A.M. Best Downgrades Ratings of Converium.OLDWICK, N.J. -- A.M. Best Co. has downgraded the financial strength ratings of Converium AG (Switzerland Switzerland (swĭt`sərlənd), Fr. Suisse, Ger. Schweiz, Ital. Svizzera, officially Swiss Confederation, federal republic (2005 est. pop. 7,489,000), 15,941 sq mi (41,287 sq km), central Europe. ) and its rated core subsidiaries (collectively referred to as Converium) to A- (Excellent) from A (Excellent). At the same it has downgraded all issuer credit ratings and related debt issues and placed all ratings under review with negative implications. (See full list of ratings below.) These actions follow the announcement of further adverse reserve development. A.M. Best has been factoring further adverse reserve development in its ratings for some time, but the effect of this reserve action will cause second quarter results to fall below expectations. The problem is primarily due to U.S. casualty losses related to the underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. years 1997 to 2001, which will be bolstered bol·ster n. A long narrow pillow or cushion. tr.v. bol·stered, bol·ster·ing, bol·sters 1. To support or prop up with or as if with a long narrow pillow or cushion. 2. by up to USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 400 million. It will trigger net impairments of up to USD 289 million of deferred tax assets and USD 94 million of goodwill, negatively affecting the balance sheet of Converium Reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. (North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. ) Inc. A.M. Best is currently assessing the full impact of this reserve strengthening and discussing with management any plans for raising new capital. A.M. Best aims to resolve the under review situation as soon as possible. In addition, A.M. Best is reviewing the core status of Converium Reinsurance (North America) Inc and Converium Insurance (North America) Inc. The financial strength rating has been downgraded to A- (Excellent) from A (Excellent) and the issuer credit rating has been downgraded to "a-" from "a" for the following companies: --Converium AG --Converium Rueckversicherung (Deutschland) AG --Converium Reinsurance (North America) Inc. --Converium Insurance (North America) Inc. --Converium Insurance (UK) Ltd The issuer credit rating has been downgraded to "bbb-" from "bbb" for Converium Finance S.A. The issuer credit rating has been downgraded to "bb+" from "bbb-" for Converium Holdings (North America) Inc. The following debt rating has been downgraded to "bbb" from "bbb+": Converium Finance S.A.-- --USD 200 million 8.25% guaranteed subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. notes, due December December: see month. 2032 (guaranteed by Converium Holding AG and Converium AG) The following debt rating has been downgraded to "bb+" from "bbb-": Converium Holdings (North America) Inc.-- --USD 200 million 7.125% unsubordinated senior notes, due October October: see month. 2023 (originally issued by Zurich Reinsurance Centre Holdings, Inc and assumed by Converium Holdings (North America) Inc). For a list of A.M. Best's debt ratings, please visit http://www.ambest.com/debtratings/. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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