Converium Holding Ltd, Zug: First Quarter 2003 Results.Business Editors ZUG Zug (ts  k), canton (1993 pop. 87,100), 93 sq mi (241 sq km), N central Switzerland. , Switzerland--(BUSINESS WIRE)--April 29, 2003Converium, one of the world's leading reinsurers, today reports on its financial results for the first quarter 2003. Successful 2003 renewals in hard market - Converium emerging as a winner in the reshuffling re·shuf·fle tr.v. re·shuf·fled, re·shuf·fling, re·shuf·fles 1. To shuffle again: reshuffle cards. 2. of the 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. market Substantial improvement of non-life In the physical sciences, non-life is an umbrella term set to distinguish or characterize those inanimate chemical precursors found in the primeval soup of the early years of planetary evolution from which life, theoretically, evolved or came into existence. performance continues - non-life combined ratio of 98.3% for 1Q2003, no material net developments of prior years' reserves Investment returns in line with benchmarks Life result below expectations Net income 1Q2003: US$ 25.5 million 1Q2003 Gross premiums written When a non-life insurance company closes a contract to provide insurance against loss, the revenues (premiums) expected to be received over the life of the contract are called gross premiums written. : US$ 1,264 million (34.3% increase over 1Q2002) 1Q2003 Net premiums written: US$ 1,185 million (31.8% increase over 1Q2002) 1Q2003 Non-life combined ratio: 98.3% (improvement by 4.1 percentage points compared to 1Q2002) 1Q2003 Average annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. total investment return (pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta ): 3.1% p.a. (improvement by 1.5 percentage points compared to 1Q2002) 1Q2003 Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. : US$ 26.4 million (32.5% decrease compared to 1Q2002) 1Q2003 Net income: US$ 25.5 million (11.1% decrease compared to 1Q2002) 1Q2003 Earnings per share: US$ 0.64 (11.1% decrease compared to 1Q2002) 1Q2003 Cash flow from operating activities: US$ 208.3 million (216.6% increase over 1Q2002) Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. as per March 31, 2003: US$ 1,794.1 million (3.2% increase compared to year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2002) Book value per share as per March 31, 2003: US$ 45.03 (3.4% increase compared to year-end 2002) 1. Summary Group Result Converium continues to strengthen its position as a global leading professional reinsurer re·in·sure tr.v. re·in·sured, re·in·sur·ing, re·in·sures To insure again, especially by transferring all or part of the risk in a contract to a new contract with another insurance company. , particularly in specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. lines, and emerges as a winner in the reshuffling of the reinsurance market. During the January January: see month. 1 and April 1 renewal seasons, approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 75% of our non-life premium(1) was up for renewal. We renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. approximately 70%(2) of our non-life premium volume that was renewable during the January 1 and April 1 renewal seasons and experienced combined increases in rates and shares of approximately 29%(3) on the renewed business. Converium's financial results for the first quarter 2003 were driven by the continuing strong performance in non-life 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. , the disappointing result of Converium Life, the impact of the implementation of Converium's global tax concept as well as the current conditions in the capital markets. Current conditions in the capital markets, particularly the high volatilities in the global equity markets, and the historically low interest rates, resulted in the first quarter of 2003 in impairments of US$ 15.8 million, and a reduction of the average annualized total investment income yield (pre-tax) by 2.5 percentage points to 2.9%. For the three months ended March 31, 2003, Converium Group reported a net income (after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. ) of US$ 25.5 million, compared to US$ 28.7 million for the first quarter of 2002, a decrease of US$ 3.2 million or 11.1%. 2. Converium Group: Financial Results as per March 31, 2003 Table: Financial highlights 1Q2003 - income statement
(unaudited; in US$ million, Three months ended Year ended
unless noted) March 31 Dec 31
2003 2002 2002
---------------------------------------------------------------------
Gross premiums written 1,263.8 941.2 3,535.8
- growth (%) +34.3% 22.7%
---------------------------------------------------------------------
Net premiums written 1,184.6 898.9 3,322.2
- growth (%) +31.8% 33.8%
---------------------------------------------------------------------
Net premiums earned 884.3 715.6 3,165.5
- growth (%) +23.6% 37.9%
---------------------------------------------------------------------
Non-life loss ratio 72.4% 75.9% 72.9%(4)
- improvement in percentage
points -3.5 pts -7.1 pts(5)
---------------------------------------------------------------------
Non-life underwriting expense 21.7% 21.6% 21.1%
ratio
- improvement/deterioration in
percentage points +0.1 pts -2.1 pts
---------------------------------------------------------------------
Non-life administration expense
ratio 4.2% 4.9% 5.3%
- improvement in percentage
points -0.7 pts -0.8 pts
---------------------------------------------------------------------
Non-life combined ratio 98.3% 102.4% 99.3%(4)
- improvement in percentage
points -4.1 pts -9.5 pts(5)
---------------------------------------------------------------------
Net investment income 56.2 64.7 251.8
- growth (%) -13.1% +10.1%
---------------------------------------------------------------------
Average annualized net
investment income yield (pre-tax) 3.4% 4.8% 4.3%
- change in percentage points -1.4 pts -0.4 pts
---------------------------------------------------------------------
Operating income(6) 26.4 39.1 67.7
- growth (%) -32.5%
---------------------------------------------------------------------
Total investment results 47.9 64.4 241.5
- growth (%) -25.6% +14.8%
- including impairments of -15.8 -8.0 -48.3
---------------------------------------------------------------------
Average annualized total
investment income yield (pre-tax) 2.9% 4.8% 4.1%
- change in percentage points -1.9 pts -0.2 pts
---------------------------------------------------------------------
Net income 25.5 28.7 106.8
- growth (%) -11.1%
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Earnings per share (US$) 0.64 0.72 2.68
- growth (%) 11.1%
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Retention ratio (%)(7) 93.7% 95.5% 94.0%
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Table: Financial highlights 1Q2003 - cash flow statement, investment return, return on equity
(unaudited; in US$ million, unless Three months ended Year ended
noted) March 31 Dec 31
2003 2002 2002
-----------------------------------------------------------------
Cash flow from operating activities 208.3 65.8 870.4
- growth (%) 216.6% 179.4%
-----------------------------------------------------------------
Average annualized total investment
return (pre-tax) 3.1% 1.6% 2.2%
- change in percentage points +1.5pts
-----------------------------------------------------------------
Annualized return on equity(8) 5.9% 7.3% 6.8%
- change in percentage points -1.4 pts
-----------------------------------------------------------------
