During the January 2006 renewals Converium said it wrote and bound an estimated non-life premium volume of about $1.13 billion–representing a decline of less than 3 percent (at constant foreign exchange rates).

The Zug, Switzerland-based Converium said it is satisfied with the renewals. The company said in a statement that its 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 nonproportional covers. This resulted in lower overall reinsurance market volume. An additional $410 million of non-life premium volume will be up for renewal later in 2006, according to the reinsurer. This includes life & health business. The company expects total gross premiums written for 2006 of $1.8-to-$1.9 billion.

Inga Beale, Converium's new CEO, said she is “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 U.S. hurricanes struck last year.”

Ms. 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.”

Converium said that in January it wrote and bound non-life contracts of $1.13 billion, reflecting more than 97 percent of the business which was up for renewal (at constant foreign exchange rates as of Dec. 31, 2005).

The slight decline in overall renewed business reflects the trend among many clients to retain more risk, or reduce their cessions to reinsurers, as their capital base continues to strengthen, according to Converium. In addition, an increasing number of clients restructured their reinsurance programs in favor of nonproportional, rather than proportional coverage, reducing the premium volume available to reinsurers.

Converium said it offset this decrease in renewed business with premium growth of $78 million as a result of rate or share increases and new business of $116 million. Non-life business worth $410 million will be up for renewal later this year.

The company cited a growth in marine, motor and property business, and a decline in more rating-sensitive areas. Standard p-c reinsurance segments wrote and bound $625 million of business, an increase of almost 6 percent. The company's specialty lines segment recorded a renewal volume of $504 million, a reduction of 12 percent.

In the marine, motor and property lines of business, Converium's renewed business increased by about 9 percent, 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 percent, 17 percent and 27 percent, respectively, primarily due to the cancellation of a small number of large-volume contracts. These movements were in line with the company's expectations.

In its Western European markets Converium said its written and bound premium declined by around 4 percent, largely reflecting the restructuring of reinsurance programs toward nonproportional 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 percent, in Asia-Pacific, Eastern Europe and the Middle East.

Converium's renewed premium volume in North America, written out of Europe, declined by approximately 32 percent as a result of the cancellation of liability business. Renewals in the p-c 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.

Special Reports /

Converium Satisfied With Stable Renewal Season

Related Stories

Recommended For You