.43

$8.89

$7.74

$6.33

$3.93

$2.56

Adjustment for goodwill and other intangibles(1)

(0.17)

(0.11)

(0.23)

Tangible book value per common share

Adjustment for accumulated dividends

Tangible book value per common share
plus accumulated dividends

11.74

2.05

10.06

1.53

9.20

1.05

8.89

0.65

7.74

0.33

6.33

0.05

3.93

2.56

$13.79

$11.59

$10.25

$9.54

$8.07

$6.38

$3.93

$2.56

(1) For 2009 and 2008, goodwill and other intangibles includes $43.8 million and $49.8 million, respectively, of goodwill and other intangibles included in investments in other ventures,
under equity method.

401159.Text.cs2.indd 22

3/4/10 9:32:57 AM

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For The Fiscal Year Ended December 31, 2009

OR
‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission File No. 001-14428
RENAISSANCERE HOLDINGS LTD.
(Exact Name Of Registrant As Specified In Its Charter)

Bermuda
(State or Other Jurisdiction of
Incorporation or Organization)

98-014-1974
(I.R.S. Employer
Identification Number)

Renaissance House, 8-20 East Broadway, Pembroke HM 19 Bermuda
(Address of Principal Executive Offices)

(441) 295-4513
(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Common Shares, Par Value $1.00 per share

Name of each exchange on which registered

New York Stock Exchange, Inc.

Series B 7.30% Preference Shares, Par Value $1.00 per share

New York Stock Exchange, Inc.

Series C 6.08% Preference Shares, Par Value $1.00 per share

New York Stock Exchange, Inc.

Series D 6.60% Preference Shares, Par Value $1.00 per share

New York Stock Exchange, Inc.

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Act.
Yes È No ‘
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ‘ No È
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes È No ‘
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes ‘ No ‘
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ‘
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company, as defined in Rule 12b-2 of the Act. Large accelerated filer È, Accelerated filer ‘, Non-accelerated filer ‘,
Smaller reporting company ‘
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes ‘ No È
The aggregate market value of Common Shares held by nonaffiliates of the registrant at June 30, 2009 was $2,758.1 million based
on the closing sale price of the Common Shares on the New York Stock Exchange on that date.

The number of Common Shares outstanding at February 10, 2010 was 60,058,112.

The information required by Part III of this report, to the extent not set forth herein, is incorporated by reference to the registrant’s
Definitive Proxy Statement to be filed in respect of our 2010 Annual General Meeting of Shareholders.

RENAISSANCERE HOLDINGS LTD.
TABLE OF CONTENTS

ITEM 1.
ITEM 1A.
ITEM 1B.
ITEM 2.
ITEM 3.
ITEM 4.

PART I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
UNRESOLVED STAFF COMMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS
AND ISSUER REPURCHASES OF EQUITY SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . .
SELECTED CONSOLIDATED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

ITEM 6.
ITEM 7.

ITEM 5.

PART II

Page

4
4
36
53
60
60
60
60

60
63

ITEM 7A.
ITEM 8.
ITEM 9.

RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

65
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK . . . . . . . . . . . 129
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . . . . . . . . . . . . . . . . . . . . . . . . 132
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

ITEM 9A.
ITEM 9B.

FINANCIAL DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
CONTROLS AND PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
PART III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE . . . . . . . . . . . . . . 134
EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND

ITEM 10.
ITEM 11.
ITEM 12.

RELATED SHAREHOLDER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR

ITEM 14.

INDEPENDENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
PRINCIPAL ACCOUNTANT FEES AND SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
PART IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139

ITEM 15.

NOTE ON FORWARD-LOOKING STATEMENTS

This Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to
significant business, economic and competitive uncertainties and contingencies, many of which, with respect to
future business decisions, are subject to change. These uncertainties and contingencies can affect actual results
and could cause actual results to differ materially from those expressed in any forward-looking statements made
by, or on behalf of, us.

In particular, statements using words such as “may”, “should”, “estimate”, “expect”, “anticipate”, “intends”,
“believe”, “predict”, “potential”, or words of similar import generally involve forward-looking statements. For
example, we may include certain forward-looking statements in “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” with regard to trends in results, prices, volumes, operations,
investment results, margins, combined ratios, reserves, overall market trends, risk management and exchange
rates. This Form 10-K also contains forward-looking statements with respect to our business and industry, such
as those relating to our strategy and management objectives, trends in market conditions, market standing and
product volumes, investment results, government initiatives and regulatory matters, and pricing conditions in the
reinsurance and insurance industries.

In light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements
in this report should not be considered as a representation by us or any other person that our objectives or plans
will be achieved. Numerous factors could cause our actual results to differ materially from those addressed by the
forward-looking statements, including the following:

(cid:129)

we are exposed to significant losses from catastrophic events and other exposures that we cover, which
we expect to cause significant volatility in our financial results from time to time;

the frequency and severity of catastrophic events or other events which we cover could exceed our
estimates and cause losses greater than we expect;

risks associated with implementing our business strategies and initiatives, including risks related to
developing or enhancing the operations, controls and other infrastructure necessary in respect of our
more recent, new or proposed initiatives;

risks relating to adverse legislative developments including, the risk of new legislation in Florida
continuing to expand the reinsurance coverages offered by the Florida Hurricane Catastrophe Fund
(“FHCF”) and the insurance policies written by the state-sponsored Citizens Property Insurance
Corporation (“Citizens”); failing to reduce such coverages or implementing new programs which reduce
the size of the private market; and the risk that new, state based or federal legislation will be enacted
and adversely impact us;

the risk that the Risk Management Agency of the U.S. Department of Agriculture (the “RMA”) adversely
changes the financial terms of the Standard Reinsurance Agreement (the “SRA”) which we are
currently party to and under which our Individual Risk segment participates in the federal multi-peril
crop insurance program;

the risk of the lowering or loss of any of the ratings of RenaissanceRe Holdings Ltd. or of one or more of
our subsidiaries or changes in the policies or practices of the rating agencies;

risks relating to our strategy of relying on third party program managers, third party administrators, and
other vendors to support our Individual Risk operations;

risks due to our dependence on a few insurance and reinsurance brokers for the preponderance of our
revenue, a risk we believe is increasing as a larger portion of our business is provided by a small
number of these brokers, including as a result of the merger of AON Corporation (“AON”) and Benfield
Group Limited (“Benfield”);

the risk we might be bound to policyholder obligations beyond our underwriting intent, and the risk that
our third party program managers or agents may elect not to continue or renew their programs with us;

the inherent uncertainties in our reserving process, including those related to the 2005 and 2008
catastrophes, which uncertainties we believe are increasing as we diversify into new product classes;

(cid:129)

we are exposed to the risk that our customers may fail to make premium payments due to us (a risk
that may be increasing in certain of our key markets), as well as the risk of failures of our reinsurers,
brokers, third party program managers or other counterparties to honor their obligations to us, including
their obligations to make third party payments for which we might be liable, which risks we believe
continue to be heightened during the ongoing period of financial market dislocation;

risks associated with appropriately modeling, pricing for, and contractually addressing new or potential
factors in loss emergence, such as the trend toward potentially significant global warming and other
aspects of climate change which have the potential to adversely affect our business, or the ongoing
financial crisis, which could cause us to underestimate our exposures and potentially adversely impact
our financial results;

risks associated with a sustained weakness or weakening in business and economic conditions,
specifically in the principal markets in which we do business, which may adversely affect the demand
for our products and ultimately our business and operating results;

risks relating to a deterioration in the investment markets and current economic conditions which could
adversely affect our net investment income and lead to investment losses, particularly with respect to
our illiquid investments in asset classes experiencing significant volatility;

risks associated with highly subjective judgments, such as valuing our more illiquid assets, and
determining the impairments taken on our investments, which could impact our financial position or
operating results;

risks associated with our investment portfolio, including the risk that investment managers may breach
our investment guidelines, or the inability of such guidelines to mitigate risks arising out of the ongoing
financial crisis;

changes in economic conditions, including interest rate, currency, equity and credit conditions which
could affect our investment portfolio or declines in our investment returns for other reasons which could
reduce our profitability and hinder our ability to pay claims promptly in accordance with our strategy,
which risks we believe are currently enhanced in light of the ongoing financial crisis, both globally and
in the U.S.;

we are exposed to counterparty credit risk, including with respect to reinsurance brokers, customers,
agents, retrocessionaires, capital providers and parties associated with our investment portfolio, energy
trading business, and premiums and other receivables owed to us, which risks we believe continue to
be heightened as a result of the ongoing global economic downturn;

emerging claims and coverage issues, which could expand our obligations beyond the amount we
intend to underwrite;

loss of services of any one of our key senior officers, or difficulties associated with the transition of new
members of our senior management team;

a contention by the U.S. Internal Revenue Service (the “IRS”) that Renaissance Reinsurance Ltd.
(“Renaissance Reinsurance”), or any of our other Bermuda subsidiaries, is subject to U.S. taxation;

the passage of federal or state legislation subjecting Renaissance Reinsurance or our other Bermuda
subsidiaries to supervision, regulation or taxation in the U.S. or other jurisdictions in which we operate,
or increasing the taxation of business ceded to us;

changes in insurance regulations in the U.S. or other jurisdictions in which we operate, including the
risks that U.S. federal or state governments will take actions to diminish the size of the private markets
in respect of the coverages we offer, the risk of potential challenges to the Company’s claim of
exemption from insurance regulation under current laws and the risk of increased global regulation of
the insurance and reinsurance industry;

operational risks, including system or human failures;

risks in connection with our management of third party capital;

(cid:129)

risks that we may require additional capital in the future, particularly after a catastrophic event or to
support potential growth opportunities in our business, which may not be available or may be available
only on unfavorable terms, risks which we believe to be heightened during the ongoing financial market
crisis;

risks relating to failure to comply with covenants in our debt agreements;

risks relating to the inability of our operating subsidiaries to declare and pay dividends to the Company;

risks that acquisitions or strategic investments that we have made or may make could turn out to be
unsuccessful;

risks that certain of our new or potentially expanding business lines could have a significant negative
impact on our financial results or cause significant volatility in our results for any particular period;

the risk that ongoing or future industry regulatory developments will disrupt our business, or that of our
business partners, or mandate changes in industry practices in ways that increase our costs, decrease
our revenues or require us to alter aspects of the way we do business;

we operate in a highly competitive environment, which we expect to increase over time from new
competition from non-traditional participants as capital markets products provide alternatives and
replacements for our more traditional reinsurance and insurance products and as a result of
consolidation in the (re)insurance industry;

risks arising out of possible changes in the distribution or placement of risks due to increased
consolidation of customers or insurance and reinsurance brokers, or third party program managers, or
from potential changes in their business practices which may be required by future regulatory changes;

the risk that there could be regulatory or legislative changes adversely impacting us, as a
Bermuda-based company, relative to our competitors, or actions taken by multinational organizations
having such an impact;

acts of terrorism, war or political unrest; and

risks relating to changes in regulatory regimes and/or accounting rules, such as the roadmap to
International Financial Reporting Standards (“IFRS”), which could result in significant changes to our
financial results.

The factors listed above should not be construed as exhaustive. Certain of these risk factors and others are
described in more detail in “Item 1A. Risk Factors” below. We undertake no obligation to release publicly the
results of any future revisions we may make to forward-looking statements to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated events.

PART I

ITEM 1. BUSINESS

Unless the context otherwise requires, references in this Form 10-K to “RenaissanceRe” or the “Company” mean
RenaissanceRe Holdings Ltd. and its subsidiaries, which principally include, but are not limited to, Renaissance
Reinsurance, RenRe Insurance Holdings Ltd. and its subsidiaries (“RenRe Insurance”), Renaissance Trading
Ltd. (“Renaissance Trading”), RenRe Energy Advisors Ltd. (“REAL”) and the Company’s Lloyd’s syndicate,
RenaissanceRe Syndicate 1458 (“Syndicate 1458”).

We also underwrite reinsurance on behalf of joint ventures, principally including Top Layer Reinsurance Ltd.
(“Top Layer Re”), recorded under the equity method of accounting, and DaVinci Reinsurance Ltd. (“DaVinci”).
The financial results of DaVinci and DaVinci’s parent company, DaVinciRe Holdings Ltd. (“DaVinciRe”), are
consolidated in our financial statements. For your convenience, we have included a glossary beginning on page
53 of selected insurance and reinsurance terms. All dollar amounts referred to in this Form 10-K are in U.S.
dollars unless otherwise indicated. Any discrepancies in the tables included herein between the amounts listed
and the totals thereof are due to rounding.

GENERAL

RenaissanceRe, established in Bermuda in 1993 to write principally property catastrophe reinsurance, is today a
leading global provider of reinsurance and insurance coverages and related services. Through our operating
subsidiaries, we seek to produce superior returns for our shareholders by being a trusted, long-term partner to
our customers for assessing and managing risk, delivering responsive solutions, and keeping our promises. We
accomplish this by leveraging our core capabilities of risk assessment and information management, and by
investing in our capabilities to serve our customers across the cycles that have historically characterized our
markets. Overall, our strategy focuses on superior risk selection, marketing, capital management and joint
ventures. We provide value to our customers and joint venture partners in the form of financial security,
innovative products, and responsive service. We are known as a leader in paying valid reinsurance claims
promptly. We principally measure our financial success through long-term growth in tangible book value per
common share plus the change in accumulated dividends, which we believe is the most appropriate measure of
our Company’s performance, and believe we have delivered superior performance in respect of this measure over
time.

Our core products include property catastrophe reinsurance, which we write through our principal operating
subsidiary Renaissance Reinsurance and joint ventures, principally DaVinci and Top Layer Re; specialty
reinsurance risks written through Renaissance Reinsurance and DaVinci; and primary insurance and quota share
reinsurance, which we write through the operating subsidiaries of RenRe Insurance. We believe that we are one
of the world’s leading providers of property catastrophe reinsurance. We also believe we have a strong position in
certain specialty reinsurance lines of business and are building a franchise in the U.S. insurance and crop
insurance business. Our reinsurance and insurance products are principally distributed through intermediaries,
with whom we seek to cultivate strong relationships.

We currently conduct our business through two reportable segments, Reinsurance and Individual Risk. For the
year ended December 31, 2009, our Reinsurance and Individual Risk segments accounted for 69.3% and
30.7%, respectively, of our total consolidated gross premiums written. Our segments are more fully described in
“Business Segments” below.

CORPORATE STRATEGY

Our mission is to produce superior returns for our shareholders by being a trusted, long-term partner to our
customers for assessing and managing risk, delivering responsive solutions, and keeping our promises. Our vision
is to seek to generate long-term growth in tangible book value per common share plus the change in
accumulated dividends for our shareholders by being a leader in select financial services through our people and
culture, executing our expertise in risk, and having a passion for exceeding our customers’ expectations.

Since our inception, we have cultivated and endeavor to preserve certain competitive advantages that position us
to fulfill our strategic objectives. We believe these competitive advantages are:

(cid:129)

Superior Risk Selection. We seek to underwrite our reinsurance, insurance and financial risks through
the use of sophisticated risk selection techniques, including computer models and databases, such as

(cid:129)

the Renaissance Exposure Management System (“REMS©”) and the Program Analysis Central
Repository (“PACeR”). We pursue a disciplined approach to underwriting and only select those risks
that we believe will produce an attractive return on equity, subject to prudent risk constraints.

Superior Marketing. We believe our modeling and technical expertise, and the risk management
advice that we provide to our customers, has enabled us to become a provider of first choice in many
lines of business to our customers worldwide. We seek to offer stable, predictable and consistent
risk-based pricing and a prompt turnaround on our claims.

Superior Capital Management. We generally seek to write as much attractively priced business as is
available to us and then manage our capital accordingly. Accordingly, we generally seek to raise capital
when we forecast an increased demand in the market, at times by accessing capital through joint
ventures or other structures and seek to return capital to our shareholders or joint venture investors
when the demand for our coverages appears to decline, and we believe a return of capital would be
beneficial to our shareholders or joint venture investors.

Superior Joint Ventures. Building upon our relationships and expertise in risk selection, marketing
and capital management, we seek to pursue and execute on joint venture and investment
opportunities, which include new partners and diversifying classes of business. We believe our focus on
our joint ventures allows us to leverage our access to business and our underwriting capabilities on an
efficient capital base, develop fee income, and diversify our portfolio. We routinely evaluate and expect
that we may in the future pursue additional joint venture opportunities and strategic investments.

We believe we are well positioned to fulfill these objectives by virtue of the experience and skill of our
management team, our significant financial strength, and our strong relationships with brokers and customers. In
addition, we believe our superior service, our proprietary modeling technology, and our extensive business
relationships, which have enabled us to become a leader in the property catastrophe reinsurance market, will be
instrumental in allowing us to achieve our strategic objectives. In particular, we believe our strategy, high
performance culture, and commitment to our customers and joint venture partners permit us to differentiate
ourselves by offering specialized services and products at times and in markets where capacity and alternatives
may be limited.

BUSINESS SEGMENTS

We currently conduct our business through two reportable segments, Reinsurance and Individual Risk. Financial
data relating to our two segments is included in “Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations.”

Reinsurance Segment

Our Reinsurance operations are comprised of three units: 1) property catastrophe reinsurance, primarily written
through Renaissance Reinsurance and DaVinci; 2) specialty reinsurance, primarily written through Renaissance
Reinsurance and DaVinci; and 3) certain other activities of ventures as described herein. Our Reinsurance
operations are managed by the Global Chief Underwriting Officer, who leads a team of underwriters, risk
modelers and other industry professionals, who have access to our proprietary risk management, underwriting
and modeling resources and tools. We believe the expertise of our underwriting and modeling team and our
proprietary analytic tools, together with superior customer service, provide us with a significant competitive
advantage.

Our portfolio of business has continued to be increasingly characterized by relatively large transactions with
ceding companies with whom we do business, although no current relationship exceeds 15% of our gross
premiums written. Accordingly, our gross premiums written are subject to significant fluctuations depending on
our success in maintaining or expanding our relationships with these large customers. We market our
reinsurance products worldwide exclusively through brokers, whose market has become extremely consolidated
in recent years. In 2009, three brokerage firms accounted for 90.1% of our Reinsurance segment gross
premiums written. We believe that recent market dynamics, and trends in our industry in respect of potential
future consolidation, have increased our exposure to the risks of broker, client and counterparty concentration.

The following table shows our total catastrophe and specialty reinsurance gross premiums written:

Year ended December 31,
(in thousands)

Renaissance catastrophe premiums
Renaissance specialty premiums

Total Renaissance premiums

DaVinci catastrophe premiums
DaVinci specialty premiums

Total DaVinci premiums

Total Reinsurance premiums

Total specialty premiums (1)

Total catastrophe premiums (2)

2009

2008

2007

$ 706,947 $ 633,611 $ 662,987
277,882

111,889

153,701

818,836

389,502
2,457

391,959

787,312

361,010
6,069

367,079

940,869

340,117
9,434

349,551

$1,210,795 $1,154,391 $1,290,420

$ 114,346 $ 159,770 $ 287,316

$1,096,449 $ 994,621 $1,003,104

(1) Total specialty premiums written includes $nil, $nil and $0.4 million premiums assumed from our Individual

Risk segment for the years ended December 31, 2009, 2008 and 2007, respectively.

(2) Total catastrophe premiums written includes $12.7 million, $5.7 million and $37.0 million of premiums

assumed from our Individual Risk segment for the years ended December 31, 2009, 2008 and 2007,
respectively.

Property Catastrophe Reinsurance

We believe we are one of the largest providers of property catastrophe reinsurance in the world, based on our
total catastrophe premium. Our principal property catastrophe reinsurance products include catastrophe excess
of loss reinsurance and excess of loss retrocessional reinsurance as described below:

Catastrophe Excess of Loss Reinsurance. We principally write catastrophe reinsurance on an excess of loss
basis, which means we provide coverage to our insureds when aggregate claims and claim expenses from a
single occurrence of a covered peril exceed the attachment point specified in a particular contract. Under these
contracts, we indemnify an insurer for a portion of the losses on insurance policies in excess of a specified loss
amount, and up to an amount per loss specified in the contract. The coverage provided under excess of loss
reinsurance contracts may be on a worldwide basis or limited in scope to selected geographic areas. Coverage
can also vary from “all property” perils to limited coverage on selected perils, such as “earthquake only”
coverage.

Excess of Loss Retrocessional Reinsurance. We also write retrocessional reinsurance contracts that provide
property catastrophe coverage to other reinsurers or retrocedants. In providing retrocessional reinsurance, we
focus on property catastrophe retrocessional reinsurance, which covers the retrocedant on an excess of loss basis
when aggregate claims and claim expenses from a single occurrence of a covered peril and from a multiple
number of reinsureds exceed a specified attachment point. The coverage provided under excess of loss
retrocessional contracts may be on a worldwide basis or limited in scope to selected geographic areas. Coverage
can also vary from “all property” perils to limited coverage on selected perils, such as “earthquake only”
coverage. The information available to retrocessional underwriters concerning the original primary risk can be less
precise than the information received from primary companies directly. Moreover, exposures from retrocessional
business can change within a contract term as the underwriters of a retrocedant alter their book of business after
retrocessional coverage has been bound.

Our property catastrophe reinsurance contracts are generally “all risk” in nature. Our most significant exposure is
to losses from earthquakes and hurricanes and other windstorms, although we are also exposed to claims arising
from other catastrophes, such as tsunamis, freezes, floods, fires, tornadoes, explosions and acts of terrorism in
connection with the coverages we provide. Our predominant exposure under such coverage is to property
damage. However, other risks, including business interruption and other non-property losses, may also be
covered under our property reinsurance contracts when arising from a covered peril. We offer our coverages on a
worldwide basis.

Because of the wide range of possible catastrophic events to which we are exposed, including the size of such
events and because of the potential for multiple events to occur in the same time period, our catastrophe
reinsurance business is volatile and our results of operations reflect this volatility. Further, our financial condition
may be impacted by this volatility over time or at any point in time. The effects of claims from one or a number of
severe catastrophic events could have a material adverse effect on us. We expect that increases in the values and
concentrations of insured property and the effects of inflation will increase the severity of such occurrences in the
future.

Catastrophe-Linked Securities. We also invest in catastrophe-linked securities (“cat-linked securities”).
Cat-linked securities are generally privately placed fixed income securities as to which all or a portion of the
repayment of the principal is linked to catastrophic events; for example, the occurrence of one or more
hurricanes or earthquakes producing industry losses exceeding certain specified thresholds. We underwrite,
model, evaluate and monitor these securities using the same tools and techniques used to evaluate our more
traditional property catastrophe reinsurance business assumed. In addition, we may enter into derivative
transactions, such as total return swaps, that are based on or referenced to underlying cat-linked securities.
Based on an evaluation of the specific features of each cat-linked security, we account for these securities as
reinsurance or at fair value, as applicable, in accordance with U.S. generally accepted accounting principles
(“GAAP”). In addition, in future periods we may utilize the growing market for cat-linked securities to expand our
ceded reinsurance buying if we find the pricing and terms of such coverage attractive.

We seek to moderate the volatility of our risk portfolio through superior risk selection, diversification and the
purchase of retrocessional coverages and other protections. In furtherance of our strategy, we may increase or
decrease our presence in the catastrophe reinsurance business based on market conditions and our assessment
of risk-adjusted pricing adequacy. We frequently seek to purchase reinsurance or other protection for our own
account to further reduce the financial impact that a large catastrophe or a series of catastrophes could have on
our results.

As a result of our position in the market and reputation for superior customer service, we believe we have
superior access to reinsurance business we view as desirable compared to the market as a whole. As described
above, we use our proprietary underwriting tools and guidelines to attempt to construct an attractive portfolio from
these opportunities. We dynamically model policy submissions against our current in-force underwriting portfolio,
comparing our estimate of the modeled expected returns of the contract against the amount of capital that we
allocate to the contract, based on our estimate of its marginal impact on our overall risk portfolio. At times, our
approach to portfolio management has resulted and may result in the future in our having a relatively large
market share of catastrophe reinsurance exposure in a particular geographic region, such as Florida, or to a
particular peril, such as U.S. hurricane risk, where we believe supply and demand characteristics promote our
providing significant capacity, or where the risks or class of risks otherwise adds efficiency to our portfolio.
Conversely, from time to time we may have a disproportionately low market share in certain regions or perils
where we believe our capital would be less effectively deployed.

Specialty Reinsurance

We write a number of lines of reinsurance other than property catastrophe, such as catastrophe exposed workers’
compensation, surety, terrorism, political risk, trade credit, medical malpractice, catastrophe exposed personal
lines property, casualty clash, certain other casualty lines and other specialty lines of reinsurance, which we
collectively refer to as specialty reinsurance. As with our catastrophe business, our team of experienced
professionals seek to underwrite these lines using a disciplined underwriting approach and sophisticated
analytical tools.

We generally target lines of business where we believe we can adequately quantify the risks assumed and where
potential losses could be characterized as low frequency and high severity, similar to our catastrophe reinsurance
coverages. We also seek to identify market dislocations and write new lines of business whose risk and return
characteristics are estimated to exceed our hurdle rates. We also seek to manage the correlations of this business
with our overall portfolio, including our aggregate exposure to single and aggregated catastrophe events. We
believe that our underwriting and analytical capabilities have positioned us well to manage this business.

We offer our specialty reinsurance products principally on an excess of loss basis, as described above with
respect to our catastrophe reinsurance products, and also provide some proportional coverage. In a proportional
reinsurance arrangement (also referred to as quota share reinsurance and pro-rata reinsurance), the reinsurer

shares a proportional part of the original premiums and losses of the reinsured. The reinsurer pays the cedant a
commission which is generally based on the cedant’s cost of acquiring the business being reinsured (including
commissions, premium taxes, assessments and miscellaneous administrative expenses) and may also include a
profit factor. Our products frequently include tailored features such as limits or sub-limits which we believe help
us manage our exposures. Any liability exceeding, or otherwise not subject to, such limits reverts to the cedant.
As with our catastrophe reinsurance business, our specialty reinsurance frequently provides coverage for
relatively large limits or exposures, and thus we are subject to potential significant claims volatility.

We generally seek to write significant lines on our specialty reinsurance treaties. As a result of our financial
strength, we have the ability to offer significant capacity and, for select risks, we have made available significant
limits. In 2009, we added experienced underwriting and support executives to our specialty reinsurance unit, and
invested in new and enhanced risk management tools and processes. In addition, we believe that the launch of
Syndicate 1458 will help us grow our market presence over time in respect of select lines of business we find
attractive. While we believe that these and other initiatives will support growth in our specialty reinsurance unit in
due course, we intend to continue to apply our disciplined underwriting approach which, together with currently
prevailing market conditions, is likely to temper our growth in current and near term-term periods.

We believe these capabilities, the strength of our specialty reinsurance underwriting team, and our demonstrated
ability and willingness to pay valid claims are competitive advantages of our specialty reinsurance business.

Ventures

We pursue a number of other opportunities through our ventures unit, which has responsibility for managing our
joint venture relationships, executing customized reinsurance transactions to assume or cede risk and managing
certain investments directed at classes of risk other than catastrophe reinsurance. We also provide customized
weather and energy risk management solutions to various customers on a worldwide basis.

Property Catastrophe Managed Joint Ventures. We actively manage property catastrophe-oriented joint
ventures, which provide us with an additional presence in the market, enhance our client relationships and
generate fee income. These joint ventures allow us to leverage our access to business and our underwriting
capabilities on a larger capital base. Currently, our joint ventures include Top Layer Re and DaVinci. Renaissance
Underwriting Managers, Ltd. (“RUM”), a wholly owned subsidiary of the Company, acts as the exclusive
underwriting manager for each of these joint ventures.

DaVinci was established in 2001 and principally writes property catastrophe reinsurance and certain low
frequency, high severity specialty reinsurance lines of business on a global basis. In general, we seek to construct
for DaVinci a property catastrophe reinsurance portfolio with risk characteristics similar to those of Renaissance
Reinsurance’s property catastrophe reinsurance portfolio and certain lines of specialty reinsurance such as
terrorism and catastrophe exposed workers’ compensation. In accordance with DaVinci’s underwriting guidelines,
it can only participate in business that is underwritten by Renaissance Reinsurance. We maintain majority voting
control of DaVinciRe and, accordingly, consolidate the results of DaVinciRe into our consolidated results of
operations and financial position. We seek to manage DaVinci’s capital efficiently over time in light of the market
opportunities and needs we perceive and believe we are able to serve. Our ownership in DaVinciRe was 38.2%
and 22.8% at December 31, 2009 and 2008, respectively. In January 2010, DaVinciRe redeemed the shares of
certain third party DaVinciRe shareholders and in a separate transaction, we sold a portion of our shares in
DaVinciRe to a third party shareholder. As a result of these transactions, our ownership interest in DaVinciRe
increased to 41.2%. We expect our ownership in DaVinciRe to fluctuate over time.

Top Layer Re writes high excess non-U.S. property catastrophe reinsurance. Top Layer Re is owned 50% by
State Farm Mutual Automobile Insurance Company (“State Farm”) and 50% by Renaissance Reinsurance, a
wholly owned subsidiary of the Company. State Farm provides $3.9 billion of stop loss reinsurance coverage to
Top Layer Re. We account for our equity ownership in Top Layer Re under the equity method of accounting and
our proportionate share of its results are reflected in equity in earnings (losses) of other ventures in our
consolidated statements of operations.

During 2009, we formed and launched a new managed joint venture, Timicuan Reinsurance II Ltd. (“Tim Re II”),
which provided additional capacity to the Florida property catastrophe market for the 2009 wind season. In
conjunction with the formation and launch of Tim Re II, $49.5 million of non-voting Class B shares were sold to
external investors, and we also invested an additional $10.0 million in Tim Re II’s non-voting Class B shares,
representing a 16.8% ownership interest. We ceded a defined portfolio of property catastrophe excess of loss

reinsurance contracts incepting June 1, 2009 to Tim Re II under a fully-collateralized facultative retrocessional
reinsurance contract in return for a potential underwriting profit commission. The Class B shareholders
participated in substantially all of the profits or losses of Tim Re II while the Class B shares remained outstanding.
Tim Re II, a wholly owned subsidiary, is considered a variable interest entity and is consolidated by the Company.
Tim Re II repurchased the Class B shares subsequent to December 31, 2009, which was the end of the contract
period.

During 2007 and 2006, we participated in the formation of Starbound Reinsurance II Ltd. (“Starbound II”) and
Starbound Reinsurance Ltd. (“Starbound Re”), respectively. These joint ventures provided capacity to the U.S.
property catastrophe market, primarily for the 2007 and 2006 U.S. hurricane seasons, respectively. While these
joint ventures were active, we owned a minority interest share of the entities and accounted for them as
investments in other ventures, under equity method. These joint ventures have subsequently terminated and
have returned capital to the joint venture shareholders. Effective July 31, 2008 and August 31, 2007, we
repurchased all of the issued and outstanding share capital of Starbound II and Starbound Re, respectively. We
now account for these entities as consolidated subsidiaries.

In addition, during 2006, we sold third party capital in Timicuan Reinsurance Ltd. (“Tim Re”) to provide
additional capacity to accept property catastrophe excess of loss reinsurance business for the 2006 hurricane
season, in return for a profit commission. In January 2007, the Company purchased all of the issued and
outstanding equity securities of Tim Re and now accounts for Tim Re as a consolidated subsidiary.

Ventures works on a range of other customized reinsurance transactions. For example, we have participated in
and continuously analyze, other attractive opportunities in the market for cat-linked securities and derivatives. We
believe our products contain a number of customized features designed to fit the needs of our partners, as well
as our risk management objectives.

Strategic Investments. Ventures also pursues strategic investments where, rather than assuming exclusive
management responsibilities ourselves, we instead partner with other market participants. These investments are
directed at classes of risk other than catastrophe, and at times may also be directed at non-insurance risks. We
find these investments attractive both for their expected returns, and also because they provide us diversification
benefits and information and exposure to other aspects of the market.

Examples of these investments include our investments in Tower Hill Insurance Group, LLC (“THIG”), Tower Hill
Claims Services, LLC (“THCS”) and Tower Hill Claims Management, LLC (“THCM”) (collectively, the “Tower Hill
Companies”), which operate primarily in the State of Florida, Essent Group Ltd. (“Essent”) and Platinum
Underwriters Holdings Ltd. (“Platinum”). THIG is a managing general agency specializing in insurance coverage
for site built and manufactured homes. THCS and THCM provide claim adjustment services through exclusive
agreements with THIG. During the third quarter of 2008, we invested $50.0 million in the Tower Hill Companies,
representing a 25.0% ownership interest, to expand our core platforms by obtaining ownership in an additional
distribution channel for the Florida homeowners market and to enhance our relationships with other stakeholders.
Essent provides mortgage insurance and reinsurance coverage for mortgages located in the U.S. Platinum is a
Bermuda-domiciled reinsurance company listed on the New York Stock Exchange.

Weather Operations. We undertake weather related consulting activities through our operating companies,
principally including Weather Predict Inc. (“Weather Predict”), WeatherPredict Consulting Inc. (“WP Consulting”)
and Accurate Environmental Forecasting Inc. (“AEF”). Through these subsidiaries we provide fee-based
consulting services, sell weather-related information and forecasts, and engage in education, research and
development, and loss mitigation activities, such as the RenaissanceRe Wall of Wind research facility located in
southern Florida and the Stormstruck® interactive weather experience at the Walt Disney World® Resort in
Florida.

Weather and Energy Risk Management Operations. We provide energy related risk management solutions and
financial products through Renaissance Trading and REAL and sell certain financial products primarily to address
weather risks, and engage in certain weather, energy and commodity derivatives trading activities. Principally
through REAL, we expect that our participation will increase in the trading markets for securities and derivatives
linked to energy, commodities, weather, other natural phenomena, and/or products or indices linked in part to
such phenomena. While our activities focus on financial products that allow various energy, utility and other
customers to manage their exposures to energy related commodities, we expect our own results in this area to
potentially be volatile over time. As this unit grows, we will seek to continue to invest in operating and control
environment systems and procedures, hire staff and develop and install management information and other
systems.

Business activities that appear in our consolidated underwriting results, such as DaVinci and certain reinsurance
transactions, are included in our Reinsurance segment results; the results of our investments, such as Top Layer
Re, and Platinum, our weather and energy related activities and other ventures are included in the “Other”
category of our segment results.

Competition

The markets in which we operate are highly competitive, and we believe that competition is increasing and
becoming more robust. Our competitors include independent reinsurance and insurance companies, subsidiaries
and/or affiliates of globally recognized insurance companies, reinsurance divisions of certain insurance
companies and domestic and international underwriting operations, including underwriting syndicates at Lloyd’s.
As our business evolves over time we expect our competitors to change as well.

In 2009, enhanced competition from new entrants in the reinsurance market appears to have been deferred to a
degree due to the issues that faced the capital and credit markets. However, these issues have somewhat
subsided and we anticipate renewed competition from entities such as hedge funds, investment banks,
exchanges and other capital market participants that had shown interest over the past several years in entering
the reinsurance market. In addition, we continue to anticipate further, and perhaps accelerating, growth in
financial products such as exchange traded catastrophe options, cat-linked securities, unrated privately held
reinsurance companies providing collateralized reinsurance, catastrophe-linked derivative agreements and other
financial products, intended to compete with traditional reinsurance. We believe that competition from
non-traditional sources such as these will increase in the future. Many of these competitors have greater
financial, marketing and management resources than we do. In addition, the tax policies of the countries where
our customers operate, as well as government sponsored or backed catastrophe funds, affect demand for
reinsurance. We are unable to predict the extent to which the foregoing new, proposed or potential initiatives may
affect the demand for our products or the risks which may be available for us when providing coverage.

Individual Risk Segment

We define our Individual Risk segment to include underwriting that involves understanding the characteristics of
the original underlying insurance policy. Our Individual Risk segment is managed, effective January 2010, by the
Global Chief Underwriting Officer. Our Individual Risk operations seek to identify and write classes of business
which we believe to be attractively priced relative to the risk exposure and where our capabilities in modeling,
analytical tools and information systems may provide a competitive advantage. In 2009, our crop insurance
business was the most significant contributor to the results of our Individual Risk segment, as shown in the table
below. We currently expect this relationship to continue in 2010, as a result of factors including expected further
softening of market conditions in respect of other lines of primary insurance business we had historically targeted,
among other factors.

The following table shows our Individual Risk gross premiums written by major type of business:

2009

2008

2007

Gross
Premiums
Written

Percentage
of Gross
Premiums
Written

Gross
Premiums
Written

Percentage
of Gross
Premiums
Written

Gross
Premiums
Written

Percentage
of Gross
Premiums
Written

Year ended December 31,
(in thousands, except percentages)

Individual Risk gross premiums written

Crop
Commercial multi-line
Commercial property
Personal lines property

$290,324
106,183
84,821
49,459

54.7% $272,559
20.0% 119,987
16.0% 134,601
60,162

9.3%

46.4% $178,728
20.4% 162,422
23.0% 164,438
51,006
10.2%

32.1%
29.2%
29.5%
9.2%

Total Individual Risk gross premiums

written

$530,787

100.0% $587,309

100.0% $556,594

100.0%

Our Individual Risk business is written by RenRe Insurance through its principal operating subsidiaries:

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Agro National Inc. (“Agro National”) – a managing general underwriter of crop insurance that
participates in the U.S. federal government’s Multiple Peril Crop Insurance program (“MPCI”);

Glencoe Insurance Ltd. (“Glencoe”) – a Bermuda domiciled excess and surplus lines insurance
company that is currently eligible to do business on an excess and surplus lines basis in 48 U.S. states,
the District of Columbia, Puerto Rico and the U.S. Virgin Islands;

Lantana Insurance Ltd. (“Lantana”) – a Bermuda domiciled insurance company currently eligible as an
excess and surplus lines carrier in 48 U.S. states, the District of Columbia, Puerto Rico and the U.S.
Virgin Islands;

Stonington Insurance Company (“Stonington”) – a Texas domiciled insurance company that is licensed
on an admitted basis in 50 states and the District of Columbia;

Stonington Lloyds Insurance Company (“Stonington Lloyds”) – a Texas domiciled Lloyd’s plan insurer;
and

RenRe Insurance Underwriters Inc. (“RenRe Underwriters”) – a managing general underwriter through
which we underwrite our large and complex commercial property insurance risk business.

Our principal contracts currently include insurance policies and quota share reinsurance with respect to risks
including: 1) crop insurance, which includes multi-peril crop insurance, crop hail and other named peril
agriculture risk management products; 2) commercial property, which principally includes catastrophe-exposed
commercial property products; 3) commercial multi-line, which includes commercial property and liability
coverage, such as general liability, automobile liability and physical damage, building and contents, professional
liability and various specialty products; and 4) personal lines property, which principally includes homeowners
personal lines property coverage and catastrophe exposed personal lines property coverage.

Our Individual Risk business is currently produced primarily through four distribution channels:

1) Wholly owned program managers – where we write primary insurance through wholly owned

specialized program managers;

2) Third party program managers – where we write primary insurance through third party specialized
program managers, who produce business pursuant to agreed-upon underwriting guidelines and
provide related back-office functions;

3) Quota share reinsurance – where we write quota share reinsurance with primary insurers who produce
business pursuant to agreed-upon underwriting guidelines and provide most back-office functions; and

4) Broker and agent produced business – where we write primary insurance produced through licensed

intermediaries on a risk-by-risk basis.

The following table shows the percentage of our Individual Risk gross premiums written by distribution channel:

2009

2008

2007

Gross
Premiums
Written

Percentage
of Gross
Premiums
Written

Gross
Premiums
Written

Percentage
of Gross
Premiums
Written

Gross
Premiums
Written

Percentage
of Gross
Premiums
Written

Year ended December 31,
(in thousands, except percentages)

Individual Risk gross premiums written

Program managers – wholly

owned (1)

Program managers – third party
Quota share reinsurance
Broker and agent produced business

$302,269
189,690
40,117
(1,289)

56.9% $272,559
35.7% 216,880
97,444
426

7.6%
(0.2%)

46.4% $178,728
36.9% 235,849
16.6% 139,952
2,065

0.1%

32.1%
42.4%
25.1%
0.4%

Total Individual Risk gross premiums

written

$530,787

100.0% $587,309

100.0% $556,594

100.0%

(1) Program managers – wholly owned represents Agro National which we acquired in an asset purchase on
June 2, 2008 and for 2009, our commercial property operations. The table above is presented as if Agro
National has been a wholly-owned subsidiary since the first period presented.

We underwrite crop insurance primarily through Agro National, whose business we acquired in 2008 through an
asset acquisition, and which previously had been our long-term managing general agent, and through Stonington,
which participates in the U.S. federally sponsored MPCI Program. Agro National and Stonington focus on
traditional multi-peril crop insurance, crop hail, and other agriculture risk management products, all offered
through independent agents. In 2009, our crop insurance business saw an increase in appointed agents, policy
count and insured acres, offset by declines in commodity prices used in determining the policy premium. In
future periods, while we plan to continue to seek operational expansion of our crop insurance business, we
anticipate that our gross premiums written will be impacted by our disciplined underwriting approach and subject
to fluctuations from a number of factors including the impact of relevant commodity prices, and the potential
changes to the SRA which may come into effect for the 2011 crop insurance underwriting year.

In respect of other lines of business in our Individual Risk segment, we seek to identify and do business with third
party program managers and quota share reinsurance cedants whom we believe utilize superior underwriting
methodologies. We rely on these third parties for services including policy issuance, premium collection, claims
processing, and compliance with various state laws and regulations including licensing. We seek to work closely
with these partners, attempting to employ our analytical methodologies and, where appropriate, our expertise in
catastrophe risk, to arrive at adequate pricing for the risks being underwritten. We seek to structure these
relationships to provide value to both parties and meaningful protections to us. Historically, our strategy relating to
third party program manager relationships has been to pursue a relatively small number of relatively large
relationships. We launched our commercial insurance operations during 2009.

We actively oversee our third party relationships through a program operations team at RenRe North America Inc.
and through the use of proprietary tools such as PACeR. Our program operations team includes professionals
from diverse disciplines. This group assists with the initial due diligence as well as the ongoing monitoring of
these third parties. Our ongoing monitoring includes periodic audits of our third party program managers and
third party administrators. In addition, for our large third party program managers we generally maintain an
employee in an underwriting capacity on-site at the program manager to oversee the program manager’s
compliance with our prescribed underwriting guidelines. We generally seek to have contractual performance
standards for each of our programs and third party administrators whose compensation is subject to adjustment
based on meeting these standards. The program operations team audits compliance with our underwriting
guidelines and contractually agreed operating guidelines and performance standards. The program operations
team also seeks to ensure corrective action is taken quickly to resolve issues identified during the audit process.

Competition

In our Individual Risk business, we face competition from independent insurance companies, subsidiaries or
affiliates of major worldwide companies and others, some of which have greater financial and other resources
than we do. Primary insurers compete on the basis of various factors including distribution channels, product,
price, service, financial strength and reputation. In our Individual Risk business, we compete not only in respect
of the insurance and reinsurance products we offer, but in respect of the contractual relationships with the third
party program managers with whom we seek to partner. Increased competition in respect of our products could
result in decreased premium rates, less attractive terms and conditions, and a decrease in our share of programs
we believe to be attractive. Increased competition in respect of our program manager partners, as to whom we
seek to be extremely selective and whose relationship we seek to tightly manage in a disciplined, consistent
fashion, could result in less favorable terms and conditions in respect of our contractual arrangements with our
partners, the loss of existing program manager relationships, or constrain our ability to add new relationships to
our operations. Competition in the crop insurance business is also impacted by changes in the terms of the SRA
or other program alterations implemented by the RMA, which could adversely impact the market, and could shift
the focus of competition from underwriting and quality services, where we believe our operations to be strong, to
other avenues where our ability to compete for customers may be lessened. In addition, there has been a growing
trend of insurance and reinsurance companies acquiring third party program managers. Acquisitions of third
party program managers with whom we do business by other insurance or reinsurance companies could result in
us losing that program manager relationship. Any of the foregoing could adversely impact the prospects for
potential growth and for profitability of our Individual Risk segment.

RATINGS

Financial strength ratings are an important factor in respect of the competitive position of reinsurance and
insurance companies. Rating organizations continually review the financial positions of our reinsurers and
insurers. We continue to receive high claims-paying and financial strength ratings from A.M. Best Co. (“A.M.
Best”), Standard & Poor’s Rating Agency (“S&P”), Moody’s and Fitch. These ratings represent independent
opinions of an insurer’s financial strength, operating performance and ability to meet policyholder obligations, and
are not an evaluation directed toward the protection of investors or a recommendation to buy, sell or hold any of
our securities.

Presented below are the ratings of our principal operating subsidiaries and joint ventures by segment and the
senior debt ratings and enterprise risk management (“ERM”) rating of RenaissanceRe as of February 10, 2010.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations, Capital
Resources, Credit Ratings” for information about recent ratings actions.

At February 10, 2010

A.M. Best

S&P (4)

Moody’s

Fitch

REINSURANCE SEGMENT (1)
Renaissance Reinsurance
DaVinci
Top Layer Re
Renaissance Europe

INDIVIDUAL RISK SEGMENT (1)

Glencoe
Stonington
Stonington Lloyds
Lantana

RENAISSANCERE (2)

RENAISSANCERE (3)

A+
A
A+
A+

A
A
A
A

—

AA-
A1
A+ —
AA —
AA- —

A+ —
A+ —
A+ —
A+ —

A
—
—
—

—
—
—
—

BBB+

Excellent —

—

(1) The A.M. Best, S&P, Moody's and Fitch ratings for the companies in the Reinsurance and Individual Risk

segments reflect the insurer's financial strength rating (see explanation of the rating levels below).

(2) The A.M. Best, S&P, Moody's and Fitch ratings for RenaissanceRe represent the credit ratings on its senior

unsecured debt.

(3) The S&P rating for RenaissanceRe represents the rating on its Enterprise Risk Management practices.

(4) The S&P ratings for the companies in the Reinsurance (excluding Top Layer) and Individual Risk segments
reflect, in addition to the insurer's financial strength rating, the insurer's counterpary party credit rating.

“A+” is the second highest designation of A.M. Best’s sixteen rating levels. “A+” rated insurance

A.M. Best.
companies are defined as “Superior” companies and are considered by A.M. Best to have a very strong ability to
meet their obligations to policyholders. “A” is the third highest designation assigned by A.M. Best, representing
A.M. Best’s opinion that the insurer has an excellent ability to meet its ongoing obligations to policyholders.

In addition, A.M. Best assigns an issuer credit rating (“ICR”) to an entity which is an opinion on the ability of an
entity to meet its senior obligations.

On January 29, 2009, A.M. Best affirmed the financial strength rating (the “FSR”) of “A+” (Superior) of
Renaissance Reinsurance and Renaissance Europe. A.M. Best also affirmed the ICR of “a-” on the Company’s
senior notes. Concurrently, A.M. Best upgraded the FSR to “A” (Excellent) from “A-” (Excellent) for Glencoe,
Lantana, Stonington and Stonington Lloyds. Additionally, the FSR of DaVinci was affirmed at “A” (Excellent). The
outlook is stable for these ratings.

S&P. The “AA” range (“AA+”, “AA”, AA-”), which has been assigned by S&P to Renaissance Reinsurance,
Renaissance Reinsurance of Europe (“Renaissance Europe”) and Top Layer Re, is the second highest rating
assigned by S&P, and indicates that S&P believes the insurers have very strong financial security characteristics,
differing only slightly from those rated higher. S&P assigns an issuer credit rating to an entity which is an opinion
on the credit worthiness of obligor with respect to a specific financial obligation.

On August 14, 2009, S&P initiated coverage on certain insurance subsidiaries of RenRe Insurance, namely,
Glencoe, Stonington, Stonington Lloyd’s and Lantana, assigning a counterparty credit rating (“CCR”) and FSR of
A+. The outlook is stable for these ratings.

On January 21, 2009, S&P initiated coverage of Renaissance Europe, assigning a rating of “AA-” for both its CCR
and FSR. The outlook on Renaissance Europe is stable.

On December 13, 2007, S&P raised its CCR on RenaissanceRe to “A” from “A-”. At the same time, S&P raised
its CCR and FSR on Renaissance Reinsurance to “AA-” from “A+”. In addition, S&P raised its CCR on DaVinci to
“A+” from “A”. The outlook is stable for these ratings.

In addition, S&P assesses companies Enterprise Risk Management (“ERM”) practices, which is an opinion on the
many critical dimensions of risk that determine overall creditworthiness. RenaissanceRe has been assigned an
ERM rating of “Excellent”, which is the highest rating assigned by S&P, and indicates that S&P believes the
Company has extremely strong capabilities to consistently identify, measure, and manage risk exposures and
losses within the Company’s predetermined tolerance guidelines.

Moody’s. Moody’s Insurance Financial Strength Ratings and Moody’s Credit Ratings represent its opinions of
the ability of insurance companies to pay punctually policyholder claims and obligations and senior unsecured
debt instruments. Moody’s believes that insurance companies rated A1, such as Renaissance Reinsurance, and
companies rated A3, such as RenaissanceRe, offer good financial security. However, Moody’s believes that
elements may be present which suggest a susceptibility to impairment sometime in the future.

On November 2, 2009, Moody’s raised the insurance FSR of Renaissance Reinsurance to A1 from A2 and the
senior debt rating of RenaissanceRe to A3 from Baa1. The outlook is stable for these ratings.

Fitch. Fitch Ratings Ltd. Issuer Financial Strength ratings provide an assessment of the financial strength of an
insurance organization. Fitch believes that insurance companies rated “A”, such as Renaissance Reinsurance,
have “Strong” capacity to meet policyholders and contract obligations on a timely basis with a low expectation of
ceased or interrupted payments. Fitch also provides Long-Term Credit Ratings, used as a benchmark measure of
probability of default; these were formerly described as Issuer Default Ratings. RenaissanceRe has been rated
“BBB+”, meaning there are currently expectations of low credit risk.

While the ratings of our principal operating subsidiaries and joint ventures within our Reinsurance segment
remain among the highest in our business, adverse ratings actions could have a negative effect on our ability to
fully realize current or future market opportunities. In addition, it is common for our reinsurance contracts to
contain provisions permitting our customers to cancel coverage pro-rata if our relevant operating subsidiary is
downgraded below a certain rating level. Whether a client would exercise this right would depend, among other
factors, on the reason for such a downgrade, the extent of the downgrade, the prevailing market conditions and
the pricing and availability of replacement reinsurance coverage. Therefore, in the event of a downgrade, it is not
possible to predict in advance the extent to which this cancellation right would be exercised, if at all, or what

effect such cancellations would have on the financial condition or future operations, but such effect potentially
could be material. To date we are not aware that we have experienced such a cancellation. Our ratings are
subject to periodic review and may be revised or revoked by the agencies which issue them.

UNDERWRITING AND ENTERPRISE RISK MANAGEMENT

Underwriting

Our primary underwriting goal is to construct a portfolio of reinsurance and insurance contracts and other
financial risks that maximizes our return on shareholders’ equity, subject to prudent risk constraints, and to
generate long-term growth in tangible book value per common share plus the change in accumulated dividends.
We assess each new (re)insurance contract on the basis of the expected incremental return relative to the
incremental contribution to portfolio risk.

Reinsurance

We have developed a proprietary, computer-based pricing and exposure management system, REMS©. Since
inception, we have continued to invest in and improve REMS©, incorporating our underwriting and modeling
experience, additional proprietary software and a significant amount of new industry data. REMS© has analytic
and modeling capabilities that help us to assess the risk and return of each incremental reinsurance contract in
relation to our overall portfolio of reinsurance contracts. We combine the analyses generated by REMS© with
other information available to us, including our own knowledge of the client submitting the proposed program, to
assess the premium offered against the risk of loss and the cost of consumed capital which the program
presents. We utilize a multiple model and multiple risk approach combining both probabilistic and deterministic
techniques. The underlying risk models integrated into our underwriting and REMS© framework are a
combination of internally constructed and commercially available models. We use commercially available natural
hazard catastrophe models to assist with validating and stress testing our base model and REMS© results. We
continually strive to improve our analytical techniques for both natural hazard and non-natural hazard models in
REMS© and while our experience is most developed for analyzing natural hazard catastrophe risks, we continue
to make significant advances in our capabilities for assessing non-natural hazards catastrophe risks.

We believe that REMS© is a robust underwriting and risk management system that has been successfully
integrated into our business processes and culture. Before we bind a reinsurance risk, exposure data, historical
loss information and other risk data is gathered from customers. The exposure data is input into the REMS©
modeling system and used as a base to create risk distributions to represent the risk being evaluated. We believe
that the REMS© modeling system helps us to analyze each policy on a consistent basis, assisting our
determination of what we believe to be an appropriate price to charge for each policy based upon the risk that is
assumed. REMS© combines computer-generated statistical simulations that estimate event probabilities with
exposure and coverage information on each client’s reinsurance contract to produce expected claims for
reinsurance programs submitted to us. Operationally, on a deal-by-deal basis, our models employ simulation
techniques that have the ability to generate 40,000 years of loss activity. When deemed necessary, we stress test
the 40,000 year simulations with simulations of up to 1,000,000 years. At a consolidated level, we routinely utilize
simulations of 500,000 years to incorporate investment risk, expense risk and operational risk at a portfolio and
risk assuming entity level. For natural hazards, we have modeled certain simulated events in excess of $400
billion in insured losses. From this simulation, we generate a probability distribution of potential outcomes for
each policy in our portfolio and for our total portfolio. In part, through the utilization of REMS©, we seek to
compare our estimate of the expected returns in respect of a contract with the amount of capital that we
notionally allocate to the contract based on our estimate of its marginal impact on our portfolio of risks. We have
also customized REMS© by including additional perils, risks and geographic areas that may not be captured in
the commercially available models.

We periodically review the estimates and assumptions that are reflected in REMS© and our other tools. For
example, in the second half of 2009 we assessed recent U.S. Geological Survey research updates and
independently evaluated and revised our assumptions relating to U.S. earthquake risks. In 2005, we revised our
assumptions on Atlantic basin hurricane frequency and severity. The publicly available commercial catastrophe
models historically base their frequency and severity distributions on the last 100 years of hurricane activity,
assuming that this time frame is an appropriate framework on which to base estimates of the hurricane risk to
which the insurance industry is exposed. We currently do not believe, based on our review of the scientific
literature, private research, and discussions with climatologists, meteorologists and other weather scientists,
including those at Weather Predict, that the past 100 years of data is reflective of current climatological risks. In

particular, we believe there has been an increase in the frequency and severity of hurricanes that have the
potential to make landfall in the U.S., potentially as a result of decadal ocean water temperature cyclical trends, a
longer-term trend towards global warming, or both or other factors. We started using these revised assumptions in
REMS© to model and evaluate our portfolio of risk in the latter part of 2005, whereas commercially available
models did not release updated models until late 2006. The process of updating all of the underlying risk models
is continuous, and many of the assumptions involve significant judgment on our part, and further experience or
scientific research may lead us to further adjust these assumptions. Changes in our modeled assumptions may
impact from time to time the amount of capacity we are prepared to offer.
Our catastrophe reinsurance underwriters use REMS© in their pricing decisions, which we believe provides them
with several competitive advantages. These include the ability:

(cid:129)

to simulate a range of potential outcomes that adequately represents the risk to an individual contract;

to analyze the incremental impact of an individual reinsurance contract on our overall portfolio;

to better assess the underlying exposures associated with assumed retrocessional business;

to price contracts within a short time frame;

to capture various classes of risk, including catastrophe and other insurance risks;

to assess risk across multiple entities (including our various joint ventures) and across different
components of our capital structure; and

to provide consistent pricing information.

As part of our risk management process, we also use REMS© to assist us with the purchase of reinsurance
coverage for our own account.
Our underwriting and risk management process, in conjunction with REMS©, quantifies and manages our
exposure to claims from any single catastrophic event and the exposure to losses from a series of catastrophic
events. As part of our pricing and underwriting process, we also assess a variety of other factors, including:

(cid:129)

the reputation of the proposed cedant and the likelihood of establishing a long-term relationship with
the cedant;

the geographic area in which the cedant does business and its market share;

historical loss data for the cedant and, where available, for the industry as a whole in the relevant
regions, in order to compare the cedant’s historical catastrophe loss experience to industry averages;

the cedant’s pricing strategies; and

the perceived financial strength of the cedant.

In order to estimate the risk profile of each line of non-natural hazard reinsurance (i.e. lines of business within our
specialty unit), we establish probability distributions and assess the correlations with the rest of our portfolio. In
lines with catastrophe risk, such as excess workers’ compensation and terrorism, we are directly leveraging our
skill in modeling for our property catastrophe reinsurance risks, and seek to appropriately estimate and manage
the correlations between these specialty lines and our catastrophe reinsurance portfolio. For other classes of
business, in which we believe we have little or no natural catastrophe exposure, and therefore less correlation
with our property catastrophe reinsurance coverages, we derive probability distributions from a variety of
underlying information sources, including recent historical experience, and the application of judgment as
appropriate. The nature of some of these businesses lends itself less to the analysis that we use for our property
catastrophe reinsurance coverages, reflecting both the nature of available exposure information, and the impact
of human factors such as tort exposure. We produce probability distributions to represent our estimates of the
related underlying risks which our products cover, which we believe helps us to make consistent underwriting
decisions and to manage our total risk portfolio.

Individual Risk

For our catastrophe-exposed business in our Individual Risk segment, we generally seek to utilize proprietary
modeling tools similar to those that have been developed in our Reinsurance operations, as described above. We
have modified these tools to create proprietary ways to price and understand risk on a primary insurance level.
We also combine these analyses with those of our Reinsurance segment to monitor our aggregate group
catastrophic exposures. Although we have made significant investments in our systems, tools and procedures for
our Individual Risk operations, we do not believe these to be as developed as our underwriting systems for our
Reinsurance operations.

For the business produced through third party program managers, we combine an evaluation process with
ongoing periodic auditing and monitoring for those program managers that we utilize. When evaluating a potential
new program manager, we consider numerous factors including: (i) whether the program manager can provide
and help us analyze historic loss and other business data; (ii) whether the program manager has the ability to
provide us with appropriately detailed information about the risks being assumed so that we can adequately
analyze and model the portfolio; (iii) whether the program manager will agree to accept a portion of their
compensation based on the underwriting performance of their program and provide us with the other terms and
conditions we require; (iv) whether the program manager has the infrastructure to process the business produced
for us; (v) our assessment of the integrity and experience of the program manager’s management team; (vi) the
potential profitability of the program to us; and (vii) the availability of our internal resources to appropriately
execute transaction terms, and provide the ongoing monitoring we require. In considering pricing for the products
to be offered by the program manager, we evaluate the expected frequency and severity of losses, the costs of
providing the necessary coverage (including the cost of administering policy benefits, claims handling expenses,
sales and other administrative and overhead costs), and the necessity of third party reinsurance. All of these
factors are evaluated to develop both a stand-alone view on expected profitability over the life of the program, as
well as the marginal effect on the overall portfolio of risk being assumed by the Company.

We provide our third party program managers with written underwriting guidelines and seek to regularly monitor
their compliance with our guidelines. Also, our contracts generally provide that a portion of the commission
payable to our third party program managers will be on a retrospective basis, which is intended to permit us to
adjust commissions based on our profitability and claims experience as they develop. We rely on our third party
program managers to perform underwriting pursuant to these contractual guidelines, and believe we benefit from
their proximity to the customer, developed distribution channels and expertise in niche areas.

In addition to utilizing REMS© within our Individual Risk operations, we have developed a proprietary information
management and analytical database, PACeR. All policy, claims and risk data for each program is housed within
this database. We use this data for a range of activities, including but not limited to exposure-weighted price
monitoring, peak zone exposure management, predictive analytics, actuarial analyses, new product development,
claims operations management, and accounting. By compiling this detailed data over time we hope to create a
competitive advantage.

In our crop insurance business, we have invested in an experienced team of crop, commodity and economic
analysts who have developed proprietary tools to manage risk, pricing and exposure in this business. These
proprietary tools are constructed from databases that involve a comprehensive set of historical profit and loss
experience data developed at a crop, state, and in some cases, county and farm level of detail. We augment this
with stochastic simulation techniques similar to those used in our property catastrophe reinsurance business and
also incorporate proprietary weather forecast information to support our efforts to build a portfolio of risks we
estimate to have a likelihood of producing attractive returns based on modeled outcomes.

Enterprise Risk Management

We have sought to develop and utilize a series of tools and processes that support a robust system of ERM within
our organization. We consider ERM to be a key process, managed by our senior executive team under the
oversight of our Board of Directors, and implemented by personnel from across our organization. We believe that
ERM helps us to identify potential events that may affect us, to quantify, evaluate and manage the risks to which
we are exposed, and to provide reasonable assurance regarding the achievement of our objectives. We believe
that effective ERM can provide us with a significant competitive advantage. We also believe that effective ERM
assists our efforts to minimize the likelihood of suffering financial outcomes in excess of the ranges which we
have estimated in respect of specific investments, underwriting decisions, or other operating or business
activities. We believe that our risk management tools support our strategy of pursuing opportunities and help us
to identify opportunities that we believe to be the most attractive. In particular, we utilize our risk management
tools to support our efforts to monitor our capital position, on a consolidated basis and for each of our major
operating subsidiaries, and to allocate an appropriate amount of capital to support the risks that we have
assumed in the aggregate and for each of our major operating subsidiaries. We believe that our risk management
efforts are essential to our corporate strategy and our goal of achieving long-term growth in tangible book value
per share plus the change in accumulated dividends for our shareholders.

Our ERM framework comprises three primary areas of focus, as set forth below:

(1) Assumed Risk. We define assumed risk as all activities where we deliberately take risk against the
Company’s capital base, including underwriting risks and other quantifiable risks such as credit risk
and interest rate risk as they relate to investments, ceded reinsurance credit risk and strategic
investment risk, each of which can be analyzed in substantial part through quantitative tools and
techniques. Of these, we believe underwriting risk to be the most material to us. In order to understand,
monitor, quantify and proactively assess underwriting risk, we seek to develop and deploy appropriate
tools to, among other things, estimate the comparable expected returns on potential business
opportunities, and estimate the impact that such incremental business could have on our overall risk
profile. We use the tools and methods described above in “Underwriting” to seek to achieve these
objectives.

Embedded within our consideration of assumed risk is our management of the Company’s aggregate
risk profile. In part through the utilization of REMS© and our other systems and procedures, we seek to
analyze our in-force aggregate assumed risk portfolio on a daily basis. We believe this capability helps
us to manage our aggregate exposures, as well as to rigorously analyze individual proposed transactions
and evaluate them in the context of our in-force portfolio. This aggregation process captures line of
business, segment and corporate risk profiles, calculates internal and external capital tests and explicitly
models ceded reinsurance. Generally, additional data is added quarterly to our aggregate risk
framework to reflect updated or new information or estimates relating to matters such as interest rate
risk, credit risk, capital adequacy and liquidity. This information is used in day-to-day decision making
for underwriting, investments and operations and is also reviewed quarterly from both a unit level and in
respect of our consolidated financial position.

(2) Business Environment Risk. We define this as the risk of changes in the business, political or

regulatory environment that could negatively impact our short term or long-term financial results or the
markets in which we operate. Accordingly, these risks are predominately extrinsic to the Company and
in general, our ability to alter or eliminate these risks is limited. Rather, our efforts focus on monitoring
developments, assessing potential impacts of any such changes, and investing in cost effective means
to attempt to mitigate the consequences of and ensure compliance with any new requirements
applicable to us.

(3) Operational Risk. We believe we are subject to a number of additional risks arising out of operational,
regulatory, and other matters. We define operational risk as the risk that we fail to create, manage,
control or mitigate the people, processes, structures or functions required to execute our strategic and
tactical plans and assemble an optimized portfolio of assumed risk, and to adjust to and comply with
the evolving requirements of business environment risk applicable to us. In light of the rapid evolution
of our markets, business environment, and business initiatives, we seek to continually invest in the
tools, processes and procedures to cost-effectively mitigate our exposure to operational risk.

Identification and monitoring of business environment risk and operational risk is coordinated by senior personnel
including our Chief Financial Officer (“CFO”), General Counsel and Chief Compliance Officer (“CCO”), Corporate
Controller and Chief Accounting Officer (“CAO”), Chief Administrative Officer, Chief Risk Officer (“CRO”) and
Internal Audit, utilizing resources within the Company.

In an effort to identify and reduce operational and regulatory risk, we have significantly enhanced our control
environment and have added additional finance, legal and back-office resources, to keep pace with the rate of
growth experienced by the Company and will continue to do so in the future as appropriate. For example:

(cid:129)

we have developed and expanded the compliance and internal audit functions;

the accounting function has been strengthened by the addition of a significant number of professionals;

accounting, legal and/or compliance resources have been placed in our business units to monitor,
identify and resolve potential accounting, legal and compliance needs at the operational level; and

we have documented accounting guidelines for the review of all non-standard reinsurance contracts
and other structured and/or complex financial transactions.

Although financial reporting is a key area of our focus, other operational risks are addressed through our disaster
recovery program, human resource practices such as motivating and retaining top talent, and our strict
compliance with legal and tax protocols.

Controls and Compliance Committee. We believe that a key component of our current operational risk
management platform is our Controls and Compliance Committee. The Controls and Compliance Committee is
comprised of our CFO, CCO, CAO, Chief Administrative Officer, CRO, staff compliance professionals and
representatives from our business units. The purpose of the Controls and Compliance Committee is to establish,
assess the effectiveness of, and enforce policies, procedures and practices relating to accounting, financial
reporting, internal controls, regulatory, legal, compliance and related matters, for ensuring compliance with
applicable laws, regulations, the Company’s Code of Ethics and Conduct, and other relevant standards. In
addition, the Controls and Compliance Committee is charged with reviewing certain transactions that potentially
contain complex and/or significant underwriting, tax, legal, accounting, regulatory, reputational or compliance
issues.

Ongoing Development and Enhancement. We frequently seek to accurately capture, reflect and categorize risks
we monitor in part through quantitative risk distributions, even where we believe that such quantitative analysis is
not as robust or well developed as our tools and models for measuring and evaluating other risks, such as
catastrophe and market risks. We also seek to improve the methods by which we measure risks. We believe
effective risk management is a core attribute of our culture and is a continual process that requires ongoing
improvement and development. We seek from time to time to identify new best practices or additional
developments both from within our industry and from other sectors. We believe that our ongoing efforts to embed
ERM throughout our organization are important to our efforts to produce and maintain a competitive advantage to
achieve our corporate goals.

GEOGRAPHIC BREAKDOWN

Our exposures are generally diversified across geographic zones, but are also a function of market conditions and
opportunities. The Company’s largest exposure has historically been to the U.S. and Caribbean property
catastrophe market, which represented 47.2% of the Company’s gross premiums written for the year ended
December 31, 2009. A significant amount of our U.S. and Caribbean premium provides coverage against
windstorms, mainly U.S. Atlantic hurricanes, as well as earthquakes and other natural and man-made
catastrophes. The following table sets forth the percentage of our gross premiums written allocated to the territory
of coverage exposure:

Year ended December 31,
(in thousands, except percentages)

2009

2008

2007

Gross
Premiums
Written

Percentage
of Gross
Premiums
Written

Gross
Premiums
Written

Percentage
of Gross
Premiums
Written

Gross
Premiums
Written

Percentage
of Gross
Premiums
Written

Property catastrophe reinsurance
United States and Caribbean
Worldwide (excluding U.S) (1)
Europe
Worldwide
Australia and New Zealand
Other

Specialty reinsurance (2)

Total reinsurance (3)
Individual Risk (4)

$ 815,840
78,222
60,363
92,586
5,293
31,495
114,346

1,198,145
530,787

47.2% $ 745,016
75,489
72,153
67,371
5,455
23,465
159,770

4.5%
3.5%
5.4%
0.3%
1.8%
6.6%

42.9% $ 735,322
66,392
111,702
27,577
4,360
20,374
287,316

4.3%
4.2%
3.9%
0.3%
1.4%
9.2%

69.3% 1,148,719
587,309
30.7%

66.2% 1,253,043
556,594
33.8%

40.6%
3.7%
6.2%
1.5%
0.2%
1.1%
15.9%

69.2%
30.8%

Total gross premiums written

$1,728,932

100.0% $1,736,028

100.0% $1,809,637

100.0%

(1) The category “Worldwide (excluding U.S.)” consists of contracts that cover more than one geographic region
(other than the U.S.). The exposure in this category for gross premiums written to date is predominantly from
Europe and Japan.

(2) The category Specialty reinsurance consists of contracts that are predominantly exposed to U.S. and, to a

lesser extent, worldwide risks.

(3) Excludes $12.7 million, $5.7 million and $37.4 million of premium assumed from our Individual Risk

segment in 2009, 2008 and 2007, respectively.

(4) The category Individual Risk consists of contracts that are primarily exposed to U.S. risks.

RESERVES FOR CLAIMS AND CLAIM EXPENSES

We believe the most significant accounting judgment made by management is our estimate of claims and claim
expense reserves. Claims and claim expense reserves represent estimates, including actuarial and statistical
projections at a given point in time, of the ultimate settlement and administration costs for unpaid claims and
claim expenses arising from the insurance and reinsurance contracts we sell. We establish our claims and claim
expense reserves by taking claims reported to us by insureds and ceding companies, but which have not yet
been paid (“case reserves”), adding the costs for additional case reserves (“additional case reserves”) which
represent our estimates for claims previously reported to us which we believe may not be adequately reserved as
of that date, and adding estimates for the anticipated cost of claims incurred but not yet reported to us (“IBNR”).

The following table summarizes our claims and claim expense reserves by line of business and split between
case reserves, additional case reserves and IBNR at December 31, 2009 and 2008:

At December 31, 2009
(in thousands)

Property catastrophe reinsurance
Specialty reinsurance

Total Reinsurance
Individual Risk

Total

At December 31, 2008
(in thousands)

Property catastrophe reinsurance
Specialty reinsurance

Total Reinsurance
Individual Risk

Total

Case
Reserves

Additional
Case Reserves

IBNR

Total

$165,153
119,674

$148,252
101,612

$ 258,451 $ 571,856
604,104

382,818

284,827
189,389

249,864
3,658

641,269
332,999

1,175,960
526,046

$474,216

$253,522

$ 974,268 $1,702,006

$312,944
113,953

$297,279
135,345

$ 250,946 $ 861,169
636,650

387,352

426,897
253,327

432,624
14,591

638,298
394,875

1,497,819
662,793

$680,224

$447,215

$1,033,173 $2,160,612

Our gross claims and claim expense reserves decreased $458.6 million in 2009, from $2.2 billion at
December 31, 2008 to $1.7 billion at December 31, 2009, as shown in the table above. The decrease was driven
by $284.2 million of claims and claims expenses incurred during 2009, including $548.2 million of current
accident year claims and claim expenses, which was more than offset by a $264.0 million reduction of prior
accident year claims and claim expenses and $742.8 million of paid losses during 2009. The paid losses in 2009
include $183.9 million of losses on current accident year claims and claim reserves and $558.9 million on prior
accident year claims and claims expense reserves.

Our estimates of claims and claim expense reserves are not precise in that, among other matters, they are based
on predictions of future developments and estimates of future trends and other variable factors. Some, but not all,
of our reserves are further subject to the uncertainty inherent in actuarial methodologies and estimates. Because
a reserve estimate is simply an insurer’s estimate at a point in time of its ultimate liability, and because there are
numerous factors which affect reserves and claims payments that cannot be determined with certainty in
advance, our ultimate payments will vary, perhaps materially, from our estimates of reserves. If we determine in a
subsequent period that adjustments to our previously established reserves are appropriate, such adjustments are
recorded in the period in which they are identified. During the year ended December 31, 2009, changes to prior
year estimated claims reserves increased our net income by $244.5 million (2008 – $234.8 million, 2007 –
$233.2 million), excluding the consideration of changes in reinstatement premium, profit commissions,
redeemable noncontrolling interest – DaVinciRe and income tax expense.

Our reserving methodology for each line of business uses a loss reserving process that calculates a point estimate
for the Company’s ultimate settlement and administration costs for claims and claim expenses. We do not
calculate a range of estimates. We use this point estimate, along with paid claims and case reserves, to record
our best estimate of additional case reserves and IBNR in our financial statements. Under GAAP, we are not
permitted to establish estimates for catastrophe claims and claim expense reserves until an event occurs that
gives rise to a loss.

Reserving for our reinsurance claims involves other uncertainties, such as the dependence on information from
ceding companies, which among other matters, includes the time lag inherent in reporting information from the
primary insurer to us or to our ceding companies and differing reserving practices among ceding companies. The
information received from ceding companies is typically in the form of bordereaux, broker notifications of loss
and/or discussions with ceding companies or their brokers. This information can be received on a monthly,
quarterly or transactional basis and normally includes estimates of paid claims and case reserves. We sometimes
also receive an estimate or provision for IBNR. This information is often updated and adjusted from time-to-time
during the loss settlement period as new data or facts in respect of initial claims, client accounts, industry or
event trends may be reported or emerge in addition to changes in applicable statutory and case laws.

We recorded $586.3 million of gross claims and claim expenses incurred in the third quarter of 2008 as a result
of losses arising from hurricanes Gustav and Ike which struck the United States (“U.S.”) in the third quarter of
2008. Our estimates of losses from hurricanes Gustav and Ike are based on factors including currently available
information derived from the Company’s preliminary claims information from certain customers and brokers,
industry assessments of losses from the events, proprietary models, and the terms and conditions of our
contracts. Given the magnitude and relatively recent occurrence of these events, as well as the large storms of
2005, including hurricane Katrina, meaningful uncertainty remains regarding total covered losses for the
insurance industry and, accordingly, several of the key assumptions underlying our loss estimates. In addition,
our actual net losses from these events may increase if our reinsurers or other obligors fail to meet their
obligations. Our actual losses from these events will likely vary, perhaps materially, from these current estimates
due to the inherent uncertainties in reserving for such losses, including the preliminary nature of the available
information, the potential inaccuracies and inadequacies in the data provided by customers and brokers, the
inherent uncertainty of modeling techniques and the application of such techniques, the effects of any demand
surge on claims activity and complex coverage and other legal issues.

Because of the inherent uncertainties discussed above, we have developed a reserving philosophy which
attempts to incorporate prudent assumptions and estimates, and we have generally experienced favorable net
development on prior year reserves in the last several years. However, there is no assurance that this will occur in
future periods.

Our reserving techniques, assumptions and processes differ between our Reinsurance and Individual Risk
segments, as well as between our property catastrophe reinsurance and specialty reinsurance businesses within
our Reinsurance segment. Refer to our “Claims and Claim Expense Reserves Critical Accounting Estimates”
discussion in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”
for more information on the risks we insure and reinsure, the reserving techniques, assumptions and processes
we follow to estimate our claims and claim expense reserves, and our current estimates versus our initial
estimates of our claims reserves, for each of these units.

The following table represents the development of our GAAP balance sheet reserves for December 31, 1999
through December 31, 2009. This table does not present accident or policy year development data. The top line
of the table shows the gross reserves for claims and claim expenses at the balance sheet date for each of the
indicated years. This represents the estimated amounts of claims and claim expenses arising in the current year
and all prior years that are unpaid at the balance sheet date, including additional case reserves and IBNR
reserves. The table also shows the re-estimated amount of the previously recorded reserves based on experience
as of the end of each succeeding year. The estimate changes as more information becomes known about the
frequency and severity of claims for individual years. The “cumulative redundancy on net reserves” represents
the aggregate change to date from the indicated estimate of the gross reserve for claims and claim expenses, net
of losses recoverable on the second line of the table. The table also shows the cumulative net paid amounts as of
successive years with respect to the net reserve liability. At the bottom of the table is a reconciliation of the gross
reserve for claims and claim expenses to the net reserve for claims and claim expenses, the gross re-estimated
liability to the net re-estimated liability for claims and claim expenses, and the cumulative redundancy on gross
reserves.

With respect to the information in the table below, it should be noted that each amount includes the effects of all
changes in amounts for prior periods, including the effect of foreign exchange rates.

Year ended December 31,
(in millions)

Gross reserve for claims
and claim expenses

Reserve for claims and

claim expenses, net of
losses recoverable

1 Year Later
2 Years Later
3 Years Later
4 Years Later
5 Years Later
6 Years Later
7 Years Later
8 Years Later
9 Years Later
10 Years Later

Cumulative redundancy on

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

$478.6 $403.6 $572.9 $804.8 $977.9 $1,459.4 $2,614.6 $2,098.2 $2,028.5 $2,160.6 $1,702.0

$174.9 $237.0 $355.3 $605.3 $828.7 $1,241.6 $1,941.4 $1,796.3 $1,845.2 $1,861.1 $1,507.8
—
—
—
—
—
—
—
—
—
—

196.8 221.0 378.3 511.6 688.4 1,000.2 1,804.8 1,563.2 1,610.4 1,616.6
—
168.4 168.4 344.7 470.5 403.5
—
121.7 138.6 308.0 294.4 384.6
—
111.1 107.7 214.1 282.1 357.5
—
54.4 209.2 269.7 332.6
—
52.3 199.3 243.8 323.4
—
—
45.8 182.7 233.8
—
—
—
46.9 180.0
—
—
—
—
43.7
—
—
—
—
—

963.6 1,633.5 1,403.5 1,392.1
—
869.8 1,493.0 1,263.1
—
—
819.1 1,401.3
—
—
—
793.9
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—

81.9
38.7
36.8
30.8
32.2
31.1

net reserves

$143.8 $193.3 $175.3 $371.5 $505.3 $ 447.7 $ 540.1 $ 533.2 $ 453.1 $ 244.5 $

—

Cumulative Net Paid

Losses
1 Year Later
2 Years Later
3 Years Later
4 Years Later
5 Years Later
6 Years Later
7 Years Later
8 Years Later
9 Years Later
10 Years Later

Gross reserve for claims
and claim expenses
Reinsurance recoverable

on unpaid losses

Net reserve for claims and

$ 24.6 $ 11.1 $ 88.1 $ 81.9 $ 64.1 $ 338.9 $ 452.0 $ 304.5 $ 397.8 $ 372.8 $
437.2
488.3
541.1
571.8
—
—
—
—
—

90.2 119.1
0.3 152.0
3.2 111.6 122.6 134.0
(7.9) 128.0 101.6 129.7
(0.6) 107.0
96.6 164.7
2.6 111.7 114.0 172.3
—
9.0 123.3 121.0
—
—
—
—
—
—

532.0
656.2
—
—
—
—
—
—
—

684.0
873.8
958.0
—
—
—
—
—
—

583.6
—
—
—
—
—
—
—
—

16.0
1.2
2.7
(9.0)
3.3
4.7
6.3
12.5
14.0

15.1 123.0
—
16.7
—
—

—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—
—
—

$478.6 $403.6 $572.9 $804.8 $977.9 $1,459.4 $2,614.6 $2,098.2 $2,028.5 $2,160.6 $1,702.0

303.7 166.6 217.6 199.5 149.2

217.8

673.2

301.9

183.3

299.5

194.2

claim expenses

$174.9 $237.0 $355.3 $605.3 $828.7 $1,241.6 $1,941.4 $1,796.3 $1,845.2 $1,861.1 $1,507.8

$375.4 $225.6 $356.9 $398.9 $464.6 $1,011.6 $2,036.5 $1,537.4 $1,529.2 $1,896.6 $

—

Gross liability re-estimated
Reinsurance recoverable

on unpaid losses
re-estimated

—

344.2 181.9 176.9 165.1 141.2

217.7

635.1

274.3

137.1

280.0

Net liability re-estimated

$ 31.2 $ 43.7 $180.0 $233.8 $323.4 $ 793.9 $1,401.4 $1,263.1 $1,392.1 $1,616.6 $

Cumulative redundancy on

gross reserves

$103.2 $178.0 $216.0 $405.9 $513.3 $ 447.8 $ 578.1 $ 560.8 $ 499.3 $ 264.0 $

The following table presents an analysis of our paid, unpaid and incurred losses and loss expenses and a
reconciliation of beginning and ending reserves for claims and claim expenses for the years indicated:

Year ended December 31,
(in thousands)

Net reserves as of January 1

Net incurred related to:

Current year
Prior years

Total net incurred

Net paid related to:
Current year
Prior years

Total net paid

Total net reserves as of December 31
Losses recoverable as of December 31

Total gross reserves as of December 31

2009

2008

2007

$1,861,078 $1,845,221 $1,796,301

441,786
(244,499)

995,316
(234,827)

712,424
(233,150)

197,287

760,489

479,274

177,797
372,803

550,600

346,845
397,787

744,632

125,816
304,538

430,354

1,507,765
194,241

1,861,078
299,534

1,845,221
183,275

$1,702,006 $2,160,612 $2,028,496

For the year ended December 31, 2009, the prior year favorable development of $244.5 million included
favorable development of $249.5 million attributable to our Reinsurance segment and adverse development of
$5.0 million attributable to our Individual Risk segment. Within our Reinsurance segment, our property
catastrophe reinsurance unit experienced $184.4 million of favorable development on prior years’ claims and
claim expense reserves and our specialty reinsurance unit experienced $65.1 million of favorable development
on prior years’ claims and claim expense reserves.

The favorable development within our property catastrophe reinsurance unit of $184.4 million in 2009 was
principally attributable to a reduction in ultimate net losses associated with the 2008 hurricanes, Gustav and Ike
($44.7 million); the 2005 hurricanes, Katrina, Rita and Wilma ($25.5 million); the 2007 European windstorm
Kyrill ($16.7 million); the 2007 California wildfires ($14.1 million); the 2007 flooding in the United Kingdom
(“U.K.”) ($14.6 million); and the 2004 hurricanes, Charley, Frances, Ivan and Jeanne ($11.3 million), due to
better than expected reported claims activity, and with respect of the 2004 and 2005 hurricanes, the adoption of
a new actuarial technique using reported loss development factors to estimate the ultimate losses for these
events, as discussed in more detail in “Item 7. Management’s Discussion and Analysis of Financial Condition and
Results of Operations, Summary of Critical Accounting Estimates, Claims and Claim Expense Reserves, Property
Catastrophe Reinsurance.” The remaining favorable development within our property catastrophe reinsurance
unit was due to a reduction of ultimate net losses on a variety of smaller catastrophes such as hail storms, winter
freezes, floods, fires, tornadoes which occurred during the 2006 through 2008 accident years.

The favorable development within our specialty reinsurance unit of $65.1 million in 2009 was principally
attributable to lower than expected claims emergence on the 2005 through 2008 underwriting years of $87.6
million which was driven by the application of our formulaic actuarial reserving methodology for this business with
the reductions being due to actual paid and reported loss activity being more favorable to date than what was
originally anticipated when setting the initial IBNR reserves, $10.0 million due to a reduction on one claim on a
contract related to the 2005 hurricanes, and partially offset by a $32.5 million increase in our estimated ultimate
net losses on the 2008 Madoff matter.

The adverse development within our Individual Risk segment of $5.0 million in 2009 was principally driven by
$26.9 million of adverse development in our crop insurance business primarily due to an increase in the severity
of reported loss activity in 2009 on the 2008 crop year. This more than offset a $2.4 million reduction in ultimate
net losses on the 2004 and 2005 hurricanes principally due to the adoption of a new actuarial technique using
reported loss development factors to estimate the ultimate losses for these events, as discussed in more detail in
“Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Summary of
Critical Accounting Estimates, Claims and Claim Expense Reserves, Individual Risk”, $2.1 million of favorable
development due to changes in actuarial assumptions and $17.4 million of favorable development principally
driven by the application of our formulaic actuarial reserving methodology for this business with the reductions

being due to actual paid and reported loss activity being more favorable to date than what was originally
anticipated when setting the initial IBNR reserves.

For the year ended December 31, 2008, the prior year favorable development of $234.8 million included $188.1
million attributable to our Reinsurance segment and $46.7 million attributable to our Individual Risk segment.
Within our Reinsurance segment, the catastrophe reinsurance unit experienced favorable development on prior
years estimated ultimate claim reserves of $131.6 million, principally as a result of a comprehensive review of the
Company’s expected ultimate net losses associated with the 2005 hurricanes, Katrina, Rita and Wilma, which
resulted in an $82.7 million decrease in net losses from these events. The comprehensive review of the 2005
hurricanes included a case-by-case review of the claims for our largest outstanding additional case reserves by
cedant for each hurricane, reviewing updated information received from customers, brokers and other industry
sources regarding these claims, reviewing industry paid and reported loss development patterns for hurricanes
Katrina, Rita and Wilma and comparing these statistics to our paid and reported loss development patterns for
these events, and reviewing our historical experience for previous large catastrophes, including the 2004
hurricanes. Based on the work completed, we determined to reduce our current best estimate of the ultimate net
losses arising from these events by $82.7 million. The $82.7 million decrease in ultimate net losses was
comprised of a $58.6 million decrease in additional case reserves and a $28.3 million decrease in IBNR and
partially offset by a corresponding $4.2 million decrease in losses recoverable. We did not change our reserving
methodology as a result of this review. Our specialty reinsurance unit, within the Reinsurance segment, and our
Individual Risk segment experienced $56.5 million and $46.7 million, respectively, of favorable development in
2008. The favorable development within our specialty reinsurance unit and Individual Risk segment was
principally driven by the application of our formulaic actuarial reserving methodology for these books of business
with the reductions being due to actual paid and reported loss activity being more favorable to date than what
was originally anticipated when setting the initial IBNR reserves.

