RenaissanceRe's profit shrinks 28 percent in 1Q

RenaissanceRe Holdings Ltd.'s profit shrank 28 percent in the first quarter as the insurer collected less in premiums and reaped weaker returns from its investment portfolio, the company said Tuesday.

The insurer's stock on Wednesday lost 88 cents to $52.47.

RenaissanceRe earned $137.2 million, or $2.05 per share, in the first quarter, compared with profit of $190.8 million, or $2.63 per share, in the first quarter last year.

Operating income, which insurers usually emphasize because they say it offers a clearer glimpse into the health of an underwriter's strength, was $2.21 per share. Analysts polled by Thomson Financial forecast operating profit of $2.20 per share, on average.

Premiums dwindled 17 percent to $527 million. The company wrote less business in certain markets because competition has dragged premiums too low, RenaissanceRe said.

Insurers have been slashing prices for three years, posing underwriters with a decision whether to pass up business or accept risks at an unfavorable price.

"We remain disciplined in our underwriting given current market conditions," Chief Executive Neill A. Currie said in a statement.

In the reinsurance segment, which writes insurance policies promising to cover losses on other insurers' policies, premiums slipped 14 percent to $443.7 million.

Of each premium dollar collected, RenaissanceRe spent 51.4 cents administering claims, down 14.2 cents on the dollar from the first quarter last year. The company received an unusually low volume of claims.

Investment income halved to $52.5 million. The company lost money on investments in hedge funds and private equity firms, as well as some bank loans and bond funds.