Swiss-based Converium has issued a bulletin describing a successful January renewal season. It said it expects total gross premiums written for 2005 to exceed $2 billion, which is in line with its expectations.
Beginning in July 2004 Converium underwent what it’s then CEO Martin Kauer described as a “perfect storm,” beginning with reserve strengthening in the U.S., followed by rating agency downgrades and finally by the loss of almost half its business. According to Standard & Poor’s, Converium’s net reinsurance premiums written in 2003 were $3.827 billion, making it the 9th largest global reinsurer at the time.
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The company’s bulletin noted that “63 percent of the Company’s renewable non-life business volume (excluding Converium Reinsurance (North America) Inc., which is in orderly run-off) was successfully maintained. In Europe, Asia and Latin America Converium was able to retain 70 percent of directly written non-life premiums and 55 percent of brokered non-life premiums up for renewal.”
It also indicated that it had been successful in “maintaining 87 percent of its treaty direct client relationships and 56 percent of its treaty broker relationships.” Converium also noted that it has “managed to establish a significant number of new direct client and broker relationships,” and that “overall, the positive outcome of the January 2005 renewals testifies to the resilience and viability of the Converium franchise.”
The bulletin also said: “The January renewals were characterized by heightened competition and plentiful capacity, which put pressure on rates, terms and conditions in certain markets. Overall market conditions, however, remained attractive. Converium’s profitability-focused underwriting approach led it to decline business amounting to approximately 5 percent of the premium volume renewable in January 2005. Converium’s adherence to the imperative of technical underwriting contributed to substantial top-line reductions, for example in the motor line of business.”
The full statement may be obtained on the company’s Web site at: http://www.converium.com.
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