Converium Quarterly Net Down 11 Percent

By Lisa S. Howard, International Editor

NU Online News Service, April 29, 12:09 p.m. EDT,London?Converium Holding Ltd. reported that first-quarternet income fell 11.1 percent to $25.5 million, driven down in partby its poorly performing life insurance unit.

Net income was reduced by $3.2 compared with last year'sfirst-quarter profit of $28.7 million.

The company's operating income for the quarter ended March 31came to $26.4 million, a 32.5 percent decrease from the $39.1million reported for the same period last year. Earnings per sharewere 64 cents, an 11.1 percent decrease from the 72 cents reportedlast year.

Converium reported gross premiums written of $1.2 billion forthe first quarter, a 34.3 percent increase over the $941.2 millionreported for the first quarter 2002.

Net premiums written during the quarter were nearly $1.2billion, a 31.8 percent increase over the $898.9 million reportedduring the first quarter last year.

First-quarter non-life combined ratio came to 98.3 compared with102.4 reported in the same period of 2002.

Converium's first-quarter results were shaped by the continuingstrong performance in non-life underwriting, the disappointingresult of Converium Life, and current conditions in capitalmarkets, particularly the highly volatile global equity markets,said the Zug, Switzerland-based company in a statement.

While no material net developments had occurred for prior years'reserves on the non-life side, Converium Life's reserves wereincreased by $12.5 million due to guaranteed minimum death benefitcontracts.

In addition, the company said that Converium Life had adversedevelopment of $3.7 million on certain U.S. special risk business,which all acted to bring a segment loss of $17.3 million during thefirst quarter 2003.

Conditions in capital markets and low interest rates resulted infirst-quarter "impairments of $15.8 million, and a reduction of theaverage annualized total investment income yield (pre-tax) by 2.5percentage points to 2.9 percent," Converium said.