Converium Re CFO Kauer To Leave

By Caroline McDonald

NU Online News Service, Nov. 9, 11:54 a.m.EST?Zug, Switzerland-based reinsurer Converium hasannounced that Martin A. Kauer, group chief financial officer,plans to leave the company early next year.[@@]

"The board of directors has taken note of Mr. Kauer's intendeddeparture and thanks him for his efforts for Converium and for hisensuring continuity of management during the period of transition,"The reinsurer said in a Friday press release. "This will allow theboard to find a suitable successor."

Converium made headlines when it was downgraded to a "triple-B"from "A-minus" by Standard & Poor's on Sept. 10, just prior tothe reinsurance Rendez-Vous de Septembre in Monte Carlo?an annualgathering of insurers and reinsurers where reinsurers discussfuture business with clients.

The company said then that it was putting its United Statesoperations in runoff.

S&P first lowered Converium's rating to "A-minus" in Julywhen the company revealed that it would need to boost reserves oncasualty business in the United States by nearly $400 million.

A.M. Best and Moody's also announced downgrades, with the Bestrating falling to "B-double-plus" from "A-minus" on Sept. 1, andthe Moody's rating dropping to Baa1 from A2 on Aug. 31. Fitchratings in London downgraded the reinsurer to "double-B-plus" from"A-minus."

On Sept. 29, however, A.M. Best Co. announced it had affirmedthe financial strength rating of "B-double-plus" and upgraded theissuer credit rating to "triple-B-plus" from "triple-B" ofConverium AG (Switzerland) and certain rated subsidiaries.

The under review status has been removed and the outlook isstable for all ratings affected, according to A.M. Best.

Jose Sanchez-Crespo, general manager of the A.M. Best Londonoffice, told National Underwriter that the upgrade was inresponse to measures taken by Converium, including a significantreduction of premium of one of the companies in North America,which the company originally intended to continue trading.

"They will write a small proportion directly from Switzerland,"he said. "Obviously, it will not be the same volume they have beendoing so the premium risk will be significantly reduced."

A.M. Best said in September that the positive rating actionfollows shareholders' approval of Converium's fully underwrittenCHF 533 million (US $420 million) rights issue and reflects A.M.Best's evaluation of the company's latest business plan, whichincorporates an estimated reduction in net premium written of morethan 50 percent in 2005. An offsetting factor in the rating iscontinuing risk from the company's reserves.