vol. XVII no. 3

				Page 1 In 1992 Hurricane Andrew swept across south Florida and pummeled its way to Louisiana, leaving a $26 billion path of destruction and an insurance industry in shock. In the aftermath of the most destructive natural disaster to date worldwide, insurance carriers fled the property catastrophe market. Eleven insurers became insolvent, and many of the remaining companies in the Florida market made plans to flee. But where some insurers perceived too much risk, others saw opportunity. Eight new companies formed after Andrew to offer property catastrophe insurance and reinsurance. Reinsurers are the safety net for primary insurance carriers when a natural disaster or other event causes excess damages in the tens of millions of dollars. The smallest by far of these new ventures, with capital of $140 million, was Renaissance Re Holdings Ltd., founded by Warburg, Pincus, General Electric Pension Fund and USF&G Corporation in June 1993. "Crisis periods offer an opportunity to enter the market, but they are not sufficient to guarantee sustainability," says James Stanard, chairman and CEO of Renaissance Re. True to its name, Renaissance has led in the rebirthing of a market and has proven more than sustainable. Today it insures most of the major insurance companies around the globe against catastrophic losses, backed by $3.5 billion in capital and $2 billion in equity. As one of the largest property catastrophe reinsurers worldwide, it has posted consistent and substantial gains in its stock value since going public in 1995. It took a series of hurricanes in 2004 - Jeanne, Ivan, Frances and Charley - to cause Renaissance's first quarterly loss in its history, and still the company expects to show a profit for the fiscal year. Rather than seeking to provide one-stop shopping to meet all of a client's insurance needs, Renaissance Re follows a different approach. It focuses on a small number of specialty areas and markets products through reinsurance brokers. Four business units now fall under the Renaissance umbrella - Renaissance Re, Davinci Re, Top Layer Re and Glencoe Group. Together they offer property catastrophe reinsurance, catastrophe-linked securities insurance, aviation/liability and other noncatastrophe lines, specialty reinsurance in areas such as terrorism, and primary and commercial insurance through joint ventures with State Farm and other financial investors. Top | Next Page

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