For the year ended December 31, 2007, the prior year favorable development of $233.2 million included $194.4
million attributable to our Reinsurance segment and $38.8 million attributable to our Individual Risk segment.
Within our Reinsurance segment, the catastrophe reinsurance unit experienced $93.1 million of favorable
development on prior years’ estimated ultimate claim reserves, principally as a result of a reduction of the
ultimate losses for the 2006 and 2005 accident years as reported claims have been, to date, less than expected.
Included in the 2005 accident year is a $19.2 million reduction in net claims and claim expenses associated with
hurricanes Katrina, Rita and Wilma. Our specialty reinsurance unit experienced $101.3 million of favorable
development in 2007. The favorable development within our specialty reinsurance unit and Individual Risk
segment was principally driven by the application of our formulaic actuarial reserving methodology for these
books of business with the reductions being due to actual paid and reported loss activity being more favorable to
date than what was originally anticipated when setting the initial IBNR reserves.

Net claims and claim expenses incurred were reduced by $3.3 million during 2009 (2008 – $1.9 million, 2007 –
$3.3 million) related to income earned on assumed reinsurance contracts that were classified as deposit
contracts with underwriting risk only. Other income was reduced by $0.7 million during 2009 (2008 – $1.9
million, 2007 – $1.4 million) related to premiums and losses incurred on assumed reinsurance contracts that
were classified as deposit contracts with timing risk only. Aggregate deposit liabilities of $63.9 million are
included in reinsurance balances payable at December 31, 2009 (2008 – $73.6 million) and aggregate deposit
assets of $nil are included in other assets at December 31, 2009 (2008 – $nil) associated with these contracts.

INVESTMENTS

Our investment guidelines stress preservation of capital, market liquidity, and diversification of risk. The large
majority of our investments consist of highly rated fixed income securities. We also hold a significant amount of
short term investments. Short term investments are managed as part of our investment portfolio and have a
maturity of one year or less when purchased. In addition, we have an allocation to other investments, including
hedge funds, private equity partnerships, senior secured bank loan funds and other investments. Our
investments are subject to market-wide risks and fluctuations, as well as to risks inherent in particular securities.

The table below summarizes our portfolio of invested assets:

At December 31,
(in thousands, except percentages)

U.S. treasuries
Agencies
Non-U.S. government (Sovereign debt)
FDIC guaranteed corporate
Non-U.S. government-backed corporate
Corporate
Agency mortgage-backed securities
Non-agency mortgage-backed securities
Commercial mortgage-backed securities
Asset-backed securities

Total fixed maturity investments, at fair value (1)

Short term investments, at fair value
Other investments, at fair value

Total managed investment portfolio

Investments in other ventures, under equity method

2009

2008

$ 918,157
165,577
198,059
855,988
248,746
1,135,504
393,397
36,383
251,472
92,509

4,295,792
1,002,306
858,026

6,156,124
97,287

14.7% $ 467,480
448,521
55,370
207,393
3,530
537,975
756,902
98,672
255,020
166,022

2.6%
3.2%
13.7%
4.0%
18.2%
6.3%
0.6%
4.0%
1.5%

68.8% 2,996,885
16.0% 2,172,343
773,475
13.7%

98.5% 5,942,703
99,879

1.5%

7.8%
7.4%
0.9%
3.4%
0.1%
8.9%
12.5%
1.6%
4.3%
2.7%

49.6%
36.0%
12.8%

98.4%
1.6%

Total investments

$6,253,411 100.0% $6,042,582 100.0%

(1)

Included in fixed maturity investments, at fair value at December 31, 2009 and 2008 are $736.6 million and
$nil, respectively, of fixed maturity investments designated as trading under ASC Topic 320 Investments –
Debt and Equity Securities.

For additional information regarding the investment portfolio, refer to “Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations, Summary of Results of Operations for 2009, 2008 and
2007, Investments”.

MARKETING

Reinsurance

We believe that our modeling and technical expertise, the risk management advice that we provide to our
customers, and our reputation for paying claims promptly has enabled us to become a provider of first choice in
many lines of business to our customers worldwide. We market our Reinsurance products worldwide exclusively
through reinsurance brokers and we focus our marketing efforts on targeted brokers. We believe that our existing
portfolio of business is a valuable asset and, therefore, we attempt to continually strengthen relationships with our
existing brokers and customers. We target prospects that are capable of supplying detailed and accurate
underwriting data and that potentially add further diversification to our book of business.

We believe that primary insurers’ and brokers’ willingness to use a particular reinsurer is based not just on
pricing, but also on the financial security of the reinsurer, its claim paying ability ratings and demonstrated
willingness to promptly pay valid claims, the quality of a reinsurer’s service, the reinsurer’s willingness and ability
to design customized programs, its long-term stability and its commitment to provide reinsurance capacity. We
believe we have established a reputation with our brokers and customers for prompt response on underwriting
submissions, fast claims payments and a reputation for providing creative solutions to our customers’ needs.
Since we selectively write large lines on a limited number of property catastrophe reinsurance contracts, we can
establish reinsurance terms and conditions on those contracts that are attractive in our judgment, make large
commitments to the most attractive programs and provide superior client responsiveness. We believe that our
willingness and ability to design customized programs and to provide advice on catastrophe risk management has
helped us to develop long-term relationships with brokers and customers.

Our reinsurance brokers assess client needs and perform data collection, contract preparation and other
administrative tasks, enabling us to market our reinsurance products cost effectively by maintaining a smaller
staff. We believe that by maintaining close relationships with brokers, we are able to obtain access to a broad
range of potential reinsureds. In recent years, our distribution has become increasingly reliant on a small number

of such relationships, a trend which we believe was accelerated by the merger of AON and Benfield in 2008. We
expect this concentration to continue and perhaps increase. The following table shows the percentage of our
Reinsurance segment gross premiums written generated through our largest brokers for the years ended
December 31, 2009, 2008 and 2007:

Year ended December 31,

2009

2008

2007

Percentage of gross premiums written

AON Benfield (1)
Marsh Inc.
Willis Group

Total of largest brokers

All others

Total percentage of gross premiums written

58.7% 61.5% 60.4%
20.9% 18.2% 19.6%
8.9% 11.8%
10.5%

90.1% 88.6% 91.8%
8.2%

9.9% 11.4%

100.0% 100.0% 100.0%

(1) On November 11, 2008, AON Corporation completed its acquisition of Benfield Group Limited. Benfield

Group Limited and AON Corporation accounted for 48.3% and 13.2% respectively, of gross premiums
written in 2008, and 50.0% and 10.4%, respectively, of gross premiums written in 2007.

During 2009, our Reinsurance segment issued authorization for coverage on programs submitted by 46 brokers
worldwide (2008 – 40 brokers). We received approximately 3,565 program submissions during 2009 (2008 –
approximately 2,791). Of these submissions, we issued authorizations for coverage for approximately 946
programs, or approximately 27% of the program submissions received (2008 – approximately 828 programs, or
approximately 30%).

Individual Risk

Our Individual Risk business is currently produced primarily through four distribution channels as per the table
below:

Year ended December 31,

2009

2008

2007

Individual Risk gross premiums written

Program managers – wholly owned (1)
Program managers – third party
Quota share reinsurance
Broker and agent produced business

Total Individual Risk gross premiums written

56.9% 46.4% 32.1%
35.7% 36.9% 42.4%
7.6% 16.6% 25.1%
0.4%
0.1%
(0.2%)

100.0% 100.0% 100.0%

The business produced through third party program managers, quota share reinsurance and broker-produced
business principally comes to us through intermediaries. Our financial security ratings, combined with our
reputation in the reinsurance marketplace, including the long-standing relationships we have developed with our
reinsurance intermediaries, have enhanced our presence in our Individual Risk markets.

With respect to our program business, we believe that our strategy of establishing strong relationships and
assisting our partners with modeling, risk analysis and other expertise has helped us to develop a favorable
reputation in this market. We believe that our existing third party program managers are an important source of
referrals and endorsements of our approach to this business. In addition, we acquired the net assets of Agro
National, LLC in June 2008, a managing general underwriter of crop insurance, and believe our direct ownership
of this operation will facilitate our pursuit of additional opportunities in the crop insurance and agricultural
products markets. In 2009, we launched our commercial property operations, the gross premiums written for
which are included in program managers – wholly owned.

Our broker-produced business is principally written on an excess and surplus lines basis by Glencoe and Lantana
on a risk-by-risk basis. This business is generally submitted to us through licensed surplus lines brokers who are
generally responsible for regulatory compliance, premium tax collection and certain other matters associated with
policy placement.

New Business

For information related to New Business, refer to “Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations, Overview”.

EMPLOYEES

At February 10, 2010, we and our subsidiaries employed approximately 506 people worldwide (February 11,
2009 – 400 people, February 12, 2008 – 236 people). We believe our strong employee relations are among our
most significant strengths. None of our employees are subject to collective bargaining agreements. We are not
aware of any current efforts to implement such agreements at any of our subsidiaries. Historically, the Company
has looked for opportunities to strengthen its operations during periods of softening markets in preparation for
improving market conditions.

As noted above, we added approximately 106 employees year over year, primarily driven by our acquisition of
Spectrum Partners Ltd. (“Spectrum Partners”), the parent company of Spectrum Syndicate Management Ltd.
(“Spectrum”), the Lloyd’s managing agency for Syndicate 1458, and by the addition of resources in, among
others, our accounting, legal, information technology and risk management functions, as well as certain of our
operating business units. We believe that our employee headcount is likely to continue to increase over time as
the Company expands geographically, and seeks to enter new lines of business. We expect that our employee
growth in the U.S., U.K. and other highly regulated markets will increase our operating and compliance
complexity and expenses, although we do not expect these increases to be material to the Company as a whole.

INFORMATION TECHNOLOGY

Our information technology infrastructure is important to our business. Our information technology platform,
supported by a team of professionals, is currently principally located in our corporate headquarters and principal
corporate offices in Bermuda. Additional information technology assets are maintained at the office locations of
our operating subsidiaries. We have implemented backup procedures that seek to ensure that our key business
systems and data are backed up, generally on a daily basis, and can be restored promptly if and as needed. In
addition, we generally store backup information at off-site locations, in order to seek to minimize our risk of loss of
key data in the event of a disaster.

We have implemented and periodically test our disaster recovery plans with respect to our information technology
infrastructure. Among other things, our recovery plans involve arrangements with off-site, secure data centers in
alternative locations. We believe we will be able to access our systems from these facilities in the event that our
primary systems are unavailable due to a scenario such as a natural disaster.

REGULATION

U.S. Regulation

Reinsurance Regulation. Our Bermuda-domiciled insurance operations and joint ventures principally consist of
Renaissance Reinsurance, DaVinci, Top Layer Re, Glencoe and Lantana. Renaissance Reinsurance, DaVinci and
Top Layer Re are Bermuda-based companies that operate as reinsurers. Although none of these companies is
admitted to transact the business of insurance in any jurisdiction except Bermuda, the insurance laws of each
state of the U.S. regulate the sale of reinsurance to ceding insurers authorized in the state by non-admitted alien
reinsurers, such as Renaissance Reinsurance or DaVinci, acting from locations outside the state. Rates, contract
terms and conditions of reinsurance agreements generally are not subject to regulation by any governmental
authority. A primary insurer ordinarily will enter into a reinsurance agreement, however, only if it can obtain credit
for the reinsurance ceded on its statutory financial statements. In general, regulators permit ceding insurers to
take credit for reinsurance under the following circumstances if the contract contains certain minimum
provisions: if the reinsurer is licensed or accredited, if the reinsurer is domiciled in a state with substantially
similar regulatory requirements as the primary insurer’s domiciliary jurisdiction and meets certain financial
requirements, or if the reinsurance obligations are collateralized appropriately.

As alien companies, our Bermuda subsidiaries collateralize their reinsurance obligations to U.S. insurance
companies. With some exceptions, the sale of insurance or reinsurance within a jurisdiction where the insurer is
not admitted to do business is prohibited. None of Renaissance Reinsurance, DaVinci or Top Layer Re intends to
maintain an office or to solicit, advertise, settle claims or conduct other insurance activities in any jurisdiction,
other than Bermuda, where the conduct of such activities would require that each company be so admitted.

The National Association of Insurance Commissioners (“NAIC”) adopted a framework to modernize the current
U.S. reinsurance regulatory framework. As a first step toward implementation of the framework, the NAIC
developed a draft federal bill entitled the “Reinsurance Regulatory Modernization Act of 2009” (the “RRMA”) and
sought congressional sponsors of the RRMA. The RRMA failed to find congressional support as portions of the
proposal were opposed by domestic reinsurers and the U.S. Department of the Treasury. Therefore, the NAIC is
refocusing its attention on credit for reinsurance reforms. The RRMA contemplates credit for reinsurance
collateral levels from 0% to 100% based on the ratings assigned to reinsurers. Accordingly, the RRMA, if
promulgated, may lead to a reduction of the collateral requirements for non-U.S. reinsurers, which could be
beneficial to our Bermuda subsidiaries. Certain individual states have moved forward with initiatives for similar
revised collateral requirements as well. At this time, we are unable to determine how such changes in the U.S.
reinsurance regulatory framework will be implemented and the effect, if any, such changes would have on our
operations or financial condition.

Excess and Surplus Lines Regulation. Glencoe and Lantana, domiciled in Bermuda, are not licensed in the U.S.
but are eligible to offer coverage in the U.S. exclusively in the surplus lines market. Glencoe and Lantana are
each eligible to write surplus lines primary insurance in 48 U.S. states, the District of Columbia, Puerto Rico and
the U.S. Virgin Islands, and each is subject to the surplus lines regulation and reporting requirements of the
jurisdictions in which it is eligible to write surplus lines primary insurance. In accordance with certain provisions
of the NAIC Nonadmitted Insurance Model Act, which provisions have been adopted by a number of states,
Glencoe and Lantana have each established, and are required to maintain, a trust funded to a minimum amount
as a condition of its status as an eligible, non-admitted insurer in the U.S. Although surplus lines business is
generally less regulated than the admitted market, strict regulations apply to surplus lines placements under the
laws of every state, and the regulation of surplus lines insurance may undergo changes in the future. Federal
and/or state measures may be introduced and promulgated that would result in increased oversight and
regulation of surplus lines insurance. For example, the Nonadmitted and Reinsurance Reform Act of 2009
(“NRRA”), which would create uniform standards for surplus lines insurer eligibility, as well as create a uniform
system of placement and premium tax allocation for multistate surplus lines risks and surplus lines broker
licensing, passed the House of Representatives earlier this year and is awaiting action in the Senate. In 2008, the
Florida Supreme Court held that surplus lines insurers were subject to insurance law provisions governing policy
delivery, policy forms, the payment of attorney fees and other matters; however, in 2009, the Florida legislature
passed FL SB 1894 and HB 853 to clarify the limited applicability of Florida insurance law to surplus lines
insurers (exempt from the provisions governing policy delivery, policy forms, etc.). This case could foreshadow
more extensive oversight of surplus lines insurance by other jurisdictions. Any increase in our regulatory burden
may impact our operations and ultimately could impact our financial condition as well.

Admitted Market Regulation. Our admitted U.S. insurance company operations currently consist of Stonington
and Stonington Lloyds, both Texas domiciled insurers. Stonington is licensed to write primary insurance in 50
states and the District of Columbia. Stonington Lloyds is a Texas Lloyds’ company licensed to write primary
insurance in Texas. Stonington acts as an attorney-in-fact for Stonington Lloyds. As licensed insurers operating in
the “admitted” market, these companies are subject to extensive regulation. The extent of regulation varies from
state to state but generally has its source in statutes that delegate regulatory, supervisory and administrative
authority to a department of insurance in each state. Among other things, state insurance statutes require
insurance companies to file financial statements, conduct periodic examinations of the affairs of insurance
companies and regulate insurer solvency standards, insurer licensing, authorized investments, premium rates,
restrictions on the size of risks that may be insured under a single policy, loss and expense reserves and
provisions for unearned premiums, deposits of securities for the benefit of policyholders, policy form approval,
policy renewals and non-renewals, and market conduct regulation including both underwriting and claims
practices.

Licensed U.S. insurers are required to participate in various state residual market mechanisms whose goal is to
provide affordability and availability of insurance to those consumers who may not otherwise be able to obtain
insurance. The mechanics of how each state’s residual markets operate may differ, but generally, risks are either
assigned to various private carriers or the state manages the risk through a pooling arrangement. If losses exceed

the funds the pool has available to pay those losses, the pools have the ability to assess insurers to provide
additional funds to the pool. The amounts of the assessment for each company are normally based upon the
proportion of each insurer’s (and in some cases the insurer’s and its affiliates’) written premium for coverages
similar to those provided by the pool, and are frequently uncapped. State guaranty associations also have the
ability to assess licensed U.S. insurers in order to provide funds for payment of losses for insurers which have
become insolvent. In many cases, but not all, assessed insurers may recoup the amount of these guaranty fund
and state pool assessments by surcharging future policyholders.

Holding Company Regulation. We and our U.S. insurance company subsidiaries are subject to regulation under
the insurance holding company laws of various jurisdictions. The insurance holding company laws and
regulations vary from jurisdiction to jurisdiction, but generally require an insurance holding company, and
insurers that are subsidiaries of insurance holding companies, to register with state regulatory authorities and to
file with those authorities certain reports, including information concerning their capital structure, ownership,
financial condition, certain intercompany transactions and general business operations. In addition, under the
terms of applicable state statutes, any person or entity obtaining beneficial ownership of 10% (with certain limited
exceptions) or more of our outstanding voting securities is required to apply for and receive prior regulatory
approval for such acquisition, and our U.S. insurance company subsidiaries are required to report ownership
changes to their domiciliary regulator. Further, in order to protect insurance company solvency, state insurance
statutes typically place limitations on the amount of dividends or other distributions payable to affiliates by
insurance companies. The NAIC is studying the need for group-wide supervision of insurance holding company
systems, which may include group-wide capital requirements. Such group solvency initiatives may result in
changes to the state holding company statutes increasing direct state supervision over insurance holding
companies.

NAIC Ratios. The NAIC has established 11 financial ratios to assist state insurance departments in their
oversight of the financial condition of licensed U.S. insurance companies operating in their respective states. The
NAIC’s Insurance Regulatory Information System (“IRIS”) calculates these ratios based on information submitted
by insurers on an annual basis and shares the information with the applicable state insurance departments. Each
ratio has an established “usual range” of results and assists state insurance departments in executing their
statutory mandate to oversee the financial condition of insurance companies. A ratio result falling outside the
usual range of IRIS ratios is not considered a failing result; rather unusual values are viewed as part of the
regulatory early monitoring system. Furthermore, in some years, it may not be unusual for financially sound
companies to have several ratios with results outside the usual ranges. An insurance company may fall out of the
usual range for one or more ratios because of specific transactions that are in themselves immaterial. Generally,
an insurance company will be subject to increased regulatory scrutiny if it falls outside the usual ranges with
respect to four or more of the ratios.

Risk-Based Capital. The NAIC has implemented a risk-based capital (“RBC”) formula and model law applicable
to all licensed U.S. property/casualty insurance companies. The RBC formula is designed to measure the
adequacy of an insurer’s statutory surplus in relation to the risks inherent in its business. Such analysis permits
regulators to identify inadequately capitalized insurers. The RBC formula develops a risk adjusted target level of
statutory capital by applying certain factors to insurers’ business risks such as asset risk, underwriting risk, credit
risk and off-balance sheet risk. The target level of statutory surplus varies not only as a result of the insurer’s size,
but also on the risk profile of the insurer’s operations. Insurers that have less statutory capital than the RBC
calculation requires are considered to have inadequate capital and are subject to varying degrees of regulatory
action depending upon the level of capital inadequacy. The RBC formulas have not been designed to differentiate
among adequately capitalized companies that operate with higher levels of capital. Therefore, it is inappropriate
and ineffective to use the formulas to rate or to rank such companies.

Legislative and Regulatory Proposals. Government intervention in the insurance and reinsurance markets in the
U.S. continues to evolve. Although U.S. state regulation is the primary form of regulation of insurance and
reinsurance, Congress has considered over the past years various proposals relating to potential surplus lines
regulation, reinsurance regulation, the creation of an optional federal charter, the creation of a systemic risk
regulator, repeal of the insurance company antitrust exemption from the McCarran Ferguson Act, and tax law
changes, including changes to increase the taxation of reinsurance premiums paid to off-shore affiliates with
respect to U.S. risks. None of these proposals were adopted by the 110th Congress before it adjourned. The
111th Congress has picked up several of these insurance-related initiatives, and in addition, is currently
considering a bill that would create a Federal Insurance Office (“FIO”) within the Department of Treasury. The
FIO would have oversight over all lines of insurance except health insurance and would report annually to the

Congress. Although we are unable to predict whether the FIO proposal or any other proposed laws and
regulations will be adopted, or the form in which any such laws and regulations would be adopted, we believe it is
more likely than at times in the past that the current Congress will adopt laws and/or regulations with respect to
insurance, and we anticipate that these developments will impact our operations and also could impact our
financial condition.

In addition to potential new insurance industry regulation, the Obama administration and Congress are also
considering various regulatory reforms for the financial markets, including potentially as it pertains to the
(re)insurance industry. We are unable to predict what reforms will be proposed or adopted or the effect, if any,
that such reforms would have on our operations and financial condition. We are carefully monitoring such
developments.

In 2007, Florida enacted legislation which enabled the FHCF to offer increased amounts of coverage in addition
to the mandatory coverage amount, at below-market rates. Further, the legislation expanded the ability of the
state-sponsored insurer, Citizens, to compete with private insurance companies, such as ours and other
companies that cede business to us. This legislation reduced the role of the private insurance and reinsurance
markets in Florida, a key target market of ours. In May 2009, the Florida legislature took steps to strengthen the
financial condition of FHCF and Citizens, which a government-appointed task force determined have been
impaired by, issues including the crisis in the credit markets, widespread rate inadequacy, and issues arising out
of the application of discounts for housing retrofits and mitigation features. A bill was passed in 2009 that would
permit Citizens to raise its rates by up to 10% starting in 2010 and every year thereafter until its current shortfall
is corrected and Citizens has sufficient funds to pay its claims and expenses. This legislation also increased the
rates for FHCF and incremental staged reductions in the amount of its coverage.

It is possible that other states, particularly those with Atlantic or Gulf Coast exposures, may enact new or
expanded legislation based on some version of the earlier Florida precedent, which would further diminish
aggregate private market demand for our products. For example, in the past, federal bills have been proposed in
Congress (and, in 2007, passed by the House of Representatives) which would, if enacted, create a federal
reinsurance backstop or guarantee mechanism for catastrophic risks, including those we currently insure and
reinsure in the private markets. In 2009 the Catastrophe Obligation Guarantee Act was introduced in the Senate
and House (S. 886) (the “COGA”) to federally guarantee bond issuances by certain government entities,
potentially including the FHCF, the Texas Windstorm Insurance Association, the California Earthquake Authority,
and others. Similar legislation has been introduced in the House of Representatives. If enacted, this legislation, or
legislation similar to these proposals, would, we believe, likely contribute to growth of these state entities or to
their inception or alteration in a manner adverse to us. While none of this legislation has been enacted to date,
and although we believe such legislation would be vigorously opposed if introduced in 2010, if enacted these bills
would likely further erode the role of private market catastrophe reinsurers and could adversely impact our
financial results, perhaps materially.

The potential for further expansion into additional insurance markets, could expose us or our subsidiaries to
increasing regulatory oversight, including the oversight of countries other than Bermuda and the U.S. However,
we intend to continue to conduct our operations so as to minimize the likelihood that Renaissance Reinsurance,
DaVinci, Top Layer Re, Glencoe, Lantana, or any of our other Bermudian subsidiaries will become subject to
direct U.S. regulation. In addition, as discussed above, REAL and Renaissance Trading are involved in certain
commodities trading activities relating to weather, natural gas, heating oil, power, crude oil, agricultural
commodities and cross-commodity structures. While REAL’s and Renaissance Trading’s operations currently are
not subject to significant federal oversight, we are monitoring carefully new or revised legislation or regulation in
the U.S. or otherwise, which could increase the regulatory burden and operating expenses of these operations.

Bermuda Regulation

All Bermuda companies must comply with the provisions of the Companies Act 1981. In addition, the Insurance
Act 1978, and related regulations (the “Insurance Act”), regulates the business of our Bermuda insurance,
reinsurance and management company subsidiaries.

As a holding company, RenaissanceRe is not currently subject to the Insurance Act. However, the Insurance Act
regulates the insurance and reinsurance business of our operating insurance companies. The Company’s most
significant operating subsidiaries include Renaissance Reinsurance and DaVinci which are registered as Class 4
general business insurers and Glencoe, Lantana, and Top Layer Re which are registered as Class 3A general
business insurers under the Insurance Act. RUM is registered as an insurance manager.

The Insurance Act imposes solvency and liquidity standards as well as auditing and reporting requirements and
confers on the Bermuda Monetary Authority (“BMA”) powers to supervise, investigate and intervene in the affairs
of insurance companies. Significant requirements of the Insurance Act include the appointment of an
independent auditor and loss reserve specialist (both of whom must be approved by the BMA), the filing of an
annual financial return and provisions relating to the payment of distributions and dividends. In particular:

(cid:129)

An insurer must prepare annual statutory financial statements which must be submitted as part of its
statutory financial return no later than four months after the insurer’s financial year end (unless
specifically extended). The annual statutory financial statements give detailed information and analyses
regarding premiums, claims, reinsurance, reserves and investments. The statutory financial return
includes, among other items, a report of the approved independent auditor on the statutory financial
statements; a declaration of statutory ratios; a solvency certificate; the statutory financial statements
themselves; the opinion of the approved loss reserve specialist; and, in the case of Class 4 insurers,
details concerning ceded reinsurance. The statutory financial statements and the statutory financial
return do not form part of the public records maintained by the BMA.

In addition to preparing statutory financial statements, effective December 31, 2009, all Class 4
insurers must prepare financial statements in respect of their insurance business in accordance with
GAAP or IFRS.

An insurer’s statutory assets must exceed its statutory liabilities by an amount greater than the
prescribed minimum solvency margin which varies with the category of its registration and net
premiums written and loss reserves posted (“Minimum Solvency Margin”). The Minimum Solvency
Margin that must be maintained by a Class 4 insurer is the greater of (i) $100 million, or (ii) 50% of net
premiums written (with a credit for reinsurance ceded not exceeding 25% of gross premiums) or
(iii) 15% of net discounted aggregate loss and loss expense provisions and other insurance reserves.
The Minimum Solvency Margin for a Class 3A insurer is the greater of (i) $1 million, or (ii) 20% of the
first $6 million of net premiums written; if in excess of $6 million, the figure is $1.2 million plus 15% of
net premiums written in excess of $6 million, or (iii) 15% of net discounted aggregate loss and loss
expense provisions and other insurance reserves.

In addition, each Class 4 insurer must maintain its capital at a level equal to its enhanced capital
requirement (“ECR”) which is established by reference to the Bermuda Solvency Capital Requirement
(“BSCR”) model which came into force in 2008 to assist the BMA to better assess the adequacy of a
Class 4 insurer’s capital. Alternatively, under the Insurance Act, insurers may, subject to the terms of
the Insurance Act and to the BMA’s oversight, elect to utilize an approved internal capital model to
determine regulatory capital. The BMA believes that use of an internal model to substantiate the
required regulatory capital requirement may in many circumstances better reflect a specific insurer’s
particular business profile than a market-wide regulatory model. An insurer’s internal model must
satisfy certain criteria to be approved for the determination of regulatory capital. In either case, the ECR
shall at all times equal or exceed the Class 4 insurer’s Minimum Solvency Margin and may be adjusted
in circumstances where the BMA concludes that the insurer’s risk profile deviates significantly from the
assumptions underlying its ECR or the insurer’s assessment of its risk management policies and
practices used to calculate the ECR applicable to it.

(cid:129)

An insurer engaged in general business is required to maintain the value of its relevant assets at not
less than 75% of the amount of its relevant liabilities (“Minimum Liquidity Ratio”).

(cid:129)

Both Class 3A and Class 4 general business insurers are prohibited from declaring or paying any
dividends if in breach of the required Minimum Solvency Margin or Minimum Liquidity Ratio (the
“Relevant Margins”) or if the declaration or payment of such dividend would cause the insurer to fail to
meet the Relevant Margins. Where an insurer fails to meet its Relevant Margins on the last day of any
financial year, it is prohibited from declaring or paying any dividends during the next financial year
without the prior approval of the BMA. Further, a Class 4 insurer is prohibited from declaring or paying
in any financial year dividends of more than 25% of its total statutory capital and surplus (as shown on
its previous financial year’s statutory balance sheet) unless it files (at least seven days before payment
of such dividends) with the BMA an affidavit stating that it will continue to meet its Relevant Margins.
Class 3A and Class 4 insurers must obtain the BMA’s prior approval for a reduction by 15% or more of
the total statutory capital as set forth in its previous year’s financial statements. These restrictions on
declaring or paying dividends and distributions under the Insurance Act are in addition to the solvency
requirements under the Companies Act which apply to all Bermuda companies.

If the BMA believes that an investigation is required in the interests of an insurer’s policyholders or
persons who may become policyholders, it may appoint an inspector who has extensive powers of
investigation. If it appears to the BMA to be desirable in the interests of policyholders, the BMA may
also exercise these powers in relation to holding companies, subsidiaries and other affiliates of insurers.
If it appears to the BMA that there is a risk of an insurer becoming insolvent, or that the insurer is in
breach of the Insurance Act or any conditions of its registration, the BMA may exercise extensive
powers of intervention including directing the insurer not to take on any new insurance business or
prohibiting the company from declaring and paying dividends or other distributions.

Any person who, directly or indirectly, becomes a beneficial owner of at least 10%, 20%, 33% or 50%
of the voting shares of an insurer or its parent company must notify the BMA in writing within 45 days
that he has become such an owner.

(cid:129) Where it appears to the BMA that a person who is a controller of any description of a registered person
is not or is no longer a fit and proper person to be such a controller, it may serve him with a written
notice of objection to his being such a controller of the registered person.

(cid:129) Under the provisions of the Insurance Act, the BMA may, from time to time, conduct “on site” visits at

the offices of insurers it regulates.

(cid:129)

The BMA may cancel an insurer’s registration on certain grounds specified in the Insurance Act,
including without limitation, (i) the failure of that insurer to comply with its obligations under the
Insurance Act or (ii) the failure of that insurer in the opinion of the BMA to carry on its business in
accordance with sound insurance principles.

U.K. Regulation

Lloyd’s Regulation

General. The operations of RenaissanceRe Syndicate Management Ltd. (“RSML”), formerly known as
Spectrum, are franchised by Lloyd’s. The Lloyd’s Franchise Board was formally constituted on January 1, 2003.
The Franchise Board is responsible for setting risk management and profitability targets for the Lloyd’s market
and operates a business planning and monitoring process for all syndicates. RSML’s business plan for Syndicate
1458 requires annual approval by the Lloyd’s Franchise Board, including maximum underwriting capacity, and
may require changes to any business plan presented to it or additional capital to be provided to support the
underwriting plan. Lloyd’s also imposes various charges and assessments on its members. If material changes in
the business plan for Syndicate 1458 were required by Lloyd’s, or if charges and assessments payable by
RenaissanceRe Corporate Capital (UK) Limited (“RenaissanceRe CCL”) to Lloyd’s were to increase significantly,
these events could have an adverse effect on the operations and financial results of RSML. The Company has
provided capital to Lloyd’s to support RenaissanceRe CCL’s underwriting business at Lloyd’s. Dividends from a
Lloyd’s managing agent and a Lloyd’s corporate member can be declared and paid provided the relevant
company has sufficient profits available for distribution.

By entering into a membership agreement with Lloyd’s, RenaissanceRe CCL undertakes to comply with all Lloyd’s
bye-laws and regulations as well as the provisions of the Lloyd’s Acts and the Financial Services and Markets Act
2000 (the “FSMA”) that are applicable to it.

Capital Requirements. The underwriting capacity of a member of Lloyd’s must be supported by providing a
deposit (referred to as “Funds at Lloyd’s”) in the form of cash, securities or letters of credit in an amount
determined under the Individual Capital Adequacy regime of the U.K.’s Financial Services Authority (the “FSA”).
The amount of such deposit is calculated for each member through the completion of an annual capital
adequacy exercise. Under these requirements, Lloyd’s must demonstrate that each member has sufficient assets
to meet its underwriting liabilities plus a required solvency margin.

Restrictions. A Reinsurance to Close (“RITC”) is put in place after the third year of operations of a syndicate
year of account. If the Lloyd’s managing agency concludes that an appropriate RITC for a syndicate that it
manages cannot be determined or negotiated on commercially acceptable terms in respect of a particular
underwriting year, it must determine that the underwriting year remain open and be placed into run-off. During
this period there cannot be a release of the Funds at Lloyd’s of a corporate member that is a member of that
syndicate without the consent of Lloyd’s and such consent will only be considered where the member has surplus
Funds at Lloyd’s.

The financial security of the Lloyd’s market is regularly assessed by three independent rating agencies (A.M.
Best, S&P and Fitch). A satisfactory credit rating issued by an accredited rating agency is necessary for Lloyd’s
syndicates to be able to trade in certain classes of business at current levels. RSML and RenaissanceRe CCL
would be adversely affected if Lloyd’s current ratings were downgraded.

Intervention Powers. The Council of Lloyd’s has wide discretionary powers to regulate members’ underwriting at
Lloyd’s. It may, for instance, change the basis on which syndicate expenses are allocated or vary the Funds at
Lloyd’s or the investment criteria applicable to the provision of Funds at Lloyd’s. Exercising any of these powers
might affect the return on an investment of the corporate member in a given underwriting year. If a member of
Lloyd’s is unable to pay its debts to policyholders, such debts may be payable by the Lloyd’s Central Fund, which
in many respects acts as an equivalent to a state guaranty fund in the U.S. If Lloyd’s determines that the Central
Fund needs to be increased, it has the power to assess premium levies on current Lloyd’s members. The Council
of Lloyd’s has discretion to call or assess up to 3% of a member’s underwriting capacity in any one year as a
Central Fund contribution.

Lloyd’s approval is also required before any person can acquire control (as defined below in relation to the FSMA
and giving prior notification to the FSA) of a Lloyd’s managing agent or Lloyd’s corporate member.

FSA Regulation

RSML’s operations are regulated by the FSA as well as being franchised by Lloyd’s of London. The FSA has
substantial powers of intervention in relation to the Lloyd’s managing agents, such as RSML, which it regulates,
including the power to remove their authorization to manage Lloyd’s syndicates. In addition, each year the FSA
requires Lloyd’s to satisfy an annual solvency test which measures whether Lloyd’s has sufficient assets in the
aggregate to meet all outstanding liabilities of its members, both current and run-off. If Lloyd’s fails this test, the
FSA may require Lloyd’s to cease trading and/or its members to cease or reduce underwriting.

Lloyd’s as a whole is authorized by the FSA and is required to implement certain rules prescribed by the FSA,
pursuant to its powers under the Lloyd’s Act 1982 relating to the operation of the Lloyd’s market. Lloyd’s
prescribes, in respect of its managing agents and corporate members, certain minimum standards relating to
their management and control, solvency and various other requirements. The FSA directly monitors Lloyd’s
managing agents’ compliance with the systems and controls prescribed by Lloyd’s. If it appears to the FSA that
either Lloyd’s is not fulfilling its delegated regulatory responsibilities or that managing agents are not complying
with the applicable regulatory rules and guidance, the FSA may intervene at its discretion.

Future regulatory changes or rulings by the FSA could impact RSML’s business strategy or financial assumptions,
possibly resulting in an adverse effect on RSML’s financial condition and operating results.

Change of Control. The FSA regulates the acquisition of control of any Lloyd’s managing agent which is
authorized under the FSMA. Any company or individual that, together with its or his associates, directly or
indirectly acquires 10% or more of the shares in a Lloyd’s managing agent or its parent company, or is entitled to
exercise or control the exercise of 10% or more of the voting power in such Lloyd’s managing agent or its parent
company, would be considered to have acquired control for the purposes of the relevant legislation, as would a
person who had significant influence over the management of such Lloyd’s managing agent or its parent

company by virtue of his shareholding or voting power in either. A purchaser of 10% or more of RenaissanceRe’s
common shares or voting power would therefore be considered to have acquired control of RSML. Under the
FSMA, any person or entity proposing to acquire control over a Lloyd’s managing agent must give prior
notification to the FSA of his or the entity’s intention to do so. The FSA would then have sixty working days to
consider the application to acquire control. Failure to make the relevant prior application could result in action
being taken against RSML by the FSA. Lloyd’s approval is also required before any person can acquire control
(using the same definition as for the FSA) of a Lloyd’s managing agent or Lloyd’s corporate member.

Lloyd’s worldwide insurance and reinsurance business is subject to various regulations,

Other Applicable Laws.
laws, treaties and other applicable policies of the European Union, as well as each nation, state and locality in
which it operates. Material changes in governmental requirements and laws could have an adverse affect on
Lloyd’s and its member companies, including RSML and RenaissanceRe CCL.

Environmental and Climate Change Matters

Our principal coverages and services relate to natural disasters and catastrophes, such as earthquakes or
hurricanes. We believe, and believe the consensus view of current scientific studies substantiates, that changes
in climate conditions, primarily global temperatures and expected sea levels, are likely to increase the severity,
and possibly the frequency, of natural disasters and catastrophes relative to the historical experience over the
past 100 years. We expect that this may increase the risk of claims under our property and casualty lines of
business, particularly with respect to properties located in coastal areas and operations covered by our crop
insurance line of business, among others. While a substantial portion of our coverages accordingly may be
adversely impacted by climate change, we have taken certain measures, to the extent permissible by law and
prevailing market conditions, to mitigate against such losses by giving consideration to these risks in our
underwriting decisions. We continuously monitor and adjust, as we believe appropriate, our risk management
models to reflect our judgment of how to interpret current developments and information such as the studies
referred to above. However, it is possible that, even after these assessments, we will have underestimated the
frequency or severity of hurricanes or other catastrophes. To the extent broad environmental factors, exacerbated
by climate change or otherwise, lead to increases in likely insured losses, particularly if those losses exceed
expectations and the prior estimates of market participants, regulators or other stakeholders, the markets and
clients we serve may be disrupted and adversely impacted, and we may be adversely affected, directly or
indirectly. Further, certain of our investments such as catastrophe-linked securities and property catastrophe
managed joint ventures related to hurricane coverage, could also be adversely impacted by climate change.

An increasing number of federal, state, local and foreign government requirements and international agreements
apply to environmental and climate change, in particular by seeking to limit or penalize the discharge of materials
such as greenhouse gas (“GHG”) into the environment or otherwise relating to the protection of the environment.
Although our operations are characterized by a small number of professional office facilities, and we have not
been directly, materially impacted by these changes to date, it is our policy to monitor and seek to ensure
compliance with these requirements, as applicable. We believe that, as a general matter, our policies, practices
and procedures are properly designed to identify and manage environmental and climate-related risks,
particularly the risks of potential financial liability in connection with our reinsurance, insurance and trading
businesses. However, we believe that some risk of environmental damage is inherent in respect of any
commercial operation, and may increase for us if our business continues to expand and diversify, including as a
result of the possible expansion of the products and services offered by REAL. For example, our weather and
energy risk management operations and our customers of such services could be impacted by climate change
and increased GHG regulation. Likewise, certain of our investments may also be adversely affected by climate
change and increased governmental regulation of, or international agreements pertaining to, GHG emissions.
Moreover, our evaluation may be flawed or may reflect inaccurate or incomplete information, and it is possible
our exposure to climate change or other environmental risks is greater than we have currently estimated.

At this time, we do not believe that any existing or currently pending climate change legislation, regulation, or
international treaty or accord known to us would be reasonably likely to have a material effect in the foreseeable
future on our business or on our results of operations, capital expenditures or financial position. However, it is
possible that future developments, such as increasingly strict environmental laws and standards and enforcement
policies, could give rise to more severe exposure, more costly compliance requirements, or otherwise bring into
question our current policies and practices. In addition, it is possible that state insurance regulation could impact
the ability of our customers, or of the Company, to manage property exposures in areas vulnerable to significant

climate-driven losses. For example, if our Reinsurance segment customers or Individual Risk operations are
unable to utilize actuarially sound, risk-based pricing, to modify policy terms if necessary to reflect changes in the
underlying risks, or to otherwise manage exposures appropriately to reflect the risk of increased loss from both
large scale natural catastrophes and smaller scale weather events, our markets, customers, or our own financial
results may all be adversely affected. We will continue to monitor emerging developments in this area.

AVAILABLE INFORMATION

We maintain a website at http://www.renre.com. The information on our website is not incorporated by reference
in this Form 10-K.

We make available, free of charge through our website, our financial information, including the information
contained in our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K
and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as
soon as reasonably practicable after we electronically file such material with, or furnish such material to, the SEC.
We also make available, free of charge from our website, our Audit Committee Charter, Compensation/
Governance Committee Charter, Corporate Governance Guidelines and Statement of Policies, and Code of Ethics
and Conduct (“Code of Ethics”). Such information is also available in print for any shareholder who sends a
request to RenaissanceRe Holdings Ltd., Attn: Office of the Corporate Secretary, P.O. Box HM 2527, Hamilton,
HMGX, Bermuda. Reports filed with the Securities and Exchange Commission (“SEC”) may also be viewed or
obtained at the SEC Public Reference Room at 100 F Street, N.E., Washington, DC 20549. Information on the
operation of the SEC Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The SEC
maintains an internet site that contains reports, proxy and information statements, and other information
regarding issuers, including the Company, that file electronically with the SEC. The address of the SEC’s website
is http://www.sec.gov.

ITEM 1A. RISK FACTORS
Factors that could cause our actual results to differ materially from those in the forward-looking statements
contained in this Form 10-K and other documents we file with the SEC include the following:

RISKS RELATED TO OUR COMPANY
Our exposure to catastrophic events and other exposures that we cover could cause our financial results to vary
significantly from one period to the next.
Our largest product based on total gross premiums written is property catastrophe reinsurance. We also sell lines
of specialty reinsurance and certain Individual Risk products that are exposed to catastrophe risk. We therefore
have a large overall exposure to natural and man-made disasters, such as earthquakes, hurricanes, tsunamis,
winter storms, freezes, floods, fires, tornados, hailstorms, drought and other natural or man-made disasters, such
as acts of terrorism. As a result, our operating results have historically been, and we expect will continue to be,
significantly affected by relatively few events of a large magnitude.
We expect claims from catastrophic events to cause substantial volatility in our financial results for any fiscal
quarter or year; moreover, catastrophic claims could adversely affect our financial condition, results of operations
and cash flows. Our ability to write new business could also be affected. We believe that increases in the value
and geographic concentration of insured property, particularly along coastal regions, and the effects of inflation
may continue to increase the severity of claims from catastrophic events in the future.
From time to time, we expect to have greater exposures in one or more specific geographic areas than our overall
share of the worldwide market would unilaterally suggest. Accordingly, when and if catastrophes occur in these
areas, we may experience relatively more severe net negative impacts from such events than our competitors. In
particular, the Company has historically had a relatively large percentage of its coverage exposures concentrated
in the state of Florida.
Through Renaissance Trading and REAL, we sell certain financial products primarily to address weather risks,
and engage in certain weather, energy and commodity derivatives trading activities. The trading markets for these
derivatives are generally linked to energy and agriculture commodities, weather and other natural
phenomena. We expect our results from these activities will be subject to volatility, both potentially as a result of
the occurrence or non-occurrence of the event or events which might trigger counterparty payments under these
contracts, and as a result of the potential for variance in the reportable fair value of these contracts between
periods as a result of a wide number of potential factors. While our current portfolio of such derivative contracts is
not material to our consolidated results taken as a whole, and is currently of comparably short duration, it is
possible that our results from these activities will increase on an absolute or relative basis over time, and that the
duration of the derivative contracts in this portfolio will lengthen in the future.

We may fail to execute our strategy, which would impair our future financial results.
Historically, our principal product has been property catastrophe reinsurance. As we have expanded and
continue to expand into other lines of business, we have been and will be presented with new and expanded
challenges and risks which we may not manage successfully. Businesses in early stages of development present
substantial business, financial and operational risks and may suffer significant losses. For example, our current
and potential future expansion may require us to develop new client and customer relationships, supplement
existing or build new operating procedures, hire staff, develop and install management information and other
systems, as well as take numerous other steps to implement our strategies. If we fail to continue to develop the
necessary infrastructure, or otherwise fail to execute our strategy, our results from these newer lines of business
will likely suffer, perhaps substantially, and our future financial results may be adversely affected.
In addition, our expansion into newer lines of business may place increased demands on our financial,
managerial and human resources. For example, we may need to attract additional professionals, and to the
extent we are unable to attract such additional professionals, our existing financial, managerial and human
resources may be strained. Our future profitability depends in part on our ability to further develop our resources
and effectively manage expansion, and our inability to do so may impair our future financial results. It is also
possible that a determination to retract or diminish an initiative we had previously determined to incubate or
explore could be poorly executed, leading to restructuring or other losses, or to executive distraction, exceeding
our estimates.

A decline in the ratings assigned to our financial strength may adversely impact our business, perhaps materially
so.
Third party rating agencies assess and rate the financial strength of reinsurers and insurers, such as Renaissance
Reinsurance and certain of our other operating subsidiaries and joint ventures. These ratings are based upon

criteria established by the rating agencies. Periodically, the rating agencies evaluate us and may downgrade or
withdraw their financial strength ratings in the future if we do not continue to meet the criteria of the ratings
previously assigned to us. The financial strength ratings assigned by rating agencies to reinsurance or insurance
companies are based upon factors relevant to policyholders and are not directed toward the protection of
investors.

These ratings are subject to periodic review and may be revised or revoked, by the agencies which issue them. In
addition, from time to time one or more rating agencies have effected changes in their capital models and rating
methodologies, which have generally served to increase the amounts of capital required to support the ratings,
and it is possible that legislation arising as a result of the ongoing financial crisis may result in additional changes.

Negative ratings actions in the future could have an adverse effect on our ability to fully realize the market
opportunities we currently expect to participate in. In addition, it is increasingly common for our reinsurance
contracts to contain provisions permitting our customers to cancel coverage pro-rata if our relevant operating
subsidiary is downgraded below a certain rating level. Whether a client would exercise this right would depend,
among other factors, on the reason for such a downgrade, the extent of the downgrade, the prevailing market
conditions and the pricing and availability of replacement reinsurance coverage. Therefore, in the event of a
downgrade, it is not possible to predict in advance the extent to which this cancellation right would be exercised,
if at all, or what effect such cancellations would have on our financial condition or future operations, but such
effect potentially could be material. To date, we are not aware that we have experienced such a cancellation.

Our ability to compete with other reinsurers and insurers, and our results of operations, could be materially
adversely affected by any such ratings downgrade. For example, following a ratings downgrade we might lose
customers to more highly rated competitors or retain a lower share of the business of our customers.

For the current ratings of certain of our subsidiaries and joint ventures, refer to “Item 1. Business, Ratings”.

Because we depend on a few insurance and reinsurance brokers in our Reinsurance segment and several third
party program managers in our Individual Risk segment for a preponderance of our revenue, loss of business
provided by them could adversely affect us.

Our Reinsurance business markets insurance and reinsurance products worldwide exclusively through insurance
and reinsurance brokers. Three brokerage firms accounted for 90.1% of our Reinsurance segment gross
premiums written for the year ended December 31, 2009. Subsidiaries and affiliates of AON Benfield, Marsh Inc.
and the Willis Group accounted for approximately 58.7%, 20.9% and 10.5%, respectively, of our Reinsurance
segment gross premiums written in 2009.

Our Individual Risk business markets a significant portion of its insurance and reinsurance products through third
party program managers. In recent years, our Individual Risk business has similarly experienced an increased
concentration of production from a smaller number of intermediaries. Third party program managers accounted
for 35.7% of our Individual Risk segment gross premiums written for the year ended December 31, 2009.

The loss of a substantial portion of the business provided by our brokers and/or third party program managers
would have a material adverse effect on us. Our ability to market our products could decline as a result of any
loss of the business provided by these brokers and/or third party program managers and it is possible that our
premiums written would decrease.

The terms of the Federal Multiple Peril Crop Insurance Program may change and adversely impact us.

We are one of 15 companies that currently participate in the MPCI program sponsored by the RMA. In recent
years, crop insurance premiums, which are primarily driven by MPCI, have become an increasingly larger portion
of our business, totaling $290.3 million of gross premiums written in 2009, and representing 54.7% of the total
gross premiums written in our Individual Risk segment in 2009. In June 2008, we purchased the assets of Agro
National, LLC, a managing general underwriter that has been producing MPCI business on our behalf since
2004, for a purchase price of $80.5 million, and we have goodwill and intangible assets of $58.1 million on our
consolidated balance sheet at December 31, 2009 as a result of this acquisition.

The RMA has currently proposed several changes to the SRA that, if ultimately adopted, would adversely affect
the financial results of MPCI insurers such as ours, beginning in 2011. If the SRA is finalized as drafted, we
would receive lower expense reimbursements and would be likely to retain less of the underwriting profit we
generate, which would negatively impact the profitability of our MPCI business, perhaps substantially or materially

so. While we might try to adjust to such changes by reducing costs, altering service levels, or taking other actions,
it is possible any remedies or mitigating measures we might pursue would be insufficient or that we would not
succeed in their execution, and the MPCI business could prove to be unattractive or unprofitable. If the RMA
adopts the currently proposed changes to the SRA, this could reduce the probability that our crop insurance
business is successful, or possibly result in us electing not to participate in the MPCI program in 2011, any of
which in turn could require us to impair all, or a portion, of the carrying value of the goodwill and intangible assets
we have recorded in connection with the acquisition of Agro National, LLC.

Industry feedback to the draft of the SRA has to date not been positive and the RMA is expected to circulate
further drafts of the agreement before it becomes final. However, we cannot predict what changes the final
version will have, if any, and therefore what impact the changes will have on our future profitability, or whether we
would enter into the new SRA for Reinsurance Year 2011.

Our utilization of brokers, third party program managers and other third parties to support our business exposes
us to operational and financial risks.

Our Individual Risk operations rely largely on third party program managers, and other agents and brokers
participating in our programs, to produce and service a substantial portion of our operations in this segment. In
these arrangements, we typically grant the program manager the right to bind us to newly issued and renewal
insurance policies, subject to underwriting guidelines we provide and other contractual restrictions and
obligations. Should our third party program managers issue policies that contravene these guidelines, restrictions
or obligations, we could nonetheless be deemed liable for such policies. Although we would intend to resist
claims that exceed or expand on our underwriting intention, it is possible that we would not prevail in such an
action, or that our program manager would be unable to substantially indemnify us for their contractual breach.
We also rely on our third party program managers, third party administrators or other third parties we retain, to
collect premiums and to pay valid claims. We could also be exposed to the program manager’s or their
producer’s operational risk, for example, but not limited to, contract wording errors, technological and staffing
deficiencies and inadequate disaster recovery plans.

We could also be exposed to potential liabilities relating to the claims practices of the third party administrators
we have retained to manage much of the claims activity that we expect to arise in our Individual Risk operations.
Although we have implemented monitoring and other oversight protocols, we cannot assure you that these
measures will be sufficient to mitigate all of these exposures.

We are also subject to the risk that our successful third party program managers will not renew their programs
with us. Although our contracts are generally not for defined terms, generally either party can cancel the contract
in a relatively short period of time. While we believe our arrangements offer numerous benefits to our program
participants, we cannot assure you we will retain the programs that produce business we believe to be attractive
or that these programs or the underlying insureds will renew with us. Failure to retain or replace the third party
program managers, or the program manager’s failure to retain or replace their producers, would impair our ability
to execute our operational strategy, and our financial results could be adversely affected.

With respect to our Reinsurance operations we do not separately evaluate each of the individual risks assumed
under our reinsurance contracts and, accordingly, like other reinsurers, are heavily dependent on the original
underwriting decisions made by our ceding companies. We are therefore subject to the risk that our customers
may not have adequately evaluated the risks to be reinsured, or that the premiums ceded to us will not
adequately compensate us for the risks we assume, perhaps materially so.

Our claims and claim expense reserves are subject to inherent uncertainties.

Our claims and claim expense reserves reflect our estimates using actuarial and statistical projections at a given
point in time of our expectations of the ultimate settlement and administration costs of claims incurred. Although
we use actuarial and computer models as well as historical reinsurance and insurance industry loss statistics, we
also rely heavily on management’s experience and judgment to assist in the establishment of appropriate claims
and claim expense reserves. However, because of the many assumptions and estimates involved in establishing
reserves, the reserving process is inherently uncertain. Our estimates and judgments are based on numerous
factors, and may be revised as additional experience and other data become available and are reviewed, as new
or improved methodologies are developed, as loss trends and claims inflation impact future payments, or as
current laws or interpretations thereof change.

Our specialty reinsurance and Individual Risk operations are expected to produce claims which at times can only
be resolved through lengthy and unpredictable litigation. The measures required to resolve such claims, including
the adjudication process, present more reserve challenges than property losses (which tend to be reported
comparatively more promptly and to be settled within a relatively shorter period of time). Actual net claims and
claim expenses paid may deviate, perhaps substantially, from the reserve estimates reflected in our financial
statements.

We expect that some of our assumptions or estimates will prove to be inaccurate, and that our actual net claims
and claim expenses paid will differ, perhaps substantially, from the reserve estimates reflected in our financial
statements. To the extent that our actual claims and claim expenses exceed our expectations, we would be
required to increase claims and claim expense reserves. This would reduce our net income by a corresponding
amount in the period in which the deficiency is identified. To the extent that our actual claims and claim
expenses are lower than our expectations, we would be required to decrease claims and claim expense reserves
and this would increase our net income.

Estimates of losses are based on a review of potentially exposed contracts, information reported by and
discussions with counterparties, and our estimate of losses related to those contracts and are subject to change
as more information is reported and becomes available.

As an example, our estimates of losses from catastrophic events, such as the 2008 hurricanes Gustav and Ike,
and the 2005 hurricanes Katrina, Rita and Wilma, are based on factors including currently available information
derived from the Company’s claims information from certain customers and brokers, industry assessments of
losses from the events, proprietary models, and the terms and conditions of our contracts. Due to the size and
unusual complexity of the legal and claims issues relating to these events, particularly hurricanes Katrina and Ike,
meaningful uncertainty remains regarding total covered losses for the insurance industry and, accordingly,
several of the key assumptions underlying our loss estimates. In addition, actual losses from these events may
increase if our reinsurers or other obligors fail to meet their obligations to us. Our actual losses from these events
will likely vary, perhaps materially, from these current estimates due to the inherent uncertainties in reserving for
such losses, including the nature of the available information, the potential inaccuracies and inadequacies in the
data provided by customers and brokers, the inherent uncertainty of modeling techniques and the application of
such techniques, the effects of any demand surge on claims activity and complex coverage and other legal
issues.

Unlike the loss reserves of U.S. insurers, the loss reserves of our Bermuda-licensed insurers, including
Renaissance Reinsurance, DaVinci and Glencoe, are not regularly examined by insurance regulators, although,
as registered Bermuda insurers, we are required to submit opinions of our approved loss reserve specialist with
the annual statutory financial returns of our Bermuda-licensed insurers with regard to their respective loss and
loss expenses provisions. The loss reserve specialist, who will normally be a qualified actuary, must be approved
by the BMA.

The emergence of matters which may impact certain of our coverages, such as the asserted trend toward
potentially significant global warming and the recent financial crisis, could cause us to underestimate our
exposures and potentially adversely impact our financial results, perhaps significantly.

In our Reinsurance business, we use analytic and modeling capabilities that help us to assess the risk and return
of each reinsurance contract in relation to our overall portfolio of reinsurance contracts. For catastrophe-exposed
business in our Individual Risk segment, we also seek to utilize proprietary modeling tools that have been
developed in conjunction with the modeling and other resources utilized in our Reinsurance operations. See
“Item 1. Business, Underwriting and Enterprise Risk Management.”

In general, our techniques for evaluating catastrophe risk are much better developed than those for other classes
of risk in businesses that we have entered into recently or may enter into in the future. Our models and databases
may not accurately address the emergence of a variety of matters which might be deemed to impact certain of
our coverages. Accordingly, our models may understate the exposures we are assuming and our financial results
may be adversely impacted, perhaps significantly.

We believe, and believe the consensus view of current scientific studies substantiates, that changes in climate
conditions, primarily global temperatures and expected sea levels, are likely to increase the severity and possibly
the frequency of natural catastrophes relative to the historical experience over the past 100 years. We expect that
this may increase claims under our property and casualty lines of business, particularly with respect to properties
located in coastal areas and operations covered by our multi-peril crop insurance line of business, among

others. While a substantial portion of our insureds fall into categories that may be adversely impacted by climate
change, we have taken certain measures, to the extent permissible by law and prevailing market conditions, to
mitigate against such losses by giving consideration to these risks in our underwriting decisions. We continuously
monitor and adjust, as we believe appropriate, our risk management models to reflect our judgment of how to
interpret current developments and information such as these studies. However, it is possible that, even after
these assessments, we will have underestimated the frequency or severity of hurricanes or other catastrophes. To
the extent broad environmental factors, exacerbated by climate change or otherwise, lead to increases in likely
insured losses, particularly if those losses exceed expectations and the prior estimates of market participants,
regulators or other stakeholders, the markets and clients we serve may be disrupted and adversely impacted, and
we may be adversely affected, directly or indirectly. Further, certain of our investments such as cat-linked
securities and property catastrophe managed joint ventures related to hurricane coverage, could also be
adversely impacted by climate change.

Changing weather patterns and climatic conditions, such as global warming, may have added to the
unpredictability and frequency of natural disasters in some parts of the world and created additional uncertainty
as to future trends and exposures.

Our specialty reinsurance portfolio is also exposed to emerging risks arising from the ongoing financial crisis,
including with respect to a potential increase of claims in directors & officers, errors & omissions, mortgage
valuation, surety, casualty clash and other lines of business.

The ongoing weakness in business and economic conditions generally or specifically in the principal markets in
which we do business could adversely affect our business and operating results.

Although there have been some indicators of stabilization, the U.S. and numerous other leading markets around
the world continue to experience significant recessionary conditions, and we believe meaningful risk remains of
potential further deterioration in economic conditions, including substantial and continuing financial market
disruptions. While many governments, including the U.S. federal government, have taken substantial steps to
stabilize economic conditions in an effort to increase liquidity and capital availability, if economic conditions do
not stabilize, or deteriorate further, the business environment in our principal markets would be further adversely
affected, which accordingly could adversely affect demand for the products sold by us or our customers. In
addition, during an economic downturn we believe our consolidated credit risk, reflecting our counterparty
dealings with agents, brokers, customers, retrocessionaires, capital providers, parties associated with our
investment portfolio, among others, is likely to be increased. Moreover, we continue to monitor the risk that our
principal markets will experience increased inflationary conditions, which would, among other things, cause loss
costs to increase, and impact the performance of our investment portfolio. The onset, duration and severity of an
inflationary period cannot be estimated with precision.

Some of our investments are relatively illiquid and are in asset classes that may experience significant market
valuation fluctuations.

Although we invest primarily in highly liquid securities in order to ensure our ability to pay valid claims in a
prompt manner, we do hold certain investments that may lack liquidity, such as our alternative investments and
bank loan fund investments. If we require significant amounts of cash on short notice in excess of our normal
cash requirements or are required to post or return collateral in connection with our investment portfolio, we may
have difficulty selling these investments in a timely manner, be forced to sell them for less than we otherwise
would have been able to realize, or both.

At times, the reported value of our liquid and relatively illiquid types of investments and, our high quality,
generally liquid asset classes, do not necessarily reflect the lowest current market price for the asset. If we were
forced to sell certain of our assets in the current market, there can be no assurance that we will be able to sell
them for the prices at which we have recorded them and we may be forced to sell them at significantly lower
prices.

A reduction in market liquidity may make it difficult to value certain of our securities as trading becomes less
frequent. As such, valuations may include assumptions or estimates that may be more susceptible to significant
period-to-period changes which could have a material adverse effect on our consolidated results of operations or
financial condition.

The determination of the impairments taken on our investments is highly subjective and could materially impact
our financial position or results of operations.

The determination of the impairments taken on our investments varies by investment type and is based upon our
periodic evaluation and assessment of known and inherent risks associated with the respective asset class. Such
evaluations and assessments are revised as conditions change and new information becomes available.
Management updates its evaluations regularly and reflects impairments in operations as such evaluations are
revised. There can be no assurance that our management has accurately assessed the level of impairments
taken in our financial statements. Furthermore, additional impairments may need to be taken in the future, which
could materially impact our financial position or results of operations. Historical trends may not be indicative of
future impairments.

A decline in our investment performance could reduce our profitability and hinder our ability to pay claims
promptly in accordance with our strategy.

We have historically derived a significant portion of our income from our invested assets, which are comprised of,
among other things, fixed maturity securities, such as bonds, asset-backed securities, mortgage-backed
securities and investments in bank loan funds, hedge funds and private equity partnerships. Accordingly, our
financial results are subject to a variety of investment risks, including risks relating to general economic
conditions, market volatility, interest rate fluctuations, foreign currency risk, liquidity risk and credit and default
risk. Additionally, with respect to certain of our investments, we are subject to pre-payment or reinvestment risk.

Our invested assets have grown over the years and have come to effect a comparably greater contribution to our
financial results. Accordingly, a failure to successfully execute our investment strategy could have a material
adverse effect on our overall results. In the event of a significant or total loss in our investment portfolio, the
Company’s ability to pay any claims promptly in accordance with our strategy could be adversely affected.

The market value of our fixed maturity investments is subject to fluctuation depending on changes in various
factors, including prevailing interest rates and widening credit spreads.

Increases in interest rates could cause the market value of our investment portfolio to decrease, perhaps
substantially. Conversely, a decline in interest rates could reduce our investment yield, which would reduce our
overall profitability. Interest rates are highly sensitive to many factors, including governmental monetary policies,
domestic and international economic and political conditions and other factors beyond our control. Any measures
we take that are intended to manage the risks of operating in a changing interest rate environment may not
effectively mitigate such interest rate sensitivity.

A portion of our investment portfolio is allocated to other investments which we expect to have different risk
characteristics than our investments in traditional fixed maturity securities and short term investments. These
other investments include private equity partnerships, hedge fund investments, senior secured bank loan funds
and catastrophe bonds and are recorded on our consolidated balance sheet at fair value. The fair value of certain
of these investments is generally established on the basis of the net valuation criteria established by the
managers of such investments. These net asset valuations are determined based upon the valuation criteria
established by the governing documents of the investments. Such valuations may differ significantly from the
values that would have been used had ready markets existed for the shares, partnership interests or notes of the
investments. Many of the investments are subject to restrictions on redemptions and sales which are determined
by the governing documents and limit our ability to liquidate these investments in the short term. These
investments expose us to market risks including interest rate risk, foreign currency risk, equity price risk and
credit risk. In addition, we typically do not hold the underlying securities of these investments in our custody
accounts, as a result, we generally do not have the ability to quantify the risks associated with these investments
in the same manner for which we have for our fixed maturity securities. The performance of these investments is
also dependent on the individual investment managers and the investment strategies. It is possible that the
investment managers will leave and/or the investment strategies will become ineffective or that such managers
will fail to follow our investment guidelines. Any of the foregoing could result in a material adverse change to our
investment performance, and accordingly adversely affect our financial results.

We are exposed to counterparty credit risk, including with respect to reinsurance brokers.

In accordance with industry practice, we pay virtually all amounts owed on claims under our policies to
reinsurance brokers, and these brokers, in turn, pay these amounts over to the insurers that have reinsured a

portion of their liabilities with us (we refer to these insurers as ceding insurers). Likewise, premiums due to us by
ceding insurers are virtually all paid to brokers, who then pass such amounts on to us. In many jurisdictions, if a
broker were to fail to make such a payment to a ceding insurer, we would remain liable to the ceding insurer for
the deficiency. Conversely, in many jurisdictions, when the ceding insurer pays premiums for these policies to
reinsurance brokers for payment over to us, these premiums are considered to have been paid by the cedants
and the ceding insurer will no longer be liable to us for those amounts, whether or not we have actually received
the premiums. Consequently, in connection with the settlement of reinsurance balances, we assume a
substantial degree of credit risk associated with brokers around the world.

We are also exposed to the credit risk of our customers, who, pursuant to their contracts with us, frequently pay
us over time. Our premiums receivable at December 31, 2009 totaled $589.8 million, and these amounts are
generally not collateralized. To the extent such customers become unable to pay future premiums, we would be
required to recognize a downward adjustment to our premiums receivable in our financial statements. In 2009,
we increased our allowance for potentially uncollectible premiums due to us, and we cannot assure you that such
premiums will ever be collected or that additional amounts will not be required to be written down in 2010, or
future periods.

As a result of the ongoing global economic downturn, our consolidated credit risk, reflecting our counterparty
dealings with agents, brokers, customers, retrocessionaires, capital providers, parties associated with our
investment portfolio and others has increased, perhaps materially so.

We are exposed to counterparty credit risks in connection with our energy related trading business.

We undertake energy related trading activities through our operating subsidiaries, including Renaissance Trading
and REAL, where counterparty credit risk becomes a relevant factor. These operating subsidiaries execute
weather, energy and commodity derivative transactions where the value of the derivatives at any point in time is
dependent upon not only the market but also the viability of the counterparty. The failure or perceived weakness
of any of our counterparties has the potential to expose us to risk of loss in these situations. Financial institutions,
energy companies and hedge funds have historically been our most significant counterparties. The ongoing
instability of the financial markets has resulted in many financial institutions becoming significantly less
creditworthy, and we are exposed to these counterparty risks. Although our operating subsidiaries have credit risk
management policies and procedures, we cannot assure you that any of the policies or procedures will be
effective. While many of the original trading positions established in our energy related trading business are
partially or substantially hedged, the effectiveness of those hedges depends on the willingness and ability to pay
of the parties with whom we establish the hedge positions. The failure of our policies and procedures, or the
failure of one or more of our counterparties, could result in losses that substantially exceed our expectations and
could have a material adverse effect on our results of operations.

Retrocessional reinsurance may become unavailable on acceptable terms.

As part of our risk management, we buy reinsurance for our own account. This type of insurance when
purchased to protect reinsurance companies is known as “retrocessional reinsurance.” Our primary insurance
companies also buy reinsurance from third parties.

From time to time, market conditions (including the ongoing financial crisis) have limited, and in some cases
have prevented, insurers and reinsurers from obtaining reinsurance. Accordingly, we may not be able to obtain
our desired amounts of retrocessional reinsurance. In addition, even if we are able to obtain such retrocessional
reinsurance, we may not be able to negotiate terms as favorable to us as in the past. This could limit the amount
of business we are willing to write, or decrease the protection available to us as a result of large loss events.

When we purchase reinsurance or retrocessional reinsurance for our own account, the insolvency, inability or
reluctance of any of our reinsurers to make timely payments to us under the terms of our reinsurance agreements
could have a material adverse effect on us. Generally, we believe that the “willingness to pay” of some reinsurers
and retrocessionaires is declining, and that the overall industry ability to pay has also declined due to the recent
financial crisis and other factors. This risk may be more significant to us at present than at most times in the past.
At December 31, 2009, we had recorded $194.2 million of reinsurance recoverables, net of a valuation allowance
of $7.6 million for uncollectible recoverables. We cannot assure you that such recoverables will ever be collected
or that additional amounts will not be required to be written down in 2010, or future periods. A large portion of
our reinsurance recoverables are concentrated with a relatively small number of reinsurers. The risk of such
concentration of retrocessional coverage may be increased by recent and future consolidation within the industry.

Emerging claim and coverage issues, or other litigation, could adversely affect us.

Unanticipated developments in the law as well as changes in social and environmental conditions could
potentially result in unexpected claims for coverage under our insurance and reinsurance contracts. These
developments and changes may adversely affect us, perhaps materially so. For example, we could be subject to
developments that impose additional coverage obligations on us beyond our underwriting intent, or to increases
in the number or size of claims to which we are subject. With respect to our specialty reinsurance and Individual
Risk operations, these legal, social and environmental changes may not become apparent until some point in
time after their occurrence. For example, we could be deemed liable for losses arising out of a matter, such as
the potential for industry losses arising out of an avian flu pandemic, that we had not anticipated or had
attempted to contractually exclude. Moreover, irrespective of the clarity and inclusiveness of policy language,
there can be no assurance that a court or arbitration panel will limit enforceability of policy language or not issue
a ruling adverse to us. Our exposure to these uncertainties could be exacerbated by the increased willingness of
some market participants to dispute insurance and reinsurance contract and policy wordings. Alternatively,
potential efforts by us to exclude such exposures could, if successful, reduce the market’s acceptance of our
related products. The full effects of these and other unforeseen emerging claim and coverage issues are
extremely hard to predict. As a result, the full extent of our liability under our coverages may not be known for
many years after a contract is issued. Our exposure to this uncertainty will grow as our “long-tail” casualty
businesses grow, because in these lines claims can typically be made for many years, making them more
susceptible to these trends than our traditional catastrophe business, which is typically more “short-tail.” In
addition, we could be adversely affected by the growing trend of plaintiffs targeting participants in the
property-liability insurance industry in purported class action litigation relating to claim handling and other
practices. While we continually seek to improve the effectiveness of our contracts and claims capabilities, we may
fail to mitigate our exposure to these growing uncertainties.

The loss of key senior members of management could adversely affect us.

Our success has depended, and will continue to depend, in substantial part upon our ability to attract and retain
our senior officers. The loss of services of members of senior management in the future, and the uncertain
transition of new members of our senior management team, may strain our ability to execute our growth
initiatives. The loss of one or more of our senior officers could adversely impact our business, by, for example,
making it more difficult to retain customers or other business contacts whose relationship depends in part on the
service of the departing officer. In general, the loss of the services of any members of our current senior
management team, potentially including the executive retirements announced in January 2010, may adversely
affect our business, perhaps materially so. We do not currently maintain key man life insurance policies with
respect to any of our employees.

In addition, our ability to execute our business strategy is dependent on our ability to attract and retain a staff of
qualified underwriters and service personnel. The location of our global headquarters in Bermuda may impede
our ability to recruit and retain highly skilled employees. Under Bermuda law, non-Bermudians (other than
spouses of Bermudians, holders of Permanent Residents’ Certificates and holders of Working Residents’
Certificates) may not engage in any gainful occupation in Bermuda without a valid government work permit.
Substantially all of our officers are working in Bermuda under work permits that will expire over the next three
years. The Bermuda government could refuse to extend these work permits, which would adversely impact us. In
addition, a Bermuda government policy limits the duration of work permits to a total of six years, which is subject
to certain exemptions only for key employees. A work permit is issued with an expiry date (up to five years) and
no assurances can be given that any work permit will be issued or, if issued, renewed upon the expiration of the
relevant term. If any of our senior officers were not permitted to remain in Bermuda, or if we experience delays or
failures to obtain permits for a number of our professional staff, our operations could be disrupted and our
financial performance could be adversely affected as a result.

U.S. taxing authorities could contend that one or more of our Bermuda subsidiaries are subject to U.S. corporate
income tax, as a result of changes in law or regulations, or otherwise.

If the IRS were to contend successfully that one or more of our Bermuda subsidiaries is engaged in a trade or
business in the U.S., such subsidiary would, to the extent not exempted from tax by the U.S.-Bermuda income
tax treaty, be subject to U.S. corporate income tax on that portion of its net income treated as effectively
connected with a U.S. trade or business, as well as the U.S. corporate branch profits tax. Although we would
vigorously resist such a contention, if we were ultimately held to be subject to taxation, our earnings would
correspondingly decline.

In addition, benefits of the U.S.-Bermuda income tax treaty which may limit any such tax to income attributable
to a permanent establishment maintained by one or more of our Bermuda subsidiaries in the U.S. are only
available to any of such subsidiaries if more than 50% of its shares are beneficially owned, directly or indirectly,
by individuals who are Bermuda residents or U.S. citizens or residents. Our Bermuda subsidiaries may not be
able to continually satisfy such beneficial ownership test or be able to establish it to the satisfaction of the IRS.
Finally, it is unclear whether the U.S.-Bermuda income tax treaty (assuming satisfaction of the beneficial
ownership test) applies to income other than premium income, such as investment income.

Changes in U.S. tax law or regulations could increase the costs of our products and services or otherwise reduce
our profitability.

Congress has recently conducted hearings relating to the tax treatment of offshore insurance and is reported to
be considering legislation that would adversely affect reinsurance between affiliates and offshore insurance and
reinsurance more generally. In 2009, U.S. Rep. Richard Neal introduced one such proposal, H.R. 3424 (the
“Neal Bill”), which provides that foreign insurers and reinsurers would be capped in deducting reinsurance
premiums ceded from U.S. units to offshore affiliates. The Neal Bill, which was referred to the House Ways and
Means Committee, would limit deductions for related party reinsurance cessions to the average percentage of
premium ceded to unrelated reinsurers (determined in reference to individual business lines). In the first quarter
of 2010, the current administration released its 2010 initial budget, which included a proposal to raise revenue
by enacting increased taxation on international reinsurance via means which appeared to have similarities with
the Neal Bill. We can provide no assurance that this legislation or similar legislation will not be adopted. We
believe that passage of such legislation would adversely affect us, perhaps materially.

In addition, in March 2009, U.S. Senator Carl Levin and Rep. Lloyd Doggett introduced legislation in the U.S.
Senate and House, respectively, entitled the “Stop Tax Haven Abuse Act” (S. 506). If enacted, this legislation
would, among other things, cause to be treated as a U.S. corporation for U.S. tax purposes generally, entities
whose shares are publicly traded on an established securities market, or whose gross assets are $50.0 million or
more, if the “management and control” of such a corporation is, directly or indirectly, treated as occurring
primarily within the U.S. The proposed legislation provides that a corporation will be so treated if substantially all
of the executive officers and senior management of the corporation who exercise day-to-day responsibility for
making decisions involving strategic, financial, and operational policies of the corporation are located primarily
within the U.S. In addition, among other things, the legislation would establish presumptions for entities and
transactions in jurisdictions deemed to be “offshore secrecy jurisdictions” and would provide a list of such
jurisdictions. To date, this legislation has not been approved by either the House of Representatives or the
Senate. However, we can provide no assurance that this legislation or similar legislation will not ultimately be
adopted. While we do not believe that the legislation would impact us, it is possible that an adopted bill would
include additional or expanded provisions which could negatively impact us, or that the interpretation or
enforcement of the current proposal, if enacted, would be more expansive or adverse than we currently estimate.

In 2008, the Internal Revenue Service released a revenue ruling (Rev. Rul. 2008-15), in which it publicly
adopted the position that the federal excise tax imposed on insurance or reinsurance premiums paid to certain
non-U.S. taxpayers (the “FET”) applies to reinsurance contracts between foreign insurance companies.
Simultaneously, the IRS issued Announcement 2008-18, announcing a voluntary compliance initiative under
which eligible non-U.S. insurers, reinsurers, and other agents, solicitors, and brokers may avoid IRS examination
with respect to the FET. Under Section 4371 of the Internal Revenue Code, premiums on insurance policies,
indemnity bonds, annuity contracts, and reinsurance contracts with respect to risks located in the U.S. paid by a
U.S. person or by a non-U.S. person engaged in a trade or business in the U.S. are subject to the FET. The FET
is imposed at the rate of 4% on casualty insurance and indemnity bonds; 1% on life, health, and annuity
contracts; and 1% on reinsurance. The IRS has authority to collect the tax not only from the person paying the
premium but also from any person who signs, sells or issues documents connected with the policy. In the
pronouncements noted above, the IRS took the position that the FET cascades through reinsurance contracts on
U.S. risks between foreign insurers. While commentators and market participants have questioned the statutory
and jurisdictional basis for the IRS’s position, the IRS has continued to assert that, under this cascading theory, if
a foreign insurance company insures or reinsures a U.S. risk that would be subject to the FET, and then obtains
reinsurance for that risk from a second foreign insurance company, the FET applies to the reinsurance contract
between the two foreign parties (unless a treaty exemption applies). Further, the IRS has asserted that FET
applies even where the first foreign insurance company is exempt from FET under an applicable treaty. We did
not elect to participate in the voluntary compliance initiative, and it is possible that the IRS would disagree with

our position with respect to FET and the IRS’s cascade theory. In 2009, we were contacted by the IRS and asked
to provide information with respect to the FET filings effected by Renaissance Reinsurance in 2008. While we
believe our FET position is supported by a thorough analysis of relevant statutory and case law, and believe that
the imposition of the IRS position would not give rise to material financial obligations, it is possible the IRS will
continue to maintain its position and could prevail in any audit or other controversy or that the financial
consequences of the IRS’s position would be greater than we currently estimate.

We are unable to predict the effect that current governmental proposals could have on the Company.

The current administration and Congress have made, or called for consideration of, several additional proposals
relating to a variety of issues, including with respect to universal healthcare, financial regulation reform, including
regulation of the OTC derivatives market, the establishment of a single-state system of licensure for U.S. and
foreign reinsurers, executive compensation and others. We continue to carefully monitor relevant proposals and
believe that these and other potential proposals could have varying degrees of impact on us ranging from minimal
to material. At this time, we are unable to predict with certainty which, if any, proposals may be passed or what
level of impact any such proposal could have on us.

Regulatory challenges in the U.S. or elsewhere to our Bermuda operations’ claims of exemption from insurance
regulation could restrict our ability to operate, increase our costs, or otherwise adversely impact us.

Renaissance Reinsurance, DaVinci and Top Layer Re are not licensed or admitted in any jurisdiction except
Bermuda. Renaissance Reinsurance, Glencoe, DaVinci and Top Layer Re each conduct business only from their
principal offices in Bermuda and do not maintain an office in the U.S. The insurance and reinsurance regulatory
framework continues to be subject to increased scrutiny in many jurisdictions, including the U.S. and various
states within the U.S. If our Bermuda insurance or reinsurance operations become subject to the insurance laws
of any state in the U.S., we could face inquiries or challenges to the future operations of these companies.

Moreover, we could be put at a competitive disadvantage in the future with respect to competitors that are
licensed and admitted in U.S. jurisdictions. Among other things, jurisdictions in the U.S. do not permit insurance
companies to take credit for reinsurance obtained from unlicensed or non-admitted insurers on their statutory
financial statements unless security is posted. Our contracts generally require us to post a letter of credit or
provide other security after a reinsured reports a claim. In order to post these letters of credit, issuing banks
generally require collateral. It is possible that the European Union or other countries might adopt a similar regime
in the future, or that U.S. rules could be altered in a way that treats Bermuda-based companies
disproportionately. Any such development, or if we are unable to post security in the form of letters of credit or
trust funds when required, could significantly and negatively affect our operations.

Glencoe and Lantana are currently each eligible, non-admitted excess and surplus lines insurers in 48 U.S.
states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands, and are each subject to certain
regulatory and reporting requirements of these jurisdictions. However, neither Glencoe nor Lantana is admitted or
licensed in any U.S. jurisdiction; moreover, Glencoe only conducts business from Bermuda. Accordingly, the
scope of Glencoe’s and Lantana’s activities in the U.S. is limited, which could adversely affect their ability to
compete. Although surplus lines business is generally less regulated than the admitted market, the regulation of
surplus lines insurance may undergo changes in the future. federal and/or state measures may be introduced
and promulgated that could result in increased oversight and regulation of surplus lines insurance. Additionally,
some recent and pending cases in Florida and California courts have raised potentially significant questions
regarding surplus lines insurance in those states such as whether surplus lines insurers will be subject to policy
form content, filing and approval requirements or additional taxes. In 2008, the Florida Supreme Court held that
surplus lines insurers were subject to insurance law provisions governing policy delivery, policy forms, the
payment of attorney fees and other matters; however, in 2009, the Florida legislature passed FL SB 1894 and HB
853 to clarify the limited applicability of Florida insurance law to surplus lines insurers (exempt from the
provisions governing policy delivery, policy forms, etc.). This case could foreshadow more extensive oversight of
surplus lines insurance by other jurisdictions, which could adversely impact our excess and surplus lines
business, or the surplus lines markets for which we are a lead reinsurer.

Stonington, which writes insurance in all 50 states and the District of Columbia on an admitted basis, is subject to
extensive regulation under state statutes which confer regulatory, supervisory and administrative powers on state
insurance commissioners. Such regulation generally is designed to protect policyholders rather than investors or
shareholders of the insurer.

Our current or future business strategy could cause one or more of our currently unregulated non-insurance
subsidiaries to become subject to some form of regulation. Any failure to comply with applicable laws could result
in the imposition of significant restrictions on our ability to do business, and could also result in fines and other
sanctions, any or all of which could adversely affect our financial results and operations.

We could be required to allocate considerable time and resources to comply with any new or additional regulatory
requirements, and any such requirements may impact the operations of our insurance and/or non-insurance
subsidiaries and ultimately could impact our financial condition as well. In addition, we could be adversely
affected if a regulatory authority believed we had failed to comply with applicable law or regulation.

We are unable to predict the effect that governmental actions for the purpose of stabilizing the financial markets
will have on such markets generally or on the Company in particular.

In response to the financial crises affecting the banking system and financial markets and going concern threats
to investment banks and other financial institutions, on October 3, 2008, then-President Bush signed the
Emergency Economic Stabilization Act (“EESA”) into law. Pursuant to the EESA, the U.S. Treasury has the
authority to, among other things, purchase up to $700 billion of mortgage-backed and other securities from
financial institutions for the purpose of stabilizing the financial markets. Subsequently, on February 17, 2009,
President Obama signed into law the American Recovery and Reinvestment Act of 2009 (the “ARRA”), a $787
billion stimulus bill for the purpose of stabilizing the economy by, among other things, creating jobs. The U.S.
federal government and other governmental and regulatory bodies have taken or are considering taking other
actions to address the financial crisis. Some companies that engage in both life and property casualty insurance
lines of business, have participated in the ARRA programs and many believe that current market conditions have
been adversely impacted by the government support of certain large market participants, which may have
contributed to inadequate pricing conditions in respect of certain lines and coverages. We are unable to predict
the effect that any such governmental actions will have on the financial markets generally or on the Company’s
competitive position, business and financial condition in particular, though we are monitoring the situation as it
evolves.

Operational risks, including systems or human failures, are inherent in business, including ours.

We are subject to operational risks including fraud, employee errors, failure to document transactions properly or
to obtain proper internal authorization, failure to comply with regulatory requirements or obligations under our
agreements, information technology failures, or external events. Losses from these risks may occur from time to
time and may be significant. As our business and operations grow more complex we are exposed to more risk in
these areas.

Our modeling, underwriting and information technology and application systems are critical to our success.
Moreover, our proprietary technology and application systems have been an important part of our underwriting
strategy and our ability to compete successfully. We have also licensed certain systems and data from third
parties. We cannot be certain that we will have access to these, or comparable, service providers, or that our
information technology or application systems will continue to operate as intended. While we have implemented
disaster recovery and other business contingency plans, a defect or failure in our internal controls or information
technology and application systems could result in reduced or delayed revenue growth, higher than expected
losses, management distraction, or harm to our reputation. We believe appropriate controls and mitigation
procedures are in place to prevent significant risk of defect in our internal controls, information technology and
application systems, but internal controls provide only reasonable, not absolute, assurance as to the absence of
errors or irregularities and any ineffectiveness of such controls and procedures could have a material adverse
effect on our business.

We are exposed to risks in connection with our management of third party capital.

Certain of our operating subsidiaries manage third party capital, and in some cases our own capital. We manage
our own capital and other capital through our Lloyd’s managing agency business. Depending on the jurisdiction
and form of organization, our operating subsidiaries may owe certain legal duties and obligations to third party
investors (including reporting obligations) and are subject to a variety of often complex laws and regulations.
Compliance with some of these laws and regulations requires significant management time and attention,
particularly with respect to our newer businesses and ventures. Although we seek to continually monitor our
policies and procedures to attempt to ensure compliance, faulty judgments, simple errors or mistakes, or the
failure of our personnel to adhere to established policies and procedures, could result in our failure to comply
with applicable laws or regulations which could result in significant liabilities, penalties or other losses to the
Company, and seriously harm our business and results of operations.

