Form 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of July, 2005
CONVERIUM HOLDING AG
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(Translation of registrant's name into English)
Baarerstrasse 8
CH-6300 Zug
Switzerland
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
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Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
--- ---
If "Yes" is marked, indicate the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82- Not Applicable
Converium Holding Ltd, Zug
Zug, Switzerland - August 9, 2005 - Converium produces a positive result in the
second quarter of 2005.
o For the second quarter of 2005 Converium reports income before taxes of
US$ 49.2 million, pre-tax operating income(1) of US$ 60.7 million and
net income of US$ 70.8 million. All business segments contributed to
the quarter's positive result.
o The encouraging result reflects a solid technical underwriting
performance, supported by the absence of any major catastrophic events,
and a strong total investment result. Net income further increased as a
result of an income tax benefit.
o Prior year loss reserves have remained stable. For three consecutive
quarters there were only minor loss reserve movements.
o Converium remains confident about the economic profitability of its
ongoing business. The non-life combined ratio, excluding an
administration expense ratio of 8.8%, was 93.6%. This is a
satisfactory result given the large share of proportional and
medium- to long-tail business in Converium's portfolio.
o Converium's results are only partially reflective of the cost reduction
measures initiated in March 2005. Their effect continues to be offset
by costs resulting from staff retention plans and expenses which
Converium considers vital investments to facilitate a fast rebound.
o In the second quarter Converium generated a total investment result of
US$ 86.8 million, resulting in an average annualized total investment
income yield (pre-tax) of 4.3% on average total invested assets of
US$ 8,070.9 million.
Terry Clarke, CEO, said: "I am very pleased that Converium has swung back to a
positive result in the second quarter of 2005. We have seen a favorable
development of prior year loss reserves for both the ongoing and the run-off
operation. For the third consecutive quarter, prior year reserve movements have
been minor. In addition, our ongoing operations, which continue to be affected
by a temporarily inflated cost base, remain profitable."
Mr. Clarke added: "I am confident that the second quarter marks a turning point
on our way to full recovery. We now start to reap the benefits from the
relentless efforts of our staff to put Converium back on track."
(1) Pre-tax operating income (loss) is defined as income (loss) before
taxes excluding net realized capital gains (losses), impairment of goodwill,
amortization of intangible assets and restructuring costs.
Second quarter 2005 key metrics
o Gross premiums written: US$ 362.0 million
o Income before taxes: US$ 49.2 million
o Pre-tax operating income: US$ 60.7 million
o Net income: US$ 70.8 million
o Segment income(2) of ongoing operations: US$ 74.1 million
o Segment income(2) of run-off operation: US$ 6.9 million
o Ongoing non-life combined ratio: 102.4%
o Ongoing non-life administration expense ratio: 8.8%
o Average annualized total investment income
yield (pre-tax): 4.3%
First half 2005 key metrics
o Gross premiums written: US$ 1,079.5 million
o Loss before taxes: US$ -16.4 million
o Pre-tax operating income: US$ 12.9 million
o Net income: US$ 9.0 million
o Segment income(2) of ongoing operations: US$ 53.1 million
o Segment income(2) of run-off operation: US$ 2.3 million
o Ongoing non-life combined ratio: 108.9%
o Ongoing non-life administration expense ratio: 7.2%
o Average annualized total investment income
yield (pre-tax): 4.1%
o Shareholders' equity: US$ 1,648.2 million
Overview of second quarter/first half of 2005 performance and short-term outlook
Converium produces a positive result
For the second quarter of 2005 Converium reported an income before taxes of US$
49.2 million, a pre-tax operating income of US$ 60.7 million and a net income of
US$ 70.8 million as compared to a loss before taxes of US$ 381.9 million, a
pre-tax operating loss of US$ 299.6 million and a net loss of US$ 660.0 million
in the same period of 2004. For the first half of 2005 this translates into a
loss before taxes of US$ 16.4 million, pre-tax operating income of US$ 12.9
million and net income of US$ 9.0 million. This compares with a loss before
taxes of US$ 295.5 million, a pre-tax operating loss of US$ 221.7 million and a
net loss of US$ 594.3 million for the same period of 2004.
The decrease in gross premiums written, net premiums written, and net premiums
earned in the second quarter of 2005 (by 64.8%, 65.1% and 39.3% compared to the
same period in 2004) reflects the reduction in business volume caused by the
placement of Converium Reinsurance (North America) Inc. (CRNA) into orderly
run-off in 2004 and the impact of the ratings downgrades which prompted clients
to cancel their business or reduce their shares with Converium. Despite the
decrease in premiums, there was still some growth in the Agribusiness, Aviation
and Accident & Health lines of business resulting from increased shares in
existing business and new client relationships.
In addition, due to the seasonality involved with the renewal of its business in
different markets, Converium generally records the largest share of its premium
volume in the first quarter of a given year and approximately half of its annual
premium volume by the end of the second quarter of a given year.
(2) Segment income (loss) is defined as net premiums earned plus total
investment results minus losses, loss adjustment expenses and life benefits,
underwriting acquisition costs and other operating and administration expenses.
Satisfactory results of ongoing business segments
The non-life combined ratio for Converium's ongoing operations was 102.4%
(including an administration expense ratio of 8.8%) for the second quarter of
2005 compared to 108.7% in the same period of 2004. For the first half of 2005
and 2004 the non-life combined ratio for the ongoing operations was 108.9%
(including an administration expense ratio of 7.2%) and 100.7%, respectively.
This is a satisfactory result as almost two-thirds of Converium's ongoing
portfolio consist of medium- and long-tail business and therefore generate
substantial investment income over time. In addition, Converium's mix of
business has shifted from non-proportional to proportional business which
generally carries higher underwriting expenses.
Converium is also pleased about the broad-based character of its profitable
quarter. All business segments made a positive contribution to the bottom-line
in the second quarter. The Standard Property & Casualty Reinsurance, Specialty
Lines and Life & Health Reinsurance segments reported a segment income of US$
32.5 million, US$ 41.3 million and US$ 0.3 million, respectively.