Table: Financial highlights 1Q2003 - balance sheet (unaudited; in US$ million, unless March 31, 2003 Dec 31, 2002 noted) -------------------------------------------------------------------- Total invested assets 6,398 6,117 - growth (%) +4.6% -------------------------------------------------------------------- Total assets 12,763 12,051 - growth (%) +5.9% -------------------------------------------------------------------- Total underwriting reserves, net of reinsurance 7,247 6,736 - growth (%) +7.6% -------------------------------------------------------------------- Shareholders' equity 1,794 1,738 - growth (%) +3.2% -------------------------------------------------------------------- Book value per share (US$) 45.03 43.55 - growth (%) +3.4% -------------------------------------------------------------------- 3. Highlights of Converium Group's 1Q2003 Report Strong growth of the non-life business Today, Converium Group is fully established as an independent leading global reinsurer and has been able to benefit from the reshuffling of the reinsurance market. Gross premiums written grew 34.2% to US$ 1,178.4 million, net premiums written grew 33.9% to US$ 1,120.3 million, net premiums earned grew 25.3% to US$ 840.3 million for the three months ended March 31, 2003. Significant improvement of the performance in non-life underwriting The re-underwriting and the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of the underwriting process pay off. The non-life combined ratio was 98.3% for the first quarter of 2003, an improvement of 4.1 percentage points compared to the first quarter of 2002. No material net developments of prior years' reserves None of Converium's non-life business segments (Converium Zurich, Converium 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. , Converium Cologne Cologne (kəlōn`), Ger. Köln, city (1994 pop. 962,500), North Rhine–Westphalia, W Germany, on the Rhine River. It is a commercial, financial, and industrial center, a rail and road junction, and a river port. ) reported any material net developments of prior years' reserves in the first three months of 2003. Marginal (jargon) marginal - 1. Extremely small. "A marginal increase in core can decrease GC time drastically." In everyday terms, this means that it is a lot easier to clean off your desk if you have a spare place to put some of the junk while you sort through it. 2. asbestos asbestos, mineral asbestos, common name for any of a variety of silicate minerals within the amphibole and serpentine groups that are fibrous in structure and more or less resistant to acid and fire. and environmental exposures Converium's asbestos and environmental exposures are marginal; as per March 31, 2003, the respective reserves were less than 1% of gross reserves. Converium maintained a survival ratio of 13.6 years as per March 31, 2003. Life results below expectations Guaranteed minimum death benefit contracts required an increase in Converium Life's reserves of US$ 12.5 million in addition to claims paid of US$ 3.4 million. In addition, Converium Life had adverse development of US$ 3.7 million on certain US special risk business. This resulted in a segment loss of US$ 17.3 million for the first quarter of 2003. Converium is currently working on strategies that would allow mitigating mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. the investment risks embedded Inserted into. See embedded system. in its GMDB-book (Guaranteed Minimum Death Benefit). Total investment results: US$ 47.9 million (minus 25.6%) Converium's investment results were impacted by the high volatilities in the global equity markets, the low interest rates, the continuing strong cash flow from operating activities, Converium's strategic and tactical asset allocation Tactical Asset Allocation (TAA) Portfolio strategy that allows active departures from the normal asset mix according to specified objective measures of value. Often called active management. It involves forecasting asset returns, volatilities, and correlations. , as well as the benchmarks applied for the passive asset management approach. The returns of the different asset classes are in line with the respective benchmarks. Total investment results including impairments of US$ 15.8 million were US$ 47.9 million for the three months ended March 31, 2003. The average annualized total investment income yield (pre-tax) was 2.9% for the first quarter of 2003 (first quarter 2002: 4.8%). The average annualized total investment return (pre-tax) was 3.1% for the first quarter of 2003, an improvement of 1.5 percentage points compared to the first quarter of 2002. Converium's impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. policy is fully compliant
Cost of options fully charged Converium continued to fully charge the costs of options to operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 123) and recorded US$ 1.0 million in the first quarter of 2003. Pre-tax operating income: US$ 26.4 million Converium reported a pre-tax operating income(9) of US$ 26.4 million for the first quarter of 2003 (first quarter 2002: US$ 39.1 million). Net income: US$ 25.5 million Converium reported a net income of US$ 25.5 million for the first quarter 2003 (first quarter 2002: US$ 28.7 million) and earnings per share of US$ 0.64 (first quarter 2002: US$ 0.72). Cash flow: US$ 208.3 million (plus 216.6%) Driven by the continuously improved operating performance, Converium increased the cash flow from operating activities by 216.6% to US$ 208.3 million for the first quarter of 2003 (first quarter 2002: US$ 65.8 million). Shareholders' equity increased by 3.2% Since year-end 2002, the shareholders' equity increased by 3.2% to US$ 1,794.1 million as per March 31, 2003. Book value per share: plus 3.4% Book value per share increased by 3.4% to US$ 45.03 as per March 31, 2003 compared to US$ 43.55 as per year-end 2002. Repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of shares for Employee Participation Plans Converium Holding Ltd has repurchased 100,000 shares in the period of January 1 through March 31, 2002 on the SWX Swiss Exchange SWX Swiss Exchange An all-electronic securities exchange formed from the 1995 merger of exchanges in Geneva, Basel, and Zurich. The exchange offers trading in equity securities, investment funds, exchange-traded funds, bonds, Eurobonds, and options. in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with its share delivery obligations under the various Employee Participation Plans. Converium Holding Ltd will continue its repurchases of own stock in order to fulfill ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. its share delivery obligations under the various Employee Participation Plans. New Chief Underwriting Officer Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). appointed ap·point tr.v. ap·point·ed, ap·point·ing, ap·points 1. To select or designate to fill an office or a position: appointed her the chief operating officer of the company. 2. Converium further appointed Hans-Joachim Guenther as Chief Underwriting Officer Europe of Converium Zurich, effective June June: see month. 1, 2003. He will be in charge of the markets of United Kingdom, Western and Southern Europe Southern Europe or sometimes Mediterranean Europe is a region of the European continent. There is no clear definition of the term which can vary depending on whether geographic, cultural, linguistic or historical factors are taken into account. , 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 the Benelux Be·ne·lux An economic union of Belgium, the Netherlands, and Luxembourg, originally established as a customs union in 1948. Noun 1. countries. 