Converium Holding AG: Net Income of US$ 68.7 Million for the Full Year 2005


ZUG, Switzerland, March 15, 2006 (PRIMEZONE) -- In the financial year 2005 Converium (NYSE:CHR) has produced net income of US$ 68.7 million. This result primarily reflects:



 -- a satisfactory underwriting performance of Converium's ongoing 
    operations, which produced total segments' income of US$ 173.8 
    million;

 -- a net pre-tax impact of US$ 164.8 million from the following 
    major natural catastrophes: winter storm Erwin, the Continental 
    European floods and hurricanes Katrina, Rita and Wilma;

 -- a net positive impact of prior accident years on the technical 
    result of US$ 12.1 million, mainly due to the continuing 
    stabilization of Converium's prior accident years' loss reserves;

 -- the successful progression of the Converium Reinsurance (North 
    America) Inc. (CRNA) run-off and commutation strategy, which 
    resulted in a total reduction of net liabilities of US$ 653.1 
    million to approximately US$ 1.1 billion, and a net income 
    benefit from commutations of US$ 60.5 million.

 -- total operating and administration expenses of US$ 210.8 million, 
    a decline of 4.1% compared with 2004, despite significant 
    additional expenses arising from the internal review and 
    restatement, as well as Converium's operational restructuring; and

 -- a total investment result of US$ 350.4 million, or an average 
    total investment income yield of 4.4%, which is equal to 2004.

For the fourth quarter of 2005 Converium reports net income of US$ 34.2 million, largely driven by:



 -- a satisfactory underwriting performance of Converium's ongoing 
    operations, which produced total segments' income of US$ 63.2 
    million;

 -- hurricane Wilma, which caused net pre-tax losses for the entire 
    Company of approximately US$ 46.5 million;

 -- operating and administration expenses of US$ 63.2 million, 
    representing an increase of US$ 22.9 million compared with the 
    third quarter of 2005, primarily due to expenses associated 
    with the internal review and the restatement;

 -- successful commutations of CRNA liabilities resulting in a net 
    income benefit of US$ 22.0 million; and

 -- a total investment result of US$ 111.6 million or an average 
    annualized total investment income yield of 6.0%, including net 
    realized capital gains of US$ 33.6 million, primarily from the 
    sale of equity securities.

Based on Converium's financial performance in 2005 and the Company's strong capitalization, the Board of Directors proposes a gross cash dividend of CHF 0.10 per share to the Annual General Meeting of April 11, 2006.

Inga Beale, Chief Executive Officer, commented: "The unprecedented string of natural catastrophes experienced in 2005 has served as a reminder that we are in the business of risk. Nevertheless I am encouraged by Converium's financial results for 2005. Based on the underlying quality of our ongoing business, the stability of prior accident years' loss reserves and the progress in running-off and commuting CRNA liabilities, we have been able to absorb significant catastrophe losses and to generate net income of close to US$ 70 million."

Inga Beale continued: "After my first six weeks at the helm of Converium I am convinced that our franchise is stable, our business strategy appropriate and our underwriting expertise top class. I therefore strongly believe that 2006 will see further progress towards Converium's sustainable recovery."

Financial results of the fourth quarter and the full year 2005

Key metrics (in US$, unless noted)

Three months Full year 2005 ended December 31, 2005



                                       Three months   Full year 2005
                                      ended December
                                         31, 2005

  Gross premiums written               375.4 million        1,994.3
                                                            million
  Income before tax                     38.8 million   84.3 million
  Pre-tax operating income               2.8 million U100.8 million
  Ongoing total segment income(A)       63.2 million  173.8 million
  Impact from winter storm Erwin,
  Continental European floods and       60.4 million  164.8 million
  hurricanes Katrina, Rita and Wilma
  Net income                            34.2 million   68.7 million
  Ongoing non-life combined ratio(B)          110.8%         107.2%
  Impact on combined ratio from             14.9 pts        7.7 pts
  winter storm Erwin, European floods
  and hurricanes Katrina, Rita and
  Wilma
  Adjusted ongoing non-life combined
  ratio (excluding Erwin, floods and           95.9%          99.5%
  hurricanes)
  Average annualized total investment           6.0%           4.4%
  income yield (pre-tax)
  Shareholders' equity                                      1,653.4
                                                            million

For the full year 2005, Converium reported pre-tax operating income of US$ 100.8 million and net income of US$ 68.7 million. This result reflects a negative impact of US$ 164.8 million from the following major natural catastrophes: winter storm Erwin, the Continental European floods and the hurricanes Katrina, Rita and Wilma. However, the financial performance benefited from a net positive impact of prior accident years on the technical result of US$ 12.1 million resulting from net positive development of prior accident years' loss reserves of US$ 75.5 million, offset by reductions in premiums, related losses and acquisition costs of net US$ 63.4 million. Additional positive effects were recorded due to the successful progression of the CRNA run-off and the effective execution of its commutation strategy. Converium also reported a satisfactory underwriting performance of its ongoing operations, which produced total segment income of US$ 173.8 million. The ongoing non-life combined ratio was 107.2%. Finally, the full year performance benefited from a decline in total operating and administration expenses by 4.1% to US$ 210.8 million in 2005 - despite significant additional legal, audit and consulting expenses, mainly arising from the internal review and restatement of prior years' financial information as well as the Company's operational restructuring.

