Hannover Re says it is satisfied with the January treaty renewals, despite weaker rates and a 2% contraction in volumes amid a more competitive climate.

“Although the rate level in non-life reinsurance was broadly lower than the previous year, we achieved adequate margins thanks to our systematic underwriting discipline,” CEO Ulrich Wallin said.

The company reduced its participation in areas where risks were not adequately priced and expects profitability to be largely stable relative to last year.

It says increased retentions carried by insurers and an absence of market-changing major losses were key factors in premium declines.

Hannover Re had total non-life premium volume of €6.03 billion ($9.12 billion) booked in the previous year, with about €3.91 billion ($5.92 billion) up for renewal as of January 1.

Total renewed premium volume came in at €3.83 billion ($5.8 billion), it says.

Inflow of capital from the insurance-linked securities market led to particularly sharp rate decreases in the US natural catastrophe business, but did not cause significant share reductions for the company.

“Although rates for US property business came under pressure owing to a year of relatively light losses, leaving aside the Canadian market, the rate reductions proved to be smaller than anticipated,” Hannover Re said.

Renewals in Germany were highly competitive, with expectations for premium growth “not met in all areas”, despite natural catastrophe price rises following extreme weather.

In marine reinsurance, protection and indemnity covers increased following the Costa Concordia shipwreck and Hannover Re’s premium volume grew 5%.

In the property and casualty business, prices in the US fell 10-25% under some loss-free programs, while in Europe and Canada extreme weather led to rate increases of up to 10%.

Hannover Re says “particularly vigorous” premium growth was recorded in Thailand and Russia, while Latin American markets were stable or slightly higher.