ZUG, Switzerland, April 29, 2004 (PRIMEZONE) -- Converium Holding AG:
Converium's best quarter operating income so far Net income of US$ 65.7 million -- Return on equity of 12.6% First Quarter 2004 highlights: Operating income: US$ 77.2 million (plus 192.4%) Net income: US$ 65.7 million (plus 157.6%) Return on equity: 12.6% (plus 6.7 percentage points) Gross premiums written: US$ 1.4 billion (plus 9.5%) Non-life combined ratio: 96.4% (improved by 1.7 percentage points) Total investment income yield: 4.1% (improved by 1.2 percentage points) Shareholders' equity: US$ 2.2 billion (plus 4.8%) Cash flows: US$ 228.6 million (plus 9.7%)
Dirk Lohmann, Converium's Chief Executive Officer, stated: "The first quarter operating income is the best Converium has thus far reported in its history. I am encouraged by the continuing improvement in the combined ratio as well as the growth in our investment results, which are developing as we had anticipated."
Dirk Lohmann further commented: "We are carefully observing the consolidation process unfolding in the reinsurance industry. Depending on opportunity, Converium is ready to play an active role in this process - in a way that is accretive to our shareholders and without assuming material legacy issues."
Martin Kauer, Chief Financial Officer, said: "Converium's financial flexibility is intact. Quarter after quarter, we keep strengthening Converium's shareholders' equity and claims supporting capital. The recent approval by our shareholders at our Annual General Meeting of April 27, 2004 to create an authorized capital and a conditional share capital serves to further enhance Converium's financial flexibility, which will allow us to capitalize on opportunities as they arise."
Financial highlights 1Q2004 Income statement, Return on equity, Cash flows
Three months ended March 31, Change
In US$ million, unless noted 2004 2003 (%)
Gross premiums written 1,383.6 1,263.8 +9.5%
Net premiums written 1,298.6 1,184.6 +9.6%
Net premiums earned 993.0 884.3 +12.3%
Non-life loss ratio 72.0% 73.1% -1.1pts
Non-life underwriting expense
ratio 21.2% 21.6% -0.4pts
Non-life administration expense
ratio(1) 3.2% 3.4% -0.2pts
Non-life combined ratio(2) 96.4% 98.1% -1.7pts
Life & Health technical
result(3) 4.9 -8.9 n.m.
Total investment results(4) 81.1 47.9 +69.3%
Total investment income
yield(5) 4.1% 2.9% +1.2pts
Total investment return(6) 7.3% 3.1% +4.2pts
Operating income(7) 77.2 26.4 +192.4%
Net income 65.7 25.5 +157.6%
Earnings per share (US$) 1.65 0.64 +157.8%
Return on equity(8) 12.6% 5.9% +6.7pts
Cash flows 228.6 208.3 +9.7%
Financial highlights
Balance sheet March 31, Dec. 31, Change
In US$ million, unless noted 2004 2003 (%)
Total invested assets plus cash 8,002.6 7,809.5 +2.5%
Claims supporting capital(9) 2,573.7 2,473.9 +4.0%
Shareholders' equity 2,183.0 2,083.3 +4.8%
Book value per share (US$) 54.80 52.38 +4.6%
Book value per share (CHF) 69.42 65.21 +6.5%
Continuing strong performance of Converium's non-life business
Positive contribution by Life & Health Reinsurance segment
Investment results in-line with benchmarks
For the three months ended March 31, 2004 Converium reported an operating income7 of US$ 77.2 million, an increase of 192.4% over the prior year's period. Net income for the first quarter of 2004 was US$ 65.7 million (plus 157.6%), earnings per share were US$ 1.65 (plus 157.8%), resulting in a return on equity8 of 12.6%, an improvement of 6.7 percentage points compared to the same period of the previous year.
The increase in gross premiums written, net premiums written, and net premiums earned in the first quarter of 2004 reflected the strict underwriting discipline and cycle management applied by Converium as well as diverse developments of rate dynamics in different areas of the reinsurance market place. In the first quarter of 2004, Converium's Standard Property & Casualty Reinsurance segment increased gross premiums written and net premiums written by 24.2% to US$ 723.2 million, respectively by 24.5% to US$ 671.6 million, and net premiums earned by 14.8% to US$ 443.4 million; this growth was driven by all lines of business except the Property line, where we experienced a tightening of terms and conditions. Converium's Specialty Lines segment reduced its business volume: gross premiums written decreased by 6.3% to US$ 503.7 million, net premiums written decreased by 8.4% to US$ 478.3 million; net premiums earned increased by 9.1% to US$ 445.3 million, reflecting this segment's strong growth in underwriting years 2003 and prior. However, due to diverse rate dynamics some lines grew substantially (e.g. Agribusiness line: plus 100.0% to US$ 26.6 million) while others materially decreased (e.g. Aviation & Space line: minus 14.4% to US$ 96.7 million).