In 2005, gross premiums written decreased by 49.9%, net premiums written by 51.3% and net premiums earned by 38.6%. This decline in gross and net premiums written reflects the reduction in overall business volume due to the ratings downgrades in 2004 and the placement of CRNA into orderly run-off. Overall, full-year gross premiums written are closely in line with the previously stated volume expectation of approximately US$ 2 billion.

Based on the developments of 2004, Converium placed its North American reinsurance operations into run-off and started to implement and execute a vigorous commutation strategy. In 2005, CRNA commuted net liabilities of US$ 372.9 million. As a result, total net liabilities of CRNA decreased by 36.9% to approximately US$ 1.1 billion. Based on the commutations a net income benefit of US$ 60.5 million was recorded.

Converium reported an ongoing non-life combined ratio of 107.2% for the full year 2005, as compared with 106.1% for 2004. Adjusted for the losses from winter storm Erwin, the Continental European floods as well as hurricanes Katrina, Rita and Wilma, the ongoing non-life combined ratio was 99.5%, which reflects a satisfactory underlying underwriting performance.

The Life & Health Reinsurance segment reported segment income of US$ 17.6 million for the year ended December 31, 2005, as compared with US$ 16.7 million for the previous year.

Converium reported net investment income for 2005 of US$ 324.9 million and an average net investment income yield of 4.1%, an increase as compared with 2004. This improvement was achieved despite a lower asset base and largely resulted from a higher allocation to fixed maturities securities. The Company's average total investment income yield for the year ended December 31, 2005 remained unchanged at 4.4% compared with 2004 and reflects net realized capital gains of US$ 25.5 million, which occurred primarily in the fourth quarter of 2005.

For the fourth quarter of 2005, Converium reported pre-tax operating income of US$ 2.8 million and a net income of US$ 34.2 million. The quarterly result was largely driven by a total impact from natural catastrophes of US$ 60.4 million. Hurricane Wilma accounted for US$ 46.5 million, with the residual impact being attributable to further developments for hurricanes Katrina and Rita, offset by loss reserve reductions relating to the 2004 Asian tsunami. The financial performance of the fourth quarter of 2005 was also impacted by operating and administration expenses of US$ 63.2 million, representing an increase of US$ 22.9 million compared with the third quarter of 2005. This development is reflective of extraordinary legal, audit and consulting fees of approximately US$ 15 million mainly associated with the internal review and the restatement of prior years' financial accounts.

The negative effects from natural catastrophes and increasing operating and administration expenses were partially offset by a net positive impact of prior accident years on the technical result of US$ 6.8 million resulting from net positive development of prior accident years' loss reserves of US$ 31.9 million, and premiums, related losses and acquisition costs of net US$ 25.1 million. In addition, a net income benefit of US$ 22.0 million was recorded as a result of the successful commutation of CRNA liabilities. The performance of Converium's ongoing operations is reflected in total segment income of US$ 63.2 million.

Gross premiums written in the fourth quarter of 2005 decreased by 13.6% to US$ 375.4 million, net premiums written by 15.2% to US$ 314.5 million and net premiums earned by 35.5% to US$ 441.5 million, as compared with the same period in 2004. These decreases in premiums are largely due to the rating downgrades in 2004 and the placement of CRNA into orderly run-off.

For the fourth quarter of 2005, Converium reported net investment income of US$ 78.0 million and an average annualized net investment income yield of 4.2%, a slight increase as compared with 2004. The Company's average annualized total investment income yield was 6.0%, as compared to 4.3% in the fourth quarter of 2004. This is a result of net realized capital gains of US$ 33.6 million.

Outlook

The continuing resilience of Converium's franchise as evidenced in the January renewals as well as the improving financial performance demonstrates that the Company's current business strategy is a promising basis for a sustainable recovery.

Based on the successful January renewals and barring any exceptional catastrophe losses, adverse financial markets developments or other unexpected adverse developments, Converium expects a further improvement of its financial results in 2006.

Business Development

The following are comments on the development of Converium's three ongoing business segments, the Run-Off segment and the Corporate Center. Reference is made to the tables attached to this press release.

