Fitch Affirms Converium Ratings; Off Rating Watch Negative

March 21, 2006

Fitch Ratings announced that it has affirmed Swiss-based Converium AG’s Insurer Financial Strength “BBB-” rating and has removed it from Rating Watch Negative (RWN) on which it had been placed since November 4, 2005. Fitch also affirmed other ratings within the Converium group and withdrew them from RWN. The outlook on all of the ratings is now stable.

“The removal of Converium’s ratings from RWN follows the publication of 2005 year-end results, restated financial information for the periods 1998 to 2004, and for each quarter from 31 March 2003 to June 2005,” said Fitch. “The restatement resulted from an internal review of the way that the group had accounted for certain complex finite reinsurance transactions. Fitch was concerned that the restatement of Converium’s accounts could potentially result in deterioration in the group’s overall financial profile and damage its franchise in advance of the January 2006 renewal season.”

Chris Waterman, Senior Director, Fitch’s Insurance group noted: “The restatement exercise had not resulted in significant heightened volatility in Converium’s operating profile. In addition, the group’s franchise as a standalone going concern remains viable following successful completion of the January 2006 renewal season in which premium volumes were stable relative to those underwritten during the same period in 2005.”

Fitch also said that while it “views these developments positively, it remains concerned that regulators have historically focused their attention on companies that have restated their accounts and, as such, Fitch considers that Converium could potentially face an increased risk of fines and/or shareholder actions.

“Converium’s ratings reflect the group’s strong levels of capitalization, recent stabilization of loss reserve development, return to profitability in 2005 and conservative investment strategy. Offsetting rating factors include the group’s poor historical operating performance, relatively high expense base and ongoing class action lawsuits.

“Upside potential to Converium’s ratings would result from a continued trend in profitable operating performance, sustained strong capitalization, further stability in loss reserve development and successful run-off or sale of Converium Reinsurance North America. Downside risk would stem from material adverse development of loss reserves, negative developments from the finite reinsurance review/investigations and significant compensatory damage awards from class action lawsuits.”

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