Bermuda,-based PartnerRe Ltd. announced that during the January 1, 2010 treaty renewal season it expects to write and bind approximately $2.6 billion of non-life premium. The bulletin added that this figure “includes $440 million in premium from PARIS RE, whose acquisition was completed in December 2009.”
On a constant foreign exchange basis, the total expected premium for the combined Company of $2.594 billion represents a “20 percent increase over the expiring premium of PartnerRe’s original January 1, 2009 portfolio of $2.159 billion.”
PartnerRe also noted that it renews approximately 60 percent of its total annual non-life treaty business on January 1. “The remainder is comprised of treaty business that renews at other times during the year, in addition to approximately $500 million of combined facultative business that is underwritten throughout the year.”
“Of the total expected premium of $2.6 billion, $299 million is still in process. Approximately 88 percent of the in process business is U.S. agriculture, which traditionally renews later in the first quarter.”
Concerning the integration of PARIS RE, the Company explained that they had “renewed their January 1 books separately in order to facilitate an orderly renewal process for clients.” The two companies are now in the process of consolidating their two books, and they will renew under the PartnerRe name from mid-year 2010.
PartnerRe President & CEO Patrick Thiele commented: “Overall, we are pleased with the performance of both the PartnerRe and PARIS RE books of treaty business in the January 1 renewal. Specifically, the PartnerRe book was stable with little change in overall client buying behavior, pricing or terms and conditions.”
He added that “PARIS RE experienced the normal dislocation and portfolio attrition associated with a change in control. Despite this, PARIS RE renewed approximately 90 percent of the business that met its portfolio objectives. New business remains challenging to achieve given the current stable environment.”
Individually, PartnerRe recorded an 8 percent cancellation rate, while PARIS RE’s cancellation rate was higher at 20 percent. Renewal changes represent both changes in pricing as well as changes in participation on treaties.
Thiele also explained that “overall priced technical ratios on the combined book were broadly in line with those in 2009, and we maintained double digit priced ROEs despite the continuation of a low interest rate environment.” He expressed confidence that PartnerRe’ would “maintain profitability in line with our long-term goal of 13 percent operating ROE in 2010, barring unusually large loss events. Our larger combined portfolio, backed by our substantially larger capital base, positions us well for 2010 and beyond.”
The complete bulletin, including a breakdown may be accessed on the Company’s web site at: www.partnerre.com
Was this article valuable?
Here are more articles you may enjoy.