4. Key Drivers of Converium Group's Financial Results 1Q2003 For the three months ended March 31, 2003, Converium Group reported a pre-tax operating income(9) of US$ 26.4 million, compared to US$ 39.1 million for the same period in 2002. For the first quarter of 2003, the net income (after-tax) of US$ 25.5 million compares to US$ 28.7 million for the first quarter of 2002, a decrease of US$ 3.2 million or 11.1%. Converium's financial results for the first quarter 2003 were driven by (1) the continuing strong performance in non-life underwriting, (2) the current conditions in the capital markets, (3) the result of Converium Life, and by (4) the impact of the implementation of Converium's global tax concept. 4.1 Continuing Strong Performance in Non-life Underwriting The re-underwriting of the non-life book and the restructuring of the underwriting process resulted in a continued substantial improvement of the underlying performance. For the first quarter 2003 gross premiums written by our non-life operations grew by 34.2% to US$ 1,178.4 million, net premiums written by 33.9% to US$ 1,120.3 million, and net premiums earned by 25.3% to US$ 840.3 million.. The non-life combined ratio decreased by 4.1 percentage points to 98.3% for the quarter ended March 2003, compared to 102.4% for the three months ended March 31, 2002. This decrease is reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. of improved pricing, terms and conditions as well as of the continued re-underwriting of our non-life portfolio to achieve return on equity targets. All of the non-life segments - Converium Zurich, Converium North America, and Converium Cologne - contributed to the continuously improving performance of Converium's non-life book and none reported material net developments of prior years' reserves. 4.2 Current Conditions in the Capital Markets Converium's investment results were impacted by the high volatilities in the global equity markets, the historically low interest rates, the continuing strong cash flow from operating activities, Converium's strategic and tactical asset allocation, as well as the benchmarks applied for the passive asset management approach. Converium Group reported a cash flow from operating activities of US$ 208.3 million for first quarter of 2003 compared to US$ 65.8 million for the same period in 2002 (plus 216.6%). This substantial growth in the cash flow from operating activities contributed to a significant increase of total invested assets plus cash and cash equivalents of 4.2% to US$ 6,750.5 million as of March 31, 2003, compared to year-end 2002. From a tactical perspective Converium has driven its overall exposure to the equity markets to a level that corresponds to the lower range of the optimal equity allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as recommended by its ALM analysis. The process happened essentially through investing new cash in fixed income instruments Fixed income instruments Assets that pay a fixed dollar amount, such as bonds and preferred stock. . Table: Total invested assets (breakdown breakdown /break·down/ (brak´doun) 1. the act or process of ceasing to function. 2. an often sudden collapse in health. 3. loss of self-control. by major currencies and asset classes)
(unaudited; in US$ million, Balance
unless noted) at at
March 31, 2003 Dec 31, 2002
------------------------------------------------------------------
Fixed maturities
US$ 2,257.6 1,993.2
Euro 358.6 310.4
British pounds 198.5 174.1
------------------------------------------------------------------
Mortgage-backed securities
US$ 895.7 827.0
------------------------------------------------------------------
Funds Withheld Asset
US$ 860.7 871.5
Euro 316.2 315.5
British pounds 380.3 385.8
Other 71.6 74.2
------------------------------------------------------------------
Equity securities
US$ 329.2 339.4
Euro 62.6 90.2
British pounds 24.2 26.4
------------------------------------------------------------------
Real estate (direct and indirect)
Swiss francs 230.7 242.9
------------------------------------------------------------------
Other, net 412.7 465.7
------------------------------------------------------------------
Total invested assets 6,397.9 6,117.3
---------------------------------=================================
As a consequence of the passive asset management approach Converium applies, the returns of the different asset classes were in line with the respective benchmarks. Table: Performance of benchmarks and largest portfolios (in millions of Market value Performance(10) Delta original currencies, Benchmark Portfolio unless noted) ---------------------- Largest portfolios in US$ Fixed maturities 2,257.6 1.11%(11) 1.07% -0.04% Mortgage-backed securities 854.6 1.00%(12) 0.98% -0.02% Equity securities 258.2 -3.15%(13) -3.16% -0.01% ---------------------------------------------------------------------- Largest portfolios in Euro Fixed maturities 328.7 1.06%(14) 0.99% -0.07% Equity securities 58.1 -12.95%(15) -12.65% +0.30% ---------------------------------------------------------------------- Largest portfolios in British pounds Fixed maturities 109.2 -1.20%(16) -1.10% +0.10% Equity securities 15.4 -6.90%(17) -7.00% -0.10% ---------------------------------------------------------------------- Largest portfolio in Swiss francs Real estate (direct and indirect) 337.7 n.a. 1.15% n.a. ---------------------------------------------------------------------- Largest portfolio in Australian $ Fixed maturities 103.6 0.93%(18) 0.95% +0.02% ---------------------------------------------------------------------- Largest portfolio in Singapore $ Fixed maturities 34.9 1.65%(19) 1.64% -0.01% ---------------------------------------------------------------------- The tables below illustrate how the achieved investment returns are reflected in the financial statements. Table: Investment results
(unaudited; in US$ Three months ended Year ended
million, unless noted) March 31 Dec 31
2003 2002 2002
---------------------------------------------------------------------
Net investment income 56.2 64.7 251.8
- growth (%) -13.1% +10.1%
---------------------------------------------------------------------
Average annualized net
investment income yield
(pre-tax) 3.4% 4.8% 4.3%
- change in percentage
points -1.4 pts -0.4 pts
---------------------------------------------------------------------
Net realized capital
(losses) gains -8.3 -0.3 -10.3
- impairments(20) -15.8 -8.0 -48.3
---------------------------------------------------------------------
Total investment results 47.9 64.4 241.5
- growth (%) -25.6% +14.8%
---------------------------------------------------------------------
Average annualized total
investment income yield
(pre-tax) 2.9% 4.8% 4.1%
- change in percentage
points -1.9 pts -0.2 pts
---------------------------------------------------------------------
Change in unrealized
(losses) gains +3.8 -38.5 -109.0
---------------------------------------------------------------------
Total investment return
(pre-tax) 51.7 25.9 132.5
- growth (%) +99.6%
---------------------------------------------------------------------
Average annualized total
investment return (pre-tax) 3.1% 1.6% 2.2%
- change in percentage
points +1.5pts
---------------------------------------------------------------------
4.3 Result of Converium Life Converium Life reported a segment loss of US$ 17.3 million for the three months ended March 31, 2003, compared to a segment income of US$ 2.2 million for the same period in 2002. The segment loss of US$ 17.3 million for the first quarter of 2003 is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to reserve strengthening of US$ 12.5 million in order to align align (  līn),v to move the teeth into their proper positions to conform to the line of occlusion. the reserves to the expected future benefits payable and the claims paid of US$ 3.4 million for a closed block of long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. (variable annuity Variable Annuity An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio. ) business, Guaranteed Minimum Death Benefit (GMDB GMDB Guaranteed Minimum Death Benefit (insurance) ). In addition, Converium Life had adverse development of US$ 3.7 million on certain US special risk business. Table: Financial results of the GMDB-book