We may be adversely affected by foreign currency fluctuations.
Our functional currency is the U.S. dollar; however, as we expand geographically, an increasing portion of our
premium is, and likely will be, written in currencies other than the U.S. dollar and a portion of our claims and
claim expense reserves is also in non-U.S. dollar currencies. Moreover, we maintain a portion of our cash and
investments in currencies other than the U.S. dollar. Although we generally seek to hedge significant non-U.S.
dollar positions, we may, from time to time, experience losses resulting solely from fluctuations in the values of
these foreign currencies, which could cause our consolidated earnings to decrease. In addition, failure to manage
our foreign currency exposures could cause our results of operations to be more volatile.

We may require additional capital in the future, which may not be available or only available on unfavorable terms.
We monitor our capital adequacy on a regular basis. The capital requirements of our business depend on many
factors, including our ability to write new business successfully and to establish premium rates and reserves at
levels sufficient to cover losses. Our ability to sell our reinsurance and insurance products is largely dependent
upon the quality of our claims paying and financial strength ratings as evaluated by independent rating agencies.
To the extent that our existing capital is insufficient to support our future operating requirements, we may need to
raise additional funds through financings or limit our growth. While we do not currently expect to require
additional external capital in the near term due to our strong current capital position, our operations are subject to
the ever present potential for significant volatility in capital due to our exposure to potentially significant
catastrophic events. Any further equity or debt financing, or capacity needed for letters of credit, if available at all,
may be on terms that are unfavorable to us, particularly in light of the recent disruptions, uncertainty and volatility
in the capital and credit markets. Our ability to raise such capital successfully would depend upon the facts and
circumstances at the time, including our financial position and operating results, market conditions, and
applicable legal issues. Access to capital on attractive terms has been challenging for many companies during
the ongoing global credit crisis. If we are unable to obtain adequate capital if and when needed, our business,
results of operations and financial condition would be adversely affected. In addition, in the future we may be
unable to raise new capital for our managed joint ventures and other private alternative investment vehicles,
which would reduce our future fee income and market capacity.
Our principal existing letter of credit facility and our revolving credit facility are scheduled to expire on April 27,
2010 and March 31, 2010, respectively. For more information, refer to “Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations, Capital Resources”. We may not succeed in renewing
or replacing these facilities on terms attractive to us or at all. Our ability to renew or replace these credit facilities
is subject to many factors beyond our control, such as more stringent credit criteria and/or conditions emanating
from or as a result of the recent difficult conditions in the global capital and credit markets, the effect of which
may be to make a renewal or replacement so onerous as to make us consider alternate sources of such liquidity
or limit our ability to write business for our customers.

The covenants in our debt agreements limit our financial and operational flexibility, which could have an adverse
effect on our financial condition.
We have incurred indebtedness, and may incur additional indebtedness in the future. At December 31, 2009, we
had an aggregate of $300.0 million of indebtedness outstanding. Our indebtedness primarily consists of publicly
traded notes and letter of credit and revolving credit facilities. For more details on our indebtedness, see “Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, Capital Resources”.
The agreements covering our indebtedness, particularly our bank loans, contain covenants that limit our ability,
among other things, to borrow money, make particular types of investments or other restricted payments, sell
assets, merge or consolidate. These agreements also require us to maintain specific financial ratios. If we fail to
comply with these covenants or meet these financial ratios, the lenders under our credit facilities could declare a
default and demand immediate repayment of all amounts owed to them, cancel their commitments to lend or
issue letters of credit, or both, and require us to pledge additional or a different type of collateral.

Because we are a holding company, we are dependent on dividends and payments from our subsidiaries.
As a holding company with no direct operations, we rely on investment income, cash dividends and other
permitted payments from our subsidiaries to make principal and interest payments on our debt and to pay
dividends to our shareholders. The holding company does not have any operations and from time to time may not
have significant liquid assets. Bermuda law and various U.S. insurance regulations may limit the ability of our
subsidiaries to pay dividends. If our subsidiaries are restricted from paying dividends to us, we may be unable to
pay dividends or to repay our indebtedness. For example, since our U.S. insurance subsidiaries may only pay
dividends out of earned surplus, and as these subsidiaries’ earned surplus is negative, they cannot currently pay
dividends without the applicable state insurance department approval.

Acquisitions or strategic investments that we have made or may make could turn out to be unsuccessful.

As part of our strategy, we frequently monitor and analyze opportunities to acquire or make a strategic investment
in new or other businesses that will not detract from our core Reinsurance and Individual Risk operations. The
negotiation of potential acquisitions or strategic investments as well as the integration of an acquired business or
new personnel could result in a substantial diversion of management resources. Acquisitions could involve
numerous additional risks such as potential losses from unanticipated litigation or levels of claims and inability to
generate sufficient revenue to offset acquisition costs. Any failure by us to effectively limit such risks or implement
our acquisitions or strategic investment strategies could have a material adverse effect on our business, financial
condition or results of operations.

Results in certain of our newer or potentially expanding business lines could cause significant volatility in our
consolidated financial statements.

As we continue to grow and diversify our operations, certain of our new or potentially expanding business lines
could have a significant negative impact on our financial results or cause significant volatility in our results for any
fiscal quarter or year. For example, we may experience losses or experience significant volatility in our financial
results with respect to our crop insurance business as a result of volatility in commodity prices and weather
events, such as flooding, drought, hail, windstorms and other natural phenomena, all of which impacts the
profitability of this line of business. In addition, our weather and energy products and trading business is
accounted for at fair value and the value of our positions can change significantly which could have a significant
negative impact on our financial results, or cause significant volatility in our results for any fiscal quarter or year.

Some aspects of our corporate structure may discourage third party takeovers and other transactions or prevent
the removal of our current board of directors and management.

Some provisions of our Amended and Restated Bye-Laws have the effect of making more difficult or discouraging
unsolicited takeover bids from third parties or preventing the removal of our current board of directors and
management. In particular, our Bye-Laws prohibit transfers of our capital shares if the transfer would result in a
person owning or controlling shares that constitute 9.9% or more of any class or series of our shares. In addition,
our Byelaws reduce the total voting power of any shareholder owning, directly or indirectly, beneficially or
otherwise, as described in our Bye-laws, more than 9.9% of our common shares to not more than 9.9% of the
total voting power of our capital stock unless otherwise waived at the discretion of the Board. The primary
purpose of these provisions is to reduce the likelihood that we will be deemed a “controlled foreign corporation”
within the meaning of the Internal Revenue Code for U.S. federal tax purposes. However, these provisions may
also have the effect of deterring purchases of large blocks of common shares or proposals to acquire us, even if
some or a majority of our shareholders might deem these purchases or acquisition proposals to be in their best
interests.

In addition, our Bye-Laws provide for, among other things:

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a classified Board, whose size is fixed and whose members may be removed by the shareholders only
for cause upon a 66 2⁄ 3% vote;

restrictions on the ability of shareholders to nominate persons to serve as directors, submit resolutions
to a shareholder vote and requisition special general meetings;

a large number of authorized but unissued shares which may be issued by the Board without further
shareholder action; and

a 66 2⁄ 3% shareholder vote to amend, repeal or adopt any provision inconsistent with several provisions
of the Bye-Laws.

These Bye-Law provisions make it more difficult to acquire control of us by means of a tender offer, open market
purchase, proxy contest or otherwise. These provisions are designed to encourage persons seeking to acquire
control of us to negotiate with our directors, which we believe would generally best serve the interests of our
shareholders. However, these provisions could have the effect of discouraging a prospective acquirer from
making a tender offer or otherwise attempting to obtain control of us. In addition, these Bye-Law provisions could
prevent the removal of our current board of directors and management. To the extent these provisions discourage
takeover attempts, they could deprive shareholders of opportunities to realize takeover premiums for their shares
or could depress the market price of the shares.

We indirectly own certain U.S. based insurance subsidiaries. Our ownership of a U.S. insurance company can,
under applicable state insurance company laws and regulations, delay or impede a change of control of
RenaissanceRe. It is possible that we will form, acquire or invest in other U.S. domestic insurance companies in
the future, which could make this risk more severe. Under applicable state insurance regulations, any proposed
purchase of 10% or more of our voting securities would require the prior approval of the relevant insurance
regulatory authorities.

In addition, similar provisions apply to our Lloyd’s managing agent, whereby the FSA regulates the acquisition of
control of any Lloyd’s managing agent which is authorized under the FSMA. Any company or individual that,
together with its or his associates, directly or indirectly acquires 10% or more of the shares in a Lloyd’s managing
agent or its parent company, or is entitled to exercise or control the exercise of 10% or more of the voting power
in such Lloyd’s managing agent or its parent company, would be considered to have acquired control for the
purposes of the relevant legislation, as would a person who had significant influence over the management of
such Lloyd’s managing agent or its parent company by virtue of his shareholding or voting power in either.

Investors may have difficulties in serving process or enforcing judgments against us in the U.S.

We are a Bermuda company. In addition, certain of our officers and directors reside in countries outside the U.S.
All or a substantial portion of our assets and the assets of these officers and directors are or may be located
outside the U.S. Investors may have difficulty effecting service of process within the U.S. on our directors and
officers who reside outside the U.S. or recovering against us or these directors and officers on judgments of U.S.
courts based on civil liabilities provisions of the U.S. federal securities laws whether or not we appoint an agent in
the U.S. to receive service of process.

RISKS RELATED TO OUR INDUSTRY

The reinsurance and insurance businesses are historically cyclical and the pricing and terms for our products
may decline, which could affect our profitability.

The reinsurance and insurance industries have historically been cyclical, characterized by periods of decreasing
prices followed by periods of increasing prices. Reinsurers have experienced significant fluctuations in their
results of operations due to numerous factors, including the frequency and severity of catastrophic events,
perceptions of risk, levels of capacity, general economic conditions and underwriting results of other insurers and
reinsurers. All of these factors fluctuate and may contribute to price declines generally in the reinsurance and
insurance industries. For example, an increase in capital in our industry after the 2005 catastrophe events, and
the enactment of the 2007 Florida legislation described below, helped create a softening market where pricing
decreased in certain lines and became less attractive; on the other hand, the combination of the 2008 storms
and the effects of the recent financial crisis resulted in relatively attractive market conditions at the time of the
July 1, 2009 and January 1, 2010 catastrophe renewals.

The catastrophe-exposed lines in which we are a market leader are affected significantly by volatile and
unpredictable developments, including natural and man-made disasters. The occurrence, or nonoccurrence, of
catastrophic events, the frequency and severity of which are inherently unpredictable, affects both industry
results and consequently prevailing market prices of our products.

We expect premium rates and other terms and conditions of trade to vary in the future. If demand for our
products falls or the supply of competing capacity rises, our prospects for potential growth, due in part to our
disciplined approach to underwriting, may be adversely affected. In particular, we might lose existing customers
or decline business, which we might not regain when industry conditions improve.

In recent years, hedge funds and investment banks have been increasingly active in the reinsurance market and
markets for related risks. While this trend has slowed during the ongoing period of financial dislocation, we
generally expect increased competition from a wider range of entrants over time. It is possible that such new or
alternative capital could cause reductions in prices of our products. To the extent that industry pricing of our
products does not meet our hurdle rate, we would generally expect to reduce our future underwriting activities
thus resulting in reduced premiums and a reduction in expected earnings.

Recent or future legislation may decrease the demand for our property catastrophe reinsurance products and
adversely affect our business and results of operations.

In 2007, the State of Florida enacted legislation to expand the FHCF’S provision of below-market rate reinsurance
to up to $28.0 billion per season (the “2007 Florida Bill”). In May of 2009, the Florida legislature enacted

Bill No. CS/CS/CS/HB 1495 (the “2009 Bill”), which will gradually phase out $12.0 billion in optional reinsurance
coverage under the FHCF over the next five years, reducing the coverage amount to $16.0 billion. The 2009 Bill
will also increase the cost of the optional coverage, starting with an increase by a factor of two in the 2009-2010
season and raising costs by a factor of one in each succeeding year until the phase-out is complete. The 2009
Bill similarly allows the state-sponsored property insurer, Citizens, to raise its rates up to 10% starting in 2010
and every year thereafter, until such time that it has sufficient funds to pay its claims and expenses. The rate
increases and cut back on coverage by FHCF and Citizens will allow for an increased role of the private insurers
in Florida, a market in which we have established substantial market share. This legislation may, however, take
several years to have a significant effect on the private market. Moreover, it is possible that the Florida legislature
will reverse or weaken the 2009 Bill, for example by acting on current proposals to increase the FHCF coverage in
2010 rather than permit this coverage to recede as contemplated by the 2009 Bill.

We believe the 2007 Florida Bill caused a substantial decline in the private reinsurance and insurance markets in
and relating to Florida, and contributed to the decline in our property catastrophe gross premiums written in 2008
and 2007 as compared to 2006. The 2007 Florida Bill and other regulatory actions over this period may have
contributed to instability in the Florida primary insurance market, where many insurers reported substantial and
continuing losses in 2009, an unusually low catastrophe year. Because of our position as one of the largest
providers of catastrophe-exposed coverage, both on a global basis and in respect of the Florida market, the 2007
Florida Bill and the weakened financial position of Florida insurers may have a disproportionate adverse impact
on us compared to other reinsurance market participants.

It is also possible that other states, particularly those with Atlantic or Gulf Coast exposures, may enact new or
expanded legislation based on the Florida precedent, or may otherwise enact legislation, which would further
diminish aggregate private market demand for our products. Alternatively, legislation adversely impacting the
private markets could be enacted on a regional or at the federal level. For example, in the past, federal bills have
been proposed in Congress (and, in 2007, passed by the House of Representatives) which would, if enacted,
create a federal reinsurance backstop or guarantee mechanism for catastrophic risks, including those we
currently insure and reinsure in the private markets. In 2009, the COGA was introduced in the Senate to federally
guarantee bond issuances by certain government entities, potentially including the FHCF, the Texas Windstorm
Insurance Association, the California Earthquake Authority, and others. Similar legislation has been introduced in
the House of Representatives. If enacted, this legislation (or legislation similar to these proposals in import)
would, we believe, likely contribute to growth of these state entities or to their inception or alteration in a manner
adverse to us. While none of this legislation has been enacted to date, and although we believe such legislation
would be vigorously opposed if introduced in 2010, if enacted these bills would likely further erode the role of
private market catastrophe reinsurers and could adversely impact our financial results, perhaps materially.
Moreover, we believe that numerous modeled potential catastrophes could exceed the actual or politically
acceptable bonded capacity of the FHCF, which could lead either to a severe dislocation or the necessity of
federal intervention in the Florida market, either of which would adversely impact the private insurance and
reinsurance industry.

Other political, regulatory and industry initiatives could adversely affect our business.

The insurance and reinsurance regulatory framework is subject to heavy scrutiny by the U.S. and individual state
governments as well as an increasing number of international authorities. Government regulators are generally
concerned with the protection of policyholders to the exclusion of other constituencies, including shareholders.
Governmental authorities in both the U.S. and worldwide seem increasingly interested in the potential risks posed
by the reinsurance industry as a whole, and to commercial and financial systems in general. While we do not
believe these inquiries have identified meaningful new risks posed by the reinsurance industry, and we cannot
predict the exact nature, timing or scope of possible governmental initiatives, we believe it is likely there will be
increased regulatory intervention in our industry in the future. For example, the U.S. federal government has
increased its scrutiny of the insurance regulatory framework in recent years, and some state legislators have
considered or enacted laws that will alter and likely increase state regulation of insurance and reinsurance
companies and holding companies. Moreover, the NAIC, which is an association of the insurance commissioners
of all 50 states and the District of Columbia and state insurance regulators, regularly reexamine existing laws and
regulations.

For example, we could be adversely affected by proposals to:

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provide insurance and reinsurance capacity in markets and to consumers that we target, such as the
legislation enacted in Florida in 2007 or the proposed federal legislation described above;

(cid:129)

require our participation in industry pools and guaranty associations;

expand the scope of coverage under existing policies for matters such as hurricanes Katrina, Rita and
Wilma, and the New Orleans flood, or such as a pandemic flu outbreak;

increasingly mandate the terms of insurance and reinsurance policies;

establish a new federal insurance regulator or financial industry systemic risk regulator;

revise laws, regulations, or contracts under which we operate, such as, but not limited to, the 2008
Farm Bill or the 2011 SRA;

disproportionately benefit the companies of one country over those of another; or

repeal or diminish the insurance company antitrust exemption from the McCarran Ferguson Act.

Our primary insurance business, which is regulated more comprehensively than reinsurance, increases our
exposure to adverse political, judicial and legal developments.

We are incorporated in Bermuda and are therefore subject to changes in Bermuda law and regulation that may
have an adverse impact on our operations, including imposition of tax liability or increased regulatory supervision
or change in regulation. In addition, we are subject to changes in the political environment in Bermuda, which
could make it difficult to operate in, or attract talent to, Bermuda. The Bermuda insurance and reinsurance
regulatory framework recently has become subject to increased scrutiny in many jurisdictions, including in the
U.S. and in various states within the U.S. We are unable to predict the future impact on our operations of
changes in the laws and regulations to which we are or may become subject. Moreover, our exposure to potential
regulatory initiatives could be heightened by the fact that our principal operating companies are domiciled in, and
operate exclusively from, Bermuda. For example, Bermuda, a small jurisdiction, may be disadvantaged in
participating in global or cross border regulatory matters as compared with larger jurisdictions such as the U.S. or
the leading European Union countries. In addition, Bermuda, which is currently an overseas territory of the U.K.,
may consider changes to its relationship with the U.K. in the future. These changes could adversely affect
Bermuda’s position in respect of its regulatory initiatives, which could adversely impact us commercially.

We operate in a highly competitive environment.

The reinsurance industry is highly competitive. We compete, and will continue to compete, with major U.S. and
non-U.S. insurers and property catastrophe reinsurers, including other Bermuda-based reinsurers. Many of our
competitors have greater financial, marketing and management resources than we do. Historically, periods of
increased capacity levels in our industry generally have led to increased competition, and decreased prices for
our products.

We believe that our principal competitors in the property catastrophe reinsurance market include other
companies active in the Bermuda market, including Ace, Allied World, Arch, Axis, Endurance, Everest Re, IPC,
Montpelier Re, Partner Re, Platinum, Transatlantic, Validus, White Mountains and XL, as well as a growing
number of private, unrated reinsurers offering predominately collateralized reinsurance. We also compete with
certain Lloyd’s syndicates active in the London market, as well as with a number of other industry participants,
such as AIG, Berkshire, Hannover Re, Munich Re Group and Swiss Re. As our business evolves over time, we
expect our competitors to change as well. For example, following hurricane Katrina in August 2005, a significant
number of new reinsurance companies were formed in Bermuda which have resulted in new competition, which
may well continue in subsequent periods. Also, hedge funds and investment banks have shown an interest in
entering the reinsurance market, either through the formation of reinsurance companies, or through the use of
other financial products, such as catastrophe bonds and other cat-linked securities. In addition, we may not be
aware of other companies that may be planning to enter the reinsurance market or of existing companies that
may be planning to raise additional capital. We cannot predict what effect any of these developments may have
on our businesses.

The markets in which our Individual Risk unit operates are also highly competitive. Primary insurers compete on
the basis of factors including distribution channels, product, price, service and financial strength. Many of our
primary insurance competitors, especially in jurisdictions in which we have recently expanded, or may expand in

the future, are larger and more established than we are and have greater financial resources and consumer
recognition. We seek primary insurance pricing that will result in adequate returns on the capital allocated to our
primary insurance business. We may lose primary insurance business to competitors offering competitive
insurance products at lower prices or on more advantageous terms.

Consolidation in the (re)insurance industry could adversely impact us.

We believe that several (re)insurance industry participants are seeking to consolidate. These consolidated entities
may try to use their enhanced market power to negotiate price reductions for our products and services. If
competitive pressures reduce our prices, we would expect to write less business. As the insurance industry
consolidates, competition for customers will become more intense and the importance of acquiring and properly
servicing each customer will become greater. We could incur greater expenses relating to customer acquisition
and retention, further reducing our operating margins. In addition, insurance companies that merge may be able
to spread their risks across a consolidated, larger capital base so that they require less reinsurance. The number
of companies offering retrocessional reinsurance may decline. Reinsurance intermediaries could also consolidate,
potentially adversely impacting our ability to access business and distribute our products. We could also
experience more robust competition from larger, better capitalized competitors. Any of the foregoing could
adversely affect our business or our results of operation.

The Organization for Economic Cooperation and Development (“OECD”) and the European Union are considering
measures that might increase our taxes and reduce our net income.

The OECD has published reports and launched a global dialogue among member and non-member countries on
measures to limit harmful tax competition. These measures are largely directed at counteracting the effects of
jurisdictions perceived by the OECD to be tax havens or to offer preferential tax regimes. In the OECD’s report
dated April 18, 2002 and updated as of June 2004 and November 2005 via a “Global Forum,” Bermuda was not
listed as an uncooperative tax haven jurisdiction because it had previously committed to eliminate harmful tax
practices and to embrace international tax standards for transparency, exchange of information and the
elimination of any aspects of the regimes for financial and other services that attract business with no substantial
domestic activity. We are not able to predict what changes will arise from the commitment or whether such
changes will subject us to additional taxes.

Regulatory regimes and changes to accounting rules may adversely impact financial results irrespective of
business operations.

Accounting standards and regulatory changes may require modifications to our accounting principles, both
prospectively and for prior periods and such changes could have an adverse impact on our financial results. In
particular, the SEC has formally proposed a plan to first allow and then require companies to file financial
statements in accordance with IFRS rather than GAAP. Such changes, if ultimately adopted, could have a
significant impact on our financial reporting, impacting key matters such as our loss reserving policies and
premium and expense recognition. For example, the International Accounting Standards Board is considering
adopting an accounting standard that would require all reinsurance and insurance contracts to be accounted for
under a new measurement basis, contract fulfillment value, which is considered to be more closely related to fair
value than the current measurement basis, and would also require that deferred acquisition costs be
derecognized and that future acquisition costs be expensed as incurred. We are currently evaluating how the
SEC’s initiatives will impact us, including with respect to our loss reserving policy and the effect it might have on
recognizing premium revenue and policy acquisition costs. Required modification of our existing principles, either
with respect to these issues or other issues in the future, could have an impact on our results of operations,
including changing the timing of the recognition of underwriting income, increasing the volatility of our reported
earnings and changing our overall financial statement presentation.

Heightened scrutiny of issues and practices in the insurance industry may adversely affect our business.

We believe that certain government authorities, including state officials in Florida, are continuing to scrutinize and
investigate a number of issues and practices within the insurance industry. While we have not been named in any
actions or proceedings, it is possible such scrutiny could expand to include us in the future, and it is also possible
that these investigations or related regulatory developments will mandate or otherwise give rise to changes in
industry practices in a fashion that increases our costs or requires us to alter how we conduct our business.

We cannot predict the ultimate effect that these investigations, and any changes in industry practice, including
future legislation or regulations that may become applicable to us, will have on the insurance industry, the
regulatory framework, or our business.

As noted above, because we frequently assume the credit risk of the counterparties with whom we do business
throughout our insurance and reinsurance operations, our results of operations could be adversely affected if the
credit quality of these counterparties is severely impacted by the current investigations in the insurance industry
or by changes to industry practices.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

Glossary of Selected Insurance and Reinsurance Terms

Accident year . . . . . . . . . . . . . . . . . . . .

Year of occurrence of a loss. Claim payments and reserves for claims
and claim expenses are allocated to the year in which the loss occurred
for losses occurring contracts and in the year the loss was reported for
claims made contracts.

Acquisition expenses . . . . . . . . . . . . . .

The aggregate expenses incurred by a company acquiring new
business, including commissions, underwriting expenses, premium
taxes and administrative expenses.

Additional case reserves . . . . . . . . . . .

Additional case reserves represent management’s estimate of reserves
for claims and claim expenses that are allocated to specific contracts,
less paid and reported losses by the client.

Attachment point . . . . . . . . . . . . . . . . .

The dollar amount of loss (per occurrence or in the aggregate, as the
case may be) above which excess of loss reinsurance becomes
operative.

Bordereaux . . . . . . . . . . . . . . . . . . . . .

A report providing premium or loss data with respect to identified
specific risks. This report is periodically furnished to a reinsurer by the
ceding insurers or reinsurers.

Bound . . . . . . . . . . . . . . . . . . . . . . . . .

A (re)insurance policy is considered bound, and the (re)insurer
responsible for the risks of the policy, when both parties agree to the
terms and conditions set forth in the policy.

Broker

. . . . . . . . . . . . . . . . . . . . . . . . .

Capacity . . . . . . . . . . . . . . . . . . . . . . . .

An intermediary who negotiates contracts of insurance or reinsurance,
receiving a commission for placement and other services rendered,
between (1) a policy holder and a primary insurer, on behalf of the
insured party, (2) a primary insurer and reinsurer, on behalf of the
primary insurer, or (3) a reinsurer and a retrocessionaire, on behalf of
the reinsurer.

The percentage of surplus, or the dollar amount of exposure, that an
insurer or reinsurer is willing or able to place at risk. Capacity may
apply to a single risk, a program, a line of business or an entire book of
business. Capacity may be constrained by legal restrictions, corporate
restrictions or indirect restrictions.

Case reserves . . . . . . . . . . . . . . . . . . . .

Loss reserves, established with respect to specific, individual reported
claims.

Casualty insurance or reinsurance . . .

Insurance or reinsurance that is primarily concerned with the losses
caused by injuries to third persons and their property (in other words,
persons other than the policyholder) and the legal liability imposed on
the insured resulting there from. Also referred to as liability insurance.

Catastrophe . . . . . . . . . . . . . . . . . . . . .

A severe loss, typically involving multiple claimants. Common perils
include earthquakes, hurricanes, hailstorms, severe winter weather,
floods, fires, tornadoes, explosions and other natural or man-made
disasters. Catastrophe losses may also arise from acts of war, acts of
terrorism and political instability.

Catastrophe excess of loss
reinsurance . . . . . . . . . . . . . . . . . . . . .

Catastrophe-linked securities;
cat-linked securities . . . . . . . . . . . . . . .

A form of excess of loss reinsurance that, subject to a specified limit,
indemnifies the ceding company for the amount of loss in excess of a
specified retention with respect to an accumulation of losses resulting
from a “catastrophe.”

Cat-linked securities are generally privately placed fixed income
securities where all or a portion of the repayment of the principal is
linked to catastrophic events. This includes securities where the
repayment is linked to the occurrence and/or size of, for example, one
or more hurricanes or earthquakes, or other industry losses associated
with these catastrophic events.

Cede; cedant; ceding company . . . . . . When a party reinsures its liability with another, it “cedes” business and

is referred to as the “cedant” or “ceding company.”

Claim . . . . . . . . . . . . . . . . . . . . . . . . . . Request by an insured or reinsured for indemnification by an insurance
company or a reinsurance company for losses incurred from an insured
peril or event.

Claims made contracts . . . . . . . . . . . .

Contracts that cover claims for losses occurring during a specified
period that are reported during the term of the contract.

Claims and claim expense ratio, net

. . .

The ratio of net claims and claim expenses to net premiums earned
determined in accordance with either statutory accounting principles or
GAAP.

Claim reserves . . . . . . . . . . . . . . . . . . .

Liabilities established by insurers and reinsurers to reflect the estimated
costs of claim payments and the related expenses that the insurer or
reinsurer will ultimately be required to pay in respect of insurance or
reinsurance policies it has issued. Claims reserves consist of case
reserves, established with respect to individual reported claims,
additional case reserves and “IBNR” reserves. For reinsurers, loss
expense reserves are generally not significant because substantially all
of the loss expenses associated with particular claims are incurred by
the primary insurer and reported to reinsurers as losses.

Combined ratio . . . . . . . . . . . . . . . . . .

The combined ratio is the sum of the net claims and claim expense
ratio and the underwriting expense ratio. A combined ratio below 100%
generally indicates profitable underwriting prior to the consideration of
investment income. A combined ratio over 100% generally indicates
unprofitable underwriting prior to the consideration of investment
income.

Crop insurance . . . . . . . . . . . . . . . . . .

Lines of insurance that provide coverage for risks including multi-peril
crop, crop hail and other named peril agriculture risk management
products.

Crop year . . . . . . . . . . . . . . . . . . . . . . .

The annual period from July 1 of any year through June 30 of the
following year and identified by reference to the year containing June.

Decadal

. . . . . . . . . . . . . . . . . . . . . . . . Refers to events occurring over a 10-year period, such as an oscillation

whose period is roughly 10 years.

Deemed inuring reinsurance . . . . . . . .

Excess and surplus lines
reinsurance . . . . . . . . . . . . . . . . . . . . .

A designation of other reinsurances which are first applied pursuant to
the terms of the reinsurance agreement to reduce the loss subject to a
particular reinsurance agreement. If the other reinsurances are to be
disregarded as respects loss to that particular agreement, they are said
to inure only to the benefit of the reinsured.

Any type of coverage that cannot be placed with an insurer admitted to
do business in a certain jurisdiction. Risks placed in excess and
surplus lines markets are often substandard as respects adverse loss
experience, unusual, or unable to be placed in conventional markets
due to a shortage of capacity.

Excess of loss . . . . . . . . . . . . . . . . . . . . Reinsurance or insurance that indemnifies the reinsured or insured

against all or a specified portion of losses on underlying insurance
policies in excess of a specified amount, which is called a “level” or
“retention.” Also known as non-proportional reinsurance. Excess of loss
reinsurance is written in layers. A reinsurer or group of reinsurers
accepts a layer of coverage up to a specified amount. The total
coverage purchased by the cedant is referred to as a “program” and
will typically be placed with predetermined reinsurers in pre-negotiated
layers. Any liability exceeding the outer limit of the program reverts to
the ceding company, which also bears the credit risk of a reinsurer’s
insolvency.

Exclusions . . . . . . . . . . . . . . . . . . . . . .

Those risk, perils, or classes of insurance with respect to which the
reinsurer will not pay loss or provide reinsurance, notwithstanding the
other terms and conditions of reinsurance.

Frequency . . . . . . . . . . . . . . . . . . . . . .

The number of claims occurring during a given coverage period.

Funds at Lloyd’s . . . . . . . . . . . . . . . . . .

Funds of an approved form that are lodged and held in trust at Lloyd’s
as security for a member’s underwriting activities. They comprise the
members’ deposit, personal reserve fund and special reserve fund and
may be drawn down in the event that the member’s syndicate level
premium trust funds are insufficient to cover his liabilities. The amount
of the deposit is related to the member’s premium income limit and
also the nature of the underwriting account.

Generally Accepted Accounting
Principles in the United States . . . . . .

Also referred to as GAAP. Accounting principles as set forth in opinions
of the Accounting Principles Board of the American Institute of Certified
Public Accountants and/or statements of the Financial Accounting
Standards Board and/or their respective successors and which are
applicable in the circumstances as of the date in question.

Gross premiums written . . . . . . . . . . . .

Total premiums for insurance written and assumed reinsurance during
a given period.

Incurred but not reported (“IBNR”)

. . . Reserves for estimated losses that have been incurred by insureds and

Insurance-linked securities . . . . . . . . .

International Financial Reporting
Standards . . . . . . . . . . . . . . . . . . . . . . .

reinsureds but not yet reported to the insurer or reinsurer, including
unknown future developments on losses that are known to the insurer
or reinsurer.

Financial instruments whose values are driven by (re)insurance loss
events. For the Company, insurance-linked securities are generally
linked to property losses due to natural catastrophes.

Also referred to as IFRS. Accounting principles, standards and
interpretations as set forth in opinions of the International Accounting
Standards Board which are applicable in the circumstances as of the
date in question.

Layer

. . . . . . . . . . . . . . . . . . . . . . . . . .

The interval between the retention or attachment point and the
maximum limit of indemnity for which a reinsurer is responsible.

Line . . . . . . . . . . . . . . . . . . . . . . . . . . .

The amount of excess of loss reinsurance protection provided to an
insurer or another reinsurer, often referred to as limit.

Line of business . . . . . . . . . . . . . . . . . .

The general classification of insurance written by insurers and
reinsurers, e.g. fire, allied lines, homeowners and surety, among others.

Lloyd’s . . . . . . . . . . . . . . . . . . . . . . . . . Depending on the context this term may refer to (a) the society of

individual and corporate underwriting members that insure and
reinsure risks as members of one or more syndicates (i.e. Lloyd’s is not
an insurance company) (b) the underwriting room in the Lloyd’s
Building in which managing agents underwrite insurance and
reinsurance on behalf of their syndicate members. In this sense Lloyd’s
should be understood as a market place; or (c) the Corporation of
Lloyd’s which regulates and provides support services to the Lloyd’s
market.

An occurrence that is the basis for submission and/or payment of a
claim. Whether losses are covered, limited or excluded from coverage is
dependent on the terms of the policy.

Loss; losses . . . . . . . . . . . . . . . . . . . . .

Loss ratio . . . . . . . . . . . . . . . . . . . . . . . Net claims incurred expressed as a percentage of net earned

premiums.

Loss reserve . . . . . . . . . . . . . . . . . . . . .

For an individual loss, an estimate of the amount the insurer expects to
pay for the reported claim. For total losses, estimates of expected
payments for reported and unreported claims. These may include
amounts for claims expenses.

Managing agent . . . . . . . . . . . . . . . . . .

An underwriting agent which has permission from Lloyd’s to manage a
syndicate and carry on underwriting and other functions for a member.

Net claims and claim expenses . . . . . .

The expenses of settling claims, net of recoveries, including legal and
other fees and the portion of general expenses allocated to claim
settlement costs (also known as claim adjustment expenses or loss
adjustment expenses) plus losses incurred with respect to net claims.

Net premiums earned . . . . . . . . . . . . .

The portion of net premiums written during or prior to a given period
that was actually recognized as income during such period.

Net premiums written . . . . . . . . . . . . . Gross premiums written for a given period less premiums ceded to

reinsurers and retrocessionaires during such period.

Non-proportional reinsurance . . . . . . .

See “Excess of loss.”

Perils . . . . . . . . . . . . . . . . . . . . . . . . . .

Property insurance or reinsurance . . .

This term refers to the causes of possible loss in the property field,
such as fire, windstorm, collision, hail, etc. In the casualty field, the
term “hazard” is more frequently used.

Insurance or reinsurance that provides coverage to a person with an
insurable interest in tangible property for that person’s property loss,
damage or loss of use.

Property per risk . . . . . . . . . . . . . . . . . Reinsurance on a treaty basis of individual property risks insured by a

ceding company.

Proportional reinsurance . . . . . . . . . . .

Quota share reinsurance . . . . . . . . . . .

Reinstatement premium . . . . . . . . . . .

Reinsurance . . . . . . . . . . . . . . . . . . . . .

A generic term describing all forms of reinsurance in which the
reinsurer shares a proportional part of the original premiums and losses
of the reinsured. (Also known as pro-rata reinsurance, quota share
reinsurance or participating reinsurance.) In proportional reinsurance
the reinsurer generally pays the ceding company a ceding commission.
The ceding commission generally is based on the ceding company’s
cost of acquiring the business being reinsured (including commissions,
premium taxes, assessments and miscellaneous administrative
expense) and also may include a profit factor. See also “Quota Share
Reinsurance”.

A form of proportional reinsurance in which the reinsurer assumes an
agreed percentage of each insurance policy being reinsured and shares
all premiums and losses according with the reinsured. See also
“Proportional Reinsurance”.

The premium charged for the restoration of the reinsurance limit of a
catastrophe contract to its full amount after payment by the reinsurer of
losses as a result of an occurrence.

An arrangement in which an insurance company, the reinsurer, agrees
to indemnify another insurance or reinsurance company, the ceding
company, against all or a portion of the insurance or reinsurance risks
underwritten by the ceding company under one or more policies.
Reinsurance can provide a ceding company with several benefits,
including a reduction in net liability on individual risks and catastrophe
protection from large or multiple losses. Reinsurance also provides a
ceding company with additional underwriting capacity by permitting it
to accept larger risks and write more business than would be possible
without a concomitant increase in capital and surplus, and facilitates
the maintenance of acceptable financial ratios by the ceding company.
Reinsurance does not legally discharge the primary insurer from its
liability with respect to its obligations to the insured.

Reinsurance to Close . . . . . . . . . . . . . .

Retention . . . . . . . . . . . . . . . . . . . . . . .

Retrocessional reinsurance;
Retrocessionaire . . . . . . . . . . . . . . . . .

Also referred to as a RITC, it is a contract to transfer the responsibility
for discharging all the liabilities that attach to one year of account of a
syndicate into a later year of account of the same or different syndicate
in return for a premium.

The amount or portion of risk that an insurer retains for its own
account. Losses in excess of the retention level are paid by the
reinsurer. In proportional treaties, the retention may be a percentage of
the original policy’s limit. In excess of loss business, the retention is a
dollar amount of loss, a loss ratio or a percentage.

A transaction whereby a reinsurer cedes to another reinsurer, the
retrocessionaire, all or part of the reinsurance that the first reinsurer
has assumed. Retrocessional reinsurance does not legally discharge
the ceding reinsurer from its liability with respect to its obligations to the
reinsured. Reinsurance companies cede risks to retrocessionaires for
reasons similar to those that cause primary insurers to purchase
reinsurance: to reduce net liability on individual risks, to protect against
catastrophic losses, to stabilize financial ratios and to obtain additional
underwriting capacity.

Risks . . . . . . . . . . . . . . . . . . . . . . . . . .

A term used to denote the physical units of property at risk or the object
of insurance protection that are not perils or hazards. Also defined as
chance of loss or uncertainty of loss.

Risks attaching contracts . . . . . . . . . . .

Contracts that cover claims that arise on underlying insurance policies
that incept during the term of the reinsurance contract.

Solvency II . . . . . . . . . . . . . . . . . . . . . .

A modernized set of regulatory requirements for (re)insurance firms
that operate in the European Union, currently expected to be in force
for 2012.

Specialty lines . . . . . . . . . . . . . . . . . . .

Lines of insurance and reinsurance that provide coverage for risks that
are often unusual or difficult to place and do not fit the underwriting
criteria of standard commercial products carriers.

Statutory accounting principles . . . . . . Recording transactions and preparing financial statements in

accordance with the rules and procedures prescribed or permitted by
Bermuda, U.S. state insurance regulatory authorities including the
NAIC and/or in accordance with Lloyd’s specific principles, all of which
generally reflect a liquidating, rather than going concern, concept of
accounting.

Stop loss . . . . . . . . . . . . . . . . . . . . . . . .

A form of reinsurance under which the reinsurer pays some or all of a
cedant’s aggregate retained losses in excess of a predetermined dollar
amount or in excess of a percentage of premium.

Submission . . . . . . . . . . . . . . . . . . . . .

An unprocessed application for (i) insurance coverage forwarded to a
primary insurer by a prospective policyholder or by a broker on behalf
of such prospective policyholder, (ii) reinsurance coverage forwarded to
a reinsurer by a prospective ceding insurer or by a broker or
intermediary on behalf of such prospective ceding insurer or (iii)
retrocessional coverage forwarded to a retrocessionaire by a
prospective ceding reinsurer or by a broker or intermediary on behalf of
such prospective ceding reinsurer.

Syndicate . . . . . . . . . . . . . . . . . . . . . . .

A member or group of members underwriting (re)insurance business at
Lloyd’s through the agency of a managing agent or substitute agent to
which a syndicate number is assigned.

Treaty . . . . . . . . . . . . . . . . . . . . . . . . . .

A reinsurance agreement covering a book or class of business that is
automatically accepted on a bulk basis by a reinsurer. A treaty contains
common contract terms along with a specific risk definition, data on
limit and retention, and provisions for premium and duration.

Underwriting . . . . . . . . . . . . . . . . . . . .

The insurer’s or reinsurer’s process of reviewing applications submitted
for insurance coverage, deciding whether to accept all or part of the
coverage requested and determining the applicable premiums.

Underwriting capacity . . . . . . . . . . . . .

The maximum amount that an insurance company can underwrite. The
limit is generally determined by a company’s retained earnings and
investment capital. Reinsurance serves to increase a company’s
underwriting capacity by reducing its exposure from particular risks.

Underwriting expense ratio . . . . . . . . .

The ratio of the sum of the acquisition expenses and operational
expenses to net premiums earned, determined in accordance with
GAAP.

Underwriting expenses . . . . . . . . . . . .

The aggregate of policy acquisition costs, including commissions, and
the portion of administrative, general and other expenses attributable to
underwriting operations.

Unearned premium . . . . . . . . . . . . . . .

The portion of premiums written representing the unexpired portions of
the policies or contracts that the insurer or reinsurer has on its books as
of a certain date.

ITEM 2. PROPERTIES

We lease office space in Bermuda, which houses our executive offices and operations for both our Reinsurance
and Individual Risk segments. In addition, our Individual Risk segment and other U.S. based subsidiaries lease
office space in a number of U.S. states. Both our Reinsurance and Individual Risk segments also lease office
space in Dublin, Ireland and London, U.K. While we believe that for the foreseeable future our current office
space is sufficient for us to conduct our operations, it is likely that we will expand into additional facilities and
perhaps new locations to accommodate future growth. To date, the cost of acquiring and maintaining our office
space has not been material to us as a whole.

ITEM 3.

LEGAL PROCEEDINGS

Our operating subsidiaries are subject to claims litigation involving disputed interpretations of policy coverages.
Generally, our primary insurance operations are subject to greater frequency and diversity of claims and claims-
related litigation and, in some jurisdictions, may be subject to direct actions by allegedly injured persons or
entities seeking damages from policyholders. These lawsuits, involving claims on policies issued by our
subsidiaries which are typical to the insurance industry in general and in the normal course of business, are
considered in our loss and loss expense reserves which are discussed in its loss reserves discussion. In addition
to claims litigation, we and our subsidiaries are subject to lawsuits and regulatory actions in the normal course of
business that do not arise from or directly relate to claims on insurance policies. This category of business
litigation may involve allegations of underwriting or claims-handling errors or misconduct, employment claims,
regulatory activity or disputes arising from our business ventures. Any such litigation or arbitration contains an
element of uncertainty, and we believe the inherent uncertainty in such matters may have increased recently and
will likely continue to increase. Currently, we believe that no individual, normal course litigation or arbitration to
which we are presently a party is likely to have a material adverse effect on our financial condition, business or
operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER
REPURCHASES OF EQUITY SECURITIES

PRICE RANGE OF COMMON SHARES

Our common shares began publicly trading on June 27, 1995 on the New York Stock Exchange under the
symbol “RNR.” The following table sets forth, for the periods indicated, the high and low prices per share of our
common shares as reported in composite New York Stock Exchange trading:

Period

2009
First Quarter
Second Quarter
Third Quarter
Fourth Quarter

2008
First Quarter
Second Quarter
Third Quarter
Fourth Quarter

Price Range
of Common Shares
Low
High

$52.24 $39.37
43.10
45.60
50.46

52.65
56.17
57.37

$60.34 $49.54
44.59
43.92
31.50

55.40
56.95
52.25

On February 10, 2010, the last reported sale price for our common shares was $51.74 per share. At
February 10, 2010, there were 253 holders of record of our common shares.

PERFORMANCE GRAPH

The following graph compares the cumulative return on our common shares including reinvestment of our
dividends on our common shares to such return for the S&P 500 Composite Stock Price Index (“S&P 500”) and
S&P’s Property-Casualty Industry Group Stock Price Index (“S&P P/C”), for the five-year period commencing
January 1, 2005 and ending December 31, 2009, assuming $100 was invested on January 1, 2005. Each
measurement point on the graph below represents the cumulative shareholder return as measured by the last
sale price at the end of each calendar year during the period from January 1, 2005 through December 31, 2009.
As depicted in the graph below, during this period, the cumulative return was (1) 11.4% on our common shares;
(2) 2.1% for the S&P 500; and (3) negative 10.6% for the S&P P/C.

Comparison of Five Year Cumulative Total Return

$140.00

$130.00

$120.00

$110.00

$100.00

$90.00

$80.00

$70.00

Jan. 1,
2005

Dec. 31,
2005

Dec. 31,
2006

Dec. 31,
2007

Dec. 31,
2008

Dec. 31,
2009

RNR

S&P 500

S&P P/C

DIVIDEND POLICY

Historically, we have paid dividends on our common shares every quarter, and have increased our dividend
during each of the fourteen years since our initial public offering. The Board of Directors of RenaissanceRe
declared regular quarterly dividends of $0.24 per share during 2009 with dividend record dates of
March 13, June 15, September 15 and December 15, 2009. The Board of Directors declared regular quarterly
dividends of $0.23 per share during 2008 with dividend record dates of March 14, June 13, September 15 and
December 15, 2008. On February 17, 2010, the Board of Directors approved an increased dividend of $0.25 per
common share, payable on March 31, 2010, to shareholders of record on March 15, 2010. The declaration and
payment of dividends are subject to the discretion of the Board and depend on, among other things, our financial
condition, general business conditions, legal, contractual and regulatory restrictions regarding the payment of
dividends by us and our subsidiaries and other factors which the Board may in the future consider to be relevant.

ISSUER REPURCHASES OF EQUITY SECURITIES

The Company’s share repurchase program may be effected from time to time, depending on market conditions
and other factors, through open market purchases and privately negotiated transactions. On February 17, 2010,
the Company approved an increase in its authorized share repurchase program to an aggregate amount of
$500.0 million. Unless terminated earlier by resolution of the Company’s Board of Directors, the program will
expire when the Company has repurchased the full value of the shares authorized. The table below details the
repurchases that were made under the program during the three months ended December 31, 2009, and also
includes other shares purchased which represents withholdings from employees surrendered in respect of
withholding tax obligations on the vesting of restricted stock, or in lieu of cash payments for the exercise price of
employee stock options.

Total shares purchased
Average
price per
share

Shares
purchased

Other shares purchased
Average
price per
share

Shares
purchased

Shares purchased under
repurchase program
Average
price per
share

Shares
purchased

Beginning dollar amount available

to be repurchased
October 1 – 31, 2009
November 1 – 30, 2009
December 1 – 31, 2009

22,194 $56.78
640,006 $53.63
320,696 $53.38

22,194
8,506
796

$56.78
— $ —
$53.24 631,500 $53.64
$53.97 319,900 $53.38

Dollar
amount still
available
under
repurchase
program
(in millions)

$382.4
—
(33.9)
(17.1)

Total

982,896 $53.62

31,496

$55.75 951,400 $53.55

$331.4(1)

(1) Dollar amount still available under repurchase program at December 31, 2009 does not reflect the increased

authorization noted above.

In the future, the Company may adopt additional trading plans or authorize purchase activities under the
remaining authorization, which the Board may increase in the future. See “Note 14. Shareholders’ Equity in our
Notes to Consolidated Financial Statements” for additional information regarding our stock repurchase program.

Subsequent to December 31, 2009 and through February 17, 2010, the Company repurchased 1.9 million of its
common shares at an aggregate cost of $101.5 million at an average share price of $53.78. As a result of the
new authorization noted above, as of February 17, 2010, a total of $500.0 million was available for repurchase
under the Company’s share repurchase program.

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

The following tables set forth our selected consolidated financial data and other financial information at the end of
and for each of the years in the five-year period ended December 31, 2009. This historical financial information
was prepared in accordance with GAAP. The consolidated statement of operations data for the years ended
December 31, 2009, 2008, 2007, 2006 and 2005 and the balance sheet data at December 31, 2009, 2008,
2007, 2006 and 2005 were derived from our consolidated financial statements. You should read the selected
consolidated financial data in conjunction with our consolidated financial statements and related notes thereto
and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this
filing and all other information appearing elsewhere or incorporated into this filing by reference.

Year ended December 31,
(in thousands, except share and
per share data and percentages)

Statement of Operations Data:
Gross premiums written
Net premiums written
Net premiums earned
Net investment income
Net realized and unrealized gains on fixed

maturity investments

Net other-than-temporary impairments
Net claims and claim expenses incurred
Acquisition expenses
Operational expenses
Underwriting income (loss)
Income (loss) before taxes
Net income (loss)
Net income (loss) available (attributable)

to RenaissanceRe common
shareholders

Net income (loss) available (attributable)

to RenaissanceRe common
shareholders per common share –
diluted

Dividends per common share
Weighted average common shares

outstanding – diluted

Return on average common equity
Combined ratio

2009

2008

2007

2006

2005

$1,728,932 $1,736,028
1,353,620
1,386,824
24,231

1,206,397
1,273,816
323,981

$1,809,637 $1,943,647 $1,809,128
1,543,287
1,529,620
1,402,709
1,529,777
217,252
318,106

1,435,335
1,424,369
402,463

93,162
(22,481)
197,287
189,775
189,686
697,068
1,061,753
1,052,659

10,700
(217,014)
760,489
213,553
122,165
290,617
84,721
84,153

26,806
(25,513)
479,274
254,930
110,464
579,701
758,400
776,832

11,937
(46,401)
446,230
280,697
109,586
693,264
942,204
941,269

26,247
(33,209)
1,635,656
237,594
85,838
(556,379)
(403,212)
(403,212)

838,858

(13,280)

569,575

761,635

(281,413)

13.40
0.96

(0.21)
0.92

7.93
0.88

10.57
0.84

(3.99)
0.80

61,210

63,411

71,825

72,073

30.2%
45.3%

(0.5%)
79.0%

20.9%
59.3%

36.3%
54.7%

70,592

(13.6%)
139.7%

At December 31,

2009

2008

2007

2006

2005

Balance Sheet Data:
Total investments
Total assets
Reserve for claims and claim expenses
Reserve for unearned premiums
Debt
Capital leases
Subordinated obligation to capital trust
Preferred shares
Total shareholders’ equity attributable to

common shareholders
Total shareholders’ equity
Common shares outstanding

Book value per common share
Accumulated dividends

Book value per common share plus

accumulated dividends

Change in book value per common share
plus change in accumulated dividends

$6,253,411 $6,042,582
7,984,051
2,160,612
510,235
450,000
26,292
—
650,000

7,801,041
1,702,006
446,649
300,000
26,014
—
650,000

$6,634,348 $6,342,805 $5,291,153
6,871,261
7,769,026
2,614,551
2,098,155
501,744
578,424
500,000
450,000
2,931
2,742
103,093
103,093
500,000
800,000

8,286,355
2,028,496
563,336
451,951
2,533
—
650,000

3,190,786
3,840,786
61,745

2,382,743
3,032,743
61,503

2,827,503
3,477,503
68,920

2,480,497
3,280,497
72,140

1,753,840
2,253,840
71,523

51.68 $

8.88

38.74
7.92

60.56 $

46.66

41.03 $

34.38 $

7.00

6.12

24.52
5.28

48.03 $

40.50 $

29.80

35.9%

(3.3%)

21.9%

43.6%

(16.1%)

Years ended December 31,
(in thousands, except ratios)

Segment Information:

Reinsurance
Gross premiums written (1)
Net premiums written
Underwriting income (loss)
Net claims and claim expense

ratio – calendar year
Underwriting expense ratio

Combined ratio

Individual Risk
Gross premiums written
Net premiums written
Underwriting (loss) income
Net claims and claim expense

ratio – calendar year
Underwriting expense ratio

Combined ratio

Total
Gross premiums written
Net premiums written
Underwriting income (loss)
Net claims and claim expense

ratio – calendar year
Underwriting expense ratio

Combined ratio

2009

2008

2007

2006

2005

$1,210,795
839,023
719,188

$1,154,391
871,893
281,625

$1,290,420
1,024,493
528,659

$1,321,163
1,039,103
636,236

$1,202,975
1,024,010
(461,540)

(10.3%)
25.7%

15.4%

48.5%
20.5%

69.0%

25.2%
19.6%

44.8%

15.2%
19.3%

34.5%

132.2%
16.5%

148.7%

$ 530,787
367,374
(22,120)

$ 587,309
481,727
8,992

$ 556,594
410,842
51,042

$ 689,392
490,517
57,028

$ 651,430
519,277
(94,839)

67.2%
38.0%

105.2%

67.0%
31.1%

98.1%

51.0%
38.1%

89.1%

53.5%
36.3%

89.8%

84.1%
36.7%

120.8%

$1,728,932
1,206,397
697,068

$1,736,028
1,353,620
290,617

$1,809,637
1,435,335
579,701

$1,943,647
1,529,620
693,264

$1,809,128
1,543,287
(556,379)

15.5%
29.8%

45.3%

54.8%
24.2%

79.0%

33.6%
25.7%

59.3%

29.2%
25.5%

54.7%

116.6%
23.1%

139.7%

(1)

Includes $12.7 million, $5.7 million, $37.4 million, $66.9 million and $45.3 million of premium assumed
from our Individual Risk segment in the years ended December 31, 2009, 2008, 2007, 2006 and 2005,
respectively.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion and analysis of our results of operations for the year ended December 31, 2009,
compared with the years ended December 31, 2008 and 2007. The following also includes a discussion of our
liquidity and capital resources at December 31, 2009. This discussion and analysis should be read in conjunction
with the audited consolidated financial statements and related notes included in this filing. This filing contains
forward-looking statements that involve risks and uncertainties. Actual results may differ materially from the
results described or implied by these forward-looking statements. See “Note on Forward-Looking Statements.”

OVERVIEW

Since a substantial portion of the reinsurance and insurance we write provides protection from damages relating
to natural and man-made catastrophes, our results depend to a large extent on the frequency and severity of
such catastrophic events, and the coverages we offer to customers affected by these events. We are exposed to
significant losses from these catastrophic events and other exposures that we cover. Accordingly, we expect a
significant degree of volatility in our financial results and our financial results may vary significantly from
quarter-to-quarter or from year-to-year, based on the level of insured catastrophic losses occurring around the
world.

Our revenues are principally derived from three sources: 1) net premiums earned from the reinsurance and
insurance policies we sell; 2) net investment income and realized and unrealized gains from the investment of
our capital funds and the investment of the cash we receive on the policies which we sell; and 3) other income
received from our joint ventures, advisory services, weather and energy risk management operations and various
other items.

Our expenses primarily consist of: 1) net claims and claim expenses incurred on the policies of reinsurance and
insurance we sell; 2) acquisition costs which typically represent a percentage of the premiums we write; 3)
operating expenses which primarily consist of personnel expenses, rent and other operating expenses; 4)
corporate expenses which include certain executive, legal and consulting expenses, costs for research and
development, and other miscellaneous costs associated with operating as a publicly traded company; 5)
redeemable noncontrolling interest – DaVinciRe, which represents the interest of third parties with respect to the
net income (loss) of DaVinciRe; and 6) interest and dividend costs related to our debt and preference shares. We
are also subject to taxes in certain jurisdictions in which we operate; however, since the majority of our income is
currently earned in Bermuda, a non-taxable jurisdiction, the tax impact to our operations has historically been
minimal. We currently expect our growth outside of Bermuda to result in a higher effective tax rate in future
periods.

The operating results, also known as the underwriting results, of an insurance or reinsurance company are
discussed frequently by reference to its net claims and claim expense ratio, underwriting expense ratio, and
combined ratio. The net claims and claim expense ratio is calculated by dividing net claims and claim expenses
incurred by net premiums earned. The underwriting expense ratio is calculated by dividing underwriting
expenses (acquisition expenses and operational expenses) by net premiums earned. The combined ratio is the
sum of the net claims and claim expense ratio and the underwriting expense ratio. A combined ratio below 100%
generally indicates profitable underwriting prior to the consideration of investment income. A combined ratio over
100% generally indicates unprofitable underwriting prior to the consideration of investment income. We also

discuss our net claims and claim expense ratio on an accident year basis. This ratio is calculated by taking net
claims and claim expenses, excluding development on net claims and claim expenses from events that took
place in prior fiscal years, divided by net premiums earned.

We currently conduct our business through two reportable segments, Reinsurance and Individual Risk. Those
segments are more fully described as follows:

Reinsurance

Our Reinsurance segment has three main units:

1) Property catastrophe reinsurance, written for our own account and for DaVinci, is our traditional core

business. We believe we are one of the world’s leading providers of this coverage, based on catastrophe
gross premiums written. This coverage protects against large natural catastrophes, such as
earthquakes, hurricanes and tsunamis, as well as claims arising from other natural and man-made
catastrophes such as winter storms, freezes, floods, fires, wind storms, tornadoes, explosions and acts
of terrorism. We offer this coverage to insurance companies and other reinsurers primarily on an excess
of loss basis. This means that we begin paying when our customers’ claims from a catastrophe exceed
a certain retained amount.

2) Specialty reinsurance, written for our own account and for DaVinci, covering certain targeted classes of
business where we believe we have a sound basis for underwriting and pricing the risk that we assume.
Our portfolio includes various classes of business, such as catastrophe exposed workers’
compensation, surety, terrorism, political risk, trade credit, medical malpractice, catastrophe-exposed
personal lines property, casualty clash, certain other casualty lines and other specialty lines of
reinsurance that we collectively refer to as specialty reinsurance. We believe that we are seen as a
market leader in certain of these classes of business, such as casualty clash, surety, catastrophe-
exposed workers’ compensation and terrorism.

3) Through our ventures unit, we pursue joint ventures and other strategic relationships. Our four principal
business activities in this area are: 1) property catastrophe joint ventures which we manage, such as
Top Layer Re and DaVinci; 2) strategic investments in other market participants, such as our
investments in Platinum, Essent and the Tower Hill Companies, where, rather than assuming exclusive
management responsibilities ourselves, we partner with other market participants; 3) weather and
energy risk management operations primarily through Renaissance Trading and REAL; and 4)
fee-based consulting services, research and development and loss and mitigation activities. Only
business activities that appear in our consolidated underwriting results, such as DaVinci, Tim Re II and
certain reinsurance transactions, are included in our Reinsurance segment results; our share of the
results of our investments in other ventures, accounted for under the equity method and our weather
and energy risk management operations are included in the “Other” category of our segment results.

Individual Risk

We define our Individual Risk segment to include underwriting that involves understanding the characteristics of
the original underlying insurance policy. Our principal contracts currently include insurance contracts and quota
share reinsurance with respect to risks including: 1) crop insurance, which includes multi-peril crop insurance,
crop hail and other named peril agriculture risk management products; 2) commercial property, which principally
includes catastrophe-exposed commercial property products; 3) commercial multi-line, which includes
commercial property and liability coverage, such as general liability, automobile liability and physical damage,
building and contents, professional liability and various specialty products; and 4) personal lines property, which
principally includes homeowners personal lines property coverage and catastrophe exposed personal lines
property coverage.

Our Individual Risk business is primarily produced through four distribution channels: 1) wholly owned program
managers – where we write primary insurance through our own subsidiaries; 2) third party program managers –
where we write primary insurance through third party program managers, who produce business pursuant to
agreed-upon underwriting guidelines and provide related back-office functions; 3) quota share reinsurance –
where we write quota share reinsurance with primary insurers who, similar to our third party program managers,
provide most of the back-office and support functions; and 4) brokers and agents – where we write primary
insurance produced through licensed intermediaries on a risk-by-risk basis.

Our Individual Risk business is principally written through Glencoe and Lantana, which write on an excess and
surplus lines basis, and through Stonington and Stonington Lloyd’s, which write on an admitted basis. Since the
inception of our Individual Risk business, we have substantially relied on third parties for services including the
generation of premium, the issuance of policies and the processing of claims, though as previously disclosed, we
have internalized an increasing amount of these services over the past two years. We principally oversee our third
party partners through a program operations team at RenRe North America Inc., which conducts initial due
diligence as well as ongoing monitoring.

Establishment of Syndicate 1458 and Acquisition of Spectrum

In May 2009, we established Syndicate 1458, a Lloyd’s syndicate, to start writing certain lines of insurance and
reinsurance business incepting on or after June 1, 2009. The syndicate was established to enhance our
underwriting platform by providing access to Lloyd’s extensive distribution network and worldwide licenses.
RenaissanceRe CCL, an indirect wholly owned subsidiary of the Company, is the sole corporate member of
Syndicate 1458.

On June 4, 2009, we entered into a definitive agreement granting us an option to purchase all of the outstanding
shares of Spectrum Partners, the parent company and sole owner of Spectrum, now known as RSML, and
Spectrum Insurance Services Ltd. On November 2, 2009, the Company acquired 100% of the outstanding and
issued common shares of Spectrum Partners. Prior to acquiring the outstanding and issued common shares of
Spectrum Partners, the Company had contracted with Spectrum to be the managing agent of Syndicate 1458.
Spectrum Partners is based in London, U.K., and prior to the Company’s acquisition, was an independent Lloyd’s
managing agency that provided the requisite services mandated for entrants into the Lloyd’s market. One of the
requirements to enter the Lloyd’s market and establish an underwriting syndicate is to obtain the services of a
managing agent. Generally, new entrants either solicit the services of a managing agency, such as Spectrum, or
acquire an existing managing agent.

The results of Syndicate 1458 and Spectrum were not significant to our overall consolidated results of operations
and financial position for 2009.

New Business

In addition to the potential growth of our existing reinsurance and insurance businesses, from time to time we
consider diversification into new ventures, either through organic growth, the formation of new joint ventures, or
the acquisition of or the investment in other companies or books of business of other companies. This potential
diversification includes opportunities to write targeted, additional classes of risk-exposed business, both directly
for our own account and through possible new joint venture opportunities. We also regularly evaluate
opportunities to grow our business by utilizing our skills, capabilities, proprietary technology and relationships to
expand into further risk-related coverages, services and products. Generally, we focus on underwriting or trading
risks where reasonably sufficient data may be available, and where our analytical abilities may provide us a
competitive advantage, in order for us to seek to model estimated probabilities of losses and returns in
accordance with our approach in respect of our current portfolio of risks. We also regularly review potential new
investments, in both operating entities and financial instruments.

In evaluating potential new ventures or investments, we generally seek an attractive estimated return on equity,
the ability to develop or capitalize on a competitive advantage, and opportunities which we believe will not detract
from our core Reinsurance and Individual Risk operations. Accordingly, we regularly review strategic
opportunities and periodically engage in discussions regarding possible transactions, although there can be no
assurance that we will complete any such transactions or that any such transaction would be successful or
contribute materially to our results of operations or financial condition. We believe that our ability to potentially
attract investment and operational opportunities is supported by our strong reputation and financial resources,
and by the capabilities and track record of our ventures unit.

SUMMARY OF CRITICAL ACCOUNTING ESTIMATES

Claims and Claim Expense Reserves

General Description

The following table summarizes our claims and claim expense reserves by line of business and split between
case reserves, additional case reserves and IBNR at December 31, 2009 and 2008:

At December 31, 2009
(in thousands)

Property catastrophe reinsurance
Specialty reinsurance

Total Reinsurance
Individual Risk

Total

At December 31, 2008
(in thousands)

Property catastrophe reinsurance
Specialty reinsurance

Total Reinsurance
Individual Risk

Total

Case Reserves

Additional Case
Reserves

IBNR

Total

$165,153
119,674

284,827
189,389

$148,252
101,612

$ 258,451 $ 571,856
604,104

382,818

249,864
3,658

641,269
332,999

1,175,960
526,046

$474,216

$253,522

$ 974,268 $1,702,006

$312,944
113,953

426,897
253,327

$297,279
135,345

$ 250,946 $ 861,169
636,650

387,352

432,624
14,591

638,298
394,875

1,497,819
662,793

$680,224

$447,215

$1,033,173 $2,160,612

Our estimates of claims and claim expense reserves are not precise in that, among other matters, they are based
on predictions of future developments and estimates of future trends and other variable factors. Some, but not all,
of our reserves are further subject to the uncertainty inherent in actuarial methodologies and estimates. Because
a reserve estimate is simply an insurer’s estimate at a point in time of its ultimate liability, and because there are
numerous factors which affect reserves and claims payments but cannot be determined with certainty in
advance, our ultimate payments will vary, perhaps materially, from our estimates of reserves. If we determine in a
subsequent period that adjustments to our previously established reserves are appropriate, such adjustments are
recorded in the period in which they are identified. During the years ended December 31, 2009, 2008 and 2007,
changes to prior year estimated claims reserves increased our net income by $244.5 million, $234.8 million and
$233.2 million, respectively, excluding the consideration of changes in reinstatement premium, profit
commissions, redeemable noncontrolling interest – DaVinciRe and income tax expense.

and/or discussions with ceding companies or their brokers. This information can be received on a monthly,
quarterly or transactional basis and normally includes estimates of paid claims and case reserves. We sometimes
also receive an estimate or provision for IBNR. This information is often updated and adjusted from time-to-time
during the loss settlement period as new data or facts in respect of initial claims, client accounts, industry or
event trends may be reported or emerge in addition to changes in applicable statutory and case laws.

We recorded $586.3 million of gross claims and claim expenses incurred in the third quarter of 2008 as a result
of losses arising from hurricanes Gustav and Ike which struck the U.S. in the third quarter of 2008. Our estimates
of losses from hurricanes Gustav and Ike are based on factors including currently available information derived
from the Company’s preliminary claims information from certain customers and brokers, industry assessments of
losses from the events, proprietary models, and the terms and conditions of our contracts. Given the magnitude
and relatively recent occurrence of these events, as well as the large storms of 2005, including hurricane Katrina,
meaningful uncertainty remains regarding total covered losses for the insurance industry and, accordingly,
several of the key assumptions underlying our loss estimates. In addition, our actual net losses from these events
and Katrina may increase if our reinsurers or other obligors fail to meet their obligations. Our actual losses from
these events and Katrina, will likely vary, perhaps materially, from these current estimates due to the inherent
uncertainties in reserving for such losses, including the nature of the available information, the potential
inaccuracies and inadequacies in the data provided by customers and brokers, the inherent uncertainty of
modeling techniques and the application of such techniques, the effects of any demand surge on claims activity
and complex coverage and other legal issues.

Included in our results for 2007 are $157.5 million of net claims and claim expenses from Kyrill and the U.K.
flood losses which occurred in 2007, as well as $60.0 million in estimated losses associated with exposure to
sub-prime related casualty losses. Estimates of these losses are based on a review of potentially exposed
contracts, information reported by and discussions with counterparties, and the Company’s estimate of losses
related to those contracts and are subject to change as more information is reported and becomes available.
Such information is frequently reported more slowly, and with less initial accuracy, with respect to non-U.S.
events such as Kyrill and the U.K. floods than with large U.S. catastrophe losses. In addition, the sub-prime
related casualty net claims and claim expenses are based on underlying liability contracts which are considered
“long-tail” business, and will therefore take many years before the actual losses are known and reported, which
increases the uncertainty with respect to the estimate for ultimate losses for this event. The net claims and claim
expenses from Kyrill, the U.K. floods and sub-prime related casualty losses are all attributable to the Company’s
Reinsurance segment.

Our reserving techniques, assumptions and processes differ between our Reinsurance and Individual Risk
segments, as well as between our property catastrophe reinsurance and specialty reinsurance businesses within
our Reinsurance segment. Following is a discussion of the risks we insure and reinsure, the reserving techniques,
assumptions and processes we follow to estimate our claims and claim expense reserves, and our current
estimates versus our initial estimates of our claims reserves, for each of these units.

Reinsurance Segment

Property Catastrophe Reinsurance

Within our property catastrophe reinsurance unit, we principally write property catastrophe excess of loss
reinsurance contracts to insure insurance and reinsurance companies against natural and man-made
catastrophes. Under these contracts, we indemnify an insurer or reinsurer when its aggregate paid claims and
claim expenses from a single occurrence of a covered peril exceed the attachment point specified in the contract,
up to an amount per loss specified in the contract. Our most significant exposure is to losses from earthquakes
and hurricanes and other windstorms, although we are also exposed to claims arising from other catastrophes,
such as tsunamis, freezes, floods, fires, tornadoes, explosions and acts of terrorism. Our predominant exposure
under such coverage is to property damage. However, other risks, including business interruption and other
non-property losses, may also be covered under our property catastrophe reinsurance contracts when arising
from a covered peril. Our coverages are offered on either a worldwide basis or are limited to selected geographic
areas.

Coverage can also vary from “all property” perils to limited coverage on selected perils, such as “earthquake only”
coverage. We also enter into retrocessional contracts that provide property catastrophe coverage to other
reinsurers or retrocedants. This coverage is generally in the form of excess of loss retrocessional contracts and
may cover all perils and exposures on a worldwide basis or be limited in scope to selected geographic areas,
perils and/or exposures. The exposures we assume from retrocessional business can change within a contract
term as the underwriters of a retrocedant may alter their book of business after the retrocessional coverage has
been bound. We also offer dual trigger reinsurance contracts which require us to pay claims based on claims
incurred by insurers and reinsurers in addition to the estimate of insured industry losses as reported by
referenced statistical reporting agencies.

Our property catastrophe reinsurance business is generally characterized by loss events of low frequency and
high severity. Initial reporting of paid and incurred claims in general, tends to be relatively prompt. We consider
this business “short-tail” as compared to the reporting of claims for “long-tail” products, which tends to be
slower. However, the timing of claims payment and reporting also varies depending on various factors, including:
whether the claims arise under reinsurance of primary insurance companies or reinsurance of other reinsurance
companies; the nature of the events (e.g., hurricanes, earthquakes or terrorism); the geographic area involved;
post-event inflation which may cause the cost to repair damaged property to increase significantly from current
estimates, or for property claims to remain open for a longer period of time, due to limitations on the supply of
building materials, labor and other resources; complex policy coverage and other legal issues; and the quality of
each client’s claims management and reserving practices. Management’s judgments regarding these factors are
reflected in our claims reserve estimates.

Reserving for most of our property catastrophe reinsurance business does not involve the use of traditional
actuarial techniques. Rather, claims and claim expense reserves are estimated by management after a
catastrophe occurs by completing an in-depth analysis of the individual contracts which may potentially be
impacted by the catastrophic event. The in-depth analysis generally involves: 1) estimating the size of insured
industry losses from the catastrophic event; 2) reviewing our portfolio of reinsurance contracts to identify those
contracts which are exposed to the catastrophic event; 3) reviewing information reported by customers and
brokers; 4) discussing the event with our customers and brokers; and 5) estimating the ultimate expected cost to
settle all claims and administrative costs arising from the catastrophic event on a contract-by-contract basis and
in aggregate for the event. Once an event has occurred, during the then current reporting period we record our
best estimate of the ultimate expected cost to settle all claims arising from the event. Our estimate of claims and
claim expense reserves is then determined by deducting cumulative paid losses from our estimate of the ultimate
expected loss for an event and our estimate of IBNR is determined by deducting cumulative paid losses, case
reserves and additional case reserves from our estimate of the ultimate expected loss for an event. Once we
receive a notice of loss or payment request under a catastrophe reinsurance contract, we are generally able to
process and pay such claims promptly.

Because the events from which claims arise under policies written by our property catastrophe reinsurance
business are typically prominent, public occurrences such as hurricanes and earthquakes, we are often able to
use independent reports as part of our loss reserve estimation process. We also review catastrophe bulletins
published by various statistical reporting agencies to assist us in determining the size of the industry loss,
although these reports may not be available for some time after an event. In addition to the loss information and
estimates communicated by cedants and brokers, we also use industry information which we gather and retain in
our REMS© modeling system. The information stored in our REMS© modeling system enables us to analyze each
of our policies in relation to a loss and compare our estimate of the loss with those reported by our policyholders.
The REMS© modeling system also allows us to compare and analyze individual losses reported by policyholders
affected by the same loss event. Although the REMS© modeling system assists with the analysis of the underlying
loss and provides us with the information and ability to perform increased analysis, the estimation of claims
resulting from catastrophic events is inherently difficult because of the variability and uncertainty associated with
property catastrophe claims and the unique characteristics of each loss.

For smaller events including localized severe weather events such as windstorms, hail, ice, snow, flooding,
freezing and tornadoes, which are not necessarily prominent, public occurrences, we initially place greater
reliance on catastrophe bulletins published by statistical reporting agencies to assist us in determining what
events occurred during the reporting period than we do for large events. This includes reviewing Catastrophe
Bulletins published by Property Claim Services for U.S. catastrophes. We set our initial estimates of reserves for
claims and claim expenses for these smaller events based on a combination of our historical market share for
these types of losses and the estimate of the total insured industry property losses as reported by statistical

reporting agencies, although we generally make significant adjustments based on our current exposure to the
geographic region involved as well as the size of the loss and the peril involved. This approach supplements our
approach for estimating losses for larger catastrophes, which as discussed above, includes discussions with
brokers and ceding companies, reviewing individual contracts impacted by the event, and modeling the loss in
our REMS© system. Approximately one year from the date of loss for these small events, we estimate IBNR for
these events by using an actuarial technique. The actuarial technique is to use a paid Bornhuetter-Ferguson
actuarial technique in estimating IBNR. The paid Bornhuetter-Ferguson actuarial technique loss development
factors are selected based on a review of our historical experience and these factors are reviewed at least
annually. There were no changes to the paid loss development factors over the last three years.

In general, our property catastrophe reinsurance reserves for our more recent reinsured catastrophic events are
subject to greater uncertainty and, therefore, greater potential variability, and are likely to experience material
changes from one period to the next. This is due to the uncertainty as to the size of the industry losses from the
event, uncertainty as to which contracts have been exposed to the catastrophic event, uncertainty due to complex
legal and coverage issues that can arise out of large or complex catastrophic events such as the events of
September 11, 2001 and hurricane Katrina, and uncertainty as to the magnitude of claims incurred by our
customers. As our property catastrophe reinsurance claims age, more information becomes available and we
believe our estimates become more certain, although there is no assurance this trend will continue in the future.
As seen in the Actual vs. Initial Estimated Property Catastrophe Reinsurance Claims and Claim Expense Reserve
Analysis table below, 67.3% of our inception to date claims and claim expenses in our property catastrophe
reinsurance unit were incurred in the 2004, 2005 and 2008 accident years, due principally to the losses from
hurricanes Charley, Frances, Ivan, Jeanne, Katrina, Rita, Wilma, Gustav and Ike. Due to the size and complexity
of the losses in these accident years, there still remains considerable uncertainty as to the ultimate settlement
costs associated with these accident years.

In 2009, we reviewed our processes and methodology for estimating the ultimate expected cost to settle all claims
arising from certain mature large U.S. hurricanes. During this process, we evaluated several actuarial
methodologies including using paid loss development factors, reported loss development factors and ratios of
IBNR to case reserves. In this review, among other things, we looked at our historical claims experience on these
mature large U.S. hurricanes, the number of claims associated with these mature large U.S. hurricanes and
available industry claims information on the same or similar events. We determined that the use of the reported
loss development factor methodology for these mature large U.S. hurricanes would provide us with the best
estimate of ultimate losses in respect of these events. Currently, we believe this approach is only applicable for
the 2004 and 2005 large hurricanes as we believe that (i) these events have a large enough number of reported
claims to be statistically sound, (ii) these events have available industry reported claims information to
supplement our own historical reported loss information, and (iii) a sufficient amount of time has passed from the
date of loss that the use of an actuarial method could assist in estimating the ultimate costs. We implemented this
actuarial methodology in the fourth quarter of 2009 with respect to our 2004 and 2005 hurricane losses. In the
future, we expect to evaluate applying this methodology to other mature large U.S. hurricanes as we deem
appropriate. In implementing this actuarial technique, we adjusted our ultimate losses at December 31, 2009 on
the 2004 hurricanes from 96.6% reported to 98.1% reported and from 93.6% reported to 95.8% reported for the
2005 hurricanes. The impact of these changes within our property catastrophe reinsurance unit was a decrease
in ultimate losses on the 2004 hurricanes by $12.3 million and by $28.1 million for our 2005 hurricane losses.
The net positive impact to our financial results was $26.9 million after considering offsetting changes in
reinsurance recoveries, reinstatement premiums, profit commissions and redeemable noncontrolling interest –
DaVinciRe.

Within our property catastrophe reinsurance business, we seek to review our claims and claim expense reserves
quarterly. Our quarterly review procedures include identifying events that have occurred up to the latest balance
sheet date, determining our best estimate of the ultimate expected cost to settle all claims and administrative
costs associated with those new events which have arisen during the reporting period, reviewing the ultimate
expected cost to settle claims and administrative costs associated with those events which occurred during
previous periods, and considering new estimation techniques, such as additional actuarial methods or other
statistical techniques, that can assist us in developing a best estimate. This process is judgmental in that it
involves reviewing changes in paid and reported losses each period and adjusting our estimates of the ultimate
expected losses for each event if there are developments that are different from our previous expectations. If we
determine that adjustments to an earlier estimate are appropriate, such adjustments are recorded in the period in
which they are identified. During the years ended December 31, 2009, 2008 and 2007, changes to our prior year
estimated claims reserves in our property catastrophe reinsurance unit increased our net income by

$184.4 million, $131.6 million and $93.1 million, respectively, excluding the consideration of changes in
reinstatement premium, profit commissions, redeemable noncontrolling interest – DaVinciRe and income tax
expense.

The favorable development within our property catastrophe reinsurance unit of $184.4 million in 2009 was
principally attributable to a reduction in ultimate net losses associated with the 2008 hurricanes, Gustav and Ike
($44.7 million); the 2005 hurricanes, Katrina, Rita and Wilma ($25.5 million); the 2007 European windstorm
Kyrill ($16.7 million); the 2007 California wildfires ($14.1 million); the 2007 flooding in the U.K. ($14.6 million);
and the 2004 hurricanes, Charley, Frances, Ivan and Jeanne ($11.3 million), due to better than expected
reported claims activity, and with respect to the 2004 and 2005 hurricanes, the adoption of a new actuarial
technique using reported loss development factors to estimate the ultimate losses for these events, as discussed
in more detail above. The remaining favorable development within our property catastrophe reinsurance unit was
due to a reduction of ultimate net losses on a variety of smaller catastrophes such as hail storms, winter freezes,
floods, fires, tornadoes which occurred during the 2006 through 2008 accident years.

Our favorable development on prior years estimated ultimate claim reserves in our property catastrophe
reinsurance unit of $131.6 million in 2008 was principally as a result of a comprehensive review of the
Company’s expected ultimate net losses associated with the 2005 hurricanes, Katrina, Rita and Wilma, which
resulted in an $82.7 million decrease in net losses from these events. The comprehensive review of the 2005
hurricanes included a case-by-case review of the claims for our largest outstanding additional case reserves by
cedant for each hurricane, reviewing updated information received from customers, brokers and other industry
sources regarding these claims, reviewing industry paid and reported loss development patterns for hurricanes
Katrina, Rita and Wilma and comparing these statistics to our paid and reported loss development patterns for
these events, and reviewing our historical experience for previous large catastrophes, including the 2004
hurricanes. Based on the work completed, we determined to reduce our current best estimate of the ultimate net
losses arising from these events by $82.7 million. The $82.7 million decrease in ultimate net losses was
comprised of a $58.6 million decrease in additional case reserves and a $28.3 million decrease in IBNR and
partially offset by a corresponding $4.2 million decrease in losses recoverable. We did not change our reserving
methodology in 2008 as a result of this review.

Actual Results vs. Initial Estimates

The table below summarizes our initial assumptions and changes in those assumptions for claims and claim
expense reserves within our property catastrophe reinsurance unit. As discussed above, the key assumption in
estimating reserves for our property catastrophe reinsurance unit is our estimate of ultimate claims and claim
expenses. The table shows our initial estimates of ultimate claims and claim expenses for each accident year and
how these initial estimates have developed over time. The initial estimate of accident year claims and claim
expenses represents our estimate of the ultimate settlement and administration costs for claims incurred from
catastrophic events occurring during a particular accident year, and as reported as of December 31 of that year.
The re-estimated ultimate claims and claim expenses as of December 31, 2007, 2008 and 2009, represent our
revised estimates as reported as of those dates. The cumulative favorable (adverse) development shows how our
most recent estimates as reported at December 31, 2009 differ from our initial accident year estimates. Favorable
development implies that our current estimates are lower than our initial estimates while adverse development
implies that our current estimates are higher than our original estimates. Total reserves as of December 31, 2009
reflect the unpaid portion of our estimates of ultimate claims and claim expenses. The table is presented on a
gross basis and therefore does not include the benefit of reinsurance recoveries. It also does not consider the
impact of loss related premium or redeemable noncontrolling interest – DaVinciRe.

Actual vs. Initial Estimated Property Catastrophe Reinsurance Claims and Claim Expense Reserve Analysis

(in thousands,
except percentages)

Accident Year

Initial
Estimate of
Accident
Year Claims
and Claim
Expenses

Re-estimated Claims and
Claim Expenses
as of December 31,
2008

2007

2009

Cumulative
Favorable
(Adverse)
Development

% Decrease
(Increase) from
Initial
Ultimate

Claims and
Claim Expense
Reserves as of
December 31,
2009

% of Claims
and Claim
Expenses
Unpaid as of
December 31,
2009

1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

$ 100,816 $ 137,491 $ 137,396 $ 138,107 $ (37,291)
11,168
22,458
34,004
(25,499)
59,614
36,884
37,410
84,039
50,354
(68,061)
125,828
60,367
93,936
92,760
—

64,234
45,868
7,200
154,797
209,540
19,118
225,486
74,589
77,042
851,586
1,461,140
77,093
245,892
—
—

72,561
67,671
43,050
129,171
267,981
54,600
257,285
155,573
126,312
762,392
1,473,974
121,754
245,892
599,481
90,800

64,086
45,855
7,203
154,701
207,884
18,793
220,220
73,353
76,736
846,652
1,380,484
63,153
210,447
599,481
—

61,393
45,213
9,046
154,670
208,367
17,716
219,875
71,534
75,958
830,453
1,348,146
61,387
151,956
506,721
90,800

(37.0%)
15.4%
33.2%
79.0%
(19.7%)
22.2%
67.6%
14.5%
54.0%
39.9%
(8.9%)
8.5%
49.6%
38.2%
15.5%
—

1,473
105
23
10
3,365
10,246
251
25,778
7,080
8,629
23,197
120,798
4,682
57,577
240,507
68,135

$4,569,313 $3,651,076 $4,106,444 $3,991,342 $577,971

12.9%

$571,856

1.1%
0.2%
0.1%
0.1%
2.2%
4.9%
1.4%
11.7%
9.9%
11.4%
2.8%
9.0%
7.6%
37.9%
47.5%
75.0%

14.3%

As quantified in the table above, since the inception of the Company in 1993, while we have experienced adverse
development from time to time, on a cumulative basis we have experienced $578.0 million of favorable
development on the run-off of our gross reserves within our property catastrophe reinsurance unit. This
represents 12.9% of our initial estimated gross claims and claim expenses for accident years 2008 and prior of
$4.5 billion and is calculated based on our estimates of claims and claim expense reserves as of December 31,
2009, compared to our initial estimates of ultimate claims and claim expenses, as of the end of each accident
year. As described above, given the complexity in reserving for claims and claims expenses associated with
catastrophe losses for property catastrophe excess of loss reinsurance contracts, we have experienced
development, both favorable and unfavorable, in any given accident year in amounts that exceed our inception to
date percentage of 12.9%. For example, our 2000 accident year developed favorably by $36.9 million, which is
67.6% better than our initial estimates of claims and claim expenses for the 2000 accident year as estimated as
of December 31, 2000, while our 1994 accident year developed unfavorably by $37.3 million, or 37.0%. On a
net basis our cumulative favorable or unfavorable development is generally reduced by offsetting changes in our
reinsurance recoverables, as well as changes to loss related premiums such as reinstatement premiums, and
redeemable noncontrolling interest for changes in claims and claim expenses that impact DaVinciRe, all of which
generally move in the opposite direction to changes in our ultimate claims and claim expenses.

The percentage of claims unpaid at December 31, 2009 for each accident year reflects both the speed at which
claims and claim expenses for each accident year have been paid and our estimate of claims and claim expenses
for that accident year. As seen above, claims and claim expenses for the 2004 accident year have to date been
paid quickly compared to prior accident years. This is due to the fact that hurricanes Charley, Frances, Ivan and
Jeanne which occurred in 2004 have been relatively rapid claims paying events. This is driven in part by the mix
of our business in Florida, which primarily includes property catastrophe excess of loss reinsurance for personal
lines property coverage, rather than commercial property coverage or retrocessional coverage, and the speed of
the settlement and payment of claims by our underlying cedants. In contrast, our 2001 accident year, which
includes losses from the events of September 11, 2001, and our 2005 accident year, which includes significant
losses from hurricane Katrina, includes a higher mix of commercial business and retrocessional coverage where
the underlying claims of our cedants tend to be settled and paid more slowly. In addition, claims from our
underlying cedants for the 2001 and 2005 accident years are subject to more complex coverage and legal
matters due to the complexity of the catastrophic events taking place in those years.

Sensitivity Analysis

The table below shows the impact on our ultimate claims and claim expenses, net income and shareholders’
equity as of and for the year ended December 31, 2009 of reasonably likely changes to our estimates of ultimate
losses for claims and claim expenses incurred from catastrophic events within our property catastrophe
reinsurance business unit. The reasonably likely changes are based on an historical analysis of the
period-to-period variability of our ultimate costs to settle claims from catastrophic events, giving due consideration
to changes in our reserving practices over time. In general, our claim reserves for our more recent catastrophic
events are subject to greater uncertainty and, therefore, greater variability and are likely to experience material
changes from one period to the next. This is due to the uncertainty as to the size of the industry losses from the
event, uncertainty as to which contracts have been exposed to the catastrophic event, and uncertainty as to the
magnitude of claims incurred by our clients. As our claims age, more information becomes available and we
believe our estimates become more certain, although there is no assurance this trend will continue in the future.
As a result, the sensitivity analysis below is based on the age of each accident year, our current estimated
ultimate claims and claim expenses for the catastrophic events occurring in each accident year, and the
reasonably likely variability of our current estimates of claims and claim expenses by accident year. The impact
on net income and shareholders’ equity assumes no increase or decrease in reinsurance recoveries, loss related
premium or redeemable noncontrolling interest – DaVinciRe.

