Swiss-based Converium Holding Ltd. reported third quarter net income of $44.3 million on net premiums written of $887.4 million, beating analysts’ forecasts, and reversing the $5.6 million loss it reported during the same period last year.
Figures for the first nine months of 2003 show net income of $128.9 million. Converium is now ranked as the world’s 10th largest reinsurer. It reported $3.2221 billion in gross premiums written for the period, and improved its non-life combined ratio to 97.7 pervcent from 104.2 percent for the same period in 2002.
CEO Dirk Lohmann commented: “Converium continued to benefit from the reshuffling in the reinsurance industry. The strong performance of our non-life segments, Standard Property & Casualty Reinsurance and Specialty Lines, continued and reflects Converium’s strong global franchise and the disciplined execution of our strategy that allow us to benefit from the current attractive market conditions.”
He also pointed out that the company had further strengthened its reserves during the period by $14.3 million. “In addition we have secured the ability to call upon additional reinsurance protection of up to US$ 75.0 million in excess of the newly strengthened carried reserve levels as at September 30, 2003,” Lohmann indicated. “We presently believe that this additional reinsurance protection provides adequate coverage to protect Converium against any significant movement in the key variables and assumptions within our existing models.”
He added that “the strong performance we continued to experience in Standard Property & Casualty Reinsurance as well as in Specialty Lines reflects Converium’s global franchise as well as our strong distribution, both direct and via broker. Today, our portfolio is well diversified by lines of business, globally balanced by regions, and well spread between short-, mid-, and long-tail business. The disciplined execution of our strategy resulted in substantial cash flows that drove the strong growth of total invested assets, the corresponding investment results will be a key value driver for future earnings.”
CFO Martin Kauer, noted: “Notwithstanding the interest rate increase, the conservative positioning of our bond portfolio in terms of duration and credit quality resulted in a relatively moderate decrease of the unrealized capital gains on the fixed income securities; however, this decrease has been compensated by the positive impact of the continued rebound of the equity markets, and overall we maintained the aggregate net unrealized gains positions at the level that was reported at the end of June 2003. Since year-end 2002, Converium’s shareholders’ equity increased by 11.6%, or by more than 13.0% including paid dividends, to US$ 1,940.0 million as per September 30, 2003. Our claims supporting capital of US$ 2,330.4 million enables us to continue to benefit from today’s hard reinsurance market.”
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