The Run-Off segment recorded segment income of US$ 6.9 million for the second
quarter supported by net positive development of prior years' loss reserves. As
of June 30, 2005 Converium has not yet concluded and legally bound further
material commutations with its cedents. The Company is vigorously executing its
commutation strategy and reiterates its target to commute or otherwise settle
CRNA's liabilities of approximately US$ 500 million in 2005.
Favorable loss reserve developments
In the second quarter of 2005 Converium recorded net positive development of
prior years' loss reserves of US$ 6.7 million, including a net positive
development of US$ 3.1 million in the Run-Off segment. This compares with net
strengthening of prior years' loss reserves of US$ 387.7 million in the same
period of 2004. For the first half of 2005 the Company recorded net
strengthening of prior years' loss reserves of US$ 3.7 million as compared to
net strengthening of US$ 430.7 million in the first half of 2004.
Converium is pleased about the second quarter 2005 being the third consecutive
quarter with only minor prior year loss reserve developments. Converium believes
this outcome to reflect the adequacy of prior years' loss reserve actions.
Strong total investment result
In the second quarter of 2005 Converium generated total investment results of
US$ 86.8 million or an average annualized total investment income yield
(pre-tax) of 4.3%. Investments continued to perform strongly as compared to the
same period of 2004, reflecting a moderate growth in average total invested
assets, including cash and cash equivalents as well as an allocation shift from
equity securities to fixed income securities in mid-2004. Converium's asset mix
is now characterized by a higher allocation to relatively high-yielding fixed
income securities. In addition, Converium benefited from higher investment
income generated by business written on a funds withheld basis.
In the second quarter of 2005, net realized capital losses amounted to US$ 1.0
million as compared to net realized capital gains of US$ 12.5 million in the
same period of 2004 that were driven by the sale of certain equity investments
to adjust Converium's asset allocation with the objective of reducing investment
risk during 2004.
Cost base affected by timing of cost management measures and vital investments
to facilitate the Company's rebound
In the second quarter of 2005, the administration expense ratio for the ongoing
non-life business was 8.8% as compared to 4.6% in the same period of 2004. Other
operating and administration expenses for the Company were US$ 50.2 million, a
decrease of US$ 4.5 million compared to the same period of 2004 and a decrease
of US$ 6.7 million compared to the first quarter of 2005.
The economics of Converium's ongoing operations continue to be masked by the
Company's relatively high administration expense base. At this point in time,
the administration expenses are only partially reflective of the strict cost
management measures initiated in March 2005. These measures are expected to show
effect by the end of 2005. In addition, the expense base and accordingly the
ongoing non-life combined ratio carry the cost of staff retention plans.
Furthermore, Converium incurs certain expenses which it considers crucial
investments in order to be able to rapidly capitalize on the restoration of its
financial strength ratings which are expected for 2006, and to accelerate the
recovery of its market position.
Net income increased as a result of an income tax benefit
Converium recorded an income tax benefit of US$ 21.6 million and US$ 25.4
million for the second quarter and the first half of 2005, respectively. Over
the past year, Converium has established a full valuation allowance against
existing tax losses carried forward in its primary locations, resulting in
minimal current income tax expense relating to pre-tax income. Therefore tax
benefits and expenses are primarily driven by the development of existing
deferred tax assets and liabilities, which are established to reflect
differences in the tax accounting rules of local jurisdictions and US GAAP
accounting.
In the second quarter of 2005, Converium's income tax benefit resulted from the
reduction of deferred acquisition costs (DAC), caused by the decline in its
overall non-life premium volume, as well as certain timing differences related
to the recognition of investment gains and losses.
Encouraging July 1 renewals
For Converium's ongoing non-life operations approximately 7% of the in-force
portfolio was up for renewal in July. The main renewal areas were Latin America
and the Caribbean. The Company retained almost two-thirds of the renewable
business. In ratings-sensitive lines of business (e.g. Aviation) and
geographical markets (Australia), Converium recorded, as expected, a major
decline in renewed business volume. In Latin America, however, about 75% of the
renewable business was successfully retained. In the Middle East region
Converium even increased premium volume. Overall, this outcome is in line with
expectations. Converium therefore continues to believe that its US$ 2 billion
gross premiums written target for the 2005 calendar year is achievable.
Short-term outlook: Continued implementation of Converium's roadmap to recovery
Converium will continue to focus on the systematic implementation of its roadmap
to recovery:
o Operate as a stand-alone entity: The outcome of the July renewals
confirms the trend established by the January and April renewals.
Converium's franchise continues to prove resilient and viable.
o Right-size the organization: Converium is committed to strict cost
management in view of the reduced top-line. The Company continues to
target administration expenses for its ongoing operations at a ratio of
6.5% of net premiums written in 2006, which includes certain
investments vital for a swift rebound of the Company.
o Achieve a better financial strength rating: Converium's management is
in regular contact with the rating agencies. Restoring their confidence
based on a stable financial performance remains a key corporate
priority.
o Implement future business strategies: Encouraged by the robustness of
its franchise, Converium will enter the upcoming January 2006 renewal
negotiations with the self-confidence of a knowledge-based,
client-centric and nimble multi-line reinsurer offering a clear
geographic focus.
o Successfully manage the run-off of CRNA: The Company remains committed
to reducing legacy exposure from the US business in a way that meets
the interests of shareholders. Converium will continue to diligently
pursue commutations, look into the option of selling CRNA and
constantly evaluate any other options for extracting maximum value for
shareholders from the US business.
Business development
Standard Property & Casualty Reinsurance reported segment income of US$ 32.5
million for the second quarter and US$ 34.9 million for the first half of 2005,
compared to US$ 22.0 million and US$ 69.0 million for the same periods of 2004,
respectively. The segment results were primarily attributable to a solid
underwriting performance, supported by net positive development of prior years'
loss reserves of US$ 3.3 million in the first half of 2005 and to the absence of
major catastrophic events in the second quarter of 2005.
