RenaissanceRe Holdings Ltd.'s net income rose by more than 50 percent, despite taking a hit of almost $125 million for the Chilean earthquake during the first quarter of 2010.

The reinsurer posted a profit of $165 million, or $2.73 per share, during the first quarter of 2010 compared to $97.3 million, or $1.57 per share, for the first quarter of 2009.

Operating income stood at $116.5 million, or $1.91 per share, in the first quarter versus $94.2 million or $1.52 per share in 2009.

That excluded net realised and unrealised gains on fixed maturity investments of $48.6 million and net other-than-temporary impairments of $33,000 in the first quarter of 2010 and net realised gains on fixed maturity investments of $22.1 million and net other-than-temporary impairments of $19 million in the first quarter of 2009.

The company reported an annualised return on average common equity of 20.9 percent in the first quarter of 2010, compared to 16 percent a year earlier.

Book value per common share increased to $53.86 at March 31, 2010, a 4.2 percent increase in the first quarter of 2010, compared to a 2.3 percent increase in the first quarter of 2009.

Neill Currie, CEO of RenaissanceRe, said: "Favourable reserve development and strong investment performance were key drivers for the quarter.

"An event like Xynthia is a relatively common occurrence, whereas the Chilean earthquake had a much lower probability of occurring. We are in the business of protecting our clients from such events and our estimated losses were well within our modelled expectations. "

RenaissanceRe recorded $124.5 million of net negative impact from the Chilean earthquake and Xynthia in the first quarter of 2010, including the sum of estimates of net claims and claim expenses incurred, earned reinstatement premiums assumed and ceded, lost profit commissions and non-controlling interest.

Gross premiums written for the first quarter of 2010 decreased 5.8 percent, to $563.5 million versus to $598.3 million in the first quarter of 2009.

The company generated $89.8 million of underwriting income and had a combined ratio of 67.7 percent in the first quarter of 2010, compared to $131.2 million of underwriting income and a 56.5 percent combined ratio in the first quarter of 2009. Favourable development on prior years' reserves totalled $161.7 million.

In the reinsurance segment, the company's Lloyd's unit, which recently started operations, generated $14 million of gross premiums written during the first quarter of 2010.