Bermuda’s PartnerRe Ltd. announced that during the January 1 renewal season it expects to write and bind approximately $2.1 billion of Non-Life premium. The life renewals are not included, as they are distributed evenly throughout the year.
“Approximately 60-65 percent of the total annual Non-Life business is expected to renew on January 1,” said the bulletin. “On a constant foreign exchange basis, the January 1, 2009 renewals would represent a one percent increase over total renewable expiring premium of $2.0 billion.”
President & CEO Patrick Thiele commented: “Overall, we are pleased with our performance in the January 1 renewal. We were able to marginally increase our production over 2008, while maintaining our portfolio balance and operating within our disciplined risk framework. We grew in markets where we saw the best opportunities from a risk/return perspective, and maintained our position in those areas where profitability has stabilized but not yet demonstrated improvement.”
PartnerRe said that “to date, from a renewable premium base of approximately $2.0 billion, $1.7 billion has been resolved with $296 million in process, where negotiations have not yet concluded. Approximately 85 percent of the in process business is U.S. agriculture, which traditionally renews later in the first quarter.
“Of the remaining $1.7 billion, $204 million was not renewed. This represents a 12 percent cancellation rate, the lowest seen over the last five years, and reflecting a reversal of the trend of increasing client retentions. The non-renewed premium includes approximately $99 million, which 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. In addition, PartnerRe declined to renew approximately $105 million, which did not meet the Company’s portfolio objectives. New business totaled $204 million, which was spread across most business lines, and reflective of cedants’ desire for increased reinsurance protection.”
Thiele indicated that the “Non-Life reinsurance market stabilized at January 1, reversing all of the deterioration seen in the first nine months of 2008, and in some areas – primarily catastrophe-exposed lines – priced profitability improved. The area of greatest uncertainty was U.S. specialty casualty, where, despite growing evidence of increasing loss trends, terms and conditions did not improve.”
“Overall, we priced our January 1, 2009 business at approximately the same technical ratio level as we did at January 1, 2008, and we believe there is scope to improve on this level through the remainder of the year. We expect this renewal book to achieve our long-term goal of 13 percent operating return on beginning equity, barring unusual large loss events.”
A financial breakdown in greater detail may be obtained on the Company’s web site at: www.partnerre.com.
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