Bermuda’s PartnerRe Ltd. announced that it had written and bound approximately $1.8 billion of estimated Non-Life premium during the January renewal season.
“On a constant foreign exchange basis, that represents a 4 percent decline over total renewable expiring premium of $1.9 billion,” said the announcement. “The January 1, 2007 renewals are expected to represent 55 percent or approximately the same percentage of the total annual Non-Life business as in 2006. The Non-Life renewal does not include PartnerRe’s Life or ART operations.”
President and CEO Patrick Thiele commented: “Overall, we found the market to be orderly at January 1. A significant amount of business — almost 10 percent of our renewable premium — left the reinsurance market as cedants continued to retain more risk. Despite this, competition at the reinsurance level was reasonable. Absent significant market loss events, we would expect competition in all lines to increase for the remainder of the year.”
The bulletin also noted: “Renewable expiring premium of $1.9 billion excludes policies remaining in process or which were extended for renewal later in 2007. Of this amount, approximately $207 million, or 11 percent, was removed from the market as a result of cedants’ decisions to retain more of their business, or restructure quota share coverages to excess of loss treaties, which provide less premium. In addition, PartnerRe declined to renew approximately $125 million, or 6 percent of expiring premiums, due to pricing or terms and conditions that did not meet the Company’s objectives.
“Renewal increases were primarily the result of increased participations on existing treaties as pricing was generally on the decline for other than U.S. wind-exposed business. In addition, new business totaled $164 million with the Worldwide Specialty sub-segment having the greatest success. PartnerRe benefited from its long-standing client relationships.”
“We are generally pleased with the January 1 renewals” Thiele continued. “While we wrote modestly lower levels of premium in the January 1, 2007 renewals, we were able to shift our capital to higher return, more capital intensive lines, and thus maintain a level of priced profitability that is generally consistent with 2006 renewals, and above our long term target. This shift to higher return lines was accompanied by a modest increase in portfolio volatility.”
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