HANOVER/FRANKFURT (Reuters) – Reinsurer Hannover Re said it hadincreased its overall premium volume when renewing contracts withits insurance company customers at the start of the year, amidintense competition.

The world's third-biggest reinsurer said the premium volume ofcontracts renewed in January rose 1 percent to 3.82 billion euros($5.23 billion), with prices rising in lines hit by damage claimsin 2012.

Chief Executive Ulrich Wallin said in a statement the company'sunderwriting strategy had enabled the firm to achieve price levelsat least on a par with the quality of 2012, even though theenvironment was considerably more competitive than in the previousyear.

The company reiterated its guidance for 2013, including the goalof earning around 800 million euros in net profit. It is expectedto post net profit of around 810 million euros for its 2012financial year when it reports on March 7, according to ThomsonReuters data.

However, Hannover was feeling a “certain amount of pressure”from the rising number or competitors and from insurance companiesthat were choosing to keep more risk on their own books, ratherthan pass it along to reinsurers, Wallin said.

“It therefore will become more difficult for us to continuegrowing as we are,” he said.

Reinsurers such as Hannover, Munich Re and Swiss Re help theirinsurance company customers cover the cost of major damage claimslike hurricanes or earthquakes in exchange for part of thepremium.

Billions of euros in contracts to regulate that risk coverageare negotiated at the end of each year and come into force on Jan.1.

Hannover's North America business grew by 14 percent, withprices for insurance policies hit hard by superstorm Sandy lastyear rising by between 10 and 30 percent, the company said.

Prices for marine insurance were affected both by Sandy and thesinking of the Costa Concordia cruise ship, rising by as much as 40percent for some types of cover, it added.

Premiums in Hannover's home market of Germany contractedslightly.

The reinsurer raised its notional budget for the cost of majordamage claims this year to 625 million euros from 560 million lastyear due to the increased volume of its non-life reinsurancepremiums and to changes in the mathematical models it uses toassess risks in different countries.

The company repeated that it was likely to pay a dividend for2012 that was above its target payout range of 35-40 percent of netprofit. It paid 2.10 euros per share as a 2011 dividend, or 42percent of net profit.

($1 = 0.7301 euros) (Reporting by Kathrin Jones and JonathanGould; editing by Keiron Henderson)