The non-life combined ratio2 improved by 1.7 percentage points to 96.4%. In the first quarter of 2004, Converium reported net strengthenings of prior years' reserves of US$ 43.0 million (0.8% of Converium's non-life net reserves as per March 31, 2004), US$ 10.1 million in the Standard Property & Casualty Reinsurance segment and US$ 32.9 million for the Specialty Lines segment, compared to net strengthenings of US$ 11.3 million for the same period of 2003.
Converium's Life & Health Reinsurance segment reported a segment income of US$ 4.9 million, an improvement of US$ 15.2 million.
As a consequence of Converium properly executing its strategy to grow in longer-tail lines, total invested assets continued to grow, and the investment results' contribution to net income increased. Converium's investment results were in line with the respective benchmarks. The developments of capital markets led to an increase in net unrealized gains on investments of US$ 32.1 million, net of taxes.
Converium reported an effective tax rate(10) of 24.0% for the first three months of 2004 compared to a tax benefit rate of 40.9% for the same period in 2003, when the effective tax rate10 was reduced by a change in expected tax rates in Switzerland.
Cash flows increased by 9.7% to US$ 228.6 million, reflecting the strict underwriting discipline applied by Converium in the prevailing market conditions. Based on stable exchange rates, gross premiums written increased by 2.5%, net premiums written by 2.3% and net premiums earned by 5.9%. The non-life combined ratio2 was 96.6%.
Annual General Meeting 2004
At the Annual General Meeting on April 27, 2004 in Zug, Switzerland, the shareholders of Converium Holding Ltd approved all proposals of the Board of Directors, in particular:
-- The annual report, the annual financial statements and the
consolidated annual financial statements (consolidated
statements) for 2003, and acknowledged the reports of the
auditors and group auditors;
-- The allocation of available earnings and declaration of
dividend that resulted in a gross dividend of CHF 1.50 per
registered share, to be paid out from April 29, 2004;
-- Release of the members of the Board of Directors and of the
management from liability;
-- The re-election of the Board members Peter C. Colombo, Terry G.
Clarke, Jurgen Forterer, and Derrell J. Hendrix;
-- Amendments to the Articles of Incorporation:
-- Deletion of Art. 3a of the Articles of Incorporation (contingent
share capital for the participation of employees) and
replacement by a new Art. 3a (contingent share capital for
option rights and/or conversion rights of up to CHF 40
million);
-- The creation of an authorized share capital of up to CHF
40 million in Art. 3b (authorized share capital); as well
as
-- The re-election of PricewaterhouseCoopers Ltd, Zurich, as auditors
and group auditors for a further term of one year.
Business Development
The following are comments on the development of Converium's three main business segments and the Corporate Center. Reference is made to the tables attached to this press release.
Standard Property & Casualty Reinsurance represented approximately 52% of total net premiums written in the first quarter of 2004. For the first quarter of 2004 Converium's Standard Property & Casualty Reinsurance segment reported a segment income of US$ 60.4 million, an increase of 23.0% (1Q2003: US$ 49.1 million).
In the first quarter 2004 gross premiums written increased by 24.2% to US$ 723.2 million, net premiums written increased by 24.5% to US$ 671.6 million, and net premiums earned increased by 14.8% to US$ 443.4 million. This growth was driven by the Motor lines of business (net premiums written: plus 38.4% to US$ 279.5 million) and General Third Party Liability (net premiums written: plus 46.5% to US$ 128.5 million), and partially offset by the Property line (net premiums written: minus 1.2% to US$ 241.5 million). This growth reflects the fact that Converium's distribution platform provides access to profitable business and that strict underwriting discipline and cycle management were applied. The Standard Property & Casualty Reinsurance segment's non-life combined ratio2 was 92.1% for the first quarter of 2004 (compared to 90.9% for the first quarter of 2003) reflecting the strong underlying profitability of this segment's book of business, particularly of the most recent underwriting years. Overall, the results of Converium's catastrophe business were well within the model-based expectations.