Property Catastrophe Reinsurance Claims and Claim Expense Reserve Sensitivity Analysis

(in thousands,
except percentages)

Higher
Recorded
Lower

Ultimate Claims and
Claim Expenses as
of December 31,
2009

$4,221,035
3,991,342
$3,761,651

$ Impact of Change
in Ultimate Claims
and Claim Expenses
as of December 31,
2009

% Impact of Change
in Ultimate Claims
and Claim Expenses
as of December 31,
2009

$ 229,693
—
$(229,691)

5.8%
—
(5.8%)

% Impact of Change
on Net Income for
the Year Ended
December 31, 2009

% Impact of Change
on Shareholders'
Equity as of
December 31, 2009

(21.8%)
—
21.8%

(6.0%)
—
6.0%

We believe the changes we made to our estimated ultimate claims and claim expenses represent reasonably
likely outcomes based on our experience to date and our future expectations. While we believe these are
reasonably likely outcomes, we do not believe the reader should consider the above sensitivity analysis an
actuarial reserve range. In addition, the sensitivity analysis only reflects reasonably likely changes in our
underlying assumptions. It is possible that our estimated ultimate claims and claim expenses could be
significantly higher or lower than the sensitivity analysis described above. For example, we could be liable for
events for which we have not estimated claims and claim expenses or for exposures we do not currently believe
are covered under our policies. These changes could result in significantly larger changes to our estimated
ultimate claims and claim expenses, net income and shareholders’ equity than those noted above. We also
caution the reader that the above sensitivity analysis is not used by management in developing our reserve
estimates and is also not used by management in managing the business.

Specialty Reinsurance

Within our specialty reinsurance business unit we write a number of reinsurance lines such as catastrophe
exposed workers’ compensation, surety, terrorism, political risk, trade credit, medical malpractice, catastrophe
exposed personal lines property, casualty clash, property per risk, catastrophe exposed personal lines property
and other specialty lines of reinsurance, which we collectively refer to as specialty reinsurance. We offer our
specialty reinsurance products principally on an excess of loss basis, as described above with respect to our
property catastrophe reinsurance products, and we also provide some proportional coverage. In a proportional
reinsurance arrangement (also referred to as quota share reinsurance or pro-rata reinsurance), the reinsurer
shares a proportional part of the original premiums and losses of the reinsured. We offer our specialty
reinsurance products to insurance companies and other reinsurance companies and provide coverage for
specific geographic regions or on a worldwide basis. We expanded our specialty reinsurance business in 2002
and have increased our presence in the specialty reinsurance market since that time.

Our specialty reinsurance business can generally be characterized as providing coverage for low frequency and
high severity losses, similar to our property catastrophe reinsurance business. As with our property catastrophe
reinsurance business, our specialty reinsurance contracts frequently provide coverage for relatively large limits or
exposures. As a result of the foregoing, our specialty reinsurance business is subject to significant claims

volatility. In periods of low claims frequency or severity, our results will generally be favorably impacted while in
periods of high claims frequency or severity our results will generally be negatively impacted.

Our processes and methodologies in respect of loss estimation for the coverages we offer through our specialty
reinsurance operation differ from those used for our property catastrophe-oriented coverages. For example, our
specialty reinsurance coverages are more likely to be impacted by factors such as long-term inflation and
changes in the social and legal environment, which we believe gives rise to greater uncertainty in our claims
reserves. Moreover, in reserving for our specialty reinsurance coverages we do not have the benefit of a
significant amount of our own historical experience in certain of these lines. We believe this makes our specialty
reinsurance reserving subject to greater uncertainty than our property catastrophe reinsurance unit.

When initially developing our reserving techniques for our specialty reinsurance coverages, we considered
estimating reserves utilizing several actuarial techniques such as paid and reported loss development methods.
We elected to use the Bornhuetter-Ferguson actuarial technique because this method is appropriate for lines of
business, such as our specialty reinsurance business, where there is a lack of historical claims experience. This
method allows for greater weight to be applied to expected results in periods where little or no actual experience
is available, and, hence, is less susceptible to the potential pitfall of being excessively swayed by one year or one
quarter of actual paid and/or reported loss data. This method uses initial expected loss ratio expectations to the
extent that losses are not paid or reported, and it assumes that past experience is not fully representative of the
future. As the Company’s reserves for claims and claim expenses age, and actual claims experience becomes
available, this method places less weight on expected experience and places more weight on actual experience.
We reevaluate our actuarial reserving techniques on a periodic basis.

The utilization of the Bornhuetter-Ferguson actuarial technique requires us to estimate an expected ultimate
claims and claim expense ratio and select an expected loss reporting pattern. We select our estimates of the
expected ultimate claims and claim expense ratios and expected loss reporting patterns by reviewing industry
standards and adjusting these standards based upon the terms of the coverages we offer. The estimated
expected claims and claim expense ratio may be modified to the extent that reported losses at a given point in
time differ from what would be expected based on the selected loss reporting pattern. Our estimate of IBNR is the
product of the premium we have earned, the initial expected ultimate claims and claim expense ratio and the
percentage of estimated unreported losses. In addition, certain of our specialty reinsurance coverages may be
impacted by natural and man-made catastrophes. We estimate claim reserves for these losses after the event
giving rise to these losses occur, following a process that is similar to our property catastrophe reinsurance unit
described above.

Within our specialty reinsurance business, we seek to review substantially all of our claims and claim expense
reserves quarterly. Typically, our quarterly review procedures include reviewing paid and reported claims in the
most recent reporting period, reviewing the development of paid and reported claims from prior periods, and
reviewing our overall experience by underwriting year and in the aggregate. We monitor our expected ultimate
claims and claim expense ratios and expected loss reporting assumptions on a quarterly basis and compare them
to our actual experience. These actuarial assumptions are generally reviewed annually, based on input from our
actuaries, underwriters, claims personnel and finance professionals, although adjustments may be made more
frequently if needed. Assumption changes are made to adjust for changes in the pricing and terms of coverage
we provide, changes in industry standards, as well as our actual experience, to the extent we have enough data to
rely on our own experience. If we determine that adjustments to an earlier estimate are appropriate, such
adjustments are recorded in the period in which they are identified. During the years ended December 31, 2009,
2008 and 2007, changes to our prior year estimated claims reserves in our specialty reinsurance unit increased
our net income by $65.1 million, $56.5 million and $101.3 million, respectively, excluding the consideration of
changes in reinstatement premium, profit commissions, redeemable noncontrolling interest – DaVinciRe and
income tax expense.

The favorable development within our specialty reinsurance unit of $65.1 million in 2009 was principally
attributable to lower than expected claims emergence on the 2005 through 2008 underwriting years of $87.6
million which was driven by the application of our formulaic actuarial reserving methodology for this business with
the reductions being due to actual paid and reported loss activity being more favorable to date than what was
originally anticipated when setting the initial IBNR reserves, as well as $10.0 million due to a reduction on one
claim on a contract related to the 2005 hurricanes, and partially offset by a $32.5 million increase in our
estimated ultimate net losses on the 2008 Madoff matter.

Actual Results vs. Initial Estimates

The Actual vs. Initial Estimated Ultimate Claims and Claim Expense Ratio table below summarizes our key actuarial
assumptions in reserving for our specialty reinsurance business. As noted above, the key actuarial assumptions
include the estimated ultimate claims and claim expense ratios and the estimated loss reporting patterns. The
table shows our initial estimates of the ultimate claims and claim expense ratio by underwriting year. The table
shows how our initial estimates of these ratios have developed over time, with the re-estimated ratios reflecting a
combination of the amount and timing of paid and reported losses compared to our initial estimates. The initial
estimate is based on the actuarial assumptions that were in place at the end of that year. A decrease in the
ultimate claims and claim expense ratio implies that our current estimates are lower than our initial estimates while
an increase in the ultimate claims and claim expense ratio implies that our current estimates are higher than our
initial estimates. The result would be a corresponding favorable impact on shareholders’ equity and net income or
a corresponding unfavorable impact on shareholders’ equity and net income, respectively. The table also shows
how our initial estimated ultimate claims and claim expense ratios have changed from one underwriting year to the
next. The table below reflects a summary of the weighted average assumptions for all classes of business written
within our specialty reinsurance unit. The table is presented on a gross loss basis and therefore does not include
the benefit of reinsurance recoveries or loss related premium.

Actual vs. Initial Estimated Specialty Reinsurance Claims and Claim Expense Reserve Analysis—Estimated
Ultimate Claims and Claim Expense Ratio

Estimated Ultimate Claims and Claim Expenses Ratio

Underwriting Year
2002
2003
2004
2005
2006
2007
2008
2009

Initial Estimate
77.2%
76.8%
78.2%
78.2%
76.6%
62.9%
57.9%
68.6%

December 31, 2007
24.4%
28.5%
49.8%
49.3%
59.5%
91.9%
—
—

Re-estimate as of
December 31, 2008
24.7%
30.3%
46.1%
42.4%
55.1%
73.9%
89.4%
—

December 31, 2009
22.4%
29.8%
41.1%
38.7%
47.9%
64.7%
97.5%
57.4%

The table above shows our initial estimated ultimate claims and claim expense ratios for attritional losses for each
new underwriting year within our specialty reinsurance unit as of the end of each calendar year. Until 2007, our
initial estimated ultimate remained relatively constant between 76.6% in 2006 and 78.2% in 2004 and 2005.
This reflects the fact that management had not made significant changes to its initial estimates of expected
ultimate claims and claim expense ratios from one underwriting year to the next. The principal reason for the
modest changes from one underwriting year to the next is that the mix of business has changed. For example,
the mix of business for the 2007, 2008 and 2009 underwriting years have a lower initial expected ultimate claims
and claim expense ratio than in prior years as it is more heavily weighted to business that is expected to produce
a lower level of losses. The decrease in the initial estimated ultimate claims and claim expense ratio from 2006 to
2007 also reflects assumption changes made for certain classes of business where our experience, and the
industry experience in general, has been better than expected and, as a result, we decreased our initial estimated
ultimate claims and claim expense ratio for these classes of business. The increase in the initial estimated
ultimate claims and claim expense ratio for 2009, compared to 2008, is principally due to a shift in the mix of
business to higher expected loss ratio business as our modeled expected loss ratio assumptions did not change.

As each underwriting year has developed, our re-estimated expected ultimate claims and claim expense ratios
have changed. In particular, our re-estimated ultimate claims and claim expense ratios have decreased
significantly from the initial estimates for the 2002 through 2005 underwriting years. This was principally due to
our 2005 reserve review. During our 2005 reserve review, we further segmented the specialty business with the
aim of grouping risks into more homogeneous categories which respond to the evolution of actual exposures. This
became possible as the volume of this business increased over the three preceding years. This further
segmentation required the selection of loss reporting patterns to be applied to these new groups. We also
updated our assumptions for our original loss reporting patterns based on a combination of new industry
information and actual experience accumulated over the three preceding years. The assumptions for the new loss
reporting patterns were applied to all prior underwriting years. In addition, we made explicit allowances for
commuted contracts whereas previously these were considered in the overall reserving assumptions. We also

reviewed substantially all of our case reserves and additional case reserves. The result of the foregoing was a
decrease in our specialty reinsurance re-estimated ultimate claims and claim expense reserves in 2005.
Subsequent to this reserve review, the results of our specialty book of business have been mixed. The 2006
underwriting year includes favorable development as actual paid and reported losses during 2006 have been less
than expected, which has resulted in a reduction in our expected ultimate claims and claim expense ratio for this
year. However, the 2008 and 2007 underwriting years have performed worse than expected and our current
estimates are higher than our initial estimates. This is due in part to the losses in our casualty clash line of
business in 2008 and 2007, associated with exposure to the deterioration of the credit and capital markets in
2008 as well as the Madoff matter discovered in the fourth quarter of 2008 and with sub-prime exposure in
2007. As noted above, our specialty reinsurance business is characterized by events of low frequency and high
severity which results in actual experience that can be significantly better or worse than long-term trends or
industry standards may imply.

As noted above, some of our specialty reinsurance contracts are exposed to net claims and claim expenses from
large natural and man-made catastrophes. Net claims and claim expenses from these large catastrophes are
reserved for after the events which gave rise to the claims in a manner which is consistent with our property
catastrophe reinsurance reserving practices as discussed above. The large catastrophes occurring during the
period from 2003 to 2008 impacting our specialty unit principally include hurricanes Katrina, Rita and Wilma,
which occurred in 2005. Our estimate of ultimate net claims and claim expenses from hurricanes Katrina, Rita
and Wilma, within our specialty reinsurance unit, net of reinsurance recoveries and assumed and ceded loss
related premium, totaled $98.8 million, $77.1 million, $73.1 million, $73.1 million and $63.1 million at
December 31, 2005, 2006, 2007, 2008 and 2009, respectively.

Sensitivity Analysis

The table below quantifies the impact on our reserves for claims and claim expenses, net income and
shareholders’ equity as of and for the year ended December 31, 2009 of reasonably likely changes to the
actuarial assumptions used to estimate our December 31, 2009 claims and claim expense reserves within our
specialty reinsurance business unit. The table quantifies reasonably likely changes in our initial estimated
ultimate claims and claim expense ratios and estimated loss reporting patterns. The changes to the initial
estimated ultimate claims and claim expense ratios represent percentage increases or decreases to our current
estimated ultimate claims and claim expense ratios. The change to the reporting patterns represent claims
reporting that is both faster and slower than our current estimated claims reporting patterns. The impact on net
income and shareholders’ equity assumes no increase or decrease in reinsurance recoveries, loss related
premium or redeemable noncontrolling interest – DaVinciRe.

Specialty Reinsurance Claims and Claim Expense Reserve Sensitivity Analysis

(in thousands,
except percentages)

Estimated Ultimate Claims and Claim
Expense Ratio
Increase expected claims and

Estimated Loss
Reporting Pattern

$ Impact of Change
in Reserves for
Claims and Claim
Expenses as of
December 31,
2009

% Impact of Change
in Reserves for
Claims and Claim
Expenses as of
December 31,
2009

% Impact of Change
in Net Income for
the Year Ended
December 31,
2009

% Impact of
Change in
Shareholders'
Equity as of
December 31,
2009

claim expense ratio by 25% Slower reporting

$ 204,791

Increase expected claims and

claim expense ratio by 25% Expected reporting

95,705

Increase expected claims and

claim expense ratio by 25% Faster reporting

2,533

Expected claims and claim

expense ratio

Expected claims and claim

expense ratio

Expected claims and claim

expense ratio

Decrease expected claims and

Slower reporting

87,269

Expected reporting

—

Faster reporting

(74,537)

(12.3%)

33.9%

15.8%

0.4%

14.4%

(19.5%)

(5.3%)

(9.1%)

(2.5%)

(0.2%)

(0.1%)

(8.3%)

(2.3%)

claim expense ratio by 25% Slower reporting

(30,252)

(5.0%)

Decrease expected claims and

claim expense ratio by 25% Expected reporting

(95,705)

(15.8%)

Decrease expected claims and

claim expense ratio by 25% Faster reporting

(151,607)

(25.1%)

14.4%

—

7.1%

2.9%

9.1%

—

1.9%

0.8%

2.5%

3.9%

We believe that ultimate claims and claim expense ratios 25.0% above or below our estimated assumptions
constitute reasonably likely outcomes based on our experience to date and our future expectations. In addition,
we believe that the adjustments that we made to speed up or slow down our estimated loss reporting patterns are
reasonably likely changes. While we believe these are reasonably likely changes, we do not believe the reader
should consider the above sensitivity analysis an actuarial reserve range. In addition, we caution the reader that
the above sensitivity analysis only reflects reasonably likely changes. It is possible that our initial estimated claims
and claim expense ratios and loss reporting patterns could be significantly different from the sensitivity analysis
described above. For example, we could be liable for events which we have not estimated reserves for or for
exposures we do not currently think are covered under our contracts. These changes could result in significantly
larger changes to reserves for claims and claim expenses, net income and shareholders’ equity than those noted
above. We also caution the reader that the above sensitivity analysis is not used by management in developing
our reserve estimates and is also not used by management in managing the business.

Individual Risk Segment

We define our Individual Risk segment to include underwriting that involves understanding the characteristics of
the underlying insurance policy. Our principal contracts currently include insurance policies and quota share
reinsurance with respect to risks including: 1) crop insurance, which includes multi-peril crop insurance, crop
hail and other named peril agriculture risk management products; 2) commercial property, which principally
includes catastrophe-exposed commercial property products; 3) commercial multi-line, which includes
commercial property and liability coverage, such as general liability, automobile liability and physical damage,
building and contents, professional liability and various specialty products; and 4) personal lines property, which
principally includes homeowners personal lines property coverage and catastrophe exposed personal lines
property coverage.

We use the Bornhuetter-Ferguson actuarial technique to estimate claims and claim expenses within our
Individual Risk segment for our property and casualty business. The comments discussed above relating to our
reserving techniques and processes for our specialty reinsurance unit also apply to our Individual Risk segment.
In addition, certain of our coverages may be impacted by natural and man-made catastrophes. We estimate
claim reserves for these losses after the event giving rise to these losses occurs, following a process that is similar
to our property catastrophe reinsurance unit including, starting in 2009, the use of reported loss development
factors for the 2004 and 2005 large hurricanes, as described in more detail above. In addition, for our crop
insurance business we estimate our claims and claim expenses using an expected loss ratio method. Our
expected loss ratio is developed based on our current best estimate of the ultimate costs to settle all claims
arising out of the risks we have covered under these policies and takes into consideration our historical
experience, historical industry experience, current and estimated future commodity prices, as well as events
which have occurred which are estimated to impact future crop yields such as droughts, hail, windstorms and
flooding. Reserving for our crop insurance business is generally much more uncertain in the first few quarters
after the issuance of a policy due to the difficulty in estimating the aforementioned variables, but since principally
all claims have historically been settled within fifteen months of the issuance of a policy this uncertainty is
generally resolved in a relatively short period of time compared to other insurance lines of business.

During the years ended December 31, 2009, 2008 and 2007, changes to our prior year estimated claims
reserves in our Individual Risk unit decreased our net income by $5.0 million, increased our net income by $46.7
million and increased our net income by $38.8 million, respectively, excluding the consideration of changes in
reinstatement premium, profit commissions and income tax expense.

Actual Results vs. Initial Estimates

The Actual vs. Initial Estimated Ultimate Claims and Claim Expense Ratio table below summarizes our key
actuarial assumptions in reserving for our Individual Risk segment. As noted above, the key actuarial
assumptions include the estimated ultimate claims and claim expense ratios and the estimated loss reporting
patterns. The table shows our initial estimates of the ultimate claims and claim expense ratios by accident year.
The table shows how our initial estimates of these ratios have developed over time with the re-estimated ratios
reflecting a combination of the amount and timing of paid and reported losses compared to our initial estimates.
The initial estimate is based on the actuarial assumptions that were in place at the end of that year. A decrease in
the ultimate claims and claim expense ratio implies that our current estimates are lower than our initial estimates
while an increase in the ultimate claims and claim expense ratio implies that our current estimates are higher
than our initial estimates. The result would be a corresponding favorable impact on shareholders’ equity and net
income or a corresponding unfavorable impact on shareholders’ equity and net income, respectively. The table
also shows how our initial estimated ultimate claims and claim expense ratios have changed from one accident
year to the next. The table below reflects a summary of the weighted average assumptions for all classes of
business written within our Individual Risk segment. The table is presented on a gross loss basis and therefore
does not include the benefit of reinsurance recoveries or loss related premium.

Actual vs. Initial Estimated Individual Risk Segment Claims and Claim Expense Reserve Analysis—Estimated
Ultimate Claims and Claim Expense Ratio

Accident Year

Initial Estimate

December 31, 2007

Re-estimate as of
December 31, 2008

December 31, 2009

Estimated Expected Ultimate Claims and Claim Expense Ratio

2003
2004
2005
2006
2007
2008
2009

55.3%
59.2%
51.9%
55.8%
55.9%
68.5%
64.1%

38.0%
48.1%
49.1%
51.8%
50.9%
—
—

37.3%
46.3%
48.4%
50.2%
43.7%
66.2%
—

37.2%
45.6%
46.4%
48.3%
42.9%
71.2%
64.4%

The table above shows that our initial estimated ultimate claims and claim expense ratios for attritional losses for
each new accident year within our Individual Risk segment as of the end of each calendar year, have historically
stayed relatively constant between 2003 and 2007. This reflects the fact that management has not made
significant changes to its estimated initial expected ultimate claims and claim expense ratio from one period to
the next. The principal reason for the changes from one year to the next is that the mix of business has changed.
For example, during 2008, our initial estimated ultimate claims and claim expense ratio increased relative to the
preceding five years, as a result of the increase in our crop insurance business which has a higher net claims and
claim expenses ratio relative to the other lines of business within the Individual Risk segment and comprises a
larger percentage of our overall Individual Risk premiums. As each accident year has developed, our re-estimated
ultimate claims and claim expense ratios have generally been reduced. This reflects the impact of actual
experience in our Individual Risk business where actual paid and reported losses to date for attritional losses are
less than originally expected. As described above, under the Bornhuetter-Ferguson actuarial technique less
weight is placed on initial estimates and more weight is placed on actual experience as our claims and claim
expense reserves age.

As noted above, some of our Individual Risk contracts are exposed to net claims and claim expenses from large
natural and man-made catastrophes. Net claims and claim expenses from these large catastrophes are reserved
for after the event which gave rise to the claims in a manner which is consistent with our property catastrophe
reinsurance reserving practices as discussed above. The large catastrophes occurring during the period from
2004 to 2008 principally include hurricanes Charley, Frances, Ivan and Jeanne in 2004, hurricanes Katrina, Rita
and Wilma in 2005, and hurricanes Gustav and Ike in 2008. Our ultimate net claims and claim expenses from
these events within our Individual Risk segment, net of reinsurance recoveries and assumed and ceded loss
related premium, are shown in the table below.

(in thousands)

Events

Charley, Frances, Ivan and Jeanne – 2004
Katrina, Rita and Wilma – 2005
Gustav and Ike – 2008

Sensitivity Analysis

Estimated Net Claims and Claim Expenses

As of December 31,
of the applicable
accident year

December 31,
2007

December 31,
2008

December 31,
2009

$158,303
140,080
40,298

$185,829
131,620
—

$189,863
127,874
40,298

$191,500
123,560
39,989

The table below quantifies the impact on our reserves for claims and claim expenses, net income and
shareholders’ equity as of and for the year ended December 31, 2009 of reasonably likely changes to the
actuarial assumptions used to estimate our December 31, 2009 claims and claim expense reserves within our
Individual Risk segment. The table quantifies reasonably likely changes in our initial estimated ultimate claims
and claim expense ratios and estimated loss reporting patterns. The changes to the initial estimated ultimate
claims and claim expense ratios represent percentage increases or decreases to our current estimated ultimate
claims and claim expense ratios. The change to the reporting patterns represent claims reporting that is both
faster and slower than our current estimated reporting patterns. The impact on net income and shareholders’
equity assumes no increase or decrease in reinsurance recoveries or loss related premium and is before tax.

Individual Risk Claims and Claim Expense Reserve Sensitivity Analysis

(in thousands,
except percentages)

Estimated Ultimate Claims and Claim
Expense Ratio
Increase expected claims
and claim expense ratio
by 10%

Increase expected claims
and claim expense ratio
by 10%

Expected claims and claim

$ Impact of Change
in Reserves for
Claims and Claim
Expenses as of
December 31,
2009

% Impact of Change
in Reserves for
Claims and Claim
Expenses as of
December 31,
2009

% Impact of Change
in Net Income for
the Year Ended
December 31,
2009

% Impact of
Change in
Shareholders’
Equity as of
December 31,
2009

Estimated Loss
Reporting Pattern

Slower reporting

$ 93,854

17.8%

(8.9%)

(2.4%)

Expected reporting

33,301

6.3%

(3.2%)

(0.9%)

Faster reporting

(14,688)

(2.8%)

1.4%

0.4%

expense ratio

Slower reporting

54,803

10.4%

(5.2%)

(1.4%)

Expected claims and claim

expense ratio

Expected reporting

—

Expected claims and claim

expense ratio

Faster reporting

(43,627)

(8.3%)

4.1%

1.1%

Decrease expected claims
and claim expense ratio
by 10%

Slower reporting

16,022

3.0%

(1.5%)

(0.4%)

Expected reporting

(33,301)

(6.3%)

3.2%

0.9%

Faster reporting

(72,565)

(13.8%)

6.9%

1.9%

We believe that ultimate claims and claim expense ratios 10.0% above or below our estimated assumptions
constitute reasonably likely outcomes based on our experience to date and our future expectations. In addition,
we believe that the adjustments that we made to speed up or slow down our estimated loss reporting patterns are
reasonably likely changes. While we believe these are reasonably likely changes, we do not believe the reader
should consider the above sensitivity analysis an actuarial reserve range. In addition, we caution the reader that
the above sensitivity analysis only reflects reasonably likely changes. It is possible that our initial estimated claims
and claim expense ratios and loss reporting patterns could be significantly different from the sensitivity analysis
described above. For example, we could be liable for events which we have not estimated reserves for or for
exposures we do not currently think are covered under our contracts. These changes could result in significantly
larger changes to our reserves for claims and claim expenses, net income and shareholders’ equity than those
noted above. We also caution the reader that the above sensitivity analysis is not used by management in
developing our reserve estimates and is also not used by management in managing the business.

Losses Recoverable

We enter into reinsurance agreements in order to help reduce our exposure to large losses and to help manage
our risk portfolio. Amounts recoverable from reinsurers are estimated in a manner consistent with the claims and
claim expense reserves associated with the related assumed reinsurance. For multi-year retrospectively rated
contracts, we accrue amounts (either assets or liabilities) that are due to or from assuming companies based on
estimated contract experience. If we determine that adjustments to earlier estimates are appropriate, such
adjustments are recorded in the period in which they are determined.

The estimate of losses recoverable can be more subjective than estimating the underlying claims and claim
expense reserves as discussed under the heading “Claims and Claim Expense Reserves” above. In particular,
losses recoverable may be affected by deemed inuring reinsurance, industry losses reported by various statistical
reporting services, and other factors. Losses recoverable on dual trigger reinsurance contracts require us to
estimate our ultimate losses applicable to these contracts as well as estimate the ultimate amount of insured
losses for the industry as a whole that will be reported by the applicable statistical reporting agency, as per the
contract terms. In addition, the level of our additional case reserves and IBNR reserves has a significant impact
on losses recoverable. These factors can impact the amount and timing of the losses recoverable to be recorded.

The majority of the balance we have accrued as recoverable will not be due for collection until some point in the
future. The amounts recoverable ultimately collected are open to uncertainty due to the ultimate ability and
willingness of reinsurers to pay our claims, for reasons including insolvency and elective run-off, contractual
dispute and various other reasons. In addition, because the majority of the balances recoverable will not be
collected for some time, economic conditions as well as the financial and operational performance of a particular
reinsurer may change, and these changes may affect the reinsurer’s willingness and ability to meet their
contractual obligations to us. To reflect these uncertainties, we estimate and record a valuation allowance for
potential uncollectible losses recoverable which reduces losses recoverable and net earnings.

We estimate our valuation allowance by applying specific percentages against each recovery based on our
counterparty’s credit rating. The percentages applied are based on historical industry default statistics developed
by major rating agencies and are then adjusted by us based on industry knowledge and our judgment and
estimates. We also apply case-specific valuation allowances against certain recoveries that we deem unlikely to
be collected in full. We then evaluate the overall adequacy of the valuation allowance based on other qualitative
and judgmental factors. The valuation allowance recorded against losses recoverable was $7.6 million at
December 31, 2009 (2008 – $8.7 million). The reinsurers with the three largest balances accounted for 40.1%,
12.7% and 10.7%, respectively, of our losses recoverable balance at December 31, 2009 (2008 – 26.6%,
18.2% and 8.1%, respectively). The three largest company-specific components of the valuation allowance
represented 29.8%, 26.3% and 12.3%, respectively, of our total valuation allowance at December 31, 2009
(2008 – 40.5%, 23.0% and 9.6%, respectively).

Fair Value Measurements and Impairments

Fair Value

The use of fair value to measure certain assets and liabilities with resulting unrealized gains or losses is pervasive
within our financial statements, and is a critical accounting policy and estimate for us. Fair value is defined under

accounting guidance currently applicable to us to be the price that would be received upon the sale of an asset
or paid to transfer a liability in an orderly transaction between open market participants at the measurement date.
We recognize the change in unrealized gains and losses arising from changes in fair value in our consolidated
statements of operations, with the exception of changes in unrealized gains and losses on our fixed maturity
investments available for sale, which are recognized as a component of accumulated other comprehensive
income in shareholders’ equity.

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic Fair Value
Measurements and Disclosures prescribes a fair value hierarchy that prioritizes the inputs to the respective
valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted
prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs
(Level 3). The three levels of the fair value hierarchy are described below:

(cid:129)

Fair values determined by Level 1 inputs utilize unadjusted quoted prices obtained from active markets
for identical assets or liabilities for which the Company has access to. The fair value is determined by
multiplying the quoted price by the quantity held by the Company;

Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that
are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices
for similar assets and liabilities in active markets, and inputs other than quoted prices that are
observable for the asset or liability, such as interest rates and yield curves that are observable at
commonly quoted intervals, broker quotes and certain pricing indices; and

Level 3 inputs are based on unobservable inputs for the asset or liability, and include situations where
there is little, if any, market activity for the asset or liability. In these cases, significant management
assumptions can be used to establish management’s best estimate of the assumptions used by other
market participants in determining the fair value of the asset or liability.

The fair value of certain of our other investments, which principally include hedge funds, private equity
partnerships, senior secured bank loan funds and non-U.S. fixed income funds, is generally established on the
basis of the net valuation criteria established by the managers of such investments, if applicable. These net asset
valuations are determined based upon the valuation criteria established by the governing documents of such
investments. Such valuations may differ significantly from the values that would have been used had ready
markets existed for the shares, partnership interests or notes. Many of our fund investments are subject to
restrictions on redemptions and sales which are determined by the governing documents and limit our ability to
liquidate these investments in the short term. In addition, due to a lag in reporting, some of our fund managers,
fund administrators, or both, are unable to provide final fund valuations as of our current reporting date. In these
circumstances, we estimate the fair value of these funds by starting with the prior month’s or quarter’s fund
valuation, adjusting these valuations for capital calls, redemptions or distributions and the impact of changes in
foreign currency exchange rates, and then estimating the return for the current period. In circumstances in which
we estimate the return for the current period, we use all credible information available to us. This principally
includes preliminary estimates reported to us by our fund managers, obtaining the valuation of underlying
portfolio investments where such underlying investments are publicly traded and therefore have a readily
observable price, using information that is available to us with respect to the underlying investments, reviewing
various indices for similar investments or asset classes, as well as estimating returns based on the results of
similar types of investments for which we have reported results, or other valuation methods, as necessary. Actual
final fund valuations may differ from our estimates, perhaps materially so, and these differences are recorded in
the period they become known as a change in estimate. Our estimate of the fair value of catastrophe bonds are
based on quoted market prices, or when such prices are not available, by reference to broker or underwriter bid
indications.

In order to determine if a market is active or inactive for a security, we consider a number of factors, including,
but not limited to, the spread between what a seller is asking for a security and what a buyer is bidding for the
same security, the volume of trading activity for the security in question, the price of the security compared to its
par value (for fixed maturity investments), and other factors that may be indicative of market activity.

See “Note 7. Fair Value Measurements in our Notes to Consolidated Financial Statements” for additional
information about fair value measurements.

Below is a summary of the assets and liabilities that are measured at fair value on a recurring basis and also
represents the carrying amount of such assets and liabilities on our consolidated balance sheet:

At December 31, 2009
(in thousands)

Assets
Fixed maturity investments
Short term investments
Other investments
Other secured assets
Other assets (1)

Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)

Significant
Other
Observable
Inputs (Level 2)

Significant
Unobservable
Inputs (Level 3)

Total

$4,295,792
1,002,306
858,026
27,730
37,947

$918,157
—
—
—
1,030

$3,377,635
1,002,306
464,113
27,730
33,350

—
—
393,913
—
3,567

$6,221,801

$919,187

$4,905,134

$397,480

Percentage of total fair value assets and liabilities

100.0%

14.8%

78.8%

6.4%

(1) Other assets of $4.1 million, $34.9 million and $39.1 million are included in Level 1, Level 2 and Level 3,
respectively. Other liabilities of $3.1 million, $1.5 million and $35.5 million are included in Level 1, Level 2
and Level 3, respectively.

As at December 31, 2009, we classified $433.0 million and $35.5 million of assets and liabilities, respectively, at
fair value on a recurring basis using Level 3 inputs. This represented 5.5% and 1.1% of our total assets and
liabilities, respectively. Level 3 fair value measurements are based on valuation techniques that use at least one
significant input that is unobservable. These measurements are made under circumstances in which there is
little, if any, market activity for the asset or liability. We use valuation models or other pricing techniques that
require a variety of inputs including contractual terms, market prices and rates, yield curves, credit curves,
measures of volatility, prepayment rates and correlations of such inputs, some of which may be unobservable, to
value these Level 3 assets and liabilities. Our assessment of the significance of a particular input to the fair value
measurement in its entirety requires judgment. In making the assessment, we considered factors specific to the
asset or liability. In certain cases, the inputs used to measure fair value of an asset or a liability may fall into
different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair
value measurement in its entirety is classified is determined based on the lowest level input that is significant to
the fair value measurement of the asset or liability.

Impairments

The amount and timing of asset impairment is subject to significant estimation techniques and asset impairment
is a critical accounting estimate for us. The more significant impairment reviews we complete are for our fixed
maturity investments available for sale, equity method investments and goodwill and other intangible assets as
described in more detail below.

Fixed Maturity Investments Available For Sale

Pursuant to new authoritative GAAP guidance effective April 1, 2009, we revised our quarterly process for
assessing whether declines in the fair value of our fixed maturity investments available for sale represent
impairments that are other-than-temporary. The process now includes reviewing each fixed maturity investment
available for sale that is impaired and determining: (i) if we have the intent to sell the debt security or (ii) if it is
more likely than not that we will be required to sell the debt security before its anticipated recovery; and
(iii) assessing whether a credit loss exists, that is, where we expect that the present value of the cash flows
expected to be collected from the security are less than the amortized cost basis of the security.

In assessing our intent to sell securities, our procedures may include actions such as discussing planned sales
with our third party investment managers, reviewing sales that have occurred shortly after the balance sheet date,
and consideration of other qualitative factors that may be indicative of our intent to sell or hold the relevant
securities. The Company recognized a total of $1.3 million of other-than-temporary impairments due to our intent
to sell these securities during the year ended December 31, 2009.

In assessing whether it is more likely than not that we will be required to sell a security before its anticipated
recovery, we consider various factors including our future cash flow forecasts and requirements, legal and
regulatory requirements, the level of our cash, cash equivalents, short term investments, fixed maturity
investments trading and fixed maturity investments available for sale in an unrealized gain position, and other
relevant factors. For the year ended December 31, 2009, we recognized $nil of other-than-temporary
impairments due to required sales.

In evaluating credit losses, we consider a variety of factors in the assessment of a security including: (i) the time
period during which there has been a significant decline below cost; (ii) the extent of the decline below cost and
par; (iii) the potential for the security to recover in value; (iv) an analysis of the financial condition of the issuer;
(v) the rating of the issuer; (vi) the implied rating of the issuer based on an analysis of option adjusted spreads;
(vii) the absolute level of the option adjusted spread for the issuer; and (viii) an analysis of the collateral structure
and credit support of the security, if applicable.

Once we determine that it is possible that a credit loss may exist for a security, we perform a detailed review of
the cash flows expected to be collected from the issuer. We estimate expected cash flows by applying estimated
default probabilities and recovery rates to the contractual cash flows of the issuer, with such default and recovery
rates reflecting long-term historical averages adjusted to reflect current credit, economic and market conditions,
giving due consideration to collateral and credit support, if applicable, and discounting the expected cash flows at
the purchase yield on the security. In instances in which a determination is made that an impairment exists but
we do not intend to sell the security and it is not more likely than not that we will be required to sell the security
before the anticipated recovery of its remaining amortized cost basis, the impairment is separated into: (i) the
amount of the total other-than-temporary impairment related to the credit loss; and (ii) the amount of the total
other-than-temporary impairment related to all other factors. The amount of the other-than-temporary impairment
related to the credit loss is recognized in earnings. The amount of the other-than-temporary impairment related to
all other factors is recognized in other comprehensive income. For the year ended December 31, 2009, we
recognized $21.2 million of credit related other-than-temporary impairments which were recognized in earnings
and $4.5 million related to other factors which were recognized in other comprehensive income. At
December 31, 2009 and 2008, our gross unrealized losses on fixed maturity investments available for sale totaled
$17.1 million and $nil, respectively.

Under the pre-existing guidance, which was in effect for 2007, 2008 and the three months ended March 31,
2009, the Company assessed, on a quarterly basis, whether declines in the fair value of its fixed maturity
investments available for sale represented impairments that were other-than-temporary based on several factors.
The factors the Company considered in the assessment of a security included: (i) the time period during which
there had been a significant decline below cost; (ii) the extent of the decline below cost; (iii) the Company’s intent
and ability to hold the security; (iv) the potential for the security to recover in value; (v) an analysis of the financial
condition of the issuer; and (vi) an analysis of the collateral structure and credit support of the security, if
applicable. Where the Company determined that there was an other-than-temporary decline in the fair value of
the security, the cost of the security was written down to its fair value and the unrealized loss at the time of
determination was reflected in the Company’s consolidated statements of operations.

The majority of the Company’s fixed maturity investments available for sale are managed by external investment
managers in accordance with specific investment mandates and guidelines. The investment managers are
directed to manage the Company’s investments to maximize total investment return in accordance with these
investment mandates and guidelines. While the Company has adequate capital and liquidity to support its
operations and to hold its fixed maturity investments available for sale which were in an unrealized loss position
until they recover in value, the Company has not prohibited or restricted its investment managers from selling
these investments and its investment managers actively traded the Company’s investments. The Company was
therefore unable to represent or certify that it had the intent or ability to hold these investments until they
recovered in value. As a consequence, under the pre-existing guidance which was in effect for 2007, 2008 and
the three months ended March 31, 2009, the Company impaired essentially all of its fixed maturity investments
available for sale that were in an unrealized loss position at each quarterly reporting date.

consistent with the way in which we manage the portfolio, which is on a total investment return basis. We
currently expect to continue to designate, in future periods, upon acquisition, certain fixed maturity investments
as trading, rather than as available for sale, and, as a result, we currently expect our fixed maturity investments
available for sale balance to decrease and our fixed maturity trading balance to increase over time, resulting in a
reduction in other-than-temporary accounting judgments we make. This change will over time result in additional
volatility in our net income (loss) in future periods as net unrealized gains and losses on these fixed maturity
investments will be recorded currently in net income (loss), rather than as a component of accumulated other
comprehensive income (loss) in shareholders’ equity.

Investments in Other Ventures, Under Equity Method

Investments in which we have significant influence over the operating and financial policies of the investee are
classified as investments in other ventures, under equity method, and are accounted for under the equity method
of accounting. Under this method, we record our proportionate share of income or loss from such investments in
our results for the period. Any decline in the value of investments in other ventures, under equity method,
including goodwill and other intangible assets arising upon acquisition of the investee, considered by
management to be other-than-temporary, is impaired and is reflected in our consolidated statements of
operations in the period in which it is determined. As of December 31, 2009, we had $97.3 million
(2008 – $99.9 million) in investments in other ventures, under equity method on our consolidated balance
sheets, including $8.5 million of goodwill and $35.3 million of other intangible assets (2008 – $8.5 million and
$41.3 million).

In determining whether an equity method investment is impaired, we look at a variety of factors including the
operating and financial performance of the investee, the investee’s future business plans and projections, recent
transactions and market valuations of publicly traded companies where available, discussions with the investees’
management, and our intent and ability to hold the investment until it recovers in value. In doing this, we make
assumptions and estimates in assessing whether an impairment has occurred and if, in the future, our
assumptions and estimates made in assessing the fair value of these investments change, this could result in a
material decrease in the carrying value of these investments. This would cause us to write-down the carrying
value of these investments and could have a material adverse effect on our results of operations in the period the
impairment charge is taken. During the year ended December 31, 2009, we recorded $nil (2008 – $1.0 million,
2007 – $nil) in other-than-temporary impairment charges related to investments in other ventures, under the
equity method.

Goodwill and Other Intangible Assets

Goodwill and other intangible assets acquired are initially recorded at fair value. Subsequent to initial recognition,
finite lived other intangible assets are amortized over their estimated useful life, subject to impairment, and
goodwill and indefinite lived other intangible assets are carried at the lower of cost or fair value. If goodwill or
other intangible assets are impaired, they are written down to their estimated fair values with a corresponding
expense reflected in our consolidated statements of operations.

We test goodwill and other intangible assets for impairment in the fourth quarter of each year, or more frequently
if events or changes in circumstances indicate that the carrying amount may not be recoverable. For purposes of
the annual impairment evaluation, goodwill is assigned to the applicable reporting unit of the acquired entities
giving rise to the goodwill and other intangible assets are tested based on the cash flows they produce. There are
many assumptions and estimates underlying the fair value calculation. Principally, we identify the reporting unit
or business entity that the goodwill or other intangible asset is attributed to, and review historical and forecasted
operating and financial performance and other underlying factors affecting such analysis, including market
conditions. Other assumptions used could produce significantly different results which may result in a change in
the value of goodwill or our other intangible assets and related charge in our consolidated statements of
operations. An impairment charge could be recognized in the event of a significant decline in the implied fair
value of those operations where the goodwill or other intangible assets are applicable. As at December 31, 2009,
excluding the amounts recorded in investments in other ventures, under equity method, as noted above, our
consolidated balance sheets include $31.9 million of goodwill (2008 – $26.0 million) and $44.8 million of other
intangible assets (2008 – $48.2 million). As part of the annual impairment evaluation noted above, no reporting
units were identified to be at risk of failing step one of the process for recognition and measurement of an
impairment loss in accordance with ASC Topic Intangibles – Goodwill and Other. Impairment charges were $nil
during 2009 (2008 – $nil, 2007 – $nil).

Premiums

We recognize premiums as revenue over the terms of the related contracts and policies. Our written premiums
are based on policy and contract terms and include estimates based on information received from both insureds
and ceding companies. The information received is typically in the form of bordereaux, broker notifications and/or
discussions with ceding companies or their broker. This information can be received on a monthly, quarterly or
transactional basis and normally includes estimates of written premium (including adjustment and reinstatement
premium), earned premium, acquisition costs and ceding commissions.

We generally recognize premium on the date the contract is bound, even if the contract provides for an effective
date prior to the date the contract is bound, thus preventing premature revenue recognition. The date the
contract is bound is usually the date we are on risk for the policy. The date we are on risk is generally either the
effective date of the contract if the slip is signed prior to the effective date of the contract or the date the
reinsurance slip is signed if that occurs after the effective date of the contract. The signing of the reinsurance
contract normally occurs after the date the slip is signed.

We book premiums on non-proportional contracts in accordance with the contract terms. Premiums written on
losses occurring contracts are typically earned over the contract period. Premiums on risks attaching contracts
are either estimated or earned as reported by the cedants, which may be over a period more than twice as long
as the contract period. For multi-year policies, only the initial annual premium is included as written at policy
inception. The remaining annual premiums are included as written at each successive anniversary date within
the multi-year term. Management is required to make estimates based on judgment and historical experience for
periods during which information has not yet been received.

In our Individual Risk business, it is often necessary to estimate portions of premiums written from quota-share
contracts and by third party program managers and the related commission expense. Management estimates
these amounts based on discussions with ceding companies and third party program managers, together with
historical experience and judgment. Total premiums written estimated in our Individual Risk business at
December 31, 2009, 2008 and 2007 were $5.6 million, $12.9 million and $6.5 million, respectively, and total
estimated premiums earned were $1.2 million, $2.5 million and $0.9 million, respectively. Total earned
commissions estimated at December 31, 2009, 2008 and 2007 were $3.2 million, $2.4 million and $0.2 million,
respectively. Management tracks the actual premium received and commissions incurred and compares this to
the estimates previously booked. Such estimates are subject to adjustment in subsequent periods when actual
figures are recorded. To date, such subsequent adjustments have not been material.

Since premiums for our Reinsurance segment are contractually driven and the reporting lag for such premiums is
minimal, estimates for premiums written for this segment are usually not significant. The minimum and deposit
premiums on excess policies are usually set forth in the language of the contract and are used to record
premiums on these policies. Actual premiums are determined in subsequent periods based on actual exposures
and any adjustments are recorded in the period in which they are identified. In recent periods, the complexity of
estimating reinsurance premiums has been impacted by the financial difficulties being experienced in certain of
our target markets, which has contributed to circumstances in which primary insurers have been unable to make,
or have sought to defer, premium payments due to us. We cannot assure you that our estimates of the
collectability of premiums are accurate or that these trends will not be accelerated in future periods.

Reinstatement premiums are estimated after the occurrence of a significant loss and are recorded in accordance
with the contract terms based upon paid losses and case reserves. Reinstatement premiums are earned when
written.

Ceded premiums are also recognized on the date the contract is bound and are deducted from gross premiums
written, to arrive at net premiums written. Ceded premiums are earned over the terms of the related contracts
and policies, and are reflected as a reduction to gross premiums earned to arrive at net premiums earned.

Income Taxes

Income taxes have been provided in accordance with the provisions of FASB ASC Topic Income Taxes, on those
operations which are subject to income tax. Deferred tax assets and liabilities result from temporary differences
between the amounts recorded in our consolidated financial statements and the tax basis of the Company’s
assets and liabilities. Such temporary differences are primarily due to the tax basis discount on unpaid losses and
loss expenses, unearned premium reserves, net operating loss carryforwards, intangible assets, accrued
expenses, deferred policy acquisition costs and certain investments. The effect on deferred tax assets and

liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A
valuation allowance against deferred tax assets is recorded if it is more likely than not that all, or some portion, of
the benefits related to deferred tax assets will not be realized.

At December 31, 2009, our net deferred tax asset and valuation allowance were $8.6 million (2008 – $17.0
million) and $2.4 million (2008 – $1.4 million), respectively (see “Note 18. Taxation in our Notes to Consolidated
Financial Statements” for additional information). At each balance sheet date, we assess the need to establish a
valuation allowance that reduces the net deferred tax asset when it is more likely than not that all, or some
portion, of the deferred tax assets will not be realized. The valuation allowance is based on all available
information including projections of future GAAP taxable income from each tax-paying component in each tax
jurisdiction. In 2009, 2008 and 2007, we generated cumulative GAAP taxable income in our U.S. tax-paying
subsidiaries. During 2008 and 2007, our valuation allowance was reassessed and we determined at such time
that it was more likely than not that we will continue to generate GAAP taxable income in our U.S. tax-paying
subsidiaries and therefore be able to recover all of our U.S. net deferred tax asset. As a result, we reduced our
valuation allowance for the years ending December 31, 2008 and December 31, 2007 by $1.7 million and $25.8
million, respectively. This resulted in a corresponding increase to net income in 2008 and 2007, respectively.
Projections of future GAAP taxable income incorporate several assumptions of future business and operations
that are likely to differ from actual experience.

The Company had no unrecognized tax benefits upon adoption of guidance under FASB ASC Topic Income
Taxes and has no unrecognized tax benefits as of December 31, 2009. Tax years 2006 through 2008, 2005
through 2008 and 2008, are open for examination by the Internal Revenue Service, Irish tax authorities and U.K.
tax authorities, respectively.

SUMMARY OF RESULTS OF OPERATIONS FOR 2009, 2008 AND 2007

Summary Overview

Year ended December 31,
(in thousands, except per share amounts and ratios)

Highlights

Gross premiums written
Net premiums written
Net premiums earned
Net claims and claim expenses incurred
Underwriting income
Net investment income
Net realized and unrealized gains on fixed maturity investments
Net other-than-temporary impairments

Net income
Net income (loss) available (attributable) to RenaissanceRe

common shareholders

Total assets
Total shareholders’ equity

Per share data

Net income (loss) available (attributable) to RenaissanceRe

common shareholders per common share – diluted

Dividends per common share

Book value per common share
Accumulated dividends per common share

Book value per common share plus accumulated dividends

Key ratios

Net claims and claim expense ratio – current accident year
Net claims and claim expense ratio – prior accident years

Net claims and claim expense ratio – calendar year
Underwriting expense ratio

Combined ratio

Return on average common equity

Change in book value per common share plus change in

accumulated dividends

2009

2008

2007

$1,728,932 $1,736,028 $1,809,637
1,435,335
1,353,620
1,424,369
1,386,824
479,274
760,489
579,701
290,617
402,463
24,231
26,806
10,700
(25,513)
(217,014)

1,206,397
1,273,816
197,287
697,068
323,981
93,162
(22,481)

1,052,659

84,153

776,832

838,858

(13,280)

569,575

$7,801,041 $7,984,051 $8,286,355
$3,840,786 $3,032,743 $3,477,503

13.40 $

(0.21) $

0.96 $

0.92 $

51.68 $

38.74 $

8.88

7.92

60.56 $

46.66 $

7.93

0.88

41.03
7.00

48.03

34.7%
(19.2%)

15.5%
29.8%

45.3%

30.2%

71.8%
(17.0%)

54.8%
24.2%

79.0%

50.0%
(16.4%)

33.6%
25.7%

59.3%

(0.5%)

20.9%

35.9%

(3.3%)

21.9%

We generated $838.9 million of net income available to RenaissanceRe common shareholders in 2009, which
represents the highest net income available to RenaissanceRe common shareholders that the Company has
recorded since its inception, compared to a net loss attributable to RenaissanceRe common shareholders of
$13.3 million in 2008, an increase of $852.1 million. In 2007, we generated $569.6 million of net income
available to RenaissanceRe common shareholders. As a result of our net income available to RenaissanceRe
common shareholders in 2009, we generated a 30.2% return on average common equity and our book value per
common share increased from $38.74 at December 31, 2008 to $51.68 at December 31, 2009, a 35.9%
increase, after considering dividends paid to our common shareholders. In 2008 and 2007, we generated returns
on average common equity of (0.5%) and 20.9%, respectively, and (decreased) increased our book value per
common share plus the change in accumulated dividends by (3.3%) and 21.9%, respectively.

During 2009, the most significant events affecting our financial performance on a comparative basis to 2008
include:

(cid:129)

Significantly Improved Investment Results – our net investment income was $324.0 million in 2009, a
$299.8 million increase from $24.2 million in 2008, we generated $93.2 million of net realized and

unrealized gains on fixed maturity investments, an increase of $82.5 million from $10.7 million in
2008, and our net other-than-temporary impairments were $22.5 million in 2009, a $194.5 million
decrease from $217.0 million in 2008. Overall, our investment results increased by $576.7 million to
$394.7 million in 2009, from negative $182.1 million in 2008. The increase in our investment results
was primarily due to higher total returns on certain non-investment grade allocations which are
included in other investments, higher returns on hedge fund and private equity investments and the
contraction of credit spreads on our fixed maturity investments. The reduction in net other-than-
temporary impairments was due in part to our adoption in the second quarter of 2009 of new guidance
on the recognition and presentation of other-than-temporary impairments (see “Note 6. Investments in
our Notes to Unaudited Consolidated Financial Statements” for additional information), as well as
improving market conditions for investments;

(cid:129) Higher Underwriting Income – our underwriting income increased $406.5 million to $697.1 million in
2009 and our combined ratio decreased 33.7 percentage points to 45.3% for 2009, compared to
$290.6 million of underwriting income and a combined ratio of 79.0% in 2008. The increase in our
underwriting income and decrease in our combined ratio were principally driven by a decrease in
current accident year net claims and claim expenses due to a comparably low level of insured
catastrophes occurring during 2009, compared to 2008, specifically the comparative impact of
hurricanes Gustav and Ike, which occurred during 2008 and resulted in $419.1 million of underwriting
losses and increased our combined ratio by 32.3 percentage points; and partially offset by

(cid:129) Higher Net Income Attributable to Redeemable Noncontrolling Interest – DaVinciRe – our net income
attributable to redeemable noncontrolling interest – DaVinciRe increased $116.4 million to $171.5
million in 2009, compared to $55.1 million in 2008, principally due to the increase in net investment
income and underwriting income as noted above which also impacted DaVinciRe and increased its net
income in 2009 and consequently increased redeemable noncontrolling interest – DaVinciRe.

We do not view our favorable 2009 investment results as indicative of what we expect in future periods as the
strong results in 2009 were in part due to the contraction of credit spreads in the fixed income market from
historic lows reached in 2008. In addition, our underwriting results benefited from an unusually low level of
insured catastrophic losses in 2009, which we would typically not expect to recur in future periods.

During 2008, the most significant events affecting our financial performance on a comparative basis to 2007
include:

(cid:129)

Lower Investment Results – our net investment income decreased $378.2 million to $24.2 million in
2008 from $402.5 million in 2007, driven by $219.6 million of net investment losses within our other
investments, principally private equity partnerships, hedge funds and bank loan funds, which
represents a $325.1 million decrease from $105.5 million of net investment income on these
investments in 2007. In addition, net investment income from our short term investments decreased
$70.0 million to $48.4 million in 2008 from $118.5 million in 2007, as a result of a reduction in short
term interest rates and lower average balances for these investments. Further, other-than-temporary
impairments in our portfolio of fixed maturity investments available for sale increased by $191.5 million
in 2008 to $217.0 million, compared to $25.5 million in 2007, primarily due to widening credit spreads
as a result of the turmoil in the financial markets;

Lower Underwriting Income – our underwriting income decreased $289.1 million to $290.6 million in
2008 and our combined ratio increased 19.7 percentage points to 79.0% for the year, compared to
$579.7 million of underwriting income and a combined ratio of 59.3% in 2007. The decrease in our
underwriting income was principally driven by hurricanes Gustav and Ike, which as described in more
detail below, generated underwriting losses of $419.1 million and increased our combined ratio by 32.3
percentage points; and

Lower Net Income Attributable to Redeemable Noncontrolling Interest – DaVinciRe – our net income
attributable to redeemable noncontrolling interest – DaVinciRe decreased $109.3 million to $55.1
million in 2008, compared to $164.4 million in 2007, principally due to the reduction in net investment
income and underwriting income as noted above which also impacted DaVinciRe and decreased its net
income in 2008 and consequently decreased redeemable noncontrolling interest – DaVinciRe.

Following is supplemental financial data regarding the net financial statement impact on our results for 2008 due
to hurricanes Gustav and Ike:

Year ended December 31, 2008
Ike

Total

Gustav

(in thousands, except ratios)

Net claims and claim expenses incurred
Net reinstatement premiums earned
Lost profit commissions

Net impact on underwriting result

Redeemable noncontrolling interest – DaVinciRe

Net negative impact

Impact on combined ratio

$(77,013) $(391,018) $(468,031)
53,605
44,784
(4,690)
(2,789)

8,821
(1,901)

(70,093)
22,607

(349,023)
120,275

(419,116)
142,882

$(47,486) $(228,748) $(276,234)

5.2%

26.7%

32.3%

The 2008 net negative impact from hurricanes Gustav and Ike includes the sum of net claims and claim
expenses incurred, assumed and ceded reinstatement premiums earned, lost profit commissions, assessment
related losses and expenses, and redeemable noncontrolling interest – DaVinciRe. Net negative impact is based
on management’s estimates following a review of our potential exposures and discussions with our
counterparties. Given the magnitude and relatively recent occurrence of these events, meaningful uncertainty
remains regarding total covered losses for the insurance industry and, accordingly, several of the key
assumptions underlying our loss estimates. In addition, actual losses from these events may increase if the
Company’s reinsurers or other obligors fail to meet their obligations. Actual losses from these events will likely
vary, perhaps materially, from these current estimates due to the inherent uncertainties in reserving for such
losses, including the preliminary nature of the available information, the potential inaccuracies and inadequacies
in the data provided by customers and brokers, the inherent uncertainty of modeling techniques and the
application of such techniques, the effects of any demand surge on claims activity and complex coverage and
other legal issues. Changes to these estimates will be recorded in the periods in which they occur.

Underwriting Results by Segment

Reinsurance Segment

Below is a summary of the underwriting results and ratios for our Reinsurance segment followed by an analysis of
our property catastrophe reinsurance unit and specialty reinsurance unit underwriting results and ratios for the
years ended December 31, 2009, 2008 and 2007:

Reinsurance segment overview

Year ended December 31,
(in thousands, except percentages)

Gross premiums written (1)

Net premiums written

Net premiums earned
Net claims and claim expenses incurred
Acquisition expenses
Operational expenses

Underwriting income

2009

2008

2007

$1,210,795 $1,154,391

$1,290,420

$ 839,023 $ 871,893

$1,024,493

849,725
(87,639)
78,848
139,328

909,759
440,900
105,437
81,797

957,661
241,118
119,915
67,969

$ 719,188 $ 281,625

$ 528,659

Net claims and claim expenses incurred – current accident

year

Net claims and claim expenses incurred – prior accident years

$ 161,868 $ 629,022
(188,122)

(249,507)

$ 435,495
(194,377)

Net claims and claim expenses incurred – total

$ (87,639) $ 440,900

$ 241,118

Net claims and claim expense ratio – current accident year
Net claims and claim expense ratio – prior accident years

Net claims and claim expense ratio – calendar year
Underwriting expense ratio

Combined ratio

19.0%
(29.3%)

(10.3%)
25.7%

15.4%

69.1%
(20.6%)

48.5%
20.5%

69.0%

45.5%
(20.3%)

25.2%
19.6%

44.8%

(1)

Includes gross premiums ceded from the Individual Risk segment to the Reinsurance segment of $12.7
million, $5.7 million, and $37.4 million for the years ended December 31, 2009, 2008 and 2007,
respectively.

Reinsurance Segment Gross Premiums Written – Gross premiums written in our Reinsurance segment increased
by $56.4 million, or 4.9%, to $1,210.8 million in 2009, compared to $1,154.4 million in 2008, due to growth in
gross premiums written in our catastrophe unit of $101.8 million, which benefited from our ability and
determination to increase the capacity provided to our customers in light of, among other things, continuing
attractive market conditions, the inception of several new programs, and $32.0 million of gross premiums written
by Tim Re II, a fully-collateralized joint venture established by us in 2009 for the 2009 U.S. hurricane season,
partially offset by a decline in our specialty reinsurance premiums of $45.4 million, as discussed below. Gross
premiums written in our Reinsurance segment for 2008 includes $58.4 million of loss related reinstatement
premiums as a result of hurricanes Gustav and Ike. Our Reinsurance segment results have been increasingly
impacted in recent periods by a relatively small number of comparably large transactions with significant
customers.

For 2008, gross premiums written in our Reinsurance segment decreased $136.0 million, or 10.5%, to $1,154.4
million in 2008, compared to $1,290.4 million in 2007, primarily due to the then softening market conditions in
2008 which resulted in lower premium rates and a reduction in business that met our underwriting standards
and partially offset by $58.4 million of loss related reinstatement premiums written following hurricanes Gustav
and Ike. As discussed below, in 2007 we entered into a large transaction in our specialty reinsurance unit that
renewed at a lower participation rate and on a smaller premium base in 2008, resulting in a $66.4 million
decrease in gross premiums written from this contract in our Reinsurance segment, compared to 2007.

Gross Premiums Written by Geographic Region

The following is a summary of our gross reinsurance premiums written, excluding premiums assumed from our
Individual Risk segment, allocated to the territory of coverage exposure:

Reinsurance segment gross premiums written

2009

2008

2007

Gross
Premiums
Written

Percentage
of Gross
Premiums
Written

Gross
Premiums
Written

Percentage
of Gross
Premiums
Written

Gross
Premiums
Written

Percentage
of Gross
Premiums
Written

$ 815,840
78,222
60,363
92,586
5,293
31,495
114,346

68.1% $ 745,016
6.6%
75,489
5.1%
72,153
7.7%
67,371
0.4%
5,455
23,465
2.6%
9.5% 159,770

64.8% $ 735,322
6.6%
66,392
6.3% 111,702
27,577
5.9%
4,360
0.5%
20,374
2.0%
13.9% 287,316

58.7%
5.3%
8.9%
2.2%
0.3%
1.6%
23.0%

Year ended December 31,
(in thousands, except percentages)

Property catastrophe reinsurance
United States and Caribbean
Worldwide (excluding U.S) (1)
Europe
Worldwide
Australia and New Zealand
Other

Specialty reinsurance (2)

Total Reinsurance gross premiums

written (3)

$1,198,145

100.0% $1,148,719

100.0% $1,253,043

100.0%

(1) The category “Worldwide (excluding U.S.)” consists of contracts that cover more than one geographic region

(other than the U.S.). The exposure in this category for gross written premiums written to date is
predominantly from Europe and Japan.

(2) The category Specialty reinsurance consists of contracts that are predominantly exposed to U.S. and, to a

lesser extent, worldwide risks.

(3) Reinsurance segment gross premiums written excludes $12.7 million, $5.7 million and $37.4 million of

premiums assumed from the Individual Risk segment in 2009, 2008 and 2007, respectively.

Our property catastrophe reinsurance gross premiums written continue to be characterized by a large percentage
of U.S. and Caribbean premium as we have found business derived from exposures in Europe and the rest of the
world to be, in general, less attractive on a risk-adjusted basis during recent periods. A significant amount of our
U.S. and Caribbean premium provides coverage against windstorms, mainly U.S. Atlantic hurricanes, as well as
earthquakes and other natural and man-made catastrophes.

Ceded Premiums Written

Year ended December 31,
(in thousands)

2009

2008

2007

Ceded premiums written – Reinsurance segment

$371,772 $282,498 $265,927

Due to the potential volatility of the property catastrophe reinsurance contracts which we sell, we purchase
reinsurance to reduce our exposure to large losses and to help manage our risk portfolio. We use our REMS©
modeling system to evaluate how each purchase interacts with our portfolio of reinsurance contracts we write,
and with the other ceded reinsurance contracts we purchase, to determine the appropriateness of the pricing of
each contract and whether or not it helps us to balance our portfolio of risks.

Ceded premiums written increased by $89.3 million in 2009, principally due to the Company electing to
purchase additional reinsurance protection due to appropriately priced coverage being available during 2009,
combined with the utilization in the 2009 U.S. hurricane season of a fully-collateralized joint venture, Tim Re II,
pursuant to which $32.0 million of assumed catastrophe reinsurance premium was fully ceded in 2009.

Ceded premiums written increased by $16.6 million in 2008, primarily as a result of the Company electing to
purchase additional reinsurance protection due to appropriately priced coverage being available during 2008 and
partially offset by the Company electing to not participate in a fully-collateralized joint venture due to a decrease
in demand for these vehicles in 2008 compared to 2007.

To the extent that appropriately priced coverage is available, we anticipate continued use of reinsurance to reduce
the impact of large losses on our financial results and to manage our portfolio of risk; however, the buying of ceded
reinsurance in our Reinsurance segment is based on market opportunities and is not based on placing a specific
reinsurance program each year. In addition, in future periods we may utilize the growing market for cat-linked
securities to expand our ceded reinsurance buying if we find the pricing and terms of such coverages attractive.

Reinsurance Segment Underwriting Results – Our Reinsurance segment generated $719.2 million of
underwriting income and reported a combined ratio of 15.4% in 2009, compared to $281.6 million of
underwriting income and a combined ratio of 69.0% in 2008, an increase of $437.6 million in underwriting
income and a 53.6 percentage point decrease in the combined ratio. The increase in underwriting income and
decrease in the combined ratio were primarily due to a $528.5 million decrease in net claims and claim expenses
due to a comparably lower level of insured catastrophes occurring in 2009, compared to 2008, specifically the
comparative impact of hurricanes Gustav and Ike, which added $432.5 million in net claims and claim expenses
and 46.6 percentage points to the Reinsurance segment’s combined ratio in 2008, as detailed in the table below.
In 2009, our Reinsurance segment generated a net claims and claim expenses ratio of negative 10.3%, an
underwriting expense ratio of 25.7% and a combined ratio of 15.4%. Current accident year losses of $161.9
million in 2009 were down $467.2 million from $629.0 million in 2008, principally due to the comparably low
level of insured catastrophes occurring in 2009, compared to 2008, specifically the comparative impact of
hurricanes Gustav and Ike as noted above and as detailed in the table below.

Our Reinsurance segment generated $281.6 million of underwriting income and a combined ratio of 69.0% in
2008, representing a $247.0 million decrease in underwriting income and a 24.2 percentage point increase in
our combined ratio compared to 2007. The decrease in underwriting income in 2008 was principally driven by a
$199.8 million increase in net claims and claim expenses, principally driven by losses associated with hurricanes
Gustav and Ike, combined with a $47.9 million decrease in net premiums earned due to the decrease in gross
premiums written noted above. Hurricanes Gustav and Ike resulted in $378.8 million in underwriting losses and
increased the Reinsurance segment’s combined ratio by 46.6 percentage points, as detailed in the table below.
The most significant losses in 2007 were from Kyrill, the U.K. floods and sub-prime related casualty losses which
collectively resulted in $217.5 million of net claims and claim expenses.

(in thousands, except ratios)

Net claims and claim expenses incurred
Net reinstatement premiums earned
Lost profit commissions

Net impact on underwriting result

Impact on combined ratio

Year ended December 31, 2008
Reinsurance

Gustav

Ike

Total

$(65,753) $(366,771) $(432,524)
58,396
49,575
(4,690)
(2,789)

8,821
(1,901)

$(58,833) $(319,985) $(378,818)

6.8%

39.0%

46.6%

Our underwriting results over the last three years have been, and may well continue to be, impacted by prior year
reserve development. Our prior year reserves experienced $249.5 million, $188.1 million and $194.4 million of
net favorable development in 2009, 2008 and 2007, respectively. The favorable prior year reserve development
in 2009 was principally the result of reductions in estimated ultimate losses on certain specific events within the
catastrophe unit, and lower than expected claims emergence within our specialty unit, as discussed in more
detail below. For 2008, the favorable prior year reserve development was principally the result of a reduction in
ultimate net losses associated with the 2005 hurricanes, Katrina, Rita and Wilma. The favorable prior year reserve
development in 2007 was principally attributable to a reduction in our catastrophe unit ultimate losses related to
the 2006 and 2005 accident years, combined with continued lower than expected claims emergence in our
specialty unit.

Losses from our property catastrophe reinsurance and specialty reinsurance policies can be infrequent, but
severe, as demonstrated by our 2008 results compared to 2009 and 2007. During periods with low levels of

property catastrophe loss activity, such as 2009 and 2007, we have the potential to produce a low level of losses
and a related increase in underwriting income. As described above, we believe there has been an increase in the
frequency and severity of hurricanes that have the potential to make landfall in the U.S., potentially as a result of
decadal ocean water temperature cyclical trends, a longer-term trend towards global warming, or both or other
factors.

Our underwriting expenses consist of acquisition expenses and operational expenses. Acquisition expenses
consist of the costs to acquire premiums and are principally comprised of broker commissions and excise taxes.
Acquisition expenses are driven by contract terms and are normally a set percentage of premiums and,
accordingly, these costs will normally move in line with the fluctuation in gross premiums earned. In 2009, the
acquisition expense ratio of 9.3% was slightly lower than the 11.6% recorded in 2008, primarily as a result of
higher profit commissions on ceded premiums earned during 2009. In 2007, the acquisition expense ratio was
12.5%.

Operating expenses consist of salaries and other general and administrative expenses. For 2009, our operating
expenses increased $57.5 million, or 70.3%, to $139.3 million, compared to $81.8 million in 2008, primarily as a
result of an increase in our employee base and our strong financial results in 2009 which has increased
compensation cost, as well as the impact of the larger employee base on technology, occupancy, consulting and
related general and administrative expenses. In 2008, operating expenses increased $13.8 million to $81.8
million primarily as a result of increased headcount and the related increase in compensation, general and
administrative expenses. Our operating expense ratio may increase over time, as a result of factors including the
absolute and comparative growth of our operating expenses, further refinements to internal expense allocations,
and market trends and dynamics.

We have entered into joint ventures and specialized quota share cessions of our book of business. In accordance
with the joint venture and quota share agreements, we are entitled to certain profit commissions and fee income.
We record these profit commissions and fees as a reduction in acquisition and operating expenses and,
accordingly, these fees have reduced our underwriting expense ratios. These fees totaled $70.0 million, $47.8
million and $29.5 million in 2009, 2008 and 2007, respectively, and resulted in a corresponding decrease to the
Reinsurance segment underwriting expense ratio of 8.2%, 5.3% and 3.1% for the years ended December 31,
2009, 2008 and 2007, respectively. In addition, we are entitled to certain fee income and profit commissions
from DaVinci. Because the results of DaVinci, and its parent DaVinciRe, are consolidated in our results of
operations, these fees and profit commissions are eliminated in our consolidated financial statements and are
principally reflected in redeemable noncontrolling interest – DaVinciRe. The net impact of all fees and profit
commissions related to these joint ventures and specialized quota share cessions within our Reinsurance
segment was $124.0 million, $77.3 million and $80.6 million for the years ending December 31, 2009, 2008 and
2007, respectively.

Catastrophe

Catastrophe overview

Year ended December 31,
(in thousands, except percentages)

2009

2008

2007

Property catastrophe gross premiums written

Renaissance
DaVinci

$ 706,947 $ 633,611
361,010

389,502

$ 662,987
340,117

Total property catastrophe gross premiums written (1)

$1,096,449 $ 994,621

$1,003,104

Net premiums written

Net premiums earned
Net claims and claim expenses incurred
Acquisition expenses
Operational expenses

Underwriting income

$ 732,886 $ 712,341

$ 737,177

705,598
(102,072)
55,198
103,040

717,570
372,760
62,038
62,626

726,265
128,573
77,089
49,370

$ 649,432 $ 220,146

$ 471,233

Net claims and claim expenses incurred – current accident year
Net claims and claim expenses incurred – prior accident years

82,323 $ 504,351
(131,591)

(184,395)

$ 221,662
(93,089)

Net claims and claim expenses incurred – total

$ (102,072) $ 372,760

$ 128,573

Net claims and claim expense ratio – current accident year
Net claims and claim expense ratio – prior accident years

Net claims and claim expense ratio – calendar year
Underwriting expense ratio

Combined ratio

11.7%
(26.2%)

(14.5%)
22.5%

8.0%

70.3%
(18.4%)

51.9%
17.4%

69.3%

30.5%
(12.8%)

17.7%
17.4%

35.1%

(1)

Includes gross premiums written ceded from the Individual Risk segment to the catastrophe unit of $12.7
million, $5.7 million and $37.0 million for the years ended December 31, 2009, 2008 and 2007,
respectively.

Catastrophe Reinsurance Gross Premiums Written – In 2009, our catastrophe reinsurance gross premiums
written increased by $101.8 million, or 10.2%, to $1,096.4 million, compared to 2008. The growth in our
catastrophe reinsurance gross premiums written principally reflected our ability and determination to increase the
capacity provided to our customers in light of, among other things, attractive market conditions for the 2009
underwriting year, the inception of several new programs, and $32.0 million of gross premiums written by our
Tim Re II joint venture established during the second quarter of 2009 for the 2009 underwriting year. Included in
gross premiums written in 2008 was $58.4 million of loss related reinstatement premiums as a result of
hurricanes Gustav and Ike. Our catastrophe reinsurance results can be substantially impacted, and have been in
recent periods, by a relatively small number of comparably large transactions with significant customers.

In 2008, our catastrophe reinsurance gross premiums written decreased $8.5 million, or 0.8%, to $994.6 million,
compared to $1,003.1 million in 2007, principally due to the then softening market conditions in 2008 resulting
in lower premium rates and a reduction in business that met the Company’s underwriting standards, combined
with a $31.3 million decrease in gross premiums written assumed from our Individual Risk segment. Offsetting
these decreases was $58.4 million of loss related reinstatement premiums written and earned as a result of
hurricanes Gustav and Ike during 2008. In the absence of this loss related premium our catastrophe gross
premiums written would have decreased 6.7% in 2008 compared to the 0.8% decrease noted above.

Our property catastrophe reinsurance gross premiums written continues to be characterized by a large
percentage of U.S. and Caribbean premium, as we have found business derived from exposures in Europe or the
rest of the world to be, in general, less attractive on a risk-adjusted basis during recent periods. A significant
amount of our U.S. and Caribbean premium provides coverage against windstorms, mainly U.S. Atlantic
hurricanes, as well as earthquakes and other natural and man-made catastrophes.

Catastrophe Reinsurance Underwriting Results – In 2009, our catastrophe unit generated $649.4 million of
underwriting income and reported a combined ratio of 8.0%, compared to $220.1 million of underwriting income
and a combined ratio of 69.3% in 2008, an increase in underwriting income of $429.3 million and a decrease in
the combined ratio of 61.3 percentage points. The increase in underwriting income and decrease in the
combined ratio in 2009 were primarily due to a decrease in net claims and claim expenses incurred of $474.8
million, and partially offset by an increase in underwriting expenses of $33.6 million, compared to 2008. In 2009,
our catastrophe unit generated a net claims and claim expense ratio of negative 14.5%, an underwriting expense
ratio of 22.5% and a combined ratio of 8.0%, compared to 51.9%, 17.4% and 69.3%, respectively, in 2008.
Current accident year losses of $82.3 million decreased $422.0 million from $504.4 million in 2008, principally
due to the comparably low level of insured catastrophes during 2009, compared to 2008, specifically the
comparative impact of hurricanes Gustav and Ike which resulted in $432.5 million of net claims and claim
expenses incurred in the catastrophe unit in 2008 and added 60.2 percentage points to the catastrophe unit’s
combined ratio as detailed in the table below. The 5.1 percentage point increase in our underwriting expense
ratio in 2009, compared to 2008, was principally driven by an increase in operational expenses of $40.4 million
primarily as a result of an increase in our employee base which has increased compensation and related
operating expenses as discussed above, and partially offset by a $6.8 million decrease in acquisition expenses,
primarily as a result of higher profit commissions on ceded premiums earned.

As discussed above, our 2008 catastrophe reinsurance unit underwriting results were negatively impacted from
losses associated with hurricanes Gustav and Ike. We generated $220.1 million of underwriting income and
recorded a net claims and claims expense ratio of 51.9%, underwriting expense ratio of 17.4% and combined
ratio of 69.3% in 2008, compared to $471.2 million of underwriting income, a net claims and claim expense ratio
of 17.7%, underwriting expense ratio of 17.4% and a combined ratio of 35.1% in 2007. Our 2008 accident year
net claims and claim expenses of $504.4 million were $282.7 million higher than 2007, primarily as a result of
losses associated with hurricanes Gustav and Ike. Hurricanes Gustav and Ike added 60.2 percentage points to
the catastrophe unit’s combined ratio as detailed in the table below.

(in thousands, except ratios)

Net claims and claim expenses incurred
Net reinstatement premiums earned
Lost profit commissions

Net impact on underwriting result

Impact on combined ratio

Year ended December 31, 2008
Catastrophe
Ike

Total

Gustav

$(65,753) $(366,771) $(432,524)
58,396
49,575
(4,690)
(2,789)

8,821
(1,901)

$(58,833) $(319,985) $(378,818)

8.7%

50.2%

60.2%

During 2009, our property catastrophe reinsurance unit experienced $184.4 million of favorable development on
prior year reserves principally due to a reduction in ultimate net losses associated with the 2008 hurricanes,
Gustav and Ike ($44.7 million); the 2005 hurricanes, Katrina, Rita and Wilma ($25.5 million); the 2007 European
windstorm Kyrill ($16.7 million); the 2007 California wildfires ($14.1 million); the 2007 flooding in the U.K.
($14.6 million); and the 2004 hurricanes, Charley, Frances, Ivan and Jeanne ($11.3 million), due to better than
expected reported claims activity, and with respect to the 2004 and 2005 hurricanes, the adoption of a new
actuarial technique using reported loss development factors to estimate the ultimate losses for these events, as
discussed in more detail in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations, Summary of Critical Accounting Estimates, Claims and Claim Expense Reserves, Property
Catastrophe Reinsurance.” The remaining favorable development within our property catastrophe reinsurance
unit was due to a reduction of ultimate net losses on a variety of smaller catastrophes such as hail storms, winter
freezes, floods, fires, tornadoes which occurred during the 2006 through 2008 accident years.

Our catastrophe reinsurance unit experienced $131.6 million of favorable development in 2008 principally as a
result of a reduction in ultimate net losses associated with the 2005 hurricanes, Katrina, Rita and Wilma. In 2007,
we experienced $93.1 million of favorable development which improved our calendar year loss ratio by 12.8
percentage points, principally as a result of a reduction of ultimate losses for the 2006 and 2005 accident years,
due to lower than expected reported claims. We cannot provide assurance that favorable reserve releases will
continue, or that we will not experience unfavorable reserve development in the future.

Specialty

Specialty overview

Year ended December 31,
(in thousands, except percentages)

Specialty gross premiums written

Renaissance
DaVinci

Total specialty gross premiums written (1)

Net premiums written

Net premiums earned
Net claims and claim expenses incurred
Acquisition expenses
Operational expenses

Underwriting income

2009

2008

2007

$111,889 $153,701 $ 277,882
9,434

2,457

6,069

$114,346 $159,770 $ 287,316

$106,137 $159,552 $ 287,316

144,127
14,433
23,650
36,288

192,189
68,140
43,399
19,171

231,396
112,545
42,826
18,599

$ 69,756 $ 61,479 $ 57,426

Net claims and claim expenses incurred – current accident year
Net claims and claim expenses incurred – prior accident years

$ 79,545 $124,671 $ 213,833
(101,288)
(56,531)

(65,112)

Net claims and claim expenses incurred – total

$ 14,433 $ 68,140 $ 112,545

Net claims and claim expense ratio – current accident year
Net claims and claim expense ratio – prior accident years

Net claims and claim expense ratio – calendar year
Underwriting expense ratio

Combined ratio

55.2%
(45.2%)

64.9%
(29.4%)

92.4%
(43.8%)

10.0%
41.6%

51.6%

35.5%
32.5%

68.0%

48.6%
26.6%

75.2%

(1)

Includes gross premiums written ceded from the Individual Risk segment to the Specialty unit of $nil, $nil
and $0.4 million for the years ended December 31, 2009, 2008 and 2007, respectively.

Specialty Reinsurance Gross Premiums Written – In 2009, our specialty reinsurance gross premiums written
decreased by $45.4 million, or 28.4%, to $114.3 million, compared to $159.8 million in 2008, principally due to
the non-renewal of several programs that did not meet our underwriting standards, combined with the
non-renewal and portfolio transfer out of a catastrophe exposed homeowners personal lines property quota share
contract during the second quarter of 2009. Our specialty reinsurance premiums are prone to significant volatility
as this business is characterized by a relatively small number of comparably large transactions.

In 2008, our specialty reinsurance gross premiums written decreased $127.5 million, or 44.4%, to $159.8
million, compared to $287.3 million of gross premiums written in 2007. The decrease is principally due to one
large contract incepted in 2007 that renewed in 2008 at a lower participation rate and on a smaller premium
base than in 2007, resulting in a $66.4 million decrease in gross premiums written from this contract, combined
with the then softening market conditions experienced in 2008, compared to 2007, which impacted principally
all lines of business.

Specialty Reinsurance Underwriting Results – Our specialty reinsurance unit generated $69.8 million of
underwriting income and reported a 51.6% combined ratio in 2009, compared to $61.5 million of underwriting
income and a 68.0% combined ratio in 2008, an increase in underwriting income of $8.3 million and a decrease
in the combined ratio of 16.4 percentage points. The improved underwriting income was primarily due to a $53.7
million decrease in net claims and claim expenses incurred and a $2.6 million decrease in underwriting expenses
and partially offset by a $48.1 million decrease in net premiums earned. Current accident year losses in 2009 of
$79.5 million were down $45.1 million from $124.7 million in 2008, principally reflecting a lack of large losses in
2009 and lower net premiums earned. Although underwriting expenses decreased by $2.6 million in 2009, our
underwriting expense ratio increased 9.1 percentage points in 2009, principally due to the impact of lower net
premiums earned and a higher operating expense base. Our operating expenses increased $17.1 million in 2009
to $36.3 million, compared to $19.2 million in 2008, principally due to an increase in our employee base and our
strong financial results in 2009, which resulted in increased compensation expenses, as well as an increase in
related general and administrative operating expenses as a result of the higher head count. Our acquisition

expense ratio decreased from 22.6% in 2008 to 16.4% in 2009, principally as a result of the non-renewal and
portfolio transfer out of a catastrophe exposed homeowners personal lines property quota share contract which
had a higher acquisition expense ratio relative to other programs in the specialty unit.

In 2008, our specialty reinsurance unit generated underwriting income of $61.5 million, a net claims and claim
expense ratio of 35.5%, an underwriting expense ratio of 32.5% and a combined ratio of 68.0%, compared to
$57.4 million of underwriting income, a net claims and claim expense ratio of 48.6%, underwriting expense ratio
of 26.6% and a combined ratio of 75.2% in 2007. The increase in underwriting income and decrease in the
combined ratio in 2008 was primarily due to a decrease in net claims and claim expenses as a result of a $60.0
million reserve for casualty clash losses related to sub-prime events being established in the fourth quarter of
2007. Net underwriting losses in 2008 associated with sub-prime related losses as well as the Madoff matter,
both arising out of exposures within our casualty clash line of business, were $2.5 million and $15.0 million,
respectively, with the 2008 sub-prime related losses decreasing significantly from 2007. The decrease in net
claims and claim expenses was partially offset by a decrease in net premiums earned as a result of the decrease
in gross premiums written, as noted above.

Our specialty reinsurance unit experienced favorable development on prior year reserves of $65.1 million, $56.5
million and $101.3 million, in 2009, 2008 and 2007, respectively. The favorable development within our
specialty reinsurance unit of $65.1 million in 2009 was principally attributable to lower than expected claims
emergence on the 2005 through 2008 underwriting years of $87.6 million which was driven by the application of
our formulaic actuarial reserving methodology for this business with the reductions being due to actual paid and
reported loss activity being more favorable to date than what was originally anticipated when setting the initial
IBNR reserves, as well as $10.0 million due to a reduction on one claim on a contract related to the 2005
hurricanes, and partially offset by a $32.5 million increase in our estimated ultimate net losses on the 2008
Madoff matter.

The favorable development on prior year reserves in 2008 was due to reported claim activity being less than
expected. The reductions in our prior year reserves in 2007 was principally driven by the application of our
formulaic reserving methodology used for this book of business with the decrease being due to actual paid and
reported loss activity coming in better than what we anticipated when setting the initial reserve estimates. Our
2007 accident year was also favorably impacted by a reduction to our initial expected loss ratios for two lines of
business. Since establishing the specialty reinsurance business unit in 2002, reported claim activity has been
less than expected and therefore we have adjusted our estimated loss reporting patterns to reflect this
experience. We cannot provide assurance that favorable reserve releases will continue, or that we will not
experience unfavorable reserve development in the future.