(unaudited; in US$ Three months Twelve months ended December 31,
million) ended
March 31,
2003 2002 2001 2000
---------------------------------------------------------------------
Net premiums earned 1.4 8.1 4.5 7.8
---------------------------------------------------------------------
Claims paid -3.4 -12.5 -3.3 -1.7
---------------------------------------------------------------------
Reserve strengthening -12.5 -15.6 -13.4 -2.9
---------------------------------------------------------------------
Underwriting
acquisition costs -0.1 -0.1 -0.2 -0.2
---------------------------------------------------------------------
Technical result(21) -14.6 -20.1 -12.4 3.0
---------------------------------------------------------------------
Converium is currently working on strategies that would allow mitigating the investment risks embedded in its GMDB-book (Guaranteed Minimum Death Benefit). 4.4 Impact of the Implementation of Converium's Global Tax Concept In the last months, Converium's global tax concept was implemented. The legal entities of the Converium Group are generally taxed based on the local statutory accounts. Converium Ltd started to assume reinsurance business on October October: see month. 1, 2001. Hence, 2002 was the first full calendar year of Converium Ltd's reinsurance operations. The effective tax rate expected to be applicable for the full fiscal year 2003 was taken into consideration for the first quarter 2003. The estimated effective tax rate is based on the graduated tax Tax structured so that the rate increases as the amount of income of taxpayer increases. rate concept in Switzerland and incorporates business written by Converium Ltd's branches. A reduction of the estimated effective tax rate for 2003 together with other non-recurring resulted in a tax benefit of US$ 4.7 million for the first quarter of 2003. Converium Ruckversicherung (Deutschland) AG is the legal entity used by both Converium Cologne as well as Converium Life to assume non-life and life reinsurance. The segment loss of Converium Life for the first quarter 2003 resulted in a deferred tax benefit for Converium Ruckversicherung (Deutschland) AG of US$ 7.8 million. 5. Successful 2003 Renewals in Hard Reinsurance Market Continue Converium continues to strengthen its position as an independent leading global reinsurer, particularly in specialty lines. The April 1 renewals are driven by the Japanese Japanese (jăp'ənēz`), language of uncertain origin that is spoken by more than 125 million people, most of whom live in Japan. There are also many speakers of Japanese in the Ryukyu Islands, Korea, Taiwan, parts of the United States, and and other Far Eastern markets. At the same time, a small volume of business was up for renewal in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Converium pursued to increase its market presence and grew its estimated premium income(22) in excess of 10%(23) in the Far Eastern markets. Converium is emerging as one of the few players with the required local presence, intimate market and specialty knowledge to address the needs in these markets. During the January 1 and April 1 renewal seasons, approximately 75% of our non-life premium(24) was up for renewal. We renewed approximately 70%(25) of our non-life premium volume that was renewable during the January 1 and April 1 renewal seasons and experienced combined increases in rates and shares of approximately 29%(26) on the renewed business. We chose to non-renew about 30%(26) of the renewable non-life premium volume because the underlying business did not meet our stringent performance standards or because the treaties were restructured from a proportional proportional values expressed as a proportion of the total number of values in a series. proportional dwarf the patient is a miniature without disproportionate reductions or enlargements of body parts. to a non-proportional basis or were retained by the client. However, the non-renewed premium volume was more than offset by new business. The aggregate impact of improved rates, increased shares and new business, offset by cancellations, resulted in premium growth of more than 25%(26) of non-life premium volume that was renewable during the January 1 and April 1 renewal seasons. 6. Quotes from Management Dirk Lohmann, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Converium, said: "The reshuffling of the reinsurance league table continues as we expected. Outside the United States and with the exception of property cat lines we rarely run into the new markets established in Bermuda Bermuda (bûrmy `də), British dependency (2005 est. pop. 65,400), 21 sq mi (53 sq km), comprising some 150 coral rocks, islets, and islands (of which some 20 are inhabited), in the . Local market expertise and access to the decision makers of the
direct insurers matter. The 2003 renewals so far are clear evidence that
Converium is fully established as an independent leading global
reinsurer and is emerging as a winner out of the shake Shake can refer to:
"I am very pleased by the development of our non-life operations; a combined ratio of 98.3% and no material net adverse developments from prior years are the clear result of our re-underwriting efforts and the reserve actions we took in the last years. I am personally disappointed by the continuous emergence of additional reserve requirements Reserve Requirements Requirements regarding the amount of funds that banks must hold in reserve against deposits made by their customers. This money must be in the bank's vaults or at the closest Federal Reserve Bank. for our GMDB-book - business underwritten several years ago. Particularly, since our new life business is developing favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. ." Martin Kauer, CFO See Chief Financial Officer. Converium, said: "We achieved a non-life combined ratio of 98.3% for the first quarter of 2003. All of our non-life segments contributed to the continuously improving performance, none of them reported material net reserve developments." "We are disappointed about the results of our GMDB-book that had a significant impact on the performance of our life operations. Several years ago, we stopped writing life businesses with embedded investment risk. Converium is currently working on strategies that would allow the mitigation MITIGATION. To make less rigorous or penal. 2. Crimes are frequently committed under circumstances which are not justifiable nor excusable, yet they show that the offender has been greatly tempted; as, for example, when a starving man steals bread to satisfy of the investment risks embedded in its GMDB-book." "The low interest rates are clearly reflected in our investment results, but we also apply current yield curves when pricing the business. The allocation to equities has been tactically tac·ti·cal adj. 1. Of, relating to, or using tactics. 