For the second quarter of 2005, the segment recorded a net strengthening of
prior years' loss reserves of US$ 6.9 million, primarily related to a
strengthening within the Motor line of business (US$ 17.9 million), which was
partially offset by positive development within the Property line of business
(US$ 17.6 million). The development in Property business includes a
strengthening of US$ 4.4 million related to the US / Caribbean hurricanes that
occurred in late 2004. For the second quarter 2005, the loss ratio remained
relatively flat as compared to the same period of 2004. The impact of winter
storm Erwin, which resulted in net pre-tax losses in the amount of US$ 32.5
million during the first quarter of 2005, added 7.7 percentage points to the
loss ratio for the first half of 2005.
The combined ratio was 120.7% (including an administration expense ratio of
28.6%) for the second quarter of 2005 and 105.0% (including an administration
expense ratio of 7.0%) for the first half of 2005, compared to 103.6% and 97.1%
for the same periods of 2004, respectively.
In the second quarter of 2005, gross premiums written decreased 83.2% to US$
47.9 million, net premiums written declined 83.0% to US$ 43.3 million
(representing approximately 13.1% of total net premiums written) and net
premiums earned decreased 46.5% to US$ 178.9 million, compared to the same
period of 2004. In the first half of 2005, gross premiums written dropped 49.9%
to US$ 460.4 million, net premiums written decreased 47.8% to US$ 446.2 million
(representing approximately 43.1% of total net premiums written), and net
premiums earned declined 40.4% to US$ 420.9 million, compared to the same period
of 2004. The premium volume in 2005 was impacted by the ratings downgrades that
occurred in 2004, which resulted in clients canceling their business or reducing
their shares with Converium. In addition, due to the seasonality involved with
the renewal of its business in different markets, Converium generally records
the largest share of its premium volume in the first quarter of a given year and
approximately half of the annual premium volume by the end of the second quarter
of a given year. In the first half of 2005, the reduction in net premiums
written by line of business included:
o Motor, which decreased by 60.7% or US$ 195.1 million to
US$ 126.5 million;
o Property, which declined by 14.1% or US$ 42.9 million to
US$ 262.0 million;
o General Third Party Liability, which dropped by 76.7% or US$ 147.9
million to US$ 44.5 million, also due to revisions to premium estimates
on our London Market North America and United Kingdom book of business;
and
o Personal accident business assumed from non-life insurers, which
decreased by 54.7% or US$ 14.1 million to US$ 11.7 million.
Specialty Lines reported a segment income of US$ 41.3 million for the second
quarter and US$ 11.7 million for the first half of 2005, compared to a segment
loss of US$ 10.6 million and segment income US$ 37.4 million for the same
periods of 2004, respectively. The segment results were primarily attributable
to a solid underwriting performance, supported by net positive development of
prior years' loss reserves of US$ 10.5 million in the second quarter of 2005,
which was primarily driven by positive development within the Aviation line of
business (US$ 19.5 million) and partially offset by net strengthening within
other lines of business of the segment. For the first half of 2005, Converium
recorded net positive development of prior years' loss reserves of US$ 6.4
million. The segment result also benefited from the absence of major
catastrophic events in the second quarter of 2005.
The result for the first half of 2005 has also been affected by the commutation
of certain retrocession contracts, which had a negative impact on losses of US$
38.7 million during the first quarter of 2005. For the second quarter the
combined ratio was 99.6% (including an administration expense ratio of 5.1%) and
111.6% (including an administration expense ratio of 7.4%) for the first half of
2005, compared to 115.1% and 105.1% for the same periods of 2004, respectively.
In the second quarter of 2005, gross premiums written decreased 34.1% to US$
247.3 million, net premiums written declined 33.9% to US$ 229.5 million
(representing approximately 69.3% of total net premiums written) and net
premiums earned increased 9.0% to US$ 327.3 million, compared to the same period
of 2004. In the first half of 2005, gross premiums written decreased 44.4% to
US$ 401.8 million, net premiums written declined 42.6% to US$ 384.9 million
(representing approximately 37.2% of total net premiums written), and net
premiums earned increased 6.4% to US$ 619.7 million, compared to the same period
of 2004. The premium volume in 2005 was impacted by the ratings downgrades that
occurred in 2004, which resulted in clients canceling their business or reducing
their shares with Converium.
In the first half of 2005, the reduction in net premiums written by line of
business included:
o Aviation & Space, which decreased by 31.5% or US$ 59.8 million to US$
129.9 million;
o Credit & Surety, which dropped by 69.2% or US$ 69.4
million to US$ 30.9 million;
o Professional Liability and other Special Liability, which decreased by
45.5% or US$ 97.6 million to US$ 116.8 million;
o Engineering, which fell by 39.6% or US$ 29.6 million to
US$ 45.2 million;
o Marine & Energy, which decreased by 25.8% or US$ 13.9 million to
US$ 40.0 million; and
o Workers' Compensation, which declined by 97.3% or US$ 33.2 million to
US$ 0.9 million.
These decreases were offset by an increase in net premiums written in the
Agribusiness line of business, which grew by US$ 4.2 million to US$ 21.2
million. Additionally, in Specialty Lines, Converium successfully renewed the
significant business with its strategic partner, the Medical Defence Union
(MDU).
Life & Health Reinsurance reported a segment income of US$ 0.3 million for the
second quarter and US$ 6.5 million for the first half of 2005, compared to US$
1.9 million and US$ 3.4 million for the same periods of 2004, respectively. The
technical result was US$ 1.5 million for the second quarter of 2005 and US$ 8.1
million for the first half of 2005, compared to US$ 4.1 million and US$ 5.4
million for the same periods in 2004, respectively. It is defined as net
premiums earned minus losses, loss adjustment expenses and life benefits minus
underwriting acquisition costs plus technical interest.