For the first quarter of 2004, the Standard Property & Casualty Reinsurance segment reported net strengthenings of prior years' reserves of US$ 10.1 million (0.6% of the Standard Property & Casualty Reinsurance segment's net reserves as per March 31, 2004) reflecting both the strict application of Converium's prudent reserving policy and a strengthening of the reserves for the Motor line of business, compared to a recognition of net positive developments of US$ 10.7 million for the same period of the previous year.
Based on stable exchange rates, gross premiums written increased by 16.2%, net premiums written by 16.2%, and net premiums earned by 8.3%; the non-life combined ratio2 was 92.4%.
Frank Schaar, Executive Vice President, Standard Property & Casualty Reinsurance, commented: "Converium's strong global distribution platform provides access to the business in the quantity and the quality we want to see. Our transparent pricing approach allows us to be selective in the business we accept while maintaining strong client relationships."
Frank Schaar further commented: "The April 1, 2004 renewal season that is driven by the Far East confirmed our expectations regarding the development of terms and conditions. While we experienced strong competition in the Property line of business, we continued to strictly apply Converium's profitability standards."
Specialty Lines represented approximately 37% of total net premiums written in the first quarter of 2004. For the first quarter 2004 Converium's Specialty Lines segment reported a segment income of US$ 38.6 million, an improvement of US$ 37.4 million (1Q2003: US$ 1.2 million).
In the first quarter 2004, gross premiums written decreased by 6.3% to US$ 503.7 million, and net premiums written decreased by 8.4% to US$ 478.3 million; net premiums earned increased by 9.1% to US$ 445.3 million. The strict underwriting discipline and cycle management applied by Converium reflected diverse developments of price dynamics in the different lines of business covered by the Specialty Lines segment: while net premiums written by the Professional Liability & Other Special Liability line increased by 13.8% to US$ 178.9 million, Engineering increased by 17.4% to US$ 42.6 million, Marine & Energy by 44.5% to US$ 36.7 million, and Agribusiness by 100.0% to US$ 26.6 million, net premiums written by the Aviation & Space line decreased by 14.4% to US$ 96.7 million, Workers' Compensation by 56.7% to US$ 53.6 million, and Credit & Surety by 18.9% to US$ 43.2 million. The Specialty Lines segment's non-life combined ratio2 was 100.7% for the first quarter of 2004 compared to 104.9% for the first quarter of 2003, an improvement of 4.2 percentage points, and reflected the strong performance of recent underwriting years, the strict application of Converium's prudent reserving policy, the continuing reserve volatility of old underwriting years, particularly in the Professional Liability & Other Special Liability line, and the longer-tail of the Specialty Lines segment book of business.
For the first quarter of 2004, the Specialty Lines segment reported net strengthenings of prior years' reserves of US$ 32.9 million (0.9% of the Specialty Lines segment's net reserves as per March 31, 2004) relating to the continuing volatility of old underwriting years, particularly in the Professional Liability & Other Special Liability line, compared to net strengthenings of US$ 22.0 million for the same period of the previous year.
Based on stable exchange rates, gross premiums written decreased by 12.3%, and net premiums written by 14.5%, while net premiums earned increased by 2.8%; the non-life combined ratio2 was 100.9%.
Benjamin Gentsch, Executive Vice President, Specialty Lines, said: "The premium development of the different lines of business of the Specialty Lines segment are clear evidence of the diverse price dynamics we are experiencing in the reinsurance market place as well as of the strict underwriting discipline and cycle management applied by Converium. We measure profitability by return on capital -- all contracts as well as all client relationships have to meet our strict performance standards."
Benjamin Gentsch further commented: "We will continue to develop core specialty business in which we can position ourselves clearly as a market leader and can effectively leverage our intellectual assets in risk analysis, structuring, product design, and risk modeling. The focus on specialty business is based upon the belief that Converium, thanks to its intellectual and structural assets, can benefit from significant market entry barriers that will allow for superior profit generation over the cycle."
Peter Boller, Chief Risk Officer, commented: "We expect that the reserving behavior of US cedents continues to be affected by the implementation of Sarbanes-Oxley; hence, the volatility of longer-tail risks is likely to continue for some time. As a consequence, we continue to further strengthen our reserves for older years to anticipate potential developments. On the other hand, we are satisfied with the sustainable and strong performance in the more recent underwriting years which are developing favorably."
