ZUG, Switzerland, May 23, 2006 (PRIMEZONE) -- In the first quarter of 2006 Converium produced net income of USD 61.6 million, primarily driven by:
-- a strong underwriting performance of ongoing operations, with a related non-life combined ratio of 94.8% and segment income of USD 71.1 million;
-- a net positive impact of prior accident years on the technical result of USD 12.4 million, reflecting the continuing stabilization of Converium's prior accident years' developments;
-- the successful progression of the North American run-off and commutation strategy, which led to a total reduction of net reserves in the Run-Off segment of USD 111.9 million to approximately USD 1.2 billion, and a benefit on the technical result from commutations of USD 12.4 million;
-- total operating and administration expenses of USD 35.7 million, a decline of 37.3% compared with the first quarter of 2005; and
-- a total investment result of USD 70.3 million or an average annualized total investment income yield of 3.9%, which is at the same level as in the first quarter of 2005.
Shareholders' equity as of March 31, 2006 amounted to USD 1,709.7 million, an increase of USD 56.3 million or 3.4% compared with December 31, 2005. Return on shareholders' equity (annualized) was 14.9% versus -1.3% in the first quarter of 2005.
As previously reported, Converium recorded successful April non-life treaty renewals, binding 99.5% of business up for renewal. Including the January 1, 2006 treaty renewals, Converium has already bound approximately 93% of the non-life premium volume targeted for 2006. The Company, therefore, remains confident that it will achieve total gross premiums written of USD 1.8-1.9 billion for the full year.
Inga Beale, Chief Executive Officer, commented: "I am very pleased with our first quarter financial performance. Converium's net result certainly benefited from only light catastrophic losses over the three months. More importantly, however, we are proud to report further progress in areas under our direct influence: first, administration expenses have come down significantly, returning our cost base to a more competitive level; second, our prior-year loss reserve position continues to be stable; third, the run-off of Converium's North American liabilities is progressing according to plan and making a positive contribution to our bottom-line."
Inga Beale continued: "The entire Converium team is really encouraged by the further progress we have made in our turnaround, which is the result of many months of hard work. The improving financial performance and continuing stabilization of Converium give us great confidence as we look towards the future."
The full text of this press release, including financial tables, is available at: http://hugin.info/133486/R/1052372/174687.pdf