Individual Risk Segment

Below is a summary of the underwriting results and ratios for the years ended December 31, 2009, 2008 and
2007 for our Individual Risk segment:

Individual Risk segment overview

Year ended December 31,
(in thousands, except percentages)

Gross premiums written

Net premiums written

Net premiums earned
Net claims and claim expenses incurred
Acquisition expenses
Operational expenses

Underwriting (loss) income

2009

2008

2007

$530,787 $587,309

$556,594

$367,374 $481,727

$410,842

$424,091 $477,065
319,589
108,116
40,368

284,926
110,927
50,358

$466,708
238,156
135,015
42,495

$ (22,120) $

8,992

$ 51,042

Net claims and claim expenses incurred – current accident year
Net claims and claim expenses incurred – prior accident years

$279,918 $366,294
(46,705)

5,008

$276,929
(38,773)

Net claims and claim expenses incurred – total

$284,926 $319,589

$238,156

Net claims and claim expense ratio – current accident year
Net claims and claim expense ratio – prior accident years

Net claims and claim expense ratio – calendar year
Underwriting expense ratio

Combined ratio

66.0%
1.2%

67.2%
38.0%

105.2%

76.8%
(9.8%)

67.0%
31.1%

98.1%

59.3%
(8.3%)

51.0%
38.1%

89.1%

Individual Risk Segment Gross Premiums Written – The following table shows our Individual Risk gross premiums
written by major type of business for the years ended December 31, 2009, 2008 and 2007:

2009

2008

2007

Gross
Premiums
Written

Percentage
of Gross
Premiums
Written

Gross
Premiums
Written

Percentage
of Gross
Premiums
Written

Gross
Premiums
Written

Percentage
of Gross
Premiums
Written

Year ended December 31,
(in thousands, except percentages)

Individual Risk gross premiums written

Crop
Commercial multi-line
Commercial property
Personal lines property

$290,324
106,183
84,821
49,459

54.7% $272,559
20.0% 119,987
16.0% 134,601
60,162

9.3%

46.4% $178,728
20.4% 162,422
23.0% 164,438
51,006
10.2%

32.1%
29.2%
29.5%
9.2%

Total Individual Risk gross premiums

written

$530,787

100.0% $587,309

100.0% $556,594

100.0%

Gross premiums written for our Individual Risk segment decreased $56.5 million, or 9.6%, to $530.8 million in
2009 compared to $587.3 million in 2008. The decrease in gross premiums written was primarily due to
decreases of $49.8 million, $13.8 million and $10.7 million from our commercial property, commercial multi-line
and personal lines property businesses, respectively, as a result of our decision in late 2008 to terminate several
program manager relationships and a commercial property quota share contract as a result of the then softening
market conditions and, during the second quarter of 2009, to reduce our participation on a personal lines
property quota share contract. Offsetting these decreases in gross premiums written for 2009, was a $17.8
million, or 6.5% increase, in our crop insurance gross premiums written, principally driven by an increase in
policy count, which more than offset a decline in commodity prices used in determining the policy premium.

Gross premiums written for our Individual Risk segment increased $30.7 million, or 5.5%, to $587.3 million in
2008, compared to $556.6 million in 2007. The increase in gross premiums written for our Individual Risk
segment is primarily due to a $93.8 million increase in the crop insurance business due principally to higher

commodity prices and in part due to more insured acres, and partially offset by reductions in the commercial
property and commercial multi-line businesses where management maintained underwriting discipline in the
then increasingly softening U.S. property and casualty market.

Our Individual Risk premiums can fluctuate significantly between quarters and between years based on several
factors, including, without limitation, the timing of the inception or cessation of new program managers and quota
share reinsurance contracts, including whether or not we have portfolio transfers in or portfolio transfers out, of
quota share reinsurance contracts of in-force books of business. In addition, our gross premiums written in
respect of our crop insurance business are subject to fluctuations from a number of factors including the impact
of relevant commodity prices.

While business produced through our various distribution channels varies from year to year, as detailed in the
table below, business produced through our wholly owned program managers now represents our largest
distribution channel. In addition, in recent years we have significantly reduced the amount of business produced
through quota share reinsurance and, to a lesser extent, third party program managers.

2009

2008

2007

Gross
Premiums
Written

Percentage
of Gross
Premiums
Written

Gross
Premiums
Written

Percentage
of Gross
Premiums
Written

Gross
Premiums
Written

Percentage
of Gross
Premiums
Written

Year ended December 31,
(in thousands, except percentages)

Individual Risk gross premiums written

Program managers – wholly

owned (1)

Program managers – third party
Quota share reinsurance
Broker-produced business

$302,269
189,690
40,117
(1,289)

56.9% $272,559
35.7% 216,880
97,444
426

7.6%
(0.2%)

46.4% $178,728
36.9% 235,849
16.6% 139,952
2,065

0.1%

32.1%
42.4%
25.1%
0.4%

Total Individual Risk gross premiums

written

$530,787

100.0% $587,309

100.0% $556,594

100.0%

(1) Program managers – wholly owned represents Agro National which we acquired in an asset purchase on
June 2, 2008, and for 2009, our commercial property operations. The table above is presented as if Agro
National has been a wholly owned subsidiary since the first period presented.

On June 2, 2008, the Company acquired substantially all the assets and assumed certain liabilities of Agro
National, LLC for $80.5 million. Agro National is based in Council Bluffs, Iowa and is a managing general
underwriter of crop insurance. Agro National offers risk protection products and services to the agricultural
community throughout the U.S. Agro National participates in the U.S. federal government’s MPCI program and
has been writing business on behalf of Stonington, a wholly owned subsidiary of the Company, since 2004. The
acquisition was undertaken to purchase the distribution channel for the Company’s crop insurance business
which was previously conducted through a managing general agency contractual relationship with Agro National,
LLC. With the acquisition of the net assets of Agro National, LLC in 2008 we invested in this line of business and
plan to seek to increase our gross premiums written for this business, subject to market conditions. The premium
and underwriting results associated with this business can be volatile, driven principally by changes in commodity
prices and weather events in the U.S. which impacts the price and yield of the insured crops and correspondingly
also impacts the premium charged for the policies issued and the net claims and claim expenses incurred. Due
to the growing proportion of this line of business within our Individual Risk results, we expect this potential
volatility to increase.

The RMA has currently proposed several changes to the SRA that, if ultimately adopted, would adversely affect
the financial results of MPCI insurers such as ours, in 2011. Industry feedback to the draft of the SRA has to date
not been positive and the RMA is expected to circulate further drafts of the agreement before it becomes final.
However, we cannot predict what changes the final version will have, if any, and therefore what impact the
changes will have on our future profitability, or whether we would enter into the new SRA for Reinsurance Year
2011.

100

Ceded Premiums Written

Year ended December 31,
(in thousands)

2009

2008

2007

Ceded premiums written – Individual Risk segment (1)

$163,413 $105,582 $145,752

(1)

Includes $12.7 million, $5.7 million and $37.4 million of premium ceded to our Reinsurance segment in
2009, 2008 and 2007, respectively.

We purchase reinsurance to reduce our exposure to large losses and to help manage our portfolio of risks. Ceded
premiums written in our Individual Risk segment during 2009 increased by $57.8 million to $163.4 million, as a
result of a portion of the estimated underwriting income in association with the multi-peril crop insurance
business that is remitted to the U.S. government in the form of ceded premiums written and earned. The
decrease in ceded premiums written in 2008 compared with 2007 was principally due to a decrease in
intercompany ceded premiums written from our Individual Risk segment to our Reinsurance segment, as
discussed below.

Individual Risk Segment Underwriting Results – Our Individual Risk segment incurred an underwriting loss of
$22.1 million in 2009, compared to generating underwriting income of $9.0 million in 2008, a decrease of $31.1
million. In 2009, our Individual Risk segment generated a net claims and claim expense ratio of 67.2%, an
underwriting expense ratio of 38.0% and a combined ratio of 105.2%, compared to 67.0%, 31.1% and 98.1%,
respectively, in 2008. The decrease in our Individual Risk segment’s underwriting income and corresponding
increase in the segment’s combined ratio was due primarily to a $53.0 million decrease in net premiums earned,
a $12.8 million increase in underwriting expenses and partially offset by a $34.7 million decrease in net claims
and claim expenses incurred, as a result of the comparably low level of catastrophes during 2009, compared to
2008. Net premiums written decreased $114.4 million to $367.4 million in 2009, compared to $481.7 million in
2008 due to the decrease in gross premiums written and a $57.8 million increase in ceded premiums written, as
noted above. The Individual Risk segment underwriting results for 2009 were negatively impacted by $5.0 million
of adverse development on prior year reserves, as discussed in more detail below, and by $17.5 million of net
crop hail losses in excess of net premiums earned within the Company’s crop hail line of business for accident
year 2009.

In 2008, our Individual Risk segment generated $9.0 million of underwriting income and recorded a net claims
and claim expense ratio of 67.0%, an expense ratio of 31.1% and a combined ratio of 98.1%, compared to
$51.0 million of underwriting income, a net claims and claim expense ratio of 51.0%, an expense ratio of 38.1%
and a combined ratio of 89.1%, in 2007. The decrease in our Individual Risk segment underwriting income in
2008 was principally driven by an increase in net claims and claim expenses incurred of $81.4 million,
principally due to $35.5 million of net incurred losses associated with hurricanes Gustav and Ike, and a higher
level of attritional losses in our crop insurance business. Hurricanes Gustav and Ike resulted in $40.3 million of
underwriting losses, inclusive of $4.8 million of ceded reinstatement premiums earned, and added 8.4
percentage points to our Individual Risk segment’s 2008 combined ratio, as detailed in the table below.

(in thousands, except ratios)

Net claims and claim expenses incurred
Net reinstatement premiums earned
Lost profit commissions

Net impact on underwriting result

Impact on combined ratio

Year ended December 31, 2008
Individual Risk
Ike

Total

Gustav

$(11,260) $(24,247) $(35,507)
(4,791)
—

(4,791)
—

—
—

$(11,260) $(29,038) $(40,298)

2.3%

6.0%

8.4%

In 2007, the Individual Risk current accident year net claims and claim expense ratios were positively impacted
by the absence of large losses as a result of minimal catastrophe loss activity in the U.S.

101

Our Individual Risk segment purchases reinsurance from our Reinsurance segment. As detailed in the table
below, our Individual Risk segment ceded $12.7 million, $5.7 million and $37.4 million of premiums to the
Reinsurance segment in 2009, 2008 and 2007, respectively. In addition, our Individual Risk segment ceded
losses to our Reinsurance segment of $4.2 million, $7.1 million and negative $0.3 million in 2009, 2008 and
2007, respectively. The net result of these transactions to the Individual Risk segment was an underwriting loss of
$8.6 million, $9.2 million and $42.6 million in 2009, 2008 and 2007, respectively. There was a corresponding
opposite effect on our Reinsurance segment underwriting results as a result of this reinsurance and, therefore,
these transaction have no impact on our consolidated results of operations. We believe the terms of such
cessions are on an arm’s length basis.

Year ended December 31,
(in thousands)

2009

2008

2007

Premiums ceded to Reinsurance segment

$(12,650) $ (5,672) $(37,377)

Ceded premiums earned
Claims and claim expenses incurred

Underwriting loss

$(12,783) $(16,338) $(42,230)
(324)

7,121

4,226

$ (8,557) $ (9,217) $(42,554)

Also impacting the underwriting result in 2009 was adverse development on prior years estimated ultimate net
claims reserves of $5.0 million, compared to 2008 and 2007, which experienced reductions of prior year
estimated ultimate net claims reserves of $46.7 million and $38.8 million, respectively. The adverse development
within our Individual Risk segment of $5.0 million in 2009 was principally driven by $26.9 million of adverse
development in our crop insurance business primarily due to an increase in the severity of reported loss activity in
2009 on the 2008 crop year. This more than offset a $2.4 million reduction in ultimate net losses on the 2004
and 2005 hurricanes principally due to the adoption of a new actuarial technique using reported loss
development factors to estimate the ultimate losses for these events, as discussed in more detail in “Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, Summary of Critical
Accounting Estimates, Claims and Claim Expense Reserves, Individual Risk”, $2.1 million of favorable
development due to changes in actuarial assumptions and $17.4 million of favorable development principally
driven by the application of our formulaic actuarial reserving methodology for this business with the reductions
being due to actual paid and reported loss activity being more favorable to date than what was originally
anticipated when setting the initial IBNR reserves.

The reduction in prior years estimated ultimate net claims reserves in 2008 and 2007 was principally driven by
the application of our formulaic reserving methodology used for the Individual Risk book of business and is
primarily due to actual paid and reported loss activity being better than what we had anticipated when estimating
the initial ultimate claims and claims expense ratios and the initial loss reporting patterns. In addition, during
2008 we revised our reported loss development patterns for several of our liability lines of business to reflect the
Company’s actual experience to date with these lines. The impact of this was a $7.8 million reduction in prior
year reserves.

Our underwriting expenses consist of acquisition expenses and operational expenses. Acquisition expenses
consist of costs to acquire premiums and are comprised of fees and expenses paid to: 1) third party program
managers, who source primary insurance premiums for us through specialized programs; 2) primary insurers, for
whom we write quota share reinsurance; and 3) broker commissions and excise taxes paid to brokers, who
source insurance for us on a risk-by-risk basis. Acquisition expenses are driven by contract terms and are
generally determined based on a set percentage of premiums. Acquisition expenses as a percentage of net
premiums earned in 2009 were 26.2%, compared to 22.7% and 28.9% in 2008 and 2007, respectively. The
increase in the acquisition expense ratio in 2009 is primarily due to profit sharing commissions due to favorable
development increasing our underwriting results on older accident years. In 2008, certain components of
underwriting expenses that were incurred in 2007 with respect to the crop insurance business are no longer
reflected due to our acquisition of substantially all of the assets of Agro National, LLC, the agency that produces
this business, in the second quarter of 2008. Operating expenses consist of compensation and other general and
administrative expenses. Our Individual Risk business historically operated with a relatively small number of
employees and, accordingly, we have outsourced much of the administration in our Individual Risk business to
third party program managers and third party administrators. However we continuously monitor and analyze
opportunities to internalize such services and in recent years we have increased our headcount and related

102

expenses. Operating expenses in our Individual Risk segment increased to $50.4 million in 2009, from $40.4
million in 2008 and $42.5 million in 2007, principally as a result of the Company’s investment in personnel and
related infrastructure in association with its ongoing business development initiatives.

Net Investment Income

Year ended December 31,
(in thousands)

Fixed maturity investments
Short term investments
Other investments

Hedge funds and private equity investments
Other

Cash and cash equivalents

Investment expenses

Net investment income

2009

2008

2007

$160,550 $ 201,220 $176,785
118,483

48,437

9,924

18,279
145,367
855

334,975
(10,994)

(101,779)
(117,867)
7,452

87,985
17,469
11,026

37,463
(13,232)

411,748
(9,285)

$323,981 $ 24,231 $402,463

Net investment income for 2009 was $324.0 million, compared to $24.2 million in 2008. The $299.8 million
increase in net investment income was principally driven by a $120.1 million increase in net investment income
from our hedge funds and private equity investments from negative $101.8 million in 2008 to $18.3 million in
2009, and a $263.2 million increase in net investment income from our senior secured bank loan funds and
non-U.S. fixed income funds within our other investments, from negative $117.9 million in 2008 to $145.4
million in 2009, and partially offset by a $40.7 million and $38.5 million decrease in net investment income from
our fixed maturity investments and short term investments, respectively, primarily due to lower yields due to the
current lower interest rate environment and lower average invested assets for our short term investments. Our
hedge fund, private equity and other investments are accounted for at fair value with the change in fair value
recorded in net investment income which included net unrealized gains of $88.5 million in 2009, compared to
$259.4 million of net unrealized losses in 2008. Our net investment income for 2009 benefitted from the
tightening of credit spreads, which resulted in increases in the fair value of many of our investments.

Net investment income for 2008 was $24.2 million, compared to $402.5 million during 2007, a decrease of
$378.2 million, as a result of lower returns in our investment portfolio mainly driven by our other investments.
Included in the net investment loss is a $101.8 million loss from hedge funds and private equity investments in
2008 compared to $88.0 million of net investment income from these funds in 2007, a decrease of $189.8
million. Also included in net investment loss in 2008 is a $117.9 million loss related primarily to senior secured
bank loan funds and non-U.S. fixed income funds compared to $17.5 million of net investment income from
these funds in 2007, a decrease of $135.3 million. The results from the Company’s other investments described
above include net unrealized losses of $259.4 million in 2008, compared to net unrealized gains of $47.3 million
in 2007. Net investment income from fixed maturity investments available for sale increased $24.4 million to
$201.2 million in 2008, compared to $176.8 million in 2007 as a result of higher returns on these investments
due in part to a widening of credit spreads. Net investment income from short term investments decreased $70.0
million in 2008 to $48.4 million from $118.5 million in 2007, principally due to a decrease in short term interest
rates as well as a decrease in average balances for these investments as a result of our share repurchases during
2008.

Reductions in the Federal Funds rate by the Board of Governors of the Federal Reserve Board and corresponding
decline in interest rates has lowered the interest rate at which we invest our assets. We expect these
developments, combined with the current composition of our investment portfolio and other factors, to put
downward pressure on our net investment income for the foreseeable future. Among other factors, our current
asset allocations reflect a relative reduction from earlier periods of the number of classes of securities
characterized by higher estimated yields and expected risk, which has reduced the yield to maturity for our
investment portfolio and which we expect will also impact future net investment income.

103

Fixed Maturity Investments – Net Realized and Unrealized Gains and Net Other-Than-Temporary Impairments

Year ended December 31,
(in thousands)

Gross realized gains
Gross realized losses

2009

2008

2007

$143,733 $ 99,634 $ 35,923
(9,117)

(88,934)

(39,183)

Net realized gains on fixed maturity investments
Net unrealized losses on fixed maturity investments, trading

104,550
(11,388)

10,700
—

26,806
—

Net realized and unrealized gains on fixed maturity investments

$ 93,162 $ 10,700 $ 26,806

Total other-than-temporary impairments
Portion recognized in other comprehensive income, before taxes

Net other-than-temporary impairments

(26,999)
4,518

(217,014)
—

(25,513)
—

$ (22,481) $(217,014) $(25,513)

Our investment portfolio is structured to preserve capital and provide us with a high level of liquidity. A large
majority of our investments are invested in the fixed income markets and, therefore, our realized holding gains
and losses on investments are highly correlated to fluctuations in interest rates. Therefore, as interest rates
decline, we will tend to have realized gains from the turnover of our investment portfolio, and as interest rates
rise, we will tend to have realized losses from the turnover of our investment portfolio.

During the fourth quarter of 2009, we started designating, upon acquisition, certain fixed maturity investments as
trading, rather than as available for sale and, as a result, we recognized $11.4 million of net unrealized losses on
these securities in our consolidated statements of operations in 2009. We made this change, due in part to the
new authoritative other-than-temporary impairment GAAP guidance that became effective in 2009 which has
resulted in additional accounting judgments required to be made on a quarterly basis, combined with an effort to
report our fixed maturity investment portfolio results in our consolidated statements of operation in a manner
consistent with the way in which we manage the portfolio, which is on a total investment return basis. We
currently expect to continue to designate, in future periods, upon acquisition, certain fixed maturity investments
as trading, rather than as available for sale, and, as a result, we currently expect our fixed maturity investments
available for sale balance to decrease and our fixed maturity trading balance to increase over time, resulting in a
reduction in other-than-temporary accounting judgments we make. This change will over time result in additional
volatility in our net income (loss) in future periods as net unrealized gains and losses on these fixed maturity
investments will be recorded currently in net income (loss), rather than as a component of accumulated other
comprehensive income (loss) in shareholders’ equity.

Net other-than-temporary impairments were $22.5 million in 2009, compared to $217.0 million in 2008. Net
other-than-temporary impairments relate to our fixed maturity investments available for sale. For the years ended
December 31, 2008 and 2007 and for the first three months of 2009, we recognized other-than-temporary
impairments if we could not assert that we had the ability and intent to hold our securities for a period of time
sufficient to allow for any anticipated recovery in fair value in accordance with authoritative literature. If the
impairment was determined to be other-than-temporary, then an impairment loss was recognized in earnings
equal to the entire difference between the security’s amortized cost basis and its fair value at the balance sheet
date. For the years ended December 31, 2008 and 2007 and for the first three months of 2009, we recognized
other-than-temporary impairments of $217.0 million, $25.5 million and $19.0 million, respectively. For the nine
months ended December 31, 2009, under updated guidance for the recognition and presentation of other-than-
temporary impairments which we adopted in the second quarter of 2009, we recorded $8.0 million of total other-
than-temporary impairments of which $3.5 million was recognized in earnings and includes $2.2 million for credit
losses and $1.3 million for investments we intend to sell, with the remaining $4.5 million related to other factors
recorded as an unrealized loss in accumulated other comprehensive income. Under the guidance adopted in the
second quarter of 2009, we now recognize other-than-temporary impairments in earnings for impaired fixed
maturity investments available for sale (i) for which we have the intent to sell the security or (ii) it is more likely
than not that we will be required to sell the security before its anticipated recovery and (iii) for those securities
which have a credit loss.

Realized investment gains and losses totaled $99.6 million and $88.9 million, respectively, during 2008,
compared to $35.9 million and $9.1 million, respectively, in 2007. Other-than-temporary impairment charges
related to our fixed maturity investments available for sale totaled $217.0 million and $25.5 million in 2008 and

104

2007, respectively. Other-than-temporary impairments in 2008 were driven by the turmoil in the financial
markets and widening credit spreads. During 2007, our $25.5 million of other-than-temporary impairment
charges was a result of a falling interest rate environment during the year which resulted in lower unrealized
losses on our fixed maturity securities, prior to the recognition of other-than-temporary impairment losses on such
securities. Credit-related other-than-temporary impairment charges totaled $8.3 million and $nil for 2008 and
2007, respectively. The credit-related other-than-temporary impairment charges in 2008, which includes
impairments for which the Company believes it will not be able to recover the full principal amount if held to
maturity, were principally driven by our direct holdings of fixed maturity securities issued by Lehman Brothers.

Equity in Earnings (Losses) of Other Ventures

Year ended December 31,
(in thousands)

Top Layer Re
Tower Hill and the Tower Hill Companies
ChannelRe
Other

2009

2008

2007

$12,619 $11,377 $ 14,949
3,432
— (151,751)
4,761

(2,083)
—
440

1,681

545

Total equity in earnings (losses) of other ventures

$10,976 $13,603 $(128,609)

Equity in earnings of other ventures in 2009 primarily represents our pro-rata share of the net income (loss) from
our investments in Top Layer Re, Tower Hill Holdings Inc. (“Tower Hill”) and the Tower Hill Companies. Equity in
earnings of other ventures generated $11.0 million in income in 2009, compared to $13.6 million in 2008. The
$2.6 million decrease in equity in earnings of other ventures in 2009 compared to 2008 is primarily due to
Starbound II becoming a consolidated entity effective August 1, 2008, which is included in other in the table
above, combined with lower equity in earnings from Tower Hill and the Tower Hill Companies. Equity in earnings
(losses) of other ventures generated $13.6 million in income in 2008, compared to a loss of $128.6 million in
2007. The increase is primarily due to the absence of any additional losses related to ChannelRe, since
ChannelRe is in a negative shareholders’ equity position, and consequently, our investment in ChannelRe
continued to be carried at $nil during 2008 and 2009. Until such time as ChannelRe’s shareholders’ equity is
positive, we will not record any equity in earnings in our investment in ChannelRe. It is possible that in future
periods the nonperformance risk or own credit risk portion of ChannelRe’s mark-to-market on its financial
guaranty contracts accounted for as derivatives under GAAP may increase, or that the underlying mark-to-market
on ChannelRe’s financial guaranty contracts accounted for as derivatives under GAAP may decrease, or both,
which could result in ChannelRe returning to a positive equity position, at which time we would then record our
share of ChannelRe’s net income, subject to impairment, or our share of ChannelRe’s net loss. Except for the
fourth quarter of 2007 reduction to $nil of the carrying value of ChannelRe, the equity pick-up for our results in
respect of ChannelRe is recorded one quarter in arrears.

The equity pick-up for our earnings in Tower Hill and the Tower Hill Companies is recorded one quarter in
arrears.

Following is a summary of our equity in losses of ChannelRe.

Year ended December 31,
(in thousands)

2009

2008

2007

Equity in earnings of ChannelRe excluding unrealized

mark-to-market losses

Equity in ChannelRe unrealized mark-to-market losses

Total equity in losses of ChannelRe

— $
—

— $

—$
15,420
— (167,171)

—$ (151,751)

As discussed above, we reduced the carried value of our investment in ChannelRe to $nil in 2007 and until such
time as ChannelRe’s shareholders’ equity is positive, we will not record any equity in earnings in our investment
in ChannelRe. In 2007, our share of ChannelRe’s results was impacted by $167.2 million of negative
mark-to-market losses. These mark-to-market losses were primarily driven by a widening of credit spreads and a
lack of liquidity in 2007 which was primarily driven by issues related to the sub-prime market. We do not
currently expect the mark-to-market losses experienced by ChannelRe in 2007 to reverse.

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Other Income (Loss)

Year ended December 31,
(in thousands)

Weather and energy risk management operations
Mark-to-market on Platinum warrant
Weather-related and loss mitigation
Assumed and ceded reinsurance contracts accounted for as derivatives

and deposits

Other

Total other income (loss)

2009

2008

2007

$ 37,184 $25,122 $ (8,781)
5,468
(11,405)

4,958
(11,069)

(538)
(9,072)

(33,594)
4,542

(9,739)
4,479

(35,453)
12,241

$ 2,021 $10,252 $(37,930)

In 2009, we generated $2.0 million of other income compared to $10.3 million in 2008. The $8.2 million
decrease in other income was primarily due to a $23.9 million increase in other loss related to our assumed and
ceded reinsurance contracts accounted for as derivatives and deposits, principally due to the inception of several
new ceded contracts during the second quarter of 2009, for which the losses principally relate to the expiration of
the contractual premium over the risk period and for which no recoveries have been estimated, and partially
offset by a $12.1 million increase in other income from our weather and energy risk management operations from
$25.1 million in 2008 to $37.2 million in 2009.

We have expanded our weather and energy risk management operations in the last several years to include
products such as weather derivatives and energy derivatives. The weather and energy risk management
operations results include net realized and unrealized gains and losses on agreements with end users and net
realized and unrealized gains and losses on hedging and trading activities. The end user contracts we enter into
and our trading activities are based in part on proprietary weather forecasts provided to us by our Weather Predict
subsidiary. As noted above, the pre-tax profits from our weather and energy risk management operations
increased to $37.2 million in 2009 from $25.1 million in 2008 and a loss of $8.8 million in 2007. The weather
products and trading activities in which we engage are both seasonal and volatile, and there is no assurance that
our performance to date will be indicative of future periods. We are currently in the process of enhancing our
weather and energy risk management infrastructure and operations to engage in the physical delivery and
settlement of various of our energy products with our customers.

Corporate Expenses

Year ended December 31,
(in thousands)

2009

2008

2007

Other corporate expenses
Internal review and external investigation related expenses

Total corporate expenses

$23,265
(9,025)

$21,668
3,967

$23,173
5,687

$14,240

$25,635

$28,860

Corporate expenses include certain executive, director, legal and consulting expenses, costs for research and
development, and other miscellaneous costs associated with operating as a publicly traded company. Corporate
expenses decreased $11.4 million in 2009, compared to 2008, primarily due to the recognition of a corporate
insurance recovery.

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Interest, Capital Securities and Preferred Share Dividends

Year ended December 31,
(in thousands)

2009

2008

2007

Interest – DaVinciRe revolving credit facility
Interest – RenaissanceRe revolving credit facility
Interest – $150 million 7.0% Senior Notes
Interest – $100 million 5.875% Senior Notes
Interest – $103.1 million subordinated obligation to Capital Trust
Other

Total interest expense

Dividends – $150 million 8.10% Series A Preference Shares
Dividends – $100 million 7.30% Series B Preference Shares
Dividends – $250 million 6.08% Series C Preference Shares
Dividends – $300 million 6.60% Series D Preference Shares

Total preferred share dividends

$ 3,192 $ 8,678 $12,167
—
10,500
5,875
4,818
266

3,398
—
5,875
—
2,646

3,050
5,688
5,875
—
1,342

15,111

24,633

33,626

—
7,300
15,200
19,800

561
7,300
15,200
19,800

42,300

42,861

Total interest expense and preferred share dividends

$57,411 $66,933 $76,487

During 2009, our interest expense decreased by $9.5 million to $15.1 million, compared to $24.6 million in
2008, primarily as a result of the repayment at maturity of our 7.0% Senior Notes, which came due on July 15,
2008, and the decrease in interest expense associated with DaVinciRe’s revolving credit facility due to a
reduction in the average interest rates on the facility to approximately 1.3% during 2009, from 4.3% during
2008. Offsetting this decrease was an increase in interest expense on our revolving credit facility under which
$150.0 million was outstanding from July 15, 2008 until November 9, 2009, at which time we repaid the
balance. The average interest rate on this borrowing from January 1, 2009 through November 9, 2009 was 2.6%,
lower than the coupon rate on the 7.0% Senior Notes repaid at maturity in July 2008 with the proceeds from our
revolving credit facility drawdown at that time.

During 2008, our interest expense decreased $9.0 million to $24.6 million, compared to $33.6 million in 2007
primarily as a result of the repayment at maturity of our 7.0% Senior Notes, which came due July 15, 2008,
combined with the 2007 extinguishment of the subordinated obligation to RenaissanceRe Capital Trust (“Capital
Trust”), as detailed below, which resulted in the Company not having any further interest expense under this
agreement during 2008. Offsetting these decreases was an increase in interest expense on our revolving credit
facility as we borrowed $150.0 million under this facility to repay the 7.0% Senior Notes, described above. The
average interest rate on this borrowing was 4.2%, therefore lower than the 7.0% coupon rate on the Senior Notes.
Preferred share dividends remained relatively constant in 2008, when compared to 2007.

Income Tax (Expense) Benefit

Year ended December 31,
(in thousands)

2009

2008

2007

Income tax (expense) benefit

$(9,094)

$(568)

$18,432

We are subject to income taxes in certain jurisdictions in which we operate; however, since the majority of our
income is currently earned in Bermuda, a non-taxable jurisdiction, the tax impact to our operations has
historically been minimal. In 2009, 2008 and 2007, we generated cumulative GAAP taxable income in our U.S.
tax-paying subsidiaries. During 2008 and 2007, our valuation allowance was reassessed and we now believe that
it is more likely than not that we will continue to generate GAAP taxable income in our U.S. tax-paying insurance
subsidiaries and therefore be able to recover all of our U.S. net deferred tax asset. As a result, our valuation
allowance was reduced by $1.7 million and $25.8 million in 2008 and 2007, respectively, and there was a
corresponding decrease to income tax expense and increase to our net income. Our valuation allowance totaled
$2.4 million and $1.4 million at December 31, 2009 and 2008, respectively. The remaining valuation allowance
as of December 31, 2009 relates exclusively to our operations in Ireland and the U.K. Our Ireland and U.K.
operations have produced GAAP taxable losses and we currently do not believe it is more likely than not that we

107

will generate GAAP taxable income from our subsidiaries in these operations and therefore do not believe that we
will be able to recover our net deferred tax assets from these operations. We expect our consolidated effective tax
rate to increase in the future, as our global operations outside of Bermuda expand. In addition, it is possible that
we could be adversely affected by changes in tax laws, regulation, or enforcement, any of which could increase
our effective tax rate more rapidly or steeply than we currently anticipate.

Net Income Attributable to Redeemable Noncontrolling Interest – DaVinciRe

Year ended December 31,
(in thousands)

2009

2008

2007

Net income attributable to redeemable noncontrolling interest –

DaVinciRe

$(171,501) $(55,133) $(164,396)

In October 2001, we formed DaVinciRe and DaVinci with other equity investors. The Company owns a
noncontrolling economic interest in DaVinciRe; however, because we control a majority of DaVinciRe’s
outstanding voting rights, the consolidated financial statements of DaVinciRe are included in our consolidated
financial statements. Redeemable noncontrolling interest – DaVinciRe represents the portion of DaVinciRe’s
earnings owned by third parties for the years ended December 31, 2009, 2008 and 2007. In 2009, 2008 and
2007, DaVinciRe generated net income which resulted in net income attributable to redeemable noncontrolling
interest expense – DaVinciRe. Our economic ownership interest in DaVinciRe at December 31, 2009, 2008 and
2007 was approximately 38.2%, 22.8% and 20.5%, respectively.

In January 2010, DaVinciRe redeemed the shares of certain third party DaVinciRe shareholders and in a separate
transaction, we sold a portion of our shares in DaVinciRe to a third party shareholder. As a result of these
transactions, our ownership interest in DaVinciRe has increased to 41.2%. We expect our ownership in
DaVinciRe to fluctuate over time.

LIQUIDITY AND CAPITAL RESOURCES

Financial Condition

RenaissanceRe is a holding company, and we therefore rely on dividends from our subsidiaries and investment
income to make principal and interest payments on our debt and to make dividend payments to our preference
and RenaissanceRe common shareholders.

The payment of dividends by our subsidiaries is, under certain circumstances, limited under statutory regulations
and insurance law, which require our insurance subsidiaries to maintain certain measures of solvency and
liquidity. In addition, Bermuda regulations require approval from the BMA for any reduction of capital in excess of
15% of statutory capital, as defined in the Insurance Act. At December 31, 2009, the statutory capital and
surplus of our Bermuda (re)insurance subsidiaries was $3.3 billion (2008 – $3.2 billion), and the amount of
capital and surplus required to be maintained was $528.1 million (2008 – $525.5 million). During 2009,
Renaissance Reinsurance, DaVinciRe and the operating subsidiaries of RenRe Insurance returned capital to our
holding company, which included dividends declared and return of capital, net of capital contributions received,
of $781.8 million, $nil and $120.8 million, respectively, compared with $73.6 million, $100.0 million and $63.8
million, respectively, in 2008.

Our principal U.S. insurance subsidiary, Stonington, is also required to maintain certain measures of solvency
and liquidity. Restrictions with respect to dividends are based on state statutes. In addition, there are restrictions
based on risk-based capital tests which is the threshold that constitutes the authorized control level. If
Stonington’s statutory capital and surplus falls below the authorized control level, the Texas Department of
Insurance (“TDI”) is authorized to take whatever regulatory actions are considered necessary to protect
policyholders and creditors. At December 31, 2009, the estimated consolidated statutory capital and surplus of
Stonington was $122.3 million (2008 – $128.6 million). Because of an accumulated deficit in earned surplus
from prior operations, Stonington cannot currently pay an ordinary dividend without TDI approval.

RenaissanceRe CCL and Syndicate 1458 are subject to regulation by the Council of Lloyd’s. Syndicate 1458 is
also subject to regulation by the FSA under the FSMA. Underwriting capacity of a member of Lloyd’s must be
supported by providing a deposit in the form of cash, securities or letters of credit, which are referred to as Funds
at Lloyd’s, in an amount determined by Lloyd’s in relation to the member’s underwriting capacity. This amount is

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determined by Lloyd’s through application of a risk-based capital formula. At December 31, 2009, the Company
maintained $74.3 million and £15.0 million as a Funds at Lloyd’s facility. In addition, the FSA requires Lloyd’s
syndicates to satisfy an annual solvency test and to maintain solvency on a continuous basis, which Syndicate
1458 was in compliance with at December 31, 2009.

In the aggregate, our operating subsidiaries have historically produced sufficient cash flows to meet their
expected claims payments and operational expenses and to provide dividend payments to us. Our subsidiaries
also maintain a concentration of investments in high quality liquid securities, which management believes will
provide additional liquidity for extraordinary claims payments should the need arise. As of April 9, 2009, we
entered into an amended and restated revolving credit facility to meet additional liquidity and capital
requirements. At December 31, 2009, no amounts remained outstanding under this facility. See “Capital
Resources” section below.

Cash Flows and Liquidity

Cash flows provided by operating activities. Cash flows provided by operating activities in 2009 were
$588.9 million, which principally consisted of our net income of $1,052.7 million and an increase in reinsurance
balances payable of $66.1 million, partially offset by a decrease in our reserve for unearned premiums of $63.6
million, a decrease in claims and claim expenses, net of $353.3 million, an unrealized gain included in net
investment income of $88.5 million related to our other investments and net realized and unrealized investment
gains on fixed maturity investments of $93.2 million. As discussed under “Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations, Summary of Results of Operations for 2009, 2008 and
2007”, we generated strong underwriting results and significantly improved investment results, which contributed
to cash flows provided by operating activities. In addition, as noted above, claims and claim expenses, net
decreased $353.3 million in 2009, compared to 2008, primarily as a result of $550.6 million of paid claims and
claim expenses during 2009, partially offset by incurred claims and claim expenses of $197.3 million. Our 2009
cash flows provided by operating activities were primarily used to support our investing and financing activities as
discussed below.

Cash flows used in investing activities. During 2009, our cash flows used in investing activities in 2009 were
$115.8 million, which principally reflects our decision to decrease our allocation to short term investments by
$1.2 billion, and increase our allocation to fixed maturity investments by $1.3 billion, as a result of the low interest
rate environment experienced during 2009. In addition, we made several strategic investments during 2009,
including the acquisition of Spectrum during the fourth quarter of 2009.

Cash flows used in financing activities. Our cash flows used in financing activities in 2009 were $485.8 million,
primarily as a result of the repurchase of $51.0 million of our common shares and the repayment of the $150.0
million borrowed under our prior revolving credit facility during the fourth quarter of 2009, the repurchase of
$132.7 million of the outstanding shares of DaVinciRe from third party shareholders in the first quarter of 2009
and the payment of $59.7 million and $42.3 million in dividends to our common and preferred shareholders,
respectively.

We have generated cash flows from operations over the three year period between 2007 and 2009 significantly in
excess of our operating commitments. However, because a large portion of the coverages we provide can
produce losses of high severity and low frequency, it is not possible to accurately predict our future cash flows
from operating activities. As a consequence, cash flows from operating activities may fluctuate, perhaps
significantly, between individual quarters and years. Due to the magnitude and relatively recent occurrence of
hurricanes Gustav and Ike during the third quarter of 2008, meaningful uncertainty remains regarding losses
from these events and our actual ultimate net losses from these events may vary from preliminary estimates,
perhaps materially. As a result, our cash flows from operations would be impacted accordingly.

Reserves for Claims and Claim Expenses

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The following table summarizes our claims and claim expense reserves by line of business and split between
case reserves, additional case reserves and IBNR at December 31, 2009 and 2008:

At December 31, 2009
(in thousands)

Property catastrophe reinsurance
Specialty reinsurance

Total Reinsurance
Individual Risk

Total

At December 31, 2008
(in thousands)

Property catastrophe reinsurance
Specialty reinsurance

Total Reinsurance
Individual Risk

Total

Case
Reserves

Additional
Case Reserves

IBNR

Total

$165,153
119,674

$148,252
101,612

$ 258,451 $ 571,856
604,104

382,818

284,827
189,389

249,864
3,658

641,269
332,999

1,175,960
526,046

$474,216

$253,522

$ 974,268 $1,702,006

$312,944
113,953

$297,279
135,345

$ 250,946 $ 861,169
636,650

387,352

426,897
253,327

432,624
14,591

638,298
394,875

1,497,819
662,793

$680,224

$447,215

$1,033,173 $2,160,612

Our estimates of claims and claim expense reserves are not precise in that, among other matters, they are based
on predictions of future developments and estimates of future trends and other variable factors. Some, but not all,
of our reserves are further subject to the uncertainty inherent in actuarial methodologies and estimates. Because
a reserve estimate is simply an insurer’s estimate at a point in time of its ultimate liability, and because there are
numerous factors which affect reserves and claims payments but cannot be determined with certainty in
advance, our ultimate payments will vary, perhaps materially, from our estimates of reserves. If we determine in a
subsequent period that adjustments to our previously established reserves are appropriate, such adjustments are
recorded in the period in which they are identified. During the twelve months ended December 31, 2009, 2008
and 2007, changes to prior year estimated claims reserves increased our net income by $244.5 million, $234.8
million and $233.2 million, respectively, excluding the consideration of changes in reinstatement premium, profit
commissions, redeemable noncontrolling interest – DaVinciRe and income tax expense.

Our reserving methodology for each line of business uses a loss reserving process that calculates a point estimate
for the Company’s ultimate settlement and administration costs for claims and claim expenses. We do not
calculate a range of estimates. We use this point estimate, along with paid claims and case reserves, to record
our best estimate of additional case reserves and IBNR in our consolidated financial statements. Under GAAP,
we are not permitted to establish estimates for catastrophe claims and claim expense reserves until an event
occurs that gives rise to a loss.

We recorded $586.3 million of gross claims and claim expenses incurred in 2008 as a result of losses arising
from hurricanes Gustav and Ike which struck the U.S. in the third quarter of 2008. Our estimates of losses from
hurricanes Gustav and Ike are based on factors including currently available information derived from the
Company’s preliminary claims information from certain customers and brokers, industry assessments of losses
from the events, proprietary models, and the terms and conditions of our contracts. Given the magnitude and

110

relatively recent occurrence of these events, as well as the large storms of 2005, including hurricane Katrina,
meaningful uncertainty remains regarding total covered losses for the insurance industry and, accordingly,
several of the key assumptions underlying our loss estimates. In addition, our actual net losses from these events
may increase if our reinsurers or other obligors fail to meet their obligations. Our actual losses from these events
will likely vary, perhaps materially, from these current estimates due to the inherent uncertainties in reserving for
such losses, including the preliminary nature of the available information, the potential inaccuracies and
inadequacies in the data provided by customers and brokers, the inherent uncertainty of modeling techniques
and the application of such techniques, the effects of any demand surge on claims activity and complex coverage
and other legal issues.

Capital Resources

Our total capital resources at December 31, 2009 and 2008 were as follows:

At December 31,
(in thousands)

Common shareholders’ equity
Preference shares

Total shareholders’ equity

5.875% Senior Notes
RenaissanceRe revolving credit facility – borrowed
RenaissanceRe revolving credit facility – unborrowed
DaVinciRe revolving credit facility – borrowed
DaVinciRe revolving credit facility – unborrowed
Renaissance Trading credit facility – borrowed
Renaissance Trading credit facility – unborrowed

Total capital resources

2009

2008

$3,190,786 $2,382,743
650,000

650,000

3,840,786

3,032,743

100,000
—
345,000
200,000
—
—
10,000

100,000
150,000
350,000
200,000
—
—
10,000

$4,495,786 $3,842,743

During 2009, our capital resources increased by $653.0 million, primarily due to our comprehensive income
attributable to RenaissanceRe of $923.4 million, and partially offset by $59.7 million of dividends on
RenaissanceRe common shares during 2009, $51.0 million of common share repurchases during 2009 and by
the decrease in our committed revolving credit facility from $500.0 million to $345.0 million, effective April 9,
2009, as discussed below.

Preference Shares

In December 2006, we raised $300.0 million through the issuance of 12 million Series D Preference Shares; in
March 2004, we raised $250.0 million through the issuance of 10 million Series C Preference Shares; and in
February 2003, we raised $100.0 million through the issuance of 4 million Series B Preference Shares. The
Series D, Series C and Series B Preference Shares may be redeemed at $25 per share at our option on or after
December 1, 2011, March 23, 2009 and February 4, 2008, respectively. Dividends on the Series D, Series C and
Series B Preference Shares are cumulative from the date of original issuance and are payable quarterly in arrears

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at 6.60%, 6.08% and 7.30%, respectively, when, if, and as declared by the Board of Directors. If RenaissanceRe
submits a proposal to our shareholders concerning an amalgamation or submits any proposal that, as a result of
any changes to Bermuda law, requires approval of the holders of RenaissanceRe preference shares to vote as a
single class, RenaissanceRe may redeem the Series D Preference Shares prior to December 11, 2011, at $26
per share. The preference shares have no stated maturity and are not convertible into any other of our securities.

Senior Notes

In January 2003, we issued $100.0 million of 5.875% Senior Notes due February 15, 2013, with interest on the
notes payable on February 15 and August 15 of each year. The notes can be redeemed by us prior to maturity
subject to payment of a “make-whole” premium. The notes, which are senior obligations, contain various
covenants, including limitations on mergers and consolidations, restrictions as to the disposition of the stock of
designated subsidiaries and limitations on liens of the stock of designated subsidiaries, which the Company was
in compliance with as of February 18, 2010.

RenaissanceRe Revolving Credit Facility (“Credit Agreement”)

Effective April 9, 2009, we amended and restated our Credit Agreement. The Credit Agreement provides for a
revolving commitment of $345.0 million. As part of the $345.0 million commitment, letters of credit may be
issued for the account of the Company’s subsidiaries in an aggregate amount up to $150.0 million, of which up
to $75.0 million may be used for the issuance of letters of credit for the account of the Company’s non-insurance
subsidiaries. On November 9, 2009, the Company repaid $150.0 million previously borrowed under the Credit
Agreement. The Company has the right, subject to satisfying certain conditions, to increase the size of the facility
up to $500.0 million, until the expiration of the current term. Amounts borrowed under the Credit Agreement
bear interest at a rate selected by the Company equal to the Base Rate or LIBOR plus a margin, all as more fully
set forth in the Credit Agreement. The scheduled commitment termination date under the Credit Agreement is
March 31, 2010.

The Credit Agreement contains representations, warranties and covenants we believe to be customary for bank
loan facilities of this type, including customary covenants limiting the Company’s ability to merge, consolidate,
enter into negative pledge agreements, sell a substantial amount of assets, incur liens and declare or pay
dividends under certain circumstances. The Credit Agreement also contains certain financial covenants we
believe to be customary for reinsurance and insurance companies in revolving credit facilities of this type, which
generally provide that the Company’s consolidated debt to capital shall not exceed the ratio of 0.35:1 and that the
consolidated net worth (the “Net Worth Requirements”) of the Company and Renaissance Reinsurance shall
equal or exceed $1.8 billion and $960.0 million, respectively, subject to a grace period in the case of the Net
Worth Requirements which is conditioned on, among other things, Renaissance Reinsurance maintaining a
certain financial strength rating, all as more fully set forth in the Credit Agreement. The Company was in
compliance with the financial covenants under the Credit Agreement as of February 18, 2010.

We are currently engaged in discussions with our lenders to renew the Credit Agreement, although it is possible
that such renewal, if any, may be on terms that are less favorable to us than those contained in the existing Credit
Agreement, particularly in light of the ongoing disruptions, uncertainty and volatility in the capital and credit
markets, during which access to capital on attractive terms has been challenging for many companies. Our ability
to renew the Credit Agreement, and the terms of such renewal, if any, will depend upon the facts and
circumstances at the time, including our financial position, operating results and credit and capital market
conditions. In the event that we are unable to renew the Credit Agreement at a reasonable price and otherwise on
terms satisfactory to us or at all, or if we decide not to renew the Credit Agreement in whole or in part, we may
pursue alternative financing arrangements in order to meet our ongoing liquidity needs.

DaVinciRe Revolving Credit Facility

112

and $450.0 million, respectively, and requires DaVinciRe to maintain a debt to capital ratio of no greater than
30%. DaVinciRe was in compliance with the financial covenants as of February 18, 2010. At December 31,
2009, $200.0 million remained outstanding. Neither RenaissanceRe nor Renaissance Reinsurance is a guarantor
of this facility and the lenders have no recourse against us or our subsidiaries other than DaVinciRe and DaVinci
under the DaVinciRe Credit Agreement. Pursuant to the terms of the Credit Agreement, a default by DaVinciRe
on its obligations under the DaVinciRe Credit Agreement will not result in a default under the Credit Agreement.

Renaissance Trading Margin Facility and Guarantees

Renaissance Trading maintains a brokerage facility with a leading prime broker, which has an associated margin
facility. This margin facility, which we believe allows Renaissance Trading to prudently manage its cash position
related to its exchange traded products, is supported by a $10.0 million guarantee issued by RenaissanceRe.
Interest on amounts outstanding under this facility is at overnight LIBOR plus 75 basis points. At December 31,
2009, $nil was outstanding under the facility.

From time to time, the Company provides guarantees to support the weather and energy risk management
operations of Renaissance Trading. As of December 31, 2009, there were approximately $161.0 million of such
guarantees outstanding. We expect the amount of these guarantees to fluctuate over time.

Letter of Credit Facilities

Under the terms of certain reinsurance contracts, our insurance and reinsurance subsidiaries and joint ventures
may be required to provide letters of credit to reinsureds in respect of reported claims and/or unearned
premiums. Our principal letter of credit facility is evidenced by a Second Amended and Restated Reimbursement
Agreement, dated as of April 27, 2007 (the “Principal Facility”), and is a syndicated secured facility which
matures on April 27, 2010. The Principal Facility evidences a commitment from the lenders thereunder in an
aggregate amount of $1.4 billion, which may be increased up to an amount not to exceed $1.8 billion provided
certain conditions are met. The Principal Facility contains representations, warranties and covenants we believe
to be customary for facilities of this type, including customary covenants limiting the ability to merge, consolidate,
sell a substantial amount of assets, incur indebtedness and declare or pay dividends. The Principal Facility also
contains certain financial covenants we believe to be customary for reinsurance and insurance companies in
facilities of this type, which require the Company and DaVinci to maintain a minimum net worth of $750.0 million
and $300.0 million, respectively. We were in compliance with these financial covenants as of February 18, 2010.

Under the Principal Facility, our participating operating subsidiaries and our managed joint ventures have
pledged (and must maintain as pledged) as collateral shares issued to them by our subsidiary, Renaissance
Investment Holdings Ltd. (“RIHL”), with a sufficient collateral value to support their respective obligations under
the Principal Facility, including reimbursement obligations for outstanding letters of credit. In addition, for liquidity
purposes, in order to be permitted to pledge RIHL shares as collateral, each participating subsidiary and joint
venture must maintain additional unpledged RIHL shares that have a net asset value at least equal to 15% of its
facility usage, and RIHL shares having an aggregate net asset value equal to at least 15% of the net asset value of
all outstanding RIHL shares must remain unencumbered. The participating subsidiaries and joint ventures have
the option to post alternative forms of collateral. In the case of a default under the Principal Facility, or in other
circumstances in which the rights of the lenders thereunder to collect on their collateral may be impaired, the
lenders may exercise certain remedies, including redemption of pledged shares and conversion of the collateral
into cash or eligible marketable securities. The redemption of shares by the collateral agent takes priority over any
pending redemption of unpledged shares by us or other holders.

We are currently engaged in discussions with our lenders to renew the Principal Facility, although it is possible
that such renewal, if any, may be on terms that are less favorable to us than those contained in the existing
Principal Facility, particularly in light of the ongoing disruptions, uncertainty and volatility in the capital and credit
markets, during which access to capital on attractive terms has been challenging for many companies. Our ability
to renew the Principal Facility, and the terms of such renewal, if any, will depend upon the facts and
circumstances at the time, including our financial position, operating results and credit and capital market
conditions. In the event that we are unable to renew the Principal Facility at a reasonable price and otherwise on
terms satisfactory to us or at all, we may have to seek alternative means of supporting the operations of our
Bermuda-based entities, which could include utilizing holding company funds. These alternatives, if required,
could increase our operating expenses on an absolute and relative basis compared to past periods.

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On April 29, 2009, Renaissance Reinsurance entered into a Master Reimbursement Agreement (the
“Reimbursement Agreement”) and a Pledge Agreement (the “Pledge Agreement”) with Citibank Europe PLC
(“CEP”). The Reimbursement Agreement provides for the issuance and renewal of letters of credit by CEP from
time to time in its sole discretion, which are used to support business written by Syndicate 1458. At
December 31, 2009, two letters of credit issued by CEP under the Reimbursement Agreement were outstanding,
in the amount of $74.3 million and £15.0 million, respectively, each having an expiration date of December 31,
2013. Pursuant to the Pledge Agreement, Renaissance Reinsurance has agreed to pledge to CEP and maintain
certain securities with a collateral value equal to 75% of the aggregate amount of the then-outstanding letters of
credit. In respect of the 25% unsecured portion, Renaissance Reinsurance is required to comply with certain
financial covenants, including maintaining a certain minimum financial strength rating, minimum net worth, and
a maximum consolidated debt to capital ratio for the consolidated group. In the event Renaissance Reinsurance
is unable to satisfy any of these financial covenants, it will be required to pledge additional collateral in respect of
the unsecured portion. We were in compliance with these financial covenants as of February 18, 2010.

In addition, our subsidiary, Stonington, is a party to a collateralized letter of credit and reimbursement agreement,
pursuant to which letters of credit in an aggregate amount of $6.6 million have been issued for the benefit of two
counterparties. Stonington’s obligations under this facility are secured by cash and eligible marketable securities.
Renaissance Reinsurance is also party to a collateralized letter of credit and reimbursement agreement in the
amount of $37.5 million that supports our Top Layer Re joint venture. Renaissance Reinsurance is obligated to
make a mandatory capital contribution of up to $50.0 million in the event that a loss reduces Top Layer Re’s
capital below a specified level.

At February 10, 2010, we had $760.7 million of letters of credit with effective dates on or before December 31,
2009 outstanding under the Principal Facility and total letters of credit outstanding under all facilities of $847.0
million.

Redeemable Noncontrolling Interest – DaVinciRe

DaVinciRe shareholders are party to a shareholders agreement (the “Shareholders Agreement”) which provides
DaVinciRe shareholders, excluding us, with certain redemption rights, that enable each shareholder to notify
DaVinciRe of such shareholder’s desire for DaVinciRe to repurchase up to half of such shareholder’s aggregate
number of shares held, subject to certain limitations, such as limiting the aggregate of all share repurchase
requests to 25% of DaVinciRe’s capital in any given year and satisfying all applicable regulatory requirements. If
total shareholder requests exceed 25% of DaVinciRe’s capital, the number of shares repurchased will be reduced
among the requesting shareholders pro-rata, based on the amounts desired to be repurchased. Shareholders
desiring to have DaVinciRe repurchase their shares must notify DaVinciRe before March 1 of each year. The
repurchase price will be based on GAAP book value as of the end of the year in which the shareholder notice is
given, and the repurchase will be effective as of such date. Payment will be made by April 1 of the following year,
following delivery of the audited financial statements for the year in which the repurchase was effective. The
repurchase price is subject to a true-up for development on outstanding loss reserves after settlement of all
claims relating to the applicable years. Certain third party shareholders of DaVinciRe submitted repurchase
notices on or before the required annual redemption notice date of March 1, 2009, in accordance with the
Shareholders Agreement. The repurchase notices submitted on or before March 1, 2009, were for shares of
DaVinciRe with a GAAP book value of $173.6 million at December 31, 2009. Effective January 1, 2010,
DaVinciRe redeemed the shares for $173.6 million, less a $17.6 million reserve holdback, and, in a separate
transaction, we sold a portion of our shares in DaVinciRe to a third party shareholder. As a result of these
transactions, our ownership interest in DaVinciRe increased to 41.2%. We expect our ownership in DaVinciRe to
fluctuate over time.

Credit Ratings

Our ratings continue to be among the highest in our industry and continue to be supported by our strong
financial position. Our credit ratings are also supported by our prudent ERM practices which are rated “excellent”
by S&P.

On November 2, 2009, Moody’s raised the insurance FSR of Renaissance Reinsurance to A1 from A2 and the
senior debt rating of RenaissanceRe to A3 from Baa1. The outlook is stable for these ratings.

114

On January 29, 2009, A.M. Best affirmed the FSR of “A+” (Superior) of Renaissance Reinsurance and
Renaissance Europe. A.M. Best also affirmed the issuer credit rating (“ICR”) of “a-” on the Company’s senior
notes. Concurrently, A.M. Best upgraded the FSR to “A” (Excellent) from “A-” (Excellent) for Glencoe, Lantana,
Stonington and Stonington Lloyds. Additionally, the FSR of DaVinci was affirmed at “A” (Excellent). The outlook is
stable for these ratings.

On January 21, 2009, S&P initiated coverage of Renaissance Europe, assigning a rating of “AA-” for both its CCR
and FSR. The outlook on Renaissance Europe is stable.

Although the ratings of Renaissance Reinsurance are among the highest in our business, adverse ratings actions
could have a negative effect on our ability to fully realize current or future market opportunities. Moreover, if our
ratings are reduced from their current levels by A.M. Best, S&P, Moody’s or Fitch, we believe our competitive
position in the insurance industry would suffer and it would be more difficult for us to market our products. A
significant downgrade could result in a substantial loss of business as ceding companies and brokers that place
such business move to other reinsurers with higher ratings. We cannot give any assurance regarding whether or to
what extent the rating agencies may downgrade our ratings. In addition, it is increasingly common for our
reinsurance contracts to contain provisions permitting our customers to cancel coverage pro-rata if our relevant
operating subsidiary is downgraded below a certain rating level. Whether a client would exercise this right would
depend, among other factors, on the reason for such a downgrade, the extent of the downgrade, the prevailing
market conditions and the pricing and availability of replacement reinsurance coverage. Therefore, in the event of
a downgrade, it is not possible to predict in advance the extent to which this cancellation right would be exercised,
if at all, or what effect such cancellations would have on our financial condition or future operations, but such
effect potentially could be material. To date, we are not aware that we have experienced such a cancellation.

Shareholders’ Equity

Our shareholders’ equity increased $808.0 million to $3.8 billion at December 31, 2009 from $3.0 billion at
December 31, 2008. The significant components of the increase in shareholders’ equity includes our
comprehensive income attributable to RenaissanceRe of $923.4 million, partially offset by $59.7 million of
dividends paid to RenaissanceRe common shareholders and $51.0 million of common share repurchases made
during 2009.

Investments

The table below shows the aggregate amounts of our invested assets at December 31, 2009 and 2008:

At December 31,
(in thousands, except percentages)

Total fixed maturity investments, at fair value (1)

Short term investments, at fair value
Other investments, at fair value

Total managed investment portfolio

Investments in other ventures, under equity method

Total investments

2009

2008

2.6%
3.2%
13.7%
4.0%
18.2%
6.3%
0.6%
4.0%
1.5%

$ 918,157
165,577
198,059
855,988
248,746
1,135,504
393,397
36,383
251,472
92,509
4,295,792
1,002,306
858,026
6,156,124
97,287

7.8%
7.4%
0.9%
3.4%
0.1%
8.9%
12.5%
1.6%
4.3%
2.7%
49.6%
36.0%
12.8%
98.4%
1.6%
$6,253,411 100.0% $6,042,582 100.0%

14.7% $ 467,480
448,521
55,370
207,393
3,530
537,975
756,902
98,672
255,020
166,022
68.8% 2,996,885
16.0% 2,172,343
773,475
13.7%
98.5% 5,942,703
99,879

1.5%

(1)

115

At December 31, 2009, we held investments totaling $6.3 billion, compared to $6.0 billion at December 31,
2008, with net unrealized appreciation included in accumulated other comprehensive income of $46.0 million at
December 31, 2009, compared to $79.9 million at December 31, 2008. Our investment guidelines stress
preservation of capital, market liquidity, and diversification of risk. Notwithstanding the foregoing, our investments
are subject to market-wide risks and fluctuations, as well as to risks inherent in particular securities.

The large majority of our investments consist of highly rated fixed income securities. We also have an allocation to
other investments, including hedge funds, private equity partnerships, senior secured bank loan funds and other
investments. At December 31, 2009, these other investments totaled $858.0 million, or 13.7%, of our total
investments (2008 – $773.5 million or 12.8%).

At December 31, 2009, our fixed maturity investments and short term investment portfolio had a dollar-weighted
average credit quality rating of AA (2008 – AA). At December 31, 2009, our average yield to maturity on our fixed
maturity investments and our short term investment portfolio was 2.3% (2008 – 2.8%). At December 31, 2009,
our non-investment grade fixed maturity investments totaled $85.2 million or 2.0% of our fixed maturity
investments (2008 – $58.5 million or 2.0%, respectively). In addition, within our other investments category we
have several funds that invest in non-investment grade fixed income securities and non-investment grade
cat-linked securities. At December 31, 2009, the funds that invest in non-investment grade fixed income
securities and non-investment grade cat-linked securities totaled $410.8 million (2008 – $317.1 million).

As of December 31, 2009, we had $1,002.3 million of short term investments (2008 – $2,172.3 million). Short
term investments are managed as part of our investment portfolio and have a maturity of one year or less when
purchased. Short term investments are carried at fair value. During 2009, we decreased our allocation to short
term investments by $1.2 billion, and increased our allocation to fixed maturity investments by $1.3 billion.

Our target benchmark portfolio for our fixed maturity investments and short term investments currently has a 3.2
year duration. Our duration at December 31, 2009 was 2.6 years (2008 – 1.5 years), reflecting our view that the
current level of rates affords inadequate compensation for the assumption of additional interest rate risk
associated with longer duration. From time to time, we may reevaluate the duration of our portfolio in light of the
duration of our liabilities and market conditions.

As with other fixed income investments, the value of our fixed maturity investments will fluctuate with changes in
the interest rate environment and when changes occur in the overall investment market and in overall economic
conditions. Additionally, our differing asset classes expose us to other risks which could cause a reduction in the
value of our investments. Examples of some of these risks include:

(cid:129)

Changes in the overall interest rate environment can expose us to “prepayment risk” on our mortgage-
backed investments. When interest rates decline, consumers will generally make prepayments on their
mortgages and, as a result, our investments in mortgage-backed securities will be repaid to us more
quickly than we might have originally anticipated. When we receive these prepayments, our
opportunities to reinvest these proceeds back into the investment markets will likely be at reduced
interest rates. Conversely, when interest rates increase, consumers will generally make fewer
prepayments on their mortgages and, as a result, our investments in mortgage-backed securities will be
repaid to us less quickly than we might have originally anticipated. This will increase the duration of our
portfolio, which is disadvantageous to us in a rising interest rate environment.

Our investments in mortgage-backed securities are also subject to default risk. This risk is due in part
to defaults on the underlying securitized mortgages, which would decrease the market value of the
investment and be disadvantageous to us.

Our investments in debt securities of other corporations are exposed to losses from insolvencies of
these corporations, and our investment portfolio can also deteriorate based on reduced credit quality of
these corporations. We are also exposed to widening credit spreads even if specific securities are not
downgraded.

Our investments in asset-backed securities are subject to prepayment risks, as noted above, and to the
structural risks of these securities. The structural risks primarily emanate from the priority of each
security in the issuer’s overall capital structure. We are also exposed to widening credit spreads.

116

(cid:129) Within our other investments category, we have several funds that invest in non-investment grade fixed
income securities as well as securities denominated in foreign currencies. These investments expose us
to losses from insolvencies and other credit-related issues. We are also exposed to fluctuations in
foreign exchange rates that may result in realized losses to us if our exposures are not hedged or if our
hedging strategies are not effective and also to widening of credit spreads.

The following table summarizes the fair value by contractual maturity of our fixed maturity investment portfolio at
the dates indicated. Actual maturities may differ from contractual maturities because borrowers may have the
right to call or prepay obligations with or without penalty.

At December 31,
(in thousands, except percentages)

Due in less than one year
Due after one through five years
Due after five through ten years
Due after ten years
Mortgage-backed securities
Asset-backed securities

2009

2008

83,280
2,867,397
498,382
72,972
681,252
92,509

1.9% $ 115,316
66.7% 1,327,837
183,396
11.6%
93,720
1.7%
15.9% 1,110,594
166,022

2.2%

3.8%
44.4%
6.1%
3.1%
37.1%
5.5%

Total fixed maturity investments, at fair value

$4,295,792 100.0% $2,996,885 100.0%

The following table summarizes the composition of the fair value of our fixed maturity investments at the dates
indicated by ratings as assigned by S&P, or Moody’s and/or other rating agencies when S&P ratings were not
available.

At December 31,
(in thousands, except percentages)

AAA
AA
A
BBB
Non-investment grade

2009

2008

$3,107,713
493,965
424,563
184,374
85,177

72.3% $2,524,500
147,405
11.5%
200,318
9.9%
66,123
4.3%
58,539
2.0%

84.2%
4.9%
6.7%
2.2%
2.0%

Total fixed maturity investments, at fair value

$4,295,792 100.0% $2,996,885 100.0%

Our fixed maturity investments are classified as available for sale and trading and are reported at fair value. The
net unrealized appreciation or depreciation on fixed maturity investments available for sale is included in
accumulated other comprehensive income. The net unrealized gains (losses) on fixed maturity investments
trading is included in net realized and unrealized gains on fixed maturity investments. Net investment income
includes interest income together with amortization of market premiums and discounts and is net of investment
management and custody fees. The amortization of premium and accretion of discount for fixed maturity
investments is computed using the effective yield method. The fair values of our fixed maturity investments are
based on quoted market prices, or when such prices are not available, by reference to broker or trader bid
indications and/or internal pricing valuation techniques.

Realized gains or losses on the sale of investments are determined on the basis of the first in first out cost method
and include adjustments to the cost basis of investments for declines in value that are considered to be other-
than-temporary. Pursuant to authoritative guidance effective April 1, 2009, we revised our quarterly process for
assessing whether declines in the fair value of our fixed maturity investments available for sale represent
impairments that are other-than-temporary. The process now includes reviewing each fixed maturity investment
available for sale that is impaired and determining: (i) if we have the intent to sell the debt security or (ii) if it is
more likely than not that we will be required to sell the debt security before its anticipated recovery; and
(iii) assessing whether a credit loss exists, that is, where we expect that the present value of the cash flows
expected to be collected from the security are less than the amortized cost basis of the security. See “Note 6.
Investments in our Notes to Consolidated Financial Statements” for additional information regarding other-than-
temporary impairments.

117

During 2009, we recorded $22.5 million (2008 – $217.0 million, 2007 – $25.5 million) in net other-than-
temporary impairment charges. The significant decrease in net other-than-temporary impairments is due to a
combination of improved economic conditions during 2009, compared to 2008, and the adoption of new
authoritative accounting guidance related to the recognition and presentation of other-than-temporary
impairments adopted during the second quarter of 2009. The net other-than-temporary impairment charges in
2009 and 2008 were primarily due to widening credit spreads during the early part of 2009 and throughout 2008
as a result of the turmoil in the financial and capital markets and the net other–than-temporary impairment
charges in 2007 were principally due to rising interest rates. For the three months ended December 31, 2009,
and the years ending December 31, 2008 and 2007, we recognized impairment charges for principally all of our
fixed maturity investments available for sale that were in an unrealized loss position at the end of each quarter as
under prior authoritative accounting guidance we did not have the intent to hold them until they fully recovered in
value. Credit-related impairment charges were $21.2 million, $8.3 million and $nil in 2009, 2008 and 2007,
respectively, and relate to impaired securities which we believe we will not be able to recover the full principal
amount if held to maturity. At December 31, 2009 and 2008, we held 108 and nil, respectively, fixed maturity
investments available for sale securities that were in an unrealized loss position. At December 31, 2009 and
2008, our gross unrealized losses on fixed maturity investments available for sale totaled $17.1 million and $nil,
respectively.

118

Credit Rating and Yield to Maturity

The following table summarizes the composition of the amortized cost and fair value of our fixed maturity investments, short term
investments and other investments at the date indicated by ratings as assigned by S&P, or Moody’s and/or other rating agencies
when S&P ratings were not available and the respective yield to maturity.

Amortized
Cost

Fair
Value

% of Total
Managed
Investment
Portfolio

Yield to
Maturity

AAA

BBB

Non-
Investment
Grade

Not Rated

Credit Rating (1)

At December 31, 2009
(in thousands, except percentages)

Short term investments

$1,002,306 $1,002,306

16.3% 0.2% $ 976,986 $

1,502 $ 22,660 $

100.0%

97.5%

0.1%

2.3%

1,158 $
0.1%

— $
0.0%

—
0.0%

Fixed maturity investments

U.S. treasuries
Agencies
Fannie Mae & Freddie Mac
Other agencies

926,728

918,157

15.0% 2.1% 918,157

83,051
81,020

83,632
81,945

1.4% 1.7%
1.3% 1.7%

78,827
81,945

Total agencies

164,071

165,577

2.7% 1.7% 160,772

—

—
—

—

4,805
—

4,805

—

—
—

—

—
—

—

—
—

—

Non-U.S. government (Sovereign

debt)

189,922

198,059

3.2% 3.3% 130,948

21,670

12,954

22,777

8,989

721

FDIC guaranteed corporate

850,193

855,988

13.9% 1.4% 855,988

—

248,888

248,746

4.0% 2.5% 239,805

8,941

1,111,299 1,135,504

18.4% 3.7%

78,040

454,694

378,698

149,059

72,163

2,850

—

Non-U.S. government-backed

corporate

Corporate

Mortgage-backed securities

Residential mortgage-backed

securities

Agency securities
Non-agency securities
Non-agency securities – Alt A
Non-agency securities – Sub-

prime

Total residential mortgage-

backed securities

Commercial mortgage-backed

securities

391,838
21,285
13,786

393,397
21,822
14,561

6.4% 3.5% 393,397
15,522
0.4% 6.6%
11,843
0.2% 9.6%

—

0.0% 0.0%

—

426,909

429,780

7.0% 3.9% 420,762

253,713

251,472

4.1% 4.8% 210,732

Total mortgage-backed securities

680,622

681,252

11.1% 4.2% 631,494

Asset-backed securities

Student loans
Auto
Credit cards
Other

Total asset-backed securities

51,936
19,402
6,964
11,141

89,443

54,973
19,604
7,093
10,839

92,509

0.9% 1.4%
0.3% 1.5%
0.1% 0.9%
0.2% 4.4%

1.5% 1.7%

54,973
19,604
7,093
10,839

92,509

—
5,402
916

—

6,318

2,342

8,660

—
—
—
—

—

—
—
1,473

—

1,473

26,633

28,106

—
—
—
—

—

—
773
—

—

773

11,765

12,538

—
—
—
—

—

—
125
329

—

454

—

454

—
—
—
—

—

—
—
—

—

—
—
—
—

—

Total securitized assets

770,065

773,761

12.6% 3.9% 724,003

8,660

28,106

12,538

454

Total fixed maturity investments

4,261,166 4,295,792

69.8% 2.8% 3,107,713

493,965

424,563

184,374

81,606

100.0%

72.3%

11.5%

9.9%

4.3%

1.9%

3,571

0.1%

Other investments

Private equity partnerships
Senior secured bank loan funds
Catastrophe bonds
Non-U.S. fixed income funds
Hedge funds
Miscellaneous other

investments

Total other investments

286,108
245,701
160,051
75,891
54,163

36,112

858,026

4.6%
4.0%
2.6%
1.2%
0.9%

0.6%

13.9%

Total managed investment portfolio

$6,156,124

100.0%

—
—
—
—
— 25,595
—
—
—
—

—
—
—
— 45,215
—
—

—
— 245,701
— 134,456
30,676

— 286,108
—
—
—
— 54,163

—

— 27,750

—

8,362

— 25,595

— 72,965

410,833

348,633

$4,084,699 $521,062 $447,223 $258,497 $492,439 $352,204
7.3%

66.3%

8.5%

4.2%

8.0%

5.7%

(1) The credit ratings included in this table are those assigned by Standard & Poor’s Corporation. The Company has grouped short term investments with

an A-1+ and A-1 short-term issue credit rating as AAA, short term investments with A-2 short-term issue credit rating as AA and short term investments
with an A-3 short-term issue credit rating as A.

119

The following table summarizes the composition of the fair value of our corporate fixed maturity investments at
the date indicated by ratings as assigned by S&P, or Moody’s and/or other rating agencies when S&P ratings were
not available.

At December 31, 2009
(in thousands)

Sector

Total

AAA

BBB

Financials
Industrial, utilities and energy
Consumer
Communications and technology
Basic materials

Total corporate fixed maturity

$ 555,341 $37,317 $252,644 $231,541 $ 26,490
48,902
31,152
25,505
17,010

50,465
151,585
—
—

184,799
259,646
111,988
23,730

—
25,613
15,110
—

63,383
23,735
56,008
4,031

Non-Investment
Grade

$ 7,349
22,049
27,561
15,365
2,689

investments, at fair value (1)

$1,135,504 $78,040 $454,694 $378,698 $149,059

$75,013

(1) Excludes FDIC guaranteed and non-U.S. government backed corporate fixed maturity investments, at fair

value.

The following table summarizes the composition of the fair value of the fixed maturity investments and short term
investments of our top ten corporate issuers at the date indicated.

At December 31, 2009
(in thousands)

Issuer

General Electric Company
Wells Fargo & Company
JP Morgan Chase & Co.
Pfizer Inc.
Novartis AG
Rabobank Nederland
Credit Suisse Group AG
Citigroup Inc.
Barclays PLC
Bank of America Corporation

Total (1)

Total

Fixed maturity
investments

Short term
investments

$ 84,959
75,614
60,415
38,291
31,304
28,873
28,529
27,612
26,996
26,416

$ 83,210
75,614
58,615
38,291
31,304
27,373
28,529
25,812
24,999
25,906

$1,749
—
1,800
—
—
1,500
—
1,800
1,997
510

$429,009

$419,653

$9,356

(1) Excludes FDIC guaranteed and non-U.S. government backed corporate fixed maturity and short term

investments, at fair value.

Other Investments

The table below shows our portfolio of other investments at December 31, 2009 and 2008:

At December 31,
(in thousands)

Private equity partnerships
Senior secured bank loan funds
Catastrophe bonds
Non-U.S. fixed income funds
Hedge funds
Miscellaneous other investments

Total other investments

120

2009

2008

$286,108 $258,901
215,870
93,085
81,719
105,838
18,062

245,701
160,051
75,891
54,163
36,112

$858,026 $773,475

The fair value of certain of our fund investments, which principally include hedge funds, private equity
partnerships, senior secured bank loan funds and non-U.S. fixed income funds, is generally established on the
basis of the net valuation criteria established by the managers of such investments, if applicable. These net asset
valuations are determined based upon the valuation criteria established by the governing documents of such
investments. Such valuations may differ significantly from the values that would have been used had ready
markets existed for the shares, partnership interests or notes. Many of our fund investments are subject to
restrictions on redemptions and sales which are determined by the governing documents and limit our ability to
liquidate these investments in the short term. In addition, due to a lag in reporting, some of our fund managers,
fund administrators, or both, are unable to provide final fund valuations as of our current reporting date. In these
circumstances, we estimate the fair value of these funds by starting with the prior month’s or quarter’s fund
valuation, adjusting these valuations for capital calls, redemptions or distributions and the impact of changes in
foreign currency exchange rates, and then estimating the return for the current period. In circumstances in which
we estimate the return for the current period, we use all credible information available to us. This principally
includes preliminary estimates reported to us by our fund managers, obtaining the valuation of underlying
portfolio investments where such underlying investments are publicly traded and therefore have a readily
observable price, using information that is available to us with respect to the underlying investments, reviewing
various indices for similar investments or asset classes, as well as estimating returns based on the results of
similar types of investments for which we have reported results, or other valuation methods, as necessary. Actual
final fund valuations may differ from our estimates and these differences are recorded in the period they become
known as a change in estimate. Our estimate of the fair value of catastrophe bonds are based on quoted market
prices, or when such prices are not available, by reference to broker or underwriter bid indications.

The table below shows our portfolio of other investments measured using net asset valuations:

At December 31, 2009
(in thousands)

Fair Value

Unfunded
Commitments

Redemption
Frequency

Redemption
Notice Period

Private equity partnerships
Senior secured bank loan funds
Non-U.S. fixed income funds
Hedge funds

$286,108
245,701
75,891
54,163

See below
$182,493
See below
—
— Monthly, Bi-monthly
5 - 20 days
— Annually, Bi-annually 45 - 90 days

See below
See below

Total other investments measured using

net asset valuations

$661,863

$182,493

Private equity partnerships – Included in our investments in private equity partnerships are alternative asset
limited partnerships that invest in certain private equity asset classes including U.S. and global leveraged
buyouts; mezzanine investments; distressed securities; real estate; oil, gas and power; and secondaries. The fair
values of the investments in this category have been estimated using the net asset value per share of the
investments. We generally have no right to redeem our interest in any of these private equity partnerships in
advance of dissolution of the applicable partnership. Instead, the nature of these investments is that distributions
are received by us in connection with the liquidation of the underlying assets of the applicable limited
partnership. If these investments were held, it is estimated that the majority of the underlying assets of the limited
partnerships would liquidate over 7 to 10 years.

Senior secured bank loan funds – Our investment in senior secured bank loan funds includes funds that invest
primarily in bank loans and other senior debt instruments. The fair values of the investments in this category have
been estimated using the net asset value per share of the funds. Investments of $147.1 million are redeemable,
in whole or in part, on a monthly basis. Currently, we generally have no right to redeem our remaining $98.6
million investment in bank loan funds in advance of dissolution of the applicable funds. Instead, the nature of
these investments is that distributions are received by us in connection with the liquidation of the underlying
assets of the applicable fund. If these investments were held, it is estimated that the majority of the underlying
assets of the funds would liquidate over 6 to 8 years. It is our understanding that the management of the senior
secured bank loan funds which currently cannot generally be redeemed is planning to restructure these
investments during 2010, in such a way that we may have the option to transfer our investment to a fund
structure which we would liquidate in the near term, although we cannot assure you this restructuring will be
consummated.

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Non-U.S. fixed income funds – The Company’s non-U.S. fixed income funds invest primarily in European high
yield bonds, non-U.S. convertible securities and high income convertible securities. The fair values of the
investments in this category have been estimated using the net asset value per share of the investments.
Investments of $45.2 million are redeemable, in whole or in part, on a bi-monthly basis. The remaining $30.7
million can generally only be redeemed by the Company at a rate of 10% per month. These investments may
permit redemptions which exceed this amount, but they are not obliged to do so.

Hedge funds – The Company invests in hedge funds that pursue multiple strategies without limiting itself to a
pre-defined strategy or set of strategies. The strategies employed include, among others, the following:
fundamentally driven long/short; event oriented; credit, distressed credit and structured credit investments and
arbitrage; capital structure arbitrage; and private investments. The fair values of the investments in this category
have been estimated using the net asset value per share of the investments. Included in the Company’s hedge
fund investments is $10.7 million of side pocket investments which are not redeemable at the option of the
shareholder. As to each investment in a hedge fund that includes side pocket investments, if the investment is
otherwise fully redeemed, the Company will still retain its interest in the side pocket investments until the
underlying investments attributable to such side pockets are liquidated, realized or deemed realized at the
discretion of the fund manager.

Interest income, income distributions and realized and unrealized gains and losses on other investments are
included in net investment income and totaled $163.6 million in 2009 (2008 – negative $219.6 million,
2007 – positive $105.5 million) of which $88.5 million was related to net unrealized gains (2008 – net unrealized
losses of $259.4 million, 2007 – net unrealized gains of $47.3 million). Our investment in hedge funds decreased
$51.7 million to $54.2 million at December 31, 2009, compared to $105.8 million at December 31, 2008,
principally as a result of $57.0 million in redemptions during 2009.

We have committed capital to private equity partnerships and other entities of $650.7 million, of which $424.2
million has been contributed at December 31, 2009. Our remaining commitments to these funds at
December 31, 2009 totaled $223.6 million. In the future, we may enter into additional commitments in respect of
private equity partnerships or individual portfolio company investment opportunities.

Investments in Other Ventures, under Equity Method

The table below shows our investments in other ventures, under equity method:

Year ended December 31,
(in thousands, except percentages)

Tower Hill Companies
Top Layer Re
Tower Hill
Other

Total investments in other

2009

2008

Investment

Ownership % Carrying Value

Investment

Ownership % Carrying Value

$50,000
13,125
10,000
12,040

25.0%
50.0%
28.6%
n/a

$41,544
26,329
14,437
14,977

$50,000
13,125
10,000
12,040

25.0%
50.0%
28.6%
n/a

$47,699
25,367
15,227
11,586

$99,879

ventures, under equity method

$85,165

$97,287

$85,165

Investments in other ventures, under equity method, also includes the Company’s investment in ChannelRe of
$nil (2008 – $nil). During 2007, ChannelRe, suffered a significant net loss which reduced ChannelRe’s GAAP
shareholders’ equity below $nil. The net loss was driven by unrealized mark-to-market losses related to financial
guaranty contracts accounted for as derivatives under GAAP. As a result, the Company reduced its carried value
in ChannelRe to $nil which negatively impacted our net income by $151.8 million in 2007. As a result of
reducing the Company’s carried value in ChannelRe to $nil, combined with the fact that the Company has no
further contractual obligations to provide capital or other support to ChannelRe, the Company believes it currently
has no further negative economic exposure to ChannelRe. Since ChannelRe remained in a negative shareholders’
equity position during 2008 and 2009, the Company’s investment in ChannelRe continues to be carried at $nil. It
is possible that in future periods the nonperformance risk or own credit risk portion of ChannelRe’s
mark-to-market on its financial guaranty contracts accounted for as derivatives under GAAP may increase, or that

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the underlying mark-to-market on ChannelRe’s financial guaranty contracts accounted for as derivatives under
GAAP may decrease, or both, which could result in ChannelRe returning to a positive equity position, at which
time the Company would then record its share of ChannelRe’s net income, subject to impairment, or the
Company’s share of ChannelRe’s net loss, although we currently do not expect the losses to reverse.

On July 1, 2008, the Company invested $50.0 million in the Tower Hill Companies representing a 25.0% equity
ownership. Included in the purchase price was $40.0 million of other intangibles and $7.8 million of goodwill,
which, in accordance with generally accepted accounting principles, are recorded as “Investments in other
ventures, under equity method” rather than “Goodwill and other intangibles” on the Company’s consolidated
balance sheet.

The Company’s share of the equity in earnings of Tower Hill and the Tower Hill Companies are reported one
quarter in arrears.

RIHL

RIHL, a wholly owned subsidiary of the Company, holds investment grade fixed maturity securities and short term
investments and was formed to enhance administrative efficiency and take advantage of the increased benefits
and reduced costs ordinarily associated with the management of large investment portfolios of different
subsidiaries in the same group. In addition, the administrative efficiency afforded by the use of RIHL facilitates
the establishment of our collateralized letter of credit facility on advantageous terms that we believe would
otherwise not be available. Through RIHL, certain of our operating subsidiaries invest in a diversified portfolio of
highly liquid debt securities which are recorded at fair value. RIHL has been assigned a rating of AAAf/S2 by S&P
and 100% of the securities held through RIHL have been assigned a rating of A or higher by nationally
recognized rating agencies. We may redeem our interests in RIHL at the current net asset value no more
frequently than monthly. Third party service providers perform custodial functions in respect of RIHL, including
valuation of the investment assets held through RIHL. Currently, external investment managers manage the
assets held through RIHL, pursuant to written investment guidelines.

Under the terms of certain reinsurance contracts, certain of our subsidiaries and joint ventures are required to
provide letters of credit to reinsureds in respect of reported claims and/or unearned premiums. We maintain a
facility which, as of December 31, 2009, makes available to our operating subsidiaries and joint ventures letters
of credit having an aggregate face amount not to exceed $1.4 billion. To support the facility, our participating
operating subsidiaries and joint ventures have pledged RIHL shares and other securities owned by them as
collateral. At February 10, 2010, we had $760.7 million of letters of credit with effective dates on or before
December 31, 2009 outstanding under our $1.4 billion letter of credit facility and $847.0 million of total letters of
credit outstanding under all facilities.

Effects of Inflation

The potential exists, after a catastrophe loss, for the development of inflationary pressures in a local economy.
The anticipated effects on us are considered in our catastrophe loss models. Our estimates of the potential effects
of inflation are also considered in pricing and in estimating reserves for unpaid claims and claim expenses. In
addition, as summarized in “Current Outlook” below, it is possible that the risk of general economic inflation has
increased which could, among other things, cause claims and claim expenses to increase and also impact the
performance of our investment portfolio. The actual effects of this inflation on our results cannot be accurately
known until, among other items, claims are ultimately settled. The onset, duration and severity of an inflationary
period cannot be estimated with precision.

Off-Balance Sheet and Special Purpose Entity Arrangements

At December 31, 2009, we have not entered into any off-balance sheet arrangements, as defined by
Item 303(a)(4) of Regulation S-K.

Recently Issued Accounting Pronouncements

Accounting Standards Codification

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Effective for financial statements issued for interim and annual periods ending after September 15, 2009 the
FASB ASC (the “Codification”) is now the authoritative source of U.S. GAAP. The Codification changes the
structure of authoritative guidance to a Topic based model versus the previous model of Original
Pronouncements, modified by Emerging Issues Task Force Abstracts, FASB Staff Positions, etc. Among other
things, the Codification is expected to: reduce the amount of time and effort required to solve an accounting
research issue; mitigate the risk of noncompliance through improved usability of the literature; provide accurate
information with real-time updates as Accounting Standards Updates are released; and assist the FASB with
research and convergence efforts. The adoption of the Codification did not impact our consolidated statements of
operations and financial condition.

Accounting for Transfers of Financial Assets

In June 2009, the FASB issued Statement No. 166, Accounting for Transfers of Financial Assets – an
amendment of FASB Statement No. 140, and the FASB subsequently codified it as Accounting Standard Update
(“ASU”) 2009-16, updating ASC Topic 860 Transfers and Servicing. The objective of ASU 2009-16 is to improve
the relevance, representational faithfulness, and comparability of the information that a reporting entity provides
in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position,
financial performance, and cash flows; and a transferor’s continuing involvement, if any, in transferred financial
assets. ASU 2009-16 must be applied as of the beginning of the reporting entity’s first annual reporting period
that begins after November 15, 2009, for interim periods within that first annual period and for interim and
annual reporting periods thereafter. Earlier application is prohibited. ASU 2009-16 must be applied to transfers
occurring on or after the effective date. Additionally, the disclosure provisions of ASU 2009-16 should be applied
to transfers that occurred both before and after the effective date. We are currently evaluating the potential
impacts of the adoption of ASU 2009-16 on our consolidated statements of operations and financial condition.