The decrease in segment income and technical result for the second quarter of
2005 was primarily driven by Converium's decision to non-renew two large
contracts as well as updated cedent information pertaining to our European and
Latin American markets.
The increased segment income in the first half of 2005 was primarily
attributable to the expansion of existing reinsurance transactions in
Continental Europe but was partially offset by negative loss development of US$
1.5 million in the first quarter of 2005 related to the tsunami that occurred in
late 2004.
In the second quarter of 2005, gross premiums written decreased 16.0% to US$
59.3 million, net premiums written fell 2.6% to US$ 55.7 million (representing
approximately 16.8% of total net premiums written), and net premiums earned
decreased 11.4% to US$ 74.1 million, compared to the same period of 2004. For
the first half of 2005, gross premiums written decreased 7.1% to US$ 176.4
million, net premiums written increased 0.7% to US$ 169.5 million (representing
approximately 16.4% of total net premiums written), and net premiums earned
increased 2.6% to US$ 155.2 million, compared to the same period of 2004.
In the first half of 2005, the growth of net premiums written in the Life &
Health Reinsurance segment primarily occurred in Life and Disability
reinsurance, which increased by 8.5% or US$ 10.3 million to US$ 132.2 million,
and is largely reflective of the expansion of existing reinsurance transactions
as well new business being written. This increase was offset by a decrease of
4.9% or US$ 2.0 million in net premiums written to US$ 38.5 million in the
Accident and Health line of business due to the cancellation of contracts where
the overall performance was not in-line with Converium's profitability targets
as well as to the impact of the ratings downgrades that occurred in 2004.
The Run-Off segment represents all non-life and life business originating from
CRNA and Converium Insurance (North America) Inc., excluding the US-originated
aviation business portfolio. The Run-Off segment reported a segment income of
US$ 6.9 million for the second quarter and US$ 2.3 million for the first half of
2005, compared to US$ -289.6 million and US$ -284.2 million for the same periods
of 2004, respectively. In the second quarter of 2005 the segment recorded US$
3.1 million of net positive development of prior years' loss reserves, which
resulted in net strengthening of prior years' loss reserves of US$ 13.3 million
in the first half of 2005. In the second quarter of 2004 the Run-Off segment
strengthened its prior years' loss reserves by US$ 331.3 million, primarily
within the Professional Liability and other Special Liability and General Third
Party Liability lines of business, which resulted in US$ 397.4 million of net
reserve strengthening of prior years' loss reserves in the first half of 2004.
The Corporate Center carries certain administration expenses, such as costs of
the Board of Directors, the Global Executive Committee and other corporate
functions as well as other expenses not allocated to the operating segments. The
Corporate Center reported costs of US$ 11.8 million for the second quarter and
US$ 19.0 million for the first half of 2005, compared to US$ 7.4 million and US$
17.1 million for the same periods of 2004, respectively. The increase in the
first half of 2005 as compared to the same period of 2004 was due to increased
consulting fees related to Converium's organizational and operational
restructuring.
* * * * * * *
Converium 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 continue to provide investors with perspectives on its value drivers,
its strategic initiatives and those factors critical to understanding its
business and operating environment.
Enquiries:
Esther Gerster Zuzana Drozd
Head of Public Relations Head of Investor Relations
esther.gerster@converium.com zuzana.drozd@converium.com
Phone: +41 (0) 44 639 90 22 Phone: +41 (0) 44 639 91 20
Fax: +41 (0) 44 639 70 22 Fax: +41 (0) 44 639 71 20
About Converium
Converium is an independent international multi-line reinsurer known for its
innovation, professionalism and service. Today Converium employs about 600
people in 20 offices around the globe and is organized into four business
segments: Standard Property & Casualty Reinsurance, Specialty Lines and Life &
Health Reinsurance, which are based principally on ongoing global lines of
business, as well as the Run-Off segment, which primarily comprises the business
from Converium Reinsurance (North America) Inc., excluding the US originated
aviation business portfolio. Converium has a "BBB+" rating (outlook stable) from
Standard & Poor's and a "B++" rating (outlook stable) from A.M. Best Company.
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 ` seek to', `expects', `should continue', `believes',
`anticipates', `estimates' and `intends'. The specific forward-looking
statements cover, among other matters, the reinsurance market, the Company's
operating results, the rating environment and the prospect for improving results
and expense reductions. 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
the impact of our ratings downgrade or a further lowering or loss of one of our
financial strength ratings; uncertainties of assumptions used in our reserving
process; risk associated with implementing our business strategies and our
capital improvement measures and the run-off of our North American business;
cyclicality of the reinsurance industry; the occurrence of natural and man-made
catastrophic events with a frequency or severity exceeding our estimates; acts
of terrorism and acts of war; changes in economic conditions, including interest
and currency rate conditions that could affect our investment portfolio; actions
of competitors, including industry consolidation and development of competing
financial products; a decrease in the level of demand for our reinsurance or
increased competition in our industries or markets; a loss of our key employees
or executive officers without suitable replacements being recruited within a
suitable period of time; our ability to address material weaknesses we have
identified in our internal control environment; political risks in the countries
in which we operate or in which we reinsure risks; the passage of additional
legislation or the promulgation of new regulation in a jurisdiction in which we
or our clients operate or where our subsidiaries are organized; the effect on
the insurance industry as a result of the investigations being carried out by
the US Securities and Exchange Commission and New York's Attorney General;
changes in our investment results due to the changed composition of our invested
assets or changes in our investment policy; failure of our retrocessional
reinsurers to honor their obligations or changes in the credit worthiness of our
reinsurers; our failure to prevail in any current or future arbitration or
litigation; and extraordinary events affecting our clients, such as bankruptcies
and liquidations , 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
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Financial highlights: Income statement Three months ended Six months ended
June 30, June 30,
In US$ million, unless noted 2005 2004 2005 2004
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Gross premiums written 362.0 1,027.6 1,079.5 2,411.2
- change (%) -64.8% -55.2%
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Net premiums written 330.9 948.8 1,035.8 2,247.4
- change (%) -65.1% -53.9%
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Net premiums earned 612.8 1,009.9 1,301.6 2,002.9
- change (%) -39.3% -35.0%
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Ongoing non-life loss ratio(3) 73.4% 82.3% 80.6% 75.9%
- change in percentage points -8.9pts +4.7pts
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Ongoing non-life underwriting expense ratio(4) 20.2% 21.8% 21.1% 21.2%
- change in percentage points -1.6pts -0.1pts
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Ongoing non-life administration expense ratio(5) 8.8% 4.6% 7.2% 3.6%
- change in percentage points +4.2pts +3.6pts
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Ongoing non-life combined ratio(6) 102.4% 108.7% 108.9% 100.7%
- change in percentage points -6.3pts +8.2pts
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Life & Health technical result(7) 1.5 4.1 8.1 5.4
- change (%) -63.4% +50.0%
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Total investment results(8) 86.8 89.2 168.3 171.0
- change (%) -2.7% -1.6%
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Average annualized total investment income yield (pre tax)(9) 4.3% 4.5% 4.1% 4.3%
- change in percentage points
-0.2pts -0.2pts
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Pre-tax operating income (loss) (10) 60.7 -299.6 12.9 -221.7
- change (%) n.m. n.m.
