PartnerRe, a Bermuda-based property-casualty reinsurer, said its January volume of business was five percent lower than is typical at this time of year, citing a shift in insurance buying habits.

"A significant amount of business ? close to ten percent of our renewable premium ? left the reinsurance market," chief executive Patrick Thiele said in a Wednesday statement.

PartnerRe said it generally counted on 60 percent of its business coming through the door in January.

For 2006, it estimated its January business amounted to only 55 percent of total business for the year.

The so-called January 1 renewal period is historically the time of year that reinsurers, or insurers of insurers, sell the most policies.

PartnerRe said premium sales fell by $172 million, mostly because insurance buyers retained more risk. Insurers may also be taking longer to decide how much reinsurance to buy, in part to weigh options in this more expensive environment, and to analyse what type of protection to buy.

Reinsurance rates, especially in the US and particularly for hurricane-prone areas, are rising after record losses in 2005 from hurricane activity. Insurers buy reinsurance protection to spread the risk in policies sold to individuals and corporations. Ace Limited, Bermuda's largest property and casualty reinsurer, this week said it planned to increase the amount of reinsurance it bought.

"We haven't finished buying protection," said Ace chief executive Evan Greenberg on a Wednesday earnings conference call. "Prices are marginally higher than we contemplated but they are in a tolerable range."

Ace which sells both insurance and reinsurance said not only was it planning to buy more reinsurance, it was also raising its own prices.

While most insurers will pass on those higher costs in charging higher themselves, Mr. Thiele said some insurers were buying excess of loss reinsurance, which usually carries a lower premium pricetag.

Partner Re sold $1.79 billion in policies in January, which it estimated was about two percent below the $1.83 billion in premium it could have taken in on policies coming up for renewal.

And the company said new business accounted for $241 million of the premiums sold.

It also turned down $104 million, or 6 percent of the business that came up for renewal because customers wanted to pay less than the rates it was charging, or were seeking lighter policy terms and conditions.

Insurers and reinsurers turn down business when the pricing, or terms, of the contracts don't meet profitability targets.

PartnerRe said its January business data did not include policies sold by PartnerRe's life or alternative risk divisions. In 2004, the company counted on those units for about 11 percent of total business.

The company said prices in the US for property-catastrophe policies increased an average of seven percent. Internationally, PartnerRe said it walked away from some business because premium pricing was too low, and competition was still stiff. The company said its global P&C business shrank by $87 million, or 12 percent, but it maintained profitability.

Ace said it expected to see both property and casualty rates increase through the year. On the property side it said US rates had increased while casualty rates were little changed. Mr. Greenberg said retail insurance pricing internationally was too low.

"The farther one gets away from the '05 cat losses the longer it takes to come to grips with the new perception of risk," Mr. Greenberg said. Increased capital requirements from rating agencies, a change to the way insurers model the potential risks in policies and higher reinsurance pricing "add further impetus for market tightening," Mr. Greenberg said.

Other Bermuda reinsurers, including new entrants in the 'Class of 2005', are also predicting pricing will harden through 2006.