Supply of capital is exceeding demand in the reinsurance industry, according to RenaissanceRe Holdings Ltd CEO Kevin O’Donnell.

The Bermuda-based reinsurer last night reported first-quarter net income of $151 million last night and surpassed Wall Street’s expectations.

The earnings broke down to $3.56 per share and represented a 20 percent slide from 2013’s first-quarter earnings of $190.5 million, or $4.23 per share.

Operating earnings of $136.1 million, or $3.20 per share, comfortably exceeded the $2.92 consensus expectation of analysts tracked by Yahoo Finance, but fell short of the $176.2 million, or $3.91 per share achieved last year.

RenRe CEO Kevin O’Donnell said: “Pressure on pricing persists, as abundant supply from many forms of capital continues to outstrip demand. Despite the challenging environment, we are well positioned to bring efficient risk management solutions to clients and to build an attractive portfolio through our unique mix of owned rated balance sheets, non-owned rated balance sheets, and collateralised vehicles.”

Mr O’Donnell described the first three months of the year as a “solid quarter”. He added: “Our results were driven by strong underwriting in each of our segments and good investment performance.”

The company’s combined ratio of 47.2 percent meant it spent less than half of its premium dollars on claims and expenses. This compared to an even better combined ratio of 36.2 percent in the first quarter of 2013.

The company reported an annualised return on average common equity of 17.6 percent and an annualised operating return on average common equity of 15.9 percent.

Book value per common share increased $2.01, or 2.5 percent, in the first quarter of 2014 to $82.30, compared to a 4.3 percent increase in the first quarter of 2013.

The company wrote more business as gross premiums written totalled $705.3 million — an increase of $69.8 million, or 11 percent.

The company said the increase was driven by the Specialty Reinsurance and Lloyd’s segments which grew gross premiums written by $72 million and $9 million, respectively.

Managed catastrophe premiums written were $496 million, a 6.4 percent decrease compared to the first quarter of 2013.

The total investment result in the first quarter of 2014 was $53.7 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 $51.4 million in the first quarter of 2013.

Net income attributable to non-controlling interests in the first quarter of 2014 was $42.8 million and increased from $38.6 million in the first quarter of 2013, principally due to a decrease in RenRe’s ownership in DaVinciRe Holdings Ltd to 26.5 percent at March 31, 2014, compared to 32.9 percent a year earlier.

RenRe repurchased an aggregate of 3.0 million common shares in open market transactions at an aggregate cost of $277.1 million and at an average share price of $93.04.

Already during the second quarter, through April 25, the company has bought back a further 329,000 shares in open-market transactions at an average share price of $96.84.