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Net income (loss) 70.8 -660.0 9.0 -594.3
- change (%) n.m. n.m.
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Earnings (loss) per share (US$) 0.48 -8.32 0.06 -7.49
- change (%) n.m. (rest.) n.m. (rest.)
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Annualized return on shareholders' equity(11) 17.9% n.m. 1.1% -57.1%
- change in percentage points n.m. n.m.
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(3) Ongoing non-life loss ratio is defined as ongoing non-life losses and loss adjustment expenses divided by
ongoing non-life net premiums earned.
(4) Ongoing non-life underwriting expense ratio is defined as ongoing non-life underwriting acquisition costs
divided by ongoing non-life net premiums earned.
(5) Ongoing non-life administration expense ratio is defined as ongoing other non-life operating and
administration expenses divided by ongoing non-life net premiums written.
(6) Ongoing non-life combined ratio is defined as ongoing non-life loss ratio (to premiums earned) plus ongoing
non-life underwriting expense ratio (to premiums earned) plus ongoing non-life administration expense ratio (to
premiums written).
(7) Life & Health technical result is defined as Life & Health net premiums earned minus Life & Health losses,
loss adjustment expenses and life benefits minus Life & Health underwriting acquisition costs plus Life & Health
technical interests.
(8) Total investment results are defined as net investment income plus net realized capital (losses) gains.
(9) Average annualized total investment income yield (pre-tax) is defined as total investment results divided
by average total invested assets (including cash and cash equivalents), annualized.
(10) Pre-tax operating income (loss) is defined as income (loss) before taxes excluding net realized capital
(losses) gains, impairment of goodwill, amortization of intangible assets and restructuring costs.
(11) Annualized return on equity is defined as net income (loss) divided by shareholders' equity at the
beginning of the period.
------------------------------------------------------------------------------------------ ------------ -------------
Financial highlights: Balance sheet June 30, Dec. 31,
In US$ million, unless noted 2005 2004
------------------------------------------------------------------------------------------ ------------ -------------
------------------------------------------------------------------------------------------ ------------ -------------
Total invested assets plus cash and cash equivalents 7,966.8 8,469.3
- change compared to December 2004 -5.9%
------------------------------------------------------------------------------------------ ------------ -------------
------------------------------------------------------------------------------------------ ------------ -------------
Claims supporting capital(12) 2,039.4 2,111.3
- change compared to December 2004 -3.4%
------------------------------------------------------------------------------------------ ------------ -------------
------------------------------------------------------------------------------------------ ------------ -------------
Shareholders' equity 1,648.2 1,720.2
- change compared to December 2004 -4.2%
------------------------------------------------------------------------------------------ ------------ -------------
------------------------------------------------------------------------------------------ ------------ -------------
Book value per share (US$)(13) 11.26 11.76
- change (%) -4.3%
------------------------------------------------------------------------------------------ ------------ -------------
------------------------------------------------------------------------------------------ ------------ -------------
Book value per share (CHF) 14.43 13.37
- change (%) +7.9%
------------------------------------------------------------------------------------------ ------------ -------------
----------------------------------------------------------------- ------------------------ --------------------------
Financial highlights: Investment results Three months ended Six months ended
June 30, June 30,
In US$ million, unless noted 2005 2004 2005 2004
----------------------------------------------------------------- ------------ ----------- ------------ -------------
----------------------------------------------------------------- ------------ ----------- ------------ -------------
Investment income - Fixed maturities 62.1 47.8 116.0 94.0
----------------------------------------------------------------- ------------ ----------- ------------ -------------
----------------------------------------------------------------- ------------ ----------- ------------ -------------
Investment income - Equity securities 2.7 7.1 3.9 9.2
----------------------------------------------------------------- ------------ ----------- ------------ -------------
----------------------------------------------------------------- ------------ ----------- ------------ -------------
Investment income - Funds Withheld Asset 16.2 19.0 33.1 39.3
----------------------------------------------------------------- ------------ ----------- ------------ -------------
----------------------------------------------------------------- ------------ ----------- ------------ -------------
Investment income - other, net of expenses 6.8 2.8 17.0 6.8
----------------------------------------------------------------- ------------ ----------- ------------ -------------
----------------------------------------------------------------- ------------ ----------- ------------ -------------
Net investment income 87.8 76.7 170.0 149.3
----------------------------------------------------------------- ------------ ----------- ------------ -------------
----------------------------------------------------------------- ------------ ----------- ------------ -------------
Average annualized net investment income yield 4.4% 3.8% 4.1% 3.8%
(pre-tax)
----------------------------------------------------------------- ------------ ----------- ------------ -------------
----------------------------------------------------------------- ------------ ----------- ------------ -------------