Variable Interest Entities

In June 2009, the FASB issued Statement No. 167, Amendments to FASB Interpretation No. 46(R), and the
FASB subsequently codified it as ASU 2009-17, updating ASC Topic 810 Consolidations. The objective of ASU
2009-17 is to improve financial reporting by enterprises involved with variable interest entities. The FASB
undertook this project to address (1) the effects on certain provisions of FASB Interpretation No. 46,
Consolidation of Variable Interest Entities – an Interpretation of ARB No. 51, as revised (“FIN 46(R)”), as a result
of the elimination of the qualifying special-purpose entity concept in ASU 2009-16, and (2) constituent concerns
about the application of certain key provisions of FIN 46(R), including those in which the accounting and
disclosures under the interpretation do not always provide timely and useful information about an enterprise’s
involvement in a variable interest entity. ASU 2009-17 shall be effective as of the beginning of each reporting
entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first
annual reporting period, and for interim and annual reporting periods thereafter. Earlier application is prohibited.
We are currently evaluating the potential impacts of the adoption of ASU 2009-17 on our consolidated statements
of operations and financial condition.

Investments in Certain Entities That Calculate Net Asset Value per Share

In September 2009, the FASB issued ASU No. 2009-12, Investments in Certain Entities That Calculate Net Asset
Value per Share (or its Equivalent) (“ASU 2009-12”), which amends FASB ASC Topic Fair Value Measurements
and Disclosures. ASU 2009-12 provides additional guidance on estimating the fair value of certain alternative
investments, such as hedge funds, private equity investments and venture capital funds. The updated guidance
allows the fair value of such investments to be determined using net asset value (“NAV”) as a practical expedient,
unless it is probable the investment will be sold at a value other than the NAV. In addition, the guidance requires
disclosures by major category of investment regarding the attributes of the investments within the scope of the
guidance, regardless of whether the fair value of the investment is measured using the NAV or other fair value
technique. ASU 2009-12 shall be effective for interim and annual periods ending after December 15, 2009. Early
application is permitted in financial statements for earlier interim and annual periods that have not been issued. If
an entity elects to early adopt the measurement amendments in this update, the entity is permitted to defer the
adoption of the disclosure provisions until periods ending after December 15, 2009. The Company adopted ASU
2009-12 in the fourth quarter of 2009 and the adoption of this guidance did not have a material impact on our
consolidated statements of operations and financial condition.

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Contractual Obligations

At December 31, 2009
(in thousands)

Total

Less than 1 year

1-3 years

3-5 years More than 5 years

Long term debt obligations (1)

5.875% Senior Notes
DaVinciRe revolving credit facility (2)

Private equity and investment commitments (3)
Operating lease obligations
Capital lease obligations
Other secured liabilities
Obligations under credit derivative contracts
Payable for investments purchased
Reserve for claims and claim expenses (4)

$ 118,365 $
202,620
223,609
45,133
50,628
27,500
172
59,236
1,702,006

5,875 $ 11,750 $100,740
—
200,745
1,875
223,609
—
—
11,112
16,049
9,190
5,784
5,784
2,892
—
—
27,500
43
43
43
59,236
—
—
426,389 312,025
548,591

—
—
—
8,782
36,168
—
43
—
415,001

Total contractual obligations

$2,429,269 $878,811 $660,760 $429,704

$459,994

(1)

Includes contractual interest and dividend payments.

(2) The interest on this facility is based on a spread above LIBOR. We have reflected the interest due in 2010

and 2011 based upon the current interest rate on the facility.

(3) The private equity and investment commitments do not have a defined contractual commitment date and we

have therefore included them in the less than one year category.

(4) We caution the reader that the information provided above related to estimated future payment dates of our

reserves for claims and claim expenses is not prepared or utilized for internal purposes and that we currently
do not estimate the future payment dates of claims and claim expenses. Because of the nature of the
coverages that we provide, the amount and timing of the cash flows associated with our policy liabilities will
fluctuate, perhaps significantly, and therefore are highly uncertain. We have based our estimates of future
claim payments upon benchmark industry payment patterns, drawing upon available relevant sources of loss
and allocated loss adjustment expense development data. These benchmarks are revised periodically as new
trends emerge. We believe that it is likely that this benchmark data will not be predictive of our future claim
payments and that material fluctuations can occur due to the nature of the losses which we insure and the
coverages which we provide.

In certain circumstances, many of our contractual obligations may be accelerated to dates other than those
reflected in the table, due to defaults under the agreements governing those obligations (including pursuant to
cross-default provisions in such agreements) or in connection with certain changes in control of the Company, if
applicable. In addition, in connection with any such default under the agreement governing these obligations, in
certain circumstances, these obligations may bear an increased interest rate or be subject to penalties as a result
of such a default.

Current Outlook

General Economic Conditions

While there have been some indicators of stabilization, the U.S. and numerous other leading markets around the
world continue to experience significant recessionary conditions. It is not clear that sustained economic recovery
in the principal markets we serve is imminent, or that the pace of recovery, if any, would be rapid. Accordingly,
we believe meaningful risk remains for continued uncertainty or disruptions in general economic conditions,
including additional dislocations in the financial markets or asset classes or of a “double dip” recession in the
U.S. or other key markets. In 2009, many governments, including the U.S. federal government, took substantial
steps to stabilize economic conditions, in an effort to increase liquidity and capital availability; these efforts
contributed to significant changes in the financial markets in 2009, resulting in rapid recoveries of asset
valuations across many sectors, and increased access to private and public sources of capital. However, if these
stabilizing efforts were to cease prematurely, or if economic conditions otherwise cease to stabilize and again
commence to deteriorate further, the business environment in our principal markets would be further adversely
affected, which accordingly could adversely affect demand for the products sold by us or our customers. In
addition, during a period of continued economic downturn like the current one, we believe our consolidated

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credit risk, reflecting our counterparty dealings with customers, agents, brokers, retrocessionaires, capital
providers and parties associated with our investment portfolio, among others, is likely to be increased. Moreover,
we continue to monitor the risk that our principal markets will experience increased inflationary conditions, which
would, among other things, cause costs related to our claims and claim expenses to increase, and impact the
performance of our investment portfolio. The onset, duration and severity of an inflationary period cannot be
estimated with precision.

We currently expect that 2010 will be characterized by meaningful returns of capital, both by us and by
participants in our industry more generally. However, our operations are subject to the ever present potential for
significant volatility in capital due primarily to our exposure to potentially significant catastrophic events; if the
current financial market disruptions should continue or worsen, it could prove difficult to raise capital, if needed,
on attractive terms or at all, which would have a material negative impact on our operations. In addition, our
revolving credit facility and our principal existing letter of credit facility are scheduled to expire on March 31,
2010, and April 27, 2010 respectively. For more information, refer to “Capital Resources” above.

Ongoing conditions in the investment markets, the interest rate environment and general economic conditions
could adversely affect our net investment income on our fixed income investments and our other invested assets.
In 2009, our investment results benefited substantially from factors including spreads tightening and improving
valuations at levels which we would not anticipate repeating in future periods. In addition to impacting our
reported net income, potential future losses on our investment portfolio, including potential future mark-to-market
results, would adversely impact our equity capital. We expect the current volatile financial markets and
challenging economic conditions to persist for some time and we are unable to predict with certainty when
conditions might improve, or the pace or scale of any such improvement.

Market Conditions and Competition

In 2009, U.S. coastal regions exposed to severe hurricane risk benefited from an unusually inactive year
meteorologically in the Atlantic basin, which is often attributed to the El Nino effect. As a result, insured industry
losses for 2009 were relatively benign, particularly in the Eastern and Southeastern U.S. This is in contrast to
2004, 2005 and 2008, for example, in which hurricanes Katrina, Wilma and Ike, among others, resulted in
substantial insured property losses. In addition, the dislocations in the investment markets in 2008 eroded the
capital and surplus of many market participants. The combination of the 2008 storms and the effects of the
financial crisis resulted in relatively attractive market conditions at the January and June 1, 2009 catastrophe
renewals. The January 1, 2010 renewal season was characterized by overall stability; and also by a relative shift
toward ample supply of capital, impacted by the recovery in the financial markets, asset valuations and the
perception of liquidity; decreasing demand, impacted by the same factors; as well as by exposure reduction. In
addition, the competitive conditions in the markets we serve are believed to have been meaningfully impacted in
2009 by the U.S. federal government’s financing and backstopping of certain large market participants, which
are deemed by many market observers and participants to have contributed to inadequate pricing conditions in
respect of certain lines and coverages.

Absent significant new loss events or the occurrence of other contingencies, we currently expect to see
increasingly competitive market conditions for our products throughout 2010, particularly in lines of insurance
and reinsurance lacking significant catastrophe exposure. The benign insured catastrophe loss activity in 2009
combined with improvement in the capital markets is likely to have a positive impact on the financial situation
and capacity of our customers and our competitors, and is likely to result in increasingly competitive market
conditions for our products throughout 2010. Among other things, increased capital levels and appetite for risk
among primary insurance companies may continue to lead to increased retentions, impacting the reinsurance
marketplace. Despite these possibilities, we believe that our strong relationships, and track record of superior
claims paying ability and other client service, will enable us to compete for the business we find attractive.
However, it is possible that industry pricing in our core product lines will decrease more rapidly than we
anticipate, or that we will encounter more significant competitive barriers than we have in the past.

The market for our catastrophe reinsurance products is generally dynamic and volatile. The market dynamics
noted above, increased or decreased catastrophe loss activity, and changes in the amount of capital in the
industry can result in significant changes to the pricing, policy terms and demand for our catastrophe
reinsurance products over a relatively short period of time. In addition, changes in state-sponsored catastrophe
funds, or residual markets, which have generally grown dramatically in recent years, or the implementation of
new government-subsidized or sponsored programs, can dramatically alter market conditions. We believe that the
overall trend of increased frequency and severity of catastrophic Gulf and Atlantic Coast storms experienced in
recent years may continue for the foreseeable future. Increased understanding of the potential increase in

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frequency and severity of storms may contribute to increased demand for protection in respect of coastal risks
which could impact pricing and terms and conditions in coastal areas over time. We do not believe that the level
of weather-related losses incurred in 2009 is indicative of the likely level of such losses in future periods. Overall,
we expect higher property loss cost trends, driven by increased severity and by the potential for increased
frequency, to continue over time in the future. At the same time, certain markets we target are currently being
impacted by fundamental weakness experienced by primary insurers, due to the ongoing economic dislocation
and, in many cases, inadequate primary insurance rate levels. These conditions, which occurred in a period
characterized by unusually low insured catastrophic losses, contributed to certain publicly announced instances
of insolvency, regulatory supervision and other regulatory actions, and have weakened the ability of certain
carriers to invest in reinsurance and other protections for coming periods, and in some cases to meet their
existing premium obligations. It is possible that these dynamics will accelerate in the first half of 2010, and
potentially lead to unstable and volatile markets in certain regions and sectors.

With respect to our Individual Risk segment, certain competitors retained more programs in 2009 than we had
originally expected and did so at economic terms and conditions that we did not find attractive. Moreover, as
noted above, market conditions in certain of the sectors in which we focus were adversely impacted by the
expansive government financing of certain market participants, which may have contributed to inadequate
pricing levels for a number of lines and coverages in 2009. We sought to maintain our disciplined underwriting
and while we continued to see a substantial number of market opportunities, we did not write as many policies as
we had anticipated going into the 2009 renewal season. Market conditions are fluid and evolving and we cannot
assure you that pricing conditions in these markets will improve or that we will succeed in growing our business if
they do. While we did increase our policy count and aggregate of insured acres relating to our crop insurance
business in 2009 compared to 2008, premiums in this line of business are inherently volatile as they are driven in
part by commodity prices, which are subject to significant short and long-term price changes. We currently
expect market conditions in these lines of primary insurance to remain very competitive throughout 2010,
particularly for new business. Moreover, the dynamics which could contribute to a potential improvement in rates
during 2010 in some product lines may well be largely offset by a decline in exposures arising from the ongoing
recessionary conditions in our key markets. We plan to continue our disciplined underwriting approach with
respect to both the products which we underwrite and the programs as to which we form partnerships. While we
continuously and actively consider new or expanded relationships and seek to respond quickly to potential new
business opportunities, our in-depth due diligence process means that executing on potential new opportunities
within this segment take time. We believe that we have established ourselves as an effective and creative, though
disciplined, partner for program business opportunities for which to compete.

In addition, we continue to explore potential strategic investments and other opportunities from time to time that
are presented to us or that we originate. In evaluating these potential investments and opportunities, we seek an
attractive return on equity, the ability to develop or capitalize on a competitive advantage, and opportunities that
will not detract from our core operations. We currently expect the competitive conditions in our core businesses,
and the ongoing dislocation in the capital and credit markets, to present additional, potentially attractive growth,
investment and operational opportunities, particularly given our strong reputation, financial resources, and track
record.

Legislative and Regulatory Update

As previously disclosed, in 2007 the U.S. House of Representatives passed legislation which would expand the
National Flood Insurance Program (the “NFIP”) to cover damage to or loss of real or related personal property
located in the U.S. arising from any windstorm (any hurricane, tornado, cyclone, typhoon, or other wind event). In
addition, in 2007, the House passed legislation (together with the NFIP, the “2007 House Bills”), which would
create a National Catastrophe Risk Consortium and would also require the U.S. Treasury Department to establish
a national homeowner’s insurance stabilization program. The National Catastrophe Risk Consortium program
would allow multiple participating states to pool their respective catastrophic risk insurance or reinsurance wind
pools or other residual markets among each other. The stabilization program would allow the Treasury
Department to make below-cost loans to participating states or their reinsurance pools and/or residual markets.

In 2009, Congress passed a series of short term extensions of the NFIP, the latest of which expires again in
February 2010. The House of Representatives and the Federal Emergency Management Agency are also

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exploring the possibility of new legislation which might reshape the federal flood insurance program, perhaps
substantially. At this juncture it is not possible to predict whether the program will indeed be amended, and, if so,
whether any such changes would impact us. A failure to renew the NFIP program, particularly if unanticipated by
industry participants, could have dislocating impacts on the industry and our customers and potentially have an
adverse impact on us.

While the Senate has not yet enacted any of the legislation reflected in the 2007 House Bills (and has passed a
competing version of the NFIP renewal bill which would not add wind to the program), the respective sponsors of
the 2007 House Bills have indicated plans to reintroduce versions of this legislation in the House and Senate in
2010. In 2009, the COGA was introduced in the Senate and House which would provide for the federal guarantee
of bond issuances by certain government entities, potentially including the FHCF, the Texas Windstorm Insurance
Association, the California Earthquake Authority, and others. If enacted, either of these bills, or legislation similar
to these proposals, would, we believe, likely contribute to the growth of these state entities or to their inception or
alteration in a manner adverse to us. While none of this legislation has been enacted to date, and although we
believe such legislation would be vigorously opposed if introduced in 2010, if enacted these bills would likely
further erode the role of private market catastrophe reinsurers and could adversely impact our financial results,
perhaps materially.

In 2009, Congress conducted hearings relating to the tax treatment of offshore insurance and is reported to be
considering legislation that would adversely affect reinsurance between affiliates and offshore insurance and
reinsurance more generally. In July 2009, U.S. Rep. Richard Neal introduced one such proposal, H.R. 3424 (the
“Neal Bill”), which provides that foreign insurers and reinsurers would be capped in deducting reinsurance
premiums ceded from U.S. units to offshore affiliates. The Neal Bill, which was referred to the House Ways and
Means Committee, would limit deductions for related party reinsurance cessions to the average percentage of
premium ceded to unrelated reinsurers (determined in reference to individual business lines). In the first quarter
of 2010, the current administration released its 2010 initial budget, which included a proposal to raise revenue
by enacting increased taxation on international reinsurance via means which appeared to have similarities with
the Neal Bill. We can provide no assurance that this legislation or similar legislation will not be adopted. We
believe that passage of such legislation would adversely affect us, perhaps materially.

In March 2009, U.S. Senator Carl Levin and Rep. Lloyd Doggett introduced legislation in the U.S. Senate and
House, respectively, entitled the “Stop Tax Haven Abuse Act” (S. 506). If enacted, this legislation would, among
other things, cause to be treated as a U.S. corporation for U.S. tax purposes generally, entities whose shares are
publicly traded on an established securities market, or whose gross assets are $50.0 million or more, if the
“management and control” of such a corporation is, directly or indirectly, treated as occurring primarily within the
U.S. The proposed legislation provides that a corporation will be so treated if substantially all of the executive
officers and senior management of the corporation who exercise day-to-day responsibility for making decisions
involving strategic, financial, and operational policies of the corporation are located primarily within the U.S. In
addition, among other things, the legislation would establish presumptions for entities and transactions in
jurisdictions deemed to be “offshore secrecy jurisdictions” and would provide a list of such jurisdictions. To date,
this legislation has not been approved by either the House of Representatives or the Senate. However, we can
provide no assurance that this legislation or similar legislation will not ultimately be adopted. While we do not
believe that the legislation would impact us, it is possible that an adopted bill would include additional or
expanded provisions which could negatively impact us, or that the interpretation or enforcement of the current
proposal, if enacted, would be more expansive or adverse than we currently estimate.

The RMA has currently proposed several changes to the SRA, which governs substantial elements of the Federal
MPCI program in which we participate. The proposal would, if ultimately adopted, have the effect of dramatically
reducing the administrative and operating support provided to participating insurers in the program. Other
changes reflected in the proposal would have additional adverse impacts on crop insurers, including us. If the
RMA proposals are adopted in a revised SRA, we would expect our crop insurance business to be adversely
impacted, although at this time we cannot precisely quantify the degree of such impact, if any. We cannot assure
you that efforts to amend or ameliorate the RMA’s proposal will succeed.

The U.S. Congress and the current administration have made, or called for consideration of, several additional
proposals relating to a variety of issues, with respect to, universal healthcare, financial regulation reform,
including regulation of the over-the-counter derivatives market, the establishment of a single-state system of

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licensure for U.S. and foreign reinsurers, executive compensation and others. We continue to carefully monitor
relevant proposals and believe that these and other potential proposals could have varying degrees of impact on
the Company ranging from minimal to material. At this time, we are unable to predict with certainty which, if any,
proposals may be passed or what level of impact any such proposal could have on the Company.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are principally exposed to five types of market risk: interest rate risk; foreign currency risk; equity price risk;
credit risk; and energy and weather-related risk. The Company’s investment guidelines permit, subject to
approval, investments in derivative instruments such as futures, options, forward contracts and swap agreements,
which may be used to assume risks or for hedging purposes.

Interest Rate Risk

Our investment portfolio includes fixed maturity investments and short term investments, whose fair values will
fluctuate with changes in interest rates. We attempt to maintain adequate liquidity in our fixed maturity
investments portfolio to fund operations, pay reinsurance and insurance liabilities and claims and provide funding
for unexpected events. We seek to manage our interest rate risk in part by monitoring the duration and structure
of our investment portfolio.

The aggregate hypothetical loss generated from an immediate adverse parallel shift in the treasury yield curve of
100 basis points would cause a decrease in market value of 2.3%, which equated to a decrease in market value
of approximately $121.9 million on a portfolio valued at $5.3 billion at December 31, 2009. The foregoing reflects
the use of an immediate time horizon, since this presents the worst-case scenario. Credit spreads are assumed to
remain constant in these hypothetical examples.

We use interest rate futures within our portfolio of fixed maturity investments to manage our exposure to interest
rate risk, which can include increasing or decreasing our exposure to this risk. At December 31, 2009, we had
$826.9 million of notional long positions and $46.5 million of notional short positions of Eurodollar and non-U.S.
dollar futures contracts. We account for these futures contracts at fair value and record them in our consolidated
balance sheet as other assets or other liabilities depending on the rights or obligations. The fair value of these
derivatives as recognized in other assets and liabilities in our consolidated balance sheet at December 31, 2009,
was $0.9 million (2008 – $0.1 million) and $0.1 million (2008 – $0.1 million), respectively. During 2009, we
recorded gains of $5.2 million (2008 – gains of $12.4 million, 2007 – losses of $1.9 million) in our consolidated
statement of operations related to these derivatives. The fair value of these derivatives is determined using
exchange traded closing prices. The aggregate hypothetical loss generated from an immediate adverse parallel
shift in the treasury yield curve of 100 basis points would cause a decrease in market value of our net position in
these derivatives of approximately $1.2 million at December 31, 2009. The foregoing reflects the use of an
immediate time horizon, since this presents the worst-case scenario. Credit spreads are assumed to remain
constant in these hypothetical examples.

Foreign Currency Risk

Our functional currency is the U.S. dollar. We write a portion of our business in currencies other than U.S. dollars
and may, from time to time, experience foreign exchange gains and losses, other income (loss) and incur
underwriting income (losses) in currencies other than U.S. dollars, which will in turn affect our consolidated
financial statements. All changes in exchange rates, with the exception of non-U.S. dollar denominated
investments classified as available for sale, are recognized currently in our consolidated statements of operations.

Underwriting Operations Related Foreign Currency Contracts

Our foreign currency policy with regard to our underwriting operations is generally to hold foreign currency assets,
including cash, investments and receivables that approximate the foreign currency liabilities, including claims
and claim expense reserves and reinsurance balances payable. From time to time, the Company may use foreign
currency forward and option contracts to minimize the effect of fluctuating foreign currencies on the value of
non-U.S. dollar denominated assets and liabilities associated with our underwriting operations. At December 31,
2009, the total notional exposure in U.S. dollars of our underwriting related foreign currency contracts was $21.0
million (2008 – $133.0 million). Our foreign currency and option contracts are recorded at fair value, which is
determined principally by obtaining quotes from independent dealers and counterparties. During 2009, we
incurred a loss of $0.1 million (2008 – $21.4 million, 2007 – generated a gain of $3.6 million), on our foreign
currency forward and option contracts related to our underwriting operations.

129

Investment Portfolio Related Foreign Currency Forward Contracts

For our investment operations, we are exposed to currency fluctuations through our investments in non-U.S.
dollar fixed maturity investments, short term investments and other investments. At December 31, 2009, our
combined investment in these non-U.S. dollar investments was $281.8 million (2008 – $141.1 million). To
economically hedge our exposure to currency fluctuations from these investments, we have from time to time
entered into foreign currency forward contracts. Unrealized foreign exchange gains or losses arising from
non-U.S. dollar investments classified as available for sale are recorded in accumulated other comprehensive
income. Realized foreign exchange gains or losses from the sale of our non-U.S. dollar fixed maturity investments
available for sale, realized and unrealized foreign exchange gains or losses from the sale of our non-U.S. dollar
fixed maturity investments trading and other investments, and foreign exchange gains (losses) associated with
our hedging of these non-U.S. dollar investments are recorded in net foreign exchange gains (losses) in our
statements of operations. At December 31, 2009, the Company had outstanding investment portfolio related
foreign currency contracts of $316.7 million in short positions and $95.2 million in long positions, denominated in
U.S. dollars. During 2009, we recorded a loss of $6.4 million (2008 – gain of $5.8 million, 2007 – loss of $15.1
million) on our foreign currency forward contracts related to hedging our non-U.S. dollar investments. This was
offset by a gain of $5.5 million (2008 – loss of $4.9 million) on our non-U.S. dollar denominated investments. In
addition, we recorded a gain of $2.6 million in accumulated other comprehensive income (2008 – loss of $3.3
million) related to the change in unrealized foreign exchange gains (losses) on non-U.S. dollar investments which
are classified as available for sale. In the future, we may choose to increase our exposure to non-U.S. dollar
investments.

Energy and Risk Management Operations Related Foreign Currency Contracts

The Company’s energy and risk management operations are exposed to currency fluctuations through certain
derivative transactions it enters into that are denominated in non-U.S. dollars. The Company may, from time to
time, use foreign currency forward and option contracts to minimize the effect of fluctuating foreign currencies on
the value of non-U.S. dollar denominated assets and liabilities associated with these operations. At December 31,
2009, the total notional amount in U.S. dollars of the Company’s energy and risk management operations related
foreign currency contracts was $13.0 million. For the year ended December 31, 2009, the Company incurred
losses of $0.5 million (2008 – generated income of $0.1 million, 2007 – $nil) on its foreign currency forward and
option contracts related to its energy and risk management operations.

Credit Risk

Our exposure to credit risk is primarily due to our fixed maturity investments, short term investments, premiums
receivable and ceded reinsurance balances. At December 31, 2009 and 2008, our invested asset portfolio had a
dollar weighted average rating of AA. From time to time, we purchase credit derivatives to hedge our exposures in
the insurance industry, to assist in managing the credit risk associated with ceded reinsurance, or to assume
credit risk. We account for credit derivatives at fair value and record them on our consolidated balance sheet as
other assets or other liabilities depending on the rights or obligations. The fair value of the credit derivatives are
determined using industry valuation models. The fair value of these credit derivatives can change based on a
variety of factors including changes in credit spreads, default rates and recovery rates, the correlation of credit
risk between the referenced credit and the counterparty, and market rate inputs such as interest rates. The fair
value of these credit derivatives, as recognized in other liabilities in our balance sheet at December 31, 2009, was
$0.5 million (2008 – $0.9 million). During 2009, we recorded gains of $0.3 million (2008 – $1.1 million,
2007 – $0.5 million) in our consolidated statement of operations.

We are exposed to credit risk through our equity investment in ChannelRe, a privately held financial guaranty
reinsurance company. Our investment in ChannelRe is subject to potentially significant variability, resulting from
mark-to-market changes, due to changes in credit market conditions. While the Company has no further negative
economic exposure to ChannelRe, it is possible that the mark-to-market will fluctuate, perhaps increasing or
decreasing over time, and it is possible that as the underlying securities near maturity, if there are no defaults on
the underlying securities for which ChannelRe is obligated, the mark-to-market adjustment could reverse,
perhaps materially.

Energy and Weather-Related Derivative Risk

Energy and Risk Management Operations

Through Renaissance Trading, we transact certain derivative-based risk management products primarily to
address weather and energy risk and engage in hedging and trading activities related to these risks. The trading

130

markets for these derivatives are generally linked to energy and agriculture commodities, weather and other
natural phenomena. Currently, a significant percentage of the Company’s derivative-based risk management
products are transacted on a dual-trigger basis combining weather or other natural phenomenon, with prices for
commodities or securities related to energy or agriculture. The fair value of these contracts is obtained through
the use of quoted market prices, or in the absence of such quoted prices, industry or internal valuation models.
These contracts are recorded on our consolidated balance sheet in other assets and other liabilities and totaled
$17.0 million and $25.1 million, respectively, at December 31, 2009 (2008 – $41.7 million and $38.8 million,
respectively). During 2009, we generated income related to these derivatives of $52.3 million (2008 – $33.7
million), which is included in other income (loss) and represents net settlements and changes in the fair value of
these contracts. Any realized gains or losses are included in the calculation. Generally, the Company’s current
portfolio of such derivative contracts are of comparably short duration and are frequently seasonal in nature. It is
possible the duration of derivative contracts in this portfolio will lengthen in the future.

We use, among other things, value-at-risk (“VaR”) analysis to monitor the risks associated with our energy and
weather derivatives trading portfolio. VaR is a tool that measures the potential loss that could occur if our trading
positions were maintained over a defined period of time, calculated at a given statistical confidence level. Due to
the seasonal nature of our energy and weather derivatives trading activities, the VaR is based on a rolling two
season (one-year) holding period assuming no dynamic trading during the holding period. A 99% confidence
level is used for the VaR analysis. A 99% confidence level implies that within a one-year period, the potential loss
in our portfolio is not expected to exceed the VaR estimate in 99% of the possible modeled outcomes. In the
remaining estimated 1% of the possible outcomes, the anticipated potential loss is expected to be higher than the
VaR figure, and on average substantially higher.

The VaR model, based on a Monte Carlo simulation methodology, seeks to take into account correlations between
different positions and potential for movements to offset one another within the portfolio. The expected value of
the risk factors in our portfolio are generally obtained from exchange-traded futures markets. For most of the risk
factors, the volatility is derived from exchange-traded options markets. For those risk factors for which
exchange-traded options might not exist, the volatility is based on historical analysis matched to broker quotes
from the over-the-counter market, where available. The joint distribution of outcomes is based on our estimate of
the historical seasonal dependence among the underlying risk factors, scaled to the current market levels.
Management then estimates the expected outcomes by applying a Monte Carlo simulation to these risk factors.
The joint distribution of the simulated risk factors is then filtered through the portfolio positions, and then the
distribution of the outcomes is realized. The 99th percentile of this distribution is then calculated as the portfolio
VaR. The major limitation of this methodology is that the market data used to forecast parameters of the model
may not be an appropriate proxy of those parameters. The VaR methodology uses a number of assumptions,
such as (i) risks are measured under average market conditions, assuming normal distribution of market risk
factors, (ii) future movements in market risk factors follow estimated historical movements, and (iii) the assessed
exposures do not change during the holding period. There is no guarantee that these assumptions will prove
correct. We expect that, for any given period, our actual results will differ from our assumptions, including with
respect to previously estimated potential losses and that such losses could be substantially higher than the
estimated VaR.

At December 31, 2009, the estimated VaR for our portfolio of energy and weather-related derivatives, as
described above, calculated at an estimated 99% confidence level, was $23.1 million. The average, low and high
amounts calculated by our VaR analysis during the year ended December 31, 2009 were $21.5 million, $0.1
million and $46.4 million, respectively.

Cat-Linked Securities

In addition, we have entered into a credit derivatives agreement with respect to cat-linked securities whereby we
have sold cat-linked securities with a par amount of $27.5 million at December 31, 2009 (2008 – $77.4 million)
to a bank, while retaining the underlying risk. The agreement allows us to repurchase these securities at par and
obligates us to repurchase the securities under certain circumstances including catastrophe triggering events and
events of default. As a result of this transaction, we are receiving the spread over LIBOR for each of the cat-linked
securities subject to the credit derivatives agreement, less a financing fee. The credit derivatives agreement is
accounted for at fair value with changes in fair value recognized in other loss. We recognized $3.9 million
(2008 – $2.2 million, 2007 – $2.0 million) of other income in our consolidated statements of operations in 2009
from this transaction. A 10% decrease in the value of securities underlying the credit derivatives agreement
would negatively impact our results by $2.8 million.

131

Equity Price Risk

We are exposed to equity price risk due to our investment in a warrant to purchase common shares of Platinum,
which we carry on our balance sheet at fair value, as well as to our investments in hedge funds, private equity
funds and other investments as described below. The risk to the Platinum warrant is the potential for loss in fair
value resulting from a decrease in the price of Platinum’s common stock. The aggregate fair value of this
investment in Platinum was $34.9 million at December 31, 2009 (2008 – $29.9 million). A hypothetical 10
percent decline in the price of Platinum stock, holding all other factors constant, would have resulted in a $7.7
million decline in the fair value of the warrant (assuming no other changes to the inputs to the Black-Scholes
option valuation model that we use). The decline in the fair value of the warrant would be recorded in other
income (loss).

We are also indirectly exposed to equity market risk through our investments in: 1) some hedge funds that have
net long equity positions; 2) private equity partnerships whose exit strategies often depend on the equity markets;
such investments totaled $340.3 million at December 31, 2009 (2008 – $364.7 million); and 3) our investments
in other ventures, under equity method, which totaled $97.3 million at December 31, 2009 (2008 – $99.9
million). A hypothetical 10 percent decline in the prices of these hedge funds, private equity partnerships and
investments in other ventures, under equity method, holding all other factors constant, would have resulted in a
$43.8 million decline in the fair value of these investments at December 31, 2009.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Reference is made to Item 15(a) of this Report for the Consolidated Financial Statements of RenaissanceRe and
the Notes thereto, as well as the Schedules to the Consolidated Financial Statements.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Internal Controls: We have designed various disclosure controls and procedures (as
defined in Rules 13a-15(e) and Rule 15d-15(e) under the Exchange Act), to help ensure that information
required to be disclosed in our periodic Exchange Act reports, such as this annual report, is recorded, processed,
summarized and reported on a timely and accurate basis. Our disclosure controls and procedures are also
designed with the objective of ensuring that such information is accumulated and communicated to our senior
management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely
decisions regarding required disclosure. Our internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles and includes those
policies and procedures that: (1) pertain to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of the issuer; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the issuer are being made only in
accordance with authorizations of management and directors of the issuer; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets
that could have a material effect on the financial statements.

Limitations on the effectiveness of controls: Our Board of Directors and management, including our Chief
Executive Officer and Chief Financial Officer, do not expect that our disclosure controls and procedures or
internal control over financial reporting will prevent all errors and all fraud. Controls, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the objectives of the controls are met.
Further, we believe that the design of prudent controls must reflect appropriate resource constraints, such that
the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all
controls, there can be no absolute assurance that all control issues and instances of fraud, if any, applicable to us
have been or will be detected. These inherent limitations include the realities that judgments in decision-making
can be faulty, and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be
circumvented by the individual acts of some individuals, by collusion of more than one person, or by
management override of the control. The design of any system of controls also is based in part upon certain

132

assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions; over time, controls may become inadequate
because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may
occur and not be detected.

Evaluation: An evaluation was performed under the supervision and with the participation of the Company’s
management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design
and operation of the Company’s disclosure controls and procedures as required by Rules 13a-15(b) and
15d-15(b) of the Exchange Act. Based upon that evaluation, the Company’s management, including our Chief
Executive Officer and Chief Financial Officer, concluded that, at December 31, 2009, the Company’s disclosure
controls and procedures were effective at the reasonable assurance level in ensuring that information required to
be disclosed in Company reports filed under the Exchange Act is (i) recorded, processed, summarized and
reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to
management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow
timely decisions regarding required disclosure. There has been no change in the Company’s internal control over
financial reporting during the quarter ended December 31, 2009 that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

On February 16, 2010, the Compensation/Governance Committee of the Board (the “Committee”) approved a
form of award agreement for purposes of granting restricted stock units (“RSUs”) under the RenaissanceRe
Holdings Ltd. 2010 Restricted Stock Unit Plan (the “RSU Plan”) and determined that the Company’s named
executive officers were eligible to participate under the RSU plan.

RSUs granted pursuant to the RSU Plan represent the right to receive, subject to vesting and forfeiture conditions
as determined by the Committee, a cash amount equal to the fair market value of one common share of the
Company upon vesting and settlement. In the event the Company declares a cash dividend payable to holders of
common shares, each outstanding RSU will entitle its holder to receive, upon settlement (and subject to the
vesting conditions applicable to such award), an amount equal to such cash dividend. Unless otherwise provided
in an award agreement or in an applicable executive’s employment agreement, in the event a holder is
terminated for any reason, all of his unvested RSUs will be forfeited. Pursuant to the form of award agreement
approved by the Committee, if a holder achieves retirement eligibility (as defined by the Company’s retirement
policies), any RSUs that have been held by such holder for at least one year shall immediately vest. A holder’s
RSUs will also vest upon his death or a termination due to disability. All awards granted under the RSU Plan will
be subject to incentive compensation clawback and recoupment policies implemented by the Board from time to
time.

The RSU Plan provides for RSUs to be adjusted as appropriate to reflect changes in the outstanding stock or
capital structure of the Company, the declaration of any extraordinary dividend, or any change in applicable laws
or circumstances that results or could result in the substantial dilution or enlargement of participants’ rights
under the RSU Plan. Pursuant to the RSU Plan, in the event of a change in control of the Company (as defined in
the RSU Plan), all then-outstanding RSUs shall be deemed to have vested immediately prior to such change in
control, and such RSUs shall be settled in cash on the date of such change in control.

The Board or the Committee may terminate the RSU Plan at any time and may amend or suspend the RSU Plan
at any time and from time to time, except that the rights provided under RSUs outstanding at the time of any
such termination, amendment, or suspension shall not be impaired by such amendment (unless the participant
consents in writing) or suspension or termination.

133

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

This item is omitted because a definitive proxy statement that involves the election of directors will be filed with
the Securities and Exchange Commission not later than 120 days after the close of the fiscal year pursuant to
Regulation 14A, which proxy statement is incorporated by reference.

RenaissanceRe has adopted a Code of Ethics that applies to its directors and executive officers. The Code of
Ethics is available free of charge on our website http://www.renre.com. We intend to disclose any amendments to
our Code of Ethics by posting such information on our website, as well as disclosing any waivers of our code
applicable to our principal executive officer, principal financial officer, principal accounting officer or controller
and other executive officers who perform similar functions through such means or by filing a Form 8-K.

ITEM 11.

EXECUTIVE COMPENSATION

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
SHAREHOLDER MATTERS

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

134

PART IV

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)

Financial Statements, Financial Statement Schedules and Exhibits.

Financial Statements

The Consolidated Financial Statements of RenaissanceRe Holdings Ltd. and related Notes thereto are listed in
the accompanying Index to Consolidated Financial Statements and are filed as part of this Form 10-K.

Financial Statement Schedules

The Schedules to the Consolidated Financial Statements of RenaissanceRe Holdings Ltd. are listed in the
accompanying Index to Schedules to Consolidated Financial Statements and are filed as a part of this Form 10-K.

3.1

3.2

3.3

3.4

10.1

10.2

10.3

10.4

10.5

10.6

10.7

10.8

10.9

10.10

10.11

10.12

10.13

10.14

Exhibits

Memorandum of Association. (1)

Amended and Restated Bye-Laws. (2)

Memorandum of Increase in Share Capital of RenaissanceRe Holdings Ltd. (3)

Specimen Common Share certificate. (1)

Form of Director Retention Agreement, dated as of November 8, 2002, entered into by each of the
non-employee directors of RenaissanceRe Holdings Ltd. (4)

Amended and Restated Employment Agreement, dated as of February 22, 2006, between
RenaissanceRe Holdings Ltd. and Neill A. Currie. (5)

Amendment No. 1, dated as of March 1, 2007, to the Employment Agreement, dated as of
February 22, 2006 by and between RenaissanceRe Holdings Ltd. and Neill A. Currie. (6)

Amendment No. 2, dated as of November 19, 2008, between RenaissanceRe Holdings Ltd. and Neill
A. Currie. (7)

Further Amended and Restated Employment Agreement, dated as of February 19, 2009, between
RenaissanceRe Holdings Ltd. and Neill A. Currie. (8)

Amendment No. 1 to the Further Amended and Restated Employment Agreement, dated January 8,
2010, by and among RenaissanceRe Holdings Ltd. and Neill A. Currie. (9)

Employment Agreement, dated as of July 19, 2006, between RenaissanceRe Holdings Ltd. and
Fred R. Donner. (10)

Separation, Consulting, and Release Agreement, dated as of June 12, 2009, by and between
RenaissanceRe Holdings Ltd. and Fred R. Donner. (11)

Employment Agreement, dated as of June 10, 2009, by and between RenaissanceRe Holdings Ltd.
and Jeffrey D. Kelly. (11)

Amendment No. 1 the Employment Agreement, dated January 8, 2010, by and among
RenaissanceRe Holdings Ltd. and Jeffrey D. Kelly. (9)

Amended and Restated Employment Agreement, dated as of July 19, 2006, between RenaissanceRe
Holdings Ltd. and John D. Nichols, Jr. (10)

Separation, Consulting, and Release Agreement, dated January 11, 2010, by and between
RenaissanceRe Holdings Ltd. and John D. Nichols, Jr. (9)

Separation, Consulting, and Release Agreement, dated January 11, 2010, by and between
RenaissanceRe Holdings Ltd. and William J. Ashley. (9)

Sublease Agreement, dated as of July 19, 2006, between Renaissance Reinsurance Ltd. and John D.
Nichols, Jr. (10)

10.15

Form of Employment Agreement for Executive Officers. (10)

135

10.16

10.17

10.18

10.19

10.20

10.21

10.22

10.23

10.24

10.25

10.26

10.27

10.28

10.29

10.30

10.31

10.32

10.33

10.34

10.35

10.36

10.37

10.38

10.39

10.40

10.41

10.42

Form of Amendment to Employment Agreement for Executive Officers. (13)

Form of Amendment to Employment Agreement for Executive Officers. (7)

Form of Amendment No. 3 to the Amended and Restated Employment Agreement for Executive
Officers. (9)

Third Amended and Restated Credit Agreement, dated as of April 9, 2009, by and among
RenaissanceRe Holdings Ltd., various financial institutions parties thereto, Bank of America, N.A., as
LC Issuer and Administrative Agent for the lenders, Citibank, N.A., as Syndication Agent, Barclays
Bank PLC, The Bank of New York Mellon and Wachovia Bank, National Association, as
Co-Documentation Agents, and Banc of America Securities LLC and Citigroup Global Markets Inc., as
Joint Lead Arrangers and Joint Book Managers. (15)

First Amendment Agreement to the Third Amended and Restated Credit Agreement, dated as of
November 23, 2009, by and among RenaissanceRe Holdings Ltd., the lenders named therein and
Bank of America, N.A., as LC Issuer and Administrative Agent for the lenders.

Third Amended and Restated Credit Agreement, dated as of April 5, 2006, by and among DaVinciRe
Holdings Ltd., the banks, financial institutions and other institutional lenders listed thereto (the
“Lenders”), Citigroup Global Markets Inc., as sole lead arranger, book manager and syndication agent,
and Citibank, N.A. as administrative agent for the Lenders. (16)

RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (18)

Amendment No. 1 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (19)

Amendment No. 2 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (19)

Amendment No. 3 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (20)

UK Schedule to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (20)

UK Sub-Plan to the RenaissanceRe Holdings 2001 Stock Incentive Plan. (20)

Form of Option Grant Notice and Agreement pursuant to which option grants were made under the
RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (21)

Form of Restricted Stock Grant Notice and Agreement pursuant to which Restricted Stock grants are
made under the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (21)

RenaissanceRe Holdings Ltd. 2004 Stock Option Incentive Plan. (22)

Amendment No. 1 to the RenaissanceRe Holdings Ltd. 2004 Stock Option Incentive Plan. (23)

Form of Option Agreement pursuant to which option grants are made under the RenaissanceRe
Holdings 2004 Stock Option Incentive Plan to executive officers. (22)

Amended and Restated RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (25)

Amendment No. 1 to the RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (25)

Amendment No. 2 to the RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (26)

Amendment No. 3 to the RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (31)

Form of Restricted Stock Grant Agreement for Directors. (5)

Form of Option Grant Agreement for Directors. (5)

Master Standby Letter of Credit Reimbursement Agreement, dated as of November 2, 2001, between
Renaissance Reinsurance Ltd. and Fleet National Bank. Timicuan Reinsurance Ltd. has become a
party to this agreement pursuant to an accession agreement. (27)

Certificate of Designation, Preferences and Rights of 7.30% Series B Preference Shares. (28)

Certificate of Designation, Preferences and Rights of 6.08% Series C Preference Shares. (29)

Certificate of Designation, Preferences and Rights of 6.60% Series D Preference Shares. (30)

136

10.43

10.44

10.45

10.46

10.47

10.48

10.49

10.50

21.1

23.1

31.1

31.2

32.1

32.2

Senior Indenture, dated as of July 1, 2001, between RenaissanceRe Holdings Ltd., as Issuer, and
Bankers Trust Company, as Trustee. (12)

Second Supplemental Indenture, by and between RenaissanceRe Holdings Ltd. and Deutsche Bank
Trust Company Americas (f/k/a Bankers Trust Company), dated as of January 31, 2003. (14)

Second Amended and Restated Reimbursement Agreement, dated as of April 27, 2007, by and
among Renaissance Reinsurance Ltd., Renaissance Reinsurance of Europe, Glencoe Insurance Ltd.,
DaVinci Reinsurance Ltd., RenaissanceRe Holdings Ltd., Wachovia Bank, National Association, as
Issuing Bank, Administrative Agent, and Collateral Agent for the Lenders, certain Co-Syndication
Agents, ING Bank N.V., as Documentation Agent, and certain Lenders party thereto. (17)

Master Reimbursement Agreement, dated as of April 29, 2009, by and between Renaissance
Reinsurance Ltd. and Citibank Europe PLC. (20)

Pledge Agreement, dated as of April 29, 2009, by and between Renaissance Reinsurance Ltd. and
Citibank Europe PLC. (20)

Agreement Regarding Use of Aircraft Interest, dated as of November 17, 2009, by and between
RenaissanceRe Holdings Ltd. and Neill A. Currie.

RenaissanceRe Holdings Ltd. 2010 Restricted Stock Unit Plan.

Form of Restricted Stock Unit Agreement (for grants under the RenaissanceRe Holdings Ltd. 2010
Restricted Stock Unit Plan).

List of Subsidiaries of the Registrant.

Consent of Ernst & Young Ltd.

Certification of Neill A. Currie, Chief Executive Officer of RenaissanceRe Holdings Ltd., pursuant to
Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.

Certification of Jeffrey D. Kelly, Chief Financial Officer of RenaissanceRe Holdings Ltd., pursuant to
Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.

Certification of Neill A. Currie, Chief Executive Officer of RenaissanceRe Holdings Ltd., pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of Jeffrey D. Kelly, Chief Financial Officer of RenaissanceRe Holdings Ltd., pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

Incorporated by reference to the Registration Statement on Form S-1 of RenaissanceRe Holdings Ltd.
(Registration No. 33-70008) which was declared effective by the SEC on July 26, 1995.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period
ended June 30, 2002, filed with the SEC on August 14, 2002.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period
ended March 31, 1998, filed with the SEC on May 14, 1998 (SEC File Number 000-26512)

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Annual Report on Form 10-K for the year
ended December 31, 2002, filed with the SEC on March 31, 2003 (SEC File Number 001-14428)

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the
SEC on February 27, 2006

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period
ended March 31, 2007, filed with the SEC on May 2, 2007.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the
SEC on November 25, 2008.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the
SEC on February 25, 2009.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the
SEC on January 14, 2010.

137

(10)

(11)

(12)

(13)

(14)

(15)

(16)

(17)

(18)

(19)

(20)

(21)

(22)

(23)

(24)

(25)

(26)

(27)

(28)

(29)

(30)

(31)

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the
SEC on July 21, 2006, relating to certain events which occurred on July 19, 2006. Other than with respect
to the Percent and Lump Sum Percent (as defined and disclosed in the Form 8-K) and matters such as
names and titles, the employment agreements for Messrs. O’Donnell and Ashley are identical to the form
filed as Exhibit 10.9.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the
SEC on June 15, 2009.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the
SEC on July 17, 2001.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period
ended March 31, 2008, filed with the SEC on May 2, 2008.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the
SEC on January 31, 2003.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the
SEC on April 14, 2009.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the
SEC on April 11, 2006, relating to certain events which occurred on April 5, 2006.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the
SEC on May 3, 2007.

Incorporated by reference to Exhibit 99.2 to the Registration Statement on Form S-8 (Registration
No. 333-90758) dated June 19, 2002.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period
ended March 31, 2007, filed with the SEC on May 2, 2007.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period
ended March 31, 2009, filed with the SEC on May 1, 2009.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period
ended September 30, 2004, filed with the SEC on November 9, 2004.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the
SEC on September 2, 2004.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Annual Report on Form 10-K for the year
ended December 31, 2004, filed with the SEC on March 31, 2005 (SEC File Number 001-14428).

Incorporated by reference to Exhibit 99.1 to the Registration Statement on Form S-8 (Registration
No. 333-90758) dated June 19, 2002.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period
ended March 31, 2007, filed with the SEC on May 2, 2007.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period
ended September 30, 2008, filed with the SEC on October 30, 2008.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Annual Report on Form 10-K for the year
ended December 31, 2001, filed with the SEC on April 1, 2002.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the
SEC on February 4, 2003.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the
SEC on March 18, 2004.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Form 8-A, filed with the SEC on December 14,
2006.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Annual Report on Form 10-K for the year
ended December 31, 2008, filed with the SEC on February 20, 2009.

138

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in Hamilton,
Bermuda on February 18, 2010.

RENAISSANCERE HOLDINGS LTD.

/s/ Neill A. Currie

Neill A. Currie
President, Chief Executive Officer,
Director

Signature

Title

Date

/s/ Neill A. Currie

Neill A. Currie

/s/ Jeffrey D. Kelly

Jeffrey D. Kelly

/s/ Mark A. Wilcox

Mark A. Wilcox

/s/ W. James MacGinnitie

W. James MacGinnitie

/s/ Thomas A. Cooper

Thomas A. Cooper

/s/ David C. Bushnell

David C. Bushnell

/s/ James L. Gibbons

James L. Gibbons

/s/ Jean D. Hamilton

Jean D. Hamilton

/s/ William F. Hecht

William F. Hecht

/s/ Henry Klehm, III

Henry Klehm, III

/s/ Ralph B. Levy

Ralph B. Levy

/s/ Anthony M. Santomero

Anthony M. Santomero

/s/ Nicholas L. Trivisonno

Nicholas L. Trivisonno

President, Chief Executive Officer,
Director

February 18, 2010

Executive Vice President, Chief
Financial Officer

February 18, 2010

Senior Vice President, Corporate
Controller and Chief Accounting
Officer

Chairman of the Board of
Directors

Director

139

February 18, 2010

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Management’s Report on Internal Control Over Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Balance Sheets at December 31, 2009 and 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Operations for the Years Ended December 31, 2009, 2008, and 2007 . . . . . .

Page

F-2

F-3

F-4

F-5

F-6

Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 2009,

2008 and 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-7

Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2009, 2008 and

2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Cash Flows for the Years Ended December 31, 2009, 2008 and 2007 . . . . . . .

F-8

F-9

Notes to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-10

F-1

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management at RenaissanceRe Holdings Ltd. (the “Company”) is responsible for establishing and maintaining
effective internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities
Exchange Act of 1934, as amended. The Company’s internal control over financial reporting was designed to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with U.S. generally accepted accounting principles and to reflect
management’s judgments and estimates concerning effects of events and transactions that are accounted for or
disclosed. There are inherent limitations to the effectiveness of any controls. Controls, no matter how well
conceived and operated, can provide only reasonable assurance that its objectives are met. No evaluation of
controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company
have been detected.

Management, with the participation of the Chief Executive Officer and Chief Financial Officer, assessed its internal
control over financial reporting as of December 31, 2009. In making this assessment, management used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal
Control-Integrated Framework. Based on this assessment, management believes that the Company maintained
effective internal control over financial reporting as of December 31, 2009.

The Company’s effectiveness of internal control over financial reporting as of December 31, 2009, has been
audited by Ernst & Young Ltd., the Independent Registered Public Accountants who also audited the Company’s
consolidated financial statements. Ernst & Young Ltd.’s attestation report on the effectiveness of the Company’s
internal control over financial reporting appears on page F-4.

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF RENAISSANCERE HOLDINGS LTD.

We have audited the accompanying consolidated balance sheets of RenaissanceRe Holdings Ltd. and
Subsidiaries as of December 31, 2009 and 2008, and the related consolidated statements of operations, changes
in shareholders’ equity, comprehensive income, and cash flows for each of the three years in the period ended
December 31, 2009. These financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated
financial position of RenaissanceRe Holdings Ltd. and Subsidiaries at December 31, 2009 and 2008, and the
consolidated results of their operations and their cash flows for each of the three years in the period ended
December 31, 2009, in conformity with U.S. generally accepted accounting principles.

As described in Note 3, on January 1, 2009, RenaissanceRe Holdings Ltd. and subsidiaries adopted FASB
Statement No. 160, Noncontrolling Interest in Consolidated Financial Statements – an amendment of ARB
No. 51 (Codified in FASB ASC Topic 810, Consolidation) on a prospective basis, except for the presentation and
disclosures which were applied retrospectively for all periods presented. In addition, as described in Note 6, on
April 1, 2009 the Company adopted FSP FAS 115-2, Recognition and Presentation of Other-Than-Temporary
Impairments (Codified in FASB ASC Topic 320, Investments – Debt and Equity Securities).

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), RenaissanceRe Holdings Ltd.’s internal control over financial reporting as of December 31, 2009,
based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated February 18, 2010 expressed an unqualified
opinion thereon.

/s/ Ernst & Young Ltd.

Hamilton, Bermuda
February 18, 2010

F-3

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF RENAISSANCERE HOLDINGS LTD.

We have audited RenaissanceRe Holdings Ltd.’s internal control over financial reporting as of December 31,
2009, based on criteria established in Internal Control – Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (the COSO criteria). RenaissanceRe Holdings Ltd.’s
management is responsible for maintaining effective internal control over financial reporting, and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying
Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on
the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether effective internal control over financial reporting was maintained in all material respects. Our audit
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company
are being made only in accordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

In our opinion, RenaissanceRe Holdings Ltd. maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2009, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the consolidated balance sheets of RenaissanceRe Holdings Ltd. as of December 31, 2009 and
2008, and the related consolidated statements of operations, changes in shareholders’ equity, comprehensive
income, and cash flows for each of the three years in the period ended December 31, 2009 of RenaissanceRe
Holdings Ltd. and our report dated February 18, 2010 expressed an unqualified opinion thereon.

/s/ Ernst & Young Ltd.

Hamilton, Bermuda
February 18, 2010

F-4

RenaissanceRe Holdings Ltd. and Subsidiaries
Consolidated Balance Sheets
At December 31, 2009 and 2008
(in thousands of United States Dollars, except per share amounts)

Assets
Fixed maturity investments available for sale, at fair value

(Amortized cost $3,513,183 and $2,916,991 at December 31, 2009 and

2008, respectively) (Notes 6 and 7)

$3,559,197

$2,996,885

Fixed maturity investments trading, at fair value (Amortized cost $747,983 at

December 31, 2009

December 31, 2008

December 31, 2009) (Notes 6 and 7)

Short term investments, at fair value (Notes 6 and 7)
Other investments, at fair value (Notes 6 and 7)
Investments in other ventures, under equity method (Note 6)

Total investments

Cash and cash equivalents
Premiums receivable
Ceded reinsurance balances (Note 8)
Losses recoverable (Note 8)
Accrued investment income
Deferred acquisition costs
Receivable for investments sold
Other secured assets (Note 9)
Other assets
Goodwill and other intangibles (Note 5)

Total assets

Liabilities, Redeemable Noncontrolling Interest and Shareholders’ Equity
Liabilities
Reserve for claims and claim expenses (Note 10)
Reserve for unearned premiums
Debt (Note 11)
Reinsurance balances payable
Payable for investments purchased
Other secured liabilities (Note 9)
Other liabilities

Total liabilities

Commitments and Contingencies (Note 24)

736,595
1,002,306
858,026
97,287

6,253,411
260,716
589,827
91,852
194,241
31,928
61,870
7,431
27,730
205,347
76,688

—
2,172,343
773,475
99,879

6,042,582
274,692
565,630
88,019
299,534
26,614
81,904
236,485
76,424
217,986
74,181

$7,801,041

$7,984,051

$1,702,006
446,649
300,000
381,548
59,236
27,500
256,669

$2,160,612
510,235
450,000
315,401
378,111
77,420
290,998

3,173,608

4,182,777

Redeemable noncontrolling interest – DaVinciRe (Notes 3 and 13)

786,647

768,531

Shareholders’ Equity (Note 14)
Preference Shares: $1.00 par value – 26,000,000 shares issued and
outstanding at December 31, 2009 (2008 – 26,000,000 shares)
Common shares: $1.00 par value – 61,744,857 shares issued and
outstanding at December 31, 2009 (2008 – 61,503,333 shares)

Accumulated other comprehensive income
Retained earnings

Total shareholders’ equity

Total liabilities, redeemable noncontrolling interest and shareholders’

equity

650,000

61,745
41,438
3,087,603

3,840,786

61,503
75,387
2,245,853

3,032,743

$7,801,041

$7,984,051

See accompanying notes to the consolidated financial statements

F-5

RenaissanceRe Holdings Ltd. and Subsidiaries
Consolidated Statements of Operations
For the years ended December 31, 2009, 2008 and 2007
(in thousands of United States Dollars, except per share amounts)

Revenues

Gross premiums written

Net premiums written (Note 8)
Decrease (increase) in unearned premiums

2009

2008

2007

$1,728,932 $1,736,028 $1,809,637

$1,206,397 $1,353,620 $1,435,335
(10,966)

67,419

33,204

Net premiums earned (Note 8)
Net investment income (Note 6)
Net foreign exchange (losses) gains
Equity in earnings (losses) of other ventures (Note 6)
Other income (loss)
Net realized and unrealized gains on fixed maturity investments (Note 6)

1,273,816
323,981
(13,623)
10,976
2,021
93,162

1,386,824
24,231
2,600
13,603
10,252
10,700

1,424,369
402,463
3,968
(128,609)
(37,930)
26,806

Total other-than-temporary impairments
Portion recognized in other comprehensive income, before taxes

Net other-than-temporary impairments

Total revenues

Expenses

Net claims and claim expenses incurred (Note 10)
Acquisition expenses
Operational expenses
Corporate expenses
Interest expense (Note 11)

Total expenses

Income before taxes
Income tax (expense) benefit (Note 18)

Net income

Net income attributable to redeemable noncontrolling

interest – DaVinciRe (Notes 3 and 13)

Net income attributable to RenaissanceRe

Dividends on preference shares (Note 14)

(26,999)
4,518

(217,014)
—

(25,513)
—

(22,481)

(217,014)

(25,513)

1,667,852

1,231,196

1,665,554

197,287
189,775
189,686
14,240
15,111

760,489
213,553
122,165
25,635
24,633

606,099

1,146,475

1,061,753
(9,094)

1,052,659

84,721
(568)

84,153

479,274
254,930
110,464
28,860
33,626

907,154

758,400
18,432

776,832

(171,501)

(55,133)

(164,396)

881,158
(42,300)

29,020
(42,300)

612,436
(42,861)

Net income (loss) available (attributable) to RenaissanceRe common

shareholders

$ 838,858 $ (13,280) $ 569,575

Net income (loss) available (attributable) to RenaissanceRe common

shareholders per common share – basic (Note 15)

Net income (loss) available (attributable) to RenaissanceRe per

common share – diluted (Note 15)
Dividends per common share (Note 17)

$
$

13.50 $

(0.21) $

8.08

13.40 $
0.96 $

(0.21) $
0.92 $

7.93
0.88

See accompanying notes to the consolidated financial statements

F-6

RenaissanceRe Holdings Ltd. and Subsidiaries
Consolidated Statements of Changes in Shareholders’ Equity
For the years ended December 31, 2009, 2008 and 2007
(in thousands of United States Dollars)

2009

2008

2007

Preference shares

Balance – January 1
Repurchase of shares

Balance – December 31

Common shares

Balance – January 1
Repurchase of shares
Exercise of options and issuance of restricted stock awards

(Note 21)

Balance – December 31

Additional paid-in capital
Balance – January 1
Repurchase of shares
Reduction in redeemable noncontrolling interest – DaVinciRe
Exercise of options and issuance of restricted stock awards

(Note 21)

Balance – December 31

Accumulated other comprehensive income

Balance – January 1
Cumulative effect of change in accounting principle, net of taxes (1)
Change in net unrealized gains on investments
Portion of other-than-temporary impairments recognized in other

comprehensive income

Balance – December 31

Retained earnings

Balance – January 1
Cumulative effect of change in accounting principle, net of taxes (1)
Net income
Net income attributable to redeemable noncontrolling

interest – DaVinciRe (Note 13)

Repurchase of shares
Dividends on common shares
Dividends on preference shares

Balance – December 31

Total Shareholders’ Equity

$ 650,000 $ 650,000 $ 800,000
(150,000)

—

650,000

61,503
(951)

1,193

61,745

68,920
(8,064)

72,140
(3,588)

647

368

61,503

68,920

—
(36,455)
896

107,867
(131,328)
—

284,123
(196,583)
—

35,559

23,461

20,327

—

107,867

75,387
(76,198)
37,731

4,518

41,438

44,719
—
30,668

25,217
—
19,502

—

75,387

44,719

2,245,853
76,198
1,052,659

2,605,997
—
84,153

2,099,017
—
776,832

(171,501)
(13,566)
(59,740)
(42,300)

(55,133)
(289,014)
(57,850)
(42,300)

(164,396)
—
(62,595)
(42,861)

3,087,603

2,245,853

2,605,997

$3,840,786 $3,032,743 $3,477,503

(1) Cumulative effect adjustment to opening retained earnings as of April 1, 2009, related to the recognition and
presentation of other-than-temporary impairments, as required by Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification (“ASC”) Topic Investments – Debt and Equity Securities.

See accompanying notes to the consolidated financial statements

F-7

RenaissanceRe Holdings Ltd. and Subsidiaries
Consolidated Statements of Comprehensive Income
For the years ended December 31, 2009, 2008 and 2007
(in thousands of United States Dollars)

Comprehensive income

Net income
Other comprehensive income, net of tax

Change in net unrealized gains
Portion of other-than-temporary impairments recognized in other

comprehensive income

Comprehensive income
Net income attributable to redeemable noncontrolling

interest – DaVinciRe

Other comprehensive loss (income) attributable to redeemable

noncontrolling interest – DaVinciRe

Comprehensive income attributable to redeemable noncontrolling

2009

2008

2007

$1,052,659 $ 84,153 $ 776,832

37,033

28,788

20,273

4,518

—

1,094,210

112,941

797,105

(171,501)

(55,133)

(164,396)

698

1,880

(771)

interest – DaVinciRe

(170,803)

(53,253)

(165,167)

Comprehensive income attributable to RenaissanceRe

$ 923,407 $ 59,688 $ 631,938

Disclosure regarding net unrealized gains
Change in net unrealized gains (losses)
Net realized and unrealized (gains) losses and net other-than-

temporary impairments included in net income

$ 108,412 $(175,646) $ 20,795

(70,681)

206,314

(1,293)

Change in net unrealized gains on investments

37,731 $ 30,668 $ 19,502

See accompanying notes to the consolidated financial statements

F-8

RenaissanceRe Holdings Ltd. and Subsidiaries
Consolidated Statements of Cash Flows
For the years ended December 31, 2009, 2008 and 2007
(in thousands of United States Dollars)

Cash flows provided by operating activities

Net income
Adjustments to reconcile net income to net cash provided

by operating activities
Amortization and depreciation
Equity in undistributed (earnings) losses of other ventures
Net unrealized (gains) losses included in net investment

income

Net unrealized gains included in other income (loss)
Net realized and unrealized investment gains on fixed

maturity investments

Net other-than-temporary impairments
Change in:

Premiums receivable
Ceded reinsurance balances
Deferred acquisition costs
Reserve for claims and claim expenses, net
Reserve for unearned premiums
Reinsurance balances payable
Other

Net cash provided by operating activities

Cash flows used in investing activities

Proceeds from sales and maturities of investments

available for sale

Purchases of investments available for sale
Proceeds from sales and maturities of investments trading
Purchases of investments trading
Net sales (purchases) of short term investments
Net sales (purchases) of other investments
Net purchases of investments in other ventures
Net (purchases) proceeds from other assets
Net purchases of subsidiaries

Net cash used in investing activities

Cash flows used in financing activities
Dividends paid – common shares
Dividends paid – preference shares
RenaissanceRe common share repurchases
Net (repayment) drawdown of debt
Redemption of 7.0% Senior Notes
Redemption of Series A preference shares
Redemption of capital securities
Reverse repurchase agreement
Secured asset financing
DaVinci share repurchase
Third party DaVinciRe share repurchase

Net cash used in financing activities

Effect of exchange rate changes on foreign currency cash

Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents, beginning of year

2009

2008

2007

$ 1,052,659 $

84,153 $

776,832

9,213
(592)

(88,545)
(20,378)

(93,162)
22,481

(24,197)
(3,833)
20,034
(353,313)
(63,586)
66,147
65,961

588,889

(8,871)
2,638

(19,774)
142,120

259,398
(4,537)

(10,700)
217,014

(90,555)
19,897
22,308
15,857
(53,101)
39,971
52,404

(47,310)
(7,315)

(26,806)
25,513

(55,925)
26,055
2,706
48,920
(15,088)
(119,653)
60,214

545,876

790,489

10,036,434
(10,516,908)
61,218
(845,466)
1,170,037
3,994
(3,000)
(19,385)
(2,741)

11,403,443
(10,776,997)
—
—
(350,794)
(218,263)
(37,372)
6,500
(77,631)

4,301,189
(4,806,219)
—
—
589,422
(252,179)
(1,702)
—
—

(115,817)

(51,114)

(169,489)

(59,740)
(42,300)
(50,972)
(150,000)
—
—
—
(50,042)
—
—
(132,718)

(485,772)

(1,276)

(13,976)
274,692

(57,850)
(42,300)
(428,406)
148,049
(150,000)
—
—
50,000
(11,500)
(100,000)
43,549

(62,595)
(42,861)
(200,171)
1,951
—
(150,000)
(103,093)
—
88,920
—
(40,000)

(548,458)

(507,849)

(1,838)

(55,534)
330,226

2,676

115,827
214,399

Cash and cash equivalents, end of year

260,716 $

274,692 $

330,226

See accompanying notes to the consolidated financial statements

F-9

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2009

(amounts in tables expressed in thousands of United States (“U.S.”) dollars, except per share amounts)

NOTE 1. ORGANIZATION

RenaissanceRe Holdings Ltd. (“RenaissanceRe”), was formed under the laws of Bermuda on June 7, 1993.
Together with its wholly owned and majority-owned subsidiaries and DaVinciRe (as defined below), which are
collectively referred to herein as the “Company”, RenaissanceRe provides reinsurance and insurance coverages
and related services to a broad range of customers.

(cid:129)

Renaissance Reinsurance Ltd. (“Renaissance Reinsurance”), the Company’s principal reinsurance
subsidiary, provides property catastrophe and specialty reinsurance coverages to insurers and
reinsurers on a worldwide basis.

The Company also manages property catastrophe and specialty reinsurance business written on behalf
of joint ventures, which principally include Top Layer Reinsurance Ltd. (“Top Layer Re”), recorded
under the equity method of accounting, and DaVinci Reinsurance Ltd. (“DaVinci”). Because the
Company owns a noncontrolling equity interest in, but controls a majority of the outstanding voting
power of, DaVinci’s parent, DaVinciRe Holdings Ltd. (“DaVinciRe”), the results of DaVinci and
DaVinciRe are consolidated in the Company’s financial statements. Redeemable noncontrolling interest
– DaVinciRe represents the interests of external parties with respect to the net income and
shareholders’ equity of DaVinciRe. Renaissance Underwriting Managers Ltd. (“RUM”), a wholly owned
subsidiary, acts as exclusive underwriting manager for these joint ventures in return for fee-based
income and profit participation.

The Company’s Individual Risk operations include direct insurance and quota share reinsurance
written through the operating subsidiaries of RenRe Insurance Holdings Ltd. (“RenRe Insurance”),
formerly known as Glencoe Group Holdings Ltd. These operating subsidiaries principally include
Stonington Insurance Company (“Stonington”), which writes business in the U.S. on an admitted basis,
and Glencoe Insurance Ltd. (“Glencoe”) and Lantana Insurance Ltd. (“Lantana”), which write business
in the U.S. on an excess and surplus lines basis, and also provide reinsurance coverage, principally
through quota share contracts, which are analyzed on an individual risk basis. The Individual Risk
operations also include the results of Agro National Inc. (“Agro National”), a managing general
underwriter of crop insurance.

RenaissanceRe Syndicate 1458 (“Syndicate 1458”) is the Company’s Lloyd’s syndicate which was
licensed to start writing certain lines of insurance and reinsurance business effective June 1, 2009.
RenaissanceRe Corporate Capital (UK) Limited (“RenaissanceRe CCL”), a wholly owned subsidiary of
the Company, is Syndicate 1458’s sole corporate member and RenaissanceRe Syndicate Management
Ltd. (“RSML”), a wholly owned subsidiary of the Company from November 2, 2009, is the managing
agent for Syndicate 1458.

The Company, through Renaissance Trading Ltd. (“Renaissance Trading”) and RenRe Energy Advisors
Ltd. (“REAL”), transacts certain derivative-based management products primarily to address weather
and energy risk and engages in hedging and trading activities related to those transactions and
provides fee-based consulting services, respectively.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in the U.S. (“GAAP”) and include the accounts of RenaissanceRe and its wholly owned and majority-
owned subsidiaries and DaVinciRe. All significant intercompany transactions and balances have been eliminated
on consolidation. Certain prior year comparatives have been reclassified to conform to the current year
presentation.

USE OF ESTIMATES IN FINANCIAL STATEMENTS

The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported and disclosed amounts of assets and liabilities and disclosure of contingent

F-10

assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ materially from those estimates. The major estimates
reflected in the Company’s consolidated financial statements include, but are not limited to, the reserve for claims
and claim expenses, losses recoverable, including allowances for losses recoverable deemed uncollectible,
estimates of written and earned premiums, fair value, including the fair value of investments, financial
instruments and derivatives, impairment charges and the Company’s net deferred tax asset.

PREMIUMS AND RELATED EXPENSES

Premiums are recognized as income, net of any applicable reinsurance or retrocessional coverage purchased,
over the terms of the related contracts and policies. Premiums written are based on contract and policy terms
and include estimates based on information received from both insureds and ceding companies. Subsequent
differences arising on such estimates are recorded in the period in which they are determined. Reserve for
unearned premiums represents the portion of premiums written that relate to the unexpired terms of contracts
and policies in force. Such reserves are computed by pro-rata methods based on statistical data or reports
received from ceding companies. Reinstatement premiums are estimated after the occurrence of a significant
loss and are recorded in accordance with the contract terms based upon paid losses and case reserves.
Reinstatement premiums are earned when written.

Acquisition costs, consisting principally of commissions, brokerage and premium tax expenses incurred at the
time a contract or policy is issued, are deferred and amortized over the period in which the related premiums are
earned. Deferred policy acquisition costs are limited to their estimated realizable value based on the related
unearned premiums. Anticipated claims and claim expenses, based on historical and current experience, and
anticipated investment income related to those premiums are considered in determining the recoverability of
deferred acquisition costs.

CLAIMS AND CLAIM EXPENSES

The reserve for claims and claim expenses includes estimates for unpaid claims and claim expenses on reported
losses as well as an estimate of losses incurred but not reported. The reserve is based on individual claims, case
reserves and other reserve estimates reported by insureds and ceding companies as well as management
estimates of ultimate losses. Inherent in the estimates of ultimate losses are expected trends in claim severity and
frequency and other factors which could vary significantly as claims are settled. Also, during the past few years,
the Company has increased its specialty reinsurance and Individual Risk business, but does not have the benefit
of a significant amount of its own historical experience in certain of these lines of business. Accordingly, the
setting and reserving for incurred losses in these lines of business could be subject to greater variability.

Ultimate losses may vary materially from the amounts provided in the consolidated financial statements. These
estimates are reviewed regularly and, as experience develops and new information becomes known, the reserves
are adjusted as necessary. Such adjustments, if any, are reflected in the consolidated statements of operations in
the period in which they become known and are accounted for as changes in estimates.

REINSURANCE

Amounts recoverable from reinsurers are estimated in a manner consistent with the claim liability associated with
the reinsured policies. For multi-year retrospectively rated contracts, the Company accrues amounts (either
assets or liabilities) that are due to or from assuming companies based on estimated contract experience. If the
Company determines that adjustments to earlier estimates are appropriate, such adjustments are recorded in the
period in which they are determined. Losses recoverable on dual trigger reinsurance contracts require the
Company to estimate its ultimate losses applicable to these contracts as well as estimate the ultimate amount of
insured industry losses that will be reported by the applicable statistical reporting agency, as per the contract
terms. Amounts recoverable from reinsurers are recorded net of a valuation allowance for estimated uncollectible
recoveries.

Assumed and ceded reinsurance contracts that lack a significant transfer of risk are treated as deposits.

F-11

INVESTMENTS, CASH AND CASH EQUIVALENTS

Fixed Maturity Investments

Investments in fixed maturities are classified as available for sale or trading and are reported at fair value.
Investment transactions are recorded on the trade date with balances pending settlement reflected in the balance
sheet as a receivable for investments sold or a payable for investments purchased. Net investment income
includes interest and dividend income together with amortization of market premiums and discounts and is net of
investment management and custody fees. The amortization of premium and accretion of discount for fixed
maturity securities is computed using the effective yield method. For mortgage-backed securities and other
holdings for which there is prepayment risk, prepayment assumptions are evaluated quarterly and revised as
necessary. Any adjustments required due to the change in effective yields and maturities are recognized on a
prospective basis through yield adjustments. Fair values of investments are based on quoted market prices, or
when such prices are not available, by reference to broker or underwriter bid indications and/or internal pricing
valuation techniques. The net unrealized appreciation or depreciation on fixed maturity investments available for
sale is included in accumulated other comprehensive income. The net unrealized appreciation or depreciation on
fixed maturity investments trading is included in net realized and unrealized gains on fixed maturity investments.
Realized gains or losses on the sale of investments are determined on the basis of the first in first out cost method
and, for fixed maturity investments available for sale, include adjustments to the cost basis of investments for
declines in value that are considered to be other-than-temporary.

During the fourth quarter of 2009, the Company started designating, upon acquisition, certain fixed maturity
investments as trading, rather than as available for sale. The Company made this change, due in part to the new
authoritative other-than-temporary impairment GAAP guidance that became effective on April 1, 2009, which has
resulted in additional accounting judgments required to be made on a quarterly basis, combined with an effort to
report the Company’s fixed maturity investment portfolio results in the Company’s consolidated statements of
operation in a manner consistent with the way in which the Company manages the portfolio, which is on a total
investment return basis. The Company currently expects to continue to designate, in future periods, upon
acquisition, certain fixed maturity investments as trading, rather than as available for sale, and, as a result, the
Company currently expects its fixed maturity investments available for sale balance to decrease and its fixed
maturity trading balance to increase over time, resulting in a reduction in other-than-temporary accounting
judgments the Company makes. This change will over time result in additional volatility in the Company’s net
income (loss) in future periods as net unrealized gains and losses on these fixed maturity investments will be
recorded currently in net income (loss), rather than as a component of accumulated other comprehensive
income (loss) in shareholders’ equity.

Other-Than-Temporary Impairment Effective April 1, 2009

The Company recognizes other-than-temporary impairments in earnings for its impaired fixed maturity securities
available for sale (i) for which the Company has the intent to sell the security or (ii) it is more likely than not that the
Company will be required to sell the debt security before its anticipated recovery and (iii) for those securities which
have a credit loss. In assessing whether a credit loss exists, the Company compares the present value of the cash
flows expected to be collected from the security with the amortized cost basis of the security. In instances in which
a determination is made that an impairment exists but the Company does not intend to sell the security and it is not
more likely than not that the Company will be required to sell the security before the anticipated recovery of its
remaining amortized cost basis, the impairment is separated into (i) the amount of the total impairment related to
the credit loss and (ii) the amount of the total impairment related to all other factors. The amount of the total other-
than-temporary impairment related to the credit loss is recognized in earnings. The amount of the total other-than-
temporary impairment related to all other factors is recognized in other comprehensive income. In periods after the
recognition of other-than-temporary impairments on the Company’s fixed maturity securities available for sale, the
Company accounts for such securities as if they had been purchased on the measurement date of the other-than-
temporary impairment at an amortized cost basis equal to the previous amortized cost basis less the other-than-
temporary impairment recognized in earnings. For debt securities in which other-than-temporary impairments were
recognized in earnings, the difference between the new amortized cost basis and the cash flows expected to be
collected will be amortized into net investment income.

Other-Than-Temporary Impairment Process Prior to April 1, 2009

F-12

investments available for sale represented impairments that were other-than-temporary based on several factors.
The factors the Company considered in the assessment of a security included: (i) the time period during which
there had been a significant decline below cost; (ii) the extent of the decline below cost; (iii) the Company’s intent
and ability to hold the security; (iv) the potential for the security to recover in value; (v) an analysis of the financial
condition of the issuer; and (vi) an analysis of the collateral structure and credit support of the security, if
applicable. Where the Company determined that there was an other-than-temporary decline in the fair value of
the security, the cost of the security was written down to its fair value and the unrealized loss at the time of
determination was reflected in the Company’s consolidated statements of operations.

The majority of the Company’s fixed maturity investments available for sale are managed by external investment
managers in accordance with specific investment mandates and guidelines. The investment managers are
directed to manage the Company’s investments to maximize total investment return in accordance with these
investment mandates and guidelines. While the Company has adequate capital and liquidity to support its
operations and to hold its fixed maturity investments available for sale which were in an unrealized loss position
until they recover in value, the Company has not prohibited or restricted its investment managers from selling
these investments and its investment managers actively trade the Company’s investments. The Company was
therefore unable to represent or certify that it had the intent or ability to hold these investments until they
recovered in value. As a consequence, under the pre-existing guidance which was in effect for 2007, 2008 and
the three months ended March 31, 2009, the Company impaired essentially all of its fixed maturity investments
available for sale that were in an unrealized loss position at each quarterly reporting date.

Short Term Investments

Short term investments, which are managed as part of the Company’s investment portfolio and have a maturity of
one year or less when purchased, are carried at fair value. Cash equivalents include money market instruments
with a maturity of ninety days or less when purchased.

Other Investments

Other investments are carried at fair value with interest and dividend income, income distributions and realized
and unrealized gains and losses included in net investment income. The fair value of other investments is
generally established on the basis of the net asset valuation criteria established by the managers of the
investments. These net asset valuations are determined based upon the valuation criteria established by the
governing documents of such investments. Many of the Company’s other investments are subject to restrictions
on redemptions or sales which are determined by the governing documents and limit the Company’s ability to
liquidate these investments in the short term. In addition, due to a lag in reporting, some of the Company’s fund
managers, fund administrators, or both, are unable to provide final fund valuations as of the Company’s current
reporting date. In these circumstances, the Company estimates the fair value of these funds by starting with the
prior month’s or quarter’s fund valuation, adjusting these valuations for capital calls, redemptions or distributions
and the impact of changes in foreign currency exchange rates, and then estimating the return for the current
period. In circumstances in which the Company estimates the return for the current period, it uses all credible
information available. This principally includes preliminary estimates reported by its fund managers, obtaining the
valuation of underlying portfolio investments where such underlying investments are publicly traded and therefore
have a readily observable price, using information that is available to the Company with respect to the underlying
investments, reviewing various indices for similar investments or asset classes, as well as estimating returns
based on the results of similar types of investments for which the Company has reported results, or other
valuation methods, as necessary. Actual final fund valuations may differ, perhaps materially so, from the
Company’s estimates and these differences are recorded in the period they become known as a change in
estimate. The Company’s estimate of the fair value of catastrophe bonds are based on quoted market prices, or
when such prices are not available, by reference to broker or underwriter bid indications.

Investments in Other Ventures

Investments in which the Company has significant influence over the operating and financial policies of the
investee are classified as investments in other ventures, under equity method, and are accounted for under the
equity method of accounting. Under this method, the Company records its proportionate share of income or loss
from such investments in its results for the period. Any decline in value of investments in other ventures, under
equity method considered by management to be other-than-temporary is charged to income in the period in
which it is determined.

F-13

DERIVATIVES

The Company enters into derivative instruments such as futures, options, swaps, forward contracts and other
derivative contracts in order to manage its foreign currency exposure, obtain exposure to a particular financial
market, for yield enhancement, or for trading and speculation. The Company accounts for its derivatives in
accordance with FASB ASC Topic Derivatives and Hedging, which requires all derivatives to be recorded at fair
value on the Company’s balance sheet as either assets or liabilities, depending on their rights or obligations, with
changes in fair value reflected in current earnings. The Company does not currently apply hedge accounting. The
fair value of the Company’s derivatives are estimated by reference to quoted prices or broker quotes, where
available, or in the absence of quoted prices or broker quotes, the use of industry or internal valuation models.

FAIR VALUE

The Company accounts for certain of its assets and liabilities at fair value in accordance with FASB ASC Topic
Fair Value Measurements and Disclosures. FASB ASC Topic Fair Value Measurements and Disclosures clarifies
the definition of fair value, establishes a framework for measuring fair value and expands disclosures about fair
value measurements. In addition, the guidance clarifies that fair value is a market-based measurement, not an
entity-specific measurement, and sets out a fair value hierarchy with the highest priority being quoted prices in
active markets and the lowest priority to unobservable data. Fair value is the price that would be received upon
the sale of an asset or paid to transfer a liability in an orderly transaction between open market participants at the
measurement date. The Company recognizes the change in unrealized gains and losses arising from changes in
fair value in its statements of operations, with the exception of changes in unrealized gains and losses on its fixed
maturity investments available for sale, which are recognized as a component of accumulated other
comprehensive income in shareholders’ equity.

BUSINESS COMBINATIONS, GOODWILL AND OTHER INTANGIBLE ASSETS

The Company accounts for business combinations in accordance with FASB ASC Topic Business Combinations,
and goodwill and other intangible assets that arise from business combinations in accordance with FASB ASC
Topic Intangibles – Goodwill and Other. A purchase price that is in excess of the fair value of the net assets
acquired arising from a business combination is recorded as goodwill, and is not amortized. Other intangible
assets with a finite life are amortized over the estimated useful life of the asset. Other intangible assets with an
indefinite useful life are not amortized.

Goodwill and other indefinite life intangible assets are tested for impairment on an annual basis or more
frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable.
Definite life intangible assets are reviewed for indicators of impairment on an annual basis or more frequently if
events or changes in circumstances indicate that the carrying amount may not be recoverable, and tested for
impairment if appropriate. For purposes of the annual impairment evaluation, goodwill is assigned to the
applicable reporting unit of the acquired entities giving rise to the goodwill. Goodwill and other intangible assets
recorded in connection with investments accounted for under the equity method, are recorded as “Investments
in other ventures, under equity method” on the Company’s consolidated balance sheets.

The Company has established September 30 as the date for performing its annual impairment tests. If goodwill or
other intangible assets are impaired, they are written down to their estimated fair values with a corresponding
expense reflected in the Company’s consolidated statements of operations.

NONCONTROLLING INTEREST

The Company accounts for its redeemable noncontrolling interest in DaVinciRe in the mezzanine section of the
Company’s consolidated balance sheet in accordance with the requirements of certain Securities and Exchange
Commission (“SEC”) guidance which is applicable only to SEC registrants. The SEC guidance requires shares, not
required to be accounted for in accordance with FASB ASC Topic Distinguishing Liabilities from Equity, and
having redemption features that are not solely within the control of the issuer to be classified outside of
permanent equity in the mezzanine section of the balance sheet. Because the share classes related to the
noncontrolling interest portion of DaVinciRe are not considered liabilities in accordance with FASB ASC Topic
Distinguishing Liabilities from Equity and have redemption features that are not solely within the control of
DaVinciRe, the noncontrolling interest in DaVinciRe is disclosed in the mezzanine section on the Company’s
consolidated balance sheet in accordance with the SEC guidance noted above. The SEC guidance does not
impact the accounting for noncontrolling interest on the consolidated statements of operations; therefore, the
provisions of FASB ASC Topic Consolidation with respect to the consolidated statements of operations still apply.

F-14

EARNINGS PER SHARE

Basic earnings per share are based on weighted average common shares and exclude any dilutive effects of
options and restricted stock. Diluted earnings per share assumes the exercise of all dilutive stock options and
restricted stock grants.

In June 2008, the FASB issued guidance to determine whether instruments granted in share-based payment
transactions are participating securities prior to vesting and, therefore, need to be included in the earnings
allocation in computing earnings per share under FASB ASC Topic Earnings per Share. The two-class method is
used to determine earnings per share based on dividends declared on common stock and participating securities
(i.e. distributed earnings) and participation rights of participating securities in any undistributed earnings.
Unvested restricted stock granted by the Company to its employees is now considered a participating security
and the Company now uses the two-class method to calculate its net income available to RenaissanceRe
common shareholders per common share – basic and diluted. The adoption of this guidance did not have a
material effect on the Company’s prior calculations of net income (loss) available (attributable) to RenaissanceRe
common shareholders per common share – basic and diluted, and therefore prior periods have not been
restated.

FOREIGN EXCHANGE

The Company’s functional currency is the U.S. dollar. Revenues and expenses denominated in foreign currencies
are translated at the prevailing exchange rate at the transaction date. Monetary assets and liabilities denominated
in foreign currencies are translated at exchange rates in effect at the balance sheet date, which may result in the
recognition of exchange gains or losses which are included in the determination of net income.

TAXATION

Income taxes have been provided in accordance with the provisions of FASB ASC Topic Income Taxes, on those
operations which are subject to income taxes. Deferred tax assets and liabilities result from temporary differences
between the amounts recorded in the consolidated financial statements and the tax basis of the Company’s
assets and liabilities. Such temporary differences are primarily due to the tax basis discount on the reserve for
claims and claim expenses, reserve for unearned premiums, net operating loss carryforwards, intangible assets,
accrued expenses, deferred acquisition costs and certain investments. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A
valuation allowance against deferred tax assets is recorded if it is more likely than not that all, or some portion, of
the benefits related to deferred tax assets will not be realized.

Uncertain tax positions are also accounted for in accordance with FASB ASC Topic Income Taxes. Uncertain tax
positions must meet a more-likely-than-not recognition threshold to be recognized.

