Management at PartnerRe Ltd. yesterday said it expected 2004 to surpass 2003 in terms of the amount of business written and in profits it would generate.

Barring a large catastrophe or some other unforeseen disaster, Patrick Thiele, chief executive officer and president of PartnerRe yesterday said that he expected to lead his company to new record heights during the year.

?We have had a good year ? it has been a great year and we think we will have a good year next year,? said Mr. Thiele, speaking to . ?The first job is survival. During this cycle we expect to make a lot of money, but first of all do no harm.?

And he pointed to a good January renewals season as a pointer to the year ahead ? with bound non-life contracts signed which are expected to generate $2 billion in premiums. At close of markets on Monday the company, which has offices on Pitts Bay Road, reported that it had more than doubled its profits for 2003 to $467.7 million after a turn-around in investment income, strong premium growth and excellent underwriting profitability.

Net income for 2002 was $190.3 million, which included a net after tax loss on investments of $16.7 million, while the figure for 2003 included a net after-tax realised gain on investments of $80.0 million. In a news release yesterday, the company said this represents a 5 percent increase on a constant dollar basis over premiums generated in the January 2003 renewal season.

PartnerRe said it entered the January 1, 2004 renewal season with expiring non-life premium of $1.9 billion and non-renewed contracts of $340 million. Increased pricing and larger shares of treaties added up to $170 million of incremental premium on business renewed, and the company wrote $260 million of new business, it said and it expects consolidated net premiums written to reach $3.9 billion in 2004.

Mr. Thiele predicted that the hard market ? meaning that prices are high and good for insurance companies ? was slowing down and would level out during 2005.

And he said as part of this cycle, that during 2004 there was growth in some lines, while others would stay static and others would fall.

He said: ?It is difficult to talk about one cycle, what we are talking about is a series of mini-cycles within it are the shorter tail lines, the property lines, the cat lines. That levelled off, and in fact in some places the prices are declining. Whereas the casualty lines the prices continue to go up, as losses continue to go up, so you are getting a balance in your portfolio that you wouldn?t have if you were a casualty reinsurer or a cat reinsurer.

?We think the decline, when it comes, in terms of property will be a shallow decline we don?t think it will be as bad as the late 90s,? he said. ?Because with interest rates down three to four percent and the damage that has been done to the balance sheet of the insurance and reinsurance companies, we just don?t have a lot of excess capital and we don?t have a real incentive to try to become aggressive on pricing to get cash in to invest.

?So, low short-term interest rates and not having a lot of excess capital would tend to mean that even if prices flatten out and begin to decline at some point in time, it won?t be as severe. That is our hope. It would make economic sense.?

He said growth would be in the general specialty and casualty in both the US and Europe as well as growth in the European property market and credit reinsurance.

But the biggest growth would be in life insurance for PartnerRe, as the company took advantage of poor performance by the traditional carriers of this segment.

?Life is growing very rapidly,? he said adding that there had been a broadening of reinsurance pacts to include more life. ?US casualty will also grow as rapidly,? he added.

He said that not only would US casualty grow, but ART (Alternative Risk Transfer) was a close second, but that complicated accounting methods used in this segment meant that it was difficult to show on paper in the true value of this area, and it was currently lumped together with the ?other? classifications, but they were looking at ways of articulating this for shareholders and analysts.

When asked if he thought that the industry had learned its lessons from poor underwriting during the last soft market, Mr. Thiele defended his industry, saying it was not sloppy underwriting that caused problems, but market forces that dictated the way that the industry did business.

?Most of the bad underwriting is always driven by a reason, there is always an economic reason for it,? he said. ?If interest rates went to seven or eight percent, I could drop my price in some lines of business by 10 or 15 percent and earn the same return.

?I think the industry gets a bad reputation for bad behaviour when in fact many of the behaviours that we have are just driven by economic forces. We are not stupid and we are not fraudulent. We are driven by forces where there is over-supply or under-demand, or too high interest rates. We just respond to the environment we are in.?

And he said that their main objective was to make an adequate return for the shareholders.

?And we did that in 2003, and 2003 was an extraordinarily good year. And 2004 will be considerably better in terms of absolute dollars of profit. And shouldn?t be too far off in terms of return on capital.

?But we are in the risk business. We could have an earthquake or flood or a hurricane at any time and it could blow away the year. If the losses act the way they are supposed to act, the way the actuaries tell me, the expected loss, then we should do well.

?It is a little frustrating to talk about expected results, because it is only a probability, you know we can tell you what the probability is of having losses, but we can?t estimate them for sure. It is like the weather person saying there is a 60 percent chance of rain.?