Standard Property & Casualty Reinsurance represented approximately 40.7% of total net premiums written in 2005. For the full year 2005 and the fourth quarter the Standard Property & Casualty Reinsurance segment of Converium reported segment income of US$ 46.7 million and US$ 24.0 million, respectively. For the same periods of 2004 the segment reported income of US$ 91.5 million and a loss of US$ 29.4, respectively.

The positive segment result in 2005 was achieved despite a string of severe natural catastrophe losses, reflecting the quality of the segment's underlying book of business. The combined ratio for the full year 2005 was 109.5%, as compared with 101.6% in 2004. The headline losses in 2005 added 15.4 percentage points to the segment's combined ratio: winter storm Erwin (US$ 32.5 million or 3.7 percentage points), the Continental European floods (US$ 24.8 million or 2.8 percentage points), hurricane Katrina (US$ 25.6 million or 2.9 percentage points), hurricane Rita (US$ 11.2 million or 1.3 percentage points) and hurricane Wilma (US$ 41.6 million or 4.7 percentage points). In addition, the segment's combined ratio reflects an increased administration expense ratio due to the reduced premium volume in 2005. For the fourth quarter of 2005, the Standard Property & Casualty Reinsurance segment reported a combined ratio of 116.4%, which includes an impact of 25.8 percentage points due to hurricane Wilma and 3.4 percentage points relating to additional claims for hurricane Katrina. The combined ratio for the fourth quarter of 2005 compares with 124.4% for the same period of 2004.

The segment's 2005 result benefited from a net positive impact of prior accident years on the technical result of US$ 19.7 million resulting from net positive development of prior accident years' loss reserves of US$ 30.7 million, offset by reductions in premiums, related losses and acquisition costs of net US$ 11.0 million. The largest developments in prior accident years' loss reserves relate to property (net positive development of US$ 73.3 million), motor (net adverse development of US$ 25.0 million) and general third party liability (net adverse development of US$ 23.4 million). For the fourth quarter of 2005, the Standard Property & Casualty Reinsurance segment recorded a net positive impact of prior accident years on the technical result of US$ 8.1 million resulting from net positive development of prior accident years' loss reserves of US$ 21.0 million, offset by reductions in premiums, related losses and acquisition costs of net US$ 12.9 million.

For the year ended December 31, 2005, gross premiums written decreased by 46.8% to US$ 803.1 million, net premiums written by 46.4% to US$ 739.0 million and net premiums earned by 36.7% to US$ 880.8 million. In general, premium volume was impacted by the ratings downgrades in 2004, the placement of CRNA into orderly run-off as well as by the decision to reduce writings for profitability reasons. More specifically, for the full year 2005 the reduction in net premiums written in the Standard Property & Casualty Reinsurance segment by line of business included:



 -- Motor, which decreased by 56.9% to US$ 188.4 million;

 -- Property, which declined by 25.8% to US$ 390.6 million;

 -- General third party liability, which went down 61.3% to US$ 146.7 
    million; and

 -- Personal accident (assumed from non-life insurers), which 
    decreased by 61.4% to US$ 13.3 million.

For the fourth quarter of 2005, gross premiums written decreased by 58.7% to US$ 92.1 million, net premiums written by 53.3% to US$ 77.8 million and net premiums earned by 39.8% to US$ 161.4 million.

Specialty Lines represented approximately 40.6% of total net premiums written in 2005. For the full year 2005 and the fourth quarter, the Specialty Lines segment of Converium reported segment income of US$ 109.5 million and US$ 32.6 million, respectively. This performance compares with segment losses of US$ 7.3 million and US$ 41.8 million for the respective periods of 2004.

The segment's combined ratio for the full year 2005 was 105.4%, as compared with 110.6% in 2004. In 2005, the segment's performance was negatively affected by a total net pre-tax impact of US$ 13.5 million of losses from hurricanes Katrina, Wilma and Rita. For the fourth quarter of 2005, the segment reported a combined ratio of 108.4%, as compared with 118.3% for the same period of 2004. This positive trend was offset by an increased administration expense ratio due to the reduced premium volume in 2005 as well as the fronting commission for the business written through Global Aerospace Underwriting Managers Ltd. (GAUM).

The segment's result in 2005 benefited from a net positive impact of prior accident years on the technical result of US$ 23.1 million resulting from net positive development of prior accident years' loss reserves of US$ 55.3 million, offset by reductions in premiums, related losses and acquisition costs of net US$ 32.2 million. The largest developments in prior accident years' loss reserves related to aviation & space (US$ 41.6 million). They were partially offset by smaller net adverse developments in the workers' compensation, engineering and marine & energy lines of business. For the fourth quarter of 2005, the Specialty Lines segment recorded a net positive impact of prior accident years on the technical result of US$ 3.7 million resulting from net positive development of prior accident years' loss reserves of US$ 7.7 million, offset by premiums, related losses and acquisition costs of net US$ 4.0 million.

