Bermuda-based PartnerRe expects to write $2.1 billion of non-life premium for the January 1 renewal season, a result which the reinsurer's chief executive officer Patrick Thiele believes indicates a positive change of direction in the market.

The company said it had seen a 12 percent cancellation rate — the lowest in five years — which reflected a reversal of the trend of insurers buying less reinsurance as they retained higher levels of risk themselves.

"The non-life reinsurance market stabilised 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," Mr. Thiele said. "The area of greatest uncertainty was US specialty casualty, where, despite growing evidence of increasing loss trends, terms and conditions did not improve."

On a constant foreign exchange basis, the January 1 renewals would represent a one percent increase over total renewable expiring premium of $2 billion, the company said.

From a renewable premium base of approximately $2 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 US agriculture, which traditionally renews later in the first quarter. "Overall, we are pleased with our performance in the January 1 renewal," Mr. Thiele said. "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 stabilised but not yet demonstrated improvement."

New business totalled $204 million, which was spread across most business lines, and reflected cedants' desire for increased reinsurance protection.

"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," Mr. Thiele said. "We expect this renewal book to achieve our long-term goal of 13 percent operating return on beginning equity, barring unusual large loss events."