Life & Health Reinsurance represented approximately 11% of total net premiums written in the first quarter of 2004. For the first quarter 2004 Converium's Life & Health Reinsurance segment reported a segment income of US$ 4.9 million, an improvement of US$ 15.2 million (1Q2003: segment loss of US$ 10.3 million).
In the first quarter 2004 gross premiums written increased by 9.0% to US$ 156.7 million, net premiums written increased by 21.3% to US$ 148.7 million, and net premiums earned by 16.0% to US$ 104.3 million. This increase was driven by strong growth in the line of business Life & Disability (net premiums written: plus 47.3% to US$ 75.1 million) and by the Accident & Health line (net premiums written: plus 2.8% to US$ 73.6 million). For the first quarter of 2004 the Life & Health Reinsurance segment reported a technical result3 of US$ 4.9 million, an improvement of US$ 13.8 million over the prior year when there was a US$ 12.5 million reserve strengthening for a closed block of Guaranteed Minimum Death Benefit business.
Based on stable exchange rates, gross premiums written increased by 2.1%, net premiums written by 13.2%, and net premiums earned by 9.5%; the technical result3 remained almost unchanged.
Christoph Ludemann, Executive Vice President, Life & Health Reinsurance, commented: "We are building our Life & Health Reinsurance operations step by step in order to further reduce the volatility of Converium's net income, because life and health reinsurance has a low correlation to property and casualty risk and can therefore improve risk diversification." The Corporate Center carries certain administration expenses such as the costs of the Board of Directors, the Global Executive Committee, and other global functions. In the first quarter 2004 other operating and administration expenses were US$ 9.6 million (plus 7.9%).
The company has made it a policy not to provide any quarterly or annual earnings guidance and it will not update any past outlook for full year earnings. It will however provide investors with perspectives on its value drivers, its strategic initiatives and those factors critical to understanding its business and operating environment.
Enquiries:
Michael Schiendorfer Media Relations Manager michael.schiendorfer@converium.com Phone: +41 (0) 1 639 96 57 Fax: +41 (0) 1 639 76 57
or
Zuzana Drozd Head of Investor Relations zuzana.drozd@converium.com Phone: +41 (0) 1 639 91 20 Fax: +41 (0) 1 639 71 20
About Converium
Converium is an independent leading global multi-line reinsurer known for its innovation, professionalism and service. Today Converium ranks among the top ten professional reinsurers and employs approximately 850 people in 23 offices around the globe. Converium is organized into three business segments: Standard Property & Casualty Reinsurance, Specialty Lines and Life & Health Reinsurance. Converium's net losses for the September 11, 2001 terrorist attacks in the United States are capped at US$ 289.2 million by its former parent, Zurich Financial Services. Converium has minimal A&E exposures. Converium has an "A" rating (stable outlook) both from Standard & Poor's and A.M. Best Company.
Important Disclaimer
This document contains forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. It contains forward-looking statements and information relating to the Company's financial condition, results of operations, business, strategy and plans, based on currently available information. These statements are often, but not always, made through the use of words or phrases such as "expects," "should continue," "believes," "anticipates," "estimates" and "intends". The specific forward-looking statements cover, among other matters, the improving reinsurance market, the expected losses related to the September 11, 2001 attack on the United States, the outcome of insurance regulatory reviews, the Company's operating results, the rating environment and the prospect for improving results. Such statements are inherently subject to certain risks and uncertainties. Actual future results and trends could differ materially from those set forth in such statements due to various factors. Such factors include general economic conditions, including in particular economic conditions; the frequency, severity and development of insured loss events arising out of catastrophes, as well as man-made disasters such as the September 11, 2001 attack in the United States; the ability to exclude and to reinsure the risk of loss from terrorism; fluctuations in interest rates; returns on and fluctuations in the value of fixed income investments, equity investments and properties; fluctuations in foreign currency exchange rates; rating agency actions; changes in laws and regulations and general competitive factors, and other risks and uncertainties, including those detailed in the Company's filings with the U.S. Securities and Exchange Commission and the SWX Swiss Exchange. The Company does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
Consolidated statements of income
(Unaudited) Three months ended March 31, Change
In US$ million, unless noted 2004 2003 (%)
Revenues Gross premiums written 1,383.6 1,263.8 +9.5%
Less ceded premiums written -85.0 -79.2 +7.3%
Net premiums written 1,298.6 1,184.6 +9.6%
Net change in unearned
premiums -305.6 -300.3 +1.8%
Net premiums earned 993.0 884.3 +12.3%
Net investment income 71.9 56.2 +27.9%
Net realized capital gains
(losses) 9.2 -8.3 n.m.
