RenaissanceRe Holdings Ltd. beating earnings estimates by more than a dollar a share as a bet on increasing its catastrophe reinsurance capacity paid off.

RenaissanceRe reported net income of $251.1 million in the third quarter or $3.48 a share compared to a $287.3 million operating loss or $4.07 a share a year earlier.

The company was expected to earn $2.32 a share, according to 16 analysts in a Thomson First Call survey. Net premiums written for the third quarter of 2006 were $162.7 million versus $290.1 million a year earlier.

“We are very pleased to report another strong quarter with record results.

“Our core property cat business generated exceptional earnings, and our book value per share grew by over 12 percent this quarter,” chief executive Neill Currie said.

“Our annualised compounded growth in book value per share plus accumulated dividends over the last ten years is 17 percent, reflecting our continued commitment to generate long-term growth in book value for our shareholders.”

“This year we met the demands of the market by providing capacity when it was most needed.

“We currently expect the demand for capacity to continue into 2007 and our priorities remain clear: maintaining a focused and disciplined approach to underwriting that enables us to achieve superior long-term results.”

RenaissanceRe also benefited from paying off certain contracts during the quarter, which had a $31.4 million positive impact on net earnings, it said.

RenaissanceRe said operating earnings, which analysts use to measure performance because it excludes investment gains and losses, were $247 million or $3.42 a share.

Analysts on average had expected the Bermuda- based insurer to earn $2.33 a share, according to Reuters estimates.

In the year ago quarter, the reinsurer, which provides backup coverage to property carriers in case of catastrophes, had an operating loss of $4.14 a share.

Since the start of the year, RenaissanceRe’s share price has risen 26 percent compared with a 4.3 percent gain in the Standard & Poor’s insurance index. It trades at a price to earnings multiple of 6 compared with 8.7 for a group of comparable insurers.

Gross premiums written for the third quarter of 2006 were $257.8 million, compared to $382.8 million for the same quarter of 2005.

Gross premiums written in the third quarter of 2005 reflect substantial loss related premium of $72.2 million as a result of the large hurricanes in the third quarter of 2005.

Net premiums written for the third quarter of 2006 were $162.7 million, compared to $290.1 million for the same quarter of 2005.

Net premiums earned were $367.1 million for the third quarter of 2006, compared to $348.3 million in the third quarter of 2005.