----------------------------------------------------------------- ------------ ----------- ------------ -------------
----------------------------------------------------------------- ------------ ----------- ------------ -------------
Net realized capital (losses) gains -1.0 12.5 -1.7 21.7
----------------------------------------------------------------- ------------ ----------- ------------ -------------
----------------------------------------------------------------- ------------ ----------- ------------ -------------
Total investment results 86.8 89.2 168.3 171.0
----------------------------------------------------------------- ------------ ----------- ------------ -------------
----------------------------------------------------------------- ------------ ----------- ------------ -------------
Average annualized total investment income yield 4.3% 4.5% 4.1% 4.3%
(pre-tax)
----------------------------------------------------------------- ------------ ----------- ------------ -------------
----------------------------------------------------------------- ------------ ----------- ------------ -------------
Change in net unrealized gains (losses) (pre-tax) 81.9 -139.2 27.7 -76.9
----------------------------------------------------------------- ------------ ----------- ------------ -------------
----------------------------------------------------------------- ------------ ----------- ------------ -------------
Total investment return (pre-tax) 168.7 -50.0 196.0 94.1
----------------------------------------------------------------- ------------ ----------- ------------ -------------
----------------------------------------------------------------- ------------ ----------- ------------ -------------
Average annualized total investment return (pre-tax) 8.4% -2.5% 4.8% 2.4%
----------------------------------------------------------------- ------------ ----------- ------------ -------------
----------------------------------------------------------------- ------------ ----------- ------------ -------------
Average total invested assets (including cash and cash 8,070.9 7,964.5 8,218.1 7,868.0
equivalents)
----------------------------------------------------------------- ------------ ----------- ------------ -------------
(12) Claims supporting capital is defined as total shareholders' equity plus debt.
(13) Reflects the impacts of the rights offering that occurred in October 2004.
------------------------------------------------------------------ ------------------------- -------------------------
Consolidated statements of income (Unaudited) Three months ended Six months
June 30, ended
June 30,
In US$ million, unless noted 2005 2004 2005 2004
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Revenues
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Gross premiums written 362.0 1,027.6 1,079.5 2,411.2
- change (%) -64.8% -55.2%
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Less ceded premiums written -31.1 -78.8 -43.7 -163.8
- change (%) -60.5% -73.3%
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Net premiums written 330.9 948.8 1,035.8 2,247.4
- change (%) -65.1% -53.9%
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Net change in unearned premiums 281.9 61.1 265.8 -244.5
- change (%) 361.4% n.m.
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Net premiums earned 612.8 1,009.9 1,301.6 2,002.9
- change (%) -39.3% -35.0%
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Net investment income 87.8 76.7 170.0 149.3
- change (%) 14.5% 14.5%
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Net realized capital (losses) gains -1.0 12.5 -1.7 21.7
- change (%) n.m. n.m.
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Other (loss) income -1.5 5.4 -9.3 8.1
- change (%) n.m. n.m.
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Total revenues 698.1 1,104.5 1,460.6 2,182.0
- change (%) -36.7% -33.0%
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Benefits, losses and expenses
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Losses, loss adjustment expenses and life benefits -449.3 -1,103.8 -1,035.1 -1,824.7
- change (%) -59.3% -43.3%
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Underwriting acquisition costs -130.9 -224.3 -291.3 -433.4
- change (%) n.m. -32.8%
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Other operating and administration expenses -50.2 -54.7 -107.1 -107.3
- change (%) -8.2% -0.2%
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Interest expense -8.0 -8.8 -15.9 -16.6
- change (%) -9.1% -4.2%
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Impairment of goodwill - -94.0 - -94.0
- change (%) n.m. n.m.
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Amortization of intangible assets -7.0 -0.8 -14.0 -1.5
- change (%) n.m. n.m.
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Restructuring costs -3.5 - -13.6 -
- change (%) n.m. n.m.
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Total benefits, losses and expenses -648.9 -1,486.4 -1,477.0 -2,477.5
- change (%) -56.3% -40.4%
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Income (loss) before taxes 49.2 -381.9 -16.4 -295.5
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Income tax benefit (expense) 21.6 -278.1 25.4 -298.8
- change (%) n.m. n.m.
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Net income (loss) 70.8 -660.0 9.0 -594.3
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Basic earnings (loss) per share (US$) 0.48 -8.32(rest) 0.06 -7.49(rest.)
- change (%) n.m. n.m.
------------------------------------------------------------------ ------------ ------------ ------------ ------------
------------------------------------------------------------------ ------------ ------------ ------------ ------------
Pre-tax operating income (loss) 60.7 -299.6 12.9 -221.7
------------------------------------------------------------------ ------------ ------------ ------------ ------------
In the second quarter of 2005, Converium refined its chart of accounts to enhance the presentation of the line items within its
financial statements. Certain reclassifications have been made to prior year amounts to conform tocurrent year's presentation.