For the year ended December 31, 2005, gross premiums written in the Specialty Lines segment decreased by 49.7% to US$ 833.1 million, net premiums written declined by 52.9% to US$ 737.7 million and net premiums earned declined by 23.7% to US$ 1,059.2 million. This development is due to the lowering of Converium's financial strength ratings in 2004 and the placement of CRNA into orderly run-off. More specifically, it reflects:



 -- Aviation & space, which decreased by 40.2% to US$ 241.8 million;

 -- Credit & surety, which fell by 71.4% to US$ 58.4 million;

 -- Professional liability and other special liability, which 
    declined by 35.2% to US$ 282.8 million;

 -- Engineering, which decreased by 41.6% to US$ 65.5 million; and

 -- Marine & energy, which declined by 22.4% to US$ 64.0 million.

These decreases in net premiums written were partially offset by growth in agribusiness, where net premiums written increased by 221.9% to US$ 36.7 million, reflecting the success of Converium's strategy to expand this line of business in Europe.

In the fourth quarter of 2005 gross premiums written decreased by 53.7% to US$ 239.5 million, net premiums written by 60.7% to US$ 195.7 million and net premiums earned by 47.6% to US$ 215.3 million due to the ratings downgrades in 2004 and the placement of CRNA into orderly run-off.

Life & Health Reinsurance represented approximately 16.9% of total net premiums written in 2005. For the full year 2005 and the fourth quarter, the Life & Health Reinsurance segment of Converium reported segment income of US$ 17.6 million and US$ 6.6 million, respectively, as compared with US$ 16.7 million and US$ 5.8 million, respectively, in the same periods of 2004. The segment reported a technical result for the full year 2005 and the fourth quarter of US$ 14.2 million and US$ 1.3 million, respectively, as compared with US$ 16.4 million and US$ 6.1 million in the previous year. Technical result is defined as net premiums earned minus losses, loss expenses and life benefits minus acquisition costs plus other technical income, mainly technical interest.

The decrease in the technical result during 2005 was primarily attributable to Converium's decision to cancel existing reinsurance transactions in Latin America and the establishment of an additional provision for the Asian tsunami.

For the year ended December 31, 2005, gross premiums written in the Life & Health Reinsurance segment decreased by 2.8% to US$ 318.8 million, net premiums written by 2.2% to US$ 306.4 million and net premiums earned by 1.2% to US$ 314.8 million. The reductions occurred mainly in the health line of business which contracted by 30.8% to US$ 23.1 million, primarily attributable to Converium's decision to cancel existing business in the Middle East in 2004. In the fourth quarter of 2005, gross premiums written decreased by 12.7% to US$ 55.0 million, net premiums written declined by 27.8% to US$ 53.0 million and net premiums earned fell by 24.1% to US$ 71.6 million. The reduced premium volumes were mainly driven by the update of underlying information for the actuarial calculations of financing treaties.

The Run-Off segment reported segment income for the full year 2005 and the fourth quarter of US$ 47.6 million and US$ 15.0 million, respectively, as compared with a segment loss of US$ 296.0 million and segment income of US$ 87.8 million for the same periods of 2004.

For the full year 2005, the segment result was negatively affected by hurricanes Katrina, Rita and Wilma with a total net impact of US$ 15.6 million in losses, offset by a net income benefit of US$ 60.5 million from commutations. In the fourth quarter, CRNA commuted net liabilities of US$ 141.4 million, which resulted in a net income benefit of US$ 22.0 million.

For the full year 2005 the Run-Off segment recorded a net adverse impact of prior accident years on the technical result of US$ 30.7 million resulting from net adverse development of prior accident years' loss reserves of US$ 10.5 million and reductions in premiums, related losses and acquisition costs of net US$ 20.2 million. For the fourth quarter of 2005, the Run-Off segment recorded a net adverse impact of prior accident years on the technical result of US$ 5.0 million, with no significant underlying movements.

The Corporate Center carries certain administration expenses such as the costs of the Board of Directors, the Global Executive Committee, and other corporate functions as well as other expenses not allocated to the operating segments. For the full year 2005 and the fourth quarter, operating and administration expenses were US$ 50.1 million and US$ 22.8 million, respectively, as compared with US$ 38.2 million and US$ 12.7 million for the same periods of 2004. The increase in 2005 was mainly due to extraordinary legal, audit and consulting fees of approximately US$ 15 million, mainly related to the internal review and restatement of prior years' financial accounts in the fourth quarter of 2005.