2. a. Of, relating to, used in, or involving military or naval operations that are smaller, closer to base, and of less long-term significance than strategic significantly reduced to 7% of total invested assets or below 25% of shareholder's equity. This level corresponds to the lower range of the optimal equity allocation recommended by our ALM-analysis. Our investment returns, in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with our passive management policy, are in line with the respective benchmarks." "Our balance sheet is set up to weather the adverse investment climate. To protect our shareholder's equity against a sharp increase of interest rates, we are undertaking several measures. Firstly, we continued to reduce the duration of our fixed income portfolio and increased its quality. Additionally, to maintain the economical duration of our assets in line with our technical liabilities, we have explored the shift of parts of our bond portfolio from available-for-sale to held-to-maturity. We are technically ready to implement the shift." "Since year-end 2002, Converium's book value per share increased by 3.4% to US$ 45.03 as per March 31, 2002. Our claims supporting capital of US$ 2.2 billion enables us to benefit from today's hard reinsurance market." 7. Overview Business Segments 7.1 Business Development Converium's financial results reflect the continued improvement of non-life underwriting, the disappointing result of the life operations, as well as the current conditions in the capital markets. The hardening hardening, in metallurgy, treatment of metals to increase their resistance to penetration. A metal is harder when it has small grains, which result when the metal is cooled rapidly. of the reinsurance markets, a consistent implementation of our business strategy and new opportunities arising from independence all led to a profitable growth of our non-life operations and a non-life combined ratio of 98.3%. Converium Life reported a segment loss of US$ 17.3 million for the three months ended March 31, 2003, that is primarily attributable to the performance of a closed block of Guaranteed Minimum Death Benefit business (GMDB). Current conditions in the capital markets, particularly the high volatilities in the global equity markets, and the historically low interest rates, resulted in the first quarter of 2003 in impairment charges of US$ 15.8 million and a reduction of the average annualized total investment income yield (pre-tax) by 1.9 percentage points to 2.9%. Converium's investment returns, in accordance with the passive management approach, were in line with the respective benchmarks. 7.2 Converium Zurich Table: Financial highlights 1Q2003 of Converium Zurich
(unaudited; in US$ Three months ended Year ended
million, unless noted) March 31 Dec 31
2003 2002 2002
----------------------------------------------------------------------
Gross premiums written 508.6 391.4 1,802.2
- growth (%) +29.9% +25.1%
----------------------------------------------------------------------
Net premiums written 470.0 366.9 1,670.5
- growth (%) +28.1% +41.0%
----------------------------------------------------------------------
Net premiums earned 430.8 317.4 1,571.3
- growth (%) +35.7% 55.2%
----------------------------------------------------------------------
Non-life loss ratio 71.1% 80.2% 69.9%
- improvement in
percentage points -9.1 pts
----------------------------------------------------------------------
Non-life underwriting
expense ratio 21.7% 18.7% 17.9%
- deterioration in
percentage points +3.0 pts
----------------------------------------------------------------------
Non-life administration
expense ratio 5.1% 5.0% 4.8%
- deterioration in
percentage points +0.1 pts
----------------------------------------------------------------------
Non-life combined ratio 97.9% 103.9% 92.6%
- improvement in
percentage points -6.0 pts
----------------------------------------------------------------------
Total investment results 21.0 36.9 112.0
- growth (%) -43.1%
----------------------------------------------------------------------
Average annualized total
investment income yield
(pre-tax) 2.5% 5.8% 4.1%
- change in percentage
points -3.3 pts -0.9 pts
----------------------------------------------------------------------
Segment income 28.4 22.0 225.9
- growth (%) +29.1%
----------------------------------------------------------------------
Retention ratio(27) 92.4% 93.7% 92.7%
----------------------------------------------------------------------
Converium Zurich reported a segment income of US$ 28.4 million for the three months ended March 31, 2003 compared to a segment income of US$ 22.0 million for the three months ended March 31, 2002. The increase in segment income of US$ 6.4 million in the first quarter of 2003 was primarily attributable to: -- The decrease of the loss ratio by 9.1 percentage points to 71.1% for the first quarter of 2003. This increase in segment income was partially offset by: -- Investment income and realized gains Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. were lower by US$ 15.9 million, or 43.1% for the first three months of 2003 as compared to the first three months of 2002. Current conditions in the capital markets, particularly the high volatilities in the global equity markets, and the historically low interest rates, resulted in the first quarter of 2003 in impairment charges of US$ 9.9 million on the equity securities and a reduction of the average annualized total investment income yield (pre-tax) by 3.3 percentage points to 2.5%. -- Underwriting expense ratio of 21.7% for the three months ended March 31, 2003 was higher by 3.0 points compared to the three months ended 2002. This increase was due to a refinement of our process to estimate and account for underwriting acquisition costs in certain lines of business such as aviation and engineering, which resulted in an increase of our acquisition expenses. Converium Zurich did not report any material net reserve development from prior years in the first quarter of 2003 or 2002. In the first quarter of 2003, gross premiums written increased US$ 117.2 million, or 29.9%, net premiums written increased US$ 103.1 million, or 28.1%, and net premiums earned increased US$ 113.4 million, or 35.7%. The growth was spread across most lines of business and regions and primarily resulted from increased rates, increasing our share of clients' business upon renewing re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. existing business or writing new business. During the first quarter of 2003, Converium Zurich's largest growth regions included: -- the United Kingdom (net premiums written in the first quarter of 2003 increased 11.0% to US$ 215.7 million); -- business originating in North America sourced through the London London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. market (net premiums written in the first quarter of 2003 increased 51.6% to US$ 89.0 million); -- France (net premiums written in the first quarter of 2003 increased 131.5% to US$ 40.5 million); and -- the Far East/Pacific Rim (Research In Motion Limited, Waterloo, Ontario, www.rim.com) The company that makes the popular BlackBerry device. It was established in 1984. See BlackBerry. See also RDRAM. (net premiums written in the first quarter of 2003 increased 122.4% to US$ 30.7 million). The largest growth lines included such specialty lines as: -- liability (net premiums written in the first quarter of 2003 increased 52.4% to US$ 120.4 million); -- aviation and space (net premiums written in the first quarter of 2003 increased 50.2% to US$ 112.8 million); -- motor (net premiums written in the first quarter of 2003 increased 26.4% to US$ 64.6 million); -- credit and surety An individual who undertakes an obligation to pay a sum of money or to perform some duty or promise for another in the event that person fails to act. surety n. (net premiums written in the first quarter of 2003 increased 53.6% to US$ 42.4 million); and -- engineering (net premiums written in the first quarter of 2003 increased 130.3% to US$ 28.1 million). The aviation and space book contributes substantially to Converium Zurich's financial results. For the first three months ended March 2003, aviation and space contributed US$ 124.0 million or 24.4% to Converium Zurich's gross premiums written, compared to US$ 86.2 million or 22.0% for the same period in 2002. Hence, the aviation and space book has a material impact on the financial results of Converium Zurich as well as on Converium non-life. Table: Converium Zurich's aviation and space book
