Converium has Signed an Agreement to Take a 25% Shareholding in Global Aerospace Underwriting Managers Limited (GAUM).Business Editors ZUG Zug (ts  k), canton (1993 pop. 87,100), 93 sq mi (241 sq km), N central Switzerland. , Switzerland--(BUSINESS WIRE)--Nov. 28, 2002
Converium Holding Ltd Zug, is pleased to announce that its subsidiary, Converium Ltd, Zurich, has signed an agreement to take a 25% shareholding in Global Aerospace 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. Managers Limited (GAUM gaum tr.v. gaumed, gaum·ing, gaums Upper Southern U.S. To smudge or smear. [Perhaps alteration of obsolete gome, grease, variant of coom, ), a leading international aviation managing agent, and has agreed to become a member of the pools managed by it with a 25% share, commencing January 1, 2003. Completion of the acquisition is subject to various regulatory approvals. Converium, one of the leading global professional 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. companies, has further strengthened its long-term strategic position in the aviation and aerospace business by this investment in Global Aerospace Underwriting Managers Limited ("Global Aerospace") and the pool membership. Converium views its investment as an important step in its long-term strategy to be one of the top global leading reinsurance companies and to expand in Specialty Lines. Under the agreement relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc its investment in Global Aerospace, Converium's investment is below US$ 45 million. Converium is a leading provider of reinsurance in the aviation and aerospace sector. So far, Converium has indirectly reinsured 9% of the pools managed by Global Aerospace.
Converium's Aviation & Space Portfolio: Strong and profitable growth
Nine months
Ended
Sept. 30, 2002
Net premiums written (US$ millions)
- Proportional 187.1
- Non-proportional 38.4
- Structured/Finite 0.0
- Total 225.5
- Growth (%) + 67.9
- Of total non-life (%) 9.9
Loss ratio (%) 89.1
U/W expense ratio (%) 10.1
U/W combined ratio (%)2) 99.2
Year Ended December 31
2001 2000 1999 1998
Net premiums written (US$ millions)
- Proportional 160.0 83.1 47.8 39.8
- Non-proportional 21.0 34.3 47.6 3.2
- Structured/Finite 0.0 1.9 1.6 1.8
- Total 181.0 119.3 97.0 44.8
- Growth (%) + 51.7 + 23.0 + 116.5 n.a.
- Of total non-life (%) 7.7 6.3 6.5 3.8
Loss ratio (%) 203.6(1) 84.2 87.5 67.6
U/W expense ratio (%) 18.6 12.3 16.1 27.2
U/W combined ratio (%)(2) 222.2(1) 96.6 103.6 94.9
(1) Including September 11th
(2) The combined ratios presented in this table exclude administration
expenses.
The effect of rate increases post September 11th and the relatively low frequency of major airline losses in accident year 2002 so far indicate that losses in Converium's aviation business appear to be low in comparison with past experience. Converium thus believes favorable earnings in the aviation business may emerge in the fourth quarter 2002. These favorable earnings could, however, be affected by final reporting by ceding cede tr.v. ced·ed, ced·ing, cedes 1. To surrender possession of, especially by treaty. See Synonyms at relinquish. 2. companies for major losses of a catastrophic nature which may occur between the date of this press release and the end of the year 2002. About Global Aerospace Global Aerospace, one of the world's leading managing agents for aviation and aerospace risks, manages an annual premium income exceeding US$ 1 billion. Headquartered in London, it has an US office in Short Hills, New Jersey, and a Canadian office in Toronto. In addition there are six regional offices throughout 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. . For further information: www.global-aero.com. Subject to completion of the agreement, by which Converium has agreed to take a 25% stake in Global Aerospace, the remaining shares will be held by Berkshire Hathaway Berkshire Hathaway (NYSE: BRKA, NYSE: BRKB) is a conglomerate holding company headquartered in Omaha, Nebraska, U.S., that oversees and manages a number of subsidiary companies. , Munich Re Munich Re AG, in German Münchener Rück AG (ISIN: DE0008430026), is the world's second largest reinsurance company with over 5,000 customers in 160 countries and has its headquarters in Munich, Germany. , and Royal & Sun Alliance - none of them having a majority stake. Simultaneously with the agreement to acquire 25% of Global Aerospace Converium has entered into a pool members' agreement by which it became a member of the aviation and aerospace pools run by Global Aerospace and its subsidiary, Associated Aviation Associated Aviation is an airline based in Lagos, Nigeria. It was established in 1996 and operates passenger and cargo services within Nigeria and in West Africa. Its main base is Murtala Mohammed International Airport, Lagos[1]. Underwriters Inc. The proportions in which the members of the pools are committed for 2003 are: Converium 25.00% Berkshire Hathaway 25.00% Munich Re 25.00% Royal & Sun Alliance 9.25% Tokyo Marine and Fire 9.00% Mitsui Sumitomo 6.75% 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: "This investment confirms our commitment to the reinsurance of aviation and aerospace risks and further strengthens our position in the top echelon of aviation reinsurers." Mario Montelatici, Underwriting Manager & Head of the Global Center of Excellence Aviation & Space, said: "Converium's 25%-stake in Global Aerospace and our increase of our share in the respective pools from 9% to 25% represent important developments for our aviation strategy. Global Aerospace is the leading underwriting agency, Converium one of the leading reinsurers: for me, this is the perfect fit. Based on the very favorable terms and conditions in the aviation insurance and reinsurance market, I am convinced that this investment will result in a substantial improvement of the long-term profitability and the overall risk-return characteristics of Converium's aviation book." Martin Kauer, CFO See Chief Financial Officer. Converium, said: "The strategic alliance we entered with Global Aerospace by becoming a 25% shareholder and increasing our pool-membership to 25% is clear evidence of our commitment to seek alliances with partners who have strengths in areas outside our core skills, such as distribution, claims management and branding, and who will benefit from our distinct underwriting expertise and capacity. Even including the losses of September 11th, aviation is one of Converium's most profitable lines of business. We are convinced that this investment is going to further strengthen our position in the aviation market and will result in an increased profitability." This communication is directed only at persons outside the United Kingdom and may not be acted on by persons in the United Kingdom. Inquiries: Michael Schiendorfer Zuzana Drozd Media Relations Manager Head of Investor Relations michael.schiendorfer@converium.com zuzana.drozd@converium.com Phone: +41 (0) 1 639 96 57 Phone: +41 (0) 1 639 91 20 Mobile: +41 (0) 79 307 70 50 Fax: +41 (0) 1 639 71 20 Fax: +41 (0) 1 639 76 57 IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. , Ranking and Organization Converium is an independent top ten reinsurance group. The company was listed 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. and the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. on December 11, 2001. The IPO involved the placing of 40 million registered shares priced at CHF CHF In currencies, this is the abbreviation for the Swiss Franc. 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 $1 trillion. 82 per share or US$ 24.59 per American Depositary Share American Depositary Share (ADS) Foreign stock issued in the US and registered in the ADR system. (ADS) with investors worldwide. 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 allocated across the globe: 32% to institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. in the US, 24% to institutionals in the UK, 15% to institutionals 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 US. Today the company ranks 9th 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) rating from Standard & Poor's and "A" (excellent) rating by AM Best Company. Converium's September 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 is organized around four business segments consisting of our three non-life operations, 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. and Converium Cologne, as well as Converium Life. Important Disclaimer 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 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 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; 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 Swiss Exchange The major securities market of Switzerland. . 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 |
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