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 February, 2006
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
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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 - February 16, 2006 - Converium reports stable premiums from
renewal season.
During the January 2006 renewals Converium wrote and bound an estimated non-life
premium volume of around US$ 1.13 billion, which represents a decline of less
than 3% (at constant foreign exchange rates). Converium is very satisfied with
the renewals. The Company's franchise has remained resilient and robust, despite
the challenges presented by its current financial strength ratings. In addition,
Converium observed an increasing trend of clients retaining more risk and
shifting to non-proportional covers. This resulted in lower overall reinsurance
market volume. An additional US$ 410 million of Converium's non-life premium
volume will be up for renewal later in 2006. Including life & health business
the Company expects total gross premiums written for 2006 of US$ 1.8 to 1.9
billion.
Inga Beale, Converium's new CEO, said: "I am very pleased with this year's
renewals. Our underwriting professionals have again done a superb job in
maintaining the Converium franchise, in a general market environment which was
less favorable than many of us would have expected immediately after the major
US hurricanes struck last year."
Inga Beale continued: "Clients and brokers continue to support Converium as a
viable alternative in the global reinsurance markets. Their loyalty, in
conjunction with our strong capital base and the acknowledged capabilities of
our staff, make me confident that we can complete our rebound in due course."
Satisfactory non-life renewals
In January, Converium wrote and bound non-life contracts of US$ 1.13 billion,
reflecting more than 97% of the business which was up for renewal (at constant
foreign exchange rates as at December 31, 2005). The slight decline in overall
renewed business reflects the trend among many clients to retain more risk, i.e.
reduce their cessions to reinsurers, as their capital base continues to
strengthen. In addition, an increasing number of clients restructured their
reinsurance programs in favor of non-proportional, rather than proportional
coverage, reducing the premium volume available to reinsurers. Converium managed
to offset this decrease in renewed business with premium growth of US$ 78
million as a result of rate or share increases and new business of US$ 116
million. Non-life business worth US$ 410 million will be up for renewal later in
2006.
Growth in marine, motor and property business; decline in more rating-sensitive
areas
Converium's Standard Property & Casualty Reinsurance segment wrote and bound US$
625 million of business, an increase of almost 6%. The Company's Specialty Lines
segment recorded a renewal volume of US$ 504 million, a reduction of 12%.
In the marine, motor and property lines of business, Converium's renewed
business increased by about 9%, reflecting strong relationships with clients and
intermediaries as well as the diminished impact of the Company's current
financial strength ratings. In more rating-sensitive lines of business such as
credit & surety, general liability and professional liability, Converium
recorded a decline in renewed business of 22%, 17% and 27%, respectively,
primarily due to the cancellation of a small number of large-volume contracts.
These movements were in line with the Company's expectations.
Significant expansion in Asia-Pacific, Eastern Europe and the Middle East;
slight decline in Western European markets
In its Western European markets Converium's written and bound premium declined
by around 4%, largely reflecting the restructuring of reinsurance programs
towards non-proportional covers as well as Converium's decision not to renew
business which did not meet its profitability targets. However, the Company
recorded significant business growth, averaging more than 30%, in Asia-Pacific,
Eastern Europe and the Middle East. The Company's growth in these areas is
evidence of the robustness of its long-standing client and broker relationships
as well as successful new business development. Converium's renewed premium
volume in North America, written out of Europe, declined by approximately 32% as
a result of the cancellation of liability business. Renewals in the property and
property catastrophe lines of business, however, were in line with expectations
and benefited from a significant market hardening in catastrophe-afflicted
areas. Premium volume remained stable, with significantly improved rates, terms
and conditions.
Growth in brokered and non-proportional business
During the January renewals, business generated through brokers grew by
approximately 6% to around US$ 373 million. New business represents more than
20% of this total, testifying to Converium's successful efforts to broaden its
broker channels. However, direct business declined by around 6% to US$ 755
million, largely because Converium's renewed proportional book, which is
generally directly written, decreased by 6% to US$ 954 million. Non-proportional
business, which is predominantly written through brokers, grew significantly by
17% to US$ 175 million. As a result, the overall share of non-proportional
business increased from 13% to 16%, reflecting general market developments as
well as Converium's efforts to capture attractive opportunities in
non-proportional reinsurance.
Stable direct client base; increasing number of broker relationships
The January renewals saw Converium benefit from its established long-lasting
direct client relationships, access to top decision-makers and a local market
presence. These factors continue to underpin the Company's franchise and
partially offset the disadvantage arising from its current financial strength
ratings.
Converium is pleased that, despite the loss of a few larger client
relationships, it successfully preserved its non-life treaty direct client base:
Compared with July 2005, 98% of direct relationships were maintained. Converium
even succeeded in increasing the total non-life treaty relationships through
brokers by 8%, compared with July 2005. In conjunction with a solid base of
direct client relationships this is expected to support future growth in target
markets.
Continued adherence to profitability standards
In general, the January renewals were characterized by stable and attractive
rates, terms and conditions. Significant improvements of market conditions were
however limited to catastrophe-prone areas in North America and Continental
Europe. Heightened competition was noticeable especially in areas where clients
continued to retain more risk and to shift to non-proportional coverage. The
fact that Converium chose to decline approximately 6% of the business offered to
it in January 2006 demonstrates the Company's continued emphasis on the quality
of its earnings. Converium retains its adherence to the imperative of technical
underwriting.
Total gross premiums written for 2006 expected to reach US$ 1.8 to 1.9 billion
Following the January renewals, Converium reports total non-life expected
premium income of US$ 1.54 billion, which is inclusive of US$ 410 million in
non-life business up for renewal later this year. Including life & health
business and in light of the expected pattern of later non-life renewals,
Converium expects total gross premiums written for 2006 to reach US$ 1.8 to 1.9
billion. This figure also reflects a decline of approximately 8% due to foreign
exchange rate developments between December 31, 2004 and December 31, 2005: The
US dollar appreciated against most of the other currencies Converium writes
business in, which reduced the Company's reported premium volume by
approximately US$ 150 million.
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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 18 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.
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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 Company's internal review and related
restatement, 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; the impact of the restatement on our ratings and client relationships;
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 us
and the insurance industry as a result of the investigations being carried out
by the US Securities and Exchange Commission, New York's Attorney General and
other governmental authorities; 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
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/ Inga Beale
Name: Inga Beale
Title: CEO
By: /s/ Christian Felderer
Name: Christian Felderer
Title: General Legal Counsel
Date: February 24, 2006