---------------------------------------------------------------------------------------------------------------------
Consolidated balance sheets June 30, Dec. 31,
2005 2004
In US$ million, unless noted (unaudited)
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Invested assets
---------------------------------------------------------------------------------------------------------------------
Held-to-maturity securities:
Fixed maturities 819.9 850.4
---------------------------------------------------------------------------------------------------------------------
Available-for-sale securities:
Fixed maturities 4,951.1 4,834.8
Equity securities 419.4 399.4
---------------------------------------------------------------------------------------------------------------------
Other investments 254.3 281.4
---------------------------------------------------------------------------------------------------------------------
Short-term investments 81.5 117.3
---------------------------------------------------------------------------------------------------------------------
Total investments 6,526.2 6,483.3
---------------------------------------------------------------------------------------------------------------------
Funds Withheld Asset 1,159.2 1,305.1
---------------------------------------------------------------------------------------------------------------------
Total invested assets 7,685.4 7,788.4
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Other assets
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents 281.4 680.9
---------------------------------------------------------------------------------------------------------------------
Premiums receivables:
Current 331.9 416.5
Accrued 1,279.0 1,729.0
---------------------------------------------------------------------------------------------------------------------
Reserves for unearned premiums, retro 83.6 111.6
---------------------------------------------------------------------------------------------------------------------
Reinsurance assets:
Underwriting reserves 940.8 1,226.2
Insurance balances receivable 390.9 233.5
---------------------------------------------------------------------------------------------------------------------
Funds held by reinsureds 1,609.4 1,721.3
---------------------------------------------------------------------------------------------------------------------
Non-risk transfer reinsurance assets 139.1 137.0
---------------------------------------------------------------------------------------------------------------------
Deferred policy acquisition costs 334.7 484.7
---------------------------------------------------------------------------------------------------------------------
Deferred income taxes 70.2 78.3
---------------------------------------------------------------------------------------------------------------------
Other assets 346.3 335.4
---------------------------------------------------------------------------------------------------------------------
Total assets 13,492.7 14,942.8
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Liabilities
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Reinsurance liabilities
---------------------------------------------------------------------------------------------------------------------
Loss and loss adjustment expenses, gross 8,266.8 8,915.6
---------------------------------------------------------------------------------------------------------------------
Future life benefits, gross 398.9 407.1
---------------------------------------------------------------------------------------------------------------------
Reinsurance balance payable 528.8 919.4
---------------------------------------------------------------------------------------------------------------------
Reserves for unearned premiums, gross 971.8 1,312.3
---------------------------------------------------------------------------------------------------------------------
Other reinsurance liabilities 173.2 110.4
---------------------------------------------------------------------------------------------------------------------
Funds held under reinsurance contracts 445.8 379.3
---------------------------------------------------------------------------------------------------------------------
Non-risk transfer reinsurance liabilities 311.3 348.5
---------------------------------------------------------------------------------------------------------------------
Deferred income taxes 145.0 157.2
---------------------------------------------------------------------------------------------------------------------
Accrued expenses and other liabilities 211.7 281.7
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Debt 391.2 391.1
---------------------------------------------------------------------------------------------------------------------
Total liabilities 11,844.5 13,222.6
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Consolidated balance sheets June 30, Dec. 31,
2005 2004
In US$ million, unless noted (unaudited)
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Equity
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Common stock 554.9 554.9
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Additional paid-in capital 1,423.1 1,430.6
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Treasury stock -2.0 -7.7
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Unearned stock compensation -4.4 -7.5
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Total accumulated other comprehensive income: 221.8 304.1
---------------------------------------------------------------------------------------------------------------------
Accumulated other comprehensive income -5.6 -6.7
---------------------------------------------------------------------------------------------------------------------
Net unrealized gains on investments, net of taxes 101.1 116.7
---------------------------------------------------------------------------------------------------------------------
Cumulative translation adjustments 126.3 194.1
---------------------------------------------------------------------------------------------------------------------
Retained deficit -545.2 -554.2
---------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 1,648.2 1,720.2
---------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity 13,492.7 14,942.8
---------------------------------------------------------------------------------------------------------------------
In the second quarter of 2005, Converium refined its chart of accounts to enhance the presentation of the line items within its
financial statements. Certain reclassifications have been made to prior year amounts to conform to current year's presentation.
---------------------------------------------------------------------------------------------------------------------
Consolidated statements of cash flows Six months ended
(Unaudited) June 30,
In US$ million, unless noted 2005 2004
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Net income (loss) 9.0 -594.3
---------------------------------------------------------------------------------------------------------------------
Net realized capital losses (gains) on investments 1.7 -21.7
Amortization of premium/discount 27.4 28.7
Depreciation and amortization 21.8 12.2
Deferred income tax benefit -8.5 -
Impairment of goodwill and deferred tax assets - 363.8
---------------------------------------------------------------------------------------------------------------------
Total adjustments 42.4 383.0
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Deferred policy acquisition costs 117.0 -43.9
Reinsurance assets 115.8 102.6
Reserves for unearned premiums, retro 26.2 28.0
Funds held by reinsureds -8.0 -204.6
Funds Withheld Asset 80.4 157.0
Premiums receivable 321.7 -272.7
Non-risk transfer reinsurance assets -2.1 -
Unearned premiums, gross -284.1 219.5
Losses and loss adjustment expenses, gross -322.4 707.8
Future life benefits, gross 19.2 21.1
Reinsurance balances payable -225.7 187.8
Funds held under reinsurance contracts 90.5 -41.0
Other reinsurance liabilities 70.5 -90.7
Non-risk transfer reinsurance liabilities -2.2 -9.7
Income taxes, net - -10.2
Net change in all other operational assets and liabilities -85.8 -97.2
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Total changes in operational assets and liabilities -89.0 653.8
---------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Cash (used in) provided by operating activities -37.6 442.5
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Purchases of fixed maturities held-to-maturity - -92.7
Proceeds from sales and maturities of fixed maturities available-for-sale 1,859.1 1,629.2
Purchases of fixed maturities available-for-sale -2,280.9 -1,994.8
---------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities (fixed maturities) -421.8 -458.3
---------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Proceeds from sales of equity securities 26.6 449.2
Purchases of equity securities -50.6 -520.9
---------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Cash flows from investing activities (equity securities) -24.0 -71.7
---------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Net decrease (increase) in short-term investments 59.4 -9.1
Proceeds from sales of other assets 9.4 23.1
Purchases of other assets -28.9 -51.6
---------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Cash flows from investing activities (other) 39.9 -37.6
---------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Net cash used in investing activities -405.9 -567.6
---------------------------------------------------------------------------------------------------------------------
Purchases of common shares -1.5 -4.9
Dividends to shareholders - -47.9
---------------------------------------------------------------------------------------------------------------------
Net cash used in financing activities -1.5 -52.8
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash and cash equivalents 45.5 2.6
---------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Change in cash and cash equivalents -399.5 -175.3
---------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Cash and cash equivalents as of January 1 680.9 255.5
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents as of June 30 281.4 80.2
---------------------------------------------------------------------------------------------------------------------
In the second quarter of 2005, Converium refined its chart of accounts to enhance the presentation of the line items within its
financial statements. Certain reclassifications have been made to prior year amounts to conform to current year's presentation.
