The world's fifth-largest reinsurer said its net investment income was up 43.5 percent, to 298.5 million euro ($355.2 million) for the quarter.

But the Hanover, Germany-based company reported that during the first quarter its gross written premiums across all four business groups contracted substantially, by 21.8 percent, amounting to 2.5 billion euro ($2.97 billion). Hannover Re's business groups consist of property-casualty (the company's largest segment), financial, life and health reinsurance products.

"The company was again able to profit from the opportunities offered by the reinsurance markets and generated excellent results despite markedly lower gross premium income than in the comparable quarter of the previous year," Hannover Re announced.

Part of the decline in the company's premium volume was caused by exchange-rate effects. (At constant euro exchange rates, the company noted, especially against the U.S. dollar, the premium-volume decline would have been 15.2 percent.)

Hannover Re pointed out that the lower premium volume is also a result of its "More From Less" strategy, where the company has been scaling back contracts where clients aren't ready to pay rates that meet Hannover Re's expectations.

Chairman of the Executive Board Wilhelm Zeller, commenting on earnings results, said that "with our 'More From Less' initiative we have established a solid foundation for the accomplishment of our ambitious annual targets and demonstrated that the primary concern in our industry is profit, not volume." He summed up this business principle by stating, "Volume is vanity, profit is sanity."

Mr. Zeller also pointed out that his company saw further improvements in rates and conditions in almost all lines thus far in 2004. "Treaty renewals in property-casualty reinsurance on Jan. 1, 2004?when roughly two-thirds of all treaties were renegotiated?were highly successful," he said.

"We used this development to further optimize our portfolio for the years ahead," Mr. Zeller said. "Most importantly, we scaled back high-volume but lower-margin proportional business while at the same time continuing to expand our involvement in the casualty sector."

Hannover Re also reported that the combined ratio in property-casualty reinsurance for the quarter was 95.4, improving from 100.3 reported during the corresponding period in 2003, as well as from 96 reported for full-year 2003.

Looking ahead, "We expect our business to continue to develop favorably in the course of the 2004 financial year," Mr. Zeller forecast. "It is evident from the treaty renewal season in property and casualty reinsurance that the advantageous market rates and conditions are holding firm," he said. Assuming that the major loss experience remains in line with the multiyear average, Mr. Zeller also predicted, the overall 2004 results "should once again surpass the previous year."