HANOVER/FRANKFURT (Reuters) - Reinsurer Hannover Re said it had increased its overall premium volume when renewing contracts with its insurance company customers at the start of the year, amid intense competition.
The world's third-biggest reinsurer said the premium volume of contracts renewed in January rose 1 percent to 3.82 billion euros ($5.23 billion), with prices rising in lines hit by damage claims in 2012.
Chief Executive Ulrich Wallin said in a statement the company's underwriting strategy had enabled the firm to achieve price levels at least on a par with the quality of 2012, even though the environment was considerably more competitive than in the previous year.
The company reiterated its guidance for 2013, including the goal of earning around 800 million euros in net profit. It is expected to post net profit of around 810 million euros for its 2012 financial year when it reports on March 7, according to Thomson Reuters data.
However, Hannover was feeling a "certain amount of pressure" from the rising number or competitors and from insurance companies that were choosing to keep more risk on their own books, rather than pass it along to reinsurers, Wallin said.
"It therefore will become more difficult for us to continue growing as we are," he said.
Reinsurers such as Hannover, Munich Re and Swiss Re help their insurance company customers cover the cost of major damage claims like hurricanes or earthquakes in exchange for part of the premium.
Billions of euros in contracts to regulate that risk coverage are negotiated at the end of each year and come into force on Jan. 1.
Hannover's North America business grew by 14 percent, with prices for insurance policies hit hard by superstorm Sandy last year rising by between 10 and 30 percent, the company said.
Prices for marine insurance were affected both by Sandy and the sinking of the Costa Concordia cruise ship, rising by as much as 40 percent for some types of cover, it added.
Premiums in Hannover's home market of Germany contracted slightly.
The reinsurer raised its notional budget for the cost of major damage claims this year to 625 million euros from 560 million last year due to the increased volume of its non-life reinsurance premiums and to changes in the mathematical models it uses to assess risks in different countries.
The company repeated that it was likely to pay a dividend for 2012 that was above its target payout range of 35-40 percent of net profit. It paid 2.10 euros per share as a 2011 dividend, or 42 percent of net profit.
($1 = 0.7301 euros) (Reporting by Kathrin Jones and Jonathan Gould; editing by Keiron Henderson)