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ZURICH, Switzerland Swiss Reinsurance Co., the world's biggest reinsurer, said it had turned away business it considered to be unprofitable at the January 1 renewals.
The Zurich, Switzerland-based reinsurer Tuesday published 2006 year-end renewals figures.
The group reported an increase in its overall portfolio size from 9 billion Swiss francs ($7.2 billion) at the start of the renewal to 10.3 billion Swiss francs ($8.3 billion) by the end of the process, an increase in the renewed portfolio of some 14%.
Swiss Re said that it was happy to walk away from business that failed to live up to its profitability targets and reported that increased retentions among newly capital rich primary insurers had been seen.
The Insurance Solutions business acquired from General Electric last year, contributed a total of 14% to the total at this renewal.
The IS book, however, shrunk quite dramatically as Swiss Re withdrew from a large portion of mainly inwards catastrophe retrocession business and rejected some 23% of business that it said showed "inadequate prices and broader terms and conditions" than it wanted.The 1.8 billion Swiss francs ($1.4 billion) of IS business up for renewal at year-end fell to 1.3 billion Swiss francs ($1.0 billion) to provide a retention ratio of 78%.
The overall retention ratio since the business was acquired last summer is 81%, including the July 2006 U.S. renewals.
Stefan Lippe, head of products at Swiss Re, said that the group was able to renew a profitable and enlarged group despite an "abundance of capacity".
He said that the market is showing "some signs of softening" and that client retentions were up again but that the outlook remains "excellent" across most lines of business.
Ann Godbehere, chief financial officer of Swiss Re, said that the reinsurance industry remains focused on "return on capital employed" rather than market share.
Swiss Re said that proportional property business showed some softening but that overall premiums remain strong. Property treaty business remains "excellent" with strong increases in catastrophe exposed lines.
Both proportional and treaty liability accounts showed pressure on rates but this was offset by higher interest rates, said the company.
In the specialty lines, marine business volume was up 40%, engineering 20%, aviation 18% (although airline facultative business was down 25% in the last quarter of last year).