  Financial highlights:    Three months ended        Year ended      
  Income statement,           December 31,          December 31,     
  return on equity                                                   

  In US$ million, unless     2005       2004      2005       2004    
  noted                               restated             restated  
 
  Gross premiums written      375.4      434.5   1,994.3    3,978.7  
  --   change (%)            -13.6%               -49.9%             
 
  Net premiums written        314.5      370.8   1,815.7    3,726.1  
  --   change (%)            -15.2%               -51.3%             
 
  Net premiums earned         441.5      684.6   2,383.2    3,882.2
  --   change (%)            -35.5%               -38.6%
 
  Ongoing non-life loss
  ratio(C)                    68.8%      83.1%     77.4%      77.6%
  --  change in
  percentage points         -14.3pts              -0.2pts

  Ongoing non-life           
  acquisition costs                   
  ratio(D)                    33.8%      32.5%     22.9%      24.5% 
  --  change in                                                      
  percentage points         +1.3pts              -1.6pts   
 
  Ongoing non-life               
  administration expense                 
  ratio(E)                     8.2%       4.6%      6.9%       4.0% 
  --   change in                                       
  percentage points         +3.6pts              +2.9pts    
 
  Ongoing non-life           
  combined ratio(F)          110.8%     120.2%    107.2%     106.1% 
  --   change in                                                 
  percentage points         -9.4pts              +1.1pts      
 
  Life & Health                  
  technical result(G)          1.3        6.1      14.2       16.4 
  --  change (%)             -78.7%               -13.4%          
 
  Total investment             
  result(H)                  111.6       89.1     350.4      359.2 
  --  change (%)             +25.3%                -2.4%  
 
  Average total                
  investment income                
  yield(I)                     6.0%       4.3%      4.4%       4.4%   
  --  change in                                                     
  percentage points         +1.7pts                    -       
 
  Total investment               
  return(J)                   54.9      110.0     312.0      334.1 
  --  change (%)             -50.1%                -6.6%    
 
  Pre-tax operating            
  income (loss)(K)             2.8       -2.0     100.8     -321.1  
  --  change (%)               n.m.                 n.m.          
 
  Net income (loss)            34.2       10.9      68.7     -582.5  
  --  change (%)            +213.8%                 n.m.             
 
  Basic earnings (loss)        
  per share (US$)             0.23       0.08      0.47      -9.19 
  --  change (%)            +187.5%                 n.m.        
 
  Return on equity(L)          8.1%       3.5%      4.0%     -30.2% 
  --  change in                         
  percentage points         +4.6pts                 n.m.

 Financial highlights: Balance sheet   Dec. 31,   Dec. 31,  
                                          2005       2004    
  In US$ million, unless noted                     restated  
 
  Total invested assets plus cash        7,281.6    8,467.1  
  --   change (%)                         -14.0%             
 
  Claims supporting capital(M)           2,044.6    2,125.9  
  --   change (%)                          -3.8%             
 
  Shareholders' equity                   1,653.4    1,734.8  
  --   change (%)                          -4.7%             
 
  Book value per share (US$)(N)            11.29      11.86  
  --   change (%)                          -4.8%             
 
  Book value per share (CHF)(N)            14.88      13.49  
  --   change (%)                          +10.3%             
 


  Financial highlights:     Three months ended       Year ended      
  Investment results           December 31,         December 31,     
 
  In US$ million, unless     2005       2004      2005       2004    
  noted                               restated             restated  
 
  Investment income --         51.3       54.9     221.3      198.3  
  Fixed maturities                                                   
 
  Investment income --          1.1        1.6       5.9       14.8  
  Equity securities                                                  
 
  Investment income --         14.3       17.6      62.6       75.1  
  Funds Withheld Asset                                               
 
  Other investment             11.3       10.5      35.1       24.5  
  income, net                                                        
 
  Net investment income        78.0       84.6     324.9      312.7  
 
  Average net investment      4.2%(Z)     4.1%(Z)    4.1%       3.8%  
  income yield (pre-tax)                                             
 
                                                                     
 
  Net realized capital         33.6        4.5      25.5       46.5  
  gains (losses)                                                     
 
  Total investment result     111.6       89.1     350.4      359.2  
 
  Average total               6.0%(Z)     4.3%(Z)    4.4%       4.4%  
  investment income yield                                            
  (pre-tax)                                                          
  
  Change in net               -56.7       20.9     -38.4      -25.1  
  unrealized (losses)                                                
  gains (pre-tax)                                                    
 
  Total investment return      54.9      110.0     312.0      334.1  
  (pre-tax)                                                          
 
  Average total                                     4.0%       4.1%  
  investment return                                                  
  (pre-tax)                                                          
 
  Average total invested    7,443.8    8,215.1   7,874.4    8,125.0  
  assets (including cash                                             
  and cash equivalents)                                             

(Z) These figures are presented on an annualized basis

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 selected on its value drivers, its strategic initiatives and those factors critical to understanding its business and operating environment and certain financial guidance.