(unaudited; in US$ million, Three months ended Year ended
unless noted) March 31 Dec 31
2003 2002 2002
---------------------------------------------------------------------
Gross premiums written 124.0 86.2 408.9
- growth (%) +43.9%
---------------------------------------------------------------------
Net premiums written 112.8 75.1 370.2
- growth (%) +50.2%
---------------------------------------------------------------------
Net premiums earned 99.5 65.4 362.8
- growth (%) +52.1%
---------------------------------------------------------------------
Non-life technical combined
ratio(28) 96.5% 115.0% 82.3%
- change in percentage points -18.5 pts
---------------------------------------------------------------------
For the aviation and space book Converium Zurich reported a non-life technical combined ratio(29) of 96.5% for the three months ended March 31, 2003 compared to 115.0% for the three months ended March 31, 2002; respectively 82.3% for the full year 2002. This resulted in a technical result(29) for aviation and space of US$ 3.5 million for the first quarter 2003 and minus US$ 9.8 million for the first quarter of 2002. For the full year 2002, Converium reported a technical profit for aviation and space of US$ 64.3 million of which US$ 67.9 million was booked in the fourth quarter of 2002. 7.3 Converium North America Table: Financial highlights 1Q2003 of Converium North America
(unaudited; in US$ million, Three months ended Year ended
unless noted) March 31 Dec 31
2003 2002 2002
--------------------------------------------------------------------
Gross premiums written 395.2 319.0 1,243.5
- growth (%) +23.9% +8.0%
--------------------------------------------------------------------
Net premiums written 375.6 309.3 1,193.9
- growth (%) +21.4% +32.9%
--------------------------------------------------------------------
Net premiums earned 313.2 285.8 1,145.0
- growth (%) +9.6% +29.8%
--------------------------------------------------------------------
Non-life loss ratio 70.6% 72.0% 84.0%
- improvement in percentage
points -1.4 pts
--------------------------------------------------------------------
Non-life underwriting expense
ratio 24.3% 24.7% 25.0%
- improvement in percentage
points -0.4 pts
--------------------------------------------------------------------
Non-life administration
expense ratio 5.1% 6.5% 5.9%
- improvement in percentage
points -1.4 pts
--------------------------------------------------------------------
Non-life combined ratio 100.0% 103.2% 114.9%
- improvement in percentage
points -3.2 pts
--------------------------------------------------------------------
Total investment results 23.3 22.4 121.0
- growth (%) +4.0%
--------------------------------------------------------------------
Average annualized total
investment income yield
(pre-tax) 3.7% 3.9% 5.2%
- change in percentage points -0.2 pts +0.0 pts
--------------------------------------------------------------------
Segment income (loss) 16.7 13.8 -57.0
- growth (%) +21.0%
--------------------------------------------------------------------
Retention ratio(30) 95.0% 97.0% 96.0%
--------------------------------------------------------------------
Converium North America reported a segment income of US$ 16.7 million for the three months ended March 31, 2003, compared to a segment income of US$ 13.8 million for the three months ended March 31, 2002, an increase of US$ 2.9 million. The increase was due to several factors including: -- The decrease of the combined ratio by 3.2 percentage points to 100.0% for the first quarter of 2003. -- The increase of the total investment results by 4.0% to US$ 23.3 million for the first three months of 2003. This increase in segment income was partially offset by: -- Other income was lower by US$ 5.2 million in the first quarter of 2003 as compared to the first quarter of 2002. This decrease was primarily driven by a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. liability write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. , which created other income in 2002, as well as the change in market value of our investment in private equity funds relative to 2002. -- Current conditions in the capital markets, particularly the high volatilities in the global equity markets, and the historically low interest rates, resulted in the first quarter of 2002 in a reduction of the average annualized total investment income yield (pre-tax) by 0.2 percentage points to 3.7%. Converium North America did not report any material net reserve development from prior years in the first quarter of 2003 or 2002. In the three months ended March 31, 2003, gross premiums written increased US$ 76.2 million, or 23.9%, net premiums written increased US$ 66.3 million, or 21.4%, and net premiums earned increased US$ 27.4 million, or 9.6%. In the first quarter of 2003, Converium North America's net written premium growth was driven by specialty lines, including: -- workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. (net premiums written in the first quarter of 2003 increased 31.3% to US$ 149.6 million); and -- accident and health (net premiums written in the first quarter of 2003 increased 88.2% to US$ 34.3 million). 7.4 Converium Cologne Table: Financial highlights 1Q2003 of Converium Cologne
(unaudited; in US$ million, unless Three months ended Year ended
noted) March 31 Dec 31
2003 2002 2002
---------------------------------------------------------------------
Gross premiums written 281.2(31) 168.8(31) 303.4
- growth (%) +66.6% +1.2%
---------------------------------------------------------------------
Net premiums written 274.7 160.3 289.8
- growth (%) +71.4% +12.4%
---------------------------------------------------------------------
Net premiums earned 96.3 67.5 284.8
- growth (%) +42.8% +3.5%
---------------------------------------------------------------------
Non-life loss ratio 84.2% 72.1% 96.2%
- improvements in percentage points +12.1pts
---------------------------------------------------------------------
Non-life underwriting expense ratio 13.2% 21.9% 22.5%
- improvements in percentage points -8.7 pts
---------------------------------------------------------------------
Non-life administration expense
ratio(32) 1.4% 1.7% 5.3%
- improvements in percentage points -0.3 pts
---------------------------------------------------------------------
Non-life combined ratio 98.8% 95.7 124.0%
- improvements in percentage points +3.1 pts
---------------------------------------------------------------------
Total investment results 6.8 7.8 4.7
- growth (%) -12.8%
---------------------------------------------------------------------
Average annualized total investment
income yield (pre-tax) 3.2% 4.7% 0.9%
- change in percentage points -1.5 pts -3.8 pts
---------------------------------------------------------------------
Segment income (loss) 2.6 8.9 -64.4
- growth (%) -70.8%
---------------------------------------------------------------------
Retention ratio(33) 97.7% 95.0% 95.5%
---------------------------------------------------------------------
Converium Cologne reported a segment income of US$ 2.6 million for the three months ended March 31, 2003 compared to a segment income of US$ 8.9 million for the three months ended March 31, 2002. The decrease in the first three months of 2003 is primarily attributable to a -- higher combined ratio in 2003 versus 2002 as a result of late loss reporting by clients affected by the German winter storm Jeanette Jeanette (or Jeannette) is a French female name, a diminutive form of the name Jeanne. Other variations are Janette, Janet and Jane. People with this name include:
million reserve strengthening for asbestos and environmental exposure to maintain a survival ratio of 13.6 years; and to the -- impact of the current conditions in the capital markets, particularly the high volatilities in the global equity markets, and the historically low interest rates, that resulted in a reduction of the average annualized total investment income yield (pre-tax) by 1.5 percentage points to 3.2%. Partially offsetting these factors, Converium Cologne was able to record a significant decrease in its underwriting expense ratio for the first quarter of 2003. This decrease resulted from a substantial increase in new writings on a direct or non-proportional basis, as well as from the non-renewal of certain treaties with high commission rates. Additionally, a new relationship with a large primary insurance group contributed an overall fee in the amount of US$ 3.3 million, thereby reducing the underwriting expense ratio by an additional 3.5%. Converium Cologne did not report any material net reserve development from prior years in the first quarter of 2003 or 2002. For the three months ended March 31, 2003, gross premiums written increased US$ 112.4 million, or 66.6%, net premiums written increased US$ 114.4 million, or 71.4%, and net premiums earned increased US$ 28.8 million, or 42.7%. During the first quarter of 2003, Converium Cologne's largest growth regions included: -- Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). (net premiums written in the first quarter of 2003 increased 104.0% to US$ 137.9 million); and -- Central, Northern and Eastern Europe Eastern Europe The countries of eastern Europe, especially those that were allied with the USSR in the Warsaw Pact, which was established in 1955 and dissolved in 1991. (net premiums written in the first quarter of 2003 increased 100.0% to US$ 111.5 million). This premium growth was partially offset by the non-renewal of some large contracts in the Near/Middle East and North Africa, which reduced premiums by US$ 8.4 million. 7.5 Converium Life Table: Financial highlights 1Q2003 of Converium Life (unaudited; in US$ Three months ended Year ended million, unless March 31 Dec 31 noted) 2003 2002 2002 ----------------------------------------------------------------- Gross premiums written 85.4 63.0 199.0 - growth (%) +35.6% +20.8% ----------------------------------------------------------------- Net premiums written 64.3 62.4 168.0 - growth (%) +3.0% +18.8% ----------------------------------------------------------------- Net premiums earned 44.0 44.9 164.4 - growth (%) -2.0% +31.4% ----------------------------------------------------------------- Underwriting expense ratio 32.2% 21.2% 21.1% - deterioration in percentage points +11.0 pts ----------------------------------------------------------------- Administration expense ratio 2.6% 3.5% 4.2% - improvement in percentage points -0.9 pts ----------------------------------------------------------------- Total investment results 0.6 1.4 7.8 - growth (%) -57.1% ----------------------------------------------------------------- Average annualized total investment income yield (pre-tax) 3.3% 6.2% 11.0% - change in percentage points -2.9 pts +5.4 pts ----------------------------------------------------------------- Segment income (loss) -17.3 2.2 -19.4 ----------------------------------------------------------------- Retention ratio(34) 75.3% 99.1% 84.4% ----------------------------------------------------------------- Converium Life reported a segment loss of US$ 17.3 million for the three months ended March 31, 2003, compared to a segment income of US$ 2.2 million for the same period in 2002. The segment loss of US$ 17.3 million for the first quarter of 2003 is primarily attributable to: -- reserve strengthening of US$ 12.5 million in order to align the reserves to the expected future benefits payable and the claims paid of US$ 3.4 million for a closed block of long-term (variable annuity) business, Guaranteed Minimum Death Benefit (GMDB); and the -- impact of the current conditions in the capital markets, particularly the high volatilities in the global equity markets, and the historically low interest rates, that resulted in a reduction of the average annualized total investment income yield (pre-tax) by 2.9 percentage points to 3.3%; -- adverse development of US$ 3.7 million on certain US special risk business. In the three months ended March 31, 2003, gross premiums written increased US$ 22.4 million, or 35.6%, net premiums written increased US$ 1.9 million, or 3.0%, and net premiums earned decreased US$ 0.9 million, or 2.0%. The higher growth in gross premiums written compared to net premiums written is due to the fact that Converium Life expanded its business in a special US line, which was fully retroceded. The increase in net premiums written in the first quarter of 2003 is mainly driven by growth in the following regions: -- Italy Italy (ĭt`əlē), Ital. Italia, officially Italian Republic, republic (2005 est. pop. 58,103,000), 116,303 sq mi (301,225 sq km), S Europe. (net premiums written in the first quarter of 2003 increased 76.8% to US$ 24.4 million); -- Europe, excluding Italy and France (net premiums written doubled to US$ 11.6 million); -- France (net premiums written increased 35.3% to US$ 9.2 million). This was partially offset by the decline of business written in the Far East/Pacific Rim and North America (net premiums written in the first quarter 2003 declined by 44.8% to US$ 15.9 million), due to the non-renewal of a large contract in Taiwan Taiwan (tī`wän`), Portuguese Formosa, officially Republic of China, island nation (2005 est. pop. 22,894,000), 13,885 sq mi (35,961 sq km), in the Pacific Ocean, separated from the mainland of S China by the 100-mi-wide (161-km) Taiwan and a reduction of premium reported in North America in the first quarter of 2003. The company has made it a policy not to provide any quarterly or annual earnings guidance and it will not update any past outlook for full year earnings. It will however provide investors with perspective on its value drivers, its strategic initiatives and those factors critical to understanding its business and operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. . About Converium Converium is an independent leading global reinsurer known for its innovation, professionalism professionalism the upholding by individuals of the principles, laws, ethics and conventions of their profession. and service. Today Converium ranks among the top ten professional reinsurers and employs more than 800 people in 22 offices around the globe. Converium is organized in four business segments consisting of our three non-life operations, Converium Zurich, Converium North America and Converium Cologne, as well as Converium Life. Converium's September September: see month. 11 net losses are capped at US$ 289.2 million by its former parent, Zurich Financial Services Zurich Financial Services Group is a major financial services group based in Zurich, Switzerland. Global operations North America The US consumer market is served primarily by Farmers Insurance Group the third largest personal lines property & casualty insurance . Converium has minimal A&E exposures. Converium has an "A" rating (stable outlook) both from Standard & Poor's and A.M. Best Company. (34)Retention ratio is defined as net premiums written divided by gross premiums written. Important Disclaimer (networking) disclaimer - Statement ritually appended to many Usenet postings (sometimes automatically, by the posting software) reiterating the fact (which should be obvious, but is easily forgotten) that the article reflects its author's opinions and not necessarily those of the This document contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. as defined in the U.S. Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. It contains forward-looking statements and information relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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, 2001 attack on the United States, the outcome of insurance regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. 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 The person who obtains or is otherwise covered by insurance on his or her health, life, or property. The insured in a policy is not limited to the insured named in the policy but applies to anyone who is insured under the policy. insured n. loss events arising out of catastrophes, as well as man-made disasters man-made disaster Technological disaster Public health An event in which a significant number of people are injured or die as a result of human devices or activities, unrelated to conflicts, and attributed to operator error–eg, Exxon Valdez such as the September 11, 2001 attack on the United States; the ability to exclude and to reinsure re·in·sure tr.v. re·in·sured, re·in·sur·ing, re·in·sures To insure again, especially by transferring all or part of the risk in a contract to a new contract with another insurance company. the risk of loss from terrorism terrorism, the threat or use of violence, often against the civilian population, to achieve political or social ends, to intimidate opponents, or to publicize grievances. ; 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 SWX 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. www.converium.com (1)Estimated annual gross premium income of in-force business (unaudited), based on underwriters' reports. (2)Based on 100% of the total non-life premium that was up for renewal during the January 1 and April 1 renewal seasons. (3)Based on 100% of the total non-life premium renewed during the January 1 and April 1 renewal seasons. (4)Adjusted for prior years' reserve development. (5)Adjusted for prior years' reserve development and September 11th terrorist attacks. (6)Pre-tax operating income (loss) is defined as pre-tax income (loss) excluding pre-tax net realized capital gains or losses capital gains or losses n. particularly when calculating the tax liability of an individual or business, this is the difference between the original cost plus the cost of capital improvements, excluding maintenance, called "basis" and the sales price. , amortization of goodwill, and restructuring costs. (7)Retention ratio is defined as net premiums written divided by gross premiums written. (8)Return on equity is defined as net income divided by shareholders' equity at the beginning of the period. (9)Pre-tax operating income (loss) is defined as pre-tax income (loss) excluding pre-tax net realized capital gains or losses, amortization of goodwill and restructuring costs. (10)Performance is defined as quarterly time-weighted return time-weighted return A rate-of-return measure of portfolio performance that gives equal weight to each period included in the study regardless of any differences in amounts invested in each period. (11)SSB SSB Statistisk Sentralbyrå (Statistics Norway) SSB Super Smash Bros (video game) SSB Space Studies Board SSB Single Side Band SSB Single Stranded DNA-Binding Protein SSB Salomon Smith Barney 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. WGBI 5-7 years Index / SSB World BIG Index ex MBS See Mb/sec. MBS - mobile broadband services ex BBB BBB A medium grade assigned to a debt obligation by a rating agency to indicate an adequate ability to pay interest and repay principal. However, adverse developments are more likely to impair this ability than would be the case for bonds rated A and above. (12)Lehman Lehman is a common Germanic surname derived from the German word Lehen, meaning fiefdom. It may refer to: Surnames
(13)MSCI USA Index, S&P 500 (14)SSB Euro World BIG Index ex MBS ex BBB (15)MSCI Euro ex UK (16)FTSE FTSE A company that specializes in index calculation. Although not part of a stock exchange, co-owners include the London Stock Exchange and the Financial Times. Notes: The FTSE is similar to Standard & Poor's in the United States. Government All Stock Index (17)MSCI UK (18)UBSWA Composite composite, alternate common name for Asteraceae or Compositae, the aster family. composite - aggregate all (19)Lehman Brothers Lehman Brothers Holdings Inc. (NYSE: LEH), founded in 1850, is a diversified, global financial services firm. It is a participant in investment banking, equity and fixed income sales, research and trading, investment management, private equity, and private banking. Government Index, Lehman Brothers Bond index (20)Converium's strict impairment policy requires to record as realized capital losses, declines in value that exceed 20% over a period of six months, or in excess of 50.0% regardless of the period of the decline. At management's judgment, Converium impairs additional securities based on prevailing market conditions. Converium's impairment policy is fully compliant with current and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. emerging standards. (21)Technical result is defined as net premiums earned minus losses and loss adjustment expenses minus underwriting acquisition costs. (22)Estimated annual gross premium income of in-force business (unaudited), based on underwriters' reports. (23)Based on 100% of the total non-life premium that was up for renewal during the April 1 renewal season. (24)Estimated annual gross premium income of in-force business (unaudited), based on underwriters' reports. (25)Based on 100% of estimated annual gross premium income of in-force business (unaudited), based on underwriters' reports. (26)Based on 100% of the total non-life premium renewed during the January 1 and April 1 renewal seasons. (27)Retention ratio is defined as net premiums written divided by gross premiums written. (28)Non-life technical combined ratio is defined as non-life loss ratio plus non-life underwriting expense ratio. (29)Technical result is defined as net premiums earned minus losses and loss adjustment expenses and minus underwriting acquisition costs. (30)Retention ratio is defined as net premiums written divided by gross premiums written. (31)A substantial part of the underlying direct insurance policies reinsured by Converium Cologne incept in·cept tr.v. in·cept·ed, in·cept·ing, in·cepts To take in; ingest. [Latin incipere, incept-, to begin, take up; see inception. on January 1. Therefore, the ratio of gross premiums written for the first quarter divided by gross premiums written for the full year is substantially higher than 25%. (32)Non-life administration expense ratio is defined as other operating and administration expenses divided by net premiums written. The effect described in footnote Text that appears at the bottom of a page that adds explanation. It is often used to give credit to the source of information. When accumulated and printed at the end of a document, they are called "endnotes." 31 results in a non-life administration expense ratio for the first quarter of a year that is substantially lower than the non-life administration expense ratio for the full year. (33)Retention ratio is defined as net premiums written divided by gross premiums written. (34) Retention ratio is defined as net premiums written divided by gross premiums written. |
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