As of Jan. 1, some 65 percent of Munich Re's overall portfolio was up for renewal, the company said. "Of this, approximately 16 percent of existing business was not renewed because it did not meet the group's stringent profitability criteria."

Nevertheless, Munich Re said, renewed business recorded rate increases of 11 percent and increased shares of 3 percent while new business written accounted for 9 percent??

"The improvements in premiums and conditions achieved overall should help to further lower the combined ratio, provided of course that loss experience remains normal," said Stefan Heyd, member of the board of management of Munich Re.

He added that, "Improving the combined ratio is essential in view of the situation in the capital markets. Munich Re will therefore continue to pursue an underwriting policy consistently geared to profitability."

Discussing renewal trends in different business segments, the company said that third-party liability business saw reinsurance renewal premiums go up by 15 percent.

In view of the growing risk exposure, Munich Re said it expected further premium increases in the coming renewals, which applies, in particular, to long-tail business.

The liability claims outlook, the company said, will also be improved "by limits in third-party liability cover in motor insurance that have been gradually phased in with the support of Munich Re in those markets previously offering unlimited cover."

In property insurance, Munich Re said it was able to achieve average rate increases of 7 percent on business renewed in this sector, along with significant improvements in conditions.

Market acceptance of occurrence limits in proportional reinsurance for natural hazards will lead to increased profit potential, the company said.

For its marine reinsurance business, renewal premiums in the sector rose on average by about 5 percent, Munich Re said. "In addition, the long-term quality of Munich Re's portfolio was improved by increases in primary insurers' retentions and by excluding highly exposed risks from the scope of cover."

Munich Re said it appreciably improved conditions for both proportional and non-proportional reinsurance in the credit sector. "At the same time, far-reaching measures regarding primary insurance conditions were agreed to with cedents," the company said, which will provide for greater transparency regarding risks covered.

Munich Re noted that rate increases in primary insurance also were responsible for improvements in the non-life portfolio, with Munich Re directly benefiting from proportional reinsurance business improvements.