Other loss -0.1 -4.4 -97.7
Total revenues 1,074.0 927.8 +15.8%
Benefits, losses and expenses
Losses, loss adjustment
expenses and life benefits -720.9 -655.6 +10.0%
Underwriting acquisition
costs -207.9 -196.6 +5.7%
Other operating and administration
expenses -51.0 -48.9 +4.3%
Interest expense -7.8 -8.6 -9.3%
Total benefits, losses and
expenses -987.6 -909.7 +8.6%
Income before taxes 86.4 18.1 n.m.
Income tax (expense) benefit -20.7 7.4 n.m.
Net income 65.7 25.5 +157.6%
Basic earnings per share
(US$) 1.65 0.64 +157.8%
Diluted earnings per share
(US$) 1.62 0.63 +157.1%
Consolidated balance sheets March 31, Dec. 31,
In US$ million, unless noted 2004 2003
(unaudited)
Invested assets
Held-to-maturity securities:
Fixed maturities 536.4 500.4
Available-for-sale securities:
Fixed maturities 4,614.9 4,428.2
Equity securities 854.8 840.2
Other investments 155.6 173.5
Short-term investments 67.0 55.8
Total investments 6,228.7 5,998.1
Funds Withheld Asset 1,459.4 1,530.6
Total invested assets 7,688.1 7,528.7
Other assets Cash and cash equivalents 314.5 280.8
Premiums receivables:
Current 146.2 182.8
Accrued 2,186.9 1,825.5
Reinsurance assets:
Underwriting reserves 1,715.5 1,718.6
Insurance balances receivable, net 222.0 224.0
Funds held by reinsureds 1,708.4 1,374.0
Deferred policy acquisition costs 419.3 380.1
Deferred income taxes 337.4 345.1
Other assets 586.3 495.0
Total assets 15,324.6 14,354.6
Liabilities Losses and loss
adjustment expenses, gross 8,169.6 7,842.8
Unearned premiums, gross 1,751.9 1,467.4
Future life benefits, gross 492.5 483.5
Other reinsurance liabilities 1,246.0 1,087.3
Funds held under reinsurance contracts 533.9 529.8
Deferred income taxes 193.5 158.3
Accrued expenses and other liabilities 363.5 311.6
Debt 390.7 390.6
Total liabilities 13,141.6 12,271.3
Equity Common stock 253.0 253.0
Additional paid-in capital 1,325.0 1,326.7
Treasury stock -10.1 -10.0
Unearned stock compensation -5.2 -6.1
Accumulated other comprehensive income:
Net unrealized gains on investments,
net of taxes 177.4 145.3
Cumulative translation adjustments 118.9 116.1
Total accumulated other comprehensive
income 296.3 261.4
Retained earnings 324.0 258.3
Total equity 2,183.0 2,083.3
Total liabilities and equity 15,324.6 14,354.6
Consolidated statements of cash flows
(Unaudited) March 31,
In US$ million, unless noted 2004 2003
Net income 65.7 25.5
Net realized capital (gains) losses
on investments -9.2 8.3
Amortization of premium/discount 14.1 11.0
Depreciation and amortization 5.2 6.2
Total adjustments 10.1 25.5
Deferred policy acquisition costs -40.5 -57.7
Reinsurance assets 12.0 9.6
Funds held by reinsureds -333.0 -18.7
Funds Withheld Asset 77.7 23.1
Premiums receivables -314.7 -254.8
Unearned premiums, gross 278.4 296.1
Losses and loss adjustment expenses,
gross 307.5 181.0
Future life benefits, gross 12.9 67.1
Funds held under reinsurance contracts -1.3 -0.1
Other reinsurance liabilities 165.4 -77.9
Income taxes, net 21.0 -4.3
Net change in all other operational assets
and liabilities -32.6 -6.1
Total changes in operational assets and
liabilities 152.8 157.3
Cash provided by operating activities 228.6 208.3
Purchases of fixed maturities held-to-
maturity -39.6 --
Proceeds from sales and maturities of
fixed maturities available-for-sale 736.1 812.2
Purchases of fixed maturities available-
for-sale -838.3 -1,128.1
Cash flows from investing activities
(fixed maturities) -141.8 -315.9
Proceeds from sales of equity securities 116.4 10.3
Purchases of equity securities -156.5 -23.2
Cash flows from investing activities
(equity securities) -40.1 -12.9
Net (increase) decrease in short-term
investments -10.5 162.6
Proceeds from sales of other assets -- 3.7
Purchases of other assets -9.3 -52.1
Cash flows from investing activities
(other) -19.8 114.2
Net cash used in investing activities -201.7 -214.6
Net purchases of common shares -2.5 -4.2
Net cash used in financing activities -2.5 -4.2
Effect of exchange rate changes on cash