VARIABLE INTEREST ENTITIES

The Company accounts for variable interest entities (“VIE”) in accordance with FASB ASC Topic Consolidation,
which requires the consolidation of all VIE’s by the investor that will absorb a majority of the VIE’s expected losses
or residual returns. Refer to “Note 12. Variable Interest Entities”, for more information.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Accounting Standards Codification

In June 2009, the FASB issued Statement No. 168, The FASB Accounting Standards Codification™ and the
Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162 (“FAS 168”).
Effective for financial statements issued for interim and annual periods ending after September 15, 2009 the
FASB ASC (the “Codification”) is now the authoritative source of U.S. GAAP. The Codification changes the
structure of authoritative guidance to a Topic based model versus the previous model of Original
Pronouncements, modified by Emerging Issues Task Force Abstracts, FASB Staff Positions, etc. Among other
things, the Codification is expected to: reduce the amount of time and effort required to solve an accounting
research issue; mitigate the risk of noncompliance through improved usability of the literature; provide accurate
information with real-time updates as Accounting Standards Updates are released; and assist the FASB with
research and convergence efforts. The adoption of the Codification did not impact the Company’s consolidated
statements of operations and financial condition.

F-15

Accounting for Transfers of Financial Assets

In June 2009, the FASB issued Statement No. 166, Accounting for Transfers of Financial Assets – an
amendment of FASB Statement No. 140, and the FASB subsequently codified it as Accounting Standard Update
(“ASU”) 2009-16, updating ASC Topic 860 Transfers and Servicing. The objective of ASU 2009-16 is to improve
the relevance, representational faithfulness, and comparability of the information that a reporting entity provides
in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position,
financial performance, and cash flows; and a transferor’s continuing involvement, if any, in transferred financial
assets. ASU 2009-16 must be applied as of the beginning of the reporting entity’s first annual reporting period
that begins after November 15, 2009, for interim periods within that first annual period and for interim and
annual reporting periods thereafter. Earlier application is prohibited. ASU 2009-16 must be applied to transfers
occurring on or after the effective date. Additionally, the disclosure provisions of ASU 2009-16 should be applied
to transfers that occurred both before and after the effective date. The Company is currently evaluating the
potential impacts of the adoption of ASU 2009-16 on its consolidated statements of operations and financial
condition.

Variable Interest Entities

In June 2009, the FASB issued Statement No. 167, Amendments to FASB Interpretation No. 46(R,) and the
FASB subsequently codified it as ASU 2009-17, updating ASC Topic 810 Consolidations. The objective of ASU
2009-17 is to improve financial reporting by enterprises involved with variable interest entities. The FASB
undertook this project to address (1) the effects on certain provisions of FASB Interpretation No. 46,
Consolidation of Variable Interest Entities – an Interpretation of ARB No. 51, as revised (“FIN 46(R)”), as a result
of the elimination of the qualifying special-purpose entity concept in ASU 2009-16, and (2) constituent concerns
about the application of certain key provisions of FIN 46(R), including those in which the accounting and
disclosures under the interpretation do not always provide timely and useful information about an enterprise’s
involvement in a variable interest entity. ASU 2009-17 shall be effective as of the beginning of each reporting
entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first
annual reporting period, and for interim and annual reporting periods thereafter. Earlier application is prohibited.
The Company is currently evaluating the potential impacts of the adoption of ASU 2009-17 on its consolidated
statements of operations and financial condition.

Investments in Certain Entities That Calculate Net Asset Value per Share

In September 2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-12, Investments in
Certain Entities That Calculate Net Asset Value per Share (or its Equivalent) (“ASU 2009-12”), which amends
FASB ASC Topic Fair Value Measurements and Disclosures. ASU 2009-12 provides additional guidance on
estimating the fair value of certain alternative investments, such as hedge funds, private equity investments and
venture capital funds. The updated guidance allows the fair value of such investments to be determined using
the net asset value (“NAV”) as a practical expedient, unless it is probable the investment will be sold at a value
other than the NAV. In addition, the guidance requires disclosures by major category of investment regarding the
attributes of the investments within the scope of the guidance, regardless of whether the fair value of the
investment is measured using the NAV or other fair value technique. ASU 2009-12 shall be effective for interim
and annual periods ending after December 15, 2009. Early application is permitted in financial statements for
earlier interim and annual periods that have not been issued. If an entity elects to early adopt the measurement
amendments in this update, the entity is permitted to defer the adoption of the disclosure provisions until periods
ending after December 15, 2009. The Company adopted ASU 2009-12 in the fourth quarter of 2009 and the
adoption of this guidance did not have a material impact on the Company’s consolidated statements of operations
and financial condition.

NOTE 3. NONCONTROLLING INTEREST

In December 2007, the FASB issued authoritative guidance updating FASB ASC Topic Consolidation, specifically
addressing accounting and reporting standards for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. The primary objectives of the guidance, among other items, is to clearly identify,
label and present the ownership interests in subsidiaries held by parties other than the parent on the face of the
financial statements, provide guidance when dealing with changes in a parent’s ownership and provide guidance
when a subsidiary is deconsolidated. Specifically, the Company is impacted by the disclosure and presentation
requirements of the updated guidance as it relates to DaVinciRe. The updated guidance became effective on
January 1, 2009 for the Company.

F-16

The updated guidance prescribes moving “Redeemable noncontrolling interest – DaVinciRe” from the mezzanine
section of the consolidated balance sheet, to a line item, separate from the parent’s equity, in the shareholders’
equity section of the consolidated balance sheet. Similarly, the guidance, prescribes additional disclosures in the
Company’s consolidated statements of operations and consolidated statements of changes in shareholders’
equity, to provide increased transparency of the impact of noncontrolling interests on the Company’s results of
operations and financial position.

However, as noted above, the Company accounts for its redeemable noncontrolling interest in DaVinciRe in the
mezzanine section of the consolidated balance sheet in accordance with the requirements of certain SEC
guidance which is applicable only to SEC registrants. The SEC guidance requires shares, not required to be
accounted for in accordance with FASB ASC Topic Distinguishing Liabilities from Equity, and having redemption
features that are not solely within the control of the issuer, to be classified outside of permanent equity in the
mezzanine section of the balance sheet. Because the share classes related to the noncontrolling interest portion
of DaVinciRe are not considered liabilities in accordance with FASB ASC Topic Distinguishing Liabilities from
Equity and have redemption features that are not solely within the control of DaVinciRe, the noncontrolling
interest in DaVinciRe is disclosed in the mezzanine section on the Company’s consolidated balance sheet in
accordance with the SEC guidance noted above. The minority interest line item has been renamed to
“Redeemable noncontrolling interest – DaVinciRe”. All prior periods have been reclassified to reflect this new
standard. The SEC guidance does not impact the accounting for noncontrolling interest on the consolidated
statements of operations; therefore, the provisions of FASB ASC Topic Consolidation with respect to the
consolidated statements of operations still apply.

In addition to the amendments to FASB ASC Topic Consolidations, the updated guidance amends FASB ASC
Topic Earnings per Share so that earnings per share data will continue to be calculated based on amounts
attributable to the parent, both before and after the adoption of the updated guidance related to FASB ASC Topic
Consolidation.

NOTE 4. BUSINESS COMBINATIONS

Spectrum Partners Ltd. (“Spectrum Partners”)

On November 2, 2009, the Company acquired 100% of the outstanding and issued common shares of Spectrum
Partners, the parent company and sole owner of Spectrum Syndicate Management Ltd. (“Spectrum”), now
known as RSML, and Spectrum Insurance Services Ltd. Prior to acquiring the outstanding and issued common
shares of Spectrum Partners, the Company had contracted with Spectrum to be the Lloyd’s managing agent of
Syndicate 1458. Spectrum Partners is based in London, United Kingdom (“U.K.”), and prior to the Company’s
acquisition, was an independent Lloyd’s managing agency that provided the requisite services mandated for
entrants into the Lloyd’s market. One of the requirements to enter the Lloyd’s market and establish an
underwriting syndicate is to obtain the services of a Lloyd’s managing agent. Generally, new entrants either solicit
the services of a Lloyd’s managing agency, such as Spectrum, or acquire an existing Lloyd’s managing agent. As
noted above, the Company initially contracted Spectrum to be the Lloyd’s managing agent for Syndicate 1458,
and ultimately made the decision to acquire Spectrum Partners to internalize these services. The total
consideration paid by the Company was $24.7 million, which includes $9.0 million of additional compensation
amounts as determined in accordance with the terms of the purchase agreement. The additional amounts will be
paid in cash and/or equity in accordance with the purchase agreement over four years from the date of
acquisition and will be accounted for as compensation costs in operating expenses, separate from the acquisition
of the outstanding and issued common shares of Spectrum, as these amounts relate to agreements for the prior
owners to continue providing services. In connection with the purchase, the Company recorded $3.1 million of
intangible assets and $5.9 million of goodwill in the fourth quarter of 2009. The acquisition of Spectrum Partners
expedited the Company’s entrance into the Lloyd’s market. Other factors that added to the value of Spectrum
included its Lloyd’s managing agency license, future revenue streams from existing customers, Lloyd’s
relationships and workforce. These factors resulted in a purchase price greater than the fair value of the net
assets acquired and the recognition of goodwill and intangible assets. The acquisition of the net assets was
accounted for using the purchase method in accordance with FASB ASC Topic Business Combinations.

F-17

The fair value of the assets and liabilities acquired and allocation of purchase price is summarized as follows:

Purchase price

Assets acquired

Cash and cash equivalents
Accounts and notes receivable and prepaid expenses

Tangible assets acquired

Intangible asset – Lloyd’s managing agency license
Intangible asset – Customer relationships

Intangible assets acquired

Liabilities acquired

Accounts and notes payable
Deferred tax liability

Liabilities acquired

Excess purchase price – Goodwill

Amounts determined to be a separate transaction (1)

Total consideration

$ 7,728
1,522

1,867
1,252

(1,671)
(831)

$15,728

9,250

3,119

(2,502)

$ 5,861

$ 8,964

$24,692

(1) Represents stock and cash that will be issued to the former owners for certain services in accordance with
the purchase agreement. These amounts are payable over a four year period and will be expensed as
incurred.

The Lloyd’s managing agency license represents the value of the managing agency license with Lloyd’s and is not
subject to amortization, but will be reviewed for indicators of impairment on an annual basis or more frequently if
events or changes in circumstances indicate that the carrying amount may not be recoverable. The Lloyd’s
managing agency license is considered to have an indefinite estimated useful life. The customer relationships
represent the value of existing revenue streams generated by Spectrum and is estimated to have a useful life of
six years. The customers relationships are being amortized over six years. During 2009, the Company recorded
$35 thousand of intangible asset amortization related to these intangibles.

The estimated remaining amortization expense for intangible assets is as follows:

2010
2011
2012
2013
2014 and thereafter

Total remaining amortization expense

Indefinite lived

$ 209
209
209
209
381

$1,217

$1,867

The operating results of Spectrum have been included in the consolidated financial statements from November 2,
2009, the date of acquisition. The impact on the Company’s consolidated statements of operations was not
material.

Agro National

On June 2, 2008, the Company acquired substantially all the assets and assumed certain liabilities of Agro
National, LLC. Agro National is based in Council Bluffs, Iowa and is a managing general underwriter of crop
insurance. Agro National offers high quality risk protection products and services to the agricultural community
throughout the U.S. Agro National participates in the U.S. federal government’s Multiple Peril Crop Insurance
Program and has been writing business on behalf of Stonington, a wholly owned subsidiary of the Company,
since 2004. The base purchase price paid by the Company was $80.5 million, plus additional amounts as
determined in accordance with the terms of the asset purchase agreement. The additional amounts, if any, will
be paid in cash in 2011 within 30 days after the annual settlement date of the 2010 crop year. The additional

F-18

amounts are calculated in accordance with the terms of the asset purchase agreement and include a payment of
33% of the cumulative adjusted excess profit for the 2008, 2009 and 2010 crop years. The cumulative adjusted
excess profit is based on the profit, if any, in excess of a 20% cumulative return on net retained premium for the
2008, 2009 and 2010 crop years, as further defined in the agreement. In connection with the purchase, the
Company recorded $46.3 million of intangible assets and $20.4 million of goodwill in the second quarter of 2008.
The additional amounts, if any, as discussed above will be recorded as an increase in goodwill in the period in
which the contingency is resolved and the consideration becomes issuable. The acquisition was undertaken to
purchase the distribution channel for the Company’s crop insurance business which was previously conducted
through a managing general agency contractual relationship with Agro National, LLC. Other factors that added to
the value of Agro National, LLC included its agent relationships, systems and technology, brand name and
workforce. These factors resulted in a purchase price greater than the fair value of the net assets acquired and
the recognition of goodwill and intangible assets. The acquisition of the net assets was accounted for using the
purchase method in accordance with FASB ASC Topic Business Combinations.

The fair value of the assets and liabilities acquired and allocation of purchase price is summarized as follows:

Total purchase price

Assets acquired

Cash and cash equivalents
Accounts and notes receivable
Property and equipment
Software
Other assets

Tangible assets acquired

Intangible asset – Agent relationships
Intangible asset – Trade name
Intangible asset – Covenants not-to-compete

Intangible assets acquired

Liabilities acquired

Accounts payable and accrued liabilities

Liabilities acquired

Excess purchase price – Goodwill

$ 4,867
31,241
378
12,600
14

39,900
3,500
2,900

(35,345)

$ 80,500

49,100

46,300

(35,345)

$ 20,445

Agent relationships represent the value of the existing non-contractual relationships Agro National, LLC had with
its insurance agents. Agent relationships have a finite estimated useful life of approximately 20 years and are
being amortized in proportion to their expected cash flows. The trade name represents the value of the Agro
National, LLC brand and is estimated to have a useful life of 25 years. The trade name is being amortized straight
line over 25 years. Covenants not-to-compete represent non-compete agreements with key employees of Agro
National, LLC. These agreements are being amortized straight line over their contractual life which has a weighted
average life of approximately four years. During 2009, the Company recorded $4.5 million of intangible asset
amortization related to these intangibles (2008 – $4.2 million).

The estimated remaining amortization expense for the intangible assets is as follows:

2010
2011
2012
2013
2014 and thereafter

Total

$ 4,349
4,205
3,623
3,045
22,450

$37,672

Operating results of Agro National have been included in the consolidated financial statements from June 2,
2008, the date of acquisition. FASB ASC Topic Business Combinations requires the following selected unaudited
pro-forma information be provided to present a summary of the combined results of the Company and Agro
National assuming the transaction had been effective January 1, 2008. The results for the year ended

F-19

December 31, 2009 include Agro National and are therefore the same as the Company’s consolidated results.
The unaudited pro-forma data is for informational purposes only and does not necessarily represent results that
would have occurred if the transaction had taken place on the basis assumed above.

Year ended December 31,

Gross premiums written
Net premiums earned
Total revenue
Total expenses
Net income (loss) available (attributable) to RenaissanceRe

2009

2008
(unaudited)

2007
(unaudited)

$1,728,932 $1,736,028 $1,809,637
$1,273,816 $1,386,824 $1,424,369
$1,667,852 $1,231,196 $1,665,554
$ 606,099 $1,137,584 $ 899,640

common shareholders

$ 838,858 $

(4,389) $ 577,089

Net income (loss) available (attributable) to RenaissanceRe

common shareholders per common share – basic

Net income (loss) available (attributable) to RenaissanceRe

common shareholders per common share – diluted

13.50 $

(0.07) $

8.18

13.40 $

(0.07) $

8.03

The pro-forma net income (loss) available (attributable) to RenaissanceRe common shareholders per common
share – diluted for the year ended December 31, 2008 of $(0.07) (2007 – $8.03), compares to actual results of
$(0.21) for the year ended December 31, 2008 (2007 – $7.93).

Effective April 1, 2008, the Company purchased substantially all the assets of Claims Management Services, Inc.
(“CMS”). CMS was subsequently renamed Glencoe Group Claims Management Inc. (“Glencoe Claims”). Glencoe
Claims has a proprietary network of licensed adjusters and offers services on a national basis and was merged
into RenRe North America Inc. during 2009. The Company handles claims services solely for its own business
and is not currently providing claims services to third parties. The base purchase price paid by the Company was
$3.8 million, plus additional amounts as determined in accordance with the terms of the asset purchase
agreement. During 2009, the contingent additional amounts were finalized and an additional $1.5 million was
paid in accordance with the terms of the asset purchase agreement to the former owner and was expensed as
incurred and included in operating expenses. This payment was deemed a separate transaction from the
purchase of substantially all the assets of CMS as it related to compensation to the former owner for post-
acquisition services. In connection with the purchase, the Company acquired net assets with a fair value of $0.5
million and recorded $3.3 million of goodwill.

NOTE 5. GOODWILL AND OTHER INTANGIBLE ASSETS

The following table shows an analysis of goodwill and other intangible assets for the years ended December 31,
2008 and 2009:

Goodwill and other intangibles
Other
intangible
assets

Total

Goodwill

Balance as of December 31, 2007

Acquired during the year
Amortization
Impairment losses

Balance as of December 31, 2008

Gross amount
Accumulated impairment losses and amortization

Acquired during the year
Amortization
Impairment losses

Balance as of December 31, 2009

Gross amount
Accumulated impairment losses and amortization

F-20

$ 2,298 $ 3,939 $ 6,237
74,620
50,910
(6,676)
(6,676)
—
—

23,710
—
—

26,008
—

26,008
5,861
—
—

54,849
(6,676)

48,173
3,119
(6,473)
—

80,857
(6,676)

74,181
8,980
(6,473)
—

31,869

57,968
— (13,149)

89,837
(13,149)

$31,869 $ 44,819 $ 76,688

During 2009, the acquisitions of goodwill and other intangible assets relates to the Company’s acquisition of all
the outstanding and issued shares of Spectrum Partners, and in 2008, the majority of the increase in goodwill
and other intangible assets relates to the asset acquisitions of Agro National, LLC and CMS as described in “Note
4. Business Combinations”. In addition during 2008, the Company acquired other intangible assets of $4.6
million relating to a small acquisition and the purchase of patents.

The following table shows an analysis of goodwill and other intangible assets included in investments in other
ventures, under equity method for the years ended December 31, 2009 and 2008:

Goodwill and other intangible assets included in
investments in other ventures, under equity method
Other
intangible assets

Goodwill

Total

Balance as of December 31, 2007

Acquired during the year
Amortization
Impairment losses

Balance as of December 31, 2008

Gross amount
Accumulated impairment losses and amortization

Acquired during the year
Amortization
Impairment losses

Balance as of December 31, 2009

Gross amount
Accumulated impairment losses and amortization

$ —
8,477
—
—

8,477
—

8,477
—
—
—

8,477
—

$8,477

—
44,323
(2,980)
—

—
52,800
(2,980)
—

44,323
(2,980)

41,343
—
(6,009)
—

44,323
(8,989)

52,800
(2,980)

49,820
—
(6,009)
—

52,800
(8,989)

$35,334

$43,811

The gross carrying value and accumulated amortization by major category of other intangible asset as of
December 31, 2009, is shown below:

Customer relationships and customer lists
Covenants not-to-compete
Patents and intellectual property
Software
Trademarks and trade names
Lloyd’s managing agency license

Other intangible assets

Gross carrying
value

Accumulated
amortization

Total

$79,385
5,030
4,500
3,350
4,110
1,867

$98,242

$(14,783) $64,602
3,426
4,061
2,345
3,852
1,867

(1,604)
(439)
(1,005)
(258)
—

$(18,089) $80,153

F-21

The useful life of intangible assets with finite lives ranges from 1 to 25 years, with a weighted-average
amortization period of 15 years. Expected amortization of the intangible assets, including intangible assets
recorded in investments in other ventures, under equity method, is shown below:

Other
intangible
assets included
in investments
in other
ventures, under
equity method

$ 5,670
5,161
4,653
3,979
15,871

$35,334
—

Other
intangibles

$ 4,964
4,819
4,238
3,627
25,304

$42,952
1,867

Total

$10,634
9,980
8,891
7,606
41,175

$78,286
1,867

$44,819

$35,334

$80,153

2010
2011
2012
2013
2014 and thereafter

Total remaining amortization expense
Indefinite lived

Total

NOTE 6.

INVESTMENTS

Fixed Maturity Investments Available For Sale

The following table summarizes the amortized cost, fair value and related unrealized gains and losses and other-
than-temporary impairments of fixed maturity investments available for sale at December 31, 2009 and 2008:

At December 31, 2009

Amortized Cost

Included in Accumulated
Other Comprehensive Income

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Non-Credit
Other-Than-
Temporary
Impairments (1)

Fair Value

U.S. treasuries
Agencies
Non-U.S. government (Sovereign

debt)

FDIC guaranteed corporate
Non-U.S. government-backed

corporate

Corporate
Agency mortgage-backed securities
Non-agency mortgage-backed

securities

Commercial mortgage-backed

securities

Asset-backed securities

Total fixed maturity investments

$ 599,930
164,071

691
1,627

$ (2,689)
(121)

$ 597,932
165,577

$ —
—

171,137
850,193

248,888
811,304
289,433

8,706
6,175

1,557
32,128
4,521

(557)
(380)

(1,699)
(4,556)
(1,526)

179,286
855,988

248,746
838,876
292,428

(88)
—

—
(4,659)
—

35,071

1,888

(576)

36,383

(2,949)

253,713
89,443

2,183
3,598

(4,424)
(532)

251,472
92,509

—
(1,531)

available for sale

$3,513,183

$63,074

$(17,060)

$3,559,197

$(9,227)

(1) Represents the non-credit component of other-than-temporary impairments recognized in accumulated

other comprehensive income since the adoption of guidance related to the recognition and presentation of
other-than-temporary impairments under FASB ASC Topic Financial Instruments – Debt and Equity
Securities, during the second quarter of 2009, adjusted for subsequent sales of securities. It does not
include the change in fair value subsequent to the impairment measurement date.

F-22

At December 31, 2008

Included in Accumulated
Other Comprehensive Income

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Fair Value

$ 4,991
16,994
3,466
5,329
627
22,020
25,223
568
647
29

— $ 467,480
448,521
—
55,370
—
207,393
—
3,530
—
537,975
—
756,902
—
98,672
—
255,020
—
166,022
—

Amortized Cost

$ 462,489
431,527
51,904
202,064
2,903
515,955
731,679
98,104
254,373
165,993

Total fixed maturity investments available for sale

$2,916,991

$79,894

— $2,996,885

Fixed Maturity Investments Trading

The following table summarizes the fair value of fixed maturity investments trading at December 31, 2009:

At December 31, 2009

U.S. treasuries
Non-U.S. government (Sovereign debt)
Corporate
Agency mortgage-backed securities

Total fixed maturity investments trading

Fair Value

$320,225
18,773
296,628
100,969

$736,595

Net realized and unrealized gains on fixed maturity investments include net unrealized losses on fixed maturity
investments, trading of $11.4 million for the year ended December 31, 2009.

Contractual maturities of fixed maturity investments are as follows. Expected maturities will differ from contractual
maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment
penalties.

At December 31, 2009

Amortized Cost

Fair Value

Amortized Cost

Fair Value

Available for Sale

Trading

Total Fixed Maturity Investments
Amortized Cost

Fair Value

Due in less than one year
Due after one through five

79,600 $

80,992

2,286

2,288 $

81,886 $

83,280

years

2,454,190

2,481,597

392,212

385,800

2,846,402

2,867,397

Due after five through ten

years

Due after ten years
Mortgage-backed

securities

Asset-backed securities

275,796
35,938

578,216
89,443

284,122
39,695

217,414
33,665

214,260
33,277

580,282
92,509

102,406
—

100,970
—

493,210
69,603

680,622
89,443

498,382
72,972

681,252
92,509

Total

$3,513,183 $3,559,197

$747,983

$736,595 $4,261,166 $4,295,792

F-23

Net Investment Income

The components of net investment income are as follows:

Year ended December 31,

2009

2008

2007

Fixed maturity investments
Short term investments
Other investments

Hedge funds and private equity investments
Other

Cash and cash equivalents

Investment expenses

Net investment income

$160,550 $ 201,220 $176,785
118,483

48,437

9,924

18,279
145,367
855

334,975
(10,994)

(101,779)
(117,867)
7,452

87,985
17,469
11,026

37,463
(13,232)

411,748
(9,285)

$323,981 $ 24,231 $402,463

Net realized gains on the sale of investments are determined on the basis of the first in first out cost method and
for fixed maturity investments available for sale include adjustments to the cost basis of investments for declines
in value that are considered to be other-than-temporary. During the fourth quarter of 2009, the Company started
designating upon acquisition, certain fixed maturity investments as trading. As a result, unrealized gains (losses)
on fixed maturity investments designated as trading, are recorded in net realized and unrealized gains (losses) on
the Company’s consolidated statement of operations. Unrealized gains (losses) on the Company’s fixed maturity
investments available for sale, are recorded in accumulated other comprehensive income on the Company’s
consolidated balance sheet. The Company’s net realized and unrealized gains on fixed maturity investments and
net other-than-temporary impairments are as follows:

Year ended December 31,

Gross realized gains
Gross realized losses

2009

2008

2007

$143,733 $ 99,634 $ 35,923
(9,117)

(39,183)

(88,934)

Net realized gains on fixed maturity investments
Net unrealized losses on fixed maturity investments, trading

104,550
(11,388)

10,700
—

26,806
—

Net realized and unrealized gains on fixed maturity investments

$ 93,162 $ 10,700 $ 26,806

Total other-than-temporary impairments
Portion recognized in other comprehensive income, before taxes

Net other-than-temporary impairments

(26,999)
4,518

(217,014)
—

(25,513)
—

$ (22,481) $(217,014) $(25,513)

F-24

The following table provides an analysis of the length of time the Company’s fixed maturity investments available
for sale in an unrealized loss have been in a continual unrealized loss position. Prior to the adoption of guidance
related to the recognition and presentation of other-then-temporary impairments, which became effective for the
Company on April 1, 2009, the Company had essentially no fixed maturity investments available for sale in an
unrealized loss position:

At December 31, 2009

U.S. treasuries
Agencies
Non-U.S. government (Sovereign

debt)

FDIC guaranteed corporate
Non-U.S. government-backed

corporate

Corporate
Agency mortgage-backed securities
Non-agency mortgage-backed

securities

Commercial mortgage-backed

securities

Asset-backed securities

Less than 12 Months

12 Months or Greater

Total

Fair Value

Unrealized
Losses

Fair Value

Unrealized
Losses

Fair Value

Unrealized
Losses

$ 551,203 $ (2,689) $

75,537

(121)

— $ — $ 551,203 $ (2,689)
(121)
—

75,537

—

39,119
156,989

106,971
253,828
156,288

(540)
(380)

(1,699)
(4,069)
(1,348)

209
—

—
7,893
3,818

(17)
—

—
(487)
(178)

39,328
156,989

106,971
261,721
160,106

(557)
(380)

(1,699)
(4,556)
(1,526)

2,558

(54)

9,120

(522)

11,678

(576)

77,796
4,605

(1,089)
(18)

32,184
14,407

(3,335)
(514)

109,980
19,012

(4,424)
(532)

Total

$1,424,894 $(12,007) $67,631

$(5,053) $1,492,525 $(17,060)

At December 31, 2009, the Company held 108 fixed maturity investments available for sale securities that were
in an unrealized loss position and does not intend to sell these securities and it is not more likely than not that the
Company will be required to sell these securities before the anticipated recovery of the remaining amortized cost
basis. The Company performed reviews of its investments for the year ended December 31, 2009 and 2008,
respectively, in order to determine whether declines in the fair value below the amortized cost basis of its fixed
maturity investments available for sale were considered other-than-temporary in accordance with the applicable
guidance, as discussed below.

At December 31, 2009, $431.2 million of cash and investments at fair value were on deposit with, or in trust
accounts for the benefit of various counterparties, including $62.1 million on deposit, or in trust accounts for the
benefit of U.S. state regulatory authorities.

Under the terms of certain reinsurance contracts, certain of the Company’s subsidiaries and joint ventures may
be required to provide letters of credit to reinsureds in respect of reported claims and/or unearned premiums. To
support the Company’s letters of credit, participating operating subsidiaries and joint ventures have pledged
shares of Renaissance Investment Holdings Ltd. (“RIHL”) and other securities owned by them as collateral. At
December 31, 2009, the Company had pledged RIHL shares and other securities in the amount of $1.1 billion to
support its letters of credit.

Other-Than-Temporary Impairment Process Prior to April 1, 2009

F-25

The majority of the Company’s fixed maturity investments available for sale are managed by external investment
managers in accordance with specific investment mandates and guidelines. The investment managers are
directed to manage the Company’s investments to maximize total investment return in accordance with these
investment mandates and guidelines. While the Company has adequate capital and liquidity to support its
operations and to hold its fixed maturity investments available for sale which were in an unrealized loss position
until they recover in value, the Company has not prohibited or restricted its investment managers from selling
these investments and its investment managers actively traded the Company’s investments. The Company was
therefore unable to represent or certify that it had the intent or ability to hold these investments until they
recovered in value. As a consequence, under the pre-existing guidance, the Company impaired essentially all of
its fixed maturity investments available for sale that were in an unrealized loss position at each quarterly reporting
date. For the three months ended March 31, 2009, and the years ended December 31, 2008 and 2007,
respectively, the Company recorded other-than-temporary impairments of $19.0 million, $217.0 million and
$25.5 million, respectively. As of each of March 31, 2009, December 31, 2008 and December 31, 2007,
respectively, the Company had essentially no fixed maturity investments available for sale in an unrealized loss
position.

Other-Than-Temporary Impairment Process Effective April 1, 2009

Pursuant to the guidance effective April 1, 2009, the Company revised its quarterly process for assessing whether
declines in the fair value of its fixed maturity investments available for sale represent impairments that are other-
than-temporary. The process now includes reviewing each fixed maturity investment available for sale that is
impaired and determining: (i) if the Company has the intent to sell the debt security or (ii) if it is more likely than
not that the Company will be required to sell the debt security before its anticipated recovery; and (iii) assessing
whether a credit loss exists, that is, where the Company expects that the present value of the cash flows expected
to be collected from the security are less than the amortized cost basis of the security.

In assessing the Company’s intent to sell securities, the Company’s procedures may include actions such as
discussing planned sales with its third party investment managers, reviewing sales that have occurred shortly
after the balance sheet date, and consideration of other qualitative factors that may be indicative of the
Company’s intent to sell or hold the relevant securities. For the year ended December 31, 2009, the Company
recognized $1.3 million, of other-than-temporary impairments due to the Company’s intent to sell these securities
as of December 31, 2009.

In assessing whether it is more likely than not that the Company will be required to sell a security before its
anticipated recovery, the Company considers various factors including its future cash flow forecasts and
requirements, legal and regulatory requirements, the level of its cash, cash equivalents, short term investments,
fixed maturity investments trading and fixed maturity investments available for sale in an unrealized gain position,
and other relevant factors. For the year ended December 31, 2009, the Company recognized $nil of other-than-
temporary impairments due to required sales.

In evaluating credit losses, the Company considers a variety of factors in the assessment of a security including:
(i) the time period during which there has been a significant decline below cost; (ii) the extent of the decline
below cost and par; (iii) the potential for the security to recover in value; (iv) an analysis of the financial condition
of the issuer; (v) the rating of the issuer; (vi) the implied rating of the issuer based on an analysis of option
adjusted spreads; (vii) the absolute level of the option adjusted spread for the issuer; and (viii) an analysis of the
collateral structure and credit support of the security, if applicable.

Once the Company determines that it is possible that a credit loss may exist for a security, the Company performs
a detailed review of the cash flows expected to be collected from the issuer. The Company estimates expected
cash flows by applying estimated default probabilities and recovery rates to the contractual cash flows of the
issuer, with such default and recovery rates reflecting long-term historical averages adjusted to reflect current
credit, economic and market conditions, giving due consideration to collateral and credit support, if applicable,
and discounting the expected cash flows at the purchase yield on the security. In instances in which a
determination is made that an impairment exists but the Company does not intend to sell the security and it is not
more likely than not that the Company will be required to sell the security before the anticipated recovery of its
remaining amortized cost basis, the impairment is separated into: (i) the amount of the total other-than-temporary
impairment related to the credit loss; and (ii) the amount of the total other-than-temporary impairment related to
all other factors. The amount of the other-than-temporary impairment related to the credit loss is recognized in
earnings. The amount of the other-than-temporary impairment related to all other factors is recognized in other

F-26

comprehensive income. For the year ended December 31, 2009, the Company recognized $21.2 million,
respectively, of credit related other-than-temporary impairments which were recognized in earnings and $4.5
million, respectively, related to other factors which were recognized in other comprehensive income.

The following table provides a rollforward of the amount of other-than-temporary impairments related to credit
losses recognized in earnings for which a portion of an other-than-temporary impairment was recognized in
accumulated other comprehensive income for the year ended December 31, 2009:

Nine months ended December 31, 2009 (1)

Balance – April 1, 2009

Additions:

Amount related to credit loss for which an other-than-temporary impairment was not previously

recognized

Amount related to credit loss for which an other-than-temporary impairment was previously

recognized

Reductions:

Securities sold during the period
Securities for which the amount previously recognized in other comprehensive income was
recognized in earnings, because the Company intends to sell the security or is more likely
than not the Company will be required to sell the security

Increases in cash flows expected to be collected that are recognized over the remaining life of

the security

Balance – December 31, 2009

$10,620

1,779

(2,415)

—

$ 9,987

(1) Table is for the nine months ended December 31, 2009, rather than the year ended December 31, 2009, as
updated guidance related to the recognition and presentation of other- than-temporary impairments under
FASB ASC Topic Financial Instruments – Debt and Equity Securities, became effective April 1, 2009 for the
Company.

Other Investments

The table below shows the Company’s portfolio of other investments:

At December 31,

Private equity partnerships
Senior secured bank loan funds
Catastrophe bonds
Non-U.S. fixed income funds
Hedge funds
Miscellaneous other investments

Total other investments

2009

2008

$286,108 $258,901
215,870
93,085
81,719
105,838
18,062

245,701
160,051
75,891
54,163
36,112

$858,026 $773,475

Interest income, income distributions and realized and unrealized gains and losses on other investments are
included in net investment income and totaled $163.6 million (2008 – loss of $219.6 million, 2007 – income of
$105.5 million) of which $88.5 million was related to net unrealized gains (2008 – net unrealized loss of $259.4
million, 2007 – net unrealized gains of $47.3 million).

As of December 31, 2009, the Company has committed capital to private equity partnerships and other entities of
$650.7 million, of which $424.2 million has been contributed.

F-27

Measuring the Fair Value of Other Investments Using Net Asset Valuations

The table below shows the Company’s portfolio of other investments measured using net asset valuations:

At December 31, 2009

Fair Value

Unfunded
Commitments

Redemption
Frequency

Redemption
Notice Period

Private equity partnerships
Senior secured bank loan funds
Non-U.S. fixed income funds
Hedge funds

$286,108
245,701
75,891
54,163

See below
$182,493
See below
—
— Monthly, bi-monthly
5 – 20 days
— Annually, bi-annually 45 – 90 days

See below
See below

Total other investments measured using

net asset valuations

$661,863

$182,493

Private equity partnerships – Included in the Company’s investments in private equity partnerships are alternative
asset limited partnerships that invest in certain private equity asset classes including U.S. and global leveraged
buyouts; mezzanine investments; distressed securities; real estate; oil, gas and power; and secondaries. The fair
values of the investments in this category have been estimated using the net asset value per share of the
investments. The Company generally has no right to redeem its interest in any of these private equity partnerships
in advance of dissolution of the applicable partnership. Instead, the nature of these investments is that
distributions are received by the Company in connection with the liquidation of the underlying assets of the
applicable limited partnership. If these investments were held, it is estimated that the majority of the underlying
assets of the limited partnerships would liquidate over 7 to 10 years.

Senior secured bank loan funds – The Company’s investment in senior secured bank loan funds includes funds
that invest primarily in bank loans and other senior debt instruments. The fair values of the investments in this
category have been estimated using the net asset value per share of the funds. Investments of $147.1 million are
redeemable, in whole or in part, on a monthly basis. Currently, the Company generally has no right to redeem its
remaining $98.6 million investment in bank loan funds in advance of dissolution of the applicable funds. Instead,
the nature of these investments is that distributions are received by the Company in connection with the
liquidation of the underlying assets of the applicable fund. If these investments were held, it is estimated that the
majority of the underlying assets of the funds would liquidate over 6 to 8 years. It is the Company’s understanding
that the management of the senior secured bank loan funds which currently cannot generally be redeemed is
planning to restructure these investments during 2010, in such a way that the Company may have the option to
transfer its investment to a fund structure which the Company would liquidate in the near term, although the
Company cannot assure you this restructuring will be consummated.

F-28

Investments in Other Ventures, under Equity Method

The table below shows the Company’s portfolio of investments in other ventures, under equity method:

Year ended December 31,

2009

2008

Investment

Ownership % Carrying Value

Investment

Ownership % Carrying Value

Tower Hill Companies
Top Layer Re
Tower Hill
Other

$50,000
13,125
10,000
12,040

25.0% $41,544
26,329
50.0%
14,437
28.6%
14,977
n/a

$50,000
13,125
10,000
12,040

25.0% $47,699
25,367
50.0%
15,227
28.6%
11,586
n/a

Total investments in other ventures,

under equity method

$85,165

$97,287

$85,165

$99,879

The Company originally invested $13.1 million and $10.0 million in Top Layer Re and Tower Hill, respectively,
representing a 50.0% and 28.6% ownership, respectively. In May 2007, the Company invested $10.0 million in
Starbound II, which represented a 9.8% equity ownership interest in Starbound II, and in December 2007 the
Company invested an additional $9.2 million in Starbound II which increased the Company’s investment and
ownership percentage to $19.2 million and 17.1%, respectively. Effective July 31, 2008, Starbound II
repurchased the outstanding shares of its investors at book value; as a result, the Company now owns 100% of
Starbound II and consequently, Starbound II became a consolidated entity effective August 1, 2008.

The Company’s share of the equity in earnings of Tower Hill and the Tower Hill Companies are reported one
quarter in arrears.

Investments in other ventures, under equity method, also includes the Company’s investment in ChannelRe
Holdings Ltd. (“ChannelRe”) of $nil (2008 – $nil). During 2007, ChannelRe, suffered a significant net loss which
reduced ChannelRe’s GAAP shareholders’ equity below $nil. The net loss was driven by unrealized
mark-to-market losses related to financial guaranty contracts accounted for as derivatives under GAAP. As a
result, the Company reduced its carried value in ChannelRe to $nil which negatively impacted the Company’s net
income by $151.8 million in 2007. As a result of reducing the Company’s carried value in ChannelRe to $nil,
combined with the fact that the Company has no further contractual obligations to provide capital or other
support to ChannelRe, the Company believes it currently has no further negative economic exposure to
ChannelRe. Since ChannelRe remained in a negative shareholders’ equity position during 2008 and 2009, the
Company’s investment in ChannelRe continues to be carried at $nil.

The table below shows the Company’s equity in earnings (losses) of other ventures, under equity method:

Year ended December 31,

2009

2008

2007

Top Layer Re
Tower Hill and the Tower Hill Companies
ChannelRe
Other

$12,619 $11,377 $ 14,949
3,432
— (151,751)
4,761

(2,083)
—
440

1,681

545

Total equity in earnings (losses) of other ventures

$10,976 $13,603 $(128,609)

Excluding ChannelRe, for which the Company’s original investment of $119.7 million exceeds the carrying value
of $nil at December 31, 2009, undistributed earnings in the Company’s investments in other ventures, under
equity method were $18.3 million at December 31, 2009 (2008 – $17.6 million). During 2009, the Company
received $16.4 million of dividends from its investments in other ventures, under equity method (2008 – $17.2
million, 2007 – $12.8 million).

F-29

The equity in earnings (losses) of ChannelRe, Tower Hill and the Tower Hill Companies are reported one quarter
in arrears, except that the Company’s 2007 results reflect the estimated fourth quarter charge from ChannelRe as
it relates to unrealized mark-to-market losses in ChannelRe’s portfolio of financial guaranty contracts accounted
for as derivatives under GAAP.

Refer to “Note 26. Summarized Financial Information of ChannelRe Holdings Ltd.”, for more information on
ChannelRe.

NOTE 7.

FAIR VALUE MEASUREMENTS

The use of fair value to measure certain assets and liabilities with resulting unrealized gains or losses is pervasive
within the Company’s financial statements, and is a critical accounting policy and estimate for the Company. Fair
value is defined under accounting guidance currently applicable to the Company to be the price that would be
received upon the sale of an asset or paid to transfer a liability in an orderly transaction between open market
participants at the measurement date. The Company recognizes the change in unrealized gains and losses
arising from changes in fair value in its consolidated statements of operations, with the exception of changes in
unrealized gains and losses on its fixed maturity investments available for sale, which are recognized as a
component of accumulated other comprehensive income in shareholders’ equity.

FASB ASC Topic Fair Value Measurements and Disclosures prescribes a fair value hierarchy that prioritizes the
inputs to the respective valuation techniques used to measure fair value. The hierarchy gives the highest priority
to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to
unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

(cid:129)

Fair values determined by Level 1 inputs utilize unadjusted quoted prices obtained from active markets
for identical assets or liabilities for which the Company has access. The fair value is determined by
multiplying the quoted price by the quantity held by the Company;

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In
such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has
been determined based on the lowest level input that is significant to the fair value measurement of the asset or
liability. The Company’s assessment of the significance of a particular input to the fair value measurement in its
entirety requires judgment, and the Company considers factors specific to the asset or liability.

In order to determine if a market is active or inactive for a security, the Company considers a number of factors,
including, but not limited to, the spread between what a seller is asking for a security and what a buyer is bidding
for the same security, the volume of trading activity for the security in question, the price of the security
compared to its par value (for fixed maturity investments), and other factors that may be indicative of market
activity.

There have been no material changes in the Company’s valuation techniques in the period represented by these
consolidated financial statements.

F-30

Below is a summary of the assets and liabilities that are measured at fair value on a recurring basis and also
represents the carrying amount on the Company’s consolidated balance sheet:

At December 31, 2009

Total

Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)

Significant
Other
Observable
Inputs (Level 2)

Significant
Unobservable
Inputs (Level 3)

Fixed maturity investments
Short term investments
Other investments
Other secured assets
Other assets and liabilities (1)

$4,295,792
1,002,306
858,026
27,730
37,947

$918,157
—
—
—
1,030

$3,377,635
1,002,306
464,113
27,730
33,350

—
—
393,913
—
3,567

$6,221,801

$919,187

$4,905,134

$397,480

Fixed maturity investments included in Level 1 consist of the Company’s investments in U.S. treasuries. Fixed
maturity investments included in Level 2 are U.S. agencies, non-U.S. government, corporate, FDIC guaranteed
corporate, non-U.S. government-backed corporate, agency mortgage-backed, mortgage-backed and asset-
backed fixed maturity investments.

The Company’s fixed maturity investments portfolios are priced using broker quotations and pricing services,
such as index providers and pricing vendors. The pricing vendors provide pricing for a high volume of liquid
securities that are actively traded. For securities that do not trade on an exchange, the pricing services generally
utilize market data and other observable inputs in matrix pricing models to determine prices. Prices are generally
verified using third party data. Prices obtained from broker quotations are considered non-binding, however they
are based on observable inputs and by observing secondary trading of similar securities obtained from active,
non-distressed markets. The Company considers these Level 2 inputs as they are corroborated with other
externally obtained information.

Short term investments are considered Level 2 and fair values are generally determined using amortized cost
which approximates fair value and, in certain cases, in a manner similar to the Company’s fixed maturity
investments noted above.

The Company’s other investments currently include investments in hedge funds, catastrophe bonds, a non-U.S.
dollar fixed income fund and a bank loan fund for which the Company can redeem a portion of its investment on
a monthly basis, all of which are included in Level 2. Fair value estimates for the majority of the Company’s other
investments included in Level 2 are derived using net asset valuations provided by third parties such as the
relevant investment manager or administrator, recent financial information issued by the applicable investee
entity or available market data to estimate fair value. In addition, the Company’s other investments currently
include investments in private equity partnership investments and another bank loan fund, for which the
Company’s investments are subject to lock-up provisions for the multi-year term of these fund investments, and
as such these investments are included in Level 3. In certain cases, management’s judgment may also be
required to estimate fair value. The fair value of private equity partnership investments is based on net asset
values obtained from the investment manager or general partner of the respective entity. The type of underlying
investments held by the investee which form the basis of the net asset valuation include assets such as private
business ventures, for which the Company does not have access to, and as a result, is unable to corroborate the
fair value measurement and therefore requires significant management judgment to determine the underlying
value of the private equity partnership and accordingly the fair value of the Company’s investment in each private
equity partnership is considered Level 3. The Company also considers factors such as recent financial
information, the value of capital transactions with the partnership and management’s judgment regarding
whether any adjustments should be made to the net asset value. The Company regularly reviews the performance
of its private equity partnerships directly with the fund managers. The Company’s investment in the bank loan
fund which is subject to a multi-year lock up provision is valued using monthly net asset valuations received from
the investment manager. The underlying investments in this bank loan fund are relatively liquid and prices can

F-31

be obtained on a daily basis. However, the lock up provisions in this fund result in a lack of current observable
market transactions between the fund participants and the fund, and therefore, the Company considers the fair
value of its investment in this fund to be determined using Level 3 inputs.

Below is a reconciliation of the beginning and ending balances, for the periods shown, of assets and liabilities
measured at fair value on a recurring basis using Level 3 inputs. Interest and dividend income are included in net
investment income and are excluded from the reconciliation.

Fair Value Measurements Using Significant
Unobservable Inputs (Level 3)

Other
investments (1)

Other assets
and (liabilities) (2)

Total

Balance – January 1

$382,080

$(42,512)

$339,568

Total unrealized (losses) gains

Included in net investment income
Included in other income (loss)

Total realized losses

Included in net investment income
Included in other income (loss)
Total foreign exchange gains (losses)
Net purchases, issuances, and settlements
Net transfers in and/or out of Level 3

(10,356)
—

—
—
312
21,877
—

—
25,716

—
(18,123)
(54)
38,540
—

(10,356)
25,716

—
(18,123)
258
60,417
—

Balance – December 31

$393,913

$ 3,567

$397,480

(1) Other investments primarily include investments in private equity partnerships and a senior secured bank

loan fund.

(2) Balance at December 31, 2009 includes $39.1 million of other assets and $35.5 million of other liabilities.

The Fair Value Option for Financial Assets and Financial Liabilities

The Company has elected to account for certain assets and liabilities at fair value under FASB ASC Topic
Financial Instruments. These assets and liabilities were previously accounted for under applicable GAAP that
resulted in a carrying value that approximated fair value, and as such, there were no material changes to the
reported value of these assets and liabilities upon adoption of the fair value option. The Company has elected to
use the guidance under FASB ASC Topic Financial Instruments, as it represents the most current authoritative
GAAP. Below is a summary of the balances the Company has elected to account for at fair value:

At December 31,

Other investments
Other secured assets
Other assets and (liabilities) (1)

2009

2008

$858,026 $773,475
76,424
9,102 $ (11,209)

27,730

(1) Balance at December 31, 2009 includes $22.6 million of other assets and $13.5 million of other liabilities.

Balance at December 31, 2008 includes $2.8 million of other assets and $14.0 million of other liabilities.

Included in net investment income for the year ended December 31, 2009 is $88.5 million of net unrealized
gains related to the changes in fair value of other investments. Net unrealized gains and losses related to the
changes in the fair value of other secured assets and other assets and liabilities recorded in other income was a
gain $1.4 million and a loss of $2.3 million, respectively, for the year ended December 31, 2009.

Reinsurance Contracts Accounted for at Fair Value

The Company assumes and cedes certain reinsurance contracts that are accounted for at fair value under the fair
value election option. The fair value of these contracts is obtained through the use of internal valuation models.
These contracts are recorded on the Company’s balance sheet in other assets and other liabilities and totaled
$2.2 million and $nil, respectively (2008 – $2.8 million and $nil, respectively). During 2009, the Company
recorded losses of $31.9 million (2008 – $9.3 million, 2007 – $36.8 million) which are included in other income
(loss) and represent changes in the fair value of these contracts.

F-32

Insurance Contracts Accounted for at Fair Value

The Company assumes certain insurance contracts that are accounted for at fair value under the fair value
election option. The fair value of these contracts is obtained through the use of internal valuation models. These
contracts are recorded on the Company’s balance sheet in other liabilities and totaled $13.5 million at
December 31, 2009 (2008 – $14.0 million). During 2009, the Company recorded unrealized gains of $1.2
million (2008 – $1.5 million, 2007 – $2.6 million), and realized losses of $3.3 million (2008 – $nil) which are
included in other income (loss) and represent changes in the fair value and realized losses of these contracts.

Weather and Energy Transactions Accounted for at Fair Value

From time to time, the Company enters into certain weather and energy insurance type contracts through its
trading activities that it has elected to account for at fair value under the fair value election option. These
contracts are recorded on the Company’s balance sheet in other assets and totaled $0.5 million at December 31,
2009 (2008 – $nil). During 2009, the Company recorded unrealized losses of $2.8 million, which are included in
other income (loss) and represent changes in the fair value of these contracts (2008 – $nil, 2007 – $nil).

NOTE 8. CEDED REINSURANCE

The Company purchases reinsurance and other protection to manage its risk portfolio and to reduce its exposure
to large losses. The Company currently has in place contracts that provide for recovery from reinsurers of a
portion of certain claims and claim expenses, generally in excess of various retentions or on a proportional basis.
In addition to loss recoveries, certain of the Company’s ceded reinsurance contracts provide for recoveries of
additional premiums, reinstatement premiums and for lost no-claims bonuses, which are incurred when losses
are ceded to other reinsurance contracts. The Company remains liable to the extent that any reinsurance
company fails to meet its obligations.

The effect of reinsurance and retrocessional activity on premiums written and earned and on net claims and
claim expenses incurred for the years ended December 31, 2009, 2008 and 2007 was as follows:

Year ended December 31,

Premiums written
Direct
Assumed
Ceded

Net premiums written

Premiums earned
Direct
Assumed
Ceded

Net premiums earned

Claims and claim expenses
Gross claims and claim expenses incurred
Claims and claim expenses recovered

Net claims and claim expenses incurred

2009

2008

2007

$ 490,670 $ 489,866 $ 416,642
1,392,995
1,246,162
(374,302)
(382,408)

1,238,262
(522,535)

$1,206,397 $1,353,620 $1,435,335

$ 515,069 $ 487,223 $ 453,729
1,370,997
1,301,906
(400,357)
(402,305)

1,277,449
(518,702)

$1,273,816 $1,386,824 $1,424,369

$ 284,150 $ 928,263 $ 563,758
(84,484)

(167,774)

(86,863)

$ 197,287 $ 760,489 $ 479,274

The reinsurers with the three largest balances accounted for 40.1%, 12.7% and 10.7%, respectively, of the
Company’s losses recoverable balance at December 31, 2009 (2008 – 26.6%, 18.2% and 8.1%, respectively).
At December 31, 2009, the Company had a $7.6 million valuation allowance against losses recoverable
(2008 – $8.7 million). The three largest company-specific components of the valuation allowance represented
29.8%, 26.3% and 12.3%, respectively, of the Company’s total valuation allowance at December 31, 2009
(2008 – 40.5%, 23.0% and 9.6%, respectively).

NOTE 9. OTHER SECURED ASSETS AND OTHER SECURED LIABILITIES

Other secured assets and other secured liabilities represent contractual rights and obligations under a purchase
agreement, contingent purchase agreement and credit derivatives agreement (collectively, the “Agreements”)

F-33

with a major bank to sell certain securities within the Company’s catastrophe-linked securities portfolio
(“Cat-Linked Securities”). Under the terms of the Agreements, the Company originally sold its ownership interest
in Cat-Linked Securities with a par amount of $88.9 million to the bank for $88.9 million during 2007. In 2008,
the Company sold additional Cat-Linked Securities with a par amount of $17.5 million to the bank for $17.5
million. During 2009, Cat-Linked Securities with a par amount of $49.9 million matured (2008 – $29.0 million).
Agreements allow the Company to repurchase these securities at par and obligate the Company to repurchase
the securities under certain circumstances including catastrophe triggering events and events of default. As a
result of this transaction, the Company is receiving the spread over LIBOR on the remaining $27.5 million of
Cat-Linked Securities, less a financing fee.

The Company accounted for the sale of the Cat-Linked Securities under the Agreements as a secured borrowing
with a pledge of collateral under the provisions of FASB ASC Topic Transfers and Servicing, and accordingly
recognized no gain or loss upon the transaction date. The credit derivatives agreement is accounted for at fair
value with changes in fair value recognized in other income. As a result of the Agreements, the Company
reclassified its previously recorded Cat-Linked Securities, recognized an other secured asset which totaled $27.7
million at December 31, 2009, representing the fair value of the pledged collateral and credit derivatives
agreement, and recognized a $27.5 million liability, representing its obligation to repurchase the Cat-Linked
Securities at par. The Company recognized $3.9 million (2008 – $2.2 million) of other income in its consolidated
statements of operations in 2009 from this transaction, representing the spread over LIBOR less the financing fee
on the Cat-Linked Securities for the year ended December 31, 2009, inclusive of the change in the fair value of
the credit derivatives agreement.

Under the terms of the Agreements, the Company may sell other catastrophe-linked securities.

NOTE 10. RESERVE FOR CLAIMS AND CLAIM EXPENSES

The Company uses statistical and actuarial methods to estimate ultimate expected claims and claim expenses.
The period of time from the reporting of a loss to the Company and the settlement of the Company’s liability may
be many years. During this period, additional facts and trends will be revealed. As these factors become
apparent, case reserves will be adjusted, sometimes requiring an increase or decrease in the overall reserves of
the Company, and at other times requiring a reallocation of incurred but not reported (“IBNR”) reserves to
specific case reserves or additional case reserves. These estimates are reviewed regularly, and such adjustments,
if any, are reflected in the results of operations in the period in which they become known and are accounted for
as changes in estimates. Adjustments to the Company’s claims and claim expense reserves can impact current
year net income by increasing net income if the estimates of prior year claims and claim expense reserves prove
to be overstated or by decreasing net income if the estimates of prior year claims and claim expense reserves
prove to be insufficient.

The Company’s estimates of claims and claim expenses are also based in part upon the estimation of claims
resulting from natural and man-made disasters such as hurricanes, earthquakes, tsunamis, winter storms,
terrorist attacks and other catastrophic events. Estimation by the Company of claims resulting from catastrophic
events is inherently difficult because of the potential severity of property catastrophe claims. Additionally, the
Company has recently increased its Individual Risk and specialty reinsurance business but does not have the
benefit of a significant amount of its own historical experience in certain of these lines. Therefore, the Company
uses both proprietary and commercially available models, as well as historical (re)insurance industry claims
experience, for purposes of evaluating future trends and providing an estimate of ultimate claims costs.

F-34

Activity in the liability for unpaid claims and claim expenses is summarized as follows:

Year ended December 31,

Net reserves as of January 1

Net incurred related to:

Current year
Prior years

Total net incurred

Net paid related to:
Current year
Prior years

Total net paid

Total net reserves as of December 31
Losses recoverable as of December 31

Total gross reserves as of December 31

2009

2008

2007

$1,861,078 $1,845,221 $1,796,301

441,786
(244,499)

995,316
(234,827)

712,424
(233,150)

197,287

760,489

479,274

177,797
372,803

550,600

346,845
397,787

744,632

125,816
304,538

430,354

1,507,765
194,241

1,861,078
299,534

1,845,221
183,275

$1,702,006 $2,160,612 $2,028,496

For the year ended December 31, 2009, the prior year favorable development of $244.5 million included
favorable development of $249.5 million attributable to the Company’s Reinsurance segment and adverse
development of $5.0 million attributable to the Company’s Individual Risk segment. Within the Company’s
Reinsurance segment, the Company’s property catastrophe reinsurance unit experienced $184.4 million of
favorable development on prior years’ claims and claim expense reserves and its specialty reinsurance unit
experienced $65.1 million of favorable development on prior years’ claims and claim expense reserves.

The favorable development within the Company’s property catastrophe reinsurance unit of $184.4 million in 2009
was principally attributable to a reduction in ultimate net losses associated with the 2008 hurricanes, Gustav and
Ike ($44.7 million); the 2005 hurricanes, Katrina, Rita and Wilma ($25.5 million); the 2007 European windstorm
Kyrill ($16.7 million); the 2007 California wildfires ($14.1 million); the 2007 flooding in the U.K. ($14.6 million);
and the 2004 hurricanes, Charley, Frances, Ivan and Jeanne ($11.3 million), due to better than expected
reported claims activity, and with respect of the 2004 and 2005 hurricanes, the adoption of a new actuarial
technique using reported loss development factors to estimate the ultimate losses for these events. The remaining
favorable development within the Company’s property catastrophe reinsurance unit was due to a reduction of
ultimate net losses on a variety of smaller catastrophes such as hail storms, winter freezes, floods, fires, tornadoes
which occurred during the 2006 through 2008 accident years.

The favorable development within the Company’s specialty reinsurance unit of $65.1 million in 2009 was
principally attributable to lower than expected claims emergence on the 2005 through 2008 underwriting years of
$87.6 million, which was driven by the application of the Company’s formulaic actuarial reserving methodology
for this business with the reductions being due to actual paid and reported loss activity being more favorable to
date than what was originally anticipated when setting the initial IBNR reserves, $10.0 million due to a reduction
on one claim on a contract related to the 2005 hurricanes, and partially offset by a $32.5 million increase in the
Company’s estimated ultimate net losses on the 2008 Madoff matter.

The adverse development within the Company’s Individual Risk segment of $5.0 million in 2009 was principally
driven by $26.9 million of adverse development in the Company’s crop insurance business primarily due to an
increase in the severity of reported loss activity in 2009 on the 2008 crop year. This more than offset a $2.4
million reduction in ultimate net losses on the 2004 and 2005 hurricanes principally due to the adoption of a new
actuarial technique using reported loss development factors to estimate the ultimate losses for these events, $2.1
million of favorable development due to changes in actuarial assumptions and $17.4 million of favorable
development principally driven by the application of the Company’s formulaic actuarial reserving methodology for
this business with the reductions being due to actual paid and reported loss activity being more favorable to date
than what was originally anticipated when setting the initial IBNR reserves.

For the year ended December 31, 2008, the prior year favorable development of $234.8 million included $188.1
million attributable to the Company’s Reinsurance segment and $46.7 million attributable to the Company’s
Individual Risk segment. Within the Company’s Reinsurance segment, the catastrophe reinsurance unit
experienced $131.6 million of favorable development on prior years’ estimated ultimate claim reserves,

F-35

principally as a result of a comprehensive review of the Company’s expected ultimate net losses associated with
the 2005 hurricanes, Katrina, Rita and Wilma. The Company’s specialty reinsurance unit, within the Reinsurance
segment, and its Individual Risk segment experienced $56.5 million and $46.7 million, respectively, of favorable
development in 2008. The favorable development within the specialty reinsurance unit and Individual Risk
segment was principally driven by the application of formulaic actuarial reserving methodology for these books of
business with the reductions being due to actual paid and reported loss activity being more favorable to date than
what was originally anticipated when setting the initial IBNR reserves.

For the year ended December 31, 2007, the prior year favorable development of $233.2 million included $194.4
million attributable to the Company’s Reinsurance segment and $38.8 million attributable to the Company’s
Individual Risk segment. Within the Company’s Reinsurance segment, the catastrophe reinsurance unit
experienced $93.1 million of favorable development on prior years’ estimated ultimate claim reserves, principally
as a result of a reduction of the ultimate losses for the 2006 and 2005 accident years as reported claims have
come in less than expected. Included in the 2005 accident year is a $19.2 million reduction in net claims and
claim expenses associated with hurricanes Katrina, Rita and Wilma. The Company’s specialty reinsurance unit
experienced $101.3 million of favorable development in 2007. The favorable development within the Company’s
specialty reinsurance unit and Individual Risk segment was principally driven by the application of the Company’s
formulaic actuarial reserving methodology for these books of business with the reductions being due to actual
paid and reported loss activity being better than what was anticipated when setting the initial IBNR reserves.

Net claims and claim expenses incurred were reduced by $3.3 million during 2009 (2008 – $1.9 million,
2007 – $3.3 million) related to income earned on assumed reinsurance contracts that were classified as deposit
contracts with underwriting risk only. Other income was reduced by $0.7 million during 2009 (2008 – $1.9
million, 2007 – $1.4 million) related to premiums and losses incurred on assumed reinsurance contracts that
were classified as deposit contracts with timing risk only. Aggregate deposit liabilities of $63.9 million are
included in reinsurance balances payable at December 31, 2009 (2008 – $73.6 million) and aggregate deposit
assets of $nil are included in other assets at December 31, 2009 (2008 – $nil) associated with these contracts.

NOTE 11. DEBT

In July 2001, the Company issued $150.0 million of 7.0% Senior Notes which came due July 15, 2008. The
notes were paid at maturity on July 15, 2008 using existing capital resources, as discussed below.

In January 2003, the Company issued $100.0 million, which represents the carrying amount on the Company’s
consolidated balance sheet, of 5.875% Senior Notes due February 15, 2013, with interest on the notes payable
on February 15 and August 15 of each year. The notes can be redeemed by the Company prior to maturity
subject to payment of a “make-whole” premium. The notes, which are senior obligations, contain various
covenants, including limitations on mergers and consolidations, restrictions as to the disposition of the stock of
designated subsidiaries and limitations on liens of the stock of designated subsidiaries. At December 31, 2009,
the fair value of the 5.875% Senior Notes was $103.7 million (2008 – $93.3 million).

RenaissanceRe Holdings Ltd. Revolving Credit Facility

Effective April 9, 2009, the Company amended and restated its revolving credit facility (the “Credit Agreement”).
The Credit Agreement provides for a revolving commitment of $345.0 million. As part of the $345.0 million
commitment, letters of credit may be issued for the account of the Company’s subsidiaries in an aggregate
amount up to $150.0 million, of which up to $75.0 million may be used for the issuance of letters of credit for the
account of the Company’s non-insurance subsidiaries. On July 10, 2008, the Company borrowed $150.0 million
available under its prior facility to pay at maturity its 7.0% Senior Notes which came due on July 15, 2008. This
amount was repaid in full on November 9, 2009. The Company has the right, subject to satisfying certain
conditions, to increase the size of the facility up to $500.0 million. Amounts borrowed under the Credit
Agreement bear interest at a rate selected by the Company equal to the Base Rate or LIBOR, plus a margin, as
more fully set forth in the Credit Agreement. Interest rates averaged 2.6% during the period January 1, 2009
through November 9, 2009 (2008 – 4.2%). The scheduled commitment termination date under the Credit
Agreement is March 31, 2010.

The Credit Agreement contains representations, warranties and covenants that the Company believes to be
customary for bank loan facilities of this type, including customary covenants limiting the ability to merge,
consolidate, enter into negative pledge agreements, sell a substantial amount of assets, incur liens and declare or
pay dividends under certain circumstances. The Credit Agreement also contains certain financial covenants that

F-36

the Company believes to be customary for reinsurance and insurance companies in revolving credit facilities of
this type, which generally provide that the Company’s consolidated debt to capital shall not exceed the ratio of
0.35:1 and that the consolidated net worth (the “Net Worth Requirements”) of the Company and Renaissance
Reinsurance shall equal or exceed $1.8 billion and $960.0 million, respectively, subject to a grace period in the
case of the Net Worth Requirements which is conditioned on, among other things, Renaissance Reinsurance
maintaining a certain financial strength rating, all as more fully set forth in the Credit Agreement. The Company
was in compliance with the financial covenants under the Credit Agreement as of February 18, 2010.

DaVinciRe Revolving Credit Facility

DaVinciRe is a party to a Third Amended and Restated Credit Agreement, dated as of April 5, 2006 (the
“DaVinciRe Credit Agreement”), which provides for a revolving credit facility in an aggregate amount of up to
$200.0 million that matures on April 5, 2011. The term of the DaVinciRe Credit Agreement may be extended and
the commitment amount may be increased to $250.0 million, provided certain conditions are met. Interest rates
are based on a spread above LIBOR, and averaged approximately 1.3% during 2009 (2008 – 4.3%). The
DaVinciRe Credit Agreement requires DaVinciRe and DaVinci to maintain a minimum net worth of $350.0 million
and $450.0 million, respectively, and requires DaVinciRe to maintain a debt to capital ratio of no greater than
30%. DaVinciRe was in compliance with the financial covenants as of February 18, 2010. Neither
RenaissanceRe nor Renaissance Reinsurance is a guarantor of this facility and the lenders have no recourse
against RenaissanceRe or its subsidiaries other than DaVinciRe and DaVinci under the DaVinciRe Credit
Agreement. Pursuant to the terms of the Credit Agreement, a default by DaVinciRe on its obligations under the
DaVinciRe Credit Agreement will not result in a default under the Credit Agreement. At December 31, 2009,
$200.0 million remained outstanding under the DaVinciRe Credit Agreement.

Renaissance Trading Margin Facility

Renaissance Trading maintains a brokerage facility with a leading prime broker, which has an associated margin
facility. This margin facility is supported by a $10.0 million guarantee issued by RenaissanceRe. Interest on
amounts outstanding under this facility is at overnight LIBOR plus 75 basis points. At December 31, 2009, $nil
was outstanding under the facility.

Interest paid on the above debt totaled $18.7 million for the year ended December 31, 2009 (2008 – $28.2
million, 2007 – $35.5 million).

NOTE 12. VARIABLE INTEREST ENTITIES

Timicuan Reinsurance II Ltd. (“Tim Re II”)

On May 29, 2009, Tim Re II, a wholly owned subsidiary of the Company, sold $49.5 million of non-voting Class B
shares to external investors, and the Company invested an additional $10.0 million in the non-voting Class B
shares, representing a 16.8% ownership interest, providing Tim Re II with additional reinsurance capacity to
accept property catastrophe excess of loss reinsurance business. Tim Re II is a Class 3 Bermuda domiciled
reinsurer. The Company ceded a defined portfolio of property catastrophe excess of loss reinsurance contracts
incepting June 1, 2009 to Tim Re II under a fully-collateralized facultative retrocessional reinsurance contract in
return for a potential underwriting profit commission. The Class B shareholders participate in substantially all of
the profits or losses of Tim Re II while the Class B shares remain outstanding. The Class B shares indemnify Tim
Re II against losses relating to insurance risk and therefore these shares have been accounted for as prospective
reinsurance under FASB ASC Topic Financial Services – Insurance. The sale of the Class B shares was
considered a reconsideration event under FASB ASC Topic Consolidation. In accordance with the provisions of
FASB ASC Topic Consolidation, Tim Re II was considered a variable interest entity (“VIE”) and the Company was
considered the primary beneficiary. As a result, Tim Re II is consolidated by the Company and all significant
inter-company transactions have been eliminated. The Class B share capital was invested by Tim Re II in short
term investments and was pledged as collateral to the Company in support of obligations arising under the
reinsurance contract. Tim Re II was required to repurchase the Class B shares subsequent to December 31,
2009, which was the end of the contract period. The Company ceded $32.0 million of premium to Tim Re II
under the facultative retrocessional excess of loss reinsurance contract through the period ended December 31,
2009. At December 31, 2009, the Company’s consolidated balance sheet included assets and liabilities of $65.8
million and $72.3 million, respectively, related to Tim Re II, principally reflecting reinsurance underwriting
balances and investments with respect to assets and amounts payable to Class B shareholders and a reserve for
unearned premiums with respect to liabilities. Effective January 1, 2010, the Company repurchased all of the

F-37

outstanding Class B shares for $71.0 million, net of a $15.7 million holdback. The $15.7 million holdback is
expected to be settled during 2010. Subsequent to the repurchase of the Class B shares by the Company, Tim
Re II remains a consolidated subsidiary, but is no longer considered a variable interest entity.

NOTE 13. REDEEMABLE NONCONTROLLING INTEREST – DAVINCIRE

In October 2001, the Company formed DaVinciRe and DaVinci with other equity investors. RenaissanceRe owns
a noncontrolling economic interest in DaVinciRe; however, because RenaissanceRe controls a majority of
DaVinciRe’s outstanding voting rights, the consolidated financial statements of DaVinciRe are included in the
consolidated financial statements of the Company. The portion of DaVinciRe’s earnings owned by third parties for
the years ended December 31, 2009, 2008 and 2007 is recorded in the consolidated statements of operations as
redeemable noncontrolling interest.

DaVinciRe shareholders are party to a shareholders agreement (the “Shareholders Agreement”) which provides
DaVinciRe shareholders, excluding the Company, with certain redemption rights that enable each shareholder to
notify DaVinciRe of such shareholder’s desire for DaVinciRe to repurchase up to half of such shareholder’s
aggregate number of shares held, subject to certain limitations, such as limiting the aggregate of all share
repurchase requests to 25% of DaVinciRe’s capital in any given year and satisfying all applicable regulatory
requirements. If total shareholder requests exceed 25% of DaVinciRe’s capital, the number of shares
repurchased will be reduced among the requesting shareholders pro-rata, based on the amounts desired to be
repurchased. Shareholders desiring to have DaVinci repurchase their shares must notify DaVinciRe before
March 1 of each year. The repurchase price will be based on GAAP book value as of the end of the year in which
the shareholder notice is given, and the repurchase will be effective as of such date. Payment will be made by
April 1 of the following year, following delivery of the audited financial statements for the year in which the
repurchase was effective. The repurchase price is subject to a true-up for development on outstanding loss
reserves after settlement of all claims relating to the applicable years. Certain third party shareholders of
DaVinciRe submitted repurchase notices on or before the required annual redemption notice date of March 1,
2009, in accordance with the Shareholders Agreement. The repurchase notices submitted on or before March 1,
2009 were for shares of DaVinciRe with a GAAP book value of $173.6 million at December 31, 2009. Effective
January 1, 2010, DaVinciRe redeemed the shares for $173.6 million, less a $17.6 million reserve holdback, and,
in a separate transaction, the Company sold a portion of its shares in DaVinciRe to a third party shareholder. The
Company’s ownership in DaVinciRe was 38.2% at December 31, 2009 (2008 – 22.8%) and subsequent to the
above transactions, the Company’s ownership interest in DaVinciRe increased to 41.2%.

Certain shareholders of DaVinciRe put in repurchase notices on or before the March 1, 2008 repurchase notice
date. The repurchase notice was for shares with a GAAP book value of $145.5 million at December 31, 2008. On
January 30, 2009, the Company on behalf of DaVinciRe purchased the shares for $145.5 million, less a $21.8
million reserve holdback. The Company’s ownership interest in DaVinciRe increased from 22.8% at
December 31, 2008, to 37.6%. as a result of these purchases.

The Company expects its ownership in DaVinciRe to fluctuate over time.

The activity in redeemable noncontrolling interest – DaVinciRe is detailed in the table below for the year ended
December 31, 2009:

Year ended December 31, 2009

Balance – January 1

Cumulative effect of change in accounting principle, net of taxes (1)
Purchase of shares from redeemable noncontrolling interest

Comprehensive income:

Net income attributable to redeemable noncontrolling interest
Other comprehensive income attributable to noncontrolling interest

Balance – December 31

Redeemable
noncontrolling
interest -
DaVinciRe

$ 768,531
42
(152,729)

171,501
(698)

$ 786,647

(1) Cumulative effect adjustment to opening retained earnings as of April 1, 2009, related to the recognition and
presentation of other-than-temporary impairments, as required by FASB ASC Topic Investments – Debt and
Equity Securities.

F-38

NOTE 14. SHAREHOLDERS’ EQUITY

The aggregate authorized capital of the Company is 325 million shares consisting of 225 million common shares
and 100 million preference shares.

The following table is a summary of changes in common shares issued and outstanding:

Year ended December 31,
(thousands of shares)

Issued and outstanding shares – January 1
Shares repurchased
Exercise of options and issuance of restricted stock awards

Issued and outstanding shares – December 31

2009

2008

2007

61,503 68,920 72,140
(3,588)
(8,064)
368
647

(951)
1,193

61,745 61,503 68,920

On May 20, 2008, the Board of Directors authorized a $500.0 million share repurchase program. The Company’s
decision to repurchase common shares will depend on, among other matters, the market price of the common
shares and the capital requirements of the Company. During 2009, $51.0 million of shares (2008 – $428.4
million) were repurchased under this program. Common shares repurchased by the Company are normally
cancelled and retired. At December 31, 2009, $331.4 million remained available for repurchase under the Board
authorized share repurchase program.

In December 2006, the Company raised $300.0 million through the issuance of 12 million Series D Preference
Shares at $25 per share; in March 2004, the Company raised $250.0 million through the issuance of 10 million
Series C Preference Shares at $25 per share; and in February 2003 the Company raised $100.0 million through
the issuance of 4 million Series B Preference Shares at $25 per share. The Series D, Series C and Series B
Preference Shares may be redeemed at $25 per share at the Company’s option on or after December 1,
2011, March 23, 2009 and February 4, 2008, respectively. Dividends on the Series D, Series C and Series B
Preference Shares are cumulative from the date of original issuance and are payable quarterly in arrears at
6.60%, 6.08% and 7.30% respectively, when, if, and as declared by the Board of Directors. If the Company
submits a proposal to its shareholders concerning an amalgamation or submits any proposal that, as a result of
any changes to Bermuda law, requires approval of the holders of these preference shares to vote as a single
class, the Company may redeem the Series D Preference Shares prior to December 1, 2011, at $26 per share.
The preference shares have no stated maturity and are not convertible into any other securities of the Company.
Generally, the preference shares have no voting rights. Whenever dividends payable on the preference shares are
in arrears (whether or not such dividends have been earned or declared) in an amount equivalent to dividends for
six full dividend periods (whether or not consecutive), the holders of the preference shares, voting as a single
class regardless of class or series, will have the right to elect two directors to the Board of Directors of the
Company. During 2009, the Company declared and paid $42.3 million in preference share dividends
(2008 – $42.3 million, 2007 – $42.9 million).

NOTE 15.

EARNINGS PER SHARE

The Company accounts for its weighted average shares in accordance with FASB ASC Topic Earnings per Share.
Basic earnings per common share is based on weighted average common shares and excludes any dilutive
effects of stock options and restricted stock. Diluted earnings per common share assumes the exercise of all
dilutive stock options and restricted stock grants.

F-39

The following table sets forth the computation of basic and diluted earnings per common share for the years
ended December 31, 2009, 2008 and 2007:

Year ended December 31,
(thousands of shares)

Numerator:

Net income (loss) available (attributable) to RenaissanceRe common

shareholders
Amount allocated to participating common shareholders (1)

2009

2008

2007

$838,858 $(13,280) $569,575
(7,667)

(18,473)

Net income (loss) allocated to RenaissanceRe common shareholders

$820,385 $(13,221) $561,908

Denominator:

Denominator for basic income per RenaissanceRe common share –

Weighted average common shares
Per common share equivalents of employee stock options and

restricted shares

Denominator for diluted income per RenaissanceRe common share –

Adjusted weighted average common shares and assumed

conversions

Basic income (loss) per RenaissanceRe common share
Diluted income (loss) per RenaissanceRe common share

60,775

62,531

70,520

435

880

1,305

61,210

63,411

71,825

$
$

13.50 $
13.40 $

(0.21) $
(0.21) $

8.08
7.93

(1) Represents earnings attributable to holders of unvested restricted shares issued under the Company’s 2001

Stock Incentive Plan and Non-Employee Director Stock Incentive Plan.

NOTE 16. RELATED PARTY TRANSACTIONS AND MAJOR CUSTOMERS

The Company has entered into reinsurance agreements with certain subsidiaries and affiliates of Tower Hill and
has also entered into reinsurance agreements with respect to business produced by Tower Hill Insurance. These
reinsurance agreements include excess of loss reinsurance and four net retained personal property quota share
agreements for 2009 and 2008. For the year ended December 31, 2009, the Company recorded $28.1 million
(2008 – $57.3 million) of gross premium written assumed from Tower Hill and its subsidiaries and affiliates
related to the above mentioned contracts. Gross premiums earned totaled $58.5 million (2008 – $78.0 million)
and expenses incurred were $14.3 million (2008 – $29.2 million) for the year ended December 31, 2009 related
to these contracts. The Company had a net related outstanding receivable balance of $24.3 million as of
December 31, 2009 (2008 – $17.0 million).

During 2008, the Company purchased $3.5 million of intangible assets from an employee of the Company,
including rights, title and interest in and to patents and patent technologies, inventions and trade names. These
intangible assets were owned by the employee. As part of the purchase agreement, the Company paid a set price
and agreed to pay additional amounts upon successful licensing, sale, or certain other monetization by the
Company of the inventions.

During 2008, the Company invested $6.0 million in Angus Partners LLC (“Angus”), representing a 40% equity
interest, which is accounted for under the equity method of accounting. Angus provides commodity related risk
management products to third party customers. The Company had an outstanding net liability position of $4.8
million at December 31, 2009 (2008 – $38.8 million) related to certain derivative trades with Angus. For the year
ended December 31, 2009, the Company generated other income of $1.2 million (2008 – incurred an other loss
of $39.4 million) related to these trades.

During 2009, the Company received distributions from Top Layer Re of $11.5 million (2008 – $15.1 million), and
a management fee of $3.3 million (2008 – $3.5 million). The management fee reimburses the Company for
services it provides to Top Layer Re.

During the years ended December 31, 2009, 2008 and 2007, the Company received 90.1%, 88.6% and 91.8%,
respectively, of its Reinsurance segment gross premiums written from three brokers (2008 – four, 2007 – four).
During November 2008, AON Corporation (“AON”) acquired the Benfield Group Limited (“Benfield”), resulting in
the combined entity, AON Benfield, accounting for 61.5% of the Company’s Reinsurance segment gross

F-40

premiums written in 2008. Subsidiaries and affiliates of AON Benfield, Marsh Inc., and the Willis Group
accounted for approximately 58.7%, 20.9% and 10.5%, respectively, of gross premiums written for the
Reinsurance segment in 2009.

NOTE 17. DIVIDENDS

Dividends declared and paid on Common Shares amounted to $0.96, $0.92 and $0.88 per common share for
the years ended December 31, 2009, 2008 and 2007, respectively.

The total amount of dividends paid to holders of the common shares during 2009 was $59.7 million
(2008 – $57.9 million, 2007 – $62.6 million). In addition, the Company declared and paid $42.3 million in
preference share dividends during 2009 (2008 – $42.3 million, 2007 – $42.9 million).

NOTE 18.

TAXATION

Under current Bermuda law, the Company and its Bermuda subsidiaries are not subject to any income or capital
gains taxes. In the event that such taxes are imposed, the Company and its Bermuda subsidiaries would be
exempted from any such tax until March 2016 pursuant to the Bermuda Exempted Undertakings Tax Protection
Act 1966, and Amended Act of 1987.

RenRe North America Holdings Inc. (“RenRe North America”), formerly known as Glencoe U.S. Holdings Inc.
and its subsidiaries are subject to income taxes imposed by U.S. federal and state authorities and file a
consolidated U.S. tax return. Should the U.S. subsidiaries pay a dividend to the Company, withholding taxes
would apply to the extent of current year or accumulated earnings and profits. The Company also has operations
in Ireland and the U.K. which are also subject to income taxes imposed by the respective jurisdictions in which
they operate.

The Company is not subject to income taxation other than as stated above. There can be no assurance that there
will not be changes in applicable laws, regulations or treaties, which might require the Company to change the
way it operates or become subject to taxation.

Income tax (expense) benefit for 2009, 2008 and 2007 is comprised as follows:

Year ended December 31, 2009

Current

Deferred

Total

Total income tax expense

Year ended December 31, 2008

$(2,196) $ (6,898) $ (9,094)

Total income tax benefit (expense)

107 $ (675) $ (568)

Year ended December 31, 2007

Total income tax (expense) benefit

$ (385) $18,817 $18,432

The Company’s expected income tax provision computed on pre-tax income at the weighted average tax rate has
been calculated as the sum of the pre-tax income in each jurisdiction multiplied by that jurisdiction’s applicable
statutory tax rate. Statutory tax rates of 35.0%, 12.5% and 28.0%, have been used for the U.S., Ireland and the
U.K., respectively. A reconciliation of the difference between the provision for income taxes and the expected tax
provision at the weighted average tax rate for the years ended December 31, 2009, 2008 and 2007 is as follows:

Year ended December 31,

2009

2008

2007

Expected income tax (expense) benefit
Transfer pricing adjustments
Change in valuation allowance
Non-deductible expenses
State income tax expense, net of federal benefit
Other

Income tax (expense) benefit

$(3,274) $
(2,729)
(979)
(283)
(236)
(1,593)

468 $ (7,514)
—
25,845
(54)
—
155

(1,908)
1,702
(168)
—
(662)

$(9,094) $ (568) $18,432

F-41

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and
deferred tax liabilities are presented below:

At December 31,

Deferred tax assets

Net operating loss carryforwards
Unearned premium adjustment
Claims reserves, principally due to discounting for tax
Amortization and depreciation
Accrued expenses
Investments
Other

Deferred tax liabilities

Deferred acquisition costs
Investments

Net deferred tax asset before valuation allowance
Valuation allowance

Net deferred tax asset

2009

2008

$ 2,362 $ 15,603
5,542
4,567
2,269
3,600
—
1,181

3,314
3,202
232
4,063
1,368
—

14,541

32,762

(3,534)

(3,775)
— (10,643)

(3,534)

(14,418)

11,007
(2,362)

18,344
(1,383)

$ 8,645 $ 16,961

During 2009, the Company recorded net increases to the valuation allowance of $1.0 million. The Company’s
deferred tax asset relates primarily to net operating losses and GAAP versus tax basis accounting differences
relating to unearned premium reserves, loss reserves and accrued expenses. The Company’s U.S. operations
generated cumulative GAAP taxable income for the three year period ending December 31, 2009. Accordingly,
the Company believes that it is more likely than not that the deferred tax asset will be realized with the exception
of net operating loss carryforwards in Ireland and the U.K. for which a valuation allowance has been provided.

During 2008, the Company recorded net reductions to the valuation allowance of $1.7 million. The Company’s
deferred tax asset relates primarily to net operating loss carryforwards and GAAP versus tax basis accounting
differences relating to unearned premium reserves, loss reserves, accrued expenses and intangible assets. The
net operating losses, which gave rise to the deferred tax asset, have a carryforward period through 2028. While
the Company’s U.S. operations had generated losses in earlier years generating these net operating losses, the
Company’s U.S. operations generated cumulative GAAP taxable income for the three year period ending
December 31, 2008. Accordingly, the Company believes that it is now more likely than not that the deferred tax
asset will be realized with limited exceptions and therefore the valuation allowance was reduced in 2008.

During 2007, the Company recorded net reductions to the valuation allowance of $25.8 million. The Company’s
deferred tax asset relates primarily to net operating loss carryforwards and GAAP versus tax basis accounting
differences relating to unearned premium reserves, loss reserves, accrued expenses and intangible assets. The
net operating losses, which gave rise to the deferred tax asset, have a carryforward period through 2027. While
the Company’s U.S. operations had generated losses in earlier years generating these net operating losses, the
Company’s U.S. operations generated cumulative GAAP taxable income for the three year period ending
December 31, 2007. Accordingly, the Company believes that it is now more likely than not that the deferred tax
asset will be realized with limited exceptions and therefore the valuation allowance was reduced in 2007.

In Ireland, the Company has net operating loss carryforwards of $13.4 million. Under applicable law, the Irish net
operating losses carryforward for an indefinite period. In the U.K., the Company has net operating loss
carryforwards of $2.5 million. Under applicable law, the U.K. net operating losses carryforward for an indefinite
period.

The Company received a net refund for U.S. federal and Irish income taxes of $0.4 million for the year ended
December 31, 2009 and paid taxes of $0.3 million and $0.7 million for the years ended December 31, 2008 and
2007, respectively.

F-42

The Company had no unrecognized tax benefits upon adoption of guidance under FASB ASC Topic Income
Taxes and has no unrecognized tax benefits as of December 31, 2009. Interest and penalties related to uncertain
tax positions, of which there have been none, would be recognized in income tax expense. Tax years 2006
through 2008, 2005 through 2008 and 2008, are open for examination by the Internal Revenue Service, Irish tax
authorities and U.K. tax authorities, respectively.

NOTE 19. GEOGRAPHIC INFORMATION

The following is a summary of the Company’s gross premiums written allocated to the territory of coverage
exposure:

Year ended December 31,

2009

2008

2007

Property catastrophe

United States and Caribbean
Worldwide (excluding U.S.) (1)
Europe
Worldwide
Australia and New Zealand
Other

Specialty reinsurance (2)

Total Reinsurance (3)
Individual Risk (4)

Total gross premiums written

$ 815,840 $ 745,016 $ 735,322
66,392
111,702
27,577
4,360
20,374
287,316

75,489
72,153
67,371
5,455
23,465
159,770

78,222
60,363
92,586
5,293
31,495
114,346

1,198,145
530,787

1,148,719
587,309

1,253,043
556,594

$1,728,932 $1,736,028 $1,809,637

(1) The category Worldwide (excluding U.S.) consists of contracts that cover more than one geographic region

(other than the U.S.). The exposure in this category for gross written premiums to date is predominantly from
Europe and Japan.

