RenaissanceRe Holdings Ltd continued strong underwriting profitability during the second quarter of 2014 — but with a notable drop in gross premiums written and underwriting income.

The Bermuda reinsurer last night reported underwriting income of $99.7 million and a combined ratio of 61.7 percent in the second quarter of 2014, compared to $113.4 million and 61.2 percent in the second quarter of 2013, respectively.

The $13.7-million decrease in underwriting income was principally driven by a $31.5-million decrease in net premiums earned, primarily as a result of reduced gross premiums written, and partially offset by a $22.6-million decrease in net claims and claim expenses.

Gross premiums written were $511.5 million, a decrease of $191.7 million, or 27.3 percent, in the second quarter of 2014, as against the comparative period in 2013.

The drop was principally driven by the company’s Catastrophe Reinsurance segment, which experienced a decrease of $188.8 million, or 32.7 percent, driven by the continued softening of market conditions, including reduced risk-adjusted pricing for the second quarter renewals.

CEO Kevin O’Donnell said: “In the second quarter, we generated $120.8 million of net income, an annualised operating ROE [return on equity] of 11 percent and 3.5 percent growth in tangible book value per share, plus accumulated dividends. Our team executed well in tough market conditions and I am pleased with the book of business we constructed.”

He added: “We believe that over the long-term the proper assessment of risk and disciplined underwriting will continue to be key differentiators in our industry. Our strategy of matching well-structured risk with efficient capital across cycles has been the basis for our success for over two decades. We intend to continue this strategy going forward, providing customers and capital providers with a suite of innovative and flexible solutions along with industry-leading underwriting expertise and customer service.”

The company reported an annualised return on average common equity of 14.2 percent and an annualised operating return on average common equity of 11.0 percent in the second quarter of 2014, compared to 3.4 percent and 12.2 percent, respectively, in the second quarter of 2013.

Book value per common share increased $2.49, or 3.0 percent, to $84.79, compared to a 0.4 percent increase in the second quarter of 2013.

Tangible book value per common share plus accumulated dividends increased 3.5 percent in the second quarter of 2014, compared to a 0.8 percent increase in the second quarter of 2013.

Managed catastrophe premiums written were $437.9 million, a 28.0 percent decrease, compared to the second quarter of 2013, excluding the impact of $9.8 million of reinstatement premiums written in the second quarter of 2013.

For the first six months of 2014, managed catastrophe premiums, net of reinstatement premiums written, totalled $933.9 million. That was a decrease of $204.2 million, or 17.9 percent, compared to the first six months of 2013, excluding the impact of the $9.8 million of reinstatement premiums written in the first six months of 2013.

The total investment result in the second quarter of 2014 was positive $61.6 million, which includes the sum of net investment income, net realised and unrealised gains on investments and the change in net unrealised gains on fixed maturity investments available for sale, compared to negative $44.6 million in the second quarter of 2013.

The total investment result was primarily driven by the improved returns in the company’s fixed maturity investment portfolio as a result of the flattening of the yield curve and higher average invested assets during the second quarter of 2014, compared to the second quarter of 2013.

Net income attributable to noncontrolling interests in the second quarter of 2014 was $36.1 million and

increased from $14.0 million in the second quarter of 2013, principally due to an increase in the profitability of DaVinciRe Holdings Ltd., as well as a decrease in the company’s ownership in DaVinciRe to 26.5 percent at June 30, 2014, compared to 32.9 percent at June 30, 2013.

During the second quarter of 2014, the company repurchased an aggregate of 385 thousand common shares in open market transactions at an aggregate cost of $37.5 million and at an average share price of $97.29.