ZUG, Switzerland, April 30, 2002 (PRIMEZONE) -- Converium (NYSE:CHR), one of the world's leading reinsurers, on the occasion of the first annual general meeting held in Zurich, today reports on its successful 2002 renewals through April 1, and its results for 2001. Converium listed on the SWX Swiss Exchange (SWX:CHRN) and New York Stock Exchange (NYSE:CHR) in December 2001.
Continuing Success for 2002 Renewals
Clients and brokers welcome Converium's independence, and the company continues to enjoy strong 2002 renewals. Since January 1, Converium has registered an encouraging growth of 19% in its in-force gross premiums written (from approx. U.S. $ 2.7bn to approx. U.S. $ 3.1bn).
By April 1, Converium had concluded its negotiations on 80% of its premiums renewable in 2002. Given its lead positioning in key markets and in specialty lines, Converium experienced combined increases in rates and shares of around 28% on existing business. Furthermore, adherence to its strict financial discipline led Converium to non-renew a total of 24% of renewable premiums, as the underlying business did not meet its performance standards. The non-renewed premium volume was mostly offset by new business. The aggregate impact of improved premiums, larger participations and new business resulted in a sharp increase in renewed premium volume, up 19% on the total portfolio.
Converium registered strong growth in all of the Asian markets, especially in Japan, where significant premium growth of 60% was achieved, proving that Converium can also establish itself successfully as an independent reinsurer in contested markets.
Converium maintained its good positioning in the key markets and continues to successfully pursue its strategy, which includes growth in the specialty lines (e.g. aviation and space, credit & surety, agribusiness, professional liability and marine).
Highlights of the 2002 Renewals and the 2001 Result
Converium is an independent top-ten reinsurance group, which listed on the SWX Swiss Exchange and the New York Stock Exchange in December 2001.
Continued successful 2002 renewal season in a hardening market: good positioning in key markets and successful strategy of growth in specialty lines.
Year-end results of the Converium Group 2001 (consolidated): Net loss U.S. $ 367.4m (net loss 2000: U.S. $ 29.3m) Net premiums written increased by over 24% to U.S. $ 2,483m (2000: U.S. $ 1,996m).
Re-underwriting efforts continued in 2001, resulting in significantly improved quality of business portfolio and improvements in underlying performance. The actual non-life combined ratio was at 128.9%, and the adjusted non-life combined ratio decreased by 7.8 pts to 105.4% (adjustments made for 1999, 2000 and 2001 reserve actions, September 11th and Enron losses).
Strong balance sheet to harvest in a hardening market:
- Strong capitalization (equity: U.S. $ 1.57bn) - September 11: net loss capped at U.S. $ 289.2m - Asbestos & Environmental: marginal exposure (less than 1% of loss reserves, gross), reserve-levels strengthened to a survival ratio of 13.8 years (2000: 13.1 years) - Solid reserve-levels maintained - Enron-exposure: full limits booked in 2001. - As stated in the IPO-prospectus, Converium's Board of Directors will propose at today's annual general meeting not to pay out a dividend for 2001.
Dirk Lohmann, CEO Converium said: "With April 1, another important renewal deadline has successfully concluded. As expected, our independence was particularly welcome in Japan, where we enjoyed strong growth under the best conditions in years. In addition, we were able to provide further impulses for growth through the development of several specialty lines, such as professional indemnity."
Martin Kauer, CFO Converium said: "Today Converium is established as a leading independent global reinsurer - with primary insurers, brokers and investors. We have a broad shareholder base - our shares are primarily held by institutional investors in the U.S.A and the U.K.."
"We are on track - our expectations for 2002 have been fully met up until now. Thanks to our adherence to our underwriting discipline, we have been able to substantially increase the expected performance of our portfolio."
IPO, ranking and organization
The IPO of Converium took place on December 11th, 2001 and involved the placing of 35 million registered shares priced at CHF 82 per share or U.S. $ 24.59 per American Depositary Share (ADS) with investors worldwide.
By January 9, 2002, 40 million shares were sold to the public by a syndicate of banks and Converium's 100% flotation was earmarked as the largest reinsurance IPO ever worldwide and the largest corporate IPO in Switzerland since 1998. The shares were initially allocated across the globe, 32% to institutional investors in the U.S., 24% to institutional investors in the U.K., 15% to institutional investors in Switzerland, and 19% to institutional investors in the rest of the world. The remaining 10% was allocated to retail shareholders in Europe and the U.S.
Today the company ranks 8 among the top ten professional reinsurers and employs close to 750 people in 24 offices around the globe. Converium has a strong balance sheet with an "A+" (strong) from Standard & Poor's and "A" (excellent) by AM Best Company. Converium's September 11th net losses are capped at U.S. $ 289.2m by its former parent, Zurich Financial Services. Converium has minimal A&E exposures, which are strongly reserved.
Converium is organized around four business segments consisting of our three non-life operations, Converium Zurich, Converium North America and Converium Cologne, as well as Converium Life.
Important Disclaimer
This document contains forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. It contains forward-looking statements and information relating to the Company's financial condition, results of operations, business, strategy and plans, based on currently available information. These statements are often, but not always, made through the use of words or phrases such as "expects," "should continue," "believes," "anticipates," "estimates," and "intends." The specific forward-looking statements cover, among other matters, the improving reinsurance market, the expected losses related to the September 11 attack on the United States, the outcome of insurance regulatory reviews, the Company's operating results, the rating environment and the prospect for improving results. Such statements are inherently subject to certain risks and uncertainties.
Actual future results and trends could differ materially from those set forth in such statements due to various factors. Such factors include general economic conditions, including in particular economic conditions; the frequency, severity and development of insured loss events arising out of catastrophes; as well as man made disasters such as the September 11 attack on the United States; the ability to exclude and to reinsure the risk of loss from terrorism; fluctuations in interest rates; returns on and fluctuations in the value of fixed income investments, equity investments and properties; fluctuations in foreign currency exchange rates; rating agency actions; changes in laws and regulations and general competitive factors, and other risks and uncertainties, including those detailed in the Company's filings with the U.S. Securities and Exchange Commission and the Swiss Exchange. The
Company does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.