(2) The category Specialty reinsurance consists of contracts that are predominantly exposed to U.S. risks, and,

to a lesser extent, worldwide risks.

(3) Excludes $12.7 million, $5.7 million and $37.4 million of premium assumed from the Individual Risk

segment for the years ended December 31, 2009, 2008 and 2007, respectively.

(4) The category Individual Risk consists of contracts that are primarily exposed to U.S. risks.

NOTE 20. SEGMENT REPORTING

The Company has two reportable segments: Reinsurance and Individual Risk.

The Reinsurance segment consists of: 1) property catastrophe reinsurance, primarily written through
Renaissance Reinsurance and DaVinci; 2) specialty reinsurance, primarily written through Renaissance
Reinsurance and DaVinci; and 3) certain other activities of ventures as described herein. The Reinsurance
segment is managed by the Global Chief Underwriting Officer, who leads a team of underwriters, risk modelers
and other industry professionals, who have access to the Company’s proprietary risk management, underwriting
and modeling resources and tools.

The Individual Risk segment includes underwriting that involves understanding the characteristics of the original
underlying insurance policy. The Company’s Individual Risk segment is also managed by the Global Chief
Underwriting Officer. The Individual Risk segment currently provides insurance written on both an admitted basis
and an excess and surplus lines basis, and also provides reinsurance on a quota share basis. The Company does
not manage its assets by segment and therefore total assets are not allocated to the segments.

F-43

Data for the years ended December 31, 2009, 2008 and 2007 is as follows:

Year ended December 31, 2009

Reinsurance

Individual Risk

Eliminations (1)

Other

Total

Gross premiums written

$1,210,795

$530,787

$(12,650)

— $1,728,932

Net premiums written

$ 839,023

$367,374

Net premiums earned
Net claims and claim expenses

incurred

Acquisition expenses
Operational expenses

$ 849,725

$424,091

(87,639)
78,848
139,328

284,926
110,927
50,358

Underwriting income (loss)

$ 719,188

$ (22,120)

Net investment income
Equity in earnings of other ventures
Other income
Interest and preference share

dividends

Redeemable noncontrolling

interest – DaVinciRe

Other items, net
Net realized and unrealized gains on

fixed maturity investments

Net other-than-temporary

impairments

Net income available to

RenaissanceRe common
shareholders

Net claims and claim expenses

incurred – current accident year

$ 161,868

$279,918

Net claims and claim expenses

incurred – prior accident years

Net claims and claim expenses

incurred – total

Net claims and claim expense
ratio – current accident year
Net claims and claim expense
ratio – prior accident years

Net claims and claim expense

ratio – calendar year
Underwriting expense ratio

Combined ratio

(249,507)

5,008

$ (87,639) $284,926

19.0%

66.0%

(29.3%)

1.2%

(10.3%)
25.7%

67.2%
38.0%

15.4%

105.2%

— $1,206,397

— $1,273,816

—
—
—

—

323,981
10,976
2,021

197,287
189,775
189,686

697,068

323,981
10,976
2,021

(57,411)

(171,501)
(36,957)

93,162

(22,481)

$ 141,790 $ 838,858

$ 441,786

(244,499)

$ 197,287

34.7%

(19.2%)

15.5%
29.8%

45.3%

(1) Represents premium ceded from the Individual Risk segment to the Reinsurance segment.

F-44

Year ended December 31, 2008

Reinsurance

Individual Risk

Eliminations (1)

Other

Total

Gross premiums written

$1,154,391

$587,309

$(5,672)

— $1,736,028

Net premiums written

$ 871,893

$481,727

$ 909,759

$477,065

440,900
105,437
81,797

319,589
108,116
40,368

$ 281,625

8,992

Net premiums earned
Net claims and claim expenses

incurred

Acquisition expenses
Operational expenses

Underwriting income

Net investment income
Equity in earnings of other

ventures
Other income
Interest and preference share

dividends

Redeemable noncontrolling

interest – DaVinciRe

Other items, net
Net realized gains on investments
Net other-than-temporary

impairments

Net loss attributable to

RenaissanceRe common
shareholders

Net claims and claim expenses

incurred – current accident year

$ 629,022

$366,294

Net claims and claim expenses

incurred – prior accident years

(188,122)

(46,705)

Net claims and claim expenses

incurred – total

$ 440,900

$319,589

Net claims and claim expense
ratio – current accident year
Net claims and claim expense
ratio – prior accident years

Net claims and claim expense

ratio – calendar year
Underwriting expense ratio

Combined ratio

69.1%

76.8%

(20.6%)

(9.8%)

48.5%
20.5%

69.0%

67.0%
31.1%

98.1%

— $1,353,620

— $1,386,824

—
—
—

—

760,489
213,553
122,165

290,617

24,231

13,603
10,252

(66,933)

(55,133)
(23,603)
10,700

(217,014)

$(303,897) $ (13,280)

$ 995,316

(234,827)

$ 760,489

71.8%

(17.0%)

54.8%
24.2%

79.0%

(1) Represents premium ceded from the Individual Risk segment to the Reinsurance segment.

F-45

Year ended December 31, 2007

Reinsurance

Individual Risk

Eliminations (1)

Other

Total

Gross premiums written

$1,290,420

$556,594

$(37,377)

— $1,809,637

Net premiums written

$1,024,493

$410,842

$ 957,661

$466,708

241,118
119,915
67,969

238,156
135,015
42,495

$ 528,659

$ 51,042

Net premiums earned
Net claims and claim expenses

incurred

Acquisition expenses
Operational expenses

Underwriting income

Net investment income
Equity in losses of other ventures
Other loss
Interest and preference share

dividends

Redeemable noncontrolling

interest – DaVinciRe

Other items, net
Net realized gains on investments
Net other-than-temporary

impairments

Net income available to

RenaissanceRe common
shareholders

Net claims and claim expenses

incurred – current accident year

$ 435,495

$276,929

Net claims and claim expenses

incurred – prior accident years

(194,377)

(38,773)

Net claims and claim expenses

incurred – total

Net claims and claim expense
ratio – current accident year
Net claims and claim expense
ratio – prior accident years

Net claims and claim expense

ratio – calendar year
Underwriting expense ratio

Combined ratio

$ 241,118

$238,156

45.5%

59.3%

(20.3%)

(8.3%)

25.2%
19.6%

44.8%

51.0%
38.1%

89.1%

— $1,435,335

— $1,424,369

—
—
—

—

479,274
254,930
110,464

579,701

402,463
(128,609)
(37,930)

(76,487)

(164,396)
(6,460)
26,806

(25,513)

$ (10,126) $ 569,575

$ 712,424

(233,150)

$ 479,274

50.0%

(16.4%)

33.6%
25.7%

59.3%

(1) Represents premium ceded from the Individual Risk segment to the Reinsurance segment.

NOTE 21. STOCK INCENTIVE COMPENSATION AND EMPLOYEE BENEFIT PLANS

The Company has a stock incentive plan (the “2001 Stock Incentive Plan”) under which all employees of the
Company and its subsidiaries may be granted stock options and restricted stock awards. A stock option award
under the Company’s 2001 Stock Incentive Plan generally allows for the purchase of the Company’s common
shares at a price that is equal to the fair market value of the Company’s common shares as of the grant effective
date. Options to purchase common shares are granted periodically by the Board of Directors, generally vest over
four years and generally expire ten years from the date of grant. Restricted common shares are granted
periodically by the Board of Directors and generally vest ratably over a four or five year period. In addition, awards
granted under the Company’s prior 1993 stock incentive plan remain outstanding, with terms similar to the 2001
Stock Incentive Plan. The Company has also established a Non-Employee Director Stock Incentive Plan to issue
stock options and shares of restricted stock to the Company’s non-employee directors.

F-46

The Company’s 2001 Stock Incentive Plan also allows for the issuance of share-based awards, the issuance of
restricted common shares and shares tendered in connection with option exercises. For purposes of determining
the number of shares reserved for issuance under the 2001 Stock Plan, shares tendered to or withheld by the
Company in connection with certain option exercises will again be available for issuance.

In August 2004, the Company’s shareholders approved the RenaissanceRe Holdings Ltd. 2004 Stock Option
Incentive Plan (the “Premium Option Plan”) under which 6.0 million common shares were reserved for issuance
upon the exercise of options granted under the Premium Option Plan. On August 15, 2007, the Company
terminated the Premium Option Plan, such that no further option grants will be made thereunder. However,
options outstanding at the time of the termination will, unless otherwise subsequently amended pursuant to the
terms of the Premium Option Plan, remain outstanding and unmodified until they expire, subject to the terms of
the Premium Option Plan and any applicable award agreement. The Premium Option Plan provides for, among
other things, mandatory premium pricing such that options can generally only be issued thereunder with a strike
price at a minimum of 150% of the fair market value on the date of grant, minimum 5-year cliff vesting (subject
to waiver by the compensation committee of the Board of Directors), and no discretionary repricing. The
Premium Option Plan includes a dividend protection feature that reduces the strike price for extraordinary
dividends and a change in control feature that reduces the strike price based on a pre-established formula in the
event of a change in control. Other terms are substantially similar to the 2001 Stock Incentive Plan.

Valuation Assumptions

The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing
model with the following weighted average-assumptions for all awards issued in each respective year:

Year ended December 31,

Expected Volatility
Expected Term (in years)
Expected Dividend Yield
Risk-Free Interest Rate

Option Grants

2009 (1)

2008

2007

n/a
n/a
n/a
n/a

21%
5

1.7% 1.7%
2.5% 4.5%

(1) The Company did not grant any stock option awards during the year ended December 31, 2009.

Expected Volatility: The expected volatility is estimated by the Company based on the Company’s historical
stock volatility.

Expected Term: The expected term is estimated by looking at historical experience of similar awards, giving
consideration to the contractual terms of the award, vesting schedules and expectations of future employee
behavior as influenced by changes to the terms of their stock option awards.

Expected Dividend Yield: The expected dividend yield is estimated by reviewing the most recent dividend
declared by the Board of Directors.

Risk-Free Interest Rate: The risk free rate is estimated based on the yield on a U.S. treasury zero-coupon issue
with a remaining term equal to the expected term of the stock option grants.

The fair value of restricted shares is determined based on the market value of the Company’s shares on the grant
date.

Under the fair value recognition provisions of FASB ASC Topic Compensation – Stock Compensation, the
estimated fair value of employee stock options and other share-based payments, net of estimated forfeitures, is
amortized as an expense over the requisite service period. When estimating forfeitures, the Company considers
its historical forfeitures as well as expectations about employee behavior. The Company currently uses an 8%
forfeiture rate.

F-47

Summary of Stock Compensation Activity:

The following is a summary of activity under the Company’s existing stock compensation plans for the years
ending December 31, 2007, 2008 and 2009, respectively:

2001 Stock Incentive and Non-Employee Director Stock Incentive Plans

Weighted
options
outstanding

Weighted
average
exercise price

Fair
value of
options

Weighted
average
remaining
contractual life

Aggregate
intrinsic
value

Range of
exercise
prices

Balance, December 31, 2006

3,426,803

$37.43

$77,333.7 $ 0.01 – $53.96

Options granted
Options forfeited
Options expired
Options exercised

755,586
(18,092)
—
(191,649)

Balance, December 31, 2007

3,972,648

Options granted
Options forfeited
Options expired
Options exercised

800,230
(56,457)
(145,124)
(564,564)

Balance, December 31, 2008

4,006,733

$51.51
45.90
—
27.12

$40.57

$53.69
49.23
52.78
25.18

$44.79

$12.71

$ 51.13 –$59.66

$ 5,900.9

$77,749.2 $ 0.01 – $59.66

$ 9.94

$50.71 – $53.86

$ 9,946.6

6.6

$29,583.4 $11.92 – $59.66

— $ — $ —

—

Options granted
Options forfeited
Options expired
Options exercised

(7,616)
—
(426,138)

51.26
—
31.03

Balance, December 31, 2009

3,572,979

$46.42

Total options exercisable at
December 31, 2009

2,467,302

$44.36

Premium Option Plan

$ 8,283.9

$24,891.0 $12.40 – $59.66

$22,035.9 $33.52 – $59.66

5.9

5.2

Weighted
options
outstanding

Weighted
average
exercise price

Fair value of
options

Weighted
average
remaining
contractual life

Aggregate
intrinsic value

Range of
exercise prices

Balance, December 31, 2006

3,774,000

$82.34

—

Options granted
Options forfeited
Options expired
Options exercised

— $ —
—
—
—
—
—
—

Balance, December 31, 2007 (1) 3,774,000

$82.34

— $73.06 – $98.98

Options granted
Options forfeited
Options expired
Options exercised

— $ —
—
—
—
—
—
—

Balance, December 31, 2008 (1) 3,774,000

$82.34

— $73.06 – $98.98

Options granted
Options forfeited
Options expired
Options exercised

(2,500,000)
—
—

— $ —
86.61
—
—

Balance, December 31, 2009 (1) 1,274,000

$73.96

Total options exercisable at
December 31, 2009 (1)

974,000

$74.24

4.7

— $73.06 – $74.24

(1) The Premium Option Plan was terminated, as to new issuances, at the August 2007 Board of Directors

meeting and consequently, the shares available for grant under the plan are zero.

F-48

Restricted Stock

Employee
restricted stock

Non-employee director
restricted stock

Total
restricted stock

Number of
shares

Weighted
average grant-
dated fair value

Number of
shares

Weighted
average grant-
dated fair value

Number of
shares

Weighted
average grant-
dated fair value

Nonvested at December 31, 2006

888,756

$44.90

38,991

$46.16

927,747

$44.95

Awards granted
Awards vested
Awards canceled/expired/forfeited

307,251
(315,916)
(16,959)

$51.80
45.55
44.98

23,183
(16,971)
—

$51.75
47.14
—

330,434
(332,887)
(16,959)

$51.79
45.63
44.98

Nonvested at December 31, 2007

863,132

$47.11

45,203

$48.65

908,335

$47.19

Awards granted
Awards vested
Awards canceled/expired/forfeited

437,250
(358,745)
(42,346)

$51.19
46.62
49.61

23,585
(30,479)
—

$53.00
48.65
—

460,835
(389,224)
(42,346)

$51.28
46.78
49.61

Nonvested at December 31, 2008

899,291

$49.17

38,309

$51.33

937,600

$49.26

Awards granted
Awards vested
Awards canceled/expired/forfeited

919,481
(447,614)
(22,364)

$44.67
47.53
49.25

24,981
(18,675)
—

$44.03
49.98
—

944,462
(466,289)
(22,364)

$44.65
47.63
49.25

Nonvested at December 31, 2009

1,348,794

$46.64

44,615

$47.81

1,393,409

$46.68

Shares available for issuance under the Company’s 2001 Stock Incentive Plan and Non-Employee Director Stock
Incentive Plan totaled 1.3 million at December 31, 2009. The total fair value of shares vested during the year
ended December 31, 2009 was $22.9 million (2008 – $19.8 million, 2007 – $17.4 million). Cash in the amount
of $9.2 million was received from employees as a result of employee stock option exercises during the year ended
December 31, 2009 (2008 – $3.0 million, 2007 – $0.5 million). In connection with these exercises, there was no
tax benefit realized by the Company. The Company issues new shares upon the exercise of an option.

The total stock compensation expense recognized in the Company’s consolidated statements of operations for the
year ended December 31, 2009 was $38.0 million (2008 – $26.3 million, 2007 – $23.4 million). As of
December 31, 2009, there was $45.5 million of total unrecognized compensation cost related to restricted shares
and $4.4 million related to stock options expense which will be recognized during the next 2.6 years and 1.4
years, respectively.

All of the Company’s employees are eligible for defined contribution pension plans. Contributions are primarily
based upon a percentage of eligible compensation. The Company contributed $3.3 million to its defined
contribution pension plans in 2009 (2008 – $2.3 million, 2007 – $1.7 million).

NOTE 22. STATUTORY REQUIREMENTS

Under the Insurance Act 1978, amendments thereto and Related Regulations of Bermuda (“the Act”), certain
subsidiaries of the Company are required to prepare statutory financial statements and to file in Bermuda a
statutory financial return. The Act also requires these subsidiaries of the Company to maintain certain measures
of solvency and liquidity. At December 31, 2009, the statutory capital and surplus of the Bermuda subsidiaries
was $3.3 billion (2008 – $3.2 billion) and the amount required to be maintained under Bermuda law was $528.1
million (2008 – $525.5 million).

Under the Act, Renaissance Reinsurance and DaVinci are classified as Class 4 insurers, and are therefore
restricted as to the payment of dividends in the amount of 25% of the prior year’s statutory capital and surplus,
unless at least two members of the Board of Directors attest that a dividend in excess of this amount would not
cause the company to fail to meet its relevant margins. During 2009, Renaissance Reinsurance and DaVinci
declared aggregate cash dividends of $781.8 million (2008 – $238.1 million) and $4.1 million (2008 – $6.9
million), respectively.

Under the Act, Glencoe is classified as a Class 3A insurer and Glencoe is also eligible as an excess and surplus
lines insurer in a number of states in the U.S. Under the various capital and surplus requirements in Bermuda
and in these states, Glencoe is required to maintain a minimum amount of capital and surplus. In this regard, the
declaration of dividends from retained earnings and distributions from additional paid-in capital are limited to the

F-49

extent that the above requirement is met. During 2009, Glencoe declared aggregate cash dividends and returned
capital of $nil and $124.0 million, respectively (2008 – $40.0 million and $160.5 million).

In 2008, new statutory legislation was enacted in Bermuda, which included, among other things, the Bermuda
Solvency Capital Requirement (“BSCR”) which is a standard mathematical model designed to give the Bermuda
Monetary Authority (“BMA”) more advanced methods for determining an insurer’s capital adequacy. Underlying
the BSCR is the belief that all insurers should operate on an ongoing basis with a view to maintaining their capital
at a prudent level in excess of the minimum solvency margin otherwise prescribed under the Act. The Company
is currently completing the 2009 BSCR for its Class 4 insurers, Renaissance Reinsurance and DaVinci, and at
this time believes both companies will exceed the target level of required capital.

The Company’s principal U.S. insurance subsidiary Stonington is also required to maintain certain measures of
solvency and liquidity. State statutes place limitations on the amount of dividends or other distributions payable
by Stonington to its affiliates. Stonington is also subject to risk-based capital requirements. The formula for
determining the risk-based capital requirements produces a risk-adjusted target capital level of statutory capital
by applying certain factors to an insurer’s business risks, including, but not limited to, asset risk, credit risk,
underwriting risk and operational risk. If Stonington’s statutory capital and surplus falls below the target capital
level, the Texas insurance commissioner is authorized to take varying degrees of regulatory actions depending on
the level of capital inadequacy, to protect policyholders and creditors. At December 31, 2009, the estimated
consolidated statutory capital and surplus of Stonington was $122.3 million (2008 – $128.6 million). Because of
an accumulated deficit in earned surplus from prior operations, Stonington cannot currently pay an ordinary
dividend without Texas insurance commissioner approval.

Under the Lloyd’s regulations for start-up syndicates, the statutory capital of Syndicate 1458, known as Funds at
Lloyd’s (the “FAL”), is calculated using the internal Lloyd’s risk-based capital model. In addition, if the FAL are
not sufficient to cover all losses, the Lloyd’s Central Fund provides an additional level of security for policyholders.
At December 31, 2009, the FAL requirement set by Lloyd’s for Syndicate 1458 is £47.6 million based on its
business plan, approved in October 2009. Actual FAL posted for Syndicate 1458 at December 31, 2009 by
RenaissanceRe CCL, is £61.0 million, supported 100% by letters of credit. From 2010 onwards, the FAL
requirements will be based on an internal model, agreed by Lloyd’s, and from October 2012, Syndicate 1458’s
capital requirements are expected to be driven by Solvency II requirements.

The differences between statutory basis financial statements and financial statements prepared in accordance
with U.S. GAAP vary between domestic and foreign jurisdictions. The principal differences in Bermuda are that
statutory financial statements do not reflect deferred acquisition costs, prepaid assets, or fixed assets. Also,
reinsurance assets and liabilities are presented net of retrocessional reinsurance and there is no cash flow
statement. The principal differences in the U.S. are that statutory financial statements do not reflect deferred
acquisition costs, bonds are carried at amortized cost, deferred income tax is charged or credited directly to
equity, subject to limitations, and reinsurance assets and liabilities are presented net of retrocessional
reinsurance. In the U.K., Syndicate 1458 files annual syndicate accounts with Lloyd’s, which in turn are provided
to the Financial Services Authority (“FSA”). The FSA prescribes a set of admissible assets for statutory reporting
purposes, which include deferred acquisition costs. Assets not listed as admissible are deemed inadmissible and
such assets include deferred tax assets. The Company has not used any statutory accounting practices that are
not prescribed.

NOTE 23. DERIVATIVE INSTRUMENTS

The Company enters into derivative instruments such as futures, options, swaps, forward contracts and other
derivative contracts in order to manage its foreign currency exposure, obtain exposure to a particular financial
market, for yield enhancement, or for trading and speculation. The Company accounts for its derivatives in
accordance with FASB ASC Topic Derivatives and Hedging, which requires all derivatives to be recorded at fair
value on the Company’s balance sheet as either assets or liabilities, depending on the rights or obligations of the
derivatives, with changes in fair value reflected in current earnings. The Company does not currently apply hedge
accounting in respect of any positions reflected in its consolidated financial statements. The fair value of the
Company’s derivatives are estimated by reference to quoted prices or broker quotes, where available, or in the
absence of quoted prices or broker quotes, the use of industry or internal valuation models.

The Company’s guidelines permit, subject to approval, investments in derivative instruments such as futures,
forward contracts, options, swap agreements and other derivative contracts which may be used to assume risk or

F-50

for hedging purposes. The Company principally has exposure to derivatives related to the following types of risks:
interest rate risk; foreign currency risk; credit risk; energy and weather-related risk; and equity price risk.

Interest Rate Futures

The Company uses interest rate futures within its portfolio of fixed maturity investments to manage its exposure to
interest rate risk, which can include increasing or decreasing its exposure to this risk. At December 31, 2009, the
Company had $826.9 billion of notional long positions and $46.5 million of notional short positions of primarily
Eurodollar and non-U.S. dollar futures contracts. The fair value of these derivatives as recognized in other assets
and liabilities in its consolidated balance sheet at December 31, 2009 was $0.9 million (2008 – $0.1 million) and
$0.1 million (2008 – $0.1 million), respectively. During 2009, the Company recorded gains of $5.2 million (2008
– gains of $12.4 million, 2007 – losses of $1.9 million) in its consolidated statement of operations related to these
derivatives. The fair value of these derivatives is determined using exchange traded prices.

Foreign Currency Derivatives

The Company’s functional currency is the U.S. dollar. The Company writes a portion of its business in currencies
other than U.S. dollars and may, from time to time, experience foreign exchange gains and losses, other income
(loss) and incur underwriting income (losses) in currencies other than U.S. dollars, which will in turn affect the
Company’s consolidated financial statements. All changes in exchange rates, with the exception of non-U.S.
dollar denominated investments classified as available for sale, are recognized currently in the Company’s
consolidated statements of operations.

Underwriting Related Foreign Currency Contracts

The Company’s foreign currency policy with regard to its underwriting operations is generally to hold foreign
currency assets, including cash, investments and receivables that approximate the foreign currency liabilities,
including claims and claim expense reserves and reinsurance balances payable. When necessary, the Company
may use foreign currency forward and option contracts to minimize the effect of fluctuating foreign currencies on
the value of non-U.S. dollar denominated assets and liabilities associated with its underwriting operations. At
December 31, 2009, the total notional amount in U.S. dollars of the Company’s underwriting related foreign
currency contracts was $21.0 million (2008 – $133.0 million). For the year ended December 31, 2009, the
Company incurred a loss of $0.1 million (2008 – $21.4 million, 2007 – generated a gain of $3.6 million) on its
foreign currency forward and option contracts related to its underwriting operations.

Investment Portfolio Related Foreign Currency Forward Contracts

The Company’s investment operations are exposed to currency fluctuations through its investments in non-U.S.
dollar fixed maturity investments, short term investments and other investments. To economically hedge its
exposure to currency fluctuations from these investments, the Company has entered into foreign currency
forward contracts. Foreign exchange gains (losses) associated with the Company’s hedging of these non-U.S.
dollar investments are recorded in net foreign exchange gains (losses) in its consolidated statements of
operations. At December 31, 2009, the Company had outstanding investment portfolio related foreign currency
contracts of $316.7 million in short positions and $95.2 million in long positions, denominated in U.S. dollars. For
the year ended December 31, 2009, the Company recorded a loss of $6.4 million (2008 – gain of $5.8 million.
2007 – loss of $15.1 million) related to its foreign currency forward contracts entered into to seek to economically
hedge the Company’s non-U.S. dollar investments.

Energy and Risk Management Operations Related Foreign Currency Contracts

F-51

Credit Derivatives

The Company’s exposure to credit risk is primarily due to its fixed maturity investments, short term investments,
premiums receivable and ceded reinsurance balances. From time to time, the Company purchases credit
derivatives to hedge its exposures in the insurance industry, to assist in managing the credit risk associated with
ceded reinsurance, or to assume credit risk. The fair value of the credit derivatives is determined using industry
valuation models. The fair value of these credit derivatives can change based on a variety of factors including
changes in credit spreads, default rates and recovery rates, the correlation of credit risk between the referenced
credit and the counterparty, and market rate inputs such as interest rates. The fair value of these credit
derivatives, as recognized in other liabilities in the Company’s balance sheet, at December 31, 2009 was $0.5
million (2008 – $0.9 million). During 2009, the Company recorded gains of $0.3 million (2008 – $1.1 million,
2007 – $0.5 million) which are included in other income (loss) and represents net settlements and changes in
the fair value of these credit derivatives.

Energy and Weather-Related Derivatives

The Company transacts certain derivative-based risk management products primarily to address weather and
energy risks and engages in hedging and trading activities related to these risks. The trading markets for these
derivatives are generally linked to energy and agriculture commodities, weather and other natural phenomena.
Currently, a significant percentage of the Company’s derivative-based risk management products are transacted
on a dual-trigger basis combining weather or other natural phenomenon, with prices for commodities or securities
related to energy or agriculture. The fair value of these contracts is obtained through the use of quoted market
prices, or in the absence of such quoted prices, industry or internal valuation models. These contracts are
recorded on the Company’s balance sheet in other assets and other liabilities and totaled $17.0 million and $25.1
million, respectively, at December 31, 2009 (2008 – $41.7 million and $38.8 million, respectively). During 2009,
the Company generated income related to these derivatives of $52.3 million (2008 – $33.7 million,
2007 – incurred losses of $1.1 million) which is included in other income (loss) and represents net settlements
and changes in the fair value of these contracts. Generally, the Company’s current portfolio of such derivative
contracts is of comparably short duration and are frequently seasonal in nature.

At December 31, 2009, the Company had the following gross derivative contract positions outstanding relating to
its energy and weather derivatives trading activities.

Trading activity

Weather
Weather
Weather
Weather
Weather
Weather
Weather
Heating oil
Natural gas
Crude oil
Power
Corn
Soybeans
Power
Fuel Oil
Snow

Quantity (1)

Unit of measurement

1,651,118
228,000
350,000
108,000
200,000
2,000,000
1,000,000
109,776,546

$ per Degree Day
£ per Degree Day
AU$ per Degree Day
C$ per Degree Day
€ per Degree Day
AU$ per Weather Index Unit
¥ Cumulative Average Temperature
Gallons

28,813,970 One million British thermal units (“MMBTUs”)

135,000
336,000
2,640,000
880,000
18,000,000
84,000
200,000

Barrels
Megawatts per hour (“MWhr”)
Bushels
Bushels
AU$
Gallons
$ per Event

(1) Represents the sum of gross long and gross short derivative contracts.

The Company uses value-at-risk (“VaR”) analysis to monitor the risks associated with its energy and weather
derivatives trading portfolio. VaR is a tool that measures the potential loss that could occur if the Company’s
trading positions were maintained over a defined period of time, calculated at a given statistical confidence level.
Due to the seasonal nature of the Company’s energy and weather derivatives trading activities, the VaR is based
on a rolling two season (one-year) holding period assuming no dynamic trading during the holding period. A 99%
confidence level is used for the VaR analysis. A 99% confidence level implies that within a one-year period, the

F-52

potential loss in the Company’s portfolio is not expected to exceed the VaR estimate in 99% of the possible
modeled outcomes. In the remaining estimated 1% of the possible outcomes, the anticipated potential loss is
expected to be higher than the VaR figure, and on average substantially higher.

The VaR model, based on a Monte Carlo simulation methodology, seeks to take into account correlations between
different positions and potential for movements to offset one another within the portfolio. The expected value of
the risk factors in the Company’s portfolio are generally obtained from exchange-traded futures markets. For most
of the risk factors, the volatility is derived from exchange-traded options markets. For those risk factors for which
exchange-traded options might not exist, the volatility is based on historical analysis matched to broker quotes
from the over-the-counter market, where available. The joint distribution of outcomes is based on the Company’s
estimate of the historical seasonal dependence among the underlying risk factors, scaled to the current market
levels. The Company then estimates the expected outcomes by applying a Monte Carlo simulation to these risk
factors. The joint distribution of the simulated risk factors is then filtered through the portfolio positions, and then
the distribution of the outcomes is realized. The 99th percentile of this distribution is then calculated as the
portfolio VaR. The major limitation of this methodology is that the market data used to forecast parameters of the
model may not be an appropriate proxy of those parameters. The VaR methodology uses a number of
assumptions, such as (i) risks are measured under average market conditions, assuming normal distribution of
market risk factors, (ii) future movements in market risk factors follow estimated historical movements, and
(iii) the assessed exposures do not change during the holding period. There is no guarantee that these
assumptions will prove correct. The Company expects that, for any given period, its actual results will differ from
its assumptions, including with respect to previously estimated potential losses and that such losses could be
substantially higher than the estimated VaR.

At December 31, 2009, the estimated VaR for the Company’s portfolio of energy and weather-related derivatives,
as described above, calculated at an estimated 99% confidence level, was $23.1 million. The average, low and
high amounts calculated by the Company’s VaR analysis during the year ended December 31, 2009 were $21.5
million, $0.1 million and $46.4 million, respectively.

Platinum Warrant

The Company holds a warrant, which expires on October 30, 2012, to purchase up to 2.5 million common shares
of Platinum Underwriters Holding Ltd. (“Platinum”) for $27.00 per share. The Company has recorded its
investment in the Platinum warrant at fair value. At December 31, 2009, the fair value of the warrant was $34.9
million (2008 – $29.9 million). The fair value of the warrant is estimated using the Black-Scholes option pricing
model. For the year ended December 31, 2009, income of $5.0 million (2008 – loss of $0.5 million, 2007 –
income of $5.5 million) was recorded in other income (loss) representing the change in the fair value of the
warrant.

F-53

The table below shows the location on the consolidated balance sheet and fair value of the Company’s principal
derivative instruments:

At December 31,

Interest rate futures
Foreign currency forward contracts (1)
Foreign currency forward contracts (2)
Foreign currency forward contracts (3)
Credit default swaps
Energy and weather contracts (4)
Platinum warrant

Total

At December 31,

Total

Derivative Assets

2009

2008

Balance Sheet
Location

Fair
Value

Balance Sheet
Location

Fair
Value

Other assets
Other assets
Other assets
Other assets
Other assets
Other assets
Other assets

862

Other assets
— Other assets
Other assets
3,292
49
Other assets
— Other assets
Other assets
Other assets

17,006
34,871

$56,080

96
—
—
6
—
41,668
29,913

$71,683

Derivative Liabilities

2009

2008

Balance Sheet
Location

Fair
Value

Balance Sheet
Location

Fair
Value

Other liabilities $
Other liabilities
Other liabilities
Other liabilities
Other liabilities
Other liabilities
Other liabilities

143 Other liabilities $
776 Other liabilities
— Other liabilities
— Other liabilities
549 Other liabilities
25,086 Other liabilities
— Other liabilities

148
26,428
2,955
—
854
38,819
—

$26,554

$69,204

(1) Contracts used to manage foreign currency risks in underwriting and non-investment operations.

(2) Contracts used to manage foreign currency risks in investment operations.

(3) Contracts used to manage foreign currency risks in energy and risk operations.

(4)

Included in other assets is $22.7 million of derivative assets (2008 – $64.0 million) and $5.7 million of
derivative liabilities (2008 – $22.3 million). Included in other liabilities is $55.9 million of derivative assets
(2008 – $33.7 million) and $81.0 million of derivative liabilities (2008 – $72.6 million).

The location and amount of the gain (loss) recognized in the Company’s consolidated statement of operations
related to the Company’s principal derivative instruments is shown in the following table:

Year ended December 31,

Total

Location of gain (loss)
recognized on derivatives

Net investment income
Net foreign exchange (losses) gains
Net foreign exchange (losses) gains
Net foreign exchange (losses) gains
Other income (loss)
Other income (loss)
Other income (loss)

Amount of
gain (loss) recognized on
derivatives

2009

2008

$ 5,173 $ 12,391
(21,366)
5,784
62
1,148
33,681
(538)

(86)
(6,400)
(485)
312
52,294
4,958

$55,766 $ 31,162

(1) Contracts used to manage foreign currency risks in underwriting and non-investment operations.

(2) Contracts used to manage foreign currency risks in investment operations.

F-54

(3) Contracts used to manage foreign currency risks in energy and risk operations.

The Company is not aware of the existence of any credit-risk related contingent features that it believes would be
triggered in its derivative instruments that are in a net liability position at December 31, 2009.

NOTE 24. COMMITMENTS AND CONTINGENCIES

CONCENTRATION OF CREDIT RISK

Instruments which potentially subject the Company to concentration of credit risk consist principally of
investments, including the Company’s equity method investments, cash, premiums receivable and reinsurance
balances. The Company limits the amount of credit exposure to any one financial institution and, except for U.S.
Government securities, none of the Company’s investments exceeded 10% of shareholders’ equity at
December 31, 2009. See “Note 8. Ceded Reinsurance”, for information with respect to losses recoverable.

EMPLOYMENT AGREEMENTS

The Board of Directors has authorized the execution of employment agreements between the Company and
certain officers. These agreements provide for, among other things, severance payments under certain
circumstances, as well as accelerated vesting of options and restricted stock grants, upon a change in control, as
defined therein and by the Company’s 2001 Stock Incentive Plan and Premium Option Plan.

LETTERS OF CREDIT AND OTHER COMMITMENTS

At December 31, 2009, the Company’s banks have issued letters of credit of approximately $944.4 million in
favor of certain ceding companies. In connection with the Company’s Top Layer Re joint venture, the Company
has committed $37.5 million of collateral to support a letter of credit and is obligated to make a mandatory capital
contribution of up to $50.0 million in the event that a loss reduces Top Layer Re’s capital and surplus below a
specified level. The letters of credit are secured by cash and investments of similar amounts. The Company’s
principal letter of credit facility contains certain financial covenants.

At December 31, 2009, the Company has provided guarantees in the amount of $161.0 million to certain
counterparties of the weather and energy risk management operations of Renaissance Trading.

On April 29, 2009, Renaissance Reinsurance entered into a Master Reimbursement Agreement (the
“Reimbursement Agreement”) and a Pledge Agreement (the “Pledge Agreement”) with Citibank Europe PLC
(“CEP”). The Reimbursement Agreement provides for the issuance and renewal of letters of credit by CEP from
time to time in its sole discretion, which will be used to support business written by the newly formed Syndicate
1458, described above. Letter of credit fees will be payable pursuant to the terms of the Reimbursement
Agreement. Two letters of credit in the amount of $109.5 million and £25.0 million, respectively, were issued by
CEP on April 29, 2009, having an expiration date of December 31, 2013. At December 31, 2009, these letters of
credit amounted to $74.3 million and £15.0 million, respectively. Pursuant to the Pledge Agreement,
Renaissance Reinsurance has agreed to pledge and maintain certain securities with a collateral value equal to
75% of the aggregate amount of the then outstanding letters of credit. In respect of the 25% unsecured portion,
Renaissance Reinsurance is required to comply with certain financial covenants, including maintaining a certain
minimum financial strength rating, minimum net worth, and a maximum consolidated debt to capital ratio for the
consolidated group. In the event Renaissance Reinsurance is unable to satisfy any of these financial covenants, it
will be required to pledge additional collateral in respect of the unsecured portion.

PRIVATE EQUITY AND INVESTMENT COMMITMENTS

The Company has committed capital to private equity partnerships and other entities of $650.7 million, of which
$424.2 million has been contributed at December 31, 2009. These commitments do not have a defined
contractual commitment date.

INDEMNIFICATIONS AND WARRANTIES

In the ordinary course of its business, the Company may enter into contracts or agreements that contain
indemnifications or warranties. Future events could occur that lead to the execution of these provisions against
the Company. Based on past experience, management currently believes that the likelihood of such an event is
remote.

AGRO NATIONAL ASSET PURCHASE AGREEMENT

As determined in accordance with the terms of the asset purchase agreement for Agro National, the Company
may be required to pay certain additional amounts. The additional amounts, if any, will be paid in cash in 2011

F-55

within 30 days after the annual settlement date of the 2010 crop year. The additional amounts are calculated in
accordance with the terms of the asset purchase agreement and include a payment of 33% of the cumulative
adjusted excess profit for the 2008, 2009 and 2010 crop years. The cumulative adjusted excess profit is based
on the profit, if any, in excess of a 20% cumulative return on net retained premium for the 2008, 2009 and 2010
crop years, as further defined in the agreement. The Company is unable to quantify these amounts at this time.
See “Note 4. Business Combinations” for additional information on Agro National.

OPERATING LEASES

The Company and its subsidiaries lease office space under operating leases which expire at various dates
through 2019. Future minimum lease payments under existing operating leases are expected to be as follows:

Year ended December 31,

2010
2011
2012
2013
2014
After 2014

CAPITAL LEASES

Minimum lease
payments

$ 9,190
8,477
7,572
6,259
4,853
8,782

$45,133

During the fourth quarter of 2007, the Company entered into a capital lease transaction, committing the
Company to lease additional office space in Bermuda. Upon completion of construction of the building in July
2008, the Company commenced making lease payments. The initial lease term is for 20 years, with a bargain
renewal option for an additional 30 years.

The future minimum lease payments detailed below, relate principally to the transaction noted above, excluding
the bargain renewal option, and are estimated to be $50.6 million in the aggregate.

Year ended December 31,

2010
2011
2012
2013
2014
After 2014

LITIGATION

Minimum lease
payments

$ 2,892
2,892
2,892
2,892
2,892
36,168

$50,628

The Company’s operating subsidiaries are subject to claims litigation involving disputed interpretations of policy
coverages. Generally, the Company’s primary insurance operations are subject to greater frequency and diversity
of claims and claims-related litigation and, in some jurisdictions, may be subject to direct actions by allegedly
injured persons or entities seeking damages from policyholders. These lawsuits, involving claims on policies
issued by the Company’s subsidiaries which are typical to the insurance industry in general and in the normal
course of business, are considered in its loss and loss expense reserves which are discussed in its loss reserves
discussion. In addition to claims litigation, the Company and its subsidiaries are subject to lawsuits and regulatory
actions in the normal course of business that do not arise from or directly relate to claims on insurance policies.
This category of business litigation may involve allegations of underwriting or claims-handling errors or
misconduct, employment claims, regulatory activity or disputes arising from the Company’s business ventures.
Any such litigation or arbitration contains an element of uncertainty, and the Company believes the inherent
uncertainty in such matters may have increased recently and will likely continue to increase. Currently, the
Company believes that no individual, normal course litigation or arbitration to which it is presently a party is likely
to have a material adverse effect on its financial condition, business or operations.

F-56

NOTE 25. QUARTERLY FINANCIAL RESULTS (UNAUDITED)

Quarter Ended
March 31,

Quarter Ended
June 30,

Quarter Ended
September 30,

Quarter Ended
December 31,

2009

2008

2009

2008

2009

2008

2009

2008

Revenues

Gross premiums written

$598,301 $527,038 $855,172 $807,575 $202,413 $ 239,806 $ 73,046 $161,609

Net premiums written

$446,836 $403,116 $631,370 $614,022 $ 75,098 $ 194,408 $ 53,093 $142,074

Net premiums earned
Net investment income (loss)
Net foreign exchange (losses) gains
Equity in earnings (losses) of other

ventures

Other (loss) income
Net realized and unrealized gains

(losses) on fixed maturity
investments

Total other-than-temporary

impairments

Portion recognized in other

comprehensive income, before
taxes

Net other-than-temporary

impairments

Total revenues

Expenses

Net claims and claim expenses

incurred

Acquisition costs
Operational expenses
Corporate expenses
Interest expense

Total expenses

$301,748 $308,914 $379,817 $376,573 $296,013 $ 379,342 $296,238 $321,995
(82,724)
(5,553)

114,293
(4,162)

42,126
(10,155)

106,815
1,556

60,747
(862)

38,685
(231)

52,503
4,936

15,767
3,448

1,736
(14,795)

6,250
8,012

5,432
(3,656)

4,872
(24)

4,331
13,424

2,333
2,258

(523)
7,048

148
6

22,126

14,712

18,889

2,412

16,794

11,198

35,353

(17,622)

(19,022)

(25,382)

(5,289)

(26,573)

(1,408)

(98,808)

(1,280)

(66,251)

—

3,456

—

1,062

—

(19,022)

(25,382)

(1,833)

(26,573)

(346)

(98,808)

(1,280)

(66,251)

323,764

369,945

508,780

395,714

438,587

315,538

396,721

149,999

86,197
44,604
39,757
6,588
4,136

82,156
46,428
30,113
8,703
6,804

66,823
52,495
46,865
6,339
4,200

114,217
53,613
33,494
7,111
5,937

38,567
44,203
45,498
(4,319)
3,748

535,347
54,231
30,296
3,116
5,379

5,700
48,473
57,566
5,632
3,027

28,769
59,281
28,262
6,705
6,513

181,282

174,204

176,722

214,372

127,697

628,369

120,398

129,530

Income (loss) before taxes
Income tax benefit (expense)

142,482
852

195,741
(7,686)

332,058
(652)

181,342
6,295

310,890
(3,993)

(312,831) 276,323
(5,301)

455

20,469
368

Net income (loss)

143,334

188,055

331,406

187,637

306,897

(312,376) 271,022

20,837

Net (income) loss attributable to

redeemable noncontrolling interest –
DaVinciRe

Net income (loss) attributable to

RenaissanceRe

Dividends on preference shares

Net income (loss) available

(attributable) to RenaissanceRe
common shareholders

Net income (loss) available

(attributable) to RenaissanceRe
common shareholders per common
share – basic

Net income (loss) available

(attributable) to RenaissanceRe
common shareholders per common
share – diluted

Average shares outstanding – basic
Average shares outstanding – diluted

Net claims and claim expense ratio
Underwriting expense ratio

(35,475)

(40,315)

(49,652)

(41,341)

(37,694)

91,977

(48,680)

(65,454)

107,859
(10,575)

147,740
(10,575)

281,754
(10,575)

146,296
(10,575)

269,203
(10,575)

(220,399) 222,342
(10,575)

(10,575)

(44,617)
(10,575)

$ 97,284 $137,165 $271,179 $135,721 $258,628 $(230,974) $211,767 $ (55,192)

1.57 $

2.09 $

4.35 $

2.16 $

4.15 $

(3.79) $

3.41 $

(0.91)

1.57 $

2.05 $

4.32 $

2.13 $

4.12 $

(3.79) $

3.38 $

(0.91)

60,635
60,989

28.6%
27.9%

65,528
66,803

26.6%
24.8%

60,963
61,322

17.6%
26.2%

62,921
63,878

30.3%
23.2%

60,898
61,367

60,943
61,694

13.0% 141.1%
22.3%
30.3%

60,604
61,161

1.9%
35.8%

60,732
61,269

8.9%
27.2%

Combined ratio

56.5%

51.4%

43.8%

53.5%

43.3% 163.4%

37.7%

36.1%

F-57

NOTE 26. SUMMARIZED FINANCIAL INFORMATION OF CHANNELRE HOLDINGS LTD.

The following tables provide summarized financial information for ChannelRe, which is accounted for using the
equity method of accounting, for 2009, 2008 and 2007. The Company calculates its proportionate share in the
equity of ChannelRe one quarter in arrears, except for 2007, which includes ChannelRe’s estimated loss for the
fourth quarter of 2007 due to significant net unrealized mark-to-market losses on credit derivatives and other
credit-related products issued by ChannelRe. The summary information provided below is for the twelve months
ended September 30, 2009, 2008 and 2007, respectively.

As at September 30,

Balance Sheet Data

Total investments, at fair value
Cash and cash equivalents
Deferred acquisition costs
Derivative assets
Reinsurance premiums receivable
Salvage and impairment recoverables
Other assets

Total assets

Deferred premium revenue
Loss and loss adjustment expenses reserves
Loss and credit impairments payable
Derivative liabilities
Other liabilities

Total liabilities

Noncontrolling interest
Deficiency in assets / shareholders’ equity

2009

2008

2007

$ 749,451
2,037
54,947
—
98,373
57,404
3,706

$ 690,772
8,404
31,692
86,000
174
—
8,875

$637,890
18,990
36,994
20,000
3,921
—
6,537

$ 965,918

$ 825,917

$724,332

$ 222,741
23,780
64,356
762,133
5,440

$ 123,187
41,172
—
743,167
8,620

$144,478
28,245
—
115,443
6,840

1,078,450

916,146

295,006

(29,227)
(83,305)

(25,179)
(65,050)

119,815
309,511

Total liabilities, noncontrolling interest and shareholders’ equity

$ 965,918

$ 825,917

$724,332

Twelve months ended September 30,

2009

2008

2007

Statement of Operations Data

Premiums earned
Net investment income

Total revenues

Losses incurred
Acquisition costs
Other expenses

Total expenses

Realized (losses) gains and other settlements on derivatives
Unrealized losses on derivatives

Net change in fair value of derivatives
Net realized gains (losses) on investments
Net (losses) gains on foreign exchange

Net realized and unrealized losses

Net loss attributable to noncontrolling interest

41,450
24,857

66,307

23,725
11,034
11,232

45,991

(96,113)
(9,157)

(105,270)
8,217
(8,142)

$ 47,904
30,246

$ 45,354
29,430

78,150

27,508
12,163
2,868

42,539

18,461
(560,674)

(542,213)
1
1,271

74,784

11,638
12,362
4,529

28,529

14,493
(91,003)

(76,510)
(239)
1,680

(105,195)

(540,941)

(75,069)

23,676

141,024

8,043

Net loss attributable to common shareholders

$ (61,203)

$(364,306)

$ (20,771)

ChannelRe experienced significant unrealized mark-to-market losses arising from financial guaranty contracts
accounted for as derivatives under GAAP during 2007, and as a result, ChannelRe’s GAAP shareholders’ equity
decreased to below $nil as of December 31, 2007 and remained negative throughout 2008 and 2009. As such,
the Company reduced the carried value of its equity investment in ChannelRe to $nil as of December 31, 2007,
and at December 31, 2008 and 2009, the carried value of its equity investment in ChannelRe continues to be $nil.

F-58

Certain amounts have been reclassified in the prior years’ financial information, noted above, to conform to the
current presentation.

NOTE 27. SUBSEQUENT EVENTS

The Company has completed its subsequent events evaluation for the period subsequent to the balance sheet
date of December 31, 2009, through February 18, 2010, the date the consolidated financial statements were
issued.

Subsequent to December 31, 2009 and through February 17, 2010, the Company repurchased 1.9 million of its
common shares at an aggregate cost of $101.5 million at an average share price of $53.78. On February 17,
2010, the Company approved an increase in its authorized share repurchase program to an aggregate amount of
$500.0 million. As a result of the new authorization noted above, as of February 17, 2010, a total of $500.0
million was available for repurchase under the Company’s share repurchase program.

F-59

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RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

INDEX TO SCHEDULES TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm on Schedules

. . . . . . . . . . . . . . . . . . . . . . . . . .

III

Summary of Investments other than Investments in Related Parties . . . . . . . . . . . . . . . . . . . . . . . . . .

Condensed Financial Information of Registrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplementary Insurance Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reinsurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplementary Insurance Information Concerning Property-Casualty Insurance Operations . . . . . . .

Schedules other than those listed above are omitted for the reason that they are not applicable.

Pages

S-2

S-3

S-4

S-7

S-8

S-9

S-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of RenaissanceRe Holdings Ltd.

We have audited the consolidated financial statements of RenaissanceRe Holdings Ltd. as of December 31, 2009
and 2008, and for each of the three years in the period ended December 31, 2009, and have issued our report
thereon dated February 18, 2010; such financial statements and our report thereon are included elsewhere in
this Annual Report on Form 10-K. Our audits also included the financial statement schedules listed in Item 15(a)
(2) of this Annual Report on Form 10-K for the year ended December 31, 2009. These schedules are the
responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits.

In our opinion, the financial statement schedules referred to above, when considered in relation to the basic
financial statements taken as a whole, present fairly in all material respects the information set forth therein.

/s/ Ernst & Young Ltd.

Hamilton, Bermuda
February 18, 2010

S-2

SCHEDULE I

RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

SUMMARY OF INVESTMENTS
OTHER THAN INVESTMENTS IN RELATED PARTIES
(THOUSANDS OF UNITED STATES DOLLARS)

Year ended December 31, 2009

Amortized
Cost

Market
Value

Amount at
which shown
in the
Balance Sheet

$ 926,728 $ 918,157 $ 918,157
165,577
198,059
855,988
248,746
1,135,504
393,397
36,383
251,472
92,509

164,071
189,922
850,193
248,888
1,111,299
391,838
35,071
253,713
89,443

165,577
198,059
855,988
248,746
1,135,504
393,397
36,383
251,472
92,509

$4,261,166

4,295,792

1,002,306
858,026
97,287

$6,253,411 $6,253,411

Type of investment:

Fixed maturity investments

Total fixed maturity investments

Short term investments
Other investments
Investments in other ventures, under equity method

Total investments

S-3

SCHEDULE II

RENAISSANCERE HOLDINGS LTD.
CONDENSED FINANCIAL INFORMATION OF REGISTRANT

RENAISSANCERE HOLDINGS LTD.
BALANCE SHEETS
AT DECEMBER 31, 2009 AND 2008
(PARENT COMPANY)
(THOUSANDS OF UNITED STATES DOLLARS)

Assets:
Fixed maturity investments available for sale, at fair value

(Amortized cost $35,282 and $59,265 at December 31, 2009 and 2008,
respectively)

Fixed maturity investments trading, at fair value

(Amortized cost $183,541 at December 31, 2009)

Short term investments, at fair value
Other investments

Total investments

Cash and cash equivalents
Investments in subsidiaries
Due from subsidiaries
Dividends due from subsidiaries
Accrued investment income
Other assets

Total Assets

Liabilities and Shareholders’ Equity
Liabilities
Notes and bank loans payable
Contributions due to subsidiaries
Other liabilities

Total Liabilities

Shareholders’ Equity
Preference Shares: $1.00 par value – 26,000,000 shares issued and outstanding at

December 31, 2009 and 2008

Common Shares: $1.00 par value – 61,744,857 shares issued and outstanding at

December 31, 2009 (2008 – 61,503,333 shares)

Accumulated other comprehensive income
Retained earnings

Total Shareholders’ Equity

Total Liabilities and Shareholders’ Equity

At December 31,

2009

2008

36,960 $

62,536

180,250
174,291
93,059

484,560
15,206
3,310,916
46,496
136,069
1,727
17,199

—
236,133
8,880

307,549
5,122
3,059,524
18,123
—
1,214
13,745

$4,012,173 $3,405,277

$ 124,000 $ 250,000
86,262
36,272

12,522
34,865

171,387

372,534

650,000

61,745
41,438
3,087,603

61,503
75,387
2,245,853

3,840,786

3,032,743

$4,012,173 $3,405,277

S-4

SCHEDULE II

RENAISSANCERE HOLDINGS LTD.
CONDENSED FINANCIAL INFORMATION OF REGISTRANT – CONTINUED

RENAISSANCERE HOLDINGS LTD.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
(PARENT COMPANY)
(THOUSANDS OF UNITED STATES DOLLARS)

Year ended December 31,
2008

2007

2009

Revenues

Net investment income (loss)
Net foreign exchange loss
Other income (loss)
Net realized and unrealized gains on fixed maturity investments

Total other-than-temporary impairments
Portion recognized in other comprehensive income, before taxes

Net other-than-temporary impairments

Total revenues

Expenses

Interest expense
Operating and corporate expenses

Total expenses

Income (loss) before equity in net income of subsidiaries and taxes
Equity in net income of subsidiaries

Income before taxes
Income tax expense

Net income

Dividends on preference shares

$ 11,360 $ (1,745) $ 23,770
—
(145,596)
145

(38)
(4,634)
701

(120)
516
3,010

(1,041)
137

(904)

(4,578)
—

(4,578)

(327)
—

(327)

13,862

(10,294)

(122,008)

14,613
12,152

26,765

21,193
18,420

39,613

(37,059)
66,079

(161,621)
774,057

9,306
1,128

10,434

3,428
877,730

881,158
—

29,020
—

881,158
(42,300)

29,020
(42,300)

612,436
—

612,436
(42,861)

Net income (loss) available (attributable) to RenaissanceRe common

shareholders

$838,858 $(13,280) $ 569,575

S-5

SCHEDULE II

RENAISSANCERE HOLDINGS LTD.
CONDENSED FINANCIAL INFORMATION OF REGISTRANT – CONTINUED

RENAISSANCERE HOLDINGS LTD.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
(PARENT COMPANY)
(THOUSANDS OF UNITED STATES DOLLARS)

Year ended December 31,
2008

2009

2007

Cash flows provided by (used in) operating activities:

Net income
Less: equity in net income of subsidiaries

Adjustments to reconcile net income to net cash provided by (used in)

operating activities
Net unrealized (gains) losses included in net investment income
Net unrealized (gains) losses included in other income (loss)
Equity in undistributed losses of other ventures
Net realized and unrealized gains on fixed maturity investments
Net other-than-temporary impairments
Other

Net cash provided by (used in) operating activities

Cash flows provided by investing activities:

Proceeds from maturities and sales of fixed maturity investments

available for sale

Purchase of fixed maturity investments available for sale
Proceeds from maturities and sales of fixed maturity investments

trading

Purchase of fixed maturity investments trading
Contributions to subsidiaries
Dividends and return of capital from subsidiaries
Net sales of short term investments
Net (purchases) sales of other investments
Purchase of investments in other ventures
Due (from) to subsidiary

$ 881,158 $ 29,020 $ 612,436
774,057

877,730

66,079

3,428

(37,059)

(161,621)

(190)
(577)
—
(3,010)
904
32,034

32,589

17,020
3,866

—
(5,780)
— 151,751
(145)
327
11,096

(701)
4,578
51,839

39,543

(4,372)

518,941
(477,412)

511,628
(494,683)

15,370
(59,733)

22,308
(216,676)
(248,589)
838,809
61,842
(81,519)
—
(28,373)

—
—
(233,560)
403,948
141,486
(25,900)
—
138,377

—
—
(63,489)
547,785
169,273
3,093
12,262
(24,140)

Net cash provided by investing activities

389,331

441,296

600,421

Cash flows used in financing activities:
Dividends paid – common shares
Dividends paid – preference shares
RenaissanceRe common share repurchase
Redemption of 7.0% Senior Notes
Redemption of Series A preference shares
(Repayment) issuance of debt
Repayment of subordinated obligation to Capital Trust
Third party DaVinciRe share repurchase

Net cash used in financing activities

Effect of exchange rate changes on foreign currency cash

Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year

S-6

(59,740)
(42,300)
(50,972)

(57,850)
(42,300)
(428,406)
— (150,000)
—
(126,000)
—
(132,718)

(62,595)
(42,861)
(200,171)
—
— (150,000)
—
— (103,093)
(40,000)

150,000

43,549

(411,730)

(485,007)

(598,720)

(106)

10,084
5,122

—

(4,168)
9,290

—

(2,671)
11,961

$ 15,206 $

5,122 $

9,290

SCHEDULE III

RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

SUPPLEMENTARY INSURANCE INFORMATION
(THOUSANDS OF UNITED STATES DOLLARS)

December 31, 2009

Year ended December 31, 2009

Deferred
Policy
Acquisition
Costs

Future Policy
Benefits, Losses,
Claims and Loss
Expenses

Unearned
Premiums

Premium
Revenue

Benefits,
Claims,
Losses and
Settlement
Expenses

Amortization
of Deferred
Policy
Acquisition
Costs

Net
Investment
Income

Other
Operating
Expenses

Net
Written
Premiums

Reinsurance
Individual Risk
Other

$ 34,638 $1,175,960 $302,915 $ 849,725 $

27,232
—

526,046
—

143,734
—

424,091

— 323,981

— $ (87,639)$ 78,848 $139,328 $ 839,023
367,374
— 284,926 110,927
—
—
—

50,358
—

Total

$ 61,870 $1,702,006 $446,649 $1,273,816 $323,981 $197,287 $189,775 $189,686 $1,206,397

December 31, 2008

Year ended December 31, 2008

Deferred
Policy
Acquisition
Costs

Future Policy
Benefits, Losses,
Claims and Loss
Expenses

Unearned
Premiums

Premium
Revenue

Benefits,
Claims,
Losses and
Settlement
Expenses

Amortization
of Deferred
Policy
Acquisition
Costs

Net
Investment
Income

Other
Operating
Expenses

Net
Written
Premiums

Reinsurance
Individual Risk
Other

$ 44,855 $1,497,819 $313,374 $ 909,759 $

37,049
—

662,793
—

196,861
—

477,065

— 24,231

— $440,900 $105,437 $ 81,797 $ 871,893
481,727
— 319,589 108,116
—
—
—

40,368
—

Total

$ 81,904 $2,160,612 $510,235 $1,386,824 $ 24,231 $760,489 $213,553 $122,165 $1,353,620

December 31, 2007

Year ended December 31, 2007

Deferred
Policy
Acquisition
Costs

Future Policy
Benefits, Losses,
Claims and Loss
Expenses

Unearned
Premiums

Premium
Revenue

Benefits,
Claims,
Losses and
Settlement
Expenses

Amortization
of Deferred
Policy
Acquisition
Costs

Net
Investment
Income

Other
Operating
Expenses

Net
Written
Premiums

Reinsurance
Individual Risk
Other

$ 57,596 $1,418,727 $352,822 $ 957,661 $

46,616
—

609,769
—

210,514
—

466,708

— 402,463

— $241,118 $119,915 $ 67,969 $1,024,493
410,842
— 238,156 135,015
—
—
—

42,495
—

Total

$104,212 $2,028,496 $563,336 $1,424,369 $402,463 $479,274 $254,930 $110,464 $1,435,335

S-7

SCHEDULE IV

RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

REINSURANCE
(THOUSANDS OF UNITED STATES DOLLARS)

Gross
Amounts

Ceded to
Other
Companies

Assumed
From Other
Companies

Net Amount

Percentage
of Amount
Assumed to
Net

Year ended December 31, 2009

Property and liability premiums earned

$515,069 $518,702 $1,277,449 $1,273,816

100%

Year ended December 31, 2008

Property and liability premiums earned

$487,223 $402,305 $1,301,906 $1,386,824

94%

Year ended December 31, 2007

Property and liability premiums earned

$453,729 $400,357 $1,370,997 $1,424,369

96%

S-8

SCHEDULE VI

RENAISSANCERE HOLDINGS LTD. AND SUBSIDIARIES

SUPPLEMENTARY INSURANCE INFORMATION CONCERNING
PROPERTY/CASUALTY INSURANCE OPERATIONS
(THOUSANDS OF UNITED STATES DOLLARS)

Affiliation with Registrant

Consolidated Subsidiaries

Deferred
Policy
Acquisition
Costs

Reserves for
Unpaid Claims
and Claim
Adjustment
Expenses

Discount, if
any, deducted

Unearned
Premiums

Earned
Premiums

Net
Investment
Income

Year ended December 31, 2009

$ 61,870 $1,702,006

Year ended December 31, 2008

$ 81,904 $2,160,612

Year ended December 31, 2007

$104,212 $2,028,496

— $446,649 $1,273,816 $323,981

— $510,235 $1,386,824 $ 24,231

— $563,336 $1,424,369 $402,463

Affiliation with Registrant

Consolidated Subsidiaries

Claims and Claim Adjustment
Expenses Incurred Related to

Current Year

Prior Year

Amortization
of Deferred
Policy
Acquisition
Costs

Paid Claims
and Claim
Adjustment
Expenses

Net
Premiums
Written

Year ended December 31, 2009

$441,786 $ (244,499) $189,775

$550,600 $1,206,397

Year ended December 31, 2008

$995,316 $ (234,827) $213,553

$744,632 $1,353,620

Year ended December 31, 2007

$712,424 $ (233,150) $254,930

$430,354 $1,435,335

S-9

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[THIS PAGE INTENTIONALLY LEFT BLANK]

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

EXHIBITS

FORM 10-K

Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31,
2009.

RenaissanceRe Holdings Ltd.

Exhibits

3.1

3.2

3.3

3.4

10.1

10.2

10.3

10.4

10.5

10.6

10.7

10.8

10.9

10.10

10.11

10.12

10.13

10.14

10.15

10.16

10.17

10.18

10.19

The Consolidated Financial Statements of RenaissanceRe Holdings Ltd. and related Notes thereto are listed in the
accompanying Index to Consolidated Financial Statements and are filed as part of this Form 10-K.

The Schedules to the Consolidated Financial Statements of RenaissanceRe Holdings Ltd. are listed in the accompanying
Index to Schedules to Consolidated Financial Statements and are filed as a part of this Form 10-K.

Exhibits

Memorandum of Association. (1)

Amended and Restated Bye-Laws. (2)

Memorandum of Increase in Share Capital of RenaissanceRe Holdings Ltd. (3)

Specimen Common Share certificate. (1)

Form of Director Retention Agreement, dated as of November 8, 2002, entered into by each of the non-employee
directors of RenaissanceRe Holdings Ltd. (4)

Amended and Restated Employment Agreement, dated as of February 22, 2006, between RenaissanceRe Holdings Ltd.
and Neill A. Currie. (5)

Amendment No. 1, dated as of March 1, 2007, to the Employment Agreement, dated as of February 22, 2006 by and
between RenaissanceRe Holdings Ltd. and Neill A. Currie. (6)

Amendment No. 2, dated as of November 19, 2008, between RenaissanceRe Holdings Ltd. and Neill A. Currie. (7)

Further Amended and Restated Employment Agreement, dated as of February 19, 2009, between RenaissanceRe
Holdings Ltd. and Neill A. Currie. (8)

Amendment No. 1 to the Further Amended and Restated Employment Agreement, dated January 8, 2010, by and
among RenaissanceRe Holdings Ltd. and Neill A. Currie. (9)

Employment Agreement, dated as of July 19, 2006, between RenaissanceRe Holdings Ltd. and Fred R. Donner. (10)

Separation, Consulting, and Release Agreement, dated as of June 12, 2009, by and between RenaissanceRe Holdings
Ltd. and Fred R. Donner. (11)

Employment Agreement, dated as of June 10, 2009, by and between RenaissanceRe Holdings Ltd. and Jeffrey D. Kelly.
(11)

Amendment No. 1 the Employment Agreement, dated January 8, 2010, by and among RenaissanceRe Holdings Ltd.
and Jeffrey D. Kelly. (9)

Amended and Restated Employment Agreement, dated as of July 19, 2006, between RenaissanceRe Holdings Ltd. and
John D. Nichols, Jr. (10)

Separation, Consulting, and Release Agreement, dated January 11, 2010, by and between RenaissanceRe Holdings Ltd.
and John D. Nichols, Jr. (9)

Separation, Consulting, and Release Agreement, dated January 11, 2010, by and between RenaissanceRe Holdings Ltd.
and William J. Ashley. (9)

Sublease Agreement, dated as of July 19, 2006, between Renaissance Reinsurance Ltd. and John D. Nichols, Jr. (10)

Form of Employment Agreement for Executive Officers. (10)

Form of Amendment to Employment Agreement for Executive Officers. (13)

Form of Amendment to Employment Agreement for Executive Officers. (7)

Form of Amendment No. 3 to the Amended and Restated Employment Agreement for Executive Officers. (9)

Third Amended and Restated Credit Agreement, dated as of April 9, 2009, by and among RenaissanceRe Holdings Ltd.,
various financial institutions parties thereto, Bank of America, N.A., as LC Issuer and Administrative Agent for the
lenders, Citibank, N.A., as Syndication Agent, Barclays Bank PLC, The Bank of New York Mellon and Wachovia Bank,
National Association, as Co-Documentation Agents, and Banc of America Securities LLC and Citigroup Global Markets
Inc., as Joint Lead Arrangers and Joint Book Managers. (15)

10.20

10.21

10.22

10.23

10.24

10.25

10.26

10.27

10.28

10.29

10.30

10.31

10.32

10.33

10.34

10.35

10.36

10.37

10.38

10.39

10.40

10.41

10.42

10.43

10.44

10.45

10.46

10.47

First Amendment Agreement to the Third Amended and Restated Credit Agreement, dated as of November 23, 2009,
by and among RenaissanceRe Holdings Ltd., the lenders named therein and Bank of America, N.A., as LC Issuer and
Administrative Agent for the lenders.

Third Amended and Restated Credit Agreement, dated as of April 5, 2006, by and among DaVinciRe Holdings Ltd., the
banks, financial institutions and other institutional lenders listed thereto (the “Lenders”), Citigroup Global Markets Inc., as
sole lead arranger, book manager and syndication agent, and Citibank, N.A. as administrative agent for the Lenders. (16)

RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (18)

Amendment No. 1 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (19)

Amendment No. 2 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (19)

Amendment No. 3 to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (20)

UK Schedule to the RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (20)

UK Sub-Plan to the RenaissanceRe Holdings 2001 Stock Incentive Plan. (20)

Form of Option Grant Notice and Agreement pursuant to which option grants were made under the RenaissanceRe
Holdings Ltd. 2001 Stock Incentive Plan. (21)

Form of Restricted Stock Grant Notice and Agreement pursuant to which Restricted Stock grants are made under the
RenaissanceRe Holdings Ltd. 2001 Stock Incentive Plan. (21)

RenaissanceRe Holdings Ltd. 2004 Stock Option Incentive Plan. (22)

Amendment No. 1 to the RenaissanceRe Holdings Ltd. 2004 Stock Option Incentive Plan. (23)

Form of Option Agreement pursuant to which option grants are made under the RenaissanceRe Holdings 2004 Stock
Option Incentive Plan to executive officers. (22)

Amended and Restated RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (25)

Amendment No. 1 to the RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (25)

Amendment No. 2 to the RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (26)

Amendment No. 3 to the RenaissanceRe Holdings Ltd. Non-Employee Director Stock Plan. (31)

Form of Restricted Stock Grant Agreement for Directors. (5)

Form of Option Grant Agreement for Directors. (5)

Master Standby Letter of Credit Reimbursement Agreement, dated as of November 2, 2001, between Renaissance
Reinsurance Ltd. and Fleet National Bank. Timicuan Reinsurance Ltd. has become a party to this agreement pursuant
to an accession agreement. (27)

Certificate of Designation, Preferences and Rights of 7.30% Series B Preference Shares. (28)

Certificate of Designation, Preferences and Rights of 6.08% Series C Preference Shares. (29)

Certificate of Designation, Preferences and Rights of 6.60% Series D Preference Shares. (30)

Senior Indenture, dated as of July 1, 2001, between RenaissanceRe Holdings Ltd., as Issuer, and Bankers Trust
Company, as Trustee. (12)

Second Supplemental Indenture, by and between RenaissanceRe Holdings Ltd. and Deutsche Bank Trust Company
Americas (f/k/a Bankers Trust Company), dated as of January 31, 2003. (14)

Second Amended and Restated Reimbursement Agreement, dated as of April 27, 2007, by and among Renaissance
Reinsurance Ltd., Renaissance Reinsurance of Europe, Glencoe Insurance Ltd., DaVinci Reinsurance Ltd.,
RenaissanceRe Holdings Ltd., Wachovia Bank, National Association, as Issuing Bank, Administrative Agent, and
Collateral Agent for the Lenders, certain Co-Syndication Agents, ING Bank N.V., as Documentation Agent, and certain
Lenders party thereto. (17)

Master Reimbursement Agreement, dated as of April 29, 2009, by and between Renaissance Reinsurance Ltd. and
Citibank Europe PLC. (20)

Pledge Agreement, dated as of April 29, 2009, by and between Renaissance Reinsurance Ltd. and Citibank Europe
PLC. (20)

10.48

10.49

10.50

21.1

23.1

31.1

31.2

32.1

32.2

Agreement Regarding Use of Aircraft Interest, dated as of November 17, 2009, by and between RenaissanceRe
Holdings Ltd. and Neill A. Currie.

RenaissanceRe Holdings Ltd. 2010 Restricted Stock Unit Plan.

Form of Restricted Stock Unit Agreement (for grants under the RenaissanceRe Holdings Ltd. 2010 Restricted Stock Unit
Plan).

List of Subsidiaries of the Registrant.

Consent of Ernst & Young Ltd.

Certification of Neill A. Currie, Chief Executive Officer of RenaissanceRe Holdings Ltd., pursuant to Rule 13a-14(a) or
Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.

Certification of Jeffrey D. Kelly, Chief Financial Officer of RenaissanceRe Holdings Ltd., pursuant to Rule 13a-14(a) or
Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.

Certification of Neill A. Currie, Chief Executive Officer of RenaissanceRe Holdings Ltd., pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of Jeffrey D. Kelly, Chief Financial Officer of RenaissanceRe Holdings Ltd., pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10)

(11)

(12)

(13)

(14)

(15)

Incorporated by reference to the Registration Statement on Form S-1 of RenaissanceRe Holdings Ltd. (Registration
No. 33-70008) which was declared effective by the SEC on July 26, 1995.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended June 30,
2002, filed with the SEC on August 14, 2002.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended March 31,
1998, filed with the SEC on May 14, 1998 (SEC File Number 000-26512)

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Annual Report on Form 10-K for the year ended December 31,
2002, filed with the SEC on March 31, 2003 (SEC File Number 001-14428)

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on February 27,
2006

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended March 31,
2007, filed with the SEC on May 2, 2007.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on
November 25, 2008.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on February 25,
2009.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on January 14,
2010.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on July 21,
2006, relating to certain events which occurred on July 19, 2006. Other than with respect to the Percent and Lump Sum
Percent (as defined and disclosed in the Form 8-K) and matters such as names and titles, the employment agreements for
Messrs. O’Donnell and Ashley are identical to the form filed as Exhibit 10.9.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on June 15,
2009.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on July 17,
2001.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended March 31,
2008, filed with the SEC on May 2, 2008.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on January 31,
2003.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on April 14,
2009.

(16)

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on April 11,
2006, relating to certain events which occurred on April 5, 2006.

(17)

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on May 3, 2007.

(18)

(19)

(20)

(21)

(22)

(23)

(24)

(25)

(26)

(27)

(28)

(29)

Incorporated by reference to Exhibit 99.2 to the Registration Statement on Form S-8 (Registration No. 333-90758) dated
June 19, 2002.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended March 31,
2007, filed with the SEC on May 2, 2007.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended March 31,
2009, filed with the SEC on May 1, 2009.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended
September 30, 2004, filed with the SEC on November 9, 2004.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on September 2,
2004.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Annual Report on Form 10-K for the year ended December 31,
2004, filed with the SEC on March 31, 2005 (SEC File Number 001-14428).

Incorporated by reference to Exhibit 99.1 to the Registration Statement on Form S-8 (Registration No. 333-90758) dated
June 19, 2002.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended March 31,
2007, filed with the SEC on May 2, 2007.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Quarterly Report on Form 10-Q for the period ended
September 30, 2008, filed with the SEC on October 30, 2008.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Annual Report on Form 10-K for the year ended December 31,
2001, filed with the SEC on April 1, 2002.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on February 4,
2003.

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Current Report on Form 8-K, filed with the SEC on March 18,
2004.

(30)

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Form 8-A, filed with the SEC on December 14, 2006.

(31)

Incorporated by reference to RenaissanceRe Holdings Ltd.’s Annual Report on Form 10-K for the year ended December 31,
2008, filed with the SEC on February 20, 2009.

SENIOR OFFICERS

RenaissanceRe Holdings Ltd. and Subsidiaries

BERMUDA
Currie, Neill A.
President & Chief Executive Ofﬁ cer,
RenaissanceRe Holdings Ltd.
Durhager, Peter C.
Executive Vice President,
Chief Administrative Ofﬁ cer,
RenaissanceRe Holdings Ltd.
Kelly, Jeffrey D.
Executive Vice President &
Chief Financial Ofﬁ cer,
RenaissanceRe Holdings Ltd.
O’Donnell, Kevin J.
Executive Vice President,
Global Chief Underwriting Ofﬁ cer,
RenaissanceRe Holdings Ltd.
Branagan, Ian D.
Senior Vice President,
Chief Risk Ofﬁ cer,
RenaissanceRe Holdings Ltd.
Fonner, Todd R.
Senior Vice President,
Chief Investment Ofﬁ cer & Treasurer,
RenaissanceRe Holdings Ltd.
Weinstein, Stephen H.
Senior Vice President,
General Counsel,
Chief Compliance Ofﬁ cer & Secretary,
RenaissanceRe Holdings Ltd.
Cuffe, Dana J.
Senior Vice President,
Chief Information Ofﬁ cer,
RenaissanceRe Services Ltd.
Dutt, Aditya K.
Senior Vice President,
RenaissanceRe Holdings Ltd.,
President,
RenaissanceRe Ventures Ltd.
Lamendola, Robert J.
Senior Vice President,
Renaissance Reinsurance Ltd.
Marra, David A.
Senior Vice President,
Renaissance Reinsurance Ltd.
Moore, Sean M.
Senior Vice President,
RenaissanceRe Services Ltd.
O’Keefe, Justin D.
Senior Vice President,
Renaissance Reinsurance Ltd.
Paradine, Jonathan D.
Senior Vice President,
Chief Underwriting Ofﬁ cer,
Renaissance Reinsurance Ltd.
Prado, Juan I.
Senior Vice President,
Corporate Strategy,
RenaissanceRe Services Ltd.
Roberts, Rebecca J.
Senior Vice President,
Renaissance Reinsurance Ltd.
Wilcox, Mark A.
Senior Vice President,
Chief Accounting Ofﬁ cer,
Corporate Controller,
RenaissanceRe Holdings Ltd.
Bonanno, Laura
Vice President,
RenaissanceRe Services Ltd.
Brewer, John B.
Vice President,
RenaissanceRe Services Ltd.
Brookes, Trevor A.
Vice President,
Head of Internal Audit,
RenaissanceRe Holdings Ltd.
Dalton, Bryan M.
Vice President,
Renaissance Reinsurance Ltd.
DaSilva, Anne-Marie M.
Vice President,
RenaissanceRe Services Ltd.

Freisenbruch, W. Justin
Vice President,
Renaissance Reinsurance Ltd.
James, Helen L.
Vice President,
RenaissanceRe Ventures Ltd.
Komposch, Caroline M.
Vice President,
Renaissance Reinsurance Ltd.
Matusiak, James J.
Vice President,
Renaissance Reinsurance Ltd.
McCue, Keith A.
Vice President,
Renaissance Reinsurance Ltd.
Montpellier, Peter R.
Vice President,
RenaissanceRe Services Ltd.
Morgenstern, Kai H.
Vice President,
RenaissanceRe Ventures Ltd.
Nusum, Maureen B.
Vice President,
RenaissanceRe Services Ltd.
Oswald, Apryle L.
Vice President,
Glencoe Insurance Ltd.
Smith, Josephine A.
Vice President,
RenaissanceRe Services Ltd.
Tucker, Dion A.
Vice President,
RenaissanceRe Services Ltd.

COUNCIL BLUFFS, U.S.
Gibson, Kim R.
President & Chief Operating Ofﬁ cer,
Agro National Inc.
Watson, Thomas F.
Vice President,
Chief Financial Ofﬁ cer
Agro National Inc.
Connealy, Donald F.
Vice President,
Agro National Inc.
Grimsley, Gene R.
Vice President,
Agro National Inc.
Holl, Monte R.
Vice President,
Agro National Inc.
Janicek, Kenneth P.
Vice President,
Agro National Inc.
Rhodes, Randy L.
Vice President,
Agro National Inc.
Wilson, William C.
Vice President,
Agro National Inc.

DALLAS, U.S.
Lewis, Travis L.
President & Chief Operating Ofﬁ cer
RenRe North America Inc.
Primerano, Richard B.
Senior Vice President,
Chief Financial Ofﬁ cer,
RenRe North America Inc.
Cole, Joseph B.
Managing Director,
RenRe North America Inc.
Bowden, Tracy H.
Senior Vice President,
General Counsel &
Chief Compliance Ofﬁ cer,
RenRe North America Inc.
Graff, Timothy J.
Senior Vice President,
RenRe North America Inc.

Stahl, Brian C.
Senior Vice President,
RenRe North America Inc.
Brockman, Robert W.
Vice President,
RenRe North America Inc.
Childers, Jeffery C.
Vice President,
RenRe North America Inc.
Cohen, Michael N.
Vice President,
Government Affairs,
RenRe North America Inc.
Hockersmith, Jeffrey S.
Vice President,
Government Affairs
RenRe North America Inc.
Kanan, Aileen P.
Vice President,
RenRe North America Inc.
Kozuch, Walter J.
Vice President,
RenRe North America Inc.
McCreary, Roger D.
Vice President,
RenRe North America Inc.
Meehan, Patricia M.
Vice President,
RenRe North America Inc.
Radford, Kellam A.
Vice President,
RenRe North America Inc.
Schlaegel, Woldemar W.
Vice President,
RenRe North America Inc.
Scholl, David C.
Vice President,
RenRe North America Inc.

DUBLIN, IRELAND
Burnett-Herkes, James N.
Managing Director, Risk Modeling
Renaissance Reinsurance of Europe
Britchﬁ eld, Ian D.
Managing Director,
Renaissance Reinsurance of Europe
Brosnan, Sean G.
Managing Director, Investments,
Renaissance Reinsurance of Europe

HARTFORD, U.S.
Eudy, Dan R.
President,
RenRe Insurance Underwriters Inc.
Taylor, Rodney N.
Managing Director,
RenRe Insurance Underwriters Inc.
Azary, Angela H.
Vice President,
RenRe Insurance Underwriters Inc.
Curry, David A.
Vice President,
RenRe Insurance Underwriters Inc.
Keen, Christopher T.
Vice President,
RenRe Insurance Underwriters Inc.
Regan, Michael E.
Vice President,
Tax Director,
RenRe North America Inc.
Scott, Sara A.
Vice President,
RenRe Insurance Underwriters Inc.

HOUSTON, U.S.
Tawney, Mark R.
Senior Vice President,
RenRe Energy Advisors Ltd.
Kaplan, Paul E.
Vice President,
RenRe Energy Advisors Ltd.

Carrick, George M.
Vice President,
RenRe Energy Advisors Ltd.
Windle, William W.
Vice President,
RenRe Energy Advisors Ltd.
Richardson, Laurence B.
Business Development Manager,
RenRe Energy Advisors Ltd.

LONDON, U.K.
Murphy, Richard J.
Chief Executive Ofﬁ cer,
RenaissanceRe Syndicate
Management Limited
Heatherly, David A.
Executive Director,
RenaissanceRe Syndicate
Management Limited
Curtis, Ross A.
Senior Vice President,
Chief Underwriting
Ofﬁ cer of European Operations,
RenaissanceRe Syndicate
Management Limited
Fox, Kim T.
Chief Operating Ofﬁ cer,
RenaissanceRe Syndicate
Management Limited
Chappell, Joanne E.
Head of Risk & Audit,
RenaissanceRe Syndicate
Management Limited
Illston, Peter A.
Head of Operations,
RenaissanceRe Syndicate
Management Limited
Lang, Robin J.
Vice President,
RenaissanceRe Syndicate
Management Limited
Lewis, James R.
Managing Director,
RenaissanceRe Syndicate
Management Limited
Mann, James W.
Director of Underwriting,
RenaissanceRe Syndicate
Management Limited
Martis, Stavros P.
Chief Actuary,
RenaissanceRe Syndicate
Management Limited
McMenamin, Conor S.
Head of Risk, Cap. & Tech.,
RenaissanceRe Syndicate
Management Limited
Oakley, Ian R.
Director of Claims,
RenaissanceRe Syndicate
Management Limited
Yandell, David B.
Financial Director,
RenaissanceRe Syndicate
Management Limited

RALEIGH, U.S.
Tillman, Craig W.
President,
WeatherPredict Consulting Inc.
Bachiocci, David R.
Senior Scientist,
WeatherPredict Consulting Inc.
Lin, Jason J.
Vice President,
WeatherPredict Consulting Inc.
Rowe, G. Dail
Senior Scientist,
WeatherPredict Consulting Inc.
Williford, Eric C.
Senior Scientist,
WeatherPredict Consulting Inc.

BOARD OF DIRECTORS

RenaissanceRe Holdings Ltd.

FINANCIAL AND INVESTOR
INFORMATION

NEILL A. CURRIE
President &
Chief Executive Ofﬁ cer
RenaissanceRe Holdings Ltd.

W. JAMES MACGINNITIE
Chairman
RenaissanceRe Holdings Ltd.

DAVID C. BUSHNELL
Retired Chief Administrative Ofﬁ cer
Citigroup Inc.

THOMAS A. COOPER
Chief Executive Ofﬁ cer
TAC Associates

JAMES L. GIBBONS
President & CEO
CAPITAL G Limited
Chairman of CAPITAL G
Bank Limited

JEAN D. HAMILTON
Private Investor
Member of Brock Capital
Group LLC

WILLIAM F. HECHT
Retired Chairman, President & CEO
PPL Corporation

HENRY KLEHM III
Partner
Jones Day

RALPH B. LEVY
Senior Partner
King & Spalding LLP

ANTHONY M. SANTOMERO
Former President
Federal Reserve Bank of Philadelphia

NICHOLAS L. TRIVISONNO
Retired Chairman & CEO
ACNielsen Corporation

RenaissanceRe Holdings Ltd. and Subsidiaries

GENERAL INFORMATION ABOUT THE COMPANY
For the Company’s Annual Report, press releases, Forms 10-K and
10-Q or other ﬁ lings, please visit our website: www.renre.com

OR CONTACT:
Kekst and Company
437 Madison Avenue
19th Floor
New York, NY 10022
Tel: (212) 521 4800

INVESTOR INQUIRIES SHOULD BE DIRECTED TO:
Investor Relations
RenaissanceRe Holdings Ltd.
Tel: (441) 295 4513
Email: investorrelations@renre.com

ADDITIONAL REQUESTS CAN BE DIRECTED TO:
The Company Secretary
RenaissanceRe Holdings Ltd.
Tel: (441) 295 4513
Email: secretary@renre.com

STOCK INFORMATION
The Company’s stock is listed on The New York Stock Exchange under the
symbol ‘RNR’.

The following table sets forth, for the period indicated, the high and low closing
prices per share of our common shares as reported in composite New York
Stock Exchange trading.

PRICE RANGE OF COMMON SHARES

2009

2008

Period

First Quarter
Second Quarter
Third Quarter
Fourth Quarter

High

$52.24
52.65
56.17
57.37

Low

$39.37
43.10
45.60
50.46

High

$60.34
55.40
56.95
52.25

Low

$49.54
44.59
43.92
31.50

CERTIFICATIONS
The Chief Executive Ofﬁ cer and Chief Financial Ofﬁ cer have certiﬁ ed in writing
to the Securities and Exchange Commission (SEC) as to the integrity of the
Company’s ﬁ nancial statements included in this Annual Report and in the
Company’s Annual Report on Form 10-K for the ﬁ scal year ended December 31,
2009 ﬁ led with the SEC and as to the effectiveness of the Company’s disclosure
controls and procedures and internal control over ﬁ nancial reporting.

The certiﬁ cations are ﬁ led as Exhibit 31 and Exhibit 32 to the said Form 10-K.
The Chief Executive Ofﬁ cer has also certiﬁ ed to the New York Stock Exchange
in 2009 that he is not aware of any violation by the Company of the New York
Stock Exchange corporate governance listing standards.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young Ltd.
Hamilton, Bermuda

TRANSFER AGENT
BNY Mellon Shareowner Services
480 Washington Boulevard
Jersey City, NJ 07310
Phone: (800) 851 9677
Or: (201) 680 6557

Portions of this report are printed on paper that
is manufactured with post-consumer waste.

Printed by a zero discharge facility recognized by the
Massachusetts Water Resource Authority, using soy-based inks.

RenaissanceRe Holdings Ltd.
Renaissance House
8-24 East Broadway
P.O. Box HM2527
Hamilton HMGX, Bermuda
Tel: (441) 295 4513
Fax: (441) 292 9453
www.renre.com