About Converium

Converium is an independent international multi-line reinsurer known for its innovation, professionalism and service. Today Converium employs about 600 people in 18 offices around the globe and is organized into four business segments: Standard Property & Casualty Reinsurance, Specialty Lines and Life & Health Reinsurance, which are based principally on ongoing global lines of business, as well as the Run-Off segment, which primarily comprises the business from Converium Reinsurance (North America) Inc., excluding the U.S. originated aviation business portfolio. Converium has a "BBB+" rating (outlook stable) from Standard & Poor's and a "B++" rating (outlook stable) from 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 'seek to', 'expects', 'should continue', 'believes', 'anticipates', 'estimates' and 'intends'. The specific forward-looking statements cover, among other matters, the Company's internal review and related restatement, the reinsurance market, the Company's operating results, certain financial guidance such as the corporate tax rate, the reduction of CRNA net liabilities , administration expense ratio and Corporate Center costs, the rating environment, the prospect for improving results and expense reductions. 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 the impact of our ratings downgrade or a further lowering or loss of one of our financial strength ratings; the impact of the restatement on our ratings and client relationships; uncertainties of assumptions used in our reserving process; risk associated with implementing our business strategies and our capital improvement measures and the run-off of our North American business; cyclicality of the reinsurance industry; the occurrence of natural and man-made catastrophic events with a frequency or severity exceeding our estimates; acts of terrorism and acts of war; changes in economic conditions, including interest and currency rate conditions that could affect our investment portfolio; actions of competitors, including industry consolidation and development of competing financial products; a decrease in the level of demand for our reinsurance or increased competition in our industries or markets; a loss of our key employees or executive officers without suitable replacements being recruited within a suitable period of time; our ability to address material weaknesses we have identified in our internal control environment; political risks in the countries in which we operate or in which we reinsure risks; the passage of additional legislation or the promulgation of new regulation in a jurisdiction in which we or our clients operate or where our subsidiaries are organized; the effect on us and the insurance industry as a result of the investigations being carried out by the US Securities and Exchange Commission, New York's Attorney General and other governmental authorities; changes in our investment results due to the changed composition of our invested assets or changes in our investment policy; failure of our retrocessional reinsurers to honor their obligations or changes in the credit worthiness of our reinsurers; our failure to prevail in any current or future arbitration or litigation; and extraordinary events affecting our clients, such as bankruptcies and liquidations, 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.

www.converium.com



 Consolidated       Three months   Change    Year ended     Change
 statements of     ended December           December 31,
 income                  31,

 In US$ million,            2004                     2004
 unless noted       2005  restated  (%)     2005   restated  (%)
 Revenues
 Gross premiums     375.4    434.5  -13.6  1,994.3  3,978.7  -49.9
 written
 Less ceded         -60.9    -63.7   -4.4   -178.6   -252.6  -29.3
 premiums written
 Net premiums       314.5    370.8  -15.2  1,815.7  3,726.1  -51.3
 written
 Net change in      127.0    313.8  -59.5    567.5    156.1 +263.5
 unearned premiums
 Net premiums       441.5    684.6  -35.5  2,383.2  3,882.2  -38.6
 earned
 Net investment      78.0     84.6   -7.8    324.9    312.7   +3.9
 income
 Net realized        33.6                     25.5
 capital gains                 4.5   n.m.              46.5  -45.2
 (losses)
 Other (loss)       -11.0      1.1   n.m.    -13.4     -8.2  +63.4
 income
 Total revenues     542.1    774.8  -30.0  2,720.2  4,233.2  -35.7

 Losses, loss      -287.3   -491.6  -41.6 -1,775.9 -3,342.5  -46.9
 expenses and life
 benefits
 Acquisition costs -147.2   -213.1  -30.9   -575.6   -912.4  -36.9
 Other operating    -63.2    -59.3   +6.6   -210.8   -219.8   -4.1
 and
 administration
 expenses
 Interest expense    -8.0     -8.3   -3.6    -31.6    -33.1   -4.5
 Impairment of          -        -      -        -    -94.0   n.m.
 goodwill
 Amortization of     -0.2     -7.6   n.m.    -21.5     -9.9 +117.2
 intangible assets
 Restructuring       +2.6      0.7   n.m.    -20.5     -2.7   n.m.
 costs
 Total benefits,   -503.3   -779.2  -35.4 -2,635.9 -4,614.4  -42.9
 losses and                 
 expenses
 Income (loss)       38.8     -4.4   n.m.     84.3   -381.2   n.m.
 before taxes
 Income tax          -4.6     15.3   n.m.    -15.6   -201.3  -92.3
 expense
 Net income (loss)   34.2     10.9  213.8     68.7   -582.5 -111.8
 Basic earnings      0.23     0.08   n.m.     0.47    -9.19   n.m.
 (loss) per share                               
 (US$)
 Diluted earnings    0.23     0.08   n.m.     0.47    -9.19   n.m.
 (loss) per share                              
 (US$)