---------------------------------------------------------------------------------------------------------------------
Segments Three months ended Change Six months ended Change
(Unaudited) June 30, June 30,
In US$ million, unless noted 2005 2004 (%) 2005 2004 (%)
---------------------------------------------------------------------------------------------------------------------
Standard Property & Casualty Reinsurance
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Gross premiums written 47.9 284.5 -83.2 460.4 918.4 -49.9
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Net premiums written 43.3 255.7 -83.1 446.2 855.1 -47.8
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Net premiums earned 178.9 334.5 -46.5 420.9 706.5 -40.4
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Non-life loss ratio(14) 74.8% 74.2% +0.6pts 78.0% 71.7% +6.3pts
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Non-life underwriting expense ratio(15) 17.3% 22.8% -5.5pts 20.0% 21.2% -1.2pts
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Non-life administration expense 28.6% 6.6% +22.0pts 7.0% 4.2% +2.8pts
ratio(16)
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Non-life combined ratio(17) 120.7% 103.6% +17.1pts 105.0% 97.1% +7.9pts
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Total investment results(18) 30.8 28.8 +6.9 57.8 55.2 +4.7
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Segment income 32.5 22.0 +47.7 34.9 69.0 -49.4
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Retention ratio(19) 90.4% 89.9% +0.5pts 96.9% 93.1% +3.8pts
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Specialty Lines
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Gross premiums written 247.3 375.2 -34.1 401.8 723.0 -44.4
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Net premiums written 229.5 347.2 -33.9 384.9 670.6 -42.6
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Net premiums earned 327.3 300.3 +9.0 619.7 582.3 +6.4
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Non-life loss ratio(14) 72.7% 91.4% -18.7pts 82.4% 81.0% +1.4pts
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Non-life underwriting expense ratio(15) 21.8% 20.6% +1.2pts 21.8% 21.2% +0.6pts
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Non-life administration expense 5.1% 3.1% +2.0pts 7.4% 2.9% +4.5pts
ratio(16)
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Non-life combined ratio 99.6% 115.1% -15.5pts 111.6% 105.1% +6.5pts
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Total investment results(18) 34.9 36.3 -3.9 65.9 69.6 -5.3
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Segment income (loss) 41.3 -10.6 n.m. 11.7 37.4 -68.7
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Retention ratio(19) 92.8% 92.5% +0.3pts 95.8% 92.8% +3.0pts
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Life & Health Reinsurance
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Gross premiums written 59.3 70.6 -16.0 176.4 189.8 -7.1
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Net premiums written 55.7 57.2 -2.6 169.5 168.4 +0.7
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Net premiums earned 74.1 83.6 -11.4 155.2 151.3 +2.6
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Life & Health underwriting expense 25.4% 25.5% -0.1pts 29.6% 22.0% +7.6pts
ratio (20)
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Life & Health administration expense 7.4% 7.7% -0.3pts 4.8% 4.4% +0.4pts
ratio(21)
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Total investment results(18) 6.5 5.2 +25.0 12.5 9.9 +26.3
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Segment income 0.3 1.9 -84.2 6.5 3.4 +91.2
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Technical result 1.5 4.1 -63.4 8.1 5.4 +50.0
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Retention ratio(19) 93.9% 81.0% +12.9pts 96.1% 88.7% +7.4pts
---------------------------------------------------------------------------------------------------------------------
(14) Non-life loss ratio is defined as losses and loss adjustment expenses divided by net premiums earned.
(15) Non-life underwriting expense ratio is defined as underwriting acquisition costs divided by net premiums
earned.
(16) Non-life administration expense ratio is defined as other operating and administration expenses divided by
net premiums written.
(17) Non-life combined ratio is defined as non-life loss ratio (to premiums earned) plus non-life underwriting
expense ratio (to premiums earned) plus non-life administration expense ratio (to premiums written).
(18) Total investment results are defined as net investment income plus net realized capital gains (losses).
(19) Retention ratio is defined as net premiums written divided by gross premiums written.
(20) Life & Health underwriting expense ratio is defined as underwriting expenses divided by net premiums earned.
(21) Life & Health administration expense ratio is defined as other operating and administration expenses
divided by net premiums written.
----------------------------------------------------------------------------------------------------------------------
Segments Three months ended Change Six months ended Change
(Unaudited) June 30, June 30,
In US$ million, unless noted 2005 2004 (%) 2005 2004 (%)
----------------------------------------------------------------------------------------------------------------------
Run-Off
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Gross premiums written 7.5 297.3 -97.5 40.9 580.0 -92.9
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Net premiums written 2.4 288.7 -99.2 35.2 553.3 -93.6
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Net premiums earned 32.5 291.5 -88.9 105.8 562.8 -81.2
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Total investment results 14.6 18.9 -22.8 32.1 36.3 -11.6
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Segment income (loss) 6.9 -289.6 n.m. 2.3 -284.2 n.m.
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Corporate Center
----------------------------------------------------------------------------------------------------------------------
Other operating and administration -11.8 -7.4 59.5 -19.0 -17.1 11.1
expenses
----------------------------------------------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CONVERIUM HOLDING AG
By: /s/ Terry Clarke
Name: Terry Clarke
Title: CEO
By: /s/ Christian Felderer
Name: Christian Felderer
Title: General Legal Counsel
Date: August 12, 2005