RenaissanceRe benefited from a lack of hurricanes and increased investment returns as its profits grew to $258.6 million in the third quarter — despite a drop in underwriting revenue.

The reinsurer's net income was up from a net loss of $231 million for the same period in 2008, when hurricanes Ike and Gustav sparked a rush of claims.

Operating income was up at $242.2 million for the period from an operating loss of $143.4 million in the third quarter of last year.

The company also reported an annualised return on average common equity of 35.5 percent and an annualised operating return on average common equity of 33.3 percent in the third quarter of 2009, compared to minus 36.1 percent and minus 22.4 percent, respectively, in the third quarter of 2008.

Book value per common share was $49.21 at September 30, 2009, an increase of $5.04, or 11.4 percent, in the third quarter, or 27 percent through the first nine months of the year.

RenRe CEO Neill Currie said: "I am pleased to report another strong quarter with an annualised operating return on equity of 33 percent and over 11 percent growth in book value per share in the quarter.

"We generated solid underwriting profits and strong investment returns in the quarter, reflecting the quality of the portfolio of risks we have underwritten, a lack of insured catastrophes and improved investment markets.

"Year-to-date, our book value per share has increased 27 percent and we have generated an annualised operating return on equity in excess of 29 percent. I'm very pleased with the quality of the portfolio of risks our team has constructed, which reflects our strong underwriting discipline. We look forward to continuing to serve our clients, brokers and joint venture partners during the upcoming renewal season."

RenRe's combined ratio — the percentage of premium dollars spent on claims and expenses — improved to 43.3 percent for the third quarter from 163.4 percent in 2008.

Gross premiums written fell to $202.4 million from $239.8 million in the prior year period, mainly due to $49 million in reinstatement premiums written in the company's reinsurance segment in the third quarter of 2008, as a result of hurricanes Gustav and Ike, that did not recur in the third quarter of 2009.

The $408.3 million increase in underwriting income and 120.1 percentage point decrease in the combined ratio was driven by the comparably low level of insured catastrophes during the third quarter of 2009.

The reinsurance segment generated $167 million of underwriting income and a combined ratio of 17.4 percent in the third quarter of 2009, versus an underwriting loss of $227.6 million and a combined ratio of 190.6 percent in the third quarter of 2008.

Returns on the company's investment portfolio were significantly higher in the third quarter of 2009 compared to the same period last year, primarily as a result of higher total returns on its non-investment grade allocations which were included in other investments, made up of its senior secured bank loan funds and non-US fixed income funds.

The company's total investment result, which includes the sum of net investment income, net realised gains on investments, net other-than-temporary impairments on fixed maturity investments available for sale and the net change in unrealised holding gains on fixed maturity investments available for sale, was $198 million in the third quarter of 2009, compared to minus $93.3 million in the third quarter of last year.