 Consolidated balance sheets                       Dec. 31, Dec. 31,
                                                     2005     2004
 In US$ million, unless noted                               restated
 Invested assets
 Held-to-maturity securities:
            Fixed maturities                          793.6    850.4
 Available-for-sale securities:
 Fixed maturities                                   4,169.8  4,834.8
 Equity securities                                    362.6    399.4
 Other investments                                    253.1    279.2
 Short-term investments                                35.1    117.3
 Total investments                                  5,614.2  6,481.1
 Funds Withheld Asset                               1,020.1  1,305.1
 Total invested assets                              6,634.3  7,786.2
 Other assets
 Cash and cash equivalents                            647.3    680.9
 Premiums receivables                               1,059.3  1,832.2
 Reserves for unearned premiums, retro                 37.8     55.2
 Reinsurance assets:
 Underwriting reserves                                805.1    937.9
 Insurance and reinsurance balances receivable         37.6    139.3
 Funds held by reinsureds                           1,817.4  1,737.7
 Deposit assets                                       183.4    170.4
 Deferred policy acquisition costs                    304.3    482.7
 Deferred income taxes                                  1.0      6.2
 Other assets                                         298.4    358.6
 Total assets                                      11,825.9 14,187.3
 Liabilities
 Reinsurance liabilities:
 Unpaid losses and loss expenses                    7,568.9  8,908.3
 Future life benefits, gross                          405.6    407.1
 Insurance and reinsurance balances payable           226.3    583.5
 Reserves for unearned premium, gross                 610.8  1,247.7
 Other reinsurance liabilities                        127.8     70.8
 Funds held under reinsurance contracts               332.9    194.8
 Deposit liabilities                                  300.6    356.5
 Deferred income taxes                                  8.1      8.2
 Accrued expenses and other liabilities               200.3    284.5
 Debt                                                 391.2    391.1
 Total liabilities                                 10,172.5 12.452.5
 Shareholders' equity
 Common stock                                         554.9    554.9
 Additional paid-in capital                         1,354.2  1,360.5
 Treasury stock                                        -1.5     -7.7
 Unearned stock compensation                           -3.5     -7.5
 Total accumulated other comprehensive income
 Accumulated other comprehensive income                -4.9     -7.7
 Net unrealized gains on investments, net of taxes     42.7    105.2
 Cumulative translation adjustments                    96.9    191.2
 Total accumulated other comprehensive income         134.7    288.7
 Retained deficit                                    -385.4   -454.1
 Total shareholders' equity                         1,653.4  1,734.8
 Total liabilities and shareholders' equity        11,825.9 14,187.3


 Segments            Three months    Change     Year ended     Change
                         ended                 December 31,
                     December 31,
 In US$ million,     2005    2004     (%)     2005     2004     (%)
 unless noted              restated                  restated
 Standard Property & Casualty Reinsurance
 Gross premiums       92.1    222.9    -58.7   803.1  1,509.1    -46.8
 written
 Net premiums         77.8    166.7    -53.3   739.0  1,377.5    -46.4
 written
 Net premiums        161.4    268.1    -39.8   880.8  1,392.3    -36.7
 earned
 Loss ratio(O)      67.8%    81.2% -13.4pts   82.8%    72.0% +10.8pts
 Acquisition costs   35.5%    35.8%  -0.3pts   20.6%    25.4%  -4.8pts
 ratio(P)
 Administration      13.1%     7.4%  +5.7pts    6.1%     4.2%  +1.9pts
 expense ratio(Q)
 Combined ratio(R) 116.4%   124.4%  -8.0pts  109.5%   101.6%  +7.9pts
 Total investment     39.5     28.4    +39.1   122.0    113.9     +7.1
 result(S)
 Segment income       24.0    -29.4     n.m.    46.7     91.5    -49.0
 (loss)
 Retention           84.5%    74.8%  -9.7pts   92.0%    91.3%  +0.7pts
 ratio(T)

 Specialty Lines
 Gross premiums      239.5    516.8    -53.7   833.1  1,655.3    -49.7
 written
 Net premiums        195.7    498.3    -60.7   737.7  1,565.3    -52.9
 written
 Net premiums        215.3    410.8    -47.6 1,059.2  1,387.6    -23.7
 earned
 Loss ratio(O)        69.5%    84.3% -14.8pts   72.9%    83.2% -10.3pts
 Acquisition costs   32.6%    30.4%  +2.2pts   24.9%    23.6%  +1.3pts
 ratio(P)
 Administration       6.3%     3.6%  +2.7pts    7.6%     3.8%  +3.8pts
 expense ratio(Q)
 Combined ratio(R)   108.4%   118.3%  -9.9pts  105.4%   110.6%  -5.2pts
 Total investment     49.5     36.5    +35.6   142.9    147.5     -3.1
 result(S)
 Segment income       32.6    -41.8     n.m.   109.5     -7.3     n.m.
 (loss)
 Retention ratio     81.7%    96.4% -14.7pts   88.5%    94.6%  -6.1pts
 (T)
 Life & Health Reinsurance
 Gross premiums       55.0     63.0    -12.7   318.8    327.9     -2.8
 written
 Net premiums         53.0     73.4    -27.8   306.4    313.2     -2.2
 written
 Net premiums         71.6     94.3    -24.1   314.8    318.7     -1.2
 earned
 Acquisitions costs  27.4%    26.5%  +0.9pts   29.3%    22.7%  +6.6pts
 ratio(Q)
 Administration       8.1%     5.2%  +2.9pts    5.3%     4.2%  +1.1pts
 expense ratio(R)
 Total investment     11.2      5.2   +115.4    29.2     20.9    +39.7
 result(S)
 Segment income        6.6      5.8    +13.8    17.6     16.7     +5.4
 Retention ratio(T)  96.4%   116.5% -20.1pts   96.1%    95.5%  +0.6pts


 Segments             Three months ended Change   Year ended    Change
                         December 31,            December 31,
 In US$ million,         2005      2004    (%)   2005    2004     (%)
 unless noted                   restated              restated
 Run-Off Segment
 Gross premiums           -11.2   -368.2  -97.0  39.3     486.4  -91.9
 written
 Net premiums written     -12.0   -367.6  -96.7  32.6     470.1  -93.1
 Net premiums earned       -6.8    -88.6  -92.3 128.4     783.6  -83.6
 Total investment          11.4     19.0  -40.0  56.3      76.9  -26.8
 result(S)
 Segment income            15.0     87.8  -82.9  47.6    -296.0   n.m.
 (loss)

 Corporate Center
 Other operating      -22.8     -12.7      79.5      -50.1 -38.2 +31.2
 and
 administration
 expenses

(A) Total segment income (loss) is defined as net premiums earned plus total investment results minus losses, loss expenses and life benefits, acquisition costs and other operating and administration expenses.

(B) Ongoing non-life combined ratio is defined as non-life loss ratio (to premiums earned) plus non-life acquisition costs ratio (to premiums earned) plus non-life administration expense ratio (to premiums written).

(C) Ongoing non-life loss ratio is defined as losses and loss expenses divided by net premiums earned.

(D) Ongoing non-life acquisition costs ratio is defined as acquisition costs divided by net premiums earned.

(E) Ongoing non-life administration expense ratio is defined as other operating and administration expenses divided by net premiums written, excluding Corporate Center segment expenses.

(F) Ongoing non-life combined ratio is defined as non-life loss ratio (to premiums earned) plus non-life acquisition costs ratio (to premiums earned) plus non-life administration expense ratio (to premiums written).

(G) Life & Health technical result is defined as net premiums earned minus losses, loss expenses and life benefits minus acquisition costs plus other technical income, mainly technical interest.

(H) Total investment result is defined as net investment income plus net realized capital gains (losses).

(I) Average 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 for quarterly yield.

(J) 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 for the quarterly yield.

(K) Pre-tax operating income (loss) is defined as pre-tax (loss) income excluding pre-tax net realized capital gains (losses), impairment of goodwill, amortization of intangible assets and restructuring costs.

(L) Return on equity is defined as net (loss) income (after-tax) divided by shareholders' equity at the beginning of the period, annualized for the quarterly return on equity.

(M) Claims supporting capital is defined as total equity plus debt.

(N) Reflects the impacts of the Rights Offering that occurred in October 2004.

(O) Loss ratio is defined as losses and loss adjustment expenses divided by net premiums earned.

(P) Acquisition costs ratio is defined as acquisition costs divided by net premiums earned.

(Q) Administration expense ratio is defined as other operating and administration expenses divided by net premiums written, excluding Corporate Center segment expenses.

(R) Combined ratio is defined as non-life loss ratio (to premiums earned) plus non-life acquisition costs ratio (to premiums earned) plus non-life administration expense ratio (to premiums written).

(S) Total investment result is defined as net investment income plus net realized capital gains (losses).

(T) Retention ratio is defined as net premiums written divided by gross premiums written.



            

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