and cash equivalents 9.3 1.6
Change in cash and cash equivalents 33.7 -8.9
Cash and cash equivalents as of January 1 280.8 361.5
Cash and cash equivalents as of March 31 314.5 352.6
Segments Three months ended March 31, Change
(Unaudited)
In US$ million, unless noted 2004 2003 (%)
Standard Property & Casualty
Reinsurance
Gross premiums written 723.2 582.5 +24.2%
Net premiums written 671.6 539.6 +24.5%
Net premiums earned 443.4 386.1 +14.8%
Non-life loss ratio(11) 67.9% 66.6% +1.3pts
Non-life underwriting
expense ratio(12) 21.0% 20.9% +0.1pts
Non-life administration expense
ratio(13) 3.2% 3.4% -0.2pts
Non-life combined ratio2 92.1% 90.9% +1.2pts
Total investment results4 32.7 19.2 +70.3%
Segment income 60.4 49.1 +23.0%
Retention ratio(14) 92.9% 92.6% +0.3pts
Specialty Lines
Gross premiums written 503.7 537.6 -6.3%
Net premiums written 478.3 522.4 -8.4%
Net premiums earned 445.3 408.3 +9.1%
Non-life loss ratio11 76.1% 79.2% -3.1pts
Non-life underwriting
expense ratio12 21.4% 22.3% -0.9pts
Non-life administration
expense ratio13 3.2% 3.4% -0.2pts
Non-life combined ratio2 100.7% 104.9% -4.2pts
Total investment results4 42.4 25.1 +68.9%
Segment income 38.6 1.2 n.m.
Retention ratio14 95.0% 97.2% -2.2pts
Life & Health Reinsurance
Gross premiums written 156.7 143.7 +9.0%
Net premiums written 148.7 122.6 +21.3%
Net premiums earned 104.3 89.9 +16.0%
Underwriting expense
ratio Life & Health(15) 19.0% 27.7% -8.7pts
Administration expense
ratio Life & Health(16) 3.2% 3.3% -0.1pts
Total investment results4 6.0 3.6 +66.7%
Segment income (loss) 4.9 -10.3 n.m.
Retention ratio14 94.9% 85.3% +9.6pts
Corporate Center Operating and
administration expenses -9.6 -8.9 +7.9%
(1) The non-life administration expense ratio is lower in the first quarter due to the cyclical nature of the premiums written.
(2) Non-life combined ratio is defined as non-life loss ratio (to premiums earned) plus non-life underwriting expense ratio (to premiums earned) plus non-life administration expense ratio (to premiums written).
(3) Life & Health technical result is defined as net premiums earned minus losses, loss adjustment expenses and life benefits minus underwriting acquisition costs plus technical interests.
(4) Total investment results are defined as net investment income plus net realized capital gains (losses).
(5) Total investment income yield is defined as net investment income plus net realized capital gains (losses) divided by average total invested assets (including cash and cash equivalents), pre-tax and annualized.
(6) Total investment return is defined as net investment income plus net realized capital gains (losses) plus change in net unrealized capital gains (losses) divided by average total invested assets (including cash and cash equivalents), pre-tax and annualized.
(7) Operating income is defined as pre-tax income or loss excluding pre-tax net realized capital gains or losses.
(8) Return on equity is defined as net income (after-tax) divided by shareholders' equity at the beginning of the period, annualized.
(9) Claims supporting capital is defined as total equity plus debt.
(10) Effective tax rate is defined as income tax (expense) benefit divided by income before taxes times minus one.
(11) Non-life loss ratio is defined as losses and loss adjustment expenses divided by net premiums earned.
(12) Non-life underwriting expense ratio is defined as underwriting acquisition costs divided by net premiums earned.
(13) Non-life administration expense ratio is defined as other operating and administration expenses divided by net premiums written.
(14) Retention ratio is defined as net premiums written divided by gross premiums written.
(15) Life & Health underwriting expense ratio is defined as underwriting expenses divided by net premiums earned.
(16) Life & Health administration expense ratio is defined as other operating and administration expenses divided by net premiums written.
Here you can find the full press release as pdf: