RenaissanceRe Holdings Ltd. last night said its net income for the second quarter of 2006 fell 24.4 percent, but it hiked its projections for catastrophe reinsurance premium growth for the rest of the year.

The company said net income fell from $172 million or $2.39 per share in the second quarter of 2005 to $130.4 million or $1.81 per share in the same period this year.

And the reinsurer also revealed it has offered to pay a $15 million civil penalty to the US Securities and Exchange Commission to settle an SEC investigation into the company?s restatement of its financial statements for the years 2001 to 2003.

That investigation concerned the company?s use of financial reinsurance contracts that regulators allege were used to smooth earnings.

RenaissanceRe said the company would not admit any wrongdoing in the settlement.

Chief executive Neill Currie said of the company?s results: ?We had a strong quarter, with over six percent growth in book value per share and a 31.3 percent annualised operating return on equity.

?This quarter compares favourably to our second quarter of 2005, after taking into account the substantial catastrophe reserve reduction in that quarter.

?The severe capacity shortage facing many of our US clients once again provided us an opportunity to demonstrate industry leadership. In anticipation of this shortage we had previously increased the capital in (subsidiary) DaVinci.?

As a result, RenaissanceRe said it was increasing its projections for managed catastrophe premium growth from 15 percent to 40 percent, net of fully collateralised joint ventures.

During the second quarter of 2006 the company helped to form two new fully-collateralised joint ventures, Starbound Re and Tim Re.

These joint ventures enabled the company to write additional property catastrophe excess of loss reinsurance business for the company?s clients that it may not have otherwise written due to portfolio management considerations.

Gross premiums written for the second quarter of 2006 were $742.6 million, compared to $443.5 million for the same quarter of 2005.

Operating income per common share was $2.15 in the second quarter of 2006, compared to $2.37 in the second quarter of 2005.

Net premiums written for the second quarter of 2006 were $512.2 million, compared to $387.9 million for the same quarter of 2005.

Net premiums earned were $430.9 million for the second quarter of 2006, compared to $338.8 million in the second quarter of 2005.

Net investment income for the second quarter of 2006 was $74.0 million, compared to $45.8 million for the same quarter in 2005, principally reflecting a higher yield on the company?s portfolio of fixed maturity investments available for sale and short term investments, combined with an increased level of average invested assets.

Other investments, which include the company?s hedge fund and private equity investments, generated $11.1 million of net investment income in the second quarter of 2006 compared with $7.1 million in the second quarter of 2005.

During the second quarter of 2006, Renaissance recorded $24.3 million of net realised losses compared to $1.6 million